Attached files
file | filename |
---|---|
8-K - FORM 8-K - CENTERPOINT ENERGY RESOURCES CORP | h78773e8vk.htm |
EX-4.2 - EX-4.2 - CENTERPOINT ENERGY RESOURCES CORP | h78773exv4w2.htm |
EX-4.3 - EX-4.3 - CENTERPOINT ENERGY RESOURCES CORP | h78773exv4w3.htm |
Exhibit 1.1
CENTERPOINT ENERGY RESOURCES CORP.
$250,000,000 4.50% Senior Notes due 2021
$300,000,000 5.85% Senior Notes due 2041
$300,000,000 5.85% Senior Notes due 2041
Purchase Agreement
January 4, 2011
RBS Securities Inc.
600 Washington Blvd.
Stamford, Connecticut 06901
600 Washington Blvd.
Stamford, Connecticut 06901
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
One Bryant Park
New York, New York 10036
Incorporated
One Bryant Park
New York, New York 10036
RBC Capital Markets, LLC
Three World Financial Center
200 Vesey Street
New York, New York 10281
Three World Financial Center
200 Vesey Street
New York, New York 10281
SunTrust Robinson Humphrey, Inc.
3333 Peachtree Street, 11th Floor
Atlanta, Georgia 30326
3333 Peachtree Street, 11th Floor
Atlanta, Georgia 30326
as the Representatives of the several Initial Purchasers
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 several Initial
Purchasers named in Schedule I hereto (the Initial Purchasers) $250,000,000 aggregate principal
amount of its 4.50% Senior Notes due 2021 (the 2021 Notes) and $300,000,000 aggregate principal
amount of its 5.85% Senior Notes due 2041 (the 2041 Notes and together with the 2021 Notes, 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 Mellon Trust Company, National Association, as trustee
(the Trustee) and a Supplemental Indenture No. 14 to the Base Indenture dated as of January 11,
2011 (the Supplemental Indenture and, together with the Base Indenture and any amendments or
supplements thereto, the Indenture), between the Company and the Trustee.
The Notes will be offered and sold to the several Initial Purchasers without being registered
under the Securities Act of 1933, as amended (the 1933 Act), in reliance upon an exemption
therefrom. The Company has prepared a preliminary offering memorandum, subject
to completion, dated January 4, 2011, including the documents incorporated therein by
reference as of the date thereof (the Preliminary Offering Memorandum) and will prepare an
offering memorandum, dated January 4, 2011, including the documents incorporated therein by
reference as of the date of this Agreement (the Offering Memorandum) setting forth information
concerning the Company and the Notes. The Preliminary Offering Memorandum and the pricing term
sheet contained in Schedule II (the Pricing Supplement) taken together as of the Applicable Time
(as described herein) are herein referred to as the Pricing Disclosure Package. Applicable
Time means 3:15 p.m. (New York City time) on the date of this Agreement. Supplemental Marketing
Materials means any information contained in any road show (as defined in Rule 433 under the
1933 Act) prepared by or on behalf of the Company. Copies of the Preliminary Offering Memorandum
have been and copies of the Offering Memorandum will be delivered by the Company to the Initial
Purchasers pursuant to the terms of this Agreement. Any reference herein to the terms amend,
amendment or supplement with respect to the Preliminary Offering Memorandum or Offering
Memorandum shall be deemed to refer to and include, without limitation, the filing of any document
after the date hereof under the Securities Exchange Act of 1934, as amended (the 1934 Act),
deemed to be incorporated by reference therein. The Company hereby confirms that it has authorized
the use of the Pricing Disclosure Package, any Supplemental Marketing Materials and the Offering
Memorandum in connection with the offering and resale of the Notes by the Initial Purchasers in
accordance with Section 2 herein.
Each Initial Purchaser has advised the Company that if such Initial Purchaser makes offers of
the Notes purchased hereunder, the offers will be made on the terms set forth in the Pricing
Disclosure Package solely to persons whom such Initial Purchaser reasonably believes to be (i)
qualified institutional buyers (QIBs) as defined in Rule 144A under the Securities Act (Rule
144A) or (ii) non U.S. persons to whom offers and sales of the Securities may be made in reliance
upon the provisions of Regulation S under the Securities Act (Regulation S) (such persons
collectively being referred to herein as the Eligible Purchasers, and sales to Eligible
Purchasers by Initial Purchasers being referred to herein as Exempt Resales).
Holders of the Notes (including the Initial Purchasers and their direct and indirect
transferees) will be entitled to the benefits of a Registration Rights Agreement, (the
Registration Rights Agreement) dated as of the Closing Date (as defined herein) pursuant to which
the Company will agree to file with the Securities and Exchange Commission (the Commission) (i) a
registration statement under the 1933 Act (the Exchange Offer Registration Statement) registering
an issue of securities of the Company (Exchange Notes) which are identical in all material
respects to the Notes (except that the Exchange Notes will not contain terms with respect to
transfer restrictions and additional interest) and (ii) under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the 1933 Act (the Shelf Registration
Statement).
1. Representations and Warranties of the Company.
(a) The Company represents and warrants to, and agrees with, each of the Initial Purchasers,
on and as of the date hereof and the Closing Date (as defined in Section 3) that:
2
(i) The Pricing Disclosure Package and any Supplemental Marketing Materials, when considered
together with the Pricing Disclosure Package, as of the Applicable Time, do not, and the Offering
Memorandum, as of its date and on the Closing Date, will not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements contained
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 any statements or omissions made
in reliance upon and in conformity with any information furnished in writing by the Representatives
on behalf of any Initial Purchaser for use therein;
(ii) 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 Offering Memorandum or the
Offering Memorandum (including, without limitation, any document to be filed pursuant to the 1934
Act which will be incorporated by reference in the Offering Memorandum) 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;
(iii) Assuming the accuracy of the representations and the warranties of the Initial
Purchasers contained in Section 2 herein and their compliance with the agreements set forth
therein, it is not necessary, in connection with the issuance and sale of the Notes to the Initial
Purchasers and the offer, resale and delivery of the Notes by the Initial Purchasers in the manner
contemplated by this Agreement and the Offering Memorandum, to register the Notes under the 1933
Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended (the Trust
Indenture Act);
(iv) 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 Offering Memorandum;
(v) Each Significant Subsidiary (as defined in Regulation S-X under the 1933 Act) 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 Offering
Memorandum; 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; 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, are owned free from
liens, encumbrances and defects;
3
(vi) This Agreement has been duly authorized, executed and delivered by the Company;
(vii) The Registration Rights Agreement has been duly authorized by the Company and, when duly
executed and delivered in accordance with its terms by each of the parties thereto, will constitute
a valid and legally binding agreement of the Company enforceable against the Company in accordance
with its 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) and except as the indemnification or contribution obligations
thereunder may be limited under applicable laws; and the Registration Rights Agreement conforms to
the description thereof in the Pricing Disclosure Package and the Offering Memorandum;
(viii) 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 executed and 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 Indenture and
the Notes conform to the descriptions thereof in the Pricing Disclosure Package and the Offering
Memorandum;
(ix) The Exchange Notes have been duly authorized by the Company and, when executed by the
Company and duly authenticated by the Trustee in accordance with the Indenture and delivered in
accordance with the Registration Rights Agreement, will constitute valid and binding obligations of
the Company, enforceable against the Company in accordance with their 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) and
will be entitled to the benefits of the Indenture; and the Exchange Notes will conform to the
description thereof in the Pricing Disclosure Package and the Offering Memorandum;
(x) The issuance by the Company of the Notes, the compliance by the Company with all of the
applicable provisions of this Agreement, the Notes, the Indenture and the Registration Rights
Agreement (collectively, the Transaction Documents), and the consummation by the Company 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
4
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 Companys or any of its or its
subsidiaries properties;
(xi) No consent, approval, authorization, order, filing, registration or qualification of or
with any court or governmental agency or body under any statute, judgment, order, decree, rule or
regulation is required for the issuance of the Notes or the consummation by the Company of the
transactions contemplated by each Transaction Document to which it is a party, except filings of
Current Reports on Form 8-K which may be required by the 1934 Act and such consents, approvals,
authorizations, filings, registrations or qualifications (i) which are required pursuant to the
Registration Rights Agreement and (ii) as may be required to be obtained or made under applicable
state securities laws or blue sky laws;
(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 Offering Memorandum,
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 Offering Memorandum, 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 Transaction Documents, 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 Companys knowledge,
contemplated;
5
(xv) The financial statements included or incorporated by reference in the Pricing Disclosure
Package and the Offering Memorandum 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 Pricing Disclosure Package and the
Offering Memorandum, such financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a consistent basis;
(xvi) Since the date of the latest audited financial statements incorporated by reference in
the Pricing Disclosure Package and the Offering Memorandum and except as disclosed in the Pricing
Disclosure Package and the Offering Memorandum 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;
(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 Sarbanes-Oxley Act of 2002 and the
rules and regulations promulgated in connection therewith;
(xviii) The Notes satisfy the eligibility requirements of Rule 144A(d)(3) under the 1933 Act;
(xix) 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 Company Accounting Oversight Board (United States) and as required by the 1933 Act;
(xx) 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 Offering Memorandum 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);
(xxi) The Company and each of its subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent and customary for
similarly situated companies in the businesses in which they are engaged;
(xxii) The operations of the Company and its subsidiaries are and, since January 1, 2006, have
been conducted at all times in compliance with applicable financial recordkeeping and reporting
requirements and the money laundering statutes and the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the Money Laundering Laws) and no action, suit or proceeding
by or before any court or governmental agency,
6
authority or body or any arbitrator involving the Company or any of its subsidiaries with
respect to the Money Laundering Laws is pending or, to the best knowledge of the Company,
threatened;
(xxiii) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company,
any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is
currently subject to any sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (OFAC); and the Company will not directly or indirectly use the proceeds of
the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC;
(xxiv) Neither the Company nor its affiliates have, directly or through an agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as
such term is defined in the 1933 Act), which is or will be integrated with the sale of the Notes in
a manner that will require registration of the Notes under the 1933 Act;
(xxv) Neither the Company nor its affiliates nor person acting on its or their behalf (other
than the Initial Purchasers as to whom the Company makes no representation in this paragraph
(xxvi)) has engaged or will engage in any directed selling efforts (as such term is defined in
Regulation S) with respect to the Notes, and all such persons have complied and will comply with
the offering restrictions requirements of Regulation S to the extent applicable;
(xxvi) None of the Company, its affiliates or any person acting on its or their behalf (other
than the Initial Purchasers as to whom the Company makes no representation in this paragraph
(xxvii)) has engaged in any form of general solicitation or general advertising (within the meaning
of Regulation D), in connection with the offering of the Notes in any manner involving a public
offering within the meaning of Section 4(2) of the 1933 Act; and
(xxvii) The Company is eligible to register debt securities on Form S-3.
2. Representations, Warranties and Agreements by Initial Purchasers; Resale by
Initial Purchasers.
(a) Each Initial Purchaser severally and not jointly represents and warrants to, and agrees
with, the Company that it is a QIB.
(b) Each of the Initial Purchasers hereby agrees (as to itself only) with the Company that (i)
it has not and will not solicit offers for, or offer or sell, the Notes by any form of general
solicitation or general advertising (as those terms are used in Regulation D under the 1933 Act) or
in any manner involving a public offering within the meaning of Section 4(2) of the 1933 Act; and
(ii) it has and will solicit offers for the Notes only from, and will offer the Notes only to (A)
persons whom the Initial Purchasers reasonably believe to be QIBs or, if any such person is buying
for one or more institutional accounts for which such person is acting as fiduciary or agent, only
when such person has represented to the Initial Purchasers that each such account is a QIB, to whom
notice has been given that such sale or delivery is being made in reliance on Rule 144A, and, in
each case, in transactions under Rule 144A and (B) in the case of offers outside the United States,
to persons other than U.S. persons (non-U.S. purchasers,
7
which term shall include dealers or other professional fiduciaries in the United States acting
on a discretionary basis for non-U.S. beneficial owners (other than an estate or trust)); provided,
however, that, in the case of this clause (B), in purchasing such Notes such persons are deemed to
have represented and agreed as provided under the caption Transfer Restrictions contained in the
Pricing Disclosure Package and the Offering Memorandum.
(c) Each of the Initial Purchasers understands that the Notes have not been and will not be
registered under the 1933 Act and may not be offered or sold within the United States except
pursuant to an exemption from, or in a transaction not subject to, the registration requirements of
the 1933 Act. Each Initial Purchaser agrees that it has not offered or sold, and will not offer or
sell, any Notes constituting part of its allotment within the United States except in accordance
with Rule 903 of Regulation S or Rule 144A. Accordingly, neither the Initial Purchasers nor their
affiliates nor any persons acting on their behalf have engaged or will engage in any directed
selling efforts (as defined in Regulation S) with respect to the Notes.
3. Sale and Delivery.
(a) Subject to the terms and conditions herein set forth, the Company agrees to issue and sell
to each of the Initial Purchasers, severally and not jointly, and each of the Initial Purchasers
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 Initial Purchaser (plus an additional amount of
Notes that such Initial Purchaser may become obligated to purchase pursuant to the provisions of
Section 9 hereof) at a price equal to 99.278% of the principal amount of 2021 Notes and 99.054% of
the principal amount of 2041 Notes, plus accrued interest, if any, from January 11, 2011 to the
Closing Date.
(b) The Notes of each series to be purchased by each Initial Purchaser 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 RBS Securities Inc. (RBS), acting on behalf of the Initial
Purchasers for the account of each Initial Purchaser, against payment by or on behalf of such
Initial Purchaser 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 RBS, by causing DTC to credit
the Notes to the account of RBS, at DTC. The Company will cause the global certificates
representing the Notes to be made available to RBS Securities Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, RBC Capital Markets, LLC and SunTrust Robinson Humphrey, Inc., as joint-book
running managing initial purchasers (together, the Representatives), acting on behalf of the
Initial Purchasers, 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 January 11, 2011 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 7 hereof, including the cross-receipt for the Notes and any additional
certificates requested by the Initial Purchasers pursuant to Section 7 hereof, will be
8
delivered at such time and date at the offices of Baker Botts L.L.P., One Shell Plaza, 910
Louisiana, Houston, Texas 77002-4995 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 3, 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.
4. Free Writing Communications
(a) The Company represents and agrees that, unless it obtains prior written consent of the
Representatives, and each Initial Purchaser represents and agrees that, unless it obtains 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 written communication (as such term is defined in
Rule 405 of the 1933 Act) that constitutes an offer to sell or a solicitation of an offer to buy
the Notes (other than the Pricing Disclosure Package, the Offering Memorandum and, in the case of
the Initial Purchasers, a communication that contains information describing the preliminary or
final terms of the Notes or the offering thereof).
(b) The Company and the Representatives consent to the use by any Initial Purchaser of the
Pricing Supplement set forth in Schedule II hereto.
5. Covenants and Agreements.
The Company covenants and agrees with the several Initial Purchasers that:
(a) The Company will advise the Representatives promptly of any proposal to amend or
supplement the Pricing Disclosure Package or the Offering Memorandum or any Supplemental Marketing
Materials and will not effect such amendment or supplement without the Representatives consent
(such consent not to be unreasonably withheld, conditioned or delayed). If, at any time prior to
the completion of the resale of the Notes by the Initial Purchasers, any event occurs as a result
of which the Pricing Disclosure Package or the Offering Memorandum or any Supplemental Marketing
Materials as then amended or supplemented 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 the light of
the circumstances under which they were made, not misleading, the Company promptly will notify the
Representatives of such event and promptly will prepare, at its own expense, an amendment or
supplement which will correct such statement or omission (subject to the approval of the
Representatives as set forth in the preceding sentence). Neither the Representatives consent to,
nor the Initial Purchasers delivery to offerees or investors of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section 7.
9
(b) The Company will furnish to the Representatives copies of the Preliminary Offering
Memorandum, the Offering Memorandum and any Supplemental Marketing Materials and all amendments and
supplements to such documents, in each case as soon as available and in such quantities as the
Representatives reasonably request. So long as any of the Notes are restricted securities within
the meaning of Rule 144(a)(3) under the 1933 Act, the Company will furnish to each holder of such
restricted securities and to each prospective purchaser (as designated by such holder) of such
restricted securities, upon the request of such holder or prospective purchaser, any information
required to be provided by Rule 144A(d)(4) under the 1933 Act (Additional Issuer Information),
unless such Additional Issuer Information is contained, at the time of such request, in documents
filed with the Commission pursuant to Section 13 or 15(d) of the 1934 Act. This covenant is
intended to be for the benefit of the holders, and the prospective purchasers designated by such
holders, from time to time of such restricted securities.
(c) The Company will, at its expense, use reasonable efforts (i) to arrange for the
qualification of the Notes for sale and the determination of their eligibility for investment under
the laws of such jurisdictions in the United States and Canada as the Initial Purchasers shall
reasonably request and (ii) continue such qualifications in effect so long as required for the
resale of the Notes by the Initial Purchasers, provided that the Company will not be required to
qualify as a foreign corporation or to file a general consent to service of process in any such
state or subject itself to taxation in any jurisdiction where it is not now so subject. The
Company will advise the Representatives promptly of the suspension of qualification of (or any such
exemption relating to) the Notes for offering, sale or trading in any jurisdiction or the
initiation or threat of any proceeding for any such purpose, in each case of which the Company
receives notice. In the event of the issuance of any order suspending such qualification or
exemption, the Company shall use commercially reasonable efforts to obtain the withdrawal thereof
at the earliest possible moment.
(d) 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 and the Notes which would be issuable pursuant to the exchange offer described in the
Preliminary Offering Memorandum and the Offering Memorandum), without the prior written consent of
the Representatives.
(e) The Company will not at any time offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, any securities under circumstances where such offer, sale,
pledge, contract or disposition would cause the exemption afforded by Section 4(2) of the 1933 Act
or the safe harbor of Regulation S thereunder to cease to be applicable to the offer and sale of
the Notes.
(f) None of the Company, its affiliates or any person acting on its or any of their behalf (no
covenant is made as to the Initial Purchasers) will engage, in connection with the offering of the
Notes, in any form of general solicitation or general advertising within the meaning of Rule 502(c)
under the 1933 Act.
10
(g) In connection with the registration of the Notes pursuant to the Registration Rights
Agreement, the Company will qualify the Indenture under the Trust Indenture Act and will enter into
any necessary supplemental indentures in connection therewith.
(h) During the period of one year after the Closing Date, the Company will not, and will not
permit any of its affiliates (as defined in Rule 144 under the 1933 Act) to resell any of the Notes
which constitute restricted securities under Rule 144 that have been reacquired by them.
(i) The Company will not take, directly or indirectly, any action designed to cause or result
in, or that has constituted or might reasonably be expected to constitute, under the 1934 Act or
otherwise, the stabilization or manipulation of the price of any securities of the Company to
facilitate the sale or resale of the Notes.
6. Expenses.
The Company covenants and agrees with the several Initial Purchasers that the Company will pay
or cause to be paid the following costs and expenses: (i) the fees, disbursements and expenses of
the Companys counsel and accountants in connection with the issue of the Notes; (ii) the costs
incident to the authorization, issuance, sale preparation and delivery of the Notes and any taxes
payable in that connection; (iii) the costs incident to the preparation, printing and distribution
of the Pricing Disclosure Package, the Offering Memorandum and any Supplemental Marketing Materials
and any amendments or supplements thereto and the mailing and delivery of the copies thereof to the
Initial Purchasers; (iv) the costs of preparing, reproducing and distributing each of the
Transaction Documents; (v) all reasonable expenses in connection with the qualification of the
Notes for offering and sale under state securities laws as provided in Section 5(c) hereof,
including the reasonable fees and disbursements of counsel for the Initial Purchasers in connection
with such qualification and in connection with the Blue Sky and legal investment surveys; (vi) any
fees charged by rating services for rating the Notes; (vii) 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; (viii) costs and expenses relating to investor presentations or any
road show in connection with the offering and sale of the Notes including, without limitation,
any travel expenses of the Companys officers and employees; and (ix) 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 8 and 11 hereof, the Initial Purchasers will pay all of their own costs and expenses,
including the reasonable fees, disbursements and expenses of counsel for the Initial Purchasers
(except as described in 6(v) above).
7. Conditions of Initial Purchasers Obligations.
The obligations of the several Initial Purchasers 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
11
contained and the other provisions hereof to be satisfied at or prior to the Closing Date, and
to the following additional conditions:
(a) 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 under the 1934 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.
(b) Dewey & LeBoeuf LLP, counsel for the Initial Purchasers, 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.
(c) Scott Rozzell, Esq., Executive Vice President and General Counsel of the Company, or Rufus
S. Scott, Esq., Senior Vice President and Deputy General Counsel of 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 Offering Memorandum and
to enter into and perform its obligations under this Agreement, the Registration Rights Agreement,
the Indenture, the Notes and the Exchange Notes 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
12
power and authority (corporate and other) to own its properties and conduct its business as
described in the Pricing Disclosure Package and the Offering Memorandum; 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 (a) various approvals and filings with the Commission
required under the 1933 Act and the Trust Indenture Act in connection with transactions
contemplated under the Registration Rights Agreement and (b) 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, the Registration Rights
Agreement, the Indenture and the Notes;
(iv) To such counsels knowledge and other than as set forth or contemplated in the Pricing
Disclosure Package and the Offering Memorandum, 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 Registration Rights Agreement and the issuance and sale of the Notes and the Exchange
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 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; and
(vi) The description of statutes and regulations set forth in Part I of the Companys Annual
Report on Form 10-K for the fiscal year ended December 31, 2009 under the captions
BusinessRegulation and BusinessEnvironmental Matters, and those described elsewhere in the
Pricing Disclosure Package and the Offering Memorandum, fairly describe in all material respects
the portions of the statutes and regulations addressed thereby.
(d) Baker Botts 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:
13
(i) The statements set forth in the Pricing Supplement and under the caption Description of
the Notes and Registration Rights in the Pricing Disclosure Package and the Offering Memorandum
insofar as they purport to constitute summaries of certain terms of the Notes, the Exchange Notes,
the Indenture and the Registration Rights Agreement accurately summarize in all material respects
the terms of such documents;
(ii) The Indenture and the Notes conform, as to legal matters in all material respects to the
descriptions thereof contained in the Pricing Disclosure Package and the Offering Memorandum,
including, without limitation, the description under the caption Description of the Notes;
(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;
(iv) The Exchange Notes 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 in exchange for the Notes pursuant to the terms of
the Registration Rights 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;
(v) 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;
(vi) The Registration Rights Agreement has been duly authorized by all necessary corporate
action on the part of the Company; the Registration Rights Agreement has
14
been duly executed and delivered by the Company and (assuming the due authorization, execution
and delivery by the other parties thereto) 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 (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 and except as the
indemnification or contribution obligations thereunder may be limited under applicable laws;
(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;
(viii) Assuming (a) the accuracy of the representations and warranties and compliance with the
agreements of the Company and the Initial Purchasers contained in the Agreement, (b) the compliance
by the Initial Purchasers with the offering and transfer procedures and restrictions described in
the Pricing Disclosure Package and (c) the accuracy of the representations and warranties deemed to
be made in accordance with the transfer procedures and restrictions described in the Pricing
Disclosure Package by the purchasers to whom the Initial Purchasers initially resell the Notes, it
is not necessary in connection with the offer, sale and delivery of the Notes in the manner
contemplated by this Agreement and the Offering Memorandum to register the Notes under the 1933 Act
or to qualify the Indenture under the Trust Indenture Act;
(ix) 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 the Offering
Memorandum, will not be an investment company as defined in the Investment Company Act; and
(x) Although the discussion set forth in the Pricing Disclosure Package and the Offering
Memorandum under the heading Certain U.S. Federal Income Tax Considerations does not purport to
discuss all possible United States Federal tax consequences of the purchase, ownership, and
disposition of the Notes, in such counsels opinion, such discussion constitutes, in all material
respects, a fair and accurate summary of the United States Federal income tax consequences of the
ownership of the Notes and the disposition of the Notes by the holders addressed therein, based
upon current law and subject to the qualifications set forth therein.
In addition, such counsel shall state that such counsel has reviewed the Pricing Disclosure
Package and the Offering Memorandum and has participated in conferences with officers and other
representatives of the Company, with representatives of the Companys independent public accounting
firm and with the Initial Purchasers and their counsel, at which the contents of the Pricing
Disclosure Package, the Offering Memorandum and related matters were discussed. The purpose of
their professional engagement was not to establish or confirm factual matters set forth in the
Pricing Disclosure Package or the Offering Memorandum, and they have not undertaken to verify
independently any of the factual matters in such documents. Moreover, many of the determinations
required to be made in the preparation of the Pricing
15
Disclosure Package and the Offering Memorandum involve matters of a non-legal nature.
Accordingly, they are not passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements included in, the Pricing Disclosure Package and the
Offering Memorandum (except to the extent stated in paragraphs (i), (ii) and (x) above). Subject
to the foregoing and on the basis of the information they gained in the course of performing the
services referred to above, they advise the Initial Purchasers that:
i | each document incorporated by reference in the Preliminary Offering Memorandum and the Offering Memorandum, as originally filed pursuant to the 1934 Act, appears on its face to be appropriately responsive in all material respects to the requirements of the 1934 Act and the rules and regulations of the Commission thereunder. | ||
ii | nothing came to their attention that caused them to believe that: |
a) | the Pricing Disclosure Package, as of the Applicable Time, included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading | ||
b) | the Offering Memorandum, as of its date and as of the Closing Date, included or includes any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; |
it being understood that in each case they have not been asked to, and do not, express any belief
with respect to the financial statements and schedules or other financial, accounting or
statistical information contained or included or incorporated by reference therein or omitted
therefrom.
(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 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 (e) of this Section 7, 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.
(g) 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 Offering Memorandum, there has been no material adverse change in the
16
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 Offering Memorandum or as described in such certificate and (iv) as to such other
matters as you may reasonably request.
(h) The Offering Memorandum (and any amendments or supplements thereto) shall have been
prepared and copies distributed to the Initial Purchasers as promptly as practicable on or
following the date of this Agreement or such other date and time as to which the Initial Purchasers
may agree.
(i) No stop order suspending the sale of the Notes in any jurisdiction shall have been issued
or be in effect and no proceeding for that purpose shall have been commenced or shall be pending
before or threatened by the Commission.
(j) 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.
(k) At the Closing Date, the Company shall have furnished to the Initial Purchasers an
executed counterpart of the Registration Rights Agreement.
(l) The Notes shall be eligible for clearance and settlement through DTC.
The Company will furnish the Initial Purchasers with such conformed copies of the opinions,
certificates, letters and documents required herewith as the Initial Purchasers reasonably request.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Initial Purchaser, its affiliates,
the directors and officers of each Initial Purchaser and each person, if any, who controls each
Initial Purchaser within the meaning of the 1933 Act or the 1934 Act, against any and all 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 Preliminary
Offering Memorandum, the Pricing Disclosure Package, the Offering Memorandum or any Supplemental
Marketing Materials (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 necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, unless such statement or omission was
made in reliance upon, and in conformity with, written information furnished to the Company by any
Initial Purchaser 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
17
against any Initial Purchaser, any affiliate or any such director, officer or controlling
person (an Indemnified Party) unless such Indemnified Party 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 Indemnified Party, but failure to
notify the Company of any such claim (i) shall not relieve the Company from liability under this
paragraph unless and to the extent the Company did not otherwise learn of such claim and such
failure results in the forfeiture by the Company of substantial rights and defenses and (ii) shall
not relieve the Company from any liability which it may have to such Indemnified Party 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;
provided, however, that such counsel shall be reasonably satisfactory to the Indemnified Party. In
the event that the Company elects to assume the defense of any such suit and retains such counsel,
the Indemnified Party, 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 Indemnified
Party and the Indemnified Party 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
Indemnified Party, notwithstanding its 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 Indemnified Parties, 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 Companys prior written consent, which consent
shall not be unreasonably withheld. The Company shall not, without the prior written consent of
the Indemnified Party, effect any settlement, compromise or consent to the entry of judgment in any
pending or threatened action, suit or proceeding in respect of which any Indemnified Party is or
could have been a party and indemnity was or could have been sought hereunder by such Indemnified
Party, unless such settlement, compromise or consent (x) includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of such action, suit or
proceeding and (y) does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any Indemnified Party. This indemnity agreement will be in
addition to any liability which the Company might otherwise have.
(b) Each Initial Purchaser agrees severally and not jointly to indemnify and hold harmless the
Company, each of the Companys directors, 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 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 Preliminary Offering
18
Memorandum, the Pricing Disclosure Package, the Offering Memorandum or any Supplemental
Marketing Materials (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 necessary in order to make the statements therein, in light of the
circumstances under which they were made, 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 any Initial Purchaser through the Representatives specifically for use in the
preparation thereof, it being understood and agreed that the only such information furnished by any
Initial Purchaser consists of the following information in the Preliminary Offering Memorandum and
the Offering Memorandum, (i) the information in the third paragraph, the third and fourth sentences
of the fifth paragraph and the sixth paragraph under the heading Plan of Distribution; provided
that in no case is such Initial Purchaser to be liable with respect to any claims made against the
Company or any such director or controlling person unless the Company or any such director or
controlling person shall have notified such Initial Purchaser 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 or controlling person, but failure to notify
such Initial Purchaser of any such claim (i) shall not relieve such Initial Purchaser from
liability under this paragraph unless and to the extent such Initial Purchaser did not otherwise
learn of such action and such failure results in the forfeiture by such Initial Purchaser of
substantial rights and defenses and (ii) shall not relieve such Initial Purchaser from any
liability which it may have to the Company or any such director or controlling person otherwise
than on account of the indemnity agreement contained in this paragraph. Such Initial Purchaser
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 Initial Purchaser
elects to assume the defense, such defense shall be conducted by counsel chosen by it. In the
event that such Initial Purchaser elects to assume the defense of any such suit and retain such
counsel, the Company or such director 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
Initial Purchaser shall have specifically authorized the retaining of such counsel or (ii) the
parties to such suit include the Company or any such director or controlling person and the Company
or such director or controlling person and such Initial Purchaser 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
Initial Purchaser, in which case such Initial Purchaser shall not be entitled to assume the defense
of such suit on behalf of the Company or such director or controlling person, notwithstanding its
obligation to bear the reasonable fees and expenses of such counsel, it being understood, however,
that such Initial Purchaser 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 or controlling person, which firm shall be
designated in writing by the Company. Such Initial Purchaser shall not be liable to indemnify any
person for any settlement of any such claim effected without such Initial Purchasers prior written
consent, which consent shall not be unreasonably withheld. This indemnity agreement will be in
addition to any liability which such Initial Purchaser might otherwise have.
19
(c) If the indemnification provided for in this Section 8 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
Initial Purchasers 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 Initial Purchasers 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 Initial Purchasers 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 Initial Purchasers 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 Initial
Purchasers 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 Initial
Purchaser 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
Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers
obligations in this subsection (c) to contribute are several in proportion to their respective
purchase obligations and not joint.
9. Substitution of Initial Purchasers.
If any Initial Purchaser 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
Initial Purchaser agreed but failed to purchase does not exceed 10% of the total principal amount
of Notes, the non-defaulting Initial Purchasers 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 Initial Purchasers, but if no such arrangements are made by the Closing Date,
the non-defaulting Initial Purchasers shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Notes that such defaulting Initial Purchaser
agreed but failed to purchase. If any Initial Purchaser or Initial Purchasers shall so default and
the 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 Initial Purchasers and the Company for the
20
purchase of such Notes by other persons are not made within 36 hours after such default, this
Agreement will terminate.
If the non-defaulting Initial Purchaser or Initial Purchasers or substituted initial purchaser
or initial purchasers are required hereby or agree to take up all or part of the Notes of the
defaulting Initial Purchaser as provided in this Section 9, (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 Pricing Disclosure Package
or Offering Memorandum or in any other documents or arrangements, and (ii) the respective aggregate
principal amount of Notes which the non-defaulting Initial Purchasers 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 Initial Purchaser of its liability to the Company or the non-defaulting Initial
Purchasers for damages occasioned by its default hereunder. Any termination of this Agreement
pursuant to this Section 9 shall be without liability on the part of the non-defaulting Initial
Purchasers or the Company, other than as provided in Section 8 and Section 11.
10. Survival of Indemnities, Representations, Warranties, etc.
The respective indemnities, agreements, representations, warranties and other statements of
the Company and the several Initial Purchasers, 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 Initial Purchaser or any controlling person of any Initial Purchaser, or the Company, or any
officer or director or controlling person of the Company, and shall survive delivery of and payment
for the Notes.
11. Termination.
If this Agreement shall be terminated pursuant to Section 9 or if for any reason the purchase
of the Notes by the Initial Purchasers is not consummated, the Company shall remain responsible for
the expenses to be paid or reimbursed by it pursuant to Section 6 and the respective obligations of
the Company and the Initial Purchasers pursuant to Section 8 shall remain in effect. If the
purchase of the Notes by the Initial Purchasers is not consummated for any reason other than solely
because of the termination of this Agreement pursuant to Section 9, the Company will reimburse the
Initial Purchasers for fees and disbursements of counsel reasonably incurred by them in connection
with the offering of the Notes and, unless the termination is pursuant to Section 7(a)(iii)(other
than with respect to the securities of Centerpoint Energy, Inc.), (iv), (v) or (vi), for all
out-of-pocket expenses reasonably incurred by them in connection with the offering of the Notes.
12. Notices.
In all dealings hereunder, the Representatives shall act on behalf of each of the Initial
Purchasers, and the parties hereto shall be entitled to act and rely upon any statement,
21
request, notice or agreement on behalf of any Initial Purchaser made or given by the
Representatives.
All statements, requests, notices and agreements hereunder shall be in writing, and (i) if to
the Initial Purchasers shall be delivered or sent by mail, telex or facsimile transmission to the
Initial Purchasers in care of RBS Securities Inc., 600 Washington Boulevard, Stamford, Connecticut
06901, Attention: Debt Capital Markets Syndicate, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, One Bryant Park, NY1-100-18-03, New York, New York, 10036, Attention: High Grade
Transaction Management/Legal, RBC Capital Markets, LLC, Three World Financial Center, 200 Vesey
Street, New York, New York 10036, Attention: Vincent Nguyen, Debt Capital Markets and SunTrust
Robinson Humphrey, Inc., 3333 Peachtree Street, 11th Floor, Atlanta, Georgia 30326,
Attention: Investment Grade Debt Capital Markets; 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., 1111 Louisiana Street, Houston, Texas 77002, Attention: Rufus Scott (facsimile
number: 713-207-0490). Any such statements, requests, notices or agreements shall take effect upon
receipt thereof.
13. Successors.
This Agreement shall inure to the benefit of and be binding upon the several Initial
Purchasers and the Company and their respective successors and the directors and controlling
persons referred to in Section 8 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 Initial Purchaser within the meaning of the 1933 Act or
the 1934 Act, and the representations, warranties, covenants, agreements and indemnities of the
several Initial Purchasers shall also be for the benefit of each director of the Company and the
person or persons, if any, who control the Company within the meaning of the 1933 Act.
14. Relationship
The Company acknowledges and agrees that (i) the purchase and sale of the Notes pursuant to
this Agreement is an arms-length commercial transaction between the Company, on the one hand, and
the several Initial Purchasers, on the other, (ii) in connection therewith and with the process
leading to such transaction each Initial Purchaser is acting solely as a principal and not the
agent or fiduciary of the Company, (iii) no Initial Purchaser 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 Initial Purchaser 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 own legal
and financial advisors to the extent it deemed appropriate. The Company agrees that it will not
claim that the Initial Purchasers, or any of them, has rendered advisory services of
22
any nature or respect, or owes a fiduciary or similar duty to the Company, in connection with
such transaction or the process leading thereto.
15. 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.
16. 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.
23
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 Initial
Purchasers, this letter and such acceptance hereof shall constitute a binding agreement between
each of the Initial Purchasers and the Company. It is understood that your acceptance of this
letter on behalf of each of the Initial Purchasers is pursuant to the authority set forth in a form
of Agreement among Initial Purchasers, 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/ Gary L. Whitlock | |||
Name: | Gary Whitlock | |||
Title: | Executive Vice President & Chief Financial Officer |
24
Accepted as of the date hereof: RBS Securities Inc. |
||||
By: | /s/ Okwudiri Onyedum | |||
Name: | Okwudiri Onyedum | |||
Title: | Senior Vice President | |||
Merrill Lynch, Pierce, Fenner & Smith Incorporated |
||||
By: | /s/ Keith Harman | |||
Name: | Keith Harman | |||
Title: | Managing Director | |||
RBC Capital Markets, LLC |
||||
By: | /s/ John Sconzo | |||
Name: | John Sconzo | |||
Title: | Managing Director | |||
SunTrust Robinson Humphrey, Inc. |
||||
By: | /s/ Christopher S. Grumboski | |||
Name: | Christopher S. Grumboski | |||
Title: | Director | |||
For Themselves and as Representatives of the Initial Purchasers Listed on Schedule I
25
SCHEDULE I
Principal | Principal | |||||||
Amount of 2021 | Amount of 2041 | |||||||
Initial Purchaser | Notes | Notes | ||||||
RBS Securities Inc. |
$ | 50,000,000 | $ | 60,000,000 | ||||
Merrill Lynch, Pierce, Fenner & Smith
Incorporated |
50,000,000 | 60,000,000 | ||||||
RBC Capital Markets, LLC |
50,000,000 | 60,000,000 | ||||||
SunTrust Robinson Humphrey, Inc. |
50,000,000 | 60,000,000 | ||||||
Comerica Securities, Inc. |
12,500,000 | 15,000,000 | ||||||
Deutsche Bank Securities Inc. |
12,500,000 | 15,000,000 | ||||||
HSBC Securities (USA) Inc. |
12,500,000 | 15,000,000 | ||||||
Scotia Capital (USA) Inc. |
12,500,000 | 15,000,000 | ||||||
Total |
$ | 250,000,000 | $ | 300,000,000 |
26
SCHEDULE II
PRICING SUPPLEMENT
Dated: January 4, 2011
Dated: January 4, 2011
Issuer:
|
CenterPoint Energy Resources Corp. | |
Legal Format:
|
144A/Regulation S with registration rights | |
Trade Date:
|
January 4, 2011 | |
Expected Settlement Date:
|
January 11, 2011 |
4.500% Senior Notes Due 2021
Size:
|
$250,000,000 | |
Maturity Date:
|
January 15, 2021 | |
Coupon:
|
4.500% | |
Interest Payment Dates:
|
January 15 and July 15, commencing July 15, 2011 | |
Price to Public:
|
99.928% | |
Benchmark Treasury:
|
2.625% due November 15, 2020 | |
Benchmark Treasury Yield:
|
3.309% | |
Spread to Benchmark Treasury:
|
+ 120 basis points | |
Re-offer Yield:
|
4.509% | |
Make-whole call:
|
Callable at any time prior to October 15, 2020, in whole or in part, at a make whole premium of T + 20 bps; and at any time on or after October 15, 2020, in whole or in part, at 100%, plus, in each case, accrued and unpaid interest thereon to but excluding the date of redemption. | |
CUSIP:
|
Rule 144A: 15189WAE0 | |
Regulation S: U14088AB1 |
27
5.850% Senior Notes Due 2041
Size:
|
$300,000,000 | |
Maturity Date:
|
January 15, 2041 | |
Coupon:
|
5.850% | |
Interest Payment Dates:
|
January 15 and July 15, commencing July 15, 2011 | |
Price to Public:
|
99.929% | |
Benchmark Treasury:
|
3.875% due August 15, 2040 | |
Benchmark Treasury Yield:
|
4.405% | |
Spread to Benchmark Treasury:
|
+ 145 basis points | |
Re-offer Yield:
|
5.855% | |
Make-whole call:
|
Callable at any time prior to July 15, 2040, in whole or in part, at a make whole premium of T + 20 bps; and at any time on or after July 15, 2040, in whole or in part, at 100%, plus, in each case, accrued and unpaid interest thereon to but excluding the date of redemption. | |
CUSIP:
|
Rule 144A: 15189WAF7 | |
Regulation S: U14088AC9 | ||
Anticipated Ratings:
|
Moodys Baa3 | |
Standard & Poors BBB | ||
Fitch BBB | ||
Joint Book-Running Managers:
|
RBS Securities Inc. | |
Merrill Lynch, Pierce, Fenner & Smith Incorporated | ||
RBC Capital Markets, LLC | ||
SunTrust Robinson Humphrey, Inc. | ||
Co-Managers:
|
Comerica Securities, Inc. | |
Deutsche Bank Securities Inc. | ||
HSBC Securities (USA) Inc. | ||
Scotia Capital (USA) Inc. |
Note: A securities rating is not a recommendation to buy, sell or hold securities and may be
subject to revision or withdrawal at any time.
The Securities have not been registered under the Securities Act of 1933, as amended (the
Securities Act). This communication is being distributed to Qualified Institutional Buyers, as
28
defined in Rule 144A under the Securities Act and outside the United States to non-U.S. persons, as
defined in Regulation S under the Securities Act.
This communication does not constitute an offer to sell or the solicitation of an offer to buy any
securities in any jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction.
RBS Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBC Capital Markets, LLC
and SunTrust Robinson Humphrey, Inc. can arrange to send you a copy of the Preliminary Offering
Memorandum and the Offering Memorandum (when available) if you request it by calling RBS Securities
Inc. toll free at 1-866-884-2071, Merrill Lynch, Pierce, Fenner & Smith Incorporated toll free at
1-800-294-1322, RBC Capital Markets, LLC toll free at 1-866-375-6829 or SunTrust Robinson Humphrey,
Inc. toll free at 1-800-685-4786.
29