EXHIBIT 4.2
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RELIANT ENERGY, INCORPORATED
AND
THE BANK OF NEW YORK,
as Trustee
__________________
SUPPLEMENTAL INDENTURE NO. 1
Dated as of February 15, 1999
TO
JUNIOR SUBORDINATED INDENTURE
Dated as of February 15, 1999
___________________
7.20% Junior Subordinated Debentures Due 2048
$386,598,000
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SUPPLEMENTAL INDENTURE NO. 1, dated as of the fifteenth day of February,
1999, between Houston Industries Incorporated, d/b/a Reliant Energy,
Incorporated, a corporation duly organized and existing under the laws of the
State of Texas (the "Company"), and The Bank of New York, a New York banking
corporation, as trustee (the "Trustee").
RECITALS
The Company has heretofore executed and delivered to the Trustee a Junior
Subordinated Indenture, dated as of February 15, 1999 (the "Indenture"),
providing for the issuance from time to time of one or more series of its
unsecured junior subordinated debentures (the "Debentures").
Pursuant to the terms of the Indenture, the Company desires to provide for
the establishment of a new series of Debentures to be designated as the 7.20%
Junior Subordinated Debentures due 2048 (the "Series 7.20% Debentures"), the
form and substance of such Series 7.20% Debentures and the terms, provisions and
conditions thereof to be set forth as provided in the Indenture and this
Supplemental Indenture No. 1.
The Company has caused REI Trust I ("REI Trust I") to be created as a
statutory business trust under the Business Trust Act of the State of Delaware
(12 Del. Code (S) 3801 et seq.) pursuant to a Declaration of Trust, dated as
January 8, 1999 (as amended by an Amendment of the Declaration of Trust, dated
as of February 15, 1999, the "Original Declaration"), and the filing of a
Certificate of Trust with the Secretary of State of the State of Delaware on
January 11, 1999.
The Original Declaration is to be amended and restated in its entirety
pursuant to an Amended and Restated Declaration of Trust dated as of February
26, 1999 (such Amended and Restated Declaration of Trust, as amended from time
to time, the "Declaration of Trust").
REI Trust I desires to issue its 7.20% Trust Originated Preferred
Securities, Series C (the "Preferred Securities") and sell such Preferred
Securities to the underwriters set forth in that certain Underwriting Agreement
dated February 23, 1999 by and among the Company, REI Trust I and the
underwriters named therein.
In connection with such purchases of Preferred Securities and the related
purchase by the Company of the Common Securities (as defined in the Declaration
of Trust) of REI Trust I, REI Trust I will purchase and hold as trust assets the
Series 7.20% Debentures.
Pursuant to the Declaration of Trust, the legal title to the Series 7.20%
Debentures shall be owned and held of record in the name of The Bank of New York
or its successor under the Declaration of Trust, as Property Trustee (the
"Property Trustee"), in trust for the benefit of holders of the Preferred
Securities and the Common Securities.
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Upon written direction of the Company or any subsequent holder of the
Common Securities, the Regular Trustees (as defined in the Declaration of Trust)
of REI Trust I shall, unless the Series 7.20% Debentures are redeemed as
described herein, dissolve REI Trust I and cause to be distributed to the
holders of the Preferred Securities and the Common Securities, on a Pro Rata
basis (determined as provided in the terms of the Preferred Securities and
Common Securities attached as Exhibits B and C to the Declaration of Trust),
Series 7.20% Debentures and, in connection with a Liquidation Distribution (as
defined in the Declaration of Trust), the Regular Trustees may cause to be
distributed to holders of Preferred Securities and Common Securities, on a Pro
Rata basis, Series 7.20% Debentures (each a "Dissolution Event").
Section 2.01 of the Indenture provides that various matters with respect to
any series of Debentures issued under the Indenture may be established in an
indenture supplemental to the Indenture.
Subparagraph (h) of Section 9.01 of the Indenture provides that the Company
and the Trustee may enter into an indenture supplemental to the Indenture to
establish the form or terms of Debentures of any series as permitted by Section
2.01 of the Indenture.
For and in consideration of the premises and the issuance of the series of
Debentures provided for herein, it is mutually covenanted and agreed, for the
equal and proportionate benefit of the holders of the Debentures of such series,
as follows:
ARTICLE ONE
Relation to Indenture; Additional Definitions
SECTION 1.01. Relation to Indenture. This Supplemental Indenture No. 1
constitutes an integral part of the Indenture.
SECTION 1.02. Additional Definitions. For all purposes of this
Supplemental Indenture No. 1:
(1) Capitalized terms used herein shall have the meanings specified
herein or in the Indenture, as the case may be;
(2) "Additional Interest" has the meaning set forth in Section 2.05(d)
hereof;
(3) "Change in Investment Company Act Law" has the meaning set forth
in the definition of Investment Company Event;
(4) "Common Securities" has the meaning set forth in the Recitals
herein;
(5) "Compounded Interest" has the meaning set forth in Section 2.05(a)
hereof;
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(6) "Debentures" has the meaning set forth in the Recitals herein;
(7) "Declaration of Trust" has the meaning set forth in the Recitals
herein;
(8) "Dissolution Event" has the meaning set forth in the Recitals
herein;
(9) "Extended Interest Payment Period" has the meaning set forth in
Section 4.01(a) hereof;
(10) "Guarantee Payments" has the meaning set forth in Section 5.01
hereof;
(11) "Indenture" has the meaning set forth in the Recitals herein;
(12) "Interest Payment Date" has the meaning set forth in Section
2.05(a) hereof;
(13) "Investment Company Act" means the Investment Company Act of
1940, as amended;
(14) "Investment Company Event" means that the Company and the Regular
Trustees shall have received an opinion of counsel, who may be counsel for
REI Trust I, the Trustee or the Company, who may be an employee of the
Company but not an employee of REI Trust I or the Trustee, and who shall be
reasonably acceptable to the Trustee, experienced in practice under the
Investment Company Act that as a result of the occurrence of a change in
law or regulation or a change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in Investment Company Act Law"), there is
more than an insubstantial risk that REI Trust I is or will be considered
an "investment company" which is required to be registered under the
Investment Company Act, which Change in Investment Company Act Law becomes
effective on or after February 23, 1999;
(15) "Liquidation Distribution" has the meaning set forth in the
Recitals herein;
(16) "Maturity Date" has the meaning set forth in Section 2.03 hereof;
(17) "Non Book-Entry Preferred Securities" has the meaning set forth
in Section 2.04(b)(ii) hereof;
(18) "Optional Redemption Price" has the meaning set forth in Section
3.01(a) hereof;
(19) "Original Declaration" has the meaning set forth in the Recitals
herein;
(20) "Preferred Securities" has the meaning set forth in the Recitals
herein;
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(21) "Preferred Securities Guarantee" means the Guarantee Agreement,
dated as of February 26, 1999, between the Company and The Bank of New York
as the initial Guarantee Trustee thereunder, in respect of the Preferred
Securities;
(22) "Property Account" has the meaning set forth in Section 2.04(a)
hereof;
(23) "Property Trustee" has the meaning set forth in the Recitals
herein;
(24) "Regular Trustees" has the meaning set forth in the Recitals
herein;
(25) "REI Trust I" has the meaning set forth in the Recitals herein;
(26) "Series 7.20% Debentures" has the meaning set forth in the
Recitals herein and Section 2.01 hereof;
(27) "Special Event" means either a Tax Event or an Investment Company
Event;
(28) "Tax Event" means that the Company and the Regular Trustees shall
have received an opinion of counsel, who may be counsel for REI Trust I,
the Trustee or the Company, who may be an employee of the Company but not
an employee of REI Trust I or the Trustee, and who shall be reasonably
acceptable to the Trustee, experienced in such matters to the effect that
on or after February 23, 1999 as a result of (a) any amendment to, or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision
or taxing authority thereof or therein, (b) any amendment to, or change in,
an interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any
judicial decision or regulatory determination), (c) any interpretation or
pronouncement by any legislative body, court, governmental agency or
regulatory authority that provides for a position with respect to such laws
or regulations that differs from the theretofore generally accepted
position or (d) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
announced or which interpretation or pronouncement is issued or announced
or which action is taken, in each case on or after February 23, 1999, there
is more than an insubstantial risk that (i) REI Trust I is, or will be
within 90 days of the date thereof, subject to federal income tax with
respect to income accrued or received on the Series 7.20% Debentures, (ii)
REI Trust I is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of taxes, duties or other governmental
charges or (iii) interest payable by the Company to REI Trust I on the
Series 7.20% Debentures is not, or within 90 days of the date thereof will
not be, deductible by the Company for federal income tax purposes;
(29) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture No. 1; and
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(30) The terms "herein," "hereof," "hereunder" and other words of
similar import refer to this Supplemental Indenture No. 1.
ARTICLE TWO
General Terms and Conditions of the Series 7.20% Debentures
SECTION 2.01. Title of Debentures. There shall be and is hereby
authorized a series of Debentures designated as the "7.20% Junior Subordinated
Debentures due 2048" (the "Series 7.20% Debentures").
SECTION 2.02. Limitation on Aggregate Principal Amount. The aggregate
principal amount of the Series 7.20% Debentures shall be limited to
$386,598,000; provided, however, that the authorized aggregate principal amount
of the Series 7.20% Debentures may be increased above such amount by a Board
Resolution to such effect. Each Series 7.20% Debenture shall be dated the date
of its authentication.
SECTION 2.03. Maturity Date. The Series 7.20% Debentures shall mature and
the principal amount thereof shall be due and payable together with all accrued
and unpaid interest thereon, including Additional Interest and Compounded
Interest, if any, on March 31, 2048 (the "Maturity Date"); provided, if a Tax
Event occurs, then the Company will have the right (a) prior to the dissolution
of REI Trust I, to shorten the Maturity Date of the Series 7.20% Debentures, to
the minimum extent required, but not earlier than September 30, 2018, or (b) to
direct the Property Trustee to dissolve REI Trust I (if not previously
dissolved) and shorten the Maturity Date of the Series 7.20% Debentures, to the
minimum extent required, but not earlier than September 30, 2018, in each case
such that in the opinion of counsel to the Company, who may be an employee of
the Company, experienced in such matters, after shortening the Maturity Date,
interest paid on the Series 7.20% Debentures will be deductible for federal
income tax purposes.
SECTION 2.04. Place of Payment, Registration or Exchange.
(a) Except as provided in Section 2.04(b), the Series 7.20% Debentures
shall be issued in fully registered certificated form without interest coupons
in denominations of $25 or integral multiples thereof. Principal and interest
on the Series 7.20% Debentures issued in certificated form will be payable, the
transfer of such Series 7.20% Debentures will be registrable and such Series
7.20% Debentures will be exchangeable for Series 7.20% Debentures bearing
identical terms and provisions at the Corporate Trust Office of the Trustee;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the registered holders at such addresses as shall
appear in the Debenture Register and that the payment of principal with respect
to the Series 7.20% Debentures will only be made upon surrender of the Series
7.20% Debentures to the Trustee. Notwithstanding the foregoing, so long as the
Property Trustee is the legal owner and record holder of the Series 7.20%
Debentures, the payment of the principal of and interest
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(including Additional Interest and Compounded Interest, if any) on the Series
7.20% Debentures held by the Property Trustee will be made by the Company in
immediately available funds on the payment date therefor at such place and to
the Property Account (as defined in the Declaration of Trust) established and
maintained by the Property Trustee pursuant to the Declaration of Trust.
(b) In connection with a Dissolution Event:
(i) Series 7.20% Debentures in certificated form may be presented to the
Trustee by the Property Trustee in exchange for one or more Global
Debentures representing the Series 7.20% Debentures in an aggregate
principal amount equal to all Outstanding Series 7.20% Debentures, to be
registered in the name of the Depositary, or its nominee, and delivered by
the Trustee to the Depositary for crediting to the accounts of its
participants pursuant to the instructions of the Regular Trustees. The
Company upon any such presentation shall execute one or more Global
Debentures representing the Series 7.20% Debentures in such aggregate
principal amount and deliver the same to the Trustee for authentication and
delivery in accordance with the Indenture and this Supplemental Indenture
No. 1. Payments on the Series 7.20% Debentures issued as a Global
Debenture will be made to the Depositary; and
(ii) if any Preferred Securities are held in non book-entry certificated
form, Series 7.20% Debentures in certificated form may be presented to the
Trustee by the Property Trustee and any Definitive Preferred Security
Certificate (as defined in the Declaration of Trust) which represents
Preferred Securities other than Preferred Securities held by the Clearing
Agency (as defined in the Declaration of Trust) or its nominee ("Non Book-
Entry Preferred Securities") will be deemed to represent beneficial
interests in Series 7.20% Debentures presented to the Trustee by the
Property Trustee having an aggregate principal amount equal to the
aggregate liquidation amount of the Non Book-Entry Preferred Securities
until such Definitive Preferred Security Certificate is presented to the
Debenture Registrar for transfer or reissuance at which time such Preferred
Security Certificate will be canceled and a Series 7.20% Debenture,
registered in the name of the holder of the Preferred Security Certificate
or the transferee of the holder of such Preferred Security Certificate, as
the case may be, with an aggregate principal amount equal to the aggregate
liquidation amount of the Definitive Preferred Security Certificate
canceled will be executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with the Indenture and this
Supplemental Indenture No. 1. Upon issuance of such Series 7.20%
Debentures, Series 7.20% Debentures with an equivalent aggregate amount
that were presented by the Property Trustee to the Trustee will be deemed
to have been canceled.
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SECTION 2.05. Interest and Interest Rates.
(a) Each Series 7.20% Debenture will bear interest at the rate of 7.20% per
annum from February 26, 1999 until the principal thereof becomes due and
payable, and on any overdue principal and (to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum (7.20%), compounded quarterly ("Compounded
Interest"), payable (subject to the provisions of Article Four) quarterly in
arrears on March 31, June 30, September 30 and December 31 of each year (each an
"Interest Payment Date"), commencing on June 30, 1999, to the person in whose
name such Series 7.20% Debenture or any predecessor Series 7.20% Debenture is
registered, at the close of business on the regular record date for such
interest installment, which, except as set forth below, shall be, in respect of
any Series 7.20% Debentures of which the Property Trustee is the registered
holder or a Global Debenture, the close of business on the Business Day next
preceding that Interest Payment Date. Notwithstanding the foregoing sentence,
if the Preferred Securities are no longer in book-entry only form or if pursuant
to the provisions of Section 2.11(c) of the Indenture the Series 7.20%
Debentures are not represented by a Global Debenture, the regular record dates
for such interest installment shall be the close of business on the fifteenth
day of the month in which that Interest Payment Date occurs.
(b) Any such interest installment not punctually paid or duly provided for
shall forthwith cease to be payable to the registered holders on such regular
record date, and shall instead be paid to the person in whose name the Series
7.20% Debenture (or one or more Predecessor Debentures) is registered at the
close of business on a special record date to be fixed by the Trustee for the
payment of such defaulted interest, notice whereof shall be given to the
registered holders of the Series 7.20% Debentures not less than 10 days prior to
such special record date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange or quotation
system on which the Series 7.20% Debentures may be listed or traded, and upon
such notice as may be required by such exchange or quotation system, all as more
fully provided in Section 2.03 of the Indenture.
(c) The amount of interest payable for any full quarterly interest period
will be computed on the basis of a 360-day year of twelve 30-day months, and for
any period shorter than a full quarterly interest period for which interest is
computed, interest shall be computed on the basis of the actual number of days
elapsed per 90-day quarter. In the event that any date on which interest is
payable on the Series 7.20% Debentures is not a Business Day, then payment of
interest payable on such date shall 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), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on the date such payment was
originally payable.
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(d) If at any time REI Trust I shall be required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States of America or any other taxing authority,
then, in any such case, the Company shall pay as additional interest
("Additional Interest") on the Series 7.20% Debentures such additional amounts
as shall be required so that the net amounts received and retained by REI Trust
I after paying any such taxes, duties, assessments or other governmental charges
shall be equal to the amounts REI Trust I would have received had no such taxes,
duties, assessments or other governmental charges been imposed.
SECTION 2.06. Denomination of Debentures. The Series 7.20% Debentures
shall be in registered form without coupons and shall be issuable in
denominations of $25 and integral multiples thereof.
SECTION 2.07. Currency. Payment of principal and interest on the Series
7.20% Debentures shall be payable in U.S. dollars.
SECTION 2.08. Paying Agent. The Trustee shall initially serve as paying
agent of the Series 7.20% Debentures.
SECTION 2.09. Sinking Fund Obligations. The Company has no obligation to
redeem or purchase any Series 7.20% Debentures pursuant to any sinking fund or
analogous provisions (including payments made in cash in anticipation of future
sinking fund obligations) or at the option of a holder thereof.
ARTICLE THREE
Optional Redemption of the Series 7.20% Debentures
SECTION 3.01. Optional Redemption on or after February 26, 2004.
(a) Except as provided in Section 3.02 hereof and subject to the provisions
below, Series 7.20% Debentures shall not be redeemed by the Company prior to
February 26, 2004. Subject to the terms of Article 3 of the Indenture, the
Company shall have the right to redeem the Series 7.20% Debentures, without
premium or penalty, in whole or in part, at any time from time to time on or
after February 26, 2004, upon not less than 30 nor more than 60 days' notice to
each holder of the Series 7.20% Debentures, at a redemption price of 100% of the
principal amount of the Series 7.20% Debentures, together with any accrued and
unpaid interest thereon, including Compounded Interest and Additional Interest,
if any, to, but excluding, the date of such redemption (the "Optional Redemption
Price").
(b) If the Series 7.20% Debentures are redeemed on any Interest Payment
Date, accrued and unpaid interest shall be payable to holders of record on the
relevant record date.
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(c) The Company shall not redeem any Series 7.20% Debentures unless all
accrued and unpaid interest thereon, including Compounded Interest and
Additional Interest, if any, has been paid for all quarterly interest periods
terminating on or prior to the date of notice of redemption.
(d) If the Company gives a notice of redemption in respect of Series 7.20%
Debentures (which notice will be irrevocable), then by 12:00 noon, New York City
time, on the redemption date, the Company shall deposit irrevocably with the
Trustee funds sufficient to pay the applicable Optional Redemption Price and
shall give irrevocable instructions and authority to pay such Optional
Redemption Price to the holders of the Series 7.20% Debentures. If notice of
redemption shall have been given and funds deposited as required, then
immediately prior to the close of business on the redemption date interest shall
cease to accrue on the Series 7.20% Debentures called for redemption, such
Series 7.20% Debentures shall no longer be deemed to be outstanding and all
rights of holders of such Series 7.20% Debentures so called for redemption shall
cease, except the right of the holders of such Series 7.20% Debentures to
receive the Optional Redemption Price but without interest on such Optional
Redemption Price.
(e) If any date fixed for redemption of any Series 7.20% Debentures is not
a Business Day, then payment of the Optional Redemption Price payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calender year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If the Company fails to repay the
Series 7.20% Debentures on maturity or the date fixed for redemption or if
payment of the Optional Redemption Price in respect of the Series 7.20%
Debentures is improperly withheld or refused and not paid by the Company,
interest on such Series 7.20% Debentures shall continue to accrue from the
original redemption date to the date of payment, in which case the actual
payment date shall be considered the date fixed for redemption for purposes of
calculating the Optional Redemption Price.
(f) In the event of any redemption in part, the Company shall not be
required to (i) issue, register the transfer of or exchange any Series 7.20%
Debentures during a period beginning at the opening of business 15 days before
the mailing of a notice of redemption of Series 7.20% Debentures and ending at
the close of business on the date of such mailing and (ii) register the transfer
of or exchange any Series 7.20% Debentures so selected for redemption, in whole
or in part, except the unredeemed portion of any Series 7.20% Debentures being
redeemed in part.
SECTION 3.02. Optional Redemption upon the Occurrence of a Special Event.
If a Special Event shall occur and be continuing, the Company shall have the
right at any time to redeem the Series 7.20% Debentures in whole, but not in
part, for cash at the Optional Redemption Price within 90 days following the
occurrence of such Special Event.
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SECTION 3.03. Partial Redemption. If the Series 7.20% Debentures are only
partially redeemed pursuant to this Article Three, the Series 7.20% Debentures
will be redeemed pro rata or by lot or by any other method utilized by the
Trustee. Notwithstanding the foregoing, if a partial redemption of the Series
7.20% Debentures would result in the delisting of the Preferred Securities by
any national securities exchange or other organization on which the Preferred
Securities are then listed or traded, the Company shall not be permitted to
effect such partial redemption and will only redeem the Series 7.20% Debentures
in whole.
ARTICLE FOUR
Extension of Interest Payment Period
SECTION 4.01. Option to Extend Interest Payment Period.
(a) So long as the Company is not in default in the payment of interest on
the Series 7.20% Debentures, the Company shall have the right to defer payments
of interest on the Series 7.20% Debentures by extending the interest payment
period of the Series 7.20% Debentures at any time from time to time for up to 20
consecutive quarterly interest periods (each such period an "Extended Interest
Payment Period"), at the end of which period the Company shall pay all interest
accrued and unpaid thereon (together with Compounded Interest and Additional
Interest, if any); provided that no Extended Interest Payment Period may extend
beyond the Maturity Date or redemption date of the Series 7.20% Debentures.
(b) During any Extended Interest Payment Period, the Company shall not (i)
declare or pay any dividend on, or redeem, purchase, acquire or make a
distribution or liquidation payment with respect to, any of its capital stock,
other than:
(A) dividends or distributions in shares of, or options, warrants,
rights to subscribe for or purchase shares of, the Company's common stock;
(B) any declaration of a dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of
stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto;
(C) as a result of a reclassification of the Company's capital stock
or the exchange or the conversion of one class or series of the
Company's capital stock for another class or series of the Company's
capital stock;
(D) the payment of accrued dividends and the purchase of fractional
interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the
security being converted or exchanged; or
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(E) purchases of the Company's common stock related to the issuance of
the Company's common stock or rights under any of the Company's
benefit plans for its directors, officers, employees, any of the
Company's dividend reinvestment plans or stock purchase plans, or any
of the benefit plans of any of the Company's Affiliates for such
Affiliates' directors, officers or employees;
(ii) make any payment of principal or of interest or premium, if any, on or
repay, repurchase or redeem any debt security of the Company that, ranks pari
passu with or junior in interest to the Series 7.20% Debentures; or (iii) make
any guarantee payments with respect to any guarantee by the Company of the debt
securities of any Subsidiary of the Company (other than the Preferred Securities
Guarantee) if such guarantee ranks pari passu with or junior in interest to the
Series 7.20% Debentures.
(c) Prior to the termination of any Extended Interest Payment Period, the
Company may pay all or any portion of the interest accrued on the Series 7.20%
Debentures on any Interest Payment Date to holders of record on the regular
record date for such Interest Payment Date or from time to time further extend
such Extended Interest Payment Period; provided that such Extended Interest
Payment Period together with all such further extensions thereof shall not
exceed 20 consecutive quarterly interest periods. Upon the termination of any
Extended Interest Payment Period and the payment of all accrued and unpaid
interest, including any Additional Interest and Compounded Interest, the Company
may commence a new Extended Interest Payment Period, subject to the foregoing
requirements. No interest shall be due and payable during an Extended Interest
Payment Period, except at the end thereof. On the Interest Payment Date
occurring at the end of the Extended Interest Payment Period, the Company shall
pay all accrued and unpaid interest on the Series 7.20% Debentures, including
any Additional Interest and Compounded Interest, to the holders of the Series
7.20% Debentures in whose names the Series 7.20% Debentures are registered in
the Debenture Register (regardless of who the holders of record may have been on
other dates during the Extended Interest Payment Period) on the record date for
such Interest Payment Date.
SECTION 4.02. Notice of Extension of Interest Payment Period.
(a) So long as the Property Trustee is the legal owner and sole holder of
record of the Series 7.20% Debentures, at the time the Company elects to begin
an Extended Interest Payment Period, the Company shall give both the Property
Trustee and the Trustee notice of its election to begin such Extended Interest
Payment Period one Business Day prior to the earlier of (i) the next succeeding
date on which Distributions (as defined in the Declaration of Trust) on the
Preferred Securities are payable or (ii) the date REI Trust I is required to
give notice of the record date or the date such Distributions are payable to the
New York Stock Exchange or other applicable self-regulatory organization or to
holders of the Preferred Securities, but in any event not less than one Business
Day prior to such record date.
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(b) If as a result of a Dissolution Event Series 7.20% Debentures have been
distributed to holders of Trust Securities, the Company shall give the holders
of the Series 7.20% Debentures and the Trustee notice of its election to begin
an Extended Interest Payment Period at least 10 Business Days prior to the
earlier of (i) the next succeeding Interest Payment Date or (ii) the date the
Company is required to give notice of the record or payment date of such related
interest payment to the New York Stock Exchange (if the Series 7.20% Debentures
are then listed thereon) or other applicable self-regulatory organization or to
holders of the Series 7.20% Debentures.
(c) The quarter in which any notice is given pursuant to Section 4.02 shall
be counted as one of the quarters permitted in the maximum Extended Interest
Payment Period permitted under this Article Four.
ARTICLE FIVE
Covenants Applicable to the Series 7.20% Debentures
SECTION 5.01. Prohibited Actions while Preferred Securities are
Outstanding. So long as any Preferred Securities issued by REI Trust I remain
outstanding, the Company shall not (i) declare or pay any dividends on, or
redeem, purchase, acquire or make a distribution or liquidation payment with
respect to, any of its capital stock (other than (a) dividends or distributions
in shares of, or options, warrants, rights to subscribe for or purchase shares
of, common stock of the Company, (b) any declaration of a dividend in connection
with the implementation of a shareholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (c) as a result of a reclassification of the Company's
capital stock or the exchange or the conversion of one class or series of the
Company's capital stock for another class or series of the Company's capital
stock, (d) the payment of accrued dividends and the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, or (e) purchases of the Company's common stock related to the
issuance of the Company's common stock or rights under any of the Company's
benefit plans for its directors, officers, employees, any of the Company's
dividend reinvestment plans or stock purchase plans, or any of the benefit plans
of any of the Company's Affiliates for such Affiliates' directors, officers or
employees), (ii) make any payment of principal or of interest or premium, if
any, on or repay, repurchase or redeem any debt security of the Company that,
ranks pari passu with or junior in interest to the Series 7.20% Debentures or
(iii) make any guarantee payments with respect to any guarantee by the Company
of the debt securities of any Subsidiary of the Company (other than pursuant to
the Preferred Securities Guarantee) if such guarantee ranks pari passu with or
junior in interest to the Series 7.20% Debentures, if at such time (x) the
Company shall be in default with respect to its Guarantee Payments (as defined
in the Preferred Securities Guarantee) or other payment obligations under the
Preferred Securities Guarantee, (y) there shall have occurred any Event of
Default with respect to the Series 7.20% Debentures or (z) the Company shall
have given notice of its election to defer payments of interest on the Series
13
7.20% Debentures by extending the interest payment period in accordance with
Article Four hereof.
SECTION 5.02. Listing on the NYSE. In connection with the distribution of
the Series 7.20% Debentures to the holders of the Preferred Securities upon a
Dissolution Event, the Company will use its best efforts to list such Series
7.20% Debentures on the New York Stock Exchange or on such other exchange or
quotation system as the Preferred Securities are then listed and traded.
SECTION 5.03. Compliance With the Declaration of Trust. The Company
covenants and agrees for the benefit of the holders of the Preferred Securities
to comply fully with all of its obligations and agreements under the Declaration
of Trust, including, without limitation, its obligations under Article 4
thereof.
SECTION 5.04. Covenants with respect to REI Trust I. Prior to the
distribution of Series 7.20% Debentures to the holders of Preferred Securities
upon a Dissolution Event, the Company covenants and agrees for the benefit of
the holders of the Preferred Securities (i) to remain the sole direct or
indirect owner of all of the outstanding Common Securities and not to cause or
permit the Common Securities to be transferred except as permitted by the
Declaration of Trust, provided that any permitted successor of the Company under
the Indenture may succeed to the Company's ownership of the Common Securities,
and (ii) use reasonable efforts to cause REI Trust I to continue to be treated
as a grantor trust for United States federal income tax purposes, except in
connection with a Dissolution Event.
ARTICLE SIX
Form of Series 7.20% Debentures
SECTION 6.01. The Series 7.20% Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the following
forms:
(FORM OF FACE OF DEBENTURE)
[IF THE NOTE IS TO BE A GLOBAL DEBENTURE, INSERT - This Debenture is a
Global Debenture 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
Debenture is exchangeable for Debentures registered in the name of a person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Debenture (other than a
transfer of this Debenture 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) may be registered except in limited circumstances.
Unless this Debenture is presented by an authorized representative to The
Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) to the issuer or
its agent for
14
registration of transfer, exchange or payment, and any Debenture issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment hereon
is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede & Co.,
has an interest herein.]
No. $
[CUSIP NO. ____________]
RELIANT ENERGY, INCORPORATED
7.20% JUNIOR SUBORDINATED DEBENTURE DUE 2048
HOUSTON INDUSTRIES INCORPORATED, D/B/A RELIANT ENERGY, INCORPORATED, a
corporation duly organized and existing under the laws of the State of Texas
(herein referred to as the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to _____________________________, or registered assigns,
the principal sum of _________ Dollars on March 31, 2048, provided, if a Tax
Event occurs, then the Company will have the right (a) prior to the dissolution
of REI Trust I, to shorten the Maturity Date of this series of Debentures to the
minimum extent required, but not earlier than September 30, 2018, or (b) to
direct the Property Trustee to dissolve REI Trust I (if not previously
dissolved) and shorten the Maturity Date of this series of Debentures to the
minimum extent required, but not earlier than September 30, 2018, in each case
such that in the opinion of counsel to the Company, experienced in such matters,
after shortening the Maturity Date, interest paid on this series of Debentures
will be deductible for federal income tax purposes, and to pay interest on said
principal sum from February 26, 1999 or from the most recent interest payment
date (each such date, an "Interest Payment Date") to which interest has been
paid or duly provided for, quarterly in arrears on March 31, June 30, September
30 and December 31 of each year, commencing June 30, 1999 at the rate of 7.20%
per annum plus Additional Interest and Compounded Interest, if any, until the
principal hereof shall have become due and payable, and on any overdue principal
and premium, if any.
So long as the Company is not in default in the payment of interest on this
series of Debentures, the Company shall have the right to defer payments of
interest on this series of Debentures by extending the interest payment period
of this series of Debentures at any time from time to time for up to 20
consecutive quarterly interest periods (each such period an "Extended Interest
Payment Period"), at the end of which period the Company shall pay all interest
accrued and unpaid thereon (together with Compounded Interest and Additional
Interest, if any); provided that no Extended Interest Payment Period may extend
beyond the Maturity Date or redemption date of this series of Debentures. Prior
to the termination of any Extended Interest Payment Period, the Company may pay
all or any portion of the interest
15
accrued on this series of Debentures on any Interest Payment Date to holders of
record on the regular record date for such Interest Payment Date or prepay at
any time all or any portion of the interest accrued during an Extentsion Period
or from time to time further extend such Extended Interest Payment Period;
provided that such Extended Interest Payment Period together with all such
further extensions thereof shall not exceed 20 consecutive quarterly interest
periods or extend beyond the Maturity Date or redemption date of this series of
Debentures. Upon the termination of any Extended Interest Payment Period and the
payment of all accrued and unpaid interest, including any Additional Interest
and Compounded Interest, the Company may commence a new Extended Interest
Payment Period, subject to the foregoing requirements. No interest shall be due
and payable during an Extended Interest Payment Period, except at the end
thereof. On the Interest Payment Date occurring at the end of the Extended
Interest Payment Period, the Company shall pay all accrued and unpaid interest
on this series of Debentures, including any Additional Interest and Compounded
Interest, to the holders of this series of Debentures in whose names this series
of Debentures are registered in the Debenture Register (regardless of who the
holders of record may have been on other dates during the Extended Interest
Payment Period) on the record date for such Interest Payment Date.
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly interest period for which interest is
computed, interest shall be computed on the basis of the actual number of days
elapsed per 90-day quarter. In the event that any date on which interest is
payable on this series of Debentures is not a Business Day, then payment of
interest payable on such date shall 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), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on the date such payment was
originally payable. The interest installment so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the person in whose name this Debenture (or one or more
Predecessor Debentures, as defined in said Indenture) is registered at the close
of business on the regular record date for such interest installment, [IF REI
TRUST I OR ITS PROPERTY TRUSTEE IS THE HOLDER OF RECORD OF THIS DEBENTURE --
which shall be the close of business on the Business Day next preceding such
Interest Payment Date, provided if the Preferred Securities of REI Trust I are
no longer in book-entry only form, the regular record dates shall be the close
of business on the fifteenth (15th) day of the month in which such Interest
Payment Date occurs] [IF PURSUANT TO THE PROVISIONS OF SECTION 2.11(c) OF THE
INDENTURE THIS series of Debentures IS NOT REPRESENTED BY A GLOBAL DEBENTURE --
which shall be the close of business on the fifteenth (15th) day of the month in
which such Interest Payment Date occurs.] Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered holders on such regular record date, and shall instead be paid to the
person in whose name this Debenture (or one or more Predecessor Debentures) is
registered at the close of business on a special record date to be fixed by the
Trustee for the payment of such defaulted interest,
16
notice whereof shall be given to the registered holders of this series of
Debentures not less than 10 days prior to such special record date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange or quotation system on which the
Debentures of this series may be listed or traded, and upon such notice as may
be required by such exchange or quotation system, all as more fully provided in
Section 2.03 of the Indenture. The principal of and the interest on this
Debenture shall be payable at the Corporate Trust Office of the Trustee, in any
coin or currency of the United States of America which at the time of payment is
legal tender for payment of public and private debts; provided, however, that
payment of interest may be made at the option of the Company by check mailed to
the registered holder at such addresses as shall appear in the Debenture
Register and that the payment of principal will only be made upon the surrender
of this Debenture to the Trustee. Notwithstanding the foregoing, so long as the
owner and record holder of this Debenture is the Property Trustee (as defined in
the Indenture), the payment of the principal of and interest (including
Additional Interest and Compounded Interest, if any) on this Debenture will be
made by the Company in immediately available funds on the payment date therefor
at such place and to the Property Account (as defined in the Indenture)
established and maintained by the Property Trustee pursuant to the Declaration
of Trust (as defined in the Indenture).
The indebtedness evidenced by this Debenture is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Debt (as defined in the Indenture), and this Debenture is
issued subject to the provisions of the Indenture with respect thereto. Each
holder of this Debenture, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Trustee on his behalf
to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his
attorney-in-fact for any and all such purposes. Each holder hereof, by his
acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Debt, whether now outstanding or hereafter incurred, and waives reliance
by each such holder upon said provisions.
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debenture are continued on the reverse side hereof
and such continued provisions shall for all purposes have the same effect as
though fully set forth at this place.
17
IN WITNESS WHEREOF, the Company has caused this Instrument to be executed.
Dated:
-----------------
HOUSTON INDUSTRIES INCORPORATED, d/b/a
RELIANT ENERGY, INCORPORATED
By:
----------------------------------
Name:
Title:
Attest:
By:
-------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described in the
within-mentioned Indenture.
---------------------------- ----------------------------
as Trustee or as Authentication Agent
By By
--------------------------- --------------------------
Authorized Signatory Authorized Signatory
18
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Debentures"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of February 15, 1999 duly executed and delivered
between the Company and The Bank of New York, a New York banking corporation, as
Trustee (herein referred to as the "Trustee"), as supplemented by the
Supplemental Indenture No. 1 dated as of February 15, 1999 between the Company
and the Trustee (said Indenture as so supplemented being hereinafter referred to
as the "Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Debentures, and, to the extent specifically set forth in the
Indenture, the holders of Senior Debt and Preferred Securities. By the terms of
the Indenture, the Debentures are issuable in series which may vary as to
amount, date of maturity, rate of interest and in other respects as in the
Indenture provided. This series of Debentures is designated the 7.20% Junior
Subordinated Debentures due 2048 and is limited in aggregate principal amount as
specified in said Supplemental Indenture No. 1.
Except as provided in the next paragraph, the Debentures of this series
shall not be redeemed by the Company prior to February 26, 2004. The Company
shall have the right to redeem this Debenture at the option of the Company,
without premium or penalty, in whole or in part, at any time from time to time
on or after February 26, 2004 (an "Optional Redemption"), upon not less than 30
nor more than 60 days' notice to the holders of the Debentures of this series,
at the redemption price of 100% of the principal amount of the Debentures,
together with any accrued but unpaid interest thereon, including Compounded
Interest and Additional Interest, if any, to, but excluding, the date of such
redemption (the "Optional Redemption Price").
If the Debentures of this series are redeemed on any Interest Payment Date,
accrued and unpaid interest shall be payable to holders of record on the
relevant record date.
The Company shall not redeem any Debentures of this series unless all
accrued and unpaid interest thereon, including Compounded Interest and
Additional Interest, if any, has been paid for all quarterly interest periods
terminating on or prior to the date of notice of redemption.
If a Tax Event or an Investment Company Event (each, a "Special Event")
shall occur or be continuing, the Company shall have the right at any time to
redeem the Debentures of this series in whole, but not in part, for cash at the
Optional Redemption Price within 90 days following the occurrence of such
Special Event.
"Tax Event" means that the Company and the Regular Trustees shall have
received an opinion of counsel experienced in such matters to the effect that on
or after February 23, 1999 as a result of (a) any amendment to, or change
(including any announced prospective
19
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, (b) any amendment
to, or change in, an interpretation or application of any such laws or
regulations by any legislative body, court, governmental agency or regulatory
authority (including the enactment of any legislation and the publication of any
judicial decision or regulatory determination), (c) any interpretation or
pronouncement by any legislative body, court, governmental agency or regulatory
authority that provides for a position with respect to such laws or regulations
that differs from the theretofore generally accepted position or (d) any action
taken by any governmental agency or regulatory authority, which amendment or
change is enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after February 23, 1999, there is more than an insubstantial risk that (i)
REI Trust I is, or will be within 90 days of the date thereof, subject to
federal income tax with respect to income accrued or received on the Debentures
of this series, (ii) REI Trust I is, or will be within 90 days of the date
thereof, subject to more than a de minimis amount of taxes, duties or other
governmental charges or (iii) interest payable by the Company to REI Trust I on
the Debentures of this series is not, or within 90 days of the date thereof will
not be, deductible by the Company for federal income tax purposes;d
"Investment Company Event" means that the Company and the Regular Trustees
shall have received an opinion of counsel experienced in practice under the
Investment Company Act that as a result of the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
"Change in Investment Company Act Law"), there is more than an insubstantial
risk that REI Trust I is or will be considered an "investment company" which is
required to be registered under the Investment Company Act, which Change in
Investment Company Act Law becomes effective on or after February 23, 1999.
If the Debentures of this series are only partially redeemed by the Company
pursuant to an Optional Redemption, the Debentures shall be redeemed pro rata or
by lot or in some other equitable manner determined by the Trustee; provided if,
at the time of redemption, the Debentures of this series are registered as a
Global Debenture, the Depository shall determine the principal amount of such
Debentures of this series held by each holder of Debentures to be redeemed in
accordance with its customary procedures. Notwithstanding the foregoing, if a
partial redemption of the Debentures of this series would result in the
delisting of the Preferred Securities by any national securities exchange or
other organization on which the Preferred Securities are then listed or traded,
the Company shall not be permitted to effect such partial redemption and will
only redeem the Debentures of this series in whole.
In the event of redemption of this Debenture in part only, a new Debenture
or Debentures of this series for unredeemed portion hereof will be issued in the
name of the holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures of this
series may be declared, and upon such
20
declaration shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Debenture upon compliance by the Company with certain
conditions set forth therein.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture (and, if this Debenture is held as a
trust asset of REI Trust I, such consent of holders of the Preferred Securities
and the Common Securities as may be required under the Declaration of Trust), to
execute supplemental indentures for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or of modifying in any manner the rights of the
holders of the Debentures; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of the Debentures of this series,
or reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the redemption
thereof, without the consent of the holder of each Debenture so affected or (ii)
reduce the aforesaid percentage of Debentures, the holders of which are required
to consent to any such supplemental indenture, without the consent of the
holders of each Debenture (and, if this Debenture is held as a trust asset of
REI Trust I, such consent of the holders of the Preferred Securities and the
Common Securities as may be required under the Declaration of Trust) then
outstanding and affected thereby. The Indenture also contains provisions
permitting the holders of a majority in aggregate principal amount of the
Debentures of a series at the time Outstanding affected thereby (subject, in the
case of a Debenture held as a trust asset of REI Trust I and with respect to
which a Securities Exchange has not theretofore occurred, to such consent of
holders of Preferred Securities and Common Securities as may be required under
the Declaration of Trust), on behalf of the holders of the Debentures of such
series, to waive any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the Indenture with
respect to such series, and its consequences, except a default in the payment of
the principal of or premium, if any, or interest on any of the Debentures of
such series as and when the same shall become due by the terms of the Debentures
of such series otherwise than by acceleration (unless such default has been
cured and a sum sufficient to pay all matured installments of interest and
principal and any premium has been deposited with the Trustee), or a call for
redemption of the Debentures of such series. Any such consent or waiver by the
registered holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such holder and upon all future
holders and owners of this Debenture and of any Debenture issued in exchange
herefor or in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or waiver is made
upon this Debenture.
Subject to Section 13.11 of the Indenture, no reference herein to the
Indenture (other than such Section) and no provision of this Debenture or of the
Indenture shall alter or impair
21
the obligation of the Company, which is absolute and unconditional, to pay the
principal of and interest on this Debenture at the time and place at the rate
and in the money herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, this Debenture is transferable by the registered holder hereof on the
Debenture Register, upon surrender of this Debenture for registration of
transfer at the Corporate Trust Office of the Trustee accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the registered holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Debentures of authorized
denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this Debenture,
the Company, the Trustee, any paying agent and any Debenture Registrar may deem
and treat the registered holder hereof as the absolute owner hereof (whether or
not this Debenture shall be overdue and notwithstanding any notice of ownership
or writing hereon made by anyone other than the Debenture Registrar) for the
purpose of receiving payment of or on account of the principal hereof and
interest due hereon and for all other purposes, and neither the Company nor the
Trustee nor any paying agent nor any Debenture Registrar shall be affected by
any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, shareholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
[If certificated Debentures -- The Debentures of this series are issuable
only in registered form without coupons in denominations of $25 and any integral
multiple thereto.] [If Global Debenture -- This Global Debenture is exchangeable
for Debentures in definitive form under certain limited circumstances set forth
in the Indenture. Debentures of this series so issued are issuable only in
registered form without coupons in denominations of $25 or any integral multiple
thereof.] As provided in the Indenture and subject to certain limitations [If
Global Debenture -- herein and] therein set forth, Debentures of this series [If
Global Debenture -- so issued] are exchangeable for a like aggregate principal
amount of Debentures of this series of a different authorized denomination, as
requested by the holder surrendering the same.
22
All terms used in this Debenture which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
The Company and, by its acceptance of this Debenture or a beneficial
interest therein, the holder of, and any Person that acquires a beneficial
interest in, this Debenture agree that for United States federal, state and
local tax purposes it is intended that this Debenture constitute indebtedness.
THE INDENTURE AND THIS DEBENTURE 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.
23
ARTICLE SEVEN
Miscellaneous Provisions
SECTION 7.01. The Indenture, as supplemented by this Supplemental
Indenture, is in all respects ratified and confirmed. This Supplemental
Indenture No. 1 shall be deemed part of the Indenture in the manner and to the
extent herein and therein provided.
SECTION 7.02. The recitals herein contained are made by the Company and
not by the Trustee, and the Trustee assumes no responsibility for the
correctness thereof. The Trustee makes no representation as to the validity or
sufficiency of this Supplemental Indenture No. 1.
SECTION 7.03. This Supplemental Indenture No. 1 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 7.04. THIS SUPPLEMENTAL INDENTURE NO. 1 AND EACH SERIES 7.20%
DEBENTURE 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.
24
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 1 to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
HOUSTON INDUSTRIES INCORPORATED, d/b/a
RELIANT ENERGY, INCORPORATED
By: /s/ Xxxx Xxxxxxxx
-------------------------------
Name: Xxxx Xxxxxxxx
Title: Treasurer
Attest:
/s/ Xxxxxxx Xxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxx
Title: Assistant Corporate Secretary
THE BANK OF NEW YORK
as Trustee
By:/s/ Xxxx X. Xxxxx
-------------------------------
Name: Xxxx X. Xxxxx
Title: Assistant Vice President
Attest:
/s/ Xxxx Xx Xxxxxx
---------------------------
Name: Xxxx Xx Xxxxxx
Title: Assistant Vice President
25
