EXHIBIT 1.2
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THE COASTAL CORPORATION
LOGO
and
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UNDERWRITING AGREEMENT
DATED
AND
TERMS AGREEMENT
DATED
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[TITLE OF EQUITY SECURITIES]
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THE COASTAL CORPORATION
UNDERWRITING AGREEMENT
, 199
[Name and Address of Lead Underwriters]
Dear Sirs:
The Coastal Corporation, a Delaware corporation (the "Company"), proposes to
issue and sell from time to time certain of its Preferred Stock, par value
$.33 1/3 per share (the "Preferred Stock"), Common Stock, par value $.33 1/3
per share (the "Common Stock") and/or Common Stock Warrants (the "Warrants")
referred to below (collectively, the "Securities") registered under the
registration statement referred to below. The Preferred Stock may be issued in
one or more series, may have varying dividend and liquidation preferences,
voting rights and redemption provisions, and may be convertible, as described
in the certificate of designations relating to such Preferred Stock (the
"Certificate of Designations"), into shares of the Common Stock. The Warrants
are to be issued pursuant to a Warrant Agreement dated as of [ ], 199 (the
"Warrant Agreement") between the Company and [ ] as Warrant Agent (the
"Warrant Agent"). The Securities may be sold to you, and to other firms on
whose behalf you may act, for resale in accordance with the terms of offering
determined at the time of sale. The Securities involved in any such offering
are hereinafter referred to as the "Purchased Securities", and the firm or
firms which agree to purchase the same are hereinafter referred to as the
"Underwriters" of such Purchased Securities and the representative or
representatives of the Underwriters, if any, specified in a "Terms Agreement"
are hereinafter referred to as the "Representatives"; provided, however, that
if the Terms Agreement does not specify any representative of the
Underwriters, the term "Representatives" as used in this Agreement shall mean
the Underwriters. The terms and conditions herein shall constitute a separate
agreement between the Company and the respective Underwriters in regard to
each offering of Purchased Securities.
This Agreement shall not limit or affect the right of the Company to offer
or sell any of the Securities through any other underwriters or agents or
through any other arrangements specified by the Company from time to time, and
this Agreement shall apply only to Securities in respect of which a Terms
Agreement shall have been executed as referred to herein.
This is to confirm the agreement concerning the purchase of the Securities
from the Company by the Underwriters.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to,
and agrees with each Underwriter that:
(a) A registration statement on Form S-3 (File No. 333- ), prepared
by the Company in conformity with the requirements of the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder
(collectively, the "Securities Act"), has been filed with the Securities
and Exchange Commission (the "Commission") and has become effective for the
registration under the Securities Act of the Securities. Copies of such
registration statement and any amendments thereto, and all forms of the
related prospectuses relating to the Securities contained therein, have
been delivered to each Underwriter. Such registration statement, including
the documents incorporated by reference therein and all financial schedules
and exhibits thereto, as amended at the date of any Terms Agreement, is
herein referred to as the "Registration Statement". As used in this
Agreement, the term "Prospectus" means such prospectus included in the
Registration Statement, supplemented by a Prospectus Supplement as
contemplated by Section 2 hereof to reflect the terms of the Purchased
Securities and the plan of distribution thereof. Any reference herein to
the Registration Statement or the Prospectus shall be deemed to refer to
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and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act, as of the date of the
Prospectus, and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to any Prospectus shall be deemed to refer to and
include any documents filed with the Commission after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder (collectively, the "Exchange
Act"), and so incorporated by reference (all such incorporated documents
being herein called the "Incorporated Documents").
(b) As of the date of any Terms Agreement, when the Prospectus is first
filed pursuant to Rule 424(b) under the Securities Act and when, prior to
the Closing Date (as defined in Section 2 hereof), any amendment to the
Registration Statement becomes effective (including the filing of any
document incorporated by reference in the Registration Statement) and at
the Closing Date, the Registration Statement and the Prospectus, as amended
or supplemented, shall comply in all material respects with the
requirements of the Securities Act. No such document shall contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, except that the foregoing shall not apply to statements in
or omissions from any such document in reliance upon and in conformity with
written information furnished to the Company by any Underwriter
specifically for use in the preparation thereof. There is no contract or
document required to be described in the Registration Statement or the
Prospectus or required to be filed as an exhibit to the Registration
Statement that is not described or filed as required.
(c) Deloitte & Touche LLP, whose report is incorporated by reference in
the Prospectus, are independent certified public accountants as required by
the Securities Act. The financial statements and schedules (including the
related notes) included or incorporated by reference in the Registration
Statement and the Prospectus, present fairly, in all material respects, the
financial condition, the results of operations and cash flows of the
entities purported to be shown thereby at the dates and for the periods
indicated and have been prepared in accordance with generally accepted
accounting principles.
(d) The Incorporated Documents, when they became effective or were filed
with the Commission, as the case may be, complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as
applicable, and any documents so filed and incorporated by reference
subsequent to the date of the Prospectus shall, when they are filed with
the Commission, conform in all material respects to the requirements of the
Securities Act and the Exchange Act, as applicable.
(e) Each of the Company and its Subsidiaries has been duly organized and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with full power and authority (corporate
and other) to own or lease its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business and is in
good standing in each jurisdiction in which the character of the business
conducted by it or the location of the properties owned or leased by it
makes such qualification necessary, except where the failure to so qualify
would not have a material adverse effect on the Company and its
Subsidiaries taken as a whole.
(f) All of the outstanding capital stock or other equity securities of
each of the Subsidiaries of the Company have been duly and validly
authorized and issued, are fully paid and nonassessable, and are owned by
the Company free and clear of any mortgage, pledge (other than any negative
pledge agreement to which the Company or any of its Subsidiaries may be a
party), security interest or restrictions on transferability or voting.
(g) Since the date of the latest consolidated financial statements of the
Company and its subsidiaries included in the Registration Statement and the
Prospectus, there has not been any change in the Company's issued capital
stock or options, except (I) as set forth in or expressly contemplated by
the Registration Statement and the Prospectus, (II) pursuant to the
exercise of options or the conversion, exchange or
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exercise of outstanding convertible, exchangeable or exercisable securities
of the Company and (III) issuances of shares of Common Stock and options to
acquire Common Stock issued after the date of such financial statements
pursuant to the Company's employee benefit plans as in effect on the date
hereof. Except as described in or contemplated by the Prospectus, there has
not been any material adverse change in, or any adverse development which
materially affects, the condition (financial or other), results of
operation, business, prospects, net worth or assets of the Company and its
Subsidiaries taken as a whole, from the date as of which information is
given in the Prospectus.
(h) Neither the Company nor any of its Subsidiaries is, nor with the
giving of notice or lapse of time or both would be, in violation of or in
default under, nor will the execution or delivery hereof or consummation of
the transactions contemplated hereby result in a violation of, or
constitute a default under, the certificate of incorporation, by-laws or
other governing documents of the Company or any of its Subsidiaries, or any
agreement, indenture or other instrument to which the Company or any of its
Subsidiaries is a party or by which any of them is bound, or to which any
of their properties is subject where the effect of such violation or
default would have a material adverse effect on the Company and its
Subsidiaries taken as a whole. The execution and delivery of this
Agreement, the applicable Terms Agreement, the Warrant Agreement and any
Delayed Delivery Contract (as defined in Section 2(c) hereof), the
authorization, issuance and sale of the Purchased Securities, the
fulfillment of this Agreement, the applicable Terms Agreement, the Warrant
Agreement, the Certificate of Designations, the Purchased Securities and
any Delayed Delivery Contract and the consummation of the transactions
contemplated by each such agreement will not conflict with or constitute a
breach of, or default (with the passage of time or otherwise) under, or
result in the imposition of a lien on any properties of the Company or its
Subsidiaries or an acceleration of indebtedness pursuant to, the
certificate of incorporation or by-laws, or other governing documents of
the Company or any of its Subsidiaries, or any bond, debenture, note or any
other evidence of indebtedness or any indenture, mortgage, deed or trust or
any other material agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which it or any of them is bound or to
which any of the property or assets of the Company or any of its
Subsidiaries is subject, or any law, administrative regulation or order of
any court or governmental agency or authority applicable to the Company or
any of its Subsidiaries. Except for the orders of the Commission declaring
the Registration Statement effective under the Securities Act and permits
and similar authorizations required under the securities or Blue Sky laws
of certain jurisdictions, no consent, approval, authorization or order of
any court, governmental agency or body or financial institution is required
in connection with the consummation of the transactions contemplated by
this Agreement or the applicable Terms Agreement, if applicable, the
issuance of the Common Stock upon conversion, exchange or exercise of the
Purchased Securities or the filing of the Certificate of Designation with
the Secretary of State of the State of Delaware.
(i) This Agreement and the applicable Terms Agreement have been duly
authorized, executed and delivered by the Company and each constitutes the
legal, valid and binding obligation of the Company.
(j) As of the date of the Prospectus Supplement, the Company has the
authorized, issued and outstanding capitalization set forth in the
Prospectus under "Capitalization." The authorized capital stock of the
Company conforms as to legal matters to the description thereof contained
in the Registration Statement and the Prospectus, and all of the
outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and non-assessable and are
not subject to any preemptive or similar rights.
(k) All corporate action required to be taken for the authorization,
issuance and sale of the Purchased Securities pursuant to this Agreement
and the Terms Agreement has been validly and sufficiently taken. The
Purchased Securities have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and the Terms Agreement and, when
issued and delivered by the Company pursuant to this Agreement and the
Terms Agreement against payment of the consideration set forth in the Terms
Agreement (and, with respect to the Warrants, executed and authenticated in
accordance with the Warrant Agreement), the Purchased Securities will be
validly issued and fully paid and nonassessable (or, with respect to the
Warrants, legal, valid and binding obligations of the Company, enforceable
in accordance with their terms); no holder thereof will be subject to
personal liability solely by reason of being such a holder; the Purchased
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Securities will not be subject to the preemptive rights of any stockholder
of the Company. If the Purchased Securities are convertible into, or
exchangeable or exercisable for, Common Stock, the Purchased Securities are
convertible into, or exchangeable or exercisable for, Common Stock in
accordance with their terms and/or the terms of the Warrant Agreement or
the Certificate of Designation.
(l) If the Purchased Securities are convertible into or exchangeable or
exercisable for Common Stock, the Common Stock issuable upon conversion,
exchange or exercise of the Purchased Securities pursuant to the terms of
the Warrant Agreement or the Certificate of Designations has been duly
authorized and validly reserved for issuance upon such conversion, exchange
or exercise by all necessary corporate action and such Common Stock, when
duly issued upon such conversion, exchange or exercise, will be validly
issued and fully paid and nonassessable; no holder thereof will be subject
to personal liability solely by reason of being such a holder; and the
issuance of such Common Stock upon such conversion, exchange or exercise
will not be subject to preemptive rights.
(m) The Warrant Agreement has been duly authorized and when executed and
delivered by the Company will be the legal, valid and binding agreement of
the Company enforceable in accordance with its terms, except that (i) the
enforceability thereof may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceedings therefor may be brought and (iii) the waiver as to
usury may be unenforceable. The Warrant Agreement and the Warrants conform
in all material respects to their description in the Prospectus.
(n) The Delayed Delivery Contracts, if any, have been duly authorized and
when executed and delivered by the Company will be the legal, valid and
binding agreements of the Company enforceable in accordance with their
terms, except that (i) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and (ii)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceedings therefor may be brought.
(o) Subsequent to the respective dates as of which information is given
in the Registration Statement and Prospectus and prior to the Closing Date,
neither the Company nor any of its Subsidiaries has incurred or will have
incurred any liabilities or obligations for borrowed money, direct or
contingent, or entered into any transactions, not in the ordinary course of
business and material to the business of the Company and its Subsidiaries
taken as a whole, and there has not been and will not have been any
material change in the capital stock or long-term indebtedness of the
Company or any of its Subsidiaries, or any material adverse change in the
business, prospects, financial position, net worth or assets or results of
operations of the Company and its Subsidiaries taken as a whole.
(p) The Company and its Subsidiaries have such interests in their
respective real (including leasehold interests) and personal properties
that they reasonably believe are necessary, in the aggregate, to use such
properties in the manner presently used or proposed to be used by the
Company and its Subsidiaries.
(q) Except as described in the Prospectus, there is no litigation or
governmental proceeding to which the Company or any of its Subsidiaries is
a party or to which any property of the Company or any of its Subsidiaries
is subject or which is pending or, to the knowledge of the Company,
contemplated against the Company or any of its Subsidiaries which might
result in any material adverse change in the condition (financial or
other), results of operations, business, prospects, net worth or assets of
the Company and its Subsidiaries taken as a whole.
(r) Neither the Company nor any Subsidiary is in violation of any law,
ordinance, governmental rule or regulation or court decree to which it may
be subject which violation might have a material adverse effect on the
condition (financial or other), results of operations, business, prospects,
net worth or assets of the Company and its Subsidiaries taken as a whole.
(s) The conditions for use of Form S-3, set forth in the General
Instructions thereto, have been satisfied.
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2. PURCHASE AND OFFERING.
(a) The obligations of the Underwriters to purchase the Purchased
Securities will be evidenced by an exchange of telegraphic or other written
communications substantially in the form attached as Exhibit A hereto (a
"Terms Agreement") at each time the Company determines to sell Purchased
Securities, with such other provisions which the Representatives and the
Company shall agree upon. Each Terms Agreement shall specify the firms
which will be Underwriters (who shall become bound by the terms hereof when
the Terms Agreement has been entered into), the principal amount to be
purchased by each Underwriter, the purchase price to be paid by the
Underwriters and the terms of the Purchased Securities not already
specified in the Warrant Agreement or the Certificate of Designations,
including, but not limited to, dividend rates, maturities, redemption
provisions and sinking fund requirements. Each Terms Agreement shall also
specify the date of delivery and payment for the Purchased Securities other
than any Contract Securities (as defined in Section 2(c) hereof) and any
details of the terms of offering which should be reflected in the
Prospectus Supplement relating to the offering of the Purchased Securities.
Such Prospectus Supplement shall set forth the terms contained in the Terms
Agreement and such other information that you and the Company agree at the
time the Terms Agreement is entered into should be included in the
Prospectus Supplement. Insofar as any provision of this Agreement is
inconsistent with any provision of the applicable Terms Agreement, the
Terms Agreement shall be deemed to control. Purchased Securities to be
purchased by Underwriters are herein referred to as "Underwriters'
Securities", and any Purchased Securities to be purchased pursuant to
Delayed Delivery Contracts as hereinafter provided are herein referred to
as "Contract Securities". The obligations of the Underwriters to purchase
the Underwriters' Securities shall be several and not joint. It is
understood that the Underwriters propose to offer the Purchased Securities
for sale as set forth in such Prospectus Supplement.
(b) Payment of the purchase price for the Underwriters' Securities shall
be made to the Company or its order in New York Clearing House funds, by
certified or official bank check, against delivery of the Underwriters'
Securities to you for the respective accounts of the Underwriters;
provided, however, that at the request of the Company, payment will be made
in immediately available funds, in which case the Company will reimburse
you for your cost of obtaining such funds. Such payment and delivery shall
be made at 10:00 A.M. New York time on the date of delivery specified in
the Terms Agreement (unless another time not later than 10:00 A.M. New York
time on the fifth Business Day thereafter shall be agreed to by you and the
Company or unless postponed in accordance with the provisions of Section 7
hereof). The time and date that such payment and delivery are actually made
is herein sometimes referred to as the "Closing Date". The Underwriters'
Securities shall be delivered to you in definitive form, in temporary or
final form, and in such names and denominations as you shall request at
least one Business Day prior to the Closing Date by written notice to the
Company. For the purpose of expediting the checking and packaging of the
Underwriters' Securities by you, the Company agrees to make them available
to you for such purpose before the close of business on the Business Day
prior to the Closing Date.
(c) If any Terms Agreement provides for sales of Purchased Securities
pursuant to Delayed Delivery Contracts, the Company authorizes the
Underwriters to solicit offers to purchase Contract Securities pursuant to
Delayed Delivery Contracts substantially in the form of Schedule I attached
hereto (the "Delayed Delivery Contracts") with such changes therein as the
Company may approve. Delayed Delivery Contracts are to be with
institutional investors, including commercial and savings banks, insurance
companies, pension funds, investment companies and educational and
charitable institutions. At the time of purchase the Company will pay you
as compensation, for the accounts of the Underwriters, the compensation set
forth in such Terms Agreement in respect of the principal amount of
Contract Securities. The Underwriters will not have any responsibility in
respect of the validity or the performance of Delayed Delivery Contracts.
If the Company executes and delivers Delayed Delivery Contracts, the
Contract Securities shall be deducted from the Purchased Securities to be
purchased by the several Underwriters and the aggregate principal amount of
Purchased Securities to be purchased by each Underwriter shall be reduced
pro rata in proportion to the principal amount of Purchased Securities set
forth opposite each Underwriter's name in such Terms Agreement, except to
the extent that you determine that such reduction shall be otherwise
allocated and so advise the Company.
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3. COVENANTS. The Company covenants and agrees with each Underwriter that
they will furnish to counsel for the Underwriters, without charge, one signed
copy of the Registration Statement, including all exhibits, in the form it
became effective and of all amendments thereto and that, in connection with
each offering of Securities:
(a) The Company shall notify you promptly of any request by the
Commission for any amendment of or supplement to the Registration Statement
or the Prospectus, or for additional information; the Company shall prepare
and file with the Commission, promptly upon your request, any amendments of
or supplements to the Registration Statement or the Prospectus which, in
your opinion after consultation with the Company, may be necessary or
advisable in connection with the distribution of the Securities and the
Company shall not file any amendment or supplement to the Registration
Statement or the Prospectus or file any document under the Exchange Act
before the termination of the offering of the Securities if such document
would be deemed to be incorporated by reference therein which is not
approved by you after reasonable notice thereof, such approval not to be
unreasonably withheld or delayed. The Company shall notify you promptly of
the filing with the Commission of the Prospectus supplemented by the
Prospectus Supplement relating to the Purchased Securities. The Company
shall advise you promptly of the issuance by the Commission or any State or
other regulatory body of any stop order or other order suspending the
effectiveness of the Registration Statement, suspending or preventing the
use of the Prospectus, or suspending the qualification of the Securities
for offering or sale in any jurisdiction, or of the institution of any
proceedings for any such purpose; and the Company shall use its best
efforts to prevent the issuance of any stop order or other such order and,
should a stop order or other such order be issued, to obtain as soon as
possible the lifting thereof.
(b) The Company shall furnish to you, from time to time and without
charge, copies of the Registration Statement of which each Representative
shall receive a conformed copy and which shall include exhibits and all
amendments and supplements to any of such documents (including any
Incorporated Documents), in each case as soon as available and in such
quantities as you may from time to time reasonably request.
(c) If any event occurs as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary to amend the Registration Statement or
supplement the Prospectus to comply with the Securities Act, the Company
shall promptly notify you and shall amend the Registration Statement or
supplement the Prospectus or file such document (at the expense of the
Company) so as to correct such statement or omission or effect such
compliance.
(d) The Company shall take or cause to be taken all necessary action and
furnish to whomever you may direct such information as may be required in
qualifying the Purchased Securities (and the Common Stock, if applicable)
for sale under the laws of such jurisdictions as the Representative shall
designate and to continue such qualifications in effect for as long as may
be necessary for the distribution of the Purchased Securities (and the
Common Stock, if applicable); except that in no event shall the Company be
obligated in connection therewith to qualify as a foreign corporation, or
to execute a general consent for service of process.
(e) The Company shall make generally available to holders of the
Purchased Securities, in the manner contemplated by Rule 158(b) under the
Securities Act or otherwise, as soon as practicable after the date of the
applicable Terms Agreement, but in any event not later than 45 days after
the end of its fiscal quarter in which the first anniversary date of the
date of the Terms Agreement occurs (or 90 days if such fiscal quarter is
the last fiscal quarter of its fiscal year), an earnings statement
satisfying the requirements of Section 11(a) of the Securities Act and
covering a period of at least 12 consecutive months beginning after the
effective date of the Registration Statement.
(f) The Company shall apply the net proceeds of the sale of Purchased
Securities as set forth in the Prospectus.
(g) Whether or not this Agreement becomes effective or is terminated or
the sale of the Purchased Securities to you is consummated, the Company
shall pay or cause to be paid (A) all expenses (including
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transfer taxes) incurred in connection with the delivery to the
Underwriters of the Purchased Securities, (B) all fees and expenses
(including, without limitation, fees and expenses of the Company's
accountants and counsel, but excluding fees and expenses of counsel to the
Underwriters except as set forth in (C)) in connection with the
preparation, printing, filing, delivery and shipping of the Registration
Statement (including the financial statements therein and all amendments
and exhibits thereto) and the Prospectus as amended or supplemented, and
the printing, delivery and shipping of this Agreement, any Terms Agreement,
any agreement among or between Underwriters and other underwriting
documents, including the Blue Sky Survey and any legal investment survey,
(C) all filing fees and fees and disbursements of counsel to the
Underwriters incurred in connection with the qualification of the Purchased
Securities (and the Common Stock, if applicable) under state securities
laws as provided in Section 3(d) hereof, (D) the filing fee of the National
Association of Securities Dealers, Inc., if any, (E) any applicable listing
fees, (F) the cost of printing the Warrant Agreement and certificates
representing the Purchased Securities, (G) the cost and charges of the
Warrant Agent, (H) any fees payable to rating agencies in connection with
the rating of the Purchased Securities and (I) all other costs and expenses
incident to the performance of its obligations hereunder which are not
otherwise provided for in this Section. It is understood however, that,
except as provided in this Section 3(g), Section 5 and Section 6 hereof,
each of the Underwriters shall pay all of its own costs and expenses
including the fees of its counsel (except as set forth in (C) above) and
any advertising expenses connected with any offers it may make. If the sale
of the Purchased Securities provided for herein is not consummated by
reason or acts of the Company pursuant to Section 6 hereof which prevent
this Agreement or any Terms Agreement from becoming effective, or by reason
of any failure, refusal or inability on the part of the Company to perform
any agreement on its part to be performed or because any other condition of
the Underwriters' obligations hereunder is not fulfilled, the Company shall
reimburse each of the Underwriters for all reasonable out-of-pocket
disbursements (including fees and disbursements of counsel) incurred by the
Underwriters in connection with your investigation of or any preparation by
them in respect of marketing the Purchased Securities or in contemplation
of performing their respective obligations hereunder.
(h) Prior to the Closing Date, the Company, at your request, shall
furnish to you as soon as they have been prepared by the Company a copy of
any unaudited interim consolidated financial statements of the Company and
its Subsidiaries for any period subsequent to the period covered by the
financial statements appearing in the Registration Statement and the
Prospectus.
(i) To use its best efforts to effect the listing of the Purchased
Securities (including, if applicable, the shares of Common Stock issuable
upon the conversion, exchange or exercise of the Purchased Securities) on
the New York Stock Exchange on the date of the Terms Agreement.
(j) To reserve and keep available at all times, free of preemptive
rights, sufficient shares of Common Stock to satisfy any obligations to
issue shares of Common Stock upon conversion, exchange or exercise of all
of the Purchased Securities that are convertible into or exchangeable or
exercisable for the Common Stock.
4. CONDITIONS OF YOUR OBLIGATIONS. Your obligations are subject to the
accuracy, as of the date hereof and the Closing Date (as if made at such
Closing Date), of the representations and warranties of the Company contained
herein, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) The Company shall have filed with the Commission on a timely basis
pursuant to Rule 424(b) under the Securities Act, the Prospectus as
supplemented by the Prospectus Supplement covering the Purchased
Securities. No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
be pending, threatened or contemplated by the Commission or any state
securities or Blue Sky authority.
(b) You shall not have advised the Company that the Registration
Statement, any Prospectus, or any amendment or supplement thereto, contains
an untrue statement of fact which, in your opinion, is material
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or omits to state a fact which, in your opinion, is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(c) You shall have received an opinion of Xxxxxx X. X'Xxxxx, Esq., Senior
Vice President and Secretary of the Company, dated the Closing Date and
satisfactory to Xxxxxx Xxxxxx & Xxxxxxx, your counsel, to the effect that:
(i) each of the Company and its Subsidiaries has been duly
incorporated and is a validly existing corporation in good standing
under the laws of its respective jurisdiction of incorporation with
full corporate power and authority to own and occupy its properties and
carry on its business as presently conducted and as described in the
Prospectus, and the Company and each of its Subsidiaries is registered
or qualified to conduct business and is in good standing in each
jurisdiction in which, to the best of such counsel's knowledge, their
failure to so register or qualify would have a material adverse effect
on the Company and its Subsidiaries taken as a whole; all of the
outstanding capital stock or other equity securities of each of the
Subsidiaries of the Company have been duly and validly authorized and
issued, are fully paid and nonassessable, and are owned by the Company
free and clear of any mortgage, pledge (other than any negative pledge
agreement to which the Company or any of its Subsidiaries may be a
party), security interest or restrictions on transferability or voting,
other than certain equity securities of Colorado Interstate Gas
Company, which has outstanding capital stock held by entities not
affiliated with the Company but which Subsidiary the Company, directly
or indirectly, has control of its voting power and management, and
other than the capital stock of the first tier subsidiaries of Coastal
Natural Gas Company which has been pledged to secure certain
borrowings;
(ii) this Agreement, the Terms Agreement and the Warrant Agreement
have been duly authorized, executed and delivered by the Company, and
this Agreement, the Terms Agreement and the Warrant Agreement are
legal, valid and binding agreements of the Company enforceable in
accordance with their respective terms, except that (a) the
enforceability hereof and thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceedings therefor may be
brought and (c) rights to indemnity and contribution hereunder may be
limited by Federal and state securities laws or the policies underlying
such laws;
(iii) the Delayed Delivery Contracts, if any, have been duly
authorized, executed and delivered by the Company and (assuming that
they have been duly authorized, executed and delivered by the
purchasers thereunder) are valid and binding agreements of the Company;
(iv) to the best knowledge of such counsel, there are no legal or
governmental proceedings pending or threatened to which the Company or
any of its Subsidiaries is a party, or of which the business or
properties of the Company or any of its Subsidiaries is the subject,
which are required to be disclosed in the Registration Statement and
the Prospectus and are not so disclosed and there is no contract or
document concerning the Company or any of its Subsidiaries of a
character required to be described in the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or
filed as required;
(v) the execution and delivery of this Agreement, the Terms Agreement
and any Delayed Delivery Contract, the authorization, issuance and sale
of the Purchased Securities, the fulfillment of the terms of the
Warrant Agreement, this Agreement, the Certificate of Designation, the
Terms Agreement and any Delayed Delivery Contract, and the consummation
of the transactions contemplated by the Warrant Agreement, this
Agreement, the Certificate of Designation, the Terms Agreement and any
Delayed Delivery Contract, will not conflict with or constitute a
breach of, or default (with the passage of time or otherwise) under, or
result in the imposition of a lien on any properties of the Company or
its Subsidiaries or an acceleration of indebtedness pursuant to, the
certificate of incorporation and by-laws, or other equivalent
instruments of the Company or any of its Subsidiaries or, to the best
of such counsel's knowledge, any bond, debenture, note or any other
evidence of indebtedness or any
8
indenture, mortgage, deed of trust, or any other material agreement or
instrument to which the Company or any of its Subsidiaries is subject
where such breach or default would have a material adverse effect on
the Company and its Subsidiaries taken as a whole, or any law,
administrative regulation or court or governmental agency or authority
ruling or decree known to such counsel to be applicable to the Company
or any of its Subsidiaries or any of their properties or assets; and
all legally required proceedings in connection with the authorization,
issuance and sale of the Purchased Securities in accordance with the
terms of this Agreement, the Terms Agreement and the Warrant Agreement
have been taken and, except for permits and similar authorizations
required under the securities or Blue Sky laws of certain jurisdictions
(as to which such counsel need express no opinion), all consents,
approvals, authorizations or other orders of any regulatory body,
administrative agency or other governmental body legally required for
the valid issuance and sale of the Purchased Securities or any
transactions contemplated hereunder, if applicable, the issuance of the
Common Stock upon conversion, exchange or exercise of the Purchased
Securities or the filing of the Certificate of Designation with the
Secretary of State of the State of Delaware have been obtained;
(vi) the Underwriters' Securities have been duly authorized and, with
respect to the Warrants, when executed and authenticated in accordance
with the terms of the Warrant Agreement and delivered to, and paid for
by, you will be validly issued and fully paid and non-assessable or,
with respect to the Warrants, legal, valid and binding obligations of
the Company; the Contract Securities have been duly authorized and,
with respect to the Warrants, when executed and authenticated in
accordance with the terms of the Warrant Agreement and when issued and
delivered against payment as provided in the Delayed Delivery
Contracts, will be validly issued and fully paid and non-assessable or,
with respect to the Warrants, legal, valid and binding obligations of
the Company, enforceable in accordance with their terms;
(vii) the Registration Statement has become effective under the
Securities Act, and, to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or
are pending or contemplated;
(viii) the number of authorized shares of capital stock of the
Company is as set forth in the Prospectus under "Capitalization" and
the authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(ix) the Purchased Securities, the Delayed Delivery Contracts (if
any) and the Warrant Agreement conform in all material respects to the
descriptions thereof in the Prospectus;
(x) except as to financial statements and schedules and other
financial or statistical data included therein, and the exhibits
thereto, as to which such counsel need not express any opinion, (a) the
Registration Statement and the Prospectus and any supplements or
amendments thereto comply as to form in all material respects with the
Securities Act and (b) the Incorporated Documents comply as to form in
all material respects with the requirements of the Exchange Act and, to
the best knowledge of such counsel, no such Incorporated Document
contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(xi) the issuance of the Purchased Securities is not subject to
preemptive rights arising by operation of law or under the charter or
by-laws of the Company; and no holder of the Purchased Securities will
be subject to personal liability solely by reason of being such a
holder; and
(xii) if the Purchased Securities are convertible into or
exchangeable or exercisable for Common Stock, upon issuance and
delivery of the Purchased Securities, the Purchased Securities shall be
convertible, exchangeable or exercisable at the option of the holder
thereof into or for Common Stock in accordance with the terms of the
Purchased Securities and the Certificate of Designation or Warrant
Agreement; the Common Stock issuable upon conversion, exchange or
exercise of the Purchased Securities has been duly authorized and
validly reserved for issuance upon such conversion, exchange
9
or exercise by all necessary corporate action, and such Common Stock,
when issued upon such conversion, exchange or exercise, will be validly
issued, fully paid and non-assessable; no holder of the Common Stock
will be subject to personal liability solely by reason of being such a
holder; and the issuance of such shares upon such conversion, exchange
or exercise will not be subject to preemptive rights arising by
operation of law or under the charter or by-laws of the Company.
In addition, such counsel shall state that such counsel has participated
in conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company and
you at which the contents of the Registration Statement and Prospectus and
related matters were discussed and, although such counsel is not passing
upon and does not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement and
Prospectus (except to the extent stated in paragraph (ix) above), on the
basis of the foregoing (relying as to materiality to a large extent upon
the opinions of officers and other representatives of the Company), no
facts have come to the attention of such counsel that lead him to believe
that either the Registration Statement or any amendment thereto at the time
such Registration Statement or amendment became effective contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus as of its date or any supplement
thereto as of its date, and as of the Closing Date, contained an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood that such
counsel need not comment as to the financial statements, schedules and
other statistical and financial data included in the Registration Statement
or Prospectus or the exhibits to the Registration Statement).
(d) You shall have received on the Closing Date from Xxxxxx Xxxxxx &
Xxxxxxx, your counsel, an opinion to the effect set forth in clauses (ii),
(iii), (vi), (vii), (ix), (x)(a) (except with respect to the Incorporated
Documents) and (x)(b) of Section 4(c) hereof. In addition, such counsel
shall state that such counsel has participated in conferences with officers
and other representatives of the Company, counsel for the Company,
representatives of the independent public accountants for the Company and
your representatives at which the contents of the Registration Statement
and Prospectus and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and Prospectus (except to the extent provided in
paragraph (ix) of Section 4(c) hereof), on the basis of the foregoing
(relying as to materiality to a large extent upon the opinions of officers
and other representatives of the Company), no facts have come to the
attention of such counsel that lead them to believe that either the
Registration Statement or any amendment thereto at the time such
Registration Statement or amendment became effective contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus as of its date or any supplement thereto
as of its date contained an untrue statement of a material fact or omitted
to state a material fact necessary in order the make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need express no comment
with respect to the financial statements, schedules and other financial or
statistical data included or incorporated by reference in the Registration
Statement or Prospectus or the exhibits to the Registration Statement).
(e) There shall have been furnished to you a certificate, dated the
Closing Date and addressed to you, signed by the President, or any Vice
President and the Chief Financial Officer, any financial Vice President or
the Treasurer of the Company to the effect that: (i) the representations
and warranties of the Company contained in this Agreement are true and
correct, as if made at and as of the Closing Date, and the Company has
complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing Date; (ii) no
stop order suspending the effectiveness of the Registration Statement has
been issued, and no proceedings for that purpose have been initiated or
threatened; (iii) all filings required by Rule 424 of the Securities Act
have been made; (iv) the signers of said certificate have carefully
examined the Registration Statement and the Prospectus, and any amendments
or supplements thereto
10
(including any documents filed under the Exchange Act and deemed to be
incorporated by reference therein), and such documents contain all
statements and information required to be included therein, and do not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; and (v) since the execution of the Terms
Agreement, there has occurred no event required to be set forth in an
amendment or supplement to the Registration Statement or the Prospectus
which has not been so set forth; and there has been no document required to
be filed under the Exchange Act that upon such filing would be deemed to be
incorporated by reference into the Prospectus that has not been so filed.
(f) Since the execution of the Terms Agreement, neither the Company nor
any of its Subsidiaries shall have sustained any loss by fire, flood,
accident or other calamity, or shall have become a party to or be subject
to any litigation, which is material to the Company and its Subsidiaries
taken as a whole, nor shall there have been a material adverse change in
the general affairs, business, key personnel, capitalization, financial
position or net worth of the Company and its Subsidiaries taken as a whole,
whether or not arising in the ordinary course of business, which loss,
litigation or change, in your judgment, shall render it inadvisable to
proceed with the delivery of the Purchased Securities.
(g) On the date of execution of the Terms Agreement and the Closing Date
you shall have received a letter of Deloitte & Touche LLP, dated the date
of execution of the Terms Agreement and the Closing Date, as the case may
be, and addressed to you, confirming that they are independent certified
public accountants, within the meaning of the Securities Act, and stating,
as of the date of such letter (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given or incorporated in the Prospectus, and a
date not more than five days prior to the date of such letter), the
conclusions and findings of such firm with respect to the financial
information and other matters requested to be covered by its letter
delivered to you concurrently with the execution of the Terms Agreement
and, with respect to the letter delivered on the Closing Date, confirming
the conclusions and findings set forth in such prior letter.
(h) That the Company shall have accepted Delayed Delivery Contracts in
any case where sales of Contract Securities arranged by the Underwriters
have been approved by the Company.
(i) You shall have been furnished with such additional documents and
certificates as you may reasonably request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and to counsel for the
Underwriters. The Company shall furnish to you such conformed copies of
such opinions, certificates, letters and other documents as you shall
reasonably request. If any of the conditions specified in this Section 4
shall not have been fulfilled when and as required by this Agreement, this
Agreement and the applicable Terms Agreement and all obligations of the
Underwriters hereunder and thereunder may be cancelled at, or at any time
prior to, the Closing Date, by you. Any such cancellation shall be without
liability of the Underwriters to the Company. Notice of such cancellation
shall be given to the Company in writing, or by telegraph or telephone and
confirmed in writing.
5. INDEMNIFICATION AND CONTRIBUTION. (a) The Company shall indemnify and
hold harmless each of the Underwriters against any loss, claim, damage or
liability to which the Underwriters may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage or liability (or action
in respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement made by the Company in Section 1 hereof, or (ii) any
untrue statement or alleged untrue statement of a material fact contained (A)
in the Registration Statement or the Prospectus or any amendment or supplement
thereto, or (B) in any Blue Sky application or other document executed by the
Company specifically for the purpose or based upon any written information
furnished by the Company filed in any state or other jurisdiction in order to
qualify any or all of the Purchased Securities under the securities laws
thereof (any such application, document or information being hereinafter
called "Blue Sky Information"), or (iii) the omission or alleged omission to
state in the Registration Statement
11
or the Prospectus or any amendment or supplement thereto or in any Blue Sky
Information a material fact required to be stated therein or necessary to make
the statements therein not misleading; and shall reimburse each of the
Underwriters for any legal or other reasonable expenses as incurred by the
Underwriters in connection with investigating or defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action, notwithstanding the possibility that payments for
such expenses might later be held to be improper, in which case the person
receiving them shall promptly refund them; provided, however, that the Company
shall not be liable to an Underwriter in any such case to the extent, but only
to the extent, that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter specifically for use
in the preparation of the Registration Statement, Prospectus or any amendment
or supplement thereto, or any Blue Sky Information.
(b) Each of the Underwriters, severally but not jointly, shall indemnify and
hold harmless the Company against any loss, claim, damage or liability to
which the Company may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage or liability (or action in respect
thereof) arises out of or is based upon (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in the Registration
Statement or the Prospectus or any amendment or supplement thereto, or (B) in
any Blue Sky Information, or (ii) the omission or alleged omission to state in
the Registration Statement or the Prospectus or any amendment or supplement
thereto or in any Blue Sky Information a material fact required to be stated
therein or necessary to make the statements therein not misleading; and shall
reimburse any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending against any such loss, claim,
damage, liability or action, notwithstanding the possibility that payments for
such expenses might later be held to be improper, in which case the Company
shall promptly refund them; provided, however, that such indemnification and
expense reimbursement shall be available from an Underwriter to the extent,
but only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Company by such Underwriter
specifically for use in the preparation thereof.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have to an indemnified party otherwise than under
such subsection. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party,
to assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under such
subsection for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; except that you shall have the right to employ counsel
to represent you in connection with any claim in respect of which indemnity
may be sought by the Underwriters against the Company under such subsection
if, in your reasonable judgment, it is advisable for you to be represented by
separate counsel, and in that event the reasonable fees and expenses of such
separate counsel shall be paid by the Company.
(d) If the indemnification provided for in this Section 5 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages
or liabilities referred to in subsection (a) or (b) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the
offering of the Purchased Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the
12
Company on the one hand and the Underwriters on the other in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Purchased Securities (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters as set forth in the Prospectus
Supplement covering the Purchased Securities. Relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were to be
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to in the
first sentence of this subsection (d). The amount paid by an indemnified party
as a result of the losses, claims, damages or liabilities referred to in the
first sentence of this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending against any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Purchased
Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Each party entitled to contribution agrees that
upon the service of a summons or other initial legal process upon it in any
action instituted against it in respect of which contribution may be sought,
it shall promptly give written notice of such service to the party or parties
from whom contribution may be sought, but the omission so to notify such party
or parties of any such service shall not relieve the party from whom
contribution may be sought from any obligation it may have hereunder or
otherwise.
(e) The obligations of the Company under this Section 5 shall be in addition
to any liability which the Company may otherwise have, and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Securities Act and the Exchange Act; and
the obligations of the Underwriters under this Section 5 shall be in addition
to any liability that the respective Underwriters may otherwise have, and
shall extend, upon the same terms and conditions, to each director of the
Company (including any person who, with his or her consent, is named in the
Registration Statement as about to become a director of the Company), to each
officer of the Company who has signed the Registration Statement and to each
person, if any, who controls the Company within the meaning of the Securities
Act.
6. EFFECTIVE DATE AND TERMINATION OF TERMS AGREEMENT. This Agreement shall
become effective (a) at 11:00 A.M., New York City time, on the first full
Business Day following the date of the Terms Agreement or (b) at such earlier
time after the date of the Terms Agreement as you shall first release the
Purchased Securities for sale to the public. You shall notify the Company
immediately after you have taken any action which causes this Agreement to
become effective. Until this Agreement is effective, it may be terminated by
the Company by giving notice as hereinafter provided to you or by you by
giving notice as hereinafter provided to the Company, except that the
provisions of Section 3(g) and Section 5 shall at all times be effective.
Your obligations under any Terms Agreement may be terminated by you by
giving notice as hereinafter provided to the Company, if (i) the Company shall
have failed, refused or been unable, at or prior to the Closing Date to
perform any agreement on its part to be performed hereunder, (ii) any other
condition of the obligations of the Underwriters hereunder is not fulfilled,
(iii) trading in securities generally on the New York Stock Exchange ("NYSE")
or the American Stock Exchange or the over-the-counter market shall have been
suspended or minimum prices shall have been established on either of such
exchanges or such market by the Commission or by such exchange or other
regulatory body or governmental authority having jurisdiction, (iv) a general
13
banking moratorium shall have been declared by Federal or state authorities,
(v) the United States engages in hostilities or there is an escalation of
hostilities involving the United States or there is a declaration of war or
national emergency by the United States after the date hereof which, in your
judgment, makes it inadvisable or impracticable to proceed with the delivery
of the Purchased Securities, or (vi) there shall have been such a material
change in general economic, political or financial conditions or if the effect
of international conditions on the financial markets in the United States
shall be such as, in your judgment, makes it inadvisable or impracticable to
proceed with the delivery of the Purchased Securities. Any termination of this
Agreement pursuant to this Section 6 shall be without liability on the part of
the Company or the Underwriters except as otherwise provided in Sections 3(g)
and 5 hereof.
Any notice referred to above may be given at the address specified in
Section 9 hereof in writing or by telegraph or telephone, and if by telegraph
or telephone, shall be immediately confirmed in writing.
7. INCREASE IN UNDERWRITERS' COMMITMENTS. If any Underwriter shall default
in its obligation to take up and pay for the Purchased Securities to be
purchased by it under any Terms Agreement and if the number of Purchased
Securities which all Underwriters so defaulting shall have so failed to take
up and pay for does not exceed 10% of the total number of Purchased Securities
agreed to be purchased pursuant to such Terms Agreement, the non-defaulting
Underwriters shall take up and pay for (in addition to the number of Purchased
Securities they are obligated to purchase pursuant to such Terms Agreement)
the number of Purchased Securities agreed to be purchased by all such
defaulting Underwriters, as hereinafter provided. Such Purchased Securities
shall be taken up and paid for by such non-defaulting Underwriter or
Underwriters in such amount or amounts as you may designate with the consent
of each Underwriter so designated or, in the event no such designation is
made, such Purchased Securities shall be taken up and paid for by all non-
defaulting Underwriters pro rata in proportion to the number of Purchased
Securities they have agreed to purchase under such Terms Agreement.
Without relieving any defaulting Underwriter from its obligations hereunder,
the Company agrees with the non-defaulting Underwriters that it will not sell
any Purchased Securities under any Terms Agreement unless all of the
Underwriters' Securities under any such Terms Agreement are purchased by the
Underwriters (or by substituted underwriters selected by you with the approval
of the Company or selected by the Company with your approval).
If a new underwriter or underwriters are substituted by the Underwriters or
by the Company for a defaulting Underwriter or Underwriters in accordance with
the foregoing provision, the Company or you shall have the right to postpone
the Closing Date for a period not exceeding five full business days in order
that necessary changes in the Registration Statement and Prospectus and other
documents may be effected.
The term Underwriter as used in this Agreement shall refer to and include
any underwriter substituted under this Section 7.
8. SURVIVAL OF INDEMNITIES, CONTRIBUTIONS, WARRANTIES AND REPRESENTATIONS.
The indemnity and contribution agreements contained in Section 5 and the
representations, warranties and agreements of the Company in Sections 1 and 3
shall survive the delivery of the Purchased Securities to the Underwriters
hereunder and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or
on behalf of any indemnified party.
9. NOTICES. Except as otherwise provided in this Agreement, (a) whenever
notice is required by the provisions of this Agreement to be given to the
Company, such notice shall be in writing addressed to the Company at The
Coastal Corporation, Coastal Tower, Nine Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000-
0995, Attention: Director--Financial Administration, with a copy to Xxxxxx X.
X'Xxxxx, Esq.; and (b) whenever notice is required by the provisions of this
Agreement to be given to the Underwriters, such notice shall be in writing and
addressed to the Underwriters at their respective addresses furnished to the
Company in writing for the purpose of communications hereunder.
14
10. INFORMATION FURNISHED BY UNDERWRITERS. The statements with respect to
the public offering of the Purchased Securities on the cover page of the
Prospectus Supplement covering the Purchased Securities and under the caption
"Plan of Distribution", if any in such Prospectus Supplement constitute the
only information furnished to the Company in writing on behalf of or by you
expressly for use in the Registration Statement, the Prospectus, or any
amendment or supplement thereto referred to in this Agreement.
11. PARTIES. This Agreement shall inure to the benefit of and be binding
upon the Underwriters, the Company, any officer, director or controlling
person referred to in Section 5 hereof, and their respective successors and
assigns, and no other person shall acquire or have any right by virtue of this
Agreement. The term "successors and assigns", as used in this Agreement, shall
not include any purchaser of any of the Purchased Securities from the
Underwriters merely by reason of such purchase.
12. DEFINITION OF "BUSINESS DAY" AND "SUBSIDIARY". For purposes of this
Agreement, (a) "Business Day" means any day on which the NYSE is open for
trading, and (b) "Subsidiary" has the meaning set forth in Rule 405 of the
Securities Act.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE CHOICE OF LAW OR CONFLICT OF LAWS PRINCIPLES THEREOF.
14. COUNTERPART. This Agreement may be signed in one or more counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same agreement.
Please confirm, by signing and returning to us four counterparts of this
Agreement, that the foregoing correctly sets forth the Agreement between you
and the Company.
Very truly yours,
THE COASTAL CORPORATION
By: _________________________________
Confirmed and accepted as of
the date first above mentioned:
[Lead Underwriters]
By:
By: _________________________________
15
SCHEDULE A
TO
TERMS AGREEMENT
NUMBER
OF
PURCHASED
NAME SECURITIES
---- -----------
-----------
Total.....................................................
===========
EXHIBIT A
TERMS AGREEMENT
[TITLE OF SECURITIES]
[Date]
The Coastal Corporation
Coastal Tower
Nine Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Dear Sirs:
The Coastal Corporation (the "Company") and [Lead Underwriters] [as
representatives of the underwriters named in Schedule A hereto] (the
"Underwriters") have entered into an Underwriting Agreement (the "Underwriting
Agreement"), dated , relating to the issuance from time to time by the
Company of its [Title of Securities]. This Terms Agreement, relating to the
Purchased Securities referred to below, is being entered into pursuant to the
Underwriting Agreement. Capitalized terms used herein, not otherwise defined,
have the meanings given them in the Underwriting Agreement.
The Underwriters understand that the Company proposes to issue and sell
[ ] of [Title of Securities] (the "Purchased Securities"). Subject to the
terms, conditions, representations and warranties set forth or incorporated by
reference herein, the Company agrees to sell to the Underwriters and the
Underwriters agree, severally but not jointly, to purchase from the Company
the Purchased Securities in the respective numbers set forth next to their
names in Schedule A hereto, at [ ]. The Prospectus Supplement with
respect to the Purchased Securities is dated and includes the
Prospectus dated .
The Underwriters will pay for such Purchased Securities upon delivery
thereof in New York City at 10:00 A.M. (New York time) on (the
"Closing Date") in New York Clearing House funds, or at such other time on the
Closing Date as shall be agreed upon by the Company and the Underwriters.
The Purchased Securities shall have the following terms, in addition to
those set forth in the governing documents:
(a) Dividends: % per annum
(b) Conversion:
(c) Initial Public Of-
fering Price:
(d) Dividend Payment and of each year, commencing
Dates: .
(e) Redemption:
(f) Exercise Price:
All provisions contained in the Underwriting Agreement are incorporated by
reference herein in their entirety and shall be deemed to be part of this
Agreement to the same extent as if such provisions had been set forth in full
herein.
1
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CHOICE OF LAW OR
CONFLICT OF LAWS PRINCIPLES THEREOF.
This instrument may be signed by the parties in counterparts which together
shall constitute one and the same agreement between the parties and shall
become effective at such time as each of the parties shall have signed such
counterparts and shall have notified the other party thereof.
Please confirm your agreement herewith by having an authorized officer sign
a copy of this Agreement in the space provided below.
Very truly yours,
[Lead Underwriters]
By:
By: _________________________________
Name:
Title:
Accepted and Agreed to
as of the date first
above written
The Coastal Corporation
By: _________________________________
Name:
Title:
2
