Nicor Gas Company
Form 10-K
Exhibit 1.01
NORTHERN ILLINOIS GAS COMPANY
$75,000,000
FIRST MORTGAGE BONDS
6 5/8% SERIES DUE FEBRUARY 1, 2011
UNDERWRITING AGREEMENT
January 25, 2001
ABN AMRO Incorporated
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Dear Sirs:
Northern Illinois Gas Company, doing business as Nicor Gas Company (the
"Company") proposes, subject to the terms and conditions stated herein and in
the General Terms and Conditions of Underwriting Agreement in the form of Annex
A hereto, a copy of which you have previously received, to issue and sell to you
(the "Underwriter"), $75,000,000 aggregate principal amount of the Company's
First Mortgage Bonds (the "Bonds"). All of the provisions of such General Terms
and Conditions of Underwriting Agreement are incorporated herein by reference in
their entirety, and shall be deemed to be a part of this Underwriting Agreement
to the same extent as if such provisions had been set forth in full herein.
Unless otherwise defined herein, terms defined in the General Terms and
Conditions of Underwriting Agreement are used herein as therein defined.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Bonds in the form heretofore
delivered to you is now proposed to be filed or mailed for filing with the
Commission. Such amendment or supplement sets forth the terms of the Bonds.
Subject to the terms and conditions set forth herein, the Company agrees
to issue and sell to the Underwriter, and the Underwriter agrees to purchase
from the Company, all of the Bonds on the following terms and conditions:
Aggregate principal amount of Bonds
to be purchased:....................... $75,000,000
Rate of interest per annum to be borne by the
Bonds (payable semiannually):.......... 6.625% (such rate to be a
multiple of .001%)
Maturity date of the Bonds:............... February 1, 2011
Price to be paid to the Company for
the Bonds:............................. 98.903% of the principal
amount of the Bonds plus
accrued interest, if any,
from date of Supplemental
Indenture to the date of
delivery of the Bonds.
Initial public offering price of
the Bonds:............................. 99.553% of the principal
amount of the Bonds plus
accrued interest, if any,
from date of Supplemental
Indenture to the date of
delivery of the Bonds. (If
other, give details.)
Place for delivery of Bonds:.............. The Depository Trust Company
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Date and time of Time of Delivery:........ February 1, 2001 at 9:00 a.m.
Chicago Time
Place for checking Bonds on the business day
prior to Time of Delivery:............. The Depository Trust Company
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Redemption and Sinking Fund:.............. The Bonds will be redeemable
in whole at any time or in
part from time to time, at a
redemption price equal to the
greater of (i) 100% of the
principal amount of the Bonds
to be redeemed or (ii) the
sum of the present values of
the remaining scheduled
payments of principal and
interest thereon (exclusive
of interest accrued to the
date of redemption)
discounted, at the then
current treasury rate plus
25 basis points, to the date
of redemption on a semiannual
basis (assuming a 360-day
year consisting of twelve
30-day months), plus in each
case, accrued and unpaid
interest on the principal
amount being redeemed to the
date of redemption. No
sinking fund will be provided.
Address for notices per Section 12 of the General
Terms and Conditions of Underwriting Agreement: ABN AMRO Incorporated
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If the foregoing is in accordance with your understanding, please sign
and return to us the enclosed counterparts hereof, whereupon it will become a
binding agreement between the Underwriter and the Company in accordance with its
terms.
Very truly yours,
NORTHERN ILLINOIS GAS COMPANY
By
Title: Vice President and
Treasurer
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
ABN AMRO Incorporated
By
Title:
ANNEX A
NORTHERN ILLINOIS GAS COMPANY
$75,000,000
FIRST MORTGAGE BONDS
GENERAL TERMS AND CONDITIONS OF UNDERWRITING AGREEMENT
Northern Illinois Gas Company, an Illinois corporation (the "Company"),
proposes to enter into an Underwriting Agreement into which these General Terms
and Conditions are incorporated by reference (the "Underwriting Agreement") and,
subject to the terms and conditions stated therein, to issue and sell to the
underwriter or underwriters named in Schedule I to the Underwriting Agreement up
to $75,000,000 aggregate principal amount of its First Mortgage Bonds
(hereinafter called the "Bonds") under the registration statement referred to in
Section 2(a) hereof. Such Bonds will be issued under the Company's Indenture
dated as of January 1, 1954, to Continental Bank, National Association, Trustee
(the "Trustee"), as supplemented by supplemental indentures dated February 9,
1954, April 1, 1956, June 1, 1959, July 1, 1960, June 1, 1963, July 1, 1963,
August 1, 1964, August 1, 1965, May 1, 1966, August 1, 1966, July 1, 1967, June
1, 1968, December 1, 1969, August 1, 1970, June 1, 1971, July 1, 1972, July 1,
1973, April 1, 1975, April 30, 1976, April 30, 1976, July 1, 1976, August 1,
1976, December 1, 1977, January 15, 1979, December 1, 1981, March 1, 1983,
October 1, 1984, December 1, 1986, March 15, 1988, July 1, 1988, July 1, 1989,
July 15, 1990, August 15, 1991, July 15, 1992, February 1, 1993, March 15, 1993,
May 1, 1993, July 1, 1993, August 15, 1994, October 15, 1995, May 10, 1996,
August 1, 1996, June 1, 1997, October 15, 1997, February 15, 1998, June 1, 1998
and February 1, 1999, respectively, and as to be further supplemented by a
Supplemental Indenture (the "Supplemental Indenture") which will be dated the
first or fifteenth day of the calendar month in which the "Time of Delivery" (as
hereinafter defined) falls, creating the series in which the Bonds are to be
issued. Said Indenture as so supplemented is hereinafter called the "Indenture."
The term "Underwriters" herein shall refer to the several persons, firms and
corporations named in Schedule I to the Underwriting Agreement and the term
"Representatives" herein shall refer to the Underwriters identified as the
Representatives who are acting on behalf of the Underwriters (including
themselves) in the Underwriting Agreement. All obligations of the Underwriters
under the Underwriting Agreement are several and not joint. The terms
"Underwriters", "Representatives", "persons", "firms" and "corporations" shall
include the singular as well as the plural.
The terms of the issuance of the Bonds shall be as specified in the
Underwriting Agreement. The Underwriting Agreement shall constitute an agreement
by the Company and the Underwriters to be bound by all of the provisions of
these General Terms and Conditions of Underwriting Agreement, as follows:
Section 1. Sale of Bonds. Sales of the Bonds will be made to the
Underwriters, for whom the Representatives will act as such. The obligation of
the Company to issue and sell any of the Bonds and the obligation of any of the
Underwriters to purchase any of the Bonds shall be evidenced by the Underwriting
Agreement. The Underwriting Agreement shall specify the aggregate principal
amount of Bonds to be purchased, the rate and time of payment of interest to be
borne by the Bonds, the maturity date of the Bonds, the price to be paid to the
Company for the Bonds, the initial public offering price or other offering terms
of such Bonds and the redemption prices and other special terms, if any,
relating to the Bonds, the names of the Underwriters of such Bonds, the names of
the Representatives of such Underwriters and the amount of Bonds to be purchased
by each Underwriter, and, subject to the provisions of Section 3 hereof, shall
set forth the date, time and manner of the delivery of such Bonds. The terms of
the Bonds will be set forth in the Prospectus Supplement (as hereinafter
defined). The Underwriting Agreement shall be in the form of an executed writing
(which may be in counterparts) and may be evidenced by an exchange of telecopied
communications or any other rapid transmission device to produce a written
record of communications transmitted.
Section 2. Representations and Warranties of the Company.The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form S-3 with respect to the Bonds,
including a related preliminary prospectus, has been prepared by the
Company in conformity with the requirements of the Securities Act of
1933, as amended (the "Act"), and the rules and regulations of the
Securities and Exchange Commission (the "Commission") under the Act (the
"Regulations"), and has been filed with the Commission on December 17,
1998 and, if one or more amendments to such registration statement, which
may include an amended preliminary prospectus, have been filed with the
Commission, such amendments have been similarly prepared; and such
registration statement has become effective. Such registration statement,
as amended to the date of the Underwriting Agreement, together with the
prospectus supplement referred to below is hereinafter referred to as the
"Registration Statement". Such prospectus as supplemented specifically
relating to the Bonds and filed with the Commission under Rule 424(b) of
the Act is hereinafter referred to as the "Prospectus". The Prospectus
has been prepared by the Company in conformity with the requirements of
the Act and the Regulations. Copies of the Registration Statement and any
related prospectus have been delivered to the Representatives. As used
herein, Registration Statement, Prospectus and preliminary prospectus
shall include, in each case, the material incorporated therein pursuant
to Item 12 of Form S-3 filed under the Securities Exchange Act of 1934
(the "1934 Act") on or prior to the date of the Underwriting Agreement,
and "amended", "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed to include the
filing by the Company of any document pursuant to Sections 13(a), 13(c),
14 or 15(d) of the 1934 Act after the date of the Underwriting Agreement.
(b) The registration statement at the time it became effective, and
the related prospectus and any amendments and supplements thereto filed
prior to the date of the Underwriting Agreement, conformed in all
material respects to the provisions of the Act and the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act") and the rules and
regulations of the Commission thereunder, on the date of the Underwriting
Agreement and at the Time of Delivery (referred to in Section 3) the
Registration Statement, the Prospectus, and any amendments and
supplements thereto, and the Indenture, will conform in all material
respects to the Act, the Trust Indenture Act and the respective rules and
regulations of the Commission thereunder; and at the time the
registration statement became effective, the registration statement and
related prospectus did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and at the date
of this Underwriting Agreement and at the Time of Delivery, the
Registration Statement and the Prospectus and any amendments and
supplements thereto do not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein not misleading; provided, however, that none of
the representations and warranties in this subsection shall apply to
statements in or omissions from the Registration Statement or Prospectus
or any amendment or supplement thereto made in reliance upon and in
conformity with information respecting the Underwriters furnished to the
Company in writing by or on behalf of any Underwriter through the
Representatives expressly for use in the Registration Statement or
Prospectus.
(c) The documents incorporated by reference into the Prospectus, at
the time they were filed with the Commission, complied in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Regulations"), and,
at the date of this Underwriting Agreement and at the Time of Delivery,
when read together with the Prospectus and any supplement thereto will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and any documents filed after the date
of the Underwriting Agreement and so incorporated by reference in the
Prospectus will, when they are filed with the Commission, comply in all
material respects with the requirements of the 1934 Act and the 1934
Regulations, and when read together with the Prospectus and any
supplement thereto will not contain an untrue statement of material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(d) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP are independent public accountants with
respect to the Company and its subsidiaries as required by the Act and
the Regulations.
(e) The financial statements included in the Registration Statement
present fairly the financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the results of their
operations for the periods specified, and said financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis during the periods involved.
(f) The Company is a corporation in good standing, duly organized
and validly existing under the laws of Illinois, and has due corporate
authority to carry on the business in which it is engaged and to own and
operate the properties used by it in such business as described in the
Prospectus. The Company's subsidiary constitutes less than 5% of its
consolidated assets and during the year ended December 31, 2000
contributed less than 5% of its consolidated annual operating revenues
and net income, and the Company does not consider its subsidiary to be
material.
(g) The execution and delivery of the Underwriting Agreement have
been duly authorized by the Company and the Underwriting Agreement
constitutes a valid and legally binding obligation of the Company; the
Bonds have been duly authorized, and when issued and delivered pursuant
to the Underwriting Agreement and the Indenture, will have been duly
executed, authenticated, issued and delivered and will constitute valid
and legally binding obligations of the Company in accordance with their
respective terms, entitled to the benefits provided by the Indenture; the
Supplemental Indenture has been duly authorized in substantially the form
filed as an exhibit to the Registration Statement and, when executed and
delivered by the Company and the Trustee, will constitute a valid and
legally binding instrument enforceable in accordance with its terms,
except to the extent the enforceability of the Bonds and the Indenture
may be limited by bankruptcy, insolvency, reorganization or other laws of
general application relating to or affecting the enforcement of
creditors' rights or general equity principles; and the Indenture and the
Bonds as executed and delivered will conform in all material respects to
the descriptions thereof in the Prospectus.
(h) The issue and sale of the Bonds and the compliance by the
Company with all of the provisions of the Bonds, the Indenture, and the
Underwriting Agreement and the transactions contemplated thereby will not
conflict with or result in any breach or violation of any of the
provisions of, or constitute (disregarding any grace or notice period) a
default under, or result in the imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to the
terms of, any other indenture, or any mortgage, loan agreement, contract,
note, lease or other agreement or instrument to which the Company is a
party or by which the Company may be bound or to which any of the
property or assets of the Company is subject, nor will such action result
in any violation of the provisions of the charter or by-laws of the
Company or any statute or any order, rule or regulation applicable to the
Company of any court or any federal, state or other regulatory authority
or other governmental body having jurisdiction over the Company or any of
its properties.
(i) Since the respective dates as of which information is given in
the Registration Statement and Prospectus and except as may otherwise be
stated or contemplated therein; (i) there has not been any material
adverse change in the condition, financial or otherwise, of the Company
and its subsidiaries considered as one enterprise, or in the earnings,
affairs, business prospects or properties of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business or arising from any court or governmental
action, order or decree, and (ii) there has been no transaction entered
into by the Company or any subsidiary which is material to the Company
and its subsidiaries considered as one enterprise, other than
transactions in the ordinary course of business.
(j) Except as set forth in the Prospectus, the Company, with minor
exceptions, and subject to noncompliance with certain procedural and
other requirements in the procurement and granting of gas franchises in a
number of smaller municipalities formerly served by Mid-Illinois Gas
Company, has statutory authority, franchises, licenses, rights-of-way,
easements and consents, free from unduly burdensome restrictions and
adequate for the conduct of the business in which it is engaged.
(k) The Illinois Commerce Commission has entered an order
authorizing the issue and sale of the Bonds by the Company upon terms
consistent with the Underwriting Agreement, and no other consent,
approval, authorization or other order or filing with any regulatory or
governmental body is required for the issuance and sale of the Bonds and
consummation of the transactions contemplated hereby, except such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Bonds by the Underwriters.
(l) The Company is not in violation of its charter or, except as
disclosed in the Prospectus, in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or its property is bound
or affected which is material to the Company and its subsidiary
considered as one enterprise.
(m) Except as set forth in the Registration Statement and
Prospectus, there are no legal or governmental proceedings pending to
which the Company or its subsidiary is a party or of which any property
of the Company or its subsidiary is the subject, and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others, other than
proceedings which, if determined adversely to the Company and its
subsidiary, would not individually or in the aggregate have a material
adverse effect on the business, properties, financial position, net worth
or results of operations of the Company and its subsidiary considered as
a whole.
(n) the Company has good and sufficient title to all property
described or referred to in the Indenture and purported to be conveyed
thereby (except property released from the lien of the Indenture in
connection with the sale or other disposition thereof), subject only to
the lien of the Indenture and to permitted liens as defined therein; the
Indenture has been duly filed for recordation in such manner and in such
places as is required by law in order to give constructive notice of,
establish, preserve and protect the lien of the Indenture; the Indenture
constitutes a valid, direct first mortgage lien, subject only to
permitted liens, on substantially all property of the Company, except
property expressly excepted by the terms of the Indenture; the Indenture
will, when recorded or registered by the Company in accordance with its
covenants under the Indenture, constitute a valid, direct first mortgage
lien on all property of the character of that now subject to the lien of
the Indenture hereafter acquired by the Company, subject only to
permitted liens and to liens, if any, existing or placed on such
after-acquired property at the time of the acquisition thereof;
Any certificate signed by any officer of the Company and delivered to you or to
Underwriters' counsel shall be deemed a representation and warranty by the
Company to each Underwriter as to the statements made therein.
Section 3. Purchase, Sale and Delivery of Bonds. Following the execution
of the Underwriting Agreement, the several Underwriters propose to make a public
offering of their respective portions of the Bonds as soon as in the
Representatives' judgment it is advisable upon the terms and conditions set
forth in the Prospectus Supplement.
The Bonds to be purchased by each Underwriter pursuant to the
Underwriting Agreement, in definitive form and registered in such names as the
Representatives may request upon at least forty-eight hours' prior notice to the
Company, shall be delivered by or on behalf of the Company to the
Representatives for the respective accounts of the several Underwriters, against
payment therefor as specified in the Underwriting Agreement in immediately
available funds, at the office of ▇▇▇▇▇, Brown & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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delivery of such Bonds), at the time and date specified in the Underwriting
Agreement or at such other place and time and date as the Representatives and
the Company may agree upon in writing, such time and date being herein called
the "Time of Delivery". If specified by the Representatives in the Underwriting
Agreement, delivery of the Bonds will be made at the Time of Delivery at such
place in New York, New York as shall have been so specified against payment
therefor in Chicago as aforesaid.
Section 4. Covenants of the Company. The Company covenants with each
Underwriter that:
(a) The Company will notify the Representatives immediately and
confirm the notice in writing (i) of the receipt of any request by the
Commission for any amendment or supplement to the Registration Statement
or the Prospectus or any amendment or supplement thereto or for
additional information, and (ii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
of the initiation or threatened initiation of any proceedings for that
purpose or of the suspension or threatened suspension of the
qualification of the Bonds for offering or sale in any jurisdiction. The
Company will make every reasonable effort to prevent the issuance by the
Commission of any stop order and, if any such stop order shall at any
time be issued, to obtain the lifting thereof at the earliest moment.
(b) The Company will not file any amendment to the Registration
Statement or any amendment or supplement to the Prospectus (including a
prospectus filed pursuant to Rule 424 and including documents deemed to
be incorporated by reference into the Prospectus) without first having
furnished the Representatives with a copy of the proposed form thereof
and given the Representatives a reasonable opportunity to review and
comment respecting the same and having given reasonable consideration to
any comments or objections made by the Representatives.
(c) The Company will deliver to each of the Representatives, as soon
as available, one signed copy of the Registration Statement as originally
filed and of each amendment thereto, including, in each case, documents
incorporated by reference into the Registration Statement and one set of
exhibits thereto (other than exhibits incorporated by reference which
will be furnished upon specific request), and will also deliver to the
Representatives a reasonable number of conformed copies of the
Registration Statement as originally filed and of each amendment and
post-effective amendment thereto including such incorporated documents
(without exhibits) for each of the Underwriters.
(d) The Company will deliver to each Underwriter from time to time
during the period when a prospectus is required to be delivered under the
Act such number of copies of the Prospectus (as amended or supplemented
and including incorporated documents) as the Representatives may
reasonably request for the purposes contemplated by the Act or the
Regulations; provided, however, that the delivery of copies of the
Prospectus (as amended or supplemented and including incorporated
documents) more than nine months after the date of the Underwriting
Agreement shall be at the expense of the Underwriter requesting such
delivery.
(e) During the period when a prospectus is required to be delivered
under the Act, the Company will comply so far as it is able, and at its
own expense (for a period not to exceed nine months), with all
requirements imposed upon it by the Act, and by Sections 13 and 14 of the
1934 Act, as now or hereafter amended, and by the Regulations, as from
time to time in force, so far as necessary to permit the continuance of
sales of or dealing in the Bonds during such period in accordance with
the provisions hereof and of the Prospectus.
(f) If any event shall occur as a result of which it is necessary,
in the opinion of counsel for the Company and of Underwriters' counsel,
to amend or supplement the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it is necessary to amend or supplement
the Prospectus to comply with law, the Company will forthwith prepare and
furnish to the Underwriters, without expense to them except as otherwise
provided in subsection (d) of this Section 4, a reasonable number of
copies of an amendment or amendments or a supplement or supplements to
the Prospectus (in the form referred to in subsection (b) of this Section
4) which will amend or supplement the Prospectus so that as amended or
supplemented it will not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein not misleading, or so that the Prospectus will comply
with law. For the purposes of this subsection, the Company will furnish
such information as the Representatives may from time to time reasonably
request.
(g) The Company will endeavor in good faith, in cooperation with the
Underwriters, to qualify the Bonds for offering and sale under the
applicable securities laws of such jurisdictions as the Representatives
may designate; provided, however, that the Company shall not be obligated
to file any general consent to service or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified. In each jurisdiction where any of the Bonds shall be
qualified as above provided, the Company will make and file such
statements and reports in each year as are or may be reasonably required
by the laws thereof.
(h) The Company will make generally available to its security
holders as soon as practicable, but not later than 75 days after the
close of the period covered thereby, an earnings statement (in form
complying with the provisions of Section 11(a) of the Act and the
Regulations thereunder (including, at the option of the Company, Rule
158), which need not be certified by independent public accountants
unless required by the Act or the Regulations), covering a twelve-month
period beginning on the first day of the calendar quarter following the
Time of Delivery.
(i) The Company agrees that it will not publicly offer or sell any
intermediate or long-term debt between the date of the Underwriting
Agreement and Time of Delivery without the prior written consent of the
Representatives.
Section 5. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under the Underwriting Agreement,
including (i) the printing and filing by the Company of the registration
statement and the printing of the Underwriting Agreement, any Agreement Among
Underwriters, any Selling Agreement, the Supplemental Indenture and the
Underwriters' Questionnaire, (ii) the authorization, issuance and delivery of
the Bonds to the Underwriters, including the printing and engraving of the
Bonds, and all taxes, if any, upon the issuance and sale of the Bonds to the
Underwriters, (iii) the qualification of the Bonds under the securities laws of
the various jurisdictions in accordance with the provisions of subsection (g) of
Section 4, including filing fees and fees and disbursements of Underwriters'
counsel in connection with such qualification and in connection with the
preparation of the Blue Sky Survey (such fees of Underwriters' counsel not to
exceed $5,000 in the aggregate), (iv) any fees charged by securities rating
services for rating the Bonds, (v) the fees and expenses of the Trustee and its
counsel in connection with the Bonds and the Supplemental Indenture, (vi) the
printing and delivery to the Underwriters and dealers in quantities as
hereinbefore stated of copies of the registration statement and all amendments
thereto, of any preliminary prospectuses and amended preliminary prospectuses,
of the Registration Statement and any amendments thereto, and of the Prospectus
and any amendments or supplements thereto, and (vii) the cost of printing and
delivery to the Underwriters of copies of the Blue Sky Survey.
If this Agreement is terminated by the Representatives in accordance with
the provisions of Section 6 or Section 10(b), or is prevented by the Company
from becoming effective in accordance with the provisions of Section 10(a), the
Company shall reimburse the Underwriters severally for their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters incurred in connection with the offering.
Section 6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of and
compliance with the representations and warranties of the Company herein
contained, to the performance by the Company of its obligations hereunder and to
the following further conditions:
(a) At the Time of Delivery no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the Act or proceedings therefor initiated or threatened by the
Commission.
(b) At the Time of Delivery the Representatives shall have
received:
(1) The favorable opinion, dated as of the Time of Delivery,
of ▇▇▇▇▇, Brown & ▇▇▇▇▇, counsel for the Company (or, with respect
to the matters in subdivision (vi) below, other counsel reasonably
satisfactory to the Underwriters), in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) the Company is a corporation in good standing, duly
organized and validly existing under the laws of the State of
Illinois and has due corporate authority to carry on the
business in which it is engaged and to own and operate the
properties used by it in such business;
(ii) the Indenture is in due and proper form, has been
duly and validly authorized by the necessary corporate action
and by orders duly entered by the Illinois Commerce
Commission; no authorization, approval, consent, certificate
or order of any other state commission or regulatory authority
or of any federal commission or regulatory authority not
already obtained is required in respect of the execution and
delivery of the Indenture; and the Indenture has been duly and
validly executed and delivered and is a valid and enforceable
instrument in accordance with its terms, except as enforcement
of provisions of the Indenture may be limited by bankruptcy or
other laws of general application affecting the enforcement of
creditors' rights and by general equity principles;
(iii) the Bonds are in due and proper form; the issue
and sale of the Bonds by the Company in accordance with the
terms of the Underwriting Agreement have been duly and validly
authorized by the necessary corporate action and by order duly
entered by the Illinois Commerce Commission; no authorization,
approval, consent, certificate or order of any other state
commission or regulatory authority or of any federal
commission or regulatory authority not already obtained is
required in respect of such issue and sale (except such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution
of the Bonds by the Underwriters); the Bonds have been duly
executed and delivered to the Underwriters against payment of
the agreed consideration therefor and, assuming due
authentication thereof by the Trustee, constitute valid and
enforceable obligations of the Company in accordance with
their terms, secured by the lien of and, with like exception
as noted in the foregoing subdivision (ii), entitled to the
benefits provided by the Indenture, and the registered owners
of the Bonds will be entitled to the payment of principal and
interest, and premium in case of redemption, as therein
provided; the Bonds and the Indenture conform as to legal
matters in all material respects with the statements
concerning them made in the Prospectus, and such statements
accurately set forth the matters respecting the Bonds and the
Indenture required to be set forth in the Prospectus;
(iv) The Registration Statement is effective under the
Act and the Indenture has been duly qualified under the Trust
Indenture Act, and to the best of the knowledge of said
counsel no proceedings for a stop order are pending or
threatened under Section 8(d) of the Act;
(v) the execution and delivery of the Underwriting
Agreement by the Company has been duly authorized by the
necessary corporate action, and the Underwriting Agreement has
been duly executed and delivered by the Company;
(vi) the Company has good and sufficient title to all
property described or referred to in the Indenture and
purported to be conveyed thereby (except property released
from the lien of the Indenture in connection with the sale or
other disposition thereof), subject only to the lien of the
Indenture and to permitted liens as defined therein; the
Indenture has been duly filed for recordation in such manner
and in such places as is required by law in order to give
constructive notice of, establish, preserve and protect the
lien of the Indenture; the Indenture constitutes a valid,
direct first mortgage lien, subject only to permitted liens,
on substantially all property of the Company, except property
expressly excepted by the terms of the Indenture; the
Indenture will, when recorded or registered by the Company in
accordance with its covenants under the Indenture, constitute
a valid, direct first mortgage lien on all property of the
character of that now subject to the lien of the Indenture
hereafter acquired by the Company, subject only to permitted
liens and to liens, if any, existing or placed on such
after-acquired property at the time of the acquisition
thereof;
(vii) the issue and sale of the Bonds and the compliance
by the Company with all of the provisions of the Bonds, the
Indenture and the Underwriting Agreement will not conflict
with or result in a breach or violation of any of the
provisions of, or constitute (disregarding any grace or notice
period) a default under, any indenture, mortgage, loan
agreement, contract, note, lease or other agreement or
instrument, known to such counsel, to which the Company is a
party or by which the Company is bound or to which any of the
property or assets of the Company is subject (with such
exceptions as are in the aggregate not material to the
business or financial condition of the Company or the validity
of the Bonds), nor will such action result in any violation of
the provisions of the Charter or By-Laws of the Company, or,
to the best of their knowledge, any statute or any order, rule
or regulation applicable to the Company of any court or
governmental agency or body having jurisdiction over the
Company or any of its properties (except such consents,
approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Bonds by
the Underwriters);
(viii) at the time the registration statement became
effective, the registration statement and the related
prospectus (other than the financial statements and notices
thereto and supporting schedules and other financial
information included therein, as to which no opinion need be
rendered) complied as to form in all material respects with
the requirements of the Act and the Trust Indenture Act and
the Regulations;
(ix) with minor exceptions, and subject to noncompliance
with certain procedural and other requirements in the
procurement and granting of gas franchises in a number of
smaller municipalities formerly served by Mid-Illinois Gas
Company, the Company holds franchises from all of the
incorporated cities and villages included in the communities
in which the Company renders gas service; all of the
franchises so held by the Company are valid and subsisting and
authorize it to engage in the business conducted by it in the
respective municipalities granting such franchises; the
Company also holds certificates of public convenience and
necessity issued by the Illinois Commerce Commission, which
are valid and subsisting and constitute due authorization by
such commission for the conduct by the Company of its
operations in all areas served;
(x) to the best of their knowledge and information,
there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments of a character
required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration
Statement other than those described therein or filed or
incorporated by reference as exhibits thereto and the
descriptions thereof or reference thereto are correct; and
(xi) except as disclosed in the Prospectus, there are no
material pending or threatened legal proceedings, considering
the Company and the subsidiaries as a single enterprise, known
to said counsel, to which the Company or any subsidiary is a
party or of which property of the Company or any subsidiary is
the subject, and to the best of the knowledge of said counsel
there are no such proceedings contemplated by governmental
authorities.
Such counsel shall further state that, based upon their
participation in the preparation of the Registration Statement and
the Prospectus, and any amendment or supplement thereto, and upon
their review and discussions of the contents thereof, but without
independent check or verification except as specified, nothing has
come to their attention that has caused them to believe that the
Registration Statement, at the time it became effective, contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, and any
amendment or supplement thereto, at the date the Registration
Statement became effective, the date of this Agreement or at the
Time of Delivery, contained an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
(2) The favorable opinion of ▇▇▇▇▇▇▇, Harrold, ▇▇▇▇▇ & ▇▇▇▇▇,
counsel for the Underwriters, with respect to the incorporation of
the Company, the validity of the Bonds and the Indenture, the
Registration Statement, the Prospectus and other related matters as
the Representatives may reasonably request; provided that any
opinion requested with respect to the jurisdiction of regulatory
authorities (other than the Illinois Commerce Commission, the
Securities and Exchange Commission and state securities or Blue Sky
authorities) and the matters in subdivisions (vi) and (ix) above
will rely upon the opinion of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇.
(c) At the effective date of the Registration Statement and at the
Time of Delivery the Representatives shall have received a letter from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, dated the effective date or Time of Delivery,
respectively, in form and substance satisfactory to the Representatives,
advising that (i) they are independent public accountants with respect to
the Company and its subsidiaries as required by the Act and the 1934 Act
and the applicable Regulations, (ii) in their opinion, the audited
consolidated financial statements and any supplemental financial
information and schedules of the Company examined by them and
incorporated by reference in the Registration Statement and Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act, the 1934 Act and the applicable Regulations,
(iii) on the basis of a reading of the latest available unaudited interim
consolidated financial statements prepared by the Company, a reading of
the minutes of meetings of the shareholder and the board of directors and
executive committee of the Company and its subsidiaries, consultation
with officers of the Company responsible for financial and accounting
matters and other specified procedures, nothing has come to their
attention which caused them to believe that (A) the unaudited interim
condensed consolidated financial statements included or incorporated by
reference in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act, the 1934
Act and the applicable Regulations or are not in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements incorporated as
aforesaid, (B) the unaudited income statement data and balance sheet data
(other than such data for the periods referred to in (A) above) included
or incorporated by reference in the Prospectus do not agree with the
corresponding items in the audited or unaudited, as the case may be,
financial statements from which such data were derived or were not
determined on a basis substantially consistent with that of the
corresponding amounts included in the audited consolidated financial
statements of the Company incorporated in the Registration Statement and
Prospectus, or (C) at a specified date within five business days of the
date of such letter with respect to (1) below, and during the period from
the date of the latest audited consolidated financial statements or
unaudited interim condensed consolidated financial statements, as the
case may be, incorporated in the Prospectus to the date of the latest
available unaudited interim consolidated financial statements (if any)
prepared by the Company with respect to (2) below, except in all
instances as set forth in or contemplated by the Prospectus or as set
forth in such letter: (1) there was any increase in the consolidated
long-term debt of the Company and its subsidiaries, as compared with the
amounts set forth in the latest balance sheet included or incorporated by
reference in the Prospectus, or (2) there were any decreases in
consolidated operating income or net income as compared with the
corresponding period in the preceding year; and (iv) they have carried
out specified procedures performed for the purpose of comparing certain
financial information and percentages (which is limited to financial
information derived from general accounting records of the Company)
specified by the Representatives and appearing in the Registration
Statement or in schedules or exhibits to the Registration Statement or in
the Prospectus or in documents incorporated by reference in the
Prospectus with indicated amounts in the financial statements or
accounting records of the Company and (excluding any questions of legal
interpretation and, in the case of the letter delivered at the Time of
Delivery, any exceptions disclosed in the letter delivered at the
Effective Date) have found such information and percentages to be in
agreement with the relevant accounting and financial information of the
Company referred to in such letter in the description of the procedures
performed by them. If such letter discloses any material adverse
decreases or increases, as the case may be, in the items specified in
item (iii) (C) above which are not set forth in or contemplated by the
Prospectus which, in the judgment of the Representatives, makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Bonds on the terms and in the manner contemplated by the
Prospectus, this Agreement and all obligations of the Underwriters
hereunder may be cancelled by the Representatives by notifying the
Company in the manner and with the effect provided below in the last
sentence of this Section 6.
(d) At the Time of Delivery the Representatives shall have received
a certificate of the Chairman, President, Vice President and principal
financial officer, Vice President and principal accounting officer or
Treasurer of the Company, dated as of the Time of Delivery, to the effect
that the signer of such certificate has carefully examined the
Registration Statement, the Prospectus and any amendment or supplement
thereto and the Underwriting Agreement and that, in his opinion, at the
time the Registration Statement became effective, the Registration
Statement did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, and at the date of
the Underwriting Agreement the Prospectus did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein
not misleading, and since the date of the Underwriting Agreement, no
event has occurred which should have been set forth in an amendment of or
supplement to the Prospectus which has not been so set forth; and no stop
order suspending the effectiveness of the Registration Statement has been
issued and no proceedings therefor have been instituted or threatened by
the Commission; and to the further effect that all the representations
and warranties contained in Section 2 hereof are true and correct, with
the same force and effect as though expressly made at the Time of
Delivery.
(e) At the Time of Delivery the rating assigned by any nationally
recognized securities rating agency to any debt securities of the Company
as of the date of the Underwriting Agreement shall not have been lowered
since the date of the Underwriting Agreement and no such agency shall
have publicly announced that it has placed any of such debt securities on
what is commonly termed a "watch list" for possible downgrading.
(f) At the Time of Delivery counsel for the Underwriters shall have
been furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the sale of the
Bonds as herein contemplated and related proceedings, or in order to
evidence the accuracy or completeness of any of the representations or
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company in connection with
the sale of the Bonds as herein contemplated shall be satisfactory in
form and substance to the Representatives and counsel for the
Underwriters.
If any of the conditions specified in this Section shall not have been
fulfilled when and as required by this Agreement to be fulfilled, this Agreement
and all obligations of the Underwriters hereunder may be cancelled by the
Representatives by notifying the Company of such cancellation in writing or by
telecopy at any time at or prior to the Time of Delivery and any such
cancellation shall be without liability of any party to any other party except
as otherwise provided in this Agreement.
Section 7. Condition of Company's Obligations. The obligations of the
Company to sell and deliver the Bonds are subject to the following conditions:
that at the Time of Delivery no stop order suspending the effectiveness of the
Registration Statement shall have been issued or proceedings therefor initiated
or threatened; that the order of the Illinois Commerce Commission, referred to
in Section 2(k), shall be in full force and effect substantially in the form in
which such order shall originally have been entered; and that the Indenture
shall be qualified under the Trust Indenture Act.
Section 8. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the Act or the 1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense,
whatsoever, arising out of any untrue statement or alleged untrue
statement of a material fact contained in the registration statement as
it became effective, or in any amendment thereto, or in the Registration
Statement (or any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading, or arising out of any
untrue statement or alleged untrue statement of a material fact contained
in any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, unless
such untrue statement or omission or such alleged untrue statement or
omission was made in reliance upon and in conformity with written
information respecting the Underwriters furnished to the Company by or on
behalf of any Underwriter through the Representatives expressly for use
in the Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto);
(ii) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of
any litigation, commenced or threatened, or of any claim whatsoever based
upon any such untrue statement or omission or any such alleged untrue
statement or omission, if such settlement is effected with the written
consent of the Company; and
(iii) against any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced
or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or (ii) above,
and, in the case of (i) above, unless such untrue statement or omission
or such alleged untrue statement or omission was made in reliance upon
and in conformity with written information respecting the Underwriters
furnished to the Company by or on behalf of any Underwriter through the
Representatives expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement
thereto), or, in the case of (ii) above, provided such settlement is
effected with the written consent of the Company.
This indemnity agreement is subject to the condition that, insofar as it
relates to any untrue statement, alleged untrue statement, omission or alleged
omission made in a preliminary prospectus or preliminary prospectus supplement,
but eliminated or remedied in the Prospectus, such indemnity agreement shall not
inure to the benefit of any Underwriter from whom the person asserting any loss,
liability, claim or damage purchases the Bonds which are the subject thereof (or
to the benefit of any person who controls such Underwriter) if such Underwriter
fails to send or give a copy of the Prospectus (excluding documents incorporated
by reference) to such person prior to or together with written confirmation of
the sale of such Bonds to such person and the delivery thereof would have
constituted a defense to the claim by such person.
In no case shall the Company be liable under this indemnity agreement
with respect to any claim made against any Underwriter or any such controlling
person unless the Company shall be notified in writing of the nature of the
claim within a reasonable time after the assertion thereof, but failure to so
notify the Company shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. The Company shall be
entitled to participate at its own expense in the defense, or, if it so elects,
within a reasonable time after receipt of such notice, to assume the defense of
any suit brought to enforce any such claim, but if it so elects to assume the
defense, such defense shall be conducted by counsel chosen by it and approved by
the Underwriter or Underwriters or controlling person or persons, defendant or
defendants in any suit so brought, which approval shall not be unreasonably
withheld. In the event that the Company elects to assume the defense of any such
suit and retains such counsel, the Underwriter or Underwriters or controlling
person or persons, defendant or defendants in the suit shall thereafter bear the
fees and expenses of any additional counsel retained by them. In the event that
the parties to any such action (including impleaded parties) include both the
Company and one or more Underwriters and any such Underwriter shall have been
advised by counsel chosen by it and satisfactory to the Company that there may
be one or more legal defenses available to it which are different from or
additional to those available to the Company, the Company shall not have the
right to assume the defense of such action on behalf of such Underwriter and
will reimburse such Underwriter and any person controlling such Underwriter as
aforesaid for the reasonable fees and expenses of any counsel retained by them,
it being understood that the Company shall not, in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expense of more than one separate firm of attorneys for all
such Underwriters and controlling persons, which firm shall be designated in
writing by the Representatives. The Company agrees to notify the Representatives
within a reasonable time of the assertion of any claim against it, any of its
officers or directors or any person who controls the Company within the meaning
of the Act or the 1934 Act, in connection with the sale of the Bonds.
(b) Each Underwriter severally agrees that it will indemnify and hold
harmless the Company, its directors, and each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Act or the 1934 Act, to the same extent as the indemnity
contained in subsection (a) of this Section, but only with respect to statements
or omissions made in the registration statement as it became effective, or in
any amendment thereto, or in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information respecting the Underwriters
furnished to the Company by or on behalf of such Underwriter through the
Representatives expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto).
In case any action shall be brought against the Company or any person so
indemnified based on the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto) and in respect of which
indemnity may be sought against any Underwriter, such Underwriter shall have the
rights and duties given to the Company, and the Company and each person so
indemnified shall have the rights and duties given to the Underwriters, by the
provisions of subsection (a) of this Section.
(c) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Securities
and also the relative fault of the Company on the one hand and the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact, or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (c) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (c). Notwithstanding the provisions of this
subsection (c), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the 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. The
Underwriters' obligations in this subsection (c) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(d) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act or the 1934 Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of the Act or
the 1934 Act.
Section 9. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in the
Underwriting Agreement and/or contained in certificates of officers of the
Company submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or any controlling person of any Underwriter, or by or on behalf of the Company,
and shall survive payment for and delivery of the Bonds.
Section 10. Effective Date of the Underwriting Agreement and Termination
Thereof. (a) The Underwriting Agreement shall become effective at the time of
the initial public offering by the Underwriters of any of the Bonds. The time of
the initial public offering shall mean 12:00 noon, New York City time, on the
first full business day after the Underwriting Agreement is executed or at such
time as the Representatives may authorize the sale of the Bonds to the public by
the Underwriters or other securities dealers, whichever shall first occur. The
Representatives or the Company may prevent the Underwriting Agreement from
becoming effective without liability of any party to any other party, except as
otherwise provided in the Underwriting Agreement, by giving the notice indicated
below in this Section prior to the time the Underwriting Agreement would
otherwise become effective as herein provided.
(b) The Representatives shall have the right to terminate the
Underwriting Agreement by giving the notice indicated below in this Section at
any time at or prior to the Time of Delivery if (i) the Company shall have
sustained since the respective dates as of which information is given in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree; or (ii)
since the respective dates as of which information is given in the Prospectus
there shall have been any material increase in the long-term debt, or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general business affairs, management,
financial position, results of operations, or business prospects of the Company
and its subsidiaries considered as one enterprise, otherwise than as set forth
or contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Bonds on the terms and in the manner contemplated in the Prospectus; or
(iii) there shall have occurred the outbreak or escalation of hostilities
involving in a significant way the armed forces of the United States, or the
declaration by the United States, on or after the date of the Underwriting
Agreement, of a national emergency or war, or there shall have occurred a
general suspension or limitation of trading in securities on the New York or
American Stock Exchanges, or the establishment of minimum prices on either such
Exchange, or a general moratorium on commercial banking activities in New York
is declared by either federal or New York state authorities, the effect of which
in the judgment of the Representatives makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Bonds on the terms and
in the manner contemplated in the Prospectus. If the Representatives shall so
terminate the Underwriting Agreement, such termination shall be without
liability of any party to any other party except as otherwise provided in the
Underwriting Agreement.
(c) If the Representatives elect to prevent the Underwriting Agreement
from becoming effective or to terminate the Underwriting Agreement as provided
in this Section, the Company and each other Underwriter shall be notified
promptly by the Representatives, by telephone or telegram, confirmed by letter.
If the Company elects to prevent the Underwriting Agreement from becoming
effective as provided in this Section, the Representatives shall be notified
promptly by the Company by telephone or telegram, confirmed by letter.
Section 11. Default of Underwriters. If any one or more of the
Underwriters shall fail at the Time of Delivery to purchase the amount of Bonds
which it or they are obligated to purchase hereunder (the "Defaulted Bonds"),
then the Representatives shall have the right, within 24 hours thereafter, to
make arrangements for one or more of the non-defaulting Underwriters, or any
other underwriters, to purchase all, but not less than all, of the Defaulted
Bonds in such amounts as may be agreed upon and upon the terms herein set forth.
If, however, during such 24 hours the Representatives shall not have completed
such arrangements for the purchase of all of the Defaulted Bonds, then the
Company shall be entitled to a further period of 24 hours within which to
procure another party of parties satisfactory to the Representatives to purchase
all of such Defaulted Bonds on such terms. If, after giving effect to any
arrangements for the purchase of Defaulted Bonds by the Representatives and the
Company as provided above, then:
(a) if the amount of Defaulted Bonds does not exceed 10% of the
aggregate principal amount of the Bonds being sold hereunder, the
non-defaulting Underwriters shall be obligated to purchase severally the
full amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the amount of Defaulted Bonds exceeds 10% of the aggregate
principal amount of the Bonds being sold hereunder, the Underwriting
Agreement shall terminate without any liability on the part of the
Company or any non-defaulting Underwriter.
The termination of the Underwriting Agreement pursuant to this Section
shall be without liability on the part of the Company or any of said
non-defaulting Underwriters, except for the respective obligations of the
Company and the Underwriters pursuant to Section 8 and except that the Company
shall be obligated to reimburse the Underwriters for their out-of-pocket
expenses (including reasonable fees and disbursements of counsel for the
Underwriters) incurred in connection with the offering if the Underwriting
Agreement could have been terminated by the Representatives pursuant to Section
6 or 10(b).
Nothing herein shall relieve any Underwriter so defaulting from
liability, if any, for such default.
In the event of a default by any one or more Underwriters as set forth in
this Section, either the Representatives or the Company shall have the right to
postpone the Time of Delivery for an additional period not exceeding 7 days in
order that any required changes in the Registration Statement and Prospectus or
in any other documents or arrangements may be effected.
Section 12. Notices. Except as otherwise provided in the Underwriting
Agreement, all communications under the Underwriting Agreement shall be in
writing, and, if sent to the Underwriters, shall be mailed, delivered or
telecopied and confirmed to the address of the Representatives, as set forth in
the Underwriting Agreement (except that any notice to an Underwriter pursuant to
Section 8 hereof shall be sent to it at its address set forth in the copies of
the Underwriters' Questionnaires furnished to the Company), or, if sent to the
Company shall be mailed or telecopied and confirmed to it at P.O. Box 190,
Aurora, Illinois 60507-0190, or delivered to it at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, for the attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President and Treasurer.
Section 13. Parties. The Underwriting Agreement shall inure to the
benefit of and be binding upon the Underwriters and the Company and their
respective successors. Nothing expressed or mentioned in the Underwriting
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the parties hereto and their respective successors and
the controlling persons and the directors and officers referred to in Section 8,
any legal or equitable right, remedy or claim under or in respect of the
Underwriting Agreement or any provision herein contained; the Underwriting
Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of the parties hereto and their
respective successors and said controlling persons, directors and officers and
for the benefit of no other person, firm or corporation. No purchaser of any
Bonds from any Underwriter shall be deemed to be a successor by reason merely of
such purchase.
Section 14. Choice of Law. The Underwriting Agreement shall be
construed in accordance with, and governed by, the laws of the State of
Illinois.
