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Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
INDIANA GAS COMPANY, INC.
(Exact name of registrant as specified in its charter)
INDIANA 35-0793669
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1630 North Meridian Street
Indianapolis, Indiana 46202
(317) 926-3351
(Address, including zip code, and telephone
number, including area code, of
registrant's principal executive offices)
Niel C. Ellerbrook, President and Chief Executive Officer
Indiana Gas Company, Inc.
1630 North Meridian Street
Indianapolis, Indiana 46202
(317) 321-0510
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Catherine L. Bridge, Esquire Edward F. Petrosky, Esquire
Barnes & Thornburg Brown & Wood LLP
11 South Meridian Street One World Trade Center
Indianapolis, Indiana 46204 New York, New York 10048-0557
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement as
determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box.[ X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
Calculation of Registration Fee
<TABLE>
<CAPTION>
=====================================================================================================================
Title of each class
of securities to be Amount to be Proposed maximum Proposed maximum Amount of
registered registered offering price per unit aggregate offering registration fee
price
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Medium-Term
Notes, Series G $100,000,000* 100%** $100,000,000 $27,800
=====================================================================================================================
</TABLE>
* Or, in the event of the issuance of discount securities, such higher
principal amount as may be sold for an initial public offering price of
$100,000,000.
** Inserted solely for the purpose of calculating the registration fee.
- --------------------------------------------------------------------------------
S-1
<PAGE>
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Information contained in this prospectus supplement is not complete and may be
changed. We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus
supplement and the accompanying prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.
Subject to Completion
Preliminary Prospectus Supplement dated ________ ____, 1999
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 1999)
$100,000,000
Indiana Gas Company, Inc.
Medium-Term Notes, Series G
Due Nine Months or More from Date of Issue
-------------------------------
The notes:
o We will offer notes from time to time and specify the terms and conditions
of each issue of notes in a pricing supplement.
o The notes will be senior unsecured debt securities of Indiana Gas.
o The notes will have stated maturities of nine months or more from the date
they are originally issued.
o We will pay amounts due on the notes in
U.S. dollars.
o The notes may bear interest at fixed or floating rates or may not bear any
interest. If the notes bear interest at a floating rate, the floating rate
may be based on one or more indices or formulas.
o We will specify whether the notes can be redeemed or repaid before their
maturity and whether they are subject to mandatory redemption, redemption
at the option of Indiana Gas or repayment at the option of the holder of
the notes.
Investing in the notes involves certain risks.
See "Risk Factors" on page S-3.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement, the accompanying prospectus or any pricing supplement is
truthful or complete. Any representation to the contrary is a criminal offense.
<TABLE>
<CAPTION>
Agent's Discounts Proceeds, before expenses, to
Public Offering Price and Commissions Indiana Gas Company, Inc.
--------------------- --------------- -------------------------
<S> <C> <C> <C>
Per note.... 100% .125%-.750% 99.875%-99.250%
Total....... $100,000,000 $125,000--$750,000 $99,875,000--$99,250,000
</TABLE>
We may sell notes to the agent referred to below as principal for resale at
varying or fixed offering prices or through the agent as agent using its
reasonable efforts on our behalf. We may also sell notes without the assistance
of the agent, whether acting as principal or as agent.
If we sell other debt securities referred to in the accompanying prospectus, the
amount of the notes that we may offer and sell under this prospectus supplement
may be reduced.
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Merrill Lynch & Co.
-------------------------------
The date of this prospectus supplement is , 1999.
<PAGE>
TABLE OF CONTENTS
Page
PROSPECTUS SUPPLEMENT
Risk Factors.............................................................. S-3
Description of the Notes.................................................. S-4
Certain United States Federal Income Tax Considerations...................S-32
Plan of Distribution......................................................S-40
Validity of the Notes.....................................................S-42
PROSPECTUS
Indiana Gas Company, Inc.................................................. 2
Recent Developments....................................................... 3
Use of Proceeds........................................................... 4
Ratio of Earnings to Fixed Charges........................................ 4
Description of the Debt Securities........................................ 5
Plan of Distribution...................................................... 11
Where You Can Find More Information....................................... 12
Incorporation of Information We File With the SEC......................... 12
Experts................................................................... 13
You should rely only on the information contained or incorporated by
reference in this prospectus supplement, the accompanying prospectus and any
pricing supplement. Neither we nor any agent has authorized any other person to
provide you with different or additional information. If anyone provides you
with different or additional information, you should not rely on it. Neither we
nor any agent is making an offer to sell these securities in any jurisdiction
where the offer or sale is not permitted. You should assume that the information
contained or incorporated by reference in this prospectus supplement, the
accompanying prospectus and any pricing supplement is accurate only as of the
date on the front cover of the applicable pricing supplement.
References in this prospectus supplement to "Indiana Gas," "we," "us"
and "our" are to Indiana Gas Company, Inc.
References in this prospectus supplement to "agent" are to Merrill
Lynch & Co. or any other agent appointed by us.
S-2
<PAGE>
RISK FACTORS
Your investment in the notes involves certain risks. In consultation
with your own financial and legal advisers, you should carefully consider, among
other matters, the following discussion of risks before deciding whether an
investment in the notes is suitable for you. The notes are not an appropriate
investment for you if you are unsophisticated with respect to their significant
components.
Structure Risks of Notes Indexed to Interest Rate, Currency or Other Indices or
Formulas
If you invest in notes indexed to one or more interest rate or other
indices or formulas, there will be significant risks not associated with a
conventional fixed rate or floating rate debt security. These risks include
fluctuation of the indices or formulas and the possibility that you will receive
a lower, or no, amount of principal, premium or interest and at different times
than you expected. We have no control over a number of matters, including
economic, financial and political events, that are important in determining the
existence, magnitude and longevity of these risks and their results. In
addition, if an index or formula used to determine any amounts payable in
respect of the notes contains a multiplier or leverage factor, the effect of any
change in that index or formula will be magnified. In recent years, values of
certain indices and formulas have been volatile and volatility in those and
other indices and formulas may be expected in the future. However, past
experience is not necessarily indicative of what may occur in the future.
Redemption May Adversely Affect Your Return on the Notes
If your notes are redeemable at our option or are otherwise subject to
mandatory redemption, we may, in the case of optional redemption, or must, in
the case of mandatory redemption, choose to redeem your notes at times when
prevailing interest rates may be relatively low. Accordingly, you generally will
not be able to reinvest the redemption proceeds in a comparable security at an
effective interest rate as high as that of the notes.
There May Be an Uncertain Trading Market for Your Notes; Many Factors Affect the
Trading Value of Your Notes
We cannot assure you a trading market for your notes will ever develop
or be maintained. Many factors independent of our creditworthiness may affect
the trading market of your notes.
These factors include:
o the complexity and volatility of the index or formula
applicable to the notes,
o the method of calculating the principal, premium and interest
in respect of the notes,
o the time remaining to the maturity of the notes,
S-3
<PAGE>
o the outstanding amount of the notes,
o the redemption features of the notes,
o the amount of other securities linked to the index or formula
applicable to the notes, and
o the level, direction and volatility of market interest rates
generally.
In addition, because some notes were designed for specific investment
objectives or strategies, these notes will have a more limited trading market
and experience more price volatility. There may be a limited number of buyers
for these notes. This may affect the price you receive for these notes or your
ability to sell these notes at all. You should not purchase notes unless you
understand and know you can bear the related investment risks.
Our Credit Ratings May Not Reflect All Risks of an Investment in the Notes
Our credit ratings are an assessment of our ability to pay our
obligations. Consequently, real or anticipated changes in our credit ratings
will generally affect the market value of your notes. Our credit ratings,
however, may not reflect the potential impact of risks related to structure,
market or other factors discussed above on the value of your notes.
DESCRIPTION OF THE NOTES
The notes will be issued as a new series of debt securities under an
indenture, dated as of February 1, 1991, as amended, between Indiana Gas and
U.S. Bank Trust National Association (formerly Continental Bank, National
Association), as trustee. The following summary of the material provisions of
the notes and of the indenture is not complete and is qualified in its entirety
by reference to the indenture, a copy of which has been filed as an exhibit to
the registration statement of which this prospectus supplement and the
accompanying prospectus are a part.
The following description of notes will apply unless otherwise
specified in an applicable pricing supplement.
Terms of the Notes
The notes will be issued as a new series of debt securities under the
indenture. All notes issued under the indenture will be unsecured general
obligations of Indiana Gas and will rank equally with all other unsecured and
unsubordinated indebtedness of Indiana Gas from time to time outstanding.
The indenture does not limit the amount of debt which Indiana Gas may
issue. Indiana Gas may issue its debt from time to time as a single series or in
two or more separate series up to
S-4
<PAGE>
the aggregate principal amount from time to time authorized by Indiana Gas for
each series. As of March 31, 1999, Indiana Gas had $191,939,000 of outstanding
long term debt, none of which is secured.
The notes will be offered on a continuing basis and will mature on a
day nine months or more from the date of issue, as selected by the purchaser and
agreed to by Indiana Gas. Interest- bearing notes will bear interest at either
fixed or floating rates as specified in the applicable pricing supplement. Notes
may be issued at significant discounts from their principal amount payable at
stated maturity, or on any date before the stated maturity date on which the
principal or an installment of principal of a note becomes due and payable,
whether by the declaration of acceleration, call for redemption at the option of
Indiana Gas, repayment at the option of the holder or otherwise (the stated
maturity date or such prior date, as the case may be, is referred to as the
"Maturity Date" with respect to the principal repayable on such date). Some
notes may not bear interest.
The notes will be denominated in United States dollars and Indiana Gas
will make payments of principal of, and premium, if any, and interest on, the
notes in United States dollars.
Each Note will be issued in fully registered form only, without
coupons. Each note will be issued initially in book-entry form or in
certificated form. Each book-entry note will be represented by one or more fully
registered global notes registered in the name of a nominee of The Depository
Trust Company, as depository. Except as set forth under "--Book-Entry Notes" or
in any applicable pricing supplement, the notes will not be issued as
certificated notes. The notes will be issued in denominations of $1,000 and
integral multiples of $1,000. Interest rates may differ depending upon, among
other things, the aggregate principal amount of the notes purchased in any
single transaction.
The pricing supplement relating to a note will describe the following
terms:
o whether the note will bear interest at a fixed rate or at a
floating rate, or will not bear any interest;
o the price (expressed as a percentage of the aggregate
principal amount) at which the note will be issued;
o the date on which the note will be issued;
o the date on which the note will mature;
o if the note is a fixed rate note, the rate per annum at which
the note will bear interest and the interest payment dates;
o if the note is a floating rate note, the terms relating to the
determination and payment of the variable interest rate and
the interest payment dates;
S-5
<PAGE>
o if the note may be redeemed at the option of Indiana Gas, or
repaid at the option of the holder, prior to stated maturity,
a description of the provisions relating to the redemption or
repayment;
o any sinking fund or other mandatory redemption provisions
applicable to the note;
o if the note will be issued as a certificated note, a statement
to that effect;
o any other terms of the note not inconsistent with the
provisions of the indenture;
o the identity of any additional agent through or to whom the
note is sold; and
o the amount of discounts or commissions to be paid to an agent
if different from those specifically set forth in the
distribution agreement which is filed as an exhibit to the
registration statement of which this prospectus supplement and
the accompanying prospectus are a part.
Interest rates offered by Indiana Gas with respect to the notes may
differ depending upon, among other things, the aggregate principal amount of
notes purchased in any single transaction. Interest rates or formulas and other
terms of the notes are subject to change by Indiana Gas from time to time, but
no change will affect any note already issued or as to which Indiana Gas has
accepted an offer to purchase. Indiana Gas may offer notes with similar variable
terms other than interest rates concurrently at any time. Indiana Gas may also
concurrently offer notes having different variable terms to different investors.
Unless otherwise specified in the applicable pricing supplement,
"interest payment date," in the case of fixed rate notes, means each March 15
and September 15 and, in the case of floating rate notes, has the meaning
specified under "Interest -- Floating Rate Notes."
Payment of Principal and Interest
Indiana Gas will make interest payments on the book-entry notes by wire
transfer in immediately available funds through the trustee to the depository or
its nominee.
Payments of principal of, and premium, if any, and interest, if any, on
book-entry notes will be made by Indiana Gas through the trustee to the
depository or its nominee. See "--Book- Entry Notes." In the case of
certificated notes, payment of principal and premium, if any, due on the
Maturity Date will be made in immediately available funds upon presentation and
surrender of the certificated notes (and, in the case of any repayment on an
optional repayment date, upon submission of a duly completed election form if
and as required by the provisions described below) at the office or agency
maintained by Indiana Gas for such purpose in the Borough of
S-6
<PAGE>
Manhattan, The City of New York, currently the corporate trust office of the
trustee located at 100 Wall Street, Suite 2000, New York, New York 10005.
Payment of interest, if any, due on the Maturity Date of a certificated note
will be made to the person to whom payment of the principal and premium, if any,
shall be made. Payment of interest, if any, due on a certificated note on any
interest payment date other than the Maturity Date will be made by check mailed
to the address of the holder as such address shall appear in the security
register. Notwithstanding the foregoing, a holder of $10,000,000 or more in
aggregate principal amount of certificated notes (whether having identical or
different terms and provisions) will be entitled to receive interest payments,
if any, on any interest payment date other than the Maturity Date by wire
transfer in immediately available funds if such holder delivers appropriate wire
transfer instructions in writing to the trustee not less than 15 days prior to
the relevant interest payment date. Any such wire transfer instructions received
by the trustee will remain in effect until revoked by such holder.
Redemption at the Option of Indiana Gas
Indiana Gas may redeem the notes at its option prior to their stated
maturity date only if specified in the applicable notes and in the applicable
pricing supplement. If so indicated in the applicable pricing supplement,
Indiana Gas may redeem the notes at its option on any date on or after the
applicable initial redemption date specified in the applicable pricing
supplement. On or after the initial redemption date, if any, Indiana Gas may
redeem the related note at any time in whole or in part at its option at the
applicable redemption price referred to below together with interest on the
principal of the applicable note payable to the redemption date, on notice
given, not more than 60 nor less than 30 days before the redemption date.
Indiana Gas will redeem the notes in increments of $1,000, provided that any
remaining principal amount will be an authorized denomination of the applicable
note. Unless otherwise specified in the applicable pricing supplement, the
redemption price with respect to a note will initially mean a percentage (i.e.
the initial redemption percentage) of the principal amount of the note to be
redeemed specified in the applicable pricing supplement and shall decline at
each anniversary of the initial redemption date by a percentage specified in the
applicable pricing supplement (i.e. the annual redemption percentage reduction)
of the principal amount to be redeemed until the redemption price is 100% of the
principal amount.
The pricing supplement with respect to a note will specify any
applicable mandatory redemption or sinking fund provisions.
Repayment at the Option of the Holder
If so indicated in an applicable pricing supplement, Indiana Gas will
repay the notes in whole or in part at the option of the holders of the notes on
any optional repayment date specified in the applicable pricing supplement. If
no optional repayment date is indicated with respect to a note, it will not be
repayable at the option of the holder before its stated maturity date. Any
repayment in part will be in an amount equal to $1,000 or integral multiples of
$1,000, provided that any remaining principal amount will be an authorized
denomination of the applicable note.
S-7
<PAGE>
The repurchase price for any note so repurchased will be 100% of the principal
amount to be repaid, together with unpaid interest on the principal of the
applicable note payable to the date of repayment. For any note to be repaid, the
trustee must receive, at its office in Chicago, Illinois (or such other address
as Indiana Gas shall from time to time designate), not more than 60 nor less
than 30 days before the optional repayment date:
o in the case of a note in certificated form, the note and the
form entitled "Option to Elect Repayment" duly completed, or
o in the case of a note in book-entry form, instructions to that
effect from the applicable beneficial owner of the global
security representing the notes to the depository and
forwarded by the depository.
Notices of elections from a holder to exercise the repayment option must be
received by the trustee by 5:00 p.m., New York City time, on the last day for
giving such notice. Exercise of the repayment option by the holder of a note
will be irrevocable.
Only the depository may exercise the repayment option in respect of
global securities representing notes in book-entry form. Accordingly, beneficial
owners of global securities that desire to have all or any portion of the notes
in book-entry form represented by global securities repaid must instruct the
participant through which they own their interest to direct the depository to
exercise the repayment option on their behalf by forwarding the repayment
instructions to the trustee as discussed above. In order to ensure that the
instructions are received by the trustee on a particular day, the applicable
beneficial owner must so instruct the participant through which it owns its
interest before that participant's deadline for accepting instructions for that
day. Different firms may have different deadlines for accepting instructions
from their customers. Accordingly, beneficial owners of notes in book-entry form
should consult the participants through which they own their interest for the
respective deadlines. All instructions given to participants from beneficial
owners of notes in book-entry form relating to the option to elect repayment
will be irrevocable. In addition, at the time instructions are given, each
beneficial owner will cause the participant through which it owns its interest
to transfer its interest in the global security or securities representing the
related notes in book-entry form, on the depository's records, to the trustee.
See "--Book-Entry Notes."
If applicable, Indiana Gas will comply with the requirements of Section
14(e) of the Securities Exchange Act of 1934 and the rules promulgated
thereunder and any other securities laws or regulations in connection with any
repayment at the option of the holder.
Indiana Gas may at any time purchase notes at any price or prices in
the open market or otherwise. Notes so purchased by Indiana Gas may, at the
discretion of Indiana Gas, be held, resold or surrendered to the trustee for
cancellation.
S-8
<PAGE>
Interest
Each interest-bearing note will bear interest from the date of issue at
the rate per annum or, in the case of a floating rate note, pursuant to the
interest rate formula stated in the applicable note and in the applicable
pricing supplement until the principal of the note is paid or made available for
payment. Interest payments on fixed rate notes and floating rate notes will
equal the amount of interest accrued from and including the immediately
preceding interest payment date in respect of which interest has been paid or
made available for payment or from and including the date of issue, if no
interest has been paid or made available for payment with respect to the note,
to, but excluding, the related interest payment date or the Maturity Date, as
the case may be.
Interest will be payable in arrears on each interest payment date
specified in the applicable pricing supplement on which an installment of
interest is due and payable and on the Maturity Date. The first payment of
interest on any note originally issued between a regular record date and the
related interest payment date will be made on the interest payment date
immediately following the next succeeding regular record date to the registered
holder on the next succeeding regular record date. The regular record date will
be the fifteenth calendar day, whether or not a Business Day, immediately
preceding the related interest payment date.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which commercial banks are
authorized or required by law, regulation or executive order to close in The
City of New York; provided, however, with respect to Notes as to which LIBOR is
an applicable interest rate basis, that day is also a London Business Day.
"London Business Day" means a day on which commercial banks are open for
business (including dealings in the Designated LIBOR Currency (as defined
below)) in London.
Fixed Rate Notes
Unless otherwise specified in the applicable pricing supplement, each
fixed rate note will bear interest from the date of issue at the rate per annum
stated on the face of the note until the principal amount of the note is paid or
made available for payment. Unless otherwise specified in the applicable pricing
supplement, interest on fixed rate notes will be computed on the basis of a
360-day year of twelve 30-day months.
If any interest payment date or the Maturity Date of a fixed rate note
falls on a day that is not a Business Day, the related payment of principal,
premium, if any, or interest will be made on the next succeeding Business Day as
if made on the date the applicable payment was due and no interest will accrue
on the amount payable from and after the interest payment date or the Maturity
Date, as the case may be, to the date of such payment on the next succeeding
Business Day.
S-9
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Floating Rate Notes
Interest on floating rate notes will be determined by reference to the
applicable Interest Rate Basis or Interest Rate Bases, which may be one or more
of the following:
o the CD Rate,
o the CMT Rate,
o the Commercial Paper Rate,
o the Eleventh District Cost of Funds Rate,
o the Federal Funds Rate,
o LIBOR,
o the Prime Rate,
o the Treasury Rate, or
o any other Interest Rate Basis or interest rate formula that is
specified in the applicable pricing supplement.
A floating rate note may bear interest with respect to two or more
Interest Rate Bases.
Terms. Each applicable pricing supplement will specify the terms of the
floating rate note being delivered, including the following:
o whether the floating rate note is:
o a "Regular Floating Rate Note,"
o an "Inverse Floating Rate Note" or
o a "Floating Rate/Fixed Rate Note,"
o the Interest Rate Basis or Bases,
o the Initial Interest Rate,
o the Interest Reset Dates,
o the interest payment dates,
S-10
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o the period to maturity of the instrument or obligation with
respect to which the Interest Rate Basis or Bases will be
calculated (the "Index Maturity"),
o the Maximum Interest Rate and Minimum Interest Rate, if any,
o the number of basis points to be added to or subtracted from
the related Interest Rate Basis or Bases (the "Spread"),
o the percentage of the related Interest Rate Basis or Bases by
which the Interest Rate Basis or Bases will be multiplied to
determine the applicable interest rate (the "Spread
Multiplier"),
o if one or more of the specified Interest Rate Bases is LIBOR,
the Designated LIBOR Currency and the Designated LIBOR Page,
and
o if one or more of the specified Interest Rate Bases is the CMT
Rate, the Designated CMT Telerate Page and Designated CMT
Maturity Index.
The interest rate borne by the floating rate notes will be determined
as follows:
Regular Floating Rate Notes
Unless a floating rate note is designated as a Floating Rate/Fixed Rate
Note, an Inverse Floating Rate Note or as having an addendum attached or as
having "other provisions" apply relating to a different interest rate formula,
it will be a Regular Floating Rate Note and, except as described in an
applicable pricing supplement, will bear interest at the rate determined by
reference to the applicable Interest Rate Basis or Bases:
o plus or minus the applicable Spread, if any, and/or
o multiplied by the applicable Spread Multiplier, if any.
Floating Rate/Fixed Rate Notes
If a floating rate note is designated as a "Floating Rate/Fixed Rate
Note," it will bear interest at the rate determined by reference to the
applicable Interest Rate Basis or Bases:
o plus or minus the applicable Spread, if any, and/or
o multiplied by the applicable Spread Multiplier, if any.
Commencing on the first Interest Reset Date, the rate at which interest on the
applicable Floating Rate/Fixed Rate Note will be payable will be reset as of
each Interest Reset Date; provided, however, that:
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o the interest rate in effect for the period from the date of
issue to the first Interest Reset Date will be the Initial
Interest Rate, and
o the interest rate in effect commencing on, and including, the
date on which interest begins to accrue on a fixed rate basis
to maturity will be the Fixed Interest Rate, if the rate is
specified in the applicable pricing supplement, or if no Fixed
Interest Rate is specified, the interest rate in effect on the
Floating Rate/Fixed Rate Note on the day immediately preceding
the date on which interest begins to accrue on a fixed rate
basis.
Inverse Floating Rate Notes
If a floating rate note is designated as an "Inverse Floating Rate
Note," except as described below, it will bear interest equal to the Fixed
Interest Rate specified in the related pricing supplement minus the rate
determined by reference to the applicable Interest Rate Basis or Bases:
o plus or minus the applicable Spread, if any, and/or
o multiplied by the applicable Spread Multiplier, if any;
provided, however, that unless otherwise specified in the applicable pricing
supplement, the interest rate on the applicable Inverse Floating Rate Note will
not be less than zero percent. Commencing on the first Interest Reset Date, the
rate at which interest on the applicable Inverse Floating Rate Note is payable
will be Reset as of each Interest Reset Date; provided, however, that the
interest rate in effect for the period from the date of issue to the first
Interest Reset Date will be the Initial Interest Rate.
Unless otherwise specified in the applicable pricing supplement, the
interest rate with respect to each interest rate basis will be determined in
accordance with the applicable provisions below. Except as set forth above or in
the applicable pricing supplement, the interest rate in effect on each day shall
be (i) if that day is an Interest Reset Date (as defined below), the interest
rate determined as of the Interest Determination Date (as defined below)
immediately preceding such Interest Reset Date or (ii) if that day is not an
Interest Reset Date, the interest rate determined as of the Interest
Determination Date immediately preceding the most recent Interest Reset Date;
provided, however, that the interest rate in effect for the period from the date
of issue to the first Interest Reset Date will be the Initial Interest Rate
specified in the applicable pricing supplement.
Interest Reset Dates. The applicable pricing supplement will specify
the dates on which the interest rate on the related floating rate note will be
reset (each, an "Interest Reset Date"). Unless otherwise specified in the
applicable pricing supplement, the Interest Reset Dates will be, in the case of
floating rate notes which reset:
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o daily -- each Business Day;
o weekly -- the Wednesday of each week, with the exception of
weekly reset floating rate notes as to which the Treasury Rate
is an applicable Interest Rate Basis, which will reset the
Tuesday of each week, except as described below;
o monthly -- the third Wednesday of each month, with the
exception of monthly reset floating rate notes as to which the
Eleventh District Cost of Funds Rate is an applicable Interest
Rate Basis, which will reset on the first calendar day of the
month;
o quarterly -- the third Wednesday of March, June, September and
December of each year;
o semiannually -- the third Wednesday of the two months
specified in the applicable pricing supplement; and
o annually -- the third Wednesday of the month specified in the
applicable pricing supplement.
If any Interest Reset Date for any floating rate note would otherwise
be a day that is not a Business Day, the applicable Interest Reset Date will be
postponed to the next succeeding day that is a Business Day, except that in the
case of a floating rate note as to which LIBOR is an applicable Interest Rate
Basis, if the Business Day falls in the next succeeding calendar month, then the
Interest Reset Date will be the immediately preceding Business Day. In addition,
in the case of a floating rate note for which the Treasury Rate is an applicable
Interest Rate Basis, if the Interest Determination Date would otherwise fall on
an Interest Reset Date, then the applicable Interest Reset Date will be
postponed to the next succeeding Business Day.
Maximum and Minimum Interest Rates. A floating rate note may also have
either or both of the following:
o a maximum numerical limitation, or ceiling, on the rate at
which interest may accrue during any interest period (a
"Maximum Interest Rate"), and
o a minimum numerical limitation, or floor, on the rate at which
interest may accrue during any period (a "Minimum Interest
Rate").
Interest Payments. Each floating rate note will bear interest from the
date of issue at the rates specified in the applicable floating rate note until
the principal of the applicable note is paid or made available for payment.
Except as provided below or in the applicable pricing supplement, the interest
payment dates with respect to floating rate notes will be, in the case of
floating rate notes which reset:
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o daily, weekly or monthly -- the third Wednesday of each month
or on the third Wednesday of March, June, September and
December of each year, as specified in the applicable pricing
supplement;
o quarterly -- the third Wednesday of March, June, September and
December of each year;
o semiannually -- the third Wednesday of the two months of each
year specified in the applicable pricing supplement;
o annually -- the third Wednesday of the month of each year
specified in the applicable pricing supplement; and
o the Maturity Date.
If any interest payment date for any floating rate note other than the
Maturity Date, would otherwise be a day that is not a Business Day, the interest
payment date will be postponed to the next succeeding day that is a Business Day
except that in the case of a floating rate note as to which LIBOR is an
applicable Interest Rate Basis, if the Business Day falls in the next succeeding
calendar month, the applicable interest payment date will be the immediately
preceding Business Day. If the Maturity Date of a floating rate note falls on a
day that is not a Business Day, the payment of principal, premium, if any, and
interest will be made on the next succeeding Business Day, and no interest on
that payment will accrue for the period from and after the Maturity Date to the
date of that payment on the next succeeding Business Day.
All percentages resulting from any calculation on floating rate notes
will be rounded to the nearest one hundred-thousandth of a percentage point,
with five one-millionths of a percentage point rounded upwards. For example,
9.876545%, or .09876545, would be rounded to 9.87655%, or .0987655. All dollar
amounts used in or resulting from any calculation on floating rate notes will be
rounded to the nearest cent with one-half cent being rounded upward.
With respect to each floating rate note, accrued interest is calculated
by multiplying its principal amount by an accrued interest factor. Unless
otherwise specified in the applicable pricing supplement, the accrued interest
factor is computed by adding the interest factor calculated for each day in the
period for which accrued interest is being calculated.
o In the case of notes for which an applicable Interest Rate
Basis is the CD Rate, the Commercial Paper Rate, the Eleventh
District Cost of Funds Rate, the Federal Funds Rate, LIBOR or
the Prime Rate, the interest factor for each day will be
computed by dividing the interest rate applicable to
each day by 360.
o In the case of notes for which an applicable Interest Rate
Basis is the CMT Rate or the Treasury Rate, the interest
factor for each day will be
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computed by dividing the interest rate applicable to each day
by the actual number of days in the year.
o The interest factor for floating rate notes for which the
interest rate is calculated with reference to two or more
Interest Rate Bases will be calculated in each period in the
same manner as if only one of the applicable Interest Rate
Bases applied.
Interest Determination Dates. The interest rate applicable to each
interest reset period commencing on the Interest Reset Date with respect to that
interest reset period will be the rate determined as of the applicable "Interest
Determination Date" and calculated on or prior to the calculation date referred
to below.
o The Interest Determination Date with respect to the CD Rate,
the CMT Rate, the Commercial Paper Rate, the Federal Funds
Rate and the Prime Rate will be the second Business Day
preceding each Interest Reset Date for the related note.
o The Interest Determination Date with respect to the Eleventh
District Cost of Funds Rate will be the last working day of
the month immediately preceding each Interest Reset Date on
which the Federal Home Loan Bank of San Francisco publishes
the Index, as defined below.
o The Interest Determination Date with respect to LIBOR will be
the second London Business Day preceding each Interest Reset
Date; unless the Designated LIBOR Currency is British pounds
sterling, in which case the Interest Determination Date will
be the applicable Interest Reset Date.
o The Interest Determination Date with respect to the Treasury
Rate will be the day in the week in which the related Interest
Reset Date falls on which day Treasury Bills, as defined
below, are normally auctioned. Treasury Bills are normally
sold at auction on Monday of each week, unless Monday is a
legal holiday, in which case the auction is normally held on
the immediately following Tuesday, except that the auction may
be held on the preceding Friday; provided, however, that if an
auction is held on the Friday of the week preceding the
applicable Interest Reset Date, the related Interest
Determination Date will be the preceding Friday; and provided,
further, that if an auction falls on any Interest Reset Date,
then the related Interest Reset Date will instead be the first
business day following the auction.
o The Interest Determination Date pertaining to a floating rate
note the interest rate of which is determined with reference
to two or more Interest Rate Bases will be the latest business
day which is at least two business
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days before the applicable Interest Reset Date for the
applicable floating rate note on which each Interest Reset
Basis is determinable. Each Interest Rate Basis will be
determined as of the Interest Determination Date, and the
applicable interest rate will take effect on the related
Interest Reset Date.
Calculation Date. Unless otherwise provided in the applicable pricing
supplement, the trustee under the indenture will be the calculation agent. Upon
the request of the holder of any floating rate note, the calculation agent will
provide the interest rate then in effect and, if determined, the interest rate
that will become effective as a result of a determination made for the next
succeeding Interest Reset Date with respect to that floating rate note. Unless
otherwise specified in the applicable pricing supplement, the calculation date,
if applicable, pertaining to any Interest Determination Date will be the earlier
of:
o the tenth calendar day after the applicable Interest
Determination Date, or, if the tenth calendar day is not a
Business Day, the next succeeding Business Day; or
o the Business Day immediately preceding the applicable Interest
Payment Date or the Maturity Date, as the case may be.
CD Rate. CD Rate Notes will bear interest at the rates, calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any,
specified in the applicable CD Rate Notes and in any applicable pricing
supplement.
"CD Rate" means
(1) the rate on the applicable Interest Determination Date for
negotiable United States dollar certificates of deposit having
the Index Maturity specified in the applicable pricing
supplement as published in H.15(519) under the heading "CDs
(secondary market)," or
(2) if the rate referred to in clause (1) above is not so
published by 3:00 P.M., New York City time, on the related
calculation date, the rate on the applicable Interest
Determination Date for negotiable United States dollar
certificates of deposit of the Index Maturity specified in the
applicable pricing supplement as published in H.15 Daily
Update, or other recognized electronic source used for the
purpose of displaying the applicable rate, under the caption
"CDs (secondary market)," or
(3) if the rate referred to in clause (2) is not so published by
3:00 P.M., New York City time, on the related calculation
date, the rate on the applicable Interest Determination Date
calculated by the calculation agent as the arithmetic mean of
the secondary market offered rates as of 10:00 A.M.,
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New York City time, on the applicable Interest Determination
Date, of three leading non-bank dealers in negotiable United
States dollar certificates of deposit in The City of New York
(which may include an agent or its affiliates) selected by the
calculation agent for negotiable United States dollar
certificates of deposit of major United States money market
banks for negotiable certificates of deposit with a remaining
maturity closest to the Index Maturity specified in the
applicable pricing supplement in an amount that is
representative for a single transaction in that market at that
time, or
(4) if the dealers selected by the calculation agent are not
quoting as mentioned in clause (3) above, the CD Rate in
effect on the applicable Interest Determination Date.
"H.15(519)" means the weekly statistical release designated as
H.15(519), or any successor publication, published by the Board of Governors of
the Federal Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available
through the world- wide-web site of the Board of Governors of the Federal
Reserve System at http://www.bog.frb.fed.us/releases/h15/update, or any
successor site or publication.
CMT Rate. CMT Rate Notes will bear interest at the rates, calculated
with reference to the CMT Rate and the Spread and/or Spread Multiplier, if any,
specified in the applicable CMT Rate Notes and in any applicable pricing
supplement.
"CMT Rate" means
(1) the rate displayed on the Designated CMT Telerate Page under
the caption "...Treasury Constant Maturities... Federal
Reserve Board Release H.15... Mondays Approximately 3:45
P.M.," under the column for the Designated CMT Maturity Index
for
(a) if the Designated CMT Telerate Page is 7051 or any
other page as may replace that specified page on that
service, the applicable Interest Determination Date,
and
(b) if the Designated CMT Telerate Page is 7052 or any
other page as may replace that specified page on that
service, the weekly or the monthly average, as
specified in the applicable pricing supplement, for
the week or the month, as applicable, ended
immediately preceding the week or the month, as
applicable, in which the related Interest
Determination Date falls, or
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(2) if the rate referred to in clause (1) is no longer displayed
on the relevant page or is not so displayed by 3:00 P.M., New
York City time, on the related calculation date, the treasury
constant maturity rate for the Designated CMT Maturity Index
published in H.15(519), or
(3) if the rate referred to in clause (2) is no longer published
or is not published by 3:00 P.M., New York City time, on the
related calculation date, the treasury constant maturity rate
for the Designated CMT Maturity Index, or other United States
Treasury rate for the Designated CMT Maturity Index, for the
applicable Interest Determination Date with respect to the
applicable Interest Reset Date as may then be published by
either the Board of Governors of the Federal Reserve System or
the United States Department of the Treasury that the
calculation agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and
published in H.15(519), or
(4) if the rate referred to in clause (3) is not so published by
3:00 P.M., New York City time, on the applicable calculation
date, the rate on the applicable Interest Determination Date
calculated by the calculation agent as a yield to maturity,
based on the arithmetic mean of the secondary market offered
rates as of approximately 3:30 P.M., New York City time, on
the applicable Interest Determination Date reported, according
to their written records, by three leading primary United
States government securities dealers in The City of New York,
which may include an agent or its affiliates (each, a
"Reference Dealer"), selected by the calculation agent from
five Reference Dealers selected by the calculation agent after
eliminating the highest quotation, or, in the event of
equality, one of the highest, and the lowest quotation or, in
the event of equality, one of the lowest, for the most
recently issued direct noncallable fixed rate obligations of
the United States ("Treasury Notes") with an original maturity
of approximately the Designated CMT Maturity Index and a
remaining term to maturity of not less than such Designated
CMT Maturity Index minus one year, or
(5) if the calculation agent is unable to obtain three applicable
Treasury Note quotations as referred to in clause (4), the
rate on the applicable Interest Determination Date calculated
by the calculation agent as a yield to maturity based on the
arithmetic mean of the secondary market offered rates as of
approximately 3:30 P.M., New York City time, on the applicable
Interest Determination Date of three Reference Dealers in The
City of New York selected by the calculation agent from five
Reference Dealers selected by the calculation agent after
eliminating the highest quotation or, in the event of
equality, one of the highest and the lowest quotation or, in
the event of equality, one of the lowest, for Treasury Notes
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with an original maturity of the number of years that is the
next highest to the Designated CMT Maturity Index and a
remaining term to maturity closest to the Designated CMT
Maturity Index and in an amount of at least $100 million, or
(6) if three or four and not five of the Reference Dealers are
quoting as referred to in clause (5) above, the rate will be
calculated by the calculation agent as the arithmetic mean of
the offered rates obtained and neither the highest nor the
lowest of quotes will be eliminated, or
(7) if fewer than three Reference Dealers selected by the
calculation agent are quoting as mentioned in clause (6), the
CMT Rate in effect on the applicable Interest Determination
Date.
If two Treasury Notes with an original maturity as described in clause
(5) have remaining terms to maturity equally close to the Designated CMT
Maturity Index, the calculation agent will obtain from five Reference Dealers
quotations for the Treasury Notes with the shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on Bridge Telerate,
Inc. or any successor service on the page specified in the applicable pricing
supplement, or any other page as may replace that specified page on that
service, for the purpose of displaying Treasury Constant Maturities as reported
in H.15(519), or, if no page is specified in the applicable pricing supplement,
page 7052.
"Designated CMT Maturity Index" means the original period to maturity
of the U.S. Treasury securities, either 1, 2, 3, 5, 7, 10, 20 or 30 years,
specified in the applicable pricing supplement with respect to which the CMT
Rate will be calculated or, if no maturity is specified in the applicable
pricing supplement, 2 years.
Commercial Paper Rate. Commercial Paper Rate Notes will bear interest
at the rates, calculated with reference to the Commercial Paper Rate and the
Spread and/or Spread Multiplier, if any, specified in the applicable Commercial
Paper Rate Notes and in any applicable pricing supplement.
"Commercial Paper Rate" means
(1) the Money Market Yield on the applicable Interest
Determination Date of the rate for commercial paper having the
Index Maturity specified in the applicable pricing supplement
published in H.15(519) under the caption "Commercial
Paper-Nonfinancial," or
(2) if the rate described in clause (1) is not so published by
3:00 P.M., New York City time, on the related calculation
date, the Money Market Yield
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of the rate on the applicable Interest Determination Date for
commercial paper having the Index Maturity specified in the
applicable pricing supplement published in H.15 Daily Update,
or other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "Commercial
Paper-Nonfinancial," or
(3) if the rate is referred to in clause (2) is not so published
by 3:00 P.M., New York City time, on the related calculation
date, the rate on the applicable Interest Determination Date
calculated by the calculation agent as the Money Market Yield
of the arithmetic mean of the offered rates at approximately
11:00 A.M., New York City time, on the applicable Interest
Determination Date of three leading dealers of United States
dollar commercial paper in The City of New York, which may
include an agent and its affiliates, selected by the
calculation agent for commercial paper having the Index
Maturity specified in the applicable pricing supplement placed
for industrial issuers whose bond rating is "Aa," or the
equivalent, from a nationally recognized statistical rating
organization, or
(4) if the dealers selected by the calculation agent are not
quoting as mentioned in clause (3), the Commercial Paper Rate
in effect on the applicable Interest Determination Date.
"Money Market Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
Money Market = D x 360 x 100
----------------------
360 - ( D x M )
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the applicable interest reset period.
Eleventh District Cost of Funds Rate. Eleventh District Cost of Funds
Rate Notes will bear interest at the rates, calculated with reference to the
Eleventh District Cost of Funds Rate and the Spread and/or Spread Multiplier, if
any, specified in the applicable Eleventh District Cost of Funds Rate Notes and
in any applicable pricing supplement.
"Eleventh District Cost of Funds Rate" means
(1) the rate equal to the monthly weighted average cost of funds
for the calendar month immediately preceding the month in
which the applicable Interest Determination Date falls as set
forth under the caption "11th District" on the display on
Bridge Telerate, Inc. or any successor service
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on page 7058 or any other page as may replace that specified
page on that service ("Telerate Page 7058"), as of 11:00 A.M.,
San Francisco time, on the applicable Interest Determination
Date, or
(2) if the rate referred to in clause (1) does not appear on
Telerate Page 7058 on the related Interest Determination Date,
the monthly weighted average cost of funds paid by member
institutions of the Eleventh Federal Home Loan Bank District
that was most recently announced (the "Index") by the Federal
Home Loan Bank of San Francisco as the cost of funds for the
calendar month immediately preceding the applicable Interest
Determination Date, or
(3) if the Federal Home Loan Bank of San Francisco fails to
announce the Index on or before the applicable Interest
Determination Date for the calendar month immediately
preceding the applicable Interest Determination Date, the
Eleventh District Cost of Funds Rate in effect on the
applicable Interest Determination Date.
Federal Funds Rate. Federal Funds Rate Notes will bear interest at the
rates, calculated with reference to the Federal Funds Rate and the Spread and/or
Spread Multiplier, if any, specified in the applicable Federal Funds Rate Notes
and in any applicable pricing supplement.
"Federal Funds Rate" means
(1) the rate on the applicable Interest Determination Date for
United States dollar federal funds as published in H.15(519)
under the heading "Federal Funds (Effective)," as displayed on
Bridge Telerate, Inc. or any successor service on page 120 or
any other page as may replace that specified page on that
service ("Telerate Page 120"), or
(2) if the rate referred to in clause (1) does not appear on
Telerate Page 120 or is not so published by 3:00 P.M., New
York City time, on the related calculation date, the rate on
the applicable Interest Determination Date for United States
dollar federal funds published in H.15 Daily Update, or other
recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "Federal
Funds (Effective)," or
(3) if the rate referred to in clause (2) does not appear on
Telerate Page 120 or is not so published by 3:00 P.M., New
York City time, on the related calculation date, the rate on
the applicable Interest Determination Date calculated by the
calculation agent as the arithmetic mean of the rates for the
last transaction in overnight United States dollar federal
funds arranged by three leading brokers of United States
dollar federal funds transactions in The City of New York,
which may include the agent or its affiliates,
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selected by the calculation agent before 9:00 A.M., New York
City time, on the applicable Interest Determination Date, or
(4) if the brokers selected by the calculation agent are not
quoting as mentioned in clause (3), the Federal Funds Rate in
effect on the applicable Interest Determination Date.
LIBOR. LIBOR Notes will bear interest at the rates, calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any, specified in
the applicable LIBOR Notes and in any applicable pricing supplement.
"LIBOR" means
(1) if "LIBOR Telerate" is specified in the applicable pricing
supplement or if neither "LIBOR Reuters" nor "LIBOR Telerate"
is specified in the applicable pricing supplement as the
method for calculating LIBOR, the rate for deposits in the
Designated LIBOR Currency having the Index Maturity specified
in the applicable pricing supplement, commencing on the
applicable Interest Reset Date that appears on the Designated
LIBOR Page as of 11:00 A.M., London time, on the applicable
Interest Determination Date, or
(2) if "LIBOR Reuters" is specified in the applicable pricing
supplement, the arithmetic mean of the offered rates for
deposits in the Designated LIBOR Currency having the Index
Maturity specified in the applicable pricing supplement,
commencing on the applicable Interest Reset Date, that appear
on the Designated LIBOR Page specified in the applicable
pricing supplement as of 11:00 A.M., London time, on the
applicable Interest Determination Date; provided, that, if the
Designated LIBOR Page by its terms provides only for a single
rate, then the single rate will be used, or
(3) with respect to a LIBOR Interest Determination Date on which
fewer than two offered rates appear, or no rate appears, as
the case may be, on the designated LIBOR Page as specified in
clauses (1) and (2), respectively, the rate calculated by the
calculation agent as the arithmetic mean of at least two
quotations obtained by the calculation agent after requesting
the principal London offices of each of four major reference
banks, which may include affiliates of an agent, in the London
interbank market to provide the calculation agent with its
offered quotation for deposits in the Designated LIBOR
Currency for the period of the Index Maturity specified in the
applicable pricing supplement, commencing on the applicable
Interest Reset Date, to prime banks in the London interbank
market at approximately 11:00 A.M., London time, on the
applicable Interest Determination Date and in a principal
amount that is
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representative for a single transaction in the Designated
LIBOR Currency in that market at that time, or
(4) if fewer than two quotations referred to in clause (3) are so
provided, the rate on the applicable Interest Determination
Date calculated by the calculation agent as the arithmetic
mean of the rates quoted at approximately 11:00 A.M., in the
applicable Principal Financial Center on the applicable
Interest Determination Date by three major banks in such
Principal Financial Center selected by the calculation agent,
which may include affiliates of an agent, for loans in the
Designated LIBOR Currency to leading European banks, having
the Index Maturity designated in the applicable pricing
supplement and in a principal amount that is representative
for a single transaction in that market at that time, or
(5) if the banks so selected by the calculation agent are not
quoting as mentioned in clause (4), LIBOR in effect on the
applicable Interest Determination Date.
"Designated LIBOR Currency" means the currency specified in the
applicable pricing supplement as to which LIBOR shall be calculated or, if no
such currency is specified in the applicable pricing supplement, United States
dollars.
"Designated LIBOR Page" means either:
o if "LIBOR Telerate" is designated in the applicable pricing
supplement or neither "LIBOR Reuters" nor "LIBOR Telerate" is
specified in the applicable pricing supplement as the method
for calculating LIBOR, the display on Bridge Telerate, Inc. or
any successor service on the page specified in such pricing
supplement or any page as may replace the specified page on
that service for the purpose of displaying the London
interbank rates of major banks for the Designated LIBOR
Currency, or
o if "LIBOR Reuters" is specified in the applicable pricing
supplement, the display on the Reuter Monitor Money Rates
Service or any successor service on the page specified in the
applicable pricing supplement or any other page as may replace
the specified page on that service for the purpose of
displaying the London interbank rates of major banks for the
Designated LIBOR Currency.
"Principal Financial Center" means the capital city of the country to
which the Designated LIBOR Currency relates, except that with respect to United
States dollars, Australian dollars, Canadian dollars, Deutsche marks, Dutch
guilders, Italian lire, Portuguese escudos, South African rand and Swiss francs,
the "Principal Financial Center" shall be The City of New
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York, Sydney, Toronto, Frankfurt, Amsterdam, Milan, London, Johannesburg and
Zurich, respectively.
Prime Rate. Prime Rate Notes will bear interest at the rates,
calculated with reference to the Prime Rate and the Spread and/or Spread
Multiplier, if any, specified in the applicable Prime Rate Notes and any
applicable pricing supplement.
"Prime Rate" means
(1) the rate on the applicable Interest Determination Date as
published in H.15(519) under the heading "Bank Prime Loan," or
(2) if the rate referred to in clause (1) is not so published by
3:00 P.M., New York City time, on the related calculation
date, the rate on the applicable Interest Determination Date
published in H.15 Daily Update, or such other recognized
electronic source used for the purpose of displaying the
applicable rate under the caption "Bank Prime Loan," or
(3) if the rate referred to in clause (2) is not so published by
3:00 P.M., New York City time, on the related calculation
date, the rate calculated by the calculation agent as the
arithmetic mean of the rates of interest publicly announced by
at least four banks that appear on the Reuters Screen US PRIME
1 Page as the particular bank's prime rate or base lending
rate as of 11:00 A.M., New York City time, on the applicable
Interest Determination Date, or
(4) if fewer than four rates referred to in clause (3) so appear
on the Reuters Screen US PRIME 1 Page, the rate on the
applicable Interest Determination Date calculated by the
calculation agent as the arithmetic mean of the prime rates or
base lending rates quoted on the basis of the actual number of
days in the year divided by a 360-day year as of the close of
business on the applicable Interest Determination Date by
three major banks, which may include affiliates of an agent,
in The City of New York selected by the calculation agent, or
(5) if the banks selected by the calculation agent are not quoting
as mentioned in clause (4), the Prime Rate in effect on the
applicable Interest Determination Date.
"Reuters Screen US PRIME 1 Page" means the display on the Reuter
Monitor Money Rates Service or any successor service on the "US PRIME 1" page,
or other page as may replace the US PRIME 1 Page on such service, for the
purpose of displaying prime rates or base lending rates of major United States
banks.
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Treasury Rate. Treasury Rate Notes will bear interest at the rates,
calculated with reference to the Treasury Rate and the Spread and/or Spread
Multiplier, if any, specified in the applicable Treasury Rate Notes and in any
applicable pricing supplement.
"Treasury Rate" means
(1) the rate from the auction held on the applicable Interest
Determination Date (the "Auction") of direct obligations of
the United States ("Treasury Bills") having the Index Maturity
specified in the applicable pricing supplement under the
caption "INVESTMENT RATE" on the display on Bridge Telerate,
Inc. or any successor service on page 56 or any other page as
may replace that specified page on that service ("Telerate
Page 56") or page 57 or any other page as may replace that
specified page on that service ("Telerate Page 57"), or
(2) if the rate described in clause (1) is not so published by
3:00 P.M., New York City time, on the related calculation
date, the Bond Equivalent Yield (as defined below) of the rate
for the applicable Treasury Bills as published in H.15 Daily
Update, or other recognized electronic source used for the
purpose of displaying the applicable rate, under the caption
"U.S. Government Securities/Treasury Bills/Auction High," or
(3) if the rate described in clause (2) is not so published by
3:00 P.M., New York City time, on the related calculation
date, the Bond Equivalent Yield of the auction rate of the
applicable Treasury Bills as announced by the United States
Department of the Treasury, or
(4) in the event that the rate referred to in clause (3) is not
announced by the United States Department of the Treasury, or
if the Auction is not held, the Bond Equivalent Yield of the
rate on the applicable Interest Determination Date of Treasury
Bills having the Index Maturity specified in the applicable
pricing supplement published in H.15(519) under the caption
"U.S. Government Securities/Treasury Bills/Secondary Market,"
or
(5) if the rate referred to in clause (4) is not so published by
3:00 P.M., New York City time, on the related calculation
date, the rate on the applicable Interest Determination Date
of the applicable Treasury Bills as published in H.15 Daily
Update, or other recognized electronic source used for the
purpose of displaying the applicable rate, under the caption
"U.S. Government Securities/Treasury Bills/Secondary Market,"
or
(6) if the rate referred to in clause (5) is not so published by
3:00 P.M., New York City time, on the related calculation
date, the rate calculated by the calculation agent as the Bond
Equivalent Yield of the arithmetic mean of
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the secondary market bid rates, as of approximately 3:30 P.M.,
New York City time, on the applicable Interest Determination
Date, of three primary United States government securities
dealers, which may include an agent or its affiliates,
selected by the calculation agent, for the issue of Treasury
Bills with a remaining maturity closest to the Index Maturity
specified in the applicable pricing supplement, or
(7) if the dealers selected by the calculation agent are not
quoting as mentioned in clause (6), the Treasury Rate in
effect on the applicable Interest Determination Date.
"Bond Equivalent Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
Bond Equivalent Yield = D x N x 100
---------
360 - ( D x M )
where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the applicable interest reset period.
Other Provisions; Addenda
Any provisions with respect to an issue of notes, including the
determination of one or more Interest Rate Bases, the specification of one or
more Interest Rate Bases, the calculation of the interest rate applicable to a
floating rate note, the applicable interest payment dates, the stated maturity
date, any redemption or repayment provisions or any other matters relating to
the applicable notes may be modified by the terms as specified under "Other
Provisions" on the face of the applicable notes or in an Addendum relating to
the applicable notes, if so specified on the face of the applicable notes and in
the applicable pricing supplement.
Discount Notes
Indiana Gas may from time to time offer notes at a price that is less
than 100% of the principal amount of the note ("Discount Notes"). Discount Notes
may not bear any interest currently or may bear interest at a rate that is below
market rates at the time of issuance. The difference between the issue price of
a Discount Note and 100% of the principal amount is referred to as the
"discount." On the Maturity Date, the amount payable to the holder will be equal
to the sum of (i) the issue price (increased by any accruals of discount) and,
in the event of any redemption of a Discount Note (if applicable), multiplied by
the initial redemption percentage (as adjusted by the annual redemption
percentage reduction, if applicable) and (ii) any unpaid interest accrued
thereon to the Maturity Date.
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Unless otherwise specified in the applicable pricing supplement, for
purposes of determining the amount of discount that has accrued as of any
Maturity Date, the discount will be accrued using a constant yield method. The
constant yield will be calculated using a 30-day month, 360-day year convention,
a compounding period that, except for the Initial Period (as defined below),
corresponds to the shortest period between interest payment dates for the
applicable Discount Note (with ratable accruals within a compounding period), a
coupon rate equal to the initial coupon rate applicable to the Discount Note and
an assumption that the maturity of such Discount Note will not be accelerated.
If the period from the date of issue to the initial interest payment date for a
Discount Note (the "Initial Period") is shorter than the compounding period for
the Discount Note, a proportionate amount of the yield for an entire compounding
period will be accrued. If the Initial Period is longer than the compounding
period, then the period will be divided into a regular compounding period and a
short period with the short period being treated as provided in the preceding
sentence. The accrual of the applicable discount may differ from the accrual of
original issue discount for purposes of the Internal Revenue Code of 1986, as
amended (the "Code") certain Discount Notes may not be treated as having
original issue discount within the meaning of the Code and notes other than
Discount Notes may be treated as issued with original issue discount for federal
income tax purposes. See "Certain United States Federal Income Tax
Considerations."
Amortizing Notes
Indiana Gas may from time to time offer notes ("Amortizing Notes"),
with amounts of principal and interest payable in installments over the term of
the notes. Unless otherwise specified in the applicable pricing supplement,
interest on each Amortizing Note will be computed on the basis of a 360-day year
of twelve 30-day months. Payments with respect to Amortizing Notes will be
applied first to interest due and payable on the Amortizing Notes and then to
the reduction of the unpaid principal amount of the Amortizing Notes. Further
information concerning additional terms and conditions of any issue of
Amortizing Notes will be provided in the applicable pricing supplement. A table
setting forth repayment information in respect of each Amortizing Note will be
included in the applicable note and the applicable pricing supplement.
Book-Entry Notes
Description of the Global Securities
Upon issuance, all notes in book-entry form having the same date of
issue, interest rate or formula, stated maturity date and redemption and/or
repayment provisions, if any, and otherwise having identical terms and
provisions will be represented by one or more fully registered global notes (the
"Global Notes"). Each Global Note will be deposited with, or on behalf of, The
Depository Trust Company, as depository, registered in the name of the
depository or a nominee of the depository. Unless and until it is exchanged in
whole or in part for notes in certificated form, no Global Note may be
transferred except as a whole by the depository to a nominee of the depository
or by a nominee of the depository to the depository or another nominee of the
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depository or by the depository or any such nominee to a successor of the
depository or a nominee of the successor.
DTC Procedures
The following is based on information furnished by the depository:
The depository will act as securities depository for the notes in
book-entry form. The notes in book-entry form will be issued as fully registered
securities registered in the name of Cede & Co., the depository's partnership
nominee. One fully registered Global Note will be issued for each issue of notes
in book-entry form, each in the aggregate principal amount of the issue, and
will be deposited with the depository.
The depository is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. The depository holds securities that its
participants deposit with the depository. The depository also facilitates the
settlement among participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct participants of the depository
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. The depository is owned by a
number of its direct participants and by the New York Stock Exchange, Inc., the
American Stock Exchange LLC, and the National Association of Securities Dealers,
Inc. Access to the depository's system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a direct participant, either directly or
indirectly. The rules applicable to the depository and its participants are on
file with the Securities and Exchange Commission.
Purchasers of notes in book-entry form under the depository's system
must be made by or through direct participants, which will receive a credit for
those notes in book-entry form on the depository's records. The ownership
interest of each actual purchaser of each note in book-entry form represented by
a Global Note is, in turn, to be recorded on the records of direct participants
and indirect participants. Beneficial owners in book-entry form will not receive
written confirmation from the depository of their purchase, but beneficial
owners are expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the direct
participants or indirect participants through which the beneficial owner entered
into the transaction. Transfers of ownership interests in a Global Note
representing notes in book-entry form are to be accomplished by entries made on
the books of participants acting on behalf of beneficial owners. Beneficial
owners of a Global Note representing notes in book-entry form will not receive
notes in certificated form representing their ownership interests therein,
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except in the event that use of the book-entry system for such notes in
book-entry form is discontinued.
To facilitate subsequent transfers, all Global Notes representing notes
in book-entry form which are deposited with, or on behalf of, the depository are
registered in the name of the depository's nominee, Cede & Co. The deposit of
Global Notes with, or on behalf of, the depository and their registration in the
name of Cede & Co. effect no change in beneficial ownership. The depository has
no knowledge of the actual beneficial owners of the Global Notes representing
the notes in book-entry form; the depository's records reflect only the identity
of the direct participants to whose accounts such notes in book-entry form are
credited, which may or may not be the beneficial owners. The participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by the depository to
direct participants, by direct participants to indirect participants, and by
direct participants and indirect participants to beneficial owners, will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Neither the depository nor Cede & Co. will consent or vote with respect
to the Global Notes representing the notes in book-entry form. Under its usual
procedures, the depository mails an omnibus proxy to Indiana Gas as soon as
possible after the applicable record date. The omnibus proxy assigns Cede &
Co.'s consenting or voting rights to those direct participants, identified in a
listing attached to the omnibus proxy, to whose accounts the notes in book-entry
form are credited on the applicable record date.
Indiana Gas will make principal, premium, if any, and/or interest, if
any, payments on the Global Notes representing the notes in book-entry form in
immediately available funds to the depository. The depository's practice is to
credit direct participants' accounts on the applicable payment date in
accordance with their respective holdings shown on the depository's records
unless the depository has reason to believe that it will not receive payment on
the applicable payment date. Payments by participants to beneficial owners will
be governed by standing instructions and customary practices, as is the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of the applicable participant
and not of the depository, the trustee or Indiana Gas, subject to any statutory
or regulatory requirements as may be in effect from time to time. Payment of
principal, premium, if any, and/or interest, if any, to the depository is the
responsibility of Indiana Gas and the trustee, disbursement of payments to
direct participants will be the responsibility of the depository, and
disbursement of payments to the beneficial owners will be the responsibility of
direct participants and indirect participants.
If applicable, redemption notices shall be sent to Cede & Co. If less
than all of the notes in book-entry form of like tenor and terms are being
redeemed, the depository's practice is to determine by lot the amount of the
interest of each direct participant in the issue to be redeemed.
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A beneficial owner will give notice of any option to elect to have its
notes in book-entry form repaid by Indiana Gas, through its participant, to the
trustee, and will effect delivery of the applicable notes in book-entry form by
causing the direct participant to transfer the participant's interest in the
Global Note notes in book-entry form, on the depository's records, to the
trustee.
Management of the depository is aware that some computer applications,
systems and the like for processing data ("Systems") that are dependent upon
calendar dates, including dates before, on, and after January 1, 2000, may
encounter "Year 2000 problems." The depository has informed direct participants
and indirect participants and other members of the financial community (the
"Industry") that it has developed and is implementing a program so that its
Systems, as the same relate to the timely payment of distributions (including
principal and interest payments) to securityholders, book-entry deliveries, and
settlement of trades within the depository ("Depository Services"), continue to
function appropriately. This program includes a technical assessment and a
remediation plan, each of which is complete. Additionally, the depository's plan
incudes a testing phase, which is expected to be completed within appropriate
time frames.
However, the depository's ability to perform properly its services is
also dependent upon other parties, including, but not limited to, issuers and
their agents, as well as the depositary's direct participants and indirect
participants, third party vendors from whom the depository licenses software and
hardware, and third party vendors on whom the depository relies for information
or the provision of services, including telecommunication and electrical utility
service providers, among others. The depository has informed the Industry that
it is contacting (and will continue to contact) third party vendors from whom
the depository acquires services to: (i) impress upon them the importance of
such services being Year 2000 compliant; and (ii) determine the extent of their
efforts for Year 2000 remediation (and, as appropriate, testing) of their
services. In addition, the depository is in the process of developing such
contingency plans as it deems appropriate.
According to the depository, the information in the preceding two
paragraphs with respect to the depository has been provided to the Industry for
informational purposes only and is not intended to serve as a representation,
warranty, or contract modification of any kind.
The depository may discontinue providing its services as securities
depository with respect to the notes in book-entry form at any time by giving
reasonable notice to Indiana Gas or the trustee. In the event that a successor
securities depository is not obtained, notes in certificated form are required
to be printed and delivered.
Indiana Gas may decide to discontinue use of the system of book-entry
transfers through the depository or a successor securities depository. In that
event, notes in certificated form will be printed and delivered.
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The laws of some states may require that certain purchasers of
securities take physical delivery of securities in definitive form. Such limits
and such laws may impair the ability to own, transfer or pledge beneficial
interests in Global Notes.
So long as the depository, or its nominee, is the registered owner of a
Global Note, the depository or its nominee, as the case may be, will be
considered the sole owner or holder of the notes represented by such Global Note
for all purposes under the indenture. Except as provided below, beneficial
owners of a Global Note will not be entitled to have the notes represented by a
Global Note registered in their names, will not receive or be entitled to
receive physical delivery of the notes in definitive form and will not be
considered the owners or holders thereof under the indenture. Accordingly, each
person owning a beneficial interest in a Global Note must rely on the procedures
of the depository and, if that person is not a participant, on the procedures of
the participant through which that person owns its interest, to exercise any
rights of a holder under the indenture. Indiana Gas understands that under
existing industry practices, in the event that Indiana Gas requests any action
of holders or that an owner of a beneficial interest in a Global Note desires to
give or take any action which a holder is entitled to give or take under the
indenture, the depository would authorize the participants holding the relevant
beneficial interests to give or take the desired action, and the participants
would authorize beneficial owners owning through the participants to give or
take the desired action or would otherwise act upon the instructions of
beneficial owners.
Exchange for Notes in Certificated Form
If:
(a) the depository is at any time unwilling or unable to continue
as depository and a successor depository is not appointed by
Indiana Gas within 60 days,
(b) Indiana Gas executes and delivers to the trustee a company
order to the effect that the Global Notes shall be
exchangeable, or
(c) a default or an event of default has occurred and is
continuing with respect to the notes,
the Global Note or Global Notes will be exchangeable for notes in certificated
form of like tenor and of an equal aggregate principal amount, in denominations
of $1,000 and integral multiples of $1,000. The certificated notes will be
registered in the name or names as the depository instructs the trustee. It is
expected that instructions may be based upon directions received by the
depository from participants with respect to ownership of beneficial interests
in Global Notes.
The information in this section concerning the depository and the
depository's system has been obtained from sources that Indiana Gas believes to
be reliable, but Indiana Gas takes no responsibility for the accuracy of the
information.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain United States federal income tax
consequences of the purchase, ownership and disposition of the notes is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change (including changes in effective dates) or possible differing
interpretations. It deals only with notes held as capital assets and does not
purport to deal with persons in special tax situations, such as financial
institutions, insurance companies, regulated investment companies, dealers in
securities or currencies, persons holding notes as a hedge against currency
risks or as a position in a "straddle" for tax purposes, or persons whose
functional currency is not the United States dollar. It also does not deal with
holders other than original purchasers (except where otherwise specifically
noted). Persons considering the purchase of the notes should consult their own
tax advisors concerning the application of United States federal income tax laws
to their particular situations as well as any consequences of the purchase,
ownership and disposition of the notes arising under the laws of any other
taxing jurisdiction.
As used in this discussion, the term "U.S. Holder" means a beneficial
owner of a note that is for United States federal income tax purposes (i) a
citizen or resident of the United States, (ii) a corporation, partnership or
other entity (treated as a corporation or a partnership for federal income tax
purposes) created or organized in or under the laws of the United States, any
state of the United States or the District of Columbia, (other than a
partnership that is not treated as a United States person under any applicable
treasury regulations), (iii) an estate whose income is subject to United States
federal income tax regardless of its source or (iv) a trust if a court within
the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust. Notwithstanding the
preceding sentence, to the extent provided in treasury regulations, certain
trusts in existence on August 20, 1996, and treated as United States persons
under the Code and applicable treasury regulations thereunder prior to such
date, that elect to continue to be treated as United States persons under the
Code or applicable treasury regulations thereunder also will be a U.S. Holder.
As used in this discussion, the term "non-U.S. Holder" means a beneficial owner
of a note that is not a U.S.
Holder.
U.S. Holders
Payments of Interest
Payments of interest on a note generally will be taxable to a U.S.
Holder as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting).
Original Issue Discount
The following summary is a general discussion of the United States
federal income tax consequences to U.S. Holders of the purchase, ownership and
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disposition of Discount Notes. The following summary is based upon final
treasury regulations (the "OID Regulations") released by the Internal Revenue
Service ("IRS") on January 27, 1994, as amended on June 11, 1996, under the
original issue discount provisions of the Code.
For United States federal income tax purposes, original issue discount
is the excess of the stated redemption price at maturity of a note over its
issue price, if such excess equals or exceeds a de minimis amount (generally 1/4
of 1% of the note's stated redemption price at maturity multiplied by the number
of complete years to its maturity from its issue date or, in the case of a note
providing for the payment of any amount other than qualified stated interest (as
defined below) prior to maturity, multiplied by the weighted average maturity of
such note). The issue price of each note in an issue of notes equals the first
price at which a substantial amount of such notes has been sold (ignoring sales
to bond houses, brokers, or similar persons or organizations acting in the
capacity of underwriters, placement agents, or wholesalers). The stated
redemption price at maturity of a note is the sum of all payments provided by
the note other than "qualified stated interest" payments. The term "qualified
stated interest" generally means stated interest that is unconditionally payable
in cash or property (other than debt instruments of the issuer) at least
annually at a single fixed rate. In addition, under the OID Regulations, if a
note bears interest for one or more accrual periods at a rate below the rate
applicable for the remaining term of such note (e.g., notes with teaser rates or
interest holidays), and if the greater of either the resulting foregone interest
on such note or any "true" discount on such note (i.e., the excess of the note's
stated principal amount over its issue price) equals or exceeds a specified de
minimis amount, then the stated interest on the note would be treated as
original issue discount rather than qualified stated interest.
Payments of qualified stated interest on a note are taxable to a U.S.
Holder as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of a Discount Note must include original issue
discount in income as ordinary interest for United States federal income tax
purposes as it accrues under a constant yield method in advance of receipt of
the cash payments attributable to such income, regardless of such U.S. Holder's
regular method of tax accounting. In general, the amount of original issue
discount included in income by the initial U.S. Holder of a Discount Note is the
sum of the daily portions of original issue discount with respect to the
Discount Note for each day during the taxable year (or portion of the taxable
year) on which the U.S. Holder held the Discount Note. The "daily portion" of
original issue discount on any Discount Note is determined by allocating to each
day in any accrual period a ratable portion of the original issue discount
allocable to that accrual period. An "accrual period" may be of any length and
the accrual periods may vary in length over the term of the Discount Note,
provided that each accrual period is no longer than one year and each scheduled
payment of principal or interest occurs either on the final day of an accrual
period or on the first day of an accrual period. The amount of original issue
discount allocable to each accrual period is generally equal to the difference
between (i) the product of the Discount Note's adjusted issue price at the
beginning of such accrual period and its yield to maturity (determined on the
basis of compounding at the close of each accrual period and appropriately
adjusted to take into account the length of the particular accrual period) and
(ii) the amount of any qualified stated interest payments allocable to such
accrual period. The "adjusted issue price" of a Discount Note at the beginning
of any accrual period is the sum of the issue price of the Discount Note plus
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the amount of original issue discount allocable to all prior accrual periods
minus the amount of any prior payments on the Discount Note that were not
qualified stated interest payments. Under these rules, U.S. Holders generally
will have to include in income increasingly greater amounts of original issue
discount in successive accrual periods.
A U.S. Holder who purchases a Discount Note for an amount that is
greater than its adjusted issue price as of the purchase date and less than or
equal to the sum of all amounts payable on the Discount Note after the purchase
date other than payments of qualified stated interest, will be considered to
have purchased the Discount Note at an "acquisition premium." Under the
acquisition premium rules, the amount of original issue discount which such U.S.
Holder must include in its gross income with respect to such Discount Note for
any taxable year (or portion thereof in which the U.S. Holder holds the Discount
Note) will be reduced (but not below zero) by the portion of the acquisition
premium properly allocable to the period.
Under the OID Regulations, floating rate notes are subject to special
rules whereby a floating rate note will qualify as a "variable rate debt
instrument" if (a) its issue price does not exceed the total noncontingent
principal payments due under the floating rate note by more than a specified de
minimis amount and (b) it provides for stated interest, paid or compounded at
least annually, at current values of (i) one or more qualified floating rates,
(ii) a single fixed rate and one or more qualified floating rates, (iii) a
single objective rate, or (iv) a single fixed rate and a single objective rate
that is a qualified inverse floating rate.
A "qualified floating rate" is any variable rate where variations in
the value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
floating rate note is denominated. Although a multiple of a qualified floating
rate will generally not itself constitute a qualified floating rate, a variable
rate equal to the product of a qualified floating rate and a fixed multiple that
is greater than 0.65 but not more than 1.35 will constitute a qualified floating
rate. A variable rate equal to the product of a qualified floating rate and a
fixed multiple that is greater than 0.65 but not more than 1.35, increased or
decreased by a fixed rate, will also constitute a qualified floating rate. In
addition, under the OID Regulations, two or more qualified floating rates that
can reasonably be expected to have approximately the same values throughout the
term of the floating rate note (e.g., two or more qualified floating rates with
values within 25 basis points of each other as determined on the floating rate
note's issue date) will be treated as a single qualified floating rate.
Notwithstanding the foregoing, a variable rate that would otherwise constitute a
qualified floating rate but which is subject to one or more restrictions such as
a maximum numerical limitation (i.e., a cap) or a minimum numerical limitation
(i.e., a floor) may, under certain circumstances, fail to be treated as a
qualified floating rate under the OID Regulations unless such cap or floor is
fixed throughout the term of the note. An "objective rate" is a rate that is not
itself a qualified floating rate but which is determined using a single fixed
formula and that is based on objective financial or economic information. A rate
will not qualify as an objective rate if it is based on information that is
within the control of the issuer (or a related party) or that is unique to the
circumstances of the issuer (or a related party), such as dividends, profits, or
the value of the issuer's stock (although a rate does not fail to be an
objective rate merely because it is based on the credit quality of the issuer).
A "qualified
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inverse floating rate" is any objective rate where such rate is equal to a fixed
rate minus a qualified floating rate, as long as variations in the rate can
reasonably be expected to inversely reflect contemporaneous variations in the
qualified floating rate. The OID Regulations also provide that if a floating
rate note provides for stated interest at a fixed rate for an initial period of
one year or less followed by a variable rate that is either a qualified floating
rate or an objective rate and if the variable rate on the floating rate note's
issue date is intended to approximate the fixed rate (e.g., the value of the
variable rate on the issue date does not differ from the value of the fixed rate
by more than 25 basis points), then the fixed rate and the variable rate
together will constitute either a single qualified floating rate or objective
rate, as the case may be.
If a floating rate note that provides for stated interest at either a
single qualified floating rate or a single objective rate throughout the term
thereof qualifies as a "variable rate debt instrument" under the OID Regulations
and if the interest on such note is unconditionally payable in cash or property
(other than debt instruments of the issuer) at least annually, then all stated
interest on the note will constitute qualified stated interest and will be taxed
accordingly. Thus, a floating rate note that provides for stated interest at
either a single qualified floating rate or a single objective rate throughout
the term thereof and that qualifies as a "variable rate debt instrument" under
the OID Regulations will generally not be treated as having been issued with
original issue discount unless the floating rate note is issued at a "true"
discount (i.e., at a price below the note's stated principal amount) in excess
of a specified de minimis amount. The amount of qualified stated interest and
the amount of original issue discount, if any, that accrues during an accrual
period on such a floating rate note is determined under the rules applicable to
fixed rate debt instruments by assuming that the variable rate is a fixed rate
equal to (i) in the case of a qualified floating rate or qualified inverse
floating rate, the value, as of the issue date, of the qualified floating rate
or qualified inverse floating rate, or (ii) in the case of an objective rate
(other than a qualified inverse floating rate), a fixed rate that reflects the
yield that is reasonably expected for the floating rate note. The qualified
stated interest allocable to an accrual period is increased (or decreased) if
the interest actually paid during an accrual period exceeds (or is less than)
the interest assumed to be paid during the accrual period pursuant to the
foregoing rules.
In general, any other floating rate note that qualifies as a "variable
rate debt instrument" will be converted into an "equivalent" fixed rate debt
instrument for purposes of determining the amount and accrual of original issue
discount and qualified stated interest on the floating rate note. The OID
Regulations generally require that such a floating rate note be converted into
an "equivalent" fixed rate debt instrument by substituting any qualified
floating rate or qualified inverse floating rate provided for under the terms of
the floating rate note with a fixed rate equal to the value of the qualified
floating rate or qualified inverse floating rate, as the case may be, as of the
floating rate note's issue date. Any objective rate (other than a qualified
inverse floating rate) provided for under the terms of the floating rate note is
converted into a fixed rate that reflects the yield that is reasonably expected
for the floating rate note. In the case of a floating rate note that qualifies
as a "variable rate debt instrument" and provides for stated interest at a fixed
rate in addition to either one or more qualified floating rates or a qualified
inverse floating rate, the fixed rate is initially converted into a qualified
floating rate (or a qualified inverse floating rate, if the floating rate note
provides for a qualified inverse floating rate). Under such circumstances, the
qualified floating rate or qualified
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inverse floating rate that replaces the fixed rate must be such that the fair
market value of the floating rate note as of the floating rate note's issue date
is approximately the same as the fair market value of an otherwise identical
debt instrument that provides for either the qualified floating rate or
qualified inverse floating rate rather than the fixed rate. Subsequent to
converting the fixed rate into either a qualified floating rate or a qualified
inverse floating rate, the floating rate note is then converted into an
"equivalent" fixed rate debt instrument in the manner described above.
Once the floating rate note is converted into an "equivalent" fixed
rate debt instrument pursuant to the foregoing rules, the amount of original
issue discount and qualified stated interest, if any, are determined for the
"equivalent" fixed rate debt instrument by applying the general original issue
discount rules to the "equivalent" fixed rate debt instrument and a U.S. Holder
of the floating rate note will account for such original issue discount and
qualified stated interest as if the U.S. Holder held the "equivalent" fixed rate
debt instrument. In each accrual period appropriate adjustments will be made to
the amount of qualified stated interest or original issue discount assumed to
have been accrued or paid with respect to the "equivalent" fixed rate debt
instrument in the event that such amounts differ from the actual amount of
interest accrued or paid on the floating rate note during the accrual period.
If a floating rate note does not qualify as a "variable rate debt
instrument" under the OID Regulations, then the floating rate note would be
treated as a contingent payment debt obligation. U.S. Holders should be aware
that on June 11, 1996, the United States Treasury Department issued final
regulations (the "CPDI Regulations") concerning the proper United States federal
income tax treatment of contingent payment debt instruments. In general, the
CPDI Regulations would cause the timing and character of income, gain or loss
reported on a contingent payment debt instrument to substantially differ from
the timing and character of income, gain or loss reported on a contingent
payment debt instrument under general principles of current United States
federal income tax law. Specifically, the CPDI Regulations generally require a
U.S. Holder of such an instrument to include future contingent and noncontingent
interest payments in income as such interest accrues based upon a projected
payment schedule. Moreover, in general, under the CPDI Regulations, any gain
recognized by a U.S. Holder on the sale, exchange, or retirement of a contingent
payment debt instrument will be treated as ordinary income and all or a portion
of any loss realized could be treated as ordinary loss as opposed to capital
loss (depending upon the circumstances). The CPDI Regulations apply to debt
instruments issued on or after August 13, 1996. The proper United States federal
income tax treatment of floating rate notes that are treated as contingent
payment debt obligations will be more fully described in the applicable Pricing
Supplement. Furthermore, any other special United States federal income tax
considerations, not otherwise discussed herein, which are applicable to any
particular issue of notes will be discussed in the applicable Pricing
Supplement.
Certain of the notes (i) may be redeemable at the option of Indiana Gas
prior to their stated maturity (a "call option") and/or (ii) may be repayable at
the option of the holder prior to their stated maturity (a "put option"). Notes
containing such features may be subject to rules that differ from the general
rules discussed above. Investors intending to purchase notes with such features
should consult their own tax advisors, since the original issue discount
consequences will depend, in part, on the particular terms and features of the
purchased notes.
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<PAGE>
U.S. Holders may generally, upon election, include in income all
interest (including stated interest, acquisition discount, original issue
discount, de minimis original issue discount, market discount, de minimis market
discount, and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium) that accrues on a debt instrument by using the constant
yield method applicable to original issue discount, subject to certain
limitations and exceptions.
Short-Term Notes
Notes that have a fixed maturity of one year or less ("Short-Term
Notes") will be treated as having been issued with original issue discount. In
general, an individual or other cash method U.S. Holder is not required to
accrue such original issue discount unless the U.S. Holder elects to do so. If
such an election is not made, any gain recognized by the U.S. Holder on the
sale, exchange or maturity of the Short-Term Note will be ordinary income to the
extent of the original issue discount accrued on a straight-line basis, or upon
election under the constant yield method (based on daily compounding), through
the date of sale or maturity, and a portion of the deductions otherwise
allowable to the U.S. Holder for interest on borrowings allocable to the
Short-Term Note will be deferred until a corresponding amount of income is
realized. U.S. Holders who report income for United States federal income tax
purposes under the accrual method, and certain other holders including banks and
dealers in securities, are required to accrue original issue discount on a
Short-Term Note on a straight-line basis unless an election is made to accrue
the original issue discount under a constant yield method (based on daily
compounding).
Market Discount
If a U.S. Holder purchases a note, other than a Discount Note, for an
amount that is less than its issue price (or, in the case of a subsequent
purchaser, its stated redemption price at maturity) or, in the case of a
Discount Note, for an amount that is less than its adjusted issue price as of
the purchase date, such U.S. Holder will be treated as having purchased such
note at a "market discount," unless such market discount is less than a
specified de minimis amount.
Under the market discount rules, a U.S. Holder will be required to
treat any partial principal payment (or, in the case of a Discount Note, any
payment that does not constitute qualified stated interest) on, or any gain
realized on the sale, exchange, retirement or other disposition of, a note as
ordinary income to the extent of the lesser of (i) the amount of such payment or
realized gain or (ii) the market discount which has not previously been included
in income and is treated as having accrued on such note at the time of such
payment or disposition. Market discount will be considered to accrue ratably
during the period from the date of acquisition to the maturity date of the note,
unless the U.S. Holder elects to accrue market discount on the basis of
semiannual compounding.
A U.S. Holder may be required to defer the deduction of all or a
portion of the interest paid or accrued on any indebtedness incurred or
maintained to purchase or carry a note with market discount until the maturity
of the note or certain earlier dispositions, because a current deduction is only
allowed to the extent the interest expense exceeds an allocable portion of
market discount. A U.S. Holder may elect to include market discount in income
currently as it accrues (on either a
S-37
<PAGE>
ratable or semiannual compounding basis), in which case the rules described
above regarding the treatment as ordinary income of gain upon the disposition of
the note and upon the receipt of certain cash payments and regarding the
deferral of interest deductions will not apply. Generally, such currently
included market discount is treated as ordinary interest for United States
federal income tax purposes. Such an election will apply to all debt instruments
acquired by the U.S. Holder on or after the first day of the first taxable year
to which such election applies and may be revoked only with the consent of the
IRS.
Premium
If a U.S. Holder purchases a note for an amount that is greater than
the sum of all amounts payable on the note after the purchase date other than
payments of qualified stated interest, such U.S. Holder will be considered to
have purchased the note with "amortizable bond premium" equal in amount to such
excess. A U.S. Holder may elect to amortize such premium using a constant yield
method over the remaining term of the note and may offset interest otherwise
required to be included in respect of the note during any taxable year by the
amortized amount of such excess for the taxable year. However, if the note may
be optionally redeemed after the U.S. Holder acquires it at a price in excess of
its stated redemption price at maturity, special rules would apply which could
result in a deferral of the amortization of some bond premium until later in the
term of the note. Any election to amortize bond premium applies to all taxable
debt instruments held by the U.S. Holder at the beginning of the first taxable
year to which the election applies and to all taxable debt instruments acquired
on or after such date. The election may be revoked only with the consent of the
IRS.
Disposition of a Note
Except as discussed above, upon the sale, exchange or retirement of a
note, a U.S. Holder generally will recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange or retirement
(other than amounts representing accrued and unpaid interest) and such U.S.
Holder's adjusted tax basis in the note. A U.S. Holder's adjusted tax basis in a
note generally will equal such U.S. Holder's initial investment in the note
increased by any original issue discount included in income (and accrued market
discount, if any, if the U.S. Holder has included such market discount in
income) and decreased by the amount of any payments, other than qualified stated
interest payments, received and amortizable bond premium taken with respect to
such note. Such gain or loss generally will be long-term capital gain or loss if
the note were held for more than one year. The deductibility of capital losses
is subject to limitations. Prospective investors should consult their own tax
advisors concerning these tax law provisions.
Non-U.S. Holders
A non-U.S. Holder will not be subject to United States federal income
taxes on payments of principal, premium (if any) or interest (including original
issue discount, if any) on a note, unless such non-U.S. Holder is a direct or
indirect 10% or greater shareholder of Indiana Gas, a controlled foreign
corporation related to Indiana Gas or a bank receiving interest described in
section 881(c)(3)(A) of the Code. To qualify for the exemption from taxation,
the last United States payor
S-38
<PAGE>
in the chain of payment prior to payment to a non-U.S. Holder (the "Withholding
Agent") must have received in the year in which a payment of interest or
principal occurs, or in either of the two preceding calendar years, a statement
that (i) is signed by the beneficial owner of the note under penalties of
perjury, (ii) certifies that such owner is not a U.S. Holder and (iii) provides
the name and address of the beneficial owner. The statement may be made on an
IRS Form W-8 or a substantially similar form, and the beneficial owner must
inform the Withholding Agent of any change in the information on the statement
within 30 days of such change. If a note is held through a securities clearing
organization or certain other financial institutions, the organization or
institution may provide a signed statement to the Withholding Agent. However, in
such case, the signed statement must be accompanied by a copy of the IRS Form
W-8 or the substitute form provided by the beneficial owner to the organization
or institution. The United States Treasury Department is considering
implementation of further certification requirements aimed at determining
whether the issuer of a debt obligation is related to holders thereof.
Generally, a non-U.S. Holder will not be subject to federal income
taxes on any amount which constitutes capital gain upon retirement or
disposition of a note, provided the gain is not attributable to an office or
other fixed place of business maintained by the non-U.S. Holder in the United
States. Certain other exceptions may be applicable, and a non-U.S. Holder should
consult its tax advisor in this regard.
The notes will not be includible in the estate of a non-U.S. Holder
unless the individual is a direct or indirect 10% or greater shareholder of
Indiana Gas or, at the time of such individual's death, payments in respect of
the notes would have been effectively connected with the conduct by such
individual of a trade or business in the United States.
Backup Withholding
Backup withholding of United States federal income tax at a rate of 31%
may apply to payments made in respect of the notes to registered owners who are
not "exempt recipients" and who fail to provide certain identifying information
(such as the registered owner's taxpayer identification number) in the required
manner. Generally, individuals are not exempt recipients, whereas corporations
and certain other entities generally are exempt recipients. Payments made in
respect of the notes to a U.S. Holder must be reported to the IRS, unless the
U.S. Holder is an exempt recipient or establishes an exemption. Compliance with
the identification procedures described in the preceding section would establish
an exemption from backup withholding for those non-U.S.
Holders who are not exempt recipients.
In addition, upon the sale of a note to (or through) a broker, the
broker must withhold 31% of the entire purchase price, unless either (i) the
broker determines that the seller is a corporation or other exempt recipient or
(ii) the seller provides, in the required manner, certain identifying
information and, in the case of a non-U.S. Holder, certifies that such seller is
a non-U.S. Holder (and certain other conditions are met). Such a sale must also
be reported by the broker to the IRS, unless either (i) the broker determines
that the seller is an exempt recipient or (ii) the seller certifies its non-U.S.
status (and certain other conditions are met). Certification of the registered
owner's
S-39
<PAGE>
non-U.S. status would be made normally on an IRS Form W-8 or Form W-8 BEN under
penalties of perjury, although in certain cases it may be possible to submit
other documentary evidence.
Any amounts withheld under the backup withholding rules from a payment
to a beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States federal income tax provided the required
information is furnished to the IRS.
New Withholding Regulations
Final regulations dealing with withholding tax on income paid to
foreign persons, backup withholding and related matters (the "New Withholding
Regulations") were issued by the Treasury Department on October 6, 1997. The New
Withholding Regulations generally attempt to unify certification requirements
and modify reliance standards. The New Withholding Regulations generally will be
effective for payments made after December 31, 2000, subject to certain
transition rules.
Prospective investors are strongly urged to consult their own tax
advisors with respect to the New Withholding Regulations.
PLAN OF DISTRIBUTION
Indiana Gas is offering the notes for sale on a continuing basis to
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") as principal or, if agreed to at the particular time, through
Merrill Lynch as agent, in which case Merrill Lynch will use reasonable efforts
to solicit purchase of the notes. Indiana Gas may also utilize the services of
other agents identified in the applicable pricing supplement. Unless otherwise
specified in the applicable pricing supplement, Indiana Gas will pay a
commission to the agent, ranging from .125% to .750% of the principal amount of
a note, depending upon its stated maturity or, with respect to a note for which
the stated maturity is in excess of 30 years, a commission as agreed upon by
Indiana Gas and the agent at the time of sale.
Indiana Gas reserves the right to withdraw, cancel or modify the offer
made by this prospectus supplement without notice and may reject orders, in
whole or in part, whether placed directly with Indiana Gas or through the
agents. The agents will have the right, in their discretion reasonably
exercised, to reject in whole or in part any offer to purchase notes received by
them.
Unless specified in the applicable pricing supplement, any note sold to
an agent as principal will be purchased at a price equal to 100% of the
principal amount of the note less a percentage equal to the commission
applicable to an agency sale of a note of identical maturity. The agents may
resell these notes at varying prices related to prevailing market prices at the
time of sale or, if agreed to with Indiana Gas, at a fixed public offering
price. Indiana Gas may also sell notes directly and would not pay any commission
on these sales.
S-40
<PAGE>
The agents may resell any notes purchased as principal to other dealers
and, unless otherwise specified in the applicable pricing supplement, may allow
all or any portion of the discount received in connection with purchases from
Indiana Gas to such dealers. After the initial public offering of notes, the
public offering price, in the case of notes to be resold at a fixed public
offering price, the concession and the discount allowed to dealers may be
changed.
The agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933. Indiana Gas has agreed to indemnify the agents against
certain liabilities, including liabilities under the Securities Act of 1933, or
to contribute to payments the agents may be required to make in respect thereof.
Indiana Gas has agreed to reimburse the agents for certain expenses.
The agents may sell to or through dealers who may resell to investors,
and the Agents may pay all or part of their discount or commission to such
dealers. Such dealers may be deemed to be "underwriters" within the meaning of
the Securities Act of 1933.
Unless otherwise indicated in the applicable pricing supplement,
payment of the purchase price of notes will be required to be made in
immediately available funds in The City of New York.
The agents may be customers of, engage in transactions with, and
perform services for Indiana Gas in the ordinary course of business.
Upon issuance, the notes will not have an established trading market.
The notes will not be listed on any securities exchange. The agents may from
time to time purchase and sell notes in the secondary market, but the agents are
not obligated to do so, and there can be no assurance that there will be a
secondary market for the notes or that there will be liquidity in the secondary
market if one develops. From time to time, the agents may make a market in the
notes, but the agents are not obligated to do so and may discontinued any
market-making activity at any time.
In connection with the offering of notes purchased by the agents as
principal on a fixed price basis, the agents are permitted to engage in certain
transactions that stabilize the price of the notes. These transactions may
consist of bids or purchases for the purpose of pegging, fixing or maintaining
the price of the notes. If an agent creates a short position in the notes in
connection with the offering, i.e., it sells notes in an aggregate principal
amount exceeding that set forth in the applicable pricing supplement, then the
agent may reduce that short position by purchasing notes in the open market. In
general, purchases of notes for the purpose of stabilization or to reduce a
short position could cause the price of the notes to be higher than in the
absence of these purchases.
Neither Indiana Gas nor any agent makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the notes. In addition, neither Indiana
Gas nor any agent makes any representation that an agent will engage in any such
transactions or that such transactions, once commenced, will not be discontinued
without notice.
S-41
<PAGE>
VALIDITY OF THE NOTES
The validity of the notes will be passed upon for Indiana Gas by Barnes
& Thornburg, Indianapolis, Indiana and for the agents by Brown & Wood LLP, New
York, New York.
S-42
<PAGE>
[LOGO]
$100,000,000
Indiana Gas Company, Inc.
Medium-Term Notes,
Series G
Due Nine Months or More from Date of Issue
--------------------------------
PROSPECTUS SUPPLEMENT
-------------------------------
Merrill Lynch & Co.
___________ ____, 1999
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion
Preliminary Prospectus dated _________ ___, 1999
PROSPECTUS
[LOGO]
Indiana Gas Company, Inc.
Debt Securities
o By this prospectus, we may offer from time to time up
to $100,000,000 of our debt securities.
o When we offer debt securities, we will provide you
with a prospectus supplement describing the terms of
the specific issue of securities including the
offering price of the securities.
o You should read this prospectus and the prospectus
supplement relating to the specific offering of
securities carefully before you invest.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
--------------------------
The date of this prospectus is __________, 1999.
1
<PAGE>
INDIANA GAS COMPANY, INC.
We are an operating pubic utility providing gas utility service in
Indiana. We supply gas to approximately 494,000 customers in 311 communities in
48 of the 92 counties in Indiana. The largest communities which we serve include
Muncie, Anderson, Lafayette, West Lafayette, Bloomington, Terre Haute, Marion,
New Albany, Columbus, Jeffersonville, New Castle and Richmond. We do not provide
service in Indianapolis, although our general office is located
there.
Our service area has a population of approximately 2 million and
contains diversified manufacturing and agricultural enterprises. The principal
industries which we serve include:
o automotive parts and accessories;
o feed, flour and grain processing;
o metal castings;
o aluminum products;
o gypsum products;
o electrical equipment;
o metal processing; and
o glass.
Our principal executive office is located at 1630 North Meridian
Street, Indianapolis, Indiana 46202; our telephone number is 317-926-3351.
If you want to find more information about us, please see the sections
entitled "Where You Can find More Information" and "Incorporation of Information
We File with the SEC" in this prospectus.
2
<PAGE>
RECENT DEVELOPMENTS
On June 14, 1999, Indiana Energy, Inc. (the parent of Indiana Gas) and
SIGCORP Inc. announced that they have signed a definitive agreement to combine
into a new holding company, to be named Vectren Corp. SIGCORP is an investor
owned energy and telecommunications company that provides gas and electric
service to southwest Indiana and telecommunication products throughout the
Midwest and elsewhere. Under the agreement, SIGCORP shareholders will receive
one and one-third shares of the new company's common stock for each share of
SIGCORP they currently hold. Indiana Energy shareholders will receive one share
of the new company's common stock for each share of Indiana Energy they
currently hold.
Through its utility subsidiaries, Vectren will offer gas and/or
electricity to more than 650,000 customers in adjoining service areas that cover
nearly two-thirds of Indiana. Vectren's non-utility subsidiaries will offer
energy-related products and services, fiber-optic based telecommunication
services, materials management, locating and trenching services and energy
marketing to customers throughout the surrounding region.
Indiana Energy's and SIGCORP's utility companies will remain separate
subsidiaries of Vectren and will continue to operate under the names Indiana Gas
Company, Inc. and Southern Indiana Gas and Electric Company (SIGECO),
respectively. Under the merger agreement, the corporate headquarters of Vectren
and of SIGECO will be in Evansville, Indiana. Indiana Gas will continue to be
headquartered in Indianapolis, where it has been for over 50 years.
The merger is conditioned, among other things, upon the approvals of
the shareholders of Indiana Energy and SIGCORP and customary regulatory
approvals.
3
<PAGE>
USE OF PROCEEDS
We will use the net proceeds from the sale of the notes for general
corporate purposes, including repayment of long term debt and financing of our
continuing construction program. The following table sets forth information
relating to our capital expenditures for the periods indicated.
<TABLE>
<CAPTION>
Fiscal Year Ended September 30
(In thousands)
=======================================================
2000 1999 1998 1997
<S> <C> <C> <C> <C>
Amount of Capital Expenditures (1) $60,000 $61,000 $57,000 $72,000
Percentage of Capital Expenditures 64% 58%
Provided by Internal Funds
</TABLE>
(1) Amounts for 2000 and 1999 are estimated
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our historical ratios of earning to
fixed charges for the periods indicated.
<TABLE>
<CAPTION>
Twelve Months
Ended March 31, Fiscal Years Ended September 30
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995 1994
- ------------------------------ -------------- --------------- --------------- ---------------- ---------------
4.0 3.9 2.2 4.6 4.1 4.1
</TABLE>
For the purpose of calculating the ratio of earnings to fixed charges,
"earnings" consist of net income plus income taxes, investment tax credits and
fixed charges. "Fixed charges" consist of interest charges, amortization of debt
discount and expenses and the estimated interest component of rents. The ratio
of earnings to fixed charges for fiscal 1997 before the restructuring charge
relating to the restructuring of operations of Indiana Gas to reduce costs and
remain competitive was 4.4.
4
<PAGE>
DESCRIPTION OF THE DEBT SECURITIES
General
The debt securities will be issued under an indenture dated as of
February 1, 1991, between Indiana Gas and U.S. Bank Trust National Association
(formerly Continental Bank, National Association), as trustee, as supplemented,
a copy of which is filed as an exhibit to the registration statement of which
this prospectus is a part.
The following summaries of certain provisions of the indenture are not
complete and are subject to, and are qualified in their entirety by reference
to, all of the provisions of the indenture, including the definitions of terms.
The Indenture does not limit the amount of debt, secured or unsecured,
which may be issued by Indiana Gas. The debt securities offered by this
Prospectus are unsecured and rank equally with the other unsecured and
unsubordinated indebtedness of Indiana Gas.
Unless otherwise indicated in the applicable prospectus supplement,
Indiana Gas will issue the debt securities only in fully registered form,
without coupons, in denominations of $1,000 or any multiple thereof. Unless
otherwise specified in the applicable prospectus supplement, the debt securities
will be registered for transfer and exchange, and principal, premium, if any,
and interest, if any, will be payable at the corporate trust offices of the
trustee in Chicago, Illinois and New York, New York. No service charge will be
made for any transfer or exchange of the debt securities, but Indiana Gas may
require payment of a sum sufficient to cover any tax or other government charge
payable in connection with any registration or exchange other than certain
exchanges not involving any transfer.
Terms of the Debt Securities
Indiana Gas may issue the debt securities from time to time, without
limitation as to aggregate principal amount and in one or more series. Indiana
Gas may issue debt securities upon the satisfaction of conditions, including the
delivery to the trustee of a supplemental indenture or a resolution of the Board
of Directors of Indiana Gas, or a committee of the Board of Directors, or a
certificate of an officer of Indiana Gas who has been authorized by the Board of
Directors to take that kind of action, which fixes or establishes the terms of
the debt securities being issued. Any resolution or officer's certificate
approving the issuance of any issue of debt securities will include the
following terms of that issue of debt securities:
o the title of the debt securities;
o any limit on the aggregate principal amount of the debt
securities;
o the date or dates on which the principal will be payable;
5
<PAGE>
o the rate or rates (or manner of calculating the rate or rates)
at which the debt securities will bear interest, if any, and
the date or dates from which any interest will accrue;
o the interest payment dates and the regular record date for any
interest payable;
o the place or places where the principal (and premium, if any)
and interest, if any, will be payable and where the securities
may be surrendered for registration, transfer, or exchange;
o the period or periods within which, the price or prices at
which, and the terms and conditions upon which, the debt
securities may be redeemed or purchased, in whole or in part;
o any mandatory redemption or sinking fund or analogous
provisions;
o the denominations in which any debt securities will be
issuable if other than denominations of $1,000 and any
integral multiple thereof;
o the currency or currencies of payment of principal (and
premium, if any) and interest (if other than U.S. dollars);
o if the amount of payments of principal (and premium, if any)
or interest may be determined with reference to an index, the
manner in which such amounts will be determined;
o if other than the full principal amount, the portion of the
principal amount which will be payable upon declaration of
acceleration of maturity;
o any additional events of default or covenants of Indiana Gas;
and
o any other terms of the debt securities.
The applicable prospectus supplement will also describe any special
provisions for the payment of additional amounts with respect to the debt
securities.
Limitations on Liens
Indiana Gas may not create or permit to be created or to exist any
mortgage on, pledge of, or other lien on or security interest in, any property
or assets of Indiana Gas securing any indebtedness for money borrowed, unless
Indiana Gas offers to each holder of the debt securities by written notice an
undertaking by Indiana Gas to provide that the debt securities will be equally
and ratably secured with that indebtedness and any other indebtedness which is
entitled to be
6
<PAGE>
equally and ratably secured. Any holder of a debt security may accept this offer
in writing delivered to Indiana Gas on or prior to the 30th day following the
date of the notice given by Indiana Gas. However, these restrictions on liens do
not apply to
o certain governmental charges and similar liens, assessments,
pledges and deposits described in the indenture;
o leases made, or existing on property acquired, in the ordinary
course of business (including leases made in sale and
lease-back transactions);
o zoning restrictions, easements, licenses or restrictions on
the use of real property or minor irregularities in the title,
which do not, in the opinion of Indiana Gas, materially impair
the use of such property in the operation of the business of
Indiana Gas or the value of such property for the purpose of
that business;
o liens on any property acquired, constructed or improved by
Indiana Gas after the date of the indenture which are created
or assumed at the time of, or within 120 days after, the
acquisition or completion of the construction or improvement,
or within six months after the acquisition or completion
pursuant to a firm commitment for financing arranged with a
lender or investor within such 120-day period, to secure or
provide for the payment of all or any part of the purchase
price of the property or the cost of the construction or
improvement incurred after the date of the indenture;
o liens on any property already existing at the time of
acquisition, so long as the liens do not apply to any other
property owned by Indiana Gas other than unimproved real
property on which the property constructed or the improvement
is located;
o existing liens on any property or indebtedness of a
corporation which is merged or consolidated with Indiana Gas;
o liens in favor of the United States, any state, or any
department, agency or instrumentality or political subdivision
of the United States or any state, to secure partial,
progress, advance or other payments pursuant to any contract
or statute or to secure any indebtedness incurred for the
purpose of financing all or any part of the purchase price of
or the cost of constructing or improving the property subject
to such liens, including, without limitation, liens to secure
debt of the pollution control or industrial revenue bond type;
o liens to secure loans to Indiana Gas maturing within 12 months
from their creation and made in the ordinary course of
business;
7
<PAGE>
o liens on any property (including any natural gas, oil or other
mineral property) to secure all or part of the cost of
exploration, drilling or development of the property or to
secure debt incurred to provide funds for that purpose; or
o liens for the sole purpose of extending, renewing or replacing
in whole or in part debt secured by any lien referred to above
or in this bullet point, so long as the principal amount of
debt secured does not exceed the principal amount of debt
secured at the time of that extension, renewal or replacement,
and that the extension, renewal or replacement is limited to
all or a part of the property or indebtedness which secured
the lien so extended, renewed or replaced (plus improvements
on such property).
Other than the restrictions on the issuance of additional secured debt
described above, there are no provisions of the indenture which afford holders
of the debt securities protection in the event of a highly leveraged or similar
transaction involving Indiana Gas. However, such a transaction would require
regulatory approval and management of Indiana Gas believes that such approval
would be unlikely in a highly leveraged or similar context.
Events of Default
The following constitute events of default under the indenture with
respect to debt securities of any series:
o default in the payment of principal of (or premium, if any,
on) any debt security when due and continuing for three
business days;
o default in the payment of interest on any debt security when
due and continuing for 30 days;
o default in the payment of any sinking fund payment when due
and continuing for three business days;
o default in the performance or breach of any covenant or
warranty of Indiana Gas in the indenture for the benefit of
such series and continuing for 60 days after written notice to
Indiana Gas as provided in the indenture;
o default in the payment of principal, premium, if any, or
interest on (after any applicable period of grace), or
acceleration of, indebtedness evidenced by any other series
issued under the indenture or any other mortgage, indenture or
instrument, or other evidence of indebtedness of Indiana Gas
for borrowed money, in an aggregate amount exceeding
$10,000,000,
8
<PAGE>
which default is not rescinded, or indebtedness not
discharged, within 90 days after written notice to Indiana Gas
as provided in the indenture;
o certain events of bankruptcy, insolvency or reorganization;
and
o any other event of default provided with respect to debt
securities of that series.
If an event of default occurs and is continuing, either the trustee or
the holders of at least 33% in aggregate principal amount of the outstanding
debt securities may declare the principal amount of all debt securities to be
due and payable immediately. At any time after the declaration of acceleration
with respect to the debt securities has been made, but before a judgment or
decree based on acceleration has been obtained, the holders of a majority in
principal amount of the outstanding debt securities may, under certain
circumstances, rescind and annul such acceleration.
Subject to the provisions of the Indenture relating to the duties of
the trustee, before proceeding to exercise any right under the indenture at the
direction of the holders, the trustee is entitled to receive reasonable security
or indemnity from the holders. The holders of a majority in principal amount of
the outstanding debt securities may direct the time, method and place of
conducting any proceeding for any remedy available to the trustee, or exercising
any trust or power conferred on the trustee, with respect to the debt
securities. The holder of debt securities has an absolute right to receive
payment of principal, premium, if any, and interest when due and may institute
suit for the enforcement of any such payment. The trustee must, within 90 days
after a default occurs notify the holders of the default, unless cured or
waived. The trustee may withhold notice of default (except default in payment of
principal or interest) if it determines that it is in the interest of the
holders to do so. The trustee must withhold such notice for 45 days in the event
of a default relating to breaches of covenants or representations contained in
the indenture.
Indiana Gas is required to furnish annually to the trustee a statement
as to the performance by Indiana Gas of certain of its obligations under the
indenture and as to any default in that performance.
Consolidation, Merger, Sale or Conveyance
Indiana Gas may not merge or consolidate with another corporation or
sell or convey its property or assets as an entirety or substantially as an
entity unless
o Indiana Gas is the continuing corporation or the successor
corporation expressly assumes the obligations of Indiana Gas
under the indenture, and
o Indiana Gas or the successor corporation immediately after the
transaction is not in default under the indenture.
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Modification of the Indenture
The indenture may be modified and amended by Indiana Gas and the
trustee with the consent of holders of a majority in principal amount of each
series of debt securities affected. However, without the consent of each holder
of any debt security affected, no amendment or modification to any indenture may
o change the maturity of any debt security;
o reduce the principal amount of any debt security;
o change the currency of payment of principal or interest;
o reduce the interest rate or extend the time for payment of
interest;
o reduce the overdue rate;
o reduce any amount payable upon redemption;
o reduce the percentage in principal amount of the outstanding
debt securities of any series, the consent of whose holders is
required to modify or amend the indenture or waive default;
o change any obligation of Indiana Gas to maintain an office or
agency in the place of payment for the debt securities;
o change the method of calculating the rate of interest of any
debt security;
o change any obligation of Indiana Gas to pay additional amounts
as provided in the indenture;
o change the place of payment; or
o impair the right to institute suit for the enforcement of
payments on any debt security on or after the stated maturity
date or date of redemption or repayment.
The indenture permits Indiana Gas and the trustee to amend the
indenture without the consent of holders of any debt securities to evidence the
succession of another entity to Indiana Gas or the replacement of the trustee
and for certain other purposes.
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PLAN OF DISTRIBUTION
Indiana Gas may sell securities:
o to the public through underwriters which may include Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
o through agents or dealers which may include Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
o directly to purchasers.
In connection with the sale of the debt securities, underwriters may
receive compensation from Indiana Gas or from purchasers of the debt securities
for whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters may sell the debt securities to or through dealers,
and such dealers may receive compensation in the form of discounts, concessions
or commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers and agents that participate
in the distribution of the debt securities may be deemed to be underwriters, and
any discounts or commissions received by them from Indiana Gas and any profit on
the resale of the debt securities by them may be deemed to be underwriting
discounts and commissions under the Securities Act of 1933. Any such
underwriter, dealer or agent will be identified, and any such compensation
received from Indiana Gas will be described, in a prospectus supplement or
pricing supplement.
If so indicated in the prospectus supplement, Indiana Gas will
authorize underwriters to solicit offers by certain institutions to purchase
debt securities from Indiana Gas pursuant to delayed delivery contracts
providing for payment and delivery on the date stated in the prospectus
supplement. Each contract will be for an amount not less than, and, unless
Indiana Gas otherwise agrees, the aggregate principal amount of debt securities
sold pursuant to the contracts shall not be more than, the respective amounts
stated in the prospectus supplement. Institutions with whom the contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions, and other institutions, but shall in all cases be subject to the
approval of Indiana Gas. Delayed delivery contracts will not be subject to any
conditions except that the purchase by an institution of the debt securities
covered under that contract shall not at the time of delivery be prohibited
under the laws of any jurisdiction in the United States to which that
institution is subject.
Indiana Gas will indemnify the agents and the underwriters against
certain civil liabilities, including liabilities under the Securities Act of
1933, or contribute to payments the agents or the underwriters may be required
to make.
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WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC.
Our SEC filings are also available over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file by visiting
the SEC's public reference rooms in Washington, D.C., New York, New York, and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
about the public reference rooms.
We have filed a registration statement on Form S-3 with the SEC
covering the debt securities. For further information on Indiana Gas and the
securities, you should refer to our registration statement and its exhibits.
This prospectus summarizes material provisions of contracts and other documents
that we refer you to. Because the prospectus may not contain all the information
that you may find important, you should review the full text of these documents.
We have included copies of these documents as exhibits to our registration
statement of which this prospectus is a part.
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to incorporate by reference the information we file
with them, which means
o incorporated documents are considered part of this prospectus;
o we can disclose important information to you by referring you
to those documents; and
o information that we file with the SEC will automatically
update and, to the extent inconsistent, supersede this
prospectus and previously incorporated information.
We incorporate by reference the documents listed below which were filed
with the SEC under the Securities Exchange Act of 1934:
o annual report of Indiana Gas on Form 10-K for the year ended
September 30, 1998;
o quarterly reports of Indiana Gas on Form 10-Q for the quarters
ended December 31, 1998 and March 31, 1999;
o current reports of Indiana Gas on Form 8-K filed October 9,
1998, October 30, 1998, January 27, 1999, April 22, 1999 and
April 30, 1999; and
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<PAGE>
o current report of Indiana Energy, Inc. on Form 8-K filed June
15, 1999. This filing describes the proposed merger between
our parent, Indiana Energy, and SIGCORP Inc.
We also incorporate by reference each of the following documents that
we will file with the SEC after the date of this prospectus until this offering
is completed or after the date of the registration statement and before the
effectiveness of the registration statement:
o all documents filed under Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act; and
o any reports filed under Section 15(d) of the Exchange Act.
You should rely only on information contained or incorporated by
reference in this prospectus. We have not authorized any other person to provide
you with different or additional information. If anyone provides you with
different or additional information, you should not rely on it. We are not
making an offer to sell these securities in any jurisdiction where the offer or
sale is not permitted.
You should assume that the information appearing in this prospectus is
accurate as of the date of this prospectus only. Our business, financial
condition and results of operations may have changed since that date.
You may request a copy of any filings referred to above (excluding
exhibits), at no cost, by contacting us at the following address: Vice President
and Treasurer, Indiana Gas Company, Inc., 1630 North Meridian Street,
Indianapolis, Indiana 46202-1496, telephone (317) 926-3351.
EXPERTS
The financial statements and schedules included (incorporated by
reference) in this prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts (or, as experts in
accounting and auditing) in giving said reports.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses to be incurred in
connection with the issuance and distribution of the securities being
registered. All amounts shown are estimates, except the registration fee.
Securities and Exchange Commission
registration fee ....................................... $ 27,800
Fees and expenses of accountants ........................... 25,000
Fees and expenses of counsel................................ 125,000
Blue Sky and legal investment
fees and expenses....................................... 5,000
Fees and expenses of Trustee................................ 15,000
Printing expenses........................................... 20,000
Printing and engraving of Securities........................ 23,000
Rating agency fees.......................................... 77,000
Miscellaneous............................................... 15,000
--------
Total................................................... $332,800
========
Item 15. Indemnification of Directors and Officers.
The following discussion of the indemnification provisions of the
Indiana Business Corporation Law (Indiana Code ss. 23-1-37) (the "BCL"), which
applies to the Company, is a summary, is not meant to be complete, and is
qualified in its entirety by reference to the BCL.
The BCL authorizes a corporation to indemnify its directors,
officers, employees and agents against expenses in certain proceedings provided
such person (i) acted in good faith, (ii) reasonably believed if acting in an
official capacity, that his conduct was in the best interest of the corporation,
or in all other cases, that his conduct was at least not opposed to the
corporation's best interest, and (iii) in the case of criminal proceedings the
individual had reasonable cause to believe that his conduct was lawful, or had
no reasonable cause to believe that his conduct was unlawful. The BCL provides
further that a corporation shall indemnify its directors, officers, employees,
and agents who are wholly successful, on the merits or otherwise, against
expenses in the defense of such proceedings. The BCL provides, however, that
this indemnification should not be deemed exclusive of any other indemnification
rights provided by the Articles of Incorporation, By-Laws, resolution or other
authorizations adopted by a majority vote of the voting shares then issued and
outstanding.
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Under the same statute, an Indiana corporation may purchase and
maintain insurance on behalf of any person who is or was a director, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would have the
power to indemnify him against such liability under the provisions of the BCL.
Section 8.08, Clause (b) of Article 8 of the Amended and Restated
Articles of Incorporation, as amended, of the Company provides as follows:
Clause (b). Indemnification of Corporate Persons and Related Matters.
The following provisions apply to the indemnification by the Corporation of
directors, members of any committees of the Board of Directors, officers,
employees and agents of the Corporation (collectively "Corporate Persons") and
matters related thereto:
(i) Indemnification Standards. The Corporation shall indemnify
any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding,
whether civil or criminal, administrative or investigative, formal or
informal (an "Action"), by reason of the fact that he is or was a
Corporate Person of the Corporation or is or was serving at the
request of the Corporation as a Corporate Person, partner, trustee or
member or in another authorized capacity (collectively, an
"Authorized Capacity") of or for another Legal Entity, whether or not
organized or formed for profit (collectively, "Another Entity"),
against expenses (including attorneys' fees) ("Expenses") and
judgments, penalties, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such Action, if
such person (1) acted in good faith, (2) acted in a manner he
reasonably believed (A) with respect to actions as a Corporate Person
of the Corporation, to be in the best interests of the Corporation,
or (B) with respect to actions in an Authorized Capacity of or for
Another Entity, was not opposed to the best interests of the
Corporation, and (3) with respect to any criminal Action, either (A)
had reasonable cause to believe his conduct was lawful, or (B) had no
reasonable cause to believe his conduct was unlawful. The termination
of any Action by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, be
determinative that the person did not meet the standards for
indemnification set forth in this Clause (b)(i) (the "Indemnification
Standards").
(ii) Indemnification in Successfully Defended Actions. To the
extent that a person who is or was a Corporate Person of the
Corporation, or is or was serving at the request of the Corporation
in an Authorized Capacity of or for Another Entity, has been
successful on the merits or otherwise in the defense of any Action
referred to in Clause (b)(i) above, or in the defense of any claim,
issue or matter in any such Action, the Corporation shall indemnify
him against Expenses actually and reasonably incurred by him in
connection therewith.
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(iii) Indemnification Procedure. Unless ordered by a court, any
indemnification of any person under Clause (b)(i) above shall be made
by the Corporation only as authorized in the specific case upon a
determination that indemnification of such person is proper in the
circumstances because he met the Indemnification Standards. Such
determination shall be made (1) by the Board, by a majority vote of a
quorum consisting of Directors who are not at the time parties to the
Action involved ("Parties"); or (2) if a quorum cannot be obtained
under Subparagraph (1), by a majority vote of a Committee duly
designated by the Board (in which designated Directors who are
Parties may participate), consisting solely of two or more Directors
who are not at the time Parties; or (3) by written opinion of
independent legal counsel (A) selected by the Board or Committee in
the manner prescribed in Subparagraphs (1) or (2), respectively, or
(B) if a quorum cannot be obtained and a Committee cannot be
designated under Subparagraphs (1) and (2), respectively, selected by
a majority of the full Board, in which selection Directors who are
Parties may participate; or (4) by the Shareholders who are not at
the time Parties, voting together as a single class.
(iv) Advances for Expenses. Expenses reasonably incurred in
defending an Action by any person who may be entitled to
indemnification under Clause (b)(i) above may be paid by the
Corporation in advance of the final disposition of such Action if (1)
such person furnishes the Corporation with (A) a written affirmation
of his good faith belief that he has met, and (B) a written
undertaking, executed personally or on his behalf, to repay the
advance (an "Undertaking") if it is ultimately determined that he did
not meet, the Indemnification Standards; and (2) a determination is
made, under the procedure set forth in Clause (b)(iii) above, that
the facts then known to those making the determination would not
preclude indemnification under Clause (b)(i) above. An Undertaking
must be an unlimited general obligation of the person making it, but
need not be secured and may be accepted by the Corporation without
further reference to such person's financial ability to make
repayment.
(v) Rights Not Exclusive. The indemnification provided in these
Articles (1) shall not be deemed exclusive of any other rights to
which a person seeking indemnification may be entitled under (A) any
law, (B) the By-Laws, (C) any resolution of the Board or of the
Shareholders, (D) any other authorization, whenever adopted, after
notice, by a majority vote of all Shares entitled to vote on General
Voting Matters, or (E) the articles of incorporation, code of by-laws
or other governing documents or any resolution of or other
authorization by the directors, shareholders, partners, trustees,
members, owners or governing body, of Another Entity; (2) shall inure
to the benefit of the heirs, executors and administrators of such
person; and (3) shall continue as to any such person who has ceased
to be a Corporate Person of the Corporation or to be serving in an
Authorized Capacity for Another Entity.
(vi) Insurance. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a Corporate
Person of the Corporation, or is or was serving at the request of the
Corporation in an Authorized Capacity of or for
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Another Entity, against any liability asserted against and incurred
by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him
against such liability under the provisions of this Clause (b).
(vii) Definition of Corporation. For the purposes of this Clause
(b), references to "the Corporation" include any constituent
corporation absorbed in a consolidation or merger (a "Constituent")
as well as the resulting or surviving corporation (the "Survivor"),
such that any person who is or was a Corporate Person of such a
Constituent, or is or was serving at the request of such Constituent
in an Authorized Capacity of or for Another Entity, shall stand in
the same position under the provisions of this Clause (b) with
respect to the Survivor as he would if he had served the Survivor, or
at his request, in the same capacity.
The Company maintains directors' and officers' liability insurance
with an annual aggregate limit of $35,000,000 for the current policy period,
subject to a $200,000 deductible at the corporate level and an excess policy of
$50,000,000, for each wrongful act where corporate reimbursement is available to
any director or officer. When corporate reimbursement is not available as
prescribed by applicable common law, statutory law or the Company's governing
documents, the insurer will reimburse the directors and officers with no
deductible with respect to losses sustained by them for specified wrongful acts
while acting in their capacities, individually or collectively, as such
directors or officers.
Item 16. List of Exhibits.
The exhibits required by this item are listed on page E-1.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes (1) to file, during
any period in which offers or sales are being made, a post-effective amendment
to this registration statement (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any
facts or events arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in
the registration statement; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement; provided, however, that clauses (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment by
those clauses is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement; (2) that, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof; and (3) to remove from
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registration by means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Indianapolis, State of Indiana, on July 1, 1999.
INDIANA GAS COMPANY, INC.
By: /s/ Niel C. Ellerbrook
---------------------------------
Niel C. Ellerbrook, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
(1) Principal Executive Officer
/s/ Niel C. Ellerbrook President and Chief July 1, 1999
- ------------------------------------ Executive Officer
Niel C. Ellerbrook
(2) Principal Financial Officer
/s/ Niel C. Ellerbrook President and Chief July 1, 1999
- ------------------------------------ Executive Officer
Niel C. Ellerbrook
(3) Principal Accounting Officer
/s/ Jerome A. Benkert, Jr. Vice President and July 1, 1999
- ------------------------------------ Controller
Jerome A. Benkert, Jr.
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(4) A Majority of the Board of Directors
Paul T. Baker Director
Niel C. Ellerbrook Director
Lawrence A. Ferger Director
Otto N. Frenzel III Director July 1, 1999
William G. Mays Director
J. Timothy McGinley Director
John E. Worthen Director
By: /s/ Niel C. Ellerbrook
--------------------------------------
Niel C. Ellerbrook, Attorney-in-Fact
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EXHIBIT INDEX
Exhibit 1 Proposed Form of Distribution Agreement between Indiana Gas
Company, Inc. and the Agents
Exhibit 4(a) Indenture dated as of February 1, 1991 between Indiana Gas
Company, Inc. and U.S. Bank Trust National Association
(formerly known as First Trust National Association which
was formerly known as Bank of America Illinois which was
formerly known as Continental Bank, National Association),
as Trustee (incorporated by reference to Exhibit 4(a) to
Indiana Gas Company, Inc.'s Current Report on Form 8-K
dated February 1, 1991, and filed February 15, 1991); First
Supplemental Indenture thereto dated as of February 15,
1991 (incorporated by reference to Exhibit 4(b) to Indiana
Gas Company, Inc.'s Current Report on Form 8-K dated
February 1, 1991 and filed February 15, 1991); Second
Supplemental Indenture thereto dated as of September 15,
1991 (incorporated by reference to Exhibit 4(b) to Indiana
Gas Company, Inc.'s Current Report on Form 8-K dated
September 15, 1991 and filed September 25, 1991); Third
Supplemental Indenture thereto dated as of September 15,
1991 (incorporated by reference to Exhibit 4(c) to Indiana
Gas Company, Inc.'s Current Report on Form 8-K dated
September 15, 1991 and filed September 25, 1991); Fourth
Supplemental Indenture thereto dated as of December 2, 1992
(incorporated by reference to Exhibit 4(b) to Indiana Gas
Company, Inc.'s Current Report on Form 8-K dated December
1, 1992 and filed December 8, 1992); Officers' Certificate
pursuant to Section 301 of the Indenture dated as of April
5, 1995 (incorporated by reference to Exhibit 4(a) to
Indiana Gas Company, Inc.'s Current Report on Form 8-K
dated and filed April 5, 1995); and Officers' Certificate
pursuant to Section 301 of the Indenture dated as of
November 19, 1997 (incorporated by reference to Exhibit 4
to Indiana Gas Company, Inc. Current Report on Form 8-K
dated and filed December 4, 1997).
Exhibit 4(b) Proposed form of Officers' Certificate pursuant to Section
301 of the Indenture.
Exhibit 5 Opinion of Barnes & Thornburg with respect to the legality
of the securities registered hereunder.
Exhibit 12 Statement re computation of ratios
Exhibit 23(a) Consent of Arthur Andersen LLP
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Exhibit 23(b) Consent of Barnes & Thornburg (included in opinion of
counsel filed as Exhibit 5).
Exhibit 24 Powers of Attorney
Exhibit 25 Form T-1 Statement of Eligibility of Trustee
Exhibit (1)
INDIANA GAS COMPANY, INC.
$100,000,000
Medium-Term Notes, Series G
Distribution Agreement
_________________, 1999
New York, New York
Merrill Lynch & Co.
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
World Financial Center - North Tower
250 Vesey Street
New York, New York 10281
Ladies and Gentlemen:
Indiana Gas Company, Inc., an Indiana corporation (the "Company"),
proposes to issue and sell from time to time its Medium-Term Notes, Series G
(the "Securities") in an aggregate amount up to $100,000,000 and agrees with you
(the "Agent") as set forth in this Agreement.
Subject to the terms and conditions stated herein and to the
reservation by the Company of the right to sell Securities directly on its own
behalf, the Company hereby (i) appoints the Agent as an agent of the Company for
the purpose of soliciting and receiving offers to purchase Securities from the
Company pursuant to Section 2(a) hereof and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell Securities
directly to the Agent as principal, it will enter into a separate agreement
(each, a "Terms Agreement"), substantially in the form of Annex I hereto,
relating to such sale in accordance with Section 2(b) hereof. A Terms Agreement
may be an oral agreement confirmed in writing. This Distribution Agreement shall
not be construed to create either an obligation on the part of the Company to
sell any Securities or an obligation of the Agent to purchase Securities as
principal.
The Company will notify the Agent of its appointment of such other
agents, dealers or underwriters in accordance with the provisions of this
paragraph and of the principal amount of Securities sold to such other agents,
dealers or underwriters. Such other agents, dealers or underwriters will be
required (i) if in connection with a particular issuance of Securities only and
not in connection with being named the Agent, to acknowledge delivery to it of a
letter from the Company substantially in the form of Exhibit A hereto, and (ii)
if such other agent, dealer or underwriter is to be named the Agent, to deliver
to the Company a letter substantially in the form of Exhibit B hereto, to be
signed and returned by the Company.
The Securities will be issued under an indenture, dated as of February
1, 1991 (the "Indenture"), between the Company and U.S. Bank Trust National
Association (formerly known as First Trust National Association which was
formerly known as Bank of America Illinois which was formerly known as
Continental Bank, National Association), as Trustee (the "Trustee"), as
heretofore supplemented. The Securities shall have the maturities, interest
rates and redemption provisions, if any, and other terms set forth in the
Prospectus referred to below as it may be amended or supplemented from time to
time. The Securities will be issued, and the terms and rights thereof
established, from time to time by the Company in accordance with the Indenture.
1. The Company represents and warrants to, and agrees with, the Agent that:
(a) A registration statement on Form S-3 (File No. ____________ in
respect of $100,000,000 aggregate principal amount of debt securities,
including the Securities, has been filed with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Act
of 1933, as amended (the "Act"); such registration statement, as
amended, and any post-effective amendment thereto, each in the form
heretofore delivered or to be delivered to such Agent, excluding
exhibits to such registration statement, but including all documents
incorporated by reference in the prospectus included therein, have been
declared effective by the Commission in such form; no other document
with respect to such registration statement or document incorporated by
reference therein has heretofore been filed or transmitted for filing
with the Commission (other than the prospectuses filed pursuant to Rule
424(b) of the rules and regulations of the Commission under the Act,
each in the form heretofore delivered to the Agent); and no stop order
suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in
such registration statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the
Act, is hereinafter called a "Preliminary Prospectus"; the various
parts of such registration statement, including all exhibits thereto
and the documents incorporated by reference in the prospectus contained
in the registration statement at the time such part of the registration
statement became effective but excluding Form T-1, each as amended at
the time such part of the registration statement became effective, is
hereinafter collectively called the "Registration Statement", and the
Registration Statement does not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; the
prospectus (including, if applicable, any prospectus supplement)
relating to the Securities, in the form in which it has most recently
been filed, or transmitted for filing, with the Commission on or prior
to the date of this Agreement, is hereinafter called the "Prospectus",
and neither the Prospectus nor any amendment or supplement thereto
includes or will include an untrue statement of a material fact or
omits or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading; any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the
Prospectus, including any supplement to the Prospectus that sets forth
only the terms of a particular issue of the Securities (a "Pricing
Supplement"), shall be deemed to refer to and include any documents
filed after the date of such Preliminary Prospectus or Prospectus, as
the case may be, under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and incorporated therein by reference; any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; and any reference to the
Prospectus as amended or supplemented shall be deemed to refer to and
include the Prospectus as amended or supplemented (including by the
applicable Pricing Supplement filed in accordance with Section 4(a)
hereof) in relation to Securities to be sold pursuant to this
Agreement, in the form filed or transmitted for filing with the
Commission pursuant to Rule 424(b) under the Act and in accordance with
Section 4(a) hereof, including any documents incorporated by reference
therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case
may be, conformed in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder, and none of such documents contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, or any further amendment
or supplement thereto, when such documents become effective or are
filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(c) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the
capital stock or long-term debt of the Company (other than any changes
in long-term debt resulting from the issuance of Securities pursuant to
this Agreement) or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus;
(d) The Company has been duly incorporated and is validly existing as a
corporation under the laws of the jurisdiction of its incorporation,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus;
(e) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable;
(f) The Securities have been duly authorized, and, when issued and
delivered pursuant to this Agreement and any Terms Agreement, will have
been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture, which will be
substantially in the form filed as an exhibit to the Registration
Statement; the Indenture has been duly authorized and duly qualified
under the Trust Indenture Act and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture conforms and
the Securities of any particular issuance of Securities will conform to
the descriptions thereof contained in the Prospectus as amended or
supplemented to relate to such issuance of Securities;
(g) The issue and sale of the Securities, the compliance by the Company
with all of the provisions of the Securities, the Indenture, this
Agreement and any Terms Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company is
a party or by which the Company is bound or to which any of the
property or assets of the Company is subject, nor will such action
result in any violation of the provisions of the Articles of
Incorporation, as amended, or the By-laws of the Company or any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its properties; and
no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the solicitation of offers to purchase Securities, the
issue and sale of the Securities or the consummation by the Company of
the other transactions contemplated by this Agreement, any Terms
Agreement or the Indenture, except such as have been, or will have been
prior to the Commencement Date (as defined in Section 3 hereof),
obtained under the Act or the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
solicitation by such Agent of offers to purchase Securities from the
Company and with purchases of Securities by such Agent as principal, as
the case may be, in each case in the manner contemplated hereby;
(h) Neither the Company nor any of its subsidiaries is in violation of
its Articles of Incorporation or By-laws or in default in the
performance or observance of any material obligation, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound;
(i) The statements set forth in the Prospectus under the captions
"Description of the Debt Securities" and "Description of the Notes",
insofar as they purport to constitute a summary of the terms of the
Securities, and under the two captions "Plan of Distribution", insofar
as they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair;
(j) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or to which any property of the Company or any
of its subsidiaries is subject, which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(k) The Company is not, and after giving effect to each offering and
sale of the Securities will not be, an "investment company" or an
entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(l) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;
(m) Immediately after any sale of Securities by the Company hereunder
or under any Terms Agreement, the aggregate amount of Securities which
shall have been issued and sold by the Company hereunder or under any
Terms Agreement and of any debt securities of the Company (other than
such Securities) that shall have been issued and sold pursuant to the
Registration Statement will not exceed the amount of debt securities
registered under the Registration Statement;
(n) Arthur Andersen LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder; and
(o) The order of the Indiana Utility Regulatory Commission (the
"Indiana Commission"), dated December 29, 1998, authorizing the
Company, among other things, to issue up to $100,000,000 of debt
securities, including the Securities (the "Indiana Commission Order"),
is in full force and effect and is not the subject of any appeal or
other proceeding.
2. (a) On the basis of the representations and warranties herein contained, and
subject to the terms and conditions herein set forth, the Agent hereby agrees,
as agent of the Company, to use its reasonable efforts to solicit and receive
offers to purchase the Securities from the Company upon the terms and conditions
set forth in the Prospectus as amended or supplemented from time to time. So
long as this Agreement shall remain in effect with respect to the Agent, the
Company shall not, without the consent of such Agent, solicit or accept offers
to purchase, or sell, any debt securities with a maturity at the time of
original issuance of 9 months or more from date of issuance except pursuant to
this Agreement (including, without limitation, the third paragraph hereof), any
Terms Agreement, or except pursuant to a private placement not constituting a
public offering under the Act or except in connection with a firm commitment
underwriting pursuant to an underwriting agreement that does not provide for a
continuous offering of medium-term debt securities or except for any commercial
paper program with maturities of 9 months or less. However, the Company reserves
the right to sell, and may solicit and accept offers to purchase, Securities
directly on its own behalf in transactions with persons other than
broker-dealers, and, in the case of any such sale not resulting from a
solicitation made by the Agent, no commission will be payable with respect to
such sale. These provisions shall not limit Section 4(f) hereof or any similar
provision included in any Terms Agreement.
Procedural details relating to the issue and delivery of Securities,
the solicitation of offers to purchase Securities and the payment in each case
therefor shall be as set forth in the Administrative Procedure attached hereto
as Annex II as it may be amended from time to time by written agreement between
the Agent and the Company (the "Administrative Procedure"). The provisions of
the Administrative Procedure shall apply to all transactions contemplated
hereunder other than those made pursuant to a Terms Agreement. The Agent and the
Company agree to perform the respective duties and obligations specifically
provided to be performed by each of them in the Administrative Procedure. The
Company will furnish to the Trustee a copy of the Administrative Procedure as
from time to time in effect.
The Company reserves the right, in its sole discretion, to instruct the
Agent to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Securities. As soon as practicable, but
in any event not later than one business day in New York City, after receipt of
notice from the Company, the Agent will suspend solicitation of offers to
purchase Securities from the Company until such time as the Company has advised
the Agent that such solicitation may be resumed. During such period, the Company
shall not be required to comply with the provisions of Sections 4(h), 4(i), 4(j)
and 4(k). Upon advising the Agent that such solicitation may be resumed,
however, the Company shall simultaneously provide the documents required to be
delivered by Sections 4(h), 4(i), 4(j) and 4(k), and the Agent shall have no
obligation to solicit offers to purchase the Securities until such documents
have been received by the Agent. In addition, any failure by the Company to
comply with its obligations hereunder, including without limitation its
obligations to deliver the documents required by Sections 4(h), 4(i), 4(j) and
4(k), shall automatically terminate the Agent's obligations hereunder, including
without limitation its obligations to solicit offers to purchase the Securities
hereunder as agent or to purchase Securities hereunder as principal.
Unless otherwise agreed upon in a Terms Agreement, the Company agrees
to pay the Agent a commission, at the time of settlement of any sale of a
Security by the Company as a result of a solicitation made by such Agent, in an
amount equal to the following applicable percentage of the principal amount of
such Security sold:
Range of Maturities Commission (percentage
of aggregate principal
amount of Securities sold)
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years to 30 years .750%
From more than 30 years as agreed to by the
Company and the
applicable agent at
the time of sale
(b) Each sale of Securities to the Agent as principal shall be made in
accordance with the terms of this Agreement and (unless the Company and
such Agent shall otherwise agree) a Terms Agreement, which will provide
for the sale of such Securities to, and the purchase thereof by, such
Agent. A Terms Agreement may also specify certain provisions relating
to the reoffering of such Securities by such Agent. The commitment of
the Agent to purchase Securities as principal, whether pursuant to any
Terms Agreement or otherwise, shall be deemed to have been made on the
basis of the representations and warranties of the Company herein
contained and shall be subject to the terms and conditions herein set
forth. Each Terms Agreement shall specify the principal amount of
Securities to be purchased by the agent pursuant thereto, the price to
be paid to the Company for such Securities, the underwriting discounts
or commissions to be paid to the agents, if different from those
specified in the table in Section 2(a) of this Agreement, any
provisions relating to rights of, and default by, underwriters acting
together with such Agent in the reoffering of the Securities and the
time and date and place of delivery of and payment for such Securities.
Such Terms Agreement shall also specify any requirements for opinions
of counsel, accountants' letters and officers' certificates pursuant to
Section 4 hereof. The Agent proposes to offer Securities purchased by
it as principal for sale at prevailing market prices or prices related
thereto at the time of sale, which may be equal to, greater than or
less than the price at which such Securities are purchased by such
Agent from the Company.
For each sale of Securities to the Agent as principal that is not made
pursuant to a Terms Agreement, the procedural details relating to the issue and
delivery of such Securities and payment therefor shall be as set forth in the
Administrative Procedure. For each such sale of Securities to the Agent as
principal that is not made pursuant to a Terms Agreement, the Company agrees to
pay such Agent a commission (or grant an equivalent discount) as provided in
Section 2(a) hereof and in accordance with the schedule set forth therein.
Each time and date of delivery of and payment for Securities to be
purchased by the Agent as principal, whether set forth in a Terms Agreement or
in accordance with the Administrative Procedure, is referred to herein as a
"Time of Delivery".
3. The documents required to be delivered pursuant to Section 6 hereof on the
Commencement Date (as defined below) shall be delivered to the Agent at the
offices of Brown & Wood LLP, One World Trade Center, New York, New York, at
11:00 a.m., New York City time, on the date of this Agreement, which date and
time of such delivery may be postponed by agreement between the Agent and the
Company but in no event shall be later than the day prior to the date on which
solicitation of offers to purchase Securities is commenced or on which any Terms
Agreement is executed (such time and date being referred to herein as the
"Commencement Date").
4. The Company covenants and agrees with the Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which
shall be disapproved by the Agent promptly after reasonable notice
thereof or (B) after the date of any Terms Agreement or other agreement
by the Agent to purchase Securities as principal and prior to the
related Time of Delivery which shall be disapproved by the Agent party
to such Terms Agreement or so purchasing as principal promptly after
reasonable notice thereof; (ii) to prepare, with respect to any
Securities to be sold through or to such Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Securities in a
form previously approved by such Agent and to file such Pricing
Supplement pursuant to Rule 424(b)(3) under the Act not later than the
close of business of the Commission on the fifth business day after the
date on which such Pricing Supplement is first used; (iii) to make no
amendment or supplement to the Registration Statement or Prospectus,
other than any Pricing Supplement (including, without limitation, any
Pricing Supplement relating to Securities sold to or through an
underwriter or agent pursuant to the third paragraph of this
Agreement), at any time prior to having afforded the Agent a reasonable
opportunity to review and comment thereon; (iv) to file promptly all
reports and any definitive proxy or information statements required to
be filed by the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of the
Securities, and during such same period to advise such Agent, promptly
after the Company receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or has become
effective or any supplement to the Prospectus or any amended Prospectus
(other than any Pricing Supplement that relates to Securities not
purchased through or by such Agent) has been filed with the Commission,
of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any prospectus relating to the
Securities, of the suspension of the qualification of the Securities
for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request
by the Commission for the amendment or supplement of the Registration
Statement or Prospectus or for additional information; and (v) in the
event of the issuance of any such stop order or of any such order
preventing or suspending the use of any such prospectus or suspending
any such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly to take such action as such Agent may reasonably request
to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as such Agent may request and to comply with
such laws so as to permit the continuance of sales and dealings therein
for as long as may be necessary to complete the distribution or sale of
the Securities; provided, however, that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) To furnish such Agent with copies of the Registration Statement and
each amendment thereto, with copies of the Prospectus as each time
amended or supplemented, other than any Pricing Supplement (except as
provided in the Administrative Procedure), in the form in which it is
filed with the Commission pursuant to Rule 424 under the Act, and with
copies of the documents incorporated by reference therein, all in such
quantities as such Agent may reasonably request from time to time; and,
if the delivery of a prospectus is required at any time in connection
with the offering or sale of the Securities (including Securities
purchased from the Company by such Agent as principal) and if at such
time any event shall have occurred as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary during such same
period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus
in order to comply with the Act, the Exchange Act or the Trust
Indenture Act, to notify such Agent and request such Agent, in its
capacity as agent of the Company, to suspend solicitation of offers to
purchase Securities from the Company (and, if so notified, such Agent
shall cease such solicitations as soon as practicable, but in any event
not later than one business day later); and if the Company shall decide
to amend or supplement the Registration Statement or the Prospectus as
then amended or supplemented, to so advise such Agent promptly by
telephone (with confirmation in writing) and to prepare and cause to be
filed promptly with the Commission an amendment or supplement to the
Registration Statement or the Prospectus as then amended or
supplemented that will correct such statement or omission or effect
such compliance; provided, however, that if during such same period
such Agent continues to own Securities purchased from the Company by
such Agent as principal or such Agent is otherwise required to deliver
a prospectus in respect of transactions in the Securities, the Company
shall promptly prepare and file with the Commission such an amendment
or supplement;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) So long as any Securities are outstanding, to furnish to such Agent
copies of all reports or other communications (financial or other)
furnished to shareholders, and deliver to such Agent (i) as soon as
they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed;
(ii) such additional information concerning the business and financial
condition of the Company as such Agent may from time to time reasonably
request (such financial statements to be on a consolidated basis to the
extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its shareholders generally or to
the Commission); and (iii) information relating to any downgrading in
the rating of the Securities or any other debt securities of the
Company, or any published or publicly disseminated proposal to consider
a downgrade in the rating of the Securities or any other debt
securities of the Company, by any "nationally recognized statistical
rating organization" (as defined for such purposes of Rule 436(g) under
the Act), as soon as an executive officer of the Company is informed of
any such downgrading or publicly disseminated proposal to consider such
downgrading;
(f) That, from the date of any Terms Agreement with such Agent or other
agreement by such Agent to purchase Securities as principal and
continuing to and including the later of (i) the termination of the
trading restrictions for the Securities purchased thereunder, as
notified to the Company by such Agent and (ii) the related Time of
Delivery, not to offer, sell, contract to sell or otherwise dispose of
any debt securities of the Company which both mature more than 9 months
after such Time of Delivery and are substantially similar to the
Securities, without the prior written consent of such Agent;
(g) That each acceptance by the Company of an offer to purchase
Securities hereunder (including any purchase by such Agent as principal
not pursuant to a Terms Agreement), and each execution and delivery by
the Company of a Terms Agreement with such Agent, shall be deemed to be
an affirmation to such Agent that the representations and warranties of
the Company contained in or made pursuant to this Agreement are true
and correct as of the date of such acceptance, as though made at and as
of such date, and an undertaking that such representations and
warranties will be true and correct as of the settlement date for the
Securities relating to such acceptance as though made at and as of such
date (except that such representations and warranties shall be deemed
to relate to the Registration Statement and the Prospectus as amended
and supplemented relating to such Securities);
(h) That reasonably in advance of each time the Registration Statement
or the Prospectus shall be amended or supplemented (other than by a
Pricing Supplement), each time a document filed under the Act or the
Exchange Act is incorporated by reference into the Prospectus, and each
time the Company sells Securities to such Agent as principal pursuant
to a Terms Agreement and such Terms Agreement specifies the delivery of
an opinion or opinions by Brown & Wood LLP, counsel to the Agent, as a
condition to the purchase of Securities pursuant to such Terms
Agreement, the Company shall furnish to such counsel such papers and
information as they may reasonably request to enable them to furnish to
such Agent the opinion or opinions referred to in Section 6(b) hereof;
(i) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each
time a document filed under the Act or the Exchange Act is incorporated
by reference into the Prospectus and each time the Company sells
Securities to such Agent as principal pursuant to a Terms Agreement and
such Terms Agreement specifies the delivery of an opinion under this
Section 4(i) as a condition to the purchase of Securities pursuant to
such Terms Agreement, the Company shall furnish or cause to be
furnished forthwith to such Agent a written opinion of Barnes &
Thornburg, counsel for the Company, or other counsel for the Company
satisfactory to such Agent, dated the date of such amendment,
supplement, incorporation or Time of Delivery relating to such sale, as
the case may be, in form satisfactory to such Agent, to the effect that
such Agent may rely on the opinion of such counsel referred to in
Section 6(c) hereof which was last furnished to such Agent to the same
extent as though it were dated the date of such letter authorizing
reliance (except that the statements in such last opinion shall be
deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to such date) or, in lieu of such opinion, an
opinion of the same tenor as the opinion of such counsel referred to in
Section 6(c) hereof but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date;
(j) That each time the Registration Statement or the Prospectus shall
be amended or supplemented and each time that a document filed under
the Act or the Exchange Act is incorporated by reference into the
Prospectus, in either case to set forth financial information included
in or derived from the Company's consolidated financial statements or
accounting records, and each time the Company sells Securities to such
Agent as principal pursuant to a Terms Agreement and such Terms
Agreement specifies the delivery of a letter under this Section 4(j) as
a condition to the purchase of Securities pursuant to such Terms
Agreement, the Company shall cause the independent certified public
accountants who have certified the financial statements of the Company
and its subsidiaries included or incorporated by reference in the
Registration Statement forthwith to furnish such Agent a letter, dated
the date of such amendment, supplement, incorporation or Time of
Delivery relating to such sale, as the case may be, in form
satisfactory to such Agent, of the same tenor as the letter referred to
in Section 6(d) hereof but modified to relate to the Registration
Statement and the Prospectus as amended or supplemented to the date of
such letter, with such changes as may be necessary to reflect changes
in the financial statements and other information derived from the
accounting records of the Company, to the extent such financial
statements and other information are available as of a date not more
than three business days prior to the date of such letter; provided,
however, that, with respect to any financial information or other
matter, such letter may reconfirm as true and correct at such date as
though made at and as of such date, rather than repeat, statements with
respect to such financial information or other matter made in the
letter referred to in Section 6(d) hereof which was last furnished to
such Agent;
(k) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each
time a document filed under the Act or the Exchange Act is incorporated
by reference into the Prospectus and each time the Company sells
Securities to such Agent as principal and the applicable Terms
Agreement specifies the delivery of a certificate under this Section
4(k) as a condition to the purchase of Securities pursuant to such
Terms Agreement, the Company shall furnish or cause to be furnished
forthwith to such Agent a certificate, dated the date of such
supplement, amendment, incorporation or Time of Delivery relating to
such sale, as the case may be, in such form and executed by such
officers of the Company as shall be satisfactory to such Agent, to the
effect that the statements contained in the certificates referred to in
Section 6(h) hereof which were last furnished to such Agent are true
and correct at such date as though made at and as of such date (except
that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date)
or, in lieu of such certificate, certificates of the same tenor as the
certificates referred to in said Section 6(h) but modified to relate to
the Registration Statement and the Prospectus as amended and
supplemented to such date; and
(l) To offer to any person who has agreed to purchase Securities from
the Company as the result of an offer to purchase solicited by such
Agent the right to refuse to purchase and pay for such Securities if,
on the related settlement date fixed pursuant to the Administrative
Procedure, any condition set forth in Section 6(a), 6(e), 6(f) or 6(g)
hereof shall not have been satisfied (it being understood that the
judgment of such person with respect to the impracticability or
inadvisability of such purchase of Securities shall be substituted, for
purposes of this Section 4(l), for the respective judgments of the
Agent with respect to certain matters referred to in such Sections 6(e)
and 6(g), and that such Agent shall have no duty or obligation
whatsoever to exercise the judgment permitted under such Sections 6(e)
and 6(g) on behalf of any such person).
5. The Company covenants and agrees with the Agent that the Company will pay or
cause to be paid the following: (i) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus, the Prospectus and any Pricing Supplements and all other amendments
and supplements thereto and the mailing and delivering of copies thereof to such
Agent; (ii) the fees, disbursements and expenses of counsel for the Agent in
connection with the establishment of the program contemplated hereby, any
opinions to be rendered by such counsel hereunder and under any Terms Agreement
and the transactions contemplated hereunder and under any Terms Agreement; (iii)
the cost of printing, producing or reproducing this Agreement, any Terms
Agreement, any Indenture, any Blue Sky and Legal Investment Memoranda, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Securities;
(iv) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 4(b)
hereof, including the fees and disbursements of counsel for the Agent in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (v) any fees charged by securities rating services for
rating the Securities; (vi) any filing fees incident to, and the fees and
disbursements of counsel for the Agent in connection with, any required review
by the National Association of Securities Dealers, Inc. of the terms of the sale
of the Securities; (vii) the cost of preparing the Securities; (viii) the fees
and expenses of any Trustee and any agent of any Trustee and any transfer or
paying agent of the Company and the fees and disbursements of counsel for any
Trustee or such agent in connection with any Indenture and the Securities; (ix)
any advertising expenses connected with the solicitation of offers to purchase
and the sale of Securities so long as such advertising expenses have been
approved by the Company; and (x) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. Except as provided in Sections 7 and 8 hereof, the
Agent shall pay all other expenses it incurs.
6. The obligation of the Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities and the
obligation of the Agent to purchase Securities as principal, pursuant to any
Terms Agreement or otherwise, shall in each case be subject, in such Agent's
discretion, to the condition that all representations and warranties and other
statements of the Company herein (and, in the case of an obligation of the Agent
under a Terms Agreement, in or incorporated by reference in such Terms
Agreement) are true and correct at and as of the Commencement Date and any
applicable date referred to in Section 4(k) hereof that is prior to such
Solicitation Time or Time of Delivery, as the case may be, and at and as of such
Solicitation Time or Time of Delivery, as the case may be, the condition that
prior to such Solicitation Time or Time of Delivery, as the case may be, the
Company shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to such
Solicitation Time or Time of Delivery, as the case may be, the
Prospectus as amended or supplemented (including the Pricing
Supplement) with respect to such Securities shall have been filed with
the Commission pursuant to Rule 424(b) under the Act within the
applicable time period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section 4(a) hereof;
(ii) no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and (iii)
all requests for additional information on the part of the Commission
shall have been complied with to the reasonable satisfaction of such
Agent;
(b) Brown & Wood LLP, counsel to the Agent, shall have furnished to
such Agent (i) such opinion or opinions, dated the Commencement Date,
with respect to the matters covered in paragraphs (i), (iv), (v), (vi),
(ix) and (xiii) of subsection (c) below, as well as such other related
matters as such Agent may reasonably request; and (ii) if and to the
extent requested by such Agent, with respect to each applicable date
referred to in Section 4(h) hereof that is on or prior to such
Solicitation Time or Time of Delivery, as the case may be, an opinion
or opinions, dated such applicable date, to the effect that such Agent
may rely on the opinion or opinions which were last furnished to such
Agent pursuant to this Section 6(b) to the same extent as though it or
they were dated the date of such letter authorizing reliance (except
that the statements in such last opinion or opinions shall be deemed to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in any case, in lieu of such an opinion
or opinions, an opinion or opinions of the same tenor as the opinion or
opinions referred to in clause (i) but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented
to such date; and in each case such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) Barnes & Thornburg, counsel for the Company, or other counsel for
the Company satisfactory to such Agent, shall have furnished to such
Agent their written opinions, dated the Commencement Date and each
applicable date referred to in Section 4(i) hereof that is on or prior
to such Solicitation Time or Time of Delivery, as the case may be, in
form and substance satisfactory to such Agent, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation under the laws of the jurisdiction
of its incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as
described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus and all of the issued shares of capital
stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable;
(iii) To the best of such counsel's knowledge and other than
as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any
of its subsidiaries is a party or to which any property of the
Company or any of its subsidiaries is subject which, if
determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
material adverse effect on the current or future consolidated
financial position, shareholders' equity or results of
operations of the Company and its subsidiaries; and to the
best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others;
(iv) This Agreement and any applicable Terms Agreement have
been duly authorized, executed and delivered by the Company;
(v) The Securities have been duly authorized and, when duly
executed, authenticated, issued and delivered by the Company,
will constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Indenture;
and the Indenture and the Securities conform to the
descriptions thereof in the Prospectus;
(vi) The Indenture has been duly authorized, executed and
delivered by the parties thereto and constitutes a valid and
legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to (i) the United States
Bankruptcy Code, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights
or remedies generally and (ii) general equitable principles
(regardless of whether such enforcement is considered in a
proceeding at law or in equity) and to judicial discretion.
The Indenture has been duly qualified under the Trust
Indenture Act. All taxes and fees required to be paid with
respect to the execution of the Indenture and the issuance of
the Securities have been paid;
(vii) The issue and sale of the Securities, the compliance by
the Company with all of the provisions of the Securities, the
Indenture, this Agreement and any applicable Terms Agreement
and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such
counsel to which the Company is a party or by which the
Company is bound or to which any of the property or assets of
the Company is subject, nor will such action result in any
violation of the provisions of the Articles of Incorporation,
as amended, of the Company or the By-laws of the Company or
any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its properties;
(viii) The Company and its parent, Indiana Energy, Inc., are
presently exempt from the provisions of the Public Utility
Holding Company Act of 1935, as amended (except Section 9
thereof), which would otherwise require them to register
thereunder; and the Company's gas distribution activities are
exempt from or do not require compliance with the provisions
of the Natural Gas Act;
(ix) The statements set forth in the Prospectus under the
captions "Description of the Debt Securities" and "Description
of the Notes", insofar as they purport to constitute a summary
of the terms of the Securities, and under the two captions
"Plan of Distribution", insofar as they purport to describe
the provisions of the laws and documents referred to therein,
are accurate and complete in all material respects;
(x) The Company is not and, after giving effect to the
offering and sale of the Securities, will not be an
"investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the
Investment Company Act;
(xi) The documents incorporated by reference in the Prospectus
(other than the financial statements and related schedules,
financial data or statistical information therein, as to which
such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder;
and although they are not passing upon and do not assume any
responsibility for the accuracy and completeness of the
statements contained in such documents, such counsel advises
you on the basis of the discussions and inquiries concerning
various legal and related subjects and reviews of and reports
on certain corporate records, documents and proceedings and
conferences with representatives of the Company at which
certain portions of such documents were discussed (relying as
to certain facts relevant to a determination of materiality
upon the representations of the Company), no facts have come
to our attention which would lead us to believe that any of
such documents, when they became effective or were so filed,
as the case may be, contained, in the case of a registration
statement which became effective under the Act, an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, and, in the case of other
documents which were filed under the Act or the Exchange Act
with the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made when such documents were so filed,
not misleading;
(xii) To such counsel's knowledge, the Indiana Commission
Order is in full force and effect and is sufficient to permit
the Company to enter into and perform the transactions
contemplated by this Agreement; and no other consent,
approval, authorization, order, registration or qualification
of any court or governmental agency or body is required for
solicitation of offers to purchase Securities, the issue and
sale of the Securities or the consummation by the Company of
the other transactions contemplated by this Agreement, any
applicable Terms Agreement, or the Indenture, except such as
have been obtained under the Act and the Trust Indenture Act
and such as may be required under the blue sky laws of any
jurisdiction in connection with the sale of the Securities as
contemplated by this Agreement; and
(xiii) The Registration Statement and the Prospectus (other
than the financial statements and related schedules, financial
data or statistical information therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the
Trust Indenture Act and the applicable rules and regulations
thereunder; further, although they are not passing upon and do
not assume any responsibility for the accuracy and
completeness of the statements contained in the Registration
Statement and the Prospectus, such counsel advises you on the
basis of the discussions and inquiries concerning various
legal and related subjects and reviews of and reports on
certain corporate records, documents and proceedings and
conferences with representatives of the Company at which
certain portions of the Registration Statement and the
Prospectus were discussed (relying as to certain facts
relevant to a determination of materiality upon the
representations of the Company), no facts have come to our
attention which would lead us to believe that (A) as of its
effective date, the Registration Statement (other than the
financial statements and related schedules, financial data or
statistical information therein, as to which such counsel need
express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading, (B) as of their respective dates, the
Prospectus (other than the financial statements and related
schedules therein, financial data or statistical information,
as to which such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances in which they were
made, not misleading or (C) as of the date hereof either the
Registration Statement or the Prospectus (other than the
financial statements and related schedules, financial data or
statistical information therein, as to which such counsel need
express no opinion) contains an untrue statement of a material
fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; and they do not know of any amendment to the
Registration Statement required to be filed or any contracts
or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration
Statement or the Prospectus as amended or supplemented which
are not filed or incorporated by reference or described as
required;
(d) Not later than 10:00 a.m., New York City time, on the Commencement
Date and on each applicable date referred to in Section 4(j) hereof
that is on or prior to such Solicitation Time or Time of Delivery, as
the case may be, the independent certified public accountants who have
certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement
shall have furnished to such Agent a letter, dated the Commencement
Date or such applicable date, as the case may be, in form and substance
satisfactory to such Agent, to the effect set forth in Annex III
hereto;
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating to
the Securities to be delivered at the relevant Time of Delivery any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating to
the Securities to be delivered at the relevant Time of Delivery and
(ii) since the respective dates as of which information is given in the
Prospectus as amended or supplemented prior to the date of the Pricing
Supplement relating to the Securities to be delivered at the relevant
Time of Delivery there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or
any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented prior to the date of the Pricing
Supplement relating to the Securities to be delivered at the relevant
Time of Delivery, the effect of which, in any such case described in
Clause (i) or (ii), is in the judgment of such Agent so material and
adverse as to make it impracticable or inadvisable to proceed with the
solicitation by such Agent of offers to purchase Securities from the
Company or the purchase by such Agent of Securities from the Company as
principal, as the case may be, on the terms and in the manner
contemplated in the Prospectus as amended or supplemented prior to the
date of the Pricing Supplement relating to the Securities to be
delivered at the relevant Time of Delivery;
(f) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by
the Commission for purposes of Rule 436(g)(2) under the Act, and (ii)
no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating
of any of the Company's debt securities;
(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; or (ii) a general
moratorium on commercial banking activities in New York declared by
either Federal or New York State authorities; or (iii) the outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the
effect of any such event specified in this Clause (iii) in the judgment
of such Agent makes it impracticable or inadvisable to proceed with the
solicitation of offers to purchase Securities or the purchase of the
Securities from the Company as principal pursuant to the applicable
Terms Agreement or otherwise, as the case may be, on the terms and in
the manner contemplated in the Prospectus; and
(h) The Company shall have furnished or caused to be furnished to such
Agent certificates of officers of the Company dated the Commencement
Date and each applicable date referred to in Section 4(k) hereof that
is on or prior to such Solicitation Time or Time of Delivery, as the
case may be, in such form and executed by such officers of the Company
as shall be satisfactory to such Agent, as to the accuracy of the
representations and warranties of the Company herein at and as of the
Commencement Date or such applicable date, as the case may be, as to
the performance by the Company of all of its obligations hereunder to
be performed at or prior to the Commencement Date or such applicable
date, as the case may be, as to the matters set forth in subsections
(a) and (e) of this Section 6, and as to such other matters as such
Agent may reasonably request.
7. (a) The Company will indemnify and hold harmless the Agent against any
losses, claims, damages or liabilities, joint or several, to which such Agent
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement, the
Prospectus, the Prospectus as amended or supplemented or any other prospectus
relating to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse such Agent for any legal or other
expenses reasonably incurred by it in connection with investigating or defending
any such action or claim as such expenses are incurred; provided, however, that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by such Agent
expressly for use therein.
(b) The Agent will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus, the Prospectus as amended or supplemented or
any other prospectus relating to the Securities, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, the Registration Statement, the
Prospectus, the Prospectus as amended or supplemented or any other
prospectus relating to the Securities, or any such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by such Agent expressly for use therein; and
will reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and, after notice from the indemnifying party
to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or
any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to,
any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages
or liabilities (or actions in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Agent on the other from the
offering of the Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however, the
allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give
the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company
on the one hand and the Agent on the other in connection with the
statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Agent on the other shall be deemed
to be in the same proportion as the total net proceeds from the sale of
Securities (before deducting expenses) received by the Company bear to
the total commissions or discounts received by such Agent in respect
thereof. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading relates to information supplied by
the Company on the one hand or by the Agent on the other and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company and the Agent agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by per
capita allocation or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this
subsection (d), the Agent shall not be required to contribute any
amount in excess of the amount by which the total public offering price
at which the Securities purchased by or through it were sold exceeds
the amount of any damages which such Agent has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of each Agent under this subsection
(d) to contribute are several in proportion to the respective purchases
made by or through it to which such loss, claim, damage or liability
(or action in respect thereof) relates and are not joint.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls the Agent within the meaning of the Act; and the
obligations of the Agent under this Section 7 shall be in addition to
any liability which such Agent may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the
Company and to each person, if any, who controls the Company within the
meaning of the Act.
8. The Agent, in soliciting offers to purchase Securities from the Company and
in performing the other obligations of such Agent hereunder (other than in
respect of any purchase by the Agent as principal, pursuant to a Terms Agreement
or otherwise), is acting solely as agent for the Company and not as principal.
The Agent will make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Securities from the
Company was solicited by such Agent and has been accepted by the Company, but
such Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it has accepted, the
Company shall (i) hold the Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such offer any
commission to which it would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations, warranties and other
statements by the Agent and the Company set forth in or made pursuant to this
Agreement shall remain in full force and effect regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of the Agent
or any controlling person of the Agent, or the Company, or any officer or
director or any controlling person of the Company, and shall survive each
delivery of and payment for any of the Securities.
10. The provisions of this Agreement relating to the solicitation of offers to
purchase Securities from the Company may be suspended or terminated at any time
by the Company as to the Agent or by the Agent as to such Agent upon the giving
of written notice of such suspension or termination to such Agent or the
Company, as the case may be. In the event of such suspension or termination with
respect to the Agent, (x) this Agreement shall remain in full force and effect
with respect to the Agent as to which such suspension or termination has not
occurred, (y) this Agreement shall remain in full force and effect with respect
to the rights and obligations of any party which have previously accrued or
which relate to Securities which are already issued, agreed to be issued or the
subject of a pending offer at the time of such suspension or termination and (z)
in any event, this Agreement shall remain in full force and effect insofar as
the fourth paragraph of Section 2(a), and Sections 4(d), 4(e), 5, 7, 8 and 9
hereof are concerned.
11. Except as otherwise specifically provided herein or in the Administrative
Procedure, all statements, requests, notices and advice hereunder shall be in
writing, or by telephone if promptly confirmed in writing, and if to Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated shall be
sufficient in all respects when delivered or sent by telex, facsimile
transmission or registered mail to Merrill Lynch & Co., World Financial Center,
North Tower, 10th Floor, New York, New York 10281-1310, Facsimile Transmission
No. (212) 449-2234, Attention: MTN Product Management, and if to the Company
shall be sufficient in all respects when delivered or sent by facsimile
transmission or registered mail to Indiana Gas Company, Inc., 1630 North
Meridian Street, Indianapolis, Indiana 46202-1496, Facsimile Transmission No.
(317) 321-0517, Attention: Vice President and Treasurer.
12. This Agreement and any Terms Agreement shall be binding upon, and inure
solely to the benefit of, the Agent and the Company, and to the extent provided
in Sections 7, 8 and 9 hereof, the officers and directors of the Company and any
person who controls the Agent or the Company, and their respective personal
representatives, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement or any Terms Agreement. No
purchaser of any of the Securities through or from the Agent hereunder shall be
deemed a successor or assign by reason merely of such purchase.
13. Time shall be of the essence in this Agreement and any Terms Agreement. As
used herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
14. This Agreement and any Terms Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
15. This Agreement and any Terms Agreement, respectively, may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be an original, but all of such respective counterparts
shall together constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us six counterparts hereof, whereupon this letter and the
acceptance by each of you thereof shall constitute a binding agreement between
the Company and each of you in accordance with its terms.
Very truly yours,
INDIANA GAS COMPANY, INC.
By:________________________
Name:
Title:
Accepted in New York, New York, as of the date hereof:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
By: _____________________________
Name:
Title:
2
<PAGE>
EXHIBIT A
[Date]
[Address]
Re: [Amount of Issue] Medium Term Notes, Series G
Ladies and Gentlemen:
We hereby confirm that, in consideration for your agreeing to
distribute this issue, for the purpose of this issue only, we will treat you in
all respects as an agent for our $100,000,000 Medium-Term Note Program and you
will enjoy all rights and benefits, and be subject to all the obligations of the
Agent as set out in the Distribution Agreement, dated ____________, 1999, a copy
of which has been delivered to you.
This letter shall be governed by, and construed in accordance with, the
laws of the State of New York.
Please confirm your acceptance of the following by signing this letter
and returning it to us.
Yours faithfully,
INDIANA GAS COMPANY, INC.
By:
Name:
Title:
Acknowledged and Accepted:
[NAME]
By:
Name:
Title:
<PAGE>
EXHIBIT B
FORM OF DEALER ACCESSION LETTER
[Date]
Indiana Gas Company, Inc.
1630 North Meridian Street
Indianapolis, Indiana 46202-1496
Attention:
Re: $100,000,000 Medium Term Notes, Series G
Ladies and Gentlemen:
We refer to the Distribution Agreement, dated ____________, 1999,
entered into in respect of the above $100,000,000 Medium-Term Note Program (the
"Program") and made between you and the Agent party thereto (which agreement, as
amended from time to time, is herein referred to as the " Agreement") .
Conditions Precedent
We confirm that we are in receipt of the documents referenced below:
- copy of the Agreement;
- a copy of all documents referred to in Section 6 of the
Agreement;
- a side letter in a form approved by ourselves from each of the
legal advisers referred to in Section 6 of the Agreement
addressed to ourselves and giving us the full benefit of the
existing legal opinions;
and have found them to our satisfaction.
For purposes of the Agreement, our Notice Details are as follows:
[Insert name, address, telephone, telex
(+ answerback) and attention]
In consideration of your appointment of us as an Agent under the
Agreement we hereby undertake, for the benefit of each of you and each of the
other Agents, that we will perform and comply with all the duties and
obligations expressed to be assumed by an Agent under the Agreement.
We understand that, in accordance with the Agreement, with effect from
the date hereof, we shall become a party to the Agreement, vested with all the
authority, rights, powers, duties and obligations of an Agent as if originally
named as an Agent under the Agreement.
This letter is governed by, and shall be construed in accordance with,
New York law.
If the foregoing is in accordance with your understanding, please sign
and return to us a copy hereof, whereupon this letter and the acceptance by you
thereof shall constitute a binding agreement between us and each of you in
accordance with its terms.
Yours faithfully,
Acknowledged and Accepted:
INDIANA GAS COMPANY, INC.
By:
Name:
Title:
<PAGE>
ANNEX I
INDIANA GAS COMPANY, INC.
Medium-Term Notes, Series G
Terms Agreement
_____________, 19___
Ladies and Gentlemen:
Indiana Gas Company, Inc. (the "Company") proposes, subject to the
terms and conditions stated herein and in the Distribution Agreement, dated
____________, 1999 (the "Distribution Agreement"), between the Company on the
one hand and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Agent") on the other, to issue and sell to the Agent the
securities specified in the Schedule hereto (the "Purchased Securities"). Each
of the provisions of the Distribution Agreement not specifically related to the
solicitation by the Agent, as agent of the Company, of offers to purchase
Securities is incorporated herein by reference in its entirety, and shall be
deemed to be part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Nothing contained herein or in the
Distribution Agreement shall make any party hereto an agent of the Company or
make such party subject to the provisions therein relating to the solicitation
of offers to purchase Securities from the Company, solely by virtue of its
execution of this Terms Agreement. Each of the representations and warranties
set forth therein shall be deemed to have been made at and as of the date of
this Terms Agreement, except that each representation and warranty in Section 1
of the Distribution Agreement which makes reference to the Prospectus shall be
deemed to be a representation and warranty as of the date of the Distribution
Agreement in relation to the Prospectus (as therein defined), and also a
representation and warranty as of the date of this Terms Agreement in relation
to the Prospectus as amended and supplemented to relate to the Purchased
Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to _______________ and ________________ agrees to purchase from
the Company the Purchased Securities, at the time and place, in the principal
amount and at the purchase price set forth in the Schedule hereto.
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us ____ counterparts hereof, and upon acceptance hereof by you
this letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
INDIANA GAS COMPANY, INC.
By:
Name:
Title:
Accepted:
[NAME]
By:
Name:
Title:
2
<PAGE>
Schedule to Annex I
Principal Amount: $_____________
Interest Rate or Formula:
[ ] If Fixed Rate Note,
Interest Rate:
Interest Payment Dates:
[ ] If Floating Rate Note,
Interest Rate Basis(es):
If LIBOR,
[ ]LIBOR Reuters Page:
[ ]LIBOR Telerate Page:
Designated LIBOR Currency:
If CMT Rate,
Designated CMT Telerate Page:
If Telerate Page 7052:
[ ] Weekly Average
[ ] Monthly Average
Designated CMT Maturity Index:
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Day Count Convention:
Calculation Agent:
Redemption Provisions:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
Repayment Provisions:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity Date:
Authorized Denomination:
Purchase Price: __% , plus accrued interest, if any, from _________
Price to Public: __%, plus accrued interest, if any, from __________
Issue Price:
Settlement Date and Time:
Additional/Other Terms:
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the Agent referred to in
Section 4(h).]
[(2) The opinion of counsel to the Company referred to in Section
4(i).]
[(3) The accountants' letter referred to in Section 4(j).]
[(4) The officers' certificate referred to in Section 4(k).]
<PAGE>
ANNEX II
INDIANA GAS COMPANY, INC.
Administrative Procedure
------------------------
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated ________________, 1999 (the "Distribution
Agreement"), between Indiana Gas Company, Inc. (the "Company") and Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the " Agent"), to
which this Administrative Procedure is attached as Annex II. Defined terms used
herein and not defined herein shall have the meanings given such terms in the
Distribution Agreement, the Prospectus as amended or supplemented or the
Indenture.
The procedures to be followed with respect to the settlement of sales
of Securities directly by the Company to purchasers solicited by the Agent, as
agent, are set forth below. The terms and settlement details related to a
purchase of Securities by the Agent, as principal, from the Company will be set
forth in a Terms Agreement pursuant to the Distribution Agreement, unless the
Company and such Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. The Agent, in
relation to a purchase of a Security by a purchaser solicited by such Agent, is
referred to herein as the "Selling Agent" and, in relation to a purchase of a
Security by such Agent as principal other than pursuant to a Terms Agreement, as
the "Purchasing Agent."
The Company will advise the Agent in writing of those persons with whom
such Agent is to communicate regarding offers to purchase Securities and the
related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global security (a "Global Security") delivered to the
Trustee, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security") or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by the Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate representing such a Security, except as
provided in the Indenture.
Book-Entry Securities will be issued in accordance with the
Administrative Procedure set forth in Part I hereof, and Certificated Securities
will be issued in accordance with the Administrative Procedure set forth in Part
II hereof.
PART 1: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
- -----------------------------------------------------------
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representation from the Company and the Trustee to the Depositary, dated the
date hereof, and a Medium-Term Note Certificate Agreement between the Trustee
and the Depositary, dated as of January 31, 1991 (the "Certificate Agreement"),
and its obligations as a participant in the Depositary, including the
Depositary's Same-Day Funds Settlement System ("SDFS").
Posting Rates by the Company:
The Company and the Agent will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by the Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agent to suspend solicitation of offers until the new
posted rates have been established with the Agent.
Acceptance of Offers by the Company:
The Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by such Agent. The Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. The
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Agent or Purchasing Agent, as the
case may be, of its acceptance or rejection of an offer to purchase Book-Entry
Securities. If the Company accepts an offer to purchase Book-Entry Securities,
it will confirm such acceptance in writing to the Selling Agent or Purchasing
Agent, as the case may be, and by telephone and in writing to the Trustee.
Communication of Sale Information to the Company by Agent and Settlement
Procedures:
A. After the acceptance of an offer by the Company, the Selling Agent
or Purchasing Agent, as the case may be, will communicate promptly, but in no
event later than the time set forth under "Settlement Procedure Timetable"
below, the following details of the terms of such offer (the "Sale Information")
to the Company by telephone (confirmed in writing) or by facsimile transmission
or other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) Type of Interest Rate;
(3) If a Fixed Rate Book-Entry Security, the interest rate and
initial interest payment date;
(4) Trade Date;
(5) Settlement Date;
(6) Maturity Date;
(7) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as
the case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Book-Entry Security, such of the following as
are applicable:
(i) Initial Redemption Date,
(ii) Initial Redemption Percentage (% of par), and
(iii) Annual Redemption Percentage Reduction (% of Par)
that the Redemption Price shall decline (but not
below par) on each anniversary of the Initial
Redemption Date;
(12) If a Floating Rate Book-Entry Security, such of the following
as are applicable:
(i) Interest Rate Basis,
(a) If LIBOR, the designated LIBOR Page and Designated
LIBOR Currency,
(b) If CMT Rate, the Designated CMT Telerate Page and
Designated CMT Maturity Index,
(ii) Index Maturity,
(iii) Spread and/or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) If a repayable Book-Entry Security, the Optional Repayment
Date(s);
(14) Name, address and taxpayer identification number of the
registered owner(s);
(15) Denomination of certificates to be delivered at settlement;
(16) Book-Entry Security or Certificated Security; and
(17) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Trustee will assign a CUSIP number to the Global Security from a list
of CUSIP numbers previously delivered to the Trustee by the Company representing
such Book-Entry Security and then advise the Company and the Selling Agent or
Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the
following settlement information to the Depositary, and the
Depositary shall forward such information to such Agent and
Standard & Poor's Corporation:
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such
Book-Entry Security;
(3) Whether such Global Security will represent any other
Book-Entry Security (to the extent known at such
time);
(4) Number of the participant account maintained by the
Depositary on behalf of the Selling Agent or
Purchasing Agent, as the case may be;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book-Entry
Security, number of days by which such date succeeds
the record date for the Depositary's purposes (or, in
the case of Floating Rate Securities which reset
daily or weekly, the date five calendar days
immediately preceding the applicable Interest Payment
Date and, in the case of all other Book-Entry
Securities, the Regular Record Date, as defined in
the Security) and, if calculable at that time, the
amount of interest payable on such Interest Payment
Date.
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the Trustee's
participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary to (i) debit
such Book-Entry Security to the Trustee's participant account and credit such
Book-Entry Security to such Agent's participant account and (ii) debit such
Agent's settlement account and credit the Trustee's settlement account for an
amount equal to the price of such Book-Entry Security less such Agent's
commission. The entry of such a deliver order shall constitute a representation
and warranty by the Trustee to the Depositary that (a) the Global Security
representing such Book-Entry Security has been issued and authenticated and (b)
the Trustee is holding such Global Security pursuant to the Certificate
Agreement.
G. Such Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such
Book-Entry Security to such Agent's participant account and credit such
Book-Entry Security to the participant accounts of the Participants with respect
to such Book-Entry Security and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
H. Transfers of funds in accordance with SDFS deliver orders described
in Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will transfer to
the account of the Company maintained at National City Bank Indiana,
Indianapolis, Indiana, or such other account as the Company may have previously
specified to the Trustee, in funds available for immediate use in the amount
transferred to the Trustee in accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to the Company a statement
setting forth the principal amount of Book-Entry Securities outstanding as of
that date under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry Security to
the purchaser either by transmitting to the Participants with respect to such
Book-Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
L. The Depositary will, at any time, upon request of the Company or the
Trustee, promptly furnish to the Company or the Trustee a list of the names and
addresses of the participants for whom the Depositary has credited Book-Entry
Securities.
Preparation of Pricing Supplement:
If the Company accepts an offer to purchase a Book-Entry Security, it
will prepare a Pricing Supplement reflecting the terms of such Book-Entry
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade Date
(as defined below), or if the Company and the purchaser agree to settlement on
the Business Day following the date of acceptance of such offer, not later than
noon, New York City time, on such date. The Company will file such Pricing
Supplement pursuant to Rule 424(b)(3) under the 1933 Act not later than the
close of business of the Commission on the fifth business day after the date on
which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Book-Entry Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in payment
for a Book-Entry Security and the authentication and issuance of the Global
Security representing such Book-Entry Security shall constitute "settlement"
with respect to such Book-Entry Security. All orders of Book-Entry Securities
solicited by a Selling Agent or made by a Purchasing Agent and accepted by the
Company on a particular date (the "Trade Date") will be settled on a date (the
"Settlement Date") which is the third Business Day after the Trade Date pursuant
to the "Settlement Procedure Timetable" set forth below, unless the Company and
the purchaser agree to settlement on another Business Day which shall be no
earlier than the next Business Day after the Trade Date.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the third Business Day after the Trade
Date, Settlement Procedures "A" through "I" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
<PAGE>
<TABLE>
<CAPTION>
Settlement Time
Procedure
- --------------------------- -------------------------------------------------------------------------
<S> <C> <C>
A 5:00 p.m. on the Business Day following the Trade Date or 10:00 a.m. on the Business
Day prior to the Settlement Date, whichever is earlier
B 12:00 noon on the second Business Day immediately preceding the Settlement Date
C 2:00 p.m. on the second Business Day immediately preceding the Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
</TABLE>
If the initial interest rate for a Floating Rate Book-Entry Security
has not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participant Terminal System, a cancellation message to
such effect by no later than 2:00 p.m. on the Business Day immediately preceding
the scheduled Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security pursuant to Settlement Procedure "F", the Trustee may
deliver to the Depositary, through the Depositary's Participant Terminal System,
as soon as practicable a withdrawal message instructing the Depositary to debit
such Book-Entry Security to the Trustee's participant account, provided that the
Trustee's participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
mark such Global Security "canceled", make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with cusip Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely paid to
the participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn,
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security to the Trustee's
participant account and shall notify the Company and the Trustee thereof.
Thereafter, the Trustee will (i) immediately notify the Company of such order
and the Company shall transfer to such Agent funds available for immediate use
in an amount equal to the price of such Book-Entry Security which was credited
to the account of the Company maintained at the Trustee in accordance with
Settlement Procedure I, and (ii) deliver the withdrawal message and take the
related actions described in the preceding paragraph. If such failure shall have
occurred for any reason other than default by the applicable Agent to perform
its obligations hereunder or under the Distribution Agreement, the Company will
reimburse such Agent on an equitable basis for the loss of its use of funds
during the period when the funds were credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Security, the Depositary may take any actions in accordance with
its SDFS operating procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, of the Book- Entry Securities
to have been represented by a Global Security, the Trustee will provide, in
accordance with Settlement Procedure "D", for the authentication and issuance of
a Global Security representing the other Book-Entry Securities to have been
represented by such Global Security and will make appropriate entries in its
records. The Company will, from time to time, furnish the Trustee with a
sufficient quantity of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
- --------------------------------------------------------------
Posting Rates by Company:
The Company and the Agent will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by the Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agent to suspend solicitation of offers until
the new posted rates have been established with the Agent.
<PAGE>
Acceptance of Offers by Company:
The Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. The Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. The
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing Agent,
as the case may be, of its acceptance or rejection of an offer to purchase
Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in writing to the
Selling Agent or Purchasing Agent, as the case may be, and the Trustee.
Communication of Sale Information to Company by Agent:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
1. Principal Amount of Certificated Securities to be purchased;
2. Type of Interest Rate;
3. If a Fixed Rate Certificated Security, the interest rate and initial
interest payment date;
4. Trade Date;
5. Settlement Date;
6. Maturity Date;
7. Indexed Currency, the Base Rate and the Exchange Rate Determination
Date, if applicable;
8. Issue Price;
9. Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
10. Net Proceeds to the Company;
11. If a redeemable Certificated Security, such of the following as are
applicable:
(i) Initial Redemption Date,
(ii) Initial Redemption Percentage (% of par), and
(iii) Annual Redemption Percentage Reduction (% of par)
that the Redemption Price shall decline (but not
below par) on each anniversary of the Initial
Redemption Date;
12. If a Floating Rate Certificated Security, such of the following as
are applicable:
(i) Interest Rate Basis,
(a) If LIBOR, the designated LIBOR Page and
Designated LIBOR Currency,
(b) If CMT Rate, the Designated CMT Telerate
Page and Designated CMT Maturity Index,
(ii) Index Maturity,
(iii) Spread and/or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
13. If a repayable Certificated Security, the Optional Repayment
Date(s);
14. Name, address and taxpayer identification number of the registered
owner(s);
15. Denomination of certificates to be delivered at settlement;
16. Book-Entry Security or Certificated Security; and
17. Selling Agent or Purchasing Agent.
<PAGE>
Preparation of Pricing Supplement by Company:
If the Company accepts an offer to purchase a Certificated Security, it
will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade
Date, or if the Company and the purchaser agree to settlement on the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will file such Pricing Supplement pursuant to Rule 424(b)(3) under
the 1933 Act not later than the close of business of the Commission on the fifth
business day after the date on which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Certificated
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Certificated Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Certificated Security.
Date of Settlement:
All offers of Certificated Securities solicited by a Selling Agent or
made by a Purchasing Agent and accepted by the Company will be settled on a date
(the "Settlement Date") which is the third Business Day after the date of
acceptance of such offer, unless the Company and the purchaser agree to
settlement (a) on another Business Day after the acceptance of such offer or (b)
with respect to an offer accepted by the Company prior to 10:00 a.m., New York
City time, on the date of such acceptance.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or
other acceptable written means to authenticate and deliver the Certificated
Securities no later than 2:15 p.m., New York City time, on the Settlement Date.
Such instruction will be given by the Company prior to 3:00 p.m., New York City
time, on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
<PAGE>
Preparation and Delivery of Certificated Securities by Trustee and Receipt of
Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser
solicited by a Selling Agent, the Trustee will, by 2:15 p.m., New York City
time, on the Settlement Date, deliver the Certificated Securities to the Selling
Agent for the benefit of the purchaser of such Certificated Securities against
delivery by the Selling Agent of a receipt therefor. On the Settlement Date the
Selling Agent will deliver payment for such Certificated Securities in
immediately available funds to the Company in an amount equal to the issue price
of the Certificated Securities less the Selling Agent's commission; provided
that the Selling Agent reserves the right to withhold payment for which it has
not received funds from the purchaser. The Company shall not use any proceeds
advanced by a Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing Agent,
the Trustee will, by 2:15 p.m., New York City time, on the Settlement Date,
deliver the Certificated Securities to the Purchasing Agent against delivery of
payment for such Certificated Securities in immediately available funds to the
Company in an amount equal to the issue price of the Certificated Securities
less the Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make payment to
the Selling Agent for a Certificated Security, the Selling Agent will promptly
notify the Trustee and the Company thereof by telephone (confirmed in writing)
or by facsimile transmission or other acceptable written means. The Selling
Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
The Trustee will cancel the Certificated Security in respect of which
the failure occurred, make appropriate entries in its records and, unless
otherwise instructed by the Company, destroy the Certificated Security.
<PAGE>
ANNEX III
Accountants' Letter
Pursuant to Sections 4(j) and 6(d), as the case may be, of the
Distribution Agreement, the Company's independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the Act and
the applicable published rules and regulations thereunder;
(ii) In their opinion, the consolidated financial statements
and any supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) audited by them and
incorporated by reference in the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the Act and the
Exchange Act, as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public Accountants
of the consolidated interim financial statements, selected financial data, pro
forma financial information, financial forecasts and/or condensed financial
statements derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports thereon, copies
of which are attached;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of the
unaudited condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the Company's
quarterly report on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which are attached; and on the
basis of specified procedures including inquiries of officials of the Company
who have responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to in
paragraph (v)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and the
related published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such fiscal years which were included or
incorporated by reference in the Company's Annual Reports on Form 10-K for such
fiscal years;
(v) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute books
of the Company and its subsidiaries since the date of the latest audited
financial statements incorporated by reference in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be specified
in such letter, nothing came to their attention that caused them to believe
that:
(A)(i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in the
Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made
to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Company's Quarterly Reports on Form
10-Q incorporated by reference in the Prospectus for them to
be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived;
(C) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included
or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and
its subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by the
Agent, or any increases in any items specified by the Agent,
in each case as compared with amounts shown in the latest
balance sheet incorporated by reference in the Prospectus,
except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(D) for the period from the date of the latest
financial statements incorporated by reference in the
Prospectus to the specified date referred to in Clause (C)
above there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the Agent,
or any increases in any items specified by the Agent, in each
case as compared with the comparable period of the preceding
year and with any other period of corresponding length
specified by the Agent, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter.
(vi) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures referred
to in paragraphs (iii) and (v) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and financial
information specified by the Agent which are derived from the general accounting
records of the Company and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference), or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the Agent or
in documents incorporated by reference in the Prospectus specified by the Agent,
and have compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have found
them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Distribution Agreement as of the Commencement Date
referred to in Section 6(d) thereof and to the Prospectus as amended or
supplemented (including the documents incorporated by reference therein) as of
the date of the amendment, supplement, incorporation or the Time of Delivery
relating to the Terms Agreement requiring the delivery of such letter under
Section 4(j) thereof.
OFFICERS' CERTIFICATE PURSUANT TO
SECTION 301 OF THE INDENTURE
We, the undersigned Niel C. Ellerbrook, President and Chief Executive
Officer and Paul T. Baker, Executive Vice President and Chief Operating Officer
of Indiana Gas Company, Inc., an Indiana corporation (the "Company"), in
accordance with Section 301 of the Indenture, dated as of February 1, 1991, as
supplemented and modified (the "Indenture"), of the Company to U.S. Bank Trust
National Association, successor Trustee (the "Trustee"), and pursuant to the
Pricing Committee Resolutions dated _______________, 1999, do hereby establish a
series of debt securities with the following terms and characteristics:
1. The title of the securities of such series shall be "Medium-Term
Notes, Series G" (individually a "Note" and collectively the "Notes");
2. The aggregate principal amount of Notes which may be authenticated
and delivered under the Indenture shall be limited to $100,000,000;
3. The date or dates on which the principal of a Note shall be payable
shall be determined at the time of sale of the Note by the proper officers of
the Company and communicated to the Trustee by Company Order, or by the proper
officers of the Company pursuant to the Administrative Procedure (attached
hereto as Exhibit A) (the "Administrative Procedure") attached as Annex II to
the Distribution Agreement, dated _____________, 1999, among the Company,
Merrill Lynch & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated,
provided, however, that in no event shall any Note have a term of less than 9
months from date of issue;
4. Interest on the Notes shall be payable to the Person or Persons in
whose names the Notes are registered at the close of business on the Record Date
(as hereinafter defined) for such interest, except as otherwise expressly
provided in the form of Fixed Rate Note (as hereafter defined) attached hereto
as Exhibit B and the Form of Floating Rate Note (as hereinafter defined)
attached hereto as Exhibit C, and hereby authorized and approved;
5. Any particular Note may bear interest at a fixed rate (a "Fixed Rate
Note") or at a floating rate (a "Floating Rate Note") all as determined by the
proper officers of the Company as follows: there shall be determined by the
proper officers of the Company and communicated to the Trustee by Company Order,
or by the proper officers of the Company pursuant to the Administrative
Procedure, at the time of sale of the Notes or any particular Note, (a) in the
case of Fixed Rate Notes, the interest rate or rates applicable to such Fixed
Rate Notes and the Authorized Denomination (such term being referred to in the
form of Fixed Rate Note attached hereto), and (b) in the case of Floating Rate
Notes, the Initial Interest Rate, the Interest Rate Basis or Bases (which shall
be the CD Rate, the CMT Rate, the Commercial Paper Rate, the Eleventh District
Cost of Funds Rate, the Federal Funds Rate, LIBOR, the Prime Rate, the Treasury
Rate or any other Interest Rate Basis or Bases determined at the time of sale of
any particular Note) and in the case of Floating Rate Notes with a LIBOR
Interest Rate Basis, the Designated LIBOR Currency, the Maximum Interest Rate,
if any, the
-1-
<PAGE>
Minimum Interest Rate, if any, the Interest Payment Dates, the Initial Interest
Reset Date, the Interest Reset Dates, the Index Maturity, the Spread, if any,
the Spread Multiplier, if any, the Interest Category, the Day Count Convention
and the Authorized Denomination (each of such terms being referred to in the
form of Floating Rate Note attached hereto); interest shall accrue on any Note
from the Original Issue Date specified in such Note or the most recent date to
which interest has been paid or duly provided for; the Interest Payment Dates
for the Fixed Rate Notes shall be determined at the time of sale of the Notes by
the proper officers of the Company and communicated to the Trustee by Company
Order, or determined by the proper officers of the Company pursuant to the
Administrative Procedure, and the Record Date with respect to each such Interest
Payment Date shall be the date 15 calendar days immediately preceding such
Interest Payment Date (whether or not a Business Day); the Interest Payment
Dates on Floating Rate Notes shall be determined at the time of sale of the
Notes by the proper officers of the Company and communicated to the Trustee by
Company Order, or determined by the proper officers of the Company pursuant to
the Administrative Procedure, and the Record Date with respect to each such
Interest Payment Date shall be the date 15 calendar days immediately preceding
such Interest Payment Date (whether or not a Business Day); unless otherwise
determined at the time of the sale of the Floating Rate Notes by the proper
officers of the Company and communicated to the Trustee by Company Order, or
determined by the proper officers of the Company pursuant to the Administrative
Procedure, interest on Floating Rate Notes which employ the CD Rate, the
Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the Federal
Funds Rate, LIBOR or the Prime Rate as an applicable Interest Rate Basis shall
be computed on the basis of 360 days in a year and interest on Floating Rate
Notes which employ the CMT Rate or the Treasury Rate as an applicable Interest
Rate Basis shall be computed on the basis of the actual number of days in the
year;
6. The corporate trust office of the Trustee in the City of New York,
State of New York shall be the office or agency of the Company at which the
principal of and premium, if any, and interest, if any, on the Notes shall be
payable, at which Notes may be surrendered for registration of transfer and
exchange and at which notices and demands to or upon the Company with respect of
the Notes and the Indenture may be served;
7. Any particular Note shall be redeemable in whole or in part, at the
option of the Company as and to the extent determined at the time of sale of any
particular Note thereof by the proper officers of the Company and communicated
to the Trustee by Company Order, or determined by the proper officers of the
Company pursuant to the Administrative Procedure;
8. The obligation, if any, of the Company to redeem or purchase any
particular Note thereof pursuant to any sinking fund or analogous provisions or
at the option of a Holder thereof (whether by means of an estate redemption
provision or otherwise) and the period or periods within which, the price or
prices at which, and the terms and conditions upon which, any particular Note
shall be redeemed or purchased, in whole or in part, pursuant to such obligation
shall be determined at the time of sale of any particular Note by the proper
officers of the Company and communicated to the Trustee by Company Order, or
determined by the proper officers of the Company pursuant to the Administrative
Procedure;
-2-
<PAGE>
9. The Notes may be issued in whole or in part in global form and the
depositary for Notes issued in global form shall be The Depository Trust
Company; interests in Notes issued in global form may not be exchanged, in whole
or in part, for the individual securities represented thereby, except that (a)
if the depositary is at any time unwilling or unable to continue as depositary
and a successor depositary is not appointed within 60 days, (b) if the Company
delivers to the trustee a Company Order to the effect that the global notes
shall be exchangeable, or (c) if a default or event of default has occurred and
is continuing with respect to the Notes, the Company will issue individual
certificated notes in exchange for global notes;
10. The Company reserves the right to make, by one or more Officers'
Certificates supplemental to this Officers' Certificate, any additional
covenants of the Company for the benefit of the Holders of such Note thereof,
any additional Events of Default with respect to all or any series of Securities
Outstanding or any other or additional provisions with respect to the Notes;
11. No service charge shall be made for the registration of transfer or
exchange of Securities; provided, however, that the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection with the exchange or transfer;
12. In the case of any Fixed Rate Note, if any Interest Payment Date,
or Maturity Date (as defined in the form of Fixed Rate Note attached hereto)
shall not be a Business Day (as defined in the form of Fixed Rate Note attached
hereto), payment of amounts due thereon on such date may be made on the next
succeeding Business Day as if such payment were made on the date such payment
were due and no interest shall accrue on such amounts for the period from and
after such Interest Payment Date or Maturity Date, as the case may be, to such
Business Day; in the case of any Floating Rate Note, if any Interest Payment
Date (as specified in such Floating Rate Note) shall not be a Business Day (as
defined in the form of Floating Rate Note attached hereto), payment of the
amounts due thereon on such date may be made on the next succeeding Business Day
(as defined in the form of Floating Rate Note attached hereto) except that, if
the Interest Rate Basis specified in such Floating Rate Note is LIBOR and such
next succeeding Business Day is in the next succeeding calendar month, such
payment shall be made on the immediately preceding Business Day (as defined in
the form of Floating Rate Note attached hereto). If the Maturity Date (as
defined in the form of Floating Rate Note) of a Floating Rate Note is not a
Business Day, payments of principal, premium, if any, and/or interest due on
such Floating Rate Note may be made on the next succeeding Business Day, and no
interest shall accrue on such amounts for the period from and after such
Maturity Date, to such next succeeding Business Day;
13. The Notes shall be substantially in the forms of the Fixed Rate
Note and the Floating Rate Note attached hereto and hereby authorized and
approved and shall have such further terms as set forth in such forms.
Capitalized terms used herein and not defined herein have the meaning
specified in the Indenture.
-3-
<PAGE>
IN WITNESS WHEREOF, we have hereunto signed our names as of the ____
day of ___________________, 1999.
-------------------------------------
Niel C. Ellerbrook
President and Chief Executive Officer
-------------------------------------
Paul T. Baker
Executive Vice President and
Chief Operating Officer
-4-
<PAGE>
EXHIBIT A
INDIANA GAS COMPANY, INC.
Administrative Procedure
------------------------
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated ________________, 1999 (the "Distribution
Agreement"), between Indiana Gas Company, Inc. (the "Company") and Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the " Agent"), to
which this Administrative Procedure is attached as Annex II. Defined terms used
herein and not defined herein shall have the meanings given such terms in the
Distribution Agreement, the Prospectus as amended or supplemented or the
Indenture.
The procedures to be followed with respect to the settlement of sales
of Securities directly by the Company to purchasers solicited by the Agent, as
agent, are set forth below. The terms and settlement details related to a
purchase of Securities by the Agent, as principal, from the Company will be set
forth in a Terms Agreement pursuant to the Distribution Agreement, unless the
Company and such Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. The Agent, in
relation to a purchase of a Security by a purchaser solicited by such Agent, is
referred to herein as the "Selling Agent" and, in relation to a purchase of a
Security by such Agent as principal other than pursuant to a Terms Agreement, as
the "Purchasing Agent."
The Company will advise the Agent in writing of those persons with whom
such Agent is to communicate regarding offers to purchase Securities and the
related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global security (a "Global Security") delivered to the
Trustee, as agent for The Depository Trust Company (the "Depositary") and
recorded in the book-entry system maintained by the Depositary (a "Book-Entry
Security") or a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by the Agent, as set forth in the
applicable Pricing Supplement. An owner of a Book-Entry Security will not be
entitled to receive a certificate representing such a Security, except as
provided in the Indenture.
Book-Entry Securities will be issued in accordance with the
Administrative Procedure set forth in Part I hereof, and Certificated Securities
will be issued in accordance with the Administrative Procedure set forth in Part
II hereof.
PART 1: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
- -----------------------------------------------------------
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representation from the Company and the Trustee to the Depositary, dated the
date hereof, and a Medium-Term Note Certificate Agreement between the Trustee
and the Depositary, dated as of January 31, 1991 (the "Certificate Agreement"),
and its obligations as a participant in the Depositary, including the
Depositary's Same-Day Funds Settlement System ("SDFS").
Posting Rates by the Company:
The Company and the Agent will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by the Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agent to suspend solicitation of offers until the new
posted rates have been established with the Agent.
Acceptance of Offers by the Company:
The Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by such Agent. The Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. The
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Agent or Purchasing Agent, as the
case may be, of its acceptance or rejection of an offer to purchase Book-Entry
Securities. If the Company accepts an offer to purchase Book-Entry Securities,
it will confirm such acceptance in writing to the Selling Agent or Purchasing
Agent, as the case may be, and by telephone and in writing to the Trustee.
Communication of Sale Information to the Company by Agent and Settlement
Procedures:
A. After the acceptance of an offer by the Company, the Selling Agent
or Purchasing Agent, as the case may be, will communicate promptly, but in no
event later than the time set forth under "Settlement Procedure Timetable"
below, the following details of the terms of such offer (the "Sale Information")
to the Company by telephone (confirmed in writing) or by facsimile transmission
or other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) Type of Interest Rate;
(3) If a Fixed Rate Book-Entry Security, the interest rate and
initial interest payment date;
(4) Trade Date;
(5) Settlement Date;
(6) Maturity Date;
(7) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as
the case may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Book-Entry Security, such of the following as
are applicable:
(i) Initial Redemption Date,
(ii) Initial Redemption Percentage (% of par), and
(iii) Annual Redemption Percentage Reduction (% of Par)
that the Redemption Price shall decline (but not
below par) on each anniversary of the Initial
Redemption Date;
(12) If a Floating Rate Book-Entry Security, such of the following
as are applicable:
(i) Interest Rate Basis,
(a) If LIBOR, the designated LIBOR Page and Designated
LIBOR Currency,
(b) If CMT Rate, the Designated CMT Telerate Page and
Designated CMT Maturity Index,
(ii) Index Maturity,
(iii) Spread and/or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) If a repayable Book-Entry Security, the Optional Repayment
Date(s);
(14) Name, address and taxpayer identification number of the
registered owner(s);
(15) Denomination of certificates to be delivered at settlement;
(16) Book-Entry Security or Certificated Security; and
(17) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Trustee will assign a CUSIP number to the Global Security from a list
of CUSIP numbers previously delivered to the Trustee by the Company representing
such Book-Entry Security and then advise the Company and the Selling Agent or
Purchasing Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the
following settlement information to the Depositary, and the
Depositary shall forward such information to such Agent and
Standard & Poor's Corporation:
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such
Book-Entry Security;
(3) Whether such Global Security will represent any other
Book-Entry Security (to the extent known at such
time);
(4) Number of the participant account maintained by the
Depositary on behalf of the Selling Agent or
Purchasing Agent, as the case may be;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book-Entry
Security, number of days by which such date succeeds
the record date for the Depositary's purposes (or, in
the case of Floating Rate Securities which reset
daily or weekly, the date five calendar days
immediately preceding the applicable Interest Payment
Date and, in the case of all other Book-Entry
Securities, the Regular Record Date, as defined in
the Security) and, if calculable at that time, the
amount of interest payable on such Interest Payment
Date.
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the Trustee's
participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the Depositary to (i) debit
such Book-Entry Security to the Trustee's participant account and credit such
Book-Entry Security to such Agent's participant account and (ii) debit such
Agent's settlement account and credit the Trustee's settlement account for an
amount equal to the price of such Book-Entry Security less such Agent's
commission. The entry of such a deliver order shall constitute a representation
and warranty by the Trustee to the Depositary that (a) the Global Security
representing such Book-Entry Security has been issued and authenticated and (b)
the Trustee is holding such Global Security pursuant to the Certificate
Agreement.
G. Such Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such
Book-Entry Security to such Agent's participant account and credit such
Book-Entry Security to the participant accounts of the Participants with respect
to such Book-Entry Security and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
H. Transfers of funds in accordance with SDFS deliver orders described
in Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will transfer to
the account of the Company maintained at National City Bank Indiana,
Indianapolis, Indiana, or such other account as the Company may have previously
specified to the Trustee, in funds available for immediate use in the amount
transferred to the Trustee in accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to the Company a statement
setting forth the principal amount of Book-Entry Securities outstanding as of
that date under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry Security to
the purchaser either by transmitting to the Participants with respect to such
Book-Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
L. The Depositary will, at any time, upon request of the Company or the
Trustee, promptly furnish to the Company or the Trustee a list of the names and
addresses of the participants for whom the Depositary has credited Book-Entry
Securities.
Preparation of Pricing Supplement:
If the Company accepts an offer to purchase a Book-Entry Security, it
will prepare a Pricing Supplement reflecting the terms of such Book-Entry
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade Date
(as defined below), or if the Company and the purchaser agree to settlement on
the Business Day following the date of acceptance of such offer, not later than
noon, New York City time, on such date. The Company will file such Pricing
Supplement pursuant to Rule 424(b)(3) under the 1933 Act not later than the
close of business of the Commission on the fifth business day after the date on
which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Book-Entry Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in payment
for a Book-Entry Security and the authentication and issuance of the Global
Security representing such Book-Entry Security shall constitute "settlement"
with respect to such Book-Entry Security. All orders of Book-Entry Securities
solicited by a Selling Agent or made by a Purchasing Agent and accepted by the
Company on a particular date (the "Trade Date") will be settled on a date (the
"Settlement Date") which is the third Business Day after the Trade Date pursuant
to the "Settlement Procedure Timetable" set forth below, unless the Company and
the purchaser agree to settlement on another Business Day which shall be no
earlier than the next Business Day after the Trade Date.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the third Business Day after the Trade
Date, Settlement Procedures "A" through "I" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
<PAGE>
<TABLE>
<CAPTION>
Settlement Time
Procedure
- --------------------------- -------------------------------------------------------------------------
<S> <C> <C>
A 5:00 p.m. on the Business Day following the Trade Date or 10:00 a.m. on the Business
Day prior to the Settlement Date, whichever is earlier
B 12:00 noon on the second Business Day immediately preceding the Settlement Date
C 2:00 p.m. on the second Business Day immediately preceding the Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
</TABLE>
If the initial interest rate for a Floating Rate Book-Entry Security
has not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participant Terminal System, a cancellation message to
such effect by no later than 2:00 p.m. on the Business Day immediately preceding
the scheduled Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security pursuant to Settlement Procedure "F", the Trustee may
deliver to the Depositary, through the Depositary's Participant Terminal System,
as soon as practicable a withdrawal message instructing the Depositary to debit
such Book-Entry Security to the Trustee's participant account, provided that the
Trustee's participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
mark such Global Security "canceled", make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with cusip Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely paid to
the participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn,
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security to the Trustee's
participant account and shall notify the Company and the Trustee thereof.
Thereafter, the Trustee will (i) immediately notify the Company of such order
and the Company shall transfer to such Agent funds available for immediate use
in an amount equal to the price of such Book-Entry Security which was credited
to the account of the Company maintained at the Trustee in accordance with
Settlement Procedure I, and (ii) deliver the withdrawal message and take the
related actions described in the preceding paragraph. If such failure shall have
occurred for any reason other than default by the applicable Agent to perform
its obligations hereunder or under the Distribution Agreement, the Company will
reimburse such Agent on an equitable basis for the loss of its use of funds
during the period when the funds were credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Security, the Depositary may take any actions in accordance with
its SDFS operating procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, of the Book- Entry Securities
to have been represented by a Global Security, the Trustee will provide, in
accordance with Settlement Procedure "D", for the authentication and issuance of
a Global Security representing the other Book-Entry Securities to have been
represented by such Global Security and will make appropriate entries in its
records. The Company will, from time to time, furnish the Trustee with a
sufficient quantity of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
- --------------------------------------------------------------
Posting Rates by Company:
The Company and the Agent will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by the Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agent to suspend solicitation of offers until
the new posted rates have been established with the Agent.
<PAGE>
Acceptance of Offers by Company:
The Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. The Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. The
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing Agent,
as the case may be, of its acceptance or rejection of an offer to purchase
Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in writing to the
Selling Agent or Purchasing Agent, as the case may be, and the Trustee.
Communication of Sale Information to Company by Agent:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
1. Principal Amount of Certificated Securities to be purchased;
2. Type of Interest Rate;
3. If a Fixed Rate Certificated Security, the interest rate and initial
interest payment date;
4. Trade Date;
5. Settlement Date;
6. Maturity Date;
7. Indexed Currency, the Base Rate and the Exchange Rate Determination
Date, if applicable;
8. Issue Price;
9. Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
10. Net Proceeds to the Company;
11. If a redeemable Certificated Security, such of the following as are
applicable:
(i) Initial Redemption Date,
(ii) Initial Redemption Percentage (% of par), and
(iii) Annual Redemption Percentage Reduction (% of par)
that the Redemption Price shall decline (but not
below par) on each anniversary of the Initial
Redemption Date;
12. If a Floating Rate Certificated Security, such of the following as
are applicable:
(i) Interest Rate Basis,
(a) If LIBOR, the designated LIBOR Page and
Designated LIBOR Currency,
(b) If CMT Rate, the Designated CMT Telerate
Page and Designated CMT Maturity Index,
(ii) Index Maturity,
(iii) Spread and/or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
13. If a repayable Certificated Security, the Optional Repayment
Date(s);
14. Name, address and taxpayer identification number of the registered
owner(s);
15. Denomination of certificates to be delivered at settlement;
16. Book-Entry Security or Certificated Security; and
17. Selling Agent or Purchasing Agent.
<PAGE>
Preparation of Pricing Supplement by Company:
If the Company accepts an offer to purchase a Certificated Security, it
will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade
Date, or if the Company and the purchaser agree to settlement on the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will file such Pricing Supplement pursuant to Rule 424(b)(3) under
the 1933 Act not later than the close of business of the Commission on the fifth
business day after the date on which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Certificated
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such purchaser or
its agent the Prospectus as amended or supplemented (including the Pricing
Supplement) in relation to such Certificated Security prior to or together with
the earlier of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Certificated Security.
Date of Settlement:
All offers of Certificated Securities solicited by a Selling Agent or
made by a Purchasing Agent and accepted by the Company will be settled on a date
(the "Settlement Date") which is the third Business Day after the date of
acceptance of such offer, unless the Company and the purchaser agree to
settlement (a) on another Business Day after the acceptance of such offer or (b)
with respect to an offer accepted by the Company prior to 10:00 a.m., New York
City time, on the date of such acceptance.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or
other acceptable written means to authenticate and deliver the Certificated
Securities no later than 2:15 p.m., New York City time, on the Settlement Date.
Such instruction will be given by the Company prior to 3:00 p.m., New York City
time, on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
<PAGE>
Preparation and Delivery of Certificated Securities by Trustee and Receipt of
Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser
solicited by a Selling Agent, the Trustee will, by 2:15 p.m., New York City
time, on the Settlement Date, deliver the Certificated Securities to the Selling
Agent for the benefit of the purchaser of such Certificated Securities against
delivery by the Selling Agent of a receipt therefor. On the Settlement Date the
Selling Agent will deliver payment for such Certificated Securities in
immediately available funds to the Company in an amount equal to the issue price
of the Certificated Securities less the Selling Agent's commission; provided
that the Selling Agent reserves the right to withhold payment for which it has
not received funds from the purchaser. The Company shall not use any proceeds
advanced by a Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing Agent,
the Trustee will, by 2:15 p.m., New York City time, on the Settlement Date,
deliver the Certificated Securities to the Purchasing Agent against delivery of
payment for such Certificated Securities in immediately available funds to the
Company in an amount equal to the issue price of the Certificated Securities
less the Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make payment to
the Selling Agent for a Certificated Security, the Selling Agent will promptly
notify the Trustee and the Company thereof by telephone (confirmed in writing)
or by facsimile transmission or other acceptable written means. The Selling
Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
The Trustee will cancel the Certificated Security in respect of which
the failure occurred, make appropriate entries in its records and, unless
otherwise instructed by the Company, destroy the Certificated Security.
<PAGE>
EXHIBIT B
[FACE OF NOTE]
[UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]1
REGISTERED CUSIP No.: PRINCIPAL AMOUNT:
No. FXR-
---------------- --------------------
INDIANA GAS COMPANY, INC.
MEDIUM-TERM NOTE
(Fixed Rate)
<TABLE>
<CAPTION>
<S> <C> <C>
ORIGINAL ISSUE DATE: INTEREST RATE: % STATED MATURITY
DATE:
INTEREST PAYMENT DATE(S) [ ] CHECK IF DISCOUNT NOTE
[ ] _______ and ______ Issue Price: %
[ ] Other:
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
DATE: PERCENTAGE: % PERCENTAGE
REDUCTION: %
REPAYABLE AT OPTION OF OPTIONAL REPAYMENT
HOLDER: DATE(S):
[ ] Yes
[ ] No
AUTHORIZED DENOMINATION: OTHER/ADDITIONAL PROVISIONS:
[ ] $1,000 and integral
multiples thereof
[ ] Other:
ADDENDUM ATTACHED
[ ] Yes
[ ] No
</TABLE>
- --------
(1) This paragraph applies to global Notes only.
<PAGE>
Indiana Gas Company, Inc., an Indiana corporation (the "Company", which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay, without relief from valuation
and appraisement laws, to , or registered assigns, the Principal Amount of , on
the Stated Maturity Date specified above (or any Redemption Date or Repayment
Date, each as defined on the reverse hereof, or any earlier date of acceleration
of maturity) (each such date being hereinafter referred to as the " Maturity
Date" with respect to the principal repayable on such date) and to pay interest
thereon (and on any overdue principal, premium and/or interest to the extent
legally enforceable) at the Interest Rate per annum specified above, until the
principal hereof is paid or duly made available for payment. The Company will
pay interest in arrears on each Interest Payment Date, if any, specified above
(each, an "Interest Payment Date"), commencing with the first Interest Payment
Date next succeeding the Original Issue Date specified above, and on the
Maturity Date; provided, however, that if the Original Issue Date occurs between
a Record Date (as defined below) and the next succeeding Interest Payment Date,
interest payments will commence on the second Interest Payment Date next
succeeding the Original Issue Date to the registered holder (the "Holder") of
this Note on the Record Date with respect to such second Interest Payment Date.
Interest on this Note will be computed on the basis of a 360-day year of twelve
30-day months. The Company is obligated to make payment of principal, premium,
if any, and interest in respect of this Note in U.S. Dollars.
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for) to, but excluding, the applicable Interest Payment
Date or the Maturity Date, as the case may be (each, an "Interest Period"). The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions described herein, be paid to
the person in whose name this Note (or one or more predecessor Notes, as defined
on the reverse hereof) is registered at the close of business on the fifteenth
calendar day (whether or not a Business Day, as defined below) immediately
preceding such Interest Payment Date (the "Record Date"); provided, however,
that interest payable on the Maturity Date will be payable to the person to whom
the principal hereof and premium, if any, hereon shall be payable. Any such
interest not so punctually paid or duly provided for on any Interest Payment
Date other than the Maturity Date ("Defaulted Interest") shall forthwith cease
to be payable to the Holder on the close of business on any Record Date and,
instead, shall be paid to the person in whose name this Note is registered at
the close of business on a special record date (the "Special Record Date") for
the payment of such Defaulted Interest to be fixed by the Trustee hereinafter
referred to, notice whereof shall be given to the Holder of this Note by the
Trustee not less than 10 calendar days prior to such Special Record Date or may
be paid at any time in any other lawful manner, all as more fully provided for
in the Indenture.
Payment of principal, premium, if any, and interest in respect of this
Note due on the Maturity Date will be made in immediately available funds upon
presentation and surrender of this Note [(and, with respect to any applicable
repayment of this Note, upon delivery of a duly completed election form as
contemplated on the reverse hereof)] at the office or agency maintained by the
Company for that purpose in the Borough of Manhattan, The City of New York,
currently the office of the Trustee located at 100 Wall Street, Suite 2000, New
York, New York 10005, or at such other paying agency in the Borough of
Manhattan, The City of New York, as the Company may determine. Payment of
interest due on any Interest Payment Date other than the Maturity Date will be
made at the aforementioned office or agency maintained by the Company or, at the
option of the Company, by check mailed to the address of the person entitled
thereto as such address shall appear in the Security Register maintained by the
Trustee; provided, however, that a Holder of U.S.$10,000,000 or more in
aggregate principal amount of Notes (whether having identical or different terms
and provisions) will be entitled to receive interest payments on such Interest
Payment Date by wire transfer of immediately available funds if appropriate wire
transfer instructions have been received in writing by the Trustee not less than
15 calendar days prior to such Interest Payment Date. Any such wire transfer
instructions received by the Trustee shall remain in effect until revoked by
such Holder.
If any Interest Payment Date or the Maturity Date falls on a day that
is not a Business Day, the required payment of principal, premium, if any,
and/or interest shall be made on the next succeeding Business Day with the same
force and effect as if made on the date such payment was due, and no interest
shall accrue with respect to such payment for the period from and after such
Interest Payment Date or the Maturity Date, as the case may be, to the date of
such payment on the next succeeding Business Day.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which commercial banks are
authorized or required by law, regulation or executive order to close in The
City of New York.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and, if so specified on the face hereof, in an
Addendum hereto, which further provisions shall have the same force and effect
as if set forth on the face hereof.
Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Note as specified above, this Note
shall be subject to the terms set forth in such Addendum or such
"Other/Additional Provisions".
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, Indiana Gas Company, Inc. has caused this Note to
be duly executed by one of its duly authorized officers.
INDIANA GAS COMPANY, INC.
By________________________________
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Debt Securities of
the series designated therein referred
to in the within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By____________________________
Authorized Signatory
<PAGE>
[REVERSE OF NOTE]
INDIANA GAS COMPANY, INC.
MEDIUM-TERM NOTE
(Fixed Rate)
This Note is one of a duly authorized series of Debt Securities (the
"Debt Securities") of the Company issued and to be issued under an Indenture,
dated as of February 1, 1991, as amended, modified or supplemented from time to
time (the "Indenture"), between the Company and U.S. Bank Trust National
Association (formerly known as First Trust National Association which was
formerly known as Bank of America Illinois which was formerly known as
Continental Bank, National Association), as trustee (the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Debt Securities, and of the
terms upon which the Debt Securities are, and are to be, authenticated and
delivered. This Note is one of the series of Debt Securities designated as
"Medium-Term Notes, Series G, Due Nine Months or More From Date of Issue" (the
"Notes"). All terms used but not defined in this Note or in an Addendum hereto
shall have the meanings assigned to such terms in the Indenture or on the face
hereof, as the case may be.
This Note is issuable only in registered form without coupons in
minimum denominations of U.S. $1,000 and integral multiples thereof or other
Authorized Denomination specified on the face hereof.
This Note will not be subject to any sinking fund and, unless otherwise
specified on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to the Stated Maturity
Date.
This Note will be subject to redemption at the option of the Company on
any date on or after the Initial Redemption Date, if any, specified on the face
hereof, in whole or from time to time in part in increments of U.S. $1,000 or
other integral multiple of an Authorized Denomination (provided that any
remaining principal amount hereof shall be at least U.S. $1,000 or such other
minimum Authorized Denomination), at the Redemption Price (as defined below),
together with unpaid interest accrued thereon to the date fixed for redemption
(the "Redemption Date"), on written notice given to the Holder hereof (in
accordance with the provisions of the Indenture) not more than 60 nor less than
30 calendar days prior to the Redemption Date. The "Redemption Price" shall be
the Initial Redemption Percentage specified on the face hereof (as adjusted by
the Annual Redemption Percentage Reduction, if any, specified on the face hereof
as set forth below) multiplied by the principal amount of this Note to be
redeemed. The Initial Redemption Percentage shall decline at each anniversary of
the Initial Redemption Date by the Annual Redemption Percentage Reduction, if
any, until the Redemption Price is 100% of the principal amount to be redeemed.
In the event of redemption of this Note in part only, a new Note of like tenor
for the unredeemed portion hereof and otherwise having the same terms and
provisions as this Note shall be issued by the Company in the name of the Holder
hereof upon the presentation and surrender hereof.
This Note will be subject to repayment by the Company at the option of
the Holder hereof on the Optional Repayment Date(s), if any, specified on the
face hereof, in whole or in part in increments of U.S. $1,000 or other integral
multiple of an Authorized Denomination (provided that any remaining principal
amount hereof shall be at least U.S. $1,000 or such other minimum Authorized
Denomination), at a repayment price equal to 100% of the principal amount to be
repaid, together with unpaid interest accrued thereon to the date fixed for
repayment (the "Repayment Date"). For this Note to be repaid, the Trustee must
receive at its corporate trust office not more than 60 nor less than 30 calendar
days prior to the Repayment Date, [in the case of a Certificated Note, such
Certificated Note and the form thereon entitled "Option to Elect Repayment" duly
completed] [in the case of a Book-Entry Note, instructions to such effect from
the applicable Beneficial Owner to the Depositary and forwarded by the
Depositary]. Exercise of such repayment option by the Holder hereof shall be
irrevocable. In the event of repayment of this Note in part only, a new Note of
like tenor for the unrepaid portion hereof and otherwise having the same terms
and provisions as this Note shall be issued by the Company in the name of the
Holder hereof upon the presentation and surrender hereof.
If this Note is specified on the face hereof to be a Discount Note, the
amount payable to the Holder of this Note in the event of redemption, repayment
or acceleration of maturity will be equal to the sum of (1) the Issue Price
specified on the face hereof (increased by any accruals of the Discount, as
defined below) and, in the event of any redemption of this Note (if applicable),
multiplied by the Initial Redemption Percentage (as adjusted by the Annual
Redemption Percentage Reduction, if applicable) and (2) any unpaid interest
accrued thereon to the Redemption Date, Repayment Date or date of acceleration
of maturity, as the case may be. The difference between the Issue Price and 100%
of the principal amount of this Note is referred to herein as the "Discount".
For purposes of determining the amount of Discount that has accrued as
of any Redemption Date, Repayment Date or date of acceleration of maturity of
this Note, such Discount will be accrued so as to cause the yield on the Note to
be constant. The constant yield will be calculated using a 30-day month, 360-day
year convention, a compounding period that, except for the Initial Period (as
defined below), corresponds to the shortest period between Interest Payment
Dates (with ratable accruals within a compounding period) and an assumption that
the maturity of this Note will not be accelerated. If the period from the
Original Issue Date to the initial Interest Payment Date (the "Initial Period")
is shorter than the compounding period for this Note, a proportionate amount of
the yield for an entire compounding period will be accrued. If the Initial
Period is longer than the compounding period, then such period will be divided
into a regular compounding period and a short period, with the short period
being treated as provided in the preceding sentence.
If an Event of Default shall occur and be continuing, the principal of
the Notes may, and in certain cases shall, be accelerated in the manner and with
the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of any series of the Debt Securities at
any time by the Company and the Trustee with the consent of the Holders of a
majority of the aggregate principal amount of all Debt Securities at the time
outstanding and affected thereby. The Indenture also contains provisions
permitting the Holders of a majority of the aggregate principal amount of the
outstanding Debt Securities of any series, on behalf of the Holders of all such
Debt Securities, to waive compliance by the Company with certain provisions of
the Indenture. Furthermore, provisions in the Indenture permit the Holders of a
majority of the aggregate principal amount of the outstanding Debt Securities of
any series, in certain instances, to waive, on behalf of all of the Holders of
Debt Securities of such series, certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and other Notes issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula, and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
[and herein]2 set forth, the transfer of this Note is registrable in the
Security Register of the Company upon surrender of this Note for registration of
transfer at the office or agency of the Company in any place where the principal
hereof and any premium or interest hereon are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or by his
attorney duly authorized in writing, and thereupon one or more new Notes having
the same terms and provisions, of Authorized Denominations and for the same
aggregate principal amount, will be issued by the Company to the designated
transferee or transferees.
As provided in the Indenture and subject to certain limitations therein
[and herein]3 set forth, this Note is exchangeable for a like aggregate
principal amount of Notes of different Authorized Denominations but otherwise
having the same terms and provisions, as requested by the Holder hereof
surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Holder as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary, except as required by law.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF INDIANA WITHOUT REGARD TO CONFLICT OF
LAW PRINCIPLES.
- --------
2 This text applies to global Notes only.
3 This text applies to global Notes only.
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C> <C>
TEN COM as tenants in common UNIF GIFT MIN ACT - ________ Custodian ______
TEN ENT as tenants by the entireties (Cust) (Minor)
JT TEN as joint tenants with right of Under Uniform Gifts to Minors Act
survivorship and not as tenants ______________________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
----------------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[ ] [ ]
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
________________________________________________________________________________
this Note and all rights thereunder hereby irrevocably constituting and
appointing
________________________________________________________________________________
Attorney to transfer this Note on the books of the Trustee, with full power of
substitution in the premises.
Dated: _________________
____________________________________ ____________________________________
____________________________________ ____________________________________
Notice: The signature(s) on this Assignment
must correspond with the name(s) as written
upon the face of this Note in every
particular, without alteration or
enlargement or any change whatsoever.
<PAGE>
[OPTION TO ELECT REPAYMENT]
[The undersigned hereby irrevocably request(s) and instruct(s) the Company
to repay this Note (or portion hereof specified below) pursuant to its terms at
a price equal to 100% of the principal amount to be repaid, together with unpaid
interest accrued hereon to the Repayment Date, to the undersigned, at __________
______________________________________________________________________.
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate
trust office in the Borough of Manhattan, The City of New York, currently
located at ______________________________________, not more than 60 nor less
than 30 calendar days prior to the Repayment Date, this Note with this "Option
to Elect Repayment" form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S. $1,000 or other
integral multiple of an Authorized Denomination) (provided that any remaining
principal amount shall be at least U.S. $1,000 or such other minimum Authorized
Denomination) which the Holder elects to have repaid and specify the
denomination or denominations (which shall be U.S. $1,000 or such other minimum
Authorized Denomination) of the Notes to be issued to the Holder for the portion
of this Note not being repaid (in the absence of any such specification, one
such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $____________
Notice: The signature(s) on this Option to
Elect Repayment must correspond with the
name(s) as written upon the face of this
Note in every particular, without alteration
or enlargement or any change whatsoever.](4)
Dated: __________________
- --------
(4) This text applies to certificated Notes only.
6
<PAGE>
EXHIBIT C
[FACE OF NOTE]
[UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.](1)
REGISTERED CUSIP No.: PRINCIPAL AMOUNT:
No. FLR- _______________
INDIANA GAS COMPANY, INC.
MEDIUM-TERM NOTE
(Floating Rate)
<TABLE>
<CAPTION>
INTEREST RATE BASIS ORIGINAL ISSUE DATE: STATED MATURITY DATE:
OR BASES:
<S> <C> <C> <C>
IF LIBOR: IF CMT RATE:
[ ] LIBOR Reuters Designated CMT Telerate
Page: Page:
[ ] LIBOR Telerate If Telerate Page 7052:
Page: [ ] Weekly Average
Designated LIBOR [ ] Monthly Average
Currency: Designated CMT Maturity
Index:
INDEX MATURITY: INITIAL INTEREST RATE: % INTEREST PAYMENT DATE(S):
SPREAD (PLUS OR SPREAD MULTIPLIER: INITIAL INTEREST RESET
MINUS): DATE:
</TABLE>
- --------
1 This paragraph applies to global Notes only.
<PAGE>
MINIMUM INTEREST RATE: % MAXIMUM INTEREST RATE: % INTEREST RESET DATE(S):
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
DATE: PERCENTAGE: % PERCENTAGE REDUCTION: %
OPTIONAL REPAYMENT CALCULATION AGENT: [ ] CHECK IF DISCOUNT NOTE
DATE(S): Issue Price %
REPAYABLE AT OPTION
OF HOLDER:
[ ] Yes
[ ] No
INTEREST CATEGORY: DAY COUNT CONVENTION:
[ ] Regular Floating Rate Note [ ] 30/360 for the period
[ ] Floating Rate/Fixed Rate Note from to .
Fixed Rate Commencement Date: [ ] Actual/360 for the period
Fixed Interest Rate: % from to .
[ ] Inverse Floating Rate Note [ ] Actual/Actual for the period
Fixed Interest Rate: % from to .
Applicable Interest Rate Basis:
AUTHORIZED DENOMINATION:
[ ] $1,000 and integral multiples
thereof
[ ] Other:
ADDENDUM ATTACHED
[ ] Yes
[ ] No
OTHER/ADDITIONAL PROVISIONS:
Indiana Gas Company, Inc., an Indiana corporation (the "Company", which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay, without relief from valuation
and appraisement laws, to , or registered assigns, the Principal Amount of , on
the Stated Maturity Date specified above (or any Redemption Date or Repayment
Date, each as defined on the reverse hereof, or any earlier date of acceleration
of maturity) (each such date being hereinafter referred to as the " Maturity
Date" with respect to the principal repayable on such date) and to pay interest
thereon (and on any overdue principal, premium and/or interest to the extent
legally enforceable) at a rate per annum equal to the Initial Interest Rate
specified above until the Initial Interest Reset Date specified above and
thereafter at a rate determined in accordance with the provisions specified
above and on the reverse hereof or in an Addendum hereto with respect to one or
more Interest Rate Bases specified above until the principal hereof is paid or
duly made available for payment. The Company will pay interest in arrears on
each Interest Payment Date, if any, specified above (each, an "Interest Payment
Date"), commencing with the first Interest Payment Date next succeeding the
Original Issue Date specified above, and on the Maturity Date; provided,
however, that if the Original Issue Date occurs between a Record Date (as
defined below) and the next succeeding Interest Payment Date, interest payments
will commence on the second Interest Payment Date next succeeding the Original
Issue Date to the registered holder (the "Holder") of this Note on the Record
Date with respect to such second Interest Payment Date. The Company is obligated
to make payment of principal, premium, if any, and interest in respect of this
Note in U.S. Dollars.
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for) to, but excluding, the applicable Interest Payment
Date or the Maturity Date, as the case may be (each, an "Interest Period"). The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions described herein, be paid to
the person in whose name this Note (or one or more predecessor Notes, as defined
on the reverse hereof) is registered at the close of business on the fifteenth
calendar day (whether or not a Business Day, as defined below) immediately
preceding such Interest Payment Date (the "Record Date"); provided, however,
that interest payable on the Maturity Date will be payable to the person to whom
the principal hereof and premium, if any, hereon shall be payable. Any such
interest not so punctually paid or duly provided for on any Interest Payment
Date other than the Maturity Date ("Defaulted Interest") shall forthwith cease
to be payable to the Holder on the close of business on any Record Date and,
instead, shall be paid to the person in whose name this Note is registered at
the close of business on a special record date (the "Special Record Date") for
the payment of such Defaulted Interest to be fixed by the Trustee hereinafter
referred to, notice whereof shall be given to the Holder of this Note by the
Trustee not less than 10 calendar days prior to such Special Record Date or may
be paid at any time in any other lawful manner, all as more fully provided for
in the Indenture.
Payment of principal, premium, if any, and interest in respect of this
Note due on the Maturity Date will be made in immediately available funds upon
presentation and surrender of this Note [(and, with respect to any applicable
repayment of this Note, upon delivery of a duly completed election form as
contemplated on the reverse hereof)] at the office or agency maintained by the
Company for that purpose in the Borough of Manhattan, The City of New York,
currently the office of the Trustee located at 100 Wall Street, Suite 2000, New
York, New York 10005, or at such other paying agency in the Borough of
Manhattan, The City of New York, as the Company may determine. Payment of
interest due on any Interest Payment Date other than the Maturity Date will be
made at the aforementioned office of agency maintained by the Company or, at the
option of the Company, by check mailed to the address of the person entitled
thereto as such address shall appear in the Security Register maintained by the
Trustee; provided, however, that a Holder of U.S.$10,000,000 or more in
aggregate principal amount of Notes (whether having identical or different terms
and provisions) will be entitled to receive interest payments on such Interest
Payment Date by wire transfer of immediately available funds if appropriate wire
transfer instructions have been received in writing by the Trustee not less than
15 calendar days prior to such Interest Payment Date. Any such wire transfer
instructions received by the Trustee shall remain in effect until revoked by
such Holder.
If any Interest Payment Date other than the Maturity Date would
otherwise be a day that is not a Business Day, such Interest Payment Date shall
be postponed to the next succeeding Business Day, except that if LIBOR is an
applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, such Interest Payment Date shall be the immediately
preceding Business Day. If the Maturity Date falls on a day that is not a
Business Day, the required payment of principal, premium, if any, and/or
interest shall be made on the next succeeding Business Day with the same force
and effect as if made on the date such payment was due, and no interest shall
accrue with respect to such payment for the period from and after the Date to
the date of such payment on the next succeeding Business Day.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which commercial banks are
authorized or required by law, regulation or executive order to close in The
City of New York; provided, however, that if LIBOR is an applicable Interest
Rate Basis, such day is also a London Business Day (as defined below). "London
Business Day" means a day on which commercial banks are open for business
(including dealings in the Designated LIBOR Currency (as defined on the reverse
hereof)) in London.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and, if so specified on the face hereof, in an
Addendum hereto, which further provisions shall have the same force and effect
as if set forth on the face hereof.
Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Note as specified above, this Note
shall be subject to the terms set forth in such Addendum or such
"Other/Additional Provisions".
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, Indiana Gas Company, Inc. has caused this Note to
be duly executed by one of its duly authorized officers.
INDIANA GAS COMPANY, INC.
By
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Debt Securities of
the series designated therein referred
to in the within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By _________________________________
Authorized Signatory
<PAGE>
[REVERSE OF NOTE]
INDIANA GAS COMPANY, INC.
MEDIUM-TERM NOTE
(Floating Rate)
This Note is one of a duly authorized series of Debt Securities (the
"Debt Securities") of the Company issued and to be issued under an Indenture,
dated as of February 1, 1991, as amended, modified or supplemented from time to
time (the "Indenture"), between the Company and U.S. Bank Trust National
Association (formerly known as First Trust National Association which was
formerly known as Bank of America Illinois which was formerly known as
Continental Bank, National Association), as trustee (the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Debt Securities, and of the
terms upon which the Debt Securities are, and are to be, authenticated and
delivered. This Note is one of the series of Debt Securities designated as
"Medium-Term Notes, Series G, Due Nine Months or More From Date of Issue" (the
"Notes"). All terms used but not defined in this Note or in an Addendum hereto
shall have the meanings assigned to such terms in the Indenture or on the face
hereof, as the case may be.
This Note is issuable only in registered form without coupons in
minimum denominations of U.S.$1,000 and integral multiples thereof or other
Authorized Denomination specified on the face hereof.
This Note will not be subject to any sinking fund and, unless otherwise
specified on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to the Stated Maturity
Date.
This Note will be subject to redemption at the option of the Company on
any date on or after the Initial Redemption Date, if any, specified on the face
hereof, in whole or from time to time in part in increments of U.S.$1,000 or
other integral multiple of an Authorized Denomination (provided that any
remaining principal amount hereof shall be at least U.S.$1,000 or such other
minimum Authorized Denomination), at the Redemption Price (as defined below),
together with unpaid interest accrued thereon to the date fixed for redemption
(the "Redemption Date"), on written notice given to the Holder hereof (in
accordance with the provisions of the Indenture) not more than 60 nor less than
30 calendar days prior to the Redemption Date. The "Redemption Price" shall be
the Initial Redemption Percentage specified on the face hereof (as adjusted by
the Annual Redemption Percentage Reduction, if any, specified on the face hereof
as set forth below) multiplied by the principal amount of this Note to be
redeemed. The Initial Redemption Percentage shall decline at each anniversary of
the Initial Redemption Date by the Annual Redemption Percentage Reduction, if
any, until the Redemption Price is 100% of the principal amount to be redeemed.
In the event of redemption of this Note in part only, a new Note of like tenor
for the unredeemed portion hereof and otherwise having the same terms and
provisions as this Note shall be issued by the Company in the name of the Holder
hereof upon the presentation and surrender hereof.
This Note will be subject to repayment by the Company at the option of
the Holder hereof on the Optional Repayment Date(s), if any, specified on the
face hereof, in whole or in part in increments of U.S.$1,000 or other integral
multiple of an Authorized Denomination (provided that any remaining principal
amount hereof shall be at least U.S.$1,000 or such other minimum Authorized
Denomination), at a repayment price equal to 100% of the principal amount to be
repaid, together with unpaid interest accrued thereon to the date fixed for
repayment (the "Repayment Date"). For this Note to be repaid, the Trustee must
receive at its corporate trust office not more than 60 nor less than 30 calendar
days prior to the Repayment Date, [in the case of a Certificated Note, such
Certificated Note and the form thereon entitled "Option to Elect Repayment" duly
completed] [in the case of a Book-Entry Note, instructions to such effect from
the applicable Beneficial Owner to the Depositary and forwarded by the
Depositary]. Exercise of such repayment option by the Holder hereof shall be
irrevocable. In the event of repayment of this Note in part only, a new Note of
like tenor for the unrepaid portion hereof and otherwise having the same terms
and provisions as this Note shall be issued by the Company in the name of the
Holder hereof upon the presentation and surrender hereof.
If this Note is specified on the face hereof to be a Discount Note, the
amount payable to the Holder of this Note in the event of redemption, repayment
or acceleration of maturity of this Note will be equal to the sum of (1) the
Issue Price specified on the face hereof (increased by any accruals of the
Discount, as defined below) and, in the event of any redemption of this Note (if
applicable), multiplied by the Initial Redemption Percentage (as adjusted by the
Annual Redemption Percentage Reduction, if applicable) and (2) any unpaid
interest accrued thereon to the Redemption Date, Repayment Date or date of
acceleration of maturity, as the case may be. The difference between the Issue
Price and 100% of the principal amount of this Note is referred to herein as the
"Discount."
For purposes of determining the amount of Discount that has accrued as
of any Redemption Date, Repayment Date or date of acceleration of maturity of
this Note, such Discount will be accrued so as to cause an assumed yield on the
Note to be constant. The assumed constant yield will be calculated using a
30-day month, 360-day year convention, a compounding period that, except for the
Initial Period (as defined below), corresponds to the shortest period between
Interest Payment Dates (with ratable accruals within a compounding period), a
coupon rate equal to the initial interest rate applicable to this Note and an
assumption that the maturity of this Note will not be accelerated. If the period
from the Original Issue Date to the initial Interest Payment Date (the "Initial
Period") is shorter than the compounding period for this Note, a proportionate
amount of the yield for an entire compounding period will be accrued. If the
Initial Period is longer than the compounding period, then such period will be
divided into a regular compounding period and a short period, with the short
period being treated as provided in the preceding sentence.
The interest rate borne by this Note will be determined as follows:
(i) Unless the Interest Category of this Note is specified on
the face hereof as a "Floating Rate/Fixed Rate Note" or an "Inverse
Floating Rate Note" or the face hereof specifies that either
"Other/Additional Provisions" or an Addendum hereto applies, in each
case, relating to a different interest rate formula, this Note shall be
designated as a "Regular Floating Rate Note" and, except as set forth
below or specified on the face hereof or in an Addendum hereto, shall
bear interest at the rate determined by reference to the applicable
Interest Rate Basis or Bases (a) plus or minus the Spread, if any,
and/or (b) multiplied by the Spread Multiplier, if any, in each case as
specified on the face hereof. Commencing on the Initial Interest Reset
Date, the rate at which interest on this Note shall be payable shall be
reset as of each Interest Reset Date specified on the face hereof;
provided, however, that the interest rate in effect for the period, if
any, from the Original Issue Date to the Initial Interest Reset Date
shall be the Initial Interest Rate.
(ii) If the Interest Category of this Note is specified on the
face hereof as a "Floating Rate/Fixed Rate Note", then, except as set
forth below or specified on the face hereof or in an Addendum hereto,
this Note shall bear interest at the rate determined by reference to
the applicable Interest Rate Basis or Bases (a) plus or minus the
Spread, if any, and/or (b) multiplied by the Spread Multiplier, if any,
in each case as specified on the face hereof. Commencing on the Initial
Interest Reset Date, the rate at which interest on this Note shall be
payable shall be reset as of each Interest Reset Date; provided,
however, that (y) the interest rate in effect for the period, if any,
from the Original Issue Date to the Initial Interest Reset Date shall
be the Initial Interest Rate and (z) the interest rate in effect for
the period commencing on the Fixed Rate Commencement Date specified on
the face hereof to the Maturity Date shall be the Fixed Interest Rate
specified on the face hereof or, if no such Fixed Interest Rate is
specified, the interest rate in effect hereon on the day immediately
preceding the Fixed Rate Commencement Date.
(iii) If the Interest Category of this Note is specified on
the face hereof as an "Inverse Floating Rate Note", then, except as set
forth below or specified on the face hereof or in an Addendum hereto,
this Note shall bear interest at the Fixed Interest Rate minus the rate
determined by reference to the applicable Interest Rate Basis or Bases
(a) plus or minus the Spread, if any, and/or (b) multiplied by the
Spread Multiplier, if any, in each case as specified on the face
hereof; provided, however, that, unless otherwise specified on the face
hereof or in an Addendum hereto, the interest rate hereon shall not be
less than zero. Commencing on the Initial Interest Reset Date, the rate
at which interest on this Note shall be payable shall be reset as of
each Interest Reset Date; provided, however, that the interest rate in
effect for the period, if any, from the Original Issue Date to the
Initial Interest Reset Date shall be the Initial Interest Rate.
Except as set forth above or specified on the face hereof or in an
Addendum hereto, the interest rate in effect on each day shall be (i) if such
day is an Interest Reset Date, the interest rate determined as of the Interest
Determination Date (as defined below) immediately preceding such Interest Reset
Date or (ii) if such day is not an Interest Reset Date, the interest rate
determined as of the Interest Determination Date immediately preceding the most
recent Interest Reset Date; provided, however, that the interest rate in effect
for the period, if any, from the Original Issue Date to the Initial Interest
Reset Date shall be the Initial Interest Rate. If any Interest Reset Date would
otherwise be a day that is not a Business Day, such Interest Reset Date shall be
postponed to the next succeeding Business Day, except that if LIBOR is an
applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, such Interest Reset Date shall be the immediately
preceding Business Day. In addition, if the Treasury Rate is an applicable
Interest Rate Basis and the Interest Determination Date would otherwise fall on
an Interest Reset Date, then such Interest Reset Date will be postponed to the
next succeeding Business Day.
The interest rate applicable to each Interest Reset Period commencing
on the related Interest Reset Date will be determined by the Calculation Agent
as of the applicable Interest Determination Date and will be calculated by the
Calculation Agent on or prior to the Calculation Date (as defined below), except
with respect to LIBOR and the Eleventh District Cost of Funds Rate, which will
be calculated on such Interest Determination Date. The "Interest Determination
Date" with respect to the CD Rate, the CMT Rate, the Commercial Paper Rate, the
Federal Funds Rate and the Prime Rate will be the second Business Day
immediately preceding the applicable Interest Reset Date; the "Interest
Determination Date" with respect to the Eleventh District Cost of Funds Rate
shall be the last working day of the month immediately preceding the applicable
Interest Reset Date on which the Federal Home Loan Bank of San Francisco (the
"FHLB of San Francisco") publishes the Index (as defined below); and the
"Interest Determination Date" with respect to LIBOR shall be the second London
Business Day immediately preceding the applicable Interest Reset Date, unless
the Designated LIBOR Currency is British pounds sterling, in which case the
"Interest Determination Date" will be the applicable Interest Reset Date. The
"Interest Determination Date" with respect to the Treasury Rate shall be the day
in the week in which the applicable Interest Reset Date falls on which day
Treasury Bills (as defined below) are normally auctioned (Treasury Bills are
normally sold at an auction held on Monday of each week, unless such Monday is a
legal holiday, in which case the auction is normally held on the immediately
succeeding Tuesday, although such auction may be held on the preceding Friday);
provided, however, that if an auction is held on the Friday of the week
preceding the applicable Interest Reset Date, the "Interest Determination Date"
shall be such preceding Friday. If the interest rate of this Note is determined
with reference to two or more Interest Rate Bases specified on the face hereof,
the "Interest Determination Date" pertaining to this Note shall be the most
recent Business Day which is at least two Business Days prior to the applicable
Interest Reset Date on which each Interest Rate Basis is determinable. Each
Interest Rate Basis shall be determined as of such date, and the applicable
interest rate shall take effect on the related Interest Reset Date.
Unless otherwise specified on the face hereof or in an Addendum hereto,
the rate with respect to each Interest Rate Basis will be determined in
accordance with the applicable provisions below.
CD Rate. If an Interest Rate Basis for this Note is specified on the
face hereof as the CD Rate, the CD Rate shall be determined as of the applicable
Interest Determination Date (a "CD Rate Interest Determination Date") as the
rate on such date for negotiable United States dollar certificates of deposit
having the Index Maturity as published in H.15(519) (as defined below) under the
heading "CDs (secondary market)", or, if not published by 3:00 P.M., New York
City time, on the related Calculation Date, the rate on such CD Rate Interest
Determination Date for negotiable United States dollar certificates of deposit
of the Index Maturity as published in H.15 Daily Update (as hereinafter
defined), or such other recognized electronic source used for the purpose of
displaying such rate, under the caption "CDs (secondary market)." If such rate
is not yet published in H.15(519), H.15 Daily Update or another recognized
electronic source by 3:00 P.M., New York City time, on the related Calculation
Date, then the CD Rate on such CD Rate Interest Determination Date will be
calculated by the Calculation Agent specified on the face hereof and will be the
arithmetic mean of the secondary market offered rates as of 10:00 A.M., New York
City time, on such CD Rate Interest Determination Date, of three leading
non-bank dealers in negotiable United States dollar certificates of deposit in
The City of New York selected by the Calculation Agent for negotiable United
States dollar certificates of deposit of major United States money market banks
for negotiable United States dollar certificates of deposit with a remaining
maturity closest to the Index Maturity in an amount that is representative for a
single transaction in that market at that time; provided, however, that if the
dealers so selected by the Calculation Agent are not quoting as mentioned in
this sentence, the CD Rate determined as of such CD Rate Interest Determination
Date will be the CD Rate in effect on such CD Rate Interest Determination Date.
"H.15(519)" means the weekly statistical release designated as such, or
any successor publication, published by the Board of Governors of the Federal
Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available
through the world-wide-web site of the Board of Governors of the Federal Reserve
System at http://www.bog.frb.fed.us/releases/h15/update, or any successor site
or publication.
CMT Rate. If an Interest Rate Basis for this Note is specified on the
face hereof as the CMT Rate, the CMT Rate shall be determined as of the
applicable Interest Determination Date (a "CMT Rate Interest Determination
Date") as the rate displayed on the Designated CMT Telerate Page (as defined
below) under the caption "...Treasury Constant Maturities...Federal Reserve
Board Release H.15...Mondays Approximately 3:45 P.M.", under the column for the
Designated CMT Maturity Index (as defined below) for (i) if the Designated CMT
Telerate Page is 7051, or any other page as may replace such page on such
service, the rate on such CMT Rate Interest Determination Date and (ii) if the
Designated CMT Telerate Page is 7052, or any other page as may replace such page
on such service, the weekly or monthly average, as specified on the face hereof,
for the week or month, as applicable, ended immediately preceding the week or
month, as applicable, in which such CMT Rate Interest Determination Date falls.
If such rate is no longer displayed on the relevant page or is not so displayed
by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for such CMT Rate Interest Determination Date will be such treasury
constant maturity rate for the Designated CMT Maturity Index as published in
H.15(519). If such rate is no longer published or is not so published by 3:00
P.M., New York City time, on the related Calculation Date, then the CMT Rate on
such CMT Rate Interest Determination Date will be such treasury constant
maturity rate for the Designated CMT Maturity Index (or other United States
Treasury rate for the Designated CMT Maturity Index) for such CMT Rate Interest
Determination Date as may then be published by either the Board of Governors of
the Federal Reserve System or the United States Department of the Treasury that
the Calculation Agent determines to be comparable to the rate formerly displayed
on the Designated CMT Telerate Page and published in H.15(519). If such
information is not so provided by 3:00 P.M., New York City time, on the related
Calculation Date, then such CMT Rate on the CMT Rate Interest Determination Date
will be calculated by the Calculation Agent and will be a yield to maturity,
based on the arithmetic mean of the secondary market offered rates as of
approximately 3:30 P.M., New York City time, on such CMT Rate Interest
Determination Date reported, according to their written records, by three
leading primary United States government securities dealers (each, a "Reference
Dealer") in The City of New York selected by the Calculation Agent (from five
such Reference Dealers selected by the Calculation Agent and eliminating the
highest quotation (or, in the event of equality, one of the highest) and the
lowest quotation (or, in the event of equality, one of the lowest)), for the
most recently issued direct noncallable fixed rate obligations of the United
States (" Treasury Notes") with an original maturity of approximately the
Designated CMT Maturity Index and a remaining term to maturity of not less than
such Designated CMT Maturity Index minus one year. If the Calculation Agent is
unable to obtain three such Treasury Note quotations, the CMT Rate on such CMT
Rate Interest Determination Date will be calculated by the Calculation Agent and
will be a yield to maturity based on the arithmetic mean of the secondary market
offered rates as of approximately 3:30 P.M., New York City time, on such CMT
Rate Interest Determination Date of three Reference Dealers in The City of New
York (from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for Treasury Notes with an original maturity of the number of years
that is the next highest to the Designated CMT Maturity Index and a remaining
term to maturity closest to the Designated CMT Maturity Index and in an amount
of at least U.S.$100 million. If three or four (and not five) of such Reference
Dealers are quoting as described above, then the CMT Rate will be calculated by
the Calculation Agent based on the arithmetic mean of the offered rates obtained
and neither the highest nor the lowest of such quotes will be eliminated;
provided, however, that if fewer than three Reference Dealers selected by the
Calculation Agent are quoting as mentioned herein, the CMT Rate determined as of
such CMT Rate Interest Determination Date will be the CMT Rate in effect on such
CMT Rate Interest Determination Date. If two Treasury Notes with an original
maturity as described in the second preceding sentence have remaining terms to
maturity equally close to the Designated CMT Maturity Index, the Calculation
Agent will obtain from five Reference Dealers quotations for the Treasury Note
with the shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on Bridge Telerate,
Inc. (or any successor service) on the page specified on the face hereof (or any
other page as may replace such page on such service) for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519) or, if no such
page is specified on the face hereof, page 7052.
"Designated CMT Maturity Index" means the original period to maturity
of the United States Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30
years) specified on the face hereof with respect to which the CMT Rate will be
calculated or, if no such maturity is specified on the face hereof, 2 years.
Commercial Paper Rate. If an Interest Rate Basis for this Note is
specified on the face hereof as the Commercial Paper Rate, the Commercial Paper
Rate shall be determined as of the applicable Interest Determination Date (a
"Commercial Paper Rate Interest Determination Date") as the Money Market Yield
(as defined below) on such date of the rate for commercial paper having the
Index Maturity as published in H.15(519) under the caption "Commercial
Paper-Nonfinancial" or, if not so published by 3:00 P.M., New York City time, on
the related Calculation Date, the Money Market Yield of the rate on such
Commercial Paper Rate Interest Determination Date for commercial paper having
the Index Maturity as published in H.15 Daily Update, or such other recognized
electronic source used for the purpose of displaying such rate, under the
caption "Commercial Paper-Nonfinancial." If such rate is not yet published in
H.15(519), H.15 Daily Update or another recognized electronic source by 3:00
P.M., New York City time, on such Calculation Date, then the Commercial Paper
Rate on such Commercial Paper Rate Interest Determination Date will be
calculated by the Calculation Agent and shall be the Money Market Yield of the
arithmetic mean of the offered rates at approximately 11:00 A.M., New York City
time, on such Commercial Paper Rate Interest Determination Date of three leading
dealers of United States dollar commercial paper in The City of New York
selected by the Calculation Agent for commercial paper having the Index Maturity
placed for industrial issuers whose bond rating is "Aa", or the equivalent, from
a nationally recognized statistical rating organization; provided, however, that
if the dealers so selected by the Calculation Agent are not quoting as mentioned
in this sentence, the Commercial Paper Rate determined as of such Commercial
Paper Rate Interest Determination Date will be the Commercial Paper Rate in
effect on such Commercial Paper Rate Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:
Money Market Yield = D X 360 X 100
360 - (D X M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the applicable Interest Reset Period.
Eleventh District Cost of Funds Rate. If an Interest Rate Basis for
this Note is specified on the face hereof as the Eleventh District Cost of Funds
Rate, the Eleventh District Cost of Funds Rate shall be determined as of the
applicable Interest Determination Date (an "Eleventh District Cost of Funds Rate
Interest Determination Date") as the rate equal to the monthly weighted average
cost of funds for the calendar month immediately preceding the month in which
such Eleventh District Cost of Funds Rate Interest Determination Date falls, as
set forth under the caption "11th District"
on the display on Bridge Telerate, Inc. (or any successor service) on page 7058
or any other page as may replace such page on such service ("Telerate Page
7058") as of 11:00 A.M., San Francisco time, on such Eleventh District Cost of
Funds Rate Interest Determination Date. If such rate does not appear on Telerate
Page 7058 on such Eleventh District Cost of Funds Rate Interest Determination
Date, then the Eleventh District Cost of Funds Rate on such Eleventh District
Cost of Funds Rate Interest Determination Date shall be the monthly weighted
average cost of funds paid by member institutions of the Eleventh Federal Home
Loan Bank District that was most recently announced (the "Index") by the FHLB of
San Francisco as such cost of funds for the calendar month immediately preceding
such Eleventh District Cost of Funds Rate Interest Determination Date. If the
FHLB of San Francisco fails to announce the Index on or prior to such Eleventh
District Cost of Funds Rate Interest Determination Date for the calendar month
immediately preceding such Eleventh District Cost of Funds Rate Interest
Determination Date, the Eleventh District Cost of Funds Rate determined as of
such Eleventh District Cost of Funds Rate Interest Determination Date will be
the Eleventh District Cost of Funds Rate in effect on such Eleventh District
Cost of Funds Rate Interest Determination Date.
Federal Funds Rate. If an Interest Rate Basis for this Note is
specified on the face hereof as the Federal Funds Rate, the Federal Funds Rate
shall be determined as of the applicable Interest Determination Date (a "Federal
Funds Rate Interest Determination Date") as the rate on such date for United
States dollar federal funds as published in H.15(519) under the heading "Federal
Funds (Effective)", as such rate is displayed on Bridge Telerate, Inc. (or any
successor service) on page 120 (or any other page as may replace such page on
such service) ("Telerate Page 120"), or, if such rate does not appear on
Telerate page 120 or is not so published by 3:00 P.M., New York City time, on
the Calculation Date, the rate on such Federal Funds Rate Interest Determination
Date for United States dollar federal funds as published in H.15 Daily Update,
or such other recognized electronic source used for the purpose of displaying
such rate, under the caption "Federal Funds (Effective)." If such rate does not
appear on Telerate Page 120 or is not yet published in H.15(519), H.15 Daily
Update or another recognized electronic source by 3:00 P.M., New York City time,
on the related Calculation Date, then the Federal Funds Rate on such Federal
Funds Rate Interest Determination Date shall be calculated by the Calculation
Agent and will be the arithmetic mean of the rates for the last transaction in
overnight United States dollar federal funds arranged by three leading brokers
of United States dollar federal funds transactions in The City of New York
selected by the Calculation Agent, prior to 9:00 A.M., New York City time, on
such Federal Funds Rate Interest Determination Date; provided, however, that if
the brokers so selected by the Calculation Agent are not quoting as mentioned in
this sentence, the Federal Funds Rate determined as of such Federal Funds Rate
Interest Determination Date will be the Federal Funds Rate in effect on such
Federal Funds Rate Interest Determination Date.
LIBOR. If an Interest Rate Basis for this Note is specified on the face
hereof as LIBOR, LIBOR shall be determined by the Calculation Agent as of the
applicable Interest Determination Date (a "LIBOR Interest Determination Date")
in accordance with the following provisions:
(i) (a) if "LIBOR Telerate" is specified on the face hereof or if
neither "LIBOR Reuters" nor "LIBOR Telerate" is specified on the face hereof as
the method for calculating LIBOR, LIBOR will be the rate for deposits in the
Designated LIBOR Currency having the Index Maturity specified on the face
hereof, commencing on the applicable Interest Reset Date, that appears on the
Designated LIBOR Page (as defined below) as of 11:00 A.M., London time, on such
LIBOR Interest Determination Date; or (b) if "LIBOR Reuters" is specified on the
face hereof, the arithmetic mean of the offered rates (unless the Designated
LIBOR Page (as defined below) by its terms provides only for a single rate, in
which case such single rate will be used) for deposits in the Designated LIBOR
Currency having the Index Maturity, commencing on the applicable Interest Reset
Date, that appear (or, if only a single rate is required as aforesaid, appears)
on the Designated LIBOR Page as of 11:00 A.M., London time, on such LIBOR
Interest Determination Date. If fewer than two such offered rates so appear, or
if no such rate so appears, as applicable, LIBOR on such LIBOR Interest
Determination Date shall be determined in accordance with the provisions
described in clause (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear, or no rate appears, as the case may be, on the
Designated LIBOR Page as specified in clause (i) above, the Calculation Agent
shall request the principal London offices of each of four major reference banks
in the London interbank market, as selected by the Calculation Agent, to provide
the Calculation Agent with its offered quotation for deposits in the Designated
LIBOR Currency for the period of the Index Maturity, commencing on the
applicable Interest Reset Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date
and in a principal amount that is representative for a single transaction in the
Designated LIBOR Currency in such market at such time. If at least two such
quotations are so provided, then LIBOR on such LIBOR Interest Determination Date
will be the arithmetic mean of such quotations. If fewer than two such
quotations are so provided, then LIBOR on such LIBOR Interest Determination Date
will be the arithmetic mean of the rates quoted at approximately 11:00 A.M., in
the applicable Principal Financial Center (as defined below), on such LIBOR
Interest Determination Date by three major banks in such Principal Financial
Center selected by the Calculation Agent for loans in the Designated LIBOR
Currency to leading European banks, having the Index Maturity and in a principal
amount that is representative for a single transaction in the Designated LIBOR
Currency in such market at such time; provided, however, that if the banks so
selected by the Calculation Agent are not quoting as mentioned in this sentence,
LIBOR determined as of such LIBOR Interest Determination Date shall be LIBOR in
effect on such LIBOR Interest Determination Date.
"Designated LIBOR Currency" means the currency specified on the face
hereof as to which LIBOR shall be calculated or, if no such currency is
specified on the face hereof, United States dollars.
"Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified on
the face hereof, the display on the Reuter Monitor Money Rates Service (or any
successor service) on the page specified on the face hereof (or any other page
as may replace such page on such service) for the purpose of displaying the
London interbank rates of major banks for the Designated LIBOR Currency, or (b)
if "LIBOR Telerate" is specified on the face hereof or neither "LIBOR Reuters"
nor "LIBOR Telerate" is specified on the face hereof as the method for
calculating LIBOR, the display on Bridge Telerate, Inc. (or any successor
service) on the page specified on the face hereof (or any other page as may
replace such page on such service) for the purpose of displaying the London
interbank rates of major banks for the Designated LIBOR Currency.
"Principal Financial Center" means the capital city of the country to
which the Designated LIBOR Currency relates, except, that with respect to United
States dollars, Australian dollars, Canadian dollars, Deutsche marks, Dutch
guilders, Italian lire, Portuguese escudos, South African rand and Swiss francs,
the "Principal Financial Center" shall be The City of New York, Sydney, Toronto,
Frankfurt, Amsterdam, Milan, London, Johannesburg and Zurich, respectively.
Prime Rate. If an Interest Rate Basis for this Note is specified on the
face hereof as the Prime Rate, the Prime Rate shall be determined as of the
applicable Interest Determination Date (a "Prime Rate Interest Determination
Date") as the rate on such date as such rate is published in H.15(519) under the
caption "Bank Prime Loan" or, if not published by 3:00 P.M., New York City time,
on the related Calculation Date, the rate on such Prime Rate Interest
Determination Date as published in H.15 Daily Update, or such other recognized
electronic source used for the purpose of displaying such rate, under the
caption "Bank Prime Loan." if such rate is not yet published in H.15(519), H.15
Daily Update or another recognized electronic source by 3:00 P.M., New York City
time, on the related Calculation Date, the Prime Rate determined as of such
Prime Rate Interest Determination Date shall be calculated by the Calculation
Agent as the arithmetic mean of the rates of interest publicly announced by at
least four banks that appear on the Reuters Screen US PRIME 1 Page (as defined
below) as such bank's prime rate or base lending rate as of 11:00 A.M., New York
City time, on such Prime Rate Interest Determination Date. If fewer than four
such rates so appear on the Reuters Screen US PRIME 1 Page for such Prime Rate
Interest Determination Date, then the Prime Rate determined as of such Prime
Rate Interest Determination Date shall be calculated by the Calculation Agent as
the arithmetic mean of the prime rates or base lending rates quoted on the basis
of the actual number of days in the year divided by a 360-day year as of the
close of business on such Prime Rate Interest Determination Date by three major
banks in The City of New York selected by the Calculation Agent; provided,
however, that if the banks or trust companies so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Prime Rate determined
as of such Prime Rate Interest Determination Date will be the Prime Rate in
effect on such Prime Rate Interest Determination Date.
"Reuters Screen US PRIME 1 Page" means the display on the Reuter
Monitor Money Rates Service (or any successor service) on the "US PRIME 1" page
(or such other page as may replace the US PRIME 1 Page on such service) for the
purpose of displaying prime rates or base lending rates of major United States
banks.
Treasury Rate. If an Interest Rate Basis for this Note is specified on
the face hereof as the Treasury Rate, the Treasury Rate shall be determined as
of the applicable Interest Determination Date (a "Treasury Rate Interest
Determination Date") as the rate from the auction held on such Treasury Rate
Interest Determination Date (the "Auction") of direct obligations of the United
States ("Treasury Bills") having the Index Maturity under the caption
"INVESTMENT RATE" on the display on Bridge Telerate, Inc. (or any successor
service) on page 56 (or any other page as may replace such page on such service)
("Telerate Page 56") or page 57 (or any other page as may replace such page on
such service) ("Telerate Page 57") or, if not so published by 3:00 P.M., New
York City time, on the related Calculation Date, the Bond Equivalent Yield (as
defined below) of the rate for such Treasury Bills as published in H.15 Daily
Update, or other recognized electronic source used for the purpose of displaying
the applicable rate, under the caption "U.S. Government Securities/Treasury
Bills/Auction High." If such rate is not so published in H.15 Daily Update or
another recognized electronic source by 3:00 P.M., New York City time, on the
related Calculation Date, the Treasury Rate determined as of such Treasury Rate
Interest Determination Date shall be Bond Equivalent Yield of the auction rate
of such Treasury Bills as announced by the United States Department of the
Treasury. In the event that such auction rate is not so announced by the United
States Department of Treasury on such Calculation Date, or if no such Auction is
held, then the Treasury Rate determined as of such Treasury Rate Interest
Determination Date shall be the Bond Equivalent Yield of the rate on such
Treasury Rate Interest Determination Date of Treasury Bills having the Index
Maturity as published in H.15(519) under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market" or, if not yet published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on such
Treasury Rate Interest Determination Date of such Treasury Bills as published in
H.15 Daily Update, or such other recognized electronic source used for the
purpose of displaying such rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market." If such rate is not yet published
in H.15(519), H.15 Daily Update or another recognized electronic source by 3:00
P.M., New York City time, on the related Calculation Date, then the Treasury
Rate determined as of such Treasury Rate Interest Determination Date shall be
calculated by the Calculation Agent as the Bond Equivalent Yield of the
arithmetic mean of the secondary market bid rates, as of approximately 3:30
P.M., New York City time, on such Treasury Rate Interest Determination Date, of
three primary United States government securities dealers selected by the
Calculation Agent, for the issue of Treasury Bills with a remaining maturity
closest to the Index Maturity; provided, however, that if the dealers so
selected by the Calculation Agent are not quoting as mentioned in this sentence,
the Treasury Rate determined as of such Treasury Rate Interest Determination
Date shall be the Treasury Rate in effect on such Treasury Rate Interest
Determination Date.
<PAGE>
"Bond Equivalent Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:
<PAGE>
Bond Equivalent Yield = D X N X 100
-------------
360 - (D X M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis, N refers to 365 or 366, as the case may be, and "M" refers
to the actual number of days in the applicable Interest Reset Period.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, in each case as specified on the face hereof.
The "Calculation Date", if applicable, pertaining to any Interest
Determination Date shall be the earlier of (i) the tenth calendar day after such
Interest Determination Date or, if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding the
applicable Interest Payment Date or the Maturity Date, as the case may be. At
the request of the Holder hereof, the Calculation Agent will provide to the
Holder hereof the interest rate hereon then in effect and, if determined, the
interest rate that will become effective as a result of a determination made for
the next succeeding Interest Reset Date.
Accrued interest hereon shall be an amount calculated by multiplying
the principal amount hereof by an accrued interest factor. Such accrued interest
factor shall be computed by adding the interest factor calculated for each day
in the applicable Interest Period. Unless otherwise specified as the Day Count
Convention on the face hereof, the interest factor for each such date shall be
computed by dividing the interest rate applicable to such day by 360 if the CD
Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the
Federal Funds Rate, LIBOR or the Prime Rate is an applicable Interest Rate Basis
or by the actual number of days in the year if the CMT Rate or the Treasury Rate
is an applicable Interest Rate Basis. Unless otherwise specified as the Day
Count Convention on the face hereof, the interest factor for this Note, if the
interest rate is calculated with reference to two or more Interest Rate Bases,
shall be calculated in each period in the same manner as if only the Applicable
Interest Rate Basis specified on the face hereof applied.
All percentages resulting from any calculation on this Note shall be
rounded to the nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upwards, and all amounts used in or
resulting from such calculation on this Note shall be rounded to the nearest
cent (with one-half cent being rounded upwards).
If an Event of Default shall occur and be continuing, the principal of
the Notes may be accelerated in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of any series of Debt Securities by the
Company and the Trustee (i) with the consent of the Holders of a majority in
aggregate principal amount of all Debt Securities at the time outstanding,
considered as a class, if such amendment or modification affects all of the
series of Debt Securities at the time outstanding, or (ii) with the consent of
the Holders of a majority in aggregate principal amount of all series of Debt
Securities at the time outstanding specifically affected by such amendment or
modification, considered as a class, in case one or more, but less than all, of
the series of Debt Securities at the time outstanding are so affected. The
Indenture also contains provisions permitting the Holders of a majority of the
aggregate principal amount of the outstanding Debt Securities of any series, on
behalf of the Holders of Debt Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture. Furthermore, provisions in
the Indenture permit the Holders of a majority of the aggregate principal amount
of the outstanding Debt Securities of any series, in certain instances, to
waive, on behalf of all of the Holders of Debt Securities of such series,
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such holder and upon all future Holders of this Note and other Notes issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula, and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
[and herein]2 set forth, the transfer of this Note is registrable in the
Security Register of the Company upon surrender of this Note for registration of
transfer at the office or agency of the Company in any place where the principal
hereof and any premium or interest hereon are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or by his
attorney duly authorized in writing, and thereupon one or more new Notes having
the same terms and provisions, of Authorized Denominations and for the same
aggregate principal amount, will be issued by the Company to the designated
transferee or transferees.
As provided in the Indenture and subject to certain limitations therein
[and herein]2 set forth, this Note is exchangeable for a like aggregate
principal amount of Notes of different Authorized Denominations but otherwise
having the same terms and provisions, as requested by the Holder hereof
surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Holder as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary, except as required by law.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF INDIANA WITHOUT REGARD TO CONFLICT OF
LAW PRINCIPLES.
- --------
2 This text applies to global Notes only.
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C> <C>
TEN COM as tenants in common UNIF GIFT MIN ACT - ______ Custodian _____
TEN ENT as tenants by the entireties (Cust) (Minor)
JT TEN as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_____________________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
----------------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
____________________________________
[ ] [ ]
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
________________________________________________________________________________
this Note and all rights thereunder hereby irrevocably constituting and
appointing
_______________________________________________________________________Attorney
to transfer this Note on the books of the Trustee, with full power of
substitution in the premises.
Dated:__________________
____________________________________ ____________________________________
____________________________________ ____________________________________
Notice: The signature(s) on this Assignment
must correspond with the name(s) as written
upon the face of this Note in every
particular, without alteration or
enlargement or any change whatsoever.
<PAGE>
[OPTION TO ELECT REPAYMENT]
[The undersigned hereby irrevocably request(s) and instruct(s) the Company
to repay this Note (or portion hereof specified below) pursuant to its terms at
a price equal to 100% of the principal amount to be repaid, together with unpaid
interest accrued hereon to the Repayment Date, to the undersigned, at___________
________________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate trust
office in the Borough of Manhattan, The City of New York, currently located at ,
not more than 60 nor less than 30 calendar days prior to the Repayment Date,
this Note with this "Option to Elect Repayment" form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S.$1,000 (or other
integral multiple of an Authorized Denomination) (provided that any remaining
principal amount shall be at least U.S.$1,000 or the minimum Authorized
Denomination) which the Holder elects to have repaid and specify the
denomination or denominations (which shall be U.S.$1,000 or the minimum
Authorized Denomination) of the Notes to be issued to the Holder for the portion
of this Note not being repaid (in the absence of any such specification, one
such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $ _________
-------------------------------------------
Date: ________ Notice: The signature(s) on this Option to
Elect Repayment must correspond with the
name(s) as written upon the face of this
Note in every particular, without alteration
or enlargement or any change whatsoever.](3)
- --------
(3) This text applies to certificated Notes only.
EXHIBIT 5
July 1, 1999
Indiana Gas Company, Inc.
1630 North Meridian Street
Indianapolis, IN 46202
Dear Gentlemen:
You have requested our opinion in connection with the Registration
Statement on Form S-3 (the "Registration Statement") of Indiana Gas Company,
Inc., an Indiana corporation (the "Corporation"), filed pursuant to the
Securities Act of 1933, as amended ("Securities Act"), relating to the offer and
sale by the Corporation of up to $100,000,000 of debt securities (the "Debt
Securities") to be issued and sold under the provisions of the Indenture between
the Corporation and U. S. Bank Trust National Association, formerly known as
First Trust National Association, which was formerly known as Bank of America
Illinois, which was formerly known as Continental Bank, National Association,
dated as of February 1, 1991, as supplemented and amended and to be supplemented
and amended for the purpose of creating the series of Debt Securities. We have
examined such records, certificates and other documents and have made such
investigation of law as we have deemed necessary in the circumstances.
Based on that examination and investigation, it is our opinion that, when
the Debt Securities have been issued and sold and the purchase price thereof has
been paid in accordance with the transactions proposed in the Registration
Statement, as the same may be amended, and when the steps mentioned in the next
paragraph have been taken, and the Debt Securities shall have been duly
executed, authenticated and delivered in accordance with the Indenture, and
delivered against payment therefore, the Debt Securities will be legal, valid
and binding obligations of the Corporation.
The steps to be taken which are referred to in the preceding paragraph are:
1. Appropriate definitive action by the Board of Directors of the
Corporation or an authorized committee thereof with respect to the proposed
transactions set forth in the Registration Statement;
2. Compliance with the Securities Act, applicable state blue sky laws
and the Trust Indenture Act of 1939, as amended; and
<PAGE>
Indiana Gas Company, Inc.
Page Two
July 1, 1999
3. Issuance and sale of the Debt Securities in accordance with the
corporate authorization aforesaid.
This opinion letter is limited to the current Federal laws of the United
States and the current internal laws of the State of Indiana (without giving
effect to any conflict of law principles thereof) and we have not considered,
and express no opinion on, the laws of any other jurisdiction.
We consent to the use of our name under the caption "Legal Opinions" in the
Prospectus included in the Registration Statement and to the filing of this
opinion as Exhibit 5 to the Registration Statement.
Very truly yours,
BARNES & THORNBURG
/s/ BARNES & THORNBURG
EXHIBIT 12
INDIANA GAS COMPANY, INC.
AND SUBSIDIARY COMPANIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In Thousands, Except Ratios)
<TABLE>
Twelve Mos.
Ended Fiscal Year Ended September 30
3/31/99 1998 1997(1) 1996 1995 1994
------- ---- ------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Net income $31,565 $30,883 $13,478 $38,630 $32,109 $34,596
Income taxes 17,039 17,510 7,147 22,568 18,630 17,977
Fixed charges
(see below) 16,101 16,967 17,728 16,844 16,395 16,986
Total adjusted
earnings $64,705 $65,360 $38,353 $78,042 $67,134 $69,559
Fixed charges:
Total interest
expense $15,770 $16,234 $16,774 $15,907 $15,530 $16,037
Interest component
of rents 331 733 954 937 865 949
Total fixed charges $16,101 $16,967 $17,728 $16,844 $16,395 $16,986
Ratio of earnings
to fixed charges 4.0 3.9 2.2 4.6 4.1 4.1
</TABLE>
(1)Reflects the recording of restructuring costs in
fiscal 1997 (see Note 2). Indiana Gas' ratio of
earnings to fixed charges for 1997 before
restructuring costs was 4.4.
EXHIBIT 23-A
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of our report dated October 30,
1998, included in Indiana Gas Company, Inc.'s Form 10-K for the year ended
September 30, 1998, and to all references to our Firm included in this
Registration Statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Indianapolis, Indiana
June 30, 1999.
EXHIBIT 24
INDIANA GAS COMPANY, INC.
LIMITED POWER OF ATTORNEY
(To Sign and File Registration Statement)
The undersigned director and/or officer of INDIANA GAS COMPANY, INC.,
an Indiana corporation (the "Company"), which intends to file with the
Securities and Exchange Commission, Washington, D.C., under the provisions of
the Securities Act of 1933, as amended, a Registration Statement or Statements
and related prospectus for the registration of one or more new series of the
Company's Debt Securities in the aggregate principal amount of not to exceed
$100,000,000, does hereby appoint each of Lawrence A. Ferger and Niel C.
Ellerbrook as such person's true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for such person and in such
person's name, place and stead, in any and all capacities, to sign said
Registration Statement or Statements and related prospectus and any and all
amendments thereto, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as such person might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agent, or a
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Limited Power of
Attorney this 27th day of January, 1999.
/s/ Paul T. Baker /s/ Niel C. Ellerbrook
- ------------------------------ ------------------------------
Paul T. Baker Niel C. Ellerbrook
/s/ Lawrence A. Ferger /s/ Otto N. Frenzel III
- ------------------------------ ------------------------------
Lawrence A. Ferger Otto N. Frenzel III
/s/ William G. Mays /s/ J. Timothy McGinley
- ------------------------------ ------------------------------
William G. Mays J. Timothy McGinley
/s/ John E. Worthen
- ------------------------------
John E. Worthen
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility of
a Trustee Pursuant to Section 305(b)(2)___
-------------------------------------------------------
U.S. BANK TRUST NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601 36-4046888
(Address of principal executive offices) (Zip Code) I.R.S. Employer
Identification No.
Steven E. Charles
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Telephone (312) 228-9418
(Name, address and telephone number of agent for service)
INDIANA GAS COMPANY, INC.
(Exact name of obligor as specified in its charter)
Indiana 35-0793669
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
1630 North Meridian Street
Indianapolis, Indiana 46202
(Address of Principal Executive Offices) (Zip Code)
Debt Securities
(Title of the Indenture Securities)
================================================================================
-1-
<PAGE>
FORM T-1
Item 1. GENERAL INFORMATION. Furnish the following information as to the
Trustee.
a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency
Washington, D.C.
b) Whether it is authorized to exercise corporate trust powers.
Yes
Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the
Trustee, describe each such affiliation.
None
Items 3-15 Not applicable because, to the best of Trustee's knowledge, the
Trustee is not a trustee under any other indenture under which any
other securities or certificates of interest or participation in any
other securities of the obligor are outstanding and there is not, nor
has there been, a default with respect to securities issued under
this indenture.
Item 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this
statement of eligibility and qualification.
1. A copy of the Articles of Association of the Trustee now in
effect, incorporated herein by reference to Exhibit 1 of Form
T-1, Registration No. 333-18235.*
2. A copy of the certificate of authority of the Trustee to commence
business, incorporated herein by reference to Exhibit 2 of Form
T-1, Registration No. 333- 18235.*
3. A copy of the certificate of authority of the Trustee to exercise
corporate trust powers, incorporated herein by reference to
Exhibit 3 of Form T-1, Registration No. 333- 18235.*
4. A copy of the existing bylaws of the Trustee, as now in effect,
incorporated herein by reference to Exhibit 4 of Form T-1,
Registration No. 333-18235.*
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the
Trust Indenture Act of 1939, incorporated herein by reference to
Exhibit 6 of Form T-1, Registration No. 333-18235.*.
7. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or
examining authority, filed herewith.
8. Not applicable.
9. Not applicable.
* See* at top of page 3
-2-
<PAGE>
* Exhibits thus designated are incorporated herein by reference to
Exhibits bearing identical numbers in Item 16 of the Form T-1 filed by
the Trustee with the Securities and Exchange Commission with the specific
references noted.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the Trustee, U.S. BANK TRUST NATIONAL ASSOCIATION, a
national banking association organized and existing under the laws
of the United States of America, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Chicago,
State of Illinois on the 21st day of May, 1999.
U.S. BANK TRUST NATIONAL ASSOCIATION
By: /s/ Steven E. Charles
--------------------------------
Steven E. Charles
Assistant Vice President and
Assistant Secretary
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 12/31/1998 ST-BK: 17-1638 FFIEC 033
400 North Michigan Avenue Page RC- 1
Chicago, IL 60611 Vendor ID: D Cert: 34094 9
Transit Number: 09600069
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
<TABLE>
<CAPTION>
C200
Dollar Amounts in Thousands
<S> <C> <C> <C>
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
1. Cash and balances due from depository institutions (from Schedule RC-A): RCON
a. Noninterest-bearing balances and currency and coin (1) 0081. . 11,111 1.a
b. Interest-bearing balances (2) 0071. . 48,890 1.b
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) 1754. . 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D) 1773. . 3,735 2.b
3. Federal funds sold and securities purchased under agreements to resell 1350. . 0 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income RCON
(From Schedule RC-C) 2122 . . 0 . . . . . . . 4.a
b. LESS: Allowance for loan and lease losses 3123 . . 0 . . . . . . . 4.b
c. LESS: Allocated transfer risk reserve 3128 . . 0 . . . . . . . 4.c
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c) 2125. . 0 4.d
5. Trading assets 3545. . 0 5.
6. Premises and fixed assets (including capitalized leases) 2145. . 82 6.
7. Other real estate owned (from Schedule RC-M) 2150. . 0 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) 2130. . 0 8.
9. Customers' liability to this bank on acceptances outstanding 2155. . 0 9.
10. Intangible assets (from Schedule RC-M) 2143. . 44,547 10.
11. Other assets (from Schedule RC-F) 2160. . 2,739 11.
12. Total assets (sum of items 1 through 11) 2170. . 111,104 12.
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 12/31/1998 ST-BK: 17-1638 FFIEC 033
400 North Michigan Avenue Page RC-2
Chicago, IL 60611 Vendor ID: D Cert: 34094 10
</TABLE>
Transit Number: 09600069
Schedule RC - Continued
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
<C> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of RCON
columns A and C from Schedule RC-E) 2200. . 0 13.a
RCON
(1) Noninterest-bearing (1) 6631. 0 . . . . . . . 13.a.1
(2) Interest-bearing 6636. 0 . . . . . . . 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs . . . . . . .
(1) Noninterest-bearing . . . . . . .
(2) Interest-bearing . . . . . . .
14. Federal funds purchased and securities sold under agreements to repurchase 2800. . 0 14.
15. a. Demand notes issued to the U.S. Treasury 2840. . 0 15.a
b. Trading liabilities 3548. . 0 15.b
16. Other borrowed money (includes mortgage indebtedness and
obligations under capitalized leases):
a. With a remaining maturity of one year or less 2332. . 0 16.a
b. With a remaining maturity of more than one year through three years A547. . 0 16.b
c. With a remaining maturity of more than three years A548. . 0 16.c
17. Not applicable
18. Bank's liability on acceptances executed and outstanding 2920. . 0 18.
19. Subordinated notes and debentures (2) 3200. . 0 19.
20. Other liabilities (from Schedule RC-G) 2930. . 2,627 20.
21. Total liabilities (sum of items 13 through 20) 2948. . 2,627 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus 3838. . 0 23.
24. Common stock 3230. . 1,000 24.
25. Surplus (exclude all surplus related to preferred stock) 3839. . 106,712 25.
26. a. Undivided profits and capital reserves 3632. . 762 26.a
b. Net unrealized holding gains (losses) on available-for-sale securities 8434. . 3 26.b
27. Cumulative foreign currency translation adjustments . . . . . . .
28. Total equity capital (sum of items 23 through 27) 3210. . 108,477 28.
29. Total liabilities and equity capital (sum of items 21 and 28) 3300. . 111,104 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed
for the bank by independent external auditors as of any date during 1997 6724. . N/A M.1
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by
with generally accepted auditing standards by a certified external auditors (may be required by state
public accounting firm which submits a report on the bank chartering authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by
conducted in accordance with generally accepted auditing external auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- -------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited life preferred stock and related surplus.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. Bank Trust National Association Call Date: 12/31/1998 ST-BK: 17-1638 FFIEC 033
400 North Michigan Avenue Page RC- 3
Chicago, IL 60611 Vendor ID: D Cert: 34094 11
Transit Number: 09600069
</TABLE>
Schedule RC-A - Cash and Balances Due From Depository Institutions
Exclude assets held for trading.
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Cash items in process of collection, unposted debits, and currency and coin: RCON
----
a. Cash items in process of collection and unposted debits 0020. . 0 1.a
b. Currency and coin 0080. . 0 1.b
2. Balances due from depository institutions in the U.S.:
a. U.S. branches and agencies of foreign banks 0083. . 0 2.a
b. Other commercial banks in the U.S. and other depository institutions in the U.S 0085. . 60,001 2.b
3. Balances due from banks in foreign countries and foreign central banks:
a. Foreign branches of other U.S. banks 0073. . 0 3.a
b. Other banks in foreign countries and foreign central banks 0074. . 0 3.b
4. Balances due from Federal Reserve Banks 0090. . 0 4.
5. Total (sum of items 1 through 4) (must equal Schedule RC, sum of items 1.a and 1.b) 0010. . 60,001 5.
Memorandum
- ------------------------------------------------------------------------------------------------------------------------------------
1. Noninterest-bearing balances due from commercial banks in the U.S. RCON
(Included in items 2.a and 2.b above) 0050. . 11,111 M.1
</TABLE>
