Document:

EXHIBIT 10.21

DIRECTOR COMPENSATION AGREEMENT

DIRECTOR COMPENSATION AGREEMENT, dated as of March 28, 2008 (this “Agreement”), by and between INFONXX, Inc., a Delaware corporation (the “Company”), and Vanessa A. Wittman.

RECITALS

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it would be in the best interests of the Company to compensate Ms. Wittman, a non-employee director, for future service as a committee member for the period of twelve (12) months beginning on the date of this Agreement and ending on March 31, 2009, during which time Ms. Wittman is expected to serve on each of the Audit Committee of the Board (the “Audit Committee”), the Compensation Committee of the Board (the “Compensation Committee”) and the Nominating/Corporate Governance Committee of the Board (the “Nominating/Corporate Governance Committee”), and further, to compensate Ms. Wittman for serving as chairperson of the Audit Committee during this same period, such total compensation not to exceed in the aggregate $100,000;

WHEREAS, the Board wishes to provide the compensation referred to in the previous recital on a quarterly basis in either all cash or all unrestricted common stock, par value $.01 per share, of the Company (the “Common Stock”), as Ms. Wittman may elect prior to each quarterly payment;

WHEREAS, the Board has designated Ms. Wittman to serve as a member of each of the Audit Committee, the Compensation Committee and the Nominating/Corporate Governance Committee, in each case effective immediately subsequent to and contingent upon the completion of the Company’s proposed underwritten initial public offering (the “Offering”); and

WHEREAS, the Board has designated Ms. Wittman to serve as chairperson of the Audit Committee, effective immediately subsequent to and contingent upon the completion of the Offering;

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I 

TERMS AND CONDITIONS

Section 1.1  Payment Election. Upon the terms and subject to the conditions of this Agreement, and subject to Ms. Wittman’s continued service as described in the first recital above through each of the relevant payment dates, the Company agrees to grant to Ms. Wittman on each of              2008, June 30, 2008, September 30, 2008 and December 31, 2008 (and to the extent that any such day is not a business day, on the next business day succeeding; each such date, a “Payment Date”) that number of shares of Common Stock (the “Shares”) having a
then-fair market value (as determined by the Board in good faith) equal to $25,000 (with any 

 

fraction thereof, rounded down to the nearest whole Share, and subject to appropriate adjustment as determined by the Company for any stock split, reverse stock split or similar transaction affecting the Common Stock, including any recapitalization) (each such grant, a “Share Grant”); provided, however, should Ms. Wittman notify the Company in writing not less than 30 days prior to the relevant Payment Date of her election to forego such Share Grant, the Company shall pay Ms. Wittman on the relevant Payment Date $25,000 in immediately available funds by wire transfer to an account designated by her not later than one business day prior to
such Payment Date. 

Section 1.2  Recapitalization. Following the recapitalization described in the registration statement of the Company on Form S-1 (File No. 333-148097), on each Payment Date succeeding such recapitalization, the Company will have no Common Shares outstanding and, in the case of each period for which Ms. Wittman does not elect to receive cash compensation pursuant to the proviso in Section 1.1, Ms. Wittman’s compensation pursuant to this Agreement will be paid in Class B common stock, par value $.01 per share, of the Company (the “Class B Common Stock”), and the term “Shares,” thereafter, will refer to shares of Class B Common Stock. To the extent that additional transfer restrictions may
apply to Class B Common Shares, Ms. Wittman shall be subject to all such restrictions, and she has been advised to read carefully the Third Amended and Restated Certificate of Incorporation of the Company describing those restrictions, which are in addition to any restrictions that may apply under the securities laws and Section 1.6 below.

Section 1.3  Initial Quarterly Payment. For purposes of the            , 2008 quarterly payment, the Company waives the 30 day notice requirement set forth in Section 1.1 above and acknowledges Ms. Wittman’s election to receive cash in the amount of $25,000.

Section 1.4  Closing. The closing of each Share Grant (each, a “Closing”) shall take place at the offices of INFONXX, Inc., 655 Madison Avenue, 21st Floor, New York, New York, on the relevant Payment Date. 

Section 1.5  Certificates. In the event of a Share Grant, at the relevant Closing, the Company shall deliver to Ms. Wittman in her name one or more executed stock certificates with respect to the relevant Shares.

Section 1.6  Legends. In the event of a Share Grant, the certificates representing the Shares as contemplated above will be subject to such stop transfer orders and other restrictions as the rules, regulations and other requirements of the Securities and Exchange Commission (the “SEC”), any stock exchange upon which such shares of Common Stock are listed, and any applicable federal or state laws. The Company may cause legends to be put on any such certificates to make appropriate reference to such restrictions. Notwithstanding the generality of the foregoing, Ms. Wittman understands and agrees that the Company shall cause the legends set forth below, or legends substantially equivalent thereto, to be placed
upon any certificate(s) evidencing ownership of the Shares:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “1933 ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE 1933 ACT OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

 

 

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THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER. SUCH TRANSFER RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SHARES. 

Ms. Wittman acknowledges that the Company will not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement, or (ii) to treat as owner of such Shares, or to accord the right to vote or pay dividends to any purchaser or other transferee, to whom such Shares shall have been so transferred.

ARTICLE II 

REPRESENTATIONS AND WARRANTIES

Section 2.1  Representations and Warranties of the Company. The Company represents and warrants as of the relevant Payment Date that:

(a) Existence and Power. The Company is duly organized, validly existing and in good standing under the laws of the state of Delaware. 

(b) Authorization. The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby are within its powers and have been duly authorized by all necessary action on the part of the Company. This Agreement has been duly executed and delivered by the Company, and, assuming it is a valid and legally binding obligation of Ms. Wittman, constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

(c) Governmental Authorization. The execution, delivery and performance by the Company of this Agreement require no order, license, consent, authorization or approval of, or exemption by, or action by or in respect of, or notice to, or filing or registration with, any governmental or regulatory body, agency or official, in each case to be obtained, given or made by or on behalf of the Company, except (i) such as have been obtained or (ii) where the failure to obtain any such order, license, consent, authorization, approval or exemption, take any action or give any such notice or make any filing or registration would not reasonably be expected to adversely affect the ability of the Company to perform its obligations hereunder.

 

 

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(d) Noncontravention. The execution, delivery and performance by the Company of this Agreement do not and will not (i) violate the organizational documents of the Company, (ii) violate any law, rule, regulation, judgment, injunction, order or decree applicable to or binding upon the Company or (iii) require any consent or other action by any person under, constitute a default under (with due notice or lapse of time or both), or give rise to any right of termination, cancellation or acceleration of any right or obligation of the Company or to a loss of any benefit to which the Company is entitled under any provision of any agreement or other instrument binding upon the Company or any of its assets or properties.

Section 2.2  Representations and Warranties of Vanessa A. Wittman. Ms. Wittman represents and warrants to the Company as of the relevant Payment Date that:

(a) Authorization. This Agreement has been duly executed and delivered by Ms. Wittman, and, assuming it is a valid and legally binding obligation of the Company, constitutes a valid and binding agreement of Ms. Wittman, enforceable against Ms. Wittman in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

(b) Taxes. Ms. Wittman acknowledges and agrees that she will have full responsibility, and the Company will have no responsibility, for satisfying any liability for any federal, state or local income or other taxes required by law to be paid with respect to the cash or Shares, as the case may be. Ms. Wittman is hereby advised to seek tax counsel regarding the taxation of the cash or Shares, as the case may be.

(c) Brokers or Finders’ Fees. There is no investment banker, broker, finder or other intermediary which has been retained by, will be retained by or is authorized to act on behalf of Ms. Wittman who might be entitled to any fee or commission from Ms. Wittman or the Company upon consummation of the transactions contemplated by this Agreement.

Section 2.3  Further Representations and Warranties of Vanessa A. Wittman. In the event of a Share Grant, Ms. Wittman further represents and warrants to the Company as of the relevant Payment Date that:

(a) Transfer Restrictions. Ms. Wittman agrees and acknowledges that she will not transfer any Shares unless:

(i)  the transfer is pursuant to an effective registration statement under the Securities Act of 1933, as amended, and the rules and regulations in effect thereunder (the “1933 Act”), and in compliance with applicable provisions of state securities laws, or

(ii)  (A) counsel for Ms. Wittman (which counsel shall be reasonably acceptable to the Company) shall have furnished the Company with an opinion, satisfactory in form and substance to the Company, that no such registration is required because of the availability of an exemption from registration under the 1933 Act and 

 

 

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(B) if Ms. Wittman is a citizen or resident of any country other than the United States, or Ms. Wittman desires to effect any transfer in any such country, counsel for Ms. Wittman (which counsel shall be reasonably satisfactory to the Company) shall have furnished the Company with an opinion or other advice reasonably satisfactory in form and substance to the Company to the effect that such transfer will comply with the securities laws of such jurisdiction.

Notwithstanding the foregoing, the Company acknowledges and agrees that any of the following transfers are deemed to be in compliance with the 1933 Act and this Agreement (including without limitation any restrictions or prohibitions herein) and no opinion of counsel is required in connection therewith: (x) a transfer upon the death of Ms. Wittman to her “Estate” (defined below) or a transfer to the executors, administrators, testamentary trustees, legatees or beneficiaries of a person who has become a holder of the Shares in accordance with the terms of this Agreement; provided, that it is expressly understood that any such transferee shall be bound by the provisions of this Agreement, and (y) a transfer made in compliance with the federal securities laws to a “Trust” (defined below),
provided that such transfer is made expressly subject to this Agreement and that the transferee agrees in writing to be bound by the terms and conditions hereof. For the purposes of this Agreement, “Estate” shall mean the conservators, guardians, executors, administrators, testamentary trustees, legatees or beneficiaries of Ms. Wittman, and “Trust” shall mean a limited partnership, limited liability company, trust or custodianship, the beneficiaries of which may include only Ms. Wittman, her spouse (or ex-spouse) or her lineal descendants (including adopted) or, if at any time after any such transfer there shall be no then living spouse or lineal descendants, then to the ultimate beneficiaries of any such trust or to the estate of a deceased beneficiary.

If any Shares are to be disposed of in accordance with Rule 144 under the 1933 Act or otherwise, Ms. Wittman shall promptly notify the Company of such intended disposition and shall deliver to the Company at, or prior to, the time of such disposition such documentation as the Company may reasonably request in connection with such sale and, in the case of a disposition pursuant to Rule 144, shall deliver to the Company an executed copy of any notice on Form 144 required to be filed with the SEC.

(b) Lock-up. Ms. Wittman agrees that, if any Shares are offered to the public pursuant to an effective registration statement under the 1933 Act (other than registration of securities issued under an employee plan), Ms. Wittman will not effect any public sale or distribution of any Shares not covered by such registration statement from the time of the receipt of a notice from the Company that the Company has filed or imminently intends to file such registration statement to, or within 180 days after, the effective date of such registration statement (the “Lock-Up Period”), unless otherwise agreed to in writing by the Company; provided, however, that if (1) during the last 17 days of the initial Lock-Up Period, the Company releases earnings results or announces material news or a material event or (2) prior to the expiration of the initial Lock-Up Period, the Company announces that it will release earnings results during the 15-day period following the last day of the initial Lock-Up Period, then in each case the Lock-Up Period will be automatically extended until the expiration of the 18-day period beginning on the date of release of the earnings results or the announcement of the material news or material event, as applicable, unless the requesting party waives, in writing, such extension.

 

 

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(c) Availability of Information. Ms. Wittman represents and warrants that (i) with respect to the Shares, Ms. Wittman has received and reviewed the available information relating to the Shares, and (ii) she has been given the opportunity to obtain any additional information or documents and to ask questions and receive answers about such information, the Company and the business and prospects of the Company which she deems necessary to evaluate the merits and risks related to holding the Shares and to verify the information contained in the information received as indicated in this Section 2.2(d), and Ms. Wittman has relied solely on such information.

(d) Accredited Investor. Ms. Wittman represents and warrants that she is an “Accredited Investor” as such term is defined under Rule 501 of Regulation D.

ARTICLE III 

MISCELLANEOUS

Section 3.1 Further Assurances. The Company and Ms. Wittman agree that, from time to time, whether on or after any Closing, each of them will execute and deliver such further instruments of conveyance and transfer and take such other actions as may be necessary to carry out the purposes and intents of this Agreement. 

Section 3.2 Notices. Except as otherwise specified herein, all notices and other communications under this Agreement shall be in writing and shall be deemed to have been given if personally delivered or if sent by registered or certified United States mail, return receipt requested, postage prepaid, addressed to the proposed recipient at the last known address of the recipient. Any party may designate any other address to which notices shall be sent by giving notice of the address to the other parties in the same manner as provided herein.

Section 3.3 Governing Law; Venue. This Agreement is governed by Delaware law, without reference to the principles of conflict of laws. The parties agree that venue for any court action shall lie exclusively in any federal or state court in Wilmington, Delaware.

Section 3.4 No Right to Continued Service on the Board. Nothing contained in this Agreement or in any other agreement entered into by the Company and Ms. Wittman guarantees that Ms. Wittman will continue to serve as a member of the Board or will serve on any committee of the Board, or in the capacity of chairperson, for any specified period of time.

Section 3.5 No Accrual. Should Ms. Wittman cease to serve for any reason as a committee member or chairperson as described in the first recital of this Agreement, whether or not Ms. Wittman remains a member of the Board, Ms. Wittman shall automatically forfeit in full any and all yet unpaid quarterly payments that otherwise would have become payable by the Company under this Agreement. 

 

 

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Section 3.6 Amendments and Waivers.

(a) Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective.

(b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 3.7 Termination. This Agreement shall automatically terminate, and the transactions contemplated hereby immediately abandoned, upon the termination of the Offering in accordance with its terms.

Section 3.8 Expenses. All costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense.

Section 3.9 Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other party hereto.

Section 3.10 Counterparts; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. No provision of this Agreement shall confer upon any person other than the parties hereto any rights or remedies hereunder.

Section 3.11 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.

Section 3.12 Captions. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.

Section 3.13 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be deemed to be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforced in accordance with its terms to the maximum extent permitted by law.

Section 3.14 Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

[Signature Page Follows]

 

 

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 IN WITNESS WHEREOF, INFONXX, Inc., acting by and through its duly authorized officer, and Vanessa A. Wittman have caused this Agreement to be duly executed as of the date first above written.

 

	
                         
 	
                         
 	
                        INFONXX, INC.
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                         /s/ Zachary Green 
 
	
                         
 	
                         
 	
                         
 	
                        Name: Zachary Green
 
	
                         
 	
                         
 	
                         
 	
                        Title: Global General Counsel
 

 

	
                         
 	
                         
 	
                        VANESSA A. WITTMAN
 
	
                         
 	
                         
 	
                        

 
                        
 	
                        /s/ Vanessa A. Wittmanexv4w1

Exhibit 4.1

UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO NISOURCE FINANCE CORP. AND NISOURCE
INC. OR THEIR AGENT OR AGENTS FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL
NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES
OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.

			
	 
	No.:                     
	 	$                    

CUSIP No.: 65473Q AK 9

ISIN No.: US65473QAK94

6.15% Notes due 2013

          NiSource Finance Corp., an Indiana corporation, promises to pay to Cede & Co, or registered
assigns, the principal sum of                      on March 1, 2013.

          Interest Payment Dates: March 1 and September 1

          Record Dates: February 15 and August 15

 

 

          Additional provisions of this Note are set forth on the other side of this Note.

Dated:                     

	 	 	 	 	 	 	 
	 	 	NISOURCE FINANCE CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

This is one of the Notes of the series

referred to in the within-mentioned Indenture.

THE BANK OF NEW YORK,

as Trustee

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Authorized Officer
	 	 

 

 

6.15% Notes due 2013

1. Interest

          NiSource Finance Corp., an Indiana corporation (such corporation, and its successors and
assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises
to pay interest on the principal amount of this Note at the rate per annum shown above. The
Company will pay interest semiannually on March 1 and September 1 of each year, commencing
September 1, 2008. Interest on the Notes will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from February 19, 2003. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. The Company will pay interest on overdue
principal and premium at the above rate and will pay interest on overdue installments of interest
at such rate to the extent lawful.

2. Method of Payment

          The Company will pay interest on the Notes (except defaulted interest) to the Persons who are
registered Holders of Notes at the close of business on the February 15 or August 15 next preceding
the Interest Payment Date even if Notes are canceled after the Record Date and on or before the
Interest Payment Date. Holders must surrender Notes to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United States that at the
time of payment is legal tender for payment of public and private debts. Payments in respect of
the Notes represented by a Global Note (including principal, premium, if any, and interest) will be
made by wire transfer of immediately available funds to the accounts specified by The Depository
Trust Company.

3. Guarantee

          NiSource Inc., a Delaware corporation and parent of the Company, will fully and
unconditionally guarantee to each Holder of the Notes and to The Bank of New York (as successor in
interest to JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan Bank)), as Trustee
(the “Trustee”) under the Indenture (as defined below) and its successors all the Obligations of
the Company under the Notes, including the due and punctual payment of the principal of, premium,
if any, and interest, if any, on the Notes (the “Security Guarantee”). The Security Guarantee
applies whether the payment is due at Stated Maturity, on an Interest Payment Date or as a result
of acceleration, redemption or otherwise. The Security Guarantee includes payment of interest on
the overdue principal of, premium, if any, and interest, if any, on the Notes (if lawful) and all
other Obligations of the Company under the Indenture. The Security Guarantee will remain valid
even if the Indenture is found to be invalid. NiSource Inc. is obligated under the Security
Guarantee to pay any guaranteed amount immediately after the Company’s failure to do so.

 

 

4. Paying Agent and Security Registrar

          Initially, the Trustee will act as Paying Agent and Security Registrar. The Company may
appoint and change any Paying Agent or Security Registrar without notice to the Holders. The
Company may act as Paying Agent or Security Registrar.

5. Indenture

          The Company issued the Notes under an Indenture dated as of November 14, 2000, among the
Company, NiSource Inc. and the Trustee (as supplemented, the “Indenture”) and pursuant to an
Officers’ Certificate of the Company dated February 19, 2003 (the “Officer’s Certificate”). The
terms of the Notes include those stated in the Indenture and the Officer’s Certificate and those
made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. sections
77aaa-77bbbb) as in effect on the date of the Officer’s Certificate (the “Act”). Capitalized terms
used herein and defined in the Indenture but not defined herein have the meanings ascribed thereto
in the Indenture. The Notes are subject to all such terms, and Holders of Notes are referred to
the Indenture and the Act for a statement of those terms.

          The Notes are senior unsecured obligations of the Company. The Notes issued on the Issue Date
will be treated as a single class for all purposes under the Indenture. The Indenture contains
covenants that limit the ability of the Company, NiSource Inc. and their Subsidiaries (other than
Utilities) to incur additional indebtedness and create liens on assets unless the total amount of
all the secured debt would not exceed 10% of Consolidated Net Tangible Assets. These covenants are
subject to important exceptions and qualifications.

6. Optional Redemption

          The Company may redeem all or part of the Notes at any time at its option at a redemption
price equal to the greater of (1) the principal amount of the Notes being redeemed plus accrued
interest to the Redemption Date or (2) the Make-Whole Amount for the Notes being redeemed. For
purposes of this provision:

          “Make-Whole Amount” means the sum, as determined by a Quotation Agent, of the present values
of the principal amount of the Notes to be redeemed, together with scheduled payments of interest
(exclusive of interest to the Redemption Date) from the Redemption Date to the Stated Maturity of
the Notes, in each case discounted to the Redemption Date on a semi-annual basis, assuming a
360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate, plus accrued
interest on the principal amount of the Notes being redeemed to the Redemption Date.

          “Adjusted Treasury Rate” means, with respect to any Redemption Date, (i) the yield, under the
heading which represents the average for the immediately preceding week, appearing in the most
recently published statistical release designated “H.15 (519)” or any successor publication which
is published weekly by the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to constant maturity under the
caption “Treasury Constant

 

 

Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity
is within three months before or after the remaining term of the Notes, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on
a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or does not contain such
yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury
Price for such Redemption Date, in each case calculated on the third Business Day preceding the
Redemption Date, plus 0.35%.

          “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term from the Redemption Date to
the Stated Maturity of the Notes that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Notes.

          “Comparable Treasury Price” means, with respect to any Redemption Date, if clause (ii) of the
definition of Adjusted Treasury Rate is applicable, the average of three, or such lesser number as
is obtained by the Trustee, Reference Treasury Dealer Quotations for such Redemption Date.

          “Quotation Agent” means the Reference Treasury Dealer selected by the Trustee after
consultation with the Company.

          “Reference Treasury Dealer” means a primary U.S. Government securities dealer selected by the
Company.

          “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any Redemption Date, the average, as determined by a Reference Treasury Dealer, of the bid and
asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its
principal amount, quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such Redemption Date.

7. Notice of Redemption

          If the Company is redeeming less than all the Notes at any time, the Trustee will select the
Notes to be redeemed using a method it considers fair and appropriate. Notice of redemption will
be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed in accordance with Section 106 of the Indenture. Notes in denominations
larger than $1,000 principal amount may be redeemed in part but only in integral multiples of
$1,000. The Company will not know the exact Redemption Price until three Business Days before the
Redemption Date. Therefore, the notice of redemption will only describe how the

 

 

Redemption Price will be calculated. If money sufficient to pay the Redemption Price of and
accrued interest on all Notes (or portions thereof) to be redeemed on the Redemption Date is
deposited with the Paying Agent on or before the Redemption Date and certain other conditions are
satisfied, on and after such Redemption Date interest will cease to accrue on such Notes (or such
portions thereof) called for redemption.

8. Additional Notes

          The Company may, without the consent of the Holders of the Notes, create and issue Additional
Notes of any series ranking equally with the Notes of that series in all respects, including having
the same CUSIP number, so that such Additional Notes shall be consolidated and form a single series
with the Notes of that series and shall have the same terms as to status, redemption or otherwise
as the Notes of that series. No Additional Notes may be issued if an Event of Default has occurred
and is continuing with respect to the Notes.

9. Denominations; Transfer; Exchange

          The Notes are in registered form without coupons in denominations of $1,000 principal amount
and integral multiples of $1,000. A Holder may transfer or exchange Notes in accordance with the
Indenture. The Security Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Security Registrar need not register the transfer or exchange of any Notes
selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the
Note not to be redeemed) for a period of 15 days before a selection of Notes to be redeemed.

10. Persons Deemed Owners

          The registered Holder of this Note may be treated as the owner of it for all purposes.

11. Unclaimed Money

          If money for the payment of principal or interest remains unclaimed for two years, the Trustee
or Paying Agent shall pay the money back to the Company at its request. After any such payment,
Holders entitled to the money must look only to the Company and not to the Trustee, the Paying
Agent or NiSource Inc., as guarantor, for payment.

12. Satisfaction and Discharge

          Under the Indenture, the Company can terminate its obligations with respect to the Notes not
previously delivered to the Trustee for cancellation when those Notes have become due and payable
or will become due and payable at their Stated Maturity within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for giving notice of
redemption. The Company may terminate its obligations with respect to the Notes by depositing with
the Trustee, as

 

 

funds in trust dedicated solely for that purpose, an amount sufficient to pay and discharge
the entire indebtedness on the Notes. In that case, the Indenture will cease to be of further
effect and the Company’s obligations will be satisfied and discharged with respect to the Notes
(except as to the Company’s obligations to pay all other amounts due under the Indenture and to
provide certain Officers’ Certificates and Opinions of Counsel to the Trustee). At the expense of
the Company, the Trustee will execute proper instruments acknowledging the satisfaction and
discharge.

13. Amendment, Waiver

          Subject to certain exceptions set forth in the Indenture, (i) the Indenture and the Notes may
be amended with the written consent of the Holders of at least a majority in principal amount
outstanding of the Notes and (ii) any default or noncompliance with any provision may be waived
with the written consent of the Holders of a majority in principal amount outstanding of the Notes.
Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the
Company and the Trustee shall be entitled to amend the Indenture to cure any ambiguity, omission,
defect or inconsistency, or to evidence the succession of another Person as obligor under the
Indenture, or to add to the Company’s or NiSource Inc.’s covenants or to surrender any right or
power conferred on the Company or NiSource Inc. under the Indenture, or to add events of default,
or to secure the Notes, or to evidence or provide for the acceptance or appointment by a successor
Trustee or facilitate the administration of the trusts under the Indenture by more than one
trustee, or to effect assumption by NiSource Inc. or one of its Subsidiaries of the Company’s
obligations under the Indenture, or to conform the Indenture to any amendment of the Trust
Indenture Act.

14. Defaults and Remedies

          Under the Indenture, Events of Default include: (i) default by the Company in the payment of
any interest upon any Note and the continuance of such default for 60 days; (ii) default by the
Company in the payment of principal of or any premium on any Note when due at Stated Maturity, on
redemption, by declaration or otherwise, and the continuance of such default for three Business
Days; (iii) default by the Company or NiSource Inc. in the performance of or breach of any covenant
or warranty in the Indenture and continuance of such default for 90 days after written notice to
the Company or NiSource Inc. from the Trustee or to the Company, NiSource Inc. and the Trustee from
the Holders of at least 33% in principal amount of the Outstanding Notes; (iv) default by the
Company or NiSource Capital Markets, Inc. under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company or NiSource Capital Markets, Inc., or the Company or
NiSource Capital Markets, Inc. defaults under any mortgage, indenture or instrument under which
there may be issued, secured or evidenced indebtedness constituting a failure to pay in excess of
$50,000,000 of the principal or interest when due and payable, subject to certain cure rights; (v)
the guarantee by NiSource Inc. ceases to be in full force and effect or is disaffirmed or denied
(other than according to its terms), or is found to be unenforceable or invalid; or (vi) certain
events of bankruptcy, insolvency or reorganization of the Company, NiSource Capital Markets, Inc.
or NiSource Inc. If an Event of Default occurs and is continuing,

 

 

the Trustee or the Holders of at least 33% in principal amount of the Notes may declare all
the Notes to be due and payable immediately. Certain events of bankruptcy or insolvency are Events
of Default which will result in the Notes being due and payable immediately upon the occurrence of
such Events of Default.

          Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The
Trustee may refuse to enforce the Indenture or the Notes unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in principal amount of
the Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders notice of any continuing default (except a default in payment of principal or
interest) if it determines that withholding notice is in the interest of the Holders.

15. Trustee Dealings with the Company

          Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal
with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were not Trustee.

16. No Recourse Against Others

          A director, officer, employee or stockholder, as such, of the Company, NiSource Inc. or the
Trustee shall not have any liability for any obligations of the Company under the Notes or the
Indenture, or any obligations of NiSource Inc. under the Security Guarantee or the Indenture, or
for any claim based on, in respect of or by reason of such obligations or their creation. By
accepting a Note, each Holder waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Notes and the Security Guarantee.

17. Authentication

          This Note shall not be valid until an authorized signatory of the Trustee (or an
Authenticating Agent) manually signs the certificate of authentication on the other side of this
Note.

18. Abbreviations

          Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM
(=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of
survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

19. CUSIP, ISIN and Common Code Numbers

          Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be

 

 

printed on the Notes and has directed the Trustee to use CUSIP numbers in notices of
redemption as a convenience to Holders. To the extent such numbers have been issued, the Company
has caused ISIN and Common Code numbers to be similarly printed on the Notes and has similarly
instructed the Trustee. No representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.

20. Governing Law.

          THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF NEW YORK, WITHOUT GIVING EFFECT TO CONTRARY CONFLICT OF LAWS OR CHOICE OF LAWS PROVISIONS OF THE
STATE OF NEW YORK OR ANY OTHER JURISDICTION.

          The Company will furnish to any Holder upon written request and without charge to the Holder a
copy of the Indenture. Requests may be made to:

NiSource Finance Corp.

801 East 86th Avenue

Merrillville, Indiana 46410

Attention: Secretary

 

 

ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to

 

 

(Print or type assignee’s name, address and zip code)

 

(Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint                                          agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.

	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Your Signature:	 	 
	 

	 	 
	 	 	 	 	 	 

	 	      	 
	 

	 	 
	 

	 	Sign exactly as your name appears on the
other side of this Note.

Signature Guarantee:

	 	 	 
	 

	 	 
	Signature must be guaranteed

	 	Signature

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of
the Security Registrar, which requirements include membership or participation in the Security
Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Security Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.

 

 

SECURITY GUARANTEE

          NiSource Inc. irrevocably and unconditionally guarantees the Obligations of NiSource Finance
Corp., an Indiana corporation (the “Company”) under the 6.15% Notes due 2013 (the “Notes”) of the
Company, including that (i) the principal of, premium, if any, and interest on the Notes shall be
promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of, premium, if any, and interest on the Notes, if
lawful, and all other Obligations of the Company to the Holders or the Trustee shall be promptly
paid in full or performed, and (ii) in case of any extension of time of payment or renewal of any
Notes or any such other Obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by
acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance
so guaranteed, NiSource Inc. shall be obligated to pay or perform the same immediately.

          The obligations of NiSource Inc. to the Holders and to the Trustee pursuant to this Security
Guarantee and the Indenture are expressly set forth in Article Fifteen of the Indenture, and
reference is hereby made to such Indenture 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.

          This Security Guarantee shall remain in full force and effect and continue notwithstanding any
petition filed by or against the Company for liquidation or reorganization.

          This Security Guarantee shall not be valid or obligatory for any purpose until the certificate
of authentication on the Note upon which this Security Guarantee is noted shall have been executed
by the Trustee under the Indenture by the manual signature of one of its authorized officers.

          THE TERMS OF ARTICLE FIFTEEN OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE.

 

 

          Capitalized terms used herein have the same meanings given in the Indenture unless otherwise
indicated.

	 	 	 	 	 	 	 
	 	 	NISOURCE INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:

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