<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 10, 1997
REGISTRATION NO. 333-
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
NIPSCO CAPITAL MARKETS, INC. NIPSCO INDUSTRIES, INC.
AS ISSUER AND REGISTRANT OF AS ISSUER AND REGISTRANT OF
DEBT SECURITIES OBLIGATIONS
(EXACT NAME OF REGISTRANT AS SPECIFIED PURSUANT TO THE SUPPORT AGREEMENT
IN ITS CHARTER) (EXACT NAME OF REGISTRANT AS SPECIFIED
IN ITS CHARTER)
INDIANA INDIANA
(STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION)
35-1762940 35-1719974
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
5265 HOHMAN AVENUE
HAMMOND, INDIANA 46320
(219) 853-5200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
---------------
FRANCIS P. GIROT, JR.
NIPSCO INDUSTRIES, INC.
5265 HOHMAN AVENUE
HAMMOND, INDIANA 46320
(219) 853-6970
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES OF COMMUNICATIONS TO:
ANDREW A. KLING MITCHELL L. HOLLINS
SCHIFF HARDIN & WAITE SONNENSCHEIN NATH & ROSENTHAL
7200 SEARS TOWER 8000 SEARS TOWER
CHICAGO, ILLINOIS 60606 CHICAGO, ILLINOIS 60606
(312) 876-1000 (312) 876-8144
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
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. [_]
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
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT(1) PRICE(1) FEE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
% Senior Notes Due 2027................ $75,000,000 100% $75,000,000 $22,727.27
- ---------------------------------------------------------------------------------------------------------
Obligations Pursuant to the Support Agree-
ment...................................... (2) (2) (2) (2)
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</TABLE>
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(1)Estimated solely for the purpose of calculating the registration fee.
(2)No separate consideration will be received for the obligations pursuant to
the Support Agreement.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
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.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE +
+WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES +
+LAWS OF ANY SUCH JURISDICTION. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED NOVEMBER 10, 1997
$75,000,000
NIPSCO CAPITAL MARKETS, INC.
% SENIOR NOTES DUE 2027
ENTITLED TO THE BENEFIT OF A SUPPORT AGREEMENT
PROVIDING FOR THE PAYMENT OF PRINCIPAL AND INTEREST BY
NIPSCO INDUSTRIES, INC.
-----------
The % Senior Notes Due 2027 (the "Notes"), which will mature on December
1, 2027, are being offered by NIPSCO Capital Markets, Inc., an Indiana
corporation ("Capital"). Interest on the Notes will be payable semiannually on
June 1 and December 1 of each year, commencing June 1, 1998. Each holder of the
Notes may require Capital to repurchase all or a portion of the Notes owned by
such holder on , , and at a purchase price equal to
100% of the principal amount thereof plus accrued interest thereon. See
"Description of the Notes--Purchase at Option of Holder." The Notes are
entitled to the benefits of a Support Agreement, dated as of April 4, 1989 (as
amended, the "Support Agreement"), between Capital and its parent company,
NIPSCO Industries, Inc. ("Industries"), providing for the payment of principal
and interest, if any, on the Notes in the event of default of Capital. See
"Description of the Support Agreement." The Notes will not be redeemable at the
option of Capital and will not be entitled to any sinking fund. See
"Description of the Notes--General."
The Notes will be represented by one or more Global Securities registered in
the name of the nominee of The Depository Trust Company ("DTC"). Beneficial
interests in the Global Securities will be shown on, and transfers thereof will
be effected only through, records maintained by DTC and its participants.
Except as described herein, Notes in definitive form will not be issued. The
Notes will be issued only in denominations of $1,000 and integral multiples
thereof. See "Description of the Notes."
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------
<TABLE>
<CAPTION>
INITIAL
PUBLIC
OFFERING UNDERWRITING PROCEEDS TO
PRICE DISCOUNT CAPITAL(1)(3)
------------ ------------ -------------
<S> <C> <C> <C>
Per Note................................ % % %
Total................................... $ $ $
</TABLE>
- -----
(1) Plus accrued interest, if any, from December 1, 1997.
(2) Capital and Industries have agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act of
1933.
(3) Before deducting expenses payable by Capital estimated at $140,000.
-----------
The Notes offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that the
Notes will be ready for delivery in book-entry form only through the facilities
of DTC in New York, New York, on or about , 1997, against payment
therefor in immediately available funds.
GOLDMAN, SACHS & CO. MORGAN STANLEY DEAN WITTER
-----------
The date of this Prospectus is , 1997.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES, INCLUDING
OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH NOTES, AND
THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE OFFERING. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
----------------
AVAILABLE INFORMATION
Capital and Industries have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (including
any amendments thereto, the "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Notes. This
Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto, certain
portions of which have been omitted pursuant to the rules of the Commission.
Statements made in this Prospectus as to the contents of any contract,
agreement or other document are not necessarily complete. With respect to each
such contract, agreement or other document filed or incorporated by reference
as an exhibit to the Registration Statement, reference is made to such exhibit
for a more complete description of the matter involved, and each such
statement is qualified in its entirety by such reference.
Industries is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Reports, proxy statements and other information filed by
Industries with the Commission may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
located at Suite 1400, 500 West Madison Street, Chicago, Illinois 60661 and at
Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of such
materials may be obtained from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such
material also may be accessed electronically by means of the Commission's home
page on the Internet at http://www.sec.gov. Such reports, proxy statements and
other information concerning Industries may also be inspected at the offices
of the New York Stock Exchange, 20 Broad Street, New York, New York 10005, the
Chicago Stock Exchange, 440 South LaSalle Street, Chicago, Illinois 60605, and
the Pacific Stock Exchange, 301 Pine Street, San Francisco, California 94104,
on which exchanges certain of Industries' securities are listed.
On September 25, 1992, the staff of the Commission informed Industries and
Capital by letter that it would not recommend enforcement action to the
Commission if Capital did not file periodic reports pursuant to Sections 13
and 15(d) of the Exchange Act, subject to Industries' compliance with the
conditions set forth therein. In reliance upon such letter, no documents have
been filed or will be filed by Capital under the Exchange Act. Capital does
not intend to issue any periodic or other reports to holders of the Notes.
Capital has been advised by the Commission's staff that financial information
regarding Capital need not be included in any registration statement on Form
S-3 filed by Capital and Industries with respect to the Notes and the Support
Agreement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Industries with the Commission are
incorporated herein by reference:
(a)Industries' Annual Report on Form 10-K for the fiscal year ended
December 31, 1996; and
(b) Industries' Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997.
2
<PAGE>
All documents subsequently filed by Industries pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering of the Notes shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference in this Prospectus shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
INDUSTRIES WILL PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY
BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE
WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS
REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED IN THIS PROSPECTUS BY
REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY
INCORPORATED BY REFERENCE INTO THE INFORMATION THAT THE PROSPECTUS
INCORPORATES. REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO NINA M. RAUSCH,
SECRETARY, NIPSCO INDUSTRIES, INC., 5265 HOHMAN AVENUE, HAMMOND, INDIANA 46320,
TELEPHONE NUMBER (219) 853-5199.
THE COMPANIES
CAPITAL
Capital was incorporated in Indiana in 1989. Capital was organized by
Industries to engage in financing activities that provide funds for use in
Industries' business operations and those of its direct and indirect wholly-
owned subsidiaries, excluding Northern Indiana Public Service Company
("Northern Indiana"). Industries owns all of the 1,000 authorized capital
shares of Capital.
On April 4, 1989, Capital and Industries entered into the Support Agreement,
which subsequently was amended as of May 15, 1989, December 10, 1990, and
February 14, 1991. Under the Support Agreement, Industries has agreed, among
other things, to ensure the timely payment of principal, premium, if any, and
interest owed on any debt securities issued by Capital, with the limitation
that no holder of such debt securities will have recourse to or against the
stock or assets of Northern Indiana, or any interest of Industries or Capital
therein. See "Description of the Support Agreement."
On March 27, 1991, the Commission issued an order pursuant to Section 6(c) of
the Investment Company Act of 1940, as amended (the "Investment Company Act"),
granting an exemption to Capital from all of the provisions of the Investment
Company Act, subject to Capital's compliance with the conditions set forth
therein.
The principal executive offices of Capital are located at 5265 Hohman Avenue,
Hammond, Indiana 46320. Its telephone number is (219) 853-5200.
INDUSTRIES
Industries is an energy/utility-based holding company, incorporated in
Indiana in 1987, providing electric energy, natural gas and water to the public
through its six wholly-owned regulated subsidiaries: Northern Indiana Public
Service Company ("Northern Indiana"); Kokomo Gas and Fuel Company ("Kokomo
Gas"); Northern Indiana Fuel and Light Company, Inc. ("NIFL"); Crossroads
Pipeline Company ("Crossroads"); Indianapolis Water Company ("IWC"); and
Harbour Water Corporation ("Harbour"). The principal executive offices of
Industries are located at 5265 Hohman Avenue, Hammond, Indiana 46320, and its
telephone number is (219) 853-5200.
3
<PAGE>
On March 25, 1997, Industries acquired IWC Resources Corporation (IWCR).
IWCR's subsidiaries include two regulated water utilities (IWC and Harbour),
which at September 30, 1997 served approximately 242,500 customers, and five
non-utility companies providing utility-related services including
installation, repair and maintenance of underground pipelines and utility line
locating and marking. The two primary non-utility subsidiaries are Miller
Pipeline Corporation ("Miller") and SM&P Utility Resources, Inc. ("SM&P").
Industries also provides non-regulated energy/utility-related services
including energy marketing and trading; power generation; gas transmission,
supply and storage; installation, repair and maintenance of underground
pipelines; utility line locating and marking; and related products targeted at
customer segments principally through the following wholly-owned subsidiaries:
NIPSCO Development Company, Inc. ("Development"); NIPSCO Energy Services, Inc.
("Services"); Primary Energy, Inc. ("Primary"); Miller; and SM&P.
Northern Indiana, Industries' largest and dominant subsidiary, was
incorporated in Indiana in 1912 and supplies electricity and natural gas to
the public in 30 counties in the northern part of Indiana, serving an area of
about 12,000 square miles with a population of approximately 2,188,000. At
September 30, 1997, it supplied approximately 414,800 customers with
electricity and approximately 651,500 customers with natural gas. For the
twelve months ended September 30, 1997, approximately 58% of its revenues were
derived from the sale of electricity and approximately 42% from the sale and
transportation of natural gas. Kokomo Gas, which was incorporated in Indiana
in 1917, and NIFL, which was incorporated in Indiana in 1906, both are engaged
in supplying natural gas to the public in service territories contiguous to
Northern Indiana's service territory. At September 30, 1997, Kokomo Gas and
NIFL served approximately 33,100 and 32,600 customers, respectively.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth Industries' ratio of earnings to fixed
charges for the periods indicated:
<TABLE>
<CAPTION>
TWELVE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, -----------------------------
1997 1996 1995 1994 1993 1992
------------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges.................... 3.17x 3.21x 3.30x 3.10x 3.00x 2.74x
</TABLE>
For the purpose of calculating the ratios of earnings to fixed charges,
"earnings" consist of income from continuing operations before income taxes,
and "fixed charges" consist of interest on all indebtedness, amortization of
debt expense, the percentage of rental expense on operating leases deemed
representative of the interest factor, and preferred stock dividend
requirements of majority-owned subsidiaries.
A statement setting forth the computation of ratio of earnings to fixed
charges is filed as an exhibit to the Registration Statement of which this
Prospectus is a part.
USE OF PROCEEDS
The net proceeds to Capital from the issue and sale of the Notes offered
hereby are estimated to be approximately $ million, after deducting
underwriting discounts and estimated expenses of this offering payable by
Capital. Capital will use $72,500,000 of the net proceeds of this offering to
repay in full Capital's obligations under its Zero Coupon Notes Due December
1, 1997, and Capital will advance the remaining balance of such net proceeds
to Industries which will use such funds for its general corporate purposes.
4
<PAGE>
DESCRIPTION OF THE NOTES
The Notes will be issued as a series of Debt Securities (as defined below)
under an Indenture, dated as of February 14, 1997, as amended or modified from
time to time (the "Indenture"), between Capital and The Chase Manhattan Bank,
as trustee (the "Trustee"). The Indenture is subject to, and governed by, the
Trust Indenture Act of 1939, as amended. The following summary of certain
provisions of the Notes and the Indenture does not purport to be complete and
is qualified in its entirety by reference to the actual provisions of the
Notes and the Indenture. Capitalized terms used but not defined herein shall
have the meanings given to them in the Notes or the Indenture, as the case may
be. The forms of the Indenture and the Notes are filed as exhibits to the
Registration Statement. The term "Debt Securities," as used in this
Prospectus, refers to all debt securities, including the Notes, issued and
issuable from time to time under the Indenture.
GENERAL
The Notes will be limited to $75,000,000 aggregate principal amount and will
mature on December 1, 2027. The Notes will bear interest at the rate of %
per annum from December 1, 1997, payable semiannually in arrears on June 1 and
December 1 of each year, commencing June 1, 1998, to the persons in whose
names the Notes are registered at the close of business on the preceding May
15 or November 15, each a record date, as the case may be, except that in the
case of Global Securities representing Notes, such payment will be made in
accordance with arrangements then in effect among Capital, the Trustee and the
Depositary. Principal of and interest on the Notes will be payable (and the
Notes may be presented for repayment) at the office or agency of Capital
maintained for such purposes in the Borough of Manhattan, The City of New
York, currently the corporate trust office of the Trustee. Interest will be
computed on the basis of a 360-day year consisting of twelve 30-day months.
The Notes will not be subject to any sinking fund. Capital will not have the
option to redeem the Notes prior to maturity. Capital is not required to
repurchase Notes from Holders prior to maturity except as described below
under "--Purchase at Option of Holder."
The covenants contained in the Indenture would not necessarily afford the
holders of the Notes protection in the event of a highly leveraged transaction
or a takeover attempt nor do they contain provisions requiring the repurchase
of any the Notes upon a change in control of Capital. In addition, the
Indenture does not contain any provisions that would limit the ability of
Capital and its subsidiaries to incur unsecured indebtedness. All Debt
Securities, including the Notes, issued and to be issued under the Indenture
will be unsecured general obligations of Capital and will rank pari passu with
all other unsecured and unsubordinated indebtedness of Capital from time to
time outstanding. The Indenture does not limit the aggregate principal amount
of Debt Securities that may be issued thereunder and Debt Securities may be
issued thereunder from time to time in one or more series up to the aggregate
principal amount from time to time authorized by Capital for each series.
Capital has heretofore issued $300,000,000 principal amount of Medium-Term
Notes constituting a separate series of Debt Securities under the Indenture
all of which principal amount remains outstanding on the date hereof. Capital
may, from time to time, without the consent of the Holders, provide for the
issuance of Notes or other Debt Securities under the Indenture in addition to
the aforementioned Medium-Term Notes and the $75,000,000 aggregate principal
of Notes offered hereby.
The Notes are a new issue of securities with no established trading market
and will not be listed on any securities exchange. Capital has been advised by
the Underwriters that the Underwriters intend to make a market in the Notes
but are not obligated to do so and may discontinue market making at any time
without notice. No assurance can be given as to the existence or liquidity of
a secondary market for the Notes.
5
<PAGE>
DELIVERY AND FORM
The Notes initially will be represented by a single book entry global
security ("Global Security") deposited with DTC and registered in the name of
the nominee of DTC. Capital has established a depositary arrangement with DTC
with respect to the Notes, the terms of which are summarized below. Each of
the Notes will be available for purchase in denominations of $1,000 and
integral multiples thereof. Unless and until certificated Notes are issued
under the limited circumstances described below, no Beneficial Owner of a Note
shall be entitled to receive a definitive certificate representing a Note. So
long as DTC or any successor depositary (collectively, the "Depositary") or
its nominee is the registered holder of the Global Security, the Depositary,
or such nominee, as the case may be, will be considered to be the sole owner
or holder of the Notes represented thereby for all purposes of the Indenture.
Investors' interests in the Global Security will be represented through
financial institutions acting on their behalf as direct and indirect
participants in the Depositary. No Global Security may be transferred except
as a whole by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or such nominee to a successor
of the Depositary or a nominee of such successor.
Except as otherwise provided below, the Beneficial Owners of the Global
Security will not be entitled to receive physical delivery of certificated
Notes and will not be considered the Holders thereof for any purpose under the
Indenture, and no Global Security shall be exchangeable or transferable.
Accordingly, each Beneficial Owner must rely on the procedures of the
Depositary and, if such Beneficial Owner is not a Participant, on the
procedures of the Participant through which such Beneficial Owner owns its
interest in order to exercise any rights of a Holder under such Global
Security or the Indenture. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of such securities in
certificated form. Such limits and laws may impair the ability to transfer
beneficial interests in the Global Security.
A Global Security will be exchangeable for certificated Notes of like tenor
and terms and of differing authorized denominations in a like aggregate
principal amount, only if (i) the Depositary notifies Capital that it is
unwilling or unable to continue as Depositary for the Global Securities or
Capital becomes aware that the Depositary has ceased to be a clearing agency
registered under the Exchange Act and, in any such case, Capital shall not
have appointed a successor to the Depositary within 90 days thereafter, (ii)
Capital, in its sole discretion, determines that the Global Security shall be
exchangeable for certificated Notes or (iii) an Event of Default (or event
which with the giving of notice or lapse of time would constitute an Event of
Default) shall have occurred and be continuing with respect to the Notes under
the Indenture. Upon any such exchange, the certificated Notes shall be
registered in the names of the Beneficial Owners of the Notes represented by
the Global Security, which names shall be provided by the Depositary's
relevant Participants (as identified by the Depositary) to the Trustee.
The following is based on information furnished by DTC:
DTC will act as securities Depositary for the Notes. The Notes will be
issued as fully registered securities registered in the name of Cede & Co.
(DTC's partnership nominee). One fully registered Global Security will be
issued for the Notes in the aggregate principal amount of such issue and will
be deposited with DTC.
DTC 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 Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited
6
<PAGE>
securities through electronic computerized book-entry changes in Participants'
accounts, thereby eliminating the need for physical movement of securities
certificates. Direct Participants of DTC ("Direct Participants") include
securities brokers and dealers (including the Underwriters), banks, trust
companies, clearing corporations and certain other organizations. DTC is owned
by a number of its Direct Participants and by the New York Stock Exchange,
Inc., the American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. Access to DTC'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 ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Securities and Exchange Commission.
Purchases of Notes under DTC's system must be made by or through Direct
Participants, which will receive a credit for such Notes on DTC's records. The
ownership interest of each actual purchaser of each Note represented by a
Global Security ("Beneficial Owner") is in turn to be recorded on the records
of Direct Participants and Indirect Participants. Beneficial Owners will not
receive written confirmation from DTC's 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 such Beneficial Owner
entered into the transaction. Transfers of ownership interests in a Global
Security representing Notes are to be accomplished by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial Owners
of a Global Security representing Notes will not receive certificated Notes
representing their ownership interests therein, except in the event that use
of the book-entry system for such Notes is discontinued.
To facilitate subsequent transfers, all Global Securities representing Notes
which are deposited with, or on behalf of, DTC are registered in the name of
DTC's nominee, Cede & Co. The deposit of Global Securities with, or on behalf
of, DTC and their registration in the name of Cede & Co. effect no change in
beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of
the Global Securities representing the Notes; the Depositary's records reflect
only the identity of the Direct Participants to whose accounts such Notes 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 DTC 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 DTC nor Cede & Co. will consent or vote with respect to any Global
Security. Under its usual procedures, DTC mails an Omnibus Proxy to Capital as
soon as possible after the applicable record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Notes are credited on the applicable record date (identified in a
listing attached to the Omnibus Proxy).
Principal, premium, if any, and/or interest, if any, payments on a Global
Security will be made in immediately available funds to DTC. DTC's practice is
to credit Direct Participants' accounts on the applicable payment date in
accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payment on such 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 such Participant and not of DTC, the Trustee or Capital,
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 DTC is the responsibility of Capital and the Trustee,
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disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct Participants and Indirect
Participants.
A Beneficial Owner shall give notice to elect to have its Notes repaid by
Capital, through its Participant, to the Trustee, and shall effect delivery of
such Notes by causing the Direct Participant to transfer the Participant's
interest in the Global Security representing such Notes, on the Depositary's
records, to the Trustee. The requirement for physical delivery of book-entry
Notes in connection with a demand for repayment will be deemed satisfied when
the ownership rights in the Global Security representing such Notes are
transferred by Direct Participants on the Depositary's records and followed by
a book-entry credit of tendered Notes to the Trustee's account.
The Depositary may discontinue providing its services as securities
depositary with respect to the Notes at any time by giving reasonable notice
to Capital or the Trustee. Under such circumstances, in the event that a
successor securities depositary is not obtained, certificated Notes are
required to be printed and delivered.
Capital may decide to discontinue use of the system of book-entry transfers
through the Depositary (or a successor securities depositary). In that event,
certificated Notes will be printed and delivered.
The information in this section concerning the Depositary and the
Depositary's system has been obtained from sources that Capital believes to be
reliable, but Capital takes no responsibility for the accuracy thereof.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. So long as the Notes are represented by the Global Security,
all payments of principal and interest will be made by Capital in immediately
available funds.
The Notes will trade in DTC's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the Notes will therefore be
required by DTC to settle in immediately available funds.
PURCHASE AT OPTION OF HOLDER
Each Holder of the Notes will have the right to require Capital to
repurchase all or a portion of the Notes in increments of $1,000 owned by such
Holder (the "Put Option") on , and (each
such date being a "Put Option Exercise Date") at a purchase price equal to
100% of the principal amount of the Notes tendered by such Holder plus accrued
interest thereon. On and after each Put Option Exercise Date, interest will
cease to accrue on the portion of the Notes tendered for repayment. On or
before each Put Option Exercise Date, Capital shall deposit with a paying
agent (or the Trustee) money sufficient to pay the principal of and any
accrued interest on the Notes to be tendered for repayment.
Capital will comply with the provisions of Rule 13e-4, Rule 14e-1 and any
other tender offer rules under the Securities Exchange Act of 1934 if required
and will file Schedule 13E-4 or any other schedule if required thereunder in
connection with any offer by the Company to purchase the Notes.
BOOK-ENTRY NOTES. So long as the Notes are held under the book-entry only
system described above, DTC, its nominee, Cede & Co. or any of DTC's Direct or
Indirect Participants as registered Holders of the Notes will be entitled to
tender the Notes on each Put Option Exercise Date for repayment and any such
tenders will be effected by means of DTC's Repayment Option Procedures. During
each Put Option Notice Period, DTC will receive instructions from its
Participants (acting on behalf of owners of beneficial interests in the Notes)
to tender the Notes for repayment under DTC's
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Repayment Option Procedures. For book-entry notes, a Holder must provide
Capital with notice of its intention to exercise its Put Option not less than
30 days nor more than 60 days prior to the Put Option Exercise Date applicable
to such Put Option (the "Put Option Notice Period"). Such notice, once given,
will be irrevocable unless waived in writing by Capital. Such tenders for
repayment will be made by DTC by means of a book-entry credit of the Notes to
the account of the Trustee, provided that DTC receives instructions from
tendering Participants by Noon on the last day that is a business day during
the applicable Put Option Notice Period. Promptly after the recording of any
such book-entry credit, DTC will provide the Trustee an Agent Put Daily
Activity Report in accordance with its Repayment Option Procedures,
identifying the Notes and the aggregate principal amount thereof as to which
such tenders for repayment have been made. OWNERS OF BENEFICIAL INTERESTS IN
NOTES WHO WISH TO EFFECTUATE THE TENDER AND REPAYMENT OF SUCH NOTES MUST
INSTRUCT THEIR RESPECTIVE DTC PARTICIPANT OR PARTICIPANTS A REASONABLE PERIOD
OF TIME IN ADVANCE OF THE EXPIRATION OF THE APPLICABLE PUT OPTION NOTICE
PERIOD.
CERTIFICATED NOTES. If at any time the use of a book-entry only system
through DTC (or any successor securities Depositary) is discontinued with
respect to the Notes as a result of the circumstances described above under
"Delivery and Form," tenders for repayment of such Notes on each Put Option
Exercise Date shall be made according to the following procedures. The Trustee
must receive at the principal office of the Trustee in New York City, at least
30, but not more than 60, days prior to the applicable Put Option Exercise
Date but no later than 5:00 p.m. New York City time on the last day for giving
notice, (i) the Notes with the form entitled "Option to Elect Repayment" on
the reverse of the Note duly completed or (ii) a telegram, telex, facsimile
transmission or letter from a member of national securities exchange or the
National Association of Securities Dealers, Inc., or a commercial bank or a
trust company in the United States of America, setting forth the name of the
registered Holder of the Note, the principal amount of the Note to be repaid,
the amount of the Note to be repurchased, a statement that the option to elect
repayment is being exercised thereby and a guarantee that the Note to be
repaid with the form entitled "Option to Elect Repayment" on the reverse of
the Note duly completed will be received by the Trustee not later than five
business days after the date of such telegram, telex, facsimile transmission
or letter and such Note and form duly completed are received by the Trustee by
such fifth business day. Any such notice received by the Trustee during a Put
Option Notice Period shall be irrevocable, unless waived in writing by
Capital. All questions as to the validity, eligibility (including time of
receipt) and the acceptance of any Note for repayment will be determined by
Capital, whose determination will be final and binding.
CONSOLIDATION, MERGER AND SALE
Under the terms of the Indenture, neither Capital nor Industries may merge
or consolidate with or into any other Corporation, or convey, transfer or
lease their properties and assets substantially as an entirety unless (i) the
Corporation formed by any such consolidation or into which it is merged or the
Person which acquires by conveyance or transfer, or which leases, its
properties and assets substantially as an entirety shall be a Corporation
organized and existing under the laws of any domestic jurisdiction and shall
expressly assume, in the case of Capital, its obligations under the Debt
Securities and the Indenture and, in the case of Industries, its obligations
under the Indenture and the Support Agreement, (ii) immediately after giving
effect to such transaction, no Event of Default, and no event which, after
notice or lapse of time, would become an Event of Default, shall have occurred
and be continuing, and (iii) Capital or Industries, as applicable, shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger, conveyance, transfer or lease
complies with the Indenture and that all conditions precedent therein provided
for relating to such transaction have been complied with.
LIMITATION ON LIENS
Neither Capital nor Industries will, nor will Industries permit any
Subsidiary other than a Utility, to, issue, assume or guarantee any debt for
money borrowed (for purposes of this paragraph, "Debt"), secured by any
mortgage, security interest, pledge, lien or other encumbrance (herein
referred to as
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"mortgage") upon any property of Capital, Industries or any such Subsidiary
(other than a Utility), except indebtedness issued by any such Subsidiary and
owned by Industries or any other such Subsidiary (whether such property or
indebtedness is owned at the date of the Indenture or thereafter acquired),
without effectively securing the Notes equally and ratably with (or prior to)
such Debt. The foregoing restrictions do not apply to (i) mortgages on any
property, acquired, constructed or improved by Industries or any of the
Subsidiaries other than the Utilities after the date of the Indenture which
are created or assumed contemporaneously with, or within 120 days after, such
acquisition or completion of such construction or improvement, or within six
months thereafter 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 such property or the cost
of such construction or improvement incurred after the date of the Indenture,
or, in addition to mortgages contemplated by clauses (ii) and (iii) below,
mortgages on any property existing at the time of acquisition thereof,
provided that the mortgages shall not apply to any property theretofore owned
by Industries or any such Subsidiary other than, in the case of any such
construction or improvement, any theretofore unimproved real property on which
the property so constructed or the improvement is located; (ii) existing
mortgages on any property or indebtedness of a corporation which is merged
with or into or consolidated with Industries or a Subsidiary; (iii) mortgages
on property or indebtedness of a corporation existing at the time such
corporation becomes a Subsidiary; (iv) mortgages to secure Debt of a
Subsidiary to Industries or to another Subsidiary other than a Utility; (v)
mortgages in favor of the United States of America, any State, any foreign
country or any department, agency or instrumentality or political subdivision
of any such jurisdiction, 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 or
the cost of constructing or improving the property subject to such mortgages,
including, without limitation, mortgages to secure Debt of the pollution
control or industrial revenue bond type; (vi) mortgages to secure loans to
Industries or any Subsidiary other than a Utility maturing within 12 months
from the creation thereof and made in the ordinary course of business; (vii)
mortgages 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 thereof or to secure Debt incurred to provide funds for any such
purpose; (viii) mortgages existing on the date of the Indenture; and (ix)
mortgages for the sole purposes of extending, renewing or replacing in whole
or in part Debt secured by any mortgage referred to in the foregoing clauses
(i) to (viii), inclusive, or this clause (ix); provided, however, that the
principal amount of Debt secured thereby shall not exceed the principal amount
of Debt so secured at the time of such extension, renewal or replacement, and
that such extension, renewal or replacement shall be limited to all or a part
of the property or indebtedness which secured the mortgage so extended,
renewed or replaced (plus improvements on such property). Furthermore, such
restrictions do not apply to the issuance, assumption or guarantee by
Industries or any Subsidiary of Debt secured by a mortgage which would
otherwise be subject to the foregoing restriction up to an aggregate amount
which, together with all other secured Debt (not including secured Debt
permitted under the foregoing exceptions), does not exceed 5 percent of
consolidated net tangible assets of Industries and the Subsidiaries (other
than the Utilities), determined in accordance with generally accepted
accounting principles and as of a date not more than 90 days prior to the
happening of the event for which such determination is being made. For
purposes of the foregoing, "consolidated net tangible assets" means the total
amount of assets appearing on a consolidated balance sheet of Industries and
the Subsidiaries (other than the Utilities), less, without duplication, (i)
all current liabilities (excluding any thereof which are by their terms
extendable or renewable at the sole option of the obligor thereon without
requiring the consent of the obligee to a date more than 12 months after the
date on which the determination of consolidated net tangible assets is made),
(ii) all reserves for depreciation and other asset valuation reserves but
excluding any reserves for deferred Federal income taxes arising from
accelerated amortization or otherwise, (iii) all intangible assets such as
goodwill, trademarks, trade names, patents and unamortized debt discount and
expense carried as an asset on said balance sheet, and (iv) all appropriate
adjustments on account of minority interests of other persons holding common
shares or stock in any Subsidiary.
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EVENTS OF DEFAULT
The Indenture provides, with respect to any series of Debt Securities
outstanding thereunder, that any one or more of the following events that has
occurred and is continuing shall constitute an Event of Default: (i) default
in the payment of any interest upon any Debt Security of that series, when the
same becomes due and payable and the continuance of such default for 30 days;
(ii) default in the payment of the principal of or any premium, if any, on any
Debt Security of that series when due, whether at maturity, upon redemption,
by declaration or otherwise and continuance of such default for a period of
three Business Days thereafter; (iii) default in the deposit of any sinking
fund payment, when and as due by the terms of any Debt Securities of that
series and the continuance of such default for three Business Days thereafter;
(iv) default in the performance or breach of any covenant or agreement of
Capital or Industries in the Indenture or the Support Agreement (other than
those referred to in (i), (ii) and (iii) above) and the continuance thereof
for 60 days after there shall have been given, by registered or certified
mail, to Capital and Industries from the Trustee or from the Holders of at
least 25 percent of the Outstanding Debt Securities of that series written
notice specifying such default and stating that such notice is a "Notice of
Default"; (v) certain events in bankruptcy, insolvency or reorganization of
Capital, Industries or Northern Indiana; (vi) a default under any bond,
debenture, note or other evidence of indebtedness for money borrowed by
Capital (including a default with respect to Debt Securities of any series
other than that series) or under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by Capital (including the Indenture), whether
such indebtedness now exists or shall hereafter be created, which default
shall constitute a failure to pay in excess of $5,000,000 of the principal or
interest of such indebtedness when due and payable after the expiration of any
applicable grace period with respect thereto or shall have resulted in such
indebtedness in an amount in excess of $5,000,000 becoming or being declared
due and payable prior to the date on which it would otherwise have become due
and payable, without such indebtedness having been discharged, or such
acceleration having been rescinded or annulled within a period of 90 days
after there shall have been given, by registered or certified mail, to Capital
by the Trustee or to Capital and the Trustee by the Holders of at least 25
percent in principal amount of the Outstanding Debt Securities of that series
written notice specifying such default and stating that such notice is a
"Notice of Default"; and (vii) any other Event of Default provided with
respect to Debt Securities of that series.
Each of Capital and Industries will be required to furnish annually to the
Trustee a statement as to the performance by it of certain of its obligations
under the Indenture and as to any default in such performance.
The Holders of not less than a majority in principal amount of the Debt
Securities may, on behalf of the Holders of all the Debt Securities, waive any
past default under the Indenture with respect to the Debt Securities and its
consequences, except a default (i) in the payment of the principal of or
interest on any Debt Securities or (ii) in respect of a covenant or provision
that cannot be modified or amended without the consent of the Holder of each
outstanding Debt Security affected thereby.
ACCELERATION OF MATURITY
If an Event of Default occurs and is continuing with respect to Debt
Securities of a particular series, the Trustee or the Holders of not less than
33 percent in principal amount of Outstanding Debt Securities of that series
may declare the Outstanding Debt Securities of that series due and payable
immediately.
At any time after a declaration of acceleration with respect to Debt
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee therefor, the
Holders of a majority in principal amount of the Outstanding Debt Securities
of that series, by written notice to Capital, Industries and such Trustee, may
rescind and annul such
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declaration and its consequences if: (i) Capital or Industries has paid or
deposited with the Trustee a sum sufficient to pay: (a) all overdue interest
on all Debt Securities of that series, (b) the principal of (and premium, if
any, on) any such Debt Securities which has become due otherwise than by such
declaration of acceleration, and interest on such unpaid principal at the rate
or rates prescribed therefor in such Debt Securities, (c) to the extent
lawful, interest on overdue interest at the rate or rates prescribed therefor
in such Debt Securities, and (d) all sums paid or advanced by such Trustee and
the reasonable compensation, expenses, disbursements and advances of such
Trustee, its agents and counsel, and any other amounts due the Trustee under
the Indenture; and (2) all Events of Default with respect to Debt Securities
of that series, other than the non-payment of the principal of such Debt
Securities which have become due solely by such declaration of acceleration,
have been cured or waived. No such rescission and annulment shall affect any
subsequent default or impair any right consequent thereon.
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may, on behalf of the Holders of all
the Debt Securities of such series and any related Coupons, waive any past
default under the Indenture with respect to such series and its consequences,
except a default (i) in the payment of the principal of (or premium, if any)
or interest on any Debt Security of such series, or (ii) in respect of a
covenant or provision that cannot be modified or amended without the consent
of the Holder of each Outstanding Debt Security of such series affected
thereby.
Subject to the provisions in the Indenture relating to the duties of the
Trustee thereunder, if an Event of Default with respect to Debt Securities of
a particular series occurs and is continuing, such Trustee shall be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders of Debt Securities of such series,
unless such Holders shall have offered to such Trustee reasonable indemnity or
security against the costs, expenses and liabilities that might be incurred by
it in compliance with such request or direction. Subject to such provisions
for the indemnification of the Trustee, the Holders of a majority in principal
amount of the Outstanding Debt Securities of such series shall have the right
to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee under the Indenture, or exercising any trust
or power conferred on the Trustee with respect to the Debt Securities of that
series; provided, that such direction shall not be in conflict with any rule
of law or the Indenture, expose the Trustee to personal liability or be unduly
prejudicial to Holders not joining therein, and the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
direction.
MODIFICATION OR WAIVER
Modification and amendment of the Indenture may be made by Capital,
Industries and the Trustee with the consent of the Holders of not less than a
majority in principal amount of all Outstanding Debt Securities thereunder of
any series that are affected by such modification or amendment; provided that
no such modification or amendment may, without the consent of the Holder of
each Outstanding Debt Security of such series: (i) change the Stated Maturity
of the principal of or any installment of principal of or interest on any Debt
Security (except as otherwise provided in the Indenture) of such series, (ii)
reduce the principal amount or the rate of interest on, or any premium payable
upon the redemption of, any Debt Security of such series, (iii) change any
obligation of Capital to pay additional amounts in respect of any Debt
Security of such series (except as otherwise provided in the Indenture), (iv)
reduce the amount of principal of a Debt Security of such series that is an
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Stated Maturity thereof, (v) change the
place or currency of payment of principal of, or any premium or interest on,
any Debt Security of such series, (vi) impair the right to institute suit for
the enforcement of any such payment on or after the Stated Maturity thereof or
any Redemption Date therefor, (vii) reduce the above-stated percentage of
Holders of Outstanding Debt Securities of such series necessary to modify or
amend the Indenture or to consent to any waiver thereunder or reduce the
requirements for voting or quorum
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described below, (viii) change any obligation of Capital to maintain an office
or agency in any requisite place of payment or an obligation of Capital to
maintain an office or agency outside the United States of America (to the
extent required pursuant to the terms of the Indenture), or (ix) modify the
foregoing requirements or reduce the percentage of Outstanding Debt Securities
of such series necessary to waive any past default.
Modification and amendment of the Indenture may be made by Capital,
Industries and the Trustee without the consent of any Holder, for any of the
following purposes: (i) to evidence the succession of another Corporation to
Capital or Industries; (ii) to add to the covenants of Capital and Industries
for the benefit of the Holders of all or any series of Debt Securities (and if
such covenants are to be for the benefit of less than all of any series of
Debt Securities, stating that such covenants are expressly being included
solely for the benefit of such portion of such series) or to surrender any
right or power herein conferred upon Capital; (iii) to add any additional
Events of Default; (iv) to add or change any provisions of the Indenture to
facilitate the issuance of Bearer Securities; (v) to change or eliminate any
provisions of the Indenture, provided that any such change or elimination
shall become effective only when there are no Outstanding Debt Securities of
any series created prior thereto that is entitled to the benefit of such
provision; (vi) to establish the form or terms of Debt Securities of any
series; (vii) to secure the Debt Securities; (viii) to provide for the
acceptance of appointment by a successor Trustee or facilitate the
administration of the trusts under the Indenture by more than one Trustee;
(ix) to cure any ambiguity, defect or inconsistency in the Indenture or to
make any other provisions with respect to matters or questions arising under
the Indenture, provided such action does not adversely affect the interests of
Holders of Debt Securities of any series under the Indenture in any material
respect; (x) to effect assumption by Industries or one of its subsidiaries of
Capital's obligations as contemplated by the Indenture; and (xi) to conform
the Indenture to any amendments to the Trust Indenture Act.
The Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series. Such a meeting may be called at any time by the
Trustee at its discretion for certain purposes set forth in the Indenture
relating to Bearer Securities or by the Trustee pursuant to a request made to
the Trustee by Capital or the Holders of at least 10% in principal amount of
the Outstanding Debt Securities of any series under the Indenture, but in any
case, notice shall be given as provided in the Indenture. Except for any
consent that must be given by the Holder of each Debt Security affected
thereby, as described above, any resolution presented at a meeting or
adjourned meeting duly reconvened at which a quorum is present may be adopted
by the affirmative vote of the Holders of a majority in principal amount of
the Debt Securities of that series Outstanding; provided, however, that, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by
the Holders of a specified percentage that is less than a majority in
principal amount of Debt Securities of a series Outstanding may be adopted at
a meeting or adjourned meeting, duly reconvened and at which a quorum is
present, by the affirmative vote of the Holders of such specified percentage
in principal amount of the Debt Securities of that series Outstanding. Any
resolution passed or decision taken at any meeting of Holders of Debt
Securities of any series duly held in accordance with the Indenture will be
binding on all Holders of Debt Securities of that series, whether or not
present or represented at the meeting. The quorum at any meeting called to
adopt a resolution, and at any reconvened meeting, will consist of Persons
entitled to vote a majority in principal amount of the Debt Securities of a
series Outstanding.
INFORMATION CONCERNING THE TRUSTEE
Except during the continuance of an Event of Default with respect to Debt
Securities of any series, the Trustee undertakes to perform, with respect to
Debt Securities of such series, only such duties of the Trustee as are
specifically set forth in the Indenture, and no implied covenants or
obligations shall be read into the Indenture against the Trustee, and in the
absence of bad faith on its part, the Trustee
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may, with respect to Debt Securities of such series, conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of the Indenture; but in the case of any such certificates
or opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of the
Indenture. In case an Event of Default with respect to Debt Securities of any
series has occurred and is continuing, the Trustee shall exercise, with
respect to Debt Securities of such series, such of the rights and powers
vested in it by the Indenture, and use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York.
MISCELLANEOUS
Industries or a Subsidiary may directly assume, by a supplemental indenture,
the performance of every covenant of the Indenture on the part of Capital to
be performed or observed. Upon any such assumption, Industries or such
Subsidiary shall succeed to and be substituted for and may exercise every
right and power of Capital under the Indenture with the same effect as if
Industries or such Subsidiary had been named as Capital therein and Capital
shall be released from its liability as obligor on the Debt Securities;
provided that, in the case of such assumption by a Subsidiary, the Support
Agreement is modified so that references to Capital and its Debt therein are
changed to, or modified to include, references to such Subsidiary and its Debt
(including the Debt Securities). No such assumption shall be permitted unless
Industries has delivered to the Trustee an Officers' Certificate of Industries
and an Opinion of Counsel for Industries, each stating that such assumption
and supplemental indenture comply with the Indenture that all conditions
precedent therein provided for relating to such transaction have been complied
with and, in the event of assumption by a Subsidiary, that Industries'
obligations under the Indenture and the Support Agreement (modified as
aforesaid) remain in full force and effect.
DESCRIPTION OF THE SUPPORT AGREEMENT
The Support Agreement between Capital and Industries provides that, during
the term thereof, (i) Industries will own all of the voting stock of Capital,
(ii) Industries will cause Capital to have at all times a positive net worth
(net assets less intangible assets, if any), as determined in accordance with
generally accepted accounting principles, and (iii) if Capital is unable to
make timely payment of principal of or any premium or interest on any Debt (as
defined below) issued by Capital, Industries will, at the request of Capital
or any Lender (as defined below), provide funds to Capital to make such
payments. The Support Agreement also provides that any Lender to Capital shall
have the right to demand that Capital enforce its rights against Industries
under the Support Agreement as described in the previous sentence, and, in the
event that Capital fails to require Industries to perform such obligations or
Capital defaults in the timely payment of principal of or any premium or
interest on any Debt owed to a Lender, such Lender may proceed directly
against Industries to enforce Capital's rights against Industries under the
Support Agreement or to obtain payment of such defaulted principal, premium or
interest owed to such Lender.
The Support Agreement provides that in no event may any Lender, on default
of Capital or Industries or upon failure by Capital or Industries to comply
with the Support Agreement, have recourse to or against the stock or assets of
Northern Indiana, or any interest of Capital or Industries
therein. Notwithstanding this limitation, the Support Agreement provides that
funds available to
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Industries to satisfy any obligations under the Support Agreement will include
cash dividends paid by Northern Indiana to Industries. In addition to the cash
dividends paid to Industries by any Subsidiary, the assets of Industries other
than the stock and assets of Northern Indiana are available as recourse to
holders of Capital's Debt. The carrying value of such assets reflected in
Industries' consolidated balance sheet at September 30, 1997 is approximately
$1.3 billion. The term "Debt" is defined in the Support Agreement as debt
securities or other obligations, and includes the Debt Securities. The term
"Lender" is defined in the Support Agreement as any person, firm or
corporation to which Capital is indebted for money borrowed or to which
Capital otherwise owes any Debt or which is acting as trustee or authorized
representative on behalf of such person, firm or corporation. The Indenture
provides that each Holder of a Debt Security, as well as the Trustee, shall be
considered a "Lender" for purposes of the Support Agreement.
Funds to pay the principal of and interest on the Debt Securities pursuant
to the Support Agreement would come from earnings in the form of dividends
paid to Industries by Northern Indiana, Kokomo Gas, NIFL and IWCR, the
earnings of other businesses of Industries and its subsidiaries or the
proceeds of refinancing transactions. During the next few years, it is
expected that the majority of Industries' earnings that would ultimately be
available to pay the principal of and interest on the Debt Securities will
depend upon dividends paid to Industries by Northern Indiana. Northern
Indiana's Indenture of Mortgage provides that Northern Indiana will not
declare or pay any dividends on any class of capital stock (other than
preferred or preference stock) except out of earned surplus or net profits of
Northern Indiana. At September 30, 1997, Northern Indiana had approximately
$139.9 million of retained earnings (earned surplus) available for the payment
of dividends. Future dividends payable by Northern Indiana to Industries will
depend upon adequate retained earnings, adequate future earnings and the
absence of adverse developments. In addition, since Industries is a holding
company, the right of its creditors, including Holders of the Debt Securities
pursuant to the Support Agreement, to participate in any distribution of the
assets of any subsidiary other than Capital upon its liquidation or
reorganization or otherwise is necessarily subject to the prior claims of
creditors of the subsidiary, except to the extent claims of Industries as a
creditor may be recognized. The Indenture does not limit the amount of
indebtedness that Capital, Industries or any of Industries' other subsidiaries
may incur.
The Support Agreement may be amended or terminated at any time by agreement
of Industries and Capital, provided that (i) no amendment regarding the terms
described above may be made unless all Lenders consent in advance and in
writing to such amendment; (ii) no amendment regarding any other term of the
Support Agreement may be made in a manner that adversely affects the rights of
Lenders unless all affected Lenders consent in advance and in writing to such
amendment; and (iii) no termination shall be effective until such time as all
Debt (including the Debt Securities) shall have been paid in full.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of the Notes. 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).
This summary also does not address the tax consequences to persons whose
functional currency is other than the U.S. Dollar or the tax consequences to
shareholders, partners or beneficiaries of a holder of Notes. Further, it does
not include any description of any alternative minimum tax consequences or the
tax laws of any state or local government or of any foreign government that
may be applicable to the Notes. This summary is based on the Internal Revenue
Code of 1986, as amended (the "Code"), Treasury regulations
15
<PAGE>
thereunder and administrative and judicial interpretations thereof, as of the
date hereof, all of which are subject to change, possibly on a retroactive
basis. 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 herein, 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
created or organized in or under the laws of the United States or of any
political subdivision thereof, (iii) an estate or trust the income of which is
subject to United States Federal income taxation regardless of its source or
(iv) any other person whose income or gain in respect of a Note is effectively
connected with the conduct of a United States trade or business. As used
herein, 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).
MARKET DISCOUNT
If a U.S. Holder purchases a Note, other than an original issue 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 an original issue 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 an original issue 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 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.
16
<PAGE>
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 then
owned and thereafter 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.
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.
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 Capital, a controlled foreign
corporation related to Capital 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 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 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 United States Federal
income taxes on any amount which constitutes capital gain upon retirement or
disposition of a Note, provided the gain is not effectively connected with the
conduct of a trade or business in the United States by the non-U.S. Holder.
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 Capital
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.
17
<PAGE>
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 non-U.S. status would be made normally on an IRS Form W-8
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.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A
HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH
RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE NOTES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED
STATES FEDERAL OR OTHER TAX LAWS.
18
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
Capital has agreed to sell to each of the Underwriters named below, and each of
such Underwriters has severally agreed to purchase, the principal amount of the
Notes set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
UNDERWRITER OF NOTES
----------- -----------
<S> <C>
Goldman, Sachs & Co................................................ $37,500,000
Morgan Stanley & Co. Incorporated.................................. 37,500,000
-----------
Total............................................................ $75,000,000
===========
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Notes, if any are
taken.
The Underwriters propose to offer the Notes in part directly to the public at
the initial public offering price set forth on the cover page of this
Prospectus and in part to certain securities dealers at such price less a
concession of % of the principal amount of the Notes. The Underwriters may
allow, and such dealers may reallow, a concession not to exceed % of the
principal amount of the Notes to certain brokers and dealers. After the Notes
are released for sale to the public, the offering price and other selling terms
may from time to time be varied by the Underwriters.
The Notes are a new issue of securities with no established trading market
and Capital does not intend to apply for listing of the Notes on a securities
exchange. Capital has been advised by the Underwriters that the Underwriters
intend to make a market in the Notes but are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be given
as to the liquidity of the trading market for the Notes.
In connection with the offering, the Underwriters may purchase and sell the
Notes in the open market. These transactions may include over-allotment and
stabilizing transactions and purchases to cover short positions created by the
Underwriters in connection with the offering. Stabilizing transactions consist
of certain bids or purchases for the purpose of preventing or retarding a
decline in the market price of the Notes; and short positions created by the
Underwriters involve the sale by the Underwriters of a greater number of Notes
than they are required to purchase from the Company in the offering. The
Underwriters also may impose a penalty bid, whereby selling concessions allowed
to broker-dealers in respect of the Notes sold in the offering may be reclaimed
by the Underwriters if such Notes are repurchased by the Underwriters in
stabilizing or covering transactions. These activities may stabilize, maintain
or otherwise affect the market price of the Notes, which may be higher than the
price that might otherwise prevail in the open market; and these activities, if
commenced, may be discontinued at any time. These transactions may be effected
in the over-the-counter market or otherwise.
In the ordinary course of its business, the Underwriters and certain of their
affiliates have engaged and may in the future engage in investment banking,
commercial banking and other transactions with (and perform related services
for) Capital and certain of its affiliates, for which such Underwriters have
received and will receive customary fees and commissions.
Capital and Industries have agreed to indemnify the several Underwriters
against certain liabilities, including liabilities under the Securities Act of
1933.
19
<PAGE>
LEGAL MATTERS
The validity of the Notes offered hereby will be passed upon for Capital by
Schiff Hardin & Waite, Chicago, Illinois. Certain legal matters relating to the
Notes offered hereby will be passed upon for the Underwriters by Sonnenschein
Nath & Rosenthal, Chicago, Illinois.
EXPERTS
The consolidated financial statements and schedules of Industries and its
subsidiaries incorporated by reference in this Registration Statement from
Industries' 1996 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1997 and June 30, 1997 have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated by reference in this
Registration Statement in reliance upon the authority of said firm as experts
in giving said reports.
20
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY CAPITAL, INDUSTRIES OR ANY UNDERWRITER. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS OR AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DE-
LIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUM-
STANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF CAPITAL OR INDUSTRIES SINCE THE DATE HEREOF OR THAT THE INFORMATION CON-
TAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
-----------
TABLE OF CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents
By Reference.............................................................. 2
The Companies.............................................................. 3
Ratios of Earnings to Fixed Charges........................................ 4
Use of Proceeds............................................................ 4
Description of the Notes................................................... 5
Description of the Support Agreement....................................... 14
Certain United States Federal Income
Tax Considerations........................................................ 15
Underwriting............................................................... 19
Legal Matters.............................................................. 20
Experts.................................................................... 20
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$75,000,000
% SENIOR NOTES DUE 2027
NIPSCO
CAPITAL MARKETS, INC.
ENTITLED TO THE BENEFIT OF A SUPPORT
AGREEMENT PROVIDING FOR THE PAYMENT OF
PRINCIPAL AND INTEREST BY
NIPSCO
INDUSTRIES, INC.
-----------
PROSPECTUS
-----------
GOLDMAN, SACHS & CO.
MORGAN STANLEY DEAN WITTER
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses in connection with the
distribution of the Notes being registered. All amounts shown below are
estimates, except the registration fee:
<TABLE>
<S> <C>
Registration fee of the Securities and Exchange Commission... $ 22,727.27
Accountants' fees and expenses............................... 10,000.00
Legal fees and expenses...................................... 50,000.00
Printing Registration Statement, prospectus and exhibits and
other printing expenses..................................... 25,000.00
Trustee fees and expenses.................................... 3,000.00
Rating agency fees........................................... 20,000.00
Miscellaneous................................................ 9,272.73
-----------
Total.................................................... $140,000.00
===========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The By-Laws of Industries provide for indemnification by Industries of each
director and officer of Industries and Capital to the fullest extent permitted
by law for liability of such director or officer arising by reason of his or
her status as a director or officer of Industries or Capital. Under the By-
Laws of Industries as well as the Indiana Business Corporation Law (the
"Indiana BCL"), Industries is required to indemnify the directors and officers
of Industries and Capital against expenses, judgments, decrees, fines,
penalties and settlements actually and reasonably incurred by such person in
connection with any action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which such person is a party by reason of
his or her connection with Industries and Capital, provided that such person
acted in good faith and in a manner he or she reasonably believed to be in the
best interest of Industries and Capital, or, with respect to a criminal
proceeding, has no reasonable cause to believe that his or her conduct was
unlawful.
The By-Laws of Industries provide that except where a director or officer is
substantially and finally successful on the merits, Industries may not
indemnify a director or officer (unless ordered by a court) until after a
determination has been made that indemnification of the director or officer is
permissible because he or she met the applicable standards of conduct.
Industries also may not advance expenses prior to the disposition of an
action, suit or proceeding until: (a) the director or officer provides
Industries with a written affirmation of his or her good faith belief that he
or she has met the applicable standards of conduct and an undertaking to repay
the advance if it is ultimately determined that he or she did not meet the
applicable standards of conduct, and (b) a determination has been made, that,
based on the facts then known to those making the determination, the director
or officer met the applicable standards of conduct. The determination that a
director or officer has met the applicable standards of conduct may be made by
a majority vote of a quorum consisting of disinterested directors, a majority
vote of a committee designated by the board of directors consisting of two or
more disinterested directors (only if a quorum of the board cannot be
obtained), special legal counsel or a majority vote of disinterested
shareholders.
As authorized under the By-Laws of Industries and the Indiana BCL,
Industries and its subsidiaries, including Capital, have insurance which
insures directors and officers for acts committed as such directors or
officers which are determined not to be indemnifiable under Industries'
indemnity provisions.
II-1
<PAGE>
ITEM 16. EXHIBITS
The Exhibits filed herewith are set forth on the Exhibit Index set forth on
page II-6 of this Registration Statement and is incorporated herein by
reference.
ITEM 17. UNDERTAKINGS
The undersigned registrants hereby undertake:
(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. Notwithstanding the foregoing, any increase or
decrease in volume of Notes offered (if the total dollar value of Notes
offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than a 20 percent change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the effective
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 the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a post-
effective amendment by those paragraphs 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 this 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 Notes offered therein, and the offering
of such Notes at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the Notes being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of Industries' annual report pursuant to Section 13(a) or
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 Notes offered therein, and the offering of such
Notes time shall be deemed to be the initial bona fide offering thereof.
(5) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
II-2
<PAGE>
(6) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus 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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions described under Item 15 above, or
otherwise, the registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the registrants of expenses incurred or paid by a
director, officer or controlling person of the registrants in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the Notes being registered,
the registrants 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 Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
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 HAMMOND, STATE OF INDIANA, ON THE 10TH DAY OF
NOVEMBER, 1997.
NIPSCO Industries, Inc.
(Registrant)
/s/ Gary L. Neale
By: _________________________________
Gary L. Neale
Chairman, 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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Gary L. Neale Chairman, President, Chief November 10, 1997
____________________________________ Executive Officer and Director
Gary L. Neale
/s/ Stephen P. Adik Executive Vice President, Chief November 10, 1997
____________________________________ Financial Officer
Stephen P. Adik
/s/ Jerry M. Springer Controller and Principal November 10, 1997
____________________________________ Accounting Officer
Jerry M. Springer
/s/ Steven C. Beering* Director November 10, 1997
____________________________________
Steven C. Beering
/s/ Arthur J. Decio* Director November 10, 1997
____________________________________
Arthur J. Decio
/s/ Ernestine M. Raclin* Director November 10, 1997
____________________________________
Ernestine M. Raclin
/s/ Denis E. Ribordy* Director November 10, 1997
____________________________________
Denis E. Ribordy
/s/ Ian M. Rolland* Director November 10, 1997
____________________________________
Ian M. Rolland
/s/ Edmund A. Schroer* Director November 10, 1997
____________________________________
Edmund A. Schroer
/s/ Robert J. Welsh, Jr.* Director November 10, 1997
____________________________________
Robert J. Welsh, Jr.
/s/ James T. Morris* Director November 10, 1997
____________________________________
James T. Morris
</TABLE>
/s/ Arthur A. Paquin
*By: __________________________
Attorney-In-Fact
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL 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 HAMMOND, STATE OF INDIANA, ON THE 10TH DAY OF
NOVEMBER, 1997.
NIPSCO Capital Markets, Inc.
(Registrant)
/s/ Stephen P. Adik
By: _________________________________
Steven P. Adik
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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Gary L. Neale Chairman and Director November 10, 1997
____________________________________
Gary L. Neale
/s/ Stephen P. Adik President, Director and November 10, 1997
____________________________________ Chief Executive Officer
Stephen P. Adik
/s/ Jeffrey W. Yundt Executive Vice President November 10, 1997
____________________________________ and Director
Jeffrey W. Yundt
/s/ Jerry M. Springer Vice President and November 10, 1997
____________________________________ Chief Financial Officer
Jerry M. Springer
/s/ Arthur A. Paquin Comptroller and Principal November 10, 1997
____________________________________ Accounting Officer
Arthur A. Paquin
/s/ Patrick J. Mulchay Director November 10, 1997
____________________________________
Patrick J. Mulchay
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
------- -------
<C> <S>
1 Form of Underwriting Agreement among NIPSCO Capital Markets, Inc.,
NIPSCO Industries, Inc., Goldman, Sachs & Co. and Morgan Stanley & Co.
Incorporated
4.1 Indenture dated February 14, 1997 among NIPSCO Capital Markets, Inc.,
NIPSCO Industries, Inc. and The Chase Manhattan Bank, as Trustee
(incorporated by reference to Exhibit 4.1 to the Registration
Statement on Form S-3 filed by Capital and Industries on February 25,
1997 (Registration No. 333-22347))
4.2 Support Agreement dated April 4, 1989 as amended as of May 15, 1989,
December 10, 1990 and February 14, 1991, between NIPSCO Industries,
Inc. and NIPSCO Capital Markets, Inc. (incorporated by reference to
Exhibit 4.2 to the Registration Statement on Form S-3 filed by Capital
and Industries on November 13, 1992 (Registration No.
33-54516))
4.3 Form of % Senior Note Due 2027
5 Opinion of Schiff Hardin & Waite as to the legality of the Notes
12 Statement re Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Schiff Hardin & Waite (contained in their opinion filed as
Exhibit 5)
24.1 Powers of Attorney of the directors of NIPSCO Industries, Inc. and
NIPSCO Capital Markets, Inc.
25 Form T-1, Statement of Eligibility of The Chase Manhattan Bank
</TABLE>
II-6
<PAGE>
Exhibit 1
NIPSCO CAPITAL MARKETS, INC.
$75,000,000
___% Senior Notes Due 2027
-----------------
Underwriting Agreement
----------------------
November __, 1997
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
As Representatives of the several Underwriters
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Dear Sirs:
NIPSCO Capital Markets, Inc., an Indiana corporation (the "Company") and a
wholly-owned subsidiary of NIPSCO Industries, Inc., an Indiana corporation
("Industries"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters"), an aggregate of $75,000,000 principal amount of the ___% Senior
Notes Due 2027 of the Company specified above (the "Securities") in the
respective principal amounts designated in Schedule I hereto.
1. The Company and Industries jointly and severally represent and warrant
to, and agree with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-_____) in
respect of the Securities has been filed with the Securities and Exchange
Commission (the "Commission"); such registration statement in the form
heretofore delivered to you has been declared effective by the Commission;
no other document with respect to such registration statement or document
incorporated by reference therein has heretofore been filed with the
Commission; 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 Securities Act of 1933, as amended (the "Act"), being
hereinafter called a "Preliminary Prospectus"; the various parts of such
registration statement, including all exhibits thereto but excluding Form
T-1 and including (i) the information contained in the form of final
prospectus filed with the
<PAGE>
Commission pursuant to Rule 424(b) under the Act in accordance with Section
5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of
the registration statement at the time it was declared effective and (ii)
the documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration statement
became effective, each as amended at the time such part of the registration
statement became effective, being hereinafter called the "Registration
Statement"; such final prospectus, in the form first filed pursuant to Rule
424(b) under the Act, being hereinafter called the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Act, as of the date of
such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include any documents filed
after the time of filing of such Preliminary Prospectus or Prospectus, as
the case may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; and any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of Industries 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);
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and regulations
of the Commission thereunder, and did 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, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to Industries or the Company by any
Underwriter through you expressly for use therein;
(c) 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
-2-
<PAGE>
necessary to make the statements therein not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to Industries or the Company by any Underwriter
through you expressly for use therein;
(d) Giving effect to the interpretations of the requirements of the
Act reflected in the Company's letter requesting "no-action" submitted to
the staff of the Commission (the "Staff"), dated April 27, 1992, as
supplemented by letters dated July 9, 1992 and September 21, 1992 (the "No-
Action Request") and the Staff's response thereto dated September 25, 1992
(the "Staff Response"), the Registration Statement and the Prospectus
conform and any further amendments or supplements to the Registration
Statement or the Prospectus will conform, in all material respects, to the
requirements of the Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the Prospectus
and any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by any Underwriter through
you expressly for use therein;
(e) Neither Industries nor any of its subsidiaries has sustained
since the date of the latest audited consolidated financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, which could, individually or
in the aggregate, reasonably be expected to have a material adverse effect
on the general affairs, management, financial position, shareholders'
equity or results of operations of Industries and its subsidiaries taken as
a whole or upon the ability of Industries or the Company to perform their
respective obligations under this Agreement (a "Material Adverse Effect"),
otherwise than as set forth or contemplated in the Prospectus; and, since
the respective dates as of which information is given in the Prospectus,
there has not been any material change in the consolidated share capital or
long-term debt of Industries and its subsidiaries or the consolidated share
capital or long-term debt of either the Company or Northern Indiana Public
Service Company, a wholly-owned subsidiary of Industries ("Northern
Indiana"), 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 Industries and its subsidiaries (taken as a whole), otherwise
than as set forth or contemplated in the Prospectus.
(f) The accountants who certified the audited financial statements
included or incorporated by reference in the Registration Statement are
independent public
-3-
<PAGE>
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(g) The financial statements included or incorporated by reference in
the Prospectus present fairly the financial position of Industries and its
subsidiaries as at the dates indicated and the results of their operations
for the periods specified; except as may be stated in the Prospectus or in
the reports of independent public accountants accompanying said financial
statements, said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis and,
with respect to financial statements included in periodic reports filed by
Industries pursuant to Sections 13 or 15(d) of the Exchange Act with the
Commission on and after September 25, 1992, contain the information
requested by the Staff in the Staff Response to be so included; and the
supporting schedules included or incorporated by reference in the
Prospectus present fairly the information required to be stated therein.
(h) Each of Industries, Northern Indiana and the Company has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the State of Indiana, with respective power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, or is
subject to no material liability or disability by reason of the failure to
be so qualified in any such jurisdiction; and each other subsidiary of
Industries has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation;
(i) Industries has an authorized capitalization as set forth in the
Prospectus; all of the issued capital shares of Industries and each wholly-
owned subsidiary of Industries have been duly and validly authorized and
issued and are fully paid and non-assessable; and except as set forth in
Exhibit 21 to the most recent Form 10-K of Industries, all of the issued
common shares of Northern Indiana and all the issued capital shares of each
other subsidiary of Industries (except for directors' qualifying shares and
as set forth or incorporated by reference in the Registration Statement)
are owned directly or indirectly by Industries, free and clear of all
liens, encumbrances, equities or claims;
(j) The Securities have been duly authorized and, when duly executed,
authenticated, issued and delivered pursuant to the indenture, dated as of
February 14, 1997 (the "Indenture"), among Industries, the Company and The
Chase Manhattan Bank, as trustee (the "Trustee"), and this Agreement
against payment of the agreed consideration therefor, will constitute valid
and legally binding obligations of the Company entitled to the benefits
provided by (i) the Support Agreement, dated April 4, 1989, as amended as
of May 15, 1989, December 10, 1990 and February 14, 1991, between
Industries and the Company (the "Support Agreement"), in the form filed as
an exhibit to the Registration Statement and (ii) the Indenture, under
which the Securities are to be issued, in the form filed as an exhibit to
the Registration Statement; the
-4-
<PAGE>
Indenture has been duly authorized and duly qualified under the Trust
Indenture Act; each of the Support Agreement and the Indenture has been
duly authorized, executed and delivered by each of Industries and the
Company and constitutes a valid and legally binding instrument, enforceable
against Industries and the Company, as the case may be, 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
Securities, the Support Agreement and the Indenture conform to the
descriptions thereof in the Prospectus;
(k) Industries' obligations under the Support Agreement will rank
prior to the equity securities of Industries and equal with all other
unsecured and unsubordinated indebtedness of Industries, whether now or
hereafter outstanding;
(l) This Agreement has been duly authorized, executed and delivered
by each of Industries and the Company and constitutes a valid and legally
binding obligation, enforceable against each of them 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;
(m) None of Industries, Northern Indiana or the Company is in
violation of its Articles of Incorporation or By-Laws or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement,
note, lease, or any other instrument to which it is a party or by which it
may be bound where such defaults, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. The issue and
sale of the Securities, the compliance by the Company with all of the
provisions of the Securities, the Indenture, the Support Agreement and this
Agreement, the compliance by Industries with all of the provisions of the
Securities, the Indenture, the Support Agreement and this 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
Industries or any of its subsidiaries is a party or by which Industries or
any of its subsidiaries is bound or to which any of the property or assets
of Industries or any of its subsidiaries is subject, nor will any such
action result in any violation of the provisions of the Articles of
Incorporation or By-laws of Industries or any of its subsidiaries, or any
statute, rule or regulation, or any order of any court or governmental
agency or body having jurisdiction over Industries or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Securities or the consummation by Industries and the Company of the
transactions contemplated by this Agreement, the Support Agreement or the
Indenture, except the registration under the Act of the Securities, such as
have been obtained under the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws
-5-
<PAGE>
in connection with the purchase and distribution of the Securities by the
several Underwriters;
(n) None of Industries, Northern Indiana or the Company has any
material contingent liability which is not disclosed in the Prospectus;
(o) Each of Industries, Northern Indiana and the Company has
statutory authority, franchises and consents free from burdensome
restrictions and adequate for the conduct of the business in which it is
engaged;
(p) Except for Industries, as and to the extent described in the
Prospectus, no person or corporation which is a "holding company" or a
"subsidiary of a holding company" within the meaning of such terms as
defined in the Public Utility Holding Company Act of 1935, as amended (the
"1935 Act") directly or indirectly owns, controls or holds with power to
vote 10% or more of the outstanding voting securities of Northern Indiana;
Industries is exempt from all provisions of the 1935 Act except Section
9(a)(2); and neither Northern Indiana nor the Company is a "holding
company" as so defined;
(q) Each of Industries, Northern Indiana and the Company has good and
marketable title in fee simple to such of its fixed assets as are real
property and good and marketable title to its other assets reflected in the
most recent consolidated balance sheet incorporated by reference in the
Prospectus, except properties and assets that are leased or that are sold
or otherwise disposed of in the ordinary course of business after the date
of said balance sheet, subject to no mortgages, liens, charges or
encumbrances of any kind whatsoever ("Liens") other than Liens permitted
under the Indenture;
(r) The Company will apply the proceeds of the sale of the Securities
in the manner described in the Prospectus and in accordance with the
provisions of Rule 3a-5 under the Investment Company Act of 1940, as
amended (the "1940 Act");
(s) The Commission has issued an order (the "Order") exempting the
Company from all of the provisions of the 1940 Act; the Order is in full
force and effect; and the Company will continue to comply with the terms
and conditions of the Order, or otherwise remain exempt from all of the
provisions of the 1940 Act, so long as any Securities are outstanding;
(t) The Prospectus accurately describes the most restrictive of the
existing limitations on the payment of dividends by Northern Indiana on its
common shares held by Industries;
(u) Neither Industries nor any of its subsidiaries 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; and
-6-
<PAGE>
(v) Other than as set forth or incorporated by reference in the
Prospectus, there are no legal or governmental proceedings pending to which
Industries or any of its subsidiaries is a party or to which any property
of Industries or any of its subsidiaries is subject which could reasonably
be expected individually or in the aggregate to have a Material Adverse
Effect; and, to the best of each of Industries' and the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the several Underwriters, and the
Underwriters agree, severally and not jointly or jointly and severally, to
purchase from the Company, at a purchase price of _____% of the principal amount
thereof, plus accrued interest, if any, from ___________, 1997 to the Time of
Delivery hereunder, the principal amount of Securities set forth opposite the
name of such Underwriter in Schedule I hereto.
3. Upon the authorization by you of the release of the Securities, the
several Underwriters propose to offer their respective portions of the
Securities for sale upon the terms and conditions set forth in the Prospectus.
4. (a) The Securities to be purchased by each Underwriter hereunder will
be represented by one or more definitive global Securities in book-entry form
which will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Goldman, Sachs & Co., for the account of each Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer, payable to the order of the Company in Federal (same day) funds,
by causing DTC to credit the Securities to the account of Goldman, Sachs & Co.
at DTC. The Company will cause the certificates representing the Securities to
be made available to Goldman, Sachs & Co. for checking at least twenty-four
hours prior to the Time of Delivery (as defined below) at the office of DTC or
its designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be 8:30 a.m., Chicago time, on December 1, 1997 or
such other time and date as you and the Company may agree upon in writing. Such
time and date are herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the cross-
receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 7(h) hereof, will be delivered at the offices
of Sonnenschein Nath & Rosenthal, 8000 Sears Tower, Chicago, Illinois 60606 (the
"Closing Location"), and the Securities will be delivered at the Designated
Office, all at the Time of Delivery. A meeting will be held at the Closing
Location on the Business Day next preceding the Time of Delivery, at which
meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in New York City are generally authorized or obligated by law or executive order
to close.
-7-
<PAGE>
5. Industries and the Company jointly and severally agree with each of
the several Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or
Prospectus prior to the Time of Delivery which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly after it
receives notice thereof, of the time when the Registration Statement, or
any amendment thereto, has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and
to furnish you with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by
Industries or the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Securities; to advise you,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or Prospectus, 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 amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under
the securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete
the distribution of the Securities, provided that in connection therewith
neither Industries nor the Company shall be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction;
(c) To furnish you copies of the Prospectus in such quantities as you
may from time to time reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months
after the time of issue of the Prospectus in connection with the offering
or sale of the Securities 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 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
-8-
<PAGE>
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 you and upon your request to file
such document and to prepare and furnish without charge to you and to any
dealer in securities as many copies as you may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which
will correct such statement or omission or effect such compliance; and in
case you are required to deliver a prospectus in connection with sales of
any of the Securities at any time nine months or more after the time of
issue of the Prospectus, upon your request but at your expense, to prepare
and deliver to each Underwriter as many copies as you may request of an
amended or supplemented Prospectus complying with Section 10(a)(3) of the
Act;
(d) To make generally available to its securityholders 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), earning statements of Industries and its subsidiaries and
of the Company (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 Industries, Rule 158);
(e) During the period beginning from the date hereof and continuing
to and including the earlier of (i) the termination of trading restrictions
on the Securities, as notified to the Company by you, and (ii) the Time of
Delivery, not to offer, sell, contract to sell or otherwise dispose of any
debt securities of Industries or the Company which mature more than one
year after the Time of Delivery and which are substantially similar to the
Securities, without your prior written consent;
(f) To furnish to the holders of the Securities as soon as
practicable after the end of each fiscal year Industries' annual report
(including a balance sheet and statements of income, shareholders' equity
and cash flows of Industries and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the end
of each of the first three quarters of each fiscal year (beginning with the
fiscal quarter ending after the effective date of the Registration
Statement), consolidated summary financial information of Industries and
its subsidiaries for such quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders of
Industries, and deliver to you (i) as soon as they are available, copies of
any reports and financial statements furnished to or filed by Industries or
the Company with the Commission or any national securities exchange on
which the Securities or any class of securities of Industries or the
Company is listed; and (ii) such additional information concerning the
business and financial condition of Industries or the Company as you may
from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of Industries
-9-
<PAGE>
and its subsidiaries are consolidated in reports furnished to Industries'
shareholders generally or to the Commission); and
(h) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds."
6. The Company and Industries jointly and severally covenant and agree
with each of the several Underwriters that the Company will pay or cause to be
paid the following: (i) the fees, disbursements and expenses of Industries' and
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 and the Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to the several Underwriters and
dealers; (ii) the cost of printing or producing this Agreement, the Indenture,
the Blue Sky Memorandum and any other documents in connection with the offering,
purchase, sale and delivery of the Securities; (iii) all expenses in connection
with the qualification of the Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the several Underwriters in connection with such
qualification and in connection with the Blue Sky Memorandum; (iv) any fees
charged by securities rating services for rating the Securities; (v) the filing
fees incident to any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Securities; (vi) the cost of
preparing the Securities; (vii) the fees and expenses of the Trustee and any
agent of the Trustee and the fees and disbursements of counsel for the Trustee
in connection with the Indenture and the Securities; (viii) the fees,
disbursements and expenses of counsel in connection with preparing the
Indenture; (ix) any transfer taxes payable in connection with the sale of the
Securities to the several Underwriters; and (x) all other costs and expenses
incident to the performance of their respective obligations hereunder which are
not otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, Section 8 and Section 11
hereof, the several Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the
Securities by any of them, and any advertising expenses connected with any
offers any of them may make.
7. The several obligations of the Underwriters hereunder shall be
subject, in their discretion, to the condition that all representations and
warranties and other statements of Industries and the Company herein are, at and
as of the Time of Delivery, true and correct, the condition that Industries and
the Company shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the rules and regulations under the Act and in accordance with Section
5(a) hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by
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<PAGE>
the Commission; and all requests for additional information on the part of
the Commission shall have been complied with to your reasonable
satisfaction;
(b) Sonnenschein Nath & Rosenthal, counsel for the Underwriters,
shall have furnished to you such opinion or opinions, dated the Time of
Delivery, with respect to the incorporation of Industries and the Company,
this Agreement, the Support Agreement, the validity of the Indenture, the
Securities, the Registration Statement, the Prospectus, and other related
matters as you may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them
to pass upon such matters;
(c) Schiff Hardin & Waite, counsel for Industries and the Company,
shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(1) Each of Industries, Northern Indiana and the Company has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Indiana, with respective
power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus;
(2) Industries has an authorized capitalization as set forth in
the Prospectus; all of the issued capital shares of Industries and
each wholly-owned subsidiary of Industries have been duly and validly
authorized and issued and are fully paid and non-assessable; and all
of the issued common shares of Northern Indiana and all the issued
capital shares of the Company and each other Significant Subsidiary of
Industries (except for directors' qualifying shares and as set forth
or incorporated by reference in the Registration Statement) are owned
directly or indirectly by Industries, free and clear of all liens,
encumbrances, equities or claims;
(3) Each of Industries, Northern Indiana and the Company has
been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction.
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<PAGE>
(4) To the best of such counsel's knowledge, other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending to which Industries or any of its subsidiaries is
a party or to which any property of Industries or any of its
subsidiaries is subject which could reasonably be expected
individually or in the aggregate to have a material adverse effect on
the consolidated financial position, shareholders' equity or results
of operations of Industries 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.
(5) Each of this Agreement and the Support Agreement has been
duly authorized, executed and delivered by each of Industries and the
Company and constitutes a valid and legally binding obligation,
enforceable against each in accordance with its terms, subject, as to
enforcement, (a) in the case of both this Agreement and the Support
Agreement, to bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles and
(b) in the case of this Agreement, to any limitations by reason of
public policy considerations on the enforcement under certain
circumstances of the indemnity provisions thereof.
(6) The Indenture has been duly authorized, executed and
delivered by the Company and Industries and constitutes a valid and
legally binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles; and the Indenture has been duly qualified
under the Trust Indenture Act.
(7) The Securities have been duly and validly authorized by all
necessary corporate action; the Securities, when duly executed,
authenticated, issued and delivered pursuant to the terms of the
Indenture and this Agreement against payment of the agreed
consideration therefor, will be valid and legally binding obligations
of the Company entitled to the benefits provided by the Support
Agreement and the Indenture and will be enforceable obligations of the
Company in accordance with their terms, except as enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws relating to or affecting
enforcement of creditors' rights or by general equity principles; the
Securities, the Support Agreement and the Indenture conform as to
legal matters with the statements concerning them made in the
Prospectus, and such statements accurately set forth the matters
respecting the Securities, the Support Agreement and the Indenture
required to be set forth in the Prospectus.
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<PAGE>
(8) The execution and delivery of this Agreement, the issue and
sale of the Securities, the compliance by each of the Company and
Industries with all of the provisions of the Securities, the
Indenture, the Support Agreement and this Agreement, and the
consummation of the transactions herein and therein contemplated, will
not conflict with or result in a breach or violation of any 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 Industries or any of its Significant
Subsidiaries is a party or by which Industries or any of its
Significant Subsidiaries is bound or to which any of the property or
assets of Industries or any of its Significant Subsidiaries is
subject, nor will such actions result in any violation of the
provisions of the Articles of Incorporation or the By-Laws of
Industries or any of its Significant Subsidiaries, or any statute,
rule or regulation, or any order known to such counsel of any court or
governmental agency or body having jurisdiction over Industries or any
of its Significant Subsidiaries or any of their properties;
(9) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Securities or the
consummation by Industries or the Company of the transactions
contemplated by this Agreement, the Support Agreement or the
Indenture, except such as have been obtained under the Act and the
Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the several Underwriters;
(10) The documents incorporated by reference in the Prospectus or
any further amendment or supplement thereto made by Industries or the
Company prior to the Time of Delivery (other than the financial
statements and related schedules 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;
(11) Giving effect to the interpretations of the requirements of
the Act reflected in the No-Action Request and the Staff Response, the
Registration Statement and the Prospectus and any further amendments
and supplements thereto made by Industries or the Company prior to the
Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of
the Act and the Trust Indenture Act and the rules and regulations
thereunder;
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(12) This Agreement has been duly authorized, executed and
delivered by the Company.
(13) The statements made in the Prospectus under the captions
"Description of the Notes" and "Certain United States Federal Income
Tax Considerations" and any other statements which are stated therein
to have been made on the basis of the opinion of said counsel have
been reviewed by said counsel and, as to matters of law and legal
conclusions, are correct in all material respects.
Such counsel shall also advise the Underwriters that although such
counsel is not passing upon and assumes no responsibility or liability for
the accuracy, completeness or fairness of the statements contained in the
documents incorporated by reference in the Prospectus or any further
amendment or supplement thereto made by Industries or the Company prior to
the Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion), they
have no reason to believe that any of such documents, when such documents
became effective or were filed with the Commission, as the case may be,
contained, in the case of a registration statement which became effective
under the 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, or, 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 light of the circumstances
under which they were made when such documents were so filed, not
misleading.
Such counsel shall also advise the Underwriters that although such
counsel is not passing upon and assumes no responsibility or liability for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus and any further amendments and
supplements thereto made by Industries or the Company prior to the Time of
Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion), they have no
reason to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by Industries or the
Company prior to the Time of Delivery (other than the financial statements
and related schedules therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading or that, as of its date, the
Prospectus or any further amendment or supplement thereto made by
Industries or the Company prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading or that, as of the Time of Delivery either the
Registration Statement or the Prospectus or any further amendment or
supplement thereto made by Industries or the Company prior to the Time of
Delivery (other than the
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<PAGE>
financial statements and related schedules therein, as to which such
counsel need express no opinion) contains an untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and they do not know of any amendment to the Registration
Statement required to be filed or of any contracts or other documents of a
character required to be filed as an exhibit to the Registration Statement
or required to be incorporated by reference into the Prospectus or required
to be described in the Registration Statement or the Prospectus which are
not filed or incorporated by reference or described as required.
(d) On the date of this Agreement and also at the Time of Delivery,
Arthur Andersen LLP shall have furnished to you a letter or letters, dated
the respective dates of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex I hereto;
(e) (i) Neither Industries 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 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, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have been
any change in the consolidated share capital or long-term debt of
Industries 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 Industries and its subsidiaries, otherwise than as set forth
or contemplated in the Prospectus, the effect of which, in any such case
described in Clause (i) or (ii), is in your judgment so material and
adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities on the terms and in the
manner contemplated in the Prospectus;
(f) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded any of Industries', Northern Indiana's or
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 Industries',
Northern Indiana's or 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
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securities generally or in trading in securities of Industries or the
Company on the New York Stock Exchange; (ii) a general moratorium on
commercial banking activities in New York or Illinois declared by either
Federal or 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 your judgment makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the Prospectus;
and
(h) Each of Industries and the Company shall have furnished or caused
to be furnished to you at the Time of Delivery certificates of officers of
Industries and of the Company satisfactory to you as to the accuracy of the
representations and warranties of Industries and the Company herein at and
as of such Time of Delivery, as to the performance by Industries and the
Company of all of their respective obligations hereunder to be performed at
or prior to such Time of Delivery, as to the matters set forth in
subsections (a), (e), (f) and (g) of this Section and as to such other
matters as you may reasonably request.
8. (a) Industries and the Company will jointly and severally indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that neither the Company nor
Industries shall 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 or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to Industries or the Company by any Underwriter through you expressly
for use therein.
(b) Each Underwriter, severally and not jointly or jointly and severally,
will indemnify and hold harmless Industries and the Company against any losses,
claims, damages or liabilities to which Industries or 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 or the Prospectus, 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 or the Prospectus or any such amendment
or supplement
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<PAGE>
in reliance upon and in conformity with written information furnished to
Industries or the Company by such Underwriter through you expressly for use
therein; and will reimburse Industries or the Company, as the case may be, 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.
(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 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by Industries and the Company, on the one hand, and the Underwriters, on the
other, from the offering of the Securities. 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
Industries and the Company, on the one hand, and the Underwriters, 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
Industries and the Company,
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on the one hand, and the Underwriters, on the other, shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by Industries or the Company, on
the one hand, or the Underwriters, on the other, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective principal amounts of Securities they have purchased and not joint or
joint and several. Industries and the Company, on the one hand, and the
Underwriters, on the other, agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
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), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of Industries and the Company under this Section 8
shall be in addition to any liability which they may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of Industries and of the
Company and to each person, if any, who controls Industries or the Company
within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Underwriter you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect
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<PAGE>
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the principal
amount of Securities which such Underwriter agreed to purchase hereunder and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of Securities which such Underwriter agreed
to purchase hereunder) of the Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase
Securities of a defaulting Underwriter or Underwriters, then this Agreement
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of Industries, the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or
Industries or the Company, or any officer or director or controlling person of
Industries or the Company, and shall survive delivery of and payment for the
Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason the Securities
are not delivered by or on behalf of the Company as provided herein, Industries
and the Company will reimburse the Underwriters for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Securities, but Industries and the Company shall then
be under no further liability to the Underwriters except as provided in Section
6 and Section 8 hereof.
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12. All statements, requests, notices, and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to Goldman, Sachs & Company at 85 Broad Street, New
York, New York 10004, Attention: Registration Department, facsimile no. (212)
902-3000 and Morgan Stanley & Co. Incorporated at 1585 Broadway, New York, New
York 10036, Attention: Managing Director - Debt Syndicate Department, facsimile
no. (212) 761-0785; and if to Industries or the Company shall be delivered or
sent by mail, telex or facsimile transmission to the address of Industries or
the Company set forth in the Registration Statement, Attention: Treasurer,
facsimile no. (219) 853-5352. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, Industries and the Company and, to the extent provided in
Section 8 and Section 10 hereof, the officers and directors of Industries and of
the Company and each person who controls Industries or the Company or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Securities from the
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement. Except as set forth in
Section 4(b) as used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business. As used herein,
"Significant Subsidiaries" shall mean (a) the Company and (b) all other direct
and indirect subsidiaries of Industries as of the Time of Delivery other than
any subsidiaries which, considered in the aggregate as a single subsidiary as of
the end of the most recent fiscal year of Industries, would not constitute a
significant subsidiary as defined in Rule 1-02 of Regulation S-X (or any
successor thereto).
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
[This space intentionally left blank]
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If the foregoing is in accordance with your understanding, please sign and
return to us four counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
between the Underwriter, on the one hand, and Industries and the Company, on the
other.
Very truly yours,
NIPSCO CAPITAL MARKETS, INC.
By:
----------------------------------
Name:
Title:
NIPSCO INDUSTRIES, INC.
By:
---------------------------------
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
By:
-------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
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ANNEX I
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Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to Industries and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, financial forecasts and/or pro forma financial information)
examined by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act or the
Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements derived from
audited financial statements of Industries for the periods specified in
such letter, as indicated in their reports thereon, copies of which have
been furnished to the representatives of the Underwriters;
(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
Prospectus and/or included in Industries' quarterly report on Form 10-Q
incorporated by reference into the Prospectus as indicated in their reports
thereon copies of which have been separately furnished to the Underwriters;
and on the basis of specified procedures including inquiries of officials
of Industries and the Company who have responsibility for financial and
accounting matters regarding whether the unaudited condensed consolidated
financial statements referred to in paragraph (vi)(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 Industries for
the five most recent fiscal years included in the Prospectus and included
or incorporated by reference in Item 6 of Industries' Annual Report on Form
10-K for the most recent fiscal year agrees with the corresponding amounts
(after restatement where applicable) in the audited consolidated financial
statements for five such fiscal years which were included or incorporated
by reference in Industries' Annual Reports on Form 10-K for such fiscal
years;
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(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) 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 Industries and its subsidiaries, inspection of the
minute books of Industries and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of Industries 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 Industries' 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 Prospectus or
included in Industries' 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, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
Industries' Annual Report on Form 10-K for the most recent fiscal
year;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in
Industries' Annual Report on Form 10-K for the most recent fiscal
year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have
I-2
<PAGE>
not been properly applied to the historical amounts in the compilation
of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest balance sheet
included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of Industries and its
subsidiaries, or any decreases in consolidated net current assets or
shareholders' equity or other items specified by the Underwriters, or
any increases in any items specified by the Underwriters, in each case
as compared with amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each case for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the
specified date referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified by
the Underwriters, or any increases in any items specified by the
Underwriters, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Underwriters, except in each case for increases or
decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(vii) 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 (vi) 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 Underwriters which
are derived from the general accounting records of Industries 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 Underwriters or in
documents incorporated by reference in the Prospectus specified by the
Underwriters, and have compared certain of such amounts, percentages and
financial information with the accounting records of Industries and its
subsidiaries and have found them to be in agreement.
I-3
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
================================================================================
Principal Amount
of Securities to
Underwriter be Purchased
----------- ----------------
- --------------------------------------------------------------------------------
<S> <C>
Goldman, Sachs & Co..................................... $37,500,000
- --------------------------------------------------------------------------------
Morgan Stanley & Co. Incorporated....................... $37,500,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
-----------
- --------------------------------------------------------------------------------
$75,000,000
===========
================================================================================
</TABLE>
I-4
<PAGE>
EXHIBIT 4.3
[Face of Note]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY") (55 WATER STREET, NEW
YORK, NEW YORK), TO NIPSCO CAPITAL MARKETS, INC. (THE "COMPANY") OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS 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.
NIPSCO CAPITAL MARKETS, INC.
____% SENIOR NOTE DUE 2027
PRINCIPAL AMOUNT NO. R-___
$75,000,000 CUSIP _________________
INTEREST RATE:______
STATED MATURITY: December 1, 2027
INTEREST PAYMENT DATES: June 1 and December 1
SUBJECT TO REPURCHASE AT THE OPTION
OF THE HOLDER ON:
_____________________;
_____________________; and
_____________________
NIPSCO Capital Markets, Inc., a corporation duly organized and existing
under the laws of the State of Indiana (herein called the "Company," which term
includes any successor corporation under the Indenture referred to below), for
value received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of SEVENTY-FIVE MILLION AND NO/100 DOLLARS on December 1, 2027
(the "Stated Maturity"), and to pay interest thereon from
<PAGE>
December 1, 1997 or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, payable semiannually in arrears on June 1
and December 1 in each year (each, an "Interest Payment Date"), commencing on
June 1, 1998, and at Maturity, at the rate of ____% per annum, until the
principal hereof is paid or duly provided for. Each payment of interest in
respect of an Interest Payment Date shall include interest accrued through the
day prior to such Interest Payment Date. The interest so payable, and paid or
duly provided for, on any Interest Payment Date shall, as provided in the
Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be May 15 or November 15 (whether or
not a Business Day), as the case may be, next preceding such Interest Payment
Date, at the office or agency of the Company maintained for such purpose in the
City of New York, New York. Interest shall be computed on the basis of a 360-day
year consisting of twelve 30-day months.
Except as otherwise provided in the Indenture, any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
holder on the related Regular Record Date and may either be paid to the Person
in whose name this Note (or one or more Predecessor Securities) is registered at
the close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to holders of
Notes not less than 10 calendar days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in the Indenture.
If any Interest Payment Date, any Put Option Exercise Date (as defined
herein) or the Stated Maturity shall not be a Business Day (as hereinafter
defined), payment of the amount due on this Note on such date may be made on the
next succeeding Business Day; and, if such payment is made or duly provided for
on such Business Day, no interest shall accrue on such amounts for the period
from and after such Interest Payment Date, such Put Option Exercise Date or the
Stated Maturity, as the case may be, to such Business Day.
Payment of the principal of and interest on this Note at Maturity shall be
made upon presentation hereof at the corporate trust office of the Trustee
maintained for that purpose in the Borough of Manhattan in the City of New York,
New York, or at such other office or agency permitted under the Indenture.
Payment of the principal of and interest on this Note shall be payable in
immediately available funds; provided however, that payment of interest on this
Note if not held in book-entry form may be made 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. Payment of the principal of and interest, if
any, on this Note, as aforesaid, shall be made in such coin or currency of the
United States of America as at the time of payment shall be legal tender for the
payment of public and private debts. Interest payable on any Interest Payment
Date will be paid to the Depositary with respect to the portion of this Note
held for its account by Cede & Co. for the purpose of permitting such party to
credit the interest received by it in respect of this Note to the accounts of
the beneficial owners hereof.
2
<PAGE>
The Company is not required to repurchase Notes from Holders prior to
Stated Maturity except as set forth herein. The Holder of this Note will have
the right to require the Company to repurchase all or a portion of this Note in
increments of $1,000 (the "Put Option") on _____________, _________________,
______________, and ________________ (each such date being a "Put Option
Exercise Date") at a purchase price equal to 100% of the principal amount of
this Note plus accrued interest thereon. If this Note or any portion is tendered
for repayment, interest will cease to accrue on this Note or such portion hereof
on or after the Put Option Exercise Date on which the Note or such portion
hereof is tendered for repayment. On or before each Put Option Exercise Date,
the Company shall deposit with the Paying Agent (or the Trustee) an amount of
money sufficient to pay the principal of and any accrued interest on the Notes
to be tendered for repayment. For book-entry notes a Holder must provide the
Company with notice of its intention to exercise its Put Option not less than 30
days nor more than 60 days prior to the applicable Put Option Exercise Date.
Such notice, once given, will be irrevocable, unless waived in writing by the
Company. An owner of a beneficial interest in this Note if held in book-entry
form who wishes to effectuate the tender and repurchase of such Note must
instruct its Depositary's participant or participants (in accordance with the
Depositary 's "Repayment Option Procedures") a reasonable period of time in
advance of the applicable Put Option Exercise Date. All questions as to the
validity, eligibility (including time of receipt) and the acceptance of this
Note or any portion hereof for repayment will be determined by the Company,
whose determination shall be final and binding.
For definitive notes to be repurchased on the applicable Put Option
Exercise Date, the Trustee must receive at the principal office of the Trustee
in New York City, at least 30, but not more than 60, days prior to the
applicable Put Option Exercise Date, but no later than 5:00 p.m. New York City
time on the last day for giving notice, (i) this Note with the "Option to Elect
Repayment Form" duly completed or (ii) a telegram, facsimile transmission or
letter from a member of a national securities exchange or the National
Association of Securities Dealers, Inc. or a commercial bank or a trust company
in the United States of America setting forth the name, address and telephone
number of the registered Holder of such Note, the principal amount of such Note,
the amount of the Note to be repurchased, a statement that the option to elect
repayment is being made thereby and a guarantee that the Note to be repaid with
the form entitled "Option to Elect Repayment" on the reverse of such Note duly
completed will be received by the Trustee not later than five Business Days
after the date of such telegram, facsimile transmission or letter, and such Note
and form are received by the Trustee by such fifth Business Day. All such
notices are irrevocable unless waived in writing by the Company.
In the event of repurchase of this Note in part only, a new Note or Notes
of this series, having the same Stated Maturity, optional repurchase provisions,
interest rate and other terms and provisions of this Note, in authorized
denominations in an aggregate principal amount equal to the unredeemed portion
hereof will be issued in the name of the holder hereof upon the surrender
hereof.
3
<PAGE>
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall have the same force and
effect as if set forth on the face hereof.
The indebtedness evidenced by this Note is entitled to the benefits of a
Support Agreement, dated as of April 4, 1989, as amended as of May 15, 1989,
December 10, 1990, and February 14, 1991 (as such Agreement may be hereafter
amended, modified or supplemented from time to time in accordance with the terms
and conditions of the Indenture, the "Support Agreement") between the Company
and NIPSCO Industries, Inc. ("Industries"). The Support Agreement provides that,
during the term thereof, (i) Industries will own all of the voting stock of the
Company, (ii) Industries will cause the Company to have at all times a positive
net worth (net assets less intangible assets, if any), as determined in
accordance with generally accepted accounting principles, and (iii) if the
Company is unable to make timely payments of principal of or any premium or
interest on any Debt (as defined below) issued by the Company, Industries will,
at the request of the Company or any Lender (as defined below), provide funds to
the Company to make such payments. The Support Agreement also provides that any
Lender to the Company shall have the right to demand that the Company enforce
its rights against Industries under the Support Agreement as described in the
previous sentence, and in the event that the Company fails to require Industries
to perform such obligations or the Company defaults in the timely payment of
principal of or any premium or interest of any Debt owed to a Lender, such
Lender may proceed directly against Industries to enforce the Company's rights
against Industries under the Support Agreement or to obtain payment of such
defaulted principal, premium or interest owed to such Lender.
The Support Agreement provides that in no event may any Lender, on default
of the Company or Industries or upon failure by the Company or Industries to
comply with the Support Agreement, have recourse to or against the stock or
assets of Northern Indiana Public Service Company ("Northern Indiana") or any
interest of the Company or Industries therein. Notwithstanding this limitation,
the Support Agreement provides that funds available to Industries to satisfy any
obligations under the Support Agreement will include cash dividends paid by
Northern Indiana to Industries.
The term "Debt" is defined in the Support Agreement as debt securities or
other obligations and includes this Note. The term "Lender" is defined in the
Support Agreement as any person, firm or corporation to which the Company is
indebted for money borrowed or to which the Company otherwise owes any Debt or
which is acting as trustee or authorized representative on behalf of such
person, firm or corporation. The Indenture provides that each holder of a Note,
as well as the Trustee, shall be considered a "Lender" for purposes of the
Support Agreement and shall have all rights of a "Lender" set forth therein.
The Support Agreement may be amended or terminated at any time by the
agreement of Industries and the Company, provided that (i) no amendment
regarding the terms described above may be made unless all Lenders consent in
advance and in writing to such amendment, (ii) no amendment regarding any other
term of the Support Agreement may be made in a manner that adversely affects the
rights of Lenders unless all affected Lenders consent in advance and in writing
to such amendment, and (iii) no termination shall be effective until such time
as all Debt (including the Note) shall have been paid in full.
4
<PAGE>
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.
IN WITNESS WHEREOF, NIPSCO Capital Markets, Inc. has caused this Note to be
duly executed.
[Corporate Seal] NIPSCO CAPITAL MARKETS, 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.
THE CHASE MANHATTAN BANK, as Trustee
By: _____________________________________________
Authorized Signatory
5
<PAGE>
[Reverse of Note]
NIPSCO CAPITAL MARKETS, INC.
____% SENIOR NOTE DUE 2027
This Note is one of a duly authorized issue of unsecured senior debt
securities of the Company known as the Company's ____% Senior Notes Due 2027,
limited to the aggregate principal amount of $75,000,000 (herein called the
"Notes" or the "Securities"), issued under an Indenture dated as of February 14,
1997 (such Indenture as originally executed and delivered and as hereafter
supplemented or amended together with the Board Resolutions adopted ,
1997 and delivered to the Trustee by the Company pursuant to Section 301 of such
Indenture setting forth certain terms of the Notes, being herein called the
"Indenture") from the Company to The Chase Manhattan Bank, as trustee (herein
called the "Trustee," which term includes any successor trustees under the
Indenture), to which Indenture, all indentures supplemental thereto and all
Board Resolutions relating 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 Notes and of the terms upon
which the Notes are, and are to be, authenticated and delivered. The acceptance
of this Note shall be deemed to constitute the consent and agreement of the
Holder hereof to all of the terms and provisions of the Indenture. All
capitalized terms used in this Note which are not defined herein shall have the
meaning assigned to them in the Indenture.
If an Event of Default, as defined in the Indenture, with respect to the
Notes shall occur and be continuing, the principal of the Notes may be declared
due and payable in the manner and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance of (i) the entire
indebtedness of the Notes or (ii) certain covenants and Events of Default with
respect to the Notes, in each case upon compliance with certain conditions set
forth therein, which provisions apply to the Notes.
The Notes do not have the benefit of any sinking fund. The Company does not
have the option to redeem the Notes prior to Stated Maturity.
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 the Debt Securities at any time by the
Company and the Trustee with the consent of the holders of not less than 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 not less than 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 not less than 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 hereof 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 the principal of and interest, if any, on
this Note at the times, places and rate or formula, in the coin or currency, and
in the manner, herein prescribed.
As provided in the Indenture and subject to certain limitations therein and
herein 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 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, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
As provided in the Indenture and subject to certain limitations therein and
herein 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 conditions, 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 in whose name this Note is
<PAGE>
registered as the owner thereof 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.
The Notes are issuable only in registered form, without coupons, in
denominations of $1,000 and any integral multiple of $1,000, and in book-entry
form. The Notes may be represented by one or more global Notes deposited with
the Depositary and registered in the name of the nominee of the Depositary, with
certain limited exceptions. So long as the Depositary or any successor
depositary or its nominee is the registered Holder of a global Note, the
Depositary, such successor depositary or such nominee, as the case may be, will
be considered to be the sole Holder of the Notes for all purposes of the
Indenture. Except as provided in the Indenture, an owner of a beneficial
interest in a global Note will not be entitled to have Notes represented by such
global Note registered in such owner's name, will not receive or be entitled to
receive physical delivery of the Notes in certificated form and will not be
considered the owner or Holder thereof under the Indenture. Each person owning a
beneficial interest in a global Note must rely on the Depositary's procedures
and, if such person is not a participant, on the procedures of the participant
through which such person owns its interest, to exercise any rights of a Holder
under the Indenture. If the Company requests any action of Holders or if an
owner of a beneficial interest in a global Note desires to take any action that
a Holder is entitled to take under the Indenture, the Depositary will authorize
the participants holding the relevant beneficial interests to give or take such
action, and such participants will otherwise act upon the instructions of
beneficial owners holding through them.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in this Note in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee, or any agent of the Company or the Trustee, from giving effect to any
written certification, proxy or other authorization furnished by any depositary,
as a Holder, with respect to this Note in global form or impair, as between such
depositary and owners of beneficial interests in such global Note, the operation
of customary practices governing the exercise of the rights of such depositary
(or its nominee) as Holder of such global Note.
2
<PAGE>
As used herein, "Business Day", when used with respect to a particular
location referred to in this Note, means any day, other than a Saturday or
Sunday, which is not a day on which state or national banks in such location are
authorized or obligated by law or executive order to close.
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in such State.
3
<PAGE>
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.
OPTION TO ELECT REPAYMENT
IN THE CASE OF CERTIFICATED NOTES ONLY
The undersigned hereby irrevocably requests and instructs the Company to
repurchase the within or attached Note (or portion thereof specified below)
pursuant to its terms at a price equal to 100% of the principal amount thereof,
together with accrued interest if any, to the applicable Put Option Exercise
Date, to the undersigned at
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and phone number of the undersigned)
For the within or attached Note to be repurchased on the applicable Put Option
Exercise Date, the Trustee must receive at the principal office of the Trustee
in New York City, at least 30, but not more than 60, days prior to the
applicable Put Option Exercise Date, but no later than 5:00 p.m. New York City
time on the last day for giving notice, (i) this Note with the "Option to Elect
Repayment Form" duly completed or (ii) a telegram, facsimile transmission or
letter from a member of a national securities exchange or the National
Association of Securities Dealers, Inc. or a commercial bank or a trust company
in the United States of America setting forth the name, address and telephone
number of the registered Holder of such Note, the principal amount of such Note,
the amount of the Note to be repurchased, a statement that the option to elect
repayment is being made thereby and a guarantee that the Note to be repaid with
the form entitled "Option to Elect Repayment" on the reverse of such Note duly
completed will be received by the Trustee not later than five Business Days
after the date of such telegram, facsimile transmission or letter, and such Note
and form are received by the Trustee by such fifth Business Day.
If less than the entire principal amount of the within or attached Note is to be
repurchased, specify the portion to be repurchased: $_______________ and specify
the denomination or denominations (which shall be an Authorized Denomination) of
the Note or Notes to be issued to the holder for the portion of the Note not
being repurchased (in the absence of specific instruction, one such Note will be
issued): $______________.
NOTICE: The signature to this Option to Elect Repayment must correspond with the
names as written upon the face of the within instrument in every particular,
without alteration or enlargement or any change whatever.
- ------------------------------------------------------
Signature of Holder
(Sign exactly as name appears on the face of the Note)
Dated:
-----------------------------------------------
4
<PAGE>
EXHIBIT 5
November 10, 1997
NIPSCO Capital Markets, Inc.
5265 Hohman Avenue
Hammond, Indiana 46320
Ladies and Gentlemen:
We are acting as counsel to NIPSCO Industries, Inc., an Indiana corporation
("Industries"), and NIPSCO Capital Markets, Inc., an Indiana corporation
("Capital"), in connection with the filing of a Registration Statement on Form
S-3 by Capital and Industries. The Registration Statement relates to the offer
and sale by Capital of $75,000,000 principal amount of its Senior Notes Due 2027
(the "Notes"), and the related obligations of Industries under the Support
Agreement dated April 4, 1989, as amended as of May 15, 1989, December 10, 1990,
and February 14, 1991, between Capital and Industries (the "Support Agreement"),
as more fully described in the Registration Statement. The Notes will be issued
under an Indenture dated as of February 14, 1997 among Capital, Industries and
The Chase Manhattan Bank, as trustee (the "Trustee") (the "Indenture"). In
connection with this opinion, we have examined such corporate records,
certificates and other documents, and have made such other factual and legal
investigations, as we have deemed necessary or appropriate for the purposes of
this opinion.
Based on the foregoing, it is our opinion that:
1. The Notes will be the legally issued, valid and binding obligations of
Capital, enforceable in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other laws relating
to or affecting the enforceability of creditors' rights generally or
by general principles of equity, at such time as:
(a) the series in which such Notes are to be issued and the terms of
the Notes shall have been established by or pursuant to
resolutions of the Board of Directors of Capital consistent with
the Indenture, and such series and terms shall have been set
forth or determined in the manner provided in an Officer's
Certificate (as defined in the Indenture) or supplemental
indenture in accordance with the requirements of the Indenture;
(b) such Notes shall have been duly executed by Capital, duly
authenticated by the Trustee pursuant to the Indenture and
delivered to the purchasers thereof upon payment of the agreed
consideration therefor; and
(c) the Registration Statement shall have become effective under the
Securities Act of 1933, as amended, and the Notes shall have been
issued as contemplated by the Registration Statement.
<PAGE>
NIPSCO Capital Markets, Inc.
November 10, 1997
Page 2
2. The Notes are entitled to the benefit of the Support Agreement, which
is the valid and binding obligation of Industries, enforceable in
accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other laws relating to or affecting the
enforcement of creditors' rights generally or by general principles of
equity.
We do not express any opinion herein concerning any laws other than the
laws of the State of Indiana and the federal laws of the United States.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the Prospectus contained in the Registration Statement.
Respectfully submitted,
SCHIFF HARDIN & WAITE
By: /s/ Andrew A. Kling
-------------------------------------
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 12
NIPSCO INDUSTRIES, INC.
RATIO OF EARNINGS TO FIXED CHARGES
TWELVE
MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------------------------------------------- -------------
1992 1993 1994 1995 1996 1997
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Earnings as defined in Item
603(d) of Regulation S-K:
Income before interest
charges................. $248,243,984 $261,422,078 $267,739,129 $284,348,649 $290,836,347 $309,341,819
Adjustments:
Federal income taxes.... 61,556,604 89,021,067 100,320,963 102,223,791 78,532,661 121,586,157
State income tax........ 11,700,316 13,132,078 15,398,420 15,420,719 12,450,863 19,043,068
Deferred investment tax
credit, net......... (7,461,688) (7,446,643) (6,488,242) (7,616,362) (7,407,813) (7,553,016)
Deferred income taxes,
net.................... 14,503,080 2,122,284 (11,488,356) (2,680,002) 27,418,121 (27,647,607)
Federal and state
income taxes included
in other income..... (3,323,871) (5,537,170) (15,332,783) (9,260,066) (4,076,337) 2,224,000
Amortization of
capitalized interest... 0 0 103,130 247,616 247,512 247,612
------------ ----------- ------------ ------------ ------------ ------------
$326,228,506 $362,714,804 $349,241,282 $383,790,245 $387,301,754 $417,241,933
============ ============ ============ ============ ============ ============
Fixed charges as defined
in item 603(d) of
Regulation S-K:
Interest on long-term debt... $ 37,660,094 $ 82,121,208 $ 78,292,155 $ 82,555,251 $ 35,381,829 $ 98,723,016
Other interest............... 9,954,982 9,235,108 11,860,228 12,731,395 17,448,667 13,431,297
Amortization of premium,
reacquisition premium,
discount and expense on
debt, net............... 3,322,908 3,662,624 3,897,161 4,401,668 4,506,472 4,678,760
Interest portion of
rent expense................ 1,395,288 2,038,882 2,220,675 2,416,111 2,656,116 3,095,497
Capitalized interest
during period............... 326,631 4,664,887 2,145,182 234,613 0 0
------------ ------------ ------------ ------------ ------------ ------------
$102,659,814 $101,835,618 $ 98,205,291 $102,488,028 $110,091,884 $119,929,560
============ ============ ============ ============ ============ ============
Plus preferred stock dividends:
Preferred dividend
requirements of
subsidiary............. $ 10,858,424 $ 10,541,008 $ 9,912,758 $ 9,046,207 $ 8,711,986 $ 7,663,016
Preferred dividend
requirements factor..... 1.52 1.66 1.67 1.54 1.59 1.56
------------ ------------ ------------ ------------ ------------ ------------
Preferred dividend
requirements of
subsidiary............. 18,200,804 16,131,969 14,571,756 13,931,169 13,852,056 11,782,705
Fixed charges................ 102,859,314 101,638,818 88,206,291 102,488,928 110,091,884 119,929,560
------------ ------------ ------------ ------------ ------------ ------------
$119,860,618 $117,767,787 $112,777,047 $116,419,187 $123,843,340 $131,712,265
============ ============ ============ ============ ============ ============
Ratio of earnings to fixed
charges 2.74 3.00 3.10 3.30 3.21 3.17
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our reports dated January 28, 1997,
included or incorporated by reference in the annual report on Form 10-K for
NIPSCO Industries, Inc. for the year ended December 31, 1996; our report dated
April 28, 1997, included in the quarterly report on Form 10-Q for NIPSCO
Industries, Inc. for the period ended March 31, 1997; our report dated July 29,
1997 included in the quarterly report on Form 10-Q for NIPSCO Industries, Inc.
for the period ended June 30, 1997; and to all references made to our Firm
included in this Registration Statement.
/s/ Arthur Andersen LLP
Chicago, Illinois
November 10, 1997
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Gary L. Neale, hereby constitute and
appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true
and lawful attorneys and agents, with full power of substitution and
resubstitution, to execute in my name and on my behalf, in all capacities as a
Director of NIPSCO Capital Markets, Inc. ("Corporation"), a Registration
Statement on Form S-3 and any amendments thereto (including, without limitation,
post-effective amendments pursuant to Rule 462(b) under the Securities Act of
1933, as amended) to be filed with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of Debt Securities of the Corporation, to file such Registration Statement with
the Securities and Exchange Commission and to comply with the undertakings of
the Corporation made in connection with such Registration Statement; and I
hereby ratify and confirm all that said attorneys, or either of them, have done
or shall lawfully do by virtue of this Power of Attorney.
DATED: October 28, 1997 /s/ Gary L. Neale
-----------------
Gary L. Neale
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Stephen P. Adik, hereby constitute and
appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true
and lawful attorneys and agents, with full power of substitution and
resubstitution, to execute in my name and on my behalf, in all capacities as a
Director of NIPSCO Capital Markets, Inc. ("Corporation"), a Registration
Statement on Form S-3 and any amendments thereto (including, without limitation,
post-effective amendments pursuant to Rule 462(b) under the Securities Act of
1933, as amended) to be filed with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of Debt Securities of the Corporation, to file such Registration Statement with
the Securities and Exchange Commission and to comply with the undertakings of
the Corporation made in connection with such Registration Statement; and I
hereby ratify and confirm all that said attorneys, or either of them, have done
or shall lawfully do by virtue of this Power of Attorney.
DATED: October 28, 1997 /s/ Stephen P. Adik
-------------------
Stephen P. Adik
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Patrick J. Mulchay, hereby constitute
and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my
true and lawful attorneys and agents, with full power of substitution and
resubstitution, to execute in my name and on my behalf, in all capacities as a
Director of NIPSCO Capital Markets, Inc. ("Corporation"), a Registration
Statement on Form S-3 and any amendments thereto (including, without limitation,
post-effective amendments pursuant to Rule 462(b) under the Securities Act of
1933, as amended) to be filed with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of Debt Securities of the Corporation, to file such Registration Statement with
the Securities and Exchange Commission and to comply with the undertakings of
the Corporation made in connection with such Registration Statement; and I
hereby ratify and confirm all that said attorneys, or either of them, have done
or shall lawfully do by virtue of this Power of Attorney.
DATED: October 28, 1997 /s/ Patrick J. Mulchay
----------------------
Patrick J. Mulchay
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Jeffrey W. Yundt, hereby constitute
and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my
true and lawful attorneys and agents, with full power of substitution and
resubstitution, to execute in my name and on my behalf, in all capacities as a
Director of NIPSCO Capital Markets, Inc. ("Corporation"), a Registration
Statement on Form S-3 and any amendments thereto (including, without limitation,
post-effective amendments pursuant to Rule 462(b) under the Securities Act of
1933, as amended) to be filed with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of Debt Securities of the Corporation, to file such Registration Statement with
the Securities and Exchange Commission and to comply with the undertakings of
the Corporation made in connection with such Registration Statement; and I
hereby ratify and confirm all that said attorneys, or either of them, have done
or shall lawfully do by virtue of this Power of Attorney.
DATED: October 28, 1997 /s/ Jeffrey W. Yundt
--------------------
Jeffrey W. Yundt
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Steven C. Beering, hereby constitute
and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my
true and lawful attorneys and agents, with full power of substitution and
resubstitution, to execute in my name and on my behalf, in all capacities as a
Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on
Form S-3 and any amendments thereto (including, without limitation, post-
effective amendments pursuant to Rule 462(b) under the Securities Act of 1933,
as amended) to be filed with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital
Markets, Inc. ("Capital Markets"), including the related obligations of the
Corporation pursuant to the Support Agreement between the Corporation and
Capital Markets, to file such Registration Statement with the Securities and
Exchange Commission and to comply with the undertakings of the Corporation made
in connection with such Registration Statement; and I hereby ratify and confirm
all that said attorneys, or either of them, have done or shall lawfully do by
virtue of this Power of Attorney.
DATED: October 28, 1997 /s/ Steven C. Beering
---------------------
Steven C. Beering
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Arthur J. Decio, hereby constitute and
appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true
and lawful attorneys and agents, with full power of substitution and
resubstitution, to execute in my name and on my behalf, in all capacities as a
Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on
Form S-3 and any amendments thereto (including, without limitation, post-
effective amendments pursuant to Rule 462(b) under the Securities Act of 1933,
as amended) to be filed with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital
Markets, Inc. ("Capital Markets"), including the related obligations of the
Corporation pursuant to the Support Agreement between the Corporation and
Capital Markets, to file such Registration Statement with the Securities and
Exchange Commission and to comply with the undertakings of the Corporation made
in connection with such Registration Statement; and I hereby ratify and confirm
all that said attorneys, or either of them, have done or shall lawfully do by
virtue of this Power of Attorney.
DATED: October 28, 1997 /s/ Arthur J. Decio
-------------------
Arthur J. Decio
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Gary L. Neale, hereby constitute and
appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true
and lawful attorneys and agents, with full power of substitution and
resubstitution, to execute in my name and on my behalf, in all capacities as a
Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on
Form S-3 and any amendments thereto (including, without limitation, post-
effective amendments pursuant to Rule 462(b) under the Securities Act of 1933,
as amended) to be filed with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital
Markets, Inc. ("Capital Markets"), including the related obligations of the
Corporation pursuant to the Support Agreement between the Corporation and
Capital Markets, to file such Registration Statement with the Securities and
Exchange Commission and to comply with the undertakings of the Corporation made
in connection with such Registration Statement; and I hereby ratify and confirm
all that said attorneys, or either of them, have done or shall lawfully do by
virtue of this Power of Attorney.
DATED: October 28, 1997 /s/ Gary L. Neale
-----------------
Gary L. Neale
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Ernestine M. Raclin, hereby constitute
and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my
true and lawful attorneys and agents, with full power of substitution and
resubstitution, to execute in my name and on my behalf, in all capacities as a
Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on
Form S-3 and any amendments thereto (including, without limitation, post-
effective amendments pursuant to Rule 462(b) under the Securities Act of 1933,
as amended) to be filed with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital
Markets, Inc. ("Capital Markets"), including the related obligations of the
Corporation pursuant to the Support Agreement between the Corporation and
Capital Markets, to file such Registration Statement with the Securities and
Exchange Commission and to comply with the undertakings of the Corporation made
in connection with such Registration Statement; and I hereby ratify and confirm
all that said attorneys, or either of them, have done or shall lawfully do by
virtue of this Power of Attorney.
DATED: October 28, 1997 /s/ Ernestine M. Raclin
-----------------------
Ernestine M. Raclin
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Denis E. Ribordy, hereby constitute
and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my
true and lawful attorneys and agents, with full power of substitution and
resubstitution, to execute in my name and on my behalf, in all capacities as a
Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on
Form S-3 and any amendments thereto (including, without limitation, post-
effective amendments pursuant to Rule 462(b) under the Securities Act of 1933,
as amended) to be filed with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital
Markets, Inc. ("Capital Markets"), including the related obligations of the
Corporation pursuant to the Support Agreement between the Corporation and
Capital Markets, to file such Registration Statement with the Securities and
Exchange Commission and to comply with the undertakings of the Corporation made
in connection with such Registration Statement; and I hereby ratify and confirm
all that said attorneys, or either of them, have done or shall lawfully do by
virtue of this Power of Attorney.
DATED: October 28, 1997 /s/ Denis E. Ribordy
--------------------
Denis E. Ribordy
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Ian M. Rolland, hereby constitute and
appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true
and lawful attorneys and agents, with full power of substitution and
resubstitution, to execute in my name and on my behalf, in all capacities as a
Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on
Form S-3 and any amendments thereto (including, without limitation, post-
effective amendments pursuant to Rule 462(b) under the Securities Act of 1933,
as amended) to be filed with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital
Markets, Inc. ("Capital Markets"), including the related obligations of the
Corporation pursuant to the Support Agreement between the Corporation and
Capital Markets, to file such Registration Statement with the Securities and
Exchange Commission and to comply with the undertakings of the Corporation made
in connection with such Registration Statement; and I hereby ratify and confirm
all that said attorneys, or either of them, have done or shall lawfully do by
virtue of this Power of Attorney.
DATED: October 28, 1997 /s/ Ian M. Rolland
------------------
Ian M. Rolland
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Edmund A. Schroer, hereby constitute
and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my
true and lawful attorneys and agents, with full power of substitution and
resubstitution, to execute in my name and on my behalf, in all capacities as a
Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on
Form S-3 and any amendments thereto (including, without limitation, post-
effective amendments pursuant to Rule 462(b) under the Securities Act of 1933,
as amended) to be filed with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital
Markets, Inc. ("Capital Markets"), including the related obligations of the
Corporation pursuant to the Support Agreement between the Corporation and
Capital Markets, to file such Registration Statement with the Securities and
Exchange Commission and to comply with the undertakings of the Corporation made
in connection with such Registration Statement; and I hereby ratify and confirm
all that said attorneys, or either of them, have done or shall lawfully do by
virtue of this Power of Attorney.
DATED: October 28, 1997 /s/ Edmund A. Schroer
---------------------
Edmund A. Schroer
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, Robert J. Welsh, hereby constitute and
appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true
and lawful attorneys and agents, with full power of substitution and
resubstitution, to execute in my name and on my behalf, in all capacities as a
Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on
Form S-3 and any amendments thereto (including, without limitation, post-
effective amendments pursuant to Rule 462(b) under the Securities Act of 1933,
as amended) to be filed with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital
Markets, Inc. ("Capital Markets"), including the related obligations of the
Corporation pursuant to the Support Agreement between the Corporation and
Capital Markets, to file such Registration Statement with the Securities and
Exchange Commission and to comply with the undertakings of the Corporation made
in connection with such Registration Statement; and I hereby ratify and confirm
all that said attorneys, or either of them, have done or shall lawfully do by
virtue of this Power of Attorney.
DATED: October 28, 1997 /s/ Robert J. Welsh
-------------------
Robert J. Welsh
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, James T. Morris, hereby constitute and
appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true
and lawful attorneys and agents, with full power of substitution and
resubstitution, to execute in my name and on my behalf, in all capacities as a
Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on
Form S-3 and any amendments thereto (including, without limitation, post-
effective amendments pursuant to Rule 462(b) under the Securities Act of 1933,
as amended) to be filed with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital
Markets, Inc. ("Capital Markets"), including the related obligations of the
Corporation pursuant to the Support Agreement between the Corporation and
Capital Markets, to file such Registration Statement with the Securities and
Exchange Commission and to comply with the undertakings of the Corporation made
in connection with such Registration Statement; and I hereby ratify and confirm
all that said attorneys, or either of them, have done or shall lawfully do by
virtue of this Power of Attorney.
DATED: October 28, 1997 /s/ James T. Morris
-------------------
James T. Morris
<PAGE>
EXHIBIT 25
________________________________________________________________________________
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) ________
________________________________________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
_____________________________________________
NIPSCO CAPITAL MARKETS, INC.
(Exact name of obligor as specified in its charter)
INDIANA 35-1762940
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
5265 HOHMAN AVENUE
HAMMOND, INDIANA 46320
(Address of principal executive offices) (Zip Code)
NIPSCO INDUSTRIES, INC.
(Exact name of obligor as specified in its charter)
INDIANA 35-1762940
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
5265 HOHMAN AVENUE
HAMMOND, INDIANA 46320
(Address of principal executive offices) (Zip Code)
___________
DEBT SECURITIES
(Title of the indenture securities)
<PAGE>
GENERAL
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.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
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.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 30th day of October, 1997.
THE CHASE MANHATTAN BANK
By /s/ R. Lorenzen
----------------------------------
R. Lorenzen
Senior Trust Officer
<PAGE>
-
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1997, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve A
<TABLE>
<CAPTION>
DOLLAR
AMOUNTS
ASSETS IN MILLIONS
-----------
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin.................................. $ 13,892
Interest-bearing balances.......................... 4,282
Securities:
Held to maturity securities.......................... 2,857
Available for sale securities........................ 34,091
Federal funds sold and securities purchased under
agreements to resell................................. 29,970
Loans and lease financing receivables:
Loans and leases, net of unearned income............. $124,827
Less: Allowance for loan and lease losses............ 2,753
Less: Allocated transfer risk reserve................ 13
--------
Loans and leases, net of unearned income,
allowance, and reserve............................. 122,061
Trading Assets....................................... 56,042
Premises and fixed assets (including capitalized
leases)............................................ 2,904
Other real estate owned.............................. 306
Investments in unconsolidated subsidiaries and
associated companies............................... 232
Customers' liability to this bank on acceptances
outstanding........................................ 2,092
Intangible assets.................................... 1,532
Other assets......................................... 10,448
--------
TOTAL ASSETS......................................... $280,709
========
</TABLE>
- 4 -
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices...................................... $ 91,249
Noninterest-bearing...................................... $ 38,157
Interest-bearing......................................... 53,092
--------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's................................................ 70,192
Noninterest-bearing........................................ $ 3,712
Interest-bearing......................................... 66,480
Federal funds purchased and securities sold under agree-
ments to repurchase........................................ 35,185
Demand notes issued to the U.S. Treasury................... 1,000
Trading liabilities........................................ 42,307
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less............ 4,593
With a remaining maturity of more than one year
through three years...................................... 260
With a remaining maturity of more than three years... 146
Bank's liability on acceptances executed and outstanding... 2,092
Subordinated notes and debentures.......................... 5,715
Other liabilities.......................................... 11,373
TOTAL LIABILITIES.......................................... 264,112
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus.............. 0
Common stock............................................... 1,211
Surplus (exclude all surplus related to preferred stock).. 10,283
Undivided profits and capital reserves..................... 5,280
Net unrealized holding gains (losses)
on available-for-sale securities........................... (193)
Cumulative foreign currency translation adjustments........ 16
TOTAL EQUITY CAPITAL....................................... 16,597
--------
TOTAL LIABILITIES AND EQUITY CAPITAL....................... $280,709
========
</TABLE>
<PAGE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR. )
-5-
