Document:

exv4w2

Exhibit-4.2

CENTERPOINT ENERGY RESOURCES CORP.

(formerly known as NorAm Energy Corp.)

To

THE BANK OF NEW YORK TRUST COMPANY, NATIONAL ASSOCIATION

(successor to JPMorgan Chase Bank, National Association

(formerly Chase Bank of Texas, National Association)),

Trustee

 

SUPPLEMENTAL INDENTURE NO. 13

Dated as of May 15, 2008

 

$300,000,000

6.00% Senior Notes due 2018

 

 

CENTERPOINT ENERGY RESOURCES CORP.

(formerly known as NorAm Energy Corp.)

SUPPLEMENTAL INDENTURE NO. 13

$300,000,000

6.00% Senior Notes due 2018

     SUPPLEMENTAL INDENTURE No. 13, dated as of May 15, 2008, between CENTERPOINT ENERGY RESOURCES
CORP., a Delaware corporation formerly known as NorAm Energy Corp. (the “Company”), and THE BANK OF
NEW YORK TRUST COMPANY, NATIONAL ASSOCIATION (successor to JPMorgan Chase Bank, National
Association (formerly 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 a new series of Securities to be designated as the “6.00% Senior Notes due 2018” (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. 13.

     Section 301 of the Original Indenture provides that various matters with respect to any series
of Securities issued under the Indenture may be established in an indenture supplemental to the
Indenture.

     Subparagraph (7) of Section 901 of the Original Indenture provides that the Company and the
Trustee may enter into an indenture supplemental to the Indenture to establish the form or terms of
Securities of any series as permitted by Sections 201 and 301 of the Original Indenture.

     For and in consideration of the premises and the issuance of the series of Securities provided
for herein, it is mutually covenanted and agreed, for the equal and proportionate benefit

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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. 13 constitutes an
integral part of the Original Indenture.

     Section 102. Additional Definitions. For all purposes of this Supplemental Indenture No. 13:

     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;

     “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; (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: 601 Travis Street, 18th Floor, Houston, Texas 77002, Attention: Global Corporate
Trust; telephone: (713) 483-6817; telecopy: (713) 483-7038;

     “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;

     “Funded Debt” has the meaning set forth in Section 304 hereof.

     “H.15 Statistical Release” has the meaning set forth in Section 402(b) hereof;

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     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 the Company or any
such Subsidiary, as applicable, but no other contingent obligation of the Company or any
such Subsidiary in respect of indebtedness incurred by other Persons shall for any purpose
be deemed to be indebtedness of the Company or any such Subsidiary;

     “Independent Investment Banker” has the meaning set forth in Section 401(c) hereof;

     “Interest Payment Date” has the meaning set forth in Section 204(a) hereof;

     “Issue Date” has the meaning set forth in Section 204(a) hereof;

     “lien” or “liens” have the meanings set forth in Section 303 hereof;

     “Long-Term Indebtedness” means, collectively, the Company’s outstanding: (a) 7.875%
Senior Notes due 2013, (b) 5.95% Senior Notes due 2014, and (c) any long-term indebtedness
(but excluding for this purpose any long-term indebtedness incurred pursuant to any
revolving credit facility, letter of credit facility or other similar bank credit facility)
of the Company issued subsequent to the issuance of the Notes and prior to the Termination
Date containing covenants substantially similar to the covenants set forth in Sections 303
and 304 hereof, or an event of default substantially similar to the event of default set
forth in Section 501(a) hereof, but not containing a provision substantially similar to the
provision set forth in Section 305 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

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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.

     “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 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

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Net Tangible Assets.

     “Redemption Price” has the meaning set forth in Section 401(a) hereof;

     “Regular Record Date” has the meaning set forth in Section 204(b) hereof;

     “Remaining Term” has the meaning set forth in Section 402(a) hereof;

     “Sale and Leaseback Transaction” means any arrangement entered into by the Company or
any Subsidiary with any Person providing for the leasing to the Company or any Subsidiary of
any Principal Property (except for temporary leases for a term, including any renewal
thereof, of not more than three years and except for leases between the Company and a
Subsidiary or between Subsidiaries), which Principal Property has been or is to be sold or
transferred by the Company or such Subsidiary to such Person;

     “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.

     “Termination Date” has the meaning set forth in Section 305.

     “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. 13; and

     The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this
Supplemental Indenture No. 13.

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ARTICLE TWO

The Series of Securities

     Section 201. Title of the Securities. The Notes shall be designated as the “6.00% Senior Notes
due 2018.”

     Section 202. Limitation on Aggregate Principal Amount. The Trustee shall authenticate and
deliver the Notes for original issue on the Issue Date in the aggregate principal amount of
$300,000,000 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 $300,000,000; 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 May 15, 2018 (the
“Maturity Date”).

     Section 204. Interest and Interest Rates.

     (a) The Notes shall bear interest at the rate of 6.00% per annum, from and including May 15,
2008 (the “Issue Date”) to, but excluding, the Maturity Date. Such interest shall be payable
semiannually in arrears, on May 15 and November 15, of each year (each such date, an “Interest
Payment Date”), commencing November 15, 2008.

     (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 May 1 and November 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 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

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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 6.00% 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.

     Section 205. Place of Payment. The Trustee shall initially serve as the Paying Agent for the
Notes. The Place of Payment where the Notes may be presented or surrendered for payment shall be
the Corporate Trust Office of the Trustee.

     Section 206. Place of Registration or Exchange; Notices and Demands With Respect to the Notes.
The place where the Holders of the Notes may present the Notes for registration of 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 99.171%
of their principal amount plus accrued interest, if any, from May 15, 2008.

     Section 208. Global Securities. The Notes shall be issuable in whole or in part in the form
of one or more Global Securities. Such Global Securities shall be deposited with, or on behalf of,
The Depository Trust Company, New York, New York, which shall act as Depositary with respect to the
Notes. Such Global Securities shall bear the legends set forth in the form of Security attached as
Exhibit A hereto.

     Section 209. Form of Securities. The Notes shall be substantially in the form attached as
Exhibit A hereto.

     Section 210. Securities Registrar. The Trustee shall initially serve as the Security
Registrar for the Notes.

     Section 211. Defeasance and Discharge; Covenant Defeasance.

     (a) Article Fourteen of the Original Indenture, including without limitation, Sections 1402
and 1403 (as modified by Section 211(b) hereof) thereof, shall apply to the Notes.

     (b) Solely with respect to the Notes issued hereby, the first sentence of Section 1403 of the
Original Indenture is hereby deleted in its entirety, and the following is substituted in lieu
thereof:

“Upon the Company’s exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be,
(1) the Company shall be released from its obligations under Article Eight
and under any covenants provided pursuant to Section 301(20), 901(2) or
901(7) for the benefit of the Holders of such Securities, including, without
limitation, the covenants provided for in Article Three of Supplemental
Indenture No. 13 to the Indenture, and (2) the occurrence of any event

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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 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:

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     (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 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;

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     (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);

     (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

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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 and delivered 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 subdivisions (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), (j) or (k) 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
entitled, pursuant to the provisions of (1) paragraph (i) or (j) 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.

-11-

 

     For purposes of this Section 304, “Subsidiary” does not include a Project Finance Subsidiary.

     Section 305. Expiration of Restrictions on Liens and Restrictions on Sale and Leaseback
Transactions. Notwithstanding anything to the contrary herein, on the date (the “Termination
Date”) (and continuing thereafter) on which there remains outstanding, in the aggregate, no more
than $200,000,000 in principal amount of Long-Term Indebtedness, the covenants of the Company set
forth in Sections 303 and 304 hereof shall terminate and the Company shall no longer be subject to
the covenants set forth in such Sections.

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, 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 institution so
appointed is unwilling or unable to make such calculation, such calculation shall be made by
Barclays Capital Inc., Credit Suisse Securities (USA) LLC or Lehman Brothers Inc., or, if such
firms are unwilling or unable to make such calculation, by a different 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.

-12-

 

     (a) For purposes of determining the Make-Whole Premium, “Comparable Treasury Yield” means a
rate of interest per annum equal to the weekly average yield to maturity of United States Treasury
securities that have a constant maturity that corresponds to the remaining term to maturity of the
Notes to be redeemed, calculated to the nearest 1/12th of a year (the “Remaining Term”). The
Comparable Treasury Yield shall be determined as of the third Business Day immediately preceding
the applicable Redemption Date.

     (b) The weekly average yields of United States Treasury securities shall be determined by
reference to the most recent statistical release published by the Federal Reserve Bank of New York
and designated “H.15 (519) Selected Interest Rates” or any successor release (the “H.15 Statistical
Release”). If the H.15 Statistical Release sets forth a weekly average yield for United States
Treasury securities having a constant maturity that is the same as the Remaining Term, then the
Comparable Treasury Yield shall be equal to such weekly average yield. In all other cases, the
Comparable Treasury Yield shall be calculated by interpolation, on a straight-line basis, between
the weekly average yields on the United States Treasury securities that have a constant maturity
closest to and greater than the Remaining Term and the United States Treasury securities that have
a constant maturity closest to and less than the Remaining Term (in each case as set forth in the
H.15 Statistical Release). Any weekly average yields so calculated by interpolation shall be
rounded to the nearest 1/100th of 1%, with any figure of 1/200th of 1% or above being rounded
upward. If weekly average yields for United States Treasury securities are not available in the
H.15 Statistical Release or otherwise, then the Comparable Treasury Yield shall be calculated by
interpolation of comparable rates selected by the Independent Investment Banker.

     Section 403. Partial Redemption. If the Company redeems the Notes in part pursuant to this
Article Four, the Trustee shall select the Notes to be redeemed on a pro rata basis or by lot or by
such other method that the Trustee in its sole discretion deems fair and appropriate. The Company
shall redeem Notes pursuant to this Article Four in multiples of $1,000 in original principal
amount. A new Note in principal amount equal to the unredeemed portion of the original Note shall
be issued upon cancellation of the original Note.

     Section 404. Notice of Optional Redemption. If the Company elects to exercise its right to
redeem all or some of the Notes pursuant to this Article Four, the Company or the Trustee shall
mail a notice of such redemption to each Holder of a Note that is to be redeemed not less than 30
days and not more than 60 days before the Redemption Date. If any Note is to be redeemed in part
only, the notice of redemption shall state the portion of the principal amount to be redeemed.

ARTICLE FIVE

REMEDIES

     Section 501. Additional Event 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

-13-

 

“Event of Default” in addition to the other events set forth in Section 501 of the Original
Indenture:

“(7) the default by the Company or any Subsidiary, other than a Project
Finance Subsidiary, in the payment, when due, after the expiration of any
applicable grace period, of principal of indebtedness for money borrowed,
other than Non-Recourse Debt, in the aggregate principal amount then
outstanding of $50 million or more, or acceleration of any indebtedness for
money borrowed in such aggregate principal amount so that it becomes due and
payable prior to the date on which it would otherwise have become due and
payable and such acceleration is not rescinded or such default is not cured
within 30 days after there has been given, by registered or certified mail,
to the Company by the Trustee or to the Company and the Trustee by the
holders of at least 25% in principal amount of Notes written notice
specifying such default and requiring the Company to cause such acceleration
to be rescinded or such default to be cured and stating that such notice is
a “Notice of Default” under the Indenture;”.

     (b) Solely with respect to the Notes issued hereby, the first paragraph of Section 502 of the
Original Indenture is hereby deleted in its entirety, and the following is substituted in lieu
thereof:

“If an Event of Default (other than an Event of Default specified in Section
501(5) or 501(6)) with respect to the Notes at the time Outstanding occurs
and is continuing, then in every such case the Trustee or the Holders of not
less than 25% in principal amount of the Notes Outstanding may declare the
principal amount of all the Notes to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders),
and upon any such declaration such principal amount (or specified amount)
shall become immediately due and payable. If an Event of Default specified
in Section 501(5) or 501(6) with respect to the Notes at the time
Outstanding occurs and is continuing, the principal amount of all the Notes
shall automatically, and without any declaration or other action on the part
of the Trustee or any Holder, become immediately due and payable.”

     Section 502. Expiration of Additional Event of Default. Notwithstanding anything to the
contrary herein, on the Termination Date (and continuing thereafter), the event of default of the
Company set forth in Section 501(a) hereof shall terminate and the Company shall no longer be
subject to such event of default.

-14-

 

ARTICLE SIX

Miscellaneous Provisions

     Section 601. The Indenture, as supplemented and amended by this Supplemental Indenture No. 13,
is in all respects hereby adopted, ratified and confirmed.

     Section 602. This Supplemental Indenture No. 13 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 603. THIS SUPPLEMENTAL INDENTURE NO. 13 AND EACH NOTE SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

     Section 604. If any provision in this Supplemental Indenture No. 13 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 605. In case any provision in this Supplemental Indenture No. 13 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 606. 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.

-15-

 

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture No. 13 to be
duly executed, as of the day and year first written above.

CENTERPOINT ENERGY RESOURCES CORP.

	 	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:
	 	David M. McClanahan
	 

	 	Title:
	 	President and Chief Executive Officer
	 
	 	 	 	 
	Attest:
	 	 	 	 
	 
	 

	 	 	 	 
	Name: Richard B. Dauphin
	Title: Assistant Corporate Secretary
 
	 
	(SEAL)
	 	 	 	 

	 	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST COMPANY, NATIONAL
	 	 	ASSOCIATION,
	 	 	As Trustee
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:
	 	Marcella Burgess
	 

	 	Title:
	 	Assistant Vice President and Trust Officer
	 
	 	 	 	 
	(SEAL)
	 	 	 	 

-16-

 

Exhibit A

[FORM OF FACE OF SECURITY]

[IF THIS SECURITY IS TO BE A GLOBAL SECURITY -] 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.

6.00% Senior Notes due 2018

			
	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 May 15, 2018, and to pay interest thereon from May 15, 2008 or from
the most recent Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on May 15 and November 15 in each year, commencing November 15, 2008, at the rate of
6.00% 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 6.00% 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

A-1 

 

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 May 1 or
November 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 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.

     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-2 

 

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its
corporate seal.

	 	 	 	 	 
	Dated: May 15, 2008	 	CENTERPOINT ENERGY RESOURCES CORP.
	 
	 	 	 	 
	 

	 	By:	 	 

	 

	 	Name:
	 	David M. McClanahan
	(SEAL)

	 	Title:
	 	President and Chief Executive
Officer
	 
	 	 	 	 
	Attest:
	 	 	 	 
	 
	 	 	 	 
	   	 	 	 	 
	Name: Richard B. Dauphin
	Title: Assistant Corporate Secretary

     This is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.

	 	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST COMPANY, NATIONAL
	 	 	ASSOCIATION
	 	 	As Trustee
	 
	 	 	 	 
	Date of Authentication:                                        
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Signatory

A-3 

 

[FORM OF REVERSE SIDE OF SECURITY]

CENTERPOINT ENERGY RESOURCES CORP.

6.00% SENIOR NOTES DUE 2018

     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 The Bank of New York Trust Company, National
Association (successor to JPMorgan Chase Bank, National Association (formerly 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
$300,000,000; 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, 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 May 15, 2018; 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-4 

 

     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 Security.

A-5 

 

     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. As provided in the Indenture and
subject to certain limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.

     All terms used in this Security which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.

A-6 

 

     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-7exv4w5

Exhibit 4.5

NORTHWEST BIOTHERAPEUTICS, INC.

LOAN AGREEMENT and

PROMISSORY NOTE

			
	 	 	 
	US $4 million
	 	May 6, 2008

SECTION 1. GENERAL.

Al Rajhi Holdings WLL, a Bahrain company with offices at Al Moayyed Towers, Seef District, Manama
Bahrain, (“Al Rajhi” or the “Holder”) hereby grants to Northwest Biotherapeutics, Inc., a Delaware
corporation (the “Maker” or the “Company”) an unsecured bridge term loan facility of Four Million
Dollars (US$4.0 million) (the “Principal Amount”) subject to the terms of this Loan Agreement and
Promissory Note (this “Note”). The funding at closing of this Note will be US$4.0 million, and the
repayment on the Maturity Date will be US$4.24 million (the “Repayment Amount”). The Repayment
Amount minus the Principal Amount shall constitute original issue discount (“OID”). At the
Maturity Date, up to US$240,000 of the Repayment Amount may, at the election of the Holder in its
sole discretion, be paid in common stock of the Company on the terms set forth in this Note
(including, without limitation, the pricing set forth in Section 11 hereof). Al Rajhi shall
forthwith following execution of this Note advance the Principal Amount to the Company at the
account notified to Al Rajhi by the Company.

Following receipt of the Principal Amount and for value received, the Company hereby promises to
pay the Repayment Amount to the order of the Al Rajhi or its assigns, in accordance with this Note,
on October 30, 2008, or such earlier date as may be applicable under Sections 3 and 4 hereof (the
“Maturity Date”).

SECTION 2. PRE-PAYMENT.

This Note may be pre-paid in whole or in part prior to the Maturity Date, at the election of the
Maker. Any such pre-payment shall have no effect upon the Repayment Amount.

SECTION 3. DEFAULT PAYMENT.

Upon the occurrence of an Event of Default (as defined in Section 4 hereof) after notice as
provided in Section 17.1 hereof (“Event of Default”), default payments shall become due and payable
on any unpaid Repayment Amount that remains outstanding after the applicable Maturity Date (the
“Default Principal”). The default payments shall be assessed on a monthly basis at the beginning of
each month or partial month in which any Default Principal remains outstanding. Such default
payments shall be a fixed amount relating to such month or partial month, and shall not be pro
rated if the Default Principal is repaid by the Maker during such month. The amount of such
default payments shall be equal to the lowest of (i) 0.25% percent of the Default Principal per
month or partial month that such Default Principal remains outstanding, representing an annualized
rate of Default Payments of three percent (3%) per annum, or (ii) the maximum rate permitted under
applicable rules and regulations of the SBA, or (iii) the maximum

 

 

rate allowed by law (the “Default
Payments”). Such Default Payments shall commence upon the occurrence of an Event of Default and
continue until such Event of Default is fully cured or waived. The Default Payments shall be paid
in common stock of the Company, at a price per share as provided in Section 11 hereof.

SECTION 4. DEFAULTS.

     4.1 Definitions. Each occurrence of any of the following events shall constitute an
“Event of Default”:

          (a) if a default occurs in the payment of any Repayment Amount, or other amounts due under
this Note, whether at the due date thereof or upon acceleration thereof, and such default remains
uncured for ten (10) business days after written notice thereof from Holder;

          (b) if any representation or warranty of Maker made herein shall have been false or misleading
in any material respect, or shall have contained any material omission, as of the date hereof;

          (c) if a material default occurs in the due observance or performance on the part of Maker of
any covenant or agreement to be observed or performed pursuant to the terms of this Note and such
default remains uncured for ten (10) business days after written notice thereof from Holder;

          (d) if Maker shall (i) discontinue its business, (ii) apply for or consent to the appointment
of a receiver, trustee, custodian or liquidator of Maker or any of its property, (iii) make a
general assignment for the benefit of creditors, or (iv) file a voluntary petition in bankruptcy,
or a petition or an answer seeking reorganization or an arrangement with creditors, or take
advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation laws or statutes, or file an answer admitting the material allegations of a petition
filed against it in any proceeding under any such law;

          (e) if there shall be filed against Maker an involuntary petition seeking reorganization of
Maker or the appointment of a receiver, trustee, custodian or liquidator of Maker or a substantial
part of its assets, or an involuntary petition under any bankruptcy, reorganization or insolvency
law of any jurisdiction, whether now or hereafter in effect (any of the foregoing petitions being
hereinafter referred to as an “Involuntary Petition”) and such Involuntary Petition shall not have
been dismissed within ninety (90) days after it was filed;

     4.2
Remedies on Default.

          (a) Upon each and every such Event of Default and at any time thereafter during the
continuance of such Event of Default: (i) any and all indebtedness and related amounts (including,
without limitation, Default Payments) due from Maker to Holder under this Note or otherwise shall
immediately become due and payable; and (ii) Holder may exercise all the rights of a creditor under
applicable law.

 

 

     (b) In case any one or more Events of Default shall occur and be continuing, and acceleration
of this Note or any other indebtedness or obligation of Maker to Holder shall have occurred, Holder
may, inter alia, proceed to protect and enforce its rights by an action at law, suit in equity
and/or other appropriate proceeding, whether for the specific performance of any agreement
contained in this Note, or for an injunction against a violation of any of the terms hereof or
thereof or in furtherance of the exercise of any power granted hereby or thereby or by law. No
right conferred upon Holder by this Note shall be exclusive of any other right referred to herein
or therein or now or hereafter available at law, in equity, by statute or otherwise.

SECTION 5. DEFENSES.

     5.1 No Offsets. The obligations of Maker under this Note shall not be subject to
reduction, limitation, impairment, termination, defense, set-off, counterclaim or recoupment for
any reason.

SECTION 6. FOLLOW-ON FINANCINGS.

     Maker is seeking additional bridge financing, and longer term financing, to follow the bridge
loan facility provided by Al Rajhi under this Note. Maker and Holder anticipate that an additional
bridge loan facility of substantially the same amount as the Principal Amount hereunder, on
substantially the same terms and conditions as provided herein, may be provided by Toucan Capital
Fund II (“Toucan Capital”), or its affiliate Cognate BioServices, provided that regulatory waiver
and/or approval is obtained from the US Small Business Administration (“SBA”). It is anticipated
that the process of agency decision upon request for such waiver and/or approval may require
approximately thirty to forty five (30-45) days. Maker and Holder also anticipate that a longer
term financing, in a larger amount than the bridge loans, may be arranged by Maker prior to the
Maturity Date of this Note. Maker will use commercially reasonable efforts to obtain such longer
term financing, and to structure such financing to be non-dilutive to Company shareholders to the
extent commercially feasible.

SECTION 7. EXTENSION OF MATURITY.

     7.1 Business Days. Should the Repayment Amount or any other amounts due under this
Note become due and payable on other than a business day, the due date thereof shall be extended to
the next succeeding business day. For the purposes of the preceding sentence, a business day shall
be any day that is not a Saturday or Sunday, or a legal holiday in England and Wales or in the
State of Delaware in the United States.

SECTION 8. ATTORNEYS’ FEES AND COLLECTION FEES.

     In the event that all or part of the indebtedness evidenced by this Note is collected at law
or in equity, or in bankruptcy, receivership or other court proceedings, arbitration or mediation,
or any settlement of any of the foregoing, Maker agrees to pay, in addition to the Repayment Amount
and any other amounts due and payable hereunder, all costs of collection incurred by

 

 

Holder in
collecting or enforcing this Note, including, without limitation, reasonable attorneys’ fees and
expenses.

SECTION 9. WAIVERS, DISPUTES, JURISDICTION.

     9.1
Waivers by Maker. Maker hereby waives presentment, demand for payment,
notice of dishonor, notice of protest and all other notices or demands in connection with the
delivery, acceptance, performance or default of this Note.

     9.2
Actions of Holder not a Waiver. No delay by Holder in exercising any
power or right hereunder shall operate as a waiver of any power or right, nor shall any single or
partial exercise of any power or right preclude other or further exercise thereof, or the exercise
of any other power or right hereunder or otherwise; and no waiver or modification of the terms
hereof shall be valid unless set forth in writing by Holder and then only to the extent set forth
therein.

     9.3 Dispute Resolution. Any dispute arising out of or in connection with this
Note, including any question regarding its existence, validity or termination, shall be referred to
and finally resolved by arbitration under the Rules of the London Court of International
Arbitration, which are deemed to be incorporated by reference into this Section. The number of
arbitrators shall be three, unless the parties jointly determine that the number of arbitrators
shall be one. The seat, or legal place, of arbitration shall be London, United Kingdom. The
language to be used in the arbitral proceedings shall be English.

     9.4
Waiver of Jury Trial. MAKER WAIVES ANY RIGHTS IT MAY HAVE TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN MAKER AND
HOLDER RELATING TO THE SUBJECT MATTER OF THIS NOTE. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS NOTE, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENT OR AGREEMENT RELATING TO
THE LOAN.

     9.5
Service of Process. Maker hereby consents to process being served in any
suit, action, or proceeding instituted in connection with this Note by delivery of a copy thereof
by certified mail, postage prepaid, return receipt requested, to Maker, and/or by delivery of a
copy thereof to a registered agent of Maker. Refusal to accept delivery, and/or avoidance of
delivery, shall be deemed to constitute delivery. Maker irrevocably agrees that service in
accordance with this Section 9.5 shall be deemed in every respect effective service of process upon
Maker in any such suit, action or proceeding, and shall, to the fullest extent permitted by law, be
taken and held to be valid personal service upon Maker. Nothing in this Section 9.5 shall affect
the right of Holder to serve process in any manner otherwise permitted by law or limit the right of
Holder otherwise to bring proceedings against Maker in the courts of any jurisdiction or
jurisdictions.

 

 

SECTION 10. COVENANTS.

     10.1
Affirmative Covenants. So long as this Note shall remain outstanding:

          (a) Office. Maker shall maintain its head office in the United States.

          (b) Use of Proceeds. Maker shall use the proceeds from this Note for operating
expenses and other obligations of the Company incurred in pursuing the Company’s business plan and
strategy including, without limitation, clinical trial expenses, research and development expenses,
expenses related to regulatory filings and processes with the US Food and Drug Administration
(“FDA”) and applicable regulators in various international markets, preparations for commercial
delivery of the Company’s products in various international markets, expenses related to US
Securities and Exchange Commission (“SEC”) filings and processes, expenses related to salaries and
other general and administrative operations, expenses related to litigation, and expenses of
accountants, attorneys, consultants and other professionals.

          (c) Seniority. The indebtedness evidenced by this Note: (i) shall be pari passu with
any bridge loan financing provided by Toucan Capital, Cognate BioServices or their assigns
hereafter on substantially the same terms and conditions as this Note, and any other indebtedness
or obligations of Maker to Holder, Toucan Capital and/or Cognate BioServices; (ii) shall be senior
in all respects to all other existing indebtedness or obligations of Maker of any kind, direct or
indirect, contingent or otherwise, other than obligations of Maker owed directly to state or
federal government and other than as provided in this Section 10.1(c)(i).

          (d) Regulatory Information. So long as any principal or other obligation under this
Note shall remain outstanding, Maker shall provide to Holder, within the applicable timeframe
specified by Holder, all such information and assessments as may be necessary or desirable in order
for Holder to comply with its reporting obligations to any governmental agency or authority
including, without limitation, the US Small Business Administration (“SBA”). To the extent that
any such information constitutes material non-public information, Holder agrees to keep such
information cmfidential in accordance with applicable securities laws.

          (e) Business Activity. So long as any principal or other obligation under this Note
shall remain outstanding, Maker shall make no change in its business activity that would render it
or any of its business activities non-compliant with SBA regulations and guidelines.

     10.2
Negative Covenants. So long as any principal or other obligation under
this Note shall remain outstanding:

          (a) No Liens. Maker shall not grant to any person or entity a security interest,
lien, license, or other encumbrance of any kind, direct or indirect, contingent or otherwise, in,
to or upon any assets of Maker, including, without limitation, any intellectual property of any
kind (collectively, “Liens”), except (i) Liens to secure further financing for the purpose of (x)
repaying the Principal Amount and any other amounts due pursuant to this Note and any other

 

 

notes
under which the repayment of principal and other consideration is pari passu with the repayment
under this Note, or (y) funding the further operations of the Company, or (ii) Liens imposed by law
for taxes that are not yet due or are being contested in good faith by the Company.

          (b) No Conflicting Agreements. Maker shall not enter into any agreement that
would materially impair, interfere or conflict with Maker’s obligations hereunder.

          (c) No Distributions or Redemptions. Maker shall not declare or pay any dividends or
make any distributions of cash, property or securities of Maker with respect to any shares of its
common stock, preferred stock or any other class or series of its stock, or, directly or indirectly
(except for repurchases of common stock by Maker in accordance with the terms of employee benefit
plans or written agreement between Maker and any of its employees approved by the Board of
Directors of Maker prior to April 29, 2008), redeem, purchase, or otherwise acquire for any
consideration any shares of its common stock or any other class of its stock.

          (d) Other Limitations.

               (i) Maker shall not change the nature of its business activity in a manner that would cause a
violation of 13 C.F.R. Section 107.720 and/or Section 107.760(b) (including, without limitation, by
undertaking real estate, film production or oil and gas exploration activities).

               (ii) Maker will at all times comply with the non-discrimination requirements of 13 C.F.R.
Parts 112, 113 and 117.

               (iii) For a period of at least one year after the date of this Note, Maker will locate no more
than 49 percent of the employees or tangible assets of Maker outside the United States.

SECTION 11. STOCK ISSUANCE, STOCK PRICE

     11.1 Partial Repayment in Stock. For the issuance of any common stock which Holder
may elect, in its sole discretion, to receive in partial satisfaction of the Company’s obligation
to pay the Repayment Amount on the Maturity Date, as provided in Section 1, the price per share of
such common stock shall be the average of the closing price on the US Nasdaq Over the Counter
Bulletin Board Market on each of the ten (10) trading days preceding the date of execution of this
Note.

     11.2 Default Payments. In the event that a Default Payment becomes due from Maker to
Holder as provided in Section 3, the issuance of common stock in satisfaction of such Default
Payments shall be at the price per share equal to the average of the closing price of the Company’s
common stock on the US Nasdaq Over the Counter Bulletin Board Market on each of the ten (10)
trading days preceding (a) the date on which such Default Payment becomes due, or (b) the date on
which such Default Payment is made, whichever is lower.

 

 

     11.3 Adjustments for Stock Splits, Dividends, Etc. In the event of changes in the Company’s
common stock by reason of stock dividends, splits, recapitalizations, reclassifications,
combinations or exchanges of shares, separations, reorganizations, liquidations, or the like, the
number of shares of common stock issuable to the Holder hereunder shall be correspondingly adjusted
to give the Holder, upon such issuance, the total number, class, and kind of shares as the Holder
would have owned had such shares of common stock been issued immediately prior to such changes, and
had the Holder continued to hold such shares until after the changes requiring such adjustment.

SECTION 12. MAKER’S REPRESENTATIONS AND WARRANTIES.

Except as disclosed in the Maker’s public filings with the SEC, Maker represents and warrants the
following:

     12.1
Organization, Good Standing and Qualification. Maker is a corporation
duly organized, validly existing and in good standing under the laws of the State of Delaware in
the United States, and has all requisite corporate power and authority to carry on its business.
Maker is duly qualified to transact business and is in good standing in each jurisdiction in which
the failure so to qualify would have a material adverse effect on its business, properties,
operations, prospects or condition (financial or otherwise).

     12.2
Authorization. The execution, delivery and performance by Maker of this
Note, and the transactions contemplated hereunder (including, without limitation, the issuance of
common stock), have been duly authorized by all requisite corporate action by Maker in accordance
with Delaware law. This Note is a valid and binding obligation of Maker, enforceable against Maker
in accordance with its terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other laws of general application affecting enforcements of
creditors’ rights or general principles of equity.

     12.3
No Conflicts. The execution, delivery, performance, issuance, sale and
delivery of this Note and compliance with the provisions hereof by Maker will not, to the knowledge
of Maker, (a) violate any provision of any law, statute, rule or regulation applicable to Maker or
any order, judgment or decree of any court, arbitrator, administrative agency or other governmental
body applicable to Maker or any of its assets or (b) conflict with or result in any material breach
of any of the terms or conditions of any agreement or instrument to which Maker is a party, or give
rise to any right of termination, cancellation or acceleration under any such agreement or
instrument, or result in the creation of any lien or other encumbrance upon any of the material
assets of Maker.

     12.4
Litigation. There is no action, suit, proceeding or investigation
pending or, to the knowledge of Maker, currently threatened against Maker, and/or its directors,
officers, advisers, agents, properties, assets or business, in each case relating to Maker and/or
its business, assets, operations or properties.

     12.5
No Liens. The material assets of Maker are not subject to any existing
lien, pledge, security interest or other encumbrance, direct or indirect, contingent or otherwise.

 

 

     12.6 “Small Business”.

               (a) Small Business Status. Maker together with its “affiliates” (as that term is
defined in Section 121.103 of Title 13 of Code of Federal Regulations (the “Federal Regulations”))
is a “small business concern” within the meaning of the Small Business Investment Act of 1958, as
amended (the “Small Business Act” or “SBIA”), and the regulations promulgated thereunder, including
Section 121.301(c) of Title 13, Code of Federal Regulations.

               (b) Information for SBA Reports. Maker has delivered and/or will deliver to Holder
certain information, set forth by and regarding the Maker and its affiliates in connection with
this Note, on SBA Forms 480, 652 and Part A and B of Form 1031. This information delivered was
true, accurate, complete and correct in all material respects, and any information yet to be
delivered will be true, accurate, complete and correct in all material respects, and in form and
substance acceptable to Holder.

               (c) Eligibility. Maker is eligible for financing by Holder pursuant to Section
107.720 of Title 13 of the Federal Regulations and any other SBA regulations.

SECTION 13. HOLDER’S REPRESENTATIONS AND WARRANTIES

Holder understands that the shares of common stock to be issued to Holder hereunder have not been
and will not be registered within any designated timeframe under the Securities Act of 1933, as
amended (the “Securities Act”). Holder also understands that the common stock is being offered
and sold pursuant to an exemption from registration contained in the Securities Act based in part
upon Holder’s representations contained in this Note. Holder hereby represents and warrants as
follows:

          13.1
Investment Experience. Holder has substantial experience in evaluating
and investing in private placement transactions of securities, and is capable of evaluating the
merits and risks of its investment in Maker and has the capacity to protect its own interests.

          13.2
Investment Purpose. Holder is acquiring the common stock for its own
account for investment only, and not with a view towards distribution.

          13.3
No Solicitation. Holder is not aware of publication of any
advertisement in connection with the issuance of shares of common stock contemplated hereby.

          13.4
Accredited Investor. Holder is an “accredited investor” within the
meaning of Regulation D under the Securities Act.

          13.5
Access to Information. Holder has had access to publicly available
financial statements and other information regarding Maker and has had an opportunity to discuss
such publicaly available information with authorized representatives of Maker. Holder has also had
the opportunity to ask questions of and receive answers from, Maker and its management regarding
the terms and conditions of the investment contemplated hereby.

 

 

          13.6
Stock Legend. Holder understands that all certificates evidencing the
common stock issued to Holder hereunder shall bear a legend, prominently stamped or printed
thereon, reading substantially as follows:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”) OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT
BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS, OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER THE ACT.”

SECTION 14. PIGGYBACK REGISTRATION RIGHTS.

     14.1
Piggyback Registrations. The Company shall notify the Holder in writing
at least fifteen (15) business days prior to the filing of any registration statement under the
Securities Act for purposes of a public offering of securities of the Company (other than
registration statements relating to employee benefit plans or with respect to corporate
reorganizations or other transactions under Rule 145 of the Securities Act), and shall afford the
Holder an opportunity to include in such registration statement all or part of the shares of common
stock issued pursuant to Section 11 hereof and held at such time by Holder (the “Registrable
Securities”). If Holder desires to include in any such registration statement all or any part of
the Registrable Securities held by it, Holder shall so notify the Company in writing within ten
(10) business days after the above-described notice from the Company. Holder’s notice to the
Company shall state the number of shares of Registrable Securities that Holder wishes to include in
such registration statement.

     14.2
Underwriting. If the registration statement under which the Company
gives notice under this Section 14 is for an underwritten offering, the Company shall so advise
Holder. In such event, the right of Holder to include its Registrable Securities in a registration
pursuant to this Section 14 shall be conditioned upon the Holder’s participation in such
underwriting and the inclusion of the Holder’s Registrable Securities in the underwriting to the
extent provided herein. Holder shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting by the Company. If the underwriter
determines in good faith that marketing factors require a limitation of the number of shares to be
underwritten, the number of shares that may be included in the underwriting shall be allocated,
first, to the Company; second, to all other holders of registration rights in effect as of the date
hereof (the “Pre-existing Rights Holders”) that have elected to exercise such rights in connection
with the registration statement; third, to Holder; and fourth, to any other shareholders of the
Company (other than Holder and the Pre-Existing Rights Holders) on a pro rata basis.

     14.4
Expenses Of Registration. All expenses incurred in connection with any
registration, qualification or compliance pursuant to this Section 14 shall be borne by the

 

 

Company, “Registration Expenses” including, without limitation, all registration and filing fees,
printing expenses, attorneys’ fees for the Company’s counsel and Holder’s counsel, blue sky fees
and expenses, provided, however, that all discounts and selling commissions applicable to the sale
incurred in connection with any registrations of Registrable Securities hereunder, shall be borne
by the Holder on the basis of the number of shares sold by Holder.

SECTION 15. INDEMNIFICATION

     15.1
Indemnification.

          (a) In addition to all rights and remedies available to Holder at law or in equity, Maker
shall indemnify Holder and each subsequent holder of this Note, and their respective affiliates,
stockholders, limited partners, general partners, officers, directors, managers, employees, agents,
representatives, successors and assigns (collectively, the “Indemnified Persons”) and pay on behalf
of or reimburse such party for any losses, damages, or expenses, including, without limitation,
reasonable attorneys’ fees and all amounts paid in investigation, defense or settlement of any of
the foregoing which any Indemnified Person may suffer, sustain or become subject to as a result of
or in connection with any material misrepresentation in, or material omission from, any of the
representations and warranties, or any material breach of any covenant or agreement on the part of
Maker under this Note, provided, however, that notwithstanding the foregoing or any other agreement
to the contrary, in no event shall Maker be liable for indirect or consequential losses or damages
of any kind, and in no event shall Maker be liable for any losses or damages resulting from the
gross negligence or willful misconduct of Holder or a subsequent holder of this Note.

          (b) Within five (5) business days after receipt of notice of commencement of any action or the
assertion of any claim by a third party, Holder shall give Maker written notice thereof together
with a copy of such claim, process or other legal pleading of such claim. Maker shall have the
right to assist in the defense thereof by representation of its own choosing, at its own expense.

     15.2
Survival. All indemnification rights hereunder shall survive the
execution and delivery of this Note and the consummation of the transactions contemplated
hereunder, for a period of two (2) years, regardless of any investigation, inquiry or examination
made for or on behalf of, or any knowledge of Holder and/or any of the Indemnified Persons, or the
acceptance by Holder of any certificate or opinion.

SECTION 16. REPLACEMENT OF NOTE.

     Upon receipt by Maker of reasonable evidence of the loss, theft, destruction, or mutilation of
this Note, Maker will deliver a new Note containing the same terms and conditions in lieu of this
Note. Any Note delivered in accordance with the provisions of this Section 6 shall be dated as of
the date of this Note.

 

 

     SECTION 17. MISCELLANEOUS.

     17.1
Notices. All notices, demands and requests of any kind to be delivered
to any party in connection with this Note shall be in writing and shall be deemed to be effective
upon delivery if (i) personally delivered, (ii) sent by confirmed facsimile with a copy sent by
nationally or internationall recognized overnight courier, (iii) sent by nationally or
internationally recognized overnight courier, or (iv) sent by registered or certified mail, return
receipt requested and postage prepaid, addressed as follows:

	 	 	 	 	 
	 

	 	if to Maker:
	 	Northwest Biotherapeutics, Inc.
	 

	 	 	 	7600 Wisconsin Avenue
	 

	 	 	 	Suite 750
	 

	 	 	 	Bethesda, MD 20814
	 

	 	 	 	Tel: +1-240-497-4060
	 

	 	 	 	Fax: +1-240-497-4065
	 

	 	 	 	Attention: Alton Boynton
	 

	 	 	 	aboynton@nwbio.com
	 
	 	 	 	 
	 

	 	with a copy to:
	 	David Engvall, Esq.
	 

	 	 	 	Covington & Burling
	 

	 	 	 	1201 Pennsylvania Avenue, N.W.
	 

	 	 	 	Washington, DC 20004-2401
	 

	 	 	 	Tel: +1-202-662-5307
	 

	 	 	 	Fax: +1- 202-778-5307
	 

	 	 	 	dengvall@cov.com
	 
	 	 	 	 
	 

	 	if to Holder:
	 	Al Rajhi Holdings WLL
	 

	 	 	 	ARH Suisse SA
	 

	 	 	 	3 Rue Maurice
	 

	 	 	 	1204 Geneve
	 

	 	 	 	Suisse
	 

	 	 	 	Tel: +41 22 316 16 60
	 

	 	 	 	Fax: xxxxxxxxxxx
	 

	 	 	 	Attention: William Lovering
	 

	 	 	 	william.lovering@rajhi holdings.com
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Roy F. Ryan, Esq.
	 

	 	 	 	Schellenberg Wittmer
	 

	 	 	 	15bis, rue des Alpes
	 

	 	 	 	1201 Geneva
	 

	 	 	 	Switzerland
	 

	 	 	 	Tel: +41 22 707 8131
	 

	 	 	 	Fax: +41 22 707 8005
	 

	 	 	 	roy.ryan@swlegal.ch

 

 

or to such other address as the party to whom notice is to be given may have furnished to the other
parties hereto in writing in accordance with the provisions of this Section.

     17.2
Parties In Interest; Assignment. This Note shall bind and inure to the
benefit of Holder, Maker and their respective successors and permitted assigns. Maker shall not
transfer or assign this Note without the prior written consent of Holder. Holder may transfer and
assign this note without the prior consent of Maker.

     17.3
Entire Agreement. This Note contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes all prior agreements and
understandings among the parties with respect thereto.

     17.4 Severability. If one or more provisions of this Note are held to be
unenforceable under applicable law, then (i) such provision shall be excluded from this Note, (ii)
the balance of the Note shall be interpreted as if such provision were so excluded, (iii) the
balance of the Note shall be enforceable in accordance with its terms, and (iv) the parties shall
negotiate in good faith to amend or add to the provisions of this Note to effectuate as nearly as
reasonably practicable, and as nearly as permitted under applicable law, the original intent of the
parties with respect to the provision excluded.

     17.5
Amendments. No provision of this Note may be amended or waived without
the express written consent of both Maker and Holder, provided, however, that Holder may waive any
provision hereof that inures to the benefit of Holder without the prior written consent of Maker.

     17.6
Headings. The section and paragraph headings contained in this Note are
for reference purposes only and shall not affect in any way the meaning or interpretation of this
Note.

     17.7
Governing Law. This Note shall be governed by and construed in
accordance with the laws of the U.S. State of New York, other than any rules relating to choice of
law.

     17.8
Nature of Obligation. This Note is being made for business and
investment purposes, and not for household or other purposes.

     17.9
Expenses. Maker shall pay, reimburse or otherwise satisfy, upon demand
of Holder, all fees, costs and expenses incurred and/or undertaken, and to be incurred and/or
undertaken, by Holder relating to the preparation, development and execution of this Note.

     17.10
No Third Party Rights. A person who is not a party to this Note shall
not have any rights under or in connection with it by virtue of the Contracts (Rights of Third
Parties) Act 1999. The rights of the parties to terminate, rescind or agree any variation, waiver
or settlement under this Note is not subject to the consent of any person that is not a party to
this Note.

 

 

     17.11
Counterparts. This Note may be executed and delivered in any number of
counterparts, each of which is an original and which, together, have the same effect as if each
party had signed the same document.

     IN WITNESS WHEREOF, Maker has caused this Note to be duly executed by its duly authorized
person(s) as of the date first written above.

	 	 	 	 	 	 	 	 	 
	NORTHWEST BIOTHERAPEUTICS, INC.	 	 	 	AL RAJHI HOLDINGS WLL
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/Anthony P.Deasey
	 	 	 	By:
	 	/s/Khalid Al Rajhi
	 
	 	 	 	 	 	 	 	 
	Name:

	 	Anthony P. Deasey
	 	 	 	Name:
	 	Khalid Al Rajhi
	 
	 	 	 	 	 	 	 	 
	Title:

	 	Senior Vice President – Chief

Financial Officer
	 	 	 	Title:
	 	Chief Executive Officer

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