Northern Indiana Public Service Company - Page 7

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                  In connection with the issuance of the Euronotes,                                   
            petitioner, Finance, and the Irving Trust Co. entered into an                             
            Indenture Agreement on October 15, 1981.  This agreement                                  
            elaborates on the form and terms of the Euronote issuance and on                          
            the responsibilities of the respective parties.  The agreement                            
            provides, inter alia, that Finance's net worth will not be                                
            reduced to an amount that is less than 40 percent of the                                  
            aggregate amount of its outstanding indebtedness.                                         
                  Also in connection with the Euronote offering, Eichhorn,                            
            Eichhorn & Link issued a legal opinion letter dated October 7,                            
            1981.  Based upon certain representations by petitioner, the                              
            opinion letter stated that the Euronote holders would not be                              
            subject to U.S. income tax upon receipt of interest income from                           
            Finance, unless the holders were engaged in a U.S. trade or                               
            business.  For purposes of this opinion letter, petitioner                                
            represented, inter alia, that the equity capital of Finance at                            
            the time of issuance of the Euronotes would not be less than $28                          
            million, consisting of accounts receivable to be assigned to                              
            Finance, and that Finance's net worth would not at any time be                            
            reduced to an amount less than 40 percent of the aggregate amount                         
            of its outstanding indebtedness, so as to maintain at all times a                         
            debt-to-equity ratio not in excess of 2-1/2 to 1.                                         
                  On October 15, 1981, petitioner and Finance executed a                              
            document captioned "Assignment of Accounts Receivable".  This                             
            assignment was authorized by petitioner's board of directors on                           




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