Northern Illinois Gas Company
Form 10-Q
Exhibit 1.01
NORTHERN ILLINOIS GAS COMPANY
$50,000,000
FIRST MORTGAGE BONDS
6.75% SERIES DUE JUNE 1, 2002
UNDERWRITING AGREEMENT
June 3, 1997
Dear Sirs:
Northern Illinois 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"), $50,000,000 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 to purchase from
the Company, the principal amount of Bonds set forth opposite the name of such
Underwriters in Schedule I hereto on the following terms and conditions:
Aggregate principal amount of Bonds to be
purchased:.............................. $50,000,000
Rate of interest per annum to be borne by
the Bonds (payable semiannually):....... 6.75% (such rate to be a multiple of .001%)
Maturity date of the Bonds:.............. June 1, 2002
Price to be paid to the Company for the 99.667% of the principal amount of the
Bonds: 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 99.790% of the principal amount of the
Bonds:.................................. Bonds plus accrued interest from the date
of Supplemental Indenture to the date of
delivery of the Bonds. (If other, give
details.)
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Place for delivery of Bonds:............. The Depository Trust Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Date and time of Time of Delivery:....... June 10, 1997 at 9:00 a.m. Chicago time
Place for checking Bonds on the business
day prior to Time of Delivery:.......... The Depository Trust Company, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Redemption and Sinking Fund:............. Any redemption provisions will be as set
forth on Schedule II hereto. No sinking
fund will be provided.
Address for notices per Section 12 of the
General Terms and Conditions of
Underwriting Agreement:................. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇-▇▇▇▇▇▇▇
Vice President
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 the
Underwriters.
Very truly yours,
Northern Illinois Gas Company
By __________________________________
Vice President and
Treasurer
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By __________________________________
Vice President
On behalf of itself and as
Representative of each of the
Underwriters named in Scheduled I
hereto.
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SCHEDULE I
PRINCIPAL
AMOUNT OF
NAME OF UNDERWRITER ▇▇▇▇▇
------------------- -----------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated............................ $12,500,000
ABN AMRO Chicago Corporation................................. 12,500,000
First Chicago Capital Markets, Inc........................... 12,500,000
▇▇▇▇▇ ▇▇▇▇▇▇ Inc............................................. 12,500,000
-----------
Total...................................................... $50,000,000
===========
SCHEDULE II
Redemption. The Bonds may not be called for redemption by the Company prior
to June 1, 2001. On June 1, 2001 and thereafter until maturity on June 1, 2002,
the Bonds may be redeemed at the Company's option, on not less than 30 nor more
than 45 days notice, 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
date fixed for redemption.
ANNEX A
NORTHERN ILLINOIS GAS COMPANY
$50,000,000
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 $50,000,000 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 ▇▇▇▇▇▇ Trust and
Savings Bank, 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 and August 1, 1996 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 April 18, 1994 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.
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(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 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, 1996 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.
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(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.
(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.
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 ▇▇▇▇▇, Brown & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (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 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.
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(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 and to arrange for the determination of the legality of the Bonds
for purchase by institutional investors; 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
5
the Company, Rule 158), which need not be certified by independent public
accountants unless required 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 $6,500 in the aggregate), (iv) any fees charges 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 10(b), or is prevented by the Company
from becoming effective in accordance with the provisions of Section 10(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
▇▇▇▇▇, Brown & ▇▇▇▇▇, counsel for the Company, 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,
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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;
(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 a 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
7
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 notes thereto and supporting 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 ▇▇▇▇▇▇▇, 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
8
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 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 amounts set forth
in "Summary Information--Consolidated Financial Information" and any other
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 and 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
9
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 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.
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 Underwriter 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
10
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 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 expense 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.
11
(c) 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
12
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, 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 Section 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
P.O. Box 190, Aurora, Illinois 60507-0190, 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.
13