EXHIBIT 1.01
NORTHERN ILLINOIS GAS COMPANY
$ ,000,000
FIRST MORTGAGE BONDS
% SERIES DUE
UNDERWRITING AGREEMENT
,200
[Name (s) of Representatives]
As Representative (s) of the several Underwriters
Dear Sirs:
Northern Illinois Gas Company, doing business as Nicor Gas Company (the
"Company") proposes, subject to the terms and conditions stated herein and in
the General Terms and Conditions of Underwriting Agreement in the form of Annex
A hereto, a copy of which you have previously received, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters"), $ ,000,000
aggregate principal amount of the Company's First Mortgage Bonds (the "Bonds").
All of the provisions of such General Terms and Conditions of Underwriting
Agreement are incorporated herein by reference in their entirety, and shall be
deemed to be a part of this Underwriting Agreement to the same extent as if such
provisions had been set forth in full herein. Unless otherwise defined herein,
terms defined in the General Terms and Conditions of Underwriting Agreement are
used herein as therein defined.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Bonds in the form heretofore
delivered to you is now proposed to be filed or mailed for filing with the
Commission. Such amendment or supplement sets forth the terms of the Bonds.
Subject to the terms and conditions set forth herein, the Company agrees to
issue and sell to the Underwriters, and the Underwriters agree, severally and
not jointly, to purchase from the Company, the principal amount of Bonds set
forth opposite the names of such Underwriters in Schedule I hereto on the
following terms and conditions:
Aggregate principal amount of Bonds to
be purchased: ............................. $ ,000,000
Rate of interest per annum to be borne by
the Bonds (payable semiannually): ......... % (such rate to be a multiple of .001%)
Maturity date of the Bonds:
Price to be paid to the Company for the
Bonds: .................................... % of the principal amount of the Bonds (not less than
99%) plus accrued interest from date of
Supplemental Indenture to the date of delivery of the
Bonds.
Initial public offering price of the Bonds: . % of the principal amount of the Bonds plus accrued
interest from date of Supplemental Indenture to the
date of delivery of the Bonds. (If other, give details.)
Place for delivery of Bonds:
Date and time of Time of Delivery:
Place for checking Bonds on the business
day prior to Time of Delivery:
Redemption and Sinking Fund: ................ Any redemption provisions will be as set forth on
Schedule II hereto. No sinking fund will be
provided.
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Address for notices per Section 12 of the
General Terms and Conditions of
Underwriting Agreement: ..................
If the foregoing is in accordance with your understanding, please sign and
return to us the enclosed counterparts hereof, whereupon it will become a
binding agreement between the Underwriters and the Company in accordance with
its terms. It is understood that your acceptance of this letter on behalf of
each of the Underwriters constitutes your representation that you are authorized
to execute this Underwriting Agreement on behalf of each of the Underwriters.
Very truly yours,
NORTHERN ILLINOIS GAS COMPANY
BY_________________________________
TITLE: Vice President and Treasurer
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
[Name (s) of Representatives]
BY ___________________________________
TITLE:
On behalf of itself and as Representative (s) of each of the Underwriters
named in Schedule I hereto.
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SCHEDULE I
Name of Underwriter Principal Amount of Bonds
------------------- -------------------------
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SCHEDULE II
(Alternative Redemption Provisions)
[Redemption. The Bonds may not be called for redemption by the Company
prior to . On and thereafter until maturity on , on not less than 30 days'
notice, the Bonds will be redeemable at the option of the Company, as a whole at
any time or in part from time to time, at the applicable redemption price
(expressed as a percentage of principal amount) set forth below under "General
Redemption Prices," plus accrued and unpaid interest to the redemption date:
General Redemption Prices
--------------------------------------------------------------------------------
If Redeemed During 12 Months'
Period Beginning *:
--------------------------------------------------------------------------------
Year Percentage Year Percentage
---- ---------- ---- ----------
% %
Determination of General Redemption Prices
The general redemption prices, expressed as a percentage of principal
amount, shall be calculated as follows: (a) for the 12-month period beginning
the date of the Supplemental Indenture, the initial public offering price, plus
one year's interest; (b) for the 12-month period beginning one year after the
date of the Supplemental Indenture and for each of the 12-month periods
thereafter through the date years prior to maturity, the price obtained by
deducting from the redemption price during the prior 12-month period, an amount
which will amortize the premium in excess of 100% as specified in (a) above over
the number of 12-month periods between the date of the Supplemental Indenture
and years prior to maturity; (c) for the years prior to maturity,
100% of the principal amount.
The calculations required shall be made on the basis of the interest rate
specified in the Underwriting Agreement. If any redemption price would not be a
multiple of .01%, such price shall be increased to the next higher such
multiple.
----------
* Insert anniversary date of Supplemental Indenture]
[Redemption. The Bonds may not be called by redemption by the Company prior
to . On and thereafter until maturity on , the Bonds, on not less
than 30 days' notice, will be redeemable at the option of the Company, as a
whole at any time or in part from time to time, at 100% of the principal amount
thereof, plus accrued and unpaid interest to the redemption date.]
[Redemption. The Bonds will be redeemable in whole at any time or in part
from time to time, at a redemption price equal to the greater of (i) 100% of the
principal amount of the Bonds to be redeemed or (ii) the sum of the present
values of the remaining scheduled payments of principal and interest thereon
(exclusive of interest accrued to the date of redemption) discounted, at the
then current Treasury Rate (as defined in the Supplemental Indenture) plus
basis points, to the date of redemption on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months), plus in each case, accrued and
unpaid interest on the principal amount being redeemed to the date of
redemption.]
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ANNEX A
NORTHERN ILLINOIS GAS COMPANY
$ ,000,000
FIRST MORTGAGE BONDS
GENERAL TERMS AND CONDITIONS OF UNDERWRITING AGREEMENT
------------------------------------------------------
Northern Illinois Gas Company, an Illinois corporation (the "Company"),
proposes to enter into an Underwriting Agreement into which these General Terms
and Conditions are incorporated by reference ( the "Underwriting Agreement")
and, subject to the terms and conditions stated therein, to issue and sell to
the underwriter or underwriters named in Schedule I to the Underwriting
Agreement up to $ ,000,000 aggregate principal amount of its First Mortgage
Bonds (hereinafter called the "Bonds") under the registration statement referred
to in Section 2(a) hereof. Such Bonds will be issued under the Company's
Indenture dated as of January 1, 1954, to Continental Bank, National
Association, Trustee (the "Trustee"), as supplemented by supplemental indentures
dated February 9, 1954, April 1, 1956, June 1, 1959, July 1, 1960, June 1, 1963,
July 1, 1963, August 1, 1964, August 1, 1965, May 1, 1966, August 1, 1966, July
1, 1967, June 1, 1968, December 1, 1969, August 1, 1970, June 1, 1971, July 1,
1972, July 1, 1973, April 1, 1975, April 30, 1976, April 30, 1976, July 1, 1976,
August 1, 1976, December 1, 1977, January 15, 1979, December 1, 1981, March 1,
1983, October 1, 1984, December 1, 1986, March 15, 1988, July 1, 1988, July 1,
1989, July 15, 1990, August 15, 1991, July 15, 1992, February 1, 1993, March 15,
1993, May 1, 1993, July 1, 1993, August 15, 1994, October 15, 1995, May 10,
1996, August 1, 1996, June 1, 1997, October 15, 1997, February 15, 1998, June 1,
1998, February 1, 1999, February 1, 2001, and May 15, 2001 respectively, and as
to be further supplemented by a Supplemental Indenture (the "Supplemental
Indenture") which will be dated the first or fifteenth day of the calendar month
in which the "Time of Delivery" (as hereinafter defined) falls, creating the
series in which the Bonds are to be issued. Said Indenture as so supplemented is
hereinafter called the "Indenture." The term "Underwriters" herein shall refer
to the several persons, firms and corporations named in Schedule I to the
Underwriting Agreement and the term "Representatives" herein shall refer to the
Underwriters identified as the Representatives who are acting on behalf of the
Underwriters (including themselves) in the Underwriting Agreement. All
obligations of the Underwriters under the Underwriting Agreement are several and
not joint. The terms "Underwriters", "Representatives", "persons", "firms" and
"corporations" shall include the singular as well as the plural.
The terms of the issuance of the Bonds shall be as specified in the
Underwriting Agreement. The Underwriting Agreement shall constitute an agreement
by the Company and the Underwriters to be bound by all of the provisions of
these General Terms and Conditions of Underwriting Agreement, as follows:
SECTION 1. Sale of Bonds. Sales of the Bonds will be made to the
Underwriters, for whom the Representatives will act as such. The obligation of
the Company to issue and sell any of the Bonds and the obligation of any of the
Underwriters to purchase any of the Bonds shall be evidenced by the Underwriting
Agreement. The Underwriting Agreement shall specify the aggregate principal
amount of Bonds to be purchased, the rate and time of payment of interest to be
borne by the Bonds, the maturity date of the Bonds, the price to be paid to the
Company for the Bonds, the initial public offering price or other offering terms
of such Bonds and the redemption prices and other special terms, if any,
relating to the Bonds, the names of the Underwriters of such Bonds, the names of
the Representatives of such Underwriters and the amount of Bonds to be purchased
by each Underwriter, and, subject to the provisions of Section 3 hereof, shall
set forth the date, time and manner of the delivery of such Bonds. The terms of
the Bonds will be set forth in the Prospectus Supplement (as hereinafter
defined). The Underwriting Agreement shall be in the form of an executed writing
(which may be in counterparts) and may be evidenced by an exchange of telecopied
communications or any other rapid transmission device to produce a written
record of communications transmitted.
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form S-3 with respect to the Bonds,
including a related preliminary prospectus, has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations of the Securities and Exchange Commission
(the "Commission") under the Act (the "Regulations"), and has been filed with
the Commission on and, if one or more amendments to such
registration statement, which may include an amended preliminary prospectus,
have been filed with the Commission, such amendments have been similarly
prepared; and such registration statement has become effective. Such
registration statement, as amended to the date of the Underwriting Agreement,
together with the prospectus supplement referred to below is hereinafter
referred to as the "Registration Statement". Such prospectus as supplemented
specifically relating to the Bonds and filed with the Commission under Rule
424(b) of the Act is hereinafter referred to as the "Prospectus". The Prospectus
has been prepared by the Company in conformity with the requirements of the Act
and the Regulations. Copies of the Registration Statement and any related
prospectus have been delivered to the Representatives. As used herein,
Registration Statement, Prospectus and preliminary prospectus shall include, in
each case, the material incorporated therein pursuant to Item 12 of Form S-3
filed under the Securities Exchange Act of 1934 (the "1934 Act") on or prior to
the date of the Underwriting Agreement, and "amended", "amendment" or
"supplement" with respect to the Registration Statement or the Prospectus shall
be deemed to include the filing by the Company of any document pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of the
Underwriting Agreement.
(b) The registration statement at the time it became effective, and the
related Prospectus and any amendments and supplements thereto filed prior to the
date of the Underwriting Agreement, conformed in all material respects to the
provisions 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, on the date of the Underwriting Agreement and at the Time of
Delivery (referred to in Section 3) the Registration Statement, the Prospectus,
and any amendments and supplements thereto, and the Indenture, will conform in
all material respects to the Act, the Trust Indenture Act and the respective
rules and regulations of the Commission thereunder; and at the time the
registration statement became effective, the registration statement and related
prospectus did not contain any 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; and at the date of this Underwriting
Agreement and at the Time of Delivery, the Registration Statement and the
Prospectus and any amendments and supplements thereto do not and will not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading; provided,
however, that none of the representations and warranties in this subsection
shall apply to statements in or omissions from the Registration Statement or
Prospectus or any amendment or supplement thereto made in reliance upon and in
conformity with information respecting the Underwriters furnished to the Company
in writing by or on behalf of any Underwriter through the Representatives
expressly for use in the Registration Statement or Prospectus.
(c) The documents incorporated by reference into the Prospectus, at the
time they were filed with the Commission, complied in all material respects with
the requirements of the 1934 Act and the rules and regulations of the Commission
thereunder (the "1934 Regulations"), and, at the date of this Underwriting
Agreement and at the Time of Delivery, when read together with the Prospectus
and any supplement thereto will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, and any documents filed after the
date of the Underwriting Agreement and so incorporated by reference in the
Prospectus will, when they are filed with the Commission, comply in all material
respects with the requirements of the 1934 Act and the 1934 Regulations, and
when read together with the Prospectus and any supplement thereto will not
contain an untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
(d) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP are independent public accountants with respect to
the Company and its subsidiaries as required by the Act and the Regulations.
(e) The financial statements included in the Registration Statement present
fairly the financial position of the Company and its consolidated subsidiaries
as of the dates indicated and the results of their
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operations for the periods specified, and said financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis during the periods involved.
(f) The Company is a corporation in good standing, duly organized and
validly existing under the laws of Illinois, and has due corporate authority to
carry on the business in which it is engaged and to own and operate the
properties used by it in such business as described in the Prospectus. The
Company's subsidiary constitutes less than 5% of its consolidated assets and
during the year ended December 31, 2000 contributed less than 5% of its
consolidated annual operating revenues and net income, and the Company does not
consider its subsidiary to be material.
(g) The execution and delivery of the Underwriting Agreement have been duly
authorized by the Company and the Underwriting Agreement constitutes a valid and
legally binding obligation of the Company; the Bonds have been duly authorized,
and when issued and delivered pursuant to the Underwriting Agreement and the
Indenture, will have been duly executed, authenticated, issued and delivered and
will constitute valid and legally binding obligations of the Company in
accordance with their respective terms, entitled to the benefits provided by the
Indenture; the Supplemental Indenture has been duly authorized in substantially
the form filed as an exhibit to the Registration Statement and, when executed
and delivered by the Company and the Trustee, will constitute a valid and
legally binding instrument enforceable in accordance with its terms, except to
the extent the enforceability of the Bonds and the Indenture may be limited by
bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting the enforcement of creditors' rights or general equity
principles; and the Indenture and the Bonds as executed and delivered will
conform in all material respects to the descriptions thereof in the Prospectus.
(h) The issue and sale of the Bonds and the compliance by the Company with
all of the provisions of the Bonds, the Indenture, and the Underwriting
Agreement and the transactions contemplated thereby will not conflict with or
result in any breach or violation of any of the provisions of, or constitute
(disregarding any grace or notice period) a default under, or result in the
imposition of any lien, charge or encumbrance upon any property or assets of the
Company pursuant to the terms of, any other indenture, or any mortgage, loan
agreement, contract, note, lease or other agreement or instrument to which the
Company is a party or by which the Company may be bound or to which any of the
property or assets of the Company is subject, nor will such action result in any
violation of the provisions of the charter or by- laws of the Company or any
statute or any order, rule or regulation applicable to the Company of any court
or any federal, state or other regulatory authority or other governmental body
having jurisdiction over the Company or any of its properties.
(i) Since the respective dates as of which information is given in the
Registration Statement and Prospectus and except as may otherwise be stated or
contemplated therein; (i) there has not been any material adverse change in the
condition, financial or otherwise, of the Company and its subsidiaries
considered as one enterprise, or in the earnings, affairs, business prospects or
properties of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business or arising from any
court or governmental action, order or decree, and (ii) there has been no
transaction entered into by the Company or any subsidiary which is material to
the Company and its subsidiaries considered as one enterprise, other than
transactions in the ordinary course of business.
(j) Except as set forth in the Prospectus, the Company, with minor
exceptions, and subject to noncompliance with certain procedural and other
requirements in the procurement and granting of gas franchises in a number of
smaller municipalities formerly served by Mid-Illinois Gas Company, has
statutory authority, franchises, licenses, rights-of-way, easements and
consents, free from unduly burdensome restrictions and adequate for the conduct
of the business in which it is engaged.
(k) The Illinois Commerce Commission has entered an order authorizing the
issue and sale of the Bonds by the Company upon terms consistent with the
Underwriting Agreement, and no other consent, approval, authorization or other
order or filing with any regulatory or governmental body is required for the
issuance and sale of the Bonds and consummation of the transactions contemplated
hereby, except 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 Bonds by the Underwriters.
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(l) The Company is not in violation of its charter or, except as disclosed
in the Prospectus, 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 other instrument to which it
is a party or by which it or its property is bound or affected which is material
to the Company and its subsidiary considered as one enterprise.
(m) Except as set forth in the Registration Statement and Prospectus, there
are no legal or governmental proceedings pending to which the Company or its
subsidiary is a party or of which any property of the Company or its subsidiary
is the subject, and, to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others, other than proceedings which, if determined adversely to the Company and
its subsidiary, would not individually or in the aggregate have a material
adverse effect on the business, properties, financial position, net worth or
results of operations of the Company and its subsidiary considered as a whole.
(n) The Company has good and sufficient title to all property described or
referred to in the Indenture and purported to be conveyed thereby (except
property released from the lien of the Indenture in connection with the sale or
other disposition thereof), subject only to the lien of the Indenture and to
permitted liens as defined therein; the Indenture has been duly filed for
recordation in such manner and in such places as is required by law in order to
give constructive notice of, establish, preserve and protect the lien of the
Indenture; the Indenture constitutes a valid, direct first mortgage lien,
subject only to permitted liens, on substantially all property of the Company,
except property expressly excepted by the terms of the Indenture; the Indenture
will, when recorded or registered by the Company in accordance with its
covenants under the Indenture, constitute a valid, direct first mortgage lien on
all property of the character of that now subject to the lien of the Indenture
hereafter acquired by the Company, subject only to permitted liens and to liens,
if any, existing or placed on such after-acquired property at the time of the
acquisition thereof;
Any certificate signed by any officer of the Company and delivered to you
or to Underwriters' counsel shall be deemed a representation and warranty by the
Company to each Underwriter as to the statements made therein.
SECTION 3. Purchase, Sale and Delivery of Bonds. Following the execution of
the Underwriting Agreement, the several Underwriters propose to make a public
offering of their respective portions of the Bonds as soon as in the
Representatives' judgment it is advisable upon the terms and conditions set
forth in the Prospectus Supplement.
The Bonds to be purchased by each Underwriter pursuant to the Underwriting
Agreement, in definitive form and registered in such names as the
Representatives may request upon at least forty-eight hours' prior notice to the
Company, shall be delivered by or on behalf of the Company to the
Representatives for the respective accounts of the several Underwriters, against
payment therefor as specified in the Underwriting Agreement in immediately
available funds, at the office of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (except as hereinafter provided with respect to
delivery of such Bonds), at the time and date specified in the Underwriting
Agreement or at such other place and time and date as the Representatives and
the Company may agree upon in writing, such time and date being herein called
the "Time of Delivery". If specified by the Representatives in the Underwriting
Agreement, delivery of the Bonds will be made at the Time of Delivery at such
place in New York, New York as shall have been so specified against payment
therefor in Chicago as aforesaid.
SECTION 4. Covenants of the Company. The Company covenants with each
Underwriter that:
(a) The Company will notify the Representatives immediately and confirm the
notice in writing (i) of the receipt of any request by the Commission for any
amendment or supplement to the Registration Statement or the Prospectus or any
amendment or supplement thereto or for additional information, and (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the initiation or threatened initiation of any
proceedings for that purpose or of the suspension or threatened suspension of
the qualification of the Bonds for offering or sale in any jurisdiction. The
Company will make every reasonable effort to prevent the issuance by the
Commission
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of any stop order and, if any such stop order shall at any time be issued, to
obtain the lifting thereof at the earliest moment.
(b) The Company will not file any amendment to the Registration Statement
or any amendment or supplement to the Prospectus (including a prospectus filed
pursuant to Rule 424 and including documents deemed to be incorporated by
reference into the Prospectus) without first having furnished the
Representatives with a copy of the proposed form thereof and given the
Representatives a reasonable opportunity to review and comment respecting the
same and having given reasonable consideration to any comments or objections
made by the Representatives.
(c) The Company will deliver to each of the Representatives, as soon as
available, one signed copy of the Registration Statement as originally filed and
of each amendment thereto, including, in each case, documents incorporated by
reference into the Registration Statement and one set of exhibits thereto (other
than exhibits incorporated by reference which will be furnished upon specific
request), and will also deliver to the Representatives a reasonable number of
conformed copies of the Registration Statement as originally filed and of each
amendment and post-effective amendment thereto including such incorporated
documents (without exhibits) for each of the Underwriters.
(d) The Company will deliver to each Underwriter from time to time during
the period when a prospectus is required to be delivered under the Act such
number of copies of the Prospectus (as amended or supplemented and including
incorporated documents) as the Representatives may reasonably request for the
purposes contemplated by the Act or the Regulations; provided, however, that the
delivery of copies of the Prospectus (as amended or supplemented and including
incorporated documents) more than nine months after the date of the Underwriting
Agreement shall be at the expense of the Underwriter requesting such delivery.
(e) During the period when a prospectus is required to be delivered under
the Act, the Company will comply so far as it is able, and at its own expense
(for a period not to exceed nine months), with all requirements imposed upon it
by the Act, and by Sections 13 and 14 of the 1934 Act, as now or hereafter
amended, and by the Regulations, as from time to time in force, so far as
necessary to permit the continuance of sales of or dealing in the Bonds during
such period in accordance with the provisions hereof and of the Prospectus.
(f) If any event shall occur as a result of which it is necessary, in the
opinion of counsel for the Company and of Underwriters' counsel, to amend or
supplement the Prospectus in order to make the Prospectus not misleading in the
light of the circumstances existing at the time it is delivered to a purchaser,
or if it is necessary to amend or supplement the Prospectus to comply with law,
the Company will forthwith prepare and furnish to the Underwriters, without
expense to them except as otherwise provided in subsection (d) of this Section
4, a reasonable number of copies of an amendment or amendments or a supplement
or supplements to the Prospectus (in the form referred to in subsection (b) of
this Section 4) which will amend or supplement the Prospectus so that as amended
or supplemented it will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein not misleading, or so that the Prospectus will comply with law. For the
purposes of this subsection, the Company will furnish such information as the
Representatives may from time to time reasonably request.
(g) The Company will endeavor in good faith, in cooperation with the
Underwriters, to qualify the Bonds for offering and sale under the applicable
securities laws of such jurisdictions as the Representatives may designate;
provided, however, that the Company shall not be obligated to file any general
consent to service or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified. In each
jurisdiction where any of the Bonds shall be qualified as above provided, the
Company will make and file such statements and reports in each year as are or
may be reasonably required by the laws thereof.
(h) The Company will make generally available to its security holders as
soon as practicable, but not later than 75 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Section 11 (a) of the Act and the Regulations thereunder (including, at the
option of the Company, Rule 158), which need not be certified by independent
public accountants unless required
5
by the Act or the Regulations), covering a twelve-month period beginning on the
first day of the calendar quarter following the Time of Delivery.
(i) The Company agrees that it will not publicly offer or sell any
intermediate or long-term debt between the date of the Underwriting Agreement
and Time of Delivery without the prior written consent of the Representatives.
SECTION 5. Payment of Expenses. The Company will pay all expenses incident
to the performance of its obligations under the Underwriting Agreement,
including (i) the printing and filing by the Company of the registration
statement and the printing of the Underwriting Agreement, any Agreement Among
Underwriters, any Selling Agreement, the Supplemental Indenture and the
Underwriters' Questionnaire, (ii) the authorization, issuance and delivery of
the Bonds to the Underwriters, including the printing and engraving of the
Bonds, and all taxes, if any, upon the issuance and sale of the Bonds to the
Underwriters, (iii) the qualification of the Bonds under the securities laws of
the various jurisdictions in accordance with the provisions of subsection (g) of
Section 4, including filing fees and fees and disbursements of Underwriters'
counsel in connection with such qualification and in connection with the
preparation of the Blue Sky Survey (such fees of Underwriters' counsel not to
exceed $ in the aggregate), (iv) any fees charged by securities rating
services for rating the Bonds, (v) the fees and expenses of the Trustee and its
counsel in connection with the Bonds and the Supplemental Indenture, (vi) the
printing and delivery to the Underwriters and dealers in quantities as
hereinbefore stated of copies of the registration statement and all amendments
thereto, of any preliminary prospectuses and amended preliminary prospectuses,
of the Registration Statement and any amendments thereto, and of the Prospectus
and any amendments or supplements thereto, and (vii) the cost of printing and
delivery to the Underwriters of copies of the Blue Sky Survey.
If this Agreement is terminated by the Representatives in accordance with
the provisions of Section 6 or Section l0(b), or is prevented by the Company
from becoming effective in accordance with the provisions of Section l0(a), the
Company shall reimburse the Underwriters severally for their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters incurred in connection with the offering.
SECTION 6. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters hereunder are subject to the accuracy of and compliance with
the representations and warranties of the Company herein contained, to the
performance by the Company of its obligations hereunder and to the following
further conditions:
(a) At the Time of Delivery no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the Act or proceedings
therefor initiated or threatened by the Commission.
(b) At the Time of Delivery the Representatives shall have received:
(1) The favorable opinion, dated as of the Time of Delivery, of ▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company (or, with respect to the matters in
subdivision (vi) below, other counsel reasonably satisfactory to the
Underwriters), in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) the Company is a corporation in good standing, duly organized
and validly existing under the laws of the State of Illinois and has
due corporate authority to carry on the business in which it is
engaged and to own and operate the properties used by it in such
business;
(ii) the Indenture is in due and proper form, has been duly and
validly authorized by the necessary corporate action and by orders
duly entered by the Illinois Commerce Commission; no authorization,
approval, consent, certificate or order of any other state commission
or regulatory authority or of any federal commission or regulatory
authority not already obtained is required in respect of the execution
and delivery of the Indenture; and the Indenture has been duly and
validly executed and delivered and is a valid and enforceable
instrument in accordance with its terms, except as enforcement of
provisions of the Indenture may be limited by bankruptcy or other laws
of general application affecting the enforcement of creditors' rights
and by general equity principles;
6
(iii) the Bonds are in due and proper form; the issue and sale of
the Bonds by the Company in accordance with the terms of the
Underwriting Agreement have been duly and validly authorized by the
necessary corporate action and by order duly entered by the Illinois
Commerce Commission; no authorization, approval, consent, certificate
or order of any other state commission or regulatory authority or of
any federal commission or regulatory authority not already obtained is
required in respect of such issue and sale (except 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 Bonds by the Underwriters); the
Bonds have been duly executed and delivered to the Underwriters
against payment of the agreed consideration therefor and, assuming due
authentication thereof by the Trustee, constitute valid and
enforceable obligations of the Company in accordance with their terms,
secured by the lien of and, with like exception as noted in the
foregoing subdivision (ii), entitled to the benefits provided by the
Indenture, and the registered owners of the Bonds will be entitled to
the payment of principal and interest, and premium in case of
redemption, as therein provided; the Bonds and the Indenture conform
as to legal matters in all material respects with the statements
concerning them made in the Prospectus, and such statements accurately
set forth the matters respecting the Bonds and the Indenture required
to be set forth in the Prospectus;
(iv) the Registration Statement is effective under the Act and
the Indenture has been duly qualified under the Trust Indenture Act,
and to the best of the knowledge of said counsel no proceedings for a
stop order are pending or threatened under Section 8(d) of the Act;
(v) the execution and delivery of the Underwriting Agreement by
the Company has been duly authorized by the necessary corporate
action, and the Underwriting Agreement has been duly executed and
delivered by the Company;
(vi) the Company has good and sufficient title to all property
described or referred to in the Indenture and purported to be conveyed
thereby (except property released from the lien of the Indenture in
connection with the sale or other disposition thereof), subject only
to the lien of the Indenture and to permitted liens as defined
therein; the Indenture has been duly filed for recordation in such
manner and in such places as is required by law in order to give
constructive notice of, establish, preserve and protect the lien of
the Indenture; the Indenture constitutes a valid, direct first
mortgage lien, subject only to permitted liens, on substantially all
property of the Company, except property expressly excepted by the
terms of the Indenture; the Indenture will, when recorded or
registered by the Company in accordance with its covenants under the
Indenture, constitute a valid, direct first mortgage lien on all
property of the character of that now subject to the lien of the
Indenture hereafter acquired by the Company, subject only to permitted
liens and to liens, if any, existing or placed on such after-acquired
property at the time of the acquisition thereof;
(vii) the issue and sale of the Bonds and the compliance by the
Company with all of the provisions of the Bonds, the Indenture and the
Underwriting Agreement will not conflict with or result in a breach or
violation of any of the provisions of, or constitute (disregarding any
grace or notice period) a default under, any indenture, mortgage, loan
agreement, contract, note, lease or other agreement or instrument,
known to such counsel, to which the Company is party or by which the
Company is bound or to which any of the property or assets of the
Company is subject (with such exceptions as are in the aggregate not
material to the business or financial condition of the Company or the
validity of the Bonds), nor will such action result in any violation
of the provisions of the Charter or By-Laws of the Company, or, to the
best of their knowledge, any statute or any order, rule or regulation
applicable to the Company of any court or governmental agency or body
having jurisdiction over the Company or any of its properties (except
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 Bonds by
the Underwriters);
(viii) at the time the registration statement became effective,
the registration statement and the related prospectus (other than the
financial statements and notices thereto and supporting
11
schedules and other financial information included therein, as to
which no opinion need be rendered) complied as to form in all material
respects with the requirements of the Act and the Trust Indenture Act
and the Regulations;
(ix) with minor exceptions, and subject to noncompliance with
certain procedural and other requirements in the procurement and
granting of gas franchises in a number of smaller municipalities
formerly served by Mid-Illinois Gas Company, the Company holds
franchises from all of the incorporated cities and villages included
in the communities in which the Company renders gas service; all of
the franchises so held by the Company are valid and subsisting and
authorize it to engage in the business conducted by it in the
respective municipalities granting such franchises; the Company also
holds certificates of public convenience and necessity issued by the
Illinois Commerce Commission, which are valid and subsisting and
constitute due authorization by such commission for the conduct by the
Company of its operations in all areas served;
(x) to the best of their knowledge and information, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement other than those described therein or filed or
incorporated by reference as exhibits thereto and the descriptions
thereof or reference thereto are correct; and
(xi) except as disclosed in the Prospectus, there are no material
pending or threatened legal proceedings, considering the Company and
the subsidiaries as a single enterprise, known to said counsel, to
which the Company or any subsidiary is a party or of which property of
the Company or any subsidiary is the subject, and to the best of the
knowledge of said counsel there are no such proceedings contemplated
by governmental authorities.
Such counsel shall further state that, based upon their participation in
the preparation of the Registration Statement and the Prospectus, and any
amendment or supplement thereto, and upon their review and discussions of
the contents thereof, but without independent check or verification except
as specified, nothing has come to their attention that has caused them to
believe that the Registration Statement, at the time it became effective,
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 the Prospectus, and any amendment
or supplement thereto, at the date the Registration Statement became
effective, the date of this Agreement or at the Time of Delivery, contained
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(2) The favorable opinion of Wildman, Harrold, ▇▇▇▇▇ & ▇▇▇▇▇, counsel
for the Underwriters, with respect to the incorporation of the Company, the
validity of the Bonds and the Indenture, the Registration Statement, the
Prospectus and other related matters as the Representatives may reasonably
request; provided that any opinion requested with respect to the
jurisdiction of regulatory authorities (other than the Illinois Commerce
Commission, the Securities and Exchange Commission and state securities or
Blue Sky authorities) and the matters in subdivisions (vi) and (ix) above
will rely upon the opinion of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇.
(c) At the effective date of the Registration Statement and at the Time of
Delivery the Representatives shall have received a letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, dated the effective date or Time of Delivery, respectively, in form and
substance satisfactory to the Representatives, advising that (i) they are
independent public accountants with respect to the Company and its subsidiaries
as required by the Act and the 1934 Act and the applicable Regulations, (ii) in
their opinion, the audited consolidated financial statements and any
supplemental financial information and schedules of the Company examined by them
and incorporated by reference in the Registration Statement and Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act, the 1934 Act and the applicable Regulations, (iii) on
the basis of a reading of the latest available unaudited interim consolidated
financial statements prepared by the Company, a reading of the minutes of
meetings of the shareholder and the board of directors and executive committee
of the Company and its subsidiaries, consultation with officers of the Company
responsible for financial and accounting matters and other specified procedures,
nothing has come to their attention which caused them to believe that (A) the
unaudited interim condensed consolidated 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, the
8
1934 Act and the applicable Regulations or are not in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements incorporated as
aforesaid, (B) the unaudited income statement data and balance sheet data
(other than such data for the periods referred to in (A) above) included or
incorporated by reference in the Prospectus do not agree with the
corresponding items in the audited or unaudited, as the case may be,
financial statements from which such data were derived or were not
determined on a basis substantially consistent with that of the
corresponding amounts included in the audited consolidated financial
statements of the Company incorporated in the Registration Statement and
Prospectus, or (C) at a specified date within five business days of the
date of such letter with respect to (1) below, and during the period from
the date of the latest audited consolidated financial statements or
unaudited interim condensed consolidated financial statements, as the case
may be, incorporated in the Prospectus to the date of the latest available
unaudited interim consolidated financial statements (if any) prepared by
the Company with respect to (2) below, except in all instances as set forth
in or contemplated by the Prospectus or as set forth in such letter: (1)
there was any increase in the consolidated long-term debt of the Company
and its subsidiaries, as compared with the amounts set forth in the latest
balance sheet included or incorporated by reference in the Prospectus, or
(2) there were any decreases in consolidated operating income or net income
as compared with the corresponding period in the preceding year; and (iv)
they have carried out specified procedures performed for the purpose of
comparing certain financial information and percentages (which is limited
to financial information derived from general accounting records of the
Company) specified by the Representatives and appearing in the Registration
Statement or in schedules or exhibits to the Registration Statement or in
the Prospectus or in documents incorporated by reference in the Prospectus
with indicated amounts in the financial statements or accounting records of
the Company and (excluding any questions of legal interpretation and, in
the case of the letter delivered at the Time of Delivery, any exceptions
disclosed in the letter delivered at the Effective Date) have found such
information and percentages to be in agreement with the relevant accounting
and financial information of the Company referred to in such letter in the
description of the procedures performed by them. If such letter discloses
any material adverse decreases or increases, as the case may be, in the
items specified in item (iii) (C) above which are not set forth in or
contemplated by the Prospectus which, in the judgment of the
Representatives, makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Bonds on the terms and in the manner
contemplated by the Prospectus, this Agreement and all obligations of the
Underwriters hereunder may be cancelled by the Representatives by notifying
the Company in the manner and with the effect provided below in the last
sentence of this Section 6.
(d) At the Time of Delivery the Representatives shall have received a
certificate of the Chairman, President, Vice President and principal
financial officer, Vice President and principal accounting officer or
Treasurer of the Company, dated as of the Time of Delivery, to the effect
that the signer of such certificate has carefully examined the Registration
Statement, the Prospectus and any amendment or supplement thereto and the
Underwriting Agreement and that, in his opinion, at the time the
Registration Statement became effective, the Registration Statement did not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, and at the date of the Underwriting
Agreement the Prospectus did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, and since
the date of the Underwriting Agreement, no event has occurred which should
have been set forth in an amendment of or supplement to the Prospectus
which has not been so set forth; and no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings therefor have been instituted or threatened by the Commission;
and to the further effect that all the representations and warranties
contained in Section 2 hereof are true and correct, with the same force and
effect as though expressly made at the Time of Delivery.
(e) At the Time of Delivery the rating assigned by any nationally
recognized securities rating agency to any debt securities of the Company
as of the date of the Underwriting Agreement shall not have been lowered
since the date of the Underwriting Agreement and no such agency shall have
publicly announced that it has placed any of such debt securities on what
is commonly termed a "watch list" for possible downgrading.
(f) At the Time of Delivery counsel for the Underwriters shall have
been furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the sale of the Bonds
as herein contemplated and related proceedings, or in order to evidence the
accuracy or completeness of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the sale of the Bonds
as herein contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
9
If any of the conditions specified in this Section shall not have been
fulfilled when and as required by this Agreement to be fulfilled, this Agreement
and all obligations of the Underwriters hereunder may be cancelled by the
Representatives by notifying the Company of such cancellation in writing or by
telecopy at any time at or prior to the Time of Delivery and any such
cancellation shall be without liability of any party to any other party except
as otherwise provided in this Agreement.
SECTION 7. Condition of Company's Obligations. The obligations of the
Company to sell and deliver the Bonds are subject to the following conditions:
that at the Time of Delivery no stop order suspending the effectiveness of the
Registration Statement shall have been issued or proceedings therefor initiated
or threatened; that the order of the Illinois Commerce Commission, referred to
in Section 2(k), shall be in full force and effect substantially in the form in
which such order shall originally have been entered; and that the Indenture
shall be qualified under the Trust Indenture Act.
SECTION 8. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Under- writer and each person, if any, who controls any
Underwriter within the meaning of the Act or the 1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense,
whatsoever, arising out of any untrue statement or alleged untrue statement
of a material fact contained in the registration statement as it became
effective, or in any amendment thereto, or in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any untrue statement
or alleged untrue statement of a material fact contained in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading, unless such untrue statement or
omission or such alleged untrue statement or omission was made in reliance
upon and in conformity with written information respecting the Underwriters
furnished to the Company by or on behalf of any Underwriter through the
Representatives expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement
thereto);
(ii) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission or any such alleged untrue statement
or omission, if such settlement is effected with the written consent of the
Company; and
(iii) against any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii) above, and, in the case
of (i) above, unless such untrue statement or omission or such alleged
untrue statement or omission was made in reliance upon and in conformity
with written information respecting the Underwriters furnished to the
Company by or on behalf of any Underwriter through the Representatives
expressly for use in the Registration Statement (or any amendment thereto)
or the Prospectus (or any amendment or supplement thereto), or, in the case
of (ii) above, provided such settlement is effected with the written
consent of the Company.
This indemnity agreement is subject to the condition that, insofar as it
relates to any untrue statement, alleged untrue statement, omission or alleged
omission made in a preliminary prospectus or preliminary prospectus supplement,
but eliminated or remedied in the Prospectus, such indemnity agreement shall not
inure to the benefit of any Underwriter from whom the person asserting any loss,
liability, claim or damage purchases the Bonds which are the subject thereof (or
to the benefit of any person who controls such Underwriter) if such Underwriter
fails to send or give a copy of the Prospectus (excluding documents incorporated
by reference) to such person prior to or together with written confirmation of
the sale of such Bonds to such person and the delivery thereof would have
constituted a defense to the claim by such person.
In no case shall the Company be liable under this indemnity agreement with
respect to any claim made against any Underwriter or any such controlling person
unless the Company shall be notified in writing of the nature of the claim
within a reasonable time after the assertion thereof, but failure to so notify
the Company shall not relieve it from any liability which it may have otherwise
than on account of this indemnity
10
agreement. The Company shall be entitled to participate at its own expense
in the defense, or, if it so elects, within a reasonable time after receipt
of such notice, to assume the defense of any suit brought to enforce any
such claim, but if it so elects to assume the defense, such defense shall
be conducted by counsel chosen by it and approved by the Underwriter or
Underwriters or controlling person or persons, defendant or defendants in
any suit so brought, which approval shall not be unreasonably withheld. In
the event that the Company elects to assume the defense of any such suit
and retains such counsel, the Underwriter or Underwriters or controlling
person or persons, defendant or defendants in the suit shall thereafter
bear the fees and expenses of any additional counsel retained by them. In
the event that the parties to any such action (including impleaded parties)
include both the Company and one or more Underwriters and any such
Underwriter shall have been advised by counsel chosen by it and
satisfactory to the Company that there may be one or more legal defenses
available to it which are different from or additional to those available
to the Company, the Company shall not have the right to assume the defense
of such action on behalf of such Underwriter and will reimburse such
Underwriter and any person controlling such Underwriter as aforesaid for
the reasonable fees and expenses of any counsel retained by them, it being
understood that the Company shall not, in connection with any one action or
separate but similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expense of more than one separate firm of attorneys for
all such Underwriters and controlling persons, which firm shall be
designated in writing by the Representatives. The Company agrees to notify
the Representatives within a reasonable time of the assertion of any claim
against it, any of its officers or directors or any person who controls the
Company within the meaning of the Act or the 1934 Act, in connection with
the sale of the Bonds.
(b) Each Underwriter severally agrees that it will indemnify and hold
harmless the Company, its directors, and each of its officers who signed
the Registration Statement and each person, if any, who controls the
Company within the meaning of the Act or the 1934 Act, to the same extent
as the indemnity contained in subsection (a) of this Section, but only with
respect to statements or omissions made in the registration statement as it
became effective, or in any amendment thereto, or in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written
information respecting the Underwriters furnished to the Company by or on
behalf of such Underwriter through the Representatives expressly for use in
the Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto). In case any action shall be brought
against the Company or any person so indemnified based on the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) and in respect of which indemnity may be sought against
any Underwriter, such Underwriter shall have the rights and duties given to
the Company, and the Company and each person so indemnified shall have the
rights and duties given to the Underwriters, by the provisions of
subsection (a) of this Section.
(c) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a)
or (b) above, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other
from the offering of the Bonds and also the relative fault of 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 as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact, or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (c) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim
which is the subject of this subsection (c). Notwithstanding the provisions
of this subsection (c), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Bonds
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. The Underwriters' obligations in this
subsection (c) to contribute are several in proportion to their respective
underwriting obligations and not joint.
11
(d) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act or the 1934 Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of the Act or
the 1934 Act.
SECTION 9. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in the Underwriting
Agreement and/or contained in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or any controlling
person of any Underwriter, or by or on behalf of the Company, and shall survive
payment for and delivery of the Bonds.
SECTION 10. Effective Date of the Underwriting Agreement and Termination
Thereof. (a) The Underwriting Agreement shall become effective at the time of
the initial public offering by the Underwriters of any of the Bonds. The time of
the initial public offering shall mean 12:00 noon, New York City time, on the
first full business day after the Underwriting Agreement is executed or at such
time as the Representatives may authorize the sale of the Bonds to the public by
the Underwriters or other securities dealers, whichever shall first occur. The
Representatives or the Company may prevent the Underwriting Agreement from
becoming effective without liability of any party to any other party, except as
otherwise provided in the Underwriting Agreement, by giving the notice indicated
below in this Section prior to the time the Underwriting Agreement would
otherwise become effective as herein provided.
(b) The Representatives shall have the right to terminate the Underwriting
Agreement by giving the notice indicated below in this Section at any time at or
prior to the Time of Delivery if (i) the Company shall have sustained since the
respective dates as of which information is given in the Prospectus any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree; or (ii) since the respective
dates as of which information is given in the Prospectus there shall have been
any material increase in the long-term debt, or any material adverse change, or
any development involving a prospective material adverse change, in or affecting
the general business affairs, management, financial position, results of
operations, or business prospects of the Company and its subsidiaries considered
as one enterprise, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause (i) or
(ii), in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Bonds on
the terms and in the manner contemplated in the Prospectus; or (iii) there shall
have occurred the outbreak or escalation of hostilities involving in a
significant way the armed forces of the United States, or the declaration by the
United States, on or after the date of the Underwriting Agreement, of a national
emergency or war, or there shall have occurred a general suspension or
limitation of trading in securities on the New York or American Stock Exchanges,
or the establishment of minimum prices on either such Exchange, or a general
moratorium on commercial banking activities in New York is declared by either
federal or New York state authorities, the effect of which in the judgment of
the Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Bonds on the terms and in the manner
contemplated in the Prospectus. If the Representatives shall so terminate the
Underwriting Agreement, such termination shall be without liability of any party
to any other party except as otherwise provided in the Underwriting Agreement.
(c) If the Representatives elect to prevent the Underwriting Agreement from
becoming effective or to terminate the Underwriting Agreement as provided in
this Section, the Company and each other Underwriter shall be notified promptly
by the Representatives, by telephone or telegram, confirmed by letter. If the
Company elects to prevent the Underwriting Agreement from becoming effective as
provided in this Section, the Representatives shall be notified promptly by the
Company by telephone or telegram, confirmed by letter.
SECTION 11. Default of Underwriters. If any one or more of the Underwriters
shall fail at the Time of Delivery to purchase the amount of Bonds which it or
they are obligated to purchase hereunder (the "Defaulted Bonds"), then the
Representatives shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted Bonds in
such amounts as may be agreed upon and upon the terms herein set forth. If,
however,
12
during such 24 hours the Representatives shall not have completed such
arrangements for the purchase of all of the Defaulted Bonds, then the Company
shall be entitled to a further period of 24 hours within which to procure
another party or parties satisfactory to the Representatives to purchase all of
such Defaulted Bonds on such terms. If, after giving effect to any arrangements
for the purchase of Defaulted Bonds by the Representatives and the Company as
provided above, then:
(a) if the amount of Defaulted Bonds does not exceed 10% of the
aggregate principal amount of the Bonds being sold hereunder, the
non-defaulting Underwriters shall be obligated to purchase severally the
full amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the amount of Defaulted Bonds exceeds 10% of the aggregate
principal amount of the Bonds being sold hereunder, the Underwriting
Agreement shall terminate without any liability on the part of the Company
or any non-defaulting Underwriter.
The termination of the Underwriting Agreement pursuant to this Section
shall be without liability on the part of the Company or any of said
non-defaulting Underwriters, except for the respective obligations of the
Company and the Underwriters pursuant to Section 8 and except that the Company
shall be obligated to reimburse the Underwriters for their out-of-pocket
expenses (including reasonable fees and disbursements of counsel for the
Underwriters) incurred in connection with the offering if the Underwriting
Agreement could have been terminated by the Representatives pursuant to Sections
6 or 10(b).
Nothing herein shall relieve any Underwriter so defaulting from liability,
if any, for such default.
In the event of a default by any one or more Underwriters as set forth in
this Section, either the Representatives or the Company shall have the right to
postpone the Time of Delivery for an additional period not exceeding 7 days in
order that any required changes in the Registration Statement and Prospectus or
in any other documents or arrangements may be effected.
SECTION 12. Notices. Except as otherwise provided in the Underwriting
Agreement, all communications under the Underwriting Agreement shall be in
writing, and, if sent to the Underwriters, shall be mailed, delivered or
telecopied and confirmed to the address of the Representatives, as set forth in
the Underwriting Agreement (except that any notice to an Underwriter pursuant to
Section 8 hereof shall be sent to it at its address set forth in the copies of
the Underwriters' Questionnaires furnished to the Company), or, if sent to the
Company shall be mailed or telecopied and confirmed to it at ▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or delivered to it at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇ for the attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President and
Treasurer.
SECTION 13. Parties. The Underwriting Agreement shall inure to the benefit
of and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in the Underwriting Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors and the controlling
persons and the directors and officers referred to in Section 8, any legal or
equitable right, remedy or claim under or in respect of the Underwriting
Agreement or any provision herein contained; the Underwriting Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of the parties hereto and their respective successors and said
controlling persons, directors and officers and for the benefit of no other
person, firm or corporation. No purchaser of any Bonds from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. Choice of Law. The Underwriting Agreement shall be construed in
accordance with, and governed by, the laws of the State of Illinois.
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