Document:

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                                                                    EXHIBIT 4.5

                               HALLIBURTON COMPANY

                    5 1/2% SENIOR NOTES DUE OCTOBER 15, 2010
                 FLOATING RATE SENIOR NOTES DUE OCTOBER 17, 2005

                   EXCHANGE AND REGISTRATION RIGHTS AGREEMENT

                                                                October 17, 2003
J.P. Morgan Securities Inc.
Citigroup Global Markets Inc.
Goldman, Sachs & Co.,
As representatives of the several Purchasers
   named in Schedule 1 to the Purchase Agreement
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017

Ladies and Gentlemen:

         Halliburton Company, a Delaware corporation (the "Company"), proposes
to issue and sell to the Purchasers (as defined herein) upon the terms set forth
in the Purchase Agreement (as defined herein) (1) an aggregate of $750,000,000
principal amount of its 5 1/2% Senior Notes due October 15, 2010 and (2) an
aggregate of $300,000,000 principal amount of its Floating Rate Senior Notes due
October 17, 2005. As an inducement to the Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the
Purchasers thereunder, the Company agrees with the Purchasers for the benefit of
holders (as defined herein) from time to time of the Registrable Securities (as
defined herein) as follows:

         1. Certain Definitions. For purposes of this Exchange and Registration
Rights Agreement, the following terms shall have the following respective
meanings:

         "Base Interest" shall mean the interest that would otherwise accrue on
     the Securities under the terms thereof and the Indenture, without giving
     effect to the provisions of this Agreement.

         The term "broker-dealer" shall mean any broker or dealer registered
     with the Commission under the Exchange Act.

         "Closing Date" shall mean the date on which the Securities are
     initially issued.

         "Commission" shall mean the United States Securities and Exchange
     Commission, or any other federal agency at the time administering the
     Exchange Act or the Securities Act, whichever is the relevant statute for
     the particular purpose.

         "Effective Time," in the case of (i) an Exchange Registration, shall
     mean the time and date as of which the Commission declares the Exchange
     Registration Statement effective or

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     as of which the Exchange Registration Statement otherwise becomes effective
     and (ii) a Shelf Registration, shall mean the time and date as of which the
     Commission declares the Shelf Registration Statement effective or as of
     which the Shelf Registration Statement otherwise becomes effective.

         "Electing Holder" shall have the meaning assigned thereto in Section
     3(f) hereof.

         "Exchange Act" shall mean the Securities Exchange Act of 1934, or any
     successor thereto, as the same shall be amended from time to time.

         "Exchange Offer" shall have the meaning assigned thereto in Section
     2(a) hereof.

         "Exchange Registration" shall have the meaning assigned thereto in
     Section 3(c) hereof.

         "Exchange Registration Statement" shall have the meaning assigned
     thereto in Section 2(a) hereof.

         "Exchange Securities" shall have the meaning assigned thereto in
     Section 2(a) hereof.

         The term "holder" shall mean each of the Purchasers and other persons
     who acquire Registrable Securities from time to time (including any
     successors or assigns), in each case for so long as such person owns any
     Registrable Securities.

         "Indenture" shall mean the Indenture, dated as of October 17, 2003
     between the Company and JPMorgan Chase Bank, as Trustee, as the same shall
     be amended from time to time.

         The term "person" shall mean a corporation, association, partnership,
     organization, business, individual, government or political subdivision
     thereof or governmental agency.

         "Purchase Agreement" shall mean the Purchase Agreement, dated as of
     October 14, 2003 between the Purchasers and the Company relating to the
     Securities.

         "Purchasers" shall mean the Purchasers named in Schedule 1 to the
     Purchase Agreement.

         "Registrable Securities" shall mean the Securities; provided, however,
     that a Security shall cease to be a Registrable Security when (i) in the
     circumstances contemplated by Section 2(a) hereof, the Security has been
     exchanged for an Exchange Security in an Exchange Offer as contemplated in
     Section 2(a) hereof (provided that any Exchange Security that, pursuant to
     the last two sentences of Section 2(a), is included in a prospectus for use
     in connection with resales by broker-dealers shall be deemed to be a
     Registrable Security with respect to Sections 5 and 8 until resale of such
     Registrable Security has been effected within the 180-day period referred
     to in Section 2(a)); (ii) in the circumstances contemplated by Section 2(b)
     hereof, a Shelf Registration Statement registering such Security under the
     Securities Act has been declared or becomes effective and such Security has
     been sold or otherwise transferred by the holder thereof pursuant to and in
     a manner contemplated by such effective Shelf Registration Statement; (iii)
     such Security is sold pursuant to Rule 144 under circumstances in which any
     legend borne by such Security relating to restrictions on transferability
     thereof, under the Securities Act or otherwise, is removed by the Company
     or pursuant to the Indenture; (iv) such Security is eligible to be sold
     pursuant to paragraph (k) of Rule 144; or (v) such Security shall cease to
     be outstanding.

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         "Registration Default" shall have the meaning assigned thereto in
     Section 2(c) hereof.

         "Registration Expenses" shall have the meaning assigned thereto in
     Section 4 hereof.

         "Resale Period" shall have the meaning assigned thereto in Section
     2(a) hereof.

         "Restricted Holder" shall mean (i) a holder that is an affiliate of the
     Company within the meaning of Rule 405, (ii) a holder who acquires Exchange
     Securities outside the ordinary course of such holder's business, (iii) a
     holder who has arrangements or understandings with any person to
     participate in the Exchange Offer for the purpose of distributing Exchange
     Securities and (iv) a holder that is a broker-dealer, but only with respect
     to Exchange Securities received by such broker-dealer pursuant to an
     Exchange Offer in exchange for Registrable Securities acquired by the
     broker-dealer directly from the Company.

         "Rule 144," "Rule 405" and "Rule 415" shall mean, in each case, such
     rule promulgated under the Securities Act (or any successor provision), as
     the same shall be amended from time to time.

         "Securities" shall mean, collectively, the $750,000,000 principal
     amount of the Company's 5 1/2% Fixed Rate Senior Notes due October 15, 2010
     and the $300,000,000 principal amount of the Company's Floating Rate Senior
     Notes due October 17, 2005 to be issued and sold to the Purchasers, and
     securities issued in exchange therefor or in lieu thereof pursuant to the
     Indenture.

         "Securities Act" shall mean the Securities Act of 1933, or any
     successor thereto, as the same shall be amended from time to time.

         "Shelf Registration" shall have the meaning assigned thereto in
     Section 2(b) hereof.

         "Shelf Registration Statement" shall have the meaning assigned thereto
     in Section 2(b) hereof.

         "Special Interest" shall have the meaning assigned thereto in Section
     2(c) hereof.

         "Trust Indenture Act" shall mean the Trust Indenture Act of 1939, or
     any successor thereto, and the rules, regulations and forms promulgated
     thereunder, all as the same shall be amended from time to time.

         Unless the context otherwise requires, any reference herein to a
"Section" or "clause" refers to a Section or clause, as the case may be, of this
Exchange and Registration Rights Agreement, and the words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Exchange and
Registration Rights Agreement as a whole and not to any particular Section or
other subdivision.

         2. Registration Under the Securities Act.

         (a) Except as set forth in Section 2(b) below, the Company agrees to
     file under the Securities Act, as soon as practicable, but no later than
     120 days after the Closing Date, a registration statement relating to an
     offer to exchange (such registration statement, the "Exchange Registration
     Statement", and such offer, the "Exchange Offer") any and all of the
     Securities for a like aggregate principal amount of debt securities issued
     by the Company which debt securities are substantially identical to the
     Securities (and are entitled to the benefits of a trust indenture which is
     substantially identical to the Indenture or is the

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     Indenture and which has been qualified under the Trust Indenture Act),
     except that they have been registered pursuant to an effective registration
     statement under the Securities Act and do not contain provisions for the
     additional interest contemplated in Section 2(c) below (such new debt
     securities hereinafter called "Exchange Securities"). The Company agrees to
     use its reasonable best efforts to cause the Exchange Registration
     Statement to become effective under the Securities Act as soon as
     practicable, but no later than 210 days after the Closing Date. The
     Exchange Offer will be registered under the Securities Act on the
     appropriate form and will comply with all applicable tender offer rules and
     regulations under the Exchange Act. The Company further agrees to use its
     reasonable best efforts to commence and complete the Exchange Offer
     promptly, but no later than 45 days after such registration statement has
     become effective, hold the Exchange Offer open for at least 30 days and
     exchange Exchange Securities for all Registrable Securities that have been
     properly tendered and not withdrawn on or prior to the expiration of the
     Exchange Offer. The Exchange Offer will be deemed to have been "completed"
     only if the debt securities received by holders other than Restricted
     Holders in the Exchange Offer for Registrable Securities are, upon receipt,
     transferable by each such holder without restriction under the Securities
     Act and the Exchange Act and without material restrictions under the blue
     sky or securities laws of a substantial majority of the States of the
     United States of America. The Exchange Offer shall be deemed to have been
     completed upon the earlier to occur of (i) the Company having exchanged the
     Exchange Securities for all outstanding Registrable Securities pursuant to
     the Exchange Offer and (ii) the Company having exchanged, pursuant to the
     Exchange Offer, Exchange Securities for all Registrable Securities that
     have been properly tendered and not withdrawn before the expiration of the
     Exchange Offer, which shall be on a date that is at least 30 days following
     the commencement of the Exchange Offer. The Company agrees (x) to include
     in the Exchange Registration Statement a prospectus for use in any resales
     by any holder of Exchange Securities that is a broker-dealer and (y) to
     keep such Exchange Registration Statement effective for a period (the
     "Resale Period") beginning when Exchange Securities are first issued in the
     Exchange Offer and ending upon the earlier of the expiration of the 180th
     day after the Exchange Offer has been completed or such time as such
     broker-dealers no longer own any Registrable Securities. With respect to
     such Exchange Registration Statement, such holders shall have the benefit
     of the rights of indemnification and contribution set forth in Sections
     5(a), (c), (d) and (e) hereof.

         (b) If (i) on or prior to the time the Exchange Offer is completed
     existing Commission interpretations are changed such that the debt
     securities received by holders other than Restricted Holders in the
     Exchange Offer for Registrable Securities are not or would not be, upon
     receipt, transferable by each such holder without restriction under the
     Securities Act, (ii) the Exchange Offer has not been completed within 255
     days following the Closing Date or (iii) the Exchange Offer is not
     available to any holder of the Securities, the Company shall, in lieu of
     (or, in the case of clause (iii), in addition to) conducting the Exchange
     Offer contemplated by Section 2(a), file under the Securities Act as soon
     as practicable, but no later than 60 days after the time such obligation to
     file arises, a "shelf" registration statement providing for the
     registration of, and the sale on a continuous or delayed basis by the
     holders of, all of the Registrable Securities, pursuant to Rule 415 or any
     similar rule that may be adopted by the Commission (such filing, the "Shelf
     Registration" and such registration statement, the "Shelf Registration
     Statement"). The Company agrees to use its reasonable best efforts (x) to
     cause the Shelf Registration Statement to become or be declared effective
     no later than 120 days after such Shelf Registration Statement is filed and
     to keep such Shelf Registration Statement continuously effective for a
     period ending on the earlier of the second anniversary of the Effective
     Time or such time as there are no longer any

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     Registrable Securities outstanding, provided, however, that no holder shall
     be entitled to be named as a selling securityholder in the Shelf
     Registration Statement or to use the prospectus forming a part thereof for
     resales of Registrable Securities unless such holder is an Electing Holder,
     and (y) after the Effective Time of the Shelf Registration Statement,
     promptly upon the request of any holder of Registrable Securities that is
     not then an Electing Holder, to take any action reasonably necessary to
     enable such holder to use the prospectus forming a part thereof for resales
     of Registrable Securities, including, without limitation, any action
     necessary to identify such holder as a selling securityholder in the Shelf
     Registration Statement; provided, however, that nothing in this clause (y)
     shall relieve any such holder of the obligation to provide the information
     required by Section 3(f) hereof. The Company further agrees to supplement
     or make amendments to the Shelf Registration Statement, as and when
     required by the rules, regulations or instructions applicable to the
     registration form used by the Company for such Shelf Registration Statement
     or by the Securities Act or rules and regulations thereunder for shelf
     registration, and the Company agrees to furnish to each Electing Holder
     copies of any such supplement or amendment prior to its being used or
     promptly following its filing with the Commission.

         (c) In the event that (i) the Company has not filed the Exchange
     Registration Statement or Shelf Registration Statement on or before the
     date on which such registration statement is required to be filed pursuant
     to Section 2(a) or 2(b), respectively, or (ii) such Exchange Registration
     Statement or Shelf Registration Statement has not become effective or been
     declared effective by the Commission on or before the date on which such
     registration statement is required to become or be declared effective
     pursuant to Section 2(a) or 2(b), respectively, or (iii) the Exchange Offer
     has not been completed within 45 days after the initial effective date of
     the Exchange Registration Statement relating to the Exchange Offer (if the
     Exchange Offer is then required to be made), or (iv) any Exchange
     Registration Statement or Shelf Registration Statement required by Section
     2(a) or 2(b) hereof is filed and declared effective but shall thereafter
     cease to be effective or fail to be usable (provided that the
     unavailability of a Registration Statement for the use of a holder as a
     result of such holder's failure to provide information pursuant to Section
     3(f) hereof shall not be deemed to make the Registration Statement fail to
     be usable) (each such event referred to in clauses (i) through (iv), a
     "Registration Default" and each period during which a Registration Default
     has occurred and is continuing, a "Registration Default Period"), then, as
     liquidated damages for such Registration Default, subject to the provisions
     of Section 8(b)), special interest ("Special Interest"), in addition to the
     Base Interest, shall accrue at a per annum rate of 0.25% for the first 90
     days of the Registration Default Period and an additional 0.25% per annum
     from and after the 91st day following the commencement of the Registration
     Default until the Registration Default has been cured. In no event shall
     Special Interest exceed 0.50% per annum. The Company shall pay Special
     Interest to holders of the Registrable Securities in the same manner and at
     the same time as interest on the Securities is paid. In the event that the
     Company fails to perform any terms of this Exchange and Registration Rights
     Agreement with respect to which Special Interest pursuant to Section 2(c)
     hereof is expressly provided as a remedy, and the Company is not in default
     of payment of such Special Interest, payment of such Special Interest shall
     constitute the sole monetary damages for such failure.

         (d) The Company shall take all actions necessary or advisable to be
     taken by it to ensure that the transactions contemplated herein are
     effected as so contemplated.

         (e) Any reference herein to a registration statement as of any time
     shall be deemed to include any document incorporated, or deemed to be
     incorporated, therein by reference as

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     of such time and any reference herein to any post-effective amendment to a
     registration statement as of any time shall be deemed to include any
     document incorporated, or deemed to be incorporated, therein by reference
     as of such time.

         3. Registration Procedures.

         If the Company files a registration statement pursuant to Section 2(a)
or Section 2(b), the following provisions shall apply:

         (a) At or before the Effective Time of the Exchange Offer Registration
     Statement or the Shelf Registration Statement, as the case may be, the
     Company shall qualify the Indenture under the Trust Indenture Act of 1939.

         (b) In the event that such qualification would require the appointment
     of a new trustee under the Indenture, the Company shall appoint a new
     trustee thereunder pursuant to the applicable provisions of the Indenture.

         (c) In connection with the Company's obligations with respect to the
     registration of Exchange Securities as contemplated by Section 2(a) (the
     "Exchange Registration"), if applicable, the Company shall, as soon as
     practicable (or as otherwise specified):

               (i) prepare and file with the Commission, as soon as practicable
          but no later than 120 days after the Closing Date, an Exchange
          Registration Statement on any form which may be utilized by the
          Company and which shall permit the Exchange Offer and resales of
          Exchange Securities by broker-dealers during the Resale Period to be
          effected as contemplated by Section 2(a), and use its reasonable best
          efforts to cause such Exchange Registration Statement to become
          effective as soon as practicable thereafter, but no later than 210
          days after the Closing Date;

               (ii) as soon as practicable prepare and file with the Commission
          such amendments and supplements to such Exchange Registration
          Statement and the prospectus included therein as may be necessary to
          effect and maintain the effectiveness of such Exchange Registration
          Statement for the periods and purposes contemplated in Section 2(a)
          hereof and as may be required by the applicable rules and regulations
          of the Commission and the instructions applicable to the form of such
          Exchange Registration Statement, and promptly provide each
          broker-dealer holding Exchange Securities with such number of copies
          of the prospectus included therein (as then amended or supplemented),
          in conformity in all material respects with the requirements of the
          Securities Act and the Trust Indenture Act and the rules and
          regulations of the Commission thereunder, as such broker-dealer
          reasonably may request prior to the expiration of the Resale Period,
          for use in connection with resales of Exchange Securities;

               (iii) promptly notify each broker-dealer that has requested or
          received copies of the prospectus included in such registration
          statement, and confirm such advice in writing, (A) when such Exchange
          Registration Statement or the prospectus included therein or any
          prospectus amendment or supplement or post-effective amendment has
          been filed, and, with respect to such Exchange Registration Statement
          or any post-effective amendment, when the same has become effective,
          (B) of any comments by the Commission and by the blue sky or
          securities commissioner or regulator of any state with respect thereto
          or any request by the Commission for amendments or supplements to such
          Exchange Registration Statement or

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          prospectus or for additional information, (C) of the issuance by the
          Commission of any stop order suspending the effectiveness of such
          Exchange Registration Statement or the initiation or threatening of
          any proceedings for that purpose, (D) the receipt by the Company of
          any notification with respect to the suspension of the qualification
          of the Exchange Securities for sale in any jurisdiction or the
          initiation or threatening of any proceeding for such purpose, or (E)
          at any time during the Resale Period when a prospectus is required to
          be delivered under the Securities Act, that such Exchange Registration
          Statement, prospectus, prospectus amendment or supplement or
          post-effective amendment does not conform in all material respects to
          the applicable requirements of the Securities Act and the Trust
          Indenture Act and the rules and regulations of the Commission
          thereunder or contains an untrue statement of a material fact or omits
          to state any material fact required to be stated therein or necessary
          to make the statements therein not misleading in light of the
          circumstances then existing;

               (iv) in the event that the Company would be required, pursuant to
          Section 3(c)(iii)(E) above, to notify any broker-dealers holding
          Exchange Securities, without delay prepare and furnish to each such
          holder a reasonable number of copies of a prospectus supplemented or
          amended so that, as thereafter delivered to purchasers of such
          Exchange Securities during the Resale Period, such prospectus shall
          conform in all material respects to the applicable requirements of the
          Securities Act and the Trust Indenture Act and the rules and
          regulations of the Commission thereunder and shall not contain an
          untrue statement of a material fact or omit to state a material fact
          required to be stated therein or necessary to make the statements
          therein not misleading in light of the circumstances then existing;
          each broker-dealer agrees that upon receipt of any notice from the
          Company pursuant to Section 3(c)(iii)(E) hereof, such broker-dealer
          shall forthwith discontinue the disposition of Registrable Securities
          pursuant to the Exchange Registration Statement applicable to such
          Registrable Securities until such broker-dealer shall have received
          copies of such amended or supplemented prospectus, and if so directed
          by the Company, such broker-dealer shall deliver to the Company (at
          the Company's expense) all copies, other than permanent file copies,
          then in such broker-dealer's possession of the prospectus covering
          such Registrable Securities at the time of receipt of such notice;

               (v) use its reasonable best efforts to obtain the withdrawal of
          any order suspending the effectiveness of such Exchange Registration
          Statement or any post-effective amendment thereto at the earliest
          practicable date;

               (vi) use its reasonable best efforts to (A) register or qualify
          the Exchange Securities under the securities laws or blue sky laws of
          such jurisdictions as are contemplated by Section 2(a) no later than
          the commencement of the Exchange Offer, (B) keep such registrations or
          qualifications in effect and comply with such laws so as to permit the
          continuance of offers, sales and dealings therein in such
          jurisdictions until the expiration of the Resale Period and (C) take
          any and all other actions as may be reasonably necessary or advisable
          to enable each broker-dealer holding Exchange Securities to consummate
          the disposition thereof in such jurisdictions; provided, however, that
          the Company shall not be required for any such purpose to (1) qualify
          as a foreign corporation in any jurisdiction wherein it would not
          otherwise be required to qualify but for the requirements of this
          Section 3(c)(vi), (2) consent to general service of process in any
          such jurisdiction or (3) make any

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          changes to its certificate of incorporation or by-laws or any
          agreement between it and its stockholders;

               (vii) use its reasonable best efforts to obtain the consent or
          approval of each governmental agency or authority, whether federal,
          state or local, which may be required to effect the Exchange
          Registration, the Exchange Offer and the offering and sale of Exchange
          Securities by broker-dealers during the Resale Period;

               (viii) provide a CUSIP number for all Exchange Securities, not
          later than the applicable Effective Time;

               (ix) comply with all applicable rules and regulations of the
          Commission, and make generally available to its securityholders as
          soon as practicable but no later than eighteen months after the
          effective date of such Exchange Registration Statement, an earning
          statement of the Company and its subsidiaries complying with Section
          11(a) of the Securities Act (including, at the option of the Company,
          Rule 158 thereunder).

          (d) In connection with the Company's obligations with respect to the
     Shelf Registration, if applicable, the Company shall, as soon as
     practicable (or as otherwise specified):

               (i) prepare and file with the Commission, as soon as practicable
          but in any case within the time periods specified in Section 2(b), a
          Shelf Registration Statement on any form which may be utilized by the
          Company and which shall register all of the Registrable Securities for
          resale by the holders thereof in accordance with such method or
          methods of disposition as may be specified by such of the holders as,
          from time to time, may be Electing Holders and use its reasonable best
          efforts to cause such Shelf Registration Statement to become effective
          as soon as practicable but in any case within the time periods
          specified in Section 2(b);

               (ii) as soon as practicable prepare and file with the Commission
          such amendments and supplements to such Shelf Registration Statement
          and the prospectus included therein as may be necessary to effect and
          maintain the effectiveness of such Shelf Registration Statement for
          the period specified in Section 2(b) hereof and as may be required by
          the applicable rules and regulations of the Commission and the
          instructions applicable to the form of such Shelf Registration
          Statement, and furnish to the Electing Holders copies of any such
          supplement or amendment simultaneously with or prior to its being used
          or filed with the Commission;

               (iii) comply with the provisions of the Securities Act with
          respect to the disposition of all of the Registrable Securities
          covered by such Shelf Registration Statement in accordance with the
          intended methods of disposition by the Electing Holders provided for
          in such Shelf Registration Statement;

               (iv) provide (A) the Electing Holders, (B) the underwriters
          (which term, for purposes of this Exchange and Registration Rights
          Agreement, shall include a person deemed to be an underwriter within
          the meaning of Section 2(a)(11) of the Securities Act), if any,
          thereof, (C) any sales or placement agent therefor, (D) counsel for
          any such underwriter or agent and (E) not more than one counsel for
          all the Electing Holders the opportunity to participate in the
          preparation of such Shelf

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          Registration Statement, each prospectus included therein or filed with
          the Commission and each amendment or supplement thereto;

               (v) for a reasonable period prior to the filing of such Shelf
          Registration Statement, and throughout the period specified in Section
          2(b), make available at reasonable times at the Company's principal
          place of business or such other reasonable place for inspection by the
          persons referred to in Section 3(d)(iv) who shall certify to the
          Company that they have a current intention to sell the Registrable
          Securities pursuant to the Shelf Registration such financial and other
          information and books and records of the Company, and cause the
          officers, employees, counsel and independent certified public
          accountants of the Company to respond to such inquiries, as shall be
          reasonably necessary, in the judgment of the respective counsel
          referred to in such Section, to conduct a reasonable investigation
          within the meaning of Section 11 of the Securities Act; provided,
          however, that each such party shall be required to maintain in
          confidence and not to disclose to any other person any information or
          records reasonably designated by the Company as being confidential,
          until such time as (A) such information becomes a matter of public
          record (whether by virtue of its inclusion in such registration
          statement or otherwise), or (B) such person shall be required so to
          disclose such information pursuant to a subpoena or order of any court
          or other governmental agency or body having jurisdiction over the
          matter (subject to the requirements of such order, and only after such
          person shall have given the Company prompt prior written notice of
          such requirement), or (C) such information is required to be set forth
          in such Shelf Registration Statement or the prospectus included
          therein or in an amendment to such Shelf Registration Statement or an
          amendment or supplement to such prospectus in order that such Shelf
          Registration Statement, prospectus, amendment or supplement, as the
          case may be, complies with applicable requirements of the federal
          securities laws and the rules and regulations of the Commission and
          does not contain an untrue statement of a material fact or omit to
          state therein a material fact required to be stated therein or
          necessary to make the statements therein not misleading in light of
          the circumstances then existing;

               (vi) promptly notify each of the Electing Holders, any sales or
          placement agent therefor and any underwriter thereof (which
          notification may be made through any managing underwriter that is a
          representative of such underwriter for such purpose) and confirm such
          advice in writing, (A) when such Shelf Registration Statement or the
          prospectus included therein or any prospectus amendment or supplement
          or post-effective amendment has been filed, and, with respect to such
          Shelf Registration Statement or any post-effective amendment, when the
          same has become effective, (B) of any comments by the Commission and
          by the blue sky or securities commissioner or regulator of any state
          with respect thereto or any request by the Commission for amendments
          or supplements to such Shelf Registration Statement or prospectus or
          for additional information, (C) of the issuance by the Commission of
          any stop order suspending the effectiveness of such Shelf Registration
          Statement or the initiation or threatening of any proceedings for that
          purpose, (D) if at any time the representations and warranties of the
          Company contemplated by Section 3(d)(xv) cease to be true and correct
          in all material respects, (E) of the receipt by the Company of any
          notification with respect to the suspension of the qualification of
          the Registrable Securities for sale in any jurisdiction or the
          initiation or threatening of any proceeding for such purpose, or (F)
          if at any time when a prospectus is required to be delivered under the
          Securities Act,

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          that such Shelf Registration Statement, prospectus, prospectus
          amendment or supplement or post-effective amendment does not conform
          in all material respects to the applicable requirements of the
          Securities Act and the Trust Indenture Act and the rules and
          regulations of the Commission thereunder or contains an untrue
          statement of a material fact or omits to state any material fact
          required to be stated therein or necessary to make the statements
          therein not misleading in light of the circumstances then existing;

               (vii) use its reasonable best efforts to obtain the withdrawal of
          any order suspending the effectiveness of such registration statement
          or any post-effective amendment thereto at the earliest practicable
          date;

               (viii) if requested by any managing underwriter or underwriters,
          any placement or sales agent or any Electing Holder, promptly
          incorporate in a prospectus supplement or post-effective amendment
          such information as is required by the applicable rules and
          regulations of the Commission and as such managing underwriter or
          underwriters, such agent or such Electing Holder specifies should be
          included therein relating to the terms of the sale of such Registrable
          Securities, including information with respect to the principal amount
          of Registrable Securities being sold by such Electing Holder or agent
          or to any underwriters, the name and description of such Electing
          Holder, agent or underwriter, the offering price of such Registrable
          Securities and any discount, commission or other compensation payable
          in respect thereof, the purchase price being paid therefor by such
          underwriters and with respect to any other terms of the offering of
          the Registrable Securities to be sold by such Electing Holder or agent
          or to such underwriters; and make all required filings of such
          prospectus supplement or post-effective amendment promptly after
          notification of the matters to be incorporated in such prospectus
          supplement or post-effective amendment;

               (ix) furnish to each Electing Holder, each placement or sales
          agent, if any, therefor, each underwriter, if any, thereof and the
          respective counsel referred to in Section 3(d)(iv) a conformed copy of
          such Shelf Registration Statement, each amendment and supplement
          thereto (in each case including all exhibits thereto (in the case of
          an Electing Holder of Registrable Securities, upon request) and
          documents incorporated by reference therein) and such number of copies
          of such Shelf Registration Statement (excluding exhibits thereto and
          documents incorporated by reference therein unless specifically so
          requested by such Electing Holder, agent or underwriter, as the case
          may be) and of the prospectus included in such Shelf Registration
          Statement (including each preliminary prospectus and any summary
          prospectus), in conformity in all material respects with the
          applicable requirements of the Securities Act and the Trust Indenture
          Act and the rules and regulations of the Commission thereunder, and
          such other documents, as such Electing Holder, agent, if any, and
          underwriter, if any, may reasonably request in order to facilitate the
          offering and disposition of the Registrable Securities owned by such
          Electing Holder, offered or sold by such agent or underwritten by such
          underwriter and to permit such Electing Holder, agent and underwriter
          to satisfy the prospectus delivery requirements of the Securities Act;
          and the Company hereby consents to the use of such prospectus
          (including such preliminary and summary prospectus) and any amendment
          or supplement thereto by each such Electing Holder and by any such
          agent and underwriter, in each case in the form most recently provided
          to such person by the Company, in connection with the offering and
          sale of the Registrable

                                       10
<PAGE>

          Securities covered by the prospectus (including such preliminary and
          summary prospectus) or any supplement or amendment thereto;

               (x) use its reasonable best efforts to (A) register or qualify
          the Registrable Securities to be included in such Shelf Registration
          Statement under such securities laws or blue sky laws of such
          jurisdictions as any Electing Holder and each placement or sales
          agent, if any, therefor and underwriter, if any, thereof shall
          reasonably request, (B) keep such registrations or qualifications in
          effect and comply with such laws so as to permit the continuance of
          offers, sales and dealings therein in such jurisdictions during the
          period the Shelf Registration is required to remain effective under
          Section 2(b) above and for so long as may be necessary to enable any
          such Electing Holder, agent or underwriter to complete its
          distribution of Securities pursuant to such Shelf Registration
          Statement and (C) take any and all other actions as may be reasonably
          necessary or advisable to enable each such Electing Holder, agent, if
          any, and underwriter, if any, to consummate the disposition in such
          jurisdictions of such Registrable Securities; provided, however, that
          the Company shall not be required for any such purpose to (1) qualify
          as a foreign corporation in any jurisdiction wherein it would not
          otherwise be required to qualify but for the requirements of this
          Section 3(d)(x), (2) consent to general service of process in any such
          jurisdiction or (3) make any changes to its certificate of
          incorporation or by-laws or any agreement between it and its
          stockholders;

               (xi) use its reasonable best efforts to obtain the consent or
          approval of each governmental agency or authority, whether federal,
          state or local, which may be required to effect the Shelf Registration
          or the offering or sale in connection therewith or to enable the
          selling holder or holders to offer, or to consummate the disposition
          of, their Registrable Securities;

               (xii) unless any Registrable Securities shall be in book-entry
          only form, cooperate with the Electing Holders and the managing
          underwriters, if any, to facilitate the timely preparation and
          delivery of certificates representing Registrable Securities to be
          sold, which certificates, if so required by any securities exchange
          upon which any Registrable Securities are listed, shall be penned,
          lithographed or engraved, or produced by any combination of such
          methods, on steel engraved borders, and which certificates shall not
          bear any restrictive legends; and, in the case of an underwritten
          offering, enable such Registrable Securities to be in such
          denominations and registered in such names as the managing
          underwriters may request at least two business days prior to any sale
          of the Registrable Securities;

               (xiii) provide a CUSIP number for all Registrable Securities, not
          later than the applicable Effective Time;

               (xiv) enter into one or more underwriting agreements, engagement
          letters, agency agreements, "best efforts" underwriting agreements or
          similar agreements, as appropriate, including customary provisions
          relating to indemnification and contribution, and take such other
          actions in connection therewith as any Electing Holders aggregating at
          least 33 1/3% in aggregate principal amount of the Registrable
          Securities at the time outstanding shall request in order to expedite
          or facilitate the disposition of such Registrable Securities;

               (xv) whether or not an agreement of the type referred to in
          Section 3(d)(xiv) hereof is entered into and whether or not any
          portion of the offering contemplated by

                                       11
<PAGE>

          the Shelf Registration is an underwritten offering or is made through
          a placement or sales agent or any other entity, (A) make such
          representations and warranties to the Electing Holders and the
          placement or sales agent, if any, therefor and the underwriters, if
          any, thereof in form, substance and scope as are customarily made in
          connection with an offering of debt securities covering matters
          similar to those contained in the Purchase Agreement; (B) use
          reasonable best efforts to obtain an opinion of counsel to the Company
          in customary form and covering matters similar to those set forth in
          Sections 7(b) and 7(c) of the Purchase Agreement, as the managing
          underwriters, if any, or as any Electing Holders of at least 33 1/3%
          in aggregate principal amount of the Registrable Securities at the
          time outstanding may reasonably request, addressed to such Electing
          Holder or Electing Holders and the placement or sales agent, if any,
          therefor and the underwriters, if any, thereof and dated the effective
          date of such Shelf Registration Statement (and if such Shelf
          Registration Statement contemplates an underwritten offering of a part
          or all of the Registrable Securities, dated the date of the closing
          under the underwriting agreement relating thereto); (C) use reasonable
          best efforts to obtain a "cold comfort" letter or letters from the
          independent certified public accountants of the Company addressed to
          the selling Electing Holders, the placement or sales agent, if any,
          therefor or the underwriters, if any, thereof, dated (i) the effective
          date of such Shelf Registration Statement and (ii) the effective date
          of any prospectus supplement to the prospectus included in such Shelf
          Registration Statement or post-effective amendment to such Shelf
          Registration Statement which includes unaudited or audited financial
          statements as of a date or for a period subsequent to that of the
          latest such statements included in such prospectus (and, if such Shelf
          Registration Statement contemplates an underwritten offering pursuant
          to any prospectus supplement to the prospectus included in such Shelf
          Registration Statement or post-effective amendment to such Shelf
          Registration Statement which includes unaudited or audited financial
          statements as of a date or for a period subsequent to that of the
          latest such statements included in such prospectus, dated the date of
          the closing under the underwriting agreement relating thereto), such
          letter or letters to be in customary form and covering such matters of
          the type customarily covered by letters of such type; (D) deliver such
          documents and certificates, including officers' certificates, as may
          be reasonably requested by any Electing Holders of at least 33 1/3% in
          aggregate principal amount of the Registrable Securities at the time
          outstanding or the placement or sales agent, if any, therefor and the
          managing underwriters, if any, thereof to evidence the accuracy of the
          representations and warranties made pursuant to clause (A) above
          hereof and the compliance with or satisfaction of any agreements or
          conditions contained in the underwriting agreement or other agreement
          entered into by the Company and (E) undertake such obligations
          relating to expense reimbursement, indemnification and contribution as
          are provided in Section 5 hereof;

               (xvi) notify in writing each holder of Registrable Securities of
          any proposal by the Company to amend or waive any provision of this
          Exchange and Registration Rights Agreement pursuant to Section 8(h)
          hereof and of any amendment or waiver effected pursuant thereto, each
          of which notices shall contain the text of the amendment or waiver
          proposed or effected, as the case may be;

               (xvii) in the event that any broker-dealer registered under the
          Exchange Act shall underwrite any Registrable Securities or
          participate as a member of an underwriting syndicate or selling group
          or "assist in the distribution" (within the meaning of the

                                       12
<PAGE>

          Conduct Rules (the "Conduct Rules") of the National Association of
          Securities Dealers, Inc. ("NASD") or any successor thereto, as amended
          from time to time) thereof, whether as a holder of such Registrable
          Securities or as an underwriter, a placement or sales agent or a
          broker or dealer in respect thereof, or otherwise, assist such
          broker-dealer in complying with the requirements of such Conduct
          Rules, including by (A) if such Conduct Rules shall so require,
          engaging a "qualified independent underwriter" (as defined in such
          Conduct Rules) to participate in the preparation of the Shelf
          Registration Statement relating to such Registrable Securities, to
          exercise usual standards of due diligence in respect thereto and, if
          any portion of the offering contemplated by such Shelf Registration
          Statement is an underwritten offering or is made through a placement
          or sales agent, to recommend the yield of such Registrable Securities,
          (B) indemnifying any such qualified independent underwriter to the
          extent of the indemnification of underwriters provided in Section 5
          hereof (or to such other customary extent as may be requested by such
          underwriter), and (C) providing such information to such broker-dealer
          as may be required in order for such broker-dealer to comply with the
          requirements of the Conduct Rules; and

               (xviii) comply with all applicable rules and regulations of the
          Commission, and make generally available to its securityholders as
          soon as practicable but in any event not later than eighteen months
          after the effective date of such Shelf Registration Statement, an
          earning statement of the Company and its subsidiaries complying with
          Section 11(a) of the Securities Act (including, at the option of the
          Company, Rule 158 thereunder).

          (e) In the event that the Company would be required, pursuant to
     Section 3(d)(vi)(F) above, to notify the Electing Holders, the placement or
     sales agent, if any, therefor and the managing underwriters, if any,
     thereof, the Company shall without delay prepare and furnish to each of the
     Electing Holders, to each placement or sales agent, if any, and to each
     such underwriter, if any, a reasonable number of copies of a prospectus
     supplemented or amended so that, as thereafter delivered to purchasers of
     Registrable Securities, such prospectus shall conform in all material
     respects to the applicable requirements of the Securities Act and the Trust
     Indenture Act and the rules and regulations of the Commission thereunder
     and shall not contain an untrue statement of a material fact or omit to
     state a material fact required to be stated therein or necessary to make
     the statements therein not misleading in light of the circumstances then
     existing. Each Electing Holder agrees that upon receipt of any notice from
     the Company pursuant to Section 3(d)(vi)(F) hereof, such Electing Holder
     shall forthwith discontinue the disposition of Registrable Securities
     pursuant to the Shelf Registration Statement applicable to such Registrable
     Securities until such Electing Holder shall have received copies of such
     amended or supplemented prospectus, and if so directed by the Company, such
     Electing Holder shall deliver to the Company (at the Company's expense) all
     copies, other than permanent file copies, then in such Electing Holder's
     possession of the prospectus covering such Registrable Securities at the
     time of receipt of such notice.

          (f) Notwithstanding the foregoing, no holder of Registrable Securities
     may include any of its Registrable Securities in any Shelf Registration
     Statement pursuant to this Exchange and Registration Rights Agreement
     unless and until such holder furnishes to the Company in writing, within 10
     days after receipt of a request therefor, the information specified in Item
     507 or 508 of Regulation S-K, as applicable, of the Securities Act for use
     in connection with any Shelf Registration Statement (each such holder
     furnishing such information and electing

                                       13
<PAGE>

     to participate in a Shelf Registration, an "Electing Holder"). No Electing
     Holder shall be entitled to Special Interest pursuant to Section 2(c)
     hereof unless and until such Electing Holder shall have provided all such
     information which is required by rules of the Commission to be included in
     the Shelf Registration Statement prior to the time it is declared
     effective. Each selling Electing Holder agrees to promptly furnish
     additional information required to be disclosed in order to make the
     information previously furnished to the Company by such holder not
     materially misleading.

          (g) Until the expiration of two years after the Closing Date, the
     Company will not, and will not permit any of its "affiliates" (as defined
     in Rule 144) to, resell any of the Securities that have been reacquired by
     any of them except pursuant to an effective registration statement under
     the Securities Act.

     4. Registration Expenses.

         The Company agrees to bear and to pay or cause to be paid promptly all
expenses incident to the Company's performance of or compliance with this
Exchange and Registration Rights Agreement, including (a) all Commission and any
NASD registration, filing and review fees and expenses including fees and
disbursements of counsel for the placement or sales agent or underwriters in
connection with such registration, filing and review, (b) all fees and expenses
in connection with the qualification of the Securities for offering and sale
under the State securities and blue sky laws referred to in Section 3(d)(x)
hereof and determination of their eligibility for investment under the laws of
such jurisdictions as any managing underwriters or the Electing Holders may
designate, including any fees and disbursements of counsel for the Electing
Holders or underwriters in connection with such qualification and determination,
(c) all expenses relating to the preparation, printing, production, distribution
and reproduction of each registration statement required to be filed hereunder,
each prospectus included therein or prepared for distribution pursuant hereto,
each amendment or supplement to the foregoing, the expenses of preparing the
Securities for delivery and the expenses of printing or producing any
underwriting agreements, agreements among underwriters, selling agreements and
blue sky or legal investment memoranda and all other documents in connection
with the offering, sale or delivery of Securities to be disposed of (including
certificates representing the Securities), (d) messenger, telephone and delivery
expenses relating to the offering, sale or delivery of Securities and the
preparation of documents referred in clause (c) above, (e) internal expenses
(including all salaries and expenses of the Company's officers and employees
performing legal or accounting duties), (f) fees, disbursements and expenses of
counsel and independent certified public accountants of the Company (including
the expenses of any opinions or "cold comfort" letters required by or incident
to such performance and compliance), (g) fees, disbursements and expenses of any
"qualified independent underwriter" engaged pursuant to Section 3(d)(xvii)
hereof, (h) fees, disbursements and expenses of one counsel for the Electing
Holders retained in connection with a Shelf Registration, as selected by the
Electing Holders of at least a majority in aggregate principal amount of the
Registrable Securities held by Electing Holders (which counsel shall be
reasonably satisfactory to the Company), (i) any fees charged by securities
rating services for rating the Securities, and (j) fees, expenses and
disbursements of any other persons, including special experts, retained by the
Company in connection with such registration (collectively, the "Registration
Expenses"). To the extent that any Registration Expenses are incurred, assumed
or paid by any holder of Registrable Securities or any placement or sales agent
therefor or underwriter thereof, the Company shall reimburse such person for the
full amount of the Registration Expenses so incurred, assumed or paid promptly
after receipt of a request therefor. Notwithstanding the foregoing, the holders
of the Registrable Securities being registered shall pay all agency fees and
commissions and underwriting

                                       14
<PAGE>

discounts and commissions attributable to the sale of such Registrable
Securities and the fees and disbursements of any counsel or other advisors or
experts retained by such holders (severally or jointly), other than the counsel
and experts specifically referred to above.

          5. Indemnification.

          (a) Indemnification by the Company. The Company will indemnify and
     hold harmless each of the holders of Registrable Securities included in an
     Exchange Registration Statement, each of the Electing Holders of
     Registrable Securities included in a Shelf Registration Statement and each
     person who participates as a placement or sales agent or as an underwriter
     in any offering or sale of such Registrable Securities against any losses,
     claims, damages or liabilities, joint or several, to which such holder,
     agent or underwriter may become subject under the Securities Act or
     otherwise, insofar as such losses, claims, damages or liabilities (or
     actions in respect thereof) arise out of or are based upon an untrue
     statement or alleged untrue statement of a material fact contained in any
     Exchange Registration Statement or Shelf Registration Statement, as the
     case may be, under which such Registrable Securities were registered under
     the Securities Act, or any preliminary, final or summary prospectus
     contained therein or furnished by the Company to any such holder, Electing
     Holder, agent or underwriter, or any amendment or supplement thereto, or
     arise out of or are based upon the omission or alleged omission to state
     therein a material fact required to be stated therein or necessary to make
     the statements therein not misleading, and will reimburse such holder, such
     Electing Holder, such agent and such underwriter for any legal or other
     expenses reasonably incurred by them in connection with investigating or
     defending any such action or claim as such expenses are incurred; provided,
     however, that the Company shall not be liable to any such person in any
     such case to the extent that any such loss, claim, damage or liability
     arises out of or is based upon an untrue statement or alleged untrue
     statement or omission or alleged omission made in such registration
     statement, or preliminary, final or summary prospectus, or amendment or
     supplement thereto, in reliance upon and in conformity with written
     information furnished to the Company by such holder, agent or underwriter
     expressly for use therein.

          (b) Indemnification by the Holders and any Agents and Underwriters. As
     a condition to including any Registrable Securities in any registration
     statement filed pursuant to this Agreement and to entering into any
     underwriting agreement with respect thereto, each holder of such
     Registrable Securities to be included and each underwriter named in any
     such underwriting agreement, severally and not jointly, agrees to (i)
     indemnify and hold harmless the Company, its directors, officers who sign
     any registration statement, each person, if any, who controls the Company
     within the meaning of either Section 15 of the Securities Act or Section 20
     of the Exchange Act and all other holders of Registrable Securities,
     against any losses, claims, damages or liabilities to which the Company or
     such other holders of Registrable Securities may become subject, under the
     Securities Act or otherwise, insofar as such losses, claims, damages or
     liabilities (or actions in respect thereof) arise out of or are based upon
     an untrue statement or alleged untrue statement of a material fact
     contained in such registration statement, or any preliminary, final or
     summary prospectus contained therein or furnished by the Company to any
     such holder, agent or underwriter, or any amendment or supplement thereto,
     or arise out of or are based upon the omission or alleged omission to state
     therein a material fact required to be stated therein or necessary to make
     the statements therein not misleading, in each case to the extent, but only
     to the extent, that such untrue statement or alleged untrue statement or
     omission or alleged omission was made in reliance upon and in conformity
     with written information furnished to the Company by such holder or
     underwriter expressly for use therein, and (ii)

                                       15
<PAGE>

     reimburse the Company for any legal or other expenses reasonably incurred
     by the Company in connection with investigating or defending any such
     action or claim as such expenses are incurred; provided, however, that no
     such holder shall be required to undertake liability to any person under
     this Section 5(b) for any amounts in excess of the dollar amount of the
     proceeds to be received by such holder from the sale of such holder's
     Registrable Securities pursuant to such registration.

          (c) Notices of Claims, Etc. Promptly after receipt by an indemnified
     party under subsection (a) or (b) above of written notice of the
     commencement of any action, such indemnified party shall, if a claim in
     respect thereof is to be made against an indemnifying party pursuant to the
     indemnification provisions of or contemplated by this Section 5, notify
     such indemnifying party in writing of the commencement of such action; but
     the omission so to notify the indemnifying party shall not relieve it from
     any liability which it may have to any indemnified party otherwise than
     under the indemnification provisions of or contemplated by Section 5(a) or
     5(b) hereof. In case any such action shall be brought against any
     indemnified party and it shall notify an indemnifying party of the
     commencement thereof, such indemnifying party shall be entitled to
     participate therein and, to the extent that it shall wish, jointly with any
     other indemnifying party similarly notified, to assume the defense thereof,
     with counsel reasonably satisfactory to such indemnified party (who shall
     not, except with the consent of the indemnified party, be counsel to the
     indemnifying party), and, after notice from the indemnifying party to such
     indemnified party of its election so to assume the defense thereof, such
     indemnifying party shall not be liable to such indemnified party for any
     legal expenses of other counsel or any other expenses, in each case
     subsequently incurred by such indemnified party, in connection with the
     defense thereof other than reasonable costs of investigation. No
     indemnifying party shall, without the written consent of the indemnified
     party, effect the settlement or compromise of, or consent to the entry of
     any judgment with respect to, any pending or threatened action or claim in
     respect of which indemnification or contribution may be sought hereunder
     (whether or not the indemnified party is an actual or potential party to
     such action or claim) unless such settlement, compromise or judgment (i)
     includes an unconditional release of the indemnified party from all
     liability arising out of such action or claim and (ii) does not include a
     statement as to or an admission of fault, culpability or a failure to act
     by or on behalf of any indemnified party.

          (d) Contribution. If for any reason the indemnification provisions
     contemplated by Section 5(a) or Section 5(b) are unavailable to or
     insufficient to hold harmless an indemnified party in respect of any
     losses, claims, damages or liabilities (or actions in respect thereof)
     referred to therein, then each indemnifying party shall contribute to the
     amount paid or payable by such indemnified party as a result of such
     losses, claims, damages or liabilities (or actions in respect thereof) in
     such proportion as is appropriate to reflect the relative fault of the
     indemnifying party and the indemnified party in connection with the
     statements or omissions which resulted in such losses, claims, damages or
     liabilities (or actions in respect thereof), as well as any other relevant
     equitable considerations. The relative fault of such indemnifying party and
     indemnified party shall be determined by reference to, among other things,
     whether the untrue or alleged untrue statement of a material fact or
     omission or alleged omission to state a material fact relates to
     information supplied by such indemnifying party or by such indemnified
     party, and the parties' relative intent, knowledge, access to information
     and opportunity to correct or prevent such statement or omission. The
     parties hereto agree that it would not be just and equitable if
     contributions pursuant to this Section 5(d) were determined by pro rata
     allocation (even if the holders or any agents or underwriters or all of
     them were treated as one entity

                                       16
<PAGE>

     for such purpose) or by any other method of allocation which does not take
     account of the equitable considerations referred to in this Section 5(d).
     The amount paid or payable by an indemnified party as a result of the
     losses, claims, damages or liabilities (or actions in respect thereof)
     referred to above shall be deemed to include any legal or other fees or
     expenses reasonably incurred by such indemnified party in connection with
     investigating or defending any such action or claim. Notwithstanding the
     provisions of this Section 5(d), no holder shall be required to contribute
     any amount in excess of the amount by which the dollar amount of the
     proceeds received by such holder from the sale of any Registrable
     Securities (after deducting any fees, discounts and commissions applicable
     thereto) exceeds the amount of any damages which such holder has otherwise
     been required to pay by reason of such untrue or alleged untrue statement
     or omission or alleged omission, and no underwriter shall be required to
     contribute any amount in excess of the amount by which the total price at
     which the Registrable Securities underwritten by it and distributed to the
     public were offered to the public exceeds the amount of any damages which
     such underwriter has otherwise been required to pay by reason of such
     untrue or alleged untrue statement or omission or alleged omission. No
     person guilty of fraudulent misrepresentation (within the meaning of
     Section 11(f) of the Securities Act) shall be entitled to contribution from
     any person who was not guilty of such fraudulent misrepresentation. The
     holders' and any underwriters' obligations in this Section 5(d) to
     contribute shall be several in proportion to the principal amount of
     Registrable Securities registered or underwritten, as the case may be, by
     them and not joint.

          (e) The obligations of the Company under this Section 5 shall be in
     addition to any liability which the Company may otherwise have and shall
     extend, upon the same terms and conditions, to each officer, director and
     partner of each holder, agent and underwriter and each person, if any, who
     controls any holder, agent or underwriter within the meaning of the
     Securities Act; and the obligations of the holders and any agents or
     underwriters contemplated by this Section 5 shall be in addition to any
     liability which the respective holder, agent or underwriter may otherwise
     have and shall extend, upon the same terms and conditions, to each officer
     and director of the Company (including any person who, with his consent, is
     named in any registration statement as about to become a director of the
     Company) and to each person, if any, who controls the Company within the
     meaning of the Securities Act.

          6. Underwritten Offerings.

          (a) Selection of Underwriters. If any of the Registrable Securities
     covered by the Shelf Registration are to be sold pursuant to an
     underwritten offering, the managing underwriter or underwriters thereof
     shall be designated by Electing Holders holding at least a majority in
     aggregate principal amount of the Registrable Securities to be included in
     such offering, provided that such designated managing underwriter or
     underwriters is or are reasonably acceptable to the Company.

          (b) Participation by Holders. Each holder of Registrable Securities
     hereby agrees with each other such holder that no such holder may
     participate in any underwritten offering hereunder unless such holder (i)
     agrees to sell such holder's Registrable Securities on the basis provided
     in any underwriting arrangements approved by the persons entitled hereunder
     to approve such arrangements and (ii) completes and executes all
     questionnaires, powers of attorney, indemnities, underwriting agreements
     and other documents reasonably required under the terms of such
     underwriting arrangements.

                                       17
<PAGE>

          7. Rule 144.

          The Company covenants to the holders of Registrable Securities that to
the extent it shall be required to do so under the Exchange Act, the Company
shall timely file the reports required to be filed by it under the Exchange Act
or the Securities Act (including the reports under Section 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the
Commission under the Securities Act) and the rules and regulations adopted by
the Commission thereunder, and shall take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar or successor rule or regulation hereafter adopted
by the Commission. Upon the request of any holder of Registrable Securities in
connection with that holder's sale pursuant to Rule 144, the Company shall
deliver to such holder a written statement as to whether it has complied with
such requirements.

          8. Miscellaneous.

          (a) No Inconsistent Agreements. The Company represents, warrants,
     covenants and agrees that it has not granted, and shall not grant,
     registration rights with respect to Registrable Securities or any other
     securities which would be inconsistent with the terms contained in this
     Exchange and Registration Rights Agreement.

          (b) Specific Performance. The parties hereto acknowledge that there
     would be no adequate remedy at law if the Company fails to perform any of
     its obligations hereunder and that the Purchasers and the holders from time
     to time of the Registrable Securities may be irreparably harmed by any such
     failure, and accordingly agree that the Purchasers and such holders, in
     addition to any other remedy to which they may be entitled at law or in
     equity, shall be entitled to compel specific performance of the obligations
     of the Company under this Exchange and Registration Rights Agreement in
     accordance with the terms and conditions of this Exchange and Registration
     Rights Agreement, in any court of the United States or any State thereof
     having jurisdiction.

          (c) Notices. All notices and other communications provided for or
     permitted hereunder shall be given as provided in the Indenture.

          (d) Parties in Interest. All the terms and provisions of this Exchange
     and Registration Rights Agreement shall be binding upon, shall inure to the
     benefit of and shall be enforceable by the parties hereto and the holders
     from time to time of the Registrable Securities and the respective
     successors and assigns of the parties hereto and such holders. In the event
     that any transferee of any holder of Registrable Securities shall acquire
     Registrable Securities, in any manner, whether by gift, bequest, purchase,
     operation of law or otherwise, such transferee shall, without any further
     writing or action of any kind, be deemed a beneficiary hereof for all
     purposes and such Registrable Securities shall be held subject to all of
     the terms of this Exchange and Registration Rights Agreement, and by taking
     and holding such Registrable Securities such transferee shall be entitled
     to receive the benefits of, and be conclusively deemed to have agreed to be
     bound by all of the applicable terms and provisions of this Exchange and
     Registration Rights Agreement. If the Company shall so request, any such
     successor, assign or transferee shall agree in writing to acquire and hold
     the Registrable Securities subject to all of the applicable terms hereof.

                                       18
<PAGE>

          (e) Survival. The respective indemnities, agreements, representations,
     warranties and each other provision set forth in this Exchange and
     Registration Rights Agreement or made pursuant hereto shall remain in full
     force and effect regardless of any investigation (or statement as to the
     results thereof) made by or on behalf of any holder of Registrable
     Securities, any director, officer or partner of such holder, any agent or
     underwriter or any director, officer or partner thereof, or any controlling
     person of any of the foregoing, and shall survive delivery of and payment
     for the Registrable Securities pursuant to the Purchase Agreement and the
     transfer and registration of Registrable Securities by such holder and the
     consummation of an Exchange Offer.

          (f) Governing Law. This Exchange and Registration Rights Agreement
     shall be governed by and construed in accordance with the laws of the State
     of New York.

          (g) Headings. The descriptive headings of the several Sections and
     paragraphs of this Exchange and Registration Rights Agreement are inserted
     for convenience only, do not constitute a part of this Exchange and
     Registration Rights Agreement and shall not affect in any way the meaning
     or interpretation of this Exchange and Registration Rights Agreement.

          (h) Entire Agreement; Amendments. This Exchange and Registration
     Rights Agreement, together with the Purchase Agreement, the Indenture and
     the form of Securities, and the other writings delivered pursuant hereto
     which form a part hereof contain the entire understanding of the parties
     with respect to its subject matter. This Exchange and Registration Rights
     Agreement supersedes all prior agreements and understandings between the
     parties with respect to its subject matter. This Exchange and Registration
     Rights Agreement may be amended and the observance of any term of this
     Exchange and Registration Rights Agreement may be waived (either generally
     or in a particular instance and either retroactively or prospectively) only
     by a written instrument duly executed by the Company and the holders of at
     least a majority in aggregate principal amount of the Registrable
     Securities at the time outstanding. Each holder of any Registrable
     Securities at the time or thereafter outstanding shall be bound by any
     amendment or waiver effected pursuant to this Section 8(h), whether or not
     any notice, writing or marking indicating such amendment or waiver appears
     on such Registrable Securities or is delivered to such holder.

          (i) Counterparts. This agreement may be executed by the parties in
     counterparts, each of which shall be deemed to be an original, but all such
     respective counterparts shall together constitute one and the same
     instrument.

                                       19
<PAGE>

         Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.

                                   Very truly yours,

                                   HALLIBURTON COMPANY

                                   By: /s/ C. Christopher Gaut
                                      -----------------------------------------
                                      Name: C. Christopher Gaut
                                      Title: Executive Vice President and Chief
                                             Financial Officer

Accepted as of the date hereof for
themselves and as Representatives
of the several Purchasers named in
Schedule 1 to the Purchase Agreement:

By: Citigroup Global Markets Inc.

By:      /s/ Sean Dolan
         -----------------------------
         Name:  Sean Dolan
         Title: Vice President

By: Goldman, Sachs & Co.

By:      /s/ Goldman, Sachs & Co.
         -----------------------------
         (Goldman, Sachs & Co.)

By: J.P. Morgan Securities Inc.

By:      /s/ Robert Bottamedi
         -----------------------------
         Name:  Robert Bottamedi
         Title: Vice President

                                       20<PAGE>
                                                                    Exhibit 10.1

                            CENTERPOINT ENERGY, INC.
                         1985 DEFERRED COMPENSATION PLAN

               (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2003)

<PAGE>

            CENTERPOINT ENERGY, INC. 1985 DEFERRED COMPENSATION PLAN
               (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2003)

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                Page
                                                                                                                ----
<S>                                                                                                             <C>
ARTICLE I PURPOSES OF PLAN; DEFINITIONS; DURATION.............................................................    2
   1.1            Purposes....................................................................................    2
   1.2            Definitions.................................................................................    2
   1.3            Term........................................................................................    4

ARTICLE II ADMINISTRATION.....................................................................................    5

ARTICLE III PARTICIPATION.....................................................................................    5
   3.1            Eligibility of Employees and Directors......................................................    5
   3.2            Designation of Participants.................................................................    5
   3.3            Election to Participate.....................................................................    5
   3.4            Salary Deferral.............................................................................    6
   3.5            Bonus Deferral..............................................................................    6
   3.6            Participation for the Participation Year Ending December 31, 1985...........................    6
   3.7            Waiver or Suspension of Deferral............................................................    7
   3.8            Cessation of Post-1988 Deferrals............................................................    7

ARTICLE IV BENEFICIARY DESIGNATIONS; WITHHOLDING..............................................................    7
   4.1            Beneficiary Designations....................................................................    7
   4.2            Withholding of Taxes........................................................................    7

ARTICLE V BENEFITS............................................................................................    7
   5.1            Benefit Payments............................................................................    7
   5.2            Death.......................................................................................    9
   5.3            Disability..................................................................................   10
   5.4            Payment Upon Termination of Employment......................................................   10
   5.5            Termination of Employment During Participation Year.........................................   10
   5.6            Terminations Under the Separation Program...................................................   11
   5.7            Terminations Under the UFI Severance Program................................................   12
   5.8            Terminations Under the 1995 Voluntary Early Retirement Program..............................   12
   5.9            Terminations under the 2002 Voluntary Early Retirement Program..............................   13

ARTICLE VI RIGHTS OF PARTICIPANTS.............................................................................   13
   6.1            Limitation of Rights........................................................................   13
   6.2            Non-Alienation of Benefits..................................................................   14
   6.3            Prerequisites to Benefits...................................................................   15
   6.4            Nature of Employer's Obligation.............................................................   15
   6.5            Claims and Review Procedures................................................................   15

ARTICLE VII MISCELLANEOUS.....................................................................................   16
   7.1            Amendment or Termination of the Plan........................................................   16
   7.2            Reliance Upon Information...................................................................   17
   7.3            Effective Date..............................................................................   17
   7.4            Governing Law...............................................................................   17
   7.5            Severability................................................................................   17
   7.6            Notice......................................................................................   17
</TABLE>

                                      -i-

<PAGE>

                            CENTERPOINT ENERGY, INC.
                         1985 DEFERRED COMPENSATION PLAN
               (AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2003)

                                    RECITALS

         Houston Industries Incorporated, a Texas corporation ("HII"),
established the Houston Industries Incorporated Deferred Compensation Plan,
effective as of September 1, 1985, and as thereafter amended (the "Plan"), for
the benefit of its eligible employees. Effective as of December 31, 1988, the
Board of Directors of HII "froze" the Plan to cease the deferral to the Plan of
compensation and bonuses earned on or after January 1, 1989.

         CenterPoint Energy, Inc., a Texas corporation (the "Company"), as
successor to HII, became sponsor of the Plan effective as of August 31, 2002.

         Pursuant to Section 7.1 of the Plan, the Board of Directors of the
Company authorized the amendment and restatement of the Plan, effective as of
January 1, 2003, in order to incorporate all prior amendments to the Plan and to
make certain design changes.

         There shall be no termination and no gap or lapse in time or effect
between the Plan, as in effect on December 31, 2002 (the "Prior Plan"), and this
Plan, as amended and restated effective as of January 1, 2003. The Prior Plan,
as in effect on December 31, 2002, in the form of this Plan shall not operate to
exclude, diminish, limit or restrict the payments or continuation of payments of
benefits to Participants under the terms of the Plan as in effect on December
31, 2002. Except to the extent otherwise required to reflect the fact that such
Prior Plan Participants' benefits accrued under the Plan are continued under
this Plan, the provisions of this Plan shall apply only to an Employee or a
Director participating in this Plan on or after January 1, 2003.

         NOW, THEREFORE, the Company hereby amends, restates in its entirety and
continues the Prior Plan, as in effect on December 31, 2002, in the form of this
CenterPoint Energy, Inc. 1985 Deferred Compensation Plan, as amended and
restated effective January 1, 2003, which shall read as follows:

                                      -1-

<PAGE>

                                   ARTICLE I

                     PURPOSES OF PLAN; DEFINITIONS; DURATION

         1.1      Purposes. This 1985 Deferred Compensation Plan of CenterPoint
Energy, Inc. for selected management and highly compensated employees is
intended to aid certain of its employees in making more adequate provision for
their retirement and is intended to be a "top-hat" plan under sections 201(2),
301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974.

         1.2      Definitions. Each term below shall have the meaning assigned
thereto for all purposes of this Plan unless the context requires a different
construction.

                  "Affiliate" means any corporation in which the shares owned or
         controlled, directly or indirectly, by the Company represent 80%, or
         more, of the voting power of the issued and outstanding capital stock
         of such corporation, and a corporation which owns or controls, directly
         or indirectly, 80% or more, of the voting power of the issued and
         outstanding capital stock of the Company, and any corporation in which
         80% or more, of the voting power of the issued and outstanding capital
         stock is owned or controlled, directly or indirectly, by any
         corporation which owns or controls, directly or indirectly, 80% or
         more, of the voting power of the issued and outstanding capital stock
         of the Company.

                  "Age" means the Participant's age on his birthday nearest the
         applicable Commencement Date.

                  "Agreement" means the deferred compensation agreement between
         the Employer and the Participant describing the benefits payable to the
         Participant under the Plan with respect to salary deferrals and Bonus
         deferrals for a Participation Year. Deferrals for each separate
         Participation Year will be covered by a separate Agreement.

                  "Beneficiary" means a person or persons, a trustee or trustees
         of a trust, or a partnership, corporation, limited liability
         partnership, limited liability company, or other entity designated by
         the Participant, as provided in Section 4.1, to receive any amounts
         distributed under the Plan after the Participant's death.

                  "Bonus" means a formula or discretionary bonus or incentive
         compensation paid by an Employer, including, but not limited to, a
         vested award under the Company's Executive Incentive Compensation Plan,
         granted after September 1, 1985.

                  "Company" means CenterPoint Energy, Inc., a Texas corporation,
         or a successor to CenterPoint Energy, Inc., in the ownership of
         substantially all of its assets.

                  "Commencement Date" means the first day of the Participation
         Year with respect to which a Compensation deferral occurs, except for
         the 1985 Participation Year, for which the Commencement Date is October
         1, 1985.

                                      -2-

<PAGE>

                  "Committee" means the Benefits Committee or such other
         committee, which shall consist of five or fewer persons, as shall be
         appointed by the Board of Directors of the Company to administer the
         Plan pursuant to Article II hereof.

                  "Compensation" means the salary and Bonus which an Employer
         pays its Employees, and the retainer fee paid to a Director by an
         Employer.

                  "Director" means a member of the board of directors of an
         Employer who is not an Employee of the Company or an Affiliate.

                  "Disability" means a physical or mental condition that
         qualifies as a total and permanent disability under the CenterPoint
         Energy, Inc. Long Term Disability Plan.

                  "Early Retirement Date" means with respect to an Employee the
         first day of the month coincident with or next following his 60th
         birthday; and means with respect to a Director the first day of the
         month coincident with or next following his resignation or removal as a
         Director before his Normal Retirement Date.

                  "Employee" means any person, including an officer of any
         Employer (whether or not he is also a director thereof), who, at the
         time such person is designated a Participant hereunder, is employed by
         the Employer on a full-time basis, who is compensated for such
         employment by a regular salary, and who, in the opinion of the
         Committee, is one of the officers or other key employees of the
         Employer in a position to contribute materially to the continued growth
         and development and to the future financial success of the Employer.

                  "Employer" means the Company and each Affiliate which has
         adopted this Plan.

                  "Employment" means employment with an Employer or currently
         acting as a Director of an Employer. Neither the transfer of a
         Participant from employment by the Company to employment by an
         Affiliate nor the transfer of a Participant from employment by an
         Affiliate to employment by the Company shall be deemed to be a
         termination of Employment of the Participant. Moreover, the Employment
         of a Participant shall not be deemed to have been terminated because of
         his absence from active employment on account of temporary illness or
         during authorized vacation or during temporary leaves of absence,
         granted by the Employer for reasons of professional advancement,
         education, health, or government service, or during military leave for
         any period if the Participant returns to active employment within 90
         days after the termination of his military leave, or during any period
         required to be treated as a leave of absence by virtue of any valid law
         or agreement. Notwithstanding the foregoing, from and after October 1,
         1997, a Participant's employment with STP Nuclear Operating Company
         shall be deemed to constitute "Employment" with an Employer hereunder
         for all purposes except any such Participant shall not be eligible to
         make any additional deferrals of Compensation under the Plan. Further
         notwithstanding the foregoing, from and after the RRI Distribution
         Date, a Participant's continuous employment with Reliant Resources,
         Inc. ("RRI") and/or its subsidiaries following such date ("RRI
         Employment") shall be deemed to constitute "Employment" with an
         Employer hereunder (to the extent such Participant commenced RRI
         Employment prior to the RRI Distribution Date and

                                      -3-

<PAGE>

         immediately prior to such date was otherwise an Employee) for all
         purposes except any such Participant shall not be eligible to make any
         additional deferrals of Compensation under the Plan; provided, however,
         that such Participant made a one-time, irrevocable election on or
         before December 31, 2000, to treat such RRI Employment as Employment
         for the Plan as described herein. The Committee may allow individuals
         electing not to treat RRI Employment as "Employment" hereunder to make
         a subsequent, one-time election, on such form and in such manner as
         prescribed by the Committee, to transfer benefits under this Plan to a
         deferred compensation program or plan sponsored by RRI.

                  "Moody's Rate" means a rate of interest equal to the composite
         yield on Moody's Average Corporate Bond Yield Index for the calendar
         month as determined from Moody's Bond Record published by Moody's
         Investors Service, Inc. (or any successor thereto), or, if such yield
         is no longer published, a substantially similar average selected by the
         Committee.

                  "Normal Retirement Date" means with respect to an Employee the
         first day of the month coincident with or next following his 65th
         birthday or the date of his termination of employment, if later, and
         means with respect to a Director the first day of the month coincident
         with or next following his 70th birthday.

                  "Participant" means an Employee or a Director who has been
         designated by the Committee to participate in the Plan pursuant to
         Section 3.2 or 3.6 hereof.

                  "Participation Year" means (1) with respect to Compensation in
         the form of a Bonus, the Plan Year during which the Bonus would have
         been paid if not deferred, and (2) with respect to Compensation in the
         form of salary, the Plan Year during which a Participant performs
         services for the Employer for a salary.

                  "Plan" means the CenterPoint Energy, Inc. 1985 Deferred
         Compensation Plan, as initially established effective September 1,
         1985, and amended and restated effective January 1, 2003, as set forth
         herein, and as the same may hereafter be amended from time to time.

                  "Plan Year" means the calendar year.

                  "RRI Distribution Date" means September 30, 2002, which is the
         date the Company distributed to its shareholders all shares of common
         stock of Reliant Resources, Inc. that the Company owned as of such
         date.

         1.3      Term. The effective date of the Plan is September 1, 1985. The
Plan shall continue until terminated by the Board of Directors of the Company.

                                      -4-

<PAGE>

                                   ARTICLE II

                                 ADMINISTRATION

         The Plan shall be administered by the Committee. The Committee shall
represent the Company and other Employers in all matters concerning the
administration of the Plan. Members of the Committee may be Participants under
the Plan, but no member may vote on any matter relating to his benefits under
the Plan. The Committee shall have primary responsibility for the administration
and operation of the Plan and shall have all powers necessary to carry out the
provisions of the Plan, including the power to determine which Employees and
Directors shall be Participants under the Plan and which Compensation may be
subject to deferral. The determination of the Committee as to the construction,
interpretation, or application of any terms and provisions of the Plan,
including whether and when there has been a termination of an Employee's
employment, shall be final, binding, and conclusive upon all persons.

                                   ARTICLE III

                                  PARTICIPATION

         3.1      Eligibility of Employees and Directors. An Employee must be a
manager or a highly compensated salaried employee of an Employer to be eligible
to participate in the Plan. All Directors shall be eligible to participate in
the Plan. The Committee may from time to time establish additional eligibility
requirements for participation in the Plan.

         3.2      Designation of Participants. Prior to the commencement of any
Participation Year after 1985 the Committee shall designate and notify in
writing the Employees and/or Directors who are eligible to elect to defer
Compensation. A designation of an Employee or Director to participate with
respect to Compensation for a particular Participation Year shall not
automatically entitle such Participant to participate with respect to any other
Participation Year. The Committee may, in its sole discretion, notify a
Participant that he is entitled to participate with respect to all future
Compensation for all Participation Years beginning after the date of
notification by the Committee in which event the Participant may continue to
participate and elect to defer Compensation awarded in respect of future
Participation Years until such time as the Committee notifies the Participant in
writing that he may not participate for particular future Participation Years.

         Notwithstanding the foregoing or any other provision of the Plan to the
contrary, no Employee or Director shall be eligible to be designated as a
Participant in the Plan with respect to Compensation earned after December 31,
1988.

         3.3      Election to Participate. After a Participant has been notified
by the Committee that he is eligible to participate in the Plan, he must, in
order to participate in the Plan, notify the Committee in writing of his
election to so participate. The election to participate in the Plan shall be
effective upon the receipt by the Committee of the Participant's written
election to defer Compensation which specifies the type or types and the amount
or amounts of his Compensation that he wishes to defer and the manner of such
deferral pursuant to Section 3.4, 3.5 or 3.6 hereof.

                                      -5-

<PAGE>

         3.4      Salary Deferral. A Participant's election to defer the payment
of salary for 1986 and subsequent Plan Years must be made prior to December 1 of
the Plan Year preceding the Plan Year in which the salary is earned by the
Participant. Such election will be irrevocable as of December 31 of the calendar
year preceding the calendar year in which the salary is earned.

         A Participant may not elect to defer less than $2,000 for any
Participation Year and may not elect to defer more than 40% of his annual salary
in any Participation Year in which the Participant is Age 50 or older, and may
not elect to defer more than 25% of his annual salary in any Participation Year
in which the Participant is Age 49 or younger.

         The amount of Compensation elected to be deferred pursuant to this
Section 3.4 shall be withheld from the Participant's salary during a Plan Year
in equal semi-monthly amounts.

         3.5      Bonus Deferral. A Participant's election to defer the payment
of a Bonus must be made prior to, and will become irrevocable on, the earlier of
(a) December 1st of the Plan Year before the Participation Year with respect to
which the Bonus is paid, or (b) the date on which the amount of Bonus to be paid
to the Participant for such Participation Year is determined or determinable by
the Board.

         A Participant may not elect to defer more than 100% of his annual cash
Bonus award with respect to a particular Participation Year, nor less than
$2,000 for each Participation Year.

         The amount of Compensation elected to be deferred under this Section
3.5 shall not be paid but shall be deemed to have been deferred in one lump sum
on the Commencement Date of the applicable Participation Year. If the amount of
Bonus awarded to the Participant with respect to a Participation Year is less
than the amount of Bonus which the Participant had elected to defer for such
Participation Year, the entire amount of the Bonus awarded shall be deferred in
accordance with this Section 3.5, and no further deferral shall be made with
respect to such election for such Participation Year.

         3.6      Participation for the Participation Year Ending December 31,
1985. Notwithstanding any other provision of the Plan to the contrary, for the
Participation Year ending December 31, 1985, the Committee may select and notify
eligible Participants, in accordance with the provisions of Section 3.2 hereof,
at any time on or before September 1, 1985.

         Any such eligible Participant may elect in writing, in accordance with
the provisions of Section 3.3 hereof, at any time on or before the date which
follows by 30 days the date on which such Participant is so notified to defer
the payment of any portion of his Compensation earned subsequent to October 1,
1985 and prior to December 31, 1985, up to the maximum salary deferral
authorized under Section 3.4. Such election shall be irrevocable as of the date
which follows by 30 days the date on which the Participant is so notified that
he is eligible to participate in the Plan. The amount of Compensation elected to
be deferred pursuant to this paragraph shall be withheld from the Participant's
salary received subsequent to October 1, 1985 during the calendar year ending
December 31, 1985, in equal semi-monthly amounts.

                                      -6-

<PAGE>

         3.7      Waiver or Suspension of Deferral. The Committee may, in its
sole discretion, grant a waiver or suspension of a Participant's irrevocable
deferral election under this Article III for such time as the Committee may deem
to be necessary upon a finding that the Participant has suffered a financial
hardship.

         3.8      Cessation of Post-1988 Deferrals. Notwithstanding any other
provision of the Plan to the contrary, no Employee, Director or Participant
shall be eligible to defer any Compensation (whether salary or Bonus) earned on
or after January 1, 1989.

                                   ARTICLE IV

                      BENEFICIARY DESIGNATIONS; WITHHOLDING

         4.1      Beneficiary Designations. Each person becoming a Participant
shall file with the Committee a designation of one or more Beneficiaries to whom
distributions otherwise due the Participant shall be made in the event of his
death while in the employ of the Company or after termination of employment but
prior to the complete distribution of the benefits payable with respect to the
Participant. Such designation shall be effective when received in writing by the
Committee. The Participant may from time to time revoke or change any such
designation of the Beneficiary by written document delivered to the Committee.
If there is no valid designation of the Beneficiary on file with the Committee
at the time of the Participant's death, or if all of the Beneficiaries
designated therein shall have predeceased the Participant or otherwise ceased to
exist, the Beneficiary shall be, and any payment hereunder shall be made to, the
Participant's spouse, if she survives the Participant, otherwise to the
Participant's estate. If the Beneficiary, whether under a valid beneficiary
designation or under the preceding sentence, shall survive the Participant but
die before receiving all payments hereunder, the balance of the benefits which
would have been paid to the Beneficiary had he or she lived shall, unless the
Participant's designation provided otherwise, be distributed to the
Beneficiary's estate.

         4.2      Withholding of Taxes. The Committee shall cause the Employer
to deduct from the amount of all benefits paid under the Plan any taxes required
to be withheld by the federal government or any state or local government.

                                   ARTICLE V

                                    BENEFITS

         5.1      Benefit Payments. The benefit payments with respect to
deferrals for a specific Participation Year will be determined by the amount of
Compensation deferred during that Participation Year and the Participant's Age
on the Commencement Date, as set forth below:

         (a)      A Participant who has attained Age 58 or older on the
     Commencement Date of a Participation Year during which part of his
     Compensation is deferred will receive 15 annual installment payments from
     his Employer commencing on the first day of the month following his
     termination of employment on or after his Normal Retirement Date. A
     Participant who has attained Age 55, 56 or 57 on the Commencement Date of a
     Participation Year during which part of his Compensation is deferred will
     receive equal annual installments for three years if Age 55, or for two
     years if Age 56, or will receive a

                                      -7-

<PAGE>

     single payment if Age 57, to commence or to be paid on the seventh
     anniversary of the Commencement Date, provided he remains in the continuous
     employ of his Employer from the Commencement Date through the date(s) of
     payment of such annual installment(s) or, if applicable, his Early
     Retirement Date. Each such Participant Age 55, 56 or 57 on any such
     Commencement Date will also receive annual installment payments for 15
     years commencing on the first of the month following his termination of
     employment on or after his Normal Retirement Date. In any case where
     payments pursuant to this Section 5.1(a) are to commence later than the
     Participant's Normal Retirement Date, the amount of such payments otherwise
     payable commencing on the Participant's Normal Retirement Date shall be
     increased by application of the interest rate specified in his Agreement,
     compounded annually from his Normal Retirement Date until the date of the
     first such payment.

         (b)      A Participant who has not attained Age 55 on the Commencement
     Date of a Participation Year during which part of his Compensation is
     deferred will receive equal annual installments for four years commencing
     on the seventh anniversary of the Commencement Date, provided he remains in
     the continuous employ of his Employer from the Commencement Date through
     the date(s) of payment of such annual installment(s) or, if applicable, his
     Early Retirement Date. Such a Participant will also receive annual
     installment payments for 15 years commencing on the first of the month
     following his termination of employment on or after his Normal Retirement
     Date. In any case where such 15 annual installment payments pursuant to
     this Section 5.1(b) are to commence later than the Participant's Normal
     Retirement Date, the amount of such payments otherwise payable commencing
     on his Normal Retirement Date shall be increased by application of the
     interest rate specified in his Agreement, compounded annually, from his
     Normal Retirement Date until the date of the first such payment.

         (c)      Notwithstanding any provision of this Article V to the
     contrary, a Participant who terminates employment (i) after December 31,
     2002, and (ii) on or after the first day of the month coincident with or
     next following the Participant's 55th birthday but prior to his Early
     Retirement Date shall receive his benefit under the Plan in 15 annual
     installment payments, with such payments commencing on the first day of the
     month coincident with or next following the month in which the Participant
     terminates employment and payable thereafter in that same month in each
     remaining year, if such Participant consents to receiving his benefit in
     accordance with this Section 5.1(c). If the Participant does not so
     consent, his benefit shall be paid as otherwise provided under this Article
     V.

         (d)      Any Participant who terminates employment after his Early
     Retirement Date (or an earlier date if authorized by the Committee in its
     discretion) but prior to his Normal Retirement Date, will (if he is living
     on the date of payment) receive 15 equal annual installment payments
     commencing on the first of the month following his Normal Retirement Date.
     Such commencement date may be accelerated by the Committee, in its sole
     discretion, but could not occur before a Participant's termination of
     employment. In any case where 15 annual installment payments pursuant to
     this Section 5.1(d) are to commence earlier than the Participant's Normal
     Retirement Date, the amount of such payments otherwise payable commencing
     on the Participant's Normal Retirement Date shall be reduced and discounted
     to reflect early receipt by application of the interest rate

                                      -8-

<PAGE>

     specified in the Participant's Agreement, compounded annually, for the
     period from the date of payment to the Participant's Normal Retirement
     Date.

         (e)      The amount of benefit payments will be stated in the Agreement
     between the Employer and the Participant, based on the Company's
     administrative guidelines under the Plan.

         (f)      Any installment benefits, at the request of the Participant
     and in the sole discretion of the Committee, may be commuted to a lump-sum
     payment or may be paid over a shorter period of time on the basis of the
     interest rate specified in the Participant's Agreement, compounded
     annually.

         5.2      Death.

         (a)      If a Participant dies (i) prior to his Normal Retirement Date
     and prior to his termination of employment, or (ii) after his termination
     of employment having met the requirements for 15 annual installment
     payments pursuant to Section 5.1(d) as of the date of such termination, but
     prior to the commencement of such 15 annual installments payments, the
     payments otherwise described in Section 5.1 not theretofore made shall not
     be made, but the Employer shall pay Participant's Beneficiary the sum or
     sums actually deferred with interest thereon compounded annually from the
     Commencement Date through the date of payment at the annual percentage rate
     specified in the Participant's Agreement, less an amount equal to the
     benefits paid prior to Participant's death with interest thereon at such
     annual rate compounded annually from the date of such prior benefit payment
     through the date of payment of the death benefit pursuant to this Section
     5.2(a). The payment pursuant to this Section 5.2(a) shall be made within 90
     days following the date of Participant's death. Notwithstanding the
     foregoing, if there is a conflict between the provisions of this section
     and the terms of the Participant's Severance Agreement (as described in
     Section 5.4), the terms of the Severance Agreement shall control.

         (b)      If Participant dies (i) after his Normal Retirement Date but
     prior to his termination of employment, (ii) after his termination of
     employment, provided he had attained his Normal Retirement Date on or
     before the date of such termination, or (iii) after commencement of 15
     annual installment payments pursuant to Section 5.1 but prior to completion
     of all such payments, the Employer shall make (or continue to make) such
     payments provided for in Section 5.1 to the Participant's Beneficiary.
     Notwithstanding the foregoing, if there is a conflict between the
     provisions of this section and the terms of the Participant's Severance
     Agreement (as described in Section 5.4), the terms of the Severance
     Agreement shall control.

         (c)      Any installment death benefits, at the request of the
     Beneficiary and in the sole discretion of the Committee, may be commuted to
     a lump-sum payment or may be paid over a shorter period of time on the
     basis of the interest rate specified in the Participant's Agreement,
     compounded annually. Notwithstanding the foregoing, if there is a conflict
     between the provisions of this section and the terms of the Participant's
     Severance Agreement (as described in Section 5.4), the terms of the
     Severance Agreement shall control.

                                      -9-

<PAGE>

         5.3      Disability. In the event of the Disability of a Participant
while in the employ of an Employer, the Participant shall be considered to have
remained in the continuous employment of the Employer during his Disability
until his Normal Retirement Date or earlier death. The benefits payable to each
Participant under the Plan shall be paid in the amounts and at the times
otherwise provided in Section 5.1, except that at the request of the Participant
and in the sole discretion of the Committee any such payments may be commuted to
a lump-sum payment or may be paid over a shorter period of time on the basis of
the interest rate specified in the Participant's Agreement, compounded annually.

         5.4      Payment Upon Termination of Employment. If the employment of a
Participant who is an Employee of an Employer is terminated for any reason other
than death, retirement at or after his Normal Retirement Date, or early
retirement in accordance with the provisions of Section 5.1(c) or 5.1(d), the 15
annual installment payments described in Section 5.1 shall not be made, but the
Employer shall pay the Participant the sum or sums actually deferred with
interest thereon compounded annually from the Commencement Date through the date
of payment, at a rate determined as follows:

         (a)      If the date of Participant's termination of employment occurs
     prior to the seventh anniversary of the Commencement Date, the interest
     rate shall be the lesser of (i) Moody's Rate, or (ii) the annual percentage
     rate specified in Participant's Agreement.

         (b)      If the date of Participant's termination of employment occurs
     after the seventh anniversary of the Commencement Date, the interest rate
     shall be the annual percentage rate specified in Participant's Agreement.

         Notwithstanding the foregoing, the amount payable under this Section
5.4 shall be reduced by an amount equal to any benefits paid prior thereto with
interest thereon at the rate determined in accordance with the foregoing
compounded annually from the date of such prior benefit payment through the date
of the termination payment pursuant to this Section 5.4. The payment pursuant to
this Section 5.4 shall be made on the first of the month coincident with or next
following the expiration of 90 days following the date of Participant's
termination of employment.

         However, if any Participant who has entered into a Severance Agreement,
as defined in the CenterPoint Energy, Inc. Executive Severance Benefits Plan,
effective as of September 3, 1997, experiences a termination giving rise to a
right to benefits under his Severance Agreement and complies with the conditions
set forth in his Severance Agreement for the receipt of benefits thereunder,
then such Participant shall be treated as if his termination did not occur until
after his Early Retirement Date, and the provisions of Section 5.1(d) shall
apply.

         5.5      Termination of Employment During Participation Year. If
Participant terminates his employment with an Employer for any reason during the
Participation Year for which Compensation is to be deferred, the amount of
deferral specified in his Agreement for that Participation Year shall be
adjusted to equal the actual deferral amount for the Participation Year prior to
such termination. In addition, any benefits payable in accordance with this Plan
shall be proportionately reduced to reflect such actual deferral amount.

                                      -10-

<PAGE>

         5.6      Terminations Under the Separation Program.

         (a)      Voluntary Terminations.

                  (i)      Prior to Early Retirement Date. Notwithstanding any
         other provision of the Plan to the contrary, if the employment of a
         Participant is terminated voluntarily under the Voluntary Early
         Retirement Program adopted by the Board of Directors of the Company on
         January 8, 1992 and prior to the first day of the month coincident with
         or next following the Participant's 60th birthday, a Normal Retirement
         Date distribution as described in Section 5.1 shall not be made, but
         the Employer (x) shall pay the Participant the sum or sums of
         Compensation actually deferred, with interest thereon, compounded
         annually, at the applicable interest rate specified in the
         Participant's agreement for each Participation Year, from the
         Commencement Date through the date of payment, (y) shall pay such
         amount in 15 annual installment payments, in accordance with Section
         5.1(b) above, commencing the month following the month in which the
         Participant terminates employment and payable thereafter in that same
         month in each remaining year, and (z) shall not make any equal annual
         installments to such Participant, as described in Section 5.1(a)-(b).

                  (ii)     After Early Retirement Date. If the employment of a
         Participant is terminated voluntarily as described in (a)(i) above but
         after the first day of the month coincident with or next following the
         Participant's 60th birthday, distributions (including the equal annual
         installments) shall be made as otherwise provided in this Article V.

         (b)      Involuntary Terminations.

                  (i)      Prior to Early Retirement Date. Notwithstanding any
         other provision of the Plan to the contrary, if the employment of a
         Participant is terminated involuntarily under the severance program
         adopted by the Board of Directors of the Company on January 8, 1992 and
         prior to the first day of the month coincident with or next following
         the Participant's 60th birthday, a Normal Retirement Date distribution
         as described in Section 5.1 shall not be made, but the Employer (a)
         shall pay the Participant the sum or sums of Compensation actually
         deferred, with interest thereon, compounded annually, at the applicable
         interest rate specified in the Participant's agreement for each
         Participation Year, from the Commencement Date through the date of
         payment, (b) shall pay such amount in a lump sum within 90 days
         following the date of Participant's termination of employment or as
         soon as practicable thereafter, and (c) shall not make any equal annual
         installments to such Participant, as described in Section 5.1(a)-(b).

                  (ii)     After Early Retirement Date. If the employment of a
         Participant is terminated involuntarily as described in (b)(i) above
         but after the first day of the month coincident with or next following
         the

                                      -11-

<PAGE>

         Participant's 60th birthday, distributions (including the equal annual
         installments) shall be made as otherwise provided in this Article V.

         (c)      Commutation. Any installment payments hereunder may be
     commuted as provided in Section 5.1(f).

         5.7      Terminations Under the UFI Severance Program.

         (a)      Prior to Early Retirement Date. Notwithstanding any other
     provision of the Plan to the contrary, if the employment of a Participant
     is terminated under the Utility Fuels, Inc. severance program, on or after
     July 26, 1993, and prior to the first day of the month coincident with or
     next following the Participant's 60th birthday, a Normal Retirement Date
     distribution as described in Section 5.1 shall not be made, but the
     Employer (i) shall pay the Participant the sum or sums of Compensation
     actually deferred, with interest thereon, compounded annually, at the
     applicable interest rate specified in the Participant's agreement for each
     Participation Year, from the Commencement Date through the date of payment,
     (ii) shall pay such amount in a lump sum within 90 days following the date
     of Participant's termination of employment or as soon as practicable
     thereafter (or, if a Participant is designated to receive installment
     payments as determined in the sole discretion of the Chief Operating
     Officer of the Company, shall pay such amount in 15 annual installment
     payments, in accordance with Section 5.1(b) above, commencing the month
     following the month in which such designated Participant terminates
     employment and payable thereafter in that same month in each remaining
     year), and (iii) shall not make any equal annual installments to such
     Participant, as described in Section 5.1(a)-(b), after the date of
     termination.

         (b)      After Early Retirement Date. If the employment of a
     Participant is terminated as described in (a) above but after the first day
     of the month coincident with or next following the Participant's 60th
     birthday, distributions (including the equal annual installments) shall be
     made as otherwise provided in this Article V.

         (c)      Commutation. Any installment payments hereunder may be
     commuted as provided in Section 5.1(f).

         5.8      Terminations Under the 1995 Voluntary Early Retirement
Program.

         (a)      Prior to Early Retirement Date. Notwithstanding any other
     provision of the Plan to the contrary, if the employment of a Participant
     who fulfills the requirements for the Voluntary Early Pension for 1995
     Program participants under Section 9.7(a) of the CenterPoint Energy, Inc.
     Retirement Plan is terminated prior to the first day of the month
     coincident with or next following the date of the Participant's 60th
     birthday, distribution shall not be made as described in Section 5.1(a),
     (b) or (d), but the Employer (x) shall pay the Participant the sum or sums
     of Compensation actually deferred, with interest thereon, compounded
     annually, at the applicable interest rate specified in the Participant's
     Agreement for each Participation Year, from the Commencement Date through
     the date of payment, (y) shall pay such amount in 15 annual installment
     payments, commencing the first day of the month following the month in
     which the Participant terminates employment and payable thereafter in that
     same month in each remaining year, and

                                      -12-

<PAGE>

     (z) shall not pay any equal annual installments (as described in Section
     5.1(a)-(b)) to such Participant.

         (b)      After Early Retirement Date. If the employment of a
     Participant is terminated voluntarily as described in subsection (a) above
     but after the Participant's Early Retirement Date, distributions (including
     the equal annual installments) shall be made as otherwise provided in this
     Article V.

         (c)      Commutation. Any installment payments hereunder may be
     commuted as provided in Section 5.1(f).

         5.9      Terminations under the 2002 Voluntary Early Retirement
     Program.

         (a)      Prior to Early Retirement Date. Notwithstanding any other
     provisions of the Plan to the contrary, if a Participant who fulfills the
     requirements of an "Eligible VERP Employee" pursuant to Section 8.6 of the
     CenterPoint Energy, Inc. Retirement Plan is terminated prior to the first
     day of the month coincident with or next following the date of the
     Participant's 60th birthday and the Participant consents to the election of
     this amendment to the Plan, distribution shall not be made as described in
     Section 5.1 (a), (b) or (d), but the Employer (x) shall pay the Participant
     the sum or sums of Compensation actually deferred, with interest thereon,
     compounded annually, at the applicable interest rate specified in the
     Participant's Agreement for each Participation Year, from the Commencement
     Date through the date of payment, minus any equal annual installments, as
     described in Section 5.1(a)-(b), paid to date, and (y) shall pay such
     amount in 15 annual installment payments commencing the first day of the
     month coincident with or next following the month in which the Participant
     terminates employment and payable thereafter in that same month in each
     remaining year.

         (b)      After Early Retirement Date. If the employment of a
     Participant is terminated voluntarily as described in subsection (a) above
     but after the Participant's Early Retirement Date, distributions shall be
     made as otherwise provided in this Article V.

         (c)      Commutation. Any installment payment hereunder may be commuted
     as provided in Section 5.1(f).

                                   ARTICLE VI

                             RIGHTS OF PARTICIPANTS

         6.1      Limitation of Rights. Nothing in this Plan shall be construed
     to:

         (a)      Give any Employee of an Employer any right to be designated a
     Participant in the Plan other than in the sole discretion of the Committee;

         (b)      Limit in any way the right of the Employer to terminate a
     Participant's employment at any time; or

                                      -13-

<PAGE>

         (c)      Be evidence of any agreement or understanding, express or
     implied, that the Company or any other Employer will employ a Participant
     in any particular position or at any particular rate of remuneration.

         6.2      Non-Alienation of Benefits. No right or benefit under this
Plan shall be subject to anticipation, alienation, transfer, sale, assignment,
pledge, encumbrance or charge, whether voluntary, involuntary, direct or
indirect, by operation of law or otherwise, including, without limitation, a
change in beneficial interest of any trust and a change in ownership of a
corporation or partnership, but not including a change of legal and beneficial
title of a right or benefit resulting from the death of any Participant or the
spouse of any Participant (any such proscribed transaction hereinafter a
"Disposition") and any attempted Disposition will be null and void. No right or
benefit hereunder shall in any manner be liable for or subject to any debts,
contracts, liabilities, or torts of any Participant or other person entitled to
such benefits. The foregoing provisions of this Section 6.2 shall not apply to a
domestic relations order awarding any benefits under the Plan to the divorced
spouse of a Participant. The foregoing provisions of this Section 6.2 shall also
not apply to an irrevocable Disposition of a right or benefit under this Plan to
a "Permitted Assignee," as defined below, by (i) a Participant age 55 or older
(an "Eligible Participant"), or (ii) a "Permitted Assignee," as defined below,
who has received an assignment from an Eligible Participant pursuant to this
sentence.

         (a)      Permitted Assignee. The term "Permitted Assignee" shall mean:

                  (i)      The Eligible Participant;

                  (ii)     A spouse of the Eligible Participant;

                  (iii)    Any person who is a lineal ascendant or descendant of
         the Eligible Participant or the Eligible Participant's spouse;

                  (iv)     Any brother or sister of the Eligible Participant;

                  (v)      Any spouse of any individual described in
         subparagraph (iii) or (iv);

                  (vi)     A trustee of any trust which, at the applicable time,
         is 100% Actuarially Held for a Permitted Assignee or Assignees (as
         defined in Section 6.2(c));

                  (vii)    Any corporation in which, at the applicable time,
         each class of stock is 100% owned by a Permitted Assignee or Permitted
         Assignees;

                  (viii)   Any partnership in which, at the applicable time,
         each class of partnership interest is 100% owned by a Permitted
         Assignee or Permitted Assignees; or

                  (ix)     Any limited liability company or other form of
         incorporated or unincorporated business organization in which each
         class of stock, membership or other equity interest is 100% owned by a
         Permitted Assignee or Assignees.

                                      -14-

<PAGE>

         (b)      Subsequent Assignees. This Section 6.2 shall be fully
     applicable to all Permitted Assignees, and the provisions of this Section
     6.2 shall be fully applicable to any right or benefit transferred by an
     Eligible Participant to any Permitted Assignee as if such Permitted
     Assignee were an Eligible Participant; provided, however, that no Permitted
     Assignee shall be deemed an Eligible Participant for determining the
     persons who constitute Permitted Assignees under Section 6.2(a). Any
     Permitted Assignee acquiring a right or benefit under this Plan shall
     execute and deliver to the Committee an Agreement pursuant to which such
     Permitted Assignee agrees to be bound by all of the terms and provisions of
     the Plan, provided that the failure to execute and deliver such an
     Agreement shall not be deemed to relieve such Permitted Assignee of the
     restrictions imposed by the Plan. Any attempted Disposition of a right or
     benefit under this Plan in breach of this Section 6.2, whether voluntary,
     involuntary, by operation of law or otherwise shall be null and void.

         (c)      Actuarially Held. In making the determination whether a trust
     is 100% Actuarially Held for Permitted Assignee(s), a trust, at the
     applicable point in time, is 100% Actuarially Held for Permitted Assignee
     or Assignees when 100% of the actuarial value of the beneficial interests
     of the trust, except as provided in the following sentence, are held for a
     Permitted Assignee or Permitted Assignees. For purposes of making the
     determination described above, the possibility that an interest in a trust
     may be appointed pursuant to a special or general power of appointment
     shall be ignored; provided, that the actual exercise of any such power of
     appointment shall not be ignored.

         6.3      Prerequisites to Benefits. No Participant, nor any Beneficiary
or other person claiming through a Participant, shall have any right or interest
in the Plan, or any benefits hereunder, unless and until all the terms,
conditions, and provisions of the Plan which affect such Participant or such
other person shall have been complied with as specified herein.

         6.4      Nature of Employer's Obligation. This Plan is intended to be,
and shall be construed as, an unfunded plan maintained by each Employer
primarily for the purpose of providing deferred compensation for a select group
of its management or highly compensated employees. The benefits provided under
this Plan shall be a general, unsecured obligation of the Employer payable
solely from the general assets of the Employer, and neither the Participant nor
the Participant's Beneficiary or estate shall have any interest in any assets of
the Employer by virtue of this Plan. No fund or other assets will ever be set
aside or segregated for the benefit of the Participant or the Participant's
Beneficiary under this Plan. The adoption of the Plan and any setting aside of
amounts by an Employer with which to discharge its obligations hereunder shall
not be deemed to create a trust; legal and equitable title to any funds so set
aside shall remain in the Employer and any funds so set aside shall remain
subject to the general creditors of the Employer. If it becomes necessary for a
Participant to institute a claim, by litigation or otherwise, to enforce his
rights under the Plan, the Employer shall indemnify Participant from and against
all costs and expenses, including legal fees, incurred by him instituting and
maintaining such claim.

         6.5      Claims and Review Procedures.

         (a)      Claims Procedure. If any person believes he or she is entitled
     to any rights or benefits under the Plan, such person may file a claim in
     writing with the Committee.

                                      -15-

<PAGE>

     If any such claim is wholly or partially denied, the Committee will notify
     such person of its decision in writing. Such notification will contain (i)
     specific reasons for the denial, (ii) specific reference to pertinent Plan
     provisions, (iii) a description of any additional material or information
     necessary for such person to perfect such claim and an explanation of why
     such material or information is necessary, and (iv) information as to the
     steps to be taken if the person wishes to submit a request for review, the
     time limits applicable to such procedures, and a statement of the person's
     rights following an adverse benefit determination on review, including a
     statement of his or her right to file a lawsuit under the Employee
     Retirement Income Security Act of 1974 ("ERISA") if the claim is denied on
     appeal. Such notification will be given within 90 days after the claim is
     received by the Committee (or within 180 days, if special circumstances
     require an extension of time for processing the claim, and if written
     notice of such extension and circumstances is given to such person within
     the initial 90-day period).

         (b)      Claim Review Procedure. Within 60 days after the date on which
     a person receives a notice of denial (or within 60 days after the date on
     which such denial is considered to have occurred), such person or his or
     her duly authorized representative ("Applicant") may (i) file a written
     request with the Committee for a review of his or her denied claim; (ii)
     review pertinent documents; and (iii) submit issues and comments in
     writing. The Committee shall render a decision no later than the date of
     its regularly scheduled meeting next following receipt of a request for
     review, except that a decision may be rendered no later than the second
     such meeting if the request is received within 30 days of the first
     meeting. The Applicant may request a formal hearing before the Committee
     which the Committee may grant in its discretion. Notwithstanding the
     foregoing, under special circumstances that require an extension of time
     for rendering a decision (including, but not limited to, the need to hold a
     hearing), the decision may be rendered not later than the date of the third
     regularly scheduled Committee meeting following the receipt of the request
     for review. If such an extension is required, the Applicant will be advised
     in writing before the extension begins. The decision on review shall be in
     written or electronic notice of the final determination. If the claim is
     denied in whole or part, such notice, which shall be in a manner calculated
     to be understood by the person receiving such notice, shall include the
     specific reasons for the decision, the specific references to the pertinent
     plan provisions on which the decision is based, that the person is entitled
     to receive, upon request and free of charge, reasonable access to, and
     copies of, all documents, records, and other information relevant to the
     claim for benefits, and a statement of the person's right to file a lawsuit
     under ERISA.

         Benefits under this Plan will only be paid if the Committee decides, in
its discretion, that a person is entitled to them. Moreover, no action at law or
in equity shall be brought to recover benefits under this Plan prior to the date
the claimant has exhausted the administrative process of appeal available under
the Plan.

                                  ARTICLE VII

                                  MISCELLANEOUS

         7.1      Amendment or Termination of the Plan. The Board of Directors
of the Company may amend or terminate this Plan at any time. Any such amendment
or termination

                                      -16-

<PAGE>

shall not, however, affect the rights of any Participant to any accrued benefits
payable under the Plan. Any such amendment or termination shall not, however,
without the written consent of the affected Participant, reduce the interest
rate applicable to, or otherwise adversely affect the rights of a Participant
with respect to, Compensation with respect to which a Participant made an
irrevocable deferral election before the later of the date that such amendment
is executed or effective.

         7.2      Reliance Upon Information. The Committee shall not be liable
for any decision or action taken in good faith in connection with the
administration of this Plan. Without limiting the generality of the foregoing,
any such decision or action taken by the Committee in reliance upon any
information supplied to it by an officer of the Company, the Company's legal
counsel, or the Company's independent accountants in connection with the
administration of this Plan shall be deemed to have been taken in good faith.

         7.3      Effective Date. The Plan was originally effective as of
September 1, 1985, and amended and restated effective as of January 1, 2003.

         7.4      Governing Law. The Plan shall be construed, administered, and
governed in all respects under the laws of the State of Texas.

         7.5      Severability. If any term, provision, covenant, or condition
of the Plan is held to be invalid, void, or otherwise unenforceable, the rest of
the Plan shall remain in full force and effect and shall in no way be affected,
impaired, or invalidated.

         7.6      Notice. Any notice or filing required or permitted to be given
to the Committee under this Plan shall be sufficient if in writing and hand
delivered, or sent by registered or certified mail, to the principal office of
the Company. Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the dates shown on the postmark on the receipt
for registration or certification.

         IN WITNESS WHEREOF, CenterPoint Energy, Inc., has caused these presents
to be executed by its duly authorized officer in a number of copies, all of
which shall constitute one and the same instrument, which may be sufficiently
evidenced by any executed copy hereof, this _______ day of September, 2003, but
effective as of January 1, 2003.

                                      CENTERPOINT ENERGY, INC.

                                      By: /s/David M. McClanahan
                                         ------------------------------------
                                           David M. McClanahan
                                           President and Chief Executive Officer

ATTEST:

   /s/Richard Dauphin
------------------------------
Assistant Secretary

                                      -17-

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