Exhibit 4.2
CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
OFFICER'S CERTIFICATE
March 18, 2003
I, the undersigned officer of CenterPoint Energy Houston Electric, LLC, a Texas
limited liability company (the "Company"), do hereby certify that I am an
Authorized Officer of the Company as such term is defined in the Indenture (as
defined herein). I am delivering this certificate pursuant to the authority
granted in the Resolutions adopted by written consent of the sole Manager of the
Company dated March 13, 2003, and Sections 105, 201, 301, 401(1) and 402(2)(A)
of the General Mortgage Indenture, dated as of October 10, 2002, as heretofore
supplemented to the date hereof (as heretofore supplemented, the "Indenture"),
between the Company and JPMorgan Chase Bank, as Trustee (the "Trustee"). Terms
used herein and not otherwise defined herein shall have the meanings assigned to
them in the Indenture, unless the context clearly requires otherwise. Based upon
the foregoing, I hereby certify on behalf of the Company as follows:
1. The terms and conditions of the Securities of the series described in this
Officer's Certificate are as follows (the numbered subdivisions set forth in
this Paragraph 1 corresponding to the numbered subdivisions of Section 301 of
the Indenture):
(1) The Securities of the tenth series to be issued under the Indenture
shall be designated as the "5.70% General Mortgage Bonds, Series J1,
due 2013" (the "Series J1 Bonds") and the "5.70% General Mortgage
Bonds, Series J2, due 2013" (the "Series J2 Bonds" and, together with
the Series J1 Bonds, the "Series J Bonds"). The Series J1 Bonds and
the Series J2 Bonds shall be treated for all purposes under the
Indenture as a single class or series of Securities. The Securities of
the eleventh series to be issued under the Indenture shall be
designated as the "6.95% General Mortgage Bonds, Series K1, due 2033"
(the "Series K1 Bonds") and the "6.95% General Mortgage Bonds, Series
K2, due 2033" (the "Series K2 Bonds" and, together with the Series K1
Bonds, the "Series K Bonds"). The Series K1 Bonds and the Series K2
Bonds shall be treated for all purposes under the Indenture as a
single class or series of Securities.
(2) There shall be no limit upon the aggregate principal amount of the
Series J Bonds that may be authenticated and delivered under the
Indenture. The Trustee shall authenticate and deliver (i) Series J1
Bonds for original issue on March 18, 2003 (the "Issue Date") in the
aggregate principal amount of $450,000,000, upon a Company Order for
the authentication and delivery thereof and satisfaction of Section
401 of the Indenture and (ii) Series J2 Bonds from time to time
thereafter in satisfaction of the Company's obligations under the
Registration Rights Agreement (as defined in subsection (15) below),
for issue only in exchange for a like principal amount of Series J1
Bonds upon the receipt by the Trustee of each of the documents
specified in the final paragraph of this subsection (2).
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There shall be no limit upon the aggregate principal amount of the
Series K Bonds that may be authenticated and delivered under the
Indenture. The Trustee shall authenticate and deliver (i) Series K1
Bonds for original issue on March 18, 2003 (the "Issue Date") in the
aggregate principal amount of $312,275,000, upon a Company Order for
the authentication and delivery thereof and satisfaction of Section 401
of the Indenture and (ii) Series K2 Bonds from time to time thereafter
in satisfaction of the Company's obligations under the Registration
Rights Agreement, for issue only in exchange for a like principal
amount of Series K1 Bonds upon the receipt by the Trustee of each of
the documents specified in the final paragraph of this subsection (2).
The Company shall deliver to the Trustee in connection with each
request for the authentication and delivery by the Trustee of Series J2
Bonds or Series K2 Bonds:
(a) a Company Order for the authentication and delivery
thereof, specifying the amount of the Securities to be
authenticated, the date on which the original issue of such
Securities is to be authenticated and the name or names of the
initial Holder or Holders;
(b) an Opinion of Counsel to the effect that:
(A) all conditions and covenants provided for in the
Indenture relating to the authentication and delivery by the
Trustee of such Securities have been complied with;
(B) the form or forms of such Securities have been
duly authorized by the Company and have been established in
conformity with the provisions of the Indenture;
(C) the term or terms of such Securities have been
authorized by the Company and have been established in
conformity with the provisions of the Indenture;
(D) when such Securities are authenticated and
delivered by the Trustee and issued and delivered by the
Company, they will constitute a valid and legally binding
obligation of the Company, enforceable against the Company and
entitled to the benefit of the Lien of the Indenture equally
and ratably with all other Securities then Outstanding; and
(c) an Officer's Certificate to the effect that all conditions
and covenants provided for in the Indenture relating to the
authentication and delivery by the Trustee of such Securities
have been complied with.
(3) Interest on the Series J Bonds and the Series K Bonds (together, the
"Bonds") shall be payable to the Persons in whose names such Securities
are registered at the close of business on the Regular Record Date for
such interest, except as otherwise expressly provided in the form of
such Securities attached hereto as Exhibit A.
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(4) The Series J Bonds shall mature and the principal thereof shall be due and
payable together with all accrued and unpaid interest thereon on March 15, 2013.
The Series K Bonds shall mature and the principal thereof shall be due and
payable together with all accrued and unpaid interest therein on March 15, 2033.
(5) Subject to subsection (15) below, the Series J Bonds shall bear interest
at the rate of 5.70% per annum and the Series K Bonds shall bear interest at the
rate of 6.95% per annum. Interest shall accrue on the Bonds from the Issue Date,
or the most recent date to which interest has been paid or duly provided for.
The Interest Payment Dates for the Bonds shall be March 15 and September 15 in
each year commencing September 15, 2003, and the Regular Record Dates with
respect to the Interest Payment Dates for the Bonds shall be the fifteenth
calendar day preceding each Interest Payment Date (whether or not a Business
Day); provided however that interest payable at maturity, upon redemption or
when principal is otherwise due will be payable to the Holder to whom principal
is payable.
(6) The Corporate Trust Office of JPMorgan Chase Bank in Houston, Texas shall
be the place at which (i) the principal of and interest on the Bonds shall be
payable, (ii) registration of transfer of the Bonds may be effected, (iii)
exchanges of the Bonds may be effected and (iv) notices and demands to or upon
the Company in respect of the Bonds and the Indenture may be served; and
JPMorgan Chase Bank shall be the Security Registrar for the Bonds; provided,
however, that the Company reserves the right to change, by one or more Officer's
Certificates, any such place or the Security Registrar; and provided, further,
that the Company reserves the right to designate, by one or more Officer's
Certificates, its principal office in Houston, Texas as any such place or itself
as the Security Registrar; provided, however, that there shall be only a single
Security Registrar for the Bonds.
(7) The Bonds shall be redeemable, at the option of the Company, at any time
or from time to time, in whole or in part, at a price equal to the greater of
(i) 100% of the principal amount of the Bonds to be redeemed or (ii) the sum of
the present values of the remaining scheduled payments of principal and interest
on the Bonds to be redeemed (not including any portion of such payments of
interest accrued to the Redemption Date) discounted to the Redemption Date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at
the applicable Treasury Rate plus 30 basis points, in the case of the Series J
Bonds, and 35 basis points, in the case of the Series K Bonds (the "Make-Whole
Amount"); plus, in each case, accrued and unpaid interest on the principal
amount being redeemed to the Redemption Date.
The Make-Whole Amount will be calculated by Credit Suisse First Boston LLC,
Deutsche Bank Securities Inc. or Salomon Smith Barney Inc., as specified by the
Company or, if such firms are unwilling or unable to select the Comparable
Treasury Issue, by an independent investment banking institution of national
standing appointed by the Company (in any such case, an "Independent Investment
Banker"). The Trustee shall
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have no responsibility for the calculation of the Make-Whole Amount and may
conclusively presume the correctness of such calculation.
For purposes of determining the Make-Whole Amount: "Treasury Rate" means,
with respect to any Redemption Date, the yield, under the heading which
represents the average for the immediately preceding week, appearing in the most
recently published statistical release designated "H.15 (519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded U.S. Treasury
securities adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Comparable Treasury Issue (if
no maturity is within three months before or after the remaining life (as
defined below), yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue will be determined and the
Treasury Rate will be interpolated or extrapolated from such yields on a
straight line basis, rounding to the nearest month); or if such release (or any
successor release) is not published during the week preceding the calculation
date or does not contain such yields, the rate per annum equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue, calculated using
a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such Redemption
Date. The Treasury Rate will be calculated on the third Business Day preceding
the Redemption Date.
"Comparable Treasury Issue" means the U.S. Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining
term ("remaining life") of the Bonds to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Bonds.
"Comparable Treasury Price" means (1) the average of five Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the highest
and lowest Reference Treasury Dealer Quotations, or (2) if the Independent
Investment Banker obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such quotations.
"Reference Treasury Dealer" means (1) Credit Suisse First Boston LLC,
Deutsche Bank Securities Inc. and Salomon Smith Barney Inc. and their respective
successors, provided, however, that if any of the foregoing shall cease to be a
primary U.S. government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company will substitute therefor another Primary Treasury Dealer
and (2) any other primary treasury dealer selected by the Company after
consultation with the Independent Investment Banker.
"Reference Treasury Dealer Quotations" means with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Independent Investment Banker, of the bid and asked prices for the Comparable
Treasury
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Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Independent Investment Banker at 5:00 p.m., New York City time,
on the third business day preceding such Redemption Date.
The Trustee will mail a notice of redemption to each holder of Bonds to be
redeemed by first-class mail at least 30 and not more than 60 days prior to the
date fixed for redemption. Unless the Company defaults on payment of the
redemption price, interest will cease to accrue on the Bonds or portions thereof
called for redemption on the Redemption Date. If fewer than all of the Bonds are
to be redeemed, the Trustee will select, not more than 60 days prior to the
Redemption Date, the particular Bonds or portions thereof for redemption from
the outstanding Bonds not previously called by such method as the Trustee deems
fair and appropriate The Trustee may select for redemption Bonds and portions of
Bonds in amounts of $1,000 or whole multiples of $1,000.
(8) Not applicable.
(9) Not applicable.
(10) Not applicable.
(11) Not applicable.
(12) Not applicable.
(13) See subsections (4) and (7) above.
(14) Not applicable.
(15) Pursuant to the terms of a registration rights agreement (the
"Registration Rights Agreement") with one or more of the initial purchasers of
the Series J1 Bonds and the Series K1 Bonds, the Company has agreed to file an
exchange offer registration statement to exchange the Series J1 Bonds for Series
J2 Bonds and the Series K1 Bonds for the Series K2 Bonds, which shall be
registered under the Securities Act of 1933, as amended (the "Securities Act")
as evidence of the same underlying indebtedness. The Company has also agreed to
file a shelf registration statement to cover resales of the Bonds, as initially
issued and sold, under certain circumstances. The terms relating to the exchange
of the Series J1 Bonds for the Series J2 Bonds and the Series K1 Bonds for the
Series K2 Bonds are set forth in the Registration Rights Agreement attached
hereto as Exhibit B.
The interest rate borne by the Registrable Securities (as defined in the
Registration Rights Agreement) shall be increased by .25% per annum upon the
occurrence of a Registration Default (as defined in the Registration Rights
Agreement), 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 continuing 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;
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provided, further, that if the Exchange Offer Registration Statement (as defined
in the Registration Rights Agreement) 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
(as defined in the Registration Rights Agreement), 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 5.70% per annum in
respect of the Series J1 Bonds and 6.95% per annum in respect of the Series K1
Bonds.
(16) Not applicable.
(17) (i) Registrable Securities offered and sold to Qualified Institutional
Buyers (as defined in Rule 144A of the Securities Act) pursuant to Rule 144A of
the Securities Act shall be issuable in whole or in part in the form of one or
more permanent Global Securities in respect of each of the Series J1 Bonds and
the Series K1 Bonds in definitive, fully registered, book-entry form, without
interest coupons (collectively, the "Rule 144A Global Bonds"). The Rule 144A
Global Bonds shall be deposited on the Issue Date with, or on behalf of, the
Depositary. Interests in each of the Rule 144A Global Bonds shall be available
for purchase only by Qualified Institutional Buyers.
(ii) Registrable Securities 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 ("Regulation S") shall initially be issuable in whole or in part
in the form of one or more temporary Global Securities in respect of each of the
Series J1 Bonds and the Series K1 Bonds in definitive, fully registered,
book-entry form, without interest coupons (collectively, the "Regulation S
Temporary Global Bonds"). Beneficial interests in each of the Regulation S
Temporary Global Bonds shall be exchanged for beneficial interests in a
corresponding Global Security in respect of each of the Series J1 Bonds and the
Series K1 Bonds respectively (the "Regulation S Permanent Global Bonds" and,
together with the Regulation S Temporary Global Bonds, the "Regulation S Global
Bonds") within a reasonable period after the expiration of the period which
expires immediately after the 40th day following the later of: (a) the
commencement of the offering of the Series J1 Bonds and the Series K1 Bonds to
Persons other than "distributors" (as defined in Regulation S) in reliance upon
Regulation S; and (b) the Issue Date (the "Distribution Compliance Period") upon
certification that the beneficial interests in the Regulation S Temporary Global
Bond relating to the Series J1 Bonds or the Regulation S Temporary Global Bond
relating to the Series K1 Bonds, as relevant, are owned by either Non-U.S.
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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.
(iii) Each of the Rule 144A Global Bonds and the Regulation S Global Bonds
(collectively, the "Global Bonds") shall represent such of the Series J1 Bonds
and the Series K1 Bonds as shall be specified therein and shall each provide
that it shall represent the aggregate principal amount of the Series J1 Bonds
and the Series K1 Bonds from time to time endorsed thereon and that the
aggregate principal amount of the Series J1 Bonds and the Series K1 Bonds
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges or redemptions. Any endorsement of a Global
Bond to reflect the amount, or any increase or decrease in the aggregate
principal amount, of the Series J1 Bonds and the Series K1 Bonds represented
thereby shall be reflected by the Trustee on Schedule A attached to the Series
J1 Bond and the Series K1 Bond, as the case may be, 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 Bond.
(iv) The Depositary Trust Company shall initially serve as Depositary with
respect to the Global Bonds. Such Global Bonds shall bear a legend in
substantially the following form:
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.
(18) Not applicable.
(19) (i) In addition to the requirements set forth in Section 305 of the
Indenture, Series J Bonds in definitive form and Series K Bonds in definitive
form that are Registrable Securities presented or surrendered for registration
of transfer or exchange pursuant to Section 305 of the Indenture shall be
accompanied by the following additional information and documents, as
applicable, upon which the Security Registrar may conclusively rely:
(a) if such Registrable 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
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(b) if such Registrable 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
(c) if such Registrable 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
(d) if such Registrable 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.
(ii) (a) The transfer and exchange of Global Bonds or beneficial interests
therein shall be effected through the Depositary, in accordance with
Section 305 of the Indenture and subsection (19) 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.
(b) The transfer and exchange of Global Bonds or beneficial interests
therein for certificated bonds (or vice versa) shall be effected
through the Trustee and the Depositary, as the case may be, in
accordance with Section 305 of the Indenture and subsection (19)
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.
(iii) Except as permitted by subparagraphs (iv) and (v) of this subsection
(19), until the expiration of the applicable holding period with respect to the
Registrable Securities set forth in Rule 144(k) of the Securities Act, unless
otherwise agreed by the Company and the Holder thereof, each certificate
evidencing the Global Bonds or certificated bonds in definitive form (and all
Series J Bonds and Series K Bonds, as the
8
case may be, 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
(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
ABOVE.
Except as permitted by subparagraphs (iv) and (v) of this subsection (19), each
certificate evidencing the Global Bonds or certificated bonds in definitive form
purchased in reliance on Regulation S (and all Bonds 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
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
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AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE
MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.
(iv) Upon any sale or transfer of a Registrable Security (including any
Registrable Security represented by a Global Bond) 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:
(a) in the case of any Registrable Security represented by a
certificated bond, the Security Registrar shall permit the Holder
thereof to exchange such Registrable Security for a certificated bond
that does not bear the legends set forth in subsection (iii) of
subparagraph (19) hereof and rescind any restriction on the transfer
of such Registrable Security; and
(b) in the case of any Registrable Security represented by a Global
Bond, such Registrable Security shall not be required to bear the
legends set forth in subsection (iii) of subparagraph (19) hereof if
all other interests in such Global Bond 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.
(v) Notwithstanding the foregoing, upon consummation of the Exchange Offer
(as defined in the Registration Rights Agreement), the Company shall issue and,
upon receipt of a Company Order in accordance with Section 401 of the Indenture,
the Trustee shall authenticate, Series J2 Bonds in exchange for Series J1 Bonds
accepted for exchange in the Exchange Offer and Series K2 Bonds in exchange for
Series K1 Bonds accepted for exchange in the Exchange Offer, which Series J2
Bonds and Series K2 Bonds shall not bear the legends set forth in subsection
(iii) of subparagraph (19) hereof and shall not provide for Additional Interest,
and the Security Registrar shall rescind any restriction on the transfer of such
Series J2 Bonds and Series K2 Bonds, in each case unless the Holder of such
Series J1 Bonds or Series K1 Bonds, as the case may be, (A) is a broker-dealer
tendering Series J1 Bonds or Series K1 Bonds, as the case may be, acquired
directly from the Company or an "affiliate" (as defined in Rule 144 under the
Securities Act) of the Company for its own account, (B) is a Person who has an
arrangement or understanding with any Person to participate in the
"distribution" (within the meaning of the Securities Act) of the Series J2 Bonds
or Series K1 Bonds, as the case may be, (C) is a Person who is an "affiliate"
(as defined in Rule 144 under the Securities Act) of the Company or (D) is a
Person who will not be acquiring the Series J2 Bonds or Series K1 Bonds, as the
case may be, in the ordinary course of such Holder's business. The Company shall
identify to the Trustee such Holders of the Series J Bonds or Series K1 Bonds,
as the case may be, 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.
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(20) For purposes of the Bonds, "Business Day" shall mean any day, other
than Saturday or Sunday, on which commercial banks and foreign exchange
markets are open for business, including dealings in deposits in U.S.
dollars, in New York.
(21) Not applicable.
(22) The Bonds shall have such other terms and provisions as are provided
in the form thereof attached hereto as Exhibit A, and shall be issued in
substantially such form.
2. The undersigned has read all of the covenants and conditions contained in
the Indenture, and the definitions in the Indenture relating thereto, relating
to the issuance of the Bonds and in respect of compliance with which this
certificate is made.
3. The statements contained in this certificate are based upon the familiarity
of the undersigned with the Indenture, the documents accompanying this
certificate, and upon discussions by the undersigned with officers and employees
of the Company familiar with the matters set forth herein.
4. In the opinion of the undersigned, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenants and conditions have been complied with.
In the opinion of the undersigned, such conditions and covenants have been
complied with.
5. To my knowledge, no Event of Default has occurred and is continuing.
6. The execution of the Tenth Supplemental Indenture, dated as of the date
hereof, between the Company and the Trustee is authorized or permitted by the
Indenture.
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IN WITNESS WHEREOF, the undersigned has executed this Officer's Certificate
on this 18th day of March, 2003.
By: /s/ Marc Kilbride
----------------------------------------
Name: Marc Kilbride
Title: Treasurer
Acknowledged and Received on
March 18, 2003
JPMORGAN CHASE BANK,
as Trustee
By: /s/ Carol Logan
--------------------------
Name: Carol Logan
Title: Vice President and Trust Officer
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EXHIBIT A
FORM OF BONDS
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
Houston Electric, LLC 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 HOUSTON ELECTRIC, LLC
5.70% General Mortgage Bonds, Series [J1] [J2], due 2013
Original Interest Accrual Date: March 18, 2003 Redeemable: Yes [X] No [ ]
Stated Maturity: March 15, 2013 Redemption Date: At any time.
Interest Rate: 5.70% Redemption Price: the greater of (i) 100% of the
Interest Payment Dates: March 15 and September 15 principal amount of the Bonds and (ii) the Make-
Regular Record Dates: Fifteenth calendar day before Whole Amount, as described herein, plus in each
respective Interest Payment Date case, accrued and unpaid interest to the Redemption
Date
This Security is not an Original Issue Discount Security
within the meaning of the within-mentioned Indenture.
-----------------------
Initial Principal Amount Registered No. R.__
[$ ]* CUSIP [15189X AA6] [U14040 AA4]
CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a limited liability company duly
organized and existing under the laws of the State of Texas (herein called the
"Company," which term includes any successor corporation under the Indenture
referred to below), for value received, hereby promises to pay to
****[ ]****
, or registered assigns, the principal sum of [ ] DOLLARS* on the Stated
Maturity specified above, and to pay interest thereon from the Original Interest
Accrual Date specified above or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually in arrears on
the Interest Payment Dates specified above in each year, commencing on September
15, 2003, and at Maturity, at the Interest Rate per annum specified above, until
the principal hereof is paid or duly provided for. The interest so payable, and
paid or duly provided for, on any Interest Payment Date shall, as provided in
such Indenture, be paid to the Person in
- -------------------------------
* 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
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date specified above (whether or
not a Business Day) next preceding such Interest Payment Date. Notwithstanding
the foregoing, interest payable at Maturity shall be paid to the Person to whom
principal shall be paid. Except as otherwise provided in said Indenture, any
such interest not so paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date and may 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 of which shall be
given to Holders of Securities of this series not less than 15 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 on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
Payment of the principal of and premium, if any, on this Security and interest
hereon at Maturity shall be made upon presentation of this Security at the
office of the Corporate Trust Administration of JPMorgan Chase Bank, located at
2001 Bryan Street, 9th Floor, Dallas, Texas, 75201 or at such other office or
agency as may be designated for such purpose by the Company from time to time.
Payment of interest on this Security (other than interest at Maturity) shall be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register, except that if such Person shall
be a securities depositary, such payment may be made by such other means in lieu
of check, as shall be agreed upon by the Company, the Trustee and such Person.
Payment of the principal of and premium, if any, and interest on this Security,
as aforesaid, shall be made in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and issuable in one or more series
under and equally secured by a General Mortgage Indenture, dated as of October
10, 2002, as supplemented and amended (such Indenture as originally executed and
delivered and as supplemented or amended from time to time thereafter, together
with any constituent instruments establishing the terms of particular
Securities, being herein called the "Indenture"), between the Company and
JPMorgan Chase Bank, 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 description of
the property mortgaged, pledged and held in trust, the nature and extent of the
security and the respective rights, limitations of rights, duties and immunities
of the Company, the Trustee and the Holders of the Securities thereunder and of
the terms and conditions upon which the Securities are, and are to be,
authenticated and delivered and secured. The acceptance of this Security shall
be deemed to constitute the consent and agreement by the Holder hereof to all of
the terms and provisions of the Indenture. This Security is one of the series
designated above.
If any Interest Payment Date, any Redemption Date or the Stated Maturity shall
not be a Business Day (as hereinafter defined), payment of the amounts due on
this Security on such date may be made on the next succeeding Business Day; and,
if such payment is made or duly provided for on such Business Day, no interest
shall accrue on such amounts for the period from and after such Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be, to such Business
Day. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
This Security is subject to redemption, at the option of the Company, at any
time or from time to time, in whole or in part, at a price equal to the greater
of (i) 100% of the principal amount of this Security (or the portion hereof to
be redeemed) or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest on this Security (or such portion to be
redeemed) (not including any portion of such payments of interest accrued to the
Redemption Date) discounted to the Redemption Date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the applicable
Treasury Rate plus 30 basis points (the "Make-Whole Amount"); plus, accrued and
unpaid interest on the principal amount being redeemed to the Redemption Date.
The Make-Whole Amount will be calculated by Credit Suisse First Boston LLC,
Deutsche Bank Securities Inc. or Salomon Smith Barney Inc., as specified by the
Company or, if such firms are unwilling or unable to select the Comparable
Treasury Issue, by an independent investment banking institution of national
standing appointed by the Company (in any such case, an "Independent Investment
Banker"). The Trustee shall have no responsibility for the calculation of the
Make-Whole Amount and may conclusively presume the correctness of such
calculation.
A-2
For purposes of determining the Make-Whole Amount: "Treasury Rate" means, with
respect to any Redemption Date, the yield, under the heading which represents
the average for the immediately preceding week, appearing in the most recently
published statistical release designated "H.15 (519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded U.S. Treasury
securities adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Comparable Treasury Issue (if
no maturity is within three months before or after the remaining life (as
defined below), yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue will be determined and the
Treasury Rate will be interpolated or extrapolated from such yields on a
straight line basis, rounding to the nearest month); or if such release (or any
successor release) is not published during the week preceding the calculation
date or does not contain such yields, the rate per annum equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue, calculated using
a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such Redemption
Date. The Treasury Rate will be calculated on the third Business Day preceding
the Redemption Date.
"Comparable Treasury Issue" means the U.S. Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining
term ("remaining life") of this Security to be redeemed that would be utilized,
at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of this Security.
"Comparable Treasury Price" means (1) the average of five Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the highest
and lowest Reference Treasury Dealer Quotations, or (2) if the Independent
Investment Banker obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such quotations.
"Reference Treasury Dealer" means (1) Credit Suisse First Boston LLC,
Deutsche Bank Securities Inc. and Salomon Smith Barney Inc. and their respective
successors, provided, however, that if any of the foregoing shall cease to be a
primary U.S. government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company will substitute therefor another Primary Treasury Dealer
and (2) any other Primary Treasury Dealer selected by the Company after
consultation with the Independent Investment Banker.
"Reference Treasury Dealer Quotations" means with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Independent Investment Banker, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Independent Investment Banker at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
The Trustee will mail a notice of redemption to each Holder of Securities to be
redeemed by first-class mail at least 30 and not more than 60 days prior to the
date fixed for redemption. Unless the Company defaults on payment of the
redemption price, interest will cease to accrue on the Securities or portions
thereof called for redemption. If fewer than all of the Securities of this
series are to be redeemed, the Trustee will select, not more than 60 days prior
to the Redemption Date, the particular Securities of this series or portions
thereof for redemption from the outstanding Securities of this series not
previously called by such method as the Trustee deems fair and appropriate The
Trustee may select for redemption Securities of this series and portions of
Securities of this series in amounts of $1,000 or whole multiples of $1,000.
The Indenture permits, with certain exceptions as therein provided, the Trustee
to enter into one or more supplemental indentures for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, the Indenture with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series then Outstanding
under the Indenture, considered as one class; provided, however, that if there
shall be Securities of more than one series Outstanding under the Indenture and
if a proposed supplemental indenture shall directly affect the rights of the
Holders of Securities of one or more, but less than all, of such series, then
the consent only of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series so directly affected, considered as one
class, shall be required; and provided, further, that if the Securities of any
series shall have been issued in more than one Tranche and if the proposed
supplemental
A-3
indenture shall directly affect the rights of the Holders of Securities of one
or more, but less than all, of such Tranches, then the consent only of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of all Tranches so directly affected, considered as one class, shall
be required; and provided, further, that the Indenture permits the Trustee to
enter into one or more supplemental indentures for limited purposes without the
consent of any Holders of Securities. The Indenture also contains provisions
permitting the Holders of a majority in principal amount of the Securities then
Outstanding, on behalf of the Holders of all Securities, 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 therefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
As provided in the Indenture and subject to certain limitations therein set
forth, this Security or any portion of the principal amount hereof will be
deemed to have been paid for all purposes of the Indenture and to be no longer
Outstanding thereunder, and, at the election of the Company, the Company's
entire indebtedness in respect thereof will be satisfied and discharged, if
there has been irrevocably deposited with the Trustee or any Paying Agent (other
than the Company), in trust, money in an amount which will be sufficient and/or
Eligible Obligations, the principal of and interest on which when due, without
regard to any reinvestment thereof, will provide moneys which, together with
moneys so deposited, will be sufficient to pay when due the principal of and
interest on this Security when due.
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 Corporate
Trust Office of JPMorgan Chase Bank in Dallas, Texas, or such other office or
agency as may be designated by the Company from time to time, 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 of authorized denominations and of like tenor and aggregate
principal amount, will be issued to the designated transferee or transferees.
[Series J1 Certificate - to be used with Rule 144A and Reg S] [THIS SECURITY (OR
ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933 (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 ABOVE.]
[Series J1 Certificate - to be used with Reg S only] [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
A-4
SECURITIES ACT.]
The Securities of this series are issuable only as registered Securities,
without coupons, and in denominations of $1,000 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 the same series and Tranche, of
any authorized denominations, as requested by the Holder surrendering the same,
and of like tenor upon surrender of the Security or Securities to be exchanged
at the office of JPMorgan Chase Bank in Dallas, Texas, or such other office or
agency as may be designated by the Company from time to time.
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 absolute 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 are not entitled to the benefit of any sinking fund.
As used herein, "Business Day" shall mean any day, other than Saturday or
Sunday, on which commercial banks and foreign exchange markets are open for
business, including dealings in deposits in U.S. dollars, in New York. All other
terms used in this Security which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
As provided in the Indenture, no recourse shall be had for the payment of the
principal of or premium, if any, or interest on any Securities, or any part
thereof, or for any claim based thereon or otherwise in respect thereof, or of
the indebtedness represented thereby, or upon any obligation, covenant or
agreement under the Indenture, against, and no personal liability whatsoever
shall attach to, or be incurred by, any incorporator, member, manager,
stockholder, officer, director or employee, as such, past, present or future of
the Company or of any predecessor or successor corporation (either directly or
through the Company or a predecessor or successor corporation), whether by
virtue of any constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly agreed
and understood that the Indenture and all the Securities are solely corporate
obligations and that any such personal liability is hereby expressly waived and
released as a condition of, and as part of the consideration for, the execution
of the Indenture and the issuance of the Securities.
Unless the certificate of authentication hereon has been executed by the Trustee
or an Authenticating Agent by manual signature, this Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
[The remainder of this page is intentionally left blank.]
A-5
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
[Seal] CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
Attest: ___________________________ By: _____________________________________
Name: Name:
Title: Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
Date of Authentication: March 18, 2003
JPMORGAN CHASE BANK, as Trustee
By: _____________________________________
Name:
Title:
A-6
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
Amount of Securities
Decrease in Aggregate Increase in Aggregate Remaining After Such Notation by
Date of Principal Amount of Principal Amount of Decrease or Security
Adjustment Securities Securities Increase Registrar
---------- ---------------------- --------------------- --------------------- ------------
A-7
FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 5.70% General Mortgage Bonds, Series J1, due 2013, of CenterPoint Energy
Houston Electric, LLC (the "Company")
This Certificate relates to $_______ principal amount of Series J1 Bonds
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 Series J1 Bond or Series J1 Bonds.
In connection with such request and in respect of each such Series J1 Bond,
the Transferor does hereby certify that the Transferor is familiar with the
Indenture, dated as of October 10, 2002 (as amended or supplemented to date, the
"Indenture"), between the Company and JPMorgan Chase Bank (the "Trustee")
relating to the above-captioned Series J1 Bonds and that the transfer of this
Series J1 Bond does not require registration under the Securities Act (as
defined below) because:*
[ ] Such Series J1 Bond is being acquired for the Transferor's own account
without transfer.
[ ] Such Series J1 Bond 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 the Officer's Certificate establishing the form, terms, and provisions of the
Series J1 Bonds).
[ ] Such Series J1 Bond 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 Series J1 Bond 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).
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.
------------------------------------------
Name of Transferor
By:
---------------------------------------
Name:
Title:
Address:
Date:
------------------------------
- --------------------------
* Fill in blank or check appropriate box, as applicable.
A-8
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
-------------, ----
JPMorgan Chase Bank
600 Travis Street
Houston, Texas 77002
Attention: Global Trust Services
Ladies and Gentlemen:
In connection with our proposed sale of certain 5.70% General Mortgage
Bonds, Series J1, due 2013 (the "Series J1 Bonds") of CenterPoint Energy Houston
Electric, LLC (the "Company"), we represent that:
(i) the offer or sale of the Series J1 Bonds 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 Series J1 Bond 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.
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:
A-9
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
Houston Electric, LLC, 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 HOUSTON ELECTRIC, LLC
6.95% General Mortgage Bonds, Series [K1] [K2], due 2033
Original Interest Accrual Date: March 18, 2003 Redeemable: Yes [X] No [ ]
Stated Maturity: March 15, 2033 Redemption Date: At any time.
Interest Rate: 6.95% Redemption Price: the greater of (i) 100% of the
Interest Payment Dates: March 15 and September 15 principal amount of the Bonds and (ii) the Make-
Regular Record Dates: Fifteenth calendar day before Whole Amount, as described herein, plus in each
respective Interest Payment Date case, accrued and unpaid interest to the
Redemption Date
This Security is not an Original Issue Discount Security
within the meaning of the within-mentioned Indenture.
-----------------------
Initial Principal Amount Registered No. R.__
[$ ]* CUSIP [15189X AB4] [U14040 AB2]
CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a limited liability company duly
organized and existing under the laws of the State of Texas (herein called the
"Company," which term includes any successor corporation under the Indenture
referred to below), for value received, hereby promises to pay to
****[ ]****
, or registered assigns, the principal sum of [ ] DOLLARS* on the Stated
Maturity specified above, and to pay interest thereon from the Original Interest
Accrual Date specified above or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually in arrears on
the Interest Payment Dates specified above in each year, commencing on September
15, 2003, and at Maturity, at the Interest Rate per annum specified above, until
the principal hereof is paid or duly provided for. The interest so payable, and
paid or duly provided for, on any Interest Payment Date shall, as provided in
such Indenture, be paid to
- ------------------------------
* 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-11
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 specified
above (whether or not a Business Day) next preceding such Interest Payment Date.
Notwithstanding the foregoing, interest payable at Maturity shall be paid to the
Person to whom principal shall be paid. Except as otherwise provided in said
Indenture, any such interest not so paid or duly provided for shall forthwith
cease to be payable to the Holder on such Regular Record Date and may 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 of
which shall be given to Holders of Securities of this series not less than 15
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
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of and premium, if any, on this Security and interest
hereon at Maturity shall be made upon presentation of this Security at the
office of the Corporate Trust Administration of JPMorgan Chase Bank, located at
2001 Bryan Street, 9th Floor, Dallas, Texas, 75201 or at such other office or
agency as may be designated for such purpose by the Company from time to time.
Payment of interest on this Security (other than interest at Maturity) shall be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register, except that if such Person shall
be a securities depositary, such payment may be made by such other means in lieu
of check, as shall be agreed upon by the Company, the Trustee and such Person.
Payment of the principal of and premium, if any, and interest on this Security,
as aforesaid, shall be made in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and issuable in one or more series
under and equally secured by a General Mortgage Indenture, dated as of October
10, 2002, as supplemented and amended (such Indenture as originally executed and
delivered and as supplemented or amended from time to time thereafter, together
with any constituent instruments establishing the terms of particular
Securities, being herein called the "Indenture"), between the Company and
JPMorgan Chase Bank, 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 description of
the property mortgaged, pledged and held in trust, the nature and extent of the
security and the respective rights, limitations of rights, duties and immunities
of the Company, the Trustee and the Holders of the Securities thereunder and of
the terms and conditions upon which the Securities are, and are to be,
authenticated and delivered and secured. The acceptance of this Security shall
be deemed to constitute the consent and agreement by the Holder hereof to all of
the terms and provisions of the Indenture. This Security is one of the series
designated above.
If any Interest Payment Date, any Redemption Date or the Stated Maturity shall
not be a Business Day (as hereinafter defined), payment of the amounts due on
this Security on such date may be made on the next succeeding Business Day; and,
if such payment is made or duly provided for on such Business Day, no interest
shall accrue on such amounts for the period from and after such Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be, to such Business
Day. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
This Security is subject to redemption, at the option of the Company, at any
time or from time to time, in whole or in part, at a price equal to the greater
of (i) 100% of the principal amount of this Security (or the portion hereof to
be redeemed) or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest on this Security (or such portion to be
redeemed) (not including any portion of such payments of interest accrued to the
Redemption Date) discounted to the Redemption Date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the applicable
Treasury Rate plus 35 basis points (the "Make-Whole Amount"); plus, in each
case, accrued and unpaid interest on the principal amount being redeemed to the
Redemption Date.
The Make-Whole Amount will be calculated by Credit Suisse First Boston LLC,
Deutsche Bank Securities Inc. or Salomon Smith Barney Inc., as specified by the
Company or, if such firms are unwilling or unable to select the Comparable
Treasury Issue, by an independent investment banking institution of national
standing appointed by the Company (in any such case, an "Independent Investment
Banker"). The Trustee shall have no responsibility for the calculation of the
Make-Whole Amount and may conclusively presume the correctness of such
calculation.
A-12
For purposes of determining the Make-Whole Amount: "Treasury Rate" means, with
respect to any Redemption Date, the yield, under the heading which represents
the average for the immediately preceding week, appearing in the most recently
published statistical release designated "H.15 (519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded U.S. Treasury
securities adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Comparable Treasury Issue (if
no maturity is within three months before or after the remaining life (as
defined below), yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue will be determined and the
Treasury Rate will be interpolated or extrapolated from such yields on a
straight line basis, rounding to the nearest month); or if such release (or any
successor release) is not published during the week preceding the calculation
date or does not contain such yields, the rate per annum equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue, calculated using
a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such Redemption
Date. The Treasury Rate will be calculated on the third Business Day preceding
the Redemption Date.
"Comparable Treasury Issue" means the U.S. Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining
term ("remaining life") of this Security to be redeemed that would be utilized,
at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of this Security.
"Comparable Treasury Price" means (1) the average of five Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the highest
and lowest Reference Treasury Dealer Quotations, or (2) if the Independent
Investment Banker obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such quotations.
"Reference Treasury Dealer" means (1) Credit Suisse First Boston LLC,
Deutsche Bank Securities Inc. and Salomon Smith Barney Inc. and their respective
successors, provided, however, that if any of the foregoing shall cease to be a
primary U.S. government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company will substitute therefor another Primary Treasury Dealer
and (2) any other Primary Treasury Dealer selected by the Company after
consultation with the Independent Investment Banker.
"Reference Treasury Dealer Quotations" means with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Independent Investment Banker, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Independent Investment Banker at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
The Trustee will mail a notice of redemption to each Holder of Securities to be
redeemed by first-class mail at least 30 and not more than 60 days prior to the
date fixed for redemption. Unless the Company defaults on payment of the
redemption price, interest will cease to accrue on the Securities or portions
thereof called for redemption. If fewer than all of the Securities of this
series are to be redeemed, the Trustee will select, not more than 60 days prior
to the Redemption Date, the particular Securities of this series or portions
thereof for redemption from the outstanding Securities of this series not
previously called by such method as the Trustee deems fair and appropriate The
Trustee may select for redemption Securities of this series and portions of
Securities of this series in amounts of $1,000 or whole multiples of $1,000.
The Indenture permits, with certain exceptions as therein provided, the Trustee
to enter into one or more supplemental indentures for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, the Indenture with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series then Outstanding
under the Indenture, considered as one class; provided, however, that if there
shall be Securities of more than one series Outstanding under the Indenture and
if a proposed supplemental indenture shall directly affect the rights of the
Holders of Securities of one or more, but less than all, of such series, then
the consent only of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series so directly affected, considered as one
class, shall be required; and provided, further, that if the Securities of any
series shall have been issued in more than one Tranche and if the proposed
supplemental
A-13
indenture shall directly affect the rights of the Holders of Securities of one
or more, but less than all, of such Tranches, then the consent only of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of all Tranches so directly affected, considered as one class, shall
be required; and provided, further, that the Indenture permits the Trustee to
enter into one or more supplemental indentures for limited purposes without the
consent of any Holders of Securities. The Indenture also contains provisions
permitting the Holders of a majority in principal amount of the Securities then
Outstanding, on behalf of the Holders of all Securities, 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 therefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
As provided in the Indenture and subject to certain limitations therein set
forth, this Security or any portion of the principal amount hereof will be
deemed to have been paid for all purposes of the Indenture and to be no longer
Outstanding thereunder, and, at the election of the Company, the Company's
entire indebtedness in respect thereof will be satisfied and discharged, if
there has been irrevocably deposited with the Trustee or any Paying Agent (other
than the Company), in trust, money in an amount which will be sufficient and/or
Eligible Obligations, the principal of and interest on which when due, without
regard to any reinvestment thereof, will provide moneys which, together with
moneys so deposited, will be sufficient to pay when due the principal of and
interest on this Security when due.
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 Corporate
Trust Office of JPMorgan Chase Bank in Dallas, Texas, or such other office or
agency as may be designated by the Company from time to time, 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 of authorized denominations and of like tenor and aggregate
principal amount, will be issued to the designated transferee or transferees.
Series K1 Certificate - To be used with Rule 144A and Reg S] [THIS SECURITY (OR
ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933 (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 ABOVE.]
[Series K1 Certificate - To be used with Reg S only] [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
A-14
SECURITIES ACT.]
The Securities of this series are issuable only as registered Securities,
without coupons, and in denominations of $1,000 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 the same series and Tranche, of
any authorized denominations, as requested by the Holder surrendering the same,
and of like tenor upon surrender of the Security or Securities to be exchanged
at the office of JPMorgan Chase Bank in Dallas, Texas, or such other office or
agency as may be designated by the Company from time to time.
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 absolute 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 are not entitled to the benefit of any sinking fund.
As used herein, "Business Day" shall mean any day, other than Saturday or
Sunday, on which commercial banks and foreign exchange markets are open for
business, including dealings in deposits in U.S. dollars, in New York. All other
terms used in this Security which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
As provided in the Indenture, no recourse shall be had for the payment of the
principal of or premium, if any, or interest on any Securities, or any part
thereof, or for any claim based thereon or otherwise in respect thereof, or of
the indebtedness represented thereby, or upon any obligation, covenant or
agreement under the Indenture, against, and no personal liability whatsoever
shall attach to, or be incurred by, any incorporator, member, manager,
stockholder, officer, director or employee, as such, past, present or future of
the Company or of any predecessor or successor corporation (either directly or
through the Company or a predecessor or successor corporation), whether by
virtue of any constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly agreed
and understood that the Indenture and all the Securities are solely corporate
obligations and that any such personal liability is hereby expressly waived and
released as a condition of, and as part of the consideration for, the execution
of the Indenture and the issuance of the Securities.
Unless the certificate of authentication hereon has been executed by the Trustee
or an Authenticating Agent by manual signature, this Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
[The remainder of this page is intentionally left blank.]
A-15
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
[Seal] CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
Attest: _____________________________ By: ____________________________________
Name: Name:
Title: Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
Date of Authentication: March 18, 2003
JPMORGAN CHASE BANK, as Trustee
By: ____________________________________
Name:
Title:
A-16
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
Amount of Securities
Decrease in Aggregate Increase in Aggregate Remaining After Such Notation by
Date of Principal Amount of Principal Amount of Decrease or Security
Adjustment Securities Securities Increase Registrar
---------- --------------------- --------------------- -------------------- ------------
A-17
FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 6.95% General Mortgage Bonds Series K1, due 2033, of CenterPoint Energy
Houston Electric, LLC (the "Company")
This Certificate relates to $_______ principal amount of Series K1 Bonds
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 Series K1 Bond or Series K1 Bonds.
In connection with such request and in respect of each such Series K1 Bond,
the Transferor does hereby certify that the Transferor is familiar with the
Indenture, dated as of October 10, 2002 (as amended or supplemented to date, the
"Indenture"), between the Company and JPMorgan Chase Bank (the "Trustee")
relating to the above-captioned Series K1 Bonds and that the transfer of this
Series K1 Bond does not require registration under the Securities Act (as
defined below) because:*
[ ] Such Series K1 Bond is being acquired for the Transferor's own account
without transfer.
[ ] Such Series K1 Bond 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 the Officer's Certificate establishing the form, terms, and provisions of the
Series K1 Bonds).
[ ] Such Series K1 Bond 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 Series K1 Bond 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).
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.
Name of Transferor
By:
-------------------------------------
Name:
Title:
Address:
Date:
---------------------------------
- -----------------------------------
* Fill in blank or check appropriate box, as applicable.
A-18
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
-------------, ----
JPMorgan Chase Bank
600 Travis Street
Houston, Texas 77002
Attention: Global Trust Services
Ladies and Gentlemen:
In connection with our proposed sale of certain 6.95% General Mortgage
Bonds due 2033, Series K1 (the "Series K1 Bonds") of CenterPoint Energy Houston
Electric, LLC (the "Company"), we represent that:
(i) the offer or sale of the Series K1 Bonds 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 Series K1 Bond 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.
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:
A-19
EXHIBIT B
FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: *_____% General Mortgage Bonds due *_______, Series *__, of CenterPoint
Energy Houston Electric, LLC (the "Company")
This Certificate relates to $_____ principal amount of Series *__ Bonds
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 Series *__ Bond or Series *__ Bonds.
In connection with such request and in respect of each such Series *__
Bond, the Transferor does hereby certify that the Transferor is familiar with
the Indenture, dated as of October 10, 2002 (as amended or supplemented to date,
the "Indenture"), between the Company and JPMorgan Chase Bank (the "Trustee")
relating to the above-captioned Series *__ Bonds and that the transfer of this
Series *__ Bond does not require registration under the Securities Act (as
defined below) because:*
[ ] Such Series *__ Bond is being acquired for the Transferor's own account
without transfer.
[ ] Such Series *__ Bond 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 this Officer's Certificate).
[ ] Such Series *__ Bond 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 Series *__ Bond 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).
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
600 Travis Street
Suite 1150
Houston, TX 77002
Attention: Global Trust Services
Ladies and Gentlemen:
In connection with our proposed sale of certain *___% General Mortgage
Bonds due *_______, Series *__ (the "Series *__ Bonds") of CenterPoint Energy
Houston Electric, LLC (the "Company"), we represent that:
(i) the offer or sale of the Series *__ Bonds 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 Series *__ Bond 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:
C-2