EXHIBIT 4.2
CENTERPOINT ENERGY RESOURCES CORP.
(formerly known as NorAm Energy Corp.)
To
JPMORGAN CHASE BANK
(successor to Chase Bank of Texas, National Association),
Trustee
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SUPPLEMENTAL INDENTURE NO. 7
Dated as of November 3, 2003
-----------------
$160,000,000
5.95% Senior Notes due 2014
Series A and Series B
CENTERPOINT ENERGY RESOURCES CORP.
(formerly known as NorAm Energy Corp.)
SUPPLEMENTAL INDENTURE NO. 7
$160,000,000
5.95% Senior Notes due 2014
Series A and Series B
SUPPLEMENTAL INDENTURE No. 7, dated as of November 3, 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
"5.95% Senior Notes due 2014, Series A" also referred to as the 5.95% Senior
Notes due 2014 (the "Series A Notes") and the "5.95% Senior Notes due 2014,
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. 7.
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
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Indenture.
For and in consideration of the premises and the issuance of the series
of Securities provided for herein, it is mutually covenanted and agreed, for the
equal and proportionate benefit of the Holders of the Securities of such series,
as follows:
ARTICLE ONE
Relation to Indenture; Additional Definitions
Section 101. Relation to Indenture. This Supplemental Indenture No. 7
constitutes an integral part of the Original Indenture.
Section 102. Additional Definitions. For all purposes of this
Supplemental Indenture No. 7:
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 40th day following the later of: (a) the
commencement of the offering of the Notes to Persons other than
"distributors" (as defined in Regulation S) in reliance upon Regulation
S; and (b) the date of closing of the offering of the Notes;
"Equity Interests" means any capital stock, partnership, joint
venture, member or limited liability or unlimited liability company
interest, beneficial interest in a trust or similar entity or other
equity interest or investment of whatever nature;
"Exchange Offer" means the offer by the Company pursuant to
the Registration Rights Agreement to the Holders of all outstanding
Transfer Restricted Securities to exchange all such outstanding
Transfer Restricted Securities held by such Holders for Series B Notes,
in an aggregate principal amount equal to the aggregate principal
amount of the Transfer Restricted Securities tendered in such exchange
offer by such Holders;
"Exchange Offer Registration Statement" has the meaning
assigned to such term in the Registration Rights Agreement;
"Global Notes" has the meaning set forth in Section 208(c)
hereof;
"H.15 Statistical Release" has the meaning set forth in
Section 402(b) hereof;
The term "indebtedness," as applied to 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 Barclays Capital Inc. and Credit
Suisse First Boston LLC, as initial purchasers in the offering of the
Series A Notes pursuant to the Offering Memorandum dated October 29,
2003 relating thereto;
"Interest Payment Date" has the meaning set forth in Section
204(a) hereof;
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"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.
"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
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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 November 3, 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;
"Regulation S Permanent Global Note" has the meaning set forth
in Section 208(b) hereof;
"Regulation S Temporary Global Note" has the meaning set forth
in Section 208(b) hereof;
"Remaining Term" has the meaning set forth in Section 402(a)
hereof;
"Rule 144A Global Note" has the meaning set forth in Section
208(a) hereof;
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"Rule 144A Information" has the meaning set forth in Section
504 hereof;
"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.
"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. 7; and
The terms "herein," "hereof," "hereunder" and other words of similar
import refer to this Supplemental Indenture No. 7.
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ARTICLE TWO
The Series of Securities
Section 201. Title of the Securities. The Series A Notes shall be
designated as the " 5.95% Notes due 2014, Series A," and the Series B Notes
shall be designated as the "5.95% Notes due 2014, 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 $160,000,000 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 $160,000,000; 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
January 15, 2014 (the "Maturity Date").
Section 204. Interest and Interest Rates.
(a) The Notes shall bear interest at the rate of 5.95% per annum,
from and including November 3, 2003 (the "Issue Date") to, but excluding, the
Maturity Date. Such interest shall be payable semiannually in arrears, on
January 15 and July 15, of each year (each such date, an "Interest Payment
Date"), commencing July 15, 2004.
(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 January 1 and July 1, 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 registered at the close of business on the Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of the Notes not less than 10
days prior to such Special Record Date, or (ii) be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
or automated quotation system on which the Notes may be listed or traded, and
upon such notice as may be required by such exchange or automated quotation
system, all as more fully provided in the Indenture.
(c) The amount of interest payable for any period shall be
computed on the basis of a 360-day year of twelve 30-day months. The amount of
interest payable for any partial period shall be computed on the basis of a
360-day year of twelve 30-day months and the days elapsed in any partial month.
In the event that any date on which interest is payable on a Note is not a
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Business Day, then a payment of the interest payable on such date will be made
on the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay) with the same force and effect as if
made on the date the payment was originally payable.
(d) Any principal and premium, if any, and any installment of
interest, which is overdue shall bear interest at the rate of 5.95% per annum
(to the extent permitted by law), from the dates such amounts are due until they
are paid or made available for payment, and such interest shall be payable on
demand.
(e) The interest rate borne by the Registrable Securities will be
increased by .25% per annum upon the occurrence of each Registration Default,
which rate will increase by an additional .25% per annum if such Registration
Default has not been cured within 90 days after the occurrence thereof and will
continue until all Registration Defaults have been cured ("Additional
Interest"); provided that the aggregate amount of any such increase in the
interest rate on the Registrable Securities shall in no event exceed .50% per
annum; provided, further, that if the Exchange Offer Registration Statement is
not declared effective on or prior to the 270th calendar day following the Issue
Date and the Company shall request Holders of Registrable Securities to provide
the information called for by the Registration Rights Agreement for inclusion in
the Shelf Registration Statement, the Registrable Securities owned by Holders
who do not deliver such information to the Company or who do not provide
comments to the Company on the Shelf Registration Statement when required
pursuant to the Registration Rights Agreement shall not be entitled to any such
Additional Interest for any day after the 315th calendar day following the Issue
Date. All accrued Additional Interest shall be paid to Holders of Registrable
Securities in the same manner and at the same time as regular payments of
interest on the Registrable Securities. Following the cure of all Registration
Defaults, the accrual of Additional Interest shall cease and the interest rate
on the Registrable Securities will revert to 5.95% 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 in Dallas, Texas.
Section 206. Place of Registration or Exchange; Notices and Demands
With Respect to the Notes. The place where the Holders of the Notes may present
the Notes for registration of transfer or exchange and may make notices and
demands to or upon the Company in respect of the Notes shall be the Corporate
Trust Office of the Trustee.
Section 207. Percentage of Principal Amount. The Notes shall be
initially issued at 99.508% of their principal amount plus accrued interest, if
any, from November 3, 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
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on behalf of, the Depositary. Interests in the Rule 144A Global Note shall be
available for purchase only by Qualified Institutional Buyers.
(b) Notes offered and sold in offshore transactions to persons
other than "U.S. persons," as defined in Regulation S under the Securities Act
(each, a "Non-U.S. Person") in reliance on Regulation S under the Securities Act
shall initially be issuable in whole or in part in the form of one or more
temporary Global Securities in definitive, fully registered, book-entry form,
without interest coupons (collectively, the "Regulation S Temporary Global
Note"). Beneficial interests in the Regulation S Temporary Global Note shall be
exchanged for beneficial interests in, and the Regulation S Temporary Global
Note shall become, a corresponding Global Security (the "Regulation S Permanent
Global Note" and, together with the Regulation S Temporary Global Note, the
"Regulation S Global Notes") within a reasonable period after the expiration of
the Distribution Compliance Period upon certification that the beneficial
interests in the Regulation S Temporary Global Note are owned by either Non-U.S.
Persons or U.S. persons who purchased such interests pursuant to an exemption
from, or in transactions not subject to, the registration requirements of the
Securities Act. Prior to the expiration of the Distribution Compliance Period,
interests in the Regulation S Temporary Global Note may only be held through
Euroclear Bank S.A./N.V., as operator of the Euroclear System, and Clearstream
Banking, societe anonyme (as indirect participants in the Depositary), unless
exchanged for interests in the Rule 144A Global Notes in accordance with the
transfer and certification requirements described herein. Notwithstanding
Section 305 of the Original Indenture, in no event shall beneficial interests in
the Regulation S Temporary Global Note of a series be transferred or exchanged
for Notes of such series in definitive form prior to (x) the expiration of the
Distribution Compliance Period and (y) the receipt by the Security Registrar of
any certificates required pursuant to Rule 903(b)(3)(ii)(B) of Regulation S
under the Securities Act.
(c) Each of the Rule 144A Global Note and the Regulation S Global
Notes (collectively, the "Global Notes") shall represent such of the Notes as
shall be specified therein and shall each provide that it shall represent the
aggregate principal amount of Notes from time to time endorsed thereon and that
the aggregate principal amount of Notes represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges or
redemptions. Any endorsement of a Global Note to reflect the amount, or any
increase or decrease in the aggregate principal amount, of Notes represented
thereby shall be reflected by the Trustee on Schedule A attached to the Note and
made by the Trustee in accordance with written instructions or such other
written form of instructions as is customary for the Depositary, from the
Depositary or its nominee on behalf of any Person having a beneficial interest
in the Global Note.
(d) The Depository Trust Company shall initially serve as
Depositary with respect to the Global Notes. Such Global Notes shall bear the
legends set forth in the form of Security attached as Exhibit A hereto.
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.
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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 of Supplemental Indenture No. 7 to the
Indenture, 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.
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
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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
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
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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 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);
13
(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 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 Section 304) 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
14
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.
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 on the Note (or portion
thereof) being redeemed at the Maturity Date; over (ii) the principal amount of
the Note (or portion thereof) being redeemed. The present values of interest and
principal payments referred to in clause (i) above will be determined in
accordance with generally accepted principles of financial analysis. Such
present values will be calculated by discounting the amount of each payment of
interest or principal from the date that each such payment would have been
payable, but for the redemption, to the Redemption Date at a discount rate equal
to the Comparable Treasury Yield (as defined below) plus 35 basis points.
(c) The Make-Whole Premium shall be calculated by an independent
investment banking institution of national standing appointed by the Company;
provided, that if the Company fails to make such appointment at least 45 days
prior to the Redemption Date, or if the
15
institution so appointed is unwilling or unable to make such calculation, such
calculation shall be made by Barclays Capital Inc. or Credit Suisse First Boston
LLC, or, if such firms are 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 Calculation.
(a) For purposes of determining the Make-Whole Premium,
"Comparable Treasury Yield" means a rate of interest per annum equal to the
weekly average yield to maturity of United States Treasury securities that have
a constant maturity that corresponds to the remaining term to maturity of the
Notes, calculated to the nearest 1/12th of a year (the "Remaining Term"). The
Comparable Treasury Yield shall be determined as of the third Business Day
immediately preceding the applicable Redemption Date.
(b) The weekly average yields of United States Treasury securities
shall be determined by reference to the most recent statistical release
published by the Federal Reserve Bank of New York and designated "H.15 (519)
Selected Interest Rates" or any successor release (the "H.15 Statistical
Release"). If the H.15 Statistical Release sets forth a weekly average yield for
United States Treasury securities having a constant maturity that is the same as
the Remaining Term, then the Comparable Treasury Yield shall be equal to such
weekly average yield. In all other cases, the Comparable Treasury Yield shall be
calculated by interpolation, on a straight-line basis, between the weekly
average yields on the United States Treasury securities that have a constant
maturity closest to and greater than the Remaining Term and the United States
Treasury securities that have a constant maturity closest to and less than the
Remaining Term (in each case as set forth in the H.15 Statistical Release). Any
weekly average yields so calculated by interpolation shall be rounded to the
nearest 1/100th of 1%, with any figure of 1/200th of 1% or above being rounded
upward. If weekly average yields for United States Treasury securities are not
available in the H.15 Statistical Release or otherwise, then the Comparable
Treasury Yield shall be calculated by interpolation of comparable rates selected
by the Independent Investment Banker.
Section 403. Partial Redemption. If the Company redeems the Notes in
part pursuant to this Article Four, the Trustee shall select the Notes to be
redeemed on a pro rata basis or by lot or by such other method that the Trustee
in its sole discretion deems fair and appropriate. The Company shall redeem
Notes pursuant to this Article 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.
16
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
(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.
17
(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 provided in this Section 502(a) and 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) other than those 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 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
18
REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY FROM IT OF
THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
Except as permitted by Sections 502(b) and (c) hereof, each certificate
evidencing the Temporary Regulation S Global Note shall bear a legend in
substantially the following form:
THE RIGHTS ATTACHING TO THIS SECURITY, AND THE CONDITIONS AND
PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED SECURITIES,
ARE AS SPECIFIED IN THIS SECURITY AND PURSUANT TO THE
INDENTURE (AS DEFINED HEREIN).
Except as permitted by Sections 502(b) and (c) hereof, each certificate
evidencing the Global Notes or certificated notes offered and sold in reliance
on Regulation S shall bear a legend in substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE TRANSFERRED IN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S.
PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL
APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE
MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES
ACT.
Each certificate evidencing the Global Notes also shall bear the legend
specified for Global Notes in the form of Note attached hereto as Exhibit A.
(b) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Note)
pursuant to Rule 144 under the Securities Act or an effective registration
statement under the Securities Act, which shall be certified to the Trustee and
Security Registrar upon which each may conclusively rely:
(i) in the case of any Transfer Restricted Security
represented by a certificated note, the Security Registrar shall permit
the Holder thereof to exchange such Transfer Restricted Security for a
certificated note that does not bear the legend set forth in Section
502(a) hereof and rescind any restriction on the transfer of such
Transfer Restricted Security; and
(ii) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer Restricted Security shall
not be required to bear the legend set forth in Section 502(a) hereof
if all other interests in such Global Note have been or are
19
concurrently being sold or transferred pursuant to Rule 144 under the
Securities Act or pursuant to an effective registration statement under
the Securities Act.
(c) Notwithstanding the foregoing, upon consummation of the
Exchange Offer, the Company shall issue and, upon receipt of a Company Order in
accordance with Section 303 of the Original Indenture, the Trustee shall
authenticate Series B Notes in exchange for Series A Notes accepted for exchange
in the Exchange Offer, which Series B Notes shall not bear the legend set forth
in Section 502(a) hereof and shall not provide for Additional Interest, and the
Security Registrar shall rescind any restriction on the transfer of such Notes,
in each case unless the Holder of such Series A Notes (A) is a broker-dealer
tendering Series A Notes acquired directly from the Company or an "affiliate"
(as defined in Rule 405 under the Securities Act) of the Company for its own
account, (B) is a Person who at the time of consummation of the Exchange Offer
has an arrangement or understanding with any Person to participate in the
"distribution" (within the meaning of the Securities Act) of the Series B Notes,
(C) is a Person who is an "affiliate" (as defined in Rule 405 under the
Securities Act) of the Company or (D) is a Person who will not be acquiring the
Series B Notes in the ordinary course of such Holder's business. The Company
shall identify to the Trustee such Holders of the Notes in a written
certification signed by an officer of the Company and, absent certification from
the Company to such effect, the Trustee shall assume that there are no such
Holders.
Section 503. Registration Rights Agreement.
The Company shall perform its obligations under the Registration Rights
Agreement and shall comply in all material respects with the terms and
conditions contained therein including, without limitation, the payment of
Additional Interest.
Section 504. Delivery of Certain Information.
At any time when the Company is not subject to Section 13 or 15(d) of
the Exchange Act, upon the request of a Holder or any beneficial holder of
Notes, the Company will promptly furnish or cause to be furnished Rule 144A
Information (as defined below) to such Holder or any beneficial holder of Notes,
or to a prospective purchaser of any such security designated by any such
holder, as the case may be, to the extent required to permit compliance by such
Holder or holder with Rule 144A under the Securities Act in connection with the
resale of any such security. "Rule 144A Information" shall be such information
as is specified pursuant to Rule 144A(d)(4) under the Securities Act.
ARTICLE 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 "Event of Default" in addition to the other
events set forth in Section 501 of the Original Indenture:
20
"(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 701. The Indenture, as supplemented and amended by this
Supplemental Indenture No. 7, is in all respects hereby adopted, ratified and
confirmed.
Section 702. This Supplemental Indenture No. 7 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 703. THIS SUPPLEMENTAL INDENTURE NO. 7 AND EACH NOTE SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE
21
OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 704. If any provision in this Supplemental Indenture No. 7
limits, qualifies or conflicts with another provision hereof which is required
to be included herein by any provisions of the Trust Indenture Act, such
required provision shall control.
Section 705. In case any provision in this Supplemental Indenture No. 7
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.
Section 706. The recitals contained herein shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the proper authorization
or due execution hereof or of the Notes by the Company.
22
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 7 to be duly executed, as of the day and year first written above.
CENTERPOINT ENERGY RESOURCES CORP.
By: /s/ Gary L. Whitlock
------------------------------
Name: Gary L. Whitlock
Title: Executive Vice President and
Chief Financial Officer
Attest:
/s/ Richard B. Dauphin
- ------------------------------------
Name: Richard B. 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)
23
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.
5.95% Senior Notes due 2014, 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 January 15, 2014,
- --------
* 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
and to pay interest thereon from November 3, 2003 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on January 15 and July 15 in each year, commencing July 15, 2004,
at the rate of 5.95% 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
5.95% 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 January 1 or July 1 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date and
shall either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system on which the Securities of
this series may be listed or traded, and upon such notice as may be required by
such exchange or automated quotation system, all as more fully provided in said
Indenture.
Payment of the principal of (and premium, if any) and any such interest
on this Security will be made at the Corporate Trust Office of the Trustee in
Dallas, Texas, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of interest may be
made (i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) by wire transfer in
immediately available funds at such place and to such account as may be
designated in writing by the Person entitled thereto as specified in the
Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
[DELETE THE FOLLOWING TWO-PARAGRAPH LEGEND, IF A REGULATION S GLOBAL NOTE.]
[THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY
A-2
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN
THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.]
[INSERT IF A TEMPORARY REGULATION S GLOBAL NOTE] [THE RIGHTS ATTACHING TO THIS
SECURITY, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR
CERTIFICATED SECURITIES, ARE AS SPECIFIED IN THIS SECURITY AND PURSUANT TO THE
INDENTURE (AS DEFINED HEREIN).]
[INSERT REGULATION S LEGEND, IF A REGULATION S GLOBAL NOTE] [THIS SECURITY (OR
ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL
APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO
THEM IN REGULATION S UNDER THE SECURITIES ACT.]
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
A-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: _______________ CENTERPOINT ENERGY 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
A-4
[FORM OF REVERSE SIDE OF SECURITY]
CENTERPOINT ENERGY RESOURCES CORP.
5.95% SENIOR NOTES DUE 2014,
SERIES [A/B]
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of 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 $160,000,000; provided,
however, that the authorized aggregate principal amount of the Securities may be
increased above such amount by a Board Resolution to such effect.
The Company shall have the right to redeem the Securities of this
series, in whole or in part, at its option at any time from time to time at a
price equal to (i) 100% of the principal amount thereof plus (ii) accrued and
unpaid interest thereon, if any, including Additional Interest, if any, to (but
excluding) the Redemption Date plus (iii) the Make-Whole Premium, if any.
The amount of the Make-Whole Premium with respect to any Security of
this Series (or portion thereof) to be redeemed will be equal to the excess, if
any, of: (i) the sum of the present values, calculated as of the Redemption
Date, of: (A) each interest payment that, but for such redemption, would have
been payable on the Security of this series (or portion thereof) being redeemed
on each Interest Payment Date occurring after the Redemption Date (excluding any
accrued and unpaid interest for the period prior to the Redemption Date); and
(B) the principal amount that, but for such redemption, would have been payable
on the Security of this series (or portion thereof) being redeemed at January
15, 2014; over (ii) the principal amount of the Security of this series (or
portion thereof) being redeemed. The present values of interest and principal
payments referred to in clause (i) above will be determined in accordance with
generally accepted principles of financial analysis. Such present values will be
calculated by discounting the amount of each payment of interest or principal
from the date that each such payment would have been payable, but for the
redemption, to the Redemption Date at a discount rate equal to the Comparable
Treasury Yield (as defined below) plus 35 basis points.
For purposes of determining the Make-Whole Premium, "Comparable
Treasury Yield" means a rate of interest per annum equal to the weekly average
yield to maturity of United States Treasury securities that have a constant
maturity that corresponds to the remaining term to maturity of the Securities of
this series, calculated to the nearest 1/12th of a year (the "Remaining Term").
The Comparable Treasury Yield shall be determined as of the third Business Day
immediately preceding the Redemption Date.
A-5
The weekly average yields of United States Treasury securities shall be
determined by reference to the most recent statistical release published by the
Federal Reserve Bank of New York and designated "H.15 (519) Selected Interest
Rates" or any successor release (the "H.15 Statistical Release"). If the H.15
Statistical Release sets forth a weekly average yield for United States Treasury
securities having a constant maturity that is the same as the Remaining Term,
then the Comparable Treasury Yield shall be equal to such weekly average yield.
In all other cases, the Comparable Treasury Yield shall be calculated by
interpolation, on a straight-line basis, between the weekly average yields on
the United States Treasury securities that have a constant maturity closest to
and greater than the Remaining Term and the United States Treasury securities
that have a constant maturity closest to and less than the Remaining Term (in
each case as set forth in the H.15 Statistical Release). Any weekly average
yields so calculated by interpolation shall be rounded to the nearest 1/100th of
1%, with any figure of 1/200th of 1% or above being rounded upward. If weekly
average yields for United States Treasury securities are not available in the
H.15 Statistical Release or otherwise, then the Comparable Treasury Yield shall
be calculated by interpolation of comparable rates selected by the Independent
Investment Banker.
In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
The Securities of this series are not entitled to the benefit of any
sinking fund.
The Indenture contains provisions for satisfaction and discharge of the
entire indebtedness of this Security upon compliance by the Company with certain
conditions set forth in the Indenture.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security or certain restrictive covenants and Events
of Default with respect to this Security, in each case upon compliance with
certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this
A-6
Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof;
provided, however, that Securities of this series that are Transfer Restricted
Securities issued to institutional accredited investors will be issued only in
denominations of $250,000 and integral multiples of $1,000 in excess thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
A-7
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
By its acceptance of this Security bearing a legend restricting
transfer, each Holder of this Security acknowledges the restrictions on transfer
of this Security set forth in the Indenture and such legend and agrees that it
will transfer this Security only as provided in the Indenture. In addition to
the rights provided to Holders of this Security under the Indenture, Holders
shall have all the rights set forth in that certain Registration Rights
Agreement, dated as of November 3, 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: 5.95% Senior Notes due 2014, 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. 7 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 5.95% Senior Notes due
2014, 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 Securities Act of 1933, as amended (the "Securities
Act:"), 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 Securities Act.
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 Securities Act.
Very truly yours,
Name of Transferor:
By: _______________________
Name:
Title:
Address:
C-2