EXHIBIT 2.1
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
by and between
NIPSCO INDUSTRIES, INC.
and
BAY STATE GAS COMPANY
dated as of December 18, 1997
and
amended and restated as of ▇▇▇▇▇ ▇, ▇▇▇▇
▇-▇
TABLE OF CONTENTS
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ARTICLE I
THE MERGER................................................................. A-1
1.1 The Merger........................................................... A-1
1.2 The Alternative Merger............................................... A-1
1.3 Closing.............................................................. A-2
1.4 Effective Time....................................................... A-2
1.5 Articles of Organization............................................. A-2
1.6 By-Laws.............................................................. A-2
1.7 Directors............................................................ A-2
1.8 Officers............................................................. A-2
ARTICLE II
CONVERSION OF SHARES....................................................... A-3
2.1 Conversion of Acquisition Shares..................................... A-3
2.2 Conversion of Company Shares......................................... A-3
2.2.1 Outstanding Shares of Company Common Stock.................... A-3
2.2.2 Cash Election................................................. A-4
2.2.3 Cash Election Shares.......................................... A-4
2.2.4 Form of Election.............................................. A-4
2.2.5 Deemed Non-Election........................................... A-4
2.2.6 Election Deadline............................................. A-4
2.2.7 Treasury Shares............................................... A-4
2.2.8 Adjustment Per Tax Opinion.................................... A-4
2.2.9 Adjustments to Prevent Dilution............................... A-4
2.3 Exchange of Certificates and Related Matters......................... A-4
2.3.1 Paying Agent.................................................. A-4
2.3.2 Letter of Transmittal......................................... A-5
2.3.3 Exchange Procedures........................................... A-5
2.3.4 Distributions with Respect to Unexchanged Shares.............. A-5
2.3.5 No Further Ownership Rights in Company Shares................. A-6
2.3.6 No Fractional Shares.......................................... A-6
2.3.7 Termination of Paying Agent................................... A-6
2.3.8 No Liability.................................................. A-6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............................. A-6
3.1 Organization, Standing and Corporate Power........................... A-7
3.2 Capital Structure.................................................... A-7
3.3 Subsidiaries......................................................... A-7
3.4 Authority; Noncontravention.......................................... A-8
3.5 SEC Documents and Financial Statements............................... A-9
3.6 Absence of Certain Changes or Events................................. A-9
3.7 Real and Personal Property........................................... A-10
3.8 Employee Matters; ERISA.............................................. A-10
3.9 Taxes................................................................ A-13
3.9.1 Filing of Timely Tax Returns.................................. A-13
3.9.2 Payment of Taxes.............................................. A-13
3.9.3 Tax Reserves.................................................. A-13
3.9.4 Tax Liens..................................................... A-13
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3.9.5 Withholding Taxes............................................... A-13
3.9.6 Extensions of Time for Filing Tax Returns....................... A-13
3.9.7 Waivers of Statute of Limitations............................... A-13
3.9.8 Expiration of Statute of Limitations............................ A-14
3.9.9 Audit Administrative and Court Proceedings...................... A-14
3.9.10 Powers of Attorney.............................................. A-14
3.9.11 Tax Rulings..................................................... A-14
3.9.12 Availability of Tax Returns..................................... A-14
3.9.13 Tax-Sharing Agreements.......................................... A-14
3.9.14 Code Section 341(f)............................................. A-14
3.9.15 Code Section 168................................................ A-14
3.9.16 Code Section 481 Adjustments.................................... A-14
3.9.17 Code Section 6661 and 6662...................................... A-14
3.9.18 Code Section 280G............................................... A-14
3.9.19 NOLS............................................................ A-14
3.9.20 Credit Carryovers............................................... A-15
3.9.21 Code Section 338 Elections...................................... A-15
3.9.22 Acquisition Indebtedness........................................ A-15
3.9.23 Intercompany Transactions....................................... A-15
3.9.24 Liability for Others............................................ A-15
3.10 Compliance with Applicable Laws..................................... A-15
3.11 Environmental Protection............................................ A-15
3.12 Litigation.......................................................... A-17
3.13 Labor Relations..................................................... A-17
3.14 Intellectual Property............................................... A-18
3.15 No Default.......................................................... A-19
3.16 Regulation as a Utility............................................. A-19
3.17 Insurance........................................................... A-19
3.18 Voting Requirements................................................. A-19
3.19 Brokers............................................................. A-19
3.20 Opinion of Financial Advisor........................................ A-19
3.21 Change in Business Relationships.................................... A-19
3.22 Material Contracts.................................................. A-20
3.23 Commodity Derivatives and Credit Exposure Matters................... A-20
3.24 No Omissions........................................................ A-20
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NIPSCO................................... A-20
4.1 Organization, Standing and Corporate Power........................... A-21
4.2 Nipsco Capital Structure............................................. A-21
4.3 Subsidiaries......................................................... A-21
4.4 Authority; Noncontravention.......................................... A-21
4.5 Nipsco SEC Documents and Financial Statements........................ A-22
4.6 Absence of Certain Changes or Events................................. A-22
4.7 Employee Matters; ERISA.............................................. A-22
4.8 Taxes................................................................ A-22
4.8.1 Filing of Timely Tax Returns.................................. A-22
4.8.2 Payment of Taxes.............................................. A-22
4.9 Environmental Matters................................................ A-22
4.9.1 Environmental Matters......................................... A-22
4.10 Brokers.............................................................. A-23
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4.11 No Omissions...................................................... A-23
4.12 Regulation as a Utility........................................... A-23
4.13 Compliance........................................................ A-23
ARTICLE V
ADDITIONAL AGREEMENTS................................................... A-23
5.1 Preparation of Registration Statement and Proxy Statement......... A-23
5.1.1 Registration Statement; Proxy Statement....................... A-24
5.1.2 Company Information........................................... A-24
5.1.3 Nipsco Information............................................ A-24
5.2 Meeting of the Company's Shareholders............................. A-24
5.3 Affiliates and Certain Shareholders............................... A-26
5.4 Best Efforts...................................................... A-26
5.5 Letter of the Company's Accountants............................... A-26
5.6 Letter of Nipsco's Accountants.................................... A-26
5.7 Access to Information; Confidentiality............................ A-26
5.8 Public Announcements.............................................. A-27
5.9 Acquisition Proposals............................................. A-27
5.10 Fiduciary Duties.................................................. A-27
5.11 Filings; Other Action............................................. A-28
5.11.1 HSR Act....................................................... A-28
5.11.2 Other Regulatory Approvals.................................... A-28
5.11.3 Other Approvals............................................... A-28
5.12 Stock Exchange Listings........................................... A-28
5.13 Indemnification................................................... A-28
5.14 Representation on Nipsco Board.................................... A-29
5.15 Cooperation, Notification......................................... A-29
5.16 Termination of Company Dividend Reinvestment Plan................. A-29
5.17 Federal Income Tax Treatment...................................... A-29
5.18 Termination of Shareholder Rights Plan............................ A-29
5.19 Actions Relating to Acquisition................................... A-29
5.20 Recognition of Existing Contracts................................. A-29
5.21 Redemption of Company Preferred Stock............................. A-29
5.22 Company Stock Options............................................. A-29
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO MERGER............... A-30
6.1 Conduct of Business of Company Pending the Merger................. A-30
6.1.1 Ordinary Course of Business................................... A-30
6.1.2 Dividends; Changes in Stock................................... A-30
6.1.3 Issuance of Securities........................................ A-31
6.1.4 Capital Expenditures.......................................... A-31
6.1.5 No Acquisitions............................................... A-31
6.1.6 No Dispositions............................................... A-31
6.1.7 No Dissolution, Etc........................................... A-31
6.1.8 Limitation on Investment in Joint Ventures.................... A-31
6.1.9 Certain Employee Matters...................................... A-31
6.1.10 Indebtedness; Leases.......................................... A-32
6.1.11 Governing Documents........................................... A-32
6.1.12 Accounting.................................................... A-32
6.1.13 Rate Matters.................................................. A-32
6.1.14 Gas Transmission and Storage.................................. ▇-▇▇
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6.1.15 Contracts..................................................... A-33
6.1.16 Insurance..................................................... A-33
6.1.17 Permits....................................................... A-33
6.1.18 Discharge of Liabilities...................................... A-33
6.1.19 1935 Act...................................................... A-33
6.1.20 Tax Matters................................................... A-33
6.1.21 Tax Status.................................................... A-33
6.2 Management of the Company and its Subsidiaries.................... A-33
6.3 Conduct of Business of Nipsco Pending the Merger.................. A-33
6.4 Other Actions..................................................... A-33
ARTICLE VII
CONDITIONS PRECEDENT.................................................... A-34
7.1 Conditions to Each Party's Obligation to Effect the Merger........ A-34
7.1.1 Company Shareholder Approval.................................. A-34
7.1.2 Governmental and Regulatory Consents.......................... A-34
7.1.3 HSR Act....................................................... A-34
7.1.4 No Injunctions or Restraints.................................. A-34
7.1.5 NYSE Listing.................................................. A-34
7.1.6 Registration Statement........................................ A-34
7.1.7 Share Purchase Rights......................................... A-34
7.2 Conditions to Obligations of Nipsco............................... A-34
7.2.1 Representations and Warranties................................ A-34
7.2.2 Performance of Obligations of the Company..................... A-34
7.2.3 Tax Opinion................................................... A-35
7.2.4 Consents and Approvals........................................ A-35
7.3 Conditions to Obligation of the Company........................... A-35
7.3.1 Representations and Warranties................................ A-35
7.3.2 Performance of Obligations of Nipsco.......................... A-35
7.3.3 Tax Opinion................................................... A-35
7.3.4 Consents and Approvals........................................ A-35
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER....................................... A-35
8.1 Termination....................................................... A-35
8.2 Effect of Termination............................................. A-36
8.3 Amendment......................................................... A-37
8.4 Extension; Waiver................................................. A-37
8.5 Procedure for Termination, Amendment, Extension or Waiver......... A-37
ARTICLE IX
SURVIVAL OF PROVISIONS.................................................. A-37
9.1 Survival.......................................................... A-37
ARTICLE X
NOTICES................................................................. A-37
10.1 Notices........................................................... A-37
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ARTICLE XI
MISCELLANEOUS............................................................ A-38
11.1 Entire Agreement................................................... A-38
11.2 Expenses........................................................... A-39
11.3 Counterparts....................................................... A-39
11.4 No Third Party Beneficiary......................................... A-39
11.5 Governing Law...................................................... A-39
11.6 Assignment; Binding Effect......................................... A-39
11.7 Headings, Gender, etc.............................................. A-39
11.8 Invalid Provisions................................................. A-39
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AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
This Amended and Restated Agreement and Plan of Merger (the "Agreement") is
made and entered into as of the 18th day of December, 1997, and amended and
restated as of the 4th day of March, 1998, by and among NIPSCO Industries,
Inc., an Indiana corporation ("Nipsco"), and Bay State Gas Company, a
Massachusetts corporation (the "Company").
PREAMBLE
Whereas, the respective boards of directors of Nipsco and the Company have
determined that the Merger (as defined in Section 1.1) is in the best
interests of their respective shareholders and have approved the Merger, upon
the terms and subject to the conditions set forth herein;
Whereas, Nipsco and the Company intend that, for federal income tax
purposes, the Merger will constitute a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code");
Whereas, Nipsco and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger; and
Now, Therefore, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Subject to the terms and conditions of this Agreement, at
the Effective Time (as defined in Section 1.4), the Company shall be merged
with and into a corporation to be organized as a wholly-owned subsidiary of
Nipsco under the laws of the Commonwealth of Massachusetts ("Acquisition")
(the "Merger"), in accordance with the Massachusetts Gas and Electricity Law
(the "MGEL") and Massachusetts Business Corporation Law (the "MBCL"), and the
separate corporate existence of the Company shall cease and Acquisition shall
continue as the surviving corporation (the "Surviving Corporation") under the
laws of the Commonwealth of Massachusetts with all the rights, privileges,
immunities and powers, and subject to all the duties and liabilities, of a
corporation organized under the MGEL and MBCL. The Merger shall have the
effects set forth in the MGEL and MBCL.
1.2 The Alternative Merger.
1.2.1 If at any time prior to December 31, 1998, (a) it becomes possible
under the laws relating to incorporation and to public utilities applicable
to the Company and its wholly owned subsidiary, Northern Utilities, Inc.
("Northern"), to merge the Company into Nipsco's wholly owned subsidiary,
Northern Indiana Public Service Company, followed immediately by the merger
of Northern into Northern Indiana Public Service Company (the "Alternative
Merger") and (b) the Securities and Exchange Commission (the "SEC") has not
approved, nor has the staff of the SEC recommended that the SEC approve,
the application for the Merger under the Public Utility Holding Company Act
of 1935, as amended (the "1935 Act"), then, subject to Section 1.2.3 and
the other terms and conditions of the Agreement, the form of the
transaction contemplated by this Agreement will be revised to provide for
the Alternative Merger, including establishing the consideration to be used
in the merger of Northern into Northern Indiana Public Service Company to
meet the requirements of a tax-free reorganization pursuant to Section 368
of the Code, and the parties shall amend the terms of this Agreement to
make them consistent with the Alternative Merger;
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provided, however, that so long as the parties are using their best efforts
to consummate the Alternative Merger, the parties may simultaneously
continue to pursue the regulatory approvals necessary for the Merger if it
is practicable to do so in a manner that will not unduly delay the
consummation of the Alternative Merger.
1.2.2 Notwithstanding Sections 1.1 and 1.2.1, if by December 31, 1998,
none of the following conditions has been met: (a) the Alternative Merger
has become legally possible; (b) the SEC has approved the application for
the Merger under the 1935 Act; (c) the SEC staff has recommended that the
SEC approve the application for the Merger under the 1935 Act, or (d) the
1935 Act has been, or subject only to the passage of time up to the time
specified in Section 8.1.2 (iii) will be, repealed or amended in relevant
manner to permit the Merger, then either party may terminate this Agreement
pursuant to Section 8.1.2(iii) of this Agreement.
1.2.3 The parties hereto acknowledge that, in the absence of regulatory
constraints under the 1935 Act, it would be preferable to effect the Merger
and for the Alternative Merger not to be effected. Accordingly, if at the
time all other conditions to the parties' respective obligations to
consummate this Agreement have been satisfied or waived, the 1935 Act has
been, or subject only to the passage of time up to the time specified in
Section 8.1.2 (iii) will be, repealed or amended in relevant manner to
permit the Merger, the parties shall effect the Merger.
1.3 Closing. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Section
8.1, and subject to the satisfaction or waiver of the conditions set forth in
Article VII, the closing of the Merger (the "Closing") shall take place at
9:00 a.m. on the second business day following the date on which the last of
the conditions set forth in Article VII shall have been fulfilled or waived in
accordance with this Agreement (the "Closing Date"), at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇ ("SH&W"), ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, unless the
parties hereto agree to another date, time or place.
1.4 Effective Time. The parties hereto shall file with the Secretary of the
Commonwealth of Massachusetts (the "Massachusetts Secretary") on the date of
the Closing (or on such other date as Nipsco and the Company may agree)
articles of merger or other appropriate documents, mutually satisfactory in
form and substance to Nipsco and the Company and executed in accordance with
the relevant provisions of the MGEL and the MBCL, and shall make all other
filings or recordings required under the MGEL and the MBCL in connection with
the Merger. The Merger shall become effective upon the filing of the articles
of merger with the Massachusetts Secretary, or at such later time as is
specified in the articles of merger (the "Effective Time").
1.5 Articles of Organization. The articles of organization of Acquisition as
in effect immediately prior to the Effective Time shall be the articles of
organization of the Surviving Corporation (the "Charter"), until duly amended
as provided therein or by applicable law.
1.6 By-Laws. The by-laws of Acquisition, as in effect immediately prior to
the Effective Time, shall be the by-laws of the Surviving Corporation (the
"By-Laws") until thereafter amended as provided by law, the By-Laws or the
Charter.
1.7 Directors. The board of directors of the Surviving Corporation from and
after the Effective Time shall be comprised of those individuals listed on
Schedule 1.7 hereto, such directors to hold office from the Effective Time
until their respective successors are duly elected or appointed and qualify in
the manner provided in the Charter or By-Laws or as otherwise provided by law.
1.8 Officers. The officers of the Company at the Effective Time shall be the
officers of the Surviving Corporation and shall hold office from the Effective
Time until their respective successors are duly elected or appointed and
qualify in the manner provided in the Charter or By-Laws or as otherwise
provided by law.
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ARTICLE II
CONVERSION OF SHARES
2.1 Conversion of Acquisition Shares. Each share of common stock of
Acquisition issued and outstanding immediately prior to the Effective Time
shall remain outstanding and unchanged by reason of the Merger as one share of
common stock of the Surviving Corporation.
2.2 Conversion of Company Shares.
2.2.1 Outstanding Shares of Company Common Stock. Subject to the
provisions of this Section 2.2, each share of common stock, par value $3.33
1/3 per share of the Company (the "Company Shares") issued and outstanding
immediately prior to the Effective Time (other than shares held as treasury
shares by the Company) shall by virtue of the Merger and without any action
on the part of the holder thereof, be converted into the right to receive
(i) $40.00 in cash (the "Cash Price"), or (ii) such number or fraction
thereof validly issued, fully paid and nonassessable shares of common
stock, without par value, of Nipsco ("Nipsco Common Shares") determined by
dividing the Cash Price by the Nipsco Share Price (as defined below) (the
"Exchange Ratio") or (iii) the right to receive a combination of cash and
Nipsco Common Shares determined in accordance with Section 2.2.2 or Section
2.2.3. The "Nipsco Share Price" shall be equal to the average of the
closing prices of the Nipsco Common Shares on the New York Stock Exchange
("NYSE") Composite Transactions Reporting System, as reported in The Wall
Street Journal, for the 20 trading days immediately preceding the second
trading day prior to the Effective Time.
2.2.2 Cash Election. Subject to the immediately following sentence, each
record holder of Company Shares immediately prior to the Effective Time
shall be entitled to elect to receive cash for all or any part of such
holder's Company Shares (a "Cash Election"). Notwithstanding the foregoing
and subject to Section 2.2.9, the aggregate number of Company Shares that
may be converted into the right to receive cash in the Merger (the "Cash
Election Number") shall not exceed an amount determined by dividing (A) the
dollar number equal to the difference between (i) one-half the product of
(x) the Cash Price multiplied by (y) the aggregate number of Company Shares
outstanding at 5:00 p.m. Eastern Time on the second day prior to the
Effective Time less (ii) the dollar amount of any special dividend paid by
the Company pursuant to the second sentence of Section 6.1.2 and other
dollar amounts as reasonably determined by SH&W, counsel to Nipsco and
Acquisition, and LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P. ("LLG&M"), counsel
to the Company, by (B) the Cash Price. Cash Elections shall be made on a
form designed for that purpose (a "Form of Election"). A holder of record
of Company Shares who holds such Company Shares as nominee, trustee or in
another representative capacity (a "Representative") may submit multiple
Forms of Election, provided that such Representative certifies that each
such Form of Election covers all the Company Shares held by such
Representative for a particular beneficial owner. To the extent not covered
by a properly given Cash Election, all Company Shares issued and
outstanding immediately prior to the Effective Time shall, except as
provided in Section 2.2.1, be converted solely into Nipsco Shares.
2.2.3 Cash Election Shares. If the aggregate number of Company Shares
covered by Cash Elections (the "Cash Election Shares") exceeds the Cash
Election Number, each Cash Election Share shall be converted into (i) the
right to receive an amount in cash, without interest, equal to the product
of (a) the Cash Price and (b) a fraction (the "Cash Fraction"), the
numerator of which shall be the Cash Election Number and the denominator of
which shall be the total number of Cash Election Shares, and (ii) a number
of Nipsco Common Shares equal to the product of (a) the Exchange Ratio and
(b) a fraction equal to one minus the Cash Fraction.
2.2.4 Form of Election. To be effective, a Form of Election must be
properly completed, signed and submitted to Nipsco's transfer agent and
registrar, as paying agent (the "Paying Agent"), and accompanied by the
certificates representing the Company Shares ("Company Certificates") as to
which the election is being made (or by an appropriate guarantee of
delivery of such Company Certificate signed by a firm that is a member of
any registered national securities exchange or a member of the National
Association of
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Securities Dealers, Inc. or a bank, broker, dealer, credit union, savings
association or other entity that is a member in good standing of the
Securities Transfer Agent's Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion
Program). Nipsco shall have the discretion, which it may delegate in whole
or in part to the Paying Agent, to determine whether Forms of Election have
been properly completed, signed and submitted or revoked and to disregard
immaterial defects in Forms of Election. The decision of Nipsco (or the
Paying Agent) in such matters shall be conclusive and binding. Neither
Nipsco nor the Paying Agent shall be under any obligation to notify any
person of any defect in a Form of Election submitted to the Paying Agent.
The Paying Agent shall also make all computations contemplated by this
Section 2.2, and all such computations shall be conclusive and binding on
the holders of Company Shares.
2.2.5 Deemed Non-Election. For the purposes hereof, a holder of Company
Shares who does not submit a Form of Election that is received by the
Paying Agent prior to the Election Deadline (as defined in Section 2.2.6)
shall be deemed not to have properly made a Cash Election. If Nipsco or the
Paying Agent shall determine that any purported Cash Election was not
properly made, such purported Cash Election shall be deemed to be of no
force and effect.
2.2.6 Election Deadline. Nipsco and the Company shall each use its best
efforts to cause copies of the Form of Election to be mailed to the record
holders of the Company Shares not less than thirty days prior to the
Effective Time and to make the Form of Election available to all persons
who become record holders of Company Shares subsequent to the date of such
mailing and no later than the close of business on the seventh business day
prior to the Effective Time. A Form of Election must be received by the
Paying Agent by 5:00 p.m., New York City time, on the last NYSE trading day
prior to the third business day before the anticipated Effective Time (the
"Election Deadline") in order to be effective. All elections may be revoked
until the Election Deadline in writing by the record holders submitting
Forms of Election.
2.2.7 Treasury Shares. Each Company Share issued and outstanding
immediately prior to the Effective Time that is then held as a treasury
share by the Company shall, by virtue of the Merger and without any action
on the part of the Company, be canceled and retired and cease to exist,
without any conversion thereof.
2.2.8 Adjustment Per Tax Opinion. If, after having made the calculation
under Section 2.2.3, the tax opinions referred to in Sections 7.2.3 and
7.3.3 (the "Tax Opinions") cannot be rendered (as reasonably determined by
SH&W and LLG&M), as a result of the Merger possibly failing to satisfy
continuity-of-interest requirements under applicable federal income tax
principles relating to reorganizations described in Section 368(a) of the
Code, then Nipsco shall reduce, to the minimum extent necessary to enable
the Tax Opinions to be rendered, the amount of cash to be delivered with
respect to the Cash Election Shares and in lieu thereof shall deliver the
number of Nipsco Common Shares having an aggregate value, based on the
Nipsco Share Price, equal to the amount of such reduction, and the Cash
Election Number shall be appropriately adjusted to give effect to such
reduction.
2.2.9 Adjustments to Prevent Dilution. In the event of any change in
Nipsco Common Shares between the date of this Agreement and the Effective
Time by reason of any stock split, stock dividend, subdivision,
reclassification, recapitalization, combination, exchange or the like, the
Exchange Ratio, the Cash Price and the calculation of all share prices
provided for in this Agreement shall be proportionately adjusted to
eliminate the effects of such event.
2.3 Exchange of Certificates and Related Matters.
2.3.1 Paying Agent. Prior to the Closing Date, Nipsco shall appoint the
Paying Agent for the purpose of paying the Cash Price and issuing Nipsco
Common Shares in exchange for Company Certificates. From time to time after
completion of the allocation and election procedures in Section 2.2, Nipsco
shall transmit, or shall cause the Surviving Corporation to transmit, cash,
and shall deliver certificates representing Nipsco Common Shares, to the
Paying Agent, for the benefit of the holders of Company Shares, when and as
required for exchanges of Company Shares pursuant to Section 2.2.
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2.3.2 Letter of Transmittal. Promptly after the Effective Time (but in no
event more than five business days thereafter), Nipsco shall require the
Paying Agent to mail to each record holder of certificates that immediately
prior to the Effective Time represented Company Shares that have been
converted pursuant to Section 2.2 a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title shall
pass, only upon proper delivery of Company Certificates to the Paying Agent
and shall be in such form and have such provisions as Nipsco reasonably may
specify) and instructions for surrendering such Company Certificates and
receiving the Merger Consideration (as defined in Section 2.3.3) to which
such holder shall be entitled therefor pursuant to Section 2.2.
2.3.3 Exchange Procedures. Upon surrender to the Paying Agent of a
Company Certificate for cancellation, together with a letter of transmittal
and such other customary documents as may be required by the instructions
to the letter of transmittal (collectively, the "Certificate") and
acceptance thereof by the Paying Agent, the holder of such Company
Certificate shall be entitled to receive in exchange therefor (i)
certificates evidencing that number of whole Nipsco Common Shares into
which the Company Shares previously represented by such Company Certificate
are converted in accordance with Section 2.2.1, (ii) the cash to which such
holder is entitled in accordance with Section 2.2.1, (iii) the cash in lieu
of fractional Nipsco Common Shares to which such holder is entitled
pursuant to Section 2.3.6, and (iv) any dividends or other distributions to
which such holder is entitled pursuant to Section 2.3.4 (the Nipsco Common
Shares, dividends, distributions and cash described in clauses (i), (ii),
(iii) and (iv) above being referred to collectively as the "Merger
Consideration"). The Paying Agent shall accept such Certificate upon
compliance with such reasonable terms and conditions as the Paying Agent
may impose to effect an orderly exchange thereof in accordance with normal
exchange practices. If the Merger Consideration (or any portion thereof) is
to be delivered to any person other than the person in whose name the
Company Certificate surrendered in exchange therefor is registered on the
record books of the Company, it shall be a condition to such exchange that
the Company Certificate so surrendered shall be properly endorsed or shall
otherwise be in proper form for transfer and that the person requesting
such exchange shall pay to the Paying Agent any transfer or other taxes
required by reason of the payment of such consideration to a person other
than the registered holder of the Company Certificate surrendered, or shall
establish to the satisfaction of the Paying Agent that such tax has been
paid or is not applicable. If any Company Certificate shall have been lost,
stolen, mislaid or destroyed, then upon receipt of (a) an affidavit of that
fact from the holder claiming such Company Certificate to be lost, mislaid,
stolen or destroyed, (b) such bond, security or indemnity as the Company or
the Paying Agent may reasonably require, and (c) any other documentation
necessary to evidence and effect the bona fide exchange thereof, the
Exchange Agent shall issue to such holder a certificate representing the
number of shares of Company Shares into which the shares represented by
such lost, stolen, mislaid or destroyed Company Certificate shall have been
converted. After the Effective Time, there shall be no further transfer on
the records of the Company or its transfer agent of any Company
Certificate, and, if any such Company Certificate is presented to the
Company for transfer, it shall be canceled against delivery of the Merger
Consideration as hereinabove provided. Until surrendered as contemplated by
this Section 2.3.3, each Company Certificate (other than a certificate
representing Company Shares to be canceled in accordance with Section
2.2.7), shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the Merger Consideration,
without any interest thereon.
2.3.4 Distributions with Respect to Unexchanged Shares. No dividends or
other distributions with respect to Nipsco Common Shares with a record date
after the Effective Time shall be paid to the holder of any certificate
that immediately prior to the Effective Time represented Company Shares
that have been converted pursuant to Section 2.2, and no other part of the
Merger Consideration shall be paid to any such holder, until the surrender
for exchange of such Company Certificate in accordance with this Article
II. Following surrender for exchange of any such Company Certificate, there
shall be paid to the holder of certificates evidencing whole Nipsco Common
Shares issued in exchange therefor, without interest, (i) at the time of
such surrender, the amount of dividends or other distributions with a
record date after the Effective Time theretofore paid with respect to the
number of whole Nipsco Common Shares into which the Company Shares
represented by such certificate immediately prior to the Effective Time
were converted
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pursuant to Section 2.2, and (ii) at the appropriate payment date, the
amount of dividends or other distributions with a record date after the
Effective Time, but prior to such surrender, and with a payment date
subsequent to such surrender, payable with respect to such whole Nipsco
Common Shares.
2.3.5 No Further Ownership Rights in Company Shares. The Merger
Consideration paid upon the surrender for exchange of Company Certificates
in accordance with the terms of this Article II shall be deemed to have
been issued and paid in full satisfaction of all rights pertaining to the
Company Shares theretofore represented by such certificates, subject,
however, to the Surviving Corporation's obligation (if any) to pay any
dividends or make any other distributions with a record date prior to the
Effective Time that may have been declared by the Company on such Company
Common Shares in accordance with the terms of this Agreement or prior to
the date of this Agreement and that remain unpaid at the Effective Time.
2.3.6 No Fractional Shares. No certificates or scrip representing
fractional Nipsco Common Shares shall be issued upon the surrender for
exchange of certificates that immediately prior to the Effective Time
represented Company Shares that have been converted pursuant to Section
2.2, and such fractional share interests shall not entitle the owner
thereof to vote or to any rights of a shareholder of Nipsco.
Notwithstanding any other provisions of this Agreement, each holder of
Company Shares who would otherwise have been entitled to receive a fraction
of a Nipsco Common Share (after taking into account all Company
Certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a Nipsco
Common Share multiplied by the Nipsco Share Price.
2.3.7 Termination of Paying Agent. Any portion of cash payable under
Section 2.2 or Nipsco Common Shares held by the Paying Agent that remains
undistributed to the holders of the Company Certificates one year after the
Effective Time shall be delivered to Nipsco, and any holders of Company
Shares who have not theretofore complied with this Article II shall
thereafter look only to Nipsco and only as general creditors thereof for
payment, without interest, of their claim for any Merger Consideration and
any dividends or distributions with respect to Nipsco Common Shares.
2.3.8 No Liability. None of Nipsco, the Surviving Corporation or the
Paying Agent shall be liable to any person in respect of any Merger
Consideration payable with respect to Company Shares delivered to a public
official pursuant to any applicable abandoned property, escheat or similar
law. If any Company Certificates shall not have been surrendered prior to
seven years after the Effective Time (or immediately prior to such earlier
date on which any Merger Consideration in respect of such Company
Certificate would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 3.4)), any such cash, Company
Shares, dividends or distributions payable in respect of such Company
Certificate shall, to the extent permitted by applicable law, become the
property of Nipsco free and clear of all claims or interest of any person
previously entitled thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Nipsco and Acquisition as
follows:
3.1 Organization, Standing and Corporate Power. The Company is a corporation
duly organized and validly existing under the laws of the Commonwealth of
Massachusetts, has the requisite corporate power and authority to carry on its
business as now being conducted, and is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the nature of
its business or the ownership or the leasing of its properties makes such
qualification or licensing necessary, except where the failure to be so
qualified or licensed would not individually or in the aggregate have a
Company Material Adverse Effect. As used in this Agreement, the term "Company
Material Adverse Effect" means a material adverse effect on the business,
assets, liabilities, results of operations, financial condition or prospects
of the Company and its subsidiaries taken as a whole. The Company has
delivered to Nipsco complete and correct copies of its Articles of
Organization and By-Laws, as amended to the date of this Agreement.
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3.2 Capital Structure. As of the date hereof, the authorized capital stock
of the Company consists of 36,000,000 Company Shares and 150,000 shares of
cumulative preferred stock, $50 par value per share (the "Company Preferred A
Shares") and 200,000 shares of cumulative preferred stock, $100 par value per
share (the "Company Preferred B Shares"). At the close of business on December
12, 1997 (i) 13,514,094 Company Shares were issued and outstanding; (ii)
44,399 shares of Company Preferred A Shares were issued and outstanding; and
(iii) 26,989 shares of Company Preferred B Shares were issued and outstanding.
The Company has no Company Shares, Company Preferred A Shares or Company
Preferred B Shares reserved for issuance, except that, as of December 12,
1997, there were 1,602,752 Company Shares reserved for issuance pursuant to
the Company's Key Employee Stock Option Plan, Profit Sharing Plan and Stock
Performance Sharing Plan (the "Company Stock Plans") and the Company's
Dividend Reinvestment Plan and 13,514,094 Company Shares reserved for issuance
under the Shareholder Rights Agreement dated as of November 15, 1989 between
the Company and The First National Bank of Boston as rights agent (the
"Shareholder Rights Agreement"). In addition, the Company has reacquired and
holds 1,620 Company Shares in treasury for reissuance pursuant to the Company
Stock Accumulation Plan for Outside Directors. All outstanding shares of
capital stock of the Company are duly authorized, validly issued, fully paid
and nonassessable and not subject to preemptive rights. No bonds, debentures,
notes or other indebtedness of the Company conferring the right to vote (or
convertible into, or exchangeable for, securities conferring the right to
vote) on any matters on which the shareholders of the Company may vote are
issued or outstanding. Section 3.2 of the disclosure schedule dated as of the
date hereof of the Company (the "Company Disclosure Schedule") sets forth the
name of each participant in each of the Company Stock Plans and the number of
Company Shares awarded to such participant as of the date hereof. Except as
set forth above or in Section 3.2 of the Company Disclosure Schedule, the
Company does not have any outstanding option, warrant, subscription or other
right, agreement or commitment that either obligates the Company to issue,
sell or transfer, repurchase, redeem or otherwise acquire or vote any shares
of capital stock of the Company or that restricts the transfer of Company
Shares.
3.3 Subsidiaries.
3.3.1 Section 3.3.1 of the Company Disclosure Schedule sets forth the
name of each Subsidiary of the Company and the jurisdiction of its
organization. Each Subsidiary of the Company is a corporation or
partnership duly organized and validly existing under the laws of the
jurisdiction of its organization and has the corporate or partnership power
and authority and all necessary government approvals to own, lease and
operate its properties and to carry on its business as now being conducted,
except where the failure to be so organized, existing and in good standing
or to have such power and authority or necessary governmental approvals
would not individually or in the aggregate have a Company Material Adverse
Effect. Each Subsidiary of the Company is duly qualified or licensed and in
good standing to do business in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by
it makes such qualification or licensing necessary, except in such
jurisdictions where the failure to be so qualified or licensed and in good
standing would not individually or in the aggregate have a Company Material
Adverse Effect. A "Subsidiary" of Brass means any corporation or other
entity (including joint ventures, partnerships and other business
associations) in which Brass directly or indirectly owns outstanding
capital stock or other voting securities having the power to elect a
majority of the directors or similar members of the governing body of such
corporation or other entity, or otherwise to direct to the management and
policies of such corporation or other entity.
3.3.2 Section 3.3.2 of the Company Disclosure Schedule sets forth, as to
each Subsidiary of the Company, its authorized capital structure and the
number of its issued and outstanding shares of capital stock or other
ownership units. Except as set forth in Section 3.3.2 of the Company
Disclosure Schedule, the Company is, directly or indirectly, the record and
beneficial owner of all of the outstanding shares of capital stock or other
ownership units of each of its Subsidiaries, and no capital stock or other
ownership units of any such Subsidiary is or may become required to be
issued by reason of any options, warrants, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or
rights convertible into or exchangeable or exercisable for, shares of any
capital stock or other ownership units of any such Subsidiary, and there
are no contracts, commitments, understandings or arrangements by which
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the Company or any of its Subsidiaries is or may be bound to issue, redeem,
purchase or sell additional shares of capital stock or other ownership
units of any such Subsidiary or securities convertible into or exchangeable
or exercisable for any such shares or units. All of such shares and other
ownership units are validly issued, fully paid and nonassessable and,
except as set forth in Section 3.3.2 of the Company Disclosure Schedule,
are owned by the Company, or by a wholly owned Subsidiary of the Company,
free and clear of all liens, claims, encumbrances, restraints on
alienation, or any other restrictions with respect to the transferability
or assignability thereof (other than restrictions on transfer imposed by
federal or state securities laws).
3.4 Authority; Noncontravention. The Company has the requisite corporate
power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of the Company, subject, in the case of the Merger, to the approval of its
shareholders as set forth in Section 5.2. This Agreement has been duly
executed and delivered by the Company and, assuming this Agreement has been
duly executed and delivered by Nipsco, constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except that the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights generally and by general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity). Except as set forth in Section 3.4 of the Company
Disclosure Schedule, the execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated by this Agreement and
compliance with the provisions hereof will not, (i) conflict with any of the
provisions of the Articles of Organization or By-Laws of the Company or the
comparable documents of any of its Subsidiaries or conflict with the joint
venture agreement or comparable document of any joint venture, partnership or
other business association or entity to which the Company or a Subsidiary is a
party, (ii) subject to the governmental filings and other matters referred to
in the following sentence, conflict with, result in a breach of or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or loss
of a material benefit under, or require the consent (the "Company Required
Consents") of any person under, any indenture or other agreement, permit,
concession, franchise, license or similar instrument or undertaking to which
the Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries or any of their assets is bound or affected, or (iii)
subject to the governmental filings and other matters referred to in the
following sentence, contravene any law, rule or regulation of any state or of
the United States of America or any political subdivision thereof or therein,
or any order, writ, judgment, injunction, decree, determination or award
currently in effect, except where, in the case of clauses (ii) and (iii)
above, such conflicts, breaches, defaults and similar matters, would not,
individually or in the aggregate, have a Company Material Adverse Effect or
materially and adversely affect the Company's ability to consummate the
transactions contemplated hereby. No consent, approval or authorization of, or
declaration or filing with, or notice to, any governmental agency or
regulatory body, court, agency, commission, division, department, public body
or other authority (a "Governmental Entity") that has not been received or
made, is required by or with respect to the Company or any of its Subsidiaries
in connection with the execution and delivery of this Agreement by the Company
or the consummation by the Company of the transactions contemplated hereby,
except for (a) the filing of pre-merger notification and report forms under
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), with respect to the Merger; (b) the filing of applications for
authorization for the Merger with the Federal Energy Regulatory Commission
(the "FERC"), the Massachusetts Department of Telecommunications and Energy
("MDTE"), the New Hampshire Public Utilities Commission ("NHMPUC") and the
Maine Public Utilities Commission ("MNEPUC"); (c) the filing with the
Securities and Exchange Commission (the "SEC") of a proxy statement (as
defined in Section 5.1.1) to be included in the Registration Statement (as
defined in Section 4.4) relating to the approval by the shareholders of the
Company of the Merger and such reports under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as may be required in connection with
this Agreement and the transactions contemplated by this Agreement; (d) the
filing of articles of merger with the Massachusetts Secretary and appropriate
documents with the relevant authorities of other states in which the Company
is qualified to do business; and (e) such other consents, approvals,
authorizations, filings or notices as
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are set forth in Section 3.4 of the Company Disclosure Schedule or as, in the
aggregate could not reasonably be expected to have a Company Material Adverse
Effect (collectively, the "Company Required Statutory Approvals").
3.5 SEC Documents and Financial Statements.
3.5.1 Except as set forth in Section 3.5.1 of the Company Disclosure
Schedule, the Company, and each of its Subsidiaries that is or was required
to do so, has timely filed all required reports, schedules, forms,
statements and other documents with the SEC since October 1, 1992 (the
"Company SEC Documents"). As of their respective dates, the Company SEC
Documents complied with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, as the case may be,
and the rules and regulations of the SEC promulgated thereunder applicable
to such Company SEC Documents, and none of the Company SEC Documents as of
such dates contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
3.5.2 The consolidated financial statements of the Company included in
the Company SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
during the periods involved ("GAAP") (except as may be indicated in the
notes thereto or, in the case of unaudited interim financial statements, as
permitted by Rule 10-01 of Regulation S-X) and fairly present, in all
material respects, the consolidated financial position of the Company and
its consolidated Subsidiaries as of the dates thereof and the consolidated
results of their operations, changes in shareholders' equity and
consolidated cash flows for the periods then ended (subject, in the case of
unaudited interim financial statements, to normal recurring adjustments,
none of which is material).
3.5.3 Except as disclosed in the Company SEC Documents filed and publicly
available prior to December 16, 1997 (the "Filed Company SEC Documents") or
in the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries has any absolute, accrued, contingent or other liabilities or
obligations due or to become due, and there are no claims or causes of
action (including but not limited to those relating to any Company Benefit
Plan (as defined in Section 3.8.1) formerly maintained by the Company or
any of its Subsidiaries or a Company ERISA Affiliate (as defined in Section
3.8.1) on or after January 1, 1992) that have been or, to the knowledge of
the Company, may be asserted against the Company or any of its
Subsidiaries, except (i) as and to the extent reflected or reserved against
on the balance sheet included in the Company's Annual Report on Form 10-K
for the year ended September 30, 1997 (the "Company Base Balance Sheet"),
or included in the notes to the Company Base Balance Sheet, (ii) for normal
and recurring liabilities incurred since September 30, 1997, in the
ordinary course of business consistent with past practice, and (iii) for
such other liabilities and obligations that are not in the aggregate
reasonably likely to have a Company Material Adverse Effect. For purposes
of this Agreement, it is understood that all references to the knowledge of
the Company means solely the knowledge of any one or more of the
individuals listed on Section 3.5.3 of the Company Disclosure Schedule.
3.6 Absence of Certain Changes or Events. Except as disclosed in the Filed
Company SEC Documents or in Section 3.6 of the Company Disclosure Schedule,
since the date of the Company Base Balance Sheet, the Company and its
Subsidiaries have conducted their business only in the ordinary course
consistent with past practice, and, except as otherwise expressly permitted by
this Agreement, there has not been (i) any change that has had or that could
reasonably be expected to have a Company Material Adverse Effect, (ii) any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any of the Company's
outstanding capital stock (other than regular quarterly cash dividends in
accordance with the Company's present dividend policy), (iii) any split,
combination or reclassification of any of its outstanding capital stock or any
issuance or the authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for shares of its outstanding
capital stock, (iv) any entry by the Company or any of its Subsidiaries into
any employment, severance, change-of-control, termination or similar agreement
with any
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officer, director or other employee, or any increase in the compensation or
severance or termination benefits payable to any director, officer or other
employee of the Company or any of its Subsidiaries (except in the ordinary
course of business consistent with past practice, or as was required under
employment agreements in effect as of the date of the Company Base Balance
Sheet) or (v) any change in the method of accounting or policy used by the
Company or any of its Subsidiaries and disclosed in the financial statements
included in the Filed Company SEC Documents.
3.7 Real and Personal Property.
3.7.1 The Company and its Subsidiaries own, or have a valid and
enforceable right to use or a valid and enforceable leasehold interest in,
all real property (including all buildings, fixtures and other improvements
thereto) used by them in the conduct of their respective businesses as such
businesses are now being conducted. Except as disclosed in the Filed
Company SEC Documents or Section 3.7.1 of the Company Disclosure Schedule,
neither the Company's nor any of its Subsidiaries' ownership of or
leasehold interest in any such property is subject to any mortgage, pledge,
lien, option, conditional sale agreement, encumbrance, security interest,
title exception or restriction or claim or charge of any kind
("Encumbrances"), except for such Encumbrances as are not in the aggregate
reasonably likely to have a Company Material Adverse Effect. All such
property is in good condition and repair and is suitable in all material
respects for the purposes for which it is now being used in the conduct of
the businesses of the Company and its Subsidiaries, except to the extent
that the poor condition or unsuitability of any such property is not in the
aggregate reasonably likely to have a Company Material Adverse Effect.
3.7.2 Except as otherwise disclosed in Section 3.7.2 of the Company
Disclosure Schedule, all personal property that is owned by the Company or
any of its Subsidiaries or used by any of them in the conduct of their
respective businesses is owned free and clear of any Encumbrances, except
for such Encumbrances as are not in the aggregate reasonably likely to have
a Company Material Adverse Effect. All such property is in good working
condition, subject to normal wear and tear, and is suitable in all material
respects for the purposes for which it is now being used in the conduct of
the businesses of the Company and its Subsidiaries, except to the extent
that the poor condition or unsuitability of any such property is not in the
aggregate reasonably likely to have a Company Material Adverse Effect.
3.8 Employee Matters; ERISA.
3.8.1 Section 3.8.1 of the Company Disclosure Schedule contains a true
and complete list of: (i) each employee benefit plan, program, policy,
agreement or arrangement covering employees, former employees, directors or
former directors of the Company (or any of its Subsidiaries) or any of
their dependents or beneficiaries, or providing benefits to such persons in
respect of services provided to any such entity, including but not limited
to any "employee benefit plan" within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")
(whether or not terminated, if the Company or any of its Subsidiaries could
have statutory or contractual liability with respect thereto on or after
the date hereof); (ii) each management, employment, deferred compensation,
severance (including any payment, right or benefit resulting from a change
in control), bonus or other contract for personal services with or covering
any current or former officer, employee or director or any consulting
contract with any person who prior to entering into such contract was a
director, officer or employee of the Company or any of its Subsidiaries
(whether or not terminated, if the Company or any of its Subsidiaries could
have statutory or contractual liability with respect thereto on or after
the date hereof); (iii) each "employee pension benefit plan" (within the
meaning of ERISA Section 3(2)) subject to Title IV of ERISA or the minimum
funding requirements of Code Section 412 maintained or contributed to by
the Company or any entity required to be aggregated therewith pursuant to
Code Section 414(b), (c) or (m) (each, a "Company ERISA Affiliate") at any
time during the seven-year period immediately preceding the date hereof
(collectively, the "Company Benefit Plans") and (iv) with respect to each
Company Benefit Plan, the source or sources of benefit payments under the
plan (including, where applicable, the identity of any trust (whether or
not a grantor trust), insurance contract, investment advisor agreement,
custodial account, agency
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agreement, or other arrangement that holds the assets of, or serves as a
funding vehicle or source of benefits for, such Company Benefit Plan).
3.8.2 Except as disclosed in Section 3.8.2 of the Company Disclosure
Schedule, all contributions and other payments required to have been made
by the Company or any of its Subsidiaries pursuant to any Company Benefit
Plan (or to any person pursuant to the terms thereof) have been timely made
or provided for, or the amount of such payment or contribution obligation
has been reflected in the Company's financial statements reflected in the
Filed Company SEC Documents.
3.8.3 Except as disclosed in Section 3.8.3 of the Company Disclosure
Schedule, each Company Benefit Plan that is intended to be "qualified"
within the meaning of Code Section 401(a) has been determined by the IRS
within the last three years to be so qualified, and, to the best knowledge
of the Company, no event or condition exists or has occurred that could
reasonably be expected to result in the revocation of any such
determination. The Company and each of its Subsidiaries are in compliance
with, and each Company Benefit Plan is and has been operated in compliance
with, its terms and all applicable laws, rules and regulations governing
such Plans, including without limitation ERISA and the Code, except for
violations that could not reasonably be expected to have a Company Material
Adverse Effect. To the best knowledge of the Company, (i) no individual or
entity has engaged in any transaction with respect to any Company Benefit
Plan that is a non-exempt prohibited transaction under Section 406 of ERISA
or Section 4495 of the Code, or as a result of which the Company or any of
its Subsidiaries could reasonably expect to be subject to liability
pursuant to ERISA Section 409 or 502 or subject to an excise tax pursuant
to Code Section 4975, (ii) no Company Benefit Plan is subject to any
ongoing audit, investigation, or other administrative proceeding of the
Internal Revenue Service (the "IRS"), the Department of Labor (the "DOL"),
or any other federal, state or local Governmental Entity, (iii) no Company
Benefit Plan is the subject of any pending application for administrative
relief under any voluntary compliance program of any Governmental Entity
(including without limitation the IRS's Voluntary Compliance Resolution
Program or Walk-in Closing Agreement Program or the DOL's Delinquent Filer
Voluntary Compliance Program), and (iv) no matter is pending relating to
any Company Benefit Plan before any court.
3.8.4 Except as disclosed in Section 3.8.4 of the Company Disclosure
Schedule with respect to the Company Benefit Plans, individually and in the
aggregate, no termination or partial termination of any Company Benefit
Plan or other event has occurred at any time, and, to the best knowledge of
the Company, there exists no condition or set of circumstances with respect
to any Company Benefit Plan that could subject the Company or any of its
Subsidiaries to any liability arising under the Code, ERISA or any other
applicable law (including without limitation any liability to or under any
such Plan or to the Pension Benefit Guaranty Corporation (the "PBGC")), or
under any indemnity agreement to which the Company, any of its Subsidiaries
or any Company ERISA Affiliate is a party, which liability, excluding
liability for benefit claims and funding obligations payable in the
ordinary course and liability for PBGC insurance premiums payable in the
ordinary course, is reasonably likely to have a Company Material Adverse
Effect. PBGC has not initiated any proceedings, and there exists no event
or condition which would constitute grounds for initiation of proceedings
by PBGC to terminate any Company Benefit Plan under Section 4042 of ERISA.
3.8.5 Except as disclosed in Section 3.8.5 of the Company Disclosure
Schedule, no Company Benefit Plan that is a "welfare plan" (within the
meaning of ERISA Section 3(1)) provides benefits for any retired or former
employees (other than as required pursuant to ERISA Section 601).
3.8.6 The Company has made or will make available to Nipsco a true and
correct copy of each collective bargaining agreement to which the Company
is a party or under which the Company has obligations and, with respect to
each Company Benefit Plan, as applicable (i) the current plan document
(including all amendments adopted since the most recent restatement) and
its most recently prepared summary plan description and all summaries of
material modifications prepared since the most recent summary plan
description, (ii) the annual report (IRS Form 5500 Series) including
financial statements prepared for the most recent three plan years, (iii)
each related trust agreement, insurance contract, annuity contract, service
provider or investment management or advisory agreement (including all
amendments to each such document), (iv) the most recent IRS determination
letter with respect to the qualified status under
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Code Section 401(a) of such Plan and a copy of any application for an IRS
determination letter filed since the most recent IRS determination letter
was issued and (v) the actuarial reports or valuations for the most recent
three plan years.
3.8.7 Except as disclosed in Section 3.8.7 of the Company Disclosure
Schedule, the consummation or announcement of any transaction contemplated
by this Agreement will not (either alone or upon the occurrence of any
additional or further acts or events) result in any (i) payment (whether of
severance pay or otherwise) becoming due from the Company or any of its
Subsidiaries under any applicable Company Benefit Plans to any officer,
employee, former employee, director or former director thereof or to the
trustee under any "rabbi trust," "secular trust" or similar arrangement, or
(ii) benefit under any Company Benefit Plan being established or becoming
accelerated, vested or payable, except for a payment or benefit that would
have been payable under the same terms and conditions without regard to the
transactions contemplated by this Agreement.
3.8.8 Except as disclosed in Section 3.8.8 of the Company Disclosure
Schedule, each Company Benefit Plan that is subject to either or both of
the minimum funding requirements of ERISA Section 302 or to Title IV of
ERISA has assets that, as of the date hereof, have a fair market value
equal to or exceeding the present value, as determined by the Plan's
independent enrolled actuary, of the accrued benefit obligations thereunder
on a termination basis, as of the date hereof, based on the actuarial
methods, tables and assumptions theretofore utilized by such Plan's
enrolled actuary in preparing such Plan's most recently prepared actuarial
valuation report, except to the extent that applicable law would require
the use of different actuarial assumptions if such Plan was to be
terminated as of the date hereof. No Company Benefit Plan subject to the
minimum funding requirements of ERISA Section 302 has incurred any
"accumulated funding deficiency" (within the meaning of ERISA Section 302
or Section 412 of the Code) as of the date hereof. No waiver from the
minimum funding standards of Section 302 of ERISA or Section 412 of the
Code has been obtained, applied for or is contemplated with respect to any
Company Benefit Plan.
3.8.9 Except as disclosed in Section 3.8.9 of the Company Disclosure
Schedule, no Company Benefit Plan is or was at any time a "multiemployer
plan" (within the meaning of ERISA Section 4001(a) (3)), a multiple
employer plan described in Code Section 413(c), or a "multiple employer
welfare arrangement" (within the meaning of ERISA Section 3(40)); and none
of the Company, any Subsidiary thereof or any Company ERISA Affiliate has
at any time within the past five years been obligated to contribute to, or
otherwise has or has had any liability with respect to, any multiemployer
plan, multiple employer plan, or multiple employer welfare arrangement. The
Company and its Subsidiaries have not made or incurred a "complete
withdrawal" or a "partial withdrawal," as such terms are defined in ERISA
Sections 4203 and 4205, from any multiemployer plan at any time during the
five-calendar-year period immediately preceding the date of this Agreement
and the transactions contemplated by the Agreement will not, in and of
themselves, give rise to such a "complete withdrawal" or "partial
withdrawal." Neither the Company nor any Subsidiary has incurred or is
aware of any withdrawal liability (as defined in Section 4201 of ERISA)
assessed against any of them with respect to any multiemployer plan.
3.8.10 Except as disclosed in Section 3.8.10 of the Company Disclosure
Schedule: (i) neither the Company nor any Subsidiary of the Company is
subject to any legal, contractual, equitable or other obligation to
establish as of any date any employee benefit plan of any nature, including
without limitation any pension, profit sharing, welfare, post-retirement
welfare, stock option, stock or cash award, nonqualified deferred
compensation or executive compensation plan, policy or practice, and (ii)
to the best knowledge of the Company, after review of all Company Benefit
Plan documents, the Company or one or more of its Subsidiaries may, in any
manner, and without the consent of any employee, beneficiary or dependent,
employees' organization or other person, terminate, modify or amend any
Company Benefit Plan or any other employee benefit plan, policy, program or
practice (or its participation in any such Company Benefit Plan or other
employee benefit plan, policy, program or practice) at any time sponsored,
maintained or contributed to by the Company or any of its Subsidiaries,
effective as of any date before, on or after the Effective Time except to
the extent that any retroactive amendment would be prohibited by ERISA
Section 204(g) or would deprive a plan participant of a benefit in which
such participant has a vested right.
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3.8.11 Except as disclosed in Section 3.8.11 of the Company Disclosure
Schedule, (i) no event constituting a "reportable event" (within the
meaning of ERISA Section 4043(b) and the regulations issued thereunder) for
which the 30-day notice requirement has not been waived by the PBGC has
occurred with respect to any Company Benefit Plan and (ii) no liability,
claim, action or litigation has been made, commenced or, to the best
knowledge of the Company, threatened, by or against the Company or any of
its Subsidiaries with respect to any Company Benefit Plan (other than for
benefits or PBGC premiums payable in the ordinary course) that is
reasonably likely to have a Company Material Adverse Effect.
3.9 Taxes. "Taxes," as used in this Agreement, means any federal, state,
county, local or foreign taxes, charges, fees, levies, or other assessments,
including all net income, gross income, sales and use, ad valorem, transfer,
gains, profits, excise, franchise, real and personal property, gross receipts,
capital stock, production, business and occupation, disability, employment,
payroll, license, estimated, stamp, custom duties, severance or withholding
taxes or charges imposed by any Governmental Entity, and includes any interest
and penalties (civil or criminal) on or additions to any such taxes and any
expenses incurred in connection with the determination, settlement or
litigation of any tax liability. "Tax Return," as used in this Agreement,
means a report, return or other information required to be supplied to a
Governmental Entity with respect to Taxes including, where permitted or
required, combined or consolidated returns for any group of entities that
includes the Company or any of its Subsidiaries, on the one hand, or Nipsco or
any of its Subsidiaries, on the other hand. "Tax Rulings," as used in this
Agreement, shall mean a written ruling of a taxing authority relating to
Taxes. "Closing Agreement," as used in this Agreement, shall mean a written
and legally binding agreement with a taxing authority relating to Taxes.
Except as disclosed in Section 3.9 of the Company Disclosure Schedule, there
are no Tax matters that, individually or in the aggregate, would reasonably be
likely to have a Company Material Adverse Effect.
3.9.1 Filing of Timely Tax Returns. The Company and each of its
Subsidiaries have filed all Tax Returns required to be filed by each of
them under applicable law. All Tax Returns were in all material respects
(and, as to Tax Returns not filed as of the date hereof, will be) true,
complete and correct and filed on a timely basis.
3.9.2 Payment of Taxes. The Company and each of its Subsidiaries have,
within the time and in the manner prescribed by law, paid (and until the
Closing Date will pay within the time and in the manner prescribed by law)
all Taxes that are currently due and payable except for Taxes for which
reserves have been taken on the Company Balance Sheet.
3.9.3 Tax Reserves. The Company and its Subsidiaries have established
(and until the Closing Date will maintain) on their books and records
reserves adequate to pay all Taxes and reserves for deferred income taxes
in accordance with GAAP.
3.9.4 Tax Liens. There are no Tax liens upon the assets of the Company or
any of its Subsidiaries except liens for Taxes not yet due.
3.9.5 Withholding Taxes. The Company and each of its Subsidiaries have
complied (and until the Closing Date will comply) in all material respects
with the provisions of the Code relating to the payment and withholding of
Taxes, including without limitation the withholding and reporting
requirements under Code Sections 1441 through 1464, 3401 through 3606, and
6041 and 6049, as well as similar provisions under any other laws, and have
within the time and in the manner prescribed by law withheld from employee
wages and paid over to the proper governmental authorities all amounts
required.
3.9.6 Extensions of Time for Filing Tax Returns. Neither the Company nor
any of its Subsidiaries has requested any extension of time within which to
file any Tax Return which Tax Return has not since been filed.
3.9.7 Waivers of Statute of Limitations. Neither the Company nor any of
its Subsidiaries has executed any outstanding waivers or comparable
consents regarding the application of the statute of limitations with
respect to any Taxes or Tax Returns.
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3.9.8 Expiration of Statute of Limitations. The statute of limitations
for the assessment of all Taxes has expired for all applicable Tax Returns
of the Company and each of its Subsidiaries or those Tax Returns have been
examined by the appropriate taxing authorities for all periods through the
date hereof, and no deficiency for any Taxes has been proposed, asserted or
assessed against the Company or any of its Subsidiaries that has not been
resolved and paid in full.
3.9.9 Audit, Administrative and Court Proceedings. No audits or other
administrative proceedings or court proceedings are presently pending with
regard to any Taxes or Tax Returns of the Company or any of its
Subsidiaries.
3.9.10 Powers of Attorney. No power of attorney currently in force has
been granted by the Company or any of its Subsidiaries concerning any Tax
matter.
3.9.11 Tax Rulings. Neither the Company nor any of its Subsidiaries has
received a Tax Ruling or entered into a Closing Agreement with any taxing
authority that would have a continuing effect after the Closing Date.
3.9.12 Availability of Tax Returns. The Company and its Subsidiaries have
made available to the Company complete and accurate copies, covering all
open years, of (i) all Tax Returns, and any amendments thereto, filed by
the Company or any of its Subsidiaries, (ii) all audit reports received
from any taxing authority relating to any Tax Return filed by the Company
or any of its Subsidiaries and (iii) any Closing Agreements entered into by
the Company or any of its Subsidiaries with any taxing authority.
3.9.13 Tax-Sharing Agreements. Except as disclosed in Section 3.9.13 of
the Company Disclosure Schedule, there are no agreements relating to the
allocation or sharing of Taxes between or among the Company and any of its
Subsidiaries.
3.9.14 Code Section 341(f). Neither the Company nor any of its
Subsidiaries has filed a consent pursuant to Code Section 341(f) or has
agreed to have Code Section 341(f)(2) apply to any disposition of a
subsection (f) asset (as such term is defined in Code Section 341(f)(4))
owned by the Company or any of its Subsidiaries.
3.9.15 Code Section 168. No property of the Company or any of its
Subsidiaries is property that the Company or any such Subsidiary or any
party to this transaction is or will be required to treat as being owned by
another person pursuant to the provisions of Code Section 168(f)(8) (as in
effect prior to its amendment by the Tax Reform Act of 1986) or is tax-
exempt use property within the meaning of Code Section 168.
3.9.16 Code Section 481 Adjustments. Neither the Company nor any of its
Subsidiaries is required to include in income any adjustment pursuant to
Code Section 481(a) by reason of a voluntary change in accounting method
initiated by the Company or any of its Subsidiaries, and, to the best of
the knowledge of the Company, the IRS has not proposed any such adjustment
or change in accounting method.
3.9.17 Code Sections 6661 and 6662. The Company and its Subsidiaries have
or had substantial authority (within the meaning of Section 6661 of the
Code for Tax Returns filed on or before December 31, 1990, and within the
meaning of Section 6662 of the Code for Tax Returns filed after December
31, 1990) for all transactions that could give rise to an understatement of
federal income tax (within the meaning of Section 6661 of the Code for Tax
Returns filed on or before December 31, 1990, and within the meaning of
Section 6662 of the Code for Tax Returns filed after December 31, 1990).
3.9.18 Code Section 280G. Except as disclosed in Section 3.9.18 of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries is a
party to any agreement, contract, or arrangement that could reasonably be
expected to result, on account of the transactions contemplated hereunder,
separately or in the aggregate, in the payment of any "excess parachute
payment" within the meaning of Code Section 280G.
3.9.19 NOLS. As of December 31, 1997, the Company and its Subsidiaries
had net operating loss carryovers available to offset future income as
disclosed in Section 3.9.19 of the Disclosure Schedule.
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Section 3.9.19 of the Disclosure Schedule discloses the amount of and year
of expiration of each company's net operating loss carryovers.
3.9.20 Credit Carryovers. As of December 31, 1997, the Company and its
Subsidiaries had tax credit carryovers available to offset future tax
liability as disclosed in Section 3.9.20 of the Company Disclosure
Schedule. Section 3.9.20 of the Company Disclosure Schedule discloses the
amount and year of expiration of each company's tax credit carryovers.
3.9.21 Code Section 338 Elections. No election under Code Section 338 (or
any predecessor provision) has been made by or with respect to the Company
or any of its Subsidiaries or any of their respective assets or properties.
3.9.22 Acquisition Indebtedness. No indebtedness of the Company or any of
its Subsidiaries is "corporate acquisition indebtedness" within the meaning
of Code Section 279(b).
3.9.23 Intercompany Transactions. Neither the Company nor any of its
Subsidiaries has engaged in any intercompany transactions within the
meaning of Treasury Regulations Section 1.1502-13 for which any income or
gain will remain unrecognized as of the close of the last taxable year
prior to the Closing Date.
3.9.24 Liability for Others. Neither the Company nor any of its
Subsidiaries has any liability for Taxes of any person other than the
Company and its Subsidiaries (i) under Treasury Regulations Section 1.1502-
6 (or any similar provision of state, local or foreign law) as a transferee
or successor, (ii) by contract or (iii) otherwise.
3.10 Compliance with Applicable Laws. Except as disclosed in Section 3.10 of
the Company Disclosure Schedule:
3.10.1 The business of the Company and each of its Subsidiaries is being
conducted in compliance in all material respects with all applicable laws,
ordinances, rules and regulations, decrees and orders of any Governmental
Entity, and all material notices, reports, documents and other information
required to be filed thereunder within three years of the date hereof were
properly filed and were in compliance in all material respects with such
laws.
3.10.2 Each of the Company and each of its Subsidiaries has all material
licenses (including, without limitation, utility licenses), permits,
authorizations, franchises and rights ("Licenses") that are necessary for
it to own or lease, as the case may be, and operate its properties and
assets and to conduct its business as now conducted. The business of the
Company and each of its Subsidiaries has been and is being conducted in
compliance in all material respects with all such Licenses. All
restrictions and limitations on those Licenses requested or required by any
utility regulator are disclosed in the Filed Company SEC Documents or in
Section 3.10 of the Company Disclosure Schedule. All such Licenses are in
full force and effect, and there is no proceeding or investigation pending
or, to the knowledge of the Company, threatened that would reasonably be
expected to lead to the revocation, amendment, failure to renew,
limitation, suspension or restriction of any such License.
3.10.3 The Company and each of its Subsidiaries that has been or is
required to do so has filed all forms, reports, statements and other
documents required by law to be filed by it with the FERC, MDPU, NHMPUC and
the MNEPUC, and such forms, reports, statements and other documents, did
not at the time they were filed contain any 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, in light of the
circumstances under which they were made, not misleading.
3.11 Environmental Protection.
3.11.1 Except as disclosed in Section 3.11.1 of the Company Disclosure
Schedule or as disclosed in the Company SEC Documents, the Company and its
Subsidiaries are and have been in material compliance with all applicable
Environmental Laws (as defined in Section 3.11.7), except where the failure
to be or to have so been in material compliance, in the aggregate, is not
reasonably likely to have a Company Material
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Adverse Effect. Except as disclosed in Section 3.11.1 of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries has
received any written notice from any person or Governmental Entity that
alleges that the Company or any of its Subsidiaries is not in material
compliance with applicable Environmental Laws, except where the failure to
be or to have so been in material compliance, in the aggregate, would not
have a Company Material Adverse Effect.
3.11.2 Except as disclosed in Section 3.11.2 of the Company Disclosure
Schedule or as disclosed in the Company SEC Documents, the Company and each
of its Subsidiaries have obtained or have applied for all material
environmental, health and safety permits and authorizations (collectively,
"Environmental Permits") necessary for the construction of their facilities
and the conduct of their operations, and all such Environmental Permits are
in good standing or, where applicable, a renewal application has been
timely filed and is pending agency approval, and the Company and its
Subsidiaries are in material compliance with all terms and conditions of
all such Environmental Permits, except where the failure to obtain such
Environmental Permits, to make such application, to be in such compliance
or to make such expenditures, in the aggregate, would not have a Company
Material Adverse Effect. The Company and each of its Subsidiaries have
taken, or prior to Closing will take, all necessary actions to ensure the
transferability of all Environmental Permits that are required with respect
to their respective businesses, operations and properties.
3.11.3 Except as disclosed in Section 3.11.3 of the Company Disclosure
Schedule or as disclosed in the Company SEC Documents, to the best
knowledge of the Company, no Environmental Claim (as defined in Section
3.11.7) is pending or, to the best knowledge of the Company, threatened:
(i) against the Company or any of its Subsidiaries; (ii) against any person
or entity whose liability for any Environmental Claim the Company or any of
its Subsidiaries has or may have retained or assumed either contractually
or by operation of law; or (iii) against any real or personal property or
operations that the Company or any of its Subsidiaries owns, leases or
manages, in whole or in part; that is reasonably likely in the aggregate to
have a Company Material Adverse Effect and the Company has no knowledge of
any facts likely to give rise to such Environmental Claim.
3.11.4 Except as disclosed in Section 3.11.4 of the Company Disclosure
Schedule or as disclosed in the Company SEC Documents, to the best
knowledge of the Company, there has been no Release (as defined in Section
3.11.7) of Hazardous Materials (as defined in Section 3.11.7) that would be
reasonably likely to (i) form the basis of any Environmental Claim against
the Company or any of its Subsidiaries, or against any person or entity
whose liability for any Environmental Claim the Company or any of its
Subsidiaries has or may have retained or assumed either contractually or by
operation of law, or (ii) cause damage to or diminution in value of real
property or operations that the Company or any of its Subsidiaries owns,
leases, or manages, in whole or in part, except for Releases of Hazardous
Materials the liability for which would not in the aggregate have a Company
Material Adverse Effect.
3.11.5 Except as disclosed in Section 3.11.5 of the Company Disclosure
Schedule, or as disclosed in the Company SEC Documents, to the best
knowledge of the Company, with respect to any predecessor of the Company or
any of its Subsidiaries, there is no Environmental Claim pending or
threatened, or Release of Hazardous Materials, that would be reasonably
likely to form the basis of any Environmental Claims that are reasonably
likely to have, in the aggregate, a Company Material Adverse Effect.
3.11.6 To the best knowledge of the Company, the Company has disclosed to
Nipsco all facts and circumstances that are likely to form the basis of an
Environmental Claim or to require expenditures by the Company or any of its
Subsidiaries in order to comply with current or future applicable
Environmental Laws, including but not limited to facts and circumstances
arising from: (i) the cost of pollution-control equipment currently
required or known to be required in the future; (ii) current investigatory,
removal, remediation or response costs or investigatory, removal,
remediation or response costs known to be required in the future, in each
case, both on-site and off-site; and/or (iii) any other environmental
matters affecting the Company or any of its Subsidiaries; and that are
reasonably likely to have, in the aggregate, a Company Material Adverse
Effect.
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3.11.7 As used in this Agreement:
(a) "Environmental Claim" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters,
directives, claims, liens, investigations, proceedings or notices of
non- compliance or violation by any person or entity (including without
limitation any Governmental Entity) alleging potential liability
(including without limitation potential liability for enforcement
costs, investigatory costs, cleanup costs, response costs, removal
costs, remedial costs, natural resources damages, property damages,
personal injuries, fines or penalties) arising out of, based on or
resulting from (i) the presence, or Release or threatened Release, of
any Hazardous Materials at any location, whether or not owned,
operated, leased or managed by the Company or any of its Subsidiaries
or joint ventures, (ii) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Laws or (iii) any
and all claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief
resulting from the presence or Release or threatened Release of any
Hazardous Materials.
(b) "Environmental Laws" means all federal, state and local laws,
rules and regulations, and any binding judicial or administrative
interpretation thereof or requirement thereunder relating to pollution
or protection of human health or the environment (including without
limitation ambient air, surface water, groundwater, land surface or
subsurface strata), including without limitation laws and regulations
relating to Releases or threatened Releases of Hazardous Materials or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials.
(c) "Hazardous Materials" means (i) any petroleum or petroleum
products or petroleum wastes (including crude oil or any fraction
thereof), nuclear fuel or waste or other radioactive materials, friable
asbestos or friable asbestos-containing material, urea formaldehyde
foam insulation, and transformers or other equipment that contain
dielectric fluid containing polychlorinated biphenyls, (ii) any
chemicals, materials or substances that are now defined as or included
in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants," or words of
similar import, under any Environmental Law and (iii) any other
chemical, material, substance or waste, exposure to which is now
prohibited, limited or regulated under any Environmental Law in a
jurisdiction in which the Company or any of its Subsidiaries or joint
ventures operates.
(d) "Release" means any release, spill, emission, leaking, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the
atmosphere, soil, surface water, groundwater or property (indoors or
outdoors).
3.12 Litigation. Except as set forth in the Filed Company SEC Documents or
Section 3.12 of the Company Disclosure Schedule, there is no suit, claim,
action, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its
Subsidiaries, and the Company has no knowledge of any facts likely to give
rise to any such litigation, that, individually or in the aggregate, could
reasonably be expected to have a Company Material Adverse Effect or to
materially and adversely affect the Company's ability to consummate the
transactions contemplated hereby. Neither the Company nor any of its
Subsidiaries is subject to any outstanding order, writ, injunction or decree
that, individually or in the aggregate, could reasonably be expected to have a
Company Material Adverse Effect. Except as set forth in the Filed Company SEC
Documents or Section 3.12 of the Company Disclosure Schedule, none of the
Company's Subsidiaries whose rates or services are subject to regulation by a
Governmental Entity (i) has rates that have been or are being collected
subject to refund, pending final resolution of any proceeding pending before a
Governmental Entity or on appeal to the courts or (ii) is a party to any
proceeding before the Governmental Entity or on appeal from orders of the
Governmental Entity.
3.13 Labor Relations. Except as set forth in Section 3.13 of the Company
Disclosure Schedule:
3.13.1 Neither the Company nor any of its Subsidiaries is a party to any
collective bargaining agreement or other current labor agreement with any
labor union or organization, and there is no current
A-17
union representation question involving employees of the Company or any of
its Subsidiaries, nor does the Company or any of its Subsidiaries know of
any activity or proceeding of any labor organization (or representative
thereof) or employee group (or representative thereof) to organize any such
employees.
3.13.2 There is no unfair labor practice charge or grievance arising out
of a collective bargaining agreement or other grievance procedure against
the Company or any of its Subsidiaries pending or, to the knowledge of the
Company or any of its Subsidiaries, threatened that could reasonably be
expected to have a Company Material Adverse Effect.
3.13.3 There is no complaint, lawsuit or proceeding in any forum by or on
behalf of any present or former employee, any applicant for employment or
any classes of the foregoing alleging breach of any express or implied
contract of employment, any law or regulation governing employment or the
termination thereof or other discriminatory, wrongful or tortious conduct
in connection with the employment relationship against the Company or any
of its Subsidiaries pending or, to the knowledge of the Company or any of
its Subsidiaries, threatened that could reasonably be expected to have a
Company Material Adverse Effect.
3.13.4 There is no strike, dispute, slowdown, work stoppage or lockout
pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened against or involving the Company or any of its Subsidiaries that
could reasonably be expected to have a Company Material Adverse Effect.
3.13.5 The Company and each of its Subsidiaries is in compliance with all
applicable laws respecting employment and employment practices, terms and
conditions of employment, wages, hours of work and occupational safety and
health, except for noncompliance that could not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse
Effect.
3.13.6 There is no proceeding, claim, suit, action or governmental
investigation pending or, to the knowledge of the Company or any of its
Subsidiaries, threatened in respect to which any current or former
director, officer, employee or agent of the Company or any of its
Subsidiaries is or may be entitled to claim indemnification from the
Company or any of its Subsidiaries pursuant to their respective articles of
organization or articles or certificates of incorporation or by-laws, as
provided in any indemnification agreement to which the Company or any of
its Subsidiaries is a party or pursuant to applicable law that could
reasonably be expected to have a Company Material Adverse Effect.
3.14 Intellectual Property. The Company and its Subsidiaries possess or have
adequate rights to use all material trademarks, trade names, patents, service
marks, brand marks, brand names, computer programs, databases, industrial
designs and copyrights necessary for the operation of their business
(collectively, the "Company Intellectual Property"), except where the failure
to possess or have adequate rights to use such properties would not have a
Company Material Adverse Effect. Except as set forth in Section 3.14 of the
Company Disclosure Schedule, all of the Company Intellectual Property is owned
by the Company or one of its Subsidiaries, free and clear of any and all
Encumbrances, except for those Encumbrances that would not, individually or in
the aggregate, have a Company Material Adverse Effect, and neither the Company
nor any of its Subsidiaries has forfeited or otherwise relinquished any
Company Intellectual Property which forfeiture would have a Company Material
Adverse Effect. To the knowledge of the Company, the use of the Company
Intellectual Property by the Company or its Subsidiaries does not, in any
material respect, conflict with, infringe upon, violate or interfere with or
constitute an appropriation of any right, title, interest or goodwill
(including, without limitation, any intellectual property right, trademark,
trade name, patent, service ▇▇▇▇, brand ▇▇▇▇, brand name, computer program,
database, industrial design, copyright or any pending application therefor) of
any other person, and neither the Company nor any of its Subsidiaries has
received notice of any claim or otherwise knows that any of the Company
Intellectual Property is invalid, conflicts with the asserted rights of any
other person, has not been used or enforced or has failed to be used or
enforced in a manner that would result in the abandonment, cancellation or
unenforceability of any of the Company Intellectual Property, except for such
conflicts, infringements, violations, interferences, claims, invalidity,
abandonments, cancellations or unenforceability that would not, individually
or in the aggregate, have a Company Material Adverse Effect.
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3.15 No Default. Neither the Company nor any of its Subsidiaries is in
default or violation (and no event has occurred that, with notice or the lapse
of time or both, would constitute a default or violation) of any term,
condition or provision of (i) its articles of organization or articles or
certificate of incorporation or by-laws, (ii) any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to which it is
now a party or by which it or any of its properties or assets may be bound
(except for the requirement under certain of such instruments to file
supplemental indentures as a result of the transactions contemplated hereby)
or (iii) any order, writ, injunction, decree, statute, rule or regulation
applicable to it, except in the case of (ii) and (iii) for defaults or
violations that in the aggregate would not have a Company Material Adverse
Effect. The Company and each of its Subsidiaries have fulfilled, and have
taken all action reasonably necessary to date to enable them to fulfill when
due, all of their material obligations under all contracts, commitments and
arrangements and, to the knowledge of the Company, no breach or default by any
other party under such contracts, commitments or arrangements has occurred or
is threatened that will or could impair the ability of the Company or any of
its Subsidiaries to enforce any of its rights thereunder in any material
respect.
3.16 Regulation as a Utility. The Company is regulated as a gas utility in
the Commonwealth of Massachusetts and in no other state; Northern is regulated
as a gas utility in the states of New Hampshire and Maine. Except as disclosed
in Section 3.16 of the Company Disclosure Schedule, neither the Company nor
any "subsidiary company" or "affiliate" (as such terms are defined in the ▇▇▇▇
▇▇▇) of the Company is subject to regulation as a public utility or public
service company (or similar designation) by any other state in the United
States, by the United States or any agency or instrumentality of the United
States or by any foreign country. The Company is a holding company exempt
under Section 3(a)(2) pursuant to Rule 2 from all provisions of the 1935 Act
except Section 9(a)(2).
3.17 Insurance. Except as disclosed in Section 3.17 of the Company
Disclosure Schedule, each of the Company and each of its Subsidiaries is, and
has been continuously since January 1, 1991, insured with financially
responsible insurers in such amounts and against such risks and losses as are
customary for companies engaged in the respective businesses conducted by the
Company and its Subsidiaries during such time period. Except as disclosed in
Section 3.17 of the Company Disclosure Schedule, neither the Company nor any
of its Subsidiaries has received any notice of cancellation or termination
with respect to any insurance policy. All insurance policies of the Company
and its Subsidiaries are valid and enforceable policies.
3.18 Voting Requirements. The affirmative vote of the holders of two-thirds
of the outstanding Company Shares, are the only votes of the holders of any
class or series of the Company's capital stock necessary to approve this
Agreement and the transactions contemplated by this Agreement (the "Company
Requisite Vote").
3.19 Brokers. Except as relates to the services provided by ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
formerly ▇▇▇▇ ▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇ ▇▇▇▇▇▇") as financial advisors
to the Company, all negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by the Company directly
with Nipsco, without the intervention of any person on behalf of the Company
in such manner as to give rise to any valid claim by any person against
Nipsco, the Company or any of their respective Subsidiaries for a finder's
fee, brokerage commission or similar payment.
3.20 Opinion of Financial Advisor. The Company has received the opinion of
▇▇▇▇ ▇▇▇▇▇▇, dated the date hereof, to the effect that, as of the date hereof,
the consideration to be received by holders of Company Shares pursuant to the
Merger is fair to such holders from a financial point of view.
3.21 Change in Business Relationships. The Company has no knowledge of any
event or circumstance that indicates that, whether on account of the
transactions contemplated by this Agreement or otherwise, any customer, agent,
representative or supplier of the Company or of any of its Subsidiaries
intends to discontinue, diminish or change its relationship with the Company
or any of its Subsidiaries in any way that would be reasonably likely to have
a Company Material Adverse Effect.
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3.22 Material Contracts. Section 3.22 of the Disclosure Schedule lists each
oral and written contract, commitment or arrangement of which the Company has
knowledge that is of a material nature (or that assumes materiality because of
its continuing nature) and under which the Company or any of its Subsidiaries
is obligated on the date hereof, including the following:
3.22.1 All consulting arrangements and contracts for professional,
advisory and other services, including contracts under which the Company or
any of its Subsidiaries performs services for others;
3.22.2 All leases of real or personal property, other than leases of
personal property whereunder total future rentals are, in each instance,
less than $1,000,000;
3.22.3 All contracts, commitments and agreements for the acquisition,
development or disposition of real or personal property, other than
conditional sales contracts and security agreements whereunder total future
payments are, in each instance, less than $1,000,000;
3.22.4 All contracts relating to the source or supply of gas and other
raw materials essential to the conduct of the business of the Company or
any of its Subsidiaries, including any financial derivatives master
agreements of transactions, confirmations, or futures account opening
agreements and/or brokerage statements evidencing financial hedging or
other trading activities;
3.22.5 All contracts relating to the employment, engagements,
compensation or termination of directors, officers, employees or agents of
the Company or any of its Subsidiaries and all pension, retirement, profit
sharing, stock option, stock purchase, stock appreciation, insurance or
similar plans or arrangements for the benefit of any employees, officers or
directors of the Company or any of its Subsidiaries, including all Company
Benefit Plans (as defined in Section 3.8.1);
3.22.6 All loans, loan commitments, letters of credit or other financial
accommodations or arrangements or evidences of indebtedness, including
modifications or amendments thereof, extended to or for the benefit of the
Company or any of its Subsidiaries;
3.22.7 All union and other labor contracts; and
3.22.8 All other material contracts made other than in the usual or
ordinary course of business of the Company or any of its Subsidiaries to
and which the Company or any of its Subsidiaries is a party or under which
the Company or any of its Subsidiaries is obligated.
3.23 Commodity Derivatives and Credit Exposure Matters. Neither the Company
nor any of its Subsidiaries has quantified on a ▇▇▇▇-to-market basis and
calculated with respect to physical and financial position exposure, (a)
natural gas forward price exposure exceeding $5,000, (b) on-system pipeline
transportation (basis) exposure exceeding $5,000, (c) off-system pipeline
transportation (basis) exposure exceeding $5,000 or (d) credit exposure (which
is unsecured and not backed by letters of credit or enforceable guarantees
from A-rated credit providers) to any one counterparty which exceeds
$1,000,000.
3.24 No Omissions. None of the information included in the Company
Disclosure Schedule or in the Company SEC Documents (including, without
limitation, the consolidated financial statements included therein) was, as of
the date such information was included in such Schedule or such Documents,
false or misleading in any material respect or omitted to state a fact therein
necessary to make such information not misleading in any material respect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NIPSCO
Nipsco hereby represents and warrants to the Company as follows:
4.1 Organization, Standing and Corporate Power. Nipsco is a corporation duly
organized and validly existing under the laws of the State of Indiana. Nipsco
has the requisite corporate power and authority to carry
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on its business as now being conducted, and Nipsco is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification or licensing necessary except where the failure to be so
qualified or licensed would not individually or in the aggregate have a Nipsco
Material Adverse Effect. As used in this Agreement, the term "Nipsco Material
Adverse Effect" means a material adverse effect on the business, assets,
liabilities, results of operations, financial condition or prospects of Nipsco
and its Subsidiaries taken as a whole. Nipsco has delivered to the Company
complete and correct copies of its articles of incorporation and by-laws, as
amended to the date of this Agreement.
4.2 Nipsco Capital Structure.
4.2.1 As of the date hereof, the authorized capital stock of Nipsco
consists of 200,000,000 Nipsco Common Shares and 20,000,000 shares of
preferred stock, without par value ("Nipsco Preferred Shares"). At the
close of business on December 12, 1997, (i) 62,196,673 Nipsco Common Shares
were issued and outstanding, and (ii) 11,695,436 Nipsco Common Shares were
held as treasury shares. Nipsco has no Nipsco Common Shares or Nipsco
Preferred Shares reserved for issuance, except that, as of December 12,
1997, there were 1,094,900 Nipsco Common Shares reserved for issuance
pursuant to Nipsco's Long-Term Incentive Plans and its Nonemployer Director
Stock Incentive Plan (the "Nipsco Stock Plans") and 2,000,000 Series A
Junior Participating Preferred Shares reserved for issuance pursuant to
Nipsco's Share Purchase Rights Plan. All outstanding shares of capital
stock of Nipsco are, and all Nipsco Common Shares that may be issued in
connection with the Merger will be when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive rights.
No bonds, debentures, notes or other indebtedness of Nipsco conferring the
right to vote (or convertible into, or exchangeable for, securities
conferring the right to vote) on any matters on which the shareholders of
Nipsco may vote are issued or outstanding. Except as set forth above or in
Section 4.2.1 of the disclosure schedule dated as of the date hereof of
Nipsco (the "Nipsco Disclosure Schedule"), Nipsco does not have any
outstanding option, warrant, subscription or other right, agreement or
commitment that either obligates Nipsco to issue, sell or transfer,
repurchase, redeem or otherwise acquire or vote any shares of capital stock
of Nipsco or its Subsidiaries or that restricts the transfer of Nipsco
Common Shares.
4.2.2 Prior to the Effective Time, the authorized capital stock of
Acquisition will consist of 1,000 common shares, without par value, all of
which will be issued and outstanding and owned by Nipsco. All such
outstanding common shares will be duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights.
4.3 Subsidiaries. Section 4.3 of the Nipsco Disclosure Schedule sets forth
the name of each of Nipsco's Subsidiaries and the jurisdiction of its
organization. Except as set forth in Schedule 4.3, Nipsco is, directly or
indirectly, the record and beneficial owner of all of the outstanding shares
of capital stock or other ownership units of each of its Subsidiaries, and no
Nipsco Subsidiary has any outstanding option, warrant, subscription or other
right, agreement or commitment that obligates either Nipsco or any of its
Subsidiaries to issue, sell or transfer, repurchase, redeem or otherwise
acquire or vote any shares of the capital stock of Nipsco or any of its
Subsidiaries, or that restricts the transfer of Nipsco Common Shares. All the
outstanding shares of capital stock of each Nipsco Subsidiary have been
validly issued and are fully paid and nonassessable and are owned by Nipsco or
a wholly owned Subsidiary, free and clear of all Encumbrances, restraints on
alienation, or any other restrictions with respect to the transferability or
assignability thereof (other than restrictions imposed by federal or state
securities laws). A "Subsidiary" of Nipsco means any corporation or other
entity (including joint ventures, partnerships and other business
associations) in which Nipsco directly or indirectly owns outstanding capital
stock or other voting securities having the power to elect a majority of the
directors or similar members of the governing body of such corporation or
other entity, or otherwise to direct to the management and policies of such
corporation or other entity.
4.4 Authority; Noncontravention. Nipsco has, and as of the Effective Time
Acquisition will have, all requisite corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder. The execution
and delivery of this Agreement by Nipsco and the consummation by it of the
transactions
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contemplated hereby has been duly authorized by all necessary corporate action
on the part of Nipsco. This Agreement has been duly executed and delivered by
Nipsco and, assuming this Agreement has been duly executed and delivered by
the Company, constitutes a valid and binding obligation of Nipsco, enforceable
against it in accordance with its terms, except that the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to creditors' rights
generally and by general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity). Except as
set forth in Section 4.4 of the Nipsco Disclosure Schedule, the execution and
delivery of this Agreement do not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions hereof will
not, (i) conflict with any of the provisions of the articles of incorporation
or by-laws of Nipsco or Acquisition or conflict with the joint venture
agreement or comparable document of any joint venture, partnership or other
business association or entity to which Nipsco or Acquisition is a party (ii)
subject to the governmental filings and other matters referred to in the
following sentence, conflict with, result in a breach of or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of a
material benefit under, or require the consent (the "Nipsco Required
Consents") of any person under, any indenture, or other agreement, permit,
concession, franchise, license or similar instrument or undertaking to which
Nipsco or any of its Subsidiaries is a party or by which Nipsco or any of its
Subsidiaries or any of their assets is bound or affected, or (iii) subject to
the governmental filings and other matters referred to in the following
sentence, contravene any law, rule or regulation of any state or of the United
States or any political subdivision thereof or therein, or any order, writ,
judgment, injunction, decree, determination or award currently in effect,
subject, in the case of clauses (ii) and (iii) above, to those conflicts,
breaches, defaults and similar matters that, individually or in the aggregate,
would not have a Nipsco Material Adverse Effect nor materially and adversely
affect Nipsco's ability to consummate the transactions contemplated hereby. No
consent, approval or authorization of, or declaration or filing with, or
notice to, any Governmental Entity that has not been received or made is
required by or with respect to Nipsco in connection with the execution and
delivery of this Agreement by Nipsco or the consummation by it of any of the
transactions contemplated hereby, except for (a) the filing of pre-merger
notification and report forms under the HSR Act with respect to the Merger;
(b) the filing with the SEC of a registration statement on Form S-4 by Nipsco
in connection with the issuance of Nipsco Common Shares in the Merger (the
"Registration Statement") and such reports under the Exchange Act as may be
required in connection with this Agreement and the transactions contemplated
by this Agreement; (c) the filing of articles of merger with the Massachusetts
Secretary and appropriate documents with the relevant authorities of the other
states in which the Company is qualified to do business; (d) filing with the
SEC for authorization of the Merger under Section 9(a)(2) of the 1935 Act; and
(e) such other consents, approvals, authorizations, filings or notices as are
set forth in Section 4.4 of the Nipsco Disclosure Schedule or as, in the
aggregate could not reasonably be expected to have a Nipsco Material Adverse
Effect (collectively, the "Nipsco Required Statutory Approvals").
4.5 Nipsco SEC Documents and Financial Statements.
4.5.1 Nipsco has timely filed all required reports, schedules, forms,
statements and other documents with the SEC since January 1, 1992 (the
"Nipsco SEC Documents"). As of their respective dates (or, with respect to
any amendment to the Nipsco SEC Documents, as of the date of the filing of
such amendment), the Nipsco SEC Documents complied with the requirements of
the Securities Act or the Exchange Act, as the case may be, and the rules
and regulations of the SEC promulgated thereunder applicable to such Nipsco
SEC Documents, and none of the Nipsco SEC Documents as of such dates
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
4.5.2 The consolidated financial statements of Nipsco included in the
Nipsco SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with GAAP
(except as may be indicated in the notes thereto or, in the case of
unaudited interim financial statements, as permitted by Rule 10-01 of
Regulation S-X) and fairly present, in all material respects, the
consolidated financial position of Nipsco and its consolidated Subsidiaries
as of the dates thereof and the consolidated results of their
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operations, changes in shareholders' equity and consolidated cash flows for
the periods then ended (subject, in the case of unaudited financial
statements, to normal recurring adjustments, none of which is material).
4.5.3 Except as disclosed in the Nipsco SEC Documents filed and publicly
available prior to December 16, 1997 (the "Filed Nipsco SEC Documents") or
in the Nipsco Disclosure Schedule, neither Nipsco nor any of its
Subsidiaries has any absolute, accrued, contingent or other liabilities or
obligations due or to become due, and there are no claims or causes of
action formerly maintained by Nipsco or any of its Subsidiaries or a Nipsco
ERISA Affiliate (as defined in Section 4.8.1) on or after January 1, 1992)
that have been or, to the knowledge of the officers of Nipsco and its
Subsidiaries and divisions, the members of Nipsco's legal department and
the director(s), manager(s) or supervisor(s) of Nipsco's environmental
compliance and affairs, may be asserted against Nipsco or any of its
Subsidiaries, except (i) as and to the extent reflected or reserved against
on the balance sheet included in Nipsco's Annual Report on Form 10-K for
the year ended December 31, 1996 (the "Nipsco Base Balance Sheet"), or
included in the notes to the Nipsco Base Balance Sheet, (ii) for normal and
recurring liabilities incurred since December 31, 1996, in the ordinary
course of business consistent with past practice, and (iii) for such other
liabilities and obligations that are not in the aggregate reasonably likely
to have a Nipsco Material Adverse Effect.
4.6 Absence of Certain Changes or Events.
(a) Except as set forth in the Nipsco SEC Documents filed prior to the
date hereof or in Section 4.6 of the Nipsco Disclosure Schedule, from
December 31, 1996 there has not been, and no fact or condition exists that
would reasonably be expected to have, a Nipsco Material Adverse Effect.
(b) Neither Nipsco nor any of its Subsidiaries has any liabilities or
obligations (whether absolute, accrued, contingent or otherwise) of a
nature required by GAAP to be reflected in a consolidated corporate balance
sheet, except liabilities, obligations or contingencies that are accrued or
reserved against in the consolidated financial statements of Nipsco or
reflected in the notes thereto for the year ended December 31, 1996, or
that were incurred after December 31, 1996 in the ordinary course of
business and would not reasonably likely have a Nipsco Material Adverse
Effect.
4.7 Employee Matters; ERISA. Each employee benefit plan, program, policy,
agreement or arrangement maintained by Nipsco or its Subsidiaries is and has
been operated in compliance with its terms and all applicable laws, rules, and
regulations governing such plans, including without limitation ERISA and the
Code, except for violations that could not reasonably be expected to have a
Nipsco Material Adverse Effect.
4.8 Taxes.
4.8.1 Filing of Timely Tax Returns. Nipsco and each of its Subsidiaries
have filed all Tax Returns required to be filed by each of them under
applicable law. All Tax Returns were in all material respects (and, as to
Tax Returns not filed as of the date hereof, will be) true, complete and
correct and filed on a timely basis except for where the failure to do so
would not have a Nipsco Material Adverse Effect.
4.8.2 Payment of Taxes. Neither Nipsco nor any of its Subsidiaries have
any liability for unpaid Taxes that, in the aggregate, would be reasonably
likely to have a Nipsco Material Adverse Effect.
4.9 Environmental Matters.
4.9.1 Environmental Matters. Except as would not, in the aggregate, be
reasonably expected to result in a Nipsco Material Adverse Effect, but
excluding matters disclosed in Section 4.9.1 of the Nipsco Disclosure
Schedule, (i) Nipsco and its Subsidiaries are and have been in material
compliance with all applicable Environmental Laws and the terms and
conditions of all applicable Environmental Permits, and neither Nipsco nor
any of its Subsidiaries has received any written notice from any person or
Governmental Entity that alleges that Nipsco or any of its Subsidiaries is
not in material compliance with applicable Environmental Laws or the terms
and conditions of all such Environmental Permits, (ii) to the best
knowledge of Nipsco, there are no Environmental Claims pending or
threatened (a) against Nipsco or any of its Subsidiaries, (b) against any
person or entity whose liability for any Environmental Claim Nipsco or
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any of its Subsidiaries has or may have retained or assumed either
contractually or by operation of law or (c) against any real or personal
property or operations that Nipsco or any of its Subsidiaries owns, leases
or manages, in whole or in part, and (iii) to the best knowledge of Nipsco,
there has been no Release of Hazardous Materials that would be reasonably
likely to (a) form the basis of any Environmental Claim against Nipsco or
any of its Subsidiaries or against any person or entity whose liability for
any Environmental Claim Nipsco or any of its Subsidiaries has or may have
retained or assumed either contractually or by operation of law or (b)
cause damage or diminution of value to any of the operations or real
properties owned, leased or managed, in whole or in part, by Nipsco or any
of its Subsidiaries.
4.9.2 To the best knowledge of Nipsco, there are no facts or
circumstances that are likely to form in the basis of an Environmental
Claim or to require expenditures by Nipsco or any of its Subsidiaries in
order to comply with currently applicable Environmental Laws, including but
not limited to facts and circumstances arising from: (i) the cost of
pollution-control equipment currently required or known to be required in
the future; (ii) current investigatory, removal, remediation or response
costs or investigatory, removal, remediation or response costs known to be
required in the future, in each case, both on-site and off-site; and/or
(iii) any other environmental matters affecting Nipsco or any of its
Subsidiaries; and that are reasonably likely to have, in the aggregate, but
excluding matters disclosed in Section 4.9.2 of the Nipsco Disclosure
Schedule, a Nipsco Material Adverse Effect.
4.10 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Nipsco directly with
the Company, without the intervention of any person on behalf of Nipsco in
such manner as to give rise to any valid claim by any person against the
Company or any of its Subsidiaries for a finder's fee, brokerage commission or
similar payment.
4.11 No Omissions. None of the information included in the Nipsco Disclosure
Schedule or in the Nipsco SEC Documents (including, without limitation, the
consolidated financial statements included therein) was, as of the date such
information was included in such Schedule or Documents, false or misleading in
any material respect or omitted to state a fact therein necessary to make such
information not misleading in any material respect.
4.12 Regulation as a Utility. Nipsco is a public utility holding company
within the meaning of the 1935 Act and is either exempt from, or is in
compliance with, all provisions thereof.
4.13 Compliance. Nipsco and its Subsidiaries hold all permits, licenses,
variances, exemptions, orders, franchises, consents and approvals of all
Governmental Entities necessary for them to own, lease and operate their
properties and assets, and to lawfully conduct their respective businesses,
except where the failure to so hold would not have a Nipsco Material Adverse
Effect. Except as set forth in Section 4.13 of the Nipsco Disclosure Schedule
or as disclosed in the Nipsco SEC Documents filed as of the date hereof,
Nipsco and its Subsidiaries are not conducting their business in violation of,
nor have they received notice of an investigation with respect to any
violation of, any law, statute, order, rule, regulation, ordinance or judgment
of any Governmental Authority, except for violations that do not have, and
would not be reasonably likely to have, a Nipsco Material Adverse Effect.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Preparation of Registration Statement and Proxy Statement.
5.1.1 Registration Statement; Proxy Statement. As soon as practicable
following the date of this Agreement, the Company shall prepare and file
with the SEC a preliminary proxy statement relating to the Company Special
Meeting (as defined in Section 5.2) as such preliminary proxy statement may
be amended from time to time (the "Proxy Statement"), and Nipsco shall
prepare and file with the SEC the Registration Statement including a
prospectus relating to the Nipsco Common Shares, as amended or supplemented
from
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time to time (the "Prospectus"). Nipsco shall use its best efforts to have
the Registration Statement declared effective under the Securities Act as
promptly as practicable after such filing. The Company shall use its best
efforts to cause the Proxy Statement to be mailed to the Company's
shareholders as promptly as practicable after the Registration Statement is
declared effective under the Securities Act. Nipsco shall also take any
action (other than qualifying to do business in any jurisdiction in which
it is not now so qualified) required to be taken under any applicable state
securities laws in connection with the issuance of the Nipsco Common Shares
in the Merger, and the Company shall furnish all information concerning the
Company and the holders of the Company Common Shares as may be reasonably
requested in connection with any such action. It shall be a condition to
the requirement of the Company to mail the Proxy Statement to its
shareholders that the Company shall have received an opinion from ▇▇▇▇
▇▇▇▇▇▇, dated the date of the Proxy Statement, to the effect that, as of
the date thereof, the consideration to be received by holders of Company
Shares pursuant to the Merger is fair to such holders from a financial
point of view.
5.1.2 Company Information. The Company agrees that none of the
information supplied or to be supplied by the Company specifically for
inclusion or incorporation by reference in (i) the Registration Statement
shall, at the time the Registration Statement is filed with the SEC, at any
time it is amended or supplemented or at the time it becomes effective
under the Securities Act, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statement therein not misleading and (ii) the Proxy
Statement shall, at the date it is first mailed to the Company's
shareholders or at the time of the Company Special Meeting, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement shall comply as to form in all material
respect with the requirements of the Exchange Act and the rules and
regulations thereunder, except with respect to statements made or
incorporated by reference therein based on information supplied by Nipsco
specifically for inclusion or incorporation by reference in the Proxy
Statement.
5.1.3 Nipsco Information. Nipsco agrees that none of the information
supplied or to be supplied by Nipsco specifically for inclusion or
incorporation by reference in (i) the Registration Statement shall, at the
time the Registration Statement is filed with the SEC, at any time it is
amended or supplemented or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and (ii) the Proxy Statement shall,
at the date the Proxy Statement is first mailed to the Company's
shareholders or at the time of the Company Special Meeting, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Registration Statement shall comply as to form in all
material respects with the requirements of the Securities Act and the rules
and regulations promulgated thereunder, except with respect to statements
made or incorporated by reference in either the Registration Statement or
the Proxy Statement based on information supplied by the Company
specifically for inclusion or incorporation by reference therein.
5.2 Meeting of the Company's Shareholders. The Company shall take all action
necessary in accordance with applicable federal and state law and the Charter
and By-laws to convene a meeting of its shareholders as promptly as
practicable and consistent with Section 5.1.1 (the "Company Special Meeting")
to consider and vote upon the approval of the Merger. Subject to Section 5.10,
the Company shall, through its board of directors (the "Company Board"),
recommend to its shareholders approval of the Merger. Without limiting the
generality of the foregoing, the Company agrees that, subject to its right to
terminate this Agreement pursuant to Section 8.12(v), its obligations pursuant
to the first sentence of Section 5.2 shall not be affected by (i) the
commencement, public proposal, public disclosure or communication to the
Company of any Acquisition Proposal (as defined in Section 5.9) or (ii) the
withdrawal or modification by the Company Board of its approval or
recommendation of this Agreement or the Merger. Subject to Sections 5.9 and
5.10, the Company shall use its best efforts to obtain the favorable vote of
its shareholders as soon as practicable after the date hereof. It shall be a
condition to the obligation of the Company to hold the Company Special Meeting
that the opinion of ▇▇▇▇ ▇▇▇▇▇▇ referred to in Section 5.1.1 shall not have
been withdrawn.
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5.3 Affiliates and Certain Shareholders. Prior to the Closing Date, the
Company shall deliver to Nipsco a letter identifying all persons who it
believes to be, at the time the Merger is submitted for approval to the
shareholders of the Company, "affiliates" of the Company for purposes of Rule
145 under the Securities Act. The Company shall use its best efforts to cause
each such person to deliver to Nipsco on or prior to the Closing Date a
written agreement in connection with restrictions on affiliates under Rule
145, in substantially the form attached as Exhibit A to this Agreement. Nipsco
shall not be required to maintain the effectiveness of the Registration
Statement or any other registration statement under the Securities Act for the
purposes of resale of Nipsco Common Shares by such affiliates, and the
certificates representing Nipsco Common Shares received by such affiliates in
the Merger shall bear a customary legend regarding applicable Securities Act
restrictions and the provisions of this Section 5.3. The Company shall use its
best efforts to obtain from each of the beneficial owners (within the meaning
of Rule 13d-3 and Rule 13d-5 of the Exchange Act) of 5% or more of the Company
Common Shares such representation letters addressed to Nipsco, SH&W and LLG&M
as such law firms shall require in connection with the delivery of their Tax
Opinions pursuant to Sections 7.2.3 and 7.3.3, respectively.
5.4 Best Efforts. Upon the terms and subject to the conditions and other
agreements set forth in this Agreement, each of the parties agrees to use its
best efforts to take, or cause to be taken, all actions, and to do, or cause
to be done, and to assist and cooperate with the other parties in doing, all
things necessary, proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement.
5.5 Letter of the Company's Accountants. Following receipt by KPMG Peat
Marwick LLP, the Company's independent auditors, of an appropriate request
from Nipsco pursuant to SAS No. 72, the Company shall use best efforts to
cause to be delivered to Nipsco a letter of KPMG Peat Marwick LLP, dated a
date within two business days before the effective date of the Registration
Statement, and addressed to Nipsco, in form and substance reasonably
satisfactory to Nipsco and customary in scope and substance for "cold comfort"
letters delivered by independent public accountants in connection with
registration statements similar to the Registration Statement.
5.6 Letter of Nipsco's Accountants. Following receipt by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, Nipsco's independent auditors, of an appropriate request from the Company
pursuant to SAS No. 72, Nipsco shall use best efforts to cause to be delivered
to the Company a letter of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, dated a date within two
business days before the effective date of the Registration Statement, and
addressed to the Company, in form and substance reasonably satisfactory to the
Company and customary in scope and substance for "cold comfort" letters
delivered by independent public accountants in connection with registration
statements similar to the Registration Statement.
5.7 Access to Information; Confidentiality. Upon reasonable notice, (i) the
Company shall, and shall cause its Subsidiaries to, afford to the officers,
employees, accountants, counsel, financial advisors and other representatives
of Nipsco, reasonable access during normal business hours during the period
prior to the Effective Time to all its properties, books, contracts,
commitments, personnel and records and (ii) Nipsco shall, and shall cause its
Subsidiaries to, afford to the officers, employees, accountants, counsel,
financial advisors and other representatives of Brass, reasonable access to
senior executives of Nipsco for the purpose of discussing Nipsco's business
(with reasonable access to the documents related thereto) during the period
sixty (60) days prior to the Effective Time. Prior to the Effective Time, each
of the Company and Nipsco shall furnish promptly to the other party a copy of
each Company SEC Document or Nipsco SEC Document, as the case may be, filed by
it (including any separate Subsidiary) during such period, and all
correspondence or written communication with any securities rating agency or
any Governmental Entity or utility regulatory authorities (that relates to the
transactions contemplated hereby or, subject to the terms of any then existing
confidentiality requirements, that is otherwise material to the financial
condition or operations of the Company and its Subsidiaries taken as a whole,
or to Nipsco and its Subsidiaries taken as a whole, as the case may be).
During such period, each of the Company and Nipsco shall furnish to the other
party such other financial, operating and other data as may be reasonably
required by the other party in order to perform its investigation regarding
the representations and
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warranties made by the other party pursuant to this Agreement. Each of Nipsco
and the Company agrees that it shall not, and that it shall cause its
respective representatives not to, use any information obtained pursuant to
this Section 5.7 for any purpose unrelated to the consummation of the
transactions contemplated by this Agreement. Except as required by law, each
of the Company and Nipsco shall hold, and shall cause its respective
directors, officers, partners, employees, accountants, counsel, financial
advisors and other representatives and affiliates to hold, any nonpublic
information obtained from the other party in confidence to the extent required
by, and in accordance with, the provisions of the letter agreement dated
October 27, 1997, as amended, between Nipsco and the Company (the
"Confidentiality Agreement").
5.8 Public Announcements. Nipsco and the Company shall consult with each
other before issuing, and shall provide each other a reasonable opportunity to
review and comment upon, any press release or public statement with respect to
this Agreement or the transactions contemplated hereby, except to the extent
disclosure prior to such consultation, review and comment may be required by
applicable law, court process or obligations pursuant to any listing agreement
with any national securities exchange.
5.9 Acquisition Proposals. The Company shall not, nor shall it authorize or
permit any officer, director or employee of, or any investment banker,
attorney or other advisor or representative of, the Company or any of its
Subsidiaries to, directly or indirectly, (i) solicit, initiate or encourage
the submission of any Acquisition Proposal (as defined below) or (ii)
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Acquisition Proposal; provided,
however, that nothing contained in this Section 5.9 shall prohibit the Company
Board from furnishing information to, or entering into discussions or
negotiations with, any person or entity that makes an unsolicited Acquisition
Proposal after the date hereof if, and only to the extent that, (a) the
Company Board, after consultation with and based upon the advice of outside
counsel, concludes in good faith that a failure to do so could reasonably be
expected to result in a breach of its fiduciary duties to the shareholders of
the Company under applicable law and (b) the Company (x) provides reasonable
notice to Nipsco to the effect that it is taking such action and (y) receives
from such person or entity an executed confidentiality agreement not less
favorable to the Company than the Confidentiality Agreement, except that such
confidentiality agreement shall not prohibit such person or entity from making
an unsolicited Acquisition Proposal to the Company Board. Notwithstanding
anything in this Agreement to the contrary, the Company shall promptly advise
Nipsco orally and in writing of the receipt by it (or by any of the other
entities or persons referred to above) after the date hereof of any
Acquisition Proposal, or any inquiry that could reasonably be expected to lead
to any Acquisition Proposal, the material terms and conditions of such
Acquisition Proposal or inquiry, and the identity of the person or entity
making any such Acquisition Proposal or inquiry, provided that the Company
shall have no obligation to disclose the identity of such person or entity if
such disclosure would violate the terms of any agreement outstanding on the
date hereof with such person or entity, or the Company Board, after
consultation with and based upon the advice of outside counsel, concludes in
good faith that such disclosure would violate its fiduciary duties or would be
otherwise inconsistent with applicable law. For purposes of this Agreement,
"Acquisition Proposal" means any bona fide proposal with respect to a merger,
consolidation, share exchange or similar transaction involving the Company or
any of its Subsidiaries, or any purchase of all or a substantial portion of
the assets or shares of the Company or any of its Subsidiaries, or any other
business combination (including without limitation the acquisition of an
equity interest therein) involving the Company or any of its Subsidiaries,
other than the transactions contemplated hereby.
5.10 Fiduciary Duties. The Company Board shall not (i) withdraw or modify
its approval or recommendation of this Agreement or the Merger, (ii) approve
or recommend an Acquisition Proposal or (iii) enter into any agreement with
respect to any Acquisition Proposal, unless the Company receives an
Acquisition Proposal and the Company Board concludes in good faith, after
consultation with and based upon the advice of outside counsel, that a failure
to do so could reasonably be expected to result in a breach of its fiduciary
duties to the shareholders of the Company under applicable law, it is
necessary for the Company Board to withdraw or modify its approval or
recommendation of this Agreement or the Merger, approve or recommend such
Acquisition Proposal or enter into an agreement with respect to such
Acquisition Proposal. Nothing contained in
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this Section 5.10 shall prohibit the Company from taking and disclosing to its
shareholders a position contemplated by Rule 14e-2(a) promulgated under the
Exchange Act or from making any disclosure to the Company's shareholders that,
in the good faith judgment of the Company Board based on advice of outside
counsel, is required under applicable law; provided that the Company does not
withdraw or modify its position with respect to the Merger or approve or
recommend an Acquisition Proposal, except under the circumstances described in
the immediately preceding sentence. In the event that the Company Board shall
act pursuant to this Section 5.10, Nipsco's remedies shall be limited to the
fees specified in Sections 8.2.4 and 8.2.5.
5.11 Filings; Other Action.
5.11.1 HSR Act. Nipsco and the Company shall file or cause to be filed
with the Federal Trade Commission and the Department of Justice any
notifications required to be filed by them under the HSR Act and the rules
and regulations promulgated thereunder with respect to the transactions
contemplated hereby. Such parties shall use all commercially reasonable
efforts to make such filings promptly and to respond on a timely basis to
any requests for additional information made by either of such agencies.
5.11.2 Other Regulatory Approvals. Nipsco and the Company shall cooperate
and use all reasonable efforts to promptly prepare and file all necessary
documentation, to effect all necessary applications, notices, petitions,
filings and other documents, and to use all commercially reasonable efforts
to obtain (and shall cooperate with each other in obtaining) any consent,
acquiescence, authorization, order or approval of, or any exemption or
nonopposition by, any Governmental Entity required to be obtained or made
by Nipsco, the Company or any of their Subsidiaries in connection with the
Merger or the taking of any action contemplated thereby or by this
Agreement.
5.11.3 Other Approvals. Nipsco and the Company shall, and shall cause
each of their respective Subsidiaries to, take all reasonable actions
necessary to obtain (and shall cooperate with each other in obtaining) all
Nipsco Required Consents and all Company Required Consents, as the case may
be.
5.12 Stock Exchange Listings. Nipsco shall use its best efforts to cause the
Nipsco Common Shares to be issued in the Merger to be approved for listing on
the NYSE, the Chicago Stock Exchange and the Pacific Stock Exchange, in each
case subject to official notice of issuance, prior to the Closing Date.
5.13 Indemnification. From and after the Effective Time, the Surviving
Corporation shall indemnify and hold harmless each Eligible Person (as defined
in the Charter), determined as of the Effective Time, against any costs or
expenses (including reasonable attorneys' fees), judgments, fines, losses,
claims, damages or liabilities incurred in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of or pertaining to matters existing or occurring
at or prior to the Effective Time, whether asserted or claimed prior to, at or
after the Effective Time, to the fullest extent that the Company or any of its
Subsidiaries would have been permitted under applicable law and the articles
of organization or certificate or articles of incorporation of the Company or
such Subsidiary in effect on the date hereof to indemnify such person (and the
Surviving Corporation shall also advance expenses as incurred to the fullest
extent permitted under applicable law provided the person to whom expenses are
advanced provides an undertaking to repay such advances if it is ultimately
determined that such person is not entitled to indemnification). Nipsco shall
cause to be maintained, for a period of not less than six years from the
Effective Time, the Company's directors' and officers' insurance and
indemnification policy in effect as of the date hereof, to the extent that it
provides coverage for events occurring prior to the Effective Time (the "D&O
Insurance") for all persons who are directors or officers of the Company who
are covered persons under the Company's D&O Insurance policies in effect on
the date hereof, so long as the annual premium therefor would not be in excess
of 200% of the last annual premium paid prior to the date hereof (the "Maximum
Premium"). If the existing D&O Insurance expires, is terminated or canceled
during such six-year period, Nipsco shall use all reasonable efforts to cause
to be obtained as much D&O Insurance as can be obtained for the remainder of
such period for an annualized premium not in excess of the Maximum Premium, on
terms and conditions no less advantageous to the covered persons than the
existing D&O Insurance. The provisions of this Section 5.13 are intended to be
for the benefit of, and shall be enforceable by, each such indemnified party,
his heirs and his personal representatives and shall be binding on all
successors and assigns of the Surviving Corporation.
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5.14 Representation on Nipsco Board. Nipsco shall take such action as may be
necessary to cause the number of directors comprising the Nipsco Board at the
Effective Time to be sufficient as to permit, subject to election by the
Nipsco shareholders, one director of the Company to serve thereon and shall
nominate and recommend for such election a Company director, who is to be
mutually determined by Nipsco and the Company and who shall serve on the
Nipsco Board for the remaining term of the class to which such director is
elected.
5.15 Cooperation, Notification. As contemplated by the provisions of Section
6.1 below, officers of the Company shall (i) confer on a regular and frequent
basis with officers of Nipsco to discuss the general status of the operation
of the Company and (ii) promptly notify Nipsco of any significant changes in
its business, properties, financial condition or results of operations. Each
of the Company and Nipsco shall advise the other of any change or event that
has had or is reasonably likely to result in a Company Material Adverse Effect
or a Nipsco Material Adverse Effect, as the case may be; and promptly provide
the other with copies of all filings made by it or any of its Subsidiaries
with any Governmental Entity in connection with this Agreement and the
transactions anticipated hereby.
5.16 Termination of Company Dividend Reinvestment Plan. The Company shall
terminate its Dividend Reinvestment Plan as soon as reasonably practicable,
but in any event no later than two months prior to the anticipated Effective
Time.
5.17 Federal Income Tax Treatment. The Company and Nipsco shall use their
reasonable best efforts to ensure that the Merger constitutes a reorganization
within the meaning of Section 368(a) of the Code.
5.18 Termination of Shareholder Rights Plan. The Company shall coordinate
with Nipsco the timing of the redemption of the common share purchase rights
issued pursuant to the Shareholder Rights Plan Agreement, but such redemption
shall take place in any event before the Effective Time.
5.19 Actions Relating to Acquisition. In connection with the organization of
Acquisition, as soon as practicable following the creation of Acquisition,
Nipsco shall: (a) cause the directors and officers of Acquisition to take such
steps as may be necessary or appropriate to complete the organization of
Acquisition; (b) adopt (as sole shareholder of Acquisition) this Agreement;
(c) cause this Agreement to be approved and to be executed and delivered, by
Acquisition; and (d) cause Acquisition to perform its obligations under this
Agreement.
5.20 Recognition of Existing Contracts. Nipsco shall honor all existing
severance and change of control agreements of the Company and all union
contracts in accordance with their terms as in effect on the date hereof, in
the manner set forth in Section 3.8.7 of the Company Disclosure Schedule.
5.21 Redemption of Company Preferred Stock. The Company shall redeem all of
its outstanding Company Preferred A Shares and Company Preferred B Shares
prior to its mailing of the Proxy Statement to its shareholders in which the
holders of Company Shares are asked to vote to approve the Merger.
5.22 Company Stock Options. (a) At the Effective Time, each outstanding
option issued under the Company Key Employee Stock Option Plan (each, a
"Company Option"), shall be assumed by Nipsco. Each such option shall be
deemed to constitute an option to acquire, on the same terms and conditions as
were applicable under such Company Option, a number of shares of Nipsco Common
Stock equal to the number of shares of Company Common Stock purchasable
pursuant to such Company Option multiplied by the Exchange Ratio, at a price
per share equal to the per-share exercise price for the shares of Company
Common Stock purchasable pursuant to such Company Option divided by the
Exchange Ratio; provided, however, that in the case of any option to which
Section 421 of the Code applies by reason of its qualification under any of
Sections 422-424 of the Code, the option price, the number of shares
purchasable pursuant to such option and the terms and conditions of exercise
of such option shall be determined in order to comply with Section 425(a) of
the Code; and provided further, that the number of shares of Nipsco Common
Stock that may be purchased upon exercise of such Company Option shall not
include any fractional share and, upon exercise of such Company Option, a cash
payment shall be made for any fractional share based upon the closing price of
a share of Nipsco Common Stock on the NYSE on the last trading day of the
calendar month immediately preceding the date of exercise.
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(b) Nipsco shall take all corporate action necessary and appropriate (i) to
reserve for issuance a sufficient number of shares of Nipsco Common Stock for
delivery upon exercise of the Company Options assumed in accordance with this
Section 5.22 and (ii) to obtain approval of its board of directors or the
compensation committee thereof for the assumption of such Company Options
before the Effective Time. As soon as practicable after the Effective Time
Nipsco shall file with the SEC a registration statement on Form S-8 (or any
successor form) or another appropriate form (or shall cause such Company
Option to be deemed an option issued pursuant to a Nipsco stock option plan
for which shares of Nipsco Common Stock have previously been registered
pursuant to an appropriate registration form), with respect to the shares of
Nipsco Common Stock subject to the Company Options assumed in accordance with
this Section 5.22 and shall use all commercially reasonable efforts to
maintain the effectiveness of such registration statement or registration
statements for so long as the Company Options remain outstanding. At or prior
to the Effective Time, the Company shall make all necessary arrangements with
respect to its Key Employee Stock Option Plan to permit the assumption of
unexercised Company Options by Nipsco pursuant to this Section 5.22.
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO MERGER
6.1 Conduct of Business of Company Pending the Merger. Prior to the date
hereof, the Company shall have delivered a capital budget of the Company and
its Subsidiaries dated December 17, 1997 (the "Company Capital Budget") .
During the period from the date of this Agreement and continuing until the
Effective Time or earlier termination of this Agreement, the Company agrees as
to itself and its Subsidiaries that except as expressly contemplated or
permitted by this Agreement or in connection with any joint venture that the
Company and Nipsco may enter into, or to the extent that Nipsco shall
otherwise consent in writing (it being understood that if a particular
activity is permissible as a result of its being disclosed and, where
applicable, approved by Nipsco under any one of the Article VI sections of the
Company Disclosure Schedule, that activity will not be prohibited under any of
the sections of Article VI):
6.1.1 Ordinary Course of Business. The Company shall, and shall cause its
Subsidiaries to, carry on their respective businesses in the usual, regular
and ordinary course consistent with past practice and use all commercially
reasonable efforts to preserve intact their present business organizations
and goodwill, keep available the services of their current officers and key
employees, endeavor to preserve the goodwill and relationships with
regulators, customers, suppliers and others having business dealings with
them, all to the end that their goodwill and ongoing businesses shall not
be impaired in any material respect at the Effective Time.
6.1.2 Dividends; Changes in Stock. The Company shall not, and it shall
not permit any of its Subsidiaries, to: (i) declare or pay any dividends on
or make other distributions in respect of any of its capital stock except
for the declaration and payment, with Record Dates and usual payment dates,
of regular quarterly cash dividends on the Company Common Shares not in
excess, in any fiscal year, of the dividends for the prior fiscal year
increased at a rate consistent with past practice, or dividends payable by
a Subsidiary of the Company to the Company or to a wholly owned Subsidiary
of the Company; (ii) split, combine or reclassify any of its capital stock
or issue or authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock;
or (iii) repurchase, redeem or otherwise acquire, or permit any of its
Subsidiaries to purchase, redeem or otherwise acquire, any shares of its
capital stock or other voting securities or any securities convertible
into, or any rights, warrants, calls, subscriptions or options to acquire,
shares of capital stock or other voting securities of the Company or any of
its Subsidiaries, (x) except as required by the terms of any such
securities outstanding on the date hereof, (y) the redemption of Company
Preferred A Shares and Company Preferred B Shares at the lowest applicable
redemption price in accordance with the terms thereof and (z) Company
Shares in ordinary market transactions not in excess of the number of
Company Shares required to be issued pursuant to stock grants or stock-
based awards made as of the date hereof pursuant to the Company Stock Plans
in accordance with the present terms of such plans. Notwithstanding
anything in this Section 6.1.2 to the contrary, the Company
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may declare a special dividend, to be paid at or immediately prior to the
Closing, up to but not in excess of an amount per share determined by
multiplying the "Daily Rate" times the number of days between December 17,
1998 and the Closing. For purposes of the foregoing, the Daily Rate shall
mean the dollar amount per share that results from dividing (A) the
difference between (x) the Company's publicly reported earnings per share
(normalized for the effects of weather) for the twelve months ended as of
the end of the most recently completed quarter for which earnings have been
publicly reported prior to the Closing (adjusted to eliminate the effect of
any extraordinary items or other mutually agreed-upon nonrecurring items,
including, but not limited to, the financial impact of the leaseback of the
Metscan AMR devices) and (y) the greater of (i) the aggregate amount of the
Company's regular cash dividends per share paid during the same twelve
month period or (ii) $1.58 by (B) 365; provided, however, that in no event
shall the Daily Rate exceed $0.00219. As used herein, "Record Date" means
each February 15, May 15, August 15 or November 15 (or, if such date is not
a business day, the first business day immediately following such date).
6.1.3 Issuance of Securities. The Company shall not, and shall not permit
any of its Subsidiaries to, issue, deliver, sell, pledge, dispose of or
encumber, or authorize or propose to issue, deliver, sell, pledge, dispose
of or encumber, any shares of its capital stock of any class or other
voting securities or any securities convertible into, or any rights,
warrants, calls, subscriptions or options to acquire, any shares of capital
stock or other voting securities or convertible securities of the Company
or any of its Subsidiaries, other than: the issuance of the Company Common
Shares pursuant to stock grants or stock-based awards made as of the date
hereof pursuant to the Company Stock Plans in accordance with the present
terms of such plans and issuances of stock by Subsidiaries to its direct or
indirect parent.
6.1.4 Capital Expenditures. Except for capital expenditures that the
Company or any of its Subsidiaries are required to make under applicable
law, the Company shall not, nor shall the Company permit any of its
Subsidiaries to, make capital expenditures (including capital lease
obligations) in excess of the amounts budgeted for capital expenditures as
set forth in the Company Capital Budget.
6.1.5 No Acquisitions. Except as set forth in Section 6.1.5 of the
Company Disclosure Schedule and not objected to by Nipsco within 45 days
after the date of this Agreement, the Company shall not, and shall not
permit any of its Subsidiaries to, acquire or agree to acquire by merging
or consolidating with, or by purchasing an interest in or a portion of the
assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division
thereof.
6.1.6 No Dispositions. Except as set forth in Section 6.1.6 of the
Company Disclosure Schedule, and except for dispositions in the ordinary
course of business as to which the market value is not in excess of $2
million singularly or aggregate, the Company shall not, and it shall not
permit any of its Subsidiaries to, sell, lease (whether such lease is an
operating or capital lease), encumber or otherwise dispose of, or agree to
sell, lease, encumber or otherwise dispose of, any of its assets.
6.1.7 No Dissolution, Etc. The Company shall not authorize, recommend,
propose or announce an intention to adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of the Company or any of its
Subsidiaries; provided that nothing in this Section 6.1.7 preclude any such
transaction which involves only wholly owned Subsidiaries of the Company.
6.1.8 Limitation on Investment in Joint Ventures. Except as set forth in
Section 6.1.8 of the Company Disclosure Schedule, the Company will not
make, and will not permit any Subsidiary to make, any additional material
investments in, or loans or capital contributions to, or to undertake any
guarantees or other obligations with respect to any joint venture or
partnership.
6.1.9 Certain Employee Matters. Except as may be required by applicable
law or any agreement to which the Company or any of its Subsidiaries is a
party on the date hereof or as set forth in Section 6.1.9 of the Company
Disclosure Schedule, the Company shall not, nor shall it permit any of its
Subsidiaries to:
(i) except in the ordinary course of business consistent with past
practice, increase the amount of (or accelerate the payment or vesting
of) any benefit or amount payable under, any employee benefit plan or
any other contract, agreement, commitment, arrangement, plan or policy
providing for
A-31
compensation or benefits to any former, present or future director,
officer or employee of the Company or any of its Subsidiaries and
maintained by, contributed to or entered into by, the Company or any of
its Subsidiaries on or prior to the date hereof, including, without
limitation, any Company Benefit Plan outstanding on the date hereof;
(ii) except in the ordinary course of business consistent with past
practice, increase (or enter into any contract, agreement, commitment
or arrangement to increase in any manner) the compensation or fringe
benefits, or otherwise to extend, expand or enhance the engagement,
employment or any related rights, of any former, present or future
director, officer or employee of the Company or any of its
Subsidiaries, except for (x) normal increases in the ordinary course of
business consistent with past practice, provided that the overall non-
bargaining base pay compensation budget for fiscal year 1998 shall not
increase by more than 4% above the level approved as of the date hereof
for fiscal year 1998, and for fiscal year 1999, the non-bargaining base
pay compensation budget shall be at such level as is proposed by the
Company and approved by Nipsco or (y) increases required under
applicable law; or
(iii) adopt, establish, enter into, implement or amend any plan,
policy, employment agreement, severance agreement, or other contract,
agreement or other arrangement providing for any form of benefits or
other compensation to any former, present or future director, officer
or employee of the Company or any of its Subsidiaries, other than in
the ordinary course of business consistent with past practice.
6.1.10 Indebtedness; Leases. Except as set forth in Section 6.1.10 of the
Company Disclosure Schedule, the Company shall not, nor shall the Company
permit any of its Subsidiaries to, (A) incur any indebtedness for borrowed
money or guarantee, or enter into a "keepwell" or similar arrangement with
respect to, any such indebtedness (including, without limitation, issuances
or sales of any debt securities or warrants or rights to acquire any debt
securities of the Company or any of its Subsidiaries), other than (x)
indebtedness between the Company or any of its Subsidiaries and another of
its Subsidiaries and (y) additional indebtedness in the ordinary course of
business under existing credit facilities, including the Company's
commercial paper facilities, in an amount not to exceed $90,000,000 or (B)
enter into any material operating lease or create any mortgages, liens,
security interests or other encumbrances on the property of the Company or
any of its Subsidiaries in connection with any indebtedness thereof, except
with respect to indebtedness permitted pursuant to this Section 6.1.10 or
(c) enter into any financial derivatives contract or purchase or sell any
exchange traded derivative futures or option contract, except for natural
gas hedging purposes in strict compliance with a price and/or basis risk
management policy approved in writing by Nipsco.
6.1.11 Governing Documents. Neither the Company nor any of its
Subsidiaries shall amend or propose to amend its certificate of
incorporation or by-laws (or similar governing documents).
6.1.12 Accounting. The Company shall not, nor shall it permit any of its
Subsidiaries to, make any changes in their accounting methods, except as
required by law, rule, regulation or GAAP.
6.1.13 Rate Matters. Subject to applicable law and except for non-
material filings in the ordinary course of business consistent with past
practice, the Company shall consult with Nipsco prior to implementing any
changes in its or any of its Subsidiaries' rates or charges (other than
automatic cost pass-through rate adjustment clauses), standards of service
or accounting or executing any agreement with respect thereto that is
otherwise permitted under this Agreement and the Company shall, and shall
cause its Subsidiaries to, deliver to Nipsco a copy of each such filing or
agreement at least five days prior to the filing or execution thereof so
that Nipsco may comment thereon. The Company shall, and shall cause its
Subsidiaries to, make all such filings only in the ordinary course of
business consistent with past practice.
6.1.14 Gas Transmission and Storage. Except as required pursuant to
tariffs on file with the FERC as of the date hereof, in the ordinary course
of business consistent with past practice, neither the Company nor any
Subsidiary of the Company shall commence construction of any additional gas
transmission, gas delivery or gas storage capacity, or obligate itself to
purchase or otherwise acquire any additional transmission, delivery or
storage facilities, or to sell or otherwise dispose of, or to share, any
such facilities owned by it.
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6.1.15 Contracts. Except in the ordinary course of business consistent
with past practice, the Company shall not, nor shall it permit any of its
Subsidiaries to, modify, amend or terminate any material contract or
agreement to which the Company or any of its Subsidiaries is a party or
waive, release or assign any material rights or claims under any such
contract or agreement.
6.1.16 Insurance. The Company shall, and shall cause its Subsidiaries to,
maintain with financially responsible insurance companies (or through self-
insurance) insurance in such amounts and against such risks and losses as
are customary for companies engaged in their respective businesses.
6.1.17 Permits. The Company shall, and shall cause its Subsidiaries to,
maintain in effect all existing governmental permits (including
Environmental Permits) which are material to their respective operations.
6.1.18 Discharge of Liabilities. The Company shall not, nor shall it
permit any of its Subsidiaries to, pay, discharge or satisfy any material
claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction, in the ordinary course of business consistent with past
practice (which includes the payment of final and unappealable judgments
and the refinancing of existing indebtedness for borrowed money either at
its stated maturity or at a lower cost of funds) or as required by their
terms, of liabilities reflected or reserved against in, or contemplated by,
the most recent consolidated financial statements (or the notes thereto) of
the Company included in the Filed Company SEC Documents, or incurred in the
ordinary course of business consistent with past practice.
6.1.19 1935 Act. The Company shall not, and shall not permit any of its
Subsidiaries to, engage in any activities which would cause a change in its
status as a holding company exempt from the 1935 Act under Section 3(a)(2)
pursuant to Rule 2 of that Act, or that would impair the ability of Nipsco
to continue to claim an exemption under Section 3(a)(1) of the 1935 Act
following the Merger.
6.1.20 Tax Matters. The Company shall not make or rescind any material
election or settle or compromise any material claim, action, suit,
litigation, proceeding, arbitration, investigation, audit, or controversy
relating to Taxes, or change any of its methods of reporting income or
deductions for federal income tax purposes from those employed in the
preparation of its federal income tax return for the taxable year ending
December 31, 1996, except as may be required by applicable law.
6.1.21 Tax Status. The Company and Nipsco shall not, and shall not permit
any of their Subsidiaries to, take any actions which would, or would be
reasonably likely to, adversely affect the status of the Merger as a
reorganization under Section 368(a) of the Code.
6.2 Management of the Company and its Subsidiaries. The Company shall, from
the date of this Agreement through the Effective Time, cause its management
and that of its Subsidiaries to consult on a regular basis and in good faith
with the employees and representatives of Nipsco concerning the management of
the Company's and its Subsidiaries' businesses.
6.3 Conduct of Business of Nipsco Pending the Merger. During the period from
the date of this Agreement and continuing until the Effective Time or earlier
termination of this Agreement, Nipsco shall, and shall cause its Subsidiaries
to, conduct their respective businesses so that the character of the business
of Nipsco and its Subsidiaries taken as a whole will not be fundamentally
altered. In no event shall either Nipsco or any of its Subsidiaries be
required to notify the Company or obtain the Company's consent prior to making
any acquisitions or dispositions of any businesses or assets.
6.4 Other Actions. The Company and Nipsco shall not, and shall not permit
any of their respective Subsidiaries to, take any action that would, or that
could reasonably be expected to, result in (i) any of the representations and
warranties of such party set forth in this Agreement becoming untrue in any
material respect, or (ii) any of the conditions of the Merger set forth in
Article VII not being satisfied on or prior to the Closing Date.
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ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
7.1.1 Company Shareholder Approval. This Agreement and the Merger shall
have been approved and adopted by an affirmative vote of the holders of the
requisite number of shares present, in person or by proxy, and entitled to
vote on the Merger at the Company Special Meeting.
7.1.2 Governmental and Regulatory Consents. The Company Required
Statutory Approvals and the Nipsco Required Statutory Approvals shall have
been obtained at or prior to the Effective Time, such approvals shall have
become Final Orders (as hereinafter defined), and no Final Order shall
impose terms or conditions that would have, or would be reasonably likely
to have, a material adverse effect on the business, operations, properties,
assets, condition (financial or otherwise), prospects or results of
operations of the Company as if it were organized as a separate subsidiary
of Nipsco following the Merger or a material adverse effect on the
business, operations, properties, assets, condition (financial or other),
prospects or results of operations of Nipsco as if it were organized as a
separate division of Nipsco following the Merger, or that would be
materially inconsistent with the agreements of the parties contained
herein. A "Final Order" means action by the relevant regulatory authority
that has not been reversed, stayed, enjoined, set aside, annulled or
suspended, with respect to which any waiting period prescribed by law
before the transactions contemplated hereby may be consummated has expired,
and as to which all conditions to the consummation of such transactions
prescribed by law, regulation or order have been satisfied, and as to which
all opportunities for rehearing are exhausted (whether or not any appeal
thereof is pending).
7.1.3 HSR Act. The waiting period (and any extension thereof) applicable
to the Merger under the HSR Act shall have been terminated or shall have
otherwise expired.
7.1.4 No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing
the consummation of the Merger shall be in effect; provided, however, that
the party invoking this condition shall use its best efforts to have any
such order or injunction vacated.
7.1.5 NYSE Listing. The Nipsco Common Shares issuable to the Company's
shareholders pursuant to this Agreement shall have been approved for
listing on the NYSE, subject to official notice of issuance.
7.1.6 Registration Statement. The Registration Statement shall have
become effective under the Securities Act and shall not be the subject of
any stop order or proceedings seeking a stop order.
7.1.7 Share Purchase Rights. The common share purchase rights issued
pursuant to the Shareholder Rights Agreement shall have been redeemed.
7.2 Conditions to Obligations of Nipsco. The obligations of Nipsco to effect
the Merger are further subject to the following conditions:
7.2.1 Representations and Warranties. The representations and warranties
of the Company contained in this Agreement shall be true and correct in all
material respects on the date hereof and (except to the extent expressly
given as of a specified date) on and as of the Closing Date as though made
on the Closing Date, and the Company shall have delivered to Nipsco a
certificate dated as of the Closing Date signed by an executive officer to
the effect set forth in this Section 7.2.1.
7.2.2 Performance of Obligations of the Company. The Company shall have
performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and the Company
shall have delivered to Nipsco a certificate dated as of the Closing Date
signed by an executive officer to the effect set forth in this Section
7.2.2.
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7.2.3 Tax Opinion. Nipsco shall have received the opinion dated the
Closing Date of SH&W, to the effect that for federal income tax purposes
the Merger shall constitute a reorganization within the meaning of Section
368(a) of the Code and no gain or loss shall be recognized by Nipsco,
Acquisition or the Company as a consequence of the Merger. In rendering
such opinion, SH&W shall be entitled to receive and may rely on
representations contained of Nipsco, Acquisition, Northern, the Company and
certain shareholders of the Company, which are in form and substance
reasonably satisfactory to such counsel.
7.2.4 Consents and Approvals. The Company and its Subsidiaries shall have
received the consents set forth in Section 3.4 of the Company Disclosure
Schedule.
7.3 Conditions to Obligation of the Company. The obligation of the Company
to effect the Merger is further subject to the following conditions:
7.3.1 Representations and Warranties. The representations and warranties
of Nipsco contained in this Agreement shall be true and correct in all
material respects on the date hereof and (except to the extent specifically
given as of an earlier date and except for the representations and
warranties set forth in Sections 4.9 and 4.13) as of the Closing Date as
though made on the Closing Date, and Nipsco shall have delivered to the
Company a certificate dated as of the Closing Date, signed by an executive
officer of Nipsco and to the effect set forth in this Section 7.3.1.
7.3.2 Performance of Obligations of Nipsco. Nipsco shall have performed
in all material respects all obligations required to be performed by it
under this Agreement at or prior to the Closing Date, and Nipsco shall have
delivered to the Company a certificate dated as of the Closing Date, signed
by an executive officer of Nipsco and to the effect set forth in this
Section 7.3.2.
7.3.3 Tax Opinion. The Company shall have received the opinion dated the
Closing Date of LLG&M, to the effect that for federal income tax purposes
the Merger shall constitute a reorganization within the meaning of Section
368(a) of the Code and that shareholders of the Company shall not be
subject to federal income tax on the receipt of Nipsco Common Shares in
exchange for Company Shares pursuant to the Merger. In rendering such
opinion, LLG&M shall be entitled to receive and may rely on representations
of Nipsco, Acquisition, Northern, the Company and certain shareholders of
the Company, which are in form and substance reasonably satisfactory to
such counsel.
7.3.4 Consents and Approvals. Nipsco and its Subsidiaries shall have
received the consents set forth in Section 4.4 of the Nipsco Disclosure
Schedule.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated and abandoned at any time
prior to the Effective Time, whether before or after approval of matters
presented in connection with the Merger by the shareholders of the Company:
8.1.1 by mutual written consent of Nipsco and the Company;
8.1.2 by either Nipsco or the Company, by written notice to the other:
(i) if, upon a vote at a duly held Company Special Meeting, the
Company Requisite Vote shall not have been obtained;
(ii) if the Effective Time shall not have occurred on or before
December 31, 1998; provided, however, that such date shall
automatically be changed to June 30, 1999 if, on December 31, 1998:
(a) the conditions set forth in Section 7.1.2 have not been
satisfied or waived;
(b) the other conditions to the consummation of the transactions
contemplated hereby are then capable of being satisfied; and
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(c) any approvals required by Section 7.1.2 that have not yet been
obtained are being pursued with diligence; provided, further, that
the right to terminate this Agreement under this Section 8.1.2 shall
not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted
in, the failure of the Effective Time to occur on or before the
termination date;
(iii) if either party shall have exercised its rights set forth in
Section 1.2.2 of this Agreement on or after December 31, 1998;
(iv) if any Governmental Entity shall have issued an order, decree or
ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the Merger and such order, decree, ruling or
other action shall have become final and nonappealable; or
(v) if the Company Board shall have exercised its rights set forth in
Section 5.10 of this Agreement.
8.1.3 by the Company if there shall have been any material breach of any
representation or warranty, or any material breach of any covenant or
agreement, of Nipsco hereunder and such breach shall not have been remedied
within 20 days after receipt by Nipsco of notice in writing from the
Company, specifying the nature of such breach and requesting that it be
remedied; or
8.1.4 by Nipsco if there shall have been any material breach of any
representation or warranty, or any material breach of any covenant or
agreement, of the Company hereunder and such breach shall not have been
remedied within 20 days after receipt by the Company of notice in writing
from Nipsco, specifying the nature of such breach and requesting that it be
remedied.
8.2 Effect of Termination.
8.2.1 In the event of termination of this Agreement by either the Company
or Nipsco as provided in Section 8.1, except as provided in Sections 8.2.4
and 8.2.5, this Agreement shall forthwith become void and have no effect,
without any liability or obligation on the part of Nipsco or the Company,
other than the last sentence of Section 5.7 and Sections 8.2 and 11.2.
Nothing contained in this Section shall relieve any party from any
liability resulting from any material breach of the representations,
warranties, covenants or agreements set forth in this Agreement.
8.2.2 In the event of termination of this Agreement by Nipsco pursuant to
Section 8.1.4 and at such time no third party Acquisition Proposal has been
made, the Company shall pay to Nipsco as liquidated damages and not as a
penalty, an amount in cash equal to the out-of-pocket expenses and fees
incurred by Nipsco arising out of, in connection with or related to the
Merger or the transactions contemplated by this Agreement not in excess of
$10,000,000 within 60 days of such termination, provided that Nipsco shall
not be in material breach of its obligations under this Agreement.
8.2.3 In the event of termination of this Agreement by the Company
pursuant to Section 8.1.3, Nipsco shall pay to the Company, as liquidated
damages and not as a penalty, an amount in cash equal to the out-of- pocket
expenses and fees incurred by the Company arising out of, in connection
with or related to the Merger or the transactions contemplated by this
Agreement not in excess of $10,000,000 within 60 days of such termination,
provided that the Company shall not be in material breach of its
obligations under this Agreement.
8.2.4 If (i) this Agreement is terminated (x) pursuant to Section
8.1.2(v), (y) following a failure to hold the Company Special Meeting or
failure to obtain the Company Requisite Vote, as the case may be, or (z)
pursuant to Section 8.1.4; and (ii) in the case of clauses (y) and (z), at
the time of such termination there shall have been made a third party
Acquisition Proposal then promptly (but not later than 30 days after such
termination), the Company shall pay to Nipsco a fee of $10,000,000.
8.2.5 If Section 8.2.4 is applicable and a transaction contemplated by
the Acquisition Proposal referred to in Section 8.2.4 or any other
Acquisition Proposal that the Company Board accepts in lieu of the
Acquisition Proposal referred to in Section 8.2.4 is consummated within two
and one-half years of termination of this Agreement, the Company shall pay
to Nipsco an additional fee of $15,000,000 upon such consummation.
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8.2.6 The payments provided in Sections 8.2.2, 8.2.3, 8.2.4 and 8.2.5
shall be the parties' sole and exclusive remedies hereunder for the
termination of this Agreement under the circumstances in which such
payments are paid (regardless of any breach of this Agreement), and upon
such delivery of such payment to Nipsco or the Company, as the case may be,
no person shall have any further claim or rights against the Company,
Nipsco or Acquisition under this Agreement.
8.3 Amendment. Subject to applicable law, at any time prior to the
Effective Time, the parties hereto may modify or amend this Agreement, by
written agreement executed and delivered by duly authorized officers of the
respective parties; provided, however, that after approval of the Merger by
the shareholders of the Company, no amendment shall be made that reduces the
Merger Consideration payable in the Merger or adversely affects the rights of
the Company's shareholders hereunder without the approval of such
shareholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.
8.4 Extension; Waiver. At any time prior to the Effective Time, subject to
applicable law, the parties may (i) extend the time for the performance of any
of the obligations or other acts of the other parties, (ii) waive any
inaccuracies in the representations and warranties of the other parties
contained in this Agreement or in any document delivered pursuant to this
Agreement or (iii) waive compliance with any of the agreements or conditions
of the other parties contained in this Agreement. Any agreement on the part of
a party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The failure of any party
to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights.
8.5 Procedure for Termination, Amendment, Extension or Waiver. A termination
of this Agreement pursuant to Section 8.1, an amendment of this Agreement
pursuant to Section 8.3 or an extension or waiver pursuant to Section 8.4
shall, in order to be effective, require in the case of Nipsco or the Company,
action by its board of directors or the duly authorized designee of its board
of directors.
ARTICLE IX
SURVIVAL OF PROVISIONS
9.1 Survival. The representations and warranties respectively required to be
made by the Company and Nipsco in this Agreement, or in any certificate,
respectively, delivered by the Company or Nipsco pursuant to Section 7.2 or
Section 7.3 hereof, shall terminate upon the Closing and be of no further
force or effect.
ARTICLE X
NOTICES
10.1 Notices. Any notice or communication given pursuant to this Agreement
must be in writing and shall be deemed to have been duly given if mailed (by
registered or certified mail, postage prepaid, return receipt requested),
transmitted by facsimile or delivered by courier, as follows:
If to the Company, to:
Bay State Gas Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
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with a copy to:
LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to Nipsco, to:
NIPSCO Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Adik
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 312-258-5600
All notices and other communications required or permitted under this
Agreement that are addressed as provided in this Section 10.1 shall, whether
sent by mail, facsimile or courier, be deemed given upon the first Business
Day after actual delivery to the party to whom such notice or other
communication is sent (as evidenced by the return receipt or shipping invoice
signed by a representative of such party or by facsimile confirmation). Any
party from time to time may change its address for the purpose of notices to
that party by giving a similar notice specifying a new address, but no such
notice shall be deemed to have been given until it is actually received by the
party sought to be charged with the contents thereof. For purposes of this
Section 10.1, "Business Day" shall mean a day other than Saturday, Sunday or
any day on which the principal commercial banks located in Massachusetts are
authorized or obligated to close under the laws of Massachusetts.
ARTICLE XI
MISCELLANEOUS
11.1 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes, except as set forth in Section 5.7 with respect to the
Confidentiality Agreement, all prior communications, agreements,
understandings, representations and warranties, whether oral or written,
between the parties hereto. There are no oral or written agreements,
understandings, representations or warranties between the parties hereto with
respect to the subject hereof other than those set forth in this Agreement.
11.2 Expenses. The Company and Nipsco each shall pay its own costs and
expenses incident to preparing for, entering into and carrying out this
Agreement and the consummation of the transactions contemplated hereby, except
that (i) the filing fee in respect of the notification and report under the
HSR Act and (ii) the expenses incurred in connection with the printing,
mailing and distribution of the Proxy Statement and the preparation and filing
of the Registration Statement shall be borne equally by the Company and
Nipsco.
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11.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other parties.
11.4 No Third Party Beneficiary. Except as otherwise specifically provided
in Section 5.13, this Agreement is not intended and may not be construed to
create any rights in any parties other than the Company and Nipsco and their
respective successors or assigns, and it is not the intention of the parties
to confer third-party beneficiary rights upon any other person.
11.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts (without regard
to the principles of conflicts of law) applicable to a contract executed and
to be performed therein.
11.6 Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties
without the prior written consent of the other parties, such consent not to be
unreasonably withheld, and any such assignment that is not consented to shall
be null and void. Subject to the preceding sentence, this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
11.7 Headings, Gender, etc. The headings used in this Agreement have been
inserted for convenience and do not constitute matter to be construed or
interpreted in connection with this Agreement. Unless the context of this
Agreement otherwise requires, (i) words of any gender are deemed to include
each other gender; (ii) words using the singular or plural number also include
the plural or singular number, respectively; (iii) the terms "hereof,"
"herein," "hereby," "hereto," and derivative or similar words refer to this
entire Agreement; (iv) the terms "Article" or "Section" refer to the specified
Article or Section of this Agreement; (v) all references to "dollars" or "$"
refer to currency of the United States of America; (vi) the term "person"
shall include any natural person, corporation, limited liability company,
general partnership, limited partnership, trust or other entity, enterprise,
authority or business organization; and (vii) the term "or" is inclusive.
11.8 Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of the Company or Nipsco under this Agreement shall not
be materially and adversely affected thereby, (i) such provision shall be
fully severable, (ii) this Agreement shall be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part
hereof, and (iii) the remaining provisions of this Agreement shall remain in
full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom.
In Witness Whereof, this Agreement has been duly executed and delivered by
the duly authorized officers of the Company and Nipsco effective as of the
date first written above.
Nipsco Industries, Inc.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
By: ___________________________________
Name:▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman, President and
Chief Executive Officer
Bay State Gas Company
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
By: ___________________________________
Name:▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and Co-Chief
Executive Officer
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