SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): SEPTEMBER 9, 2003
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CENTERPOINT ENERGY, INC.
(Exact name of registrant as specified in its charter)
TEXAS 1-31447 74-0694415
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1111 LOUISIANA
HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code: (713) 207-1111
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ITEM 5. OTHER EVENTS.
On September 9, 2003, CenterPoint Energy closed a private placement of
$200 million aggregate principal amount of its senior notes (the "Senior
Notes") with institutions pursuant to Rule 144A under the Securities Act of
1933, as amended.
For a description of the Senior Notes, please refer to the Indenture
dated as of May 19, 2003 between CenterPoint Energy and JPMorgan Chase Bank, as
trustee (the "Indenture"), and to Supplemental Indenture No. 3 dated as of
September 9, 2003 to the Indenture, between CenterPoint Energy and JPMorgan
Chase Bank, as trustee. The Indenture and Supplemental Indenture No. 3 are
attached to this report as Exhibits 4.1 and 4.2, respectively.
The Senior Notes have not been registered under the Securities Act of
1933, as amended, and the Senior Notes may not be offered or sold in the United
States absent registration or an applicable exemption from the registration
requirements. This report does not constitute an offer to sell or the
solicitation of an offer to buy any security and shall not constitute an offer,
solicitation or sale of any securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
The following exhibits are filed herewith:
4.1 Indenture dated as of May 19, 2003 between CenterPoint Energy
and JPMorgan Chase Bank, as trustee ("Indenture") (incorporated
by reference to Exhibit 4.1 to CenterPoint Energy's Current
Report on Form 8-K filed June 3, 2003)
4.2 Supplemental Indenture No. 3 dated as of September 9, 2003 to
Indenture, between CenterPoint Energy and JPMorgan Chase Bank,
as trustee
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CENTERPOINT ENERGY, INC.
Date: September 9, 2003 By: /s/ James S. Brian
--------------------------------
James S. Brian
Senior Vice President and
Chief Accounting Officer
EXHIBIT INDEX
Exhibit
Number Exhibit Description
------ -------------------
4.1 Indenture dated as of May 19, 2003 between CenterPoint Energy
and JPMorgan Chase Bank, as trustee ("Indenture") (incorporated
by reference to Exhibit 4.1 to CenterPoint Energy's Current
Report on Form 8-K filed June 3, 2003)
4.2 Supplemental Indenture No. 3 dated as of September 9, 2003 to
Indenture, between CenterPoint Energy and JPMorgan Chase Bank,
as trustee
EXHIBIT 4.2
CENTERPOINT ENERGY, INC.
To
JPMORGAN CHASE BANK,
Trustee
------------------
SUPPLEMENTAL INDENTURE NO. 3
Dated as of September 9, 2003
-----------------
7.25% Senior Notes due 2010
Series A and Series B
CENTERPOINT ENERGY, INC.
SUPPLEMENTAL INDENTURE NO. 3
7.25% Senior Notes due 2010
SUPPLEMENTAL INDENTURE No. 3, dated as of September 9, 2003, between
CENTERPOINT ENERGY, INC., a Texas corporation (the "Company"), and JPMORGAN
CHASE BANK, as Trustee (the "Trustee").
RECITALS
The Company has heretofore executed and delivered to the Trustee an
Indenture, dated as of May 19, 2003 (the "Original Indenture" and, as hereby
supplemented and amended, the "Indenture"), providing for the issuance from
time to time of one or more series of the Company's Securities.
Pursuant to the terms of the Indenture, the Company desires to provide
for the establishment of two new series of Securities to be designated as the
"7.25% Senior Notes due 2010, Series A" also referred to as the 7.25% Senior
Notes due 2010 (the "Series A Notes") and the "7.25% Senior Notes due 2010,
Series B" (the "Series B Notes" and together with the Series A Notes, the
"Notes"), the form and substance of such Notes and the terms, provisions and
conditions thereof to be set forth as provided in the Original Indenture and
this Supplemental Indenture No. 3.
Section 301 of the Original Indenture provides that various matters
with respect to any series of Securities issued under the Indenture may be
established in an indenture supplemental to the Indenture.
Subparagraph (7) of Section 901 of the Original Indenture provides
that the Company and the Trustee may enter into an indenture supplemental to
the Indenture to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301 of the Original Indenture.
For and in consideration of the premises and the issuance of the
series of Securities provided for herein, it is mutually covenanted and agreed,
for the equal and proportionate benefit of the Holders of the Securities of
such series, as follows:
ARTICLE I
Relation to Indenture; Additional Definitions
Section 101 Relation to Indenture. This Supplemental Indenture No. 3
constitutes an integral part of the Original Indenture.
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Section 102 Additional Definitions. For all purposes of this
Supplemental Indenture No. 3:
Capitalized terms used herein shall have the meaning
specified herein or in the Original Indenture, as the case may be;
"Additional Interest" has the meaning set forth in Section
204(e) hereof;
"Affiliate" of, or a Person "affiliated" with, a specific
Person means a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, the Person specified. For purposes of this definition,
"control" (including the terms "controlled by" and "under common
control with") means the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting shares, by contract,
or otherwise.
"Business Day" means, with respect to any Note, any day other
than a Saturday, a Sunday or a day on which banking institutions in
The City of New York are authorized or required by law, regulation or
executive order to close. If any Interest Payment Date, Stated
Maturity or Redemption Date of a Note falls on a day that is not a
Business Day, the required payment will be made on the next succeeding
Business Day with the same force and effect as if made on the relevant
date that the payment was due and no interest will accrue on such
payment for the period from and after the Interest Payment Date,
Stated Maturity or Redemption Date, as the case may be, to the date of
that payment on the next succeeding Business Day. The definition of
"Business Day" in this Supplemental Indenture No. 3 and the provisions
described in the preceding sentence shall supersede the definition of
Business Day in the Original Indenture and Section 113 of the Original
Indenture.
"Capital Lease" means a lease that, in accordance with
accounting principles generally accepted in the United States of
America, would be recorded as a capital lease on the balance sheet of
the lessee;
"CenterPoint Houston" means CenterPoint Energy Houston
Electric, LLC, a Texas limited liability company, and any successor
thereto; provided, that at any given time, there shall not be more
than one such successor;
"CERC" means CenterPoint Energy Resources Corp., a Delaware
corporation, and any successor thereto; provided, that at any given
time, there shall not be more than one such successor;
"Company Credit Facility" means that certain Amended and
Restated Credit Agreement, dated as of October 10, 2002, among the
Company, as borrower, the banks party thereto, Citibank, N.A., as
syndication agent, and JPMorgan Chase Bank, as administration agent,
as amended by a First Amendment, effective as of December 5, 2002, and
a Second Amendment, effective as of February 28, 2003, to such Credit
Agreement;
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"Comparable Treasury Yield" has the meaning set forth in
Section 402(a) hereof;
"Distribution Compliance Period" means the period which
expires immediately after the 40th day following the later of: (a) the
commencement of the offering of the Notes to Persons other than
"distributors" (as defined in Regulation S) in reliance upon
Regulation S; and (b) the date of closing of the offering of the
Notes;
"Equity Interests" means any capital stock, partnership,
joint venture, member or limited liability or unlimited liability
company interest, beneficial interest in a trust or similar entity or
other equity interest or investment of whatever nature;
"Exchange Offer" means the offer by the Company pursuant to
the Registration Rights Agreement to the Holders of all outstanding
Transfer Restricted Securities to exchange all such outstanding
Transfer Restricted Securities held by such Holders for Series B Notes
in an aggregate principal amount equal to the aggregate principal
amount of the Transfer Restricted Securities tendered in such exchange
offer by such Holders;
"Exchange Offer Registration Statement" has the meaning
assigned to such term in the Registration Rights Agreement;
"Global Notes" has the meaning set forth in Section 208(c)
hereof;
"H.15 Statistical Release" has the meaning set forth in
Section 402(b) hereof;
The term "Indebtedness" as applied to any Person, means
bonds, debentures, notes and other instruments or arrangements
representing obligations created or assumed by any such Person, in
respect of: (i) obligations for money borrowed (other than unamortized
debt discount or premium); (ii) obligations evidenced by a note or
similar instrument given in connection with the acquisition of any
business, properties or assets of any kind; (iii) obligations as
lessee under a Capital Lease; and (iv) any amendments, renewals,
extensions, modifications and refundings of any such indebtedness or
obligations listed in clause (i), (ii) or (iii) above. All
indebtedness of such type, secured by a lien upon property owned by
such Person although such Person has not assumed or become liable for
the payment of such indebtedness, shall also for all purposes hereof
be deemed to be indebtedness of such Person. All indebtedness for
borrowed money incurred by any other Persons which is directly
guaranteed as to payment of principal by such Person shall for all
purposes hereof be deemed to be indebtedness of any such Person, but
no other contingent obligation of such Person in respect of
indebtedness incurred by any other Persons shall for any purpose be
deemed to be indebtedness of such Person;
"Independent Investment Banker" has the meaning set forth in
Section 401(c) hereof.
"Initial Purchasers" means Banc of America Securities LLC,
Deutsche Bank Securities Inc., Wachovia Capital Markets, LLC, ABN AMRO
Incorporated, Banc One Capital Markets, Inc., Barclays Capital Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Scotia Capital
(USA) Inc. and Tokyo-Mitsubishi International plc as initial
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purchasers in the offering of the Notes pursuant to the Offering
Memorandum dated September 3, 2003 relating thereto;
"Interest Payment Date" has the meaning set forth in Section
204(a) hereof;
"Issue Date" has the meaning provided in Section 204(a)
hereof;
"Make-Whole Premium" has the meaning set forth in Section
401(b) hereof;
"Non-U.S. Person" has the meaning set forth in Section 208(b)
hereof;
"Notes" has the meaning set forth in the second paragraph of
the Recitals hereof;
"Notes Maturity Date" has the meaning set forth in Section
203 hereof;
"Original Indenture" has the meaning set forth in the first
paragraph of the Recitals hereof;
"Qualified Institutional Buyer" has the meaning assigned to
such term in Rule 144A under the Securities Act;
"Redemption Price" has the meaning set forth in Section
401(a) hereof;
"Registrable Securities" has the meaning assigned to such
term in the Registration Rights Agreement;
"Registration Default" has the meaning assigned to such term
in the Registration Rights Agreement;
"Registration Rights Agreement" means that certain
Registration Rights Agreement, dated as of September 9, 2003, by and
among the Company and the Initial Purchasers;
"Regular Record Date" has the meaning set forth in Section
204(a) hereof;
"Regulation S" means Regulation S under the Securities Act;
"Regulation S Global Notes" has the meaning set forth in
Section 208(b) hereof;
"Regulation S Permanent Global Note" has the meaning set
forth in Section 208(b) hereof;
"Regulation S Temporary Global Note" has the meaning set
forth in Section 208(b) hereof;
"Remaining Term" has the meaning set forth in Section 402(a)
hereof;
"Rule 144A Global Note" has the meaning set forth in Section
208(a) hereof;
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"Rule 144A Information" has the meaning set forth in Section
504 hereof;
"Series A Notes" has the meaning set forth in the second
paragraph of the Recitals hereof;
"Series B Notes" has the meaning set forth in the second
paragraph of the Recitals hereof;
"Shelf Registration Statement" has the meaning assigned to
such term in the Registration Rights Agreement;
"Significant Subsidiary" means, CERC, CenterPoint Houston and
Texas Genco, and any other Subsidiary which, at the time of the
creation of a pledge, mortgage, security interest or other lien upon
any Equity Interests of such Subsidiary, has consolidated gross assets
(having regard to the Company's beneficial interest in the shares, or
the like, of that Subsidiary) that represents at least 25% of the
Company's consolidated gross assets appearing in the Company's most
recent audited consolidated financial statements;
"Subsidiary" of any entity means any corporation,
partnership, joint venture, limited liability company, trust or estate
of which (or in which) more than 50% of (i) the issued and outstanding
capital stock or Equity Interests having ordinary voting power to
elect a majority of the Board of Directors or comparable governing
body of such corporation or other entity (irrespective of whether at
the time capital stock of any other class or classes of such
corporation or other entity shall or might have voting power upon the
occurrence of any contingency), (ii) the interest in the capital or
profits of such limited liability company, partnership, joint venture
or other entity, or (iii) the beneficial interest in such trust or
estate is at the time directly or indirectly owned or controlled by
such entity, by such entity and one or more of its other Subsidiaries,
or by one or more of such entity's other Subsidiaries;
"Texas Genco" means Texas Genco Holdings, Inc., a Texas
corporation, and any successor thereto; provided, that at any given
time, there shall not be more than one such successor;
"Transfer Restricted Securities" means the Registrable
Securities under the Registration Rights Agreement.
All references herein to Articles and Sections, unless
otherwise specified, refer to the corresponding Articles and Sections
of this Supplemental Indenture No. 3; and
The terms "herein," "hereof," "hereunder" and other words of
similar import refer to this Supplemental Indenture No. 3.
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ARTICLE II
The Series of Securities
Section 201 Title of the Securities. The Series A Notes shall be
designated as the "7.25% Senior Notes due 2010, Series A"; and the Series B
Notes shall be designated as the "7.25% Senior Notes due 2010, Series B." The
Series A Notes and the Series B Notes shall be treated for all purposes under
the Indenture as a single class or series of Securities.
Section 202 Limitation on Aggregate Principal Amount. The Trustee
shall authenticate and deliver Series A Notes for original issue on the Issue
Date in the aggregate principal amount of $200,000,000 and Series B Notes from
time to time thereafter for issue only in exchange for a like principal amount
of Series A Notes, in each case upon a Company Order for the authentication and
delivery thereof and satisfaction of Sections 301 and 303 of the Original
Indenture. Such order shall specify the amount of the Notes to be
authenticated, the date on which the original issue of Notes is to be
authenticated and the name or names of the initial Holder or Holders. The
aggregate principal amount of Notes that may initially be outstanding shall not
exceed $200,000,000; provided, however, that the authorized aggregate principal
amount of the Notes may be increased above such amount by a Board Resolution to
such effect.
Section 203 Stated Maturity. The stated maturity of the Notes shall be
September 1, 2010 (the "Notes Maturity Date").
Section 204 Interest and Interest Rates.
(a) The Notes shall bear interest at a rate of 7.25% per year, from
and including September 9, 2003 (the "Issue Date") to, but excluding, the Notes
Maturity Date. Such interest shall be payable semiannually in arrears on March
1 and September 1 of each year (each an "Interest Payment Date"), beginning
March 1, 2004 to the persons in whose names the Notes are registered at the
close of business on February 15 and August 15 (each a "Regular Record Date")
(whether or not a Business Day), as the case may be, immediately preceding such
Interest Payment Date.
(b) Any such interest not so punctually paid or duly provided for
shall forthwith cease to be payable to the Holder on such Regular Record Date
and shall either (i) be paid to the Person in whose name such Note (or one or
more Predecessor Securities) is registered at the close of business on the
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of the Notes not less
than 10 days prior to such Special Record Date, or (ii) be paid at any time in
any other lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system on which the Notes may be
listed or traded, and upon such notice as may be required by such exchange or
automated quotation system, all as more fully provided in the Indenture.
(c) The amount of interest payable for any period shall be computed on
the basis of a 360-day year of twelve 30-day months. The amount of interest
payable for any partial period shall be computed on the basis of a 360-day year
of twelve 30-day months and the days elapsed in any partial month. In the event
that any date on which interest is payable on a Note is not a
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Business Day, then a payment of the interest payable on such date will be made
on the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay) with the same force and effect as
if made on the date the payment was originally payable.
(d) Any principal and premium, if any, and any installment of
interest, which is overdue shall bear interest at the rate of 7.25% per annum
(to the extent permitted by law), from the dates such amounts are due until
they are paid or made available for payment, and such interest shall be payable
on demand.
(e) The interest rate borne by the Registrable Securities will be
increased by .25% per annum upon the occurrence of each Registration Default,
which rate will increase by an additional .25% per annum if such Registration
Default has not been cured within 90 days after the occurrence thereof and will
continue until all Registration Defaults have been cured ("Additional
Interest"); provided that the aggregate amount of any such increase in the
interest rate on the Registrable Securities shall in no event exceed .50% per
annum; provided, further, that if the Exchange Offer Registration Statement is
not declared effective on or prior to the 270th calendar day following the
Issue Date and the Company shall request Holders of Registrable Securities to
provide the information called for by the Registration Rights Agreement for
inclusion in the Shelf Registration Statement, the Registrable Securities owned
by Holders who do not deliver such information to the Company or who do not
provide comments to the Company on the Shelf Registration Statement when
required pursuant to the Registration Rights Agreement shall not be entitled to
any such Additional Interest for any day after the 315th calendar day following
the Issue Date. All accrued Additional Interest shall be paid to Holders of
Registrable Securities in the same manner and at the same time as regular
payments of interest on the Registrable Securities. Following the cure of all
Registration Defaults, the accrual of Additional Interest shall cease and the
interest rate on the Registrable Securities will revert to 7.25% per annum.
Section 205 Paying Agent; Place of Payment. The Trustee shall
initially serve as the Paying Agent for the Notes. The Company may appoint and
change any Paying Agent or approve a change in the office through which any
Paying Agent acts without notice, other than notice to the Trustee. The Company
or any of its Subsidiaries or any of their Affiliates may act as Paying Agent.
The Place of Payment where the Notes may be presented or surrendered for
payment shall be the Corporate Trust Office of the Trustee. At the option of
the Company, payment of interest may be made (i) by check mailed to the address
of the Person entitled thereto as such address shall appear in the Security
Register or (ii) by wire transfer in immediately available funds at such place
and to such account as may be designated in writing by the Person entitled
thereto as specified in the Security Register.
Section 206 Place of Registration or Exchange; Notices and Demands
With Respect to the Notes. The place where the Holders of the Notes may present
the Notes for registration of transfer or exchange and may make notices and
demands to or upon the Company in respect of the Notes shall be the Corporate
Trust Office of the Trustee.
Section 207 Percentage of Principal Amount. The Notes shall be
initially issued at 99.782% of their principal amount plus accrued interest, if
any, from September 9, 2003.
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Section 208 Global Notes.
(a) Notes offered and sold to Qualified Institutional Buyers pursuant
to Rule 144A shall be issuable in whole or in part in the form of one or more
permanent Global Securities in definitive, fully registered, book-entry form,
without interest coupons (collectively, the "Rule 144A Global Note"). The Rule
144A Global Note shall be deposited on the Issue Date with, or on behalf of,
the Depositary. Interests in the Rule 144A Global Note shall be available for
purchase only by Qualified Institutional Buyers.
(b) Notes offered and sold in offshore transactions to persons other
than "U.S. persons," as defined in Regulation S under the Securities Act (each,
a "Non-U.S. Person") in reliance on Regulation S under the Securities Act shall
initially be issuable in whole or in part in the form of one or more temporary
Global Securities in definitive, fully registered, book-entry form, without
interest coupons (collectively, the "Regulation S Temporary Global Note").
Beneficial interests in the Regulation S Temporary Global Note shall be
exchanged for beneficial interests in, and the Regulation S Temporary Global
Note shall become, a corresponding Global Security (the "Regulation S Permanent
Global Note" and, together with the Regulation S Temporary Global Note, the
"Regulation S Global Notes") within a reasonable period after the expiration of
the Distribution Compliance Period upon certification that the beneficial
interests in the Regulation S Temporary Global Note are owned by either
Non-U.S. Persons or U.S. persons who purchased such interests pursuant to an
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act. Prior to the expiration of the Distribution
Compliance Period, interests in the Regulation S Temporary Global Note may only
be held through Euroclear Bank S.A./N.V., as operator of the Euroclear System,
and Clearstream Banking, societe anonyme (as indirect participants in the
Depositary), unless exchanged for interests in the Rule 144A Global Notes in
accordance with the transfer and certification requirements described herein.
Notwithstanding Section 305 of the Original Indenture, in no event shall
beneficial interests in the Regulation S Temporary Global Note of a series be
transferred or exchanged for Notes of such series in definitive form prior to
(x) the expiration of the Distribution Compliance Period and (y) the receipt by
the Security Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) of Regulation S under the Securities Act.
(c) Each of the Rule 144A Global Note and the Regulation S Global
Notes (collectively, the "Global Notes") shall represent such of the Notes as
shall be specified therein and shall each provide that it shall represent the
aggregate principal amount of Notes from time to time endorsed thereon and that
the aggregate principal amount of Notes represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges or
redemptions. Any endorsement of a Global Note to reflect the amount, or any
increase or decrease in the aggregate principal amount, of Notes represented
thereby shall be reflected by the Trustee on Schedule A attached to the Note
and made by the Trustee in accordance with written instructions or such other
written form of instructions as is customary for the Depositary, from the
Depositary or its nominee on behalf of any Person having a beneficial interest
in the Global Note.
(d) The Depository Trust Company shall initially serve as Depositary
with respect to the Global Notes. Such Global Notes shall bear the legends set
forth in the form of Security attached as Exhibit A hereto.
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Section 209 Form of Securities. The Global Notes shall be
substantially in the form attached as Exhibit A hereto.
Section 210 Securities Registrar. The Trustee shall initially serve as
the Security Registrar for the Notes.
Section 211 Sinking Fund Obligations. The Company shall have no
obligation to redeem or purchase any Notes pursuant to any sinking fund or
analogous requirement or upon the happening of a specified event or at the
option of a Holder thereof.
Section 212 Defeasance and Discharge; Covenant Defeasance.
(a) Article Fourteen of the Original Indenture, including without
limitation, Sections 1402 and 1403 (as modified by Section 212(b) hereof)
thereof, shall apply to the Notes.
(b) Notwithstanding Section 1403 of the Original Indenture, the
occurrence of any event specified in Section 601(d)(i) of this Supplemental
Indenture shall be deemed not to be or result in an Event of Default with
respect to the Notes on and after the date the conditions set forth in Section
1404 of the Original Indenture with respect to such Notes are satisfied and
such covenant defeasance remains in full force and effect pursuant to Article
Fourteen of the Original Indenture.
ARTICLE III
Additional Covenant
Section 301 Limitations on Liens. The Company shall not pledge,
mortgage, hypothecate, or grant a security interest in, or permit any such
mortgage, pledge, security interest or other lien upon any Equity Interests now
or hereafter owned by the Company in any Significant Subsidiary to secure any
Indebtedness, without making effective provisions whereby the outstanding Notes
shall be equally and ratably secured with or prior to any and all such
Indebtedness and any other Indebtedness similarly entitled to be equally and
ratably secured; provided, however, that this provision shall not apply to or
prevent the creation or existence of:
(a) any mortgage, pledge, security interest, lien or encumbrance upon
the capital stock of Texas Genco to secure obligations under the
Company Credit Facility or any extension, renewal, refunding,
amendment or replacement thereof;
(b) any mortgage, pledge, security interest, lien or encumbrance upon
the Equity Interests of CenterPoint Energy Transition Bond Company,
LLC or any other special purpose Subsidiary created on or after the
date of this Supplemental Indenture by the Company in connection with
the issuance of securitization bonds for the economic value of
generation-related regulatory assets and stranded costs;
(c) any mortgage, pledge, security interest, lien or encumbrance upon
any Equity Interests in a Person which was not affiliated with the
Company prior to one year before the grant of such mortgage, pledge,
security interest, lien or encumbrance (or the Equity Interests of a
holding company formed to acquire or hold such Equity Interests)
created at
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the time of the Company's acquisition of the Equity Interests or
within one year after such time to secure all or a portion of the
purchase price for such Equity Interests; provided that the principal
amount of any Indebtedness secured by such mortgage, pledge, security
interest, lien or encumbrance does not exceed 100% of such purchase
price and the fees, expenses and costs incurred in connection with
such acquisition and acquisition financing;
(d) any mortgage, pledge, security interest, lien or encumbrance
existing upon Equity Interests in a Person which was not affiliated
with the Company prior to one year before the grant of such mortgage,
pledge, security interest, lien or encumbrance at the time of the
Company's acquisition of such Equity Interests (whether or not the
obligations secured thereby are assumed by the Company or such
Subsidiary becomes a Significant Subsidiary); provided that (i) such
mortgage, pledge, security interest, lien or encumbrance existed at
the time such Person became a Significant Subsidiary and was not
created in anticipation of the acquisition, and (ii) any such
mortgage, pledge, security interest, lien or encumbrance does not by
its terms secure any Indebtedness other than Indebtedness existing or
committed immediately prior to the time such Person becomes a
Significant Subsidiary;
(e) liens for taxes, assessments or governmental charges or levies to
the extent not past due or which are being contested in good faith by
appropriate proceedings diligently conducted and for which the Company
has provided adequate reserves for the payment thereof in accordance
with generally accepted accounting principles;
(f) pledges or deposits in the ordinary course of business to secure
obligations under workers' compensation laws or similar legislation;
(g) materialmen's, mechanics', carriers', workers' and repairmen's
liens imposed by law and other similar liens arising in the ordinary
course of business for sums not yet due or currently being contested
in good faith by appropriate proceedings diligently conducted;
(h) attachment, judgment or other similar liens, which have not been
effectively stayed, arising in connection with court proceedings;
provided that such liens, in the aggregate, shall not secure judgments
which exceed $50,000,000 aggregate principal amount at any one time
outstanding; provided further that the execution or enforcement of
each such lien is effectively stayed within 30 days after entry of the
corresponding judgment (or the corresponding judgment has been
discharged within such 30 day period) and the claims secured thereby
are being contested in good faith by appropriate proceedings timely
commenced and diligently prosecuted;
(i) other liens not otherwise referred to in paragraphs (a) through
(h) above, provided that the Indebtedness secured by such liens in the
aggregate, shall not exceed 1% of the Company's consolidated gross
assets appearing in the Company's most recent audited consolidated
financial statements at any one time outstanding;
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(j) any mortgage, pledge, security interest, lien or encumbrance on
the Equity Interests of any Subsidiary that was otherwise permitted
under this Section 301 if such Subsidiary subsequently becomes a
Significant Subsidiary; or
(k) any extension, renewal or refunding of Indebtedness secured by any
mortgage, pledge, security interest, lien or encumbrance described in
paragraphs (a) through (j) above; provided that the principal amount
of any such Indebtedness is not increased by an amount greater than
the fees, expenses and costs incurred in connection with such
extension, renewal or refunding.
ARTICLE IV
Optional Redemption of the Notes
Section 401 Redemption Price.
(a) The Company shall have the right to redeem the Notes, in whole or
in part, at its option at any time from time to time at a price equal to (i)
100% of the principal amount thereof plus (ii) accrued and unpaid interest
thereon, if any, including Additional Interest, if any, to but excluding the
Redemption Date plus (iii) the Make-Whole Premium, if any (collectively, the
"Redemption Price").
(b) The amount of the Make-Whole Premium with respect to any Note (or
portion thereof) to be redeemed will be equal to the excess, if any, of: (i)
the sum of the present values, calculated as of the Redemption Date, of: (A)
each interest payment that, but for such redemption, would have been payable on
the Note (or portion thereof) being redeemed on each Interest Payment Date
occurring after the Redemption Date (excluding any accrued and unpaid interest
for the period prior to the Redemption Date); and (B) the principal amount
that, but for such redemption, would have been payable on the Note (or portion
thereof) being redeemed at the Notes Maturity Date; over (ii) the principal
amount of the Note (or portion thereof) being redeemed. The present values of
interest and principal payments referred to in clause (i) above will be
determined in accordance with generally accepted principles of financial
analysis. Such present values will be calculated by discounting the amount of
each payment of interest or principal from the date that each such payment
would have been payable, but for the redemption, to the Redemption Date at a
discount rate equal to the Comparable Treasury Yield (as defined below) plus 50
basis points.
(c) The Make-Whole Premium shall be calculated by an independent
investment banking institution of national standing appointed by the Company;
provided, that if the Company fails to make such appointment at least 45 days
prior to the Redemption Date, or if the institution so appointed is unwilling
or unable to make such calculation, such calculation shall be made by Deutsche
Bank Securities Inc., or, if such firm is unwilling or unable to make such
calculation, by an independent investment banking institution of national
standing appointed by the Company (in any such case, an "Independent Investment
Banker").
11
Section 402 Make-Whole Premium Calculation.
(a) For purposes of determining the Make-Whole Premium, "Comparable
Treasury Yield" means a rate of interest per annum equal to the weekly average
yield to maturity of United States Treasury securities that have a constant
maturity that corresponds to the remaining term to maturity of the Notes to be
redeemed, calculated to the nearest 1/12th of a year (the "Remaining Term").
The Comparable Treasury Yield shall be determined as of the third Business Day
immediately preceding the applicable Redemption Date.
(b) The weekly average yields of United States Treasury securities
shall be determined by reference to the most recent statistical release
published by the Federal Reserve Bank of New York and designated "H.15 (519)
Selected Interest Rates" or any successor release (the "H.15 Statistical
Release"). If the H.15 Statistical Release sets forth a weekly average yield
for United States Treasury securities having a constant maturity that is the
same as the Remaining Term, then the Comparable Treasury Yield shall be equal
to such weekly average yield. In all other cases, the Comparable Treasury Yield
shall be calculated by interpolation, on a straight-line basis, between the
weekly average yields on the United States Treasury securities that have a
constant maturity closest to and greater than the Remaining Term and the United
States Treasury securities that have a constant maturity closest to and less
than the Remaining Term (in each case as set forth in the H.15 Statistical
Release). Any weekly average yields so calculated by interpolation shall be
rounded to the nearest 1/100th of 1%, with any figure of 1/200th of 1% or above
being rounded upward. If weekly average yields for United States Treasury
securities are not available in the H.15 Statistical Release or otherwise, then
the Comparable Treasury Yield shall be calculated by interpolation of
comparable rates selected by the Independent Investment Banker.
Section 403 Partial Redemption. If the Company redeems the Notes in
part pursuant to this Article Four, the Trustee shall select the Notes to be
redeemed on a pro rata basis or by lot or by such other method that the Trustee
in its sole discretion deems fair and appropriate. The Company shall redeem
Notes pursuant to this Article IV in multiples of $1,000 in original principal
amount. A new Note in principal amount equal to the unredeemed portion of the
original Note shall be issued upon cancellation of the original Note.
Section 404 Notice of Optional Redemption. If the Company elects to
exercise its right to redeem all or some of the Notes pursuant to this Article
IV, the Company or the Trustee shall mail a notice of such redemption to each
Holder of a Note that is to be redeemed not less than 30 days and not more than
60 days before the Redemption Date. If any Note is to be redeemed in part only,
the notice of redemption shall state the portion of the principal amount to be
redeemed.
ARTICLE V
Restrictions on Transfer
Section 501 Transfer and Exchange.
(a) Transfer and Exchange of Notes in Definitive Form. In addition to
the requirements set forth in Section 305 of the Original Indenture, Notes in
definitive form that are
12
Transfer Restricted Securities presented or surrendered for registration of
transfer or exchange pursuant to Section 305 of the Original Indenture shall be
accompanied by the following additional information and documents, as
applicable, upon which the Security Registrar may conclusively rely:
(i) if such Transfer Restricted Securities are being
delivered to the Security Registrar by a Holder for registration in
the name of such Holder, without transfer, a certification from such
Holder to that effect (in substantially the form of Exhibit B hereto);
or
(ii) if such Transfer Restricted Securities are being
transferred (1) to a Qualified Institutional Buyer in accordance with
Rule 144A under the Securities Act or (2) pursuant to an exemption
from registration in accordance with Rule 144 under the Securities Act
(and based upon an opinion of counsel if the Company or the Trustee so
requests) or (3) pursuant to an effective registration statement under
the Securities Act, a certification to that effect from such Holder
(in substantially the form of Exhibit B hereto); or
(iii) if such Transfer Restricted Securities are being
transferred to a Non-U.S. Person pursuant to an exemption from
registration in accordance with Rule 904 of Regulation S under the
Securities Act, certifications to that effect from such transferor (in
substantially the form of Exhibits B and C hereto) and an opinion of
counsel to that effect if the Company or the Trustee so requests; or
(iv) if such Transfer Restricted Securities are being
transferred in reliance on and in compliance with another exemption
from the registration requirements of the Securities Act, a
certification to that effect from such Holder (in substantially the
form of Exhibit B hereto) and an opinion of counsel to that effect if
the Company or the Trustee so requests.
(b) Transfer and Exchange of the Notes.
(i) The transfer and exchange of Global Notes or beneficial
interests therein shall be effected through the Depositary, in
accordance with Section 305 of the Original Indenture and Article V
hereof (including the restrictions on transfer set forth therein and
herein) and the rules and procedures of the Depositary therefor, which
shall include restrictions on transfer comparable to those set forth
therein and herein to the extent required by the Securities Act.
(ii) The transfer and exchange of Global Notes or beneficial
interests therein for certificated notes (or vice versa) shall be
effected through the Trustee and the Depositary, as the case may be,
in accordance with Section 305 of the Original Indenture and Article V
hereof (including the restrictions on transfer set forth therein and
herein) and the rules and procedures of the Depositary therefor, which
shall include restrictions on transfer comparable to those set forth
therein and herein to the extent required by the Securities Act.
13
Section 502 Legends.
(a) Except as provided in this Section 502(a) and as permitted by
Section 502(b) and (c) hereof, each certificate evidencing the Global Notes or
certificated notes in definitive form (and all Notes issued in exchange
therefor or substitution thereof) shall bear a legend in substantially the
following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS
SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF
THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THE SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED
TO IN (A) ABOVE.
Except as permitted by Sections 502(b) and (c) hereof, each certificate
evidencing the Temporary Regulation S Global Note shall bear a legend in
substantially the following form:
THE RIGHTS ATTACHING TO THIS SECURITY, AND THE CONDITIONS AND
PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED SECURITIES, ARE AS
14
SPECIFIED IN THIS SECURITY AND PURSUANT TO THE INDENTURE (AS DEFINED
HEREIN).
Except as permitted by Sections 502(b) and (c) hereof, each certificate
evidencing the Global Notes or certificated notes offered and sold in reliance
on Regulation S shall bear a legend in substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT
OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE
MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.
Each certificate evidencing the Global Notes also shall bear the legend
specified for Global Notes in the form of Note attached hereto as Exhibit A.
(b) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Note)
pursuant to Rule 144 under the Securities Act or an effective registration
statement under the Securities Act, which shall be certified to the Trustee and
Security Registrar upon which each may conclusively rely:
(i) in the case of any Transfer Restricted Security
represented by a certificated note, the Security Registrar shall
permit the Holder thereof to exchange such Transfer Restricted
Security for a certificated note that does not bear the legend set
forth in Section 502(a) hereof and rescind any restriction on the
transfer of such Transfer Restricted Security; and
(ii) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer Restricted Security shall
not be required to bear the legend set forth in Section 502(a) hereof
if all other interests in such Global Note have been or are
concurrently being sold or transferred pursuant to Rule 144 under the
Securities Act or pursuant to an effective registration statement
under the Securities Act.
(c) Notwithstanding the foregoing, upon consummation of the Exchange
Offer, the Company shall issue and, upon receipt of a Company Order in
accordance with Section 303 of the Original Indenture, the Trustee shall
authenticate Series B Notes in exchange for Series A Notes accepted for
exchange in the Exchange Offer, which Series B Notes shall not bear the legend
set forth in Section 502(a) hereof and shall not provide for Additional
Interest, and the Security Registrar shall rescind any restriction on the
transfer of such Notes, in each case unless the Holder of such Series A Notes
(A) is a broker-dealer tendering Series A Notes acquired directly from the
Company or an "affiliate" (as defined in Rule 405 under the Securities Act) of
15
the Company for its own account, (B) is a Person who at the time of
consummation of the Exchange Offer has an arrangement or understanding with any
Person to participate in the "distribution" (within the meaning of the
Securities Act) of the Series B Notes, (C) is a Person who is an "affiliate"
(as defined in Rule 405 under the Securities Act) of the Company or (D) is a
Person who will not be acquiring the Series B Notes in the ordinary course of
such Holder's business. The Company shall identify to the Trustee such Holders
of the Notes in a written certification signed by an officer of the Company
and, absent certification from the Company to such effect, the Trustee shall
assume that there are no such Holders.
Section 503 Registration Rights Agreement. The Company shall perform
its obligations under the Registration Rights Agreement and shall comply in all
material respects with the terms and conditions contained therein including,
without limitation, the payment of Additional Interest.
Section 504 Delivery of Certain Information. At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the
request of a Holder or any beneficial holder of Notes, the Company will
promptly furnish or cause to be furnished Rule 144A Information (as defined
below) to such Holder or any beneficial holder of Notes, or to a prospective
purchaser of any such security designated by any such holder, as the case may
be, to the extent required to permit compliance by such Holder or holder with
Rule 144A under the Securities Act in connection with the resale of any such
security. "Rule 144A Information" shall be such information as is specified
pursuant to Rule 144A(d)(4) under the Securities Act.
ARTICLE VI
Remedies; Modification and Waiver
Section 601 Additional Events of Default; Acceleration of Maturity.
(a) Solely with respect to the Notes issued hereby, Section 501(1) of
the Original Indenture is hereby deleted in its entirety, and the following is
substituted in lieu thereof as an Event of Default in addition to the other
events set forth in Section 501 of the Original Indenture:
"(1) default in the payment of any interest upon any Security
of that series, including Additional Interest, if any, when it becomes
due and payable, and continuance of such default for a period of 30
days;"
(b) Solely with respect to the Notes issued hereby, Section 501(5) of
the Original Indenture is hereby deleted in its entirety, and the following is
substituted in lieu thereof as an Event of Default in addition to the other
events set forth in Section 501 of the Original Indenture:
"(5) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company, CERC or
CenterPoint Houston in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company, CERC
or CenterPoint Houston a
16
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or
in respect of the Company, CERC or CenterPoint Houston under any
applicable federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company, CERC or CenterPoint Houston or of any substantial part
of its respective property, or ordering the winding up or liquidation
of its respective affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in
effect for a period of 90 consecutive days; provided that any
specified event in (A) or (B) involving CERC or CenterPoint Houston
shall not constitute an Event of Default if, at the time such event
occurs, CERC or CenterPoint Houston, as the case may be, shall no
longer be an Affiliate of the Company; or"
(c) Solely with respect to the Notes issued hereby, Section 501(6) of
the Original Indenture is hereby deleted in its entirety, and the following is
substituted in lieu thereof as an Event of Default in addition to the other
events set forth in Section 501 of the Original Indenture:
"(6) the commencement by the Company, CERC or CenterPoint
Houston of a voluntary case or proceeding under any applicable federal
or state bankruptcy, insolvency, reorganization or other similar law
or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by any of them to the entry of a decree or
order for relief in respect of the Company, CERC or CenterPoint
Houston in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against any of them, or the filing by any of them
of a petition or answer or consent seeking reorganization or relief
under any applicable federal or state law, or the consent by any of
them to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company, CERC or
CenterPoint Houston or of any substantial part of its respective
property, or the making by any of them of an assignment of a
substantial part of its respective property for the benefit of
creditors, or the admission by any of them in writing of the inability
of any of the Company, CERC or CenterPoint Houston to pay its
respective debts generally as they become due, or the taking of
corporate action by the Company, CERC or CenterPoint Houston in
furtherance of any such action; provided that any such specified event
involving CERC or CenterPoint Houston shall not constitute an Event of
Default if, at the time such event occurs,
17
CERC or CenterPoint Houston, as the case may be, shall no longer be an
Affiliate of the Company; or"
(d) Solely with respect to the Notes issued hereby, and pursuant to
Section 501(7) of the Original Indenture, the following shall each constitute
an "Event of Default" in addition to the other events set forth in Section 501
of the Original Indenture:
"(i) The default by the Company, CERC or CenterPoint Houston
in a scheduled payment at maturity, upon redemption or otherwise, in
the aggregate principal amount of $50 million or more, after the
expiration of any applicable grace period, of any Indebtedness or the
acceleration of any Indebtedness of the Company, CERC or CenterPoint
Houston in such aggregate principal amount, so that it becomes due and
payable prior to the date on which it would otherwise have become due
and payable and such payment default is not cured or such acceleration
is not rescinded within 30 days after notice to the Company in
accordance with the terms of the Indebtedness; provided that such
payment default or acceleration of CERC or CenterPoint Houston shall
not to be an Event of Default if, at the time such event occurs, CERC
or CenterPoint Houston, as the case may be, shall not be an Affiliate
of the Company; and
(ii) The Company defaults in its obligation to redeem the
Notes after exercising its redemption option pursuant to Article IV
hereof;".
Section 602 Modification and Waiver. In addition to those matters set
forth in Section 902 of the Indenture, with respect to the Notes, no amendment
or supplemental indenture shall without the consent of the Holder of each Note
affected thereby alter the manner of calculation or rate of Additional Amounts
payable on any Note or extend the time for payment of any such amount.
ARTICLE VII
Miscellaneous Provisions
Section 701 The Indenture, as supplemented and amended by this
Supplemental Indenture No. 3, is in all respects hereby adopted, ratified and
confirmed.
Section 702 This Supplemental Indenture No. 3 may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
18
Section 703 THIS SUPPLEMENTAL INDENTURE NO. 3 AND EACH NOTE SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 704 If any provision in this Supplemental Indenture No. 3
limits, qualifies or conflicts with another provision hereof which is required
to be included herein by any provisions of the Trust Indenture Act, such
required provision shall control.
Section 705 In case any provision in this Supplemental Indenture No. 3
or the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
19
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 3 to be duly executed, as of the day and year first written
above.
CENTERPOINT ENERGY, INC.
By: /s/ Gary L. Whitlock
------------------------------------
Gary L. Whitlock
Executive Vice President and
Chief Financial Officer
Attest:
/s/ Richard B. Dauphin
- ----------------------
Richard B. Dauphin
Assistant Corporate Secretary
(SEAL)
JPMORGAN CHASE BANK, as Trustee
By: /s/ Carol Logan
------------------------------------
Name: Carol Logan
Title: Vice President and Trust Officer
(SEAL)
20
Exhibit A
[FORM OF FACE OF SECURITY]
[Rule 144A Global Note]
[Regulation S Global Note]
[Certificated Note]
[IF THIS SECURITY IS TO BE A GLOBAL NOTE -] THIS SECURITY IS A GLOBAL SECURITY
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY.
[For as long as this Global Security is deposited with or on behalf of The
Depository Trust Company it shall bear the following legend.] Unless this
certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to CenterPoint Energy, Inc. or
its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
CENTERPOINT ENERGY, INC.
7.25% Senior Notes due 2010, Series [A/B]
No. __________ $ __________ *
CUSIP No. ________
CENTERPOINT ENERGY, INC., a corporation duly organized and existing
under the laws of the State of Texas (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _______________, or registered
assigns, the principal sum of ____________________ Dollars on September 1,
2010, and to pay interest thereon from September 9, 2003 or from the most
- ----------------
* REFERENCE IS MADE TO SCHEDULE A ATTACHED HERETO WITH RESPECT TO
DECREASES AND INCREASES IN THE AGGREGATE PRINCIPAL AMOUNT OF SECURITIES
EVIDENCED BY THIS CERTIFICATE.
A-1
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on March 1 and September 1 in each year, commencing March 1,
2004, at the rate of 7.25% per annum, until the principal hereof is paid or
made available for payment, provided that any principal and premium, and any
such installment of interest, which is overdue shall bear interest at the rate
of 7.25% per annum (to the extent permitted by applicable law), from the dates
such amounts are due until they are paid or made available for payment, and
such interest shall be payable on demand. The amount of interest payable for
any period shall be computed on the basis of twelve 30-day months and a 360-day
year. The amount of interest payable for any partial period shall be computed
on the basis of a 360-day year of twelve 30-day months and the days elapsed in
any partial month. In the event that any date on which interest is payable on
this Security is not a Business Day, then a payment of the interest payable on
such date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay) with the
same force and effect as if made on the date the payment was originally
payable. A "Business Day" shall mean any day other than a Saturday, a Sunday or
a day on which banking institutions in The City of New York are authorized or
required by law, regulation or executive order to close. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be February
15 or August 15 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and shall either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange or automated quotation system on which
the Securities of this series may be listed or traded, and upon such notice as
may be required by such exchange or automated quotation system, all as more
fully provided in said Indenture.
Payment of the principal of (and premium, if any) and any such
interest on this Security will be made at the Corporate Trust Office of the
Trustee, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of interest may be
made (i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) by wire transfer in
immediately available funds at such place and to such account as may be
designated in writing by the Person entitled thereto as specified in the
Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
[DELETE THE FOLLOWING TWO-PARAGRAPH LEGEND, IF A REGULATION S GLOBAL NOTE.]
[THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED
A-2
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS
SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN
THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.]
[INSERT IF A TEMPORARY REGULATION S GLOBAL NOTE] [THE RIGHTS ATTACHING TO THIS
SECURITY, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR
CERTIFICATED SECURITIES, ARE AS SPECIFIED IN THIS SECURITY AND PURSUANT TO THE
INDENTURE (AS DEFINED HEREIN).]
[INSERT REGULATION S LEGEND, IF A REGULATION S GLOBAL NOTE] [THIS SECURITY (OR
ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL
APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO
THEM IN REGULATION S UNDER THE SECURITIES ACT.]
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
A-3
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated: _____________________ CENTERPOINT ENERGY, INC.
By: ____________________________
Name:
(SEAL) Title:
Attest:
- ---------------------------
Name:
Title:
This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
JPMORGAN CHASE BANK,
As Trustee
Date of Authentication:________________
By:_________________________
Authorized Signatory
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[FORM OF REVERSE SIDE OF SECURITY]
CENTERPOINT ENERGY, INC.
7.25% NOTES DUE 2010, SERIES [A/B]
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture, dated as of May 19, 2003 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and JPMorgan Chase Bank, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof, initially limited in aggregate principal amount
to $200,000,000; provided, however, that the authorized aggregate principal
amount of the Securities may be increased above such amount by a Board
Resolution to such effect.
The Company shall have the right to redeem the Securities of this
series, in whole or in part, at its option at any time from time to time at a
price equal to (i) 100% of the principal amount thereof plus (ii) accrued and
unpaid interest thereon, if any, including Additional Interest, if any, to (but
excluding) the Redemption Date plus (iii) the Make-Whole Premium, if any.
The amount of the Make-Whole Premium with respect to any Security of
this Series (or portion thereof) to be redeemed will be equal to the excess, if
any, of: (i) the sum of the present values, calculated as of the Redemption
Date, of: (A) each interest payment that, but for such redemption, would have
been payable on the Security of this series (or portion thereof) being redeemed
on each Interest Payment Date occurring after the Redemption Date (excluding
any accrued and unpaid interest for the period prior to the Redemption Date);
and (B) the principal amount that, but for such redemption, would have been
payable on the Security of this series (or portion thereof) being redeemed at
September 1, 2010; over (ii) the principal amount of the Security of this
series (or portion thereof) being redeemed. The present values of interest and
principal payments referred to in clause (i) above will be determined in
accordance with generally accepted principles of financial analysis. Such
present values will be calculated by discounting the amount of each payment of
interest or principal from the date that each such payment would have been
payable, but for the redemption, to the Redemption Date at a discount rate
equal to the Comparable Treasury Yield (as defined below) plus 50 basis points.
For purposes of determining the Make-Whole Premium, "Comparable
Treasury Yield" means a rate of interest per annum equal to the weekly average
yield to maturity of United States Treasury securities that have a constant
maturity that corresponds to the remaining term to maturity of the Securities
of this series, calculated to the nearest 1/12th of a year (the "Remaining
Term"). The Comparable Treasury Yield shall be determined as of the third
Business Day immediately preceding the Redemption Date.
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The weekly average yields of United States Treasury securities shall
be determined by reference to the most recent statistical release published by
the Federal Reserve Bank of New York and designated "H.15 (519) Selected
Interest Rates" or any successor release (the "H.15 Statistical Release"). If
the H.15 Statistical Release sets forth a weekly average yield for United
States Treasury securities having a constant maturity that is the same as the
Remaining Term, then the Comparable Treasury Yield shall be equal to such
weekly average yield. In all other cases, the Comparable Treasury Yield shall
be calculated by interpolation, on a straight-line basis, between the weekly
average yields on the United States Treasury securities that have a constant
maturity closest to and greater than the Remaining Term and the United States
Treasury securities that have a constant maturity closest to and less than the
Remaining Term (in each case as set forth in the H.15 Statistical Release). Any
weekly average yields so calculated by interpolation shall be rounded to the
nearest 1/100th of 1%, with any figure of 1/200th of 1% or above being rounded
upward. If weekly average yields for United States Treasury securities are not
available in the H.15 Statistical Release or otherwise, then the Comparable
Treasury Yield shall be calculated by interpolation of comparable rates
selected by the Independent Investment Banker.
In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
The Securities of this series are not entitled to the benefit of any
sinking fund.
The Indenture contains provisions for satisfaction and discharge of
the entire indebtedness of this Security upon compliance by the Company with
certain conditions set forth in the Indenture.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or certain restrictive covenants and
Events of Default with respect to this Security, in each case upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of a majority in principal amount of the Securities
at the time Outstanding of each series to be affected. The Indenture also
contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange
A-6
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee
or for any other remedy thereunder, unless such Holder shall have previously
given the Trustee written notice of a continuing Event of Default with respect
to the Securities of this series, the Holders of not less than 25% in principal
amount of the Securities of this series at the time Outstanding shall have made
written request to the Trustee to institute proceedings in respect of such
Event of Default as Trustee and offered the Trustee reasonable indemnity, and
the Trustee shall not have received from the Holders of a majority in principal
amount of Securities of this series at the time Outstanding a direction
inconsistent with such request, and shall have failed to institute any such
proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder
of this Security for the enforcement of any payment of principal hereof or any
premium or interest hereon on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities
of this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof;
provided, however, that Securities of this series that are Transfer Restricted
Securities issued to institutional accredited investors will be issued only in
denominations of $250,000 and integral multiples of $1,000 in excess thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of
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like tenor of a different authorized denomination, as requested by the Holder
surrendering the same.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
By its acceptance of this Security bearing a legend restricting
transfer, each Holder of this Security acknowledges the restrictions on
transfer of this Security set forth in the Indenture and such legend and agrees
that it will transfer this Security only as provided in the Indenture. In
addition to the rights provided to Holders of this Security under the
Indenture, Holders shall have all the rights set forth in that certain
Registration Rights Agreement, dated as of September 9, 2003, among the Company
and the Initial Purchasers, including without limitation the right to receive
Additional Interest as described in Section 2.5 thereof.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.
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SCHEDULE A
SCHEDULE OF ADJUSTMENTS
The initial aggregate principal amount of Securities
evidenced by the Certificate to which this Schedule is attached is
_______________. The notations on the following table evidence decreases and
increases in the aggregate principal amount of Securities evidenced by such
Certificate.
Aggregate Principal
Decrease in Aggregate Increase in Aggregate Amount of Securities Notation by
Date of Principal Amount of Principal Amount of Remaining After Such Security
Adjustment Securities Securities Decrease or Increase Registrar
- ---------- ---------- ---------- -------------------- ---------
S-1
Exhibit B
FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 7.25% Senior Notes due 2010, Series A, of CenterPoint Energy, Inc. (the
"Company")
This Certificate relates to $_____ principal amount of Notes held in
*______ book-entry or *______ definitive form by _____________________ (the
"Transferor").
The Transferor has requested the Trustee by written order to exchange
or register the transfer of a Note or Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that the Transferor is familiar with the
Indenture, dated as of May 19, 2003 (as amended or supplemented to date, the
"Indenture"), between the Company and JPMorgan Chase Bank, (the "Trustee")
relating to the above-captioned Notes and that the transfer of this Note does
not require registration under the Securities Act (as defined below) because:*
|_| Such Note is being acquired for the Transferor's own account
without transfer.
|_| Such Note is being transferred (i) to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act")), in accordance with Rule 144A under the Securities Act
or (ii) pursuant to an exemption from registration in accordance with Rule 904
of Regulation S under the Securities Act (and in the case of clause (ii), based
upon an opinion of counsel if the Company or the Trustee so requests, together
with a certification in substantially the form of Exhibit C to Supplemental
Indenture No. 3 to the Indenture).
|_| Such Note is being transferred (i) pursuant to an exemption from
registration in accordance with Rule 144 under the Securities Act (and based
upon an opinion of counsel if the Company or the Trustee so requests) or (ii)
pursuant to an effective registration statement under the Securities Act.
|_| Such Note is being transferred in reliance on and in compliance
with another exemption from the registration requirements of the Securities Act
(and based upon an opinion of counsel if the Company or the Trustee so
requests).
- ----------------
* FILL IN BLANK OR CHECK APPROPRIATE BOX, AS APPLICABLE.
B-1
You are entitled to rely upon this certificate and you are irrevocably
authorized to produce this certificate or a copy hereof to any interested party
in any administrative or legal proceeding or official inquiry with respect to
the matters covered hereby.
[INSERT NAME OF TRANSFEROR]
By:
-----------------------------
Name:
Title:
Address:
Date:
-----------------------------------
B-2
Exhibit C
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
-------------, ----
JPMorgan Chase Bank, as Security Registrar
600 Travis, Suite 1150
Houston, Texas 77002
Attention: Institutional Trust Services
Ladies and Gentlemen:
In connection with our proposed sale of certain 7.25% Senior Notes due
2010, Series A (the "Notes"), of CenterPoint Energy, Inc. (the "Company"), we
represent that:
(i) the offer or sale of the Notes was made in an "offshore
transaction";
(ii) at the time the buy order was originated, the transferee
was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States;
(iii) no directed selling efforts have been made by us in the
United States in contravention of the requirements of Rule 903(a) or
Rule 904(a) of Regulation S under the U.S. Securities Act of 1933, as
applicable;
(iv) if this transfer of the Note is being made prior to the
expiration of the Distribution Compliance Period, such interest that
is being transferred is held immediately thereafter through The
Euroclear System or Clearstream Banking, societe anonyme; and
(v) the transaction is not part of a plan or scheme to evade
the registration requirements of the U.S. Securities Act of 1933.
C-1
You and the Company are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S under the U.S. Securities Act of 1933.
Very truly yours,
Name of Transferor:
By:
----------------------------------
Name:
Title:
Address:
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