-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PDvWBezleN1I+0RBi0+DiGKfV+MafjSVtdl/ijrfr2Vtf5C5YW1RZeUE/le6Ejsr wNqCctsnSwmGLnFCbyWpew== 0000950131-97-006645.txt : 19971111 0000950131-97-006645.hdr.sgml : 19971111 ACCESSION NUMBER: 0000950131-97-006645 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19971110 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NIPSCO CAPITAL MARKETS INC CENTRAL INDEX KEY: 0000851912 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 351762940 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-39911 FILM NUMBER: 97712145 BUSINESS ADDRESS: STREET 1: 5265 HOHMAN AVE CITY: HAMMOND STATE: IN ZIP: 46320 BUSINESS PHONE: 2198535200 MAIL ADDRESS: STREET 1: 5265 HOHMAN AVENUE CITY: HAMMOND STATE: IN ZIP: 46320 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NIPSCO INDUSTRIES INC CENTRAL INDEX KEY: 0000823392 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 351719974 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-39911-01 FILM NUMBER: 97712146 BUSINESS ADDRESS: STREET 1: 5265 HOHMAN AVE CITY: HAMMOND STATE: IN ZIP: 46320 BUSINESS PHONE: 2198535200 MAIL ADDRESS: STREET 1: 5265 HOHMAN AVENUE CITY: HAMMOND STATE: IN ZIP: 46320-1775 S-3 1 FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 10, 1997 REGISTRATION NO. 333- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- NIPSCO CAPITAL MARKETS, INC. NIPSCO INDUSTRIES, INC. AS ISSUER AND REGISTRANT OF AS ISSUER AND REGISTRANT OF DEBT SECURITIES OBLIGATIONS (EXACT NAME OF REGISTRANT AS SPECIFIED PURSUANT TO THE SUPPORT AGREEMENT IN ITS CHARTER) (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) INDIANA INDIANA (STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION) 35-1762940 35-1719974 (I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.) 5265 HOHMAN AVENUE HAMMOND, INDIANA 46320 (219) 853-5200 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES) --------------- FRANCIS P. GIROT, JR. NIPSCO INDUSTRIES, INC. 5265 HOHMAN AVENUE HAMMOND, INDIANA 46320 (219) 853-6970 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) COPIES OF COMMUNICATIONS TO: ANDREW A. KLING MITCHELL L. HOLLINS SCHIFF HARDIN & WAITE SONNENSCHEIN NATH & ROSENTHAL 7200 SEARS TOWER 8000 SEARS TOWER CHICAGO, ILLINOIS 60606 CHICAGO, ILLINOIS 60606 (312) 876-1000 (312) 876-8144 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [_] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_] CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
PROPOSED PROPOSED MAXIMUM MAXIMUM AGGREGATE AMOUNT OF TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING OFFERING REGISTRATION SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT(1) PRICE(1) FEE - --------------------------------------------------------------------------------------------------------- % Senior Notes Due 2027................ $75,000,000 100% $75,000,000 $22,727.27 - --------------------------------------------------------------------------------------------------------- Obligations Pursuant to the Support Agree- ment...................................... (2) (2) (2) (2) - ---------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------- (1)Estimated solely for the purpose of calculating the registration fee. (2)No separate consideration will be received for the obligations pursuant to the Support Agreement. THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A + +REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE + +SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY + +OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT + +BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR + +THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE + +SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE + +WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES + +LAWS OF ANY SUCH JURISDICTION. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED NOVEMBER 10, 1997 $75,000,000 NIPSCO CAPITAL MARKETS, INC. % SENIOR NOTES DUE 2027 ENTITLED TO THE BENEFIT OF A SUPPORT AGREEMENT PROVIDING FOR THE PAYMENT OF PRINCIPAL AND INTEREST BY NIPSCO INDUSTRIES, INC. ----------- The % Senior Notes Due 2027 (the "Notes"), which will mature on December 1, 2027, are being offered by NIPSCO Capital Markets, Inc., an Indiana corporation ("Capital"). Interest on the Notes will be payable semiannually on June 1 and December 1 of each year, commencing June 1, 1998. Each holder of the Notes may require Capital to repurchase all or a portion of the Notes owned by such holder on , , and at a purchase price equal to 100% of the principal amount thereof plus accrued interest thereon. See "Description of the Notes--Purchase at Option of Holder." The Notes are entitled to the benefits of a Support Agreement, dated as of April 4, 1989 (as amended, the "Support Agreement"), between Capital and its parent company, NIPSCO Industries, Inc. ("Industries"), providing for the payment of principal and interest, if any, on the Notes in the event of default of Capital. See "Description of the Support Agreement." The Notes will not be redeemable at the option of Capital and will not be entitled to any sinking fund. See "Description of the Notes--General." The Notes will be represented by one or more Global Securities registered in the name of the nominee of The Depository Trust Company ("DTC"). Beneficial interests in the Global Securities will be shown on, and transfers thereof will be effected only through, records maintained by DTC and its participants. Except as described herein, Notes in definitive form will not be issued. The Notes will be issued only in denominations of $1,000 and integral multiples thereof. See "Description of the Notes." ----------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. -----------
INITIAL PUBLIC OFFERING UNDERWRITING PROCEEDS TO PRICE DISCOUNT CAPITAL(1)(3) ------------ ------------ ------------- Per Note................................ % % % Total................................... $ $ $
- ----- (1) Plus accrued interest, if any, from December 1, 1997. (2) Capital and Industries have agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933. (3) Before deducting expenses payable by Capital estimated at $140,000. ----------- The Notes offered hereby are offered severally by the Underwriters, as specified herein, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part. It is expected that the Notes will be ready for delivery in book-entry form only through the facilities of DTC in New York, New York, on or about , 1997, against payment therefor in immediately available funds. GOLDMAN, SACHS & CO. MORGAN STANLEY DEAN WITTER ----------- The date of this Prospectus is , 1997. CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH NOTES, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING." ---------------- AVAILABLE INFORMATION Capital and Industries have filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (including any amendments thereto, the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the Notes. This Prospectus does not contain all of the information set forth in the Registration Statement and the exhibits and schedules thereto, certain portions of which have been omitted pursuant to the rules of the Commission. Statements made in this Prospectus as to the contents of any contract, agreement or other document are not necessarily complete. With respect to each such contract, agreement or other document filed or incorporated by reference as an exhibit to the Registration Statement, reference is made to such exhibit for a more complete description of the matter involved, and each such statement is qualified in its entirety by such reference. Industries is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Commission. Reports, proxy statements and other information filed by Industries with the Commission may be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices located at Suite 1400, 500 West Madison Street, Chicago, Illinois 60661 and at Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of such materials may be obtained from the Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such material also may be accessed electronically by means of the Commission's home page on the Internet at http://www.sec.gov. Such reports, proxy statements and other information concerning Industries may also be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005, the Chicago Stock Exchange, 440 South LaSalle Street, Chicago, Illinois 60605, and the Pacific Stock Exchange, 301 Pine Street, San Francisco, California 94104, on which exchanges certain of Industries' securities are listed. On September 25, 1992, the staff of the Commission informed Industries and Capital by letter that it would not recommend enforcement action to the Commission if Capital did not file periodic reports pursuant to Sections 13 and 15(d) of the Exchange Act, subject to Industries' compliance with the conditions set forth therein. In reliance upon such letter, no documents have been filed or will be filed by Capital under the Exchange Act. Capital does not intend to issue any periodic or other reports to holders of the Notes. Capital has been advised by the Commission's staff that financial information regarding Capital need not be included in any registration statement on Form S-3 filed by Capital and Industries with respect to the Notes and the Support Agreement. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by Industries with the Commission are incorporated herein by reference: (a)Industries' Annual Report on Form 10-K for the fiscal year ended December 31, 1996; and (b) Industries' Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June 30, 1997. 2 All documents subsequently filed by Industries pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering of the Notes shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference in this Prospectus shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. INDUSTRIES WILL PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED IN THIS PROSPECTUS BY REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE INTO THE INFORMATION THAT THE PROSPECTUS INCORPORATES. REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO NINA M. RAUSCH, SECRETARY, NIPSCO INDUSTRIES, INC., 5265 HOHMAN AVENUE, HAMMOND, INDIANA 46320, TELEPHONE NUMBER (219) 853-5199. THE COMPANIES CAPITAL Capital was incorporated in Indiana in 1989. Capital was organized by Industries to engage in financing activities that provide funds for use in Industries' business operations and those of its direct and indirect wholly- owned subsidiaries, excluding Northern Indiana Public Service Company ("Northern Indiana"). Industries owns all of the 1,000 authorized capital shares of Capital. On April 4, 1989, Capital and Industries entered into the Support Agreement, which subsequently was amended as of May 15, 1989, December 10, 1990, and February 14, 1991. Under the Support Agreement, Industries has agreed, among other things, to ensure the timely payment of principal, premium, if any, and interest owed on any debt securities issued by Capital, with the limitation that no holder of such debt securities will have recourse to or against the stock or assets of Northern Indiana, or any interest of Industries or Capital therein. See "Description of the Support Agreement." On March 27, 1991, the Commission issued an order pursuant to Section 6(c) of the Investment Company Act of 1940, as amended (the "Investment Company Act"), granting an exemption to Capital from all of the provisions of the Investment Company Act, subject to Capital's compliance with the conditions set forth therein. The principal executive offices of Capital are located at 5265 Hohman Avenue, Hammond, Indiana 46320. Its telephone number is (219) 853-5200. INDUSTRIES Industries is an energy/utility-based holding company, incorporated in Indiana in 1987, providing electric energy, natural gas and water to the public through its six wholly-owned regulated subsidiaries: Northern Indiana Public Service Company ("Northern Indiana"); Kokomo Gas and Fuel Company ("Kokomo Gas"); Northern Indiana Fuel and Light Company, Inc. ("NIFL"); Crossroads Pipeline Company ("Crossroads"); Indianapolis Water Company ("IWC"); and Harbour Water Corporation ("Harbour"). The principal executive offices of Industries are located at 5265 Hohman Avenue, Hammond, Indiana 46320, and its telephone number is (219) 853-5200. 3 On March 25, 1997, Industries acquired IWC Resources Corporation (IWCR). IWCR's subsidiaries include two regulated water utilities (IWC and Harbour), which at September 30, 1997 served approximately 242,500 customers, and five non-utility companies providing utility-related services including installation, repair and maintenance of underground pipelines and utility line locating and marking. The two primary non-utility subsidiaries are Miller Pipeline Corporation ("Miller") and SM&P Utility Resources, Inc. ("SM&P"). Industries also provides non-regulated energy/utility-related services including energy marketing and trading; power generation; gas transmission, supply and storage; installation, repair and maintenance of underground pipelines; utility line locating and marking; and related products targeted at customer segments principally through the following wholly-owned subsidiaries: NIPSCO Development Company, Inc. ("Development"); NIPSCO Energy Services, Inc. ("Services"); Primary Energy, Inc. ("Primary"); Miller; and SM&P. Northern Indiana, Industries' largest and dominant subsidiary, was incorporated in Indiana in 1912 and supplies electricity and natural gas to the public in 30 counties in the northern part of Indiana, serving an area of about 12,000 square miles with a population of approximately 2,188,000. At September 30, 1997, it supplied approximately 414,800 customers with electricity and approximately 651,500 customers with natural gas. For the twelve months ended September 30, 1997, approximately 58% of its revenues were derived from the sale of electricity and approximately 42% from the sale and transportation of natural gas. Kokomo Gas, which was incorporated in Indiana in 1917, and NIFL, which was incorporated in Indiana in 1906, both are engaged in supplying natural gas to the public in service territories contiguous to Northern Indiana's service territory. At September 30, 1997, Kokomo Gas and NIFL served approximately 33,100 and 32,600 customers, respectively. RATIOS OF EARNINGS TO FIXED CHARGES The following table sets forth Industries' ratio of earnings to fixed charges for the periods indicated:
TWELVE MONTHS ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, ----------------------------- 1997 1996 1995 1994 1993 1992 ------------- ----- ----- ----- ----- ----- Ratio of Earnings to Fixed Charges.................... 3.17x 3.21x 3.30x 3.10x 3.00x 2.74x
For the purpose of calculating the ratios of earnings to fixed charges, "earnings" consist of income from continuing operations before income taxes, and "fixed charges" consist of interest on all indebtedness, amortization of debt expense, the percentage of rental expense on operating leases deemed representative of the interest factor, and preferred stock dividend requirements of majority-owned subsidiaries. A statement setting forth the computation of ratio of earnings to fixed charges is filed as an exhibit to the Registration Statement of which this Prospectus is a part. USE OF PROCEEDS The net proceeds to Capital from the issue and sale of the Notes offered hereby are estimated to be approximately $ million, after deducting underwriting discounts and estimated expenses of this offering payable by Capital. Capital will use $72,500,000 of the net proceeds of this offering to repay in full Capital's obligations under its Zero Coupon Notes Due December 1, 1997, and Capital will advance the remaining balance of such net proceeds to Industries which will use such funds for its general corporate purposes. 4 DESCRIPTION OF THE NOTES The Notes will be issued as a series of Debt Securities (as defined below) under an Indenture, dated as of February 14, 1997, as amended or modified from time to time (the "Indenture"), between Capital and The Chase Manhattan Bank, as trustee (the "Trustee"). The Indenture is subject to, and governed by, the Trust Indenture Act of 1939, as amended. The following summary of certain provisions of the Notes and the Indenture does not purport to be complete and is qualified in its entirety by reference to the actual provisions of the Notes and the Indenture. Capitalized terms used but not defined herein shall have the meanings given to them in the Notes or the Indenture, as the case may be. The forms of the Indenture and the Notes are filed as exhibits to the Registration Statement. The term "Debt Securities," as used in this Prospectus, refers to all debt securities, including the Notes, issued and issuable from time to time under the Indenture. GENERAL The Notes will be limited to $75,000,000 aggregate principal amount and will mature on December 1, 2027. The Notes will bear interest at the rate of % per annum from December 1, 1997, payable semiannually in arrears on June 1 and December 1 of each year, commencing June 1, 1998, to the persons in whose names the Notes are registered at the close of business on the preceding May 15 or November 15, each a record date, as the case may be, except that in the case of Global Securities representing Notes, such payment will be made in accordance with arrangements then in effect among Capital, the Trustee and the Depositary. Principal of and interest on the Notes will be payable (and the Notes may be presented for repayment) at the office or agency of Capital maintained for such purposes in the Borough of Manhattan, The City of New York, currently the corporate trust office of the Trustee. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. The Notes will not be subject to any sinking fund. Capital will not have the option to redeem the Notes prior to maturity. Capital is not required to repurchase Notes from Holders prior to maturity except as described below under "--Purchase at Option of Holder." The covenants contained in the Indenture would not necessarily afford the holders of the Notes protection in the event of a highly leveraged transaction or a takeover attempt nor do they contain provisions requiring the repurchase of any the Notes upon a change in control of Capital. In addition, the Indenture does not contain any provisions that would limit the ability of Capital and its subsidiaries to incur unsecured indebtedness. All Debt Securities, including the Notes, issued and to be issued under the Indenture will be unsecured general obligations of Capital and will rank pari passu with all other unsecured and unsubordinated indebtedness of Capital from time to time outstanding. The Indenture does not limit the aggregate principal amount of Debt Securities that may be issued thereunder and Debt Securities may be issued thereunder from time to time in one or more series up to the aggregate principal amount from time to time authorized by Capital for each series. Capital has heretofore issued $300,000,000 principal amount of Medium-Term Notes constituting a separate series of Debt Securities under the Indenture all of which principal amount remains outstanding on the date hereof. Capital may, from time to time, without the consent of the Holders, provide for the issuance of Notes or other Debt Securities under the Indenture in addition to the aforementioned Medium-Term Notes and the $75,000,000 aggregate principal of Notes offered hereby. The Notes are a new issue of securities with no established trading market and will not be listed on any securities exchange. Capital has been advised by the Underwriters that the Underwriters intend to make a market in the Notes but are not obligated to do so and may discontinue market making at any time without notice. No assurance can be given as to the existence or liquidity of a secondary market for the Notes. 5 DELIVERY AND FORM The Notes initially will be represented by a single book entry global security ("Global Security") deposited with DTC and registered in the name of the nominee of DTC. Capital has established a depositary arrangement with DTC with respect to the Notes, the terms of which are summarized below. Each of the Notes will be available for purchase in denominations of $1,000 and integral multiples thereof. Unless and until certificated Notes are issued under the limited circumstances described below, no Beneficial Owner of a Note shall be entitled to receive a definitive certificate representing a Note. So long as DTC or any successor depositary (collectively, the "Depositary") or its nominee is the registered holder of the Global Security, the Depositary, or such nominee, as the case may be, will be considered to be the sole owner or holder of the Notes represented thereby for all purposes of the Indenture. Investors' interests in the Global Security will be represented through financial institutions acting on their behalf as direct and indirect participants in the Depositary. No Global Security may be transferred except as a whole by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or such nominee to a successor of the Depositary or a nominee of such successor. Except as otherwise provided below, the Beneficial Owners of the Global Security will not be entitled to receive physical delivery of certificated Notes and will not be considered the Holders thereof for any purpose under the Indenture, and no Global Security shall be exchangeable or transferable. Accordingly, each Beneficial Owner must rely on the procedures of the Depositary and, if such Beneficial Owner is not a Participant, on the procedures of the Participant through which such Beneficial Owner owns its interest in order to exercise any rights of a Holder under such Global Security or the Indenture. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in certificated form. Such limits and laws may impair the ability to transfer beneficial interests in the Global Security. A Global Security will be exchangeable for certificated Notes of like tenor and terms and of differing authorized denominations in a like aggregate principal amount, only if (i) the Depositary notifies Capital that it is unwilling or unable to continue as Depositary for the Global Securities or Capital becomes aware that the Depositary has ceased to be a clearing agency registered under the Exchange Act and, in any such case, Capital shall not have appointed a successor to the Depositary within 90 days thereafter, (ii) Capital, in its sole discretion, determines that the Global Security shall be exchangeable for certificated Notes or (iii) an Event of Default (or event which with the giving of notice or lapse of time would constitute an Event of Default) shall have occurred and be continuing with respect to the Notes under the Indenture. Upon any such exchange, the certificated Notes shall be registered in the names of the Beneficial Owners of the Notes represented by the Global Security, which names shall be provided by the Depositary's relevant Participants (as identified by the Depositary) to the Trustee. The following is based on information furnished by DTC: DTC will act as securities Depositary for the Notes. The Notes will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully registered Global Security will be issued for the Notes in the aggregate principal amount of such issue and will be deposited with DTC. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited 6 securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants of DTC ("Direct Participants") include securities brokers and dealers (including the Underwriters), banks, trust companies, clearing corporations and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to DTC's system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchases of Notes under DTC's system must be made by or through Direct Participants, which will receive a credit for such Notes on DTC's records. The ownership interest of each actual purchaser of each Note represented by a Global Security ("Beneficial Owner") is in turn to be recorded on the records of Direct Participants and Indirect Participants. Beneficial Owners will not receive written confirmation from DTC's of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct Participants or Indirect Participants through which such Beneficial Owner entered into the transaction. Transfers of ownership interests in a Global Security representing Notes are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners of a Global Security representing Notes will not receive certificated Notes representing their ownership interests therein, except in the event that use of the book-entry system for such Notes is discontinued. To facilitate subsequent transfers, all Global Securities representing Notes which are deposited with, or on behalf of, DTC are registered in the name of DTC's nominee, Cede & Co. The deposit of Global Securities with, or on behalf of, DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Global Securities representing the Notes; the Depositary's records reflect only the identity of the Direct Participants to whose accounts such Notes are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Neither DTC nor Cede & Co. will consent or vote with respect to any Global Security. Under its usual procedures, DTC mails an Omnibus Proxy to Capital as soon as possible after the applicable record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Notes are credited on the applicable record date (identified in a listing attached to the Omnibus Proxy). Principal, premium, if any, and/or interest, if any, payments on a Global Security will be made in immediately available funds to DTC. DTC's practice is to credit Direct Participants' accounts on the applicable payment date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on such date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name", and will be the responsibility of such Participant and not of DTC, the Trustee or Capital, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium, if any, and/or interest, if any, to DTC is the responsibility of Capital and the Trustee, 7 disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct Participants and Indirect Participants. A Beneficial Owner shall give notice to elect to have its Notes repaid by Capital, through its Participant, to the Trustee, and shall effect delivery of such Notes by causing the Direct Participant to transfer the Participant's interest in the Global Security representing such Notes, on the Depositary's records, to the Trustee. The requirement for physical delivery of book-entry Notes in connection with a demand for repayment will be deemed satisfied when the ownership rights in the Global Security representing such Notes are transferred by Direct Participants on the Depositary's records and followed by a book-entry credit of tendered Notes to the Trustee's account. The Depositary may discontinue providing its services as securities depositary with respect to the Notes at any time by giving reasonable notice to Capital or the Trustee. Under such circumstances, in the event that a successor securities depositary is not obtained, certificated Notes are required to be printed and delivered. Capital may decide to discontinue use of the system of book-entry transfers through the Depositary (or a successor securities depositary). In that event, certificated Notes will be printed and delivered. The information in this section concerning the Depositary and the Depositary's system has been obtained from sources that Capital believes to be reliable, but Capital takes no responsibility for the accuracy thereof. SAME-DAY SETTLEMENT AND PAYMENT Settlement for the Notes will be made by the Underwriters in immediately available funds. So long as the Notes are represented by the Global Security, all payments of principal and interest will be made by Capital in immediately available funds. The Notes will trade in DTC's Same-Day Funds Settlement System until maturity, and secondary market trading activity in the Notes will therefore be required by DTC to settle in immediately available funds. PURCHASE AT OPTION OF HOLDER Each Holder of the Notes will have the right to require Capital to repurchase all or a portion of the Notes in increments of $1,000 owned by such Holder (the "Put Option") on , and (each such date being a "Put Option Exercise Date") at a purchase price equal to 100% of the principal amount of the Notes tendered by such Holder plus accrued interest thereon. On and after each Put Option Exercise Date, interest will cease to accrue on the portion of the Notes tendered for repayment. On or before each Put Option Exercise Date, Capital shall deposit with a paying agent (or the Trustee) money sufficient to pay the principal of and any accrued interest on the Notes to be tendered for repayment. Capital will comply with the provisions of Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Securities Exchange Act of 1934 if required and will file Schedule 13E-4 or any other schedule if required thereunder in connection with any offer by the Company to purchase the Notes. BOOK-ENTRY NOTES. So long as the Notes are held under the book-entry only system described above, DTC, its nominee, Cede & Co. or any of DTC's Direct or Indirect Participants as registered Holders of the Notes will be entitled to tender the Notes on each Put Option Exercise Date for repayment and any such tenders will be effected by means of DTC's Repayment Option Procedures. During each Put Option Notice Period, DTC will receive instructions from its Participants (acting on behalf of owners of beneficial interests in the Notes) to tender the Notes for repayment under DTC's 8 Repayment Option Procedures. For book-entry notes, a Holder must provide Capital with notice of its intention to exercise its Put Option not less than 30 days nor more than 60 days prior to the Put Option Exercise Date applicable to such Put Option (the "Put Option Notice Period"). Such notice, once given, will be irrevocable unless waived in writing by Capital. Such tenders for repayment will be made by DTC by means of a book-entry credit of the Notes to the account of the Trustee, provided that DTC receives instructions from tendering Participants by Noon on the last day that is a business day during the applicable Put Option Notice Period. Promptly after the recording of any such book-entry credit, DTC will provide the Trustee an Agent Put Daily Activity Report in accordance with its Repayment Option Procedures, identifying the Notes and the aggregate principal amount thereof as to which such tenders for repayment have been made. OWNERS OF BENEFICIAL INTERESTS IN NOTES WHO WISH TO EFFECTUATE THE TENDER AND REPAYMENT OF SUCH NOTES MUST INSTRUCT THEIR RESPECTIVE DTC PARTICIPANT OR PARTICIPANTS A REASONABLE PERIOD OF TIME IN ADVANCE OF THE EXPIRATION OF THE APPLICABLE PUT OPTION NOTICE PERIOD. CERTIFICATED NOTES. If at any time the use of a book-entry only system through DTC (or any successor securities Depositary) is discontinued with respect to the Notes as a result of the circumstances described above under "Delivery and Form," tenders for repayment of such Notes on each Put Option Exercise Date shall be made according to the following procedures. The Trustee must receive at the principal office of the Trustee in New York City, at least 30, but not more than 60, days prior to the applicable Put Option Exercise Date but no later than 5:00 p.m. New York City time on the last day for giving notice, (i) the Notes with the form entitled "Option to Elect Repayment" on the reverse of the Note duly completed or (ii) a telegram, telex, facsimile transmission or letter from a member of national securities exchange or the National Association of Securities Dealers, Inc., or a commercial bank or a trust company in the United States of America, setting forth the name of the registered Holder of the Note, the principal amount of the Note to be repaid, the amount of the Note to be repurchased, a statement that the option to elect repayment is being exercised thereby and a guarantee that the Note to be repaid with the form entitled "Option to Elect Repayment" on the reverse of the Note duly completed will be received by the Trustee not later than five business days after the date of such telegram, telex, facsimile transmission or letter and such Note and form duly completed are received by the Trustee by such fifth business day. Any such notice received by the Trustee during a Put Option Notice Period shall be irrevocable, unless waived in writing by Capital. All questions as to the validity, eligibility (including time of receipt) and the acceptance of any Note for repayment will be determined by Capital, whose determination will be final and binding. CONSOLIDATION, MERGER AND SALE Under the terms of the Indenture, neither Capital nor Industries may merge or consolidate with or into any other Corporation, or convey, transfer or lease their properties and assets substantially as an entirety unless (i) the Corporation formed by any such consolidation or into which it is merged or the Person which acquires by conveyance or transfer, or which leases, its properties and assets substantially as an entirety shall be a Corporation organized and existing under the laws of any domestic jurisdiction and shall expressly assume, in the case of Capital, its obligations under the Debt Securities and the Indenture and, in the case of Industries, its obligations under the Indenture and the Support Agreement, (ii) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time, would become an Event of Default, shall have occurred and be continuing, and (iii) Capital or Industries, as applicable, shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease complies with the Indenture and that all conditions precedent therein provided for relating to such transaction have been complied with. LIMITATION ON LIENS Neither Capital nor Industries will, nor will Industries permit any Subsidiary other than a Utility, to, issue, assume or guarantee any debt for money borrowed (for purposes of this paragraph, "Debt"), secured by any mortgage, security interest, pledge, lien or other encumbrance (herein referred to as 9 "mortgage") upon any property of Capital, Industries or any such Subsidiary (other than a Utility), except indebtedness issued by any such Subsidiary and owned by Industries or any other such Subsidiary (whether such property or indebtedness is owned at the date of the Indenture or thereafter acquired), without effectively securing the Notes equally and ratably with (or prior to) such Debt. The foregoing restrictions do not apply to (i) mortgages on any property, acquired, constructed or improved by Industries or any of the Subsidiaries other than the Utilities after the date of the Indenture which are created or assumed contemporaneously with, or within 120 days after, such acquisition or completion of such construction or improvement, or within six months thereafter pursuant to a firm commitment for financing arranged with a lender or investor within such 120-day period, to secure or provide for the payment of all or any part of the purchase price of such property or the cost of such construction or improvement incurred after the date of the Indenture, or, in addition to mortgages contemplated by clauses (ii) and (iii) below, mortgages on any property existing at the time of acquisition thereof, provided that the mortgages shall not apply to any property theretofore owned by Industries or any such Subsidiary other than, in the case of any such construction or improvement, any theretofore unimproved real property on which the property so constructed or the improvement is located; (ii) existing mortgages on any property or indebtedness of a corporation which is merged with or into or consolidated with Industries or a Subsidiary; (iii) mortgages on property or indebtedness of a corporation existing at the time such corporation becomes a Subsidiary; (iv) mortgages to secure Debt of a Subsidiary to Industries or to another Subsidiary other than a Utility; (v) mortgages in favor of the United States of America, any State, any foreign country or any department, agency or instrumentality or political subdivision of any such jurisdiction, to secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or the cost of constructing or improving the property subject to such mortgages, including, without limitation, mortgages to secure Debt of the pollution control or industrial revenue bond type; (vi) mortgages to secure loans to Industries or any Subsidiary other than a Utility maturing within 12 months from the creation thereof and made in the ordinary course of business; (vii) mortgages on any property (including any natural gas, oil or other mineral property) to secure all or part of the cost of exploration, drilling or development thereof or to secure Debt incurred to provide funds for any such purpose; (viii) mortgages existing on the date of the Indenture; and (ix) mortgages for the sole purposes of extending, renewing or replacing in whole or in part Debt secured by any mortgage referred to in the foregoing clauses (i) to (viii), inclusive, or this clause (ix); provided, however, that the principal amount of Debt secured thereby shall not exceed the principal amount of Debt so secured at the time of such extension, renewal or replacement, and that such extension, renewal or replacement shall be limited to all or a part of the property or indebtedness which secured the mortgage so extended, renewed or replaced (plus improvements on such property). Furthermore, such restrictions do not apply to the issuance, assumption or guarantee by Industries or any Subsidiary of Debt secured by a mortgage which would otherwise be subject to the foregoing restriction up to an aggregate amount which, together with all other secured Debt (not including secured Debt permitted under the foregoing exceptions), does not exceed 5 percent of consolidated net tangible assets of Industries and the Subsidiaries (other than the Utilities), determined in accordance with generally accepted accounting principles and as of a date not more than 90 days prior to the happening of the event for which such determination is being made. For purposes of the foregoing, "consolidated net tangible assets" means the total amount of assets appearing on a consolidated balance sheet of Industries and the Subsidiaries (other than the Utilities), less, without duplication, (i) all current liabilities (excluding any thereof which are by their terms extendable or renewable at the sole option of the obligor thereon without requiring the consent of the obligee to a date more than 12 months after the date on which the determination of consolidated net tangible assets is made), (ii) all reserves for depreciation and other asset valuation reserves but excluding any reserves for deferred Federal income taxes arising from accelerated amortization or otherwise, (iii) all intangible assets such as goodwill, trademarks, trade names, patents and unamortized debt discount and expense carried as an asset on said balance sheet, and (iv) all appropriate adjustments on account of minority interests of other persons holding common shares or stock in any Subsidiary. 10 EVENTS OF DEFAULT The Indenture provides, with respect to any series of Debt Securities outstanding thereunder, that any one or more of the following events that has occurred and is continuing shall constitute an Event of Default: (i) default in the payment of any interest upon any Debt Security of that series, when the same becomes due and payable and the continuance of such default for 30 days; (ii) default in the payment of the principal of or any premium, if any, on any Debt Security of that series when due, whether at maturity, upon redemption, by declaration or otherwise and continuance of such default for a period of three Business Days thereafter; (iii) default in the deposit of any sinking fund payment, when and as due by the terms of any Debt Securities of that series and the continuance of such default for three Business Days thereafter; (iv) default in the performance or breach of any covenant or agreement of Capital or Industries in the Indenture or the Support Agreement (other than those referred to in (i), (ii) and (iii) above) and the continuance thereof for 60 days after there shall have been given, by registered or certified mail, to Capital and Industries from the Trustee or from the Holders of at least 25 percent of the Outstanding Debt Securities of that series written notice specifying such default and stating that such notice is a "Notice of Default"; (v) certain events in bankruptcy, insolvency or reorganization of Capital, Industries or Northern Indiana; (vi) a default under any bond, debenture, note or other evidence of indebtedness for money borrowed by Capital (including a default with respect to Debt Securities of any series other than that series) or under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by Capital (including the Indenture), whether such indebtedness now exists or shall hereafter be created, which default shall constitute a failure to pay in excess of $5,000,000 of the principal or interest of such indebtedness when due and payable after the expiration of any applicable grace period with respect thereto or shall have resulted in such indebtedness in an amount in excess of $5,000,000 becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, without such indebtedness having been discharged, or such acceleration having been rescinded or annulled within a period of 90 days after there shall have been given, by registered or certified mail, to Capital by the Trustee or to Capital and the Trustee by the Holders of at least 25 percent in principal amount of the Outstanding Debt Securities of that series written notice specifying such default and stating that such notice is a "Notice of Default"; and (vii) any other Event of Default provided with respect to Debt Securities of that series. Each of Capital and Industries will be required to furnish annually to the Trustee a statement as to the performance by it of certain of its obligations under the Indenture and as to any default in such performance. The Holders of not less than a majority in principal amount of the Debt Securities may, on behalf of the Holders of all the Debt Securities, waive any past default under the Indenture with respect to the Debt Securities and its consequences, except a default (i) in the payment of the principal of or interest on any Debt Securities or (ii) in respect of a covenant or provision that cannot be modified or amended without the consent of the Holder of each outstanding Debt Security affected thereby. ACCELERATION OF MATURITY If an Event of Default occurs and is continuing with respect to Debt Securities of a particular series, the Trustee or the Holders of not less than 33 percent in principal amount of Outstanding Debt Securities of that series may declare the Outstanding Debt Securities of that series due and payable immediately. At any time after a declaration of acceleration with respect to Debt Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee therefor, the Holders of a majority in principal amount of the Outstanding Debt Securities of that series, by written notice to Capital, Industries and such Trustee, may rescind and annul such 11 declaration and its consequences if: (i) Capital or Industries has paid or deposited with the Trustee a sum sufficient to pay: (a) all overdue interest on all Debt Securities of that series, (b) the principal of (and premium, if any, on) any such Debt Securities which has become due otherwise than by such declaration of acceleration, and interest on such unpaid principal at the rate or rates prescribed therefor in such Debt Securities, (c) to the extent lawful, interest on overdue interest at the rate or rates prescribed therefor in such Debt Securities, and (d) all sums paid or advanced by such Trustee and the reasonable compensation, expenses, disbursements and advances of such Trustee, its agents and counsel, and any other amounts due the Trustee under the Indenture; and (2) all Events of Default with respect to Debt Securities of that series, other than the non-payment of the principal of such Debt Securities which have become due solely by such declaration of acceleration, have been cured or waived. No such rescission and annulment shall affect any subsequent default or impair any right consequent thereon. The Holders of not less than a majority in principal amount of the Outstanding Debt Securities of any series may, on behalf of the Holders of all the Debt Securities of such series and any related Coupons, waive any past default under the Indenture with respect to such series and its consequences, except a default (i) in the payment of the principal of (or premium, if any) or interest on any Debt Security of such series, or (ii) in respect of a covenant or provision that cannot be modified or amended without the consent of the Holder of each Outstanding Debt Security of such series affected thereby. Subject to the provisions in the Indenture relating to the duties of the Trustee thereunder, if an Event of Default with respect to Debt Securities of a particular series occurs and is continuing, such Trustee shall be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the Holders of Debt Securities of such series, unless such Holders shall have offered to such Trustee reasonable indemnity or security against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction. Subject to such provisions for the indemnification of the Trustee, the Holders of a majority in principal amount of the Outstanding Debt Securities of such series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee under the Indenture, or exercising any trust or power conferred on the Trustee with respect to the Debt Securities of that series; provided, that such direction shall not be in conflict with any rule of law or the Indenture, expose the Trustee to personal liability or be unduly prejudicial to Holders not joining therein, and the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. MODIFICATION OR WAIVER Modification and amendment of the Indenture may be made by Capital, Industries and the Trustee with the consent of the Holders of not less than a majority in principal amount of all Outstanding Debt Securities thereunder of any series that are affected by such modification or amendment; provided that no such modification or amendment may, without the consent of the Holder of each Outstanding Debt Security of such series: (i) change the Stated Maturity of the principal of or any installment of principal of or interest on any Debt Security (except as otherwise provided in the Indenture) of such series, (ii) reduce the principal amount or the rate of interest on, or any premium payable upon the redemption of, any Debt Security of such series, (iii) change any obligation of Capital to pay additional amounts in respect of any Debt Security of such series (except as otherwise provided in the Indenture), (iv) reduce the amount of principal of a Debt Security of such series that is an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Stated Maturity thereof, (v) change the place or currency of payment of principal of, or any premium or interest on, any Debt Security of such series, (vi) impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof or any Redemption Date therefor, (vii) reduce the above-stated percentage of Holders of Outstanding Debt Securities of such series necessary to modify or amend the Indenture or to consent to any waiver thereunder or reduce the requirements for voting or quorum 12 described below, (viii) change any obligation of Capital to maintain an office or agency in any requisite place of payment or an obligation of Capital to maintain an office or agency outside the United States of America (to the extent required pursuant to the terms of the Indenture), or (ix) modify the foregoing requirements or reduce the percentage of Outstanding Debt Securities of such series necessary to waive any past default. Modification and amendment of the Indenture may be made by Capital, Industries and the Trustee without the consent of any Holder, for any of the following purposes: (i) to evidence the succession of another Corporation to Capital or Industries; (ii) to add to the covenants of Capital and Industries for the benefit of the Holders of all or any series of Debt Securities (and if such covenants are to be for the benefit of less than all of any series of Debt Securities, stating that such covenants are expressly being included solely for the benefit of such portion of such series) or to surrender any right or power herein conferred upon Capital; (iii) to add any additional Events of Default; (iv) to add or change any provisions of the Indenture to facilitate the issuance of Bearer Securities; (v) to change or eliminate any provisions of the Indenture, provided that any such change or elimination shall become effective only when there are no Outstanding Debt Securities of any series created prior thereto that is entitled to the benefit of such provision; (vi) to establish the form or terms of Debt Securities of any series; (vii) to secure the Debt Securities; (viii) to provide for the acceptance of appointment by a successor Trustee or facilitate the administration of the trusts under the Indenture by more than one Trustee; (ix) to cure any ambiguity, defect or inconsistency in the Indenture or to make any other provisions with respect to matters or questions arising under the Indenture, provided such action does not adversely affect the interests of Holders of Debt Securities of any series under the Indenture in any material respect; (x) to effect assumption by Industries or one of its subsidiaries of Capital's obligations as contemplated by the Indenture; and (xi) to conform the Indenture to any amendments to the Trust Indenture Act. The Indenture contains provisions for convening meetings of the Holders of Debt Securities of a series. Such a meeting may be called at any time by the Trustee at its discretion for certain purposes set forth in the Indenture relating to Bearer Securities or by the Trustee pursuant to a request made to the Trustee by Capital or the Holders of at least 10% in principal amount of the Outstanding Debt Securities of any series under the Indenture, but in any case, notice shall be given as provided in the Indenture. Except for any consent that must be given by the Holder of each Debt Security affected thereby, as described above, any resolution presented at a meeting or adjourned meeting duly reconvened at which a quorum is present may be adopted by the affirmative vote of the Holders of a majority in principal amount of the Debt Securities of that series Outstanding; provided, however, that, any resolution with respect to any request, demand, authorization, direction, notice, consent, waiver or other action that may be made, given or taken by the Holders of a specified percentage that is less than a majority in principal amount of Debt Securities of a series Outstanding may be adopted at a meeting or adjourned meeting, duly reconvened and at which a quorum is present, by the affirmative vote of the Holders of such specified percentage in principal amount of the Debt Securities of that series Outstanding. Any resolution passed or decision taken at any meeting of Holders of Debt Securities of any series duly held in accordance with the Indenture will be binding on all Holders of Debt Securities of that series, whether or not present or represented at the meeting. The quorum at any meeting called to adopt a resolution, and at any reconvened meeting, will consist of Persons entitled to vote a majority in principal amount of the Debt Securities of a series Outstanding. INFORMATION CONCERNING THE TRUSTEE Except during the continuance of an Event of Default with respect to Debt Securities of any series, the Trustee undertakes to perform, with respect to Debt Securities of such series, only such duties of the Trustee as are specifically set forth in the Indenture, and no implied covenants or obligations shall be read into the Indenture against the Trustee, and in the absence of bad faith on its part, the Trustee 13 may, with respect to Debt Securities of such series, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of the Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of the Indenture. In case an Event of Default with respect to Debt Securities of any series has occurred and is continuing, the Trustee shall exercise, with respect to Debt Securities of such series, such of the rights and powers vested in it by the Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. GOVERNING LAW The Indenture and the Debt Securities will be governed by, and construed in accordance with, the laws of the State of New York. MISCELLANEOUS Industries or a Subsidiary may directly assume, by a supplemental indenture, the performance of every covenant of the Indenture on the part of Capital to be performed or observed. Upon any such assumption, Industries or such Subsidiary shall succeed to and be substituted for and may exercise every right and power of Capital under the Indenture with the same effect as if Industries or such Subsidiary had been named as Capital therein and Capital shall be released from its liability as obligor on the Debt Securities; provided that, in the case of such assumption by a Subsidiary, the Support Agreement is modified so that references to Capital and its Debt therein are changed to, or modified to include, references to such Subsidiary and its Debt (including the Debt Securities). No such assumption shall be permitted unless Industries has delivered to the Trustee an Officers' Certificate of Industries and an Opinion of Counsel for Industries, each stating that such assumption and supplemental indenture comply with the Indenture that all conditions precedent therein provided for relating to such transaction have been complied with and, in the event of assumption by a Subsidiary, that Industries' obligations under the Indenture and the Support Agreement (modified as aforesaid) remain in full force and effect. DESCRIPTION OF THE SUPPORT AGREEMENT The Support Agreement between Capital and Industries provides that, during the term thereof, (i) Industries will own all of the voting stock of Capital, (ii) Industries will cause Capital to have at all times a positive net worth (net assets less intangible assets, if any), as determined in accordance with generally accepted accounting principles, and (iii) if Capital is unable to make timely payment of principal of or any premium or interest on any Debt (as defined below) issued by Capital, Industries will, at the request of Capital or any Lender (as defined below), provide funds to Capital to make such payments. The Support Agreement also provides that any Lender to Capital shall have the right to demand that Capital enforce its rights against Industries under the Support Agreement as described in the previous sentence, and, in the event that Capital fails to require Industries to perform such obligations or Capital defaults in the timely payment of principal of or any premium or interest on any Debt owed to a Lender, such Lender may proceed directly against Industries to enforce Capital's rights against Industries under the Support Agreement or to obtain payment of such defaulted principal, premium or interest owed to such Lender. The Support Agreement provides that in no event may any Lender, on default of Capital or Industries or upon failure by Capital or Industries to comply with the Support Agreement, have recourse to or against the stock or assets of Northern Indiana, or any interest of Capital or Industries therein. Notwithstanding this limitation, the Support Agreement provides that funds available to 14 Industries to satisfy any obligations under the Support Agreement will include cash dividends paid by Northern Indiana to Industries. In addition to the cash dividends paid to Industries by any Subsidiary, the assets of Industries other than the stock and assets of Northern Indiana are available as recourse to holders of Capital's Debt. The carrying value of such assets reflected in Industries' consolidated balance sheet at September 30, 1997 is approximately $1.3 billion. The term "Debt" is defined in the Support Agreement as debt securities or other obligations, and includes the Debt Securities. The term "Lender" is defined in the Support Agreement as any person, firm or corporation to which Capital is indebted for money borrowed or to which Capital otherwise owes any Debt or which is acting as trustee or authorized representative on behalf of such person, firm or corporation. The Indenture provides that each Holder of a Debt Security, as well as the Trustee, shall be considered a "Lender" for purposes of the Support Agreement. Funds to pay the principal of and interest on the Debt Securities pursuant to the Support Agreement would come from earnings in the form of dividends paid to Industries by Northern Indiana, Kokomo Gas, NIFL and IWCR, the earnings of other businesses of Industries and its subsidiaries or the proceeds of refinancing transactions. During the next few years, it is expected that the majority of Industries' earnings that would ultimately be available to pay the principal of and interest on the Debt Securities will depend upon dividends paid to Industries by Northern Indiana. Northern Indiana's Indenture of Mortgage provides that Northern Indiana will not declare or pay any dividends on any class of capital stock (other than preferred or preference stock) except out of earned surplus or net profits of Northern Indiana. At September 30, 1997, Northern Indiana had approximately $139.9 million of retained earnings (earned surplus) available for the payment of dividends. Future dividends payable by Northern Indiana to Industries will depend upon adequate retained earnings, adequate future earnings and the absence of adverse developments. In addition, since Industries is a holding company, the right of its creditors, including Holders of the Debt Securities pursuant to the Support Agreement, to participate in any distribution of the assets of any subsidiary other than Capital upon its liquidation or reorganization or otherwise is necessarily subject to the prior claims of creditors of the subsidiary, except to the extent claims of Industries as a creditor may be recognized. The Indenture does not limit the amount of indebtedness that Capital, Industries or any of Industries' other subsidiaries may incur. The Support Agreement may be amended or terminated at any time by agreement of Industries and Capital, provided that (i) no amendment regarding the terms described above may be made unless all Lenders consent in advance and in writing to such amendment; (ii) no amendment regarding any other term of the Support Agreement may be made in a manner that adversely affects the rights of Lenders unless all affected Lenders consent in advance and in writing to such amendment; and (iii) no termination shall be effective until such time as all Debt (including the Debt Securities) shall have been paid in full. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS The following is a summary of certain United States Federal income tax consequences of the purchase, ownership and disposition of the Notes. It deals only with Notes held as capital assets and does not purport to deal with persons in special tax situations, such as financial institutions, insurance companies, regulated investment companies, dealers in securities or currencies, persons holding Notes as a hedge against currency risks or as a position in a "straddle" for tax purposes, or persons whose functional currency is not the United States dollar. It also does not deal with holders other than original purchasers (except where otherwise specifically noted). This summary also does not address the tax consequences to persons whose functional currency is other than the U.S. Dollar or the tax consequences to shareholders, partners or beneficiaries of a holder of Notes. Further, it does not include any description of any alternative minimum tax consequences or the tax laws of any state or local government or of any foreign government that may be applicable to the Notes. This summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations 15 thereunder and administrative and judicial interpretations thereof, as of the date hereof, all of which are subject to change, possibly on a retroactive basis. Persons considering the purchase of the Notes should consult their own tax advisors concerning the application of United States Federal income tax laws to their particular situations as well as any consequences of the purchase, ownership and disposition of the Notes arising under the laws of any other taxing jurisdiction. As used herein, the term "U.S. Holder" means a beneficial owner of a Note that is for United States Federal income tax purposes (i) a citizen or resident of the United States, (ii) a corporation, partnership or other entity created or organized in or under the laws of the United States or of any political subdivision thereof, (iii) an estate or trust the income of which is subject to United States Federal income taxation regardless of its source or (iv) any other person whose income or gain in respect of a Note is effectively connected with the conduct of a United States trade or business. As used herein, the term "non-U.S. Holder" means a beneficial owner of a Note that is not a U.S. Holder. U.S. HOLDERS PAYMENTS OF INTEREST Payments of interest on a Note generally will be taxable to a U.S. Holder as ordinary interest income at the time such payments are accrued or are received (in accordance with the U.S. Holder's regular method of tax accounting). MARKET DISCOUNT If a U.S. Holder purchases a Note, other than an original issue discount note, for an amount that is less than its issue price (or, in the case of a subsequent purchaser, its stated redemption price at maturity) or, in the case of an original issue discount note, for an amount that is less than its adjusted issue price as of the purchase date, such U.S. Holder will be treated as having purchased such Note at a "market discount," unless such market discount is less than a specified de minimis amount. Under the market discount rules, a U.S. Holder will be required to treat any partial principal payment (or, in the case of an original issue discount note, any payment that does not constitute qualified stated interest) on, or any gain realized on the sale, exchange, retirement or other disposition of, a Note as ordinary income to the extent of the lesser of (i) the amount of such payment or realized gain or (ii) the market discount which has not previously been included in income and is treated as having accrued on such Note at the time of such payment or disposition. Market discount will be considered to accrue ratably during the period from the date of acquisition to the maturity date of the Note, unless the U.S. Holder elects to accrue market discount on the basis of semiannual compounding. A U.S. Holder may be required to defer the deduction of all or a portion of the interest paid or accrued on any indebtedness incurred or maintained to purchase or carry a Note with market discount until the maturity of the Note or certain earlier dispositions, because a current deduction is only allowed to the extent the interest expense exceeds an allocable portion of market discount. A U.S. Holder may elect to include market discount in income currently as it accrues (on either a ratable or semiannual compounding basis), in which case the rules described above regarding the treatment as ordinary income of gain upon the disposition of the Note and upon the receipt of certain cash payments and regarding the deferral of interest deductions will not apply. Generally, such currently included market discount is treated as ordinary interest for United States Federal income tax purposes. Such an election will apply to all debt instruments acquired by the U.S. Holder on or after the first day of the first taxable year to which such election applies and may be revoked only with the consent of the IRS. PREMIUM If a U.S. Holder purchases a Note for an amount that is greater than the sum of all amounts payable on the Note after the purchase date other than payments of qualified stated interest, such U.S. 16 Holder will be considered to have purchased the Note with "amortizable bond premium" equal in amount to such excess. A U.S. Holder may elect to amortize such premium using a constant yield method over the remaining term of the Note and may offset interest otherwise required to be included in respect of the Note during any taxable year by the amortized amount of such excess for the taxable year. However, if the Note may be optionally redeemed after the U.S. Holder acquires it at a price in excess of its stated redemption price at maturity, special rules would apply which could result in a deferral of the amortization of some bond premium until later in the term of the Note. Any election to amortize bond premium applies to all taxable debt instruments then owned and thereafter acquired by the U.S. Holder on or after the first day of the first taxable year to which such election applies and may be revoked only with the consent of the IRS. DISPOSITION OF A NOTE Except as discussed above, upon the sale, exchange or retirement of a Note, a U.S. Holder generally will recognize taxable gain or loss equal to the difference between the amount realized on the sale, exchange or retirement (other than amounts representing accrued and unpaid interest) and such U.S. Holder's adjusted tax basis in the Note. A U.S. Holder's adjusted tax basis in a Note generally will equal such U.S. Holder's initial investment in the Note increased by any original issue discount included in income (and accrued market discount, if any, if the U.S. Holder has included such market discount in income) and decreased by the amount of any payments, other than qualified stated interest payments, received and amortizable bond premium taken with respect to such Note. Such gain or loss generally will be long-term capital gain or loss if the Note were held for more than one year. NON-U.S. HOLDERS A non-U.S. Holder will not be subject to United States Federal income taxes on payments of principal, premium (if any) or interest (including original issue discount, if any) on a Note, unless such non-U.S. Holder is a direct or indirect 10% or greater shareholder of Capital, a controlled foreign corporation related to Capital or a bank receiving interest described in section 881(c)(3)(A) of the Code. To qualify for the exemption from taxation, the last United States payor in the chain of payment prior to payment to a non-U.S. Holder (the "Withholding Agent") must have received in the year in which a payment of interest or principal occurs, or in either of the two preceding calendar years, a statement that (i) is signed by the beneficial owner of the Note under penalties of perjury, (ii) certifies that such owner is not a U.S. Holder and (iii) provides the name and address of the beneficial owner. The statement may be made on an IRS Form W-8 or a substantially similar form, and the beneficial owner must inform the Withholding Agent of any change in the information on the statement within 30 days of such change. If a Note is held through a securities clearing organization or certain other financial institutions, the organization or institution may provide a signed statement to the Withholding Agent. However, in such case, the signed statement must be accompanied by a copy of the IRS Form W-8 or the substitute form provided by the beneficial owner to the organization or institution. The Treasury Department is considering implementation of further certification requirements aimed at determining whether the issuer of a debt obligation is related to holders thereof. Generally, a non-U.S. Holder will not be subject to United States Federal income taxes on any amount which constitutes capital gain upon retirement or disposition of a Note, provided the gain is not effectively connected with the conduct of a trade or business in the United States by the non-U.S. Holder. Certain other exceptions may be applicable, and a non-U.S. Holder should consult its tax advisor in this regard. The Notes will not be includible in the estate of a non-U.S. Holder unless the individual is a direct or indirect 10% or greater shareholder of Capital or, at the time of such individual's death, payments in respect of the Notes would have been effectively connected with the conduct by such individual of a trade or business in the United States. 17 BACKUP WITHHOLDING Backup withholding of United States Federal income tax at a rate of 31% may apply to payments made in respect of the Notes to registered owners who are not "exempt recipients" and who fail to provide certain identifying information (such as the registered owner's taxpayer identification number) in the required manner. Generally, individuals are not exempt recipients, whereas corporations and certain other entities generally are exempt recipients. Payments made in respect of the Notes to a U.S. Holder must be reported to the IRS, unless the U.S. Holder is an exempt recipient or establishes an exemption. Compliance with the identification procedures described in the preceding section would establish an exemption from backup withholding for those non-U.S. Holders who are not exempt recipients. In addition, upon the sale of a Note to (or through) a broker, the broker must withhold 31% of the entire purchase price, unless either (i) the broker determines that the seller is a corporation or other exempt recipient or (ii) the seller provides, in the required manner, certain identifying information and, in the case of a non-U.S. Holder, certifies that such seller is a non- U.S. Holder (and certain other conditions are met). Such a sale must also be reported by the broker to the IRS, unless either (i) the broker determines that the seller is an exempt recipient or (ii) the seller certifies its non- U.S. status (and certain other conditions are met). Certification of the registered owner's non-U.S. status would be made normally on an IRS Form W-8 under penalties of perjury, although in certain cases it may be possible to submit other documentary evidence. Any amounts withheld under the backup withholding rules from a payment to a beneficial owner would be allowed as a refund or a credit against such beneficial owner's United States Federal income tax provided the required information is furnished to the IRS. THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR OTHER TAX LAWS. 18 UNDERWRITING Subject to the terms and conditions set forth in the Underwriting Agreement, Capital has agreed to sell to each of the Underwriters named below, and each of such Underwriters has severally agreed to purchase, the principal amount of the Notes set forth opposite its name below:
PRINCIPAL AMOUNT UNDERWRITER OF NOTES ----------- ----------- Goldman, Sachs & Co................................................ $37,500,000 Morgan Stanley & Co. Incorporated.................................. 37,500,000 ----------- Total............................................................ $75,000,000 ===========
Under the terms and conditions of the Underwriting Agreement, the Underwriters are committed to take and pay for all of the Notes, if any are taken. The Underwriters propose to offer the Notes in part directly to the public at the initial public offering price set forth on the cover page of this Prospectus and in part to certain securities dealers at such price less a concession of % of the principal amount of the Notes. The Underwriters may allow, and such dealers may reallow, a concession not to exceed % of the principal amount of the Notes to certain brokers and dealers. After the Notes are released for sale to the public, the offering price and other selling terms may from time to time be varied by the Underwriters. The Notes are a new issue of securities with no established trading market and Capital does not intend to apply for listing of the Notes on a securities exchange. Capital has been advised by the Underwriters that the Underwriters intend to make a market in the Notes but are not obligated to do so and may discontinue market making at any time without notice. No assurance can be given as to the liquidity of the trading market for the Notes. In connection with the offering, the Underwriters may purchase and sell the Notes in the open market. These transactions may include over-allotment and stabilizing transactions and purchases to cover short positions created by the Underwriters in connection with the offering. Stabilizing transactions consist of certain bids or purchases for the purpose of preventing or retarding a decline in the market price of the Notes; and short positions created by the Underwriters involve the sale by the Underwriters of a greater number of Notes than they are required to purchase from the Company in the offering. The Underwriters also may impose a penalty bid, whereby selling concessions allowed to broker-dealers in respect of the Notes sold in the offering may be reclaimed by the Underwriters if such Notes are repurchased by the Underwriters in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of the Notes, which may be higher than the price that might otherwise prevail in the open market; and these activities, if commenced, may be discontinued at any time. These transactions may be effected in the over-the-counter market or otherwise. In the ordinary course of its business, the Underwriters and certain of their affiliates have engaged and may in the future engage in investment banking, commercial banking and other transactions with (and perform related services for) Capital and certain of its affiliates, for which such Underwriters have received and will receive customary fees and commissions. Capital and Industries have agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933. 19 LEGAL MATTERS The validity of the Notes offered hereby will be passed upon for Capital by Schiff Hardin & Waite, Chicago, Illinois. Certain legal matters relating to the Notes offered hereby will be passed upon for the Underwriters by Sonnenschein Nath & Rosenthal, Chicago, Illinois. EXPERTS The consolidated financial statements and schedules of Industries and its subsidiaries incorporated by reference in this Registration Statement from Industries' 1996 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June 30, 1997 have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto, and are incorporated by reference in this Registration Statement in reliance upon the authority of said firm as experts in giving said reports. 20 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE- SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY CAPITAL, INDUSTRIES OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DE- LIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUM- STANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF CAPITAL OR INDUSTRIES SINCE THE DATE HEREOF OR THAT THE INFORMATION CON- TAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. ----------- TABLE OF CONTENTS PROSPECTUS
PAGE ---- Available Information...................................................... 2 Incorporation of Certain Documents By Reference.............................................................. 2 The Companies.............................................................. 3 Ratios of Earnings to Fixed Charges........................................ 4 Use of Proceeds............................................................ 4 Description of the Notes................................................... 5 Description of the Support Agreement....................................... 14 Certain United States Federal Income Tax Considerations........................................................ 15 Underwriting............................................................... 19 Legal Matters.............................................................. 20 Experts.................................................................... 20
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- $75,000,000 % SENIOR NOTES DUE 2027 NIPSCO CAPITAL MARKETS, INC. ENTITLED TO THE BENEFIT OF A SUPPORT AGREEMENT PROVIDING FOR THE PAYMENT OF PRINCIPAL AND INTEREST BY NIPSCO INDUSTRIES, INC. ----------- PROSPECTUS ----------- GOLDMAN, SACHS & CO. MORGAN STANLEY DEAN WITTER - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth all expenses in connection with the distribution of the Notes being registered. All amounts shown below are estimates, except the registration fee: Registration fee of the Securities and Exchange Commission... $ 22,727.27 Accountants' fees and expenses............................... 10,000.00 Legal fees and expenses...................................... 50,000.00 Printing Registration Statement, prospectus and exhibits and other printing expenses..................................... 25,000.00 Trustee fees and expenses.................................... 3,000.00 Rating agency fees........................................... 20,000.00 Miscellaneous................................................ 9,272.73 ----------- Total.................................................... $140,000.00 ===========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS The By-Laws of Industries provide for indemnification by Industries of each director and officer of Industries and Capital to the fullest extent permitted by law for liability of such director or officer arising by reason of his or her status as a director or officer of Industries or Capital. Under the By- Laws of Industries as well as the Indiana Business Corporation Law (the "Indiana BCL"), Industries is required to indemnify the directors and officers of Industries and Capital against expenses, judgments, decrees, fines, penalties and settlements actually and reasonably incurred by such person in connection with any action, suit or proceeding, whether civil, criminal, administrative or investigative, to which such person is a party by reason of his or her connection with Industries and Capital, provided that such person acted in good faith and in a manner he or she reasonably believed to be in the best interest of Industries and Capital, or, with respect to a criminal proceeding, has no reasonable cause to believe that his or her conduct was unlawful. The By-Laws of Industries provide that except where a director or officer is substantially and finally successful on the merits, Industries may not indemnify a director or officer (unless ordered by a court) until after a determination has been made that indemnification of the director or officer is permissible because he or she met the applicable standards of conduct. Industries also may not advance expenses prior to the disposition of an action, suit or proceeding until: (a) the director or officer provides Industries with a written affirmation of his or her good faith belief that he or she has met the applicable standards of conduct and an undertaking to repay the advance if it is ultimately determined that he or she did not meet the applicable standards of conduct, and (b) a determination has been made, that, based on the facts then known to those making the determination, the director or officer met the applicable standards of conduct. The determination that a director or officer has met the applicable standards of conduct may be made by a majority vote of a quorum consisting of disinterested directors, a majority vote of a committee designated by the board of directors consisting of two or more disinterested directors (only if a quorum of the board cannot be obtained), special legal counsel or a majority vote of disinterested shareholders. As authorized under the By-Laws of Industries and the Indiana BCL, Industries and its subsidiaries, including Capital, have insurance which insures directors and officers for acts committed as such directors or officers which are determined not to be indemnifiable under Industries' indemnity provisions. II-1 ITEM 16. EXHIBITS The Exhibits filed herewith are set forth on the Exhibit Index set forth on page II-6 of this Registration Statement and is incorporated herein by reference. ITEM 17. UNDERTAKINGS The undersigned registrants hereby undertake: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post- effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of Notes offered (if the total dollar value of Notes offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that the undertakings set forth in paragraphs (i) and (ii) above do not apply if the information required to be included in a post- effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the Notes offered therein, and the offering of such Notes at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the Notes being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act of 1933, each filing of Industries' annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the Notes offered therein, and the offering of such Notes time shall be deemed to be the initial bona fide offering thereof. (5) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. II-2 (6) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrants pursuant to the provisions described under Item 15 above, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the Notes being registered, the registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-3 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF HAMMOND, STATE OF INDIANA, ON THE 10TH DAY OF NOVEMBER, 1997. NIPSCO Industries, Inc. (Registrant) /s/ Gary L. Neale By: _________________________________ Gary L. Neale Chairman, President and Chief Executive Officer PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE --------- ----- ---- /s/ Gary L. Neale Chairman, President, Chief November 10, 1997 ____________________________________ Executive Officer and Director Gary L. Neale /s/ Stephen P. Adik Executive Vice President, Chief November 10, 1997 ____________________________________ Financial Officer Stephen P. Adik /s/ Jerry M. Springer Controller and Principal November 10, 1997 ____________________________________ Accounting Officer Jerry M. Springer /s/ Steven C. Beering* Director November 10, 1997 ____________________________________ Steven C. Beering /s/ Arthur J. Decio* Director November 10, 1997 ____________________________________ Arthur J. Decio /s/ Ernestine M. Raclin* Director November 10, 1997 ____________________________________ Ernestine M. Raclin /s/ Denis E. Ribordy* Director November 10, 1997 ____________________________________ Denis E. Ribordy /s/ Ian M. Rolland* Director November 10, 1997 ____________________________________ Ian M. Rolland /s/ Edmund A. Schroer* Director November 10, 1997 ____________________________________ Edmund A. Schroer /s/ Robert J. Welsh, Jr.* Director November 10, 1997 ____________________________________ Robert J. Welsh, Jr. /s/ James T. Morris* Director November 10, 1997 ____________________________________ James T. Morris
/s/ Arthur A. Paquin *By: __________________________ Attorney-In-Fact II-4 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF HAMMOND, STATE OF INDIANA, ON THE 10TH DAY OF NOVEMBER, 1997. NIPSCO Capital Markets, Inc. (Registrant) /s/ Stephen P. Adik By: _________________________________ Steven P. Adik President and Chief Executive Officer PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE --------- ----- ---- /s/ Gary L. Neale Chairman and Director November 10, 1997 ____________________________________ Gary L. Neale /s/ Stephen P. Adik President, Director and November 10, 1997 ____________________________________ Chief Executive Officer Stephen P. Adik /s/ Jeffrey W. Yundt Executive Vice President November 10, 1997 ____________________________________ and Director Jeffrey W. Yundt /s/ Jerry M. Springer Vice President and November 10, 1997 ____________________________________ Chief Financial Officer Jerry M. Springer /s/ Arthur A. Paquin Comptroller and Principal November 10, 1997 ____________________________________ Accounting Officer Arthur A. Paquin /s/ Patrick J. Mulchay Director November 10, 1997 ____________________________________ Patrick J. Mulchay
II-5 EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT ------- ------- 1 Form of Underwriting Agreement among NIPSCO Capital Markets, Inc., NIPSCO Industries, Inc., Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated 4.1 Indenture dated February 14, 1997 among NIPSCO Capital Markets, Inc., NIPSCO Industries, Inc. and The Chase Manhattan Bank, as Trustee (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-3 filed by Capital and Industries on February 25, 1997 (Registration No. 333-22347)) 4.2 Support Agreement dated April 4, 1989 as amended as of May 15, 1989, December 10, 1990 and February 14, 1991, between NIPSCO Industries, Inc. and NIPSCO Capital Markets, Inc. (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-3 filed by Capital and Industries on November 13, 1992 (Registration No. 33-54516)) 4.3 Form of % Senior Note Due 2027 5 Opinion of Schiff Hardin & Waite as to the legality of the Notes 12 Statement re Computation of Ratio of Earnings to Fixed Charges 23.1 Consent of Arthur Andersen LLP 23.2 Consent of Schiff Hardin & Waite (contained in their opinion filed as Exhibit 5) 24.1 Powers of Attorney of the directors of NIPSCO Industries, Inc. and NIPSCO Capital Markets, Inc. 25 Form T-1, Statement of Eligibility of The Chase Manhattan Bank
II-6 EX-1 2 UNDERWRITING AGREEMENT Exhibit 1 NIPSCO CAPITAL MARKETS, INC. $75,000,000 ___% Senior Notes Due 2027 ----------------- Underwriting Agreement ---------------------- November __, 1997 Goldman, Sachs & Co. Morgan Stanley & Co. Incorporated As Representatives of the several Underwriters c/o Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 Dear Sirs: NIPSCO Capital Markets, Inc., an Indiana corporation (the "Company") and a wholly-owned subsidiary of NIPSCO Industries, Inc., an Indiana corporation ("Industries"), proposes, subject to the terms and conditions stated herein, to issue and sell to the several Underwriters named in Schedule I hereto (the "Underwriters"), an aggregate of $75,000,000 principal amount of the ___% Senior Notes Due 2027 of the Company specified above (the "Securities") in the respective principal amounts designated in Schedule I hereto. 1. The Company and Industries jointly and severally represent and warrant to, and agree with, each of the Underwriters that: (a) A registration statement on Form S-3 (File No. 333-_____) in respect of the Securities has been filed with the Securities and Exchange Commission (the "Commission"); such registration statement in the form heretofore delivered to you has been declared effective by the Commission; no other document with respect to such registration statement or document incorporated by reference therein has heretofore been filed with the Commission; and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in such registration statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Securities Act of 1933, as amended (the "Act"), being hereinafter called a "Preliminary Prospectus"; the various parts of such registration statement, including all exhibits thereto but excluding Form T-1 and including (i) the information contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of the registration statement at the time it was declared effective and (ii) the documents incorporated by reference in the prospectus contained in the registration statement at the time such part of the registration statement became effective, each as amended at the time such part of the registration statement became effective, being hereinafter called the "Registration Statement"; such final prospectus, in the form first filed pursuant to Rule 424(b) under the Act, being hereinafter called the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the time of filing of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; and any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of Industries filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement); (b) No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to Industries or the Company by any Underwriter through you expressly for use therein; (c) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference in the Prospectus, or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or -2- necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to Industries or the Company by any Underwriter through you expressly for use therein; (d) Giving effect to the interpretations of the requirements of the Act reflected in the Company's letter requesting "no-action" submitted to the staff of the Commission (the "Staff"), dated April 27, 1992, as supplemented by letters dated July 9, 1992 and September 21, 1992 (the "No- Action Request") and the Staff's response thereto dated September 25, 1992 (the "Staff Response"), the Registration Statement and the Prospectus conform and any further amendments or supplements to the Registration Statement or the Prospectus will conform, in all material respects, to the requirements of the Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to the Registration Statement and any amendment thereto and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by any Underwriter through you expressly for use therein; (e) Neither Industries nor any of its subsidiaries has sustained since the date of the latest audited consolidated financial statements included or incorporated by reference in the Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, which could, individually or in the aggregate, reasonably be expected to have a material adverse effect on the general affairs, management, financial position, shareholders' equity or results of operations of Industries and its subsidiaries taken as a whole or upon the ability of Industries or the Company to perform their respective obligations under this Agreement (a "Material Adverse Effect"), otherwise than as set forth or contemplated in the Prospectus; and, since the respective dates as of which information is given in the Prospectus, there has not been any material change in the consolidated share capital or long-term debt of Industries and its subsidiaries or the consolidated share capital or long-term debt of either the Company or Northern Indiana Public Service Company, a wholly-owned subsidiary of Industries ("Northern Indiana"), or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of Industries and its subsidiaries (taken as a whole), otherwise than as set forth or contemplated in the Prospectus. (f) The accountants who certified the audited financial statements included or incorporated by reference in the Registration Statement are independent public -3- accountants as required by the Act and the rules and regulations of the Commission thereunder; (g) The financial statements included or incorporated by reference in the Prospectus present fairly the financial position of Industries and its subsidiaries as at the dates indicated and the results of their operations for the periods specified; except as may be stated in the Prospectus or in the reports of independent public accountants accompanying said financial statements, said financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis and, with respect to financial statements included in periodic reports filed by Industries pursuant to Sections 13 or 15(d) of the Exchange Act with the Commission on and after September 25, 1992, contain the information requested by the Staff in the Staff Response to be so included; and the supporting schedules included or incorporated by reference in the Prospectus present fairly the information required to be stated therein. (h) Each of Industries, Northern Indiana and the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Indiana, with respective power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, or is subject to no material liability or disability by reason of the failure to be so qualified in any such jurisdiction; and each other subsidiary of Industries has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation; (i) Industries has an authorized capitalization as set forth in the Prospectus; all of the issued capital shares of Industries and each wholly- owned subsidiary of Industries have been duly and validly authorized and issued and are fully paid and non-assessable; and except as set forth in Exhibit 21 to the most recent Form 10-K of Industries, all of the issued common shares of Northern Indiana and all the issued capital shares of each other subsidiary of Industries (except for directors' qualifying shares and as set forth or incorporated by reference in the Registration Statement) are owned directly or indirectly by Industries, free and clear of all liens, encumbrances, equities or claims; (j) The Securities have been duly authorized and, when duly executed, authenticated, issued and delivered pursuant to the indenture, dated as of February 14, 1997 (the "Indenture"), among Industries, the Company and The Chase Manhattan Bank, as trustee (the "Trustee"), and this Agreement against payment of the agreed consideration therefor, will constitute valid and legally binding obligations of the Company entitled to the benefits provided by (i) the Support Agreement, dated April 4, 1989, as amended as of May 15, 1989, December 10, 1990 and February 14, 1991, between Industries and the Company (the "Support Agreement"), in the form filed as an exhibit to the Registration Statement and (ii) the Indenture, under which the Securities are to be issued, in the form filed as an exhibit to the Registration Statement; the -4- Indenture has been duly authorized and duly qualified under the Trust Indenture Act; each of the Support Agreement and the Indenture has been duly authorized, executed and delivered by each of Industries and the Company and constitutes a valid and legally binding instrument, enforceable against Industries and the Company, as the case may be, in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Securities, the Support Agreement and the Indenture conform to the descriptions thereof in the Prospectus; (k) Industries' obligations under the Support Agreement will rank prior to the equity securities of Industries and equal with all other unsecured and unsubordinated indebtedness of Industries, whether now or hereafter outstanding; (l) This Agreement has been duly authorized, executed and delivered by each of Industries and the Company and constitutes a valid and legally binding obligation, enforceable against each of them in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; (m) None of Industries, Northern Indiana or the Company is in violation of its Articles of Incorporation or By-Laws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease, or any other instrument to which it is a party or by which it may be bound where such defaults, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. The issue and sale of the Securities, the compliance by the Company with all of the provisions of the Securities, the Indenture, the Support Agreement and this Agreement, the compliance by Industries with all of the provisions of the Securities, the Indenture, the Support Agreement and this Agreement, and the consummation of the transactions herein and therein contemplated, will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which Industries or any of its subsidiaries is a party or by which Industries or any of its subsidiaries is bound or to which any of the property or assets of Industries or any of its subsidiaries is subject, nor will any such action result in any violation of the provisions of the Articles of Incorporation or By-laws of Industries or any of its subsidiaries, or any statute, rule or regulation, or any order of any court or governmental agency or body having jurisdiction over Industries or any of its subsidiaries or any of their properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Securities or the consummation by Industries and the Company of the transactions contemplated by this Agreement, the Support Agreement or the Indenture, except the registration under the Act of the Securities, such as have been obtained under the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws -5- in connection with the purchase and distribution of the Securities by the several Underwriters; (n) None of Industries, Northern Indiana or the Company has any material contingent liability which is not disclosed in the Prospectus; (o) Each of Industries, Northern Indiana and the Company has statutory authority, franchises and consents free from burdensome restrictions and adequate for the conduct of the business in which it is engaged; (p) Except for Industries, as and to the extent described in the Prospectus, no person or corporation which is a "holding company" or a "subsidiary of a holding company" within the meaning of such terms as defined in the Public Utility Holding Company Act of 1935, as amended (the "1935 Act") directly or indirectly owns, controls or holds with power to vote 10% or more of the outstanding voting securities of Northern Indiana; Industries is exempt from all provisions of the 1935 Act except Section 9(a)(2); and neither Northern Indiana nor the Company is a "holding company" as so defined; (q) Each of Industries, Northern Indiana and the Company has good and marketable title in fee simple to such of its fixed assets as are real property and good and marketable title to its other assets reflected in the most recent consolidated balance sheet incorporated by reference in the Prospectus, except properties and assets that are leased or that are sold or otherwise disposed of in the ordinary course of business after the date of said balance sheet, subject to no mortgages, liens, charges or encumbrances of any kind whatsoever ("Liens") other than Liens permitted under the Indenture; (r) The Company will apply the proceeds of the sale of the Securities in the manner described in the Prospectus and in accordance with the provisions of Rule 3a-5 under the Investment Company Act of 1940, as amended (the "1940 Act"); (s) The Commission has issued an order (the "Order") exempting the Company from all of the provisions of the 1940 Act; the Order is in full force and effect; and the Company will continue to comply with the terms and conditions of the Order, or otherwise remain exempt from all of the provisions of the 1940 Act, so long as any Securities are outstanding; (t) The Prospectus accurately describes the most restrictive of the existing limitations on the payment of dividends by Northern Indiana on its common shares held by Industries; (u) Neither Industries nor any of its subsidiaries does business with the government of Cuba or with any person or affiliate located in Cuba within the meaning of Section 517.075, Florida Statutes; and -6- (v) Other than as set forth or incorporated by reference in the Prospectus, there are no legal or governmental proceedings pending to which Industries or any of its subsidiaries is a party or to which any property of Industries or any of its subsidiaries is subject which could reasonably be expected individually or in the aggregate to have a Material Adverse Effect; and, to the best of each of Industries' and the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others. 2. Subject to the terms and conditions herein set forth, the Company agrees to issue and sell to each of the several Underwriters, and the Underwriters agree, severally and not jointly or jointly and severally, to purchase from the Company, at a purchase price of _____% of the principal amount thereof, plus accrued interest, if any, from ___________, 1997 to the Time of Delivery hereunder, the principal amount of Securities set forth opposite the name of such Underwriter in Schedule I hereto. 3. Upon the authorization by you of the release of the Securities, the several Underwriters propose to offer their respective portions of the Securities for sale upon the terms and conditions set forth in the Prospectus. 4. (a) The Securities to be purchased by each Underwriter hereunder will be represented by one or more definitive global Securities in book-entry form which will be deposited by or on behalf of the Company with The Depository Trust Company ("DTC") or its designated custodian. The Company will deliver the Securities to Goldman, Sachs & Co., for the account of each Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer, payable to the order of the Company in Federal (same day) funds, by causing DTC to credit the Securities to the account of Goldman, Sachs & Co. at DTC. The Company will cause the certificates representing the Securities to be made available to Goldman, Sachs & Co. for checking at least twenty-four hours prior to the Time of Delivery (as defined below) at the office of DTC or its designated custodian (the "Designated Office"). The time and date of such delivery and payment shall be 8:30 a.m., Chicago time, on December 1, 1997 or such other time and date as you and the Company may agree upon in writing. Such time and date are herein called the "Time of Delivery". (b) The documents to be delivered at the Time of Delivery by or on behalf of the parties hereto pursuant to Section 7 hereof, including the cross- receipt for the Securities and any additional documents requested by the Underwriters pursuant to Section 7(h) hereof, will be delivered at the offices of Sonnenschein Nath & Rosenthal, 8000 Sears Tower, Chicago, Illinois 60606 (the "Closing Location"), and the Securities will be delivered at the Designated Office, all at the Time of Delivery. A meeting will be held at the Closing Location on the Business Day next preceding the Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For the purposes of this Section 4, "Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York City are generally authorized or obligated by law or executive order to close. -7- 5. Industries and the Company jointly and severally agree with each of the several Underwriters: (a) To prepare the Prospectus in a form approved by you and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's close of business on the second business day following the execution and delivery of this Agreement, or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under the Act; to make no further amendment or any supplement to the Registration Statement or Prospectus prior to the Time of Delivery which shall be disapproved by you promptly after reasonable notice thereof; to advise you, promptly after it receives notice thereof, of the time when the Registration Statement, or any amendment thereto, has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed and to furnish you with copies thereof; to file promptly all reports and any definitive proxy or information statements required to be filed by Industries or the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus is required in connection with the offering or sale of the Securities; to advise you, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or Prospectus, of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or Prospectus or suspending any such qualification, to use promptly its best efforts to obtain its withdrawal; (b) Promptly from time to time to take such action as you may reasonably request to qualify the Securities for offering and sale under the securities laws of such jurisdictions as you may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Securities, provided that in connection therewith neither Industries nor the Company shall be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; (c) To furnish you copies of the Prospectus in such quantities as you may from time to time reasonably request, and, if the delivery of a prospectus is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the -8- Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act, the Exchange Act or the Trust Indenture Act, to notify you and upon your request to file such document and to prepare and furnish without charge to you and to any dealer in securities as many copies as you may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; and in case you are required to deliver a prospectus in connection with sales of any of the Securities at any time nine months or more after the time of issue of the Prospectus, upon your request but at your expense, to prepare and deliver to each Underwriter as many copies as you may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Act; (d) To make generally available to its securityholders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), earning statements of Industries and its subsidiaries and of the Company (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including, at the option of Industries, Rule 158); (e) During the period beginning from the date hereof and continuing to and including the earlier of (i) the termination of trading restrictions on the Securities, as notified to the Company by you, and (ii) the Time of Delivery, not to offer, sell, contract to sell or otherwise dispose of any debt securities of Industries or the Company which mature more than one year after the Time of Delivery and which are substantially similar to the Securities, without your prior written consent; (f) To furnish to the holders of the Securities as soon as practicable after the end of each fiscal year Industries' annual report (including a balance sheet and statements of income, shareholders' equity and cash flows of Industries and its consolidated subsidiaries certified by independent public accountants) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the fiscal quarter ending after the effective date of the Registration Statement), consolidated summary financial information of Industries and its subsidiaries for such quarter in reasonable detail; (g) During a period of five years from the effective date of the Registration Statement, to furnish to you copies of all reports or other communications (financial or other) furnished to shareholders of Industries, and deliver to you (i) as soon as they are available, copies of any reports and financial statements furnished to or filed by Industries or the Company with the Commission or any national securities exchange on which the Securities or any class of securities of Industries or the Company is listed; and (ii) such additional information concerning the business and financial condition of Industries or the Company as you may from time to time reasonably request (such financial statements to be on a consolidated basis to the extent the accounts of Industries -9- and its subsidiaries are consolidated in reports furnished to Industries' shareholders generally or to the Commission); and (h) To use the net proceeds received by it from the sale of the Securities pursuant to this Agreement in the manner specified in the Prospectus under the caption "Use of Proceeds." 6. The Company and Industries jointly and severally covenant and agree with each of the several Underwriters that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of Industries' and the Company's counsel and accountants in connection with the registration of the Securities under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the several Underwriters and dealers; (ii) the cost of printing or producing this Agreement, the Indenture, the Blue Sky Memorandum and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iii) all expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in Section 5(b) hereof, including the fees and disbursements of counsel for the several Underwriters in connection with such qualification and in connection with the Blue Sky Memorandum; (iv) any fees charged by securities rating services for rating the Securities; (v) the filing fees incident to any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the Securities; (vi) the cost of preparing the Securities; (vii) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities; (viii) the fees, disbursements and expenses of counsel in connection with preparing the Indenture; (ix) any transfer taxes payable in connection with the sale of the Securities to the several Underwriters; and (x) all other costs and expenses incident to the performance of their respective obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, Section 8 and Section 11 hereof, the several Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Securities by any of them, and any advertising expenses connected with any offers any of them may make. 7. The several obligations of the Underwriters hereunder shall be subject, in their discretion, to the condition that all representations and warranties and other statements of Industries and the Company herein are, at and as of the Time of Delivery, true and correct, the condition that Industries and the Company shall have performed all of their respective obligations hereunder theretofore to be performed, and the following additional conditions: (a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by -10- the Commission; and all requests for additional information on the part of the Commission shall have been complied with to your reasonable satisfaction; (b) Sonnenschein Nath & Rosenthal, counsel for the Underwriters, shall have furnished to you such opinion or opinions, dated the Time of Delivery, with respect to the incorporation of Industries and the Company, this Agreement, the Support Agreement, the validity of the Indenture, the Securities, the Registration Statement, the Prospectus, and other related matters as you may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters; (c) Schiff Hardin & Waite, counsel for Industries and the Company, shall have furnished to you their written opinion, dated the Time of Delivery, in form and substance satisfactory to you, to the effect that: (1) Each of Industries, Northern Indiana and the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Indiana, with respective power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus; (2) Industries has an authorized capitalization as set forth in the Prospectus; all of the issued capital shares of Industries and each wholly-owned subsidiary of Industries have been duly and validly authorized and issued and are fully paid and non-assessable; and all of the issued common shares of Northern Indiana and all the issued capital shares of the Company and each other Significant Subsidiary of Industries (except for directors' qualifying shares and as set forth or incorporated by reference in the Registration Statement) are owned directly or indirectly by Industries, free and clear of all liens, encumbrances, equities or claims; (3) Each of Industries, Northern Indiana and the Company has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, or is subject to no material liability or disability by reason of the failure to be so qualified in any such jurisdiction. -11- (4) To the best of such counsel's knowledge, other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which Industries or any of its subsidiaries is a party or to which any property of Industries or any of its subsidiaries is subject which could reasonably be expected individually or in the aggregate to have a material adverse effect on the consolidated financial position, shareholders' equity or results of operations of Industries and its subsidiaries; and, to the best of such counsel's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others. (5) Each of this Agreement and the Support Agreement has been duly authorized, executed and delivered by each of Industries and the Company and constitutes a valid and legally binding obligation, enforceable against each in accordance with its terms, subject, as to enforcement, (a) in the case of both this Agreement and the Support Agreement, to bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other laws of general applicability relating to or affecting creditors' rights and to general equity principles and (b) in the case of this Agreement, to any limitations by reason of public policy considerations on the enforcement under certain circumstances of the indemnity provisions thereof. (6) The Indenture has been duly authorized, executed and delivered by the Company and Industries and constitutes a valid and legally binding instrument, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Indenture has been duly qualified under the Trust Indenture Act. (7) The Securities have been duly and validly authorized by all necessary corporate action; the Securities, when duly executed, authenticated, issued and delivered pursuant to the terms of the Indenture and this Agreement against payment of the agreed consideration therefor, will be valid and legally binding obligations of the Company entitled to the benefits provided by the Support Agreement and the Indenture and will be enforceable obligations of the Company in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to or affecting enforcement of creditors' rights or by general equity principles; the Securities, the Support Agreement and the Indenture conform as to legal matters with the statements concerning them made in the Prospectus, and such statements accurately set forth the matters respecting the Securities, the Support Agreement and the Indenture required to be set forth in the Prospectus. -12- (8) The execution and delivery of this Agreement, the issue and sale of the Securities, the compliance by each of the Company and Industries with all of the provisions of the Securities, the Indenture, the Support Agreement and this Agreement, and the consummation of the transactions herein and therein contemplated, will not conflict with or result in a breach or violation of any terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which Industries or any of its Significant Subsidiaries is a party or by which Industries or any of its Significant Subsidiaries is bound or to which any of the property or assets of Industries or any of its Significant Subsidiaries is subject, nor will such actions result in any violation of the provisions of the Articles of Incorporation or the By-Laws of Industries or any of its Significant Subsidiaries, or any statute, rule or regulation, or any order known to such counsel of any court or governmental agency or body having jurisdiction over Industries or any of its Significant Subsidiaries or any of their properties; (9) No consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Securities or the consummation by Industries or the Company of the transactions contemplated by this Agreement, the Support Agreement or the Indenture, except such as have been obtained under the Act and the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the several Underwriters; (10) The documents incorporated by reference in the Prospectus or any further amendment or supplement thereto made by Industries or the Company prior to the Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion), when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder; (11) Giving effect to the interpretations of the requirements of the Act reflected in the No-Action Request and the Staff Response, the Registration Statement and the Prospectus and any further amendments and supplements thereto made by Industries or the Company prior to the Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) comply as to form in all material respects with the requirements of the Act and the Trust Indenture Act and the rules and regulations thereunder; -13- (12) This Agreement has been duly authorized, executed and delivered by the Company. (13) The statements made in the Prospectus under the captions "Description of the Notes" and "Certain United States Federal Income Tax Considerations" and any other statements which are stated therein to have been made on the basis of the opinion of said counsel have been reviewed by said counsel and, as to matters of law and legal conclusions, are correct in all material respects. Such counsel shall also advise the Underwriters that although such counsel is not passing upon and assumes no responsibility or liability for the accuracy, completeness or fairness of the statements contained in the documents incorporated by reference in the Prospectus or any further amendment or supplement thereto made by Industries or the Company prior to the Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion), they have no reason to believe that any of such documents, when such documents became effective or were filed with the Commission, as the case may be, contained, in the case of a registration statement which became effective under the Act, an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or, in the case of other documents which were filed under the Act or the Exchange Act with the Commission, an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made when such documents were so filed, not misleading. Such counsel shall also advise the Underwriters that although such counsel is not passing upon and assumes no responsibility or liability for the accuracy, completeness or fairness of the statements contained in the Registration Statement and the Prospectus and any further amendments and supplements thereto made by Industries or the Company prior to the Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion), they have no reason to believe that, as of its effective date, the Registration Statement or any further amendment thereto made by Industries or the Company prior to the Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that, as of its date, the Prospectus or any further amendment or supplement thereto made by Industries or the Company prior to the Time of Delivery (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or that, as of the Time of Delivery either the Registration Statement or the Prospectus or any further amendment or supplement thereto made by Industries or the Company prior to the Time of Delivery (other than the -14- financial statements and related schedules therein, as to which such counsel need express no opinion) contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and they do not know of any amendment to the Registration Statement required to be filed or of any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be incorporated by reference into the Prospectus or required to be described in the Registration Statement or the Prospectus which are not filed or incorporated by reference or described as required. (d) On the date of this Agreement and also at the Time of Delivery, Arthur Andersen LLP shall have furnished to you a letter or letters, dated the respective dates of delivery thereof, in form and substance satisfactory to you, to the effect set forth in Annex I hereto; (e) (i) Neither Industries nor any of its subsidiaries shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus, and (ii) since the respective dates as of which information is given in the Prospectus there shall not have been any change in the consolidated share capital or long-term debt of Industries or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of Industries and its subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the effect of which, in any such case described in Clause (i) or (ii), is in your judgment so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities on the terms and in the manner contemplated in the Prospectus; (f) On or after the date hereof (i) no downgrading shall have occurred in the rating accorded any of Industries', Northern Indiana's or the Company's debt securities by any "nationally recognized statistical rating organization," as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Act and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of Industries', Northern Indiana's or the Company's debt securities; (g) On or after the date hereof there shall not have occurred any of the following: (i) a suspension or material limitation in trading in -15- securities generally or in trading in securities of Industries or the Company on the New York Stock Exchange; (ii) a general moratorium on commercial banking activities in New York or Illinois declared by either Federal or State authorities; or (iii) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war if the effect of any such event specified in this Clause (iii) in your judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities on the terms and in the manner contemplated in the Prospectus; and (h) Each of Industries and the Company shall have furnished or caused to be furnished to you at the Time of Delivery certificates of officers of Industries and of the Company satisfactory to you as to the accuracy of the representations and warranties of Industries and the Company herein at and as of such Time of Delivery, as to the performance by Industries and the Company of all of their respective obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsections (a), (e), (f) and (g) of this Section and as to such other matters as you may reasonably request. 8. (a) Industries and the Company will jointly and severally indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that neither the Company nor Industries shall be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, the Registration Statement or the Prospectus or any such amendment or supplement in reliance upon and in conformity with written information furnished to Industries or the Company by any Underwriter through you expressly for use therein. (b) Each Underwriter, severally and not jointly or jointly and severally, will indemnify and hold harmless Industries and the Company against any losses, claims, damages or liabilities to which Industries or the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, the Registration Statement or the Prospectus or any such amendment or supplement -16- in reliance upon and in conformity with written information furnished to Industries or the Company by such Underwriter through you expressly for use therein; and will reimburse Industries or the Company, as the case may be, for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such action or claim as such expenses are incurred. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party. (d) If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by Industries and the Company, on the one hand, and the Underwriters, on the other, from the offering of the Securities. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of Industries and the Company, on the one hand, and the Underwriters, on the other, in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by Industries and the Company, -17- on the one hand, and the Underwriters, on the other, shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by Industries or the Company, on the one hand, or the Underwriters, on the other, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Underwriters' respective obligations to contribute pursuant to this Section 8 are several in proportion to the respective principal amounts of Securities they have purchased and not joint or joint and several. Industries and the Company, on the one hand, and the Underwriters, on the other, agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (e) The obligations of Industries and the Company under this Section 8 shall be in addition to any liability which they may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of Industries and of the Company and to each person, if any, who controls Industries or the Company within the meaning of the Act. 9. (a) If any Underwriter shall default in its obligation to purchase the Securities which it has agreed to purchase hereunder, you may in your discretion arrange for you or another party or other parties to purchase such Securities on the terms contained herein. If within thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such Securities, then the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to you to purchase such Securities on such terms. In the event that, within the respective prescribed periods, you notify the Company that you have so arranged for the purchase of such Securities, or the Company notifies you that it has so arranged for the purchase of such Securities, you or the Company shall have the right to postpone the Time of Delivery for a period of not more than seven days, in order to effect -18- whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company agrees to file promptly any amendments to the Registration Statement or the Prospectus which in your opinion may thereby be made necessary. The term "Underwriter" as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Securities. (b) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the aggregate principal amount of such Securities which remains unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Securities, then the Company shall have the right to require each non-defaulting Underwriter to purchase the principal amount of Securities which such Underwriter agreed to purchase hereunder and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the principal amount of Securities which such Underwriter agreed to purchase hereunder) of the Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. (c) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the aggregate principal amount of Securities which remains unpurchased exceeds one-eleventh of the aggregate principal amount of all the Securities, or if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Securities of a defaulting Underwriter or Underwriters, then this Agreement shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for the expenses to be borne by the Company and the Underwriters as provided in Section 6 hereof and the indemnity and contribution agreements in Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. 10. The respective indemnities, agreements, representations, warranties and other statements of Industries, the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or Industries or the Company, or any officer or director or controlling person of Industries or the Company, and shall survive delivery of and payment for the Securities. 11. If this Agreement shall be terminated pursuant to Section 9 hereof, the Company shall not then be under any liability to any Underwriter except as provided in Sections 6 and 8 hereof; but, if for any other reason the Securities are not delivered by or on behalf of the Company as provided herein, Industries and the Company will reimburse the Underwriters for all out-of-pocket expenses approved in writing by you, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of the Securities, but Industries and the Company shall then be under no further liability to the Underwriters except as provided in Section 6 and Section 8 hereof. -19- 12. All statements, requests, notices, and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to Goldman, Sachs & Company at 85 Broad Street, New York, New York 10004, Attention: Registration Department, facsimile no. (212) 902-3000 and Morgan Stanley & Co. Incorporated at 1585 Broadway, New York, New York 10036, Attention: Managing Director - Debt Syndicate Department, facsimile no. (212) 761-0785; and if to Industries or the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of Industries or the Company set forth in the Registration Statement, Attention: Treasurer, facsimile no. (219) 853-5352. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. 13. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, Industries and the Company and, to the extent provided in Section 8 and Section 10 hereof, the officers and directors of Industries and of the Company and each person who controls Industries or the Company or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Securities from the Underwriter shall be deemed a successor or assign by reason merely of such purchase. 14. Time shall be of the essence of this Agreement. Except as set forth in Section 4(b) as used herein, the term "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business. As used herein, "Significant Subsidiaries" shall mean (a) the Company and (b) all other direct and indirect subsidiaries of Industries as of the Time of Delivery other than any subsidiaries which, considered in the aggregate as a single subsidiary as of the end of the most recent fiscal year of Industries, would not constitute a significant subsidiary as defined in Rule 1-02 of Regulation S-X (or any successor thereto). 15. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. 16. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. [This space intentionally left blank] -20- If the foregoing is in accordance with your understanding, please sign and return to us four counterparts hereof, and upon the acceptance hereof by you, this letter and such acceptance hereof shall constitute a binding agreement between the Underwriter, on the one hand, and Industries and the Company, on the other. Very truly yours, NIPSCO CAPITAL MARKETS, INC. By: ---------------------------------- Name: Title: NIPSCO INDUSTRIES, INC. By: --------------------------------- Name: Title: Accepted as of the date hereof: Goldman, Sachs & Co. Morgan Stanley & Co. Incorporated By: ------------------------- (Goldman, Sachs & Co.) On behalf of each of the Underwriters -21- ANNEX I ------- Pursuant to Section 7(d) of the Underwriting Agreement, the accountants shall furnish letters to the Underwriters to the effect that: (i) They are independent certified public accountants with respect to Industries and its subsidiaries within the meaning of the Act and the applicable published rules and regulations thereunder; (ii) In their opinion, the financial statements and any supplementary financial information and schedules audited (and, if applicable, financial forecasts and/or pro forma financial information) examined by them and included or incorporated by reference in the Registration Statement or the Prospectus comply as to form in all material respects with the applicable accounting requirements of the Act or the Exchange Act, as applicable, and the related published rules and regulations thereunder; and, if applicable, they have made a review in accordance with standards established by the American Institute of Certified Public Accountants of the consolidated interim financial statements, selected financial data, pro forma financial information, financial forecasts and/or condensed financial statements derived from audited financial statements of Industries for the periods specified in such letter, as indicated in their reports thereon, copies of which have been furnished to the representatives of the Underwriters; (iii) They have made a review in accordance with standards established by the American Institute of Certified Public Accountants of the unaudited condensed consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows included in the Prospectus and/or included in Industries' quarterly report on Form 10-Q incorporated by reference into the Prospectus as indicated in their reports thereon copies of which have been separately furnished to the Underwriters; and on the basis of specified procedures including inquiries of officials of Industries and the Company who have responsibility for financial and accounting matters regarding whether the unaudited condensed consolidated financial statements referred to in paragraph (vi)(A)(i) below comply as to form in all material respects with the applicable accounting requirements of the Act and the Exchange Act and the related published rules and regulations, nothing came to their attention that caused them to believe that the unaudited condensed consolidated financial statements do not comply as to form in all material respects with the applicable accounting requirements of the Act and the Exchange Act and the related published rules and regulations; (iv) The unaudited selected financial information with respect to the consolidated results of operations and financial position of Industries for the five most recent fiscal years included in the Prospectus and included or incorporated by reference in Item 6 of Industries' Annual Report on Form 10-K for the most recent fiscal year agrees with the corresponding amounts (after restatement where applicable) in the audited consolidated financial statements for five such fiscal years which were included or incorporated by reference in Industries' Annual Reports on Form 10-K for such fiscal years; I-1 (v) They have compared the information in the Prospectus under selected captions with the disclosure requirements of Regulation S-K and on the basis of limited procedures specified in such letter nothing came to their attention as a result of the foregoing procedures that caused them to believe that this information does not conform in all material respects with the disclosure requirements of Items 301, 302, 402 and 503(d), respectively, of Regulation S-K; (vi) On the basis of limited procedures, not constituting an examination in accordance with generally accepted auditing standards, consisting of a reading of the unaudited financial statements and other information referred to below, a reading of the latest available interim financial statements of Industries and its subsidiaries, inspection of the minute books of Industries and its subsidiaries since the date of the latest audited financial statements included or incorporated by reference in the Prospectus, inquiries of officials of Industries and its subsidiaries responsible for financial and accounting matters and such other inquiries and procedures as may be specified in such letter, nothing came to their attention that caused them to believe that: (A) (i) the unaudited condensed consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows included in the Prospectus and/or included or incorporated by reference in Industries' Quarterly Reports on Form 10-Q incorporated by reference in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Exchange Act and the related published rules and regulations, or (ii) any material modifications should be made to the unaudited condensed consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows included in the Prospectus or included in Industries' Quarterly Reports on Form 10-Q incorporated by reference in the Prospectus for them to be in conformity with generally accepted accounting principles; (B) any other unaudited income statement data and balance sheet items included in the Prospectus do not agree with the corresponding items in the unaudited consolidated financial statements from which such data and items were derived, and any such unaudited data and items were not determined on a basis substantially consistent with the basis for the corresponding amounts in the audited consolidated financial statements included or incorporated by reference in Industries' Annual Report on Form 10-K for the most recent fiscal year; (C) the unaudited financial statements which were not included in the Prospectus but from which were derived the unaudited condensed financial statements referred to in clause (A) and any unaudited income statement data and balance sheet items included in the Prospectus and referred to in Clause (B) were not determined on a basis substantially consistent with the basis for the audited financial statements included or incorporated by reference in Industries' Annual Report on Form 10-K for the most recent fiscal year; (D) any unaudited pro forma consolidated condensed financial statements included or incorporated by reference in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Act and the published rules and regulations thereunder or the pro forma adjustments have I-2 not been properly applied to the historical amounts in the compilation of those statements; (E) as of a specified date not more than five days prior to the date of such letter, there have been any changes in the consolidated capital stock (other than issuances of capital stock upon exercise of options and stock appreciation rights, upon earn-outs of performance shares and upon conversions of convertible securities, in each case which were outstanding on the date of the latest balance sheet included or incorporated by reference in the Prospectus) or any increase in the consolidated long-term debt of Industries and its subsidiaries, or any decreases in consolidated net current assets or shareholders' equity or other items specified by the Underwriters, or any increases in any items specified by the Underwriters, in each case as compared with amounts shown in the latest balance sheet included or incorporated by reference in the Prospectus, except in each case for changes, increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and (F) for the period from the date of the latest financial statements included or incorporated by reference in the Prospectus to the specified date referred to in Clause (E) there were any decreases in consolidated net revenues or operating profit or the total or per share amounts of consolidated net income or other items specified by the Underwriters, or any increases in any items specified by the Underwriters, in each case as compared with the comparable period of the preceding year and with any other period of corresponding length specified by the Underwriters, except in each case for increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and (vii) In addition to the audit referred to in their report(s) included or incorporated by reference in the Prospectus and the limited procedures, inspection of minute books, inquiries and other procedures referred to in paragraphs (iii) and (vi) above, they have carried out certain specified procedures, not constituting an audit in accordance with generally accepted auditing standards, with respect to certain amounts, percentages and financial information specified by the Underwriters which are derived from the general accounting records of Industries and its subsidiaries, which appear in the Prospectus (excluding documents incorporated by reference), or in Part II of, or in exhibits and schedules to, the Registration Statement specified by the Underwriters or in documents incorporated by reference in the Prospectus specified by the Underwriters, and have compared certain of such amounts, percentages and financial information with the accounting records of Industries and its subsidiaries and have found them to be in agreement. I-3 SCHEDULE I
================================================================================ Principal Amount of Securities to Underwriter be Purchased ----------- ---------------- - -------------------------------------------------------------------------------- Goldman, Sachs & Co..................................... $37,500,000 - -------------------------------------------------------------------------------- Morgan Stanley & Co. Incorporated....................... $37,500,000 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ----------- - -------------------------------------------------------------------------------- $75,000,000 =========== ================================================================================
I-4 EX-4.3 3 FORM OF SENIOR NOTE DUE EXHIBIT 4.3 [Face of Note] UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK), TO NIPSCO CAPITAL MARKETS, INC. (THE "COMPANY") OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. NIPSCO CAPITAL MARKETS, INC. ____% SENIOR NOTE DUE 2027 PRINCIPAL AMOUNT NO. R-___ $75,000,000 CUSIP _________________ INTEREST RATE:______ STATED MATURITY: December 1, 2027 INTEREST PAYMENT DATES: June 1 and December 1 SUBJECT TO REPURCHASE AT THE OPTION OF THE HOLDER ON: _____________________; _____________________; and _____________________ NIPSCO Capital Markets, Inc., a corporation duly organized and existing under the laws of the State of Indiana (herein called the "Company," which term includes any successor corporation under the Indenture referred to below), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of SEVENTY-FIVE MILLION AND NO/100 DOLLARS on December 1, 2027 (the "Stated Maturity"), and to pay interest thereon from December 1, 1997 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, payable semiannually in arrears on June 1 and December 1 in each year (each, an "Interest Payment Date"), commencing on June 1, 1998, and at Maturity, at the rate of ____% per annum, until the principal hereof is paid or duly provided for. Each payment of interest in respect of an Interest Payment Date shall include interest accrued through the day prior to such Interest Payment Date. The interest so payable, and paid or duly provided for, on any Interest Payment Date shall, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be May 15 or November 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date, at the office or agency of the Company maintained for such purpose in the City of New York, New York. Interest shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the holder on the related Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to holders of Notes not less than 10 calendar days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. If any Interest Payment Date, any Put Option Exercise Date (as defined herein) or the Stated Maturity shall not be a Business Day (as hereinafter defined), payment of the amount due on this Note on such date may be made on the next succeeding Business Day; and, if such payment is made or duly provided for on such Business Day, no interest shall accrue on such amounts for the period from and after such Interest Payment Date, such Put Option Exercise Date or the Stated Maturity, as the case may be, to such Business Day. Payment of the principal of and interest on this Note at Maturity shall be made upon presentation hereof at the corporate trust office of the Trustee maintained for that purpose in the Borough of Manhattan in the City of New York, New York, or at such other office or agency permitted under the Indenture. Payment of the principal of and interest on this Note shall be payable in immediately available funds; provided however, that payment of interest on this Note if not held in book-entry form may be made at the option of the Company by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. Payment of the principal of and interest, if any, on this Note, as aforesaid, shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts. Interest payable on any Interest Payment Date will be paid to the Depositary with respect to the portion of this Note held for its account by Cede & Co. for the purpose of permitting such party to credit the interest received by it in respect of this Note to the accounts of the beneficial owners hereof. 2 The Company is not required to repurchase Notes from Holders prior to Stated Maturity except as set forth herein. The Holder of this Note will have the right to require the Company to repurchase all or a portion of this Note in increments of $1,000 (the "Put Option") on _____________, _________________, ______________, and ________________ (each such date being a "Put Option Exercise Date") at a purchase price equal to 100% of the principal amount of this Note plus accrued interest thereon. If this Note or any portion is tendered for repayment, interest will cease to accrue on this Note or such portion hereof on or after the Put Option Exercise Date on which the Note or such portion hereof is tendered for repayment. On or before each Put Option Exercise Date, the Company shall deposit with the Paying Agent (or the Trustee) an amount of money sufficient to pay the principal of and any accrued interest on the Notes to be tendered for repayment. For book-entry notes a Holder must provide the Company with notice of its intention to exercise its Put Option not less than 30 days nor more than 60 days prior to the applicable Put Option Exercise Date. Such notice, once given, will be irrevocable, unless waived in writing by the Company. An owner of a beneficial interest in this Note if held in book-entry form who wishes to effectuate the tender and repurchase of such Note must instruct its Depositary's participant or participants (in accordance with the Depositary 's "Repayment Option Procedures") a reasonable period of time in advance of the applicable Put Option Exercise Date. All questions as to the validity, eligibility (including time of receipt) and the acceptance of this Note or any portion hereof for repayment will be determined by the Company, whose determination shall be final and binding. For definitive notes to be repurchased on the applicable Put Option Exercise Date, the Trustee must receive at the principal office of the Trustee in New York City, at least 30, but not more than 60, days prior to the applicable Put Option Exercise Date, but no later than 5:00 p.m. New York City time on the last day for giving notice, (i) this Note with the "Option to Elect Repayment Form" duly completed or (ii) a telegram, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or a trust company in the United States of America setting forth the name, address and telephone number of the registered Holder of such Note, the principal amount of such Note, the amount of the Note to be repurchased, a statement that the option to elect repayment is being made thereby and a guarantee that the Note to be repaid with the form entitled "Option to Elect Repayment" on the reverse of such Note duly completed will be received by the Trustee not later than five Business Days after the date of such telegram, facsimile transmission or letter, and such Note and form are received by the Trustee by such fifth Business Day. All such notices are irrevocable unless waived in writing by the Company. In the event of repurchase of this Note in part only, a new Note or Notes of this series, having the same Stated Maturity, optional repurchase provisions, interest rate and other terms and provisions of this Note, in authorized denominations in an aggregate principal amount equal to the unredeemed portion hereof will be issued in the name of the holder hereof upon the surrender hereof. 3 Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall have the same force and effect as if set forth on the face hereof. The indebtedness evidenced by this Note is entitled to the benefits of a Support Agreement, dated as of April 4, 1989, as amended as of May 15, 1989, December 10, 1990, and February 14, 1991 (as such Agreement may be hereafter amended, modified or supplemented from time to time in accordance with the terms and conditions of the Indenture, the "Support Agreement") between the Company and NIPSCO Industries, Inc. ("Industries"). The Support Agreement provides that, during the term thereof, (i) Industries will own all of the voting stock of the Company, (ii) Industries will cause the Company to have at all times a positive net worth (net assets less intangible assets, if any), as determined in accordance with generally accepted accounting principles, and (iii) if the Company is unable to make timely payments of principal of or any premium or interest on any Debt (as defined below) issued by the Company, Industries will, at the request of the Company or any Lender (as defined below), provide funds to the Company to make such payments. The Support Agreement also provides that any Lender to the Company shall have the right to demand that the Company enforce its rights against Industries under the Support Agreement as described in the previous sentence, and in the event that the Company fails to require Industries to perform such obligations or the Company defaults in the timely payment of principal of or any premium or interest of any Debt owed to a Lender, such Lender may proceed directly against Industries to enforce the Company's rights against Industries under the Support Agreement or to obtain payment of such defaulted principal, premium or interest owed to such Lender. The Support Agreement provides that in no event may any Lender, on default of the Company or Industries or upon failure by the Company or Industries to comply with the Support Agreement, have recourse to or against the stock or assets of Northern Indiana Public Service Company ("Northern Indiana") or any interest of the Company or Industries therein. Notwithstanding this limitation, the Support Agreement provides that funds available to Industries to satisfy any obligations under the Support Agreement will include cash dividends paid by Northern Indiana to Industries. The term "Debt" is defined in the Support Agreement as debt securities or other obligations and includes this Note. The term "Lender" is defined in the Support Agreement as any person, firm or corporation to which the Company is indebted for money borrowed or to which the Company otherwise owes any Debt or which is acting as trustee or authorized representative on behalf of such person, firm or corporation. The Indenture provides that each holder of a Note, as well as the Trustee, shall be considered a "Lender" for purposes of the Support Agreement and shall have all rights of a "Lender" set forth therein. The Support Agreement may be amended or terminated at any time by the agreement of Industries and the Company, provided that (i) no amendment regarding the terms described above may be made unless all Lenders consent in advance and in writing to such amendment, (ii) no amendment regarding any other term of the Support Agreement may be made in a manner that adversely affects the rights of Lenders unless all affected Lenders consent in advance and in writing to such amendment, and (iii) no termination shall be effective until such time as all Debt (including the Note) shall have been paid in full. 4 Unless the Certificate of Authentication hereon has been executed by the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, NIPSCO Capital Markets, Inc. has caused this Note to be duly executed. [Corporate Seal] NIPSCO CAPITAL MARKETS, INC. By: _____________________________________________ Title:___________________________________________ Dated: TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Debt Securities of the series designated therein referred to in the within-mentioned Indenture. THE CHASE MANHATTAN BANK, as Trustee By: _____________________________________________ Authorized Signatory 5 [Reverse of Note] NIPSCO CAPITAL MARKETS, INC. ____% SENIOR NOTE DUE 2027 This Note is one of a duly authorized issue of unsecured senior debt securities of the Company known as the Company's ____% Senior Notes Due 2027, limited to the aggregate principal amount of $75,000,000 (herein called the "Notes" or the "Securities"), issued under an Indenture dated as of February 14, 1997 (such Indenture as originally executed and delivered and as hereafter supplemented or amended together with the Board Resolutions adopted , 1997 and delivered to the Trustee by the Company pursuant to Section 301 of such Indenture setting forth certain terms of the Notes, being herein called the "Indenture") from the Company to The Chase Manhattan Bank, as trustee (herein called the "Trustee," which term includes any successor trustees under the Indenture), to which Indenture, all indentures supplemental thereto and all Board Resolutions relating thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. The acceptance of this Note shall be deemed to constitute the consent and agreement of the Holder hereof to all of the terms and provisions of the Indenture. All capitalized terms used in this Note which are not defined herein shall have the meaning assigned to them in the Indenture. If an Event of Default, as defined in the Indenture, with respect to the Notes shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture contains provisions for defeasance of (i) the entire indebtedness of the Notes or (ii) certain covenants and Events of Default with respect to the Notes, in each case upon compliance with certain conditions set forth therein, which provisions apply to the Notes. The Notes do not have the benefit of any sinking fund. The Company does not have the option to redeem the Notes prior to Stated Maturity. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the holders of the Debt Securities at any time by the Company and the Trustee with the consent of the holders of not less than a majority of the aggregate principal amount of all Debt Securities at the time outstanding and affected thereby. The Indenture also contains provisions permitting the holders of not less than a majority of the aggregate principal amount of the outstanding Debt Securities of any series, on behalf of the holders of all such Debt Securities, to waive compliance by the Company with certain provisions of the Indenture. Furthermore, provisions in the Indenture permit the holders of not less than a majority of the aggregate principal amount of the outstanding Debt Securities of any series, in certain instances, to waive, on behalf of all of the holders of Debt Securities of such series, certain past defaults under the Indenture and their consequences. Any such consent or waiver by the holder of this Note shall be conclusive and binding upon such holder and upon all future holders of this Note and other Notes issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest, if any, on this Note at the times, places and rate or formula, in the coin or currency, and in the manner, herein prescribed. As provided in the Indenture and subject to certain limitations therein and herein set forth, the transfer of this Note is registrable in the Security Register of the Company upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal hereof and interest hereon are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the holder hereof or by his attorney duly authorized in writing, and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. As provided in the Indenture and subject to certain limitations therein and herein set forth, this Note is exchangeable for a like aggregate principal amount of Notes of different authorized denominations but otherwise having the same terms and conditions, as requested by the holder hereof surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the holder in whose name this Note is registered as the owner thereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Notes are issuable only in registered form, without coupons, in denominations of $1,000 and any integral multiple of $1,000, and in book-entry form. The Notes may be represented by one or more global Notes deposited with the Depositary and registered in the name of the nominee of the Depositary, with certain limited exceptions. So long as the Depositary or any successor depositary or its nominee is the registered Holder of a global Note, the Depositary, such successor depositary or such nominee, as the case may be, will be considered to be the sole Holder of the Notes for all purposes of the Indenture. Except as provided in the Indenture, an owner of a beneficial interest in a global Note will not be entitled to have Notes represented by such global Note registered in such owner's name, will not receive or be entitled to receive physical delivery of the Notes in certificated form and will not be considered the owner or Holder thereof under the Indenture. Each person owning a beneficial interest in a global Note must rely on the Depositary's procedures and, if such person is not a participant, on the procedures of the participant through which such person owns its interest, to exercise any rights of a Holder under the Indenture. If the Company requests any action of Holders or if an owner of a beneficial interest in a global Note desires to take any action that a Holder is entitled to take under the Indenture, the Depositary will authorize the participants holding the relevant beneficial interests to give or take such action, and such participants will otherwise act upon the instructions of beneficial owners holding through them. None of the Company, the Trustee, any Paying Agent or the Security Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in this Note in global form or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee, or any agent of the Company or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by any depositary, as a Holder, with respect to this Note in global form or impair, as between such depositary and owners of beneficial interests in such global Note, the operation of customary practices governing the exercise of the rights of such depositary (or its nominee) as Holder of such global Note. 2 As used herein, "Business Day", when used with respect to a particular location referred to in this Note, means any day, other than a Saturday or Sunday, which is not a day on which state or national banks in such location are authorized or obligated by law or executive order to close. The Indenture and this Note shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely in such State. 3 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - -------------------------------- | | | | | | ________________________________________________________________________________ - -(Please print or typewrite name and address including postal zip code of assignee) this Note and all rights thereunder hereby irrevocably constituting and appointing _____________________________________________Attorney to transfer this Note on the books of the Trustee, with full power of substitution in the premises. Dated: __________________ * - -------------------------- *Notice: The signature(s) on this Assignment must correspond with the name(s) as written upon the face of this Note in every particular, without alteration or enlargement or any change whatsoever. OPTION TO ELECT REPAYMENT IN THE CASE OF CERTIFICATED NOTES ONLY The undersigned hereby irrevocably requests and instructs the Company to repurchase the within or attached Note (or portion thereof specified below) pursuant to its terms at a price equal to 100% of the principal amount thereof, together with accrued interest if any, to the applicable Put Option Exercise Date, to the undersigned at - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type name, address and phone number of the undersigned) For the within or attached Note to be repurchased on the applicable Put Option Exercise Date, the Trustee must receive at the principal office of the Trustee in New York City, at least 30, but not more than 60, days prior to the applicable Put Option Exercise Date, but no later than 5:00 p.m. New York City time on the last day for giving notice, (i) this Note with the "Option to Elect Repayment Form" duly completed or (ii) a telegram, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or a trust company in the United States of America setting forth the name, address and telephone number of the registered Holder of such Note, the principal amount of such Note, the amount of the Note to be repurchased, a statement that the option to elect repayment is being made thereby and a guarantee that the Note to be repaid with the form entitled "Option to Elect Repayment" on the reverse of such Note duly completed will be received by the Trustee not later than five Business Days after the date of such telegram, facsimile transmission or letter, and such Note and form are received by the Trustee by such fifth Business Day. If less than the entire principal amount of the within or attached Note is to be repurchased, specify the portion to be repurchased: $_______________ and specify the denomination or denominations (which shall be an Authorized Denomination) of the Note or Notes to be issued to the holder for the portion of the Note not being repurchased (in the absence of specific instruction, one such Note will be issued): $______________. NOTICE: The signature to this Option to Elect Repayment must correspond with the names as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatever. - ------------------------------------------------------ Signature of Holder (Sign exactly as name appears on the face of the Note) Dated: ----------------------------------------------- 4 EX-5 4 OPINION OF SCHIFF HARDIN & WAITE EXHIBIT 5 November 10, 1997 NIPSCO Capital Markets, Inc. 5265 Hohman Avenue Hammond, Indiana 46320 Ladies and Gentlemen: We are acting as counsel to NIPSCO Industries, Inc., an Indiana corporation ("Industries"), and NIPSCO Capital Markets, Inc., an Indiana corporation ("Capital"), in connection with the filing of a Registration Statement on Form S-3 by Capital and Industries. The Registration Statement relates to the offer and sale by Capital of $75,000,000 principal amount of its Senior Notes Due 2027 (the "Notes"), and the related obligations of Industries under the Support Agreement dated April 4, 1989, as amended as of May 15, 1989, December 10, 1990, and February 14, 1991, between Capital and Industries (the "Support Agreement"), as more fully described in the Registration Statement. The Notes will be issued under an Indenture dated as of February 14, 1997 among Capital, Industries and The Chase Manhattan Bank, as trustee (the "Trustee") (the "Indenture"). In connection with this opinion, we have examined such corporate records, certificates and other documents, and have made such other factual and legal investigations, as we have deemed necessary or appropriate for the purposes of this opinion. Based on the foregoing, it is our opinion that: 1. The Notes will be the legally issued, valid and binding obligations of Capital, enforceable in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other laws relating to or affecting the enforceability of creditors' rights generally or by general principles of equity, at such time as: (a) the series in which such Notes are to be issued and the terms of the Notes shall have been established by or pursuant to resolutions of the Board of Directors of Capital consistent with the Indenture, and such series and terms shall have been set forth or determined in the manner provided in an Officer's Certificate (as defined in the Indenture) or supplemental indenture in accordance with the requirements of the Indenture; (b) such Notes shall have been duly executed by Capital, duly authenticated by the Trustee pursuant to the Indenture and delivered to the purchasers thereof upon payment of the agreed consideration therefor; and (c) the Registration Statement shall have become effective under the Securities Act of 1933, as amended, and the Notes shall have been issued as contemplated by the Registration Statement. NIPSCO Capital Markets, Inc. November 10, 1997 Page 2 2. The Notes are entitled to the benefit of the Support Agreement, which is the valid and binding obligation of Industries, enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other laws relating to or affecting the enforcement of creditors' rights generally or by general principles of equity. We do not express any opinion herein concerning any laws other than the laws of the State of Indiana and the federal laws of the United States. We hereby consent to the filing of this opinion as Exhibit 5 to the Registration Statement and to the reference to us under the caption "Legal Matters" in the Prospectus contained in the Registration Statement. Respectfully submitted, SCHIFF HARDIN & WAITE By: /s/ Andrew A. Kling ------------------------------------- EX-12 5 STATEMENT RE COMPUTATION OF RATIO OF EARNINGS
EXHIBIT 12 NIPSCO INDUSTRIES, INC. RATIO OF EARNINGS TO FIXED CHARGES TWELVE MONTHS ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, ------------------------------------------------------------------------------- ------------- 1992 1993 1994 1995 1996 1997 ------------ ------------ ------------ ------------ ------------ ------------ Earnings as defined in Item 603(d) of Regulation S-K: Income before interest charges................. $248,243,984 $261,422,078 $267,739,129 $284,348,649 $290,836,347 $309,341,819 Adjustments: Federal income taxes.... 61,556,604 89,021,067 100,320,963 102,223,791 78,532,661 121,586,157 State income tax........ 11,700,316 13,132,078 15,398,420 15,420,719 12,450,863 19,043,068 Deferred investment tax credit, net......... (7,461,688) (7,446,643) (6,488,242) (7,616,362) (7,407,813) (7,553,016) Deferred income taxes, net.................... 14,503,080 2,122,284 (11,488,356) (2,680,002) 27,418,121 (27,647,607) Federal and state income taxes included in other income..... (3,323,871) (5,537,170) (15,332,783) (9,260,066) (4,076,337) 2,224,000 Amortization of capitalized interest... 0 0 103,130 247,616 247,512 247,612 ------------ ----------- ------------ ------------ ------------ ------------ $326,228,506 $362,714,804 $349,241,282 $383,790,245 $387,301,754 $417,241,933 ============ ============ ============ ============ ============ ============ Fixed charges as defined in item 603(d) of Regulation S-K: Interest on long-term debt... $ 37,660,094 $ 82,121,208 $ 78,292,155 $ 82,555,251 $ 35,381,829 $ 98,723,016 Other interest............... 9,954,982 9,235,108 11,860,228 12,731,395 17,448,667 13,431,297 Amortization of premium, reacquisition premium, discount and expense on debt, net............... 3,322,908 3,662,624 3,897,161 4,401,668 4,506,472 4,678,760 Interest portion of rent expense................ 1,395,288 2,038,882 2,220,675 2,416,111 2,656,116 3,095,497 Capitalized interest during period............... 326,631 4,664,887 2,145,182 234,613 0 0 ------------ ------------ ------------ ------------ ------------ ------------ $102,659,814 $101,835,618 $ 98,205,291 $102,488,028 $110,091,884 $119,929,560 ============ ============ ============ ============ ============ ============ Plus preferred stock dividends: Preferred dividend requirements of subsidiary............. $ 10,858,424 $ 10,541,008 $ 9,912,758 $ 9,046,207 $ 8,711,986 $ 7,663,016 Preferred dividend requirements factor..... 1.52 1.66 1.67 1.54 1.59 1.56 ------------ ------------ ------------ ------------ ------------ ------------ Preferred dividend requirements of subsidiary............. 18,200,804 16,131,969 14,571,756 13,931,169 13,852,056 11,782,705 Fixed charges................ 102,859,314 101,638,818 88,206,291 102,488,928 110,091,884 119,929,560 ------------ ------------ ------------ ------------ ------------ ------------ $119,860,618 $117,767,787 $112,777,047 $116,419,187 $123,843,340 $131,712,265 ============ ============ ============ ============ ============ ============ Ratio of earnings to fixed charges 2.74 3.00 3.10 3.30 3.21 3.17
EX-23.1 6 CONSENT OF ARTHUR ANDERSEN LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Registration Statement of our reports dated January 28, 1997, included or incorporated by reference in the annual report on Form 10-K for NIPSCO Industries, Inc. for the year ended December 31, 1996; our report dated April 28, 1997, included in the quarterly report on Form 10-Q for NIPSCO Industries, Inc. for the period ended March 31, 1997; our report dated July 29, 1997 included in the quarterly report on Form 10-Q for NIPSCO Industries, Inc. for the period ended June 30, 1997; and to all references made to our Firm included in this Registration Statement. /s/ Arthur Andersen LLP Chicago, Illinois November 10, 1997 EX-24.1 7 POWERS OF ATTORNEY OF THE DIRECTORS EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, Gary L. Neale, hereby constitute and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true and lawful attorneys and agents, with full power of substitution and resubstitution, to execute in my name and on my behalf, in all capacities as a Director of NIPSCO Capital Markets, Inc. ("Corporation"), a Registration Statement on Form S-3 and any amendments thereto (including, without limitation, post-effective amendments pursuant to Rule 462(b) under the Securities Act of 1933, as amended) to be filed with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended, of Debt Securities of the Corporation, to file such Registration Statement with the Securities and Exchange Commission and to comply with the undertakings of the Corporation made in connection with such Registration Statement; and I hereby ratify and confirm all that said attorneys, or either of them, have done or shall lawfully do by virtue of this Power of Attorney. DATED: October 28, 1997 /s/ Gary L. Neale ----------------- Gary L. Neale POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, Stephen P. Adik, hereby constitute and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true and lawful attorneys and agents, with full power of substitution and resubstitution, to execute in my name and on my behalf, in all capacities as a Director of NIPSCO Capital Markets, Inc. ("Corporation"), a Registration Statement on Form S-3 and any amendments thereto (including, without limitation, post-effective amendments pursuant to Rule 462(b) under the Securities Act of 1933, as amended) to be filed with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended, of Debt Securities of the Corporation, to file such Registration Statement with the Securities and Exchange Commission and to comply with the undertakings of the Corporation made in connection with such Registration Statement; and I hereby ratify and confirm all that said attorneys, or either of them, have done or shall lawfully do by virtue of this Power of Attorney. DATED: October 28, 1997 /s/ Stephen P. Adik ------------------- Stephen P. Adik POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, Patrick J. Mulchay, hereby constitute and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true and lawful attorneys and agents, with full power of substitution and resubstitution, to execute in my name and on my behalf, in all capacities as a Director of NIPSCO Capital Markets, Inc. ("Corporation"), a Registration Statement on Form S-3 and any amendments thereto (including, without limitation, post-effective amendments pursuant to Rule 462(b) under the Securities Act of 1933, as amended) to be filed with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended, of Debt Securities of the Corporation, to file such Registration Statement with the Securities and Exchange Commission and to comply with the undertakings of the Corporation made in connection with such Registration Statement; and I hereby ratify and confirm all that said attorneys, or either of them, have done or shall lawfully do by virtue of this Power of Attorney. DATED: October 28, 1997 /s/ Patrick J. Mulchay ---------------------- Patrick J. Mulchay POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, Jeffrey W. Yundt, hereby constitute and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true and lawful attorneys and agents, with full power of substitution and resubstitution, to execute in my name and on my behalf, in all capacities as a Director of NIPSCO Capital Markets, Inc. ("Corporation"), a Registration Statement on Form S-3 and any amendments thereto (including, without limitation, post-effective amendments pursuant to Rule 462(b) under the Securities Act of 1933, as amended) to be filed with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended, of Debt Securities of the Corporation, to file such Registration Statement with the Securities and Exchange Commission and to comply with the undertakings of the Corporation made in connection with such Registration Statement; and I hereby ratify and confirm all that said attorneys, or either of them, have done or shall lawfully do by virtue of this Power of Attorney. DATED: October 28, 1997 /s/ Jeffrey W. Yundt -------------------- Jeffrey W. Yundt POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, Steven C. Beering, hereby constitute and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true and lawful attorneys and agents, with full power of substitution and resubstitution, to execute in my name and on my behalf, in all capacities as a Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on Form S-3 and any amendments thereto (including, without limitation, post- effective amendments pursuant to Rule 462(b) under the Securities Act of 1933, as amended) to be filed with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended, of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital Markets, Inc. ("Capital Markets"), including the related obligations of the Corporation pursuant to the Support Agreement between the Corporation and Capital Markets, to file such Registration Statement with the Securities and Exchange Commission and to comply with the undertakings of the Corporation made in connection with such Registration Statement; and I hereby ratify and confirm all that said attorneys, or either of them, have done or shall lawfully do by virtue of this Power of Attorney. DATED: October 28, 1997 /s/ Steven C. Beering --------------------- Steven C. Beering POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, Arthur J. Decio, hereby constitute and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true and lawful attorneys and agents, with full power of substitution and resubstitution, to execute in my name and on my behalf, in all capacities as a Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on Form S-3 and any amendments thereto (including, without limitation, post- effective amendments pursuant to Rule 462(b) under the Securities Act of 1933, as amended) to be filed with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended, of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital Markets, Inc. ("Capital Markets"), including the related obligations of the Corporation pursuant to the Support Agreement between the Corporation and Capital Markets, to file such Registration Statement with the Securities and Exchange Commission and to comply with the undertakings of the Corporation made in connection with such Registration Statement; and I hereby ratify and confirm all that said attorneys, or either of them, have done or shall lawfully do by virtue of this Power of Attorney. DATED: October 28, 1997 /s/ Arthur J. Decio ------------------- Arthur J. Decio POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, Gary L. Neale, hereby constitute and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true and lawful attorneys and agents, with full power of substitution and resubstitution, to execute in my name and on my behalf, in all capacities as a Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on Form S-3 and any amendments thereto (including, without limitation, post- effective amendments pursuant to Rule 462(b) under the Securities Act of 1933, as amended) to be filed with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended, of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital Markets, Inc. ("Capital Markets"), including the related obligations of the Corporation pursuant to the Support Agreement between the Corporation and Capital Markets, to file such Registration Statement with the Securities and Exchange Commission and to comply with the undertakings of the Corporation made in connection with such Registration Statement; and I hereby ratify and confirm all that said attorneys, or either of them, have done or shall lawfully do by virtue of this Power of Attorney. DATED: October 28, 1997 /s/ Gary L. Neale ----------------- Gary L. Neale POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, Ernestine M. Raclin, hereby constitute and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true and lawful attorneys and agents, with full power of substitution and resubstitution, to execute in my name and on my behalf, in all capacities as a Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on Form S-3 and any amendments thereto (including, without limitation, post- effective amendments pursuant to Rule 462(b) under the Securities Act of 1933, as amended) to be filed with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended, of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital Markets, Inc. ("Capital Markets"), including the related obligations of the Corporation pursuant to the Support Agreement between the Corporation and Capital Markets, to file such Registration Statement with the Securities and Exchange Commission and to comply with the undertakings of the Corporation made in connection with such Registration Statement; and I hereby ratify and confirm all that said attorneys, or either of them, have done or shall lawfully do by virtue of this Power of Attorney. DATED: October 28, 1997 /s/ Ernestine M. Raclin ----------------------- Ernestine M. Raclin POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, Denis E. Ribordy, hereby constitute and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true and lawful attorneys and agents, with full power of substitution and resubstitution, to execute in my name and on my behalf, in all capacities as a Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on Form S-3 and any amendments thereto (including, without limitation, post- effective amendments pursuant to Rule 462(b) under the Securities Act of 1933, as amended) to be filed with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended, of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital Markets, Inc. ("Capital Markets"), including the related obligations of the Corporation pursuant to the Support Agreement between the Corporation and Capital Markets, to file such Registration Statement with the Securities and Exchange Commission and to comply with the undertakings of the Corporation made in connection with such Registration Statement; and I hereby ratify and confirm all that said attorneys, or either of them, have done or shall lawfully do by virtue of this Power of Attorney. DATED: October 28, 1997 /s/ Denis E. Ribordy -------------------- Denis E. Ribordy POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, Ian M. Rolland, hereby constitute and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true and lawful attorneys and agents, with full power of substitution and resubstitution, to execute in my name and on my behalf, in all capacities as a Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on Form S-3 and any amendments thereto (including, without limitation, post- effective amendments pursuant to Rule 462(b) under the Securities Act of 1933, as amended) to be filed with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended, of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital Markets, Inc. ("Capital Markets"), including the related obligations of the Corporation pursuant to the Support Agreement between the Corporation and Capital Markets, to file such Registration Statement with the Securities and Exchange Commission and to comply with the undertakings of the Corporation made in connection with such Registration Statement; and I hereby ratify and confirm all that said attorneys, or either of them, have done or shall lawfully do by virtue of this Power of Attorney. DATED: October 28, 1997 /s/ Ian M. Rolland ------------------ Ian M. Rolland POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, Edmund A. Schroer, hereby constitute and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true and lawful attorneys and agents, with full power of substitution and resubstitution, to execute in my name and on my behalf, in all capacities as a Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on Form S-3 and any amendments thereto (including, without limitation, post- effective amendments pursuant to Rule 462(b) under the Securities Act of 1933, as amended) to be filed with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended, of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital Markets, Inc. ("Capital Markets"), including the related obligations of the Corporation pursuant to the Support Agreement between the Corporation and Capital Markets, to file such Registration Statement with the Securities and Exchange Commission and to comply with the undertakings of the Corporation made in connection with such Registration Statement; and I hereby ratify and confirm all that said attorneys, or either of them, have done or shall lawfully do by virtue of this Power of Attorney. DATED: October 28, 1997 /s/ Edmund A. Schroer --------------------- Edmund A. Schroer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, Robert J. Welsh, hereby constitute and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true and lawful attorneys and agents, with full power of substitution and resubstitution, to execute in my name and on my behalf, in all capacities as a Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on Form S-3 and any amendments thereto (including, without limitation, post- effective amendments pursuant to Rule 462(b) under the Securities Act of 1933, as amended) to be filed with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended, of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital Markets, Inc. ("Capital Markets"), including the related obligations of the Corporation pursuant to the Support Agreement between the Corporation and Capital Markets, to file such Registration Statement with the Securities and Exchange Commission and to comply with the undertakings of the Corporation made in connection with such Registration Statement; and I hereby ratify and confirm all that said attorneys, or either of them, have done or shall lawfully do by virtue of this Power of Attorney. DATED: October 28, 1997 /s/ Robert J. Welsh ------------------- Robert J. Welsh POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that I, James T. Morris, hereby constitute and appoint Francis P. Girot, Jr. and Arthur A. Paquin, or either of them, my true and lawful attorneys and agents, with full power of substitution and resubstitution, to execute in my name and on my behalf, in all capacities as a Director of NIPSCO Industries, Inc. ("Corporation"), a Registration Statement on Form S-3 and any amendments thereto (including, without limitation, post- effective amendments pursuant to Rule 462(b) under the Securities Act of 1933, as amended) to be filed with the Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended, of up to $75,000,000 principal amount of Debt Securities of NIPSCO Capital Markets, Inc. ("Capital Markets"), including the related obligations of the Corporation pursuant to the Support Agreement between the Corporation and Capital Markets, to file such Registration Statement with the Securities and Exchange Commission and to comply with the undertakings of the Corporation made in connection with such Registration Statement; and I hereby ratify and confirm all that said attorneys, or either of them, have done or shall lawfully do by virtue of this Power of Attorney. DATED: October 28, 1997 /s/ James T. Morris ------------------- James T. Morris EX-25 8 FORM T-1 EXHIBIT 25 ________________________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 _________________________ FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ___________________________________________ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ________________________________________ THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) _____________________________________________ NIPSCO CAPITAL MARKETS, INC. (Exact name of obligor as specified in its charter) INDIANA 35-1762940 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 5265 HOHMAN AVENUE HAMMOND, INDIANA 46320 (Address of principal executive offices) (Zip Code) NIPSCO INDUSTRIES, INC. (Exact name of obligor as specified in its charter) INDIANA 35-1762940 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 5265 HOHMAN AVENUE HAMMOND, INDIANA 46320 (Address of principal executive offices) (Zip Code) ___________ DEBT SECURITIES (Title of the indenture securities) GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 30th day of October, 1997. THE CHASE MANHATTAN BANK By /s/ R. Lorenzen ---------------------------------- R. Lorenzen Senior Trust Officer - Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 1997, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve A
DOLLAR AMOUNTS ASSETS IN MILLIONS ----------- Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.................................. $ 13,892 Interest-bearing balances.......................... 4,282 Securities: Held to maturity securities.......................... 2,857 Available for sale securities........................ 34,091 Federal funds sold and securities purchased under agreements to resell................................. 29,970 Loans and lease financing receivables: Loans and leases, net of unearned income............. $124,827 Less: Allowance for loan and lease losses............ 2,753 Less: Allocated transfer risk reserve................ 13 -------- Loans and leases, net of unearned income, allowance, and reserve............................. 122,061 Trading Assets....................................... 56,042 Premises and fixed assets (including capitalized leases)............................................ 2,904 Other real estate owned.............................. 306 Investments in unconsolidated subsidiaries and associated companies............................... 232 Customers' liability to this bank on acceptances outstanding........................................ 2,092 Intangible assets.................................... 1,532 Other assets......................................... 10,448 -------- TOTAL ASSETS......................................... $280,709 ========
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LIABILITIES Deposits In domestic offices...................................... $ 91,249 Noninterest-bearing...................................... $ 38,157 Interest-bearing......................................... 53,092 -------- In foreign offices, Edge and Agreement subsidiaries, and IBF's................................................ 70,192 Noninterest-bearing........................................ $ 3,712 Interest-bearing......................................... 66,480 Federal funds purchased and securities sold under agree- ments to repurchase........................................ 35,185 Demand notes issued to the U.S. Treasury................... 1,000 Trading liabilities........................................ 42,307 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less............ 4,593 With a remaining maturity of more than one year through three years...................................... 260 With a remaining maturity of more than three years... 146 Bank's liability on acceptances executed and outstanding... 2,092 Subordinated notes and debentures.......................... 5,715 Other liabilities.......................................... 11,373 TOTAL LIABILITIES.......................................... 264,112 -------- EQUITY CAPITAL Perpetual preferred stock and related surplus.............. 0 Common stock............................................... 1,211 Surplus (exclude all surplus related to preferred stock).. 10,283 Undivided profits and capital reserves..................... 5,280 Net unrealized holding gains (losses) on available-for-sale securities........................... (193) Cumulative foreign currency translation adjustments........ 16 TOTAL EQUITY CAPITAL....................................... 16,597 -------- TOTAL LIABILITIES AND EQUITY CAPITAL....................... $280,709 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. WALTER V. SHIPLEY ) THOMAS G. LABRECQUE ) DIRECTORS WILLIAM B. HARRISON, JR. ) -5- -----END PRIVACY-ENHANCED MESSAGE-----