CONSOLIDATED NATURAL GAS COMPANY
STANDARD PURCHASE AGREEMENT PROVISIONS - EQUITY SECURITIES
INCLUDING FORM OF PURCHASE AGREEMENT
CONSOLIDATED NATURAL GAS COMPANY
STANDARD PURCHASE AGREEMENT PROVISIONS - EQUITY SECURITIES
From time to time, Consolidated Natural Gas Company, a Delaware
corporation (the "Company"), may enter into purchase agreements that provide for
the sale of designated equity securities to the purchaser or purchasers named
therein. The standard provisions set forth herein may be incorporated by
reference in any such purchase agreement (the "Purchase Agreement"). The
Purchase Agreement, including the provisions incorporated therein by reference,
is herein sometimes referred to as "this Agreement". Unless otherwise defined
herein, terms defined in the Purchase Agreement are used herein as therein
defined.
1. Introductory. The Company proposes to issue and sell from time to
time equity securities registered under the registration statement referred to
in Section 2(a) (the "Registered Securities"). The Registered Securities
referred to in Schedule I of the Purchase Agreement ("Schedule I") are
hereinafter referred to as the "Firm New Securities." The Purchase Agreement may
provide for an additional number of Registered Securities (the "Additional New
Securities") which the Purchasers may purchase on the terms and conditions set
forth in the Agreement for the sole purpose of covering over-allotments. The
Firm New Securities and the Additional New Securities, if any, are referred to
as the "New Securities." Such securities may be issued in one or more series,
may have varying dividend and liquidation preferences, voting rights, redemption
provisions and other terms, with all such terms for any particular series of the
New Securities being determined at the time of the sale. The purchaser or
purchasers, as the case may be, which agree to purchase the same are hereinafter
referred to as the "Purchasers" of such New Securities. The terms "you" and
"your" refer to those Purchasers who sign the Purchase Agreement either on
behalf of themselves only or on behalf of themselves and as representatives of
the several Purchasers named in Schedule I, as the case may be, unless one or
more of such Purchasers shall have been appointed representative
("Representative") of all of the Purchasers who sign the Purchase Agreement, in
which case, the terms "you" and "your" shall mean such Purchaser acting in its
capacity as Representative.
2. Representations and Warranties. The Company represents and warrants
to and agrees with each Purchaser that:
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(a) A registration statement on Form S-3 relating to the
Registered Securities including a prospectus and all documents
incorporated by reference therein has been filed with the Securities
and Exchange Commission (the "Commission") and has become effective.
Such registration statement, including the prospectus set forth
therein, as amended by a prospectus supplement with respect to the
offering of New Securities referred to in Section 1 and all prior
amendments and supplements thereto (other than supplements and
amendments relating to Securities that are not New Securities),
including all documents filed as a part thereof or incorporated
therein, is hereinafter referred to as the "Registration Statement" and
such prospectus, as so amended or supplemented (including all material
incorporated by reference therein) is hereinafter referred to as the
"Prospectus".
(b) The Registration Statement and the Prospectus in all
material respects comply with the provisions of the Securities Act of
1933, as amended (the "Act"), and the applicable published rules and
regulations of the Commission thereunder (the "Rules and Regulations");
the Registration Statement does not 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, and
the Prospectus does not 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, in the light of the
circumstances under which they were made, not misleading and all
documents incorporated therein by reference pursuant to Item 12 of Form
S-3 as of the respective dates on which they were filed complied in all
material respects with the requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the pertinent published
rules and regulations thereunder (the "Exchange Act Rules and
Regulations") and, on said dates, and at the time of purchase, when
read together with the Prospectus, or the Prospectus as it may be
otherwise amended or supplemented, will not contain an 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, in the
light of circumstances under which they were made, not misleading,
except that the Company makes no warranty or representation to any
Purchaser with respect to any statement contained in or any matter
omitted from the Registration Statement or Prospectus, which
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statements were made, or matters omitted, in reliance upon and in
conformity with information furnished in writing to the Company by such
Purchaser or through you for use in the Registration Statement and
Prospectus.
(c) The Commission has issued an order under the Public
Utility Holding Company Act of 1935 ("PUHCA") permitting to become
effective the Form U-1 Declaration filed by the Company with respect to
the issue and sale of the Securities (including the New Securities),
such order being subject, however, to such supplemental orders, if any,
as the Commission may issue under PUHCA. A copy of such order
heretofore issued by the Commission has been or will be delivered to
the Purchasers.
(d) Except as otherwise contemplated herein, no approval,
authorization, consent, certificate or order of any State commission or
regulatory authority is necessary with respect to the issuance or the
sale of the New Securities by the Company.
(e) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has been no
material and unfavorable change in the condition of the Company and its
subsidiaries, on a consolidated basis, financial or otherwise, other
than as referred to in the Registration Statement and Prospectus.
(f) The consummation of the transactions herein contemplated
and the performance by the Company of the terms of this Agreement will
not result in the breach by the Company of any terms of, or constitute
a default under, any other agreement or undertaking of the Company.
3. Delivery and Payment. Payment for the Firm New Securities shall be
made to the Company or its order by electronic funds transfer (unless otherwise
specified in the Purchase Agreement, in which case payment shall be made as so
specified) against the delivery of the Firm New Securities at the office of the
Company, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (unless another place is
specified in the Purchase Agreement, in which case such payment shall be made at
the place so specified), to the Purchasers or you for the respective accounts of
the Purchasers. Such payment and delivery shall be made at 10:00 A.M., New York
time, on the date set forth in the Purchase Agreement, unless another time shall
be agreed to by the Company and by you or unless postponed in ac-
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cordance with the provisions of Section 11 hereof. The time at which payment
and delivery are actually made is hereinafter sometimes called "time of
purchase." You shall specify the denominations of the Firm New Securities to be
delivered and the name and address in which each Firm New Security is to be
registered, by notice delivered to the Company not later than 10:00 A.M., New
York time, on the second business day preceding the time of purchase. For the
purpose of expediting the checking of the Firm New Securities by you, the
Company agrees to make the Firm New Securities available to you, at an office
designated by the Transfer Agent, not later than 2:00 P.M., New York time, on
the first business day preceding the time of purchase.
If there are any Additional New Securities, the Purchasers shall also
have the option to purchase, severally and not jointly, from the Company,
ratably in accordance with the number of shares of Firm New Securities to be
purchased by each of them (subject to such adjustment as you shall determine to
avoid fractional shares), all or a portion of the Additional New Securities, if
any, as may be necessary to cover over-allotments made in connection with the
offering of the Firm New Securities, at the same purchase price per share to be
paid by the Purchasers to the Company for the Firm New Securities, all subject
to the terms and conditions set forth in this Agreement. This option may be
exercised at any time (but not more than once) on or before the thirtieth day
following the date hereof, by your written notice to the Company. Such notice
shall set forth the aggregate number of shares of Additional New Securities as
to which the option is being exercised, and the date when the Additional New
Securities are to be delivered, such date being herein referred to as the
"Additional Closing Date"; provided, however, that the Additional Closing Date
shall not be earlier than the date set forth in the Purchase Agreement nor
earlier than the business day after the date on which the option shall have been
exercised nor later than the eighth business day after the date on which the
option shall have been exercised. The number of shares of Additional New
Securities to be sold to each Purchaser shall be the number which bears the same
proportion to the aggregate number of shares of Additional New Securities being
purchased as the number of shares of Firm New Securities set forth opposite the
name of such Purchaser on Schedule I to the Purchase Agreement bears to the
total number of shares of Firm New Securities (subject, in each case, to such
adjustment as you may determine to eliminate fractional shares.)
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Payment of the purchase price for the Additional New Securities, if any, shall
be made on the Additional Closing Date in the same manner and at the same time
as the payment for the Firm New Securities. You shall specify the denominations
of the Additional New Securities to be delivered and the name and address in
which each Additional New Security is to be registered, by notice delivered to
the Company not later than 10:00 A.M., New York time, on the second business day
preceding the additional time of purchase. For the purpose of expediting the
checking of the Additional New Securities by you, the Company agrees to make the
Additional New Securities available to you, at an office in New York City
designated by the Transfer Agent, not later than 2:00 P.M., New York time, on
the first business day preceding the time of purchase.
4. Covenants of the Company. The Company agrees with the several
Purchasers:
(a) To advise you promptly of any proposal to amend or
supplement the Registration Statement or the Prospectus with respect to
any New Securities at any time when a prospectus relating to such New
Securities is required to be delivered under the Act and will furnish
to you a copy of each such proposed amendment or supplement prior to
the filing thereof;
(b) If at any time when a Prospectus relating to the New
Securities is required to be delivered under the Act 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
any material fact necessary to make the statements therein, in the
light of circumstances under which they were made, not misleading, or
if it is necessary at any time to amend or supplement the Registration
Statement or the Prospectus to comply with the Act, to promptly prepare
and file with the Commission an amendment or supplement which will
correct such statement or omission or an amendment which will effect
such compliance;
(c) To furnish to you copies of the registration statement
relating to the Registered Securities (including the New Securities) as
originally filed and all amendments thereto (at least one of which will
be as filed with the Commission via ▇▇▇▇▇ and will include all exhibits
except those incorporated by reference to previous filings with the
Commission), a copy of each consent and certificate of
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independent accountants and of each other person whose profession gives
authority to statements made by him and who is named in the
Registration Statement as having prepared, certified or reviewed any
part thereof, each related prospectus, the Prospectus, and all
amendments and supplements to such documents (except supplements
relating to Registered Securities that are not New Securities) as filed
with the Commission via ▇▇▇▇▇, in each case as soon as available and in
such quantities as you may reasonably request for the purpose
contemplated by the Act and to furnish to you sufficient copies of the
foregoing (including copies of the Registration Statement (other than
exhibits and consents filed as exhibits to the Registration Statement))
for distribution of two copies of the Registration Statement and a
sufficient number of copies of the Prospectus to each of the other
Purchasers;
(d) To furnish such proper information as may be required and
otherwise to cooperate in qualifying the New Securities for sale and in
determining their eligibility for investment under the laws of such
jurisdictions as you may designate and to pay or reimburse you for
expenses and reasonable legal fees incurred in connection therewith,
provided, that the Company shall not be required to qualify as a
foreign corporation or to file a consent to service of process in any
state;
(e) To advise you promptly (confirming such advice in writing)
of any request made by the Commission for amendments to the
Registration Statement or Prospectus or for additional information with
respect thereto or of notice of institution of proceedings for, or the
entry of, a stop order suspending the effectiveness of the Registration
Statement, and if such a stop order should be entered by the
Commission, to make every reasonable effort to obtain the lifting or
removal thereof as soon as possible;
(f) For a period of five years from the date hereof to furnish
to you and to each other Purchaser who may so request (i) as soon as
practicable after the close of each fiscal year a copy of the Company's
annual report to stockholders for such year and (ii) as soon as
available, a copy of each report or definitive proxy statement of the
Company filed with the Commission under the Exchange Act or mailed to
stockholders;
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(g) During such period of time after the effective date of the
Registration Statement as the Purchasers are required by law to deliver
a prospectus in connection with any sale of the New Securities
contemplated by the Prospectus, if any event relating to or affecting
the Company or of which the Company shall be advised in writing by you
shall occur which in the Company's opinion should be set forth in a
supplement or amendment to the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances when it is
delivered to a Purchaser, to amend or supplement the Prospectus by
either (i) preparing and filing with the Commission and furnishing to
you at the Company's expense a reasonable number of copies of a
supplement or supplements or an amendment or amendments to the
Prospectus or (ii) making an appropriate filing pursuant to Section 13
or 14 of the Exchange Act, which will supplement or amend the
Prospectus so that, as supplemented or amended, it will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a Purchaser, not misleading; provided that
should such event relate solely to the activities of any of the
Purchasers, then the Purchasers shall assume the expense of preparing
any such amendment or supplement;
(h) During such period of time after the date hereof as a
prospectus relating to the New Securities is required to be delivered
under the Act, to file promptly all documents required to be filed with
the Commission pursuant to Section 13 or 14 of the Exchange Act;
(i) To make generally available to its securityholders (as
contemplated by Rule 158 of the Rules and Regulations or otherwise) a
consolidated earnings statement of the Company and its subsidiaries
covering a twelve-month period beginning the first day of the first
fiscal quarter occurring after the effective date of the Registration
Statement, as soon as reasonably practicable after the termination of
such twelve-month period;
(j) To pay all expenses, fees and taxes, other than transfer
taxes, in connection with (i) the preparation and filing of the
Registration Statement and Prospectus, any documents incorporated by
reference therein at or after the date thereof and any amendments or
supplements
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thereto, (ii) the issue, sale and delivery of the New Securities to the
Purchasers, (iii) the qualification of the New Securities for sale and
the determination of their eligibility for investment under laws as
aforesaid, and (iv) the furnishing of the opinions (other than the
opinion of Counsel for the Purchasers) and certificates referred to in
Section 6 hereof, (v) the registration of the New Securities with the
National Association of Securities Dealers, Inc., and (vi) any listing
of the New Securities on any securities exchange;
(k) To pay the fees and expenses of the designated counsel to
the Purchasers (herein called "Counsel for the Purchasers") and to
reimburse the Purchasers for their reasonable out-of-pocket expenses
incurred in contemplation of the performance of this Agreement, in the
event that the New Securities are not delivered to and taken up and
paid for by the Purchasers hereunder for any reason whatsoever except
the failure or refusal of any Purchaser to take up and pay for the New
Securities for some reason not permitted by the terms of this
Agreement. The Purchasers agree to pay the fees and expenses of Counsel
for the Purchasers in any other event;
(l) To apply the net proceeds from the sale of New Securities,
together with other funds of the Company, as set forth under the
heading "Use of Proceeds" in the Prospectus;
(m) If a public offering of the New Securities which is common
stock is to be made (unless the Purchase Agreement shall provide
otherwise), to use its best efforts to list the New Securities on the
New York Stock Exchange; and
(n) If a public offering of the New Securities which is common
stock or is convertible into or exchangeable for common stock is to be
made, not to offer or sell any of the Company's common stock prior to
ten business days after the time of purchase without your consent;
provided, however, that the Company may issue equity securities (i)
pursuant to this Agreement and (ii) pursuant to any stock option,
retirement savings or other benefit or incentive plans maintained for
the Company's officers, directors or employees, or any dividend
reinvestment plan, in effect at the time of purchase.
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5. Conditions of Purchasers' Obligations. The several obligations of
the Purchasers hereunder to purchase New Securities are subject to the following
conditions:
(a) That at the time of purchase and additional time of
purchase you shall be furnished with signed copies of the following,
addressed to the Purchasers and with photostatic copies or signed or
conformed counterparts thereof for each of the other Purchasers:
(i) An opinion of counsel to the Company, stating in
substance:
(A) That the Company has been duly
incorporated and is at the time of purchase or
additional time of purchase validly existing as a
corporation in good standing under the laws of the
State of Delaware, with charter power to carry on the
business in which it is not engaged;
(B) That the subsidiaries of the Company
named in the Prospectus are validly organized and
existing under the laws of the respective
jurisdictions in which they are incorporated;
(C) That this Agreement has been duly
authorized, executed and delivered by the Company;
(D) All the outstanding shares of capital
stock of the subsidiaries have been duly and validly
authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in
the Prospectus and Prospectus Supplement, all
outstanding shares of capital stock of the
subsidiaries are owned by the Company either directly
or through wholly owned subsidiaries free and clear
of any perfected security interest and, to the
knowledge of such counsel, any other security
interests, claims, liens or encumbrances;
(E) That the capital stock of the Company
conforms to the description thereof contained in the
Prospectus and Prospectus Supplement;
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(F) That the New Securities have been duly
authorized, and, when issued and delivered to and
paid for by the Purchasers pursuant to this
Agreement, will be validly issued, fully paid and
nonassessable;
(G) That the New Securities conform in all
material respects as to legal matters with the
statements concerning the New Securities in the
Prospectus;
(H) That the statements of the law and legal
conclusions in the Prospectus set forth in the
section "The Company and Its Subsidiaries,"
"Description of Common Stock", "Description of
Preferred Stock" and, in the Annual Report of the
Company on Form 10-K incorporated by reference in the
Prospectus (in the sections "[insert appropriate
sections of Form 10-K]"), are to the best of the
knowledge of said counsel true and accurate and do
not omit to state any material facts required to be
stated therein or necessary to make such statements
not misleading;
(I) That (i) the Registration Statement and
the Prospectus and any amendment or supplement
thereto (other than the financial statements and
other financial and statistical information contained
therein, as to which such counsel need express no
opinion) comply as to form with the requirements of
Form S-3 and the Rules and Regulations; and (ii) the
documents incorporated by reference in the Prospectus
at the time the Registration Statement became
effective and at the time of purchase (other than the
financial statements and other financial and
statistical information contained therein, as to
which such counsel need express no opinion) complied
when filed pursuant to the Exchange Act as to form
with the requirements of the Exchange Act and the
Exchange Act Rules and Regulations;
(J) (i) The original order of the Commission
referred to in subsection (c) of Section 2 of this
Agreement has been obtained and, to the best of the
knowledge of said counsel, is in full force and
effect; (ii) any required supple-
11
mental order of the Commission, referred to in
subsection (c) of Section 2 of this Agreement, has
been duly issued and, to the best of the knowledge of
said counsel, is in full force and effect; and (iii)
no further approval, authorization, consent,
certificate or order of any Federal commission or
regulatory authority is necessary for the
consummation of the transactions contemplated in this
Agreement except such as have been obtained under the
Act and such as may be required under the Blue Sky or
foreign laws of any jurisdiction in connection with
the purchase and distribution of the New Securities
by the Purchasers, and such other approvals specified
in such opinion as have been obtained;
(K) That all contracts of the Company and
its subsidiaries that are required to be filed as
exhibits to the Registration Statement under the Act
and the Rules and Regulations have been so filed, and
that to the extent required all material contracts of
the Company and its subsidiaries have been properly
described in the Registration Statement and
Prospectus; and
(L) That such counsel has participated in
the preparation of the Registration Statement and
Prospectus and no facts have come to the attention of
such counsel to lead such counsel to believe that
either the Registration Statement or the Prospectus
at the time the Registration Statement or any
amendment thereto became effective, or the Prospectus
or any amendment or supplement thereto when the
Prospectus or such amendment or supplement was filed,
or the Prospectus as it may be amended or
supplemented as of the time of purchase, 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;
(ii) An opinion of Counsel for the Purchasers as to
matters referred to in paragraph (a)(i) of this Section 5
under the subheadings (C),(E),(F),(H) and (J) (except for the
third clause, in lieu of which such counsel shall state that
they are unaware of any
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approval of any other regulatory body being so required), and
that the Registration Statement and the Prospectus, as of the
date the Registration Statement became effective (other than
the financial statements and other financial and statistical
information contained therein and Exhibit 12 to the
Registration Statement), appear to comply as to form in all
material respects with the requirements of Form S-3 and the
Rules and Regulations. In addition such counsel shall state
that they have participated in conferences with officers and
other representatives of the Company, counsel for the Company
and representatives of the independent accountants of the
Company 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 as to the matters referred to in paragraph
(a)(i) of this Section 5 under subheading (E)), on the basis
of the foregoing (relying as to materiality to a large extent
upon the opinions of officers, counsel and other
representatives of the Company), no facts have come to the
attention of such counsel which lead them to believe that the
Registration Statement or any amendment thereto when such
Registration Statement or amendment became effective or the
Prospectus or any supplement thereto when such supplement was
filed 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, in the
light of the circumstances in which they were made, not
misleading (it being understood that such counsel need make
no comment with respect to the financial statements and other
financial and statistical data included in the Registration
Statement or Prospectus and Exhibit 12 to the Registration
Statement); and
(iii) A letter, dated the time of purchase and the
additional time of purchase addressed to the Purchasers from
the independent accountants for the Company to the effect
that:
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(A) they are independent accountants within the
meaning of the Act and the Rules and Regulations;
(B) in their opinion, the consolidated financial
statements audited by them and incorporated by reference
in the Registration Statement comply as to form in all
material respects with the applicable accounting
requirements of the Act and the Rules and Regulations
with respect to registration statements on Form S-3;
(C) on the basis of procedures (but not an
examination in accordance with generally accepted
auditing standards) consisting of:
(1) reading the minutes of meetings of the
stockholders and the Board of Directors of the
Company and its consolidated subsidiaries since
December 31 of the most recent preceding year as
set forth in the minute books, but in no event
through a specified date not more than five
business days prior to the date of delivery of such
letter;
(2) reading the unaudited
condensedconsolidated balance sheets, the unaudited
consolidated statements of income and the unaudited
condensed consolidated statements of cash flows for
the periods included in the Company's quarterly
reports on Form 10-Q for the current year (for the
quarters ended March 31, June 30 and September 30,
as the case may be), incorporated by reference in
the Registration Statement;
(3) reading the unaudited consolidated
financial data of the Company and subsidiaries for
the period from the latest quarterly reporting
period to the date of the latest available interim
data, furnished by the Company, officials of the
Company having advised them that no such
consolidated financial data as of any date or for
any period subsequent to such latest date were
available; and
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(4) making inquiries of certain officials of
the Company who have responsibility for financial
and accounting matters regarding the specific items
for which representations are requested below;
nothing has come to their attention as a result of
the foregoing procedures that caused them to
believe that:
(a) the unaudited condensed consolidated financial
statements incorporated by reference in the
Registration Statement do not comply as to
form in all material respects with the
applicable accounting requirements of the
Exchange Act as it applies to Form 10-Q and
the Exchange Act Rules and Regulations or said
financial statements are not stated on a basis
substantially consistent with that of the
audited financial statements incorporated by
reference in the Registration Statement;
(b) for the period from the date of the latest
quarterly report on Form 10-Q to the date of
the latest available unaudited consolidated
income statement read by such accountants,
there were any decreases, as compared with the
corresponding period of the prior year, in
consolidated total operating revenue, in
operating income before income taxes or in net
income, except in all instances for decreases
which the Registration Statement discloses
have occurred or may occur, or they shall
state any specific decreases;
(c) at the date of the latest available unaudited
consolidated balance sheet read by such
accountants, and at a subsequent specified
date not more than five days prior to the date
of delivery of such letter, there was any
change in common stock or long-term debt of
the Company, or any decrease in total
stockholders' equity as compared with amounts
shown on the latest unaudited condensed
consolidated balance
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sheet included in the Registration Statement
(including documents incorporated by
reference), [except as to dividends on common
stock that have been declared in the normal
course of business, amortization of long-term
debt discount or premium, the retirement of
long-term debt to satisfy mandatory sinking
fund requirements, and the issuance of common
stock in connection with the Company's
long-term incentive plans and thrift plans or
dividend reinvestment plans,]1 or, from the
date of the latest available unaudited
condensed consolidated income statement read
by such accountants to the subsequent
specified date, any decreases, as compared
with the corresponding period in the preceding
year, in consolidated total operating
revenues, in operating income before income
taxes or in net income, except in all
instances for changes or decreases which the
Registration Statement (including documents
incorporated by reference) discloses have
occurred or may occur, or except as otherwise
noted in such letter.
(D) the specified dollar amounts (or
percentages derived from such dollar amounts) under
captions specified by the purchasers and agreed to by
such independent accountants contained in the
Registration Statement (including documents
incorporated by reference), in each case to the
extent that such dollar amounts and percentages are
obtained from the general accounting records of the
Company and its subsidiaries subject to the internal
control structure, policies and procedures of the
Company's accounting system or are derived directly
from such records by analysis or computation, is in
agreement with such
----------
* Relevant exceptions will be stated.
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records or computations made therefrom, except as
otherwise specified in such letter;
(b) That no amendment to the Registration Statement in
the form in which the Registration Statement is effective at
the date of this Agreement, filed subsequent to the execution
of this Agreement, or supplement to the Prospectus
constituting a part of such Registration Statement, filed
subsequently to the execution of this Agreement, shall
contain information substantially different from that
contained in such Registration Statement or Prospectus which
shall be unsatisfactory in substance to you or unsatisfactory
in form to Counsel for the Purchasers;
(c) That prior to the time of purchase or the additional
time of purchase, no stop order with respect to the
effectiveness of the Registration Statement shall have been
issued under the Act by the Commission or proceedings
therefor initiated or threatened; that at the time of
purchase or the additional time of purchase the Registration
Statement, as amended or supplemented, shall not contain an
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, and that the
Prospectus, as amended or supplemented, shall not contain an
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, in the light of the
circumstances under which they were made, not misleading;
(d) That since the respective dates as of which
information is given in the Registration Statement and
Prospectus and prior to the time of purchase or the
additional time of purchase, no material and unfavorable
change in the condition of the Company and its subsidiaries
on a consolidated basis, financial or otherwise, shall have
taken place (other than as referred to in the Registration
Statement and Prospectus); and the Company will, at the time
of purchase or the additional time of purchase, deliver to
you, with photostatic copies for delivery to each of the
Purchasers, a certificate of its Chairman of the Board or its
President or a Vice President and its Treasurer or an
Assistant Treasurer that such a change has not occurred;
17
(e) That subsequent to the date of this Agreement and
prior to the time of purchase or the additional time of
purchase there shall not have occurred (i) any downgrading in
the rating of any debt securities of the Company by any
"nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act); (ii) any
banking moratorium declared by Federal or New York
authorities; or (iii) any outbreak or escalation of major
hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial
national or international calamity or emergency if, in your
reasonable judgment, the effect of any such outbreak,
escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the
sale of and payment for the New Securities;
(f) That the Company shall have performed such of its
obligations under this Agreement as are to be performed by
the terms hereof at or before the time of purchase or the
additional time of purchase.
6. Conditions of Company's Obligations. The obligations of the Company
with respect to the delivery of the New Securities shall be subject to the
following conditions:
(a) That prior to the time of purchase, no stop order with
respect to the effectiveness of the Registration Statement shall have
been issued under the Act by the Commission or proceedings therefor
initiated or threatened; and
(b) That no order or supplement to any order of the Commission
relating to the issue or sale of the New Securities or to the
application of the proceeds thereof shall contain any conditions or
provisions that are not acceptable to the Company, it being understood
that no order in effect as of the date of this Agreement contains any
such unacceptable conditions or provisions.
7. Termination of Agreement. If a public offering of the New Securities
is to be made by the Purchasers, this Agreement may be terminated at any time
prior to 5:30 P.M., New York City time, on the first business day following the
date of this Agreement (but not after the initial public offering of the New
Securities) by you with the consent of the Purchasers (including you) who have
agreed to purchase in the aggregate
18
50% or more of the number of shares of the New Securities agreed to be purchased
hereunder, if trading in common stock on the New York Stock exchange shall have
been suspended or limited (other than a temporary suspension in trading to
provide for an orderly market), or minimum prices shall have been established on
such exchange, or a banking moratorium shall have been declared by either
Federal or New York State authorities. This Agreement may also be terminated by
you, with like consent whether or not a public offering of the New Securities
has been made, at any time prior to the time of purchase, if the Company or any
of its subsidiaries shall have sustained a loss by fire, flood, accident or
other calamity that is substantial with respect to the property of the Company
and its subsidiaries as a whole and that, in your judgment, shall render it
inadvisable to proceed with the delivery of the New Securities, whether or not
such loss shall have been insured.
The time of the "initial public offering," for the purposes of this
Section 7, shall mean the time, after the execution of this Agreement, of the
release by you for publication of the first newspaper advertisement referring to
the New Securities, or the time, after the execution of this Agreement, at which
the New Securities are first generally offered by the Purchasers to the public
or to dealers by letter or telegram or otherwise, whichever shall first occur.
If this Agreement is terminated as provided in this Section 7, the
Company and each other Purchaser shall be notified promptly by telephone or
telegram, confirmed by letter. If this Agreement shall not be carried out by any
Purchaser for any reason permitted under this Agreement or if the sale of the
New Securities to the Purchasers as herein contemplated shall not be carried out
because the Company shall be unable in good faith to comply with any of the
terms of this Agreement or if the Company shall not deliver the New Securities
for any reasons specified in Section 7 hereof, the Company shall not be under
any obligation under this Agreement (except that the Company shall remain liable
to the extent provided in Sections 4(j), 4(k), 9 and 11 hereof) and the
Purchasers (except any Purchasers in default hereunder) shall be under no
liability to the Company nor be under any liability under this Agreement to one
another.
8. Indemnity by the Company. The Company agrees to indemnify, defend
and hold harmless each Purchaser and each person, if any, who controls any
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act,
19
from and against any loss, expense, liability or claim (including the reasonable
cost of investigation) which, jointly or severally, any such Purchaser or person
may incur under the Act or otherwise, insofar as such loss, expense, liability
or claim arises out of or is based upon any alleged untrue statement of a
material fact contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof) or in the
Prospectus (the term "Prospectus" for the purpose of this Section 8 shall be
deemed to include any preliminary prospectus, the prospectus included in the
Registration Statement at the time it became effective, the Prospectus, the
Prospectus as amended or supplemented and any document incorporated by reference
therein pursuant to Item 12 of Form S-3), or arises out of or is based upon any
alleged omission to state a material fact required to be stated in either such
Registration Statement or such Prospectus or necessary to make the statements
made in such Registration Statement not misleading or necessary to make the
statements in such Prospectus, in the light of the circumstances under which
they were made, not misleading, except insofar as any such loss, expense,
liability or claim arises out of or is based upon any alleged untrue statement
of a material fact contained in information furnished in writing to the Company
through you for use in such Registration Statement or in such Prospectus or
arises out of or is based upon any alleged omission from information furnished
in writing to the Company on behalf of any Purchaser through you to state a
material fact in connection with such information required to be stated therein
or necessary to make such information when used in such Registration Statement
not misleading, or necessary to make such information when used in such
Prospectus, in the light of the circumstances under which it was used, not
misleading. The Company's agreement to indemnify or reimburse any such Purchaser
or person with respect to any such loss, expense, liability or claim is
expressly conditioned upon its being notified of the action in connection
therewith brought against such Purchaser or person by letter or telegram
addressed to the Company within ten days after the summons or other first legal
process which discloses the nature of the liability or claim shall have been
personally served upon such Purchaser or person (or after he shall have received
notice of such service upon any agent designated by him) but failure so to
notify the Company shall not relieve the Company from any liability which it may
have to such Purchaser or person otherwise than on account of the indemnity
agreement contained in this Section 8. The Company shall be entitled to assume
the investigation of any liability or claim or the defense of any suit brought
to enforce any such liability or claim and
20
the Purchaser or person against whom such suit is brought shall be entitled to
participate in such investigation and defense. If the Company assumes the
investigation and defense, such investigation and defense shall be conducted by
counsel of good standing chosen by the Company and satisfactory to such
Purchaser or person, and in such case such Purchaser or person shall bear the
expense of his investigation and the fees and expenses of any additional counsel
retained by him, except those incurred after notifying the Company of such claim
and prior to being advised by the Company of its intention to assume such
investigation or defense. If the Company does not assume the investigation of
any such claim or the defense of any such suit, or if the Company shall agree in
writing to pay such fees and expenses, or if such Purchaser or person shall
reasonably conclude that there may be defenses available to it or them which are
different from or in addition to those available to the Company, the Company
will reimburse such Purchaser or person for the reasonable fees and expenses of
any counsel retained by him; provided, however, that in such event the Company
shall be entitled, at its own expense, to participate in the investigation or
defense.
The Company's indemnity agreement contained in this Section 8 and its
warranties and representations in this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of any Purchaser or
controlling person, and shall survive any termination of this Agreement or the
issue and delivery of the New Securities.
The Company agrees promptly to notify the Purchasers of the
commencement of any litigation or proceedings against the Company or any of its
officers or directors in connection with the issue and sale of the New
Securities, or such Registration Statement or Prospectus.
9. Warranties of and Indemnity by Purchasers. (a) Each Purchaser
warrants and represents that the information furnished in writing to the Company
through you for use in the Registration Statement or in the Prospectus does not
contain an untrue statement of a material fact and does not omit to state a
material fact in connection with such information required to be stated therein
or necessary to make such information when used in such Registration Statement
not misleading, or necessary to make such information when used in such
Prospectus, in the light of the circumstances under which it was used, not
misleading. Each Purchaser, in addition to any other information furnished to
the Company through you for use in the Regis-
21
tration Statement and Prospectus, hereby authorizes you to furnish to the
Company the information with regard to the terms of offering of the New
Securities by such Purchaser, for use in the Registration Statement.
(b) Each Purchaser severally agrees to indemnify, defend and hold
harmless the Company and its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, from and against any loss, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or severally,
the Company or any such person may incur under the Act or otherwise, insofar as
such loss, expense, liability or claim arises out of or is based upon any
alleged untrue statement of a material fact contained in information furnished
in writing to the Company by such Purchaser or through you for use in the
Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof), or in the prospectus (or in the Prospectus as
amended or supplemented), or arises out of or is based upon any alleged omission
from information furnished in writing to the Company by or on behalf of such
Purchaser through you to state a material fact in connection with such
information required to be stated therein or necessary to make such information
when used in such Registration Statement not misleading, or necessary to make
such information when used in such Prospectus, in the light of the circumstances
under which it was used, not misleading. The agreement of such Purchaser to
indemnify or reimburse the Company or any such person with respect to any such
loss, expense, liability or claim is expressly conditioned upon such Purchaser
being notified of the action in connection therewith brought against the Company
or any such person, by letter or telegram addressed to you, within ten days
after the summons or other first legal process which discloses the nature of the
liability or claim shall have been personally served upon the Company or any
such person (or after the Company or any such person shall have received notice
of such service on any agent designated by the Company or any such person), but
failure so to notify such Purchaser shall not relieve such Purchaser from any
liability which it may have to the Company or any such person otherwise than on
account of the indemnity agreement contained in this Section 9(b). Such
Purchaser shall be entitled to assume the investigation of any liability or
claim and the defense of any suit brought to enforce any such liability or
claim, if such liability or claim is based solely upon such alleged misstatement
or omission on the part of such Purchaser, and the Company or any person against
whom such ac-
22
tion is brought shall be entitled to participate in such investigation and
defense. If such Purchaser shall be entitled to assume and does assume the
investigation and defense, such investigation and defense shall be conducted by
counsel of good standing chosen by such Purchaser and satisfactory to the
Company or such person, and in such case the Company or such person shall bear
the expense of its investigation and the fees and expenses of any additional
counsel retained by it except those incurred after notifying such Purchaser of
such claim and prior to being advised by such Purchaser of its intention to
assume such investigation or defense. If such Purchaser shall be entitled to
assume but does not assume the investigation of any such claim or the defense of
any such suit, of if such Purchaser shall agree in writing to pay such fees and
expenses, or if the Company or such person shall reasonably conclude that there
may be defenses available to it or him which are different from or in addition
to those available to such Purchaser, such Purchaser will reimburse the Company
or such person for the reasonable fees and expenses of any counsel retained by
it; provided, however, that in such event, such Purchaser shall be entitled, at
its own expense, to participate in the investigation or defense.
The indemnity agreement on the part of such Purchaser contained in this
Section 9(b) and the warranties and representations of such Purchaser contained
in this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or such person, and shall
survive any termination of this Agreement or the issue and delivery of the New
Securities.
Each Purchaser agrees promptly to notify the Company and each other
Purchaser of the commencement of any litigation or proceedings against such
Purchaser in connection with the issue and sale of the New Securities, or such
Registration Statement or Prospectus.
10. Contribution by the Company and the Purchasers. (a) If the
indemnification provided for in Section 8 or Section 9 is unavailable to an
indemnified party under such Sections in respect of any losses, expenses,
liabilities or claims referred to therein, then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
expenses, liabilities or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Purchasers on the
23
other hand from the offering of the New 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 Company on the one
hand and the Purchasers on the other in connection with the statements or
omissions which resulted in such losses, expenses, liabilities or claims, as
well as any other relevant equitable consideration. The relative benefits
received by the Company on the one hand and the Purchasers on the other shall be
deemed to be in the same proportion as the total proceeds from the offering (net
of underwriting discounts and commissions but before deducting expenses)
received by the Company bear to the underwriting discounts and commissions
received by the Purchasers, in each case as set forth in the table on the cover
page of the Prospectus or Prospectus Supplement with respect to the New
Securities if the same be so set forth. The relative fault of the Company on the
one hand and of the Purchasers on the other shall be determined by reference to,
among other things, whether the untrue statement 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 by the Purchasers through you
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any claim or action.
(b) The Company and Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 10 were determined by pro
rata allocation (even if the Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 10, no Purchaser shall be
required to contribute any amount in excess of the amount by which the total
price at which the New Securities purchased by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Purchaser 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 Act) shall be
entitled to contribution from any person who was not
24
guilty of such fraudulent misrepresentation. The Purchasers' obligations to
contribute pursuant to this Section 10 are several in proportion to their
respective underwriting commitments and not joint.
(c) The contribution agreement contained in this Section 10 shall
remain in full force and effect regardless of any investigation made by or on
behalf of any Purchaser, or any person who controls any Purchaser within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, or by or on
behalf of the Company, its directors and officers or any person who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and shall survive any termination of this Agreement or the
issuance and delivery of the New Securities.
11. Default by a Purchaser. If any one or more Purchasers shall fail to
purchase and pay for any of the New Securities agreed to be purchased by such
Purchaser or Purchasers hereunder and such failure to purchase shall constitute
a default in the performance of its or their obligations under this Agreement,
the remaining Purchasers shall be obligated severally to take up and pay for (in
the respective proportions which the number of Firm New Securities set forth
opposite their names in Schedule I bears to the aggregate number of Firm New
Securities set forth opposite the names of all the remaining Purchasers) the New
Securities which the defaulting Purchaser or Purchasers agreed but failed to
purchase; provided, however, that in the event that the aggregate number of Firm
New Securities which the defaulting Purchaser or Purchasers agreed but failed to
purchase shall exceed 10% of the aggregate number of New Securities set forth in
Schedule I, the remaining Purchasers shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the New Securities, and if
such nondefaulting Purchasers do not purchase all the New Securities, this
Agreement will terminate without liability to any nondefaulting Purchaser or the
Company. In the event of a default by any Purchaser as set forth in this Section
11, the execution of the Purchase Agreement shall be postponed for such period,
not exceeding seven days, as the Representative shall determine in order that
the required changes in the Registration Statement and the Prospectus Supplement
or in any other documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve any defaulting Purchaser of its liability, if any,
to the Company and any nondefaulting Purchaser for damages occasioned by its
default hereunder.
25
12. Notices. All notices hereunder shall, unless otherwise expressly
permitted, be in writing and be delivered at or mailed to the following address,
or be sent by telegram to the following address: if to the Purchasers or you, to
you at your address as it appears in the Purchase Agreement, and if to the
Company, to the Company at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
13. Parties in Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Purchasers and the Company, and the
directors, officers and controlling persons referred to in Sections 8, 9 and 10
hereof, and their respective successors, assigns, executors and administrators
and no other person shall acquire or have any right under or by virtue of this
Agreement.
14. Section Headings. The section headings in this Agreement have been
inserted as a matter of convenience of reference and are not part of this
Agreement. The term "Purchasers", "persons", "firms" and "corporations" as used
herein shall include the singular of such terms as well as the plural. The term
"successor" to any Purchaser shall not include any subsequent holder of the New
Securities merely by reason of such holding.
15. Construction. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
16. Counterparts. This Agreement may be executed in one or more
counterparts and it is not necessary that the signatures of all parties appear
on the same counterpart, but such counterparts together shall constitute but one
and the same agreement.
CONSOLIDATED NATURAL GAS COMPANY
PURCHASE AGREEMENT
EQUITY SECURITIES
New York, New York
[Date]
[Name(s) of Purchaser(s) or
Name(s) of Co-Manager(s), if any
As Representative of the several
Purchasers]
[Address]
Dear Sirs:
Re: Equity Securities covered by Registration
Statement No. 333-[ ] (the "Registration Statement")
--------------------------------------------------------
Consolidated Natural Gas Company, a Delaware corporation (the
"Company"), subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, proposes and agrees to sell to
each purchaser named in Schedule I hereto (together, the "Purchasers"), for whom
you (the "Representative") are acting as representative, ________ shares of
________, $___ par value (the "Firm New Securities"). Each Purchaser agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
$________ per share, the amount of the Firm New Securities set forth opposite
such Purchaser's name in Schedule I hereto. The Firm New Securities will be
offered as set forth in the Prospectus Supplement relating to such New
Securities.
The Company also proposes to grant to the Purchasers an option to
purchase in the aggregate, up to an additional ________ shares of the New
Securities, (the "Additional New Securities") at the same purchase price per
share as above agreed. Said option may be exercised in whole or in part at any
time (but not more than once), on or before the 30th day after the date of the
Prospectus Supplement upon written or telegraphic notice by the Representative
to the Company setting forth the number of shares of the Additional New
Securities as
2
to which the several Purchasers are exercising the option and the settlement
date.
The New Securities will have the following terms:*
[Dividend preferences:]
[Liquidation preferences:]
[Voting Rights]:
[Redemption Provisions:]
All of the provisions contained in the document entitled "Consolidated
Natural Gas Company Standard Purchase Agreement Provisions -- Equity New
Securities," a copy of which has been filed as Exhibit 1.1 to the Registration
Statement and has been previously furnished to you, are hereby incorporated by
reference in their entirety and shall be deemed to be a part of this Agreement
to the same extent as if such provisions had been set forth in full herein.
[The payment for the New Securities shall be made in ____________
funds.]
[The date on which the New Securities shall be purchased shall be
___________.]
[The place at which the New Securities shall be purchased shall be
___________.]
[Notices to the [Purchasers] [Representative] shall be sent to the
following addresses:]
[We represent that we are authorized to act for the several Purchasers
named in Schedule I hereto in connection with this financing and any action
under this Agreement by any of us will be binding upon all the Purchasers.]
----------
* Complete, if applicable. To be either described in the Prospectus and
Prospectus Supplement for the New Securities or included in this Agreement.
3
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Purchasers.
Very truly yours,
CONSOLIDATED NATURAL GAS COMPANY
By:
-----------------------------
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
[Name(s) of Purchaser(s) or
Name(s) of Representative, if any]
By: _____________________________
By: _____________________________
[For themselves and the other several
Purchasers named in Schedule I to the
foregoing agreement.]
SCHEDULE I
Number of Firm
New Securities
Purchaser to be Purchased
--------- ---------------
$
Total................................... $
============