Exhibit 4.1
CENTERPOINT ENERGY RESOURCES CORP.
(formerly known as NorAm Energy Corp.)
To
JPMORGAN CHASE BANK
(successor to Chase Bank of Texas, National Association),
Trustee
__________________
SUPPLEMENTAL INDENTURE NO. 5
Dated as of March 25, 2003
_________________
$650,000,000
7.875% Senior Notes due 2013
Series A and Series B
CENTERPOINT ENERGY RESOURCES CORP.
(formerly known as NorAm Energy Corp.)
SUPPLEMENTAL INDENTURE NO. 5
$650,000,000
7.875% Senior Notes due 2013
Series A and Series B
SUPPLEMENTAL INDENTURE No. 5, dated as of March 25, 2003, between
CENTERPOINT ENERGY RESOURCES CORP., a Delaware corporation formerly known as
NorAm Energy Corp. (the "Company"), and JPMORGAN CHASE BANK (successor to Chase
Bank of Texas, National Association), as Trustee (the "Trustee").
RECITALS
The Company has heretofore executed and delivered to the Trustee an
Indenture, dated as of February 1, 1998 (the "Original Indenture" and, as
previously and hereby supplemented and amended, the "Indenture"), providing for
the issuance from time to time of one or more series of the Company's
Securities.
The Company has changed its name from "NorAm Energy Corp." to "CenterPoint
Energy Resources Corp." and all references in the Indenture to the "Company" or
"NorAm Energy Corp." shall be deemed to refer to CenterPoint Energy Resources
Corp.
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
"7.875% Senior Notes due 2013, Series A" (the "Series A Notes") and the "7.875%
Senior Notes due 2013, 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. 5.
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.
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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 ONE
Relation to Indenture; Additional Definitions
Section 101. Relation to Indenture. This Supplemental Indenture No. 5
constitutes an integral part of the Original Indenture.
Section 102. Additional Definitions. For all purposes of this Supplemental
Indenture No. 5:
Capitalized terms used herein shall have the meaning specified herein
or in the Original Indenture, as the case may be;
"Acquired Entity" has the meaning set forth in Section 303(k) hereof;
"Additional Interest" has the meaning set forth in Section 204(e)
hereof;
"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;
"Comparable Treasury Yield" has the meaning set forth in Section
402(a) hereof;
"Consolidated Net Tangible Assets" means the total amount of assets of
the Company and its Subsidiaries less, without duplication: (a) total
current liabilities (excluding indebtedness due within 12 months); (b) all
reserves for depreciation and other asset valuation reserves, but excluding
reserves for deferred federal income taxes arising from accelerated
amortization or otherwise; (c) all intangible assets such as goodwill,
trademarks, trade names, patents and unamortized debt discount and expense
carried as an asset; and (d) all appropriate adjustments on account of
minority interests of other Persons holding common stock of any Subsidiary,
all as reflected in the Company's most recent audited consolidated balance
sheet preceding the date of such determination;
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be
administered, as follows: (a) for payment, registration and transfer of the
Securities: 2001 Bryan Street, 9th Floor, Dallas, Texas 75201, Attention:
Bondholder Communications; telephone (214) 672-5125 or (800) 275-2048;
telecopy: (214) 672-5873; and (b) for all other communications relating to
the Securities: 600 Travis Street, Suite 1150, Houston, Texas 77002,
Attention: Institutional Trust Services; telephone: (713) 216-6815;
telecopy: (713) 577-5200.
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"Distribution Compliance Period" means the period which expires
immediately after the 40/th/ 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 the Company or any Subsidiary,
means bonds, debentures, notes and other instruments or arrangements
representing obligations created or assumed by any such corporation,
including any and all: (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 obligation listed
in clause (i), (ii) or (iii) above. All indebtedness secured by a lien upon
property owned by the Company or any Subsidiary and upon which indebtedness
any such corporation customarily pays interest, although any such
corporation has not assumed or become liable for the payment of such
indebtedness, shall for all purposes hereof be deemed to be indebtedness of
any such corporation. All indebtedness for borrowed money incurred by other
Persons which is directly guaranteed as to payment of principal by the
Company or any Subsidiary shall for all purposes hereof be deemed to be
indebtedness of any such corporation, but no other contingent obligation of
any such corporation in respect of indebtedness incurred by other Persons
shall for any purpose be deemed to be indebtedness of such corporation;
"Independent Investment Banker" has the meaning set forth in Section
401(c) hereof;
"Initial Purchasers" means Salomon Smith Barney Inc., Banc One Capital
Markets, Inc. and Wachovia Securities, Inc., as initial purchasers in the
offering of the
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Series A Notes pursuant to the Offering Memorandum dated March 18, 2003
relating thereto;
"Interest Payment Date" has the meaning set forth in Section 204(a)
hereof;
"Issue Date" has the meaning set forth in Section 204(a) hereof;
"lien" or "liens" have the meanings set forth in Section 303 hereof;
"Make-Whole Premium" has the meaning set forth in Section 401(b)
hereof;
"Maturity Date" has the meaning set forth in Section 203 hereof;
"Non-Recourse Debt" means (i) any indebtedness for borrowed money
incurred by any Project Finance Subsidiary to finance the acquisition,
improvement, installation, design, engineering, construction, development,
completion, maintenance or operation of, or otherwise to pay costs and
expenses relating to or providing financing for, any project, which
indebtedness for borrowed money does not provide for recourse against the
Company or any Subsidiary of the Company (other than a Project Finance
Subsidiary and such recourse as exists under a Performance Guaranty) or any
property or asset of the Company or any Subsidiary of the Company (other
than Equity Interests in, or the property or assets of, a Project Finance
Subsidiary and such recourse as exists under a Performance Guaranty) and
(ii) any refinancing of such indebtedness for borrowed money that does not
increase the outstanding principal amount thereof (other than to pay costs
incurred in connection therewith and the capitalization of any interest or
fees) at the time of the refinancing or increase the property subject to
any lien securing such indebtedness for borrowed money or otherwise add
additional security or support for such indebtedness for borrowed money.
"Non-U.S. Person" has the meaning set forth in Section 208(b);
"Notes" has the meaning set forth in the third paragraph of the
Recitals hereof;
"Original Indenture" has the meaning set forth in the first paragraph
of the Recitals hereof;
"Performance Guaranty" means any guaranty issued in connection with
any Non-Recourse Debt that (i) if secured, is secured only by assets of or
Equity Interests in a Project Finance Subsidiary, and (ii) guarantees to
the provider of such Non-Recourse Debt or any other person (a) performance
of the improvement, installation, design, engineering, construction,
acquisition, development, completion, maintenance or operation of, or
otherwise affects any such act in respect of, all or any portion of the
project that is financed by such Non-Recourse Debt, (b) completion of the
minimum agreed equity or other contributions or support to the relevant
Project Finance Subsidiary, or (c) performance by a Project Finance
Subsidiary of obligations to persons other than the provider of such
Non-Recourse Debt.
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"Principal Property" means any natural gas distribution property,
natural gas pipeline or gas processing plant located in the United States,
except any such property that in the opinion of the Board of Directors is
not of material importance to the total business conducted by the Company
and its consolidated Subsidiaries. "Principal Property" shall not include
any oil or gas property or the production or proceeds of production from an
oil or gas producing property or the production or any proceeds of
production of gas processing plants or oil or gas or petroleum products in
any pipeline or storage field;
"Project Finance Subsidiary" means any Subsidiary designated by the
Company whose principal purpose is to incur Non-Recourse Debt and/or
construct, lease, own or operate the assets financed thereby, or to become
a direct or indirect partner, member or other equity participant or owner
in a Person created for such purpose, and substantially all the assets of
which Subsidiary or Person are limited to (x) those assets being financed
(or to be financed), or the operation of which is being financed (or to be
financed), in whole or in part by Non-Recourse Debt, or (y) Equity
Interests in, or indebtedness or other obligations of, one or more other
such Subsidiaries or Persons, or (z) indebtedness or other obligations of
the Company or any Subsidiary or other Persons. At the time of designation
of any Project Finance Subsidiary, the sum of the net book value of the
assets of such Subsidiary and the net book value of the assets of all other
Project Finance Subsidiaries then existing shall not in the aggregate
exceed 10 percent of Consolidated Net Tangible Assets.
"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 March 25, 2003, by and among the Company and the
Initial Purchasers;
"Regular Record Date" has the meaning set forth in Section 204(b)
hereof;
"Regulation S" means Regulation S under the Securities Act;
"Regulation S Global Notes" has the meaning set forth in Section
208(b) hereof;
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"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;
"Sale and Leaseback Transaction" means any arrangement entered into by
the Company or any Subsidiary with any Person providing for the leasing to
the Company or any Subsidiary of any Principal Property (except for
temporary leases for a term, including any renewal thereof, of not more
than three years and except for leases between the Company and a Subsidiary
or between Subsidiaries), which Principal Property has been or is to be
sold or transferred by the Company or such Subsidiary to such Person;
"Series A Notes" has the meaning set forth in the third paragraph of
the Recitals hereof;
"Series B Notes" has the meaning set forth in the third paragraph of
the Recitals hereof;
"Shelf Registration Statement" has the meaning assigned to such term
in the Registration Rights Agreement;
"Significant Subsidiary" means any Subsidiary of the Company, other
than a Project Finance Subsidiary, that is a "significant subsidiary" as
defined in Rule 1-02 of Regulation S-X under the Securities Act of 1933 and
the Securities Exchange Act of 1934, as such regulation is in effect on the
date of issuance of the Notes.
"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 having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation 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.
"Transfer Restricted Securities" means the Registrable Securities
under the Registration Rights Agreement.
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"Value" with respect to a Sale and Leaseback Transaction has the
meaning set forth in Section 303 hereof;
All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture No. 5; and
The terms "herein," "hereof," "hereunder" and other words of similar
import refer to this Supplemental Indenture No. 5.
ARTICLE TWO
The Series of Securities
Section 201. Title of the Securities. The Series A Notes shall be
designated as the "7.875% Notes due 2013, Series A," and the Series B Notes
shall be designated as the "7.875% Notes due 2013, 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 (i) Series A Notes for original issue on the Issue Date
in the aggregate principal amount of $650,000,000 and (ii) 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 $650,000,000;
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
April 1, 2013 (the "Maturity Date").
Section 204. Interest and Interest Rates.
(a) The Notes shall bear interest at the rate of 7.875% per annum, from
and including March 25, 2003 (the "Issue Date") to, but excluding, the Maturity
Date. Such interest shall be payable semiannually in arrears, on April 1 and
October 1, of each year (each such date, an "Interest Payment Date"), commencing
October 1, 2003.
(b) The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Persons in whose names the Notes
(or one or more Predecessor Securities) are registered at the close of business
on the immediately preceding March 15 and September 15, respectively, whether or
not such day is a Business Day (each such date, a "Regular Record 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 (i) be
paid to the Person in whose name such Note (or one or more Predecessor
Securities) is
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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 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 7.875% 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 a 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 7.875% per annum.
Section 205. Place of Payment. The Trustee shall initially serve as the
Paying Agent for the Notes. The Place of Payment where the Notes may be
presented or surrendered for payment shall be the Corporate Trust Office of the
Trustee.
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
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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 100% of their principal amount plus accrued interest, if any, from
March 25, 2003.
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 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.
(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 Depositary 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. Defeasance and Discharge; Covenant Defeasance.
(a) Article Fourteen of the Original Indenture, including without
limitation, Sections 1402 and 1403 (as modified by Section 211(b) hereof)
thereof, shall apply to the Notes.
(b) Solely with respect to the Notes issued hereby, the first sentence of
Section 1403 of the Original Indenture is hereby deleted in its entirety, and
the following is substituted in lieu thereof:
"Upon the Company's exercise of its option (if any) to have this
Section applied to any Securities or any series of Securities, as the
case may be, (1) the Company shall be released from its obligations
under Article Eight and under any covenants provided pursuant to
Section 301(20), 901(2) or 901(7) for the benefit of the Holders of
such Securities, including, without limitation, the covenants provided
for in Article Three hereof, and (2) the occurrence of any event
specified in Sections 501(4) (with respect to Article Eight and to any
such covenants provided pursuant to Section 301(20), 901(2) or 901(7))
and 501(7) shall be deemed not to be or result in an Event of Default,
in each case with respect to such Securities as provided in this
Section on and after the date the conditions set forth in Section 1404
are satisfied (hereinafter called "Covenant Defeasance")."
Section 212. 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.
ARTICLE THREE
Additional Covenants
Section 301. Maintenance of Properties. The Company shall cause all
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and shall cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly conducted at all times;
provided, however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary.
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Section 302. Payment of Taxes and Other Claims. The Company shall pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.
Section 303. Restrictions on Liens. The Company shall not pledge, mortgage
or hypothecate, or permit to exist, and shall not cause, suffer or permit any
Subsidiary to pledge, mortgage or hypothecate, or permit to exist, except in
favor of the Company or any Subsidiary, any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, charge, security interest,
encumbrance or lien of any kind whatsoever (including any Capital Lease)
(collectively, a "lien" or "liens") upon, any Principal Property or any Equity
Interest in any Significant Subsidiary owning any Principal Property, at any
time owned by it or a Subsidiary, to secure any indebtedness, without making
effective provisions whereby the 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) undetermined or inchoate liens and charges incidental to
construction, maintenance, development or operation;
(b) the lien of taxes and assessments for the then current year;
(c) the lien of taxes and assessments not at the time delinquent;
(d) the lien of specified taxes and assessments which are delinquent
but the validity of which is being contested at the time by the Company or
such Subsidiary in good faith and by appropriate proceedings;
(e) any obligations or duties, affecting the property of the Company
or such Subsidiary, to any municipality or public authority with respect to
any franchise, grant, license, permit or similar arrangement;
(f) the liens of any judgments or attachment in an aggregate amount
not in excess of $10,000,000, or the lien of any judgment or attachment the
execution or enforcement of which has been stayed or which has been
appealed and secured, if necessary, by the filing of an appeal bond;
(g) any lien on any property held or used by the Company or a
Subsidiary in connection with the exploration for, development of or
production of oil, gas, natural gas (including liquefied gas and storage
gas), other hydrocarbons, helium, coal, metals, minerals, steam, timber,
geothermal or other
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natural resources or synthetic fuels, such properties to include, but not
be limited to, the Company's or a Subsidiary's interest in any mineral fee
interests, oil, gas or other mineral leases, royalty, overriding royalty or
net profits interests, production payments and other similar interests,
wellhead production equipment, tanks, field gathering lines, leasehold or
field separation and processing facilities, compression facilities and
other similar personal property and fixtures;
(h) any lien on oil, gas, natural gas (including liquefied gas and
storage gas), and other hydrocarbons, helium, coal, metals, minerals,
steam, timber, geothermal or other natural resources or synthetic fuels
produced or recovered from any property, an interest in which is owned or
leased by the Company or a Subsidiary;
(i) liens upon any property heretofore or hereafter acquired,
constructed or improved, created at the later of the time of acquisition or
commercial operation thereof, or within one year thereafter (and accessions
and proceeds thereof), to secure all or a portion of the purchase price
thereof or the cost of such construction or improvement, or existing
thereon at the date of acquisition, whether or not assumed by the Company
or a Subsidiary, provided that every such lien shall apply only to the
property so acquired or constructed and fixed improvements thereon (and
accessions and proceeds thereof);
(j) any extension, renewal or refunding, in whole or in part, of any
lien permitted by subparagraph (i) above, if limited to the same property
or any portion thereof subject to, and securing not more than the amount
secured by, the lien extended, renewed or refunded;
(k) liens upon any property of any entity heretofore or hereafter
acquired by any entity that is or becomes a Subsidiary after the date
hereof ("Acquired Entity") provided that every such lien (1) shall either
(A) exist prior to the time the Acquired Entity becomes a Subsidiary or (B)
be created at the time the Acquired Entity becomes a Subsidiary or within
one year thereafter to secure all or a portion of the acquisition price
thereof and (2) shall only apply to those properties owned by the Acquired
Entity at the time it becomes a Subsidiary or thereafter acquired by it
from sources other than the Company or any other Subsidiary;
(l) the pledge of current assets, in the ordinary course of business,
to secure current liabilities;
(m) any lien arising by reason of deposits with, or the giving of any
form of security to, any governmental agency or any body created or
approved by law or governmental regulation for any purpose at any time in
connection with the financing of the acquisition or construction of
property to be used in the business of the Company or a Subsidiary or as
required by law or governmental regulation as a condition to the
transaction of any business or the exercise of any privilege or
12
license, or to enable the Company or a Subsidiary to maintain
self-insurance or to participate in any funds established to cover any
insurance risks or in connection with workmen's compensation, unemployment
insurance, old age pensions or other social security, or to share in the
privileges or benefits required for companies participating in such
arrangements; the lien reserved in leases for rent and for compliance with
the terms of the lease in the case of leasehold estates; mechanics' or
materialmen's liens, any liens or charges arising by reason of pledges or
deposits to secure payment of workmen's compensation or other insurance,
good faith deposits in connection with tenders, leases of real estate, bids
or contracts (other than contracts for the payment of money), deposits to
secure duties or public or statutory obligations, deposits to secure, or in
lieu of, surety, stay or appeal bonds, and deposits as security for the
payment of taxes or assessments or similar charges;
(n) any lien of or upon any office equipment, data processing
equipment (including, without limitation, computer and computer peripheral
equipment), or transportation equipment (including, without limitation,
motor vehicles, tractors, trailers, marine vessels, barges, towboats,
rolling stock and aircraft);
(o) any lien created or assumed by the Company or a Subsidiary in
connection with the issuance of debt securities the interest on which is
excludable from gross income of the holder of such security pursuant to the
Internal Revenue Code, as amended, for the purposes of financing, in whole
or in part, the acquisition or construction of property to be used by the
Company or a Subsidiary; or
(p) the pledge or assignment of accounts receivable, or the pledge or
assignment of conditional sales contracts or chattel mortgages and
evidences of indebtedness secured thereby, received in connection with the
sale by the Company or such Subsidiary or others of goods or merchandise to
customers of the Company or such Subsidiary.
In case the Company or any Subsidiary shall propose to pledge, mortgage, or
hypothecate any Principal Property at any time owned by it to secure any
indebtedness, other than as permitted by paragraphs (a) to (p), inclusive, of
this Section 303, the Company shall prior thereto give written notice thereof to
the Trustee, and the Company shall or shall cause such Subsidiary to, prior to
or simultaneously with such pledge, mortgage or hypothecation, by supplemental
indenture executed to the Trustee (or to the extent legally necessary to another
trustee or additional or separate trustee), in form satisfactory to the Trustee,
effectively secure all the Notes equally and ratably with, or prior to, such
indebtedness.
Notwithstanding the foregoing provisions of this Section 303, the Company
or a Subsidiary may issue, assume or guarantee indebtedness secured by a
mortgage which would otherwise be subject to the foregoing restrictions in an
aggregate amount which, together with all other indebtedness of the Company or a
Subsidiary secured by a mortgage which, (if originally
16
issued, assumed or guaranteed at such time) would otherwise be subject to the
foregoing restrictions (not including indebtedness permitted to be secured under
paragraphs (a) through (p) above) and the Value of all Sale and Leaseback
Transactions in existence at such time (other than any Sale and Leaseback
Transaction which, if such Sale and Leaseback Transaction had been a lien, would
have been permitted by paragraph (i) of this Section 303 and other than Sale and
Leaseback Transactions as to which application of amounts have been made in
accordance with paragraph (k) of this Section 303) does not at the time of
incurrence of such indebtedness exceed 5% of Consolidated Net Tangible Assets.
"Value" means, with respect to a Sale and Leaseback Transaction, as of any
particular time, the amount equal to the greater of (1) the net proceeds from
the sale or transfer of the property leased pursuant to such Sale and Leaseback
Transaction or (2) the fair value, in the opinion of the Board of Directors, of
such property at the time of entering into such Sale and Leaseback Transaction,
in either case divided first by the number of full years of the term of the
lease and then multiplied by the number of full years of such term remaining at
the time of determination, without regard to any renewal or extension options
contained in the lease.
For purposes of this Section 303, "Subsidiary" does not include a Project
Finance Subsidiary.
Section 304. Restrictions on Sale and Leaseback Transactions. The Company
shall not, nor shall it permit any Subsidiary to, enter into any Sale and
Leaseback Transaction unless the net proceeds of such sale are at least equal to
the fair value (as determined by the Board of Directors) of such Principal
Property and either (a) the Company or such Subsidiary would be entitled,
pursuant to the provisions of (1) paragraph (i) of Section 303 or (2) paragraph
(k) of Section 303, to incur indebtedness secured by a lien on the Principal
Property to be leased without equally and ratably securing the Notes, or (b) the
Company shall, and in any such case the Company covenants that it will, within
120 days of the effective date of any such arrangement, apply an amount not less
than the fair value (as so determined) of such Principal Property (i) to the
payment or other retirement of Funded Debt incurred or assumed by the Company
which ranks senior to or pari passu with the Notes or of Funded Debt incurred or
assumed by any Subsidiary (other than, in either case, Funded Debt owned by the
Company or any Subsidiary), or (ii) to the purchase at not more than fair value
(as so determined) of Principal Property (other than the Principal Property
involved in such sale). For this purpose, "Funded Debt" means any indebtedness
which by its terms matures at or is extendable or renewable at the sole option
of the obligor thereon without requiring the consent of the obligee to a date
more than 12 months after the date of the creation of such indebtedness.
For purposes of this Section 304, "Subsidiary" does not include a Project
Finance Subsidiary.
14
ARTICLE FOUR
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 at the Maturity Date (or portion
thereof) being redeemed; 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
Business 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 Salomon Smith Barney 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").
Section 402. Make-Whole Premium.
(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,
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
15
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 Four 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
Four, 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 FIVE
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 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
16
(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 Five 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.
Section 502. Legends.
(a) Except as permitted by Sections 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
17
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 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
18
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 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 B Notes, (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 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.
ARTICLE SIX
REMEDIES
SECTION 601. Additional Events of Default; Acceleration of Maturity.
(a) Solely with respect to the Notes issued hereby, Section 501(7) of the
Original Indenture is hereby deleted in its entirety, and the following is
substituted in lieu thereof as an
19
"Event of Default" in addition to the other events set forth in Section 501
of the Original Indenture:
"(7) the default by the Company or any Subsidiary, other
than a Project Finance Subsidiary, in the payment, when due,
after the expiration of any applicable grace period, of principal
of indebtedness for money borrowed, other than Non-Recourse Debt,
in the aggregate principal amount then outstanding of $50 million
or more, or acceleration of any indebtedness for money borrowed
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 acceleration is not rescinded or such
default is not cured within 30 days after there has been given,
by registered or certified mail, to the Company by the Trustee or
to the Company and the Trustee by the holders of at least 25% in
principal amount of Notes written notice specifying such default
and requiring the Company to cause such acceleration to be
rescinded or such default to be cured and stating that such
notice is a "Notice of Default" under the Indenture;".
(b) Solely with respect to the Notes issued hereby, the first paragraph of
Section 502 of the Original Indenture is hereby deleted in its entirety, and the
following is substituted in lieu thereof:
"If an Event of Default (other than an Event of Default specified in
Section 501(5) or 501(6)) with respect to the Notes at the time
Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Notes Outstanding may declare the principal amount of all the Notes to
be due and payable immediately, by a notice in writing to the Company
(and to the Trustee if given by Holders), and upon any such
declaration such principal amount (or specified amount) shall become
immediately due and payable. If an Event of Default specified in
Section 501(5) or 501(6) with respect to the Notes at the time
Outstanding occurs and is continuing, the principal amount of all the
Notes shall automatically, and without any declaration or other action
on the part of the Trustee or any Holder, become immediately due and
payable."
ARTICLE SEVEN
Miscellaneous Provisions
Section 7.01. The Indenture, as supplemented and amended by this
Supplemental Indenture No. 5, is in all respects hereby adopted, ratified and
confirmed.
20
Section 7.02. This Supplemental Indenture No. 5 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.
Section 7.03. THIS SUPPLEMENTAL INDENTURE NO. 5 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 7.04. If any provision in this Supplemental Indenture No. 5 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 7.05. In case any provision in this Supplemental Indenture No. 5 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.
21
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 5 to be duly executed, as of the day and year first written above.
CENTERPOINT ENERGY RESOURCES CORP.
By: /s/ Marc Kilbride
---------------------------------
Name: Marc Kilbride
Title: Treasurer
Attest:
/s/ Richard Dauphin
- -------------------------------------
Name: Richard Dauphin
Title: Assistant Corporate Secretary
(SEAL)
JPMORGAN CHASE BANK, as Trustee
By: /s/ Carol Logan
---------------------------------
Name: Carol Logan
Title: Vice President and Trust Officer
(SEAL)
22
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 Resources Corp.
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 RESOURCES CORP.
7.875% Senior Notes due 2013, Series [A/B]
No. __________ $ __________ *
CUSIP No. ________
CENTERPOINT ENERGY RESOURCES CORP., a corporation duly organized and
existing under the laws of the State of Delaware formerly known as NorAm Energy
Corp. (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 April 1, 2013, and 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-1
pay interest thereon from March 25, 2003 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
on April 1 and October 1 in each year, commencing October 1, 2003, at the rate
of 7.875% 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 7.875% 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, when used with respect to any Place of Payment, each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in that Place of Payment are authorized or obligated by law 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 the March 15 or September 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 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 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.
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
A-2
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.
[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.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated: _______________ CENTERPOINT ENERGY RESOURCES CORP.
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 OF SECURITY]
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 February 1, 1998 (herein called
the "Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and JPMorgan Chase Bank (successor to Chase
Bank of Texas, National Association), 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 $650,000,000; 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 Securities 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 at the Maturity Date (or portion thereof) being
redeemed; over (ii) the principal amount of the Securities 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 applicable Redemption Date.
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
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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.
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 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
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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. 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 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
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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 March 25, 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.
A-8
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
- ---------- ---------- ---------- -------------------- ---------
A-9
Exhibit B
FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 7.875% Senior Notes due 2013, Series A, of CenterPoint Energy Resources
Corp. (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 February 1, 1998 (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. 5 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 7.875% Senior Notes
due 2013, Series A (the "Notes"), of CenterPoint Energy Resources Corp. (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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