Document:

exv10w1

 

EXHIBIT 10.1

Execution Copy

 

NiSource Finance Corp., as Issuer, 

and

NiSource Inc., as Guarantor

$315,000,000 5.21% Series A Senior Notes due November 28, 2012

$230,000,000 5.36% Series B Senior Notes due November 28, 2015

$90,000,000 5.41% Series C Senior Notes due November 28, 2016

$265,000,000 5.89% Series D Senior Notes due November 28, 2025

 

Note Purchase Agreement

 

Dated August 23, 2005

 

 

 

Table of Contents

	 	 	 	 	 	 	 
	Section	 	Heading	 	Page
	Section 1. Authorization of Notes	 	 	1	 
	 
	 	 	 	 	 	 
	Section 2. Sale and Purchase of Notes	 	 	1	 
	 
	 	 	 	 	 	 
	Section 3. Closing	 	 	2	 
	 
	 	 	 	 	 	 
	Section 4. Conditions to Closing	 	 	2	 
	 
	 	 	 	 	 	 
	 

	 	Section 4.1 Representations and Warranties
	 	 	2	 
	 
	 	 	 	 	 	 
	 

	 	Section 4.2 Performance; No Default
	 	 	2	 
	 
	 	 	 	 	 	 
	 

	 	Section 4.3 Compliance Certificates, Etc
	 	 	2	 
	 
	 	 	 	 	 	 
	 

	 	Section 4.4 Opinions of Counsel
	 	 	3	 
	 
	 	 	 	 	 	 
	 

	 	Section 4.5 Purchase Permitted By Applicable Law, Etc
	 	 	3	 
	 
	 	 	 	 	 	 
	 

	 	Section 4.6 Sale of Other Notes
	 	 	3	 
	 
	 	 	 	 	 	 
	 

	 	Section 4.7 Payment of Special Counsel Fees
	 	 	3	 
	 
	 	 	 	 	 	 
	 

	 	Section 4.8 Private Placement Number
	 	 	4	 
	 
	 	 	 	 	 	 
	 

	 	Section 4.9 Changes in Corporate Structure
	 	 	4	 
	 
	 	 	 	 	 	 
	 

	 	Section 4.10 Funding Instructions
	 	 	4	 
	 
	 	 	 	 	 	 
	 

	 	Section 4.11 Call of CEG Debt
	 	 	4	 
	 
	 	 	 	 	 	 
	 

	 	Section 4.12 Proceedings and Documents
	 	 	4	 
	 
	 	 	 	 	 	 
	Section 5. Representations and Warranties of the Obligors	 	 	4	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.1 Organization; Power and Authority
	 	 	4	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.2 Authorization, Etc
	 	 	5	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.3 Disclosure
	 	 	5	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.4 Organization and Ownership of Shares of Subsidiaries
	 	 	5	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.5 Financial Statements; Material Liabilities
	 	 	6	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.6 Compliance with Laws, Other Instruments, Etc
	 	 	6	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.7 Governmental Authorizations, Etc
	 	 	6	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.8 Litigation; Observance of Agreements, Statutes and Orders
	 	 	6	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.9 Taxes
	 	 	7	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.10 Title to Property; Leases
	 	 	7	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.11 Licenses, Permits, Etc
	 	 	7	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.12 Compliance with ERISA
	 	 	8	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.13 Private Offering
	 	 	9	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.14 Use of Proceeds; Margin Regulations
	 	 	9	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.15 Existing Indebtedness; Future Liens
	 	 	9	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.16 Foreign Assets Control Regulations, Etc
	 	 	10	 

-i-

 

TABLE OF CONTENTS
(continued)

	 	 	 	 	 	 	 
	Section	 	Heading	 	Page
	 

	 	Section 5.17 Status under Certain Statutes
	 	 	10	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.18 Environmental Matters
	 	 	10	 
	 
	 	 	 	 	 	 
	 

	 	Section 5.19 Solvency
	 	 	11	 
	 
	 	 	 	 	 	 
	Section 6. Representations of the Purchaser	 	 	11	 
	 
	 	 	 	 	 	 
	 

	 	Section 6.1 Purchase for Investment
	 	 	11	 
	 
	 	 	 	 	 	 
	 

	 	Section 6.2 Source of Funds
	 	 	11	 
	 
	 	 	 	 	 	 
	Section 7. Information as to Company	 	 	13	 
	 
	 	 	 	 	 	 
	 

	 	Section 7.1 Financial and Business Information
	 	 	13	 
	 
	 	 	 	 	 	 
	 

	 	Section 7.2 Officer’s Certificate
	 	 	15	 
	 
	 	 	 	 	 	 
	 

	 	Section 7.3 Visitation
	 	 	16	 
	 
	 	 	 	 	 	 
	Section 8. Payment and Prepayment of the Notes	 	 	16	 
	 
	 	 	 	 	 	 
	 

	 	Section 8.1 Maturity
	 	 	16	 
	 
	 	 	 	 	 	 
	 

	 	Section 8.2 Optional Prepayments with Make-Whole Amount
	 	 	16	 
	 
	 	 	 	 	 	 
	 

	 	Section 8.3 Allocation of Partial Prepayments
	 	 	17	 
	 
	 	 	 	 	 	 
	 

	 	Section 8.4 Maturity; Surrender, Etc
	 	 	17	 
	 
	 	 	 	 	 	 
	 

	 	Section 8.5 Purchase of Notes
	 	 	17	 
	 
	 	 	 	 	 	 
	 

	 	Section 8.6 Make-Whole Amount
	 	 	17	 
	 
	 	 	 	 	 	 
	Section 9. Affirmative Covenants	 	 	19	 
	 
	 	 	 	 	 	 
	 

	 	Section 9.1 Compliance with Law
	 	 	19	 
	 
	 	 	 	 	 	 
	 

	 	Section 9.2 Insurance
	 	 	19	 
	 
	 	 	 	 	 	 
	 

	 	Section 9.3 Maintenance of Properties
	 	 	19	 
	 
	 	 	 	 	 	 
	 

	 	Section 9.4 Payment of Taxes and Claims
	 	 	19	 
	 
	 	 	 	 	 	 
	 

	 	Section 9.5 Corporate Existence
	 	 	20	 
	 
	 	 	 	 	 	 
	 

	 	Section 9.6 Books and Records
	 	 	20	 
	 
	 	 	 	 	 	 
	Section 10. Negative Covenants	 	 	20	 
	 
	 	 	 	 	 	 
	 

	 	Section 10.1 Transactions with Affiliates
	 	 	20	 
	 
	 	 	 	 	 	 
	 

	 	Section 10.2 Merger, Consolidation, Etc
	 	 	20	 
	 
	 	 	 	 	 	 
	 

	 	Section 10.3 Terrorism Sanctions Regulations
	 	 	21	 
	 
	 	 	 	 	 	 
	 

	 	Section 10.4 Liens
	 	 	21	 
	 
	 	 	 	 	 	 
	 

	 	Section 10.5 Financial Covenant
	 	 	22	 
	 
	 	 	 	 	 	 
	Section 11. Events of Default	 	 	23	 
	 
	 	 	 	 	 	 
	Section 12. Remedies on Default, Etc	 	 	25	 
	 
	 	 	 	 	 	 
	 

	 	Section 12.1 Acceleration
	 	 	25	 

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TABLE OF CONTENTS
(continued)

	 	 	 	 	 	 	 
	Section	 	Heading	 	Page
	 

	 	Section 12.2 Other Remedies
	 	 	25	 
	 
	 	 	 	 	 	 
	 

	 	Section 12.3 Rescission
	 	 	26	 
	 
	 	 	 	 	 	 
	 

	 	Section 12.4 No Waivers or Election of Remedies, Expenses, Etc
	 	 	26	 
	 
	 	 	 	 	 	 
	Section 13. Registration; Exchange; Substitution of Notes	 	 	26	 
	 
	 	 	 	 	 	 
	 

	 	Section 13.1 Registration of Notes
	 	 	26	 
	 
	 	 	 	 	 	 
	 

	 	Section 13.2 Transfer and Exchange of Notes
	 	 	26	 
	 
	 	 	 	 	 	 
	 

	 	Section 13.3 Replacement of Notes
	 	 	27	 
	 
	 	 	 	 	 	 
	Section 14. Payments on Notes	 	 	27	 
	 
	 	 	 	 	 	 
	 

	 	Section 14.1 Place of Payment
	 	 	27	 
	 
	 	 	 	 	 	 
	 

	 	Section 14.2 Home Office Payment
	 	 	27	 
	 
	 	 	 	 	 	 
	Section 15. Expenses, Etc	 	 	28	 
	 
	 	 	 	 	 	 
	 

	 	Section 15.1 Transaction Expenses
	 	 	28	 
	 
	 	 	 	 	 	 
	 

	 	Section 15.2 Survival
	 	 	28	 
	 
	 	 	 	 	 	 
	Section 16. Survival of Representations and Warranties; Entire Agreement	 	 	28	 
	 
	 	 	 	 	 	 
	Section 17. Amendment and Waiver	 	 	29	 
	 
	 	 	 	 	 	 
	 

	 	Section 17.1 Requirements
	 	 	29	 
	 
	 	 	 	 	 	 
	 

	 	Section 17.2 Solicitation of Holders of Notes
	 	 	29	 
	 
	 	 	 	 	 	 
	 

	 	Section 17.3 Binding Effect, etc
	 	 	29	 
	 
	 	 	 	 	 	 
	 

	 	Section 17.4 Notes Held by NFC, etc
	 	 	30	 
	 
	 	 	 	 	 	 
	Section 18. Notices	 	 	30	 
	 
	 	 	 	 	 	 
	Section 19. Reproduction of Documents	 	 	30	 
	 
	 	 	 	 	 	 
	Section 20. Confidential Information	 	 	31	 
	 
	 	 	 	 	 	 
	Section 21. Substitution of Purchaser	 	 	32	 
	 
	 	 	 	 	 	 
	Section 22. Miscellaneous	 	 	32	 
	 
	 	 	 	 	 	 
	 

	 	Section 22.1 Successors and Assigns
	 	 	32	 
	 
	 	 	 	 	 	 
	 

	 	Section 22.2 Payments Due on Non-Business Days
	 	 	32	 
	 
	 	 	 	 	 	 
	 

	 	Section 22.3 Accounting Terms
	 	 	32	 
	 
	 	 	 	 	 	 
	 

	 	Section 22.4 Severability
	 	 	32	 
	 
	 	 	 	 	 	 
	 

	 	Section 22.5 Construction, etc
	 	 	33	 
	 
	 	 	 	 	 	 
	 

	 	Section 22.6 Counterparts
	 	 	33	 
	 
	 	 	 	 	 	 
	 

	 	Section 22.7 Governing Law
	 	 	33	 
	 
	 	 	 	 	 	 
	 

	 	Section 22.8 Jurisdiction and Process; Waiver of Jury Trial	 	 	33	 
	 
	 	 	 	 	 	 
	Section 23. The Guaranty	 	 	34	 

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	Schedule A

	 	—
	 	Information Relating to Purchasers
	 
	 	 	 	 
	Schedule B

	 	—
	 	Defined Terms
	 
	 	 	 	 
	Schedule 5.4

	 	—
	 	Subsidiaries of the Company
	 
	 	 	 	 
	Schedule 5.5

	 	—
	 	Financial Statements
	 
	 	 	 	 
	Schedule 5.8

	 	—
	 	Litigation, Environmental, Etc.
	 
	 	 	 	 
	Schedule 5.15

	 	—
	 	Existing Indebtedness
	 
	 	 	 	 
	Exhibit 1(a)

	 	—
	 	Form of 5.21% Series A Senior Note due November 28, 2012
	 
	 	 	 	 
	Exhibit 1(b)

	 	—
	 	Form of 5.36% Series B Senior Note due November 28, 2015
	 
	 	 	 	 
	Exhibit 1(c)

	 	—
	 	Form of 5.41% Series C Senior Note due November 28, 2016
	 
	 	 	 	 
	Exhibit 1(d)

	 	—
	 	Form of 5.89% Series D Senior Note due November 28, 2025
	 
	 	 	 	 
	Exhibit 4.4(a)(1)

	 	—
	 	Form of Opinion of Special Counsel for the Obligors
	 
	 	 	 	 
	Exhibit 4.4(a)(2)

	 	—
	 	Form of Opinion of Special PUHCA Counsel for the Obligors
	 
	 	 	 	 
	Exhibit 4.4(b)

	 	—
	 	Form of Opinion of Special Counsel for the Purchasers
	 
	 	 	 	 

 

 

NiSource Finance Corp.

NiSource Inc.

801 East 86th Avenue

Merrillville, Indiana 46410

August 23, 2005

	 
	To Each of the Purchasers Listed in

	     Schedule A Hereto:

Ladies and Gentlemen:

     NiSource Finance Corp., an Indiana corporation (“NFC”), and NiSource Inc., a Delaware
corporation (the “Company;” NFC and the Company being, collectively, the “Obligors”), agree with
each of the purchasers whose names appear at the end hereof (each, a “Purchaser” and, collectively,
the “Purchasers”) as follows:

SECTION 1. Authorization of Notes.

     NFC will authorize: (i) $315,000,000 aggregate principal amount of its 5.21% Series A Senior
Notes due November 28, 2012 (the “Series A Notes”), (ii) $230,000,000 aggregate principal amount of
its 5.36% Series B Senior Notes due November 28, 2015 (the “Series B Notes”), (iii) $90,000,000
aggregate principal amount of its 5.41% Series C Senior Notes due November 28, 2016 (the “Series C
Notes”), and (iv) $265,000,000 aggregate principal amount of its 5.89% Series D Senior Notes due
November 28, 2025 (the “Series D Notes”; the Series A Notes, the Series B Notes, the Series C Notes
and the Series D Notes are collectively referred to herein as the “Notes”, such term to include any
such notes issued in substitution therefor pursuant to Section 13 of this Agreement). The Series A
Notes, Series B Notes, Series C Notes and Series D Notes shall be substantially in the form set out
in Exhibit 1(a), Exhibit 1(b), Exhibit 1(c), and Exhibit 1(d), respectively. The Notes shall be
fully and unconditionally guaranteed by the Company pursuant to Section 23 of this Agreement.
Certain capitalized and other terms used in this Agreement are defined in Schedule B; and
references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an
Exhibit attached to this Agreement.

SECTION 2. Sale and Purchase of Notes.

     Subject to the terms and conditions of this Agreement, NFC will issue and sell to each
Purchaser and each Purchaser will purchase from NFC, at the Closing provided for in Section 3,
Notes in the principal amount and the Series specified opposite such Purchaser’s name in Schedule A
at the purchase price of 100% of the principal amount thereof. The Purchasers’ obligations
hereunder are several and not joint obligations and no Purchaser shall have any

 

 

liability to any Person for the performance or non-performance of any obligation by any other
Purchaser hereunder.

SECTION 3. Closing.

     The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the
offices of Dewey Ballantine LLP, 1301 Avenue of the Americas, New York, New York 10019, at 9:00
a.m., eastern standard time, at a closing (the “Closing”) on November 28, 2005 or on such other
Business Day on or prior to December 31, 2005 as may be agreed upon by the Company and the
Purchasers. At the Closing NFC will deliver to each Purchaser the Notes to be purchased by such
Purchaser in the form of a single Note for each Series to be so purchased (or such greater number
of Notes in denominations of at least $500,000 as such Purchaser may request) dated the date of the
Closing and registered in such Purchaser’s name (or in the name of its nominee), against delivery
by such Purchaser to NFC or its order of immediately available funds in the amount of the purchase
price therefor by wire transfer of immediately available funds for the account of NFC and pursuant
to the wire transfer instructions delivered pursuant to Section 4.10. If at the Closing NFC shall
fail to tender such Notes to any Purchaser as provided above in this Section 3, or any of the
conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s reasonable
satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under
this Agreement, without thereby waiving any rights such Purchaser may have by reason of such
failure or such nonfulfillment.

SECTION 4. Conditions to Closing.

     Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at
the Closing is subject to the fulfillment to such Purchaser’s reasonable satisfaction, prior to or
at the Closing, of the following conditions:

     Section 4.1 Representations and Warranties. The representations and warranties of each
Obligor in this Agreement shall be correct when made and at the time of the Closing.

     Section 4.2 Performance; No Default. Each Obligor shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed or complied with by
it prior to or at the Closing and after giving effect to the issue and sale of the Notes (and the
application of the proceeds thereof as contemplated by Section 5.14) no Default or Event of Default
shall have occurred and be continuing. Neither the Company nor any Subsidiary shall have entered
into any transaction since the date of the Memorandum that would have been prohibited by Sections
10.1, 10.2, 10.4 or 10.5 had such Sections applied since such date.

Section 4.3 Compliance Certificates, Etc.

     (a) Officer’s Certificate. Each Obligor shall have delivered to such Purchaser an
Officer’s Certificate, dated the date of the Closing, certifying that the conditions
specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

-2-

 

     (b) Secretary’s Certificate. Each Obligor shall have delivered to such Purchaser a
certificate of its Secretary or Assistant Secretary, dated the date of Closing, certifying
as to the resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes, the Guaranty and this Agreement, as
applicable.

     (c) Bring-Down Disclosure Report. Each Obligor shall have delivered to such Purchaser
the Bring-Down Disclosure Report, dated the date of Closing, and no matter disclosed in the
Bring-Down Disclosure Report, individually or in the aggregate, shall be of a nature that
could reasonably be expected to have a Material Adverse Effect.

     Section 4.4 Opinions of Counsel. Such Purchaser shall have received opinions in form and
substance reasonably satisfactory to such Purchaser, dated the date of the Closing (a) from Schiff
Hardin LLP, counsel for the Obligors, covering the matters set forth in Exhibit 4.4(a)(1) and
covering such other matters incident to the transactions contemplated hereby as such Purchaser or
its counsel may reasonably request but excluding matters covered by the opinion delivered pursuant
to clause (b) below, (b) from Thelen Reid & Priest LLP, special counsel for the Obligors covering
matters set forth in Exhibit 4.4(a)(2) relating to the Public Utility Holding Company Act of 1935,
as amended, (and the Obligors hereby instruct their counsel to deliver such opinions to the
Purchasers) and (c) from Dewey Ballantine LLP, the Purchasers’ special counsel in connection with
such transactions, substantially in the form set forth in Exhibit 4.4(b) and covering such other
matters incident to such transactions as such Purchaser may reasonably request.

     Section 4.5 Purchase Permitted By Applicable Law, Etc. On the date of the Closing such
Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each
jurisdiction to which such Purchaser is subject, without recourse to provisions (such as Section
1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (b) not violate any
applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or
liability under or pursuant to any applicable law or regulation, which law or regulation was not in
effect on the date hereof. If requested by such Purchaser, such Purchaser shall have received an
Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably
specify to enable such Purchaser to determine whether such purchase is so permitted.

     Section 4.6 Sale of Other Notes. Contemporaneously with the Closing NFC shall sell to each
other Purchaser and each other Purchaser shall purchase the Notes to be purchased by it at the
Closing as specified in Schedule A.

     Section 4.7 Payment of Special Counsel Fees. Without limiting the provisions of Section 15.1,
NFC shall have paid on or before the Closing the reasonable fees, charges and disbursements of the
Purchasers’ special counsel referred to in Section 4.4 to the extent reflected in a statement of
such counsel rendered to NFC at least one Business Day prior to the Closing.

-3-

 

     Section 4.8 Private Placement Number. A Private Placement Number issued by Standard & Poor’s
CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for each Series of the
Notes.

     Section 4.9 Changes in Corporate Structure. Neither Obligor shall have changed its
jurisdiction of incorporation or organization, as applicable, or been a party to any merger or
consolidation or succeeded to all or any substantial part of the liabilities of any other entity,
at any time following the date of the most recent financial statements referred to in Schedule 5.5.

     Section 4.10 Funding Instructions. At least three Business Days prior to the date of the
Closing, each Purchaser shall have received written instructions signed by a Responsible Officer on
letterhead of NFC confirming the wire transfer instructions for payment of the purchase price for
the Notes on the date of Closing including (i) the name and address of the transferee bank, (ii)
such transferee bank’s ABA number and (iii) the account name and number into which the purchase
price for the Notes is to be deposited.

     Section 4.11 Call of CEG Debt. The Company shall have duly delivered written irrevocable
notice of redemption of CEG Public Debt having an aggregate outstanding principal amount at least
equal to the aggregate principal amount of the Notes to be issued on the date of Closing and
setting forth as the date of redemption for such CEG Public Debt a date which is on (or not more
than 5 Business Days after) the date of Closing.

     Section 4.12 Proceedings and Documents. All corporate and other proceedings in connection
with the transactions contemplated by this Agreement and all documents and instruments incident to
such transactions shall be reasonably satisfactory to such Purchaser and its special counsel, and
such Purchaser and its special counsel shall have received all such counterpart originals or
certified or other copies of such documents as such Purchaser or such special counsel may
reasonably request.

SECTION 5. Representations and Warranties of the Obligors.

     Each Obligor represents and warrants to each Purchaser that as of the date of this Agreement
and, except as disclosed by the Obligors in a written instrument (the “Bring-Down Disclosure
Report”) to each Purchaser at or prior to the date of Closing, as of the date of Closing:

     Section 5.1 Organization; Power and Authority. Each Obligor is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of incorporation, and is
duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. Each Obligor has the corporate power and authority to own or
hold under lease the properties it purports to own or hold under lease, to transact the business it
transacts and proposes to transact, to execute and deliver this Agreement (including in the case of
the Company, without limitation, the Guaranty) and the Notes and to perform the provisions hereof
and thereof.

-4-

 

     Section 5.2 Authorization, Etc. This Agreement (including in the case of the Company, without
limitation, the Guaranty) and the Notes have been duly authorized by all necessary corporate action
on the part of each Obligor, as applicable, and this Agreement (including, without limitation, the
Guaranty) constitutes, and upon execution and delivery thereof each Note will constitute, a legal,
valid and binding obligation of each Obligor enforceable against such Obligor in accordance with
its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights
generally and (ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

     Section 5.3 Disclosure. The Obligors, through their agents, Banc of America Securities LLC
and J.P. Morgan Securities Inc., as joint bookrunning agents, have delivered to each Purchaser a
copy of a Private Placement Memorandum, dated July 2005 (the “Memorandum”), relating to the
transactions contemplated hereby. The Memorandum fairly describes, in all material respects, the
general nature of the business and principal properties of the Company and its Subsidiaries. This
Agreement, the Memorandum, the documents, certificates or other writings by or on behalf of the
Company in connection with the transactions contemplated hereby and the financial statements listed
in Schedule 5.5, in each case, delivered to the Purchasers prior to July 21, 2005 (this Agreement,
the Memorandum and such documents, certificates, writings and financial statements being referred
to, collectively, as the “Disclosure Documents”), taken as a whole, do not contain any untrue
statement of a material fact or omit to state any material fact necessary to make the statements
therein not misleading in light of the circumstances under which they were made. Except as
disclosed in the Disclosure Documents, since December 31, 2004, there has been no change in the
financial condition, operations, business, properties or prospects of the Company or any Subsidiary
except changes that individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect. There is no fact known to either Obligor that could reasonably be
expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure
Documents.

Section 5.4 Organization and Ownership of Shares of Subsidiaries.

     (a) Schedule 5.4 contains a complete and correct list of the Company’s Subsidiaries
required to be disclosed in Exhibit 21 to the most recent Form 10-K, showing, as to each
such Subsidiary, the correct name thereof and the jurisdiction of its organization.

     (b) All of the outstanding shares of capital stock or similar equity interests of each
Subsidiary shown in Schedule 5.4 are owned, directly or indirectly, by the Company and its
Subsidiaries and have been validly issued, are fully paid and nonassessable and are owned
free and clear of any Lien (except as otherwise disclosed in Schedule 5.4).

     (c) Each Subsidiary identified in Schedule 5.4 is a corporation or other legal entity
duly organized, validly existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other legal entity and is in
good standing in each jurisdiction in which such qualification is required by law, other
than those jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a

-5-

 

Material Adverse Effect. Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to own or hold under lease
and to transact the business it transacts and proposes to transact.

     (d) Except as described on Schedule 5.4, no Subsidiary is a party to, or otherwise
subject to any Material legal, regulatory, contractual or other restriction or any Material
agreement restricting the ability of such Subsidiary to pay dividends out of profits or make
any other similar distributions of profits to the Company or any of its Subsidiaries that
owns outstanding shares of capital stock or similar equity interests of such Subsidiary.

     Section 5.5 Financial Statements; Material Liabilities. The Obligors have delivered to each
Purchaser copies of the financial statements of the Company and its Subsidiaries listed on Schedule
5.5. All of said financial statements (including in each case the related schedules and notes)
fairly present in all material respects the consolidated financial position of the Company and its
Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of
their operations and cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except as set forth in
the notes thereto (subject, in the case of any interim financial statements, to normal year-end
adjustments). The Company and its Subsidiaries do not have any Material liabilities that are not
disclosed on such financial statements or otherwise disclosed in the Disclosure Documents.

     Section 5.6 Compliance with Laws, Other Instruments, Etc. The execution, delivery and
performance by either Obligor of this Agreement (including, without limitation, with respect to the
Company, the Guaranty) and, as to NFC, the Notes will not (i) contravene, result in any breach of,
or constitute a default under, or result in the creation of any Lien in respect of any property of
the Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease, corporate charter or by-laws, or any other agreement or instrument to
which the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of
their respective properties may be bound or affected, (ii) conflict with or result in a breach of
any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (iii) violate
any provision of any statute or other rule or regulation of any Governmental Authority applicable
to the Company or any Subsidiary.

     Section 5.7 Governmental Authorizations, Etc. No consent, approval or authorization of, or
registration, filing or declaration with, any Governmental Authority is required in connection with
the execution, delivery or performance by either Obligor of this Agreement (including, without
limitation, with respect to the Company, the Guaranty) or, as to NFC, the Notes, except in each
case as have been obtained and are in full force and effect.

     Section 5.8 Litigation; Observance of Agreements, Statutes and Orders.

     (a) Except as disclosed in Schedule 5.8, there are no actions, suits, investigations or
proceedings pending or, to the knowledge of either Obligor, threatened against or affecting
the Company or any Subsidiary or any property of the Company or

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any Subsidiary in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.

     (b) Neither the Company nor any Subsidiary is in default under any term of any
agreement or instrument to which it is a party or by which it is bound, or any order,
judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in
violation of any applicable law, ordinance, rule or regulation (including without limitation
Environmental Laws or the USA Patriot Act) of any Governmental Authority, which default or
violation, individually or in the aggregate, could reasonably be expected to have a Material
Adverse Effect.

     Section 5.9 Taxes. The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown to be due and
payable on such returns and all other taxes and assessments levied upon them or their properties,
assets, income or franchises, to the extent such taxes and assessments have become due and payable
and before they have become delinquent, except for any taxes and assessments (i) the amount of
which is not individually or in the aggregate Material or (ii) the amount, applicability or
validity of which is currently being contested in good faith by appropriate proceedings and with
respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves
in accordance with GAAP. The Obligors know of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on
the books of the Company and its Subsidiaries in respect of Federal, state or other taxes for all
fiscal periods are adequate. The Federal income tax liabilities of the Company and its
Subsidiaries have been finally determined (whether by reason of completed audits or the statute of
limitations having run) for all fiscal years up to and including the fiscal year ended 1998.

     Section 5.10 Title to Property; Leases. The Company and its Subsidiaries have good and
sufficient title to their respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet referred to in
Section 5.5 or purported to have been acquired by the Company or any Subsidiary after said date
(except as sold or otherwise disposed of), in each case free and clear of Liens prohibited by this
Agreement. All leases to which the Company or any Subsidiary is a party that individually or in
the aggregate are Material are valid and subsisting and are in full force and effect in all
material respects.

Section 5.11 Licenses, Permits, Etc.

(a) The Company and its Subsidiaries own or possess all licenses, permits, franchises,
authorizations, patents, copyrights, proprietary software, service marks, trademarks and
trade names, or rights thereto, that individually or in the aggregate are Material, without
known conflict with the rights of others.

(b) To the best knowledge of the Obligors, no product or service of the Company or any
of its Subsidiaries infringes in any material respect any license, permit,

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franchise, authorization, patent, copyright, proprietary software, service mark,
trademark, trade name or other right owned by any other Person.

     (c) To the best knowledge of the Obligors, there is no Material violation by any Person
of any right of the Company or any of its Subsidiaries with respect to any patent,
copyright, proprietary software, service mark, trademark, trade name or other right owned or
used by the Company or any of its Subsidiaries.

Section 5.12 Compliance with ERISA.

     (a) The Company and each ERISA Affiliate have operated and administered each Plan in
compliance with all applicable laws except for such instances of noncompliance as have not
resulted in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any unfunded obligation or benefit
liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans (as defined in Section 3 of ERISA), and no event,
transaction or condition has occurred or exists that could reasonably be expected to result
in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the
imposition of any Lien on any of the rights, properties or assets of the Company or any
ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty or
excise tax provisions or to Section 401(a)(29) or 412 of the Code or Section 4068 of ERISA,
other than such liabilities or Liens as would not be individually or in the aggregate
reasonably expected to have a Material Adverse Effect.

     (b) The present value of the aggregate benefit liabilities under each of the Plans
(other than Multiemployer Plans), determined as of the end of such Plan’s most recently
ended plan year on the basis of the actuarial assumptions specified for funding purposes in
such Plan’s most recent actuarial valuation report, did not exceed the aggregate current
value of the assets of such Plan allocable to such benefit liabilities by more than
$1,000,000 in the case of any single Plan and by more than $4,000,000 in the aggregate for
all Plans. The term “benefit liabilities” has the meaning specified in Section 4001 of
ERISA and the terms “current value” and “present value” have the meaning specified in
Section 3 of ERISA.

     (c) The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and
are not subject to contingent withdrawal liabilities) under Section 4201 or 4204 of ERISA in
respect of Multiemployer Plans that individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect.

     (d) The expected postretirement benefit obligation (determined as of the last day of
the Company’s most recently ended fiscal year in accordance with Financial Accounting
Standards Board Statement No. 106, without regard to liabilities attributable to
continuation coverage mandated by Section 4980B of the Code) of the Company and its
Subsidiaries is not Material.

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     (e) The execution and delivery of this Agreement and the issuance and sale of the Notes
hereunder will not involve any transaction that is subject to the prohibitions of Section
406 of ERISA or in connection with which a tax could be imposed pursuant to Section
4975(c)(1)(A)-(D) of the Code. The representation in the first sentence of this Section
5.12(e) with respect to any holder is made in reliance upon and subject to the accuracy of
such holder’s representation in Section 6.2 as to the sources of the funds used to pay the
purchase price of the Notes to be purchased by such holder.

     Section 5.13 Private Offering. Neither Obligor nor anyone acting on its behalf has offered
the Notes or the Guaranty or any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect thereof with, any person other
than the Purchasers and not more than 39 other Accredited Institutional Investors, each of which
has been offered the Notes and the Guaranty at a private sale for investment. Neither Obligor nor
anyone acting on its behalf has taken, or will take, any action that would subject the issuance or
sale of the Notes or the Guaranty to the registration requirements of Section 5 of the Securities
Act or to the registration requirements of any securities or blue sky laws of any applicable
jurisdiction.

     Section 5.14 Use of Proceeds; Margin Regulations. NFC will apply the proceeds of the sale of
the Notes as set forth in the Memorandum. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin
stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any securities under such
circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224)
or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220).
Margin stock does not constitute more than 25% of the value of the consolidated assets of either
Obligor and its Subsidiaries and neither Obligor has any present intention that margin stock will
constitute more than 25% of the value of such assets. As used in this Section, the terms “margin
stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said
Regulation U.

Section 5.15 Existing Indebtedness; Future Liens.

     (a) Except as described therein, Schedule 5.15 sets forth a complete and correct list
of all agreements evidencing outstanding Indebtedness that is Material of the Company and
its Subsidiaries as of June 30, 2005. Neither the Company nor any Subsidiary is in default
and no waiver of default is currently in effect, in the payment of any principal of or
interest on any such Indebtedness of the Company or such Subsidiary and no event or
condition exists with respect to any such Indebtedness of the Company or any Subsidiary that
would (i) permit (or that with notice or the lapse of time, or both, would permit) one or
more Persons to cause such Indebtedness to become due and payable before its stated maturity
or before its regularly scheduled dates of payment and (ii) as a result thereof constitute
an Event of Default.

     (b) Except as disclosed in Schedule 5.15, neither the Company nor any Subsidiary has
agreed or consented to cause or permit in the future (upon the happening

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of a contingency or otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien not permitted by Section 10.4.

     (c) Neither the Company nor any Subsidiary is a party to, or otherwise subject to any
provision contained in, any instrument evidencing Indebtedness that is Material of the
Company or such Subsidiary, any agreement relating thereto or any other Material agreement
(including, but not limited to, its charter or other organizational document) which limits
the amount of, or otherwise imposes (or could reasonably be expected to impose) restrictions
on the incurring of, the liabilities of the Obligors pursuant to this Agreement, except for
those instruments and agreements specifically indicated in Schedule 5.15.

Section 5.16 Foreign Assets Control Regulations, Etc.

     (a) Neither the sale of the Notes by NFC, the issuance of the Guaranty by the Company
hereunder nor the use of the proceeds of the Notes will violate the Trading with the Enemy
Act, as amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation
or executive order relating thereto.

     (b) Neither the Company nor any Subsidiary is a Person described or designated in the
Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets
Control or in Section 1 of the Anti-Terrorism Order. The Company and its Subsidiaries are
in compliance, in all material respects, with the USA Patriot Act.

     (c) No part of the proceeds from the sale of the Notes hereunder will be used, directly
or indirectly, for any payments to any governmental official or employee, political party,
official of a political party, candidate for political office, or anyone else acting in an
official capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as
amended, assuming in all cases that such Act applies to the Company.

     Section 5.17 Status under Certain Statutes. Neither the Company nor any Subsidiary is an
“investment company” registered or required to be registered under the Investment Company Act of
1940, as amended or is subject to regulation under the ICC Termination Act of 1995, as amended.
The Company is a “public utility holding company” within the meaning of the Public Utility Holding
Company Act of 1935, as amended (“PUHCA”). All necessary approvals under PUHCA for the issuance
and sale of the Notes and the issuance and delivery of the Guaranty have been obtained.

Section 5.18 Environmental Matters. Except as disclosed in Schedule 5.8:

     (a) Neither the Company nor any Subsidiary has knowledge of any claim or has received
any notice of any claim, and no proceeding has been instituted raising any claim against the
Company or any of its Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets, alleging any damage to
the environment or violation of any Environmental Laws, except,

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in each case, such as could not reasonably be expected to result in a Material Adverse
Effect.

     (b) Neither the Company nor any Subsidiary has knowledge of any facts which would give
rise to any claim, public or private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets or their use, except,
in each case, such as could not reasonably be expected to result in a Material Adverse
Effect.

     (c) Neither the Company nor any Subsidiary has stored any Hazardous Materials on real
properties now or formerly owned, leased or operated by any of them and has not disposed of
any Hazardous Materials in a manner contrary to any Environmental Laws in each case in any
manner that could reasonably be expected to result in a Material Adverse Effect.

     (d) All buildings on all real properties now owned, leased or operated by the Company
or any Subsidiary are in compliance with applicable Environmental Laws, except where failure
to comply could not reasonably be expected to result in a Material Adverse Effect.

     Section 5.19 Solvency. The Company is, and upon giving effect to the sale of the Notes on the
date of the Closing and the consummation of the transactions contemplated by this Agreement will
be, a “solvent institution”, as said term is used in Section 1405(c) of the New York Insurance Law,
whose “obligations . . . .are not in default as to principal or interest”, as said terms are used
in Section 1405(c).

SECTION 6. Representations of the Purchaser.

     Section 6.1 Purchase for Investment. Each Purchaser severally represents that it: (a) is an
Accredited Institutional Investor, (b) has had the opportunity to ask questions of the Obligors and
has received answers concerning the terms and conditions of the sale of the Notes, and (c) is
purchasing the Notes for its own account or for one or more separate accounts maintained by such
Purchaser or for the account of one or more pension or trust funds and not with a view to the
distribution thereof, provided that the disposition of such Purchaser’s or their property shall at
all times be within such Purchaser’s or their control. Each Purchaser understands that the Notes
have not been registered under the Securities Act and may be resold only if registered pursuant to
the provisions of the Securities Act or if an exemption from registration is available, except
under circumstances where neither such registration nor such an exemption is required by law, and
that the Company is not required to register the Notes.

     Section 6.2 Source of Funds. Each Purchaser severally represents that at least one of the
following statements is an accurate representation as to each source of funds (a “Source”) to be
used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser
hereunder:

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     (a) the Source is an “insurance company general account” (as the term is defined in the
United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in
respect of which the reserves and liabilities (as defined by the annual statement for life
insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general
account contract(s) held by or on behalf of any employee benefit plan together with the
amount of the reserves and liabilities for the general account contract(s) held by or on
behalf of any other employee benefit plans maintained by the same employer (or affiliate
thereof as defined in PTE 95-60) or by the same employee organization in the general account
do not exceed 10% of the total reserves and liabilities of the general account (exclusive of
separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed
with such Purchaser’s state of domicile; or

     (b) the Source is a separate account that is maintained solely in connection with such
Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to
any employee benefit plan (or its related trust) that has any interest in such separate
account (or to any participant or beneficiary of such plan (including any annuitant)) are
not affected in any manner by the investment performance of the separate account; or

     (c) the Source is either (i) an insurance company pooled separate account, within the
meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of the PTE
91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this
clause (c), no employee benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or

     (d) the Source constitutes assets of an “investment fund” (within the meaning of Part V
of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or
“QPAM” (within the meaning of Part V of the QPAM Exemption), no employee benefit plan’s
assets that are included in such investment fund, when combined with the assets of all other
employee benefit plans established or maintained by the same employer or by an affiliate
(within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are
satisfied, neither the QPAM nor a person controlling or controlled by the QPAM (applying the
definition of “control” in Section V(e) of the QPAM Exemption) owns a 5% or more interest in
the Company and (i) the identity of such QPAM and (ii) the names of all employee benefit
plans whose assets are included in such investment fund have been disclosed to the Company
in writing pursuant to this clause (d); or

     (e) the Source constitutes assets of a “plan(s)” (within the meaning of Section IV of
PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within
the meaning of Part IV of the INHAM exemption), the conditions of Part I(a), (g) and (h) of
the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled
by the INHAM (applying the definition of

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“control” in Section IV(d) of the INHAM Exemption) owns a 5% or more interest in the
Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit
plan(s) whose assets constitute the Source have been disclosed to the Company in writing
pursuant to this clause (e); or

     (f) the Source is a governmental plan; or

     (g) the Source is one or more employee benefit plans, or a separate account or trust
fund comprised of one or more employee benefit plans, each of which has been identified to
the Company in writing pursuant to this clause (g); or

     (h) the Source does not include assets of any employee benefit plan, other than a plan
exempt from the coverage of ERISA.

As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate
account” shall have the respective meanings assigned to such terms in Section 3 of ERISA.

SECTION 7. Information as to Company.

     Section 7.1 Financial and Business Information. The Company shall deliver to each holder of
Notes that is an Institutional Investor:

     (a) Quarterly Statements — within 60 days after the end of each quarterly fiscal period
in each fiscal year of the Company (other than the last quarterly fiscal period of each such
fiscal year), copies of,

     (1) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such quarter, and

     (2) consolidated statements of income and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second and third quarters)
for the portion of the fiscal year ending with such quarter,

setting forth in each case in comparative form the figures for the corresponding periods in
the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP
applicable to quarterly financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash flows, subject to
changes resulting from year-end adjustments, provided that delivery within the time period
specified above of copies of the Company’s Quarterly Report on Form 10-Q (the “Form 10-Q”)
prepared in compliance with the requirements therefor and filed with the SEC shall be deemed
to satisfy the requirements of this Section 7.1(a), provided, further, that the Company
shall be deemed to have made such delivery of such Form 10-Q if it shall have timely made
such Form 10-Q available on “EDGAR” (such availability being referred to as “Electronic
Delivery”);

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     (b) Annual Statements — within 120 days after the end of each fiscal year of the
Company, copies of

     (1) a consolidated balance sheet of the Company and its Subsidiaries as at the
end of such year, and

     (2) consolidated statements of income, shareholder’s equity and cash flows of
the Company and its Subsidiaries for such year,

setting forth in each case in comparative form the figures for the previous fiscal year, all
in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion
thereon of independent public accountants of recognized national standing, which opinion
shall state that such financial statements present fairly, in all material respects, the
financial position of the companies being reported upon and their results of operations and
cash flows and have been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made in accordance with
generally accepted auditing standards, and that such audit provides a reasonable basis for
such opinion in the circumstances, provided that the delivery within the time period
specified above of the Company’s Annual Report on Form 10-K (the “Form 10-K”) for such
fiscal year prepared in accordance with the requirements therefor and filed with the SEC,
shall be deemed to satisfy the requirements of this Section 7.1(b), provided, further, that
the Company shall be deemed to have made such delivery if it shall have timely made
Electronic Delivery thereof;

     (c) SEC and Other Reports — promptly upon their becoming available, one copy of each
regular or periodic report, each registration statement (without exhibits except as
expressly requested by such holder), and each prospectus and all amendments thereto filed by
the Company or any Subsidiary with the SEC and of all press releases filed by the Company or
any Subsidiary with the SEC concerning developments that are Material, provided that in each
case the Company shall be deemed to have made such delivery if it shall have timely made
Electronic Delivery thereof;

     (d) Notice of Default or Event of Default — promptly, and in any event within five
Business Days, after a Responsible Officer becoming aware of the existence of any Default or
Event of Default or that any Person has given any notice or taken any action with respect to
a claimed default hereunder or that any Person has given any notice or taken any action with
respect to a claimed default of the type referred to in Section 11(f), a written notice
specifying the nature and period of existence thereof and what action the Company is taking
or proposes to take with respect thereto;

     (e) ERISA Matters — promptly, and in any event within five Business Days, after a
Responsible Officer becoming aware of any of the following, a written notice setting forth
the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes
to take with respect thereto:

     (1) with respect to any Plan, any reportable event, as defined in Section
4043(c) of ERISA and the regulations thereunder, for which notice

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thereof has not been waived pursuant to such regulations as in effect on the
date hereof; or

     (2) the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan
that such action has been taken by the PBGC with respect to such Multiemployer Plan;
or

     (3) any event, transaction or condition that could result in the incurrence of
any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Code relating to employee
benefit plans, or in the imposition of any Lien on any of the rights, properties or
assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or
such penalty or excise tax provisions, if such liability or Lien, taken together
with any other such liabilities or Liens then existing, could reasonably be expected
to have a Material Adverse Effect;

     (f) Notices from Governmental Authority — promptly, and in any event within 30 days, of
receipt by a Responsible Officer thereof, copies of any written notice to the Company or any
Subsidiary from any Federal or state Governmental Authority relating to compliance or
non-compliance with any order, ruling, statute or other law or regulation that could
reasonably be expected to have a Material Adverse Effect; and

     (g) Requested Information — with reasonable promptness, such other data and information
relating to the business, operations, affairs, financial condition, assets or properties of
the Company or any of its Subsidiaries or relating to the ability of each Obligor to perform
its obligations hereunder and, with respect to NFC, under the Notes as from time to time may
be reasonably requested by any such holder of Notes.

     Section 7.2 Officer’s Certificate. Each set of financial statements delivered to a holder of
Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a
Senior Financial Officer setting forth (which, in the case of Electronic Delivery of any such
financial statements, shall be by separate substantially concurrent physical delivery of such
certificate to each such holder of Notes):

     (a) Covenant Compliance — the information (including detailed calculations) required in
order to establish whether the Company was in compliance with the requirements of Section
10.5, during the quarterly or annual period covered by the statements then being furnished;
and

     (b) Event of Default — a statement that such Senior Financial Officer has reviewed, or
caused review by a Responsible Officer of, the relevant terms hereof and such review shall
not have disclosed the existence during the quarterly or annual period covered by the
statements then being furnished any condition or event that constitutes a Default or an
Event of Default or, if any such condition or event existed or exists

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(including, without limitation, any such event or condition resulting from the failure
of the Company or any Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Company shall have taken or
proposes to take with respect thereto.

     Section 7.3 Visitation. Each Obligor shall permit the representatives of each holder of Notes
that is an Institutional Investor:

     (a) No Default — if no Default or Event of Default then exists, at the expense of such
holder and upon reasonable prior notice to such Obligor, to visit during normal business
hours the principal executive office of such Obligor, to discuss the affairs, finances and
accounts of such Obligor and its Subsidiaries with such Obligor’s officers, and (with the
consent of such Obligor, which consent will not be unreasonably withheld) its independent
public accountants, and (with the consent of such Obligor, which consent will not be
unreasonably withheld) to visit during normal business hours the other offices and
properties of such Obligor and each of its Subsidiaries, all as often as may be reasonably
requested in writing; and

     (b) Default — if a Default or Event of Default then exists, at the expense of each
Obligor to visit and inspect any of the offices or properties of such Obligor or any of its
Subsidiaries, to examine all their respective books of account, records, reports and other
papers, to make copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent public accountants (and
by this provision each Obligor authorizes said accountants to discuss the affairs, finances
and accounts of each Obligor and its Subsidiaries), all at such times and as often as may be
requested.

SECTION 8. Payment and Prepayment of the Notes.

     Section 8.1 Maturity. As provided therein, the entire unpaid principal balance of each Series
of the Notes shall be due and payable on the stated maturity date thereof.

     Section 8.2 Optional Prepayments with Make-Whole Amount. NFC may, at its option, upon notice
as provided below, prepay at any time all, or from time to time any part of, the Notes or any
Series of Notes, in an amount not less than $500,000 in the case of a partial prepayment, at 100%
of the principal amount so prepaid, and the Make-Whole Amount determined for the prepayment date
with respect to such principal amount. NFC will give each holder of Notes to be so prepaid written
notice of each such optional prepayment under this Section 8.2 not less than 30 days and not more
than 60 days prior to the date fixed for such prepayment. Each such notice shall specify such date
(which shall be a Business Day), the aggregate principal amount and Series of the Notes to be
prepaid on such date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.3), and the interest to be paid on the prepayment date
with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a
Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such
prepayment (calculated as if the date of such notice were the date of the prepayment), setting
forth the details of such computation. Two Business Days prior to such prepayment, NFC shall
deliver to each holder of

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Notes of the Series to be prepaid a certificate of a Senior Financial Officer specifying the
calculation of such Make-Whole Amount as of the specified prepayment date.

     Section 8.3 Allocation of Partial Prepayments. In the case of each partial prepayment of the
Notes of any Series, the principal amount of such Notes to be prepaid shall be allocated among all
of the Notes of such Series at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called for prepayment.

     Section 8.4 Maturity; Surrender, Etc. In the case of each prepayment of Notes pursuant to
this Section 8, the principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment (which shall be a Business Day), together with
interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless NFC shall fail to pay such principal amount when so due and
payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such
principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to
NFC and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid
principal amount of any Note.

     Section 8.5 Purchase of Notes. NFC will not and will not permit any of its Affiliates to
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes
of any Series except (a) upon the payment or prepayment of the Notes of any Series in accordance
with the terms of this Agreement and the Notes, or (b) pursuant to a written offer to purchase any
outstanding Notes of any Series made by NFC or any such Affiliate pro rata to the holders of all
the Notes of such Series upon the same terms and conditions. NFC will promptly cancel all Notes
acquired by it or any Affiliate pursuant to any payment or prepayment of Notes pursuant to any
provision of this Agreement and no Notes may be issued in substitution or exchange for any such
Notes.

     Section 8.6 Make-Whole Amount. “Make-Whole Amount” means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with
respect to the Called Principal of such Note over the amount of such Called Principal, provided
that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the
Make-Whole Amount, the following terms have the following meanings:

     “Called Principal” means, with respect to any Note, the principal of such Note that is
to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and
payable pursuant to Section 12.1, as the context requires.

     “Discounted Value” means, with respect to the Called Principal of any Note, the amount
obtained by discounting all Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the Settlement Date with respect to
such Called Principal, in accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which interest on such Note is
payable) equal to the Reinvestment Yield with respect to such Called Principal.

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     “Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50%
over the yield to maturity implied by (i) the yields reported as of 10:00 a.m. (New York
City time) on the second Business Day preceding the Settlement Date with respect to such
Called Principal, on the display designated as “Page PX1” (or such other display as may
replace Page PX1 on Bloomberg Financial Markets (“Bloomberg”) or, if Page PX1 (or its
successor screen on Bloomberg) is unavailable, the Telerate Access Service screen which
corresponds most closely to Page PX1 for the most recently issued actively traded U.S.
Treasury securities having a maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or (ii) if such yields are not reported as of
such time or the yields reported as of such time are not ascertainable (including by way of
interpolation), the Treasury Constant Maturity Series Yields reported, for the latest day
for which such yields have been so reported as of the second Business Day preceding the
Settlement Date with respect to such Called Principal, in Federal Reserve Statistical
Release H.15 (519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date. Such implied yield will be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to bond equivalent yields in
accordance with accepted financial practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with the maturity closest to and greater than such
Remaining Average Life and (2) the actively traded U.S. Treasury security with the maturity
closest to and less than such Remaining Average Life. The Reinvestment Yield shall be
rounded to the number of decimal places as appears in the interest rate of the applicable
Note.

     “Remaining Average Life” means, with respect to any Called Principal, the number of
years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called
Principal into (ii) the sum of the products obtained by multiplying (a) the principal
component of each Remaining Scheduled Payment with respect to such Called Principal by (b)
the number of years (calculated to the nearest one-twelfth year) that will elapse between
the Settlement Date with respect to such Called Principal and the scheduled due date of such
Remaining Scheduled Payment.

     “Remaining Scheduled Payments” means, with respect to the Called Principal of any Note,
all payments of such Called Principal and interest thereon that would be due after the
Settlement Date with respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such Settlement Date is not a
date on which interest payments are due to be made under the terms of such Note, then the
amount of the next succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on such Settlement Date
pursuant to Section 8.2 or Section 12.1.

     “Settlement Date” means, with respect to the Called Principal of any Note, the date on
which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is
declared to be immediately due and payable pursuant to Section 12.1, as the context
requires.

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SECTION 9. Affirmative Covenants.

     So long as any of the Notes are outstanding:

     Section 9.1 Compliance with Law. Each Obligor will, and will cause each of its Subsidiaries
to, comply with all laws, ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, ERISA, the USA Patriot Act and Environmental Laws, and will
obtain and maintain in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective properties or to the
conduct of their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations or failures to
obtain or maintain in effect such licenses, certificates, permits, franchises and other
governmental authorizations could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

     Section 9.2 Insurance. Each Obligor will, and will cause each of its Subsidiaries to,
maintain, with financially sound and reputable insurers, insurance with respect to their respective
properties and businesses against such casualties and contingencies, of such types, on such terms
and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves
are maintained with respect thereto) as is customary in the case of entities of established
reputations engaged in the same or a similar business and similarly situated, except in each case
to the extent that any non-compliance with the terms of this Section could not reasonably be
expected to have a Material Adverse Effect.

     Section 9.3 Maintenance of Properties. Each Obligor will, and will cause each of its
Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective properties
in good repair, working order and condition (other than ordinary wear and tear), so that the
business carried on in connection therewith may be properly conducted at all times, provided that
this Section shall not prevent any Obligor or any Subsidiary from discontinuing the operation and
the maintenance of any of its properties if such Obligor or Subsidiary has concluded such
discontinuance is desirable in the conduct of its business and could not reasonably be expected to
have a Material Adverse Effect.

     Section 9.4 Payment of Taxes and Claims. Each Obligor will, and will cause each of its
Subsidiaries to, file all tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all other taxes, assessments,
governmental charges, or levies imposed on them or any of their properties, assets, income or
franchises, to the extent such taxes, assessments, charges and levies have become due and payable
and before they have become delinquent and all claims for which sums have become due and payable
that have or might become a Lien on properties or assets of such Obligor or any of its
Subsidiaries, provided that neither the Obligors nor any of their Subsidiaries need make any such
filing or pay any such tax, assessment, charge, levy or claim if (i) if the amount, applicability
or validity thereof is contested by an Obligor or such Subsidiary on a timely basis in good faith
and in appropriate proceedings, and an Obligor or such Subsidiary has established adequate reserves
therefor in accordance with GAAP on the books of such Obligor or such Subsidiary or (ii) the
non-filing of all such returns and/or nonpayment of all such taxes,

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assessments, charges, or levies and claims (as the case may be) in the aggregate could not
reasonably be expected to have a Material Adverse Effect.

     Section 9.5 Corporate Existence. Subject to Section 10.2, each Obligor will at all times
preserve and keep in full force and effect its corporate existence. Each Obligor will at all times
preserve and keep in full force and effect the corporate existence of each of the Material
Subsidiaries (unless merged into the Company or a Wholly-Owned Subsidiary) and all Material rights
and franchises of such Obligor and of the Material Subsidiaries unless, in the good faith judgment
of an Obligor, the termination of or failure to preserve and keep in full force and effect such
corporate existence, right or franchise would not have a Material Adverse Effect.

     Section 9.6 Books and Records. Each Obligor will, and will cause each of its Subsidiaries to,
maintain proper books of record and account in conformity with GAAP and all applicable requirements
of any Governmental Authority having legal or regulatory jurisdiction over such Obligor or such
Subsidiary, as the case may be, except where failure to do so could not reasonably be expected to
result in a Material Adverse Effect.

SECTION 10. Negative Covenants.

     So long as any of the Notes are outstanding:

     Section 10.1 Transactions with Affiliates. The Obligors will not, and will not permit any of
their Subsidiaries to, enter into directly or indirectly any transaction or group of related
transactions (including without limitation the purchase, lease, sale or exchange of properties of
any kind or the rendering of any service) with any Affiliate (other than the Company or another
Subsidiary), except upon fair and reasonable terms no less favorable to such Obligor or such
Subsidiary than would be obtainable in a comparable arm’s-length transaction with a Person not an
Affiliate.

     Section 10.2 Merger, Consolidation, Etc. No Obligor will consolidate with or merge with any
other Person or convey, transfer or lease all or substantially all of its assets in a single
transaction or series of transactions to any Person unless:

     (a) the successor formed by such consolidation or the survivor of such merger or the
Person that acquires by conveyance, transfer or lease all or substantially all of the assets
of such Obligor as an entirety, as the case may be, shall be a solvent corporation, limited
liability company or other business entity organized and existing under the laws of the
United States or any State thereof (including the District of Columbia), and, if such
corporation, limited liability company or other business entity is not one of the Obligors,
(i) such corporation, limited liability company or other business entity shall have executed
and delivered to each holder of any Notes its assumption of the due and punctual performance
and observance of each covenant and condition of this Agreement (including, in the case of
the Company, the Guaranty) and, in the case of NFC, the Notes and (ii) such corporation,
limited liability company or other business entity shall have caused to be delivered to each
holder of any Notes an opinion of nationally recognized independent counsel, or other
independent counsel reasonably satisfactory to the Required Holders, to the effect that all
agreements or instruments effecting such

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assumption are enforceable in accordance with their terms and comply with the terms
hereof; and

     (b) immediately before and immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing.

No such conveyance, transfer or lease of substantially all of the assets of an Obligor in violation
of the terms of this Section shall have the effect of releasing such Obligor or any successor
corporation, limited liability company or other business entity that shall theretofore have become
such in the manner prescribed in this Section from its liability under this Agreement including, in
the case of the Company, the Guaranty or, in the case of NFC, the Notes.

     Section 10.3 Terrorism Sanctions Regulations. The Obligors will not, and will not permit any
of their Subsidiaries to, become a Person described or designated in the Specially Designated
Nationals and Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the
Anti-Terrorism Order.

     Section 10.4 Liens. The Obligors will not, and will not permit any of their Subsidiaries
(other than a Utility Subsidiary) to, create or suffer to exist any lien, security interest or
other charge or encumbrance (collectively, “Liens”) upon or with respect to any of its properties,
whether now owned or hereafter acquired, to secure or provide for or guarantee the payment of Debt
for Borrowed Money of any Person, without in any such case effectively securing, prior to or
concurrently with the creation, issuance, assumption or guaranty of any such Debt for Borrowed
Money, the Notes equally and ratably with (or prior to) such Debt for Borrowed Money; provided,
however, that the foregoing restrictions shall not apply to or prevent the creation or existence
of:

     (a) (i) Liens on any property acquired, constructed or improved by the Company or any
of its Subsidiaries (other than a Utility Subsidiary) after the date of this Agreement that
are created or assumed prior to, contemporaneously with, or within 180 days after, such
acquisition or completion of such construction or improvement, to secure or provide for the
payment of all or any part of the purchase price of such property or the cost of such
construction or improvement; or (ii) in addition to Liens contemplated by clauses (b) and
(c) below, Liens on any property existing at the time of acquisition thereof, provided that
the Liens shall not apply to any property theretofore owned by the Company or any such
Subsidiary other than, in the case of any such construction or improvement, (1) unimproved
real property on which the property so constructed or the improvement is located, (2) other
property (or improvements thereon) that is an improvement to or is acquired or constructed
for specific use with such acquired or constructed property (or improvement thereof), and
(3) any rights and interests (A) under any agreements or other documents relating to, or (B)
appurtenant to, the property being so constructed or improved or such other property;

     (b) existing Liens on any property or indebtedness of a Person that is merged with or
into or consolidated with the Company or any of its Subsidiaries; provided that such Lien
was not created in contemplation of such merger or consolidation;

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     (c) Liens on any property or indebtedness of a Person existing at the time such Person
becomes a Subsidiary of the Company; provided that such Lien was not created in
contemplation of such occurrence;

     (d) Liens to secure Debt for Borrowed Money of a Subsidiary of the Company to the
Company or to another Subsidiary of the Company;

     (e) Liens in favor of the United States of America, any State, any foreign country or
any department, agency or instrumentality or political subdivision of any such jurisdiction,
to secure partial, progress, advance or other payments pursuant to any contract or statute
or to secure any Debt for Borrowed Money incurred for the purpose of financing all or any
part of the purchase price of the cost of constructing or improving the property subject to
such Liens, including, without limitation, Liens to secure Debt for Borrowed Money of the
pollution control or industrial revenue bond type;

     (f) Liens existing on the date of this Agreement;

     (g) Liens for the sole purposes of extending, renewing or replacing in whole or in part
Debt for Borrowed Money secured by any Lien referred to in the foregoing clauses (a) through
(f), inclusive, or this clause (g); provided, however, that the principal amount of Debt for
Borrowed Money secured thereby shall not exceed the principal amount of Debt for Borrowed
Money so secured at the time of such extension, renewal or replacement (which, for purposes
of this limitation as it applies to a synthetic lease, shall be deemed to be (x) the
lessor’s original cost of the property subject to such lease at the time of extension,
renewal or replacement, less (y) the aggregate amount of all prior payments under such lease
allocated pursuant to the terms of such lease to reduce the principal amount of the lessor’s
investment, and borrowings by the lessor, made to fund the original cost of the property),
and that such extension, renewal or replacement shall be limited to all or a part of the
property or indebtedness which secured the Lien so extended, renewed or replaced (plus
improvements on such property);

     (h) Liens on any property or assets of a Project Financing Subsidiary, or on any equity
investment in a Project Financing Subsidiary, in either such case, that secure only a
Project Financing or a Contingent Guaranty that supports a Project Financing; or

     (i) Any Lien, other than a Lien described in any of the foregoing clauses (a) through
(h), inclusive, to the extent that it secures Debt for Borrowed Money, or guaranties
thereof, the outstanding principal balance of which at the time of creation of such Lien,
when added to the aggregate principal balance of all Debt for Borrowed Money secured by
Liens incurred under this clause (i) then outstanding, does not exceed 10% of Consolidated
Net Tangible Assets.

     Section 10.5 Financial Covenant. The Debt to Capitalization Ratio shall not be more than 0.75
to 1.00 at any time.

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SECTION 11. Events of Default.

     An “Event of Default” shall exist if any of the following conditions or events shall occur and
be continuing:

     (a) NFC defaults in the payment of any principal or Make-Whole Amount, if any, on any
Note when the same becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration or otherwise; or

     (b) NFC defaults in the payment of any interest on any Note for more than five Business
Days after the same becomes due and payable; or

     (c) any Obligor defaults in the performance of or compliance with any term contained in
Section 7.1(d) or Sections 10.1 through 10.5; or

     (d) any Obligor defaults in the performance of or compliance with any term contained
herein (other than those referred to in Sections 11(a), (b) and (c)) and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual
knowledge of such default and (ii) any Obligor receiving written notice of such default from
any holder of a Note (any such written notice to be identified as a “notice of default” and
to refer specifically to this Section 11(d)); or

     (e) any representation or warranty made in writing by or on behalf of an Obligor or by
any officer of an Obligor in this Agreement or in any writing furnished in connection with
the transactions contemplated hereby proves to have been false or incorrect in any material
respect on the date as of which made; or

     (f) (i) any Obligor, or any of its Subsidiaries, is in default (as principal or as
guarantor or other surety) in the payment of any principal of or premium or make-whole
amount or interest on any Indebtedness that is outstanding in an aggregate principal amount
of at least $75,000,000 beyond any period of grace provided with respect thereto, or (ii)
any Obligor, or any of its Subsidiaries, is in default in the performance of or compliance
with any term of any evidence of any Indebtedness in an aggregate outstanding principal
amount of at least $75,000,000 or of any mortgage, indenture or other agreement relating
thereto or any other condition exists, and as a consequence of such default or condition
such Indebtedness has become, or has been declared (or one or more Persons are entitled to
declare such Indebtedness to be), due and payable before its stated maturity or before its
regularly scheduled dates of payment, or (iii) as a consequence of the occurrence or
continuation of any event or condition (other than the passage of time or the right of the
holder of Indebtedness to convert such Indebtedness into equity interests), (x) any Obligor,
or any of its Subsidiaries, has become obligated to purchase or repay Indebtedness before
its regular maturity or before its regularly scheduled dates of payment in an aggregate
outstanding principal amount of at least $75,000,000, or (y) one or more Persons have the
right to require any Obligor, or any of its Subsidiaries, so to purchase or repay such
Indebtedness; or

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     (g) any Obligor or any Substantial Subsidiary (i) is generally not paying, or admits in
writing its inability to pay, its debts as they become due, (ii) files, or consents by
answer or otherwise to the filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction,
(iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment
of a custodian, receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, (v) is adjudicated as insolvent or to
be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or

     (h) a court or Governmental Authority of competent jurisdiction enters an order
appointing, without consent by any Obligor or any Substantial Subsidiary, a custodian,
receiver, trustee or other officer with similar powers with respect to it or with respect to
any substantial part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding-up or liquidation of any Obligor or any Substantial Subsidiary, or
any such petition shall be filed against any Obligor or any Substantial Subsidiary and such
petition shall not be dismissed within 60 days; or

     (i) a final judgment or judgments for the payment of money aggregating in excess of
$75,000,000 are rendered against one or more of an Obligor or its Subsidiaries and which
judgments are not, within 60 days after entry thereof, bonded, discharged or stayed pending
appeal, or are not discharged within 60 days after the expiration of such stay or subject to
an insured claim by such Obligor or Subsidiary; or

     (j) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the
Code for any plan year or part thereof or a waiver of such standards or extension of any
amortization period is sought or granted under Section 412 of the Code, (ii) a notice of
intent to terminate any Plan shall have been or is reasonably expected to be filed with the
PBGC or the PBGC shall have instituted proceedings under ERISA Section 4042 to terminate or
appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any
ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) the
aggregate “amount of unfunded benefit liabilities” (within the meaning of Section
4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of ERISA,
shall exceed $75,000,000, (iv) the Company or any ERISA Affiliate shall have incurred or is
reasonably expected to incur any unfunded obligation or benefit liability pursuant to Title
I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee
benefit plans, (v) the Company or any ERISA Affiliate withdraws from any Multiemployer Plan,
or (vi) the Company or any Subsidiary establishes or amends any employee welfare benefit
plan that provides post-employment welfare benefits in a manner that would increase the
liability of the Company or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or together with any other
such event or events, could reasonably be expected to have a Material Adverse Effect; or

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     (k) the Guaranty provided by the Company in Section 23 hereto is held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in full force
and effect or the Company or any Person acting on behalf of the Company shall deny or
disaffirm its obligations under such Guaranty.

As used in Section 11(j), the terms “employee benefit plan” and “employee welfare benefit plan”
shall have the respective meanings assigned to such terms in Section 3 of ERISA.

SECTION 12. Remedies on Default, Etc.

     Section 12.1 Acceleration. (a) If an Event of Default with respect to either Obligor
described in Section 11(g) or (h) (other than an Event of Default described in clause (i) of
Section 11(g) or described in clause (vi) of Section 11(g) by virtue of the fact that such clause
encompasses clause (i) of Section 11(g)) has occurred, all the Notes then outstanding shall
automatically become immediately due and payable.

     (b) If any other Event of Default has occurred and is continuing, any holder or holders
of more than 50% in principal amount of the Notes at the time outstanding may at any time at
its or their option, by notice or notices to the Company, declare all the Notes then
outstanding to be immediately due and payable.

     (c) If any Event of Default described in Section 11(a), (b) or (k) has occurred and is
continuing, any holder or holders of Notes at the time outstanding affected by such Event of
Default may at any time, at its or their option, by notice or notices to the Company,
declare all the Notes held by it or them to be immediately due and payable.

     Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by
declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes,
plus (x) all accrued and unpaid interest thereon (including, but not limited to, interest accrued
thereon at the Default Rate) and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be immediately due and payable,
in each and every case without presentment, demand, protest or further notice, all of which are
hereby waived. The Obligors acknowledge, and the parties hereto agree, that each holder of a Note
has the right to maintain its investment in the Notes free from repayment by NFC (except as herein
specifically provided for) and that the provision for payment of a Make-Whole Amount by NFC in the
event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended
to provide compensation for the deprivation of such right under such circumstances.

     Section 12.2 Other Remedies. If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been declared immediately due
and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to
protect and enforce the rights of such holder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement contained herein or
in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in
aid of the exercise of any power granted hereby or thereby or by law or otherwise.

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     Section 12.3 Rescission. At any time after any Notes have been declared due and payable
pursuant to Section 12.1(b) or (c), the holders of not less than 50% in principal amount of the
Notes then outstanding, by written notice to any Obligor, may rescind and annul any such
declaration and its consequences if (a) there has been paid all overdue interest on the Notes, all
principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue principal and Make-Whole
Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of
the Notes, at the Default Rate, (b) neither Obligor nor any other Person shall have paid any
amounts which have become due solely by reason of such declaration, (c) all Events of Default and
Defaults, other than non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Section 17, and (d) no judgment or
decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No
rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of
Default or Default or impair any right consequent thereon.

     Section 12.4 No Waivers or Election of Remedies, Expenses, Etc. No course of dealing and no
delay on the part of any holder of any Note in exercising any right, power or remedy shall operate
as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right,
power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be
exclusive of any other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Without limiting the obligations of NFC
under Section 15, NFC will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection
under this Section 12, including, without limitation, reasonable attorneys’ fees, expenses and
disbursements.

SECTION 13. Registration; Exchange; Substitution of Notes.

     Section 13.1 Registration of Notes. NFC shall keep at its principal executive office a
register for the registration and registration of transfers of Notes. The name and address of each
holder of one or more Notes, each transfer thereof and the name and address of each transferee of
one or more Notes shall be registered in such register. Prior to due presentment for registration
of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as
the owner and holder thereof for all purposes hereof, and no Obligor shall be affected by any
notice or knowledge to the contrary. NFC shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct copy of the names and
addresses of all registered holders of Notes.

     Section 13.2 Transfer and Exchange of Notes. Upon surrender of any Note of any Series to NFC
at the address and to the attention of the designated officer (all as specified in Section 18(3)),
for registration of transfer or exchange (and in the case of a surrender for registration of
transfer accompanied by a written instrument of transfer duly executed by the registered holder of
such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant
name, address and other information for notices of each transferee of such Note or part thereof),
within ten Business Days thereafter, NFC shall execute and deliver, at NFC’s expense (except as
provided below), one or more new Notes (as requested by the

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holder thereof) of such Series in exchange therefor, in an aggregate principal amount equal to
the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such
Person as such holder may request and shall be substantially in the form of the Note surrendered.
Each such new Note shall be dated and bear interest from the date to which interest shall have been
paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have
been paid thereon. NFC may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $500,000, provided that if necessary to enable the
registration of transfer by a holder of its entire holding of Notes of a Series, one Note of such
Series may be in a denomination of less than $500,000. Any transferee, by its acceptance of a Note
registered in its name (or the name of its nominee), shall be deemed to have made the
representations set forth in Sections 6.1 and 6.2.

     Section 13.3 Replacement of Notes. Upon receipt by NFC at the address and to the attention of
the designated officer (all as specified in Section 18(3)) of evidence reasonably satisfactory to
it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence
shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and

     (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to
it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser
or another holder of a Note with a minimum net worth of at least $100,000,000, such Person’s
own unsecured agreement of indemnity shall be deemed to be satisfactory), or

     (b) in the case of mutilation, upon surrender and cancellation thereof,

within ten Business Days thereafter, NFC at its own expense shall execute and deliver, in lieu
thereof, a new Note of the same Series, dated and bearing interest from the date to which interest
shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

SECTION 14. Payments on Notes.

     Section 14.1 Place of Payment. Subject to Section 14.2, payments of principal, Make-Whole
Amount, if any, and interest becoming due and payable on the Notes shall be made in Merrillville,
Indiana at the principal office of NFC in such jurisdiction. NFC may at any time, by notice to
each holder of a Note, change the place of payment of the Notes so long as such place of payment
shall be either the principal office of NFC in the United States or the principal office of a bank
or trust company in the United States.

     Section 14.2 Home Office Payment. So long as any Purchaser or its nominee shall be the holder
of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, NFC will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any,
and interest by the method and at the address specified for such purpose below such Purchaser’s
name in Schedule A, or by such other method or at such other address as such Purchaser shall have
from time to time specified to NFC in writing for such purpose, without the

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presentation or surrender of such Note or the making of any notation thereon, except that upon
written request of NFC made concurrently with or reasonably promptly after payment or prepayment in
full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly
after any such request, to NFC at its principal executive office or at the place of payment most
recently designated by NFC pursuant to Section 14.1. Prior to any sale or other disposition of any
Note held by a Purchaser or its nominee, such Purchaser will, at its election, either endorse
thereon the amount of principal paid thereon and the last date to which interest has been paid
thereon or surrender such Note to NFC in exchange for a new Note or Notes pursuant to Section 13.2.
NFC will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct
or indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made
the same agreement relating to such Note as the Purchasers have made in this Section 14.2.

SECTION 15. Expenses, Etc.

     Section 15.1 Transaction Expenses. Whether or not the transactions contemplated hereby are
consummated, the Obligors will pay all reasonable costs and expenses (including reasonable
attorneys’ fees of one special counsel for all holders and, if reasonably required by the Required
Holders, local or other counsel) incurred by the Purchasers and each other holder of a Note in
connection with such transactions and in connection with any amendments, waivers or consents under
or in respect of this Agreement or the Notes (whether or not such amendment, waiver or consent
becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing
or defending (or determining whether or how to enforce or defend) any rights under this Agreement
or the Notes or in responding to any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement or the Notes, or by reason of being a holder of any
Note, (b) the reasonable costs and expenses incurred in connection with the insolvency or
bankruptcy of an Obligor or any Subsidiary or in connection with any work-out or restructuring of
the transactions contemplated hereby and by the Notes and (c) the reasonable costs and expenses
incurred in connection with the initial filing of this Agreement and all related documents and
financial information with the SVOs provided, that such costs and expenses under this clause (c)
shall not exceed $5,000.00 in the aggregate. The Obligors will pay, and will save each Purchaser
and each other holder of a Note harmless from, all claims in respect of any fees, costs or
expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser or
other holder in connection with its purchase of the Notes).

     Section 15.2 Survival. The obligations of NFC under this Section 15 will survive the payment
or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement,
the Guaranty or the Notes, and the termination of this Agreement.

SECTION 16. Survival of Representations and Warranties; Entire Agreement.

     All representations and warranties contained herein shall survive the execution and delivery
of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion
thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent
holder of a Note, regardless of any investigation made at any time by or on behalf of such
Purchaser or any other holder of a Note. All statements contained in any

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certificate or other instrument delivered by or on behalf of an Obligor pursuant to this
Agreement shall be deemed representations and warranties of such Obligor under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and
understanding between each Purchaser and the Obligors and supersede all prior agreements and
understandings relating to the subject matter hereof.

SECTION 17. Amendment and Waiver. 

     Section 17.1 Requirements. (a) This Agreement may be amended, and the observance of any term
hereof may be waived (either retroactively or prospectively), with (and only with) the written
consent of each of the Obligors and the Required Holders with respect to each Series, and (b) the
Notes of any Series may be amended, and the observance of any term thereof may be waived (either
retroactively or prospectively), with (and only with) the written consent of each of the Obligors
and the Required Holders with respect to such Series; provided, however, that (a) no amendment or
waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as
it is used therein), will be effective as to any Purchaser unless consented to by such Purchaser in
writing, and (b) no such amendment or waiver may, without the written consent of the holder of each
Note at the time outstanding affected thereby, (i) subject to the provisions of Section 12 relating
to acceleration or rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of interest or of the
Make-Whole Amount on, the Notes, (ii) change the percentage of the principal amount of the Notes
the holders of which are required to consent to any such amendment or waiver, or (iii) amend any of
Sections 8, 11(a), 11(b), 12, 17, 20 or 23.

Section 17.2 Solicitation of Holders of Notes.

     (a) Solicitation. NFC will provide each holder of the Notes (irrespective of the
amount of Notes then owned by it) with sufficient information, sufficiently far in advance
of the date a decision is required, to enable such holder to make an informed and considered
decision with respect to any proposed amendment, waiver or consent in respect of any of the
provisions hereof or of the Notes. NFC will deliver executed or true and correct copies of
each amendment, waiver or consent effected pursuant to the provisions of this Section 17 to
each holder of outstanding Notes promptly following the date on which it is executed and
delivered by, or receives the consent or approval of, the requisite holders of Notes.

     (b) Payment. NFC will not directly or indirectly pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or otherwise, or
grant any security or provide other credit support, to any holder of Notes as consideration
for or as an inducement to the entering into by any holder of Notes of any waiver or
amendment of any of the terms and provisions hereof unless such remuneration is concurrently
paid, or security is concurrently granted or other credit support concurrently provided, on
the same terms, ratably to each holder of Notes then outstanding that granted its consent to
such waiver or amendment.

     Section 17.3 Binding Effect, etc. Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is binding upon them and upon each

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future holder of any Note and upon the Obligors without regard to whether such Note has been
marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect
any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or
impair any right consequent thereon. No course of dealing between any Obligor and the holder of
any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a
waiver of any rights of any holder of such Note. As used herein, the term “this Agreement” and
references thereto shall mean this Agreement as it may from time to time be amended or
supplemented.

     Section 17.4 Notes Held by NFC, etc. Solely for the purpose of determining whether the
holders of the requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this Agreement or the
Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon
the direction of the holders of a specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by NFC or any of its Affiliates shall be
deemed not to be outstanding.

SECTION 18. Notices.

     All notices and communications provided for hereunder shall be in writing and sent (a) by
telecopy if the sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered or certified mail with return
receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:

     (1) if to any Purchaser or its nominee, to such Purchaser or nominee at the
address specified for such communications in Schedule A, or at such other address as
such Purchaser or nominee shall have specified to the Obligors in writing,

     (2) if to any other holder of any Note, to such holder at such address as such
other holder shall have specified to the Obligors in writing, or

     (3) if to either Obligor, to such Obligor at its address set forth at the
beginning hereof to the attention of Chief Financial Officer, or at such other
address as such Obligor shall have specified to the holder of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

SECTION 19. Reproduction of Documents.

     This Agreement and all documents relating thereto, including, without limitation, (a)
consents, waivers and modifications that may hereafter be executed, (b) documents received by any
Purchaser at the Closing (except the Notes themselves), and (c) financial statements, certificates
and other information previously or hereafter furnished to any Purchaser, may be reproduced by such
Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such
Purchaser may destroy any original document so reproduced. Each

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Obligor agrees and stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and whether or not such
reproduction was made by such Purchaser in the regular course of business) and any enlargement,
facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.
This Section 19 shall not prohibit any Obligor or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from introducing
evidence to demonstrate the inaccuracy of any such reproduction.

SECTION 20. Confidential Information.

     For the purposes of this Section 20, “Confidential Information” means information delivered to
any Purchaser by or on behalf of any Obligor or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was
clearly marked or labeled or otherwise adequately identified when received by such Purchaser as
being confidential information of such Obligor or such Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known to such Purchaser prior to the
time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such
Purchaser or any person acting on such Purchaser’s behalf, (c) otherwise becomes known to such
Purchaser other than through disclosure by an Obligor or any Subsidiary or (d) constitutes
financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly
available. Each Purchaser will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by such Purchaser in good faith to protect confidential
information of third parties delivered to such Purchaser, provided that such Purchaser may deliver
or disclose Confidential Information to (i) its directors, trustees, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably relates to the administration of
the investment represented by its Notes), (ii) its financial advisors and other professional
advisors who agree to hold confidential the Confidential Information substantially in accordance
with the terms of this Section 20, (iii) any other holder of any Note, (iv) any Institutional
Investor to which it sells or offers to sell such Note or any part thereof or any participation
therein (if such Person has agreed in writing prior to its receipt of such Confidential Information
to be bound by the provisions of this Section 20), (v) any Person from which it offers to purchase
any security of NFC or the Company (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this Section 20), (vi) any federal
or state regulatory authority having jurisdiction over such Purchaser, (vii) the NAIC or the SVO
or, in each case, any similar organization, or any nationally recognized rating agency that
requires access to information about such Purchaser’s investment portfolio, or (viii) any other
Person to which such delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to such Purchaser, (x) in response to
any subpoena or other legal process, (y) in connection with any litigation to which such Purchaser
is a party or (z) if an Event of Default has occurred and is continuing, to the extent such
Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in
the enforcement or for the protection of the rights and remedies under such Purchaser’s Notes, the
Guaranty and this Agreement. Each holder of a Note, by its acceptance of a Note, will be deemed to
have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were
a party to this Agreement. On reasonable request by any Obligor in connection with the delivery to
any holder of a Note of

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information required to be delivered to such holder under this Agreement or requested by such
holder (other than a holder that is a party to this Agreement or its nominee), such holder will
enter into an agreement with the Obligors embodying the provisions of this Section 20.

SECTION 21. Substitution of Purchaser.

     Each Purchaser shall have the right to substitute any one of its Affiliates as the purchaser
of the Notes that it has agreed to purchase hereunder, by written notice to the Obligors, which
notice shall be signed by both such Purchaser and such Affiliate, shall contain such Affiliate’s
agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the
accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such
notice, any reference to such Purchaser in this Agreement (other than in this Section 21), shall be
deemed to refer to such Affiliate in lieu of such original Purchaser. In the event that such
Affiliate is so substituted as a Purchaser hereunder and such Affiliate thereafter transfers to
such original Purchaser all of the Notes then held by such Affiliate, upon receipt by the Company
of notice of such transfer, any reference to such Affiliate as a “Purchaser” in this Agreement
(other than in this Section 21), shall no longer be deemed to refer to such Affiliate, but shall
refer to such original Purchaser, and such original Purchaser shall again have all the rights of an
original holder of the Notes under this Agreement.

SECTION 22. Miscellaneous.

     Section 22.1 Successors and Assigns. All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent holder of a Note)
whether so expressed or not.

     Section 22.2 Payments Due on Non-Business Days. Anything in this Agreement or the Notes to
the contrary notwithstanding (but without limiting the requirement in Section 8.4 that the notice
of any optional prepayment specify a Business Day as the date fixed for such prepayment), any
payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other
than a Business Day shall be made on the next succeeding Business Day without including the
additional days elapsed in the computation of the interest payable on such next succeeding Business
Day; provided that if the maturity date of any Note is a date other than a Business Day, the
payment otherwise due on such maturity date shall be made on the next succeeding Business Day and
shall include the additional days elapsed in the computation of interest payable on such next
succeeding Business Day.

     Section 22.3 Accounting Terms. All accounting terms used herein which are not expressly
defined in this Agreement have the meanings respectively given to them in accordance with GAAP.
Except as otherwise specifically provided herein, (i) all computations made pursuant to this
Agreement shall be made in accordance with GAAP, and (ii) all financial statements shall be
prepared in accordance with GAAP.

     Section 22.4 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any

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such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted
by law) not invalidate or render unenforceable such provision in any other jurisdiction.

     Section 22.5 Construction, etc. Each covenant contained herein shall be construed (absent
express provision to the contrary) as being independent of each other covenant contained herein, so
that compliance with any one covenant shall not (absent such an express contrary provision) be
deemed to excuse compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.

     For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be
deemed to be a part hereof.

     Section 22.6 Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be an original but all of which together shall constitute one instrument. Each
counterpart may consist of a number of copies hereof, each signed by less than all, but together
signed by all, of the parties hereto.

     Section 22.7 Governing Law. This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would permit the application of
the laws of a jurisdiction other than such State.

     Section 22.8 Jurisdiction and Process; Waiver of Jury Trial.

     (a) Each Obligor irrevocably submits to the non-exclusive jurisdiction of any New York
State or federal court sitting in the Borough of Manhattan, The City of New York, over any
suit, action or proceeding arising out of or relating to this Agreement, the Guaranty or the
Notes. To the fullest extent permitted by applicable law, each Obligor irrevocably waives
and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is
not subject to the jurisdiction of any such court, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding brought in
any such court and any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum.

     (b) Each Obligor consents to process being served by or on behalf of any holder of
Notes in any suit, action or proceeding of the nature referred to in Section 22.8(a) by
mailing a copy thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, return receipt requested, to it at its address specified in Section
18 or at such other address of which such holder shall then have been notified pursuant to
said Section. Each Obligor agrees that such service upon receipt (i) shall be deemed in
every respect effective service of process upon it in any such suit, action or proceeding
and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be
valid personal service upon and personal delivery to it. Notices hereunder shall be
conclusively presumed received as evidenced by a delivery

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receipt furnished by the United States Postal Service or any reputable commercial
delivery service.

     (c) Nothing in this Section 22.8 shall affect the right of any holder of a Note to
serve process in any manner permitted by law, or limit any right that the holders of any of
the Notes may have to bring proceedings against the Obligors in the courts of any
appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one
jurisdiction in any other jurisdiction.

     (d) The parties hereto hereby waive trial by jury in any action brought on
or with respect to this Agreement, the Notes or any other document executed in connection
herewith or therewith.

SECTION 23. The Guaranty.

     The Company, as primary obligor and not merely as a surety, hereby irrevocably, absolutely and
unconditionally guarantees (the “Guaranty”) to the holder of each Note and each of their respective
successors, endorsees, transferees and assigns (each a “Beneficiary” and collectively, the
“Beneficiaries”) the prompt and complete payment by NFC, as and when due and payable, of the
Obligations, in accordance with the terms of the Notes and this Agreement (collectively, the
“Credit Documents”). The Guaranty shall rank equally and pari passu with all other unsecured and
unsubordinated debt of the Company.

     The Company hereby guarantees that the Obligations will be paid strictly in accordance with
the terms of the Credit Documents, regardless of any law now or hereafter in effect in any
jurisdiction affecting any such terms or the rights of the Beneficiaries with respect thereto. The
obligations and liabilities of the Company under the provisions of this Section shall be absolute
and unconditional irrespective of: (i) any lack of validity or enforceability of any of the
Obligations or any Credit Document, or any delay, failure or omission to enforce or agreement not
to enforce, or the stay or enjoining, by order of court, by operation of law or otherwise, of the
exercise of any right with respect to the foregoing (including, in each case, without limitation,
as a result of the insolvency, bankruptcy or reorganization of any Beneficiary, NFC or any other
Person); (ii) any change in the time, manner or place of payment of, or in any other term in
respect of, all or any of the Obligations, or any other amendment or waiver of or consent to any
departure from the Credit Documents or any agreement or instrument relating thereto; (iii) any
exchange or release of, or non-perfection of any Lien on or in any collateral, or any release,
amendment or waiver of, or consent to any departure from, any other guaranty of, or agreement
granting security for, all or any of the Obligations; (iv) any claim, set-off, counterclaim,
defense or other rights that the Company may have at any time and from time to time against any
Beneficiary or any other Person, whether in connection with the transactions contemplated by this
Agreement or any unrelated transaction; or (v) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, NFC or any other guarantor or surety in
respect of the Obligations or the Company in respect hereof.

     The Guaranty provided for herein (i) is a guaranty of payment and not of collection; (ii) is a
continuing guaranty and shall remain in full force and effect until the Obligations have been paid
in full in cash; and (iii) shall continue to be effective or shall be reinstated, as the case may

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be, if at any time any payment, or any part thereof, of any of the Obligations is rescinded or
must otherwise be returned by any Beneficiary upon or as a result of the insolvency, bankruptcy,
dissolution, liquidation or reorganization of NFC or otherwise, all as though such payment had not
been made.

     The obligations and liabilities of the Company hereunder shall not be conditioned or
contingent upon the pursuit by any Beneficiary or any other Person at any time of any right or
remedy against NFC or any other Person that may be or become liable in respect of all or any part
of the Obligations or against any collateral security or guaranty therefor or right of setoff with
respect thereto.

     The Company hereby consents that, without the necessity of any reservation of rights against
the Company and without notice to or further assent by the Company, any demand for payment of any
of the Obligations made by any Beneficiary may be rescinded by such Beneficiary and any of the
Obligations continued after such rescission.

     The Company’s obligations under this Section shall be unconditional, irrespective of any lack
of capacity of NFC or any lack of validity or enforceability of any other provision of this
Agreement or any other Credit Document, and the provisions of this Section shall not be affected in
any way by any variation, extension, waiver, compromise or release of any or all of the Obligations
or of any security or guaranty from time to time therefor.

     The obligations of the Company under this Section shall not be reduced, limited, impaired,
discharged, deferred, suspended or terminated by any proceeding or action, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership, reorganization, marshalling of
assets, assignment for the benefit of creditors, composition with creditors, readjustment,
liquidation or arrangement of NFC or any similar proceedings or actions, or by any defense NFC may
have by reason of the order, decree or decision of any court or administrative body resulting from
any such proceeding or action. Without limiting the generality of the foregoing, the Company’s
liability shall extend to all amounts and obligations that constitute the Obligations and would be
owed by NFC, but for the fact that they are unenforceable or not allowable due to the existence of
any such proceeding or action.

     The Company hereby unconditionally waives in its capacity as a guarantor under this Section:
(i) promptness and diligence; (ii) notice of or proof of reliance by the holders of the Notes upon
the terms of this Section or acceptance of the terms of this Section; (iii) notice of the
incurrence of any Obligation by NFC or the renewal, extension or accrual of any Obligation or of
any circumstances affecting NFC’s financial condition or ability to perform the Obligations; (iv)
notice of any actions taken by the Beneficiaries or NFC or any other Person under any Credit
Document or any other agreement or instrument relating thereto; (v) all other notices, demands and
protests, and all other formalities of every kind in connection with the enforcement of the
Obligations, of the obligations of the Company hereunder or under any other Credit Document, the
omission of or delay in which, but for the provisions of this Section might constitute grounds for
relieving the Company of its obligations under this Section; (vi) any requirement that the
Beneficiaries protect, secure, perfect or insure any Lien or any property subject thereto, or
exhaust any right or take any action against NFC or any other Person or any collateral; and (vii)
each other circumstance, other than payment of the Obligations in full, that might otherwise

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result in a discharge or exoneration of, or constitute a defense to, the Company’s obligations
hereunder.

     No failure on the part of any Beneficiary to exercise, and no delay in exercising, any right,
remedy, power or privilege hereunder or under any Credit Document or any other agreement or
instrument relating thereto shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder or under any Credit Document or any
other agreement or instrument relating thereto preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The terms of this Section are in
addition to and not in limitation of any other rights, remedies, powers and privileges the
Beneficiaries may have by virtue of any other instrument or agreement heretofore, contemporaneously
herewith or hereafter executed by the Company or any other Person or by applicable law or
otherwise. All rights, remedies, powers and privileges of the Beneficiaries shall be cumulative
and may be exercised singly or concurrently. The rights, remedies, powers and privileges of the
Beneficiaries under this Section against the Company are not conditional or contingent on any
attempt by the Beneficiaries to exercise any of their rights, remedies, powers or privileges
against any other guarantor or surety or under the Credit Documents or any other agreement or
instrument relating thereto against NFC or against any other Person.

     The Company hereby acknowledges and agrees that, until the Obligations have been paid in full
in cash, under no circumstances shall it be entitled to be subrogated to any rights of any
Beneficiary in respect of the Obligations performed by it hereunder or otherwise, and the Company
hereby expressly and irrevocably waives, until the Obligations have been paid in full in cash, (i)
each and every such right of subrogation and any claims, reimbursements, right or right of action
relating thereto (howsoever arising), and (ii) each and every right to contribution,
indemnification, set-off or reimbursement, whether from NFC or any other Person now or hereafter
primarily or secondarily liable for any of the Obligations, and whether arising by contract or
operation of law or otherwise by reason of the Company’s execution, delivery or performance of this
Agreement.

     The Company represents and warrants that it has established adequate means of keeping itself
informed of NFC’s financial condition and of other circumstances affecting NFC’s ability to perform
the Obligations, and agrees that no holder of any Note shall have any obligation to provide to the
Company any information it may have, or hereafter receive, in respect of NFC.

     To further evidence the Guaranty set forth in this Section 23, the Company hereby agrees that
a notation of such Guaranty shall be endorsed by the Company (by manual or facsimile signature) on
each Note; provided that the Guaranty set forth in this Section 23 shall remain in full force and
effect notwithstanding any failure to endorse any Note. The delivery of any Note, after execution
thereof, shall constitute due delivery of the Guaranty set forth in this Agreement on behalf of the
Company.

* * * * *

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     If you are in agreement with the foregoing, please sign the form of agreement on a counterpart
of this Agreement and return it to the Obligors, whereupon this Agreement shall become a binding
agreement among you and each of the Obligors.

	 	 	 	 	 
	 	Very truly yours, 

NISOURCE FINANCE CORP.

 	 
	 	By:  	/s/ David J. Vajda
 	 
	 	 	Name:  	David J. Vajda 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

	 	 	 	 	 
	 	NISOURCE INC.

 	 
	 	By:  	/s/ David J. Vajda
 	 
	 	 	Name:  	David J. Vajda 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 

[Signature Page to Note Purchase Agreement ]

 

The foregoing is hereby

agreed to as of the

date thereof.

	 	 	 	 	 
	 	THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY

 	 
	 	By:  	/s/ David A. Barras
 	 
	 	 	Name:  	David A. Barras 	 
	 	 	Title:  	Its Authorized Representative 	 
	 
	 	ALLSTATE LIFE INSURANCE COMPANY

 	 
	 	By:  	/s/ William R. Schmidt
 	 
	 	 	Name:  	WILLIAM R. SCHMIDT 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	 	 
	 	By:  	                                  /s/ Jerry D. Zinkula
 	 
	 	 	Name:  	JERRY D. ZINKULA 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	

ALLSTATE INSURANCE COMPANY 

 	 
	 	By:  	/s/
William R. Schmidt
 	 
	 	 	Name:  	WILLIAM R. SCHMIDT 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	 	 
	 	By:  	                                 /s/ Jerry D. Zlnkula
 	 
	 	 	Name:  	JERRY D. ZlNKULA 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

 	 
	 	By:  	/s/ William R. Schmidt
 	 
	 	 	Name:  	WILLIAM R. SCHMIDT 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	 	 
	 	By:  	                                  /s/ Jerry D. Zinkula
 	 
	 	 	Name:  	JERRY D. ZINKULA 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA

 	 
	 	By:  	/s/ Estelle Simsolo
 	 
	 	 	Name:  	Estelle Simsolo 	 
	 	 	Title:  	Director 	 
	 
	 	AMERICAN MAYFLOWER LIFE INSURANCE COMPANY OF NEW YORK

 	 
	 	By:  	/s/ John R. Endres
 	 
	 	 	Name:  	John R. Endres 	 
	 	 	Title:  	Investment Officer 	 
	 

Signature Page

to NiSource Finance Corp. and NiSource Inc. Note Purchase Agreement

 

 

The foregoing is hereby

agreed to as of the

date thereof.

	 	 	 	 	 
	 	FIRST COLONY LIFE INSURANCE COMPANY

 	 
	 	By:  	/s/  John R. Endres
 	 
	 	 	Name:  	John R. Endres 	 
	 	 	Title:  	Investment Officer 	 
	 
	 	GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

 	 
	 	By:  	
/s/ John R. Endres
 	 
	 	 	Name:  	John R. Endres 	 
	 	 	Title:  	Investment Officer 	 
	 
	 	GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY

 	 
	 	By:  	/s/ John R. Endres
 	 
	 	 	Name:  	John R. Endres 	 
	 	 	Title:  	Investment Officer 	 
	 
	 	ING USA ANNUITY AND LIFE INSURANCE COMPANY

RELIASTAR LIFE INSURANCE COMPANY

SECURITY LIFE OF DENVER INSURANCE COMPANY

ING LIFE INSURANCE AND ANNUITY COMPANY

By: ING Investment Management LLC, as Agent

 	 
	 	By:  	/s/ Paul Aronson
 	 
	 	 	Name:  	Paul Aronson 	 
	 	 	Title:  	Vice President 	 
	 
	 	ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA

 	 
	 	By:  	/s/ Gary Brown
 	 
	 	 	Name:  	Gary Brown 	 
	 	 	Title:  	Assistant Treasurer 	 
	 
	 	NEW YORK LIFE INSURANCE COMPANY

 	 
	 	By:  	/s/ Stuart Ashton
 	 
	 	 	Name:  	Stuart Ashton 	 
	 	 	Title:  	Investment Vice President 	 
	 

Signature Page

to NiSource Finance Corp. and NiSource Inc. Note Purchase Agreement

 

 

The foregoing is hereby

agreed to as of the

date thereof.

	 	 	 	 	 
	 	NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

By: New York Life Investment Management LLC, Its Investment Manager

 	 
	 	By:  	/s/ Stuart Ashton
 	 
	 	 	Name:  	Stuart Ashton 	 
	 	 	Title:  	Director 	 
	 
	 	NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION INSTITUTIONALLY OWNED LIFE INSURANCE SEPARATE ACCOUNT

By: New York Life Investment Management LLC, Its Investment Manager

 	 
	 	By:  	/s/ Stuart Ashton
 	 
	 	 	Name:  	Stuart Ashton 	 
	 	 	Title:  	Director 	 
	 
	 	CONNECTICUT GENERAL LIFE INSURANCE COMPANY

By: CIGNA Investments, Inc. (authorized agent)

 	 
	 	By:  	/s/ Leonard Mazlish
 	 
	 	 	Name:  	Leonard Mazlish 	 
	 	 	Title:  	Managing Director 	 
	 
	 	LIFE INSURANCE COMPANY OF NORTH AMERICA

By: CIGNA Investments, Inc. (authorized agent)

 	 
	 	By:  	/s/ Leonard Mazlish
 	 
	 	 	Name:  	Leonard Mazlish 	 
	 	 	Title:  	Managing Director 	 
	 
	 	PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY

By: Provident Investment Management, LLC

 Its: Agent

 	 
	 	By:  	/s/ Ben Vance
 	 
	 	 	Name:  	Ben Vance 	 
	 	 	Title:  	Vice   President 	 
	 
	 	UNUM LIFE INSURANCE COMPANY OF AMERICA

By: Provident Investment Management, LLC 
Its: Agent

 	 
	 	By:  	/s/ Ben Vance
 	 
	 	 	Name:  	Ben Vance 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page

to NiSource Finance Corp. and NiSource Inc. Note Purchase Agreement

 

 

The foregoing is hereby

agreed to as of the

date thereof.

	 	 	 	 	 
	 	FIRST UNUM LIFE INSURANCE COMPANY

By: Provident Investment Management, LLC
 Its: Agent

 	 
	 	By:  	/s/ Ben Vance
 	 
	 	 	Name:  	Ben Vance 	 
	 	 	Title:  	Vice President 	 
	 
	 	COLONIAL LIFE & ACCIDENT INSURANCE COMPANY

By: Provident Investment Management, LLC 
Its: Agent

 	 
	 	By:  	/s/ Ben Vance
 	 
	 	 	Name:  	Ben Vance 	 
	 	 	Title:  	Vice President 	 
	 
	 	TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY

 	 
	 	By:  	/s/ Frederick B. Howard
 	 
	 	 	Name:  	Frederick B. Howard 	 
	 	 	Title:  	Vice President 	 
	 
	 	MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

By: Babson Capital Management LLC as Investment Adviser

 	 
	 	By:  	/s/ Mark A. Ahmed
 	 
	 	 	Name:  	Mark A. Ahmed 	 
	 	 	Title:  	Managing Director 	 
	 
	 	C.M. LIFE INSURANCE COMPANY

By: Babson Capital Management LLC as Investment Sub-Adviser

 	 
	 	By:  	/s/ Mark A. Ahmed
 	 
	 	 	Name:  	Mark A. Ahmed 	 
	 	 	Title:  	Managing Director 	 
	 
	 	MASSMUTUAL ASIA LIMITED

By: Babson Capital Management LLC as Investment Adviser

 	 
	 	By:  	/s/ Mark A. Ahmed
 	 
	 	 	Name:  	Mark a. Ahmed 	 
	 	 	Title:  	Managing Director 	 
	 

Signature Page

to NiSource Finance Corp. and NiSource Inc. Note Purchase Agreement

 

 

The foregoing is hereby

agreed to as of the

date thereof.

	 	 	 	 	 
	 	HAKONE FUND LLC

By: Babson Capital Management LLC as Investment Manager

 	 
	 	By:  	/s/ Mark A. Ahmed
 	 
	 	 	Name:  	Mark A. Ahmed 	 
	 	 	Title:  	Managing Director 	 
	 
	 	JACKSON NATIONAL LIFE INSURANCE COMPANY

By: PPM America, Inc., as attorney in fact, on behalf of Jackson National Life Insurance Company

 	 
	 	By:  	/s/ Mark Staub
 	 
	 	 	Name:  	Mark Staub, 	 
	 	 	Title:  	Vice President 	 
	 
	 	THRIVENT FINANCIAL FOR LUTHERANS

 	 
	 	By:  	/s/ Glen Vanic
 	 
	 	 	Name:  	Glen Vanic 	 
	 	 	Title:  	Portfolio Manager 	 
	 
	 	PROTECTIVE LIFE INSURANCE COMPANY

 	 
	 	By:  	/s/
Philip E. Passafiume
 	 
	 	 	Name:  	PHILIP E. PASSAFIUME 	 
	 	 	Title:  	VP-INVESTMENTS 	 
	 
	 	 	 
	 	By:  	                                           /s/ Belinda Bradley
 	 
	 	 	Name:  	Belinda Bradley 	 
	 	 	Title:  	Financial Analyst I 	 
	 
	 	AMERICAN REPUBLIC INSURANCE COMPANY

By: Advantus Capital Management, Inc.

 	 
	 	By:  	/s/ Kathleen H. Parker
 	 
	 	 	Name:  	Kathleen H. Parker 	 
	 	 	Title:  	Vice President 	 
	 
	 	BLUE CROSS AND BLUE SHIELD OF FLORIDA, INC.

By: Advantus Capital Management, Inc.

 	 
	 	By:  	/s/ Kathleen H. Parker
 	 
	 	 	Name:  	Kathleen H. Parker 	 
	 	 	Title:  	Vice President 	 
	 

Signature Page

to NiSource Finance Corp. and NiSource Inc. Note Purchase Agreement

 

 

The foregoing is hereby

agreed to as of the

date thereof.

	 	 	 	 	 
	 	THE CATHOLIC AID ASSOCIATION

By: Advantus Capital Management, Inc.

 	 
	 	By:  	/s/ James W. Tobin
 	 
	 	 	Name:  	James W. Tobin 	 
	 	 	Title:  	Vice President 	 
	 
	 	THE LAFAYETTE LIFE INSURANCE COMPANY

By: Advantus Capital Management, Inc.

 	 
	 	By:  	/s/ James W. Tobin
 	 
	 	 	Name:  	James W. Tobin 	 
	 	 	Title:  	Vice President 	 
	 
	 	MINNESOTA LIFE INSURANCE COMPANY

By: Advantus Capital Management, Inc.

 	 
	 	By:  	/s/ Joseph R. Betlei
 	 
	 	 	Name:  	Joseph R. Betlei 	 
	 	 	Title:  	Vice President 	 
	 
	 	MTL INSURANCE COMPANY

By: Advantus Capital Management, Inc.

 	 
	 	By:  	/s/ Joseph R. Betlei
 	 
	 	 	Name:  	Joseph R. Betlei 	 
	 	 	Title:  	Vice President 	 
	 
	 	THE RELIABLE LIFE INSURANCE COMPANY

By: Advantus Capital Management, Inc.

 	 
	 	By:  	/s/ Joseph R. Betlei
 	 
	 	 	Name:  	Joseph R. Betlei 	 
	 	 	Title:  	Vice President 	 
	 
	 	UNITED INSURANCE COMPANY OF AMERICA

By: Advantus Capital Management, Inc.

 	 
	 	By:  	/s/ John Leiviska
 	 
	 	 	Name:  	JOHN LEIVISKA 	 
	 	 	Title:  	VICE PRESIDENT 	 
	 

Signature Page

to NiSource Finance Corp. and NiSource Inc. Note Purchase Agreement

 

 

The foregoing is hereby

agreed to as of the

date thereof.

	 	 	 	 	 
	 	WESTERN UNITED LIFE ASSURANCE COMPANY

By: Advantus Capital Management, Inc.

 	 
	 	By:  	/s/ John Leiviska
 	 
	 	 	Name:  	JOHN LEIVISKA 	 
	 	 	Title:  	VICE PRESIDENT 	 
	 
	 	HARTFORD ACCIDENT AND INDEMNITY COMPANY

By: Hartford Investment Services, Inc.

 Its Agent and Attorney-in-Fact

 	 
	 	By:  	/s/ Ronald A. Mendel
 	 
	 	 	Name:  	Ronald A. Mendel 	 
	 	 	Title:  	Managing Director 	 
	 
	 	PHYSICIANS LIFE INSURANCE COMPANY

By: Hartford Investment Management Company

 Its Investment Advisor

 	 
	 	By:  	/s/ Ronald A. Mendel
 	 
	 	 	Name:  	Ronald A. Mendel 	 
	 	 	Title:  	Managing Director 	 
	 
	 	PHOENIX LIFE INSURANCE COMPANY

 	 
	 	By:  	/s/Christopher M. Wilkos
 	 
	 	 	Name:  	CHRISTOPHER M. WILKOS 	 
	 	 	Title:  	Senior Vice President

Corporate Portfolio Management

PHOENIX LIFE INSURANCE COMPANY 	 
	 
	 	PHL VARIABLE INSURANCE COMPANY

 	 
	 	By:  	/s/ Christopher M. Wilkos
 	 
	 	 	Name:  	CHRISTOPHER M. WILKOS, CFA 	 
	 	 	Title:  	SENIOR VICE PRESIDENT

CORPORATE PORTFOLIO MANAGEMENT

PHL VARIABLE INSURANCE COMPANY 	 
	 
	 	

AMERUS LIFE INSURANCE COMPANY

By: AmerUs Capital Management Group, Inc., its authorized attorney-in-fact

 	 
	 	By:  	/s/ Roger D. Fors
 	 
	 	 	Name:  	Roger D. Fors 	 
	 	 	Title:  	VP—Private Placements 	 
	 

Signature Page

to NiSource Finance Corp. and NiSource Inc. Note Purchase Agreement

 

 

The foregoing is hereby

agreed to as of the

date thereof.

	 	 	 	 	 
	 	AMERICAN INVESTORS LIFE INSURANCE COMPANY

By: AmerUs Capital Management Group, Inc., its authorized attorney-in-fact

 	 
	 	By:  	/s/ Roger D. Fors
 	 
	 	 	Name:  	Roger D. Fors 	 
	 	 	Title:  	VP - Private Placements 	 
	 
	 	ST. PAUL FIRE AND MARINE INSURANCE COMPANY

 	 
	 	By:  	/s/ Annette M. Masterson
 	 
	 	 	Name:  	Annette M. Masterson 	 
	 	 	Title:  	Assistant Vice President 	 
	 
	 	THE TRAVELERS INDEMNITY COMPANY

 	 
	 	By:  	/s/ Annette M. Masterson
 	 
	 	 	Name:  	Annette M. Masterson 	 
	 	 	Title:  	Assistant Vice President 	 
	 
	 	CONSECO LIFE INSURANCE COMPANY

By: 40|86 Advisors, Inc., acting as Investment Advisor

 	 
	 	By:  	/s/ Edwin Ferrell
 	 
	 	 	Name:  	Edwin Ferrell 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	CONSECO SENIOR HEALTH INSURANCE COMPANY

By: 40|86 Advisors, Inc., acting as Investment Advisor

 	 
	 	By:  	/s/ Edwin Ferrell
 	 
	 	 	Name:  	Edwin Ferrell 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	BANKERS LIFE AND CASUALTY COMPANY

By: 40|86 Advisors, Inc., acting as Investment Advisor

 	 
	 	By:  	/s/ Edwin Ferrell
 	 
	 	 	Name:  	Edwin Ferrell 	 
	 	 	Title:  	Senior Vice President 	 
	 

Signature Page

to NiSource Finance Corp. and NiSource Inc. Note Purchase Agreement

 

 

The foregoing is hereby

agreed to as of the

date thereof.

	 	 	 	 	 
	 	LIFE INSURANCE COMPANY OF THE SOUTHWEST

 	 
	 	By:  	/s/ R. Scott Higgins
 	 
	 	 	Name:  	R. Scott Higgins 	 
	 	 	Title:  	Vice President, NL Capital
Management 	 
	 
	 	NATIONAL LIFE INSURANCE COMPANY

 	 
	 	By:  	/s/ R. Scott Higgins
 	 
	 	 	Name:  	R. Scott Higgins 	 
	 	 	Title:  	Vice President, NL Capital
Management 	 
	 
	 	AMERICAN EQUITY INVESTMENT LIFE INSURANCE COMPANY

 	 
	 	By:  	/s/ Rachel S. Stauffer
 	 
	 	 	Name:  	Rachel S. Stauffer 	 
	 	 	Title:  	Vice President 	 
	 
	 	COUNTRY LIFE INSURANCE COMPANY

 	 
	 	By:  	
/s/ John A. Jacobs
 	 
	 	 	Name:  	John A. Jacobs 	 
	 	 	Title:  	Senior Investment Officer 	 
	 

Signature Page

to NiSource Finance Corp. and NiSource Inc. Note Purchase Agreement

 

 

schedule b

Defined Terms

     As used herein, the following terms have the respective meanings set forth below or set forth
in the Section hereof following such term:

     “Accredited Institutional Investor” means any Person that is both an “accredited investor”
(within the meaning of Rule 501(a) of Regulation D under the Securities Act) and a Qualified
Institutional Buyer.

     “Affiliate” means, at any time, and with respect to any Person, any other Person that at such
time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is
under common Control with, such first Person. As used in this definition, “Control” means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by contract or
otherwise. Unless the context otherwise clearly requires, any reference to an “Affiliate” is a
reference to an Affiliate of the Company.

     “Anti-Terrorism Order” means Executive Order No. 13,224 of September 24, 2001, Blocking
Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support
Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.

     “Beneficiary” is defined in Section 23.

     “Bring-Down Disclosure Report” is defined in Section 5.

     “Business Day” means (a) for the purposes of Section 8.6 only, any day other than a Saturday,
a Sunday or a day on which commercial banks in New York City are required or authorized to be
closed, and (b) for the purposes of any other provision of this Agreement, any day other than a
Saturday, a Sunday or a day on which commercial banks in New York, New York or Indianapolis,
Indiana are required or authorized to be closed.

     “Capital Lease” means, as to any Person, any lease of real or personal property in respect of
which the obligations of the lessee are required, in accordance with GAAP, to be capitalized on the
balance sheet of such Person.

     “Capital
Stock” means any and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all equivalent ownership interests
in a Person other than a corporation (including, but not limited to, all common stock and preferred
stock and partnership, membership and joint venture interests in a Person), and any and all
warrants, rights or options to purchase any of the foregoing.

     “CEG Public Debt” means the following indebtedness issued by Columbia: (i) 7.05% Series D
Notes due November 28, 2007, (ii) 7.32% Series E Notes due November 28, 2010, (iii) 7.42% Series F
Notes due November 28, 2015, (iv) 7.62% Series G Notes due November 28, 2025.

B-1

 

     “Closing” is defined in Section 3.

     “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules
and regulations promulgated thereunder from time to time.

     “Columbia”
means Columbia Energy Group, a Delaware corporation.

     “Company” is defined in the first paragraph of this Agreement.

     “Confidential Information” is defined in Section 20.

     “Consolidated
Capitalization” means the sum of (a) Consolidated Debt, (b) consolidated common
equity of the Company and its Consolidated Subsidiaries determined in accordance with GAAP, and (c)
the aggregate liquidation preference of preferred stocks (other than preferred stocks subject to
mandatory redemption or repurchase) of the Company and its Consolidated Subsidiaries upon
involuntary liquidation.

     “Consolidated
Debt” means, at any time, the Indebtedness of the Company and its Consolidated
Subsidiaries that would be classified as debt on a balance sheet of the Company determined on a
consolidated basis in accordance with GAAP.

     “Consolidated
Net Tangible Assets” means, at any time, the total amount of assets appearing on
a consolidated balance sheet of the Company and its Subsidiaries, determined in accordance with
GAAP and prepared as of the end of the fiscal quarter then most recently ended, less, without
duplication, the following:

     (a) all current liabilities (excluding any thereof that are by their terms extendable
or renewable at the sole option of the obligor thereon, without requiring the consent of the
obligee, to a date more than 12 months after the date of determination);

     (b) all reserves for depreciation and other asset valuation reserves (but excluding any
reserves for deferred Federal income taxes, arising from accelerated amortization or
otherwise);

     (c) all intangible assets, such as goodwill, trademarks, trade names, patents and
unamortized debt discount and expense, carried as an asset on such balance sheet; and

     (d) all appropriate adjustments on account of minority interests of other Persons
holding common stock of any Subsidiary of the Company.

     “Consolidated
Subsidiary” means, on any date, each Subsidiary of the Company the accounts of
which, in accordance with GAAP, would be consolidated with those of the Company in its consolidated
financial statements if such statements were prepared as of such date.

     “Contingent
Guaranty” means a direct or contingent liability in respect of a Project Financing
(whether incurred by assumption, guaranty, endorsement or otherwise) that either

B-2

 

(a) is limited to guarantying performance of the completion of the Project that is financed by
such Project Financing or (b) is contingent upon, or the obligation to pay or perform under which
is contingent upon, the occurrence of any event other than failure of the primary obligor to pay
upon final maturity (whether by acceleration or otherwise).

     “Credit Documents” is defined in Section 23.

     “Debt
for Borrowed Money” means, as to any Person, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, (c) all Capital Lease obligations of such Person, and (d) all
obligations of such Person under synthetic leases, tax retention operating leases, off-balance
sheet loans or other off-balance sheet financing products that, for tax purposes, are considered
indebtedness for borrowed money of the lessee but are classified as operating leases under GAAP.

     “Debt to Capitalization Ratio” means, at any time, the ratio of Consolidated Debt to
Consolidated Capitalization.

     “Default” means an event or condition the occurrence or existence of which would, with the
lapse of time or the giving of notice or both, become an Event of Default.

     “Default Rate” means, with respect to the Notes of any Series, that rate of interest that is
2% per annum above the rate of interest stated in clause (a) of the first paragraph of the Notes of
such Series.

     “Disclosure Documents” is defined in Section 5.3.

     “Electronic Delivery” is defined in Section 7.1(a).

     “Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including but
not limited to those related to Hazardous Materials.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time in effect.

     “ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated
as a single employer together with the Company under Section 414 of the Code.

     “Event of Default” is defined in Section 11.

     “Form 10-K” is defined in Section 7.1(b).

     “Form 10-Q” is defined in Section 7.1(a).

B-3

 

     “GAAP” means generally accepted accounting principles as in effect from time to time in the
United States of America.

“Governmental Authority” means

     (a) the government of

     (1) the United States of America or any State or other political subdivision
thereof, or

     (2) any other jurisdiction in which the Company or any Subsidiary conducts all
or any part of its business, or which asserts jurisdiction over any properties of
the Company or any Subsidiary, or

     (b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.

     “Guaranty” is defined in Section 23.

     “Hazardous Material” means any and all pollutants, toxic or hazardous wastes or other
substances that might pose a hazard to health and safety, the removal of which may be required or
the generation, manufacture, refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law including, but not
limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum,
petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized
substances.

     “holder” means, with respect to any Note the Person in whose name such Note is registered in
the register maintained by the NFC pursuant to Section 13.1.

     “Indebtedness” of any Person means (without duplication) (a) Debt for Borrowed Money of such
Person, (b) obligations of such Person to pay the deferred purchase price of property or services,
except trade accounts payable arising in the ordinary course of business which are not overdue, (c)
all obligations, contingent or otherwise, of such Person in respect of any letters of credit,
bankers’ acceptances or interest rate, currency or commodity swap, cap or floor arrangements, (d)
all indebtedness of others secured by (or for which the holder of such indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the indebtedness secured thereby has been assumed, (e) all amounts payable
by such Person in connection with mandatory redemptions or repurchases of preferred stock, and (f)
obligations of such Person under direct or indirect guarantees in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of others of the kinds referred to in
clauses (a) through (e) above.

B-4

 

     “Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a Note holding
(together with one or more of its affiliates) more than 5% of the aggregate principal amount of the
Notes then outstanding, (c) any bank, trust company, savings and loan association or other
financial institution, any pension plan, any investment company, any insurance company, any broker
or dealer, or any other similar financial institution or entity, regardless of legal form, and (d)
any Related Fund of any holder of any Note.

     “Lien” is defined in Section 10.4.

     “Make-Whole Amount” is defined in Section 8.6.

     “Material” means material in relation to the business, operations, affairs, financial
condition, assets, properties, or prospects of the Company and its Subsidiaries taken as a whole.

     “Material Adverse Effect” means a material adverse effect on (a) the business, operations,
affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a
whole, (b) the ability of the Obligors to perform their respective obligations under this
Agreement, the Guaranty and the Notes, or (c) the validity or enforceability of this Agreement, the
Guaranty or the Notes.

     “Material
Subsidiary” means at any time NFC, NIPSCO, Columbia, and each Subsidiary of the
Company, other than NFC, NIPSCO and Columbia, in respect of which: (a) the Company’s and its other
Subsidiaries’ investments in and advances to such Subsidiary and its Subsidiaries exceed 10% of the
consolidated total assets of the Company and its Subsidiaries taken as a whole, as of the end of
the most recent fiscal year; or (b) the Company’s and its other Subsidiaries’ equity in the income
from continuing operations before income taxes, extraordinary items and cumulative effect of a
change in accounting principles of such Subsidiary and its Subsidiaries exceeds 10% of the
consolidated income of the Company and its Subsidiaries for the most recent fiscal year.

     “Memorandum” is defined in Section 5.3.

     “Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in
Section 4001(a)(3) of ERISA).

     “NAIC” means the National Association of Insurance Commissioners or any successor thereto.

     “NFC” is defined in the first paragraph of this Agreement.

     “NIPSCO” means Northern Indiana Public Service Company, an Indiana corporation.

     “Notes” is defined in Section 1.

     “Obligations” means all amounts, direct or indirect, contingent or absolute, of every type or
description, and at any time existing and whenever incurred (including, without limitation,

B-5

 

after the commencement of any bankruptcy proceeding), payable by NFC to any holder of a Note
pursuant to the terms of such Note or this Agreement.

     “Obligor” is defined in the first paragraph of this Agreement.

     “Officer’s Certificate” means a certificate of a Senior Financial Officer or of any officer of
an Obligor whose responsibilities extend to the subject matter of such certificate.

     “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any
successor thereto.

     “Person” means an individual, partnership, corporation, limited liability company,
association, trust, unincorporated organization, business entity or Governmental Authority.

     “Plan” means an “employee benefit plan” (as defined in Section 3(3) of ERISA) subject to Title
I of ERISA that is or, within the preceding five years, has been established or maintained, or to
which contributions are or, within the preceding five years, have been made or required to be made,
by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability.

     “Project” means an energy or power generation, transmission or distribution facility
(including, without limitation, a thermal energy generation, transmission or distribution facility
and an electric power generation, transmission or distribution facility (including, without
limitation, a cogeneration facility)), a gas production, transportation or distribution facility,
or a minerals extraction, processing or distribution facility, together with (a) all related
electric power transmission, fuel supply and fuel transportation facilities and power supply,
thermal energy supply, gas supply, minerals supply and fuel contracts, (b) other facilities,
services or goods that are ancillary, incidental, necessary or reasonably related to the marketing,
development, construction, management, servicing, ownership or operation of such facility, (c)
contractual arrangements with customers, suppliers and contractors in respect of such facility, and
(d) any infrastructure facility related to such facility, including, without limitation, for the
treatment or management of waste water or the treatment or remediation of waste, pollution or
potential pollutants.

     “Project Financing” means Indebtedness incurred by a Project Financing Subsidiary to finance
(a) the development and operation of the Project such Project Financing Subsidiary was formed to
develop or (b) activities incidental thereto; provided that such Indebtedness does not include
recourse to the Company or any of its other Subsidiaries other than (x) recourse to the Capital
Stock in any such Project Financing Subsidiary, and (y) recourse pursuant to a Contingent Guaranty.

     “Project Financing Subsidiary” means any Subsidiary of the Company (a) that (i) is not a
Material Subsidiary, and (ii) whose principal purpose is to develop a Project and activities
incidental thereto (including, without limitation, the financing and operation of such Project), or
to become a partner, member or other equity participant in a partnership, limited liability company
or other entity having such a principal purpose, and (b) substantially all the assets of

B-6

 

which are limited to the assets relating to the Project being developed or Capital Stock in
such partnership, limited liability company or other entity (and substantially all of the assets of
any such partnership, limited liability company or other entity are limited to the assets relating
to such Project); provided that such Subsidiary incurs no Indebtedness other than in respect of a
Project Financing.

     “property” or “properties” means, unless otherwise specifically limited, real or personal
property of any kind, tangible or intangible, choate or inchoate.

     “PTE” is defined in Section 6.2(a).

     “Purchaser” is defined in the first paragraph of this Agreement.

     “Qualified Institutional Buyer” means any Person who is a “qualified institutional buyer”
within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.

     “Related Fund” means, with respect to any holder of any Note, any fund or entity that (i)
invests in Securities or bank loans, and (ii) is advised or managed by such holder, the same
investment advisor as such holder or by an affiliate of such holder or such investment advisor.

     “Required Holders” means, (a) at any time after Closing, (i) the holder(s) of at least 50% in
principal amount of the Notes at the time outstanding (exclusive of Notes then owned by any Obligor
or any of its Affiliates), and (ii) with respect to any Series of Notes, the holder(s) of at least
50% in principal amount of the Notes of such Series at the time outstanding (exclusive of Notes of
such Series then owned by any Obligor or any of its Affiliates) and (b) at any time prior to
Closing, (i) the Purchaser(s) obligated hereunder to purchase at least 50% in principal amount of
the Notes and (ii) with respect to any Series of Notes, the Purchaser(s) obligated hereunder to
purchase at least 50% in principal amount of the Notes of such Series.

     “Responsible Officer” means any Senior Financial Officer and any officer of an Obligor with
responsibility for the administration of the relevant portion of this Agreement.

     “SEC” shall mean the Securities and Exchange Commission of the United States, or any successor
thereto.

     “Securities” or “Security” shall have the meaning specified in Section 2(1) of the Securities
Act.

     “Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules
and regulations promulgated thereunder from time to time in effect.

     “Senior Financial Officer” means the chief financial officer, principal accounting officer,
treasurer, assistant treasurer, director/corporate finance or comptroller of either of NFC or the
Company, as applicable.

     “Series” means any series of Notes which have the same (i) maturity date, (ii) interest rate,
(iii) interest payment periods and (iv) date of issuance (which, in the case of a Note issued

B-7

 

in exchange for another Note, shall be deemed for this purpose to be the date on which such
Note’s ultimate predecessor Note was originally issued); e.g., the Series A Notes, Series B
Notes, Series C Notes and Series D Notes, respectively, each constitute a Series of Notes.

     “Series A Notes” is defined in Section 1.

     “Series B Notes” is defined in Section 1.

     “Series C Notes” is defined in Section 1.

     “Series D Notes” is defined in Section 1.

     “Subsidiary” means, as to any Person, any other Person in which such first Person or one or
more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient
equity or voting interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing similar functions) of
such second Person, and any partnership or joint venture if more than a 50% interest in the profits
or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first
Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does
ordinarily take major business actions without the prior approval of such first Person or one or
more of its Subsidiaries). Unless the context otherwise clearly requires, any reference to a
“Subsidiary” is a reference to a Subsidiary of the Company.

     “Substantial Subsidiary” means, at any time, any Subsidiary in which the aggregate sum of (a)
the amounts invested by the Company and its other Subsidiaries in the aggregate, by way of
purchases of capital stock, Capital Leases, loans or otherwise, and (b) the amount of recourse,
whether contractual or as a matter of law (but excluding non-recourse debt), available to creditors
of such Subsidiary or Subsidiaries against the Company or any of its other Subsidiaries, is
$100,000,000 or more.

     “SVO” means the Securities Valuation Office of the NAIC or any successor to such Office.

     “USA Patriot Act” means United States Public Law 107-56, Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of
2001, as amended from time to time, and the rules and regulations promulgated thereunder from time
to time in effect.

     “Utility Subsidiary” means a Subsidiary of the Company that is subject to regulation by a
Governmental Authority (federal, state or otherwise) having authority to regulate utilities, and
any Wholly-Owned Subsidiary thereof.

     “Wholly-Owned Subsidiary” means, at any time, any Subsidiary one hundred percent of all of the
equity interests (except directors’ qualifying shares) and voting interests of which are owned by
any one or more of the Company and the Company’s other Wholly-Owned Subsidiaries at such time.

B-8

 

[Form of Series A Note]

NiSource Finance Corp.

5.21% Series A Senior Note Due November 28, 2012

			
	 	 	 
	No. [A-___]
	 	[Date]
	$[___]
	 	PPN: 65473Q A* 4

     For Value Received, the undersigned, NiSource Finance Corp. (herein called “NFC”), a
corporation organized and existing under the laws of the State of Indiana, hereby promises to pay
to [___], or registered assigns, the principal sum of [___]
Dollars (or so much thereof as shall not have been prepaid) on November 28, 2012, with
interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid
balance hereof at the rate of 5.21% per annum from the date hereof, payable semiannually, on the
28th day of November and May in each year, commencing with the 28th day of November or May next
succeeding the date hereof, until the principal hereof shall have become due and payable, and (b)
to the extent permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note Purchase Agreement referred to below), payable semiannually as aforesaid (or,
at the option of the registered holder hereof, on demand), at a rate per annum from time to time
equal to 7.21%.

     Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are
to be made in lawful money of the United States of America at the principal office of NFC in
Merrillville, Indiana or at such other place as NFC shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreement referred to below.

     This Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant to
the Note Purchase Agreement, dated as of August 23, 2005 (as from time to time amended, the “Note
Purchase Agreement”), among NFC, NiSource Inc. and the respective Purchasers named therein and is
entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreement and (ii) made the representation set forth in Sections 6.1 and 6.2 of the Note
Purchase Agreement. Unless otherwise indicated, capitalized terms used in this Note shall have the
respective meanings ascribed to such terms in the Note Purchase Agreement.

     This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender
of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized
in writing, a new Series A Note for a like principal amount will be issued to, and registered in
the name of, the transferee. Prior to due presentment for registration of transfer, NFC may treat
the person in whose name this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and NFC will not be affected by any notice to the contrary.

Exhibit 1(a)

(to Note Purchase Agreement)

 

 

     This Note is subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not otherwise.

     If an Event of Default occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any applicable Make-Whole
Amount) and with the effect provided in the Note Purchase Agreement.

     This Note shall be construed and enforced in accordance with, and the rights of NFC, NiSource
Inc. and the holder of this Note shall be governed by, the law of the State of New York excluding
choice-of-law principles of the law of such State that would permit the application of the laws of
a jurisdiction other than such State.

	 	 	 	 	 
	 	 	NiSource Finance Corp.
	 
	 	 	 	 
	 

	 	By	 	 
	 

	 	 	 	 
	 

	 	 	 	[Title]

 

 

SECURITY GUARANTEE

     NiSource Inc. irrevocably and unconditionally guarantees the Obligations of NiSource
Finance Corp., an Indiana corporation (the “Company”), under this Note including that the
principal of, premium, if any, and interest on this Note shall be promptly paid in full when
due, whether at stated maturity, by acceleration, redemption or otherwise.

     The obligations of NiSource Inc. pursuant to this Security Guarantee are expressly set
forth in Section 23 of the Note Purchase Agreement, and reference is hereby made thereto for
the precise terms of this Security Guarantee.

     No stockholder, employee, officer, director or incorporator, as such, past, present or
future, of NiSource Inc. shall have any liability under this Security Guarantee by reason of
his or its status as such stockholder, employee, officer, director or incorporator.

     THE TERMS OF SECTION 23 OF THE NOTE PURCHASE AGREEMENT ARE INCORPORATED HEREIN BY
REFERENCE.

     Capitalized terms used herein have the same meanings given in the Note Purchase
Agreement unless otherwise indicated.

	 	 	 	 	 
	 	 	NISOURCE INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: [David J. Vajda]
	 	 	Title: [Vice President and Treasurer]

 

 

[Form of Series B Note]

NiSource Finance Corp.

5.36%Series B Senior Note Due November 28, 2015

			
	 	 	 
	No. [B-___]
	 	[Date]
	$[___]
	 	PPN: 65473Q A@ 2

     For Value Received, the undersigned, NiSource Finance Corp. (herein called “NFC”), a
corporation organized and existing under the laws of the State of Indiana, hereby promises to pay
to [___], or registered assigns, the principal sum of [___]
Dollars (or so much thereof as shall not have been prepaid) on November 28, 2015, with
interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid
balance hereof at the rate of 5.36% per annum from the date hereof, payable semiannually, on the
28th day of November and May in each year, commencing with the 28th day of November or May next
succeeding the date hereof, until the principal hereof shall have become due and payable, and (b)
to the extent permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note Purchase Agreement referred to below), payable semiannually as aforesaid (or,
at the option of the registered holder hereof, on demand), at a rate per annum from time to time
equal to 7.36%.

     Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are
to be made in lawful money of the United States of America at the principal office of NFC in
Merrillville, Indiana or at such other place as NFC shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreement referred to below.

     This Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant to
the Note Purchase Agreement, dated as of August 23, 2005 (as from time to time amended, the “Note
Purchase Agreement”), among NFC, NiSource Inc. and the respective Purchasers named therein and is
entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreement and (ii) made the representation set forth in Sections 6.1 and 6.2 of the Note
Purchase Agreement. Unless otherwise indicated, capitalized terms used in this Note shall have the
respective meanings ascribed to such terms in the Note Purchase Agreement.

     This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender
of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized
in writing, a new Series B Note for a like principal amount will be issued to, and registered in
the name of, the transferee. Prior to due presentment for registration of transfer, NFC may treat
the person in whose name this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and NFC will not be affected by any notice to the contrary.

Exhibit 1(b)

(to Note Purchase Agreement)

 

 

     This Note is subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not otherwise.

     If an Event of Default occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any applicable Make-Whole
Amount) and with the effect provided in the Note Purchase Agreement.

     This Note shall be construed and enforced in accordance with, and the rights of NFC, NiSource
Inc. and the holder of this Note shall be governed by, the law of the State of New York excluding
choice-of-law principles of the law of such State that would permit the application of the laws of
a jurisdiction other than such State.

	 	 	 	 	 
	 	 	NiSource Finance Corp.
	 
	 	 	 	 
	 

	 	By	 	 
	 

	 	 	 	 
	 

	 	 	 	[Title]

 

 

SECURITY GUARANTEE

     NiSource Inc. irrevocably and unconditionally guarantees the Obligations of NiSource
Finance Corp., an Indiana corporation (the “Company”), under this Note including that the
principal of, premium, if any, and interest on this Note shall be promptly paid in full when
due, whether at stated maturity, by acceleration, redemption or otherwise.

     The obligations of NiSource Inc. pursuant to this Security Guarantee are expressly set
forth in Section 23 of the Note Purchase Agreement, and reference is hereby made thereto for
the precise terms of this Security Guarantee.

     No stockholder, employee, officer, director or incorporator, as such, past, present or
future, of NiSource Inc. shall have any liability under this Security Guarantee by reason of
his or its status as such stockholder, employee, officer, director or incorporator.

     THE TERMS OF SECTION 23 OF THE NOTE PURCHASE AGREEMENT ARE INCORPORATED HEREIN BY
REFERENCE.

     Capitalized terms used herein have the same meanings given in the Note Purchase
Agreement unless otherwise indicated.

	 	 	 	 	 
	 	 	NISOURCE INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: [David J. Vajda]
	 	 	Title: [Vice President and Treasurer]

 

 

[Form of Series C Note]

NiSource Finance Corp.

5.41%Series C Senior Note Due November 28, 2016

			
	 	 	 
	No. [C-___]
	 	[Date]
	$[___]
	 	PPN: 65473Q A# 0

     For Value Received, the undersigned, NiSource Finance Corp. (herein called “NFC”), a
corporation organized and existing under the laws of the State of Indiana, hereby promises to pay
to [___], or registered assigns, the principal sum of [___]
Dollars (or so much thereof as shall not have been prepaid) on November 28, 2016, with
interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid
balance hereof at the rate of 5.41% per annum from the date hereof, payable semiannually, on the
28th day of November and May in each year, commencing with the 28th day of November or May next
succeeding the date hereof, until the principal hereof shall have become due and payable, and (b)
to the extent permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note Purchase Agreement referred to below), payable semiannually as aforesaid (or,
at the option of the registered holder hereof, on demand), at a rate per annum from time to time
equal to 7.41%.

     Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are
to be made in lawful money of the United States of America at the principal office of NFC in
Merrillville, Indiana or at such other place as NFC shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreement referred to below.

     This Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant to
the Note Purchase Agreement, dated as of August 23, 2005 (as from time to time amended, the “Note
Purchase Agreement”), among NFC, NiSource Inc. and the respective Purchasers named therein and is
entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreement and (ii) made the representation set forth in Sections 6.1 and 6.2 of the Note
Purchase Agreement. Unless otherwise indicated, capitalized terms used in this Note shall have the
respective meanings ascribed to such terms in the Note Purchase Agreement.

     This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender
of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized
in writing, a new Series C Note for a like principal amount will be issued to, and registered in
the name of, the transferee. Prior to due presentment for registration of transfer, NFC may treat
the person in whose name this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and NFC will not be affected by any notice to the contrary.

Exhibit 1(c)

(to Note Purchase Agreement)

 

 

     This Note is subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not otherwise.

     If an Event of Default occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any applicable Make-Whole
Amount) and with the effect provided in the Note Purchase Agreement.

     This Note shall be construed and enforced in accordance with, and the rights of NFC, NiSource
Inc. and the holder of this Note shall be governed by, the law of the State of New York excluding
choice-of-law principles of the law of such State that would permit the application of the laws of
a jurisdiction other than such State.

	 	 	 	 	 
	 	 	NiSource Finance Corp.
	 
	 	 	 	 
	 

	 	By	 	 
	 

	 	 	 	 
	 

	 	 	 	     [Title]

 

 

SECURITY GUARANTEE

     NiSource Inc. irrevocably and unconditionally guarantees the Obligations of NiSource
Finance Corp., an Indiana corporation (the “Company”), under this Note including that the
principal of, premium, if any, and interest on this Note shall be promptly paid in full when
due, whether at stated maturity, by acceleration, redemption or otherwise.

     The obligations of NiSource Inc. pursuant to this Security Guarantee are expressly set
forth in Section 23 of the Note Purchase Agreement, and reference is hereby made thereto for
the precise terms of this Security Guarantee.

     No stockholder, employee, officer, director or incorporator, as such, past, present or
future, of NiSource Inc. shall have any liability under this Security Guarantee by reason of
his or its status as such stockholder, employee, officer, director or incorporator.

     THE TERMS OF SECTION 23 OF THE NOTE PURCHASE AGREEMENT ARE INCORPORATED HEREIN BY
REFERENCE.

     Capitalized terms used herein have the same meanings given in the Note Purchase
Agreement unless otherwise indicated.

	 	 	 	 	 
	 	 	NISOURCE INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: [David J. Vajda]
	 	 	Title: [Vice President and Treasurer]

 

 

[Form of Series D Note]

NiSource Finance Corp.

5.89%Series D Senior Note Due November 28, 2025

			
	 	 	 
	No. [D-___]
	 	[Date]
	$[___]
	 	PPN: 65473Q B* 3

     For Value Received, the undersigned, NiSource Finance Corp. (herein called “NFC”), a
corporation organized and existing under the laws of the State of Indiana, hereby promises to pay
to [___], or registered assigns, the principal sum of [___]
Dollars (or so much thereof as shall not have been prepaid) on November 28, 2025, with
interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid
balance hereof at the rate of 5.89% per annum from the date hereof, payable semiannually, on the
28th day of November and May in each year, commencing with the 28th day of November or May next
succeeding the date hereof, until the principal hereof shall have become due and payable, and (b)
to the extent permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note Purchase Agreement referred to below), payable semiannually as aforesaid (or,
at the option of the registered holder hereof, on demand), at a rate per annum from time to time
equal to 7.89%.

     Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are
to be made in lawful money of the United States of America at the principal office of NFC in
Merrillville, Indiana or at such other place as the NFC shall have designated by written notice to
the holder of this Note as provided in the Note Purchase Agreement referred to below.

     This Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant to
the Note Purchase Agreement, dated as of August 23, 2005 (as from time to time amended, the “Note
Purchase Agreement”), among NFC, NiSource Inc. and the respective Purchasers named therein and is
entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreement and (ii) made the representation set forth in Sections 6.1 and 6.2 of the Note
Purchase Agreement. Unless otherwise indicated, capitalized terms used in this Note shall have the
respective meanings ascribed to such terms in the Note Purchase Agreement.

     This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender
of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized
in writing, a new Series D Note for a like principal amount will be issued to, and registered in
the name of, the transferee. Prior to due presentment for registration of transfer, NFC may treat
the person in whose name this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and NFC will not be affected by any notice to the contrary.

Exhibit 1(d)

(to Note Purchase Agreement)

 

 

     This Note is subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not otherwise.

     If an Event of Default occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any applicable Make-Whole
Amount) and with the effect provided in the Note Purchase Agreement.

     This Note shall be construed and enforced in accordance with, and the rights of NFC, NiSource
Inc. and the holder of this Note shall be governed by, the law of the State of New York excluding
choice-of-law principles of the law of such State that would permit the application of the laws of
a jurisdiction other than such State.

	 	 	 	 	 
	 	 	NiSource Finance Corp.
	 
	 	 	 	 
	 

	 	By	 	 
	 

	 	 	 	 
	 

	 	 	 	     [Title]

 

 

SECURITY GUARANTEE

     NiSource Inc. irrevocably and unconditionally guarantees the Obligations of NiSource
Finance Corp., an Indiana corporation (the “Company”), under this Note including that the
principal of, premium, if any, and interest on this Note shall be promptly paid in full when
due, whether at stated maturity, by acceleration, redemption or otherwise.

     The obligations of NiSource Inc. pursuant to this Security Guarantee are expressly set
forth in Section 23 of the Note Purchase Agreement, and reference is hereby made thereto for
the precise terms of this Security Guarantee.

     No stockholder, employee, officer, director or incorporator, as such, past, present or
future, of NiSource Inc. shall have any liability under this Security Guarantee by reason of
his or its status as such stockholder, employee, officer, director or incorporator.

     THE TERMS OF SECTION 23 OF THE NOTE PURCHASE AGREEMENT ARE INCORPORATED HEREIN BY
REFERENCE.

     Capitalized terms used herein have the same meanings given in the Note Purchase
Agreement unless otherwise indicated.

	 	 	 	 	 
	 	 	NISOURCE INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: [David J. Vajda]
	 	 	Title: [Vice President and Treasurer]exv10w1

 

Exhibit 10.1

SECOND AMENDMENT TO THE NISOURCE INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2004)

     WHEREAS, NiSource Inc. (the “Company”) maintains the NiSource Inc. Supplemental Executive
Retirement Plan, as amended and restated effective January 1, 2004 and as further amended effective
January 28, 2005 (the “Plan”); and

     WHEREAS, pursuant to Section 7.5 of the Plan, the Company deems it desirable to amend the Plan
as described below.

     NOW, THEREFORE, the second sentence of Section 7.5 is hereby amended, effective July 1, 2005,
to read as follows:

“In addition, the Chief Executive Officer of the Company may amend any provision
of the Plan, except for Articles III, IV and V which may only be amended by the
Committee.”

     IN WITNESS WHEREOF, the Company has caused this Second Amendment to be executed on its behalf,
by its officer duly authorized, this 26th day of August, 2005.

	 	 	 	 	 
	 	NISOURCE INC.

 	 
	 	By:  	/s/
Michael W. O’Donnell

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