Exhibit 1.1
CENTERPOINT ENERGY RESOURCES CORP.
$150,000,000
6.25% Senior Notes due 2037
Underwriting Agreement
February 1, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ Securities LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Deutsche Bank Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
c/o Banc of America Securities LLC
as the Representatives of the several Underwriters
Ladies and Gentlemen:
CenterPoint Energy Resources Corp., a Delaware corporation (the
"COMPANY"), confirms, subject to the terms and conditions stated herein, its
agreement to issue and sell to the Underwriters named in Schedule I hereto (the
"UNDERWRITERS") $150,000,000 aggregate principal amount of its 6.25% Senior
Notes due 2037 (the "NOTES") to be issued pursuant to an Indenture dated as of
February 1, 1998 (the "BASE INDENTURE") between the Company and The Bank of New
York Trust Company, National Association (successor to JPMorgan Chase Bank,
National Association), as trustee (the "TRUSTEE") and a Supplemental Indenture
No. 10 to the Base Indenture dated as of February 6, 2007 (the "SUPPLEMENTAL
INDENTURE," and together with the Base Indenture and any amendments or
supplements thereto, the "INDENTURE"), between the Company and the Trustee. The
Company understands that the several Underwriters propose to offer the Notes for
sale upon the terms and conditions contemplated by this Agreement and by the
documents listed in Schedule III (such documents herein called the "PRICING
DISCLOSURE PACKAGE").
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company represents and warrants to, and agrees with, each of
the Underwriters, on and as of the date hereof and the Closing Date (as defined
in Section 2) that:
(i) A registration statement on Form S-3 with respect to the
Notes and other securities with an aggregate maximum initial public offering
price of $500,000,000 (File No. 333-136965), copies of which have been delivered
to the Underwriters, has been prepared and filed by the Company with the
Securities and Exchange Commission (the "COMMISSION"). Such registration
statement, including a prospectus, has been declared effective under the
Securities Act of 1933, as amended (the "1933 ACT"), and no stop order
suspending its effectiveness has been issued and no proceeding for that purpose
or pursuant to Section 8A of the 1933 Act against the Company or related to the
offering has been initiated or, to the best knowledge of the Company, threatened
by the Commission. The term "REGISTRATION STATEMENT" means such registration
statement, as deemed revised pursuant to Rule 430B(f)(1) under the 1933 Act on
the date of such registration statement's effectiveness for purposes of Section
11 of the 1933 Act, as such section applies to the Company and the Underwriters
for the Notes pursuant to Rule 430B(f)(2) under the 1933 Act (the "EFFECTIVE
DATE"). The base prospectus included in the Registration Statement relating to
the Notes and certain other issues of debt securities (exclusive of any
supplement filed pursuant to Rule 424) is herein called the "BASIC PROSPECTUS".
The Basic Prospectus as amended and supplemented by a preliminary prospectus
supplement dated February 1, 2007 relating to the Notes immediately prior to the
Applicable Time (as defined below) is hereinafter called the "PRELIMINARY
PROSPECTUS". The Company proposes to file together with the Basic Prospectus and
pursuant to Rule 424 under the 1933 Act a prospectus supplement specifically
relating to the Notes and reflecting the terms of the Notes and plan of
distribution arising from this Agreement (herein called the "PRICING
SUPPLEMENT") and has previously advised the Underwriters of all the information
to be set forth therein. The term "PROSPECTUS" means the Basic Prospectus
together with the Pricing Supplement, as first filed with the Commission
pursuant to Rule 424.
Any reference herein to the Basic Prospectus, the Preliminary
Prospectus or the 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 "1934 ACT"), on or before the date of such Basic Prospectus,
Preliminary Prospectus or Prospectus, as applicable; any reference herein to the
terms "amend," "amendment" or "supplement" with respect to the Basic Prospectus,
the Preliminary Prospectus or Prospectus shall be deemed to refer to and
include, without limitation, the filing of any document under the 1934 Act
deemed to be incorporated therein by reference after the date of such Basic
Prospectus, Preliminary Prospectus or Prospectus.
For purposes of this Agreement, the "APPLICABLE TIME" is 3:00 p.m.
(New York Time) on the date of this Agreement.
(ii) The Registration Statement, the Permitted Free Writing
Prospectus (as defined in Section 3(a)), the Preliminary Prospectus and the
Prospectus conform, and any amendments or supplements thereto will conform, in
all material respects to the requirements of the 1933 Act and the Trust
Indenture Act of 1939, as amended (the "TIA"), and the rules and regulations of
the Commission under the 1933 Act and the TIA; and (A) the Registration
Statement will not, as of the Effective Date,
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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 (B) (i) the Pricing Disclosure Package does not as of the
Applicable Time, (ii) the Prospectus and any amendment or supplement thereto
will not, as of their dates, and (iii) the Prospectus, as it may be amended or
supplemented pursuant to Section 4 hereof, as of the Closing Date 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 the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply to: (A)
any statements or omissions made in reliance upon and in conformity with any
information furnished in writing by the Representatives on behalf of the
Underwriters for use therein, and (B) any Form T-1 Statement of Eligibility and
Qualification included as an exhibit to the Registration Statement;
(iii) Each document filed or to be filed pursuant to the 1934 Act
and incorporated by reference, or deemed to be incorporated by reference in the
Preliminary Prospectus or the Prospectus (including, without limitation, any
document to be filed pursuant to the 1934 Act which will be incorporated by
reference in the Prospectus) conformed or, when so filed, will conform in all
material respects to the requirements of the 1934 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) Any Permitted Free Writing Prospectus listed on Schedule III
hereto does not include anything that conflicts with the information contained
or incorporated by reference in the Registration Statement, the Preliminary
Prospectus or the Prospectus;
(v) At the determination date for purposes of the Notes within
the meaning of Rule 164(h) under the 1933 Act, the Company was not an
"ineligible issuer" as defined in Rule 405 under the 1933 Act. The Company has
been since the time of the initial filing of the Registration Statement and
continues to be eligible to use Form S-3 under the 1933 Act;
(vi) The Company has been duly incorporated and is validly
existing in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Pricing Disclosure Package and the Prospectus;
(vii) Each Significant Subsidiary (as defined in Regulation S-X
under the ▇▇▇▇ ▇▇▇) of the Company has been duly formed and is validly existing
in good standing under the laws of the jurisdiction of its formation, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Pricing Disclosure Package and the Prospectus; and
each Significant Subsidiary of the Company is duly qualified to do business as a
foreign corporation, limited partnership or
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limited liability company in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires such
qualification; all of the issued and outstanding ownership interests of each
Significant Subsidiary of the Company have been duly authorized and validly
issued in accordance with the organizational documents of such Significant
Subsidiary; and the ownership interests of each Significant Subsidiary owned by
the Company, directly or through subsidiaries, is owned free from liens,
encumbrances and defects;
(viii) This Agreement has been duly authorized, executed and
delivered by the Company;
(ix) The Notes and the Indenture have been duly authorized by the
Company and, when the Supplemental Indenture has been duly executed and
delivered by the Company in accordance with its terms, and assuming the valid
execution and delivery thereof by the Trustee, the Indenture will constitute,
and, in the case of the Notes, when they are delivered by the Company, paid for
pursuant to this Agreement and the Indenture and duly authenticated and
delivered by the Trustee, the Notes will, on the Closing Date, constitute, valid
and legally binding obligations of the Company, enforceable in accordance with
their respective terms, subject, as to enforcement, to bankruptcy, insolvency,
fraudulent transfer, 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 Notes when delivered by the Company, paid for pursuant to
this Agreement and the Indenture and duly authenticated and delivered by the
Trustee, will be entitled to the benefits of the Indenture; and the Notes
conform to the descriptions thereof in the Pricing Disclosure Package and the
Prospectus;
(x) The issuance by the Company of the Notes, the compliance by
the Company with all of the provisions of this Agreement, the Notes 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 to
which the Company or any subsidiary is a party or by which the Company or any
subsidiary is bound or to which any of the property or assets of the Company or
any subsidiary is subject, which conflict, breach, violation, or default would
individually, or in the aggregate, have a material adverse effect on the
financial condition, business or results of operations of the Company and its
subsidiaries, taken as a whole ("MATERIAL ADVERSE EFFECT"); and (b) will not
result in any violation of the provisions of the Certificate of Incorporation or
By-laws or other organizational documents of the Company, the charter, by-laws
or other organizational documents of any subsidiary 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
subsidiaries' properties;
(xi) The Commission has issued an order under the 1933 Act
declaring the Registration Statement effective and qualifying the Indenture
under the TIA and no other consent, approval, authorization, order, registration
or qualification of or
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with any such court or governmental agency or body is required for the issue of
the Notes 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 Notes and the purchase and distribution of the Notes by the
Underwriters;
(xii) The Company and its subsidiaries possess certificates,
authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by them and have not received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have a Material
Adverse Effect;
(xiii) Except as disclosed in the Pricing Disclosure Package and
the Prospectus, neither the Company nor any of its subsidiaries is in violation
of any statute, any rule, regulation, decision or order of any governmental
agency or body or any court, domestic or foreign, relating to the use, disposal
or release of hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances (collectively, "ENVIRONMENTAL LAWS"), owns or operates any real
property contaminated with any substance that is subject to any Environmental
Laws, is liable for any off-site disposal or contamination pursuant to any
Environmental Laws, or is subject to any claim relating to any Environmental
Laws, which violation, contamination, liability or claim would individually or
in the aggregate have a Material Adverse Effect; and the Company is not aware of
any pending investigation which has a reasonable possibility of leading to such
a claim;
(xiv) Except as disclosed in the Pricing Disclosure Package and
the Prospectus, there are no pending actions, suits or proceedings against or
affecting the Company, any of its subsidiaries or any of their respective
properties that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material Adverse
Effect, or would materially and adversely affect the ability of the Company to
perform its obligations under the Indenture or this Agreement, or which are
otherwise material in the context of the sale of the Notes; and no such actions,
suits or proceedings are threatened or, to the Company's knowledge,
contemplated;
(xv) The financial statements included or incorporated by
reference in the Registration Statement, the Pricing Disclosure Package and the
Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates shown and their results of operations
and cash flows for the periods shown, and, except as otherwise disclosed in the
Registration Statement, the Pricing Disclosure Package and the Prospectus, such
financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a consistent
basis; and
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(xvi) Since the date of the latest audited financial statements
incorporated by reference in the Registration Statement, the Pricing Disclosure
Package and the Prospectus and except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus there has been no
material adverse change in the business, financial condition, prospects or
results of operations of the Company and its subsidiaries taken as a whole, and
there has been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its equity interests (other than a dividend on the
common stock of the Company in the amount of $100,000,000 paid to Utility
Holding, LLC in December 2006).
(xvii) The Company maintains a system of internal accounting
controls and maintains disclosure controls and procedures in conformity with the
requirements of the 1934 Act and is otherwise in compliance in all material
respects with the requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules
and regulations promulgated in connection therewith.
(xviii) Deloitte & Touche LLP, who have certified certain
financial statements of the Company and its subsidiaries are an independent
registered public accounting firm with respect to the Company and its
subsidiaries within the applicable rules and regulations adopted by the
Commission and the Public Accounting Oversight Board (United States) and as
required by the 1933 Act.
(xix) The Company is not, and after giving effect to the offering
and sale of the Notes and the application of the proceeds thereof as described
in the Prospectus under the caption "Use of Proceeds," will not be an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended (the "Investment Company Act").
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 Notes set forth in Schedule I opposite the name of
such Underwriter (plus an additional amount of Notes that such Underwriter may
become obligated to purchase pursuant to the provisions of Section 8 hereof) at
a price equal to 98.656% of the principal amount thereof, plus accrued interest,
if any, from February 6, 2007 to the Closing Date.
(b) The Notes to be purchased by each Underwriter hereunder will be
represented by one or more registered global notes 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 Notes to Banc
of America Securities LLC, acting on behalf of the Underwriters 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 Closing Date by the Company
to Banc of America Securities LLC, by causing DTC
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to credit the Notes to the account of Banc of America Securities LLC, at DTC.
The Company will cause the global certificates representing the Notes to be made
available to Banc of America Securities LLC, Deutsche Bank Securities Inc. and
▇.▇. ▇▇▇▇▇▇ Securities Inc., as joint-book running managing underwriters
(together, the "REPRESENTATIVES"), acting on behalf of the Underwriters, for
checking at least twenty-four hours prior to the Closing Date 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 February 6,
2007 or such other time and date as the Representatives and the Company may
agree upon in writing. Such time and date are herein called the "CLOSING DATE."
(c) The documents to be delivered on the Closing Date by or on behalf
of the parties hereto pursuant to Section 6 hereof, including the cross-receipt
for the Notes and any additional certificates requested by the Underwriters
pursuant to Section 6(h) hereof, will be delivered at such time and date at the
offices of ▇▇▇▇▇ ▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ or such other location as the Representatives and the Company may
agree in writing (the "CLOSING LOCATION"), and the Notes will be delivered at
the Designated Office, all on the Closing Date. A meeting will be held at the
Closing Location at 1:00 p.m., New York City time or at such other time as the
Representatives and the Company may agree in writing, on the New York Business
Day next preceding the Closing Date, 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. FREE WRITING PROSPECTUSES.
(a) The Company represents and agrees that, without the prior consent
of the Representatives, it has not made and will not make any offer relating to
the Notes that would constitute a "free writing prospectus" as defined in Rule
405 under the 1933 Act, other than a Permitted Free Writing Prospectus; each
Underwriter, severally and not jointly, represents and agrees that, without the
prior consent of the Company and the Representatives, it has not made and will
not make any offer relating to the Notes that would constitute a "free writing
prospectus" as defined in Rule 405 under the 1933 Act, other than a Permitted
Free Writing Prospectus or a free writing prospectus that is not required to be
filed by the Company pursuant to Rule 433; any such free writing prospectus
(which shall include the pricing term sheet discussed in Section 3(b) hereof),
the use of which has been consented to by the Company and the Representatives,
is listed on Schedule III and herein called a "PERMITTED FREE WRITING
PROSPECTUS."
(b) The Company agrees to prepare a term sheet specifying the terms of
the Notes not contained in the Preliminary Prospectus, substantially in the form
of Schedule II hereto and approved by the Representatives, and to file such
pricing term sheet pursuant to Rule 433(d) under the 1933 Act within the time
period prescribed by such Rule.
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(c) The Company and the Representatives have complied and will comply
with the requirements of Rule 433 under the 1933 Act applicable to any free
writing prospectus, including timely Commission filing where required and
legending.
(d) The Company agrees that if at any time following issuance of a
Permitted Free Writing Prospectus any event occurred or occurs as a result of
which such Permitted Free Writing Prospectus would conflict with the information
in the Registration Statement, the Preliminary Prospectus or the Prospectus or
the Pricing Disclosure Package would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances then prevailing, not
misleading, the Company will give prompt notice thereof to the Representatives
and, if requested by the Representatives, will prepare and furnish without
charge to each Underwriter a free writing prospectus or other document, the use
of which has been consented to by the Representatives, which will correct such
conflict, statement or omission; provided, however, that this representation and
warranty shall not apply to any statements or omissions in the Pricing
Disclosure Package made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through the
Representatives, expressly for use therein.
4. 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 the Registration Statement, including all documents incorporated by
reference therein and exhibits filed with the 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
written and electronic copies of the Preliminary Prospectus, the Pricing
Disclosure Package and 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;
(b) That the Company will cause the Preliminary Prospectus and 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 the Registration
Statement shall have been filed; provided, that, with respect to documents filed
pursuant to the 1934 Act and incorporated by reference into the Registration
Statement, such notice shall only be required during such time as the
Underwriters are required in the reasonable opinion of the Representatives,
based on advice of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, to
deliver a prospectus (or in lieu thereof, the notice referred to in Rule 173(a)
under the 1933 Act), (ii) of any request by the Commission for any amendment of
the Registration Statement, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose or pursuant to
Section 8A of the 1933 Act against the Company or related to the offering, and
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Notes for sale in
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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 the
Representatives, based on advice of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, to deliver a
prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the
1933 Act), the Company will not file any amendment to the Registration Statement
or supplement to the Preliminary Prospectus or the Prospectus to which the
Representatives or ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP shall have reasonably objected in
writing and the Company shall furnish one copy of every such amendment or
supplement to each of the Representatives and to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP. If the
Commission shall issue a stop order suspending the effectiveness of the
Registration Statement, the Company will take such steps to obtain the lifting
of that order as promptly as practical;
(c) That if, at any time when in the reasonable opinion of the
Representatives, based on advice of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, the information in the
Pricing Disclosure Package or the Prospectus (or in lieu thereof, the notice
referred to in Rule 173(a) under the ▇▇▇▇ ▇▇▇) 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 the Representatives, based
on advice of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, or counsel for the Company, to amend or
supplement the Pricing Disclosure Package or 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 information in the
Pricing Disclosure Package or the Prospectus (or in lieu thereof, the notice
referred to in Rule 173(a) under the ▇▇▇▇ ▇▇▇) 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 Pricing Disclosure Package or 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
Notes may have been sold by the Underwriters and to any other dealers upon
reasonable request, either amendments or supplements to the Pricing Disclosure
Package or the Prospectus or (ii) file with the Commission documents
incorporated by reference in the Pricing Disclosure Package and Prospectus,
which shall be so supplied to the Underwriters and such dealers, in either case
so that the statements in the Pricing Disclosure Package or the Prospectus as so
amended, supplemented or modified will not, in light of the circumstances when
the information in the Pricing Disclosure Package or the Prospectus (or in lieu
thereof, the notice referred to in Rule 173(a) under the ▇▇▇▇ ▇▇▇) is delivered
to a purchaser, be misleading or so that the Pricing Disclosure Package and the
Prospectus will comply with law;
(d) That the Company will endeavor to qualify, at its expense, the
Notes 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
Notes; 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;
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(e) That the Company will make generally available to its security
holders and the holders of the Notes as soon as practicable an earnings
statement of the Company covering a twelve-month period beginning after the
Closing Date which shall satisfy the provisions of Section 11(a) of the 1933 Act
and the rules and regulations of the Commission thereunder (including Rule 158
under the ▇▇▇▇ ▇▇▇); and
(f) That during the period beginning on the date of this Agreement and
continuing to and including the Closing Date, the Company will not offer, sell,
contract to sell or otherwise distribute any notes, any security convertible
into or exchangeable into or exercisable for notes or any other debt securities
substantially similar to the Notes (except for the Notes issued pursuant to this
Agreement), without the prior written consent of the Underwriters.
5. 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 the 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 Notes and all other expenses in connection with
the preparation, printing and filing of the Basic Prospectus, any Permitted Free
Writing Prospectus, the Preliminary Prospectus, the Pricing Disclosure Package
and the 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 Notes for
offering and sale under state securities laws as provided in Section 4(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 rating services
for rating the Notes; (v) the cost of preparing the Notes; (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; and
(vii) 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 7 and 10 hereof, the Underwriters will pay all of their own costs
and expenses, including any advertising expenses connected with any offers they
may make and the reasonable fees, disbursements and expenses of counsel for the
Underwriters.
6. 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 Closing Date, of the representations and warranties made herein
by the Company, to compliance at and as of the Closing Date by the Company with
its covenants and agreements herein contained and the other provisions hereof to
be satisfied at or prior to the Closing Date, and to the following additional
conditions:
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(a) (i) No stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceeding for such purpose or pursuant to
Section 8A of the 1933 Act against the Company or related to the offering shall
be pending before or threatened by the Commission, (ii) the Prospectus shall
have been filed with the Commission pursuant to Rule 424(b) within the
applicable time period prescribed for filing by the rules and regulations under
the 1933 Act and in accordance herewith and each Permitted Free Writing
Prospectus shall have been filed by the Company with the Commission within the
applicable time periods prescribed for such filings by, and otherwise in
compliance with Rule 433 under the 1933 Act to the extent so required and (iii)
the Underwriters shall have received on and as of the Closing Date, a
certificate dated such date, signed by an executive officer (including, without
limitation, the Treasurer) of the Company or an executive officer of CenterPoint
Energy, Inc., the sole stockholder of the Company ("CNP"), to the foregoing
effect.
(b) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change in the business, financial condition,
prospects or results of operations of the Company and its subsidiaries taken as
one enterprise which, in the reasonable judgment of the Representatives, is
material and adverse and makes it impractical to proceed with completion of the
offering or the sale of and payment for the Notes on the terms set forth herein;
(ii) 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 1933 Act), or any public announcement that any such
organization has newly placed under surveillance or review its rating of any
debt securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any material suspension or material
limitation of trading in securities generally on the New York Stock Exchange, or
on the over-the-counter market or any suspension of trading of any securities of
CenterPoint Energy, Inc. on any exchange or in the over-the-counter market; (iv)
any general moratorium on commercial banking activities declared by U.S. Federal
or New York State authorities; (v) any major disruption of settlements of
securities or clearance services in the United States or (vi) any act of
terrorism in the United States, any attack on, outbreak or escalation of
hostilities involving the United States, any declaration of war by Congress or
any other national or international calamity or crisis if, in the judgment of
the Representatives, the effect of any such attack, outbreak, escalation, act,
declaration, calamity or crisis on the financial markets makes it impractical to
proceed with completion of the offering or sale of and payment for the Notes on
the terms set forth herein.
(c) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated the Closing Date, 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.
(d) ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq., Executive Vice President and General Counsel
of the Company, or ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Vice President and Deputy General
Counsel of
11
the Company, shall have furnished to you his written opinion, dated the Closing
Date, 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 own its properties and conduct its business as
described in the Pricing Disclosure Package and the Prospectus and to enter into
and perform its obligations under this Agreement and the Indenture and the
Company is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification, except where the
failure to so qualify would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect;
(ii) Each Significant Subsidiary of the Company has been duly
formed and is validly existing in good standing under the laws of the
jurisdiction of its formation, with power and authority (corporate and other) to
own its properties and conduct its business as described in the Pricing
Disclosure Package and the Prospectus; and each Significant Subsidiary of the
Company is duly qualified to do business as a foreign corporation, limited
partnership or limited liability company in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to so qualify
would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; all of the issued and outstanding ownership interests
of each Significant Subsidiary of the Company have been duly authorized and
validly issued in accordance with the organizational documents of such
Significant Subsidiary; and the ownership interests of each Significant
Subsidiary owned by the Company, directly or through subsidiaries, is owned free
from liens, encumbrances and defects;
(iii) 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 Notes being
delivered at the Closing Date or for the consummation by the Company of the
transactions contemplated by this Agreement and the Indenture;
(iv) To such counsel's knowledge and other than as set forth or
contemplated in the Pricing Disclosure Package and the Prospectus, there are no
legal or governmental proceedings pending or threatened to which the Company is
subject, which, individually or in the aggregate, have a reasonable possibility
of having a Material Adverse Effect;
(v) The execution, delivery and performance by the Company of
this Agreement, the Indenture and the issuance and sale of the Notes, will not
result in the breach or violation of, or constitute a default under, (a) the
Certificate of Incorporation, the Bylaws or other organizational documents of
the Company, each as amended to date, (b) 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
12
or to which its property is subject or (c) 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, in the case of clause (b), individually or in
the aggregate, would have a Material Adverse Effect;
(vi) 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, 2005 under the captions "Business--Regulation" and
"Business--Environmental Matters," and those described elsewhere in the Pricing
Disclosure Package and the Prospectus, fairly describe in all material respects
the portions of the statutes and regulations addressed thereby; and
(vii) Such counsel does not know of any contracts or documents of
a character required to be described in the Registration Statement, Pricing
Disclosure Package or Prospectus or to be filed as exhibits to the Registration
Statement which are not so described and filed.
(e) ▇▇▇▇▇ ▇▇▇▇▇ L.L.P., counsel for the Company, shall have furnished
to you their written opinion, dated the Closing Date, in form and substance
satisfactory to you, to the effect that:
(i) The statements set forth in the pricing term sheet discussed
in Section 3(b) hereof, the Preliminary Prospectus and the Prospectus under the
caption "Description of the Notes", and in the Basic Prospectus under the
caption "Description of Our Senior Debt Securities" accurately summarize in all
material respects the terms of the Notes;
(ii) The Notes conform, as to legal matters in all material
respects to the descriptions thereof contained in the Pricing Disclosure Package
and the Prospectus including, without limitation, the description in the
Preliminary Prospectus and the Prospectus under the caption "Description of the
Notes", and in the Basic Prospectus including, without limitation, under the
caption "Description of Our Senior Debt Securities";
(iii) The Notes 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 duly executed, issued and
authenticated in accordance with the terms of the Indenture and delivered
against payment therefor pursuant to the terms of this Agreement, will
constitute legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their terms and will be entitled to the
benefits afforded by the Indenture, except as such enforceability and
entitlement are subject to the effect of (a) any applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other law
relating to or affecting creditors' rights generally, (b) general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law) and (c) any implied covenants of good faith and fair
dealing;
13
(iv) The execution and delivery of the Indenture have been duly
and validly authorized by all necessary corporate action on the part of the
Company; the Indenture has been duly and validly executed and delivered by the
Company; the Indenture constitutes a valid and binding instrument enforceable
against the Company in accordance with its terms, except as such enforceability
is subject to the effect of (a) any applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other law relating to or
affecting creditors' rights generally, (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and (c) any implied covenants of good faith and fair dealings;
(v) The Indenture has been duly qualified under the TIA;
(vi) The Registration Statement has become effective under the
1933 Act, and, to the best of such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement or any part thereof has been
issued and no proceedings for that purpose or pursuant to Section 8A of the 1933
Act against the Company or related to the offering have been instituted and are
pending or are threatened by the Commission under the 1933 Act; the Registration
Statement, as of the date of this Agreement, and the Permitted Free Writing
Prospectus and the Prospectus, as of their dates and on the Closing Date (except
for (A) the operating statistics, (B) the financial statements, pro forma
financial statements and financial statement schedules contained or incorporated
by reference therein (including the notes thereto and the auditors' reports
thereon), (C) the other financial and statistical information contained or
incorporated by reference therein, or omitted therefrom, and (D) the exhibits
thereto, as to which such counsel need not express an opinion) appear on their
face to have complied or to comply as to form in all material respects with the
requirements of the 1933 Act and the applicable rules and regulations of the
Commission thereunder, and each document incorporated by reference therein as
originally filed pursuant to the 1934 Act (except for (A) the operating
statistics, (B) the financial statements, pro forma financial statements and
financial statement schedules contained or incorporated by reference therein
(including the notes thereto and the auditors' reports thereon), (C) the other
financial and statistical information contained or incorporated by reference
therein, or omitted therefrom, and (D) the exhibits thereto, as to which such
counsel need not express an opinion) when so filed appears on its face to have
complied as to form in all material respects with the 1934 Act and the
applicable rules and regulations of the Commission thereunder;
(vii) The execution, delivery and performance by the Company of
this Agreement has been duly authorized by all necessary corporate action on the
part of the Company, and this Agreement has been duly executed and delivered by
the Company; and
(viii) The Company is not and, after giving effect to the
offering and sale of the Notes and the application of the proceeds thereof as
described in the Pricing Disclosure Package and Prospectus, will not be an
"investment company" as defined in the Investment Company Act.
14
In addition, such counsel shall state that such counsel have
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants of the Company
and representatives of the Underwriters, at which the contents of the
Registration Statement, the Pricing Disclosure Package and the Prospectus and
related matters were discussed. Although such counsel have not undertaken to
determine independently, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement, the Pricing Disclosure Package and the Prospectus or any of the
documents incorporated by reference in the Registration Statement, the Pricing
Disclosure Package and the Prospectus (except to the extent set forth in
paragraphs (i) and (ii) above), such counsel advises the Underwriters that, on
the basis of the foregoing, no facts have come to the attention of such counsel
that lead them to believe that the Registration Statement (except for (A) the
operating statistics, (B) the financial statements, pro forma financial
statements and financial statement schedules contained or incorporated by
reference therein (including the notes thereto and the auditors' reports
thereon), (C) the other financial and statistical information contained or
incorporated by reference therein, or omitted therefrom, and (D) the exhibits
thereto, as to which such counsel need not comment) as of the date of this
Agreement, 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 Pricing Disclosure Package
(except for (A) the operating statistics, (B) the financial statements, pro
forma financial statements and financial statement schedules contained or
incorporated by reference therein (including the notes thereto and the auditors'
reports thereon), (C) the other financial and statistical information contained
or incorporated by reference therein, or omitted therefrom, and (D) the exhibits
thereto, as to which such counsel need not comment), as of the Applicable Time
contained any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or that the Prospectus
(except for (A) the operating statistics, (B) the financial statements, pro
forma financial statements and financial statement schedules contained or
incorporated by reference therein (including the notes thereto and the auditors'
reports thereon), (C) the other financial and statistical information contained
or incorporated by reference therein, or omitted therefrom, and (D) the exhibits
thereto, as to which such counsel need not comment) contained, as of its date,
or contains, on the Closing Date, any untrue statement therein of a material
fact or omitted, as of its date, or omits, on the Closing Date, to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
In rendering its opinions and statements in subparagraphs (e)(vi) and in the
immediately preceding paragraph above, such counsel may assume that the date of
this Agreement is "the earlier of the date the Prospectus is first used or the
date and time of the first contract of sale of the Notes" unless the
Representatives shall advise that the earlier of such events occurred on a
different date that it shall specify, in which case the phrase "as of the date
of this Agreement" in such subparagraph and paragraph shall be replaced by the
date so identified.
15
(f) 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.
(g) At the Closing Date, Deloitte & Touche LLP shall have furnished
you a letter, dated the Closing Date, to the effect that such accountants
reaffirm, as of the Closing Date and as though made on the Closing Date, the
statements made in the letter furnished by such accountants pursuant to
paragraph (f) of this Section 6, except that the specified date referred to in
such letter will be a date not more than three business days prior to the
Closing Date.
(h) The Company shall have furnished or caused to be furnished to you
at the Closing Date certificates of the President or any Vice President and a
principal financial or accounting officer of the Company in which such officers,
to the best of their knowledge after reasonable investigation, shall state that
(i) the representations and warranties of the Company in this Agreement are true
and correct, (ii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date, (iii) subsequent to the date of the most recent financial
statements in the Pricing Disclosure Package and the Prospectus, there has been
no material adverse change in the business, financial condition, prospects or
results of operations of the Company and its subsidiaries taken as a whole
except as set forth in or contemplated by the Pricing Disclosure Package and the
Prospectus or as described in such certificate and (iv) as to such other matters
as you may reasonably request.
(i) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental agency
or body which would as of the Closing Date, prevent the issuance or the sale of
the Notes; and no injunction, restraining order or order of any other nature by
any court of competent jurisdiction shall have been issued as of the Closing
Date which would prevent the issuance or sale of the Notes.
(j) The Notes shall be eligible for clearance and settlement through
DTC.
7. 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 1933 Act or the 1934 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 as such expenses are incurred), joint or several, which may be based
upon either the 1933 Act, or the 1934 Act, or any other statute or at common
law, on the ground or alleged ground that the Registration Statement, any
preliminary prospectus, the Basic Prospectus, the Preliminary Prospectus, any
Permitted Free Writing Prospectus, the Pricing Disclosure Package, the
Prospectus or any free writing prospectus used by the Company other than a
Permitted Free Writing Prospectus (or any such document, as from time to time
amended, or deemed to be
16
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 was made in reliance upon, and in
conformity with, written information furnished to the Company by any Underwriter
through the Representatives specifically for use in the preparation thereof, it
being understood and agreed that the only such information consists of the
information described as such in subsection (b) below; 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.
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 and the Company
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 (and not more than
one local counsel) at any time for all such Underwriters and their controlling
persons, which firm shall be designated in writing by the Representatives. The
Company shall not be liable to indemnify any person for any settlement of any
such claim effected without the Company's prior written consent. This indemnity
agreement will be in addition to any liability which the Company might otherwise
have.
(b) Each Underwriter agrees severally and not jointly to indemnify and
hold harmless the Company, each of the Company's directors, each of the
Company's officers who have signed the Registration Statement, and each person,
if any, who controls the Company within the meaning of the 1933 Act or the 1934
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
17
connection therewith as such expenses are incurred), joint or several, which may
be based upon the 1933 Act, or any other statute or at common law, on the ground
or alleged ground that the Registration Statement, any preliminary prospectus,
the Basic Prospectus, the Preliminary Prospectus, any Permitted Free Writing
Prospectus, the Pricing Disclosure Package 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 the
Representatives 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 Preliminary Prospectus
and the Prospectus furnished on behalf of each Underwriter: the third paragraph,
the third and fourth sentences of the fourth paragraph and the fifth paragraph,
each under the heading "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 (and not more than
one local counsel) 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
18
any person for any settlement of any such claim effected without such
Underwriter's prior written consent. This indemnity agreement will be in
addition to any liability which such Underwriter might otherwise have.
(c) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other from the offering
of the Notes 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 Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total discounts and commissions received by the
Underwriters from the Company under this Agreement. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (c) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (c). Notwithstanding the
provisions of this subsection (c), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Notes purchased by it were resold exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. The Underwriters'
obligations in this subsection (c) to contribute are several in proportion to
their respective purchase obligations and not joint.
8. SUBSTITUTION OF UNDERWRITERS.
If any Underwriter shall default in its obligation to purchase the
Notes which it has agreed to purchase hereunder and the aggregate principal
amount of such Notes which such defaulting Underwriter agreed but failed to
purchase does not exceed 10% of the total principal amount of Notes, the
non-defaulting Underwriters may make arrangements satisfactory to the Company
for the purchase of the aggregate principal amount of such Notes by other
persons, including any of the non-defaulting Underwriters, but if no such
arrangements are made by the Closing Date, the non-defaulting Underwriters shall
be obligated severally, in proportion to their respective commitments hereunder,
to purchase the Notes that such defaulting Underwriter agreed but failed to
purchase. If any Underwriter or Underwriters shall so default and the
19
aggregate principal amount of Notes with respect to which such default or
defaults occur exceeds 10% of the total principal amount of Notes and
arrangements satisfactory to the non-defaulting Underwriters and the Company for
the purchase of such Notes by other persons are not made within 36 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 Notes of the defaulting Underwriter as provided in this Section 8, (i)
the Company shall have the right to postpone the Closing Date 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 the Registration Statement,
Pricing Disclosure Package or Prospectus or in any other documents or
arrangements, and the Company agrees to promptly file any amendments to the
Registration Statement or supplements to the Prospectus which may thereby be
made necessary, and (ii) the respective aggregate principal amount of Notes
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 8 shall be
without liability on the part of the non-defaulting Underwriters or the Company,
other than as provided in Sections 7 and 10.
9. 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 Notes.
10. TERMINATION.
If this Agreement shall be terminated pursuant to Section 8 or if for
any reason the purchase of the Notes by the Underwriters is not consummated, the
Company shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 5 and the respective obligations of the Company and the
Initial Purchasers pursuant to Section 7 shall remain in effect. If the purchase
of the Notes by the Underwriters is not consummated for any reason other than
solely because of the termination of this Agreement pursuant to Section 8 or the
occurrence of any event specified in clause (iii), (iv), (v) or (vi) of Section
6(b), the Company will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Notes.
20
11. NOTICES.
In all dealings hereunder, the Representatives 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 the Representatives.
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 the Underwriters in care of Banc of America Securities
LLC, ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: High Grade Debt
Capital Markets Transaction Management and (ii) if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the Company in
care of CenterPoint Energy Resources Corp., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇ (facsimile number: 713-207-0490). Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
12. 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 7
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 1933 Act or the 1934 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 the
Registration Statement and the person or persons, if any, who control the
Company within the meaning of the 1933 Act.
13. RELATIONSHIP
The Company acknowledges and agrees that (i) the purchase and sale of
the Notes pursuant to this Agreement is an arm's-length commercial transaction
between the Company, on the one hand, and the several Underwriters, on the
other, (ii) in connection therewith and with the process leading to such
transaction each Underwriter is acting solely as a principal and not the agent
or fiduciary of the Company, (iii) no Underwriter has assumed an advisory or
fiduciary responsibility in favor of the Company with respect to the offering
contemplated hereby or the process leading thereto (irrespective of whether such
Underwriter has advised or is currently advising the Company on other matters)
or any other obligation to the Company except the obligations expressly set
forth in this Agreement and (iv) the Company has consulted its
21
own legal and financial advisors to the extent it deemed appropriate. The
Company agrees that it will not claim that the Underwriters, or any of them, has
rendered advisory services of any nature or respect, or owes a fiduciary or
similar duty to the Company, in connection with such transaction or the process
leading thereto.
14. APPLICABLE LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
15. 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. Delivery of an executed signature page of this Agreement by
facsimile or any other rapid transmission device designed to produce a written
record of the communication transmitted shall be as effective as delivery of a
manually executed counterpart thereof.
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If the foregoing is in accordance with your understanding, please sign
and return to us seven (7) 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,
CENTERPOINT ENERGY RESOURCES CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer and
Executive Vice President
23
Accepted as of the date hereof:
BANC OF AMERICA SECURITIES LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Principal
DEUTSCHE BANK SECURITIES INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
For Themselves and as Representatives of the Underwriters Listed on Schedule I
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SCHEDULE I
Principal Amount of
Underwriters' Notes
-------------------
Banc of America Securities LLC ........................... $ 35,000,000
Deutsche Bank Securities Inc. ............................ 35,000,000
▇.▇. ▇▇▇▇▇▇ Securities Inc. .............................. 35,000,000
▇▇▇▇▇▇ Brothers Inc. ..................................... 15,000,000
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ..................................... 15,000,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ........................ 15,000,000
------------
TOTAL ................................................. $150,000,000
============
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SCHEDULE II
PRICING TERM SHEET
(to Preliminary Prospectus Supplement dated February 1, 2007)
Issuer: CenterPoint Energy Resources Corp.
Security: 6.25% Senior Notes due 2037
Size: $150,000,000
Maturity Date: February 1, 2037
Ratings: ▇▇▇▇▇'▇ Baa3
S&P BBB
Fitch BBB
Coupon: 6.25%
Interest Payment Dates: February 1 and August 1, commencing August 1, 2007
Price to public: 99.531%
Make-whole call: At any time at a discount rate of Treasury plus 25
basis points
Expected Settlement Date: February 6, 2007
Underwriters: Banc of America Securities LLC
Deutsche Bank Securities Inc.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Treasury Benchmark: 4.500% due February 15, 2036
Treasury Yield: 4.935%
Reoffer Spread: + 135 basis points
Yield to Maturity: 6.285%
The issuer has filed a registration statement (including a prospectus) with the
SEC for the offering to which this communication relates. Before you invest, you
should read the prospectus in that registration statement and other documents
the issuer has filed with the SEC for more complete information about the issuer
and this offering. You may get these documents for free by visiting ▇▇▇▇▇ on the
SEC Web site at ▇▇▇.▇▇▇.▇▇▇. Alternatively, the issuer, any underwriter or any
dealer participating in the offering will arrange to send you the prospectus if
you request it by calling Banc of America Securities LLC toll-free at
1-800-294-1322, Deutsche Bank Securities Inc. toll-free at 1-800-503-4611 or
▇.▇. ▇▇▇▇▇▇ Securities Inc. collect at ▇-▇▇▇-▇▇▇-▇▇▇▇.
26
SCHEDULE III
PRICING DISCLOSURE PACKAGE
1) Preliminary Prospectus dated February 1, 2007
2) Permitted Free Writing Prospectuses
a) Pricing Term Sheet attached as Schedule II hereto
27
