EXHIBIT 1
NORAM ENERGY CORP.
$500,000,000
Debt Securities
6-3/8% Term Enhanced ReMarketable Securities(SM) ("TERMS(SM)")
Underwriting Agreement
November 5, 1998
Credit Suisse First Boston Corporation
Chase Securities Inc.
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
NationsBanc Xxxxxxxxxx Securities LLC
c/o Credit Suisse First Boston Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
NorAm Energy Corp., a Delaware corporation (the "Company"), proposes, subject to
the terms and conditions stated herein, to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") an aggregate principal amount of
$500,000,000 of its 6-3/8% Term Enhanced ReMarketable Securities(SM) (TERMS(SM))
(the "Debt Securities") to be issued pursuant to an indenture dated as of
February 1, 1998 (the "Base Indenture") between the Company and Chase Bank of
Texas, National Association (formerly known as Texas Commerce Bank National
Association), as trustee (the "Trustee") and a Supplemental Indenture No. 2 to
the Base Indenture, dated as of November 1, 1998 (the "Supplemental Indenture",
and together with the Base Indenture and any other amendments or supplements
thereto, the "Indenture"), between the Company and the Trustee.
Credit Suisse First Boston Corporation will be appointed Remarketing
Dealer (the "Remarketing Dealer") for the Debt Securities pursuant to a
Remarketing Agreement, dated as of November 10, 1998 (the "Remarketing
Agreement"), between the Company and Credit Suisse First Boston Corporation.
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1. Representations and Warranties of the Company.
(a) The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(i) A registration statement on Form S-3 with respect to the Debt
Securities with an aggregate maximum initial public offering price of
$200,000,000 (File No. 333-41017) (the "First Registration Statement"), copies
of which have been delivered to you, has been prepared and filed by the Company
with the Securities and Exchange Commission (the "Commission") and has been
declared effective under the Securities Act of 1933, as amended (the "Act"). The
Company has also filed a registration statement on Form S-3 with the Commission
with respect to the Debt Securities with an aggregate maximum initial public
offering price of $200,000,000 (File No. 333-62377) (the "Second Registration
Statement"), copies of which have been delivered to you. The Second Registration
Statement has been declared effective under the Act. The Company has also filed
a registration statement on Form S-3 with the Commission with respect to the
Debt Securities with an aggregate maximum initial public offering price of
$100,000,000 (File No. 333-66157) (the "Third Registration Statement"),
including a prospectus, copies of which have been delivered to you. The Third
Registration Statement has been declared effective under the Act. No stop order
suspending the effectiveness of any of such Registration Statements has been
issued and no proceeding for that purpose has been initiated or, to the best
knowledge of the Company, threatened by the Commission. Each of the First
Registration Statement, the Second Registration Statement and the Third
Registration Statement (including all documents filed as part thereof or
incorporated by reference therein, but excluding any Forms T-1, as amended), as
amended and supplemented at the date of this Agreement, is hereinafter referred
to as a "Registration Statement." The prospectus relating to the Debt Securities
contained in the Third Registration Statement at the time that the Third
Registration Statement was declared effective is hereinafter referred to as the
"Basic Prospectus."
The prospectus included in the Third Registration Statement, as amended
and supplemented to the date of this Agreement (including all documents then
incorporated by reference therein and including the Final Prospectus Supplement
(hereinafter defined)), is hereinafter referred to as the "Prospectus". Any
reference herein to the Registration Statement, the Prospectus, the Basic
Prospectus or the Preliminary Supplemented Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein, or deemed to be
incorporated by reference therein, and filed under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), on or before the date of such
Registration Statement, the Prospectus, the Basic Prospectus or the Preliminary
Supplemented Prospectus. Any reference herein to the terms "amend", "amendment"
or "supplement" with respect to the Registration Statement or the Prospectus
shall be deemed to refer to and include, without limitation, the filing of any
document under the Exchange Act deemed to be incorporated therein by reference
after the date of such Registration Statement or Prospectus.
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A prospectus supplement, subject to completion, dated November 3, 1998
has been prepared and the Basic Prospectus, as so supplemented (the "Preliminary
Supplemented Prospectus"), was filed pursuant to Rule 424(b) under the Act
("Rule 424(b)") on November 3, 1998. A prospectus supplement, dated the date
hereof, setting forth the terms of the Debt Securities and of their sale and
distribution (the "Final Prospectus Supplement") has been prepared and the Basic
Prospectus, as supplemented by the Final Prospectus Supplement, will be filed
pursuant to Rule 424(b).
(ii) On the respective effective date of each Registration Statement,
each Registration Statement, as amended and supplemented at that time, conformed
in all material respects to the requirements of the Act and the Trust Indenture
Act of 1939, as amended (the "TIA"), and the applicable rules and regulations of
the Commission thereunder, and did 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; on the date of the
Preliminary Supplemented Prospectus, the Preliminary Supplemented Prospectus
conformed in all material respects to the requirements of the Act and the
applicable rules and regulations of the Commission thereunder, and did 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 on the date of this Agreement, each Registration Statement
and the Prospectus conform, and at the Time of Delivery (hereinafter defined)
they will conform, in all material respects to the requirements of the Act and
the TIA and the applicable rules and regulations of the Commission thereunder,
and on the date of this Agreement do not, and on the Time of Delivery will not,
contain 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;
(iii) Each document filed or to be filed pursuant to the Exchange Act
and incorporated by reference, or deemed to be incorporated by reference in the
Prospectus (including any document to be filed pursuant to the Exchange Act
which will constitute an amendment to the Prospectus) conformed or, when so
filed, will conform in all material respects to the requirements of the Exchange
Act and the applicable rules and regulations of the Commission thereunder, and
none of such documents included or, when so filed, will include any untrue
statement of a material fact or omitted or, when so filed, will omit to state
any 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;
(iv) This Agreement has been duly authorized, executed and delivered by
the Company;
(v) The Debt Securities and the Indenture have been duly authorized by
the Company and, assuming the valid execution and delivery thereof by the
Trustee, the Indenture constitutes, and, in the case of the Debt Securities,
when they are validly issued by the Company and duly authenticated and delivered
by the Trustee, the Debt Securities will constitute, valid and legally binding
obligations of the Company and the Trustee, enforceable in accordance with their
respective terms, subject, as to
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enforcement, to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law); the Debt Securities when validly issued by the
Company and duly authenticated and delivered by the Trustee, will be entitled to
the benefits of the Indenture; and the Debt Securities conform to the
descriptions thereof in the Prospectus.
(vi) The Remarketing Agreement has been duly authorized by the Company.
(vii) The issuance by the Company of the Debt Securities, the compliance
by the Company with all of the provisions of this Agreement, the Remarketing
Agreement, the Debt Securities and the Indenture, and the consummation of the
transactions contemplated herein and therein (a) will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument for borrowed money to which the
Company or any Significant Subsidiary (as defined in Regulation S-X) of the
Company (each, a "Significant Subsidiary") is a party or by which the Company or
any Significant Subsidiary is bound or to which any of the property or assets of
the Company or any Significant Subsidiary is subject, which conflict, breach,
violation, or default would singly, or in the aggregate, have a material adverse
effect on the business, properties or financial condition of the Company and the
Significant Subsidiaries, taken as a whole; and (b) nor will such action result
in any violation of the provisions of the Certificate of Incorporation or By-
laws of the Company or any existing statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the Company's
or any of its or its Significant Subsidiaries' properties.
(viii) The Commission has issued an order under the Act declaring each
Registration Statement effective and qualifying the Indenture under the TIA and
no other consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required for the
issue of the Debt Securities, the execution and delivery of the Remarketing
Agreement or the consummation by the Company of the other transactions
contemplated by this Agreement, and the Indenture, except such consents,
approvals, authorizations, registrations or qualifications as may be required
under state securities or blue sky laws in connection with the issuance by the
Company of the Debt Securities and the purchase and distribution of the Debt
Securities by the Underwriters.
(ix) At the date hereof, the Company has outstanding the following
securities (excluding for this purpose any revolving credit facility, letter of
credit facility or similar bank credit facility), and no others, which contain
covenants (i) limiting liens on any Principal Property (as defined in the
Prospectus) and (ii) limiting the sale and leaseback of assets:
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(a) Medium-Term Notes, Series A and B (due through 2001), (b) 8.875%
Notes due 1999, (c) 7-1/2% Notes due 2000, (d) 8.90% Debentures due 2006,
(e) 10% Debentures due 2019, (f) Term Loan (due November 1998) under that
certain $150,000,000 Term Loan Agreement dated May 15, 1997, as amended, among
the Company, Citibank, N.A., as Agent, and various lenders party thereto and
(g) 6-1/2% Debentures due February 1, 2008.
2. Sale and Delivery.
(a) Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company,
the principal amount of the Debt Securities set forth in Schedule I opposite the
name of such Underwriter (plus an additional amount of Debt Securities that such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 7 hereof) at a price equal to 102.867% of the principal amount thereof
(provided that, Credit Suisse First Boston Corporation, in its individual
capacity as the Remarketing Dealer pursuant to the Remarketing Agreement and not
as representative for the Underwriters will be solely responsible for the
payment of 3.675% of the principal amount thereof, as consideration to the
Company in connection with the Remarketing Agreement), plus accrued interest, if
any, from November 10, 1998 to the Time of Delivery.
(b) The Debt Securities to be purchased by each Underwriter hereunder
will be represented by one or more definitive global Debt Securities in book-
entry form which will be deposited by or on behalf of the Company with The
Depository Trust Company ("DTC") or its designated custodian. The Company will
deliver the Debt Securities to Credit Suisse First Boston Corporation ("CSFB")
for the account of each Underwriter, against payment by or on behalf of such
Underwriter of the amount therefor, as set forth above, by wire transfer of
Federal (same day) funds to a commercial bank account located in the United
States and designated in writing at least forty-eight hours prior to the Time of
Delivery by the Company to CSFB, by causing DTC to credit the Debt Securities to
the account of CSFB at DTC. The Company will cause the global certificates
representing the Debt Securities to be made available to CSFB for checking at
least twenty-four hours prior to the Time of Delivery at the office of DTC or
its designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be 9:30 a.m., New York City time, on November 10,
1998 or such other time and date as CSFB and the Company may agree upon in
writing. Such time and date are herein called the "Time of Delivery".
(c) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 5 hereof, including the cross-
receipt for the Debt Securities and any additional documents requested by the
Underwriters pursuant to Section 5(i) hereof, will be delivered at such time and
date at the offices of Xxxxx & Xxxxx L.L.P., Xxx Xxxxx Xxxxx, 000 Xxxxxxxxx,
Xxxxxxx, Xxxxx 00000-0000 or such other location as CSFB and the Company may
agree in writing (the "Closing Location"), and the Debt Securities will be
delivered at the Designated Office, all at the Time of Delivery. A meeting will
be held at the Closing Location at 1:00 p.m., New York City time or at
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such other time as CSFB and the Company may agree in writing, on the New York
Business Day next preceding the Time of Delivery, at which meeting the final
drafts of the documents to be delivered pursuant to the preceding sentence will
be available for review by the parties hereto. For the purposes of this Section
2, "New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
3. Covenants and Agreements.
The Company covenants and agrees with each of the Underwriters:
(a) That the Company will furnish without charge to the Underwriters a
copy of each Registration Statement, including all documents incorporated by
reference therein and exhibits filed with each Registration Statement (other
than exhibits which are incorporated by reference and have previously been so
furnished), and, during the period mentioned in paragraph (c) below, as many
copies of the Prospectus, any documents incorporated by reference therein at or
after the date thereof (including documents from which information has been so
incorporated) and any supplements and amendments thereto as each Underwriter may
reasonably request so long as such Underwriter is required to deliver a
prospectus;
(b) That the Company will cause the Prospectus to be filed pursuant to,
and in compliance with, Rule 424(b) and will promptly advise the Underwriters
(i) when any amendment to any Registration Statement shall have been filed;
provided, that, with respect to documents filed pursuant to the Exchange Act and
incorporated by reference into any Registration Statement, such notice shall
only be required during such time as the Underwriters are required in the
reasonable opinion of Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters, to
deliver a prospectus, (ii) of any request by the Commission for any amendment of
any Registration Statement, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of any Registration Statement or the
institution or threatening of any proceeding for that purpose, and (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Debt Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. So long as any
Underwriter is required in the reasonable opinion of Xxxxx Xxxxxxxxxx LLP to
deliver a prospectus, the Company will not file any amendment to any
Registration Statement or supplement to the Prospectus unless the Company has
furnished one copy of such amendment or supplement to CSFB and to Xxxxx
Xxxxxxxxxx LLP, and, if such amendment or supplement is to be filed on or prior
to the Time of Delivery, or under circumstances where the Underwriters are
required in the reasonable opinion of Xxxxx Xxxxxxxxxx LLP, to deliver a
prospectus, the Underwriters or Xxxxx Xxxxxxxxxx LLP, shall not reasonably have
objected thereto. If the Commission shall issue a stop order suspending the
effectiveness of any Registration Statement, the Company will take such steps to
obtain the lifting of that order as in the best judgment of the Company are not
contrary to the interests of the Company;
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(c) That if, at any time when in the reasonable opinion of Xxxxx
Xxxxxxxxxx LLP the Prospectus is required by law to be delivered by an
Underwriter or a dealer, any event shall occur as a result of which it is
necessary, in the reasonable opinion of Xxxxx Xxxxxxxxxx LLP or counsel for the
Company, to amend or supplement the Prospectus or modify the information
incorporated by reference therein in order to make the statements therein, in
light of the circumstances existing when the Prospectus is delivered to a
purchaser, not misleading, or if it shall be necessary in the reasonable opinion
of any such counsel, to amend or supplement the Prospectus or modify such
information to comply with law, the Company will forthwith (i) prepare and
furnish, at its own expense, to the Underwriters and to the dealers (whose names
and addresses the Underwriters will furnish to the Company) to whom Debt
Securities may have been sold by the Underwriters and to any other dealers upon
reasonable request, either amendments or supplements to the Prospectus or (ii)
file with the Commission documents incorporated by reference in the Prospectus,
which shall be so supplied to the Underwriters and such dealers, in either case
so that the statements in the Prospectus as so amended, supplemented or modified
will not, in light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus will comply with law;
(d) That the Company will endeavor to qualify, at its expense, the Debt
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Underwriters shall reasonably request and to pay all filing
fees, reasonable expenses and legal fees in connection therewith and in
connection with the determination of the eligibility for investment of the Debt
Securities; provided, that the Company shall not be required to qualify as a
foreign corporation or a dealer in securities or to file any consents to service
of process under the laws of any jurisdiction;
(e) That the Company will make generally available to its security
holders and the holders of the Debt Securities as soon as practicable an
earnings statement of the Company covering a twelve-month period beginning after
the Time of Delivery which shall satisfy the provisions of Section 11(a) of the
Act and the rules and regulations of the Commission thereunder (including Rule
158 under the Act).
(f) That during the period beginning on the date of this Agreement and
continuing to and including the Time of Delivery, the Company will not offer,
sell, contract to sell or otherwise dispose of any Debt Securities, any security
convertible into or exchangeable into or exercisable for Debt Securities or any
debt securities substantially similar to the Debt Securities (except for the
Debt Securities issued pursuant to this Agreement), without the prior written
consent of the Underwriters.
4. Expenses.
The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) all expenses in
connection with the preparation, printing and filing of each Registration
Statement as originally filed and of each amendment thereto; (ii) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the issue of the Debt Securities and all other
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expenses in connection with the preparation, printing and filing of the
Prospectus and the Preliminary Supplemented Prospectus and any amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (iii) all reasonable expenses in connection with the
qualification of the Debt Securities, for offering and sale under state
securities laws as provided in Section 3(d) hereof, including the reasonable
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and legal investment surveys;
(iv) any fees charged by Debt Securities rating services for rating the Debt
Securities; (v) the cost of preparing the Debt Securities; (vi) the fees and
expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel for the Trustee in connection with the Indenture; (vii)
the reasonable fees, disbursements and expenses of Underwriters' counsel; and
(viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Sections 6 and 9 hereof, the Underwriters will pay all of their own costs
and expenses, including any advertising expenses connected with any offers they
may make.
5. Conditions of Underwriters' Obligations.
The obligations of the Underwriters hereunder shall be subject to the
accuracy, at and (except as otherwise stated herein) as of the date hereof and
at and as of the Time of Delivery, of the representations and warranties made
herein by the Company, to compliance at and as of the Time of Delivery by the
Company with its covenants and agreements herein contained and the other
provisions hereof to be satisfied at or prior to the Time of Delivery, and to
the following additional conditions:
(a) (i) No stop order suspending the effectiveness of any Registration
Statement shall be in effect, and no proceeding for such purpose shall be
pending before or threatened by the Commission, and the Underwriters shall have
received on and as of the Time of Delivery, a certificate dated such date,
signed by an executive officer (including, without limitation, the Treasurer) of
the Company or an executive officer of Houston Industries Incorporated, the sole
stockholder of the Company ("Houston Industries"), to the foregoing effect, and
(ii) there shall have been no material adverse change in or affecting the
business, properties or financial condition of the Company from that set forth
in or contemplated by any Registration Statement at the time such Registration
Statement became effective, except as set forth in or contemplated by the
Prospectus, and the Underwriters shall have received on and as of the Time of
Delivery, a certificate dated such date, signed by an executive officer of the
Company or an executive officer of Houston Industries to the foregoing effect.
The officers or agents making such certificates may rely upon the best of his or
her knowledge as to proceedings pending or threatened.
(b) Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated the Time of Delivery, with
respect to such matters as you may reasonably request, and such counsel shall
have received such papers and information as they may reasonably request to
enable them to pass upon such matters. In giving such opinion, such counsel may
rely as to the exemption of Houston
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Industries under the Public Utility Holding Company Act of 1935, as amended (the
"1935 Act"), upon the opinion of Xxxxx & Xxxxx, L.L.P. referred to in (d) below.
(c) Xxxx Xxxx Xxxxx, Esq., Executive Vice President and Secretary of the
Company, or Xxxxx X. Xxxxx, Esq., Assistant Secretary of the Company, shall have
furnished to you his written opinion, dated the Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing
in good standing under the laws of the State of Delaware and has corporate power
and authority to enter into and perform its obligations under this Agreement and
the Indenture;
(ii) No consent, approval, authorization or other order of, or
registration with, any governmental regulatory body (other than such as may be
required under applicable state securities laws, as to which such counsel need
not express an opinion) is required for the issuance and sale of the Debt
Securities being delivered at the Time of Delivery, for the execution and
delivery of the Remarketing Agreement or for the consummation by the Company of
the transactions contemplated by this Agreement and the Indenture;
(iii) To the best of such counsel's knowledge and other than as set
forth or contemplated in the Prospectus, there are no legal or governmental
proceedings pending or threatened to which the Company is subject, which,
individually or in the aggregate, are expected to have a material adverse effect
on the financial position, stockholders' equity or results of operations of the
Company;
(iv) The execution, delivery and performance by the Company of this
Agreement, the Remarketing Agreement and the Indenture will not result in the
breach or violation of, or constitute a default under, the Certificate of
Incorporation or the Bylaws of the Company, each as amended to date, any
indenture, mortgage, deed of trust or other agreement or instrument for borrowed
money to which the Company is a party or by which it is bound or to which its
property is subject or any law, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or its
property, in any manner which would have a material adverse effect on the
business of the Company; and
(v) The description of statutes and regulations set forth in Part I
of the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1997 under the captions "Business--Regulation" and "Business--Environmental
Matters", as updated in the Forms 10-Q for the quarters ended March 31 and June
30, 1998, fairly describe in all material respects the portions of the statutes
and regulations addressed thereby.
(d) Xxxxx & Xxxxx, L.L.P., counsel for the Company, shall have furnished
to you their written opinion, dated the Time of Delivery, in form and substance
satisfactory to you, to the effect that:
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(i) Such counsel does not know of any contracts or documents of a
character required to be described in the Registration Statements or Prospectus
or to be filed as exhibits to the Registration Statements which are not so
described and filed;
(ii) The statements set forth in the Prospectus under the caption
"Description of the TERMS", and in the Basic Prospectus under the caption
"Description of Debt Securities" accurately summarizes in all material respects
the terms of the Debt Securities;
(iii) The Debt Securities conform, as to legal matters in all material
respects to the descriptions thereof contained in the Prospectus including,
without limitation, under the caption "Description of the TERMS", and in the
Basic Prospectus including, without limitation, under the caption "Description
of Debt Securities";
(iv) The Debt Securities are in the form prescribed in or pursuant to
the Indenture, have been duly and validly authorized by all necessary corporate
action on the part of the Company and, when executed and delivered by the
Company and authenticated by the Trustee as specified in or pursuant to the
Indenture, will be valid and binding obligations of the Company, enforceable in
accordance with their terms, except as such enforceability is subject to the
effect of any applicable bankruptcy, insolvency, reorganization or other law
relating to or affecting creditors' rights generally and to general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law); the Indenture has been duly authorized,
executed and delivered by the Company and, assuming it was duly executed and
delivered by the Trustee, constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms, except as such enforceability
is subject to the effect of any applicable bankruptcy, insolvency,
reorganization or other law relating to or affecting creditors' rights generally
and to general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law);
(v) The Indenture has been duly qualified under the TIA;
(vi) Pursuant to a Memorandum Opinion and Order Granting Exemption to
Holding Company dated July 24, 1997 issued by the Commission (Release No. 35-
26744), Houston Industries is exempt from regulation as a public utility holding
company under Section 3(a)(2) of the 1935 Act, except the provisions of Section
9(a)(2) thereof;
(vii) Each Registration Statement has become effective under the Act,
and, to the best of such counsel's knowledge, no stop order suspending the
effectiveness of any Registration Statement or any part thereof has been issued
and no proceedings for that purpose have been instituted and are pending or are
threatened by the Commission under the Act; the Registration Statements, as of
their respective effective dates, and the Prospectus, as of November 5, 1998,
(except for (A) the operating
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statistics, financial statements, pro forma financial statements and financial
statement schedules contained or incorporated by reference therein (including
the auditors' reports on the financial statements and the notes to the financial
statements), (B) the other financial and statistical information contained or
incorporated by reference therein and (C) the exhibits thereto, as to which such
counsel need not express an opinion) complied as to form in all material
respects with the requirements of Form S-3 under the Act and the applicable
rules and regulations of the Commission thereunder, and each document
incorporated by reference therein as originally filed pursuant to the Exchange
Act (except for (A) the operating statistics, financial statements, pro forma
financial statements and financial statement schedules contained or incorporated
by reference therein (including the auditors' reports on the financial
statements and the notes to the financial statements), (B) the other financial
and statistical information contained or incorporated by reference therein and
(C) the exhibits thereto, as to which such counsel need not express an opinion)
when so filed complied as to form in all material respects with the Exchange Act
and the applicable rules and regulations of the Commission thereunder; and
(viii) The execution, delivery and performance by the Company of
this Agreement and the Remarketing Agreement have been duly authorized by all
necessary corporate action on the part of the Company, and this Agreement and
the Remarketing Agreement have been duly executed and delivered by the Company.
In addition, such counsel shall state that no facts have come to the
attention of such counsel that lead them to believe that any Registration
Statement (except for (A) the operating statistics, financial statements, pro
forma financial statements and financial statement schedules contained or
incorporated by reference therein (including the auditors' reports on the
financial statements and the notes to the financial statements, except to the
extent that such notes describe legal or governmental proceedings to which the
Company is a party and are incorporated by reference into one or more items of a
report that is incorporated by reference in the Registration Statements or the
Prospectus, other than an item that requires that financial statements be
provided), (B) the other financial and statistical information contained or
incorporated by reference therein and (C) the exhibits thereto, as to which such
counsel need not comment) as of the time such Registration Statement became
effective, contained any 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 amended,
supplemented or modified by the filing of a document incorporated by reference
therein if so amended, supplemented or modified (except for (A) the operating
statistics, financial statement, pro forma financial statements and financial
statement schedules contained or incorporated by reference therein (including
the auditors' reports on the financial statements and the notes to the financial
statements, except to the extent that such notes describe legal or governmental
proceedings to which the Company is a party and are incorporated by reference
into one or more items of a report that is incorporated by reference in the
Prospectus, other than an item that requires that financial statements be
provided), (B) the other financial and statistical information contained or
incorporated by reference therein and (C) the exhibits thereto, as to which such
counsel need not comment), as of the date of the Prospectus contained, or as of
the Time of Delivery contains, any untrue statement of a material fact or omits
to state a material fact necessary
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in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(e) At the time of execution of this Agreement, Deloitte & Touche LLP
shall have furnished to you a letter dated the date of such execution,
substantially in the form heretofore supplied and deemed satisfactory to you.
(f) At the time of execution of this Agreement, PricewaterhouseCoopers
LLP shall have furnished to you a letter dated the date of such execution,
substantially in the form heretofore supplied and deemed satisfactory to you.
(g) At the Time of Delivery, Deloitte & Touche LLP shall have furnished
you a letter, dated the Time of Delivery, to the effect that such accountants
reaffirm, as of the Time of Delivery and as though made on the Time of Delivery,
the statements made in the letter furnished by such accountants pursuant to
paragraph (e) of this Section 5, except that the specified date referred to in
such letter will be a date not more than three business days prior to the Time
of Delivery.
(h) At the Time of Delivery, PricewaterhouseCoopers LLP shall have
furnished you a letter, dated the Time of Delivery, addressing certain matters
requested by you at the date hereof.
(i) At the Time of Delivery, the Company shall have furnished to the
Remarketing Dealer, an executed counterpart of the Remarketing Agreement.
(j) The Company shall have furnished or caused to be furnished to you at
the Time of Delivery certificates of officers of the Company satisfactory to you
as to the accuracy of the representations and warranties of the Company herein
at and as of the Time of Delivery, as to the performance by the Company of all
of its obligations hereunder to be performed at or prior to the Time of
Delivery, as to the matters set forth in the introductory paragraph to this
Section 5 and subsection (a) of this Section and as to such other matters as you
may reasonably request.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter,
and each person, if any, who controls each Underwriter within the meaning of the
Act or the Exchange Act, against any losses, claims, damages, liabilities or
expenses (including the reasonable cost of investigating and defending against
any claims therefore and counsel fees incurred in connection therewith), joint
or several, which may be based upon either the Act, or the Exchange Act, or any
other statute or at common law, on the ground or alleged ground that any
Registration Statement, any preliminary prospectus, the Basic Prospectus, the
Preliminary Supplemented Prospectus, or the Prospectus (or any such document, as
from time to time amended, or deemed to be amended, supplemented or modified)
includes or allegedly includes an untrue statement of material fact or omits to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, unless such statement or omission
-12-
was made in reliance upon, and in conformity with, written information furnished
to the Company by any Underwriter through CSFB specifically for use in the
preparation thereof; provided that in no case is the Company to be liable with
respect to any claims made against any Underwriter or any such controlling
person unless such Underwriter or such controlling person shall have notified
the Company in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon such Underwriter or such controlling person, but failure to notify
the Company of any such claim shall not relieve it from any liability which it
may have to such Underwriter or such controlling person otherwise than on
account of the indemnity agreement contained in this paragraph; and provided,
further, that the foregoing indemnity with respect to any preliminary
prospectus, the Basic Prospectus, the Preliminary Supplemented Prospectus and
the Prospectus shall not inure to the benefit of any Underwriter if a copy of
the Prospectus as amended or supplemented at the time of a sale, had not been
sent or given by or on behalf of such Underwriter to the person asserting any
such losses, claims, damages or liabilities concurrently with or prior to
delivery of the written confirmation of the sale of Debt Securities to such
person and the untrue statement or omission of a material fact contained in any
such preliminary prospectus, Basic Prospectus, Preliminary Supplemented
Prospectus or Prospectus was corrected in the Prospectus, as amended or
supplemented at that time.
The Company will be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but, if the Company elects to assume the defense,
such defense shall be conducted by counsel chosen by it. In the event that the
Company elects to assume the defense of any such suit and retains such counsel,
the Underwriter or Underwriters or controlling person or persons, defendant or
defendants in the suit, may retain additional counsel but shall bear the fees
and expenses of such counsel unless (i) the Company shall have specifically
authorized the retaining of such counsel or (ii) the parties to such suit
include the Underwriter or Underwriters or controlling person or persons and the
Underwriter or Underwriters or controlling person or persons have been advised
by such counsel that one or more legal defenses may be available to it or them
which may not be available to the Company, in which case the Company shall not
be entitled to assume the defense of such suit on behalf of such Underwriter or
Underwriters or controlling person or persons, notwithstanding their obligation
to bear the reasonable fees and expenses of such counsel, it being understood,
however, that the Company shall not, in connection with any one such suit or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time for all such Underwriters and their
controlling persons, which firm shall be designated in writing by CSFB. The
Company shall not be liable to indemnify any person for any settlement of any
such claim effected without the Company's consent. This indemnity agreement will
be in addition to any liability which the Company might otherwise have.
(b) Each Underwriter agrees to indemnify and hold harmless the Company,
each of the Company's directors, each of the Company's officers who have signed
the Registration Statements, and each person, if any, who controls the Company
-13-
within the meaning of the Act or the Exchange Act, against any losses, claims,
damages, liabilities or expenses (including the reasonable cost of investigating
and defending against any claims therefor and counsel fees incurred in
connection therewith), joint or several, which may be based upon the Act, or any
other statute or at common law, on the ground or alleged ground that any
preliminary prospectus, Preliminary Supplemented Prospectus, any Registration
Statement, the Basic Prospectus or the Prospectus (or any such document, as from
time to time amended, or deemed to be amended, supplemented or modified)
includes or allegedly includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, but only insofar as any such
statement or omission was made in reliance upon, and in conformity with, written
information furnished to the Company by such Underwriter through CSFB
specifically for use in the preparation thereof, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
following information in the Prospectus furnished on behalf of each Underwriter:
the last paragraph at the bottom of the cover page concerning the terms of the
delivery by the Underwriters, and the information contained in third, fourth and
sixth paragraphs under the caption "Underwriting"; provided that in no case is
such Underwriter to be liable with respect to any claims made against the
Company or any such director, officer, trustee or controlling person unless the
Company or any such director, officer, trustee or controlling person shall have
notified such Underwriter in writing within a reasonable time after the summons
or other first legal process giving information of the nature of the claim shall
have been served upon the Company or any such director, officer, trustee or
controlling person, but failure to notify such Underwriter of any such claim
shall not relieve it from any liability which it may have to the Company or any
such director, officer, trustee or controlling person otherwise than on account
of the indemnity agreement contained in this paragraph. Such Underwriter will be
entitled to participate at its own expense in the defense, or, if it so elects,
to assume the defense of any suit brought to enforce any such liability, but, if
such Underwriter elects to assume the defense, such defense shall be conducted
by counsel chosen by it. In the event that such Underwriter elects to assume the
defense of any such suit and retain such counsel, the Company or such director,
officer, trustee or controlling person, defendant or defendants in the suit, may
retain additional counsel but shall bear the fees and expenses of such counsel
unless (i) such Underwriter shall have specifically authorized the retaining of
such counsel or (ii) the parties to such suit include the Company or any such
director, officer, trustee or controlling person and such Underwriter and the
Company or such director, officer, trustee or controlling person have been
advised by such counsel that one or more legal defenses may be available to it
or them which may not be available to such Underwriter, in which case such
Underwriter shall not be entitled to assume the defense of such suit on behalf
of the Company or such director, officer, trustee or controlling person,
notwithstanding its obligation to bear the reasonable fees and expenses of such
counsel, it being understood, however, that such Underwriter shall not, in
connection with any one such suit or proceeding or separate but substantially
similar or related actions or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys at any time for
all of the Company and any such director, officer, trustee or controlling
person, which firm shall be designated in writing by the Company. Such
Underwriter shall not be liable to indemnify any person for any
-14-
settlement of any such claim effected without such Underwriter's consent. This
indemnity agreement will be in addition to any liability which such Underwriter
might otherwise have.
(c) If recovery is not available under Section 6(a) or 6(b) hereof, for
any reason other than as specified therein, the parties entitled to
indemnification by the terms thereof shall be entitled to contribution for
liabilities and expenses, except to the extent that contribution is not
permitted under Section 11(f) of the Act. In determining the amount of
contribution to which the respective parties are entitled, there shall be
considered the relative benefits received by each party from the offering of the
Debt Securities (taking into account the portion of the proceeds of the offering
realized by each), the parties' relative knowledge and access to information
concerning the matter with respect to which the claim was asserted, the
opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate under the circumstances. The Company and
the Underwriters agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose). No Underwriters or
any person controlling such Underwriters shall be obligated to make contribution
hereunder which in the aggregate exceeds the total public offering price of the
Debt Securities purchased by such Underwriters under this Agreement, less the
aggregate amount of any damages which such Underwriters and its controlling
persons have otherwise been required to pay in respect of the same claim or any
substantially similar claim. The Underwriters' obligations to contribute are
several in proportion to their respective underwriting obligations, and not
joint.
7. Substitution of Underwriters.
If any Underwriter shall default in its obligation to purchase the Debt
Securities which it has agreed to purchase hereunder and the aggregate principal
amount of such Debt Securities which such defaulting Underwriter agreed but
failed to purchase does not exceed 10% of the aggregate principal amount of all
the Debt Securities, the non-defaulting Underwriters may make arrangements
satisfactory to the Company for the purchase of the aggregate principal amount
of such Debt Securities by other persons, including the non-defaulting
Underwriters, but if no such arrangements are made prior to the Time of
Delivery, the non-defaulting Underwriters shall be obligated severally in
proportion to their respective commitments hereunder, to purchase the Debt
Securities which such defaulting Underwriter agreed but failed to purchase. If
any Underwriter or Underwriters shall so default and the aggregate principal
amount of such Debt Securities with respect to which such default or defaults
occur is more than 10% of the aggregate principal amount of all the Debt
Securities and arrangements satisfactory to the non-defaulting Underwriters and
the Company for the purchase of such Debt Securities by other persons are not
made within 48 hours after such default, this agreement will terminate.
If the non-defaulting Underwriter or Underwriters or substituted
underwriter or underwriters are required hereby or agree to take up all or part
of the Debt Securities of the defaulting Underwriter as provided in this Section
7, (i) the Company
-15-
shall have the right to postpone the Time of Delivery for a period of not more
than five full business days, in order that the Company may effect whatever
changes may thereby be made necessary in any Registration Statement or
Prospectus or in any other documents or arrangements, and the Company agrees to
promptly file any amendments to any Registration Statement or supplements to the
Prospectus which may thereby be made necessary, and (ii) the respective
aggregate principal amount of Debt Securities which the non-defaulting
Underwriters or substituted purchaser or purchasers shall thereafter be
obligated to purchase shall be taken as the basis of their underwriting
obligation for all purposes of this Agreement. Nothing herein contained shall
relieve any defaulting Underwriter of its liability to the Company or the non-
defaulting Underwriters for damages occasioned by its default hereunder. Any
termination of this Agreement pursuant to this Section 7 shall be without
liability on the part of the non-defaulting Underwriters or the Company, other
than as provided in Sections 6 and 9.
8. Survival of Indemnities, Representations, Warranties, etc.
The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Debt Securities.
9. Termination.
If this Agreement shall be terminated by the Underwriters, because of
any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement, the
respective indemnities shall remain in full force and effect and the Company
will reimburse the Underwriter or such Underwriters as have so terminated this
Agreement with respect to themselves for all out-of-pocket expenses (including
the fees and disbursements of their counsel) reasonably incurred by them in
connection with the transactions contemplated by this Agreement.
10. Notices.
In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and (i) if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to you in care of CSFB, 00 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Investment Banking Department - Transactions
Advisory Group; and (ii) if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the
-16-
Company in care of Houston Industries Incorporated, 0000 Xxxxxxxxx, Xxxxxxx,
Xxxxx 00000, Attention: Assistant Treasurer. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
11. Successors.
This Agreement shall inure to the benefit of and be binding upon the
several Underwriters and the Company and their respective successors and the
directors, trustees, officers and controlling persons referred to in Section 6
of this Agreement. Nothing expressed or mentioned in this Agreement is intended
or shall be construed to give any person other than the persons mentioned in the
preceding sentence any legal or equitable right, remedy or claim under or in
respect of this Agreement, or any provisions herein contained; this Agreement
and all conditions and provisions hereof being intended to be, and being, for
the sole and exclusive benefit of such persons and for the benefit of no other
person; except that the representations, warranties, covenants, agreements and
indemnities of the Company contained in this Agreement shall also be for the
benefit of the person or persons, if any, who control any Underwriter within the
meaning of the Act or the Exchange Act, and the representations, warranties,
covenants, agreements and indemnities of the several Underwriters shall also be
for the benefit of each director of the Company, each person who has signed any
Registration Statement and the person or persons, if any, who control the
Company within the meaning of the Act.
12. Applicable Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
13. Counterparts.
This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such respective counterparts shall together constitute one and the same
instrument.
-17-
If the foregoing is in accordance with your understanding, please sign
and return to us seven counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
NorAm Energy Corp.
By: /s/ Xxxx Xxxxxxxx
------------------------------
Name: Xxxx Xxxxxxxx
Title: Treasurer
Accepted as of the date hereof:
Credit Suisse First Boston Corporation
Chase Securities Inc.
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
NationsBanc Xxxxxxxxxx Securities LLC
By: Credit Suisse First Boston Corporation
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
On behalf of each of the Underwriters
-18-
SCHEDULE I
Principal Amount of
Underwriters Debt Securities
------------ ---------------
Credit Suisse First Boston Corporation............... $100,000,000
Chase Securities Inc................................. 100,000,000
Xxxxxxx, Xxxxx & Co.................................. 100,000,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated... 100,000,000
NationsBanc Xxxxxxxxxx Securities LLC................ 100,000,000
Total............................... $500,000,000
-19-
