Exhibit 10.3


[GRAPHIC OMITTED]
           Scotia Capital (USA) Inc.
           One Liberty Plaza, 165 Broadway, 26th Floor, New York, New York 10006


                                                   November 9, 1999

NiSource Inc.
5265 Hohman Avenue
Hammond, Indiana 46320-1775

Attention:        Mr. Stephen P. Adik
                  Senior Executive Vice-President
                  Chief Financial Officer & Treasurer

Dear Sirs:

                     Re: Equity Forward Purchase Transaction

         The purpose of this  facsimile is to set forth the amended and restated
terms and  conditions of the  Transaction  entered into between  Scotia  Capital
(USA) Inc. (formerly Scotia Capital Markets (USA) Inc.) ("Party A") and NiSource
Inc.  ("Party B") on the Trade Date specified  below (the  "Transaction").  This
facsimile  constitutes  a  "Confirmation"  as  referred  to in the  ISDA  Master
Agreement  specified below and amends,  restates and replaces the  Confirmation,
dated May 21, 1999, entered into between Party A and Party B.

         This  Confirmation  is  subject  to and  incorporates  the  definitions
contained in the 1991 ISDA  Definitions,  as supplemented by the 1998 Supplement
(the "1991 ISDA Definitions"),  and the 1996 ISDA Equity Derivatives Definitions
(the "Equity  Definitions")  (each as published by the  International  Swaps and
Derivatives Association, Inc. ("ISDA")) (collectively,  the "ISDA Definitions").
In the  event  of any  inconsistency  between  the  ISDA  Definitions  and  this
Confirmation,  this  Confirmation will govern.  This  Confirmation  supplements,
forms part of, and is subject to, the ISDA Master  Agreement,  dated May May 21,
1999,  as amended  and  supplemented  from time to time (the "ISDA  Agreement"),
between  Party A and Party B. All  provisions  contained  in the ISDA  Agreement
govern this Confirmation except as expressly modified below.

1. The terms of the particular  Transaction to which this  Confirmation  relates
are as follows:

I.   General Terms:

         Trade Date:                        May 21, 1999

         Effective Date:                    May 21, 1999

     Termination  Date: May 20, 2003,  subject to  postponement  pursuant to the
Optional Extension provision set out below.

     Extension  Date: The earlier of November 21, 2003 and the date on which the
restriction  cited by Party B in its  extension  notice,  given  pursuant to the
Optional Extension provision set out below, ceases to apply to Party B

     Extension Term: The period commencing on but excluding the Termination Date
to but including the Extension Date

         Optional                           Termination  Date: Any Floating Rate
                                            Reset  Date  selected  by Party B in
                                            accordance with the Notice provision
                                            of  the  Settlement  Terms  set  out
                                            below.

         Forward Purchase Seller:   Party A

         Forward Purchase Buyer:    Party B

         Exchange:                          New York Stock Exchange

     Shares:  NiSource Inc. common shares (Exchange designation "NI"), CUSIP No.
65473P105, quoted in USD on the Exchange.

     Accumulation  Period:  The period commencing on and including the Effective
Date to and including  the date by which Party A, or any U.S.  subsidiary of The
Bank of Nova Scotia  acquiring Shares in respect of this Transaction (the "Hedge
Subsidiary"), has, by means of one or more purchase transactions effected on the
Exchange through such period,  accumulated such quantity of Shares as shall have
an Aggregate Notional approximately equal to USD 150,000,000, (the date on which
such  accumulation is achieved being the  "Accumulation  Period End Date").  For
purposes hereof, "Aggregate Notional" means the product of the Initial Price and
the Number of Shares, as these terms are defined below.

                                            Party A shall provide to Party B, on
                                            or before the second Local  Business
                                            Day   following   the   Accumulation
                                            Period  End  Date,   written  notice
                                            setting     out     the     purchase
                                            transactions  effected by Party A or
                                            the Hedge  Subsidiary  and Party A's
                                            calculation of the Initial Price.

     Initial  Price:  The  price,  in USD,  per Share  calculated  as a weighted
average of the respective purchase prices per Share, including commissions which
shall  not  exceed  USD 0.04  per  Share,  each in USD,  of all  Share  purchase
transactions  effected by Party A or the Hedge Subsidiary on the Exchange during
the  Accumulation   Period,  which  weighted  average  shall  be  determined  by
multiplying  each purchase  price by the number of Shares to which such purchase
price is applicable,  aggregating the products  thereof and dividing such sum by
the total number of purchased Shares.  The quotient thereof shall be the Initial
Price (per Share).

         Disposition                        Period:  In the context of Net Share
                                            Settlement of this Transaction,  the
                                            period  commencing  on and including
                                            the Optional  Termination  Date, the
                                            Commencement Date or the Termination
                                            Date   (as    applicable)   to   and
                                            including the Final Settlement Date.

                                            For    purposes    hereof,    "Final
                                            Settlement  Date"  means the earlier
                                            of (1)  the  settlement  date of the
                                            last trade by which  Party A, or the
                                            Hedge Subsidiary,  has effected,  on
                                            the   Exchange,   the  sale  of  the
                                            Relevant  Share  Number,   (2)  90th
                                            calendar    day     following    the
                                            commencement date of the Disposition
                                            Period, or (3) the date on which the
                                            Daily Settlement  Amount (as defined
                                            in   the   Net   Share    Settlement
                                            provision) is an amount less than or
                                            equal  to zero  and,  if  less  than
                                            zero,  the absolute value thereof is
                                            less than the  closing  price of the
                                            Shares as reported  by the  Exchange
                                            in  respect  of such  Final  Trading
                                            Date (a "Zero  Settlement  Amount").
                                            "Final  Trading  Date" means the day
                                            on which any Share sale  transaction
                                            effected on the Exchange pursuant to
                                            the Net Share  Settlement  provision
                                            would settle on the Final Settlement
                                            Date.  "Relevant Share Number" means
                                            the  Number  of  Shares  or,  in the
                                            context of any partial settlement to
                                            be   effected   on   any    Optional
                                            Termination   Date,  the  number  of
                                            Shares specified or deemed specified
                                            by Party B in its termination notice
                                            given   pursuant   to   the   Notice
                                            provision set out below.

         Number                             of Shares:  The aggregate  number of
                                            Shares yielded pursuant to Party A's
                                            or the Hedge  Subsidiary's  purchase
                                            program     as     referenced     in
                                            "Accumulation  Period"  above,  less
                                            the   aggregate   number  of  Shares
                                            previously  delivered  by Party A or
                                            the  Hedge  Subsidiary  to  Party  B
                                            pursuant to all partial  settlements
                                            (as  contemplated  by the Settlement
                                            Terms)   effected   prior   to   the
                                            relevant date of determination.

         Business Days:             London and New York

II.      Floating Amounts payable by Party B

         Floating Amount Payer:     Party B

         Notional Amount:           same as Aggregate Notional

         Payment                            Dates:   The  first   Business   Day
                                            immediately       following      the
                                            Accumulation  Period  End Date  and,
                                            thereafter, the first day of each of
                                            the months of May, August,  November
                                            and February  during the Term hereof
                                            and,  if   applicable,   during  the
                                            Extension    Term,    the   Optional
                                            Termination  Date,  the  Termination
                                            Date   and,   if   applicable,   the
                                            Extension    Date,     subject    to
                                            adjustment  in  accordance  with the
                                            Modified   Following   Business  Day
                                            Convention.

     Floating  Rate  Option:   For  all   Calculation   Periods   following  the
Accumulation Period, USD-LIBOR-BBA

         Designated Maturity:       3-months

         Reset                              Dates:    In    respect    of   each
                                            Calculation   Period  following  the
                                            Accumulation  Period,  the first day
                                            of each  Calculation  Period subject
                                            to adjustment in accordance with the
                                            Modified   Following   Business  Day
                                            Convention.

         Spread:                    Plus 53.5 basis points (0.535%).

         Day Count Fraction:                Actual/360

     Floating  Rate for first  Calculation  Period  following  the  Accumulation
Period (the "Initial  Period"):  USD-LIBOR-BBA  quoted as of 11:00 a.m.,  London
time (the  "Determination  Time") on the day which is two  London  Banking  Days
prior to the first day of the Initial Period (the "Determination  Date") but for
a Designated  Maturity equal to the actual number of days in such Initial Period
plus Spread. If there is no rate quoted on the Determination  Date in respect of
such Designated  Maturity and the  Accumulation  Period is greater than 30 days,
the Floating Rate for the Initial Period shall be the rate  determined by linear
interpolation of USD-LIBOR-BBA  quoted as of the Determination Time on such date
for a Designated Maturity of one-month and of USD-LIBOR-BBA  quoted on such date
for a Designated  Maturity of  three-months,  plus  Spread.  If there is no rate
quoted as of the Determination  Time on the  Determination  Date in respect of a
Designated  Maturity  equal to the number of days in the Initial  Period and the
Accumulation  Period is less than 30 days,  the  Floating  Rate for the  Initial
Period shall be the rate  determined  by linear  interpolation  of the Overnight
Rate  and  of  USD-LIBOR-BBA   quoted  as  of  the  Determination  Time  on  the
Determination Date for a Designated  Maturity of three-months,  plus Spread. For
purposes  hereof,  "Overnight  Rate" means the average  rate at which  overnight
deposits in United States  Dollars are offered by four major banks in the London
interbank market,  as selected by Party A, as of the  Determination  Time on the
Determination Date.

     Floating  Amount in respect of  Accumulation  Period:  Notwithstanding  the
foregoing, the Floating Amount payable by Party B in respect of the Accumulation
Period shall be determined as follows:

                                            For  each  day of  the  Accumulation
                                            Period,  the Calculation Agent shall
                                            determine     an     amount     (the
                                            "Calculation  Amount") in accordance
                                            with the following formula:

                                            [Calculation  Amounti!1 + (Number of
                                            Purchased  Sharesi  x  WAPi)] x (1 +
                                            Accumulation Period Floating Ratei /
                                            360)

                                            where, "Calculation Amounti!1" means
                                            the Calculation Amount determined in
                                            respect  of the  day  preceding  the
                                            relevant   day   of   determination,
                                            "Number of Purchased  Sharesi" means
                                            the  number of Shares  purchased  by
                                            Party A or the Hedge  Subsidiary  on
                                            the relevant date of  determination;
                                            "WAPi" means the weighted average of
                                            the respective  purchase  prices per
                                            Share,  including  commissions which
                                            shall not exceed USD 0.04 per Share,
                                            each in USD,  of all Share  purchase
                                            transactions  effected by Party A or
                                            the Hedge Subsidiary on the relevant
                                            date   of    determination,    which
                                            weighted average shall be determined
                                            by  multiplying  each purchase price
                                            by the  number  of  Shares  to which
                                            such purchase  price is  applicable,
                                            aggregating the products thereof and
                                            dividing   such  sum  by  the  total
                                            number  of  purchased  Shares;   and
                                            "Accumulation Period Floating Ratei"
                                            means the Overnight Rate (as defined
                                            above)  in  effect  on the  relevant
                                            date  of  determination,  as if such
                                            date were a Reset Date, plus Spread.

                                            The  amount  payable  by  Party B to
                                            Party   A   in    respect   of   the
                                            Accumulation  Period  shall  be  the
                                            Calculation   Amount  determined  in
                                            respect of the  Accumulation  Period
                                            End Date  minus an  amount  equal to
                                            the  product  of the  Initial  Price
                                            multiplied  by the Number of Shares.
                                            Such amount shall be paid by Party B
                                            to  Party A on the  second  Business
                                            Day   following   the   Accumulation
                                            Period End Date.

III.     Settlement Terms

     Settlement:  This  Transaction may be settled,  in whole or in part, on any
Optional  Termination  Date,  and,  in the  event of a partial  settlement,  the
unsettled  portion  shall  remain,  during the Term hereof,  a  Transaction  for
purposes of the ISDA Agreement Otherwise,  this Transaction shall terminate, and
each party's obligations in respect thereof shall be settled, on the Termination
Date.  Settlement shall be effected in accordance with the settlement  mechanism
selected by Party B in its settlement notice given in accordance with the Notice
provision set out below. All partial  settlements  shall,  however,  be effected
only in integral multiples of 500,000 Shares.

     Physical  Settlement:  Where  Physical  Settlement  is  applicable,  on the
Optional  Termination  Date or Termination Date Party A shall deliver to Party B
Shares equal in number to the Number of Shares or, in the context of any partial
settlement to be effected on any Optional Termination Date, the number of Shares
specified or deemed specified by Party B in its settlement notice given pursuant
to the Notice  provision set out below (such number being,  in either case,  the
"Relevant  Share  Number")  and Party B shall pay to Party A an amount,  in USD,
equal to the product of the  Initial  Price  multiplied  by the  Relevant  Share
Number (the  "Settlement  Price").  Any delivery made pursuant to this provision
shall be on a delivery  versus  payment  basis and the due date of such delivery
shall be subject to  adjustment  in  accordance  with  Section 6.2 of the Equity
Definitions in the event of the occurrence of a Settlement Disruption Event.

         Net                                Share  Settlement:  Where  Net Share
                                            Settlement  is elected or  otherwise
                                            applies, on the Optional Termination
                                            Date,  the   Commencement   Date  or
                                            Termination  Date  (as  applicable),
                                            Party  A  shall   commence   selling
                                            Shares on the  Exchange  and  shall,
                                            for  each  day  in  the  Disposition
                                            Period,  determine  an amount in USD
                                            (the "Daily  Settlement  Amount") in
                                            accordance    with   the   following
                                            formulae:

         SA0 = Initial Price x Relevant Share Number
         SAi = SAi!1 x (1 + ONi!1 / 360) ! Number of Settled Sharesi x VWAPi
                                            where  "Number of  Settled  Sharesi"
                                            means the  number of Shares  held by
                                            Party A or the Hedge Subsidiary as a
                                            hedge of this  Transaction  the sale
                                            of  which is  settled  by Party A or
                                            the Hedge Subsidiary on the relevant
                                            day of determination,  "VWAPi" means
                                            the modified volume-weighted average
                                            per-Share  price  as  determined  by
                                            means of the  Bloomberg  service  on
                                            the   relevant  day  for  trades  in
                                            Shares   effected   on   the   third
                                            Exchange  Business Day prior to such
                                            day and  adjusted  by Party A to (i)
                                            include  commissions which shall not
                                            exceed  USD  0.04  per  Share;  (ii)
                                            exclude   the  first  trade  in  the
                                            Shares  effected on the  Exchange on
                                            the relevant  day; and (iii) exclude
                                            all trades in the Shares effected on
                                            the  Exchange  within 60  minutes of
                                            the close of trading on the Exchange
                                            on such day,  "SA0"  means the Daily
                                            Settlement   Amount   determined  in
                                            respect  of  the  first  day  of the
                                            relevant  Disposition Period,  "SAi"
                                            means  the Daily  Settlement  Amount
                                            determined   in   respect   of   the
                                            relevant  day,   "SAi!1"  means  the
                                            Daily Settlement  Amount  determined
                                            in   respect   of  the   immediately
                                            preceding day, and "ONi!1" means the
                                            Overnight  Rate in  effect as of the
                                            day   immediately    preceding   the
                                            relevant day.

                                            The    Daily    Settlement    Amount
                                            determined  in  respect of the Final
                                            Settlement  Date  shall be the Final
                                            Settlement  Amount.  For purposes of
                                            giving  effect  to  the   foregoing,
                                            "Number  of  Settled   Sharesi"  and
                                            "VWAPi"  shall be  deemed to be zero
                                            on any day in the Disposition Period
                                            which  is not an  Exchange  Business
                                            Day.

                                            If the Final Settlement  Amount is a
                                            Zero Settlement  Amount,  Party A or
                                            the Hedge  Subsidiary  shall deliver
                                            to  Party B (1) the  portion  of the
                                            Relevant   Share  Number   remaining
                                            after the Zero Settlement  Amount is
                                            reached (the "Unsold  Shares"),  and
                                            (2) the absolute  value of the Final
                                            Settlement  Amount,  in  USD,  on or
                                            before  the  Net  Share   Settlement
                                            Date. If the Final Settlement Amount
                                            is positive, Party A shall determine
                                            a number  of  Shares  in  accordance
                                            with the following formula:

     Final Settlement Amount / Closing Price

                                            where "Closing Price" is the closing
                                            price of the Shares as  reported  by
                                            the Exchange on the Final Settlement
                                            Date. Party B shall deliver to Party
                                            A  Shares  equal  in  number  to the
                                            number  of  Shares  yielded  by  the
                                            foregoing  formula  on or before the
                                            Net Share Settlement Date. If within
                                            ten  Business  Days  after the Final
                                            Settlement  Date,  Party A sells all
                                            or a portion  of the Shares (if any)
                                            delivered  to  Party  A by  Party  B
                                            pursuant    to   this   Net    Share
                                            Settlement  provision  (such  Shares
                                            being the  "Settlement  Shares") and
                                            the net proceeds received by Party A
                                            upon  the  sale of  such  Settlement
                                            Shares   is  less   than  the  Final
                                            Settlement  Amount  (or if less than
                                            all of such  Settlement  Shares  are
                                            resold,   the  applicable  pro  rata
                                            portion of such Settlement  Amount),
                                            shall  pay  in  USD  or   additional
                                            Shares    such    difference    (the
                                            "Make-whole   Amount")  to  Party  A
                                            within one  Business  Day  following
                                            the date on which  Party A's  notice
                                            to Party B of the Make-whole  Amount
                                            becomes effective in accordance with
                                            Section 12 of the ISDA Agreement. In
                                            the event  Party B elects to pay the
                                            Make-whole   Amount  in   additional
                                            Shares,  Party  B shall  deliver  to
                                            Party A the  number of whole  Shares
                                            (the  "Make-whole  Shares") equal to
                                            (i) the Make-whole Amount divided by
                                            (ii) the closing price of the Shares
                                            as reported  by the  Exchange on the
                                            Exchange  Business  Day  immediately
                                            prior to delivery of such Shares. If
                                            within ten  Business  Days after the
                                            delivery  of  Make-whole  Shares  to
                                            Party  A,  Party A sells  all or any
                                            portion  of such  Shares and the net
                                            proceeds  received  by  Party  A are
                                            less than the Make-whole  Amount (or
                                            if  less  than  all  the  Make-whole
                                            Shares are  resold,  the  applicable
                                            pro rata  portion of the  Make-whole
                                            Amount),  the  provisions  set forth
                                            above with respect to payment in USD
                                            or  Shares  based on the  Settlement
                                            Amount,   including  the  make-whole
                                            requirements, shall apply.

         Net Share
         Settlement                         Date:  The second  Clearance  System
                                            Business  Day  following  the  Final
                                            Settlement    Date,    subject    to
                                            adjustment   in   accordance    with
                                            Section    6.2   of    the    Equity
                                            Definitions  in  the  event  of  the
                                            occurrence     of    a    Settlement
                                            Disruption Event.

     Notice:  In the event Party B intends to effect a settlement  in respect of
any Optional  Termination Date, Party B shall provide Party A with prior written
notice of its intention to exercise its rights to so settle this Transaction and
such notice must become  effective  in  accordance  with  Section 12 of the ISDA
Agreement on or before the 3rd day  preceding the Optional  Termination  Date in
respect  of which  Party B intends  to effect  settlement.  If Party B's  notice
becomes effective after such 3rd day, Party B shall be deemed to have elected to
effect a settlement in respect of the next following Optional  Termination Date;
provided,  however,  that no such  notice may be given (i) on any day during the
Accumulation  Period;  or (ii)  following the occurrence of an Event of Default,
Potential  Event of Default or  Termination  Event (as such terms are defined in
the ISDA Agreement) or following the designation of an Early Termination Date in
respect of this  Transaction in accordance with Section 6 of the ISDA Agreement.
Party B shall indicate in such notice whether settlement will be effected by way
of Physical  Settlement or Net Share  Settlement.  In the context of any partial
settlement,  Party B shall  specify  the  number of Shares in  respect  of which
settlement  will be  effected.  If such  notice  does not  specify the manner of
settlement, Physical Settlement shall apply and, if such notice does not specify
the number of Shares in respect of which  settlement  will be effected,  Party B
shall be deemed to have  elected  to effect  settlement  in  respect of the full
Number of Shares then in effect.  In the  context of the  Termination  Date,  if
Party B wishes to effect  settlement  by way of Net  Share  Settlement,  Party B
shall so notify Party A and such notice must become effective in accordance with
Section  12 of the  ISDA  Agreement  on or  before  the  3rd  day  prior  to the
Termination  Date,  failing  which Party B - shall be deemed to have  elected to
utilize Physical Settlement.

     Inability  to  Sell/Purchase  Shares:  If,  in the  context  of  Net  Share
Settlement,  any cash settlement election,  or any other provision hereof which,
in order to give effect thereto,  requires Party A to sell Shares (other than to
Party B), Party A is unable to effect a sale by any reasonably economic,  viable
or practicable means,  including a private transaction,  of the requisite number
of Shares on or before the Final  Trading Date for purposes of  determining  the
Final Settlement Amount for any reason including,  without  limitation,  because
such  Shares have a  prospectus  delivery  requirement  and Party B is unable to
provide Party A with a current prospectus, then, Party B shall be deemed to have
elected Physical Settlement with respect to the unsold portion of such requisite
number of Shares,  and Party B shall,  within one Business Day of the date it is
advised by Party A that a sale of all such Shares was not  effected,  repurchase
the unsold  Shares for USD in an amount per Share that,  when  combined with all
amounts received by Party A for all effected sales of Shares, results in Party A
receiving an amount  equal to the amount Party would have  received had Physical
Settlement  been  elected.  If, in the  context of  Physical  Settlement  or the
application of the  Registration  of Shares  provision or any other provision of
this Confirmation  which, in order to give effect thereto,  requires delivery of
Shares  to Party B by Party A,  Party B is  unable,  due to the  application  of
applicable  law,  at the  relevant  time to take  delivery  of  such  Shares,  a
Termination  Event  shall be deemed to have  occurred  for  purposes of the ISDA
Agreement and in respect of which (i) Party B shall be the Affected Party,  (ii)
this Transaction shall be the only Affected  Transaction,  (iii) and the payment
measure shall be Loss (as such terms are defined in the ISDA Agreement).

     Good  Delivery:  Any party  required  to  deliver  Shares  hereunder  shall
transfer good title to such Shares, and such Shares shall be freely transferable
(together with any prospectus  required by applicable law) and free and clear of
any liens,  charges,  claims and  encumbrances.  Delivery  shall be  effected by
book-entry  transfer  of the  Shares to an  account  with The  Depository  Trust
Company (the  "Clearance  System") in the name of the recipient as is designated
by the recipient.

                  Dividends:                An   amount   equal  to  each   cash
                                            dividend  the  record  date of which
                                            precedes the  Termination  Date, or,
                                            if applicable, the Extension Date or
                                            any  further  deferral  thereof  and
                                            which is  received by Party A or the
                                            Hedge   Subsidiary   in  respect  of
                                            Shares  held by Party A or the Hedge
                                            Subsidiary to hedge this Transaction
                                            shall  be  paid  to  Party  B on  or
                                            before  the  second   Business   Day
                                            immediately  following  the  date of
                                            receipt  of such  cash  dividend  by
                                            Party A or the Hedge Subsidiary.

IV       Optional Extension

         In the event that, due to operation of any state or federal  securities
         law then in  effect  in the  United  States  of  America  and  which is
         applicable to Party B, as of the Termination Date, Party B believes, in
         good faith and in reliance  upon a written,  reasoned  legal opinion of
         its external  legal  counsel,  that it is  restricted  from  purchasing
         Shares from Party A in an amount equal to the Number of Shares, Party B
         shall so notify  Party A on or before 1:00 p.m.  (New York time) on the
         Termination  Date and shall  specify the basis of the  prohibition.  If
         requested  by Party A, Party B shall also  provide to Party A a copy of
         the legal opinion upon which Party B is relying  within three  Business
         Days of the  date on which  Party  A's  request  becomes  effective  in
         accordance  with Section 12 of the ISDA Agreement.  In such event,  the
         Termination  Date of this  Transaction  shall be the Extension Date and
         settlement  of each  party's  respective  obligations  (as provided for
         herein) shall be deferred to such date.

         In the event that as of the Extension Date,  Party B believes,  in good
         faith and in reliance  upon a written,  reasoned  legal  opinion of its
         external  counsel (a copy of which  shall be  provided  to Party A upon
         Party A's  request)  that it remains  restricted  from  purchasing  the
         requisite  number of Shares it shall so notify Party A and Party A may,
         at its option,  grant a further postponement of the Termination Date to
         a mutually  agreed  upon  settlement  date or elect to  terminate  this
         Transaction.  If Party A elects to terminate this Transaction,  Party A
         shall so  notify  Party B and  Party B shall,  on or  before  the first
         Business Day following the date on which Party A's  termination  notice
         becomes  effective (the "Termination  Election Date"),  elect to effect
         settlement  either by way of cash  settlement  or Net Share  Settlement
         (failing   which  Party  B  shall  be  deemed  to  have   elected  cash
         settlement).

         Where  Party A elects to  terminate  this  Transaction  and Party B has
         elected cash settlement,  on the first Exchange  Business Day following
         the Termination Election Date (the "Commencement Date"), Party A or the
         Hedge Subsidiary  shall commence selling the Shares  comprising its, or
         the Hedge  Subsidiary's,  hedge of this Transaction and shall determine
         the Final  Settlement  Amount as  defined  in the Net Share  Settlement
         provision above except that the Final Trading Date shall be the earlier
         of (1) the date on which Party A, or the Hedge Subsidiary, has effected
         transactions  on the Exchange by which it has completed the sale of the
         Relevant  Share  Number,  or (2) the 90th  calendar day  following  the
         Commencement Date. If the Final Settlement Amount determined in respect
         of the Final Settlement Date is negative,  Party A shall pay to Party B
         the absolute value of such amount on the Final Settlement Date. If such
         amount is  positive,  Party B shall  pay to Party A such  amount on the
         first  Business  Day  following  the date on which  Party A's notice to
         Party B that such Final  Settlement  Amount is owing by Party B becomes
         effective in accordance with Section 12 of the ISDA Agreement.

         Where  Party A elects to  terminate  and Party B has  elected Net Share
         Settlement,  the terms of the Net Share  Settlement  provision  set out
         above shall apply; provided,  however, that if (i) the Final Settlement
         Amount is a Zero Settlement  Amount,  (ii) there remains Unsold Shares,
         and  (iii)  Party B  remains  at such  time,  subject  to the  purchase
         restrictions  contemplated  above,  Party B  shall  be  deemed  to have
         elected cash  settlement in which case Party A shall  continue  selling
         the Unsold Shares (if any) and the preceding  paragraph of this Section
         shall apply.

V        Decline in Share Price

         In the event that on any Exchange  Business Day during the Term of this
         Transaction (other than the Accumulation  Period) the closing price per
         Share as quoted by the Exchange on such day is USD 12.00 or less, Party
         A may upon notice to Party B, given in  accordance  with  Section 12 of
         the ISDA  Agreement,  and  provided an Event of Default or  Termination
         Event has not occurred  with  respect to Party A or is then  continuing
         (and  which,  in the  context  of a  Termination  Event,  renders  this
         Transaction an Affected  Transaction) and provided an Early Termination
         Date has not been designated in respect of this  Transaction,  elect to
         terminate this Transaction in its entirety. Party B shall, on or before
         the  first   Business  Day  following  the  date  on  which  Party  A's
         termination notice becomes  effective,  notify Party A of the manner in
         which this Transaction shall be settled which, for purposes hereof, may
         include  cash-settlement  as  provided  for in the  Optional  Extension
         provision set out above (and, failing such notification,  Party B shall
         be deemed to have  elected  cash  settlement).  If Party B elects  cash
         settlement as provided for in such Optional Extension  provision or Net
         Share Settlement, for purposes of giving effect to such provisions, the
         commencement  of the  Disposition  Period  shall be the first  Exchange
         Business  Day  following  the date on which Party B's  election  notice
         became  effective (the "Settlement  Election Date").  If Party B elects
         Physical Settlement, settlement shall be effected on the third Business
         Day following the  Settlement  Election  Date in accordance  with,  and
         subject to, the Physical Settlement provision set out above.

         If,  in  the  context  of (i) a  cash-settlement  election,  the  Final
         Settlement Date (as provided for in the Optional Extension  provision),
         (ii) in the context of a Physical Settlement  election,  the Settlement
         Election  Date,  or  (iii) in the  context  of a Net  Share  Settlement
         election,  the Net  Share  Settlement  Date  (each  such  date  being a
         "Trigger Date"), is not an Optional Termination Date, then, in addition
         to any other  amount then payable by Party B, Party B shall also pay to
         Party A, on such date, the Break Funding Amount. For purposes,  hereof,
         "Break  Funding  Amount"  means an amount  equal to the  present  value
         (discounted  at the Discount Rate defined  below and  determined by the
         Calculation Agent in a commercially  reasonable  manner) of the product
         of (1) the  difference  between the Floating Rate Option  applicable to
         the then  current  Calculation  Period and the Discount  Rate,  (2) the
         Number  of  Shares,  (3) the  Initial  Price,  and (4) a  fraction  the
         numerator  of which is the number of days in the period  commencing  on
         and  including  the relevant  Trigger  Date,  to but excluding the next
         Optional  Termination  Date  and  the  denominator  of  which  is  360.
         "Discount Rate" means the appropriate  interpolated  USD-LIBOR-BBA rate
         determined by the Calculation Agent as of the Final Settlement Date.

VI       Adjustments

For purposes of Article 9 of the Equity  Definitions,  any reference to the term
"Share Swap Transaction" shall be deemed to mean "Forward Purchase Transaction";
provided,   however,   that  "Potential  Adjustment  Event"  shall  exclude  the
declaration or payment of any cash dividends in respect of the Shares.

Method of Adjustment:               Calculation Agent Adjustment

Calculation Agent:                          Party A

VII.     Extraordinary Events

Consequences of Merger Events:

(a)  Share-for-Share:                       Alternative Obligation
(b)  Share-for-Other:                       Cancellation and Payment
(c)  Share-for-Combined:            Alternative Obligation

Nationalization:                    Cancellation and Payment

VIII.    Regulatory Event
If during the Term of this  Transaction,  Party B effects any action,  including
any action with  respect to its capital  structure,  the result of which is that
Party A, or the Hedge  Subsidiary,  then  owns more of any class of  outstanding
voting  shares of Party B than is permitted  by the Bank Holding  Company Act of
1956, as amended, or other federal legislation (the "Regulatory  Limit"),  then,
Party B shall be deemed to have elected to partially settle this Transaction and
the extent to which the Number of Shares exceeds the  Regulatory  Limit shall be
the Relevant  Share Number for purposes of the  Settlement  Terms set out above.
For purposes of giving effect to the  foregoing,  the date on which such partial
settlement  shall be effected shall be the first Business Day following the date
on which  Party  A's  notice  to Party B that  Party A is then in  breach of the
Regulatory  Limit becomes  effective in  accordance  with Section 12 of the ISDA
Agreement.  If on such date Party B believes in good faith that it is restricted
from purchasing  Shares from Party A or the Hedge  Subsidiary,  Party B shall so
notify  Party A and, in such event,  Party A shall be deemed to have  elected to
effect such partial  settlement by way of cash-settlement as provided for in the
Optional  Extension  provision  set out above and, for purposes of giving effect
thereto, the reference therein to "Number of Shares" shall be deemed a reference
to Relevant  Share Number and  "Commencement  Date" shall be deemed to the first
Exchange Business Day following the date on which Party A's notice to Party B of
Party A's breach of the Regulatory Limit becomes effective as aforesaid.  If the
Final Settlement Date (as provided for in the Optional  Extension  provision) is
not an Optional  Termination  Date,  then,  in addition to any other amount then
payable by Party B,  Party B shall also pay to Party A, on such date,  the Break
Funding  Amount.  For purposes,  hereof,  "Break Funding Amount" means an amount
equal to the present  value  (discounted  at the Discount Rate defined below and
determined by the Calculation Agent in a commercially  reasonable manner) of the
product of (1) the difference between the Floating Rate Option applicable to the
then current  Calculation  Period and the Discount  Rate, (2) the Relevant Share
Number,  (3) the Initial Price, and (4) a fraction the numerator of which is the
number of days in the period  commencing on and  including the Final  Settlement
Date to but excluding the next Optional  Termination Date and the denominator of
which is 360. "Discount Rate" means the appropriate  interpolated  USD-LIBOR-BBA
rate determined by the Calculation Agent as of the Final Settlement Date.

IX.      Registration of Shares.

Notwithstanding any other provision hereof (including,  without limitation,  any
election of Net Share  Settlement by Party B under "Notice" above, but excluding
any  election  by  Party B of Net  Share  Settlement  or cash  settlement  under
"Optional  Extension" or "Decline in Share Price"  above),  Physical  Settlement
shall apply unless the  following  conditions  have been  satisfied:  (i) on the
Optional   Termination  Date  or  Termination  Date,  as  the  case  may  be,  a
registration   statement  (a   "Registration   Statement")   naming  as  selling
shareholders  Party A and the Hedge Subsidiary and covering the public resale of
all Shares held by Party A or the Hedge Subsidiary to hedge this Transaction and
all  Shares  deliverable  by  Party B to  Party  A  pursuant  to the  Net  Share
Settlement provisions hereof (collectively, the "Registrable Shares") shall have
been filed  with,  and  declared  effective  by,  the  Securities  and  Exchange
Commission under the Securities Act of 1933 (the "Securities  Act"), and no stop
order shall be in effect with  respect to such  Registration  Statement;  (ii) a
printed prospectus  relating to the Registrable Shares (including any prospectus
supplement  thereto and  amendments  thereof,  a  "Prospectus")  shall have been
delivered  to Party A and the Hedge  Subsidiary  in such  quantities  as Party A
shall have requested no later than the Optional  Termination Date or Termination
Date; (iii) the  Registration  Statement and the Prospectus shall be in form and
substance  reasonably  satisfactory  to Party A; (iv) no later than the Exchange
Business Day before the Optional  Termination Date or Termination  Date, Party A
and Party B shall have entered into an  agreement  (a "Transfer  Agreement")  in
connection with the public resale of the  Registrable  Shares by Party A and the
Hedge Subsidiary  substantially similar to underwriting agreements customary for
underwritten offerings of equity securities,  in form and substance satisfactory
to  Party  A,  providing  for  (without  limitation):  indemnification  of,  and
continuation  in  connection  with  the  liability  of,  Party A and  the  Hedge
Subsidiary,  the  delivery of  customary  opinions  of counsel  and  accountants
"comfort letters",  the continuous  effectiveness of the Registration  Statement
until the fortieth day after the Optional  Termination Date or Termination Date,
or if earlier,  such time as all  Registrable  Shares have been resold  pursuant
thereto  and  all  expenses  in  connection  with  such  resale,  including  all
registration  costs and all fees and expenses of counsel for each of Party A and
Party B, have been paid by Party B; (v) Party A and the Hedge  Subsidiary  shall
have  been  afforded  a  reasonable  opportunity  to  conduct  a  due  diligence
investigation  with  respect  to Party B  customary  in scope  for  underwritten
offerings  of  equity  securities,   and  acceptance  of  the  results  of  such
investigation  by  Party A and  the  Hedge  Subsidiary  cannot  be  unreasonably
withheld;  (vi) all  conditions  to the  obligations  of each  party  under  the
Transfer  Agreement  shall  have been  satisfied  or  waived  no later  than the
Optional Termination Date or Termination Date, and (vii) the representations and
warranties  of Party B set forth herein and in the Transfer  Agreement  shall be
true and correct on the date of delivery of Registrable  Shares to purchasers of
such Shares as though made at such time,  and Party B shall have  performed  all
its obligations set forth herein and in such Transfer  Agreement to be performed
by such time.

If, in the context of the Optional Extension provision or Decline in Share Price
provision,  Party B has elected to cash-settle  the  Transaction or in the event
Party B has  elected  Net Share  Settlement  and Party B is  required to deliver
Shares  to  Party A and any  condition  specified  in  items  (i) - (vii) of the
previous  paragraph shall not have been satisfied in the manner and at the times
specified  therein,  Party A may  determine to (a) have some or all  Registrable
Shares  sold  in  one  or  more   transactions   exempt  from  the  registration
requirements of the Securities Act, (b) extend this Transaction in order to give
Party B more time to satisfy such conditions,  or (c) elect Physical Settlement.
If Party A chooses  the action set forth in clause (a) above,  Party B shall pay
all  costs  of such  sales  by  Party  A,  including,  without  limitation,  any
applicable sales or purchase taxes,  transfer taxes and commissions.  If Party A
chooses the action set forth in clause (b) above, the Calculation  Agent will in
its  reasonable  discretion  adjust the terms  hereof to take into  account  any
additional costs to Party A and the Hedge Subsidiary of such extension.  For the
purposes  of this  paragraph,  references  in items (i) - (vii) of the  previous
paragraph to "the Optional Termination Date or Termination Date" shall be deemed
to be references to the  Termination  Election Date or the  Settlement  Election
Date, as the case may be.

2.       Fee

Party B will, on or before November 12, 1999, pay to Party A a fee in the amount
of USD 175,000 and the payment thereof by Party B shall be a condition precedent
to Party A's obligations hereunder.

3.       Additional Representations.

Each  party  will be  deemed  to  represent  to the  other  on the  date of this
Confirmation that, with respect to this Transaction (1) It is entering into this
Transaction  for its own  account  and not with a view to  transfer,  resale  or
distribution,  (2) it is an  "accredited  investor"  within the  meaning of Rule
501(a) of  Regulation  D under the  Securities  Act and has such  knowledge  and
experience  in financial  and business  matters that it is capable of evaluating
the  merits  and  risks  of  this  Transaction,   and  (3)  it  understands  and
acknowledges  that  this  Transaction  may  involve  the  purchase  or sale of a
"security" as defined in the Securities  Act and the securities  laws of certain
states,  and that any such security has not been registered under the Securities
Act or the  securities  laws of any  state  and,  therefore,  may  not be  sold,
pledged, hypothecated, transferred or otherwise disposed of unless such security
is registered  under the Securities Act and any applicable state securities law,
or an exemption from registration is available.



4.       Additional Party B Representation

         Party B represents to Party A that it is entering into this Transaction
in connection with its Share  repurchase  program which has been approved by its
board of directors  and publicly  announced,  solely for the purposes  stated in
such board resolution and public disclosure.

5.       Additional Agreement

         Each  party  agrees  that it  will  comply,  in  connection  with  this
Transaction  and all related or  contemporaneous  sales and purchases of Shares,
with the applicable  provisions of the Securities  Act, the Securities  Exchange
Act of 1934 (the  "Exchange  Act"),  and the rules and  regulations  thereunder,
including, without limitation, Rules 10b-5 under the Exchange Act, provided that
each  party  shall  be  entitled  to  rely   conclusively   on  any  information
communicated by the other party concerning such other party's market activities.
Party A  represents  to Party B and  agrees  that,  in  effecting  the  purchase
transactions referred to opposite  "Accumulation  Period",  above, Party A shall
make bids for and  purchases  of the Shares only in  accordance  with the price,
volume,  timing,  and method of bidding and purchasing  constraints set forth in
Rule 10b-18 under the Exchange  Act, as if Party A were the issuer of the Shares
and wished to avail itself of the protections afforded by that rule.

6.       Miscellaneous

     Transfer:  Party A may without  the consent of Party B assign and  delegate
its  rights  and  obligations  hereunder,  in  whole  or in  part,  to any  U.S.
subsidiary  of The Bank of Nova Scotia  effective  upon delivery to Party B of a
guarantee  by The  Bank of  Nova  Scotia;  provided  that,  at the  time of such
proposed  assignment  (i) no  Termination  Event,  Event of Default or Potential
Event of  Default  as  defined in this  Agreement  shall  have  occurred  and be
continuing  with respect to Party A, (ii) no Early  Termination  Date shall have
been  designated or shall have occurred,  (iii) Party B will not, as a result of
such  transfer,  be required  to pay to the  transferee  on the next  succeeding
Scheduled  Payment Date (as defined in the ISDA  Agreement) an amount in respect
of an Indemnifiable  Tax under Section  2(d)(i)(4) of the ISDA Agreement (except
in respect of interest under Section 2(e)) greater than the amount in respect of
which Party B would have been  required to pay to Party A in the absence of such
assignment,  (iv) the  assignee  will  not,  as a result  of such  transfer,  be
required to withhold or deduct on account of a Tax under Section  2(d)(i) of the
ISDA Agreement (except in respect of interest under 2(e)) on the next succeeding
Scheduled Payment Date an amount in excess of that which Party A would have been
required  to so withhold or deduct on the next  succeeding  Payment  Date in the
absence  of such  assignment  unless  the  assignee  would be  required  to make
additional   payment   pursuant  to  Section   2(d)(4)  of  the  ISDA  Agreement
corresponding to such excess,  and (v) an Event of Default or Termination  Event
will not occur as a result  of such  assignment.  With  respect  to the  results
described  in Clauses  (iii) and (iv) above,  Party A will cause the assignee to
make, and Party B will make, such reasonable Payer Tax Representations and Payee
Tax  Representations as may be reasonably  requested by the other party in order
to permit  such other party to  determine  that such result will not occur after
such transfer. Party A will cause any assignee to deliver opinions of counsel in
the form and  substance  reasonably  satisfactory  to Party B and to cause  such
assignee  to enter  into  any  legally  required  assumption  or  other  similar
agreement,  in each case at the expense of Party A. Any assignment  permitted by
the foregoing  sentences will not constitute an event or condition  described in
Sections 5(a)(viii) and 5(b)(iv) of the ISDA Agreement.

     Wire  Instructions:  Party A: The Bank of Nova Scotia,  New York Agency One
Liberty Plaza, 165 Broadway,  26th Floor New York, New York SWIFT Code: NOSCUS33
ABA# 0260-02532 Account No.: 6027-36 Attention: IBD Derivative Products

                                            Party B:
                                            (please provide)

7.            Offices

              (a) The Office of Party A for this Transaction is New York; and

              (b)  The  Office  of  Party B for  this  Transaction  is  Hammond,
Indiana.


<PAGE>




           Please  confirm that the foregoing  correctly sets forth the terms of
our  agreement  by  executing  the copy of this  Confirmation  enclosed for that
purpose  and  returning  it to us or by  sending  to us a  letter  or  facsimile
substantially  similar to this letter,  which letter or facsimile sets forth the
material  terms  of the  Transaction  to which  this  Confirmation  relates  and
indicates agreement to those terms.

                                                     Yours truly,

                            SCOTIA CAPITAL (USA) INC.




                         By:____________________________


<PAGE>


                                                   Name:
                                                   Title:




Confirmed as of the date first above written:

NiSOURCE INC.




By:__________________________________
Name:      Stephen P. Adik
Title:     Senior Executive Vice President,
           Chief Financial Officer and
           Treasurer