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exh10_64.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
10.64

     

    

     

     

    STOCK
SUBSCRIPTION AGREEMENT

     

    This
STOCK SUBSCRIPTION AGREEMENT ("Agreement") is made
and entered into as of June 2, 2008 ("Subscription Date")
by and between Far East Energy Corporation, a Nevada corporation ("Company"), and
International Finance Corporation ("Purchaser").

     

     

    Preliminary
Statement

     

    The
Purchaser desires to purchase and the Company desires to offer and sell to the
Purchaser the number of shares of the Company's common stock, par value $0.001
per share ("Company
Common Stock") set forth opposite the Purchaser's signature on the last
page of this Agreement (such shares, the "Shares") and a
warrant ("Warrant") to purchase
the number of shares of the Company Common Stock set forth opposite the
Purchaser's signature on the last page of this Agreement ("Warrant
Shares").

     

     

    Agreement

     

    The
parties, intending to be legally bound, agree as follows:

     

    ARTICLE
1

     

    SALE
OF SECURITIES

     

    1.1 Purchase of
Securities.  The Purchaser will purchase from the Company the
Shares at a price of U.S. $0.50 per Share in cash (the total price paid for such
Shares, the "Total
Purchase Price").  In consideration therefor and pursuant to
the other terms and conditions of this Agreement, the Company agrees to issue to
the Purchaser a stock certificate for the Shares and a Warrant to purchase the
Warrant Shares.  The Purchaser understands that the Company is under
no obligation to sell any Shares or issue any stock certificate or Warrant to
the Purchaser unless the Company accepts and signs this Agreement.

     

    1.2 Registration.  The
offering and sale of the Shares and the Warrant (the "Offering") are being
made pursuant to (a) an effective Registration Statement on Form S-3, as
amended (No. 333-132631), which became effective on May 10, 2006 (including
the Base Prospectus, the "Registration
Statement") filed by the Company with the Securities and Exchange
Commission (the "SEC"), (b) if
applicable, certain "free writing prospectuses" (as that term is defined in Rule
405 under the Securities Act of 1933, as amended, the "Securities Act"),
that have or will be filed with the SEC and delivered to the Purchaser on or
prior to the date hereof, and (c) a prospectus supplement containing
certain supplemental information regarding the Shares and terms of the Offering
that will be filed with the SEC (the "Prospectus
Supplement") and delivered, or otherwise made available, to the Purchaser
along with the Company's counterpart to this Agreement.

     

    ARTICLE
2

     

    DEFINITIONS

     

    For
purposes of this Agreement, to the extent not defined below, capitalized terms
shall have the meanings provided therefore in the relevant section where their
usage first appears, and the following terms shall have the meanings and
definitions set forth below:

     

    2.1 "Accounting Standards"
shall mean the generally accepted accounting principles in the United States,
applied consistently, as in effect from time to time.

     

    2.2 "Affiliate" shall
mean, with respect to any Person, any Person directly or indirectly Controlling,
Controlled by or under common Control with, that Person.

     

    2.3 "Annual Monitoring
Report" shall mean the annual monitoring report, in form and substance
satisfactory to the Purchaser and the Company, setting out the specific social,
environmental and developmental impact information to be provided by the Company
in respect of its Operations, as such form of Annual Monitoring Report may be
amended or supplemented from time to time with the Purchaser's
consent.

     

    2.4 "Applicable S&E
Law" shall mean all applicable statutes, laws, ordinances, rules and
regulations of the People's Republic of China, including but not limited to any
license, permit or other governmental Authorization, imposing liability or
setting standards of conduct concerning any environmental, social, labor, health
and safety or security risks of the type contemplated by the Performance
Standards.

     

    2.5 "Articles of
Incorporation" shall mean the Articles of Incorporation of the
Company, as amended.

     

    2.6 "Assignment
Agreements" shall mean the Assignment Agreement-Quinnan PSC, dated
June 17, 2003, by and between Phillips China, Inc., a Delaware corporation
and the Company and the Assignment Agreement-Shouyang PSC, dated June 17,
2003, by and between Phillips China Inc., a Delaware corporation, and the
Company.

     

    2.7 "Auditors" shall mean
Payne Smith & Jones, P.C. or another independent accounting
firm.

     

    2.8 "Authority" shall mean
any national, supranational, regional or local government or governmental,
administrative, fiscal, judicial, or government-owned body, department,
commission, authority, tribunal, agency or entity, or central bank (or any
Person, whether or not government owned and howsoever constituted or called,
that exercises the functions of a central bank).

     

    2.9 "Authorizations" shall
mean any consent, registration, filing, agreement, notarization, certificate,
license, approval, permit, authority or exemption from, by or with any
Authority, whether given by express action or deemed given by failure to act
within any specified time period and all
corporate,  creditors'  and  stockholders'
approvals or consents.

     

    2.10 "Base Prospectus"
shall mean the prospectus contained in the Registration Statement.

     

    2.11 "Bylaws" shall mean
the Amended and Restated Bylaws of the Company.

     

    2.12 "CAO" shall mean the
Compliance Advisor Ombudsman, the independent accountability mechanism for the
Purchaser that impartially responds to environmental and social concerns of
affected communities and aims to enhance outcomes.

     

    2.13 "CAO's Role" shall
mean the following responsibilities of the CAO: (a) to respond to
complaints by persons who have been or are likely to be directly affected by the
social or environmental impacts of the Purchaser's projects; and (b) to
oversee audits of the Purchaser's social and environmental performance,
particularly in relation to sensitive projects, and to ensure compliance with
the Purchaser's social and environmental policies, guidelines, procedures and
systems.

     

    2.14 "Certificate of Incumbency
and Authority" shall mean a certificate provided to the Purchaser by the
Company in the form of Annex E to this
Agreement.

     

    2.15 "Coercive Practice"
shall have the meaning ascribed to that term in the Anti-Corruption Guidelines
set forth in Annex C to this
Agreement.

     

    2.16 "Collusive Practice"
shall have the meaning ascribed to that term in the Anti-Corruption Guidelines
set forth in Annex C to this
Agreement.

     

    2.17 "Control" shall mean
the possession, directly or indirectly, by a Person of the power to direct or
cause the direction of the management and policies of another Person through the
ownership of voting securities or otherwise; provided that the direct or
indirect ownership of twenty percent (20%) or more of the voting power of the
total share capital of a Person is deemed to constitute control of that
Person.

     

    2.18 "Corrupt Practice"
shall have the meaning ascribed to that term in the Anti-Corruption Guidelines
set forth in Annex C to this
Agreement.

     

    2.19 "Environmental and Social
Action Plan" shall mean the plan developed by the Company, a copy of
which is attached as Annex F to this
Agreement, setting out specific social and environmental measures to be
undertaken by the Company, to enable its Operations to comply with the
Performance Standards, as such Action Plan may be amended or supplemented from
time to time with the Purchaser's consent, which was publicly disclosed on
July 20, 2007.

     

    2.20 "ESHS Management
System" shall mean the Company's environmental, social health, and safety
management system enabling it to identify, assess and manage risks in respect of
its Operations on an ongoing basis.

     

    2.21 "ESRS" shall mean the
environmental and social review summary, agreed by both the Purchaser and the
Company in accordance with the Purchaser's Disclosure Policies, that was
publicly disclosed on July 20, 2007.

     

    2.22 "Exchange Act" shall
mean the Securities Exchange Act of 1934, as amended.

     

    2.23 "Farmout Agreements"
shall mean the Farmout Agreement-Qinnan PSC, dated June 17, 2003, by and
between Phillips China Inc., a Delaware corporation, and the Company, as
amended, and Farmout Agreement-Shouyang PSC, dated June 17, 2003, by and
between Phillips China Inc., a Delaware corporation, and the
Company.

     

    2.24 "Fraudulent Practice"
shall have the meaning ascribed to that term in the Anti-Corruption Guidelines
set forth in Annex C to this
Agreement.

     

    2.25 "Material Adverse
Effect" shall mean a material adverse effect on the assets, properties,
operations, or financial condition of the Company and its Subsidiaries taken as
a whole.

     

    2.26 "Obstructive Practice"
shall have the meaning ascribed to that term in the Anti-Corruption Guidelines
set forth in Annex C to this
Agreement.

     

    2.27 "Operations" shall
mean the operations, activities and facilities of the Company and the
Subsidiaries (including the design, construction, operation, maintenance,
management and monitoring, as applicable in the United States of America and the
People's Republic of China).

     

    2.28 "Performance
Standards" shall mean the Purchaser's Performance Standards on Social
& Environmental Sustainability, dated April 30, 2006, copies of which
have been delivered to and receipt of which has been acknowledged by the
Company.

     

    2.29 "Production Sharing
Contracts" shall mean the Production Sharing Contract for Exploitation of
Coalbed Methane Resources in Enhong and Laochang, Yunnan Province, the People's
Republic of China, dated January 25, 2002, by and between China United
Coalbed Methane Corp. Ltd. and the Company, and the Production Sharing Contract
for Exploitation of Coalbed Methane Resources for the Qinnan Area in Shanxi
Province, Qinshui Basin, the People's Republic of China, dated April 16,
2002, by and between China United Coalbed Methane Corporation Ltd. and the
Phillips China Inc.

     

    2.30 "Project Documents"
shall mean the Production Sharing Contracts, the Farmout Agreements, the
Assignment Agreements and any amendment or supplement thereto, or replacement or
novation thereof.

     

    2.31 "Rules and
Regulations" shall mean the rules and regulations of the
SEC.

     

    2.32 "Sanctionable
Practice" shall mean any Corrupt Practice, Fraudulent Practice, Coercive
Practice, Collusive Practice, or Obstructive Practice, as defined in this
Agreement and interpreted in accordance with the Anti-Corruption Guidelines set
forth in Annex C to this
Agreement.

     

    2.33 "SEC Documents" shall
mean the Registration Statement, the Base Prospectus and any other preliminary
prospectus or prospectus filed with the SEC in connection with the sale and
purchase of the Shares pursuant to this Agreement, and each periodic report on
Form 10-K, 10-Q, or 8-K that the Company has filed under the Securities Act or
the Exchange Act and in accordance with the Rules and Regulations during the
twelve months prior to the Subscription Date; provided, however, that for
purposes of Section 9.4, such term shall mean any and all periodic reports
and any other documents or disclosures filed with the SEC, and any press release
or other public disclosure made by the Company (without regard to a date or time
limitations).

     

    2.34 "Subsidiary" shall
mean with respect to the Company, an Affiliate over fifty percent (50%) of whose
capital is owned, directly or indirectly by the Company.

     

    2.35 "Transaction
Documents" shall mean this Agreement and the Warrant.

     

    2.36 "World Bank" shall
mean the International Bank for Reconstruction and Development, an international
organization established by Articles of Agreement among its member
countries.

     

    ARTICLE
3

     

    CLOSING;
DELIVERY

     

    3.1 Closing.  The
closing ("Closing") of the
purchase and sale of the Shares to the Purchaser hereunder shall be held at the
Company's offices at 363 N. Sam Houston Parkway E., Suite 380, Houston, Texas
77060, on the third business day after the satisfaction or waiver (subject to
applicable law) of the latest to be satisfied or waived of the conditions set
forth in Article 7 of this Agreement (other than those conditions that by their
nature are to be satisfied at the Closing), or at such other time and place as
the Company and the Purchaser mutually agree upon. The date on which the Closing
occurs is hereinafter referred to as the "Closing
Date".  On or before the Subscription Date, the Company shall
deliver to the Purchaser an executed Company Certification and Subscription
Request, substantially in the form of Annex D.

     

    3.2 Delivery.  At
the Closing, on the basis of the representations and warranties contained in,
and subject to the terms and conditions of, this Agreement, the Purchaser shall
pay the Company the Total Purchase Price in immediately available
funds.  As soon as practicable, and in any case on or before three (3)
business days after the Closing, the Company shall deliver or cause the delivery
to the Purchaser a stock certificate representing the number of Shares purchased
by such Purchaser and a Warrant for the purchase of the Warrant
Shares.  Time shall be of the essence, and delivery at the time and
place specified or otherwise agreed pursuant to this Agreement is a further
condition of the obligation of the Purchaser hereunder.  At the
Closing, the Company shall also deliver the documents and instruments required
to be delivered pursuant to Article 7 hereof.

     

    ARTICLE
4

     

    REPRESENTATIONS
AND WARRANTIES OF THE COMPANY

     

    The
Company represents and warrants to the Purchaser that, as of the Subscription
Date, except as set forth in the disclosure schedule delivered to the Purchaser
and signed by the Company in connection with the execution and delivery of this
Agreement (the "Company Disclosure
Schedule"), the following representations and warranties are true and
correct:

     

    4.1 Organization and
Standing.  The Company and each of its Subsidiaries have been
duly incorporated or formed, as applicable, and are validly existing, and in
good standing under the laws of their respective jurisdiction of incorporation
or formation.  The Company and each of its Subsidiaries have all
requisite power and authority to own and operate its properties and assets and
to carry on their business as presently conducted.  The Company and
each of its Subsidiaries are qualified to do business as a foreign entity in
every jurisdiction in which the failure to be so qualified would have a Material
Adverse Effect.  Other than Far East Energy (Bermuda), Ltd., none of
the Company's Subsidiaries are a "significant subsidiary" as such term is
defined in Rule 405 of the Rules and Regulations.

     

    4.2 Power.  The
Company has all requisite power and authority to execute and deliver the
Transaction Documents and to carry out and perform its obligations under the
terms of the Transaction Documents.

     

    4.3 Validity.  The
execution, delivery, and performance of the Transaction Documents by the Company
have been duly authorized by all requisite action, and each of the Transaction
Documents constitutes the legal, valid, and binding obligation of the Company
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, or similar laws relating to or affecting the
enforcement of creditors' rights.

     

    4.4 No Conflict. The
execution and delivery of the Transaction Documents, the issuance, sale and
delivery of the Shares and the Warrant by the Company under this Agreement, the
performance by the Company of its obligations under the Transaction Documents
and/or the consummation of the transactions contemplated hereby and the
application of the proceeds from the sale of the Shares, as described under "Use
of Proceeds" in the most recent prospectus relating to the sale of the Shares,
will not conflict with, result in the breach or violation of, or constitute
(with or without the giving of notice or the passage of time or both) a
violation of, or default under, (a) any material bond, debenture, note or
other evidence of indebtedness, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument or under any material
lease, license, franchise, permit, to which the Company is a party or by which
it or its properties may be bound or affected, (b) the Articles of
Incorporation or the Bylaws, or (c) any statute or law, judgment, decree,
rule, regulation, ordinance or order of any Authority applicable to the Company,
any of its Subsidiaries or their respective properties, except in the case of
clause (c) for such conflicts, breaches, violations or defaults that would
not be likely to have a Material Adverse Effect.

     

    4.5 Status of
Authorizations. Except for the filings with the SEC and as required by
any "blue sky" laws and for Authorizations set forth in Section 4.5 of the
Company Disclosure Schedule, the Company need not give any notice to, make any
filing with, or obtain any Authorization of any Authority in order to consummate
the transactions contemplated by this Agreement. The Company and its
Subsidiaries possess all necessary Authorizations from any Authority that are
necessary for the operation of their respective business as currently conducted,
except where such failure to possess could not reasonably be expected to have a
Material Adverse Effect and except for those not yet required to be obtained in
which the failure to possess could reasonably be expected to have a Material
Adverse Effect, which the Company and its Subsidiaries intend to obtain in due
course.  Neither the Company nor any of its Subsidiaries has received
any written notice of proceedings relating to the revocation or modification of
any such Authorization which, if the subject of an unfavorable decision, ruling
or finding, could reasonably be expected to have a Material Adverse
Effect.

     

    4.6 No
Amendments.  Neither the Articles of Incorporation nor the
Bylaws have been amended since March 15, 2005.

     

    4.7 Authorized Capital.
The authorized, subscribed and paid-in capital and options and warrants of the
Company at the time immediately prior to the Closing and immediately after the
Closing are set forth in Section 4.7 of the Company Disclosure Schedule,
subject to any exercise of warrants, options or other right to purchase or
otherwise acquire equity securities of the Company outstanding on the
Subscription Date.  All of the issued and outstanding shares of Common
Stock were validly issued, fully paid and nonassessable.  All
subscriptions, warrants, options, convertible securities, and other rights
(contingent or other) to purchase or otherwise acquire equity securities of the
Company issued and outstanding as of the Subscription Date, or material
contracts, commitments, understandings, or arrangements by which the Company or
any of its Subsidiaries is or may be obligated to issue shares of Common Stock,
or securities or rights convertible or exchangeable for shares of Common Stock,
are in all material respects as set forth in the SEC
Documents.  Except as set forth in the SEC Documents, or as a result
of exercises of stock options pursuant to the Company's stock option and
incentive plans, no Common Stock nor any subscription, warrant, option,
convertible security, or other right (contingent or other) to purchase or
otherwise acquire equity securities of the Company is outstanding on the
Subscription Date.

     

    4.8 Shares Duly
Authorized. The Shares are duly and validly authorized and when issued
and delivered against payment pursuant to the terms of this Agreement will be
duly and validly issued, fully paid, and nonassessable, and will be free of any
liens or encumbrances with respect to the issuance thereof; provided, however,
that the transfer of the Shares shall be subject to federal securities laws at
the time a transfer is proposed.  The Shares will conform to the
description of the material terms thereof contained in the Base Prospectus under
the caption "Description of Capital Stock".

     

    4.9 No Immunity. Neither
the Company nor any of its Subsidiaries nor any of its or their properties
enjoys any right of immunity from set off, suit or execution with respect to the
Company's obligations under any Transaction Document or otherwise.

     

    4.10 Financial Condition.
Except as the Company may have publicly disclosed (and then solely to the extent
so disclosed) in the SEC Documents, press releases or in other "public
disclosures" as such term is defined in Section 101(e) of Regulation FD of
the Exchange Act, in each case, filed or made through and including the date
hereof, since March 31, 2008, there has not been any Material Adverse
Effect.

     

    4.11 Financial Statements.
The consolidated financial statements of the Company and its Subsidiaries and
the related notes thereto included in the SEC Documents present fairly, in all
material respects, the financial position and the liabilities of the Company and
its Subsidiaries as of the dates indicated and the results of operations and
cash flows for the periods therein specified subject, and in the case of
unaudited statements only, to normal year-end audit
adjustments.  Except as set forth in such financial statements (or the
notes thereto), such financial statements (including the related notes) have
been prepared in accordance with the Accounting Standards.

     

    4.12 Taxes. The Company
and each of its Subsidiaries has timely filed all federal, state, local and
foreign income and franchise and other tax returns required to be filed by any
jurisdiction to which it is subject and has paid all taxes due in accordance
therewith, except where the failure to so timely file or pay would not be likely
to result in a Material Adverse Effect.

     

    4.13 Litigation.  Except
as disclosed in the SEC Documents, neither the Company nor its Subsidiaries are
engaged in any litigation, action, suit or proceeding before any court,
governmental agency or body, domestic or foreign, now pending or, to the actual
knowledge of the Company, threatened in writing against the Company or its
Subsidiaries wherein an unfavorable decision, ruling or finding would reasonably
be expected to have a Material Adverse Effect.

     

    4.14 Compliance.  Neither
the Company nor any of its Subsidiaries (a) is in violation of its
Articles of Incorporation or Bylaws (or other applicable governing
documents) (b) is in default, and no event has occurred which, with notice
or lapse of time or both, would constitute a default, in the due performance or
observance of terms and conditions contained in any material indenture, mortgage
deed of trust, loan agreement or other agreement or instrument to which it is a
party or by which it is bound or to which any of its properties or assets is
subject or (c) is in violation of any law, ordinance, rule or regulation of
any foreign, federal, state or local government or any agency thereof, or any
writ, order or decree, to which it or its property or assets may be subject or
has failed to obtain any Authorization necessary to the ownership of its
properties or the conduct of its business, except, in the case of clause
(b) and (c) where such default, violation failure would not be likely
to result in a Material Adverse Effect.

     

    4.15 Environmental
Matters. To the best of the Company's knowledge and belief, there are no
material social or environmental risks or issues in respect of its Operations
other than those identified by the disclosed ESRS.  The Company has
not received nor is aware of (a) any existing or threatened complaint,
order, directive, claim, citation or notice from any Authority or (b) any
material written communication from any Person, in either case, concerning the
failure of its Operations to comply with any matter covered by the Performance
Standards, which has, or could reasonably be expected to have, a Material
Adverse Effect or any material adverse impact on the implementation or conduct
of the Operations in accordance with the Performance Standards.

     

    4.16 Sanctionable
Practices.  The Company has not committed or engaged in nor has
it authorized its Affiliates or any person acting on the Company's or its
Affiliate's behalf to commit or engage in, with respect to the transactions
contemplated by the Transaction Documents and the Project Documents, any
Sanctionable Practices.

     

    4.17 Insurance. The
Company's insurance policies cover such risks and contain such policy limits,
types of coverage and deductibles as are, in the Company's judgment, adequate to
insure fully against the material risks to which the Company and its
Subsidiaries and its or their employees, business, properties and other assets
would reasonably be expected to be exposed in the operation of the business as
currently conducted.  All of the Company's insurance policies are
valid and enforceable policies, all premiums due and payable under such policies
have been paid and the Company is otherwise in compliance in all material
respects with the terms of such policies and bonds.  The Company has
no knowledge or belief of any threatened termination of, or material premium
increase with respect to, any of such policies.

     

    4.18 Registration
Statement. The Registration Statement is effective under the Securities
Act and no stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the Base
Prospectus and the Prospectus Supplement has been issued by the SEC and no
proceedings for that purpose have been instituted or, to the knowledge of the
Company, are threatened by the SEC.

     

    4.19 Project
Documents.  Each Project Document is a valid and binding
agreement, enforceable against the Company and its Subsidiaries, as applicable,
in accordance with its terms, except as such enforceability (a) may be
limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) is subject to general principles of
equity (regardless of whether enforceability is considered in a proceeding at
equity or at law) and, except to the extent described in any SEC Document, the
Company and any Subsidiary of the Company are not in any material default and
have no knowledge of any material default of the counterparties thereto, under
any such Project Document.

     

    4.20 All Material Facts
Disclosed. The Registration Statement, Base Prospectus, and Prospectus
Supplement filed with the SEC and the documents incorporated therein
(a) conform in all material respects to the requirements of the Securities
Act and the Rules and Regulations, and (b) do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made, in light of the circumstances under which
they were made, not misleading.

     

    ARTICLE
5

     

    COVENANTS
OF THE COMPANY

     

     

    The
Company covenants with the Purchaser as follows:

     

    5.1 Environmental.  The
Company and its Subsidiaries shall:

     

    (a) undertake
its Operations in compliance with the Environmental and Social Action Plan and
otherwise comply with the Performance Standards, and use its reasonable efforts,
including exercising any voting or approval rights it might have under any
Project Document or other agreement governing construction or operations
relating to the Company's properties or assets to ensure that its agents,
contractors and subcontractors comply with the Performance Standards the
Environmental, Health and Safety Guidelines of the World Bank Group, and
Applicable S&E Law;

     

    (b) periodically
review the form of the Annual Monitoring Report and advise the Purchaser as to
whether revision of the form is necessary or appropriate in light of changes to
the Operations, or in light of environmental or social risks identified by the
ESHS Management System, and revise the form of the Annual Monitoring Report as
agreed with the Purchaser;

     

    (c) use all
reasonable efforts to ensure the continuing operation of the ESHS Management
System to assess and manage the social and environmental performance of the
Operations and to comply with the Performance Standards;

     

    (d) not amend
the Environmental and Social Action Plan in any material respect without the
prior written consent of the Purchaser;

     

    (e) not
undertake, or invest in any Person engaged in, any of the activities set forth
on Annex B
to this Agreement;

     

    (f) within
ninety (90) days after the end of each calendar year end, deliver to the
Purchaser the Annual Monitoring Report in a form and substance substantially
satisfactory to the Purchaser and the Company consistent with the requirements
of this Agreement confirming compliance with the Environmental and Social Action
Plan, the social and environmental covenants of this Agreement and Applicable
S&E Law or, as the case may be, identifying any non-compliance or failure,
and the actions being taken to remedy any such deficiency; and

     

    (g) within
three (3) business days after its occurrence and discovery thereof by any
executive officer of the Company or any other Company employee that (i) has
primary management responsibilities or primary oversight responsibility for the
implementation and monitoring of the ESHS Management System or (ii) is
designated under the ESHS Management System as having primary responsibility for
any such matter, notify the Purchaser, of any social, labor, health and safety,
security or environmental incident, accident or circumstance having, or which
could reasonably be expected to have, any material adverse impact on the
implementation or operation of the Operations in compliance with the Performance
Standards or a Material Adverse Effect, specifying in each case the nature of
the incident, accident, or circumstance and the impact or effect arising or
likely to arise therefrom, and the measures the Company is taking or plans to
take to address them and to prevent any future similar event and keep the
Purchaser informed of the on-going implementation of those
measures.

     

    (h) publicly
disclose any new concession areas acquired by the Company or any of its
Subsidiaries, to the extent not otherwise included in the  SEC
Documents or the Company's other public disclosures.

     

    5.2 Access.  Upon
the Purchaser's request, and with reasonable prior notice to the Company, the
Company shall permit representatives of the Purchaser and the CAO, during normal
office hours, to (a) visit any of the sites and premises where the business
of the Company or its Subsidiaries is conducted; (b) inspect any of the
sites, facilities, plants and equipment of the Company or its Subsidiaries;
(c) have access to the books of account and all records of the Company and
its Subsidiaries; and (d) have access to those employees, agents,
contractors and subcontractors of the Company and its Subsidiaries who have or
may have knowledge of matters with respect to which the Purchaser seeks
information; provided that no such reasonable notice shall be required in the
event of a default under or breach of any Transaction Document; provided,
further, that in the case of the CAO, such access shall only be for the purpose
of carrying out the CAO's Role.

     

    5.3 Sanctionable
Practices.  The Company agrees not to engage in (and the
Company shall not authorize or permit any Affiliate or any other Person acting
on its behalf to engage in) with respect to any transaction contemplated by the
Transaction Documents and the Project Documents, any Sanctionable
Practice.  The Company further covenants that should the Purchaser
notify the Company of its concern that there has been a violation of the
provisions of this paragraph, the Company shall cooperate in good faith with it
and its representatives in determining whether such a violation has occurred,
and shall respond promptly and in reasonable detail to any notice from the
Purchaser, and shall furnish documentary support for such response upon the
Purchaser's request.

     

    5.4 Insurance.  The
Company shall insure and keep insured with financially sound and reputable
insurers, all its assets and business, including all of the Operations, against
material risks, including the insurances specified in Annex A, under
forms of policies and with insurers reasonably acceptable to the Purchaser;
provided, however that the obligations under this Section 5.4 will not apply to
the insurance coverage described in Sections 1(a) and (c) of Annex A to this
Agreement until such time as the Company begins production outtake at the wells
covered by the Project Documents.

     

    5.5 Use of
Proceeds.  The Company shall not use the proceeds of the
Offering in reimbursement of, or for expenditures in the territories of any
country which is not a member of the World Bank or for goods produced in or
services supplied from any such country.

     

    5.6 Information Rights and
Reporting.  The Company agrees as follows:

     

    (a) As long
as the Company has a class of equity securities registered under
Section 12(g) of the Exchange Act or is subject to Section 15(d) of
the Exchange Act, the Company shall file electronically with the SEC or
otherwise make publicly available, all quarterly and annual financial statements
that would be required to be contained in a filing with the SEC on Forms 10-Q
and 10-K.

     

    (b) As long
as the Company does not have a class of equity securities registered under
Section 12(g) of the Exchange Act or is not subject to Section 15(d)
of the Exchange Act,  then the Company shall provide to the Purchaser:
(i) within one hundred and twenty (120) days after the end of each fiscal
year, audited annual financial statements (a balance sheet as of the end of such
financial year and the related statements of income, stockholders' equity and
cash flows for the financial year then ended) for the Company on a consolidated
basis, prepared in accordance with the Accounting Standards and certified by the
Auditors; and (ii) within sixty (60) days after the end of each quarter of
each fiscal year (excluding the fourth quarter of each fiscal year) quarterly
financial statements (a balance sheet as of the end of such quarter and the
related statements of income, stockholders' equity and cash flows for the
quarter then ended) for the Company on a consolidated basis, prepared in
accordance with the Accounting Standards (other than the inclusion of footnotes
and subject to customary year end adjustments).

     

    (c) The
Company will disclose in its periodic reports on Form 10-K, 10-Q, or 8-K (or
applicable successor reports) filed under the Exchange Act with the SEC or
otherwise made publicly available as contemplated in clause (a) above, or
otherwise prepared and provided in accordance with clause (b) above, all
payments made to the government of the People's Republic of China in all
material respects, which shall include the material tax, royalty and other
material payments made annually by the Company or any Affiliate to local and/or
national governments in the People's Republic of China under any concession
agreement, host country agreement or the Project Documents.

     

    (d) The
Company shall provide to the Purchaser a copy of any management letters
delivered by the Auditors and such other information as the Purchaser from time
to time reasonably requests with regard to any material developments in or
affecting the Company's business.

     

    (e) The
Company shall provide the Purchaser with any annual business plan and any annual
budget of the Company.

     

    (f) The
Company shall provide the Purchaser with any copies of material filings made
with respect to the Company with government agencies, including notification of
material litigation which could reasonably be expected to have a Material
Adverse Effect.

     

    5.7 Anti-Money Laundering
Provision. The Company will institute, maintain and comply with
appropriate internal procedures and controls, satisfactory to Purchaser, and
follow best international banking standards, for the purpose of:

     

    (a) preventing
the Company or any of its affiliates from being used for money laundering, the
financing of terrorist activity, fraud, or other corrupt or illegal purposes or
practices; and

     

    (b) ensuring
that the Company will not enter into any transaction with, or for the benefit
of, any individuals or institutions named on lists of sanctioned persons
promulgated by the United Nations Security Council or its committees resolutions
in connection with money laundering or anti-terrorism matters.

     

    5.8 Provision of
Information. If at any time the Purchaser notifies the Company in writing
that the Purchaser no longer wishes to receive the information or documentation
required to be delivered pursuant to Section 5.1(f), 5.1(g), 5.6(b), 5.6(d)
or 5.6(e), the Company shall immediately discontinue providing such information
and documentation to the Purchaser.  Thereafter, if the Purchaser
notifies the Company in writing that it again wishes to begin receiving such
information and documentation, the Company shall immediately again begin
providing such information and documentation to the Purchaser as required by
such Sections.

     

    ARTICLE
6

     

    REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER

     

    The
Purchaser represents and warrants to the Company, as of the Subscription Date,
with respect to the Offering as follows:

     

    6.1 Organization and
Standing.  The Purchaser is an international organization,
established by Articles of Agreement among its member
countries.

     

    6.2 Power.  The
Purchaser has all requisite power to execute and deliver the Transaction
Documents and to carry out and perform its obligations under the terms of the
Transaction Documents.

     

    6.3 Validity.  The
execution, delivery, and performance of the Transaction Documents by the
Purchaser have been duly authorized by all requisite action, and each of the
Transaction Documents constitutes the legal, valid, and binding obligation of
the Purchaser enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, or similar laws relating to or affecting
the enforcement of creditors' rights.

     

    6.4 No Conflict. The
execution and delivery of the Transaction Documents, the performance by the
Purchaser of its obligations under the Transaction Documents and/or the
consummation of the transactions contemplated hereby will not conflict with,
result in the breach or violation of, or constitute (with or without the giving
of notice or the passage of time or both) a violation of, or default under,
(a) the Articles of Agreement of the Purchaser, or (b) any
statute or law, judgment, decree, rule, regulation, ordinance or order of any
Authority applicable to the Purchaser or their respective properties, except in
the case of such conflicts, breaches, violations or defaults that would not be
likely to have a Material Adverse Effect.

     

    6.5 Status of
Authorizations.  The Purchaser need not give any notice to,
make any filing with, or obtain any Authorization of any Authority in order to
consummate the transactions contemplated by this Agreement, other than any such
notices or filings that have been made by the Purchaser.

     

    6.6 Underwriter.  The
Purchaser is not an "underwriter" within the meaning of Section 2(a)(11) of the
Securities Act in connection with its purchase of the Shares and
Warrant.

     

    6.7 Receipt of Base
Prospectus.  Purchaser acknowledges receipt of the Base
Prospectus prior to the date of any "offer" or "sale" (as such terms are defined
in the Securities Act) of the Shares and the Warrant.

     

    6.8 Residence; Accredited
Investor.  Purchaser's principal residence is the District of
Columbia, United States.  Purchaser is an "accredited investor" within
the meaning of SEC Rule 501 of Regulation D, as presently in
effect.

     

    ARTICLE
7                                

     

    CONDITIONS
OF PURCHASER'S OBLIGATIONS

     

    The
obligations of the Purchaser to consummate the transactions under this Agreement
shall be subject to the satisfaction of each of the conditions set forth below,
unless waived by the Purchaser, on or prior to the date of the
Closing.

     

    7.1 Agreement. The
Transaction Documents will be entered into and shall be in full force and
effect.

     

    7.2 Representations, Warranties
and Obligations. The representations and warranties of the Company set
forth in Article 4 of this Agreement will be true and correct in all
material respects as the Closing Date and the Subscription Date as though made
on and as of such date; the Company will have performed all obligations and
complied in all material respects with all covenants required to be performed or
complied with by the Company under this Agreement on or prior to the date of the
Closing.  The Purchaser shall have received a certificate of the Chief
Executive Officer or Chief Financial Officer of the Company to that
effect.

     

    7.3 Authorizations. The
Company has obtained and provided to the Purchaser copies of all necessary
Authorizations listed in Section 4.5 of the Company Disclosure Schedule and
resolutions of the Board of Directors of the Company and/or a committee thereof
relating to transactions contemplated by this Agreement and all of those
Authorizations and resolutions are in full force and effect.

     

    7.4 Opinion of
Counsel.  The Purchaser will have received an opinion of
counsel to the Company in form and substance reasonably satisfactory to the
Purchaser.

     

    7.5 Expenses.  The
Company shall have paid Purchaser all fees and expenses owing to the Purchaser
which are due on the date of the Closing, and all expenses owing pursuant to
Section 9.1 of this Agreement as of the date of the Closing and for which
the Company has received an invoice.

     

    7.6 Documents. The
Purchaser is satisfied that the Project Documents are fully effective and
unconditional and that there is no default under any of the Project
Documents.

     

    7.7 No Material Adverse
Effect.  Since December 31, 2007, nothing has occurred
which has or may reasonably be expected to have a Material Adverse
Effect.

     

    7.8 Insurance
Requirements.  The Purchaser has received copies of all
insurance policies evidencing compliance with the requirements of Annex A to this
Agreement (other than the insurance coverage described in Sections 1(a) and (c)
of Annex A to
this Agreement), including the renewal certificate for the ACE policy and a copy
of the Huatai policy upon receipt by the project company, together with a
certification from the Company's insurers or insurance agents confirming that
all premiums for the following policies have been paid: (a) Control of Well, (b)
Excess Liability and (c) ACE DIC/DIL Foreign Liability.

     

    7.9 Company
Certifications.  The Purchaser has received certifications by
the Company, substantially in the form of Annex D to this
Agreement, with respect to the conditions specified and expressed to be
effective as of the date of the Closing.

     

    7.10 Certificate of Incumbency
and Authority.  The Purchaser has received a Certificate of
Incumbency and Authority.

     

    ARTICLE
8

     

    CANCELLATION
RIGHT

     

    8.1 Cancellation of Purchaser's
Subscription.  Notwithstanding any other provision of this
Agreement, the Purchaser may, by written notice to the Company, cancel the right
of the Company to request a subscription of any of the Shares if at any time
prior to the date of the Closing: (a) in the reasonable opinion of the
Purchaser, a Material Adverse Effect has occurred, (b) there exists any
situation which reasonably demonstrates that performance by the Company of its
obligations under any of the Transaction Documents cannot be expected, or
(c) the date of the Closing has not occurred on or before June 30, 2008
(other than as a result of the Purchaser's breach of this
Agreement).  Notwithstanding any other provision of this Agreement,
the Company may, by written notice to the Purchaser, terminate this Agreement if
the date of the Closing has not occurred on or before June 30, 2008 (other than
as a result of the Company's breach of this Agreement).

     

    ARTICLE
9

     

    MISCELLANEOUS

     

    9.1 Expenses.  Within
ten (10) days of the receipt of any invoice or other written request, the
Company shall pay to the Purchaser, as the Purchaser may direct, or, as the case
may be, reimburse the Purchaser any amount paid by the Purchaser, on account of:
(a) all taxes, duties, fees or other charges payable on or in connection
with the execution, issue, delivery or registration of this Agreement and any
other documents related to it and (b) the reasonable fees and expenses of
the Purchaser's counsel incurred in connection with the preparation of the
investment by the Purchaser provided for under this Agreement, and the
preparation and/or review, execution and, where appropriate, translation and
registration of this Agreement and any other documents related to
it.  In the event that Purchaser brings any action or proceeding, to
enforce the terms and conditions of this Agreement and the Purchaser is the
prevailing party (as determined by the court, agency or other authority before
which such action, proceeding or arbitration is commenced), the reasonable costs
and expenses incurred by the Purchaser in relation to such efforts to enforce or
protect its rights under this Agreement and any other documents related to it,
including reasonable legal and other professional consultants'
fees.  The provisions of this Section 9.1 shall survive the
execution and delivery of this Agreement.

     

    9.2 Survival.  The
representations and warranties contained herein shall survive the execution and
delivery of this Agreement and the sale of the Shares and
Warrant.  The covenants herein shall survive the execution and
delivery of this Agreement for so long as the Purchaser "beneficially owns"
(within the meaning of Rule 13d-3 under the Exchange Act) 1,000,000 Shares
(including any Warrant Shares) (the "Threshold
Shares").  The Threshold Shares shall be subject to appropriate
and equitable adjustment in the event of stock splits, dividends, subdivisions,
recapitalizations and similar transactions.

     

    9.3 Assignment; Successors and
Assigns.  This Agreement may not be assigned by either party
without the prior written consent of the other party.  This Agreement
and all provisions thereof shall be binding upon, inure to the benefit of, and
are enforceable by the parties hereto and their respective successors and
permitted assigns.

     

    9.4 Confidentiality.  The
Purchaser acknowledges and agrees that it has received and may in the future
receive Confidential Information regarding the Company and the Purchaser's
disclosure of such Confidential Information would cause substantial harm and
damages to the Company and its Subsidiaries. The Purchaser shall hold any
Confidential Information it receives from the Company in confidence, and shall
not, without the consent of the Company, reveal any Confidential Information to
any Person other than the Purchaser's directors, officers, employees, employees
of the World Bank, attorneys, independent auditors, rating agencies, contractors
and consultants (including, without limitation, technical and financial
advisors) who need to know such information in connection with the performance
of their duties for the Purchaser.  "Confidential
Information" shall mean any written information concerning the businesses
and affairs of the Company that the Company has provided or shall in the future
provide to the Purchaser that is clearly and conspicuously identified as
"Confidential Information" but excluding information that: (a) in contained in
any SEC Documents; (b) is or becomes available to the public from a source other
than the Purchaser; (c) was available to the Purchaser prior to its disclosure
to the Purchaser by the Company; (d) was or is developed by the Purchaser
independently of, and without reference to, the Confidential Information; (e) is
required to be disclosed by action of any court, tribunal or regulatory
authority or by any requirement of law, legal process, regulation, or
governmental order, decree or rule, or is necessary for the Purchaser to
disclose in connection with any proceeding in any court or tribunal or before
any regulatory authority in order to preserve its rights; (f) the Company agrees
in writing may be disclosed; or (g) is or becomes available to the Purchaser
from sources which to the Purchaser's knowledge are under no obligation of
confidentiality to the Company.  In the event that the Purchaser
receives a request or is required to disclose any Confidential Information
pursuant to clause (e) above, the Purchaser shall (to the extent permitted by
law), promptly notify the Company of the existence of such request or
requirement to disclose such Confidential Information.

     

    9.5 Notices.  All
notices, requests, and other communications under the Transaction Documents
shall be in writing and will be deemed to have been duly given and received
(a) when personally delivered, (b) when sent by facsimile upon
confirmation of receipt, (c) one business day after the day on which the
same has been delivered prepaid to a nationally recognized courier service, or
(d) five business days after the deposit in the United States mail,
registered or certified, return receipt requested, postage prepaid, in each case
addressed to the Company at 363 N. Sam Houston Parkway E., Suite 380, Houston,
Texas 77060, Attn: Chief Executive Officer, facsimile number, (832)
598-0479, with a copy to Amar Budarapu, Esq., Baker & McKenzie LLP, 2300
Trammell Crow Center, 2001 Ross Avenue, Dallas, Texas 75201, facsimile number,
(214) 978-3099, and as to the Purchaser addressed to International Finance
Corporation, 2121 Pennsylvania Avenue, N.W., Washington, D.C. 20433, facsimile
number, (202) 974-4768, Attn: Director, Oil Gas, Mining and Chemicals
Department, with a copy (in the case of communications relating to payments)
sent to the attention of the Director, Department of Financial Operations, at
facsimile number (202) 522-7419.  Any party hereto from time to time
may change its address, facsimile number, or other information for the purpose
of notices to that party by giving notice specifying such change to the other
parties hereto.  The Purchaser and the Company may each agree to
accept notices and other communications to it under the Transaction Documents by
electronic communications pursuant to procedures reasonably approved by it;
provided that approval of such procedures may be limited to particular notices
or communications.

     

    9.6 Governing Law;
Jurisdiction.

     

    (a) The
Transaction Documents, and the provisions, rights, obligations, and conditions
set forth therein, and the legal relations between the parties thereto,
including all disputes and claims, whether arising in contract, tort, or under
statute, shall be governed by and construed in accordance with the laws of the
State of New York without giving effect to its conflict of law provisions that
would cause the applications of any other law (other than Section 5-1401 of
the New York General Obligations Law).

     

    (b) For the
exclusive benefit of the Purchaser, the Company irrevocably agrees that any
legal action, suit or proceeding arising out of or relating to the Transaction
Documents may be brought in the courts of the United States of America located
in the Southern District of New York or in the courts of the State of New York
located in the Borough of Manhattan. By the execution of the Transaction
Documents, the Company irrevocably submits to the jurisdiction of any such court
in any such action, suit or proceeding. Final judgment against the Company in
any such action, suit or proceeding shall be conclusive and may be enforced in
any other jurisdiction, including the People's Republic of China, by suit on the
judgment, a certified or exemplified copy of which shall be conclusive evidence
of the judgment, or in any other manner provided by law.

     

    (c) Nothing
in the Transaction Documents shall affect the right of the Purchaser to commence
legal proceedings or otherwise sue the Company in any other appropriate
jurisdiction, or concurrently in more than one jurisdiction, or to serve
process, pleadings and other legal papers upon the Company in any manner
authorized by the laws of any such jurisdiction.

     

    (d) The
Company also irrevocably consents, if for any reason its authorized agent for
service of process of summons, complaint and other legal process in any action,
suit or proceeding is not present in New York, New York, to the service of such
papers being made out of the courts of the United States of America located in
the Southern District of New York and the courts of the State of New York
located in the Borough of Manhattan by mailing copies of the papers by
registered United States air mail, postage prepaid, to the Company at its
address specified pursuant to Section 9.5.  In such a case, the
Purchaser shall also send by facsimile, or have sent by facsimile, a copy of the
papers to the Company.

     

    (e) Service
in the manner provided in Sections 9.6(d) in any action, suit or proceeding will
be deemed personal service, will be accepted by the Company as such and will be
valid and binding upon the Company for all purposes of any such action, suit or
proceeding.

     

    (f) The
Company irrevocably waives to the fullest extent permitted by applicable law:
(i) any objection which it may have now or in the future to the laying of
the venue of any action, suit or proceeding in any court referred to in this
Section 9.6; (ii) any claim that any such action, suit or proceeding
has been brought in an inconvenient forum; (iii) its right of removal of
any matter commenced by the Purchaser in the courts of the State of New York to
any court of the United States of America; and (iv) any and all rights to
demand a trial by jury in any such action, suit or proceeding brought against
such party by the Purchaser.

     

    (g) To the
extent that the Company may be entitled in any jurisdiction to claim for itself
or its assets immunity in respect of its obligations under the Transaction
Documents from any suit, execution, attachment (whether provisional or final, in
aid of execution, before judgment or otherwise) or other legal process or to the
extent that in any jurisdiction that immunity (whether or not claimed) may be
attributed to it or its assets, the Company irrevocably agrees not to claim and
irrevocably waives such immunity to the fullest extent permitted now or in the
future by the laws of such jurisdiction.

     

    (h) The
Company hereby acknowledges that the Purchaser shall be entitled under
applicable law, including the provisions of the International Organizations
Immunities Act, to immunity from a trial by jury in any action, suit or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby brought against the Purchaser in any court of the United
States of America. The Company hereby waives any and all rights to demand a
trial by jury in any action, suit or proceeding arising out of or relating to
the Transaction Documents or the transactions contemplated by the Transaction
Documents, brought against the Purchaser in any forum in which the Purchaser is
not entitled to immunity from a trial by jury.

     

    (i) To the
extent that the Company may, in any action, suit or proceeding brought in any of
the courts referred to in Section 9.6(b) or any other court in the United
States of America, the People's Republic of China or elsewhere arising out of or
in connection with this Agreement, be entitled to the benefit of any provision
of law requiring the Purchaser in such action, suit or proceeding to post
security for the costs of the Company, or to post a bond or to take similar
action, the Company hereby irrevocably waives such benefit, in each case to the
fullest extent now or in the future permitted under the laws of the United
States of America or any state thereof of the People's Republic of China or, as
the case may be, the jurisdiction in which such court is located.

     

    9.7 Severability.  In
the event that any provision of this Agreement or the application of any
provision hereof is declared to be illegal, invalid, or otherwise unenforceable
by a court of competent jurisdiction, the remainder of this Agreement shall not
be affected except to the extent necessary to delete such illegal, invalid, or
unenforceable provision unless that provision held invalid shall substantially
impair the benefits of the remaining portions of this Agreement.

     

    9.8 Headings.  The
headings in this Agreement are for convenience of reference only and shall not
constitute a part of this Agreement, nor shall they affect its meaning,
construction, or effect.

     

    9.9 Counterparts.  This
Agreement may be executed in multiple counterparts, each of which shall be
deemed to be an original instrument and all of which together shall constitute
one and the same instrument.  Facsimile or electronic signatures shall
be deemed originals for all purposes hereunder.

     

    9.10 Entire
Agreement.  This Agreement embodies the entire understanding
and agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to the
subject matter hereof.

     

    9.11 Further
Assurances.  The parties agree to execute and deliver all such
further documents, agreements and instruments and take such other and further
action as may be necessary or appropriate to carry out the purposes and intent
of this Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the Purchaser has caused this Agreement to be signed by the
undersigned thereto duly authorized, as of the Subscription Date.

     

    
    

     

    
      	 U.S.
      $2,250,000.00	 	 INTERNATIONAL
      FINANCE CORPORATION
	 Amount of
      Investment	 	 	 
	 (U.S.
      $0.50 per Share)	 	 	 
	 	 	 	 
	 4,500,000	 	 By:	 /s/ Delanson
      D. Crist    
	 (Number
      of Shares)	 	 Name:	 Delanson D.
      Crist    
	 	 	 Title:	 Acting
      Director Oil, Gas, Mining and Chemicals Department
	 	 	 	 
	 1,575,000	 	 	 
	 (Number
      of Warrant Shares)	 	 	 
	 	 	 	 
	 This
      Agreement is hereby confirmed, agreed and accepted by the Company as of
      the Subscription Date.	 	 
	 	 	 	 
	 	 	 FAR
      EAST ENERGY CORPORATION
	 	 	 By:    	 /s/ Randall D.
      Keys    
	 	 	 Name:	 Randall D.
      Keys
	 	 	 Title:	 Chief
      Financial Officerex4-7.htm

    
      
        
          Exhibit
4.7

         

         

        

         

        

         

        

         

        CENTERPOINT
ENERGY, INC.

         

        

         

        To

         

        

         

        THE BANK
OF NEW YORK TRUST COMPANY, NATIONAL ASSOCIATION

         

        (successor
to JPMorgan Chase Bank, National Association (formerly JPMorgan Chase
Bank))

         

        

         

        Trustee

         

        

         

        __________________

         

        

         

        SUPPLEMENTAL
INDENTURE NO. 8

         

        

         

        Dated as
of May 6, 2008

         

        

         

        _________________

         

        

         

        $300,000,000

         

        

         

        6.50%
Senior Notes due 2018

         

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      CENTERPOINT
ENERGY, INC.

      SUPPLEMENTAL
INDENTURE NO. 8

      

      6.50%
Senior Notes due 2018

      

       

      SUPPLEMENTAL
INDENTURE No. 8, dated as of May 6, 2008, between CENTERPOINT ENERGY,
INC., a Texas corporation (the “Company”), and THE BANK OF NEW YORK TRUST
COMPANY, NATIONAL ASSOCIATION (successor to JPMorgan Chase Bank, National
Association (formerly JPMorgan Chase Bank)), as Trustee (the
“Trustee”).

       

      RECITALS

       

      The
Company has heretofore executed and delivered to the Trustee an Indenture, dated
as of May 19, 2003 (the “Original Indenture”
and, as hereby supplemented and amended, the “Indenture”),
providing for the issuance from time to time of one or more series of the
Company’s Securities.

       

      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 “6.50%
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. 8.

       

      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 of the Holders of the Securities of such series, as
follows:

       

      ARTICLE
I

      

      Relation
to Indenture; Additional Definitions

       

      Section
101 Relation to
Indenture.  This Supplemental Indenture No. 8 constitutes an
integral part of the Original Indenture.

       

      Section
102 Additional
Definitions.  For all purposes of this Supplemental Indenture
No. 8:

       

      
        
           

        

        
          -1-

          
            

          

        

        
           

        

      

      Capitalized
terms used herein shall have the meaning specified herein or in the Original
Indenture, as the case may be;

       

      “Affiliate” of, or a
Person “affiliated” with, a specific Person means a Person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the Person specified.  For purposes of
this definition, “control” (including the terms “controlled by” and “under
common control with”) means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting shares, by contract, or
otherwise.

       

      “Business Day” means,
with respect to any Note, any day other than a Saturday, a Sunday or a day on
which banking institutions in The City of New York are authorized or required by
law, regulation or executive order to close.  If any Interest Payment
Date, Stated Maturity or Redemption Date of a Note falls on a day that is not a
Business Day, the required payment will be made on the next succeeding Business
Day with the same force and effect as if made on the relevant date that the
payment was due and no interest will accrue on such payment for the period from
and after the Interest Payment Date, Stated Maturity or Redemption Date, as the
case may be, to the date of that payment on the next succeeding Business
Day.  The definition of “Business Day” in this Supplemental Indenture
No. 8 and the provisions described in the preceding sentence shall supersede the
definition of Business Day in the Original Indenture and Section 113 of the
Original Indenture.

       

      “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;

       

      “CenterPoint Houston”
means CenterPoint Energy Houston Electric, LLC, a Texas limited liability
company, and any successor thereto; provided, that at any
given time, there shall not be more than one such successor;

       

      “CERC” means
CenterPoint Energy Resources Corp., a Delaware corporation, and any successor
thereto; provided, that at any
given time, there shall not be more than one such successor;

       

      “Comparable Treasury
Yield” has the meaning set forth in Section 402(a) hereof;

       

      “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;

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      “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;

       

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

       

      The term
“Indebtedness”
as applied to any Person, means bonds, debentures, notes and other instruments
or arrangements representing obligations created or assumed by any such Person,
in respect of:  (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 obligations listed in clause (i),
(ii) or (iii) above.  All indebtedness of such type, secured by a lien
upon property owned by such Person although such Person has not assumed or
become liable for the payment of such indebtedness, shall also for all purposes
hereof be deemed to be indebtedness of such Person.  All indebtedness
for borrowed money incurred by any other Persons which is directly guaranteed as
to payment of principal by such Person shall for all purposes hereof be deemed
to be indebtedness of any such Person, but no other contingent obligation of
such Person in respect of indebtedness incurred by any other Persons shall for
any purpose be deemed to be indebtedness of such Person.

       

      “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 provided in Section 204(a) hereof;

       

      “Long-Term
Indebtedness” means, collectively, the Company’s outstanding:
(a) 5.875% Senior Notes due 2008, (b) 6.850% Senior Notes due 2015, (c)
7.25% Senior Notes due 2010, (d) 3.75% Convertible Senior Notes due 2023 and
(e) 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 a covenant substantially similar to the covenant set forth in Section
301 hereof, or an event of default substantially similar to the event of default
set forth in Section 501(c) hereof, but not containing a provision substantially
similar to the provision set forth in Section 302 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;

       

      “Notes” has the
meaning set forth in the second paragraph of the Recitals hereof;

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      “Original Indenture”
has the meaning set forth in the first paragraph of the Recitals
hereof;

       

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

       

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

       

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

       

      “Significant
Subsidiary” means, CERC, CenterPoint Houston and any other Subsidiary
which, at the time of the creation of a pledge, mortgage, security interest or
other lien upon any Equity Interests of such Subsidiary, has consolidated gross
assets (having regard to the Company’s beneficial interest in the shares, or the
like, of that Subsidiary) that represents at least 25% of the Company’s
consolidated gross assets appearing in the Company’s most recent audited
consolidated financial statements;

       

      “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 or Equity Interests having ordinary voting
power to elect a majority of the Board of Directors or comparable governing body
of such corporation or other entity (irrespective of whether at the time capital
stock of any other class or classes of such corporation or other entity 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 302.

       

      All
references herein to Articles and Sections, unless otherwise specified, refer to
the corresponding Articles and Sections of this Supplemental Indenture No. 8;
and

       

      The terms
“herein,”
“hereof,”
“hereunder” and
other words of similar import refer to this Supplemental Indenture No.
8.

       

      ARTICLE
II

      

      The
Series of Securities

       

      Section
201 Title of the
Securities.  The Notes shall be designated as the “6.50% Senior
Notes due 2018”.

       

      
        
           

        

        
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      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 1,
2018 (the “Maturity
Date”).

       

      Section
204 Interest and Interest
Rates

       

      (a)           The
Notes shall bear interest at a rate of 6.50% per year, from and including
May 6, 2008 (the “Issue Date”) to, but
excluding, the Maturity Date.  Such interest shall be payable
semiannually in arrears on May 1 and November 1 of each year
(each an “Interest Payment
Date”), beginning November 1, 2008 to the persons in whose names the
Notes (or one or more Predecessor Securities) are registered at the close of
business on April 15 and October 15 (each a “Regular Record Date”)
(whether or not a Business Day), as the case may be, immediately preceding such
Interest Payment Date.

       

      (b)           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 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 6.50% 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.

       

      
        
           

        

        
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      Section
205 Paying Agent; Place of
Payment.  The Trustee shall initially serve as the Paying Agent
for the Notes.  The Company may appoint and change any Paying Agent or
approve a change in the office through which any Paying Agent acts without
notice, other than notice to the Trustee.  The Company or any of its
Subsidiaries or any of their Affiliates may act as Paying Agent.  The
Place of Payment where the Notes may be presented or surrendered for payment
shall be the Corporate Trust Office of the Trustee.  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.

       

      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 99.487% of
their principal amount plus accrued interest, if any, from May 6,
2008.

       

      Section
208 Global
Securities

       

      (a)           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 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.

       

      Section
212 Defeasance and Discharge; Covenant
Defeasance

       

      (a)           Article
Fourteen of the Original Indenture, including without limitation
Sections 1402 and 1403 thereof (as modified by Section 212(b) hereof),
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:

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

      “Upon the
Company’s exercise of its option (if any) to have this Section 1403 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. 8 to the Indenture, and (2) the occurrence of any event
specified in Sections 501(4) (with respect to Article Eight and to any
such covenants provided pursuant to Section 301(20), 901(2) or 901(7)) and
501(7) shall be deemed not to be or result in an Event of Default, in each case
with respect to such Securities as provided in this Section 1403 on and after
the date the conditions set forth in Section 1404 are satisfied
(hereinafter called “Covenant Defeasance”).”

       

      

      ARTICLE
III

      

      Additional
Covenant

       

      Section
301 Limitations on
Liens.  The Company shall not pledge, mortgage, hypothecate, or
grant a security interest in, or permit any such mortgage, pledge, security
interest or other lien upon any Equity Interests now or hereafter owned by the
Company in any Significant Subsidiary to secure any Indebtedness, without making
effective provisions whereby the outstanding Notes shall be equally and ratably
secured with or prior to any and all such Indebtedness and any other
Indebtedness similarly entitled to be equally and ratably secured; provided,
however, that this provision shall not apply to or prevent the creation or
existence of:

       

      (a)           any
mortgage, pledge, security interest, lien or encumbrance upon the Equity
Interests of CenterPoint Energy Transition Bond Company, LLC, CenterPoint Energy
Transition Bond Company II, LLC, CenterPoint Energy Transition Bond
Company III, LLC or any other special purpose Subsidiary created on or
after the date of this Supplemental Indenture by the Company in connection with
the issuance of securitization bonds for the economic value of
generation-related regulatory assets and stranded costs;

       

      (b)           any
mortgage, pledge, security interest, lien or encumbrance upon any Equity
Interests in a Person which was not affiliated with the Company prior to one
year before the grant of such mortgage, pledge, security interest, lien or
encumbrance (or the Equity Interests of a holding company formed to acquire or
hold such Equity Interests) created at the time of the Company’s acquisition of
the Equity Interests or within one year after such time to secure all or a
portion of the purchase price for such Equity Interests; provided that the
principal amount of any Indebtedness secured by such mortgage, pledge, security
interest, lien or encumbrance does not exceed 100% of such purchase price and
the fees, expenses and costs incurred in connection with such acquisition and
acquisition financing;

       

      (c)           any
mortgage, pledge, security interest, lien or encumbrance existing upon Equity
Interests in a Person which was not affiliated with the Company prior to one
year before

       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

      the grant
of such mortgage, pledge, security interest, lien or encumbrance at the time of
the Company’s acquisition of such Equity Interests (whether or not the
obligations secured thereby are assumed by the Company or such Subsidiary
becomes a Significant Subsidiary); provided that (i) such mortgage, pledge,
security interest, lien or encumbrance existed at the time such Person became a
Significant Subsidiary and was not created in anticipation of the acquisition,
and (ii) any such mortgage, pledge, security interest, lien or encumbrance does
not by its terms secure any Indebtedness other than Indebtedness existing or
committed immediately prior to the time such Person becomes a Significant
Subsidiary;

       

      (d)           liens
for taxes, assessments or governmental charges or levies to the extent not past
due or which are being contested in good faith by appropriate proceedings
diligently conducted and for which the Company has provided adequate reserves
for the payment thereof in accordance with generally accepted accounting
principles;

       

      (e)           pledges
or deposits in the ordinary course of business to secure obligations under
workers’ compensation laws or similar legislation;

       

      (f)           materialmen’s,
mechanics’, carriers’, workers’ and repairmen’s liens imposed by law and other
similar liens arising in the ordinary course of business for sums not yet due or
currently being contested in good faith by appropriate proceedings diligently
conducted;

       

      (g)           attachment,
judgment or other similar liens, which have not been effectively stayed, arising
in connection with court proceedings; provided that such liens, in the
aggregate, shall not secure judgments which exceed $50,000,000 aggregate
principal amount at any one time outstanding; provided further that the
execution or enforcement of each such lien is effectively stayed within 30 days
after entry of the corresponding judgment (or the corresponding judgment has
been discharged within such 30 day period) and the claims secured thereby are
being contested in good faith by appropriate proceedings timely commenced and
diligently prosecuted;

       

      (h)           other
liens not otherwise referred to in paragraphs (a) through (g) above, provided
that the Indebtedness secured by such liens in the aggregate, shall not exceed
1% of the Company’s consolidated gross assets appearing in the Company’s most
recent audited consolidated financial statements at any one time
outstanding;

       

      (i)           any
mortgage, pledge, security interest, lien or encumbrance on the Equity Interests
of any Subsidiary that was otherwise permitted under this Section 301 if such
Subsidiary subsequently becomes a Significant Subsidiary; or

       

      (j)           any
extension, renewal or refunding of Indebtedness secured by any mortgage, pledge,
security interest, lien or encumbrance described in paragraphs (a) through (i)
above; provided that the principal amount of any such Indebtedness is not
increased by an amount greater than the fees, expenses and costs incurred in
connection with such extension, renewal or refunding.

       

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

      Section
302 Expiration of Restrictions on
Liens.  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 covenant of the Company set forth in
Section 301 hereof shall terminate and the Company shall no longer be subject to
the covenant set forth in such Section.

       

      ARTICLE
IV

      

      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 45 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 Greenwich Capital Markets, Inc., Lehman
Brothers Inc. or Wachovia Capital Markets, LLC, 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”).

       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

      Section
402 Make-Whole Premium
Calculation

       

      (a)           For
purposes of determining the Make-Whole Premium, “Comparable Treasury
Yield” means a rate of interest per annum equal to the weekly average
yield to maturity of United States Treasury securities that have a constant
maturity that corresponds to the remaining term to maturity of the Notes 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 IV 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 IV, 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
V

      

      Remedies

       

      Section
501 Additional
Events of Default; Acceleration of Maturity

       

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

      (a)           Solely
with respect to the Notes issued hereby, Section 501(5) of the Original
Indenture is hereby deleted in its entirety, and the following is substituted in
lieu thereof as an Event of Default in addition to the other events set forth in
Section 501 of the Original Indenture:

       

      “(5)           the
entry by a court having jurisdiction in the premises of (A) a decree or order
for relief in respect of the Company, CERC or CenterPoint Houston in an
involuntary case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order
adjudging the Company, CERC or CenterPoint Houston a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company, CERC or CenterPoint
Houston under any applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company, CERC or CenterPoint Houston or of any substantial part of its
respective property, or ordering the winding up or liquidation of its respective
affairs, and the continuance of any such decree or order for relief or any such
other decree or order unstayed and in effect for a period of 90 consecutive
days; provided that any specified event in (A) or (B) involving CERC or
CenterPoint Houston shall not constitute an Event of Default if, at the time
such event occurs, CERC or CenterPoint Houston, as the case may be, shall no
longer be an Affiliate of the Company; or”

       

      (b)           Solely
with respect to the Notes issued hereby, Section 501(6) of the Original
Indenture is hereby deleted in its entirety, and the following is substituted in
lieu thereof as an Event of Default in addition to the other events set forth in
Section 501 of the Original Indenture:

       

      “(6)           the
commencement by the Company, CERC or CenterPoint Houston of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by any of them to the entry
of a decree or order for relief in respect of the Company, CERC or CenterPoint
Houston in an involuntary case or proceeding under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against any of
them, or the filing by any of them of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, or the
consent by any of them to the filing of such petition or to the appointment of
or taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company, CERC or CenterPoint
Houston or of any substantial part of its respective

       

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

      property,
or the making by any of them of an assignment of a substantial part of its
respective property for the benefit of creditors, or the admission by any of
them in writing of the inability of any of the Company, CERC or CenterPoint
Houston to pay its respective debts generally as they become due, or the taking
of corporate action by the Company, CERC or CenterPoint Houston in furtherance
of any such action; provided that any such specified event involving CERC or
CenterPoint Houston shall not constitute an Event of Default if, at the time
such event occurs, CERC or CenterPoint Houston, as the case may be, shall no
longer be an Affiliate of the Company; or”

       

      (c)           Solely
with respect to the Notes issued hereby, and pursuant to Section 501(7) of the
Original Indenture, Section 501(7) of the Original Indenture is hereby deleted
in its entirety, and the following is substituted in lieu thereof, as an “Event
of Default” in addition to the other events set forth in Section 501 of the
Original Indenture:

       

      “(7)           The
default by the Company, CERC or CenterPoint Houston in a scheduled payment at
maturity, upon redemption or otherwise, in the aggregate principal amount of $50
million or more, after the expiration of any applicable grace period, of any
Indebtedness or the acceleration of any Indebtedness of the Company, CERC or
CenterPoint Houston 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 payment default is not cured or such acceleration is not
rescinded within 30 days after notice to the Company in accordance with the
terms of the Indebtedness; provided that such payment default or acceleration of
CERC or CenterPoint Houston shall not to be an Event of Default if, at the time
such event occurs, CERC or CenterPoint Houston, as the case may be, shall not be
an Affiliate of the Company.”

       

      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(c) hereof shall
terminate and the Company shall no longer be subject to such event of
default.

       

      ARTICLE
VI

      

      Miscellaneous
Provisions

       

      Section
601 The
Indenture, as supplemented and amended by this Supplemental Indenture No. 8, is
in all respects hereby adopted, ratified and confirmed.

       

      
        
           

        

        
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      Section
602 This
Supplemental Indenture No. 8 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. 8 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. 8 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. 8 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.

       

      
        
           

        

        
          -13-

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
No. 8 to be duly executed, as of the day and year first written
above.

      

      CENTERPOINT
ENERGY, INC.

      

      

      By: /s/ Gary L.
Whitlock                                                                           

                 Gary
L. Whitlock

                 Executive
Vice President and

                 Chief
Financial Officer

      Attest:

      

      _/s/ Richard B.
Dauphin_________

      Richard B. Dauphin

            Assistant
Corporate Secretary

      

      

      

      (SEAL)

      

      

      

      THE BANK
OF NEW YORK TRUST COMPANY, NATIONAL ASSOCIATION,

      As
Trustee

      

      

      By: /s/ Kathryn
Shotwell                                                                           

      Name: Kathryn Shotwell

      Title:   Assistant
Treasurer and Trust Officer

      

      (SEAL)

      
        
           

        

        
          -14-

          
            

          

        

        
           

        

      

      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, Inc. 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, INC.

      

      6.50%
Senior Notes due 2018

      

      

      

      
        	
                No.
      __________

              	 
      	
                $  __________

              
	 
      	 
      	
                CUSIP
      No.  __________

              

      

      

      CENTERPOINT
ENERGY, INC., a corporation duly organized and existing under the laws of the
State of Texas (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 1, 2018, and to pay interest thereon from
May 6, 2008 or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually on May 1 and November 1 in each
year, commencing November 1, 2008, at the rate of 6.50% 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 6.50% per annum (to the extent permitted by
applicable law), from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on
demand.  The amount of interest payable for any period shall be
computed on the basis of twelve

       

      
        
           

        

        
          A-1

          
            

          

        

        
           

        

      

      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 any day other than a Saturday, a
Sunday or a day on which banking institutions in The City of New York are
authorized or required by law, regulation 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 April 15 or October 15 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment
Date.  Any such interest not so punctually paid or duly provided for
shall forthwith cease to be payable to the Holder on such Regular Record Date
and 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:  _________________                                                                           CENTERPOINT
ENERGY, INC.

      

      

      By:  ____________________________

      Name:

      Title:

      (SEAL)

      

      

      Attest:

      

      ___________________________

      Name:

      Title:

      

      

      

      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, INC.

      

      6.50%
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 May 19, 2003 (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 JPMorgan Chase Bank)), 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 1, 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 45 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

       

      
        
           

        

        
          A-5

          
            

          

        

        
           

        

      

      herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.

       

      As
provided in and subject to the provisions of the Indenture, the Holder of this
Security shall not have the right to institute any proceeding with respect to
the Indenture or for the appointment of a receiver or trustee or for any other
remedy thereunder, unless such Holder 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.

       

      
        
           

        

        
          A-6

          
            

          

        

        
           

        

      

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

       

      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-7

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