Document:

exv4w4

 

Exhibit 4.4

ENTONE TECHNOLOGIES, INC.

2003 STOCK PLAN

NOTICE OF STOCK OPTION GRANT

     You have been granted the following option to purchase shares of the Common Stock of Entone
Technologies, Inc. (the “Company”):

	 	 	 
	Name of Optionee:

	 	                                                            
	 
	 	 
	Total Number of Shares:

	 	                                        
	 
	 	 
	Type of Option:

	 	                                                            
	 
	 	 
	Exercise Price Per Share:

	 	$                                         
	 
	 	 
	Date of Grant:

	 	                                                            
	 
	 	 
	Date Exercisable:

	 	This option may be exercised at any time after
the Date of Grant for all or any part of the
shares subject to this option (the “Shares”).
	 
	 	 
	Vesting Commencement Date:

	 	                                                            
	 
	 	 
	Vesting Schedule:

	 	*Alt. 1 (use for 1st option granted
to any individual): None of the Shares shall
vest until the Optionee completes twelve (12)
months of continuous Service after the Vesting
Commencement Date, whereupon twenty five
percent (25%) of the Shares shall vest (and any
Repurchase Right relating to such Shares shall
terminate). Thereafter, an additional 2.08333%
of the Shares shall vest each time the Optionee
completes a month of continuous Service with
the Company. Upon a Change of Control, if the
Optionee has not completed twelve (12) months
of continuous Service, the Shares shall be
deemed vested for the completed months of
continuous Service after the Vesting
Commencement Date.
	 
	 	 
	 

	 	*Alt. 2 (use for subsequent option granted to
any individual) : 2.08333% of the Shares shall
vest each time the Optionee completes a month
of continuous Service with the Company after
the Vesting Commencement Date. [Also remove
the accelerated vesting clause from Section
7(b)]
	 
	 	 
	Expiration Date:

	 	                                        . This option expires
earlier if the Optionee’s Service terminates
earlier, as provided in Section 6 of the Stock
Option Agreement.

By your signature and the signature of the Company’s representative below, you and the Company
agree that this option is granted under and governed by the terms and conditions of the 2003 Stock
Plan and the Stock Option Agreement, both of which are attached to and made a part of this
document.

	 	 	 	 	 
	OPTIONEE:

	 	ENTONE TECHNOLOGIES, INC.	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

 

THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE EXERCISE THEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN
OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.

ENTONE TECHNOLOGIES, INC.

2003 STOCK PLAN:

STOCK OPTION AGREEMENT

SECTION 1. GRANT OF OPTION.

          (a) Option. On the terms and conditions set forth in the Notice of Stock Option
Grant and this Agreement, the Company grants to the Optionee on the Date of Grant the option to
purchase at the Exercise Price the number of Shares set forth in the Notice of Stock Option Grant.
The Exercise Price is agreed to be at least 100% of the Fair Market Value per Share on the Date of
Grant (110% of Fair Market Value if Section 3(b) of the Plan applies). This option is intended to
be an ISO or an NSO, as provided in the Notice of Stock Option Grant.

          (b) $100,000 Limitation. Even if this option is designated as an ISO in the Notice
of Stock Option Grant, it shall be deemed to be an NSO to the extent (and only to the extent)
required by the $100,000 annual limitation under Section 422(d) of the Code.

          (c) Stock Plan and Defined Terms. This option is granted pursuant to the Plan, a
copy of which the Optionee acknowledges having received. The provisions of the Plan are
incorporated into this Agreement by this reference. Capitalized terms are defined in Section 14 of
this Agreement.

SECTION 2. RIGHT TO EXERCISE.

          (a) Exercisability. Subject to Subsection (b) below and the other conditions set
forth in this Agreement, all or part of this option may be exercised prior to its expiration at the
time or times set forth in the Notice of Stock Option Grant. Shares purchased by exercising this
option may be subject to the Right of Repurchase under Section 7.

          (b) Stockholder Approval. Any other provision of this Agreement notwithstanding, no
portion of this option shall be exercisable at any time prior to the approval of the Plan by the
Company’s stockholders.

SECTION 3. TRANSFER OR ASSIGNMENT OF OPTION.

          Except as otherwise provided in this Agreement, this option and the rights and privileges
conferred hereby shall not be sold, pledged or otherwise transferred (whether by operation of law
or otherwise) and shall not be subject to sale under execution, attachment, levy or similar
process.

     SECTION 4. EXERCISE PROCEDURES.

          (a) Notice of Exercise. The Optionee or the Optionee’s representative may exercise
this option by giving written notice to the Company pursuant to Section 13(c). The notice shall
specify the election to exercise this option, the number of Shares for which it is being exercised
and the form of payment. The person exercising this option shall sign the notice. In the event
that this option is being exercised by the representative of the Optionee, the notice shall be
accompanied by proof (satisfactory to the Company) of the representative’s right to

 

 

exercise this option. The Optionee or the Optionee’s representative shall deliver to the
Company, at the time of giving the notice, payment in a form permissible under Section 5 for the
full amount of the Purchase Price.

          (b) Issuance of Shares. After receiving a proper notice of exercise, the Company
shall cause to be issued one or more certificates evidencing the Shares for which this option has
been exercised and such certificates shall be deposited in escrow under Section 7(c). Such Shares
shall be registered (i) in the name of the person exercising this option, (ii) in the names of such
person and his or her spouse as community property or as joint tenants with the right of
survivorship or (iii) with the Company’s consent, in the name of a revocable trust.

          (c) Withholding Taxes. In the event that the Company determines that it is required
to withhold any tax as a result of the exercise of this option, the Optionee, as a condition to the
exercise of this option, shall make arrangements satisfactory to the Company to enable it to
satisfy all withholding requirements. The Optionee shall also make arrangements satisfactory to
the Company to enable it to satisfy any withholding requirements that may arise in connection with
the vesting or disposition of Shares purchased by exercising this option.

SECTION 5. PAYMENT FOR STOCK.

          (a) Cash. All or part of the Purchase Price may be paid in cash or cash
equivalents.

          (b) Surrender of Stock. All or any part of the Purchase Price may be paid by
surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee.
Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at
their Fair Market Value on the date when this option is exercised. The Optionee shall not
surrender, or attest to the ownership of, Shares in payment of the Purchase Price if such action
would cause the Company to recognize compensation expense (or additional compensation expense) with
respect to this option for financial reporting purposes.

          (c) Exercise/Sale. If Stock is publicly traded, all or part of the Purchase Price
and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver
all or part of the sales proceeds to the Company.

          (d) Exercise/Pledge. If Stock is publicly traded, all or part of the Purchase Price
and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an
irrevocable direction to pledge Shares to a securities broker or lender approved by the Company, as
security for a loan, and to deliver all or part of the loan proceeds to the Company.

SECTION 6. TERM AND EXPIRATION.

          (a) Basic Term. This option shall in any event expire on the expiration date set
forth in the Notice of Stock Option Grant, which date is ten (10) years after the Date of Grant
(five (5) years after the Date of Grant if this option is designated as an ISO in the Notice of
Stock Option Grant and Section 3(b) of the Plan applies).

          (b) Termination of Service (Except by Death). If the Optionee’s Service terminates
for any reason other than death, then this option shall expire on the earliest of the following
occasions:

               (i) The expiration date determined pursuant to Subsection (a) above;

               (ii) The date three (3) months after the termination of the Optionee’s Service for
any reason other than Disability; or

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               (iii) The date six (6) months after the termination of the Optionee’s Service by
reason of Disability.

The Optionee may exercise all or part of this option at any time before its expiration under the
preceding sentence, but only to the extent that this option is exercisable for vested Shares on or
before the date when the Optionee’s Service terminates. When the Optionee’s Service terminates,
this option shall expire immediately with respect to the number of Shares for which this option is
not yet exercisable and with respect to any Restricted Shares. In the event that the Optionee dies
after termination of Service but before the expiration of this option, all or part of this option
may be exercised (prior to expiration) by the executors or administrators of the Optionee’s estate
or by any person who has acquired this option directly from the Optionee by beneficiary
designation, bequest or inheritance, but only to the extent that this option was exercisable for
vested Shares on or before the date when the Optionee’s Service terminated.

          (c) Death of the Optionee. If the Optionee dies while in Service, then this option
shall expire on the earlier of the following dates:

               (i) The expiration date determined pursuant to Subsection (a) above; or

               (ii) The date twelve (12) months after the Optionee’s death.

All or part of this option may be exercised at any time before its expiration under the preceding
sentence by the executors or administrators of the Optionee’s estate or by any person who has
acquired this option directly from the Optionee by beneficiary designation, bequest or inheritance,
but only to the extent that this option is exercisable for vested Shares on or before the
Optionee’s death. When the Optionee dies, this option shall expire immediately with respect to the
number of Shares for which this option is not yet exercisable and with respect to any Restricted
Shares.

          (d) Leaves of Absence. For any purpose under this Agreement, Service shall be
deemed to continue while the Optionee is on a bona fide leave of absence, if such leave was
approved by the Company in writing and if continued crediting of Service for such purpose is
expressly required by the terms of such leave or by applicable law (as determined by the Company).

          (e) Notice Concerning ISO Treatment. Even if this option is designated as an ISO in
the Notice of Stock Option Grant, it ceases to qualify for favorable tax treatment as an ISO to the
extent that it is exercised:

               (i) More than three (3) months after the date when the Optionee ceases to be an
Employee for any reason other than death or permanent and total disability (as defined in Section
22(e)(3) of the Code);

               (ii) More than twelve (12) months after the date when the Optionee ceases to be an
Employee by reason of permanent and total disability (as defined in Section 22(e)(3) of the Code);
or

               (iii) More than three months after the date when the Optionee has been on a leave of
absence for ninety (90) days, unless the Optionee’s reemployment rights following such leave were
guaranteed by statute or by contract.

SECTION 7. RIGHT OF REPURCHASE.

          (a) Scope of Repurchase Right. Until they vest in accordance with the Notice of
Stock Option Grant and Subsection (b) below, the Shares acquired under this Agreement shall be
“Restricted Shares” and shall be subject to repurchase (in whole or in part) by the Company through
payment of an amount equal to the Exercise Price for each of the Restricted Shares being
repurchased in the event the Optionee’s Service with the Company terminates for any reason (the
“Repurchase Right”). The Company may exercise the Repurchase Right

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only during a period of ninety (90) consecutive days commencing on the date when the
Optionee’s Service terminates (the “Repurchase Period”).

          (b) Lapse of Repurchase Right. The Right of Repurchase shall lapse with respect to
the Restricted Shares in accordance with the vesting schedule set forth in the Notice of Stock
Option Grant. Notwithstanding the foregoing, upon a Change of Control, if the Optionee has not
completed twelve (12) months of continuous Service, the Shares shall be deemed vested for the
completed months of continuous Service after the Vesting Commencement Date.

          (c) Escrow. Upon issuance, the certificate(s) for Shares shall be deposited in
escrow with the Company to be held in accordance with the provisions of this Agreement. Any
additional or exchanged securities or other property described in Subsection (f) below shall
immediately be delivered to the Company to be held in escrow. All ordinary cash dividends on
Shares (or on other securities held in escrow) shall be paid directly to the Optionee and shall not
be held in escrow. Shares, together with any other assets held in escrow under this Agreement,
shall be (i) surrendered to the Company for repurchase upon exercise of the Right of Repurchase or
the Right of First Refusal or (ii) released to the Optionee upon his or her request to the extent
that the Shares have ceased to be Restricted Shares and the Company’s Right of First Refusal has
lapsed (but not more frequently than once every six (6) months). In any event, all Shares that
have ceased to be Restricted Shares, together with any other vested assets held in escrow under
this Agreement, shall be released within ninety (90) days after the earlier of (i) the termination
of the Optionee’s Service or (ii) the lapse of the Right of First Refusal.

          (d) Exercise of Repurchase Right. The Company shall be deemed to have exercised its
Right of Repurchase automatically for all Restricted Shares as of the commencement of the
Repurchase Period, unless the Company during the Repurchase Period notifies the holder of the
Restricted Shares pursuant to Section 13(c) that it will not exercise its Right of Repurchase for
some or all of the Restricted Shares. During the Repurchase Period, the Company shall pay to the
holder of the Restricted Shares the purchase price determined under Subsection (a) above for the
Restricted Shares being repurchased. Payment shall be made in cash or cash equivalents and/or by
canceling indebtedness to the Company incurred by the Optionee in the purchase of the Restricted
Shares. The certificate(s) representing the Restricted Shares being repurchased shall be delivered
to the Company properly endorsed for transfer.

          (e) Termination of Rights as Stockholder. If the Right of Repurchase is exercised
in accordance with this Section 7 and the Company makes available the consideration for the
Restricted Shares being repurchased, then the person from whom the Restricted Shares are
repurchased shall no longer have any rights as a holder of the Restricted Shares (other than the
right to receive payment of such consideration). Such Restricted Shares shall be deemed to have
been repurchased pursuant to this Section 7, whether or not the certificate(s) for such Restricted
Shares have been delivered to the Company or the consideration for such Restricted Shares has been
accepted.

          (f) Additional or Exchanged Securities and Property. In the event of a merger or
consolidation of the Company with or into another entity, any other corporate reorganization, a
stock split, the declaration of a stock dividend, the declaration of an extraordinary dividend
payable in a form other than stock, a spin-off, an adjustment in conversion ratio, a
recapitalization or a similar transaction affecting the Company’s outstanding securities, any
securities or other property (including cash or cash equivalents) that are by reason of such
transaction exchanged for, or distributed with respect to, any Restricted Shares shall immediately
be subject to the Right of Repurchase. Appropriate adjustments to reflect the exchange or
distribution of such securities or property shall be made to the number and/or class of the
Restricted Shares. Appropriate adjustments shall also be made to the price per share to be paid
upon the exercise of the Right of Repurchase, provided that the aggregate purchase price payable
for the Restricted Shares shall remain the same. In the event of a merger or consolidation of the
Company with or into another entity or any other corporate reorganization, the Right of Repurchase
may be exercised by the Company’s successor.

          (g) Transfer of Restricted Shares. The Optionee shall not transfer, assign,
encumber or otherwise dispose of any Restricted Shares without the Company’s written consent,
except as provided in the following sentence. The Optionee may transfer Restricted Shares to one
or more members of the Optionee’s

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Immediate Family or to a trust established by the Optionee for the benefit of the Optionee
and/or one or more members of the Optionee’s Immediate Family, provided in either case that the
Transferee agrees in writing on a form prescribed by the Company to be bound by all provisions of
this Agreement. If the Optionee transfers any Restricted Shares, then this Agreement shall apply
to the Transferee to the same extent as to the Optionee.

          (h) Assignment of Repurchase Right. The Company’s Right of Repurchase shall be
freely assignable, in whole or in part. Any person who accepts an assignment of the Right of
Repurchase from the Company shall assume all of the Company’s rights and obligations under this
Section 7.

SECTION 8. RIGHT OF FIRST REFUSAL.

          (a) Right of First Refusal. In the event that the Optionee proposes to sell, pledge
or otherwise transfer to a third party any Shares acquired under this Agreement, or any interest in
such Shares, the Company shall have the Right of First Refusal with respect to all (and not less
than all) of such Shares. If the Optionee desires to transfer Shares acquired under this
Agreement, the Optionee shall give a written Transfer Notice to the Company describing fully the
proposed transfer, including the number of Shares proposed to be transferred, the proposed transfer
price, the name and address of the proposed Transferee and proof satisfactory to the Company that
the proposed sale or transfer will not violate any applicable federal or state securities laws.
The Transfer Notice shall be signed both by the Optionee and by the proposed Transferee and must
constitute a binding commitment of both parties to the transfer of the Shares. The Company shall
have the right to purchase all, and not less than all, of the Shares on the terms of the proposal
described in the Transfer Notice (subject, however, to any change in such terms permitted under
Subsection (b) below) by delivery of a notice of exercise of the Right of First Refusal within
thirty (30) days after the date when the Transfer Notice was received by the Company.

          (b) Transfer of Shares. If the Company fails to exercise its Right of First Refusal
within thirty (30) days after the date when it received the Transfer Notice, the Optionee may, not
later than ninety (90) days following receipt of the Transfer Notice by the Company, conclude a
transfer of the Shares subject to the Transfer Notice on the terms and conditions described in the
Transfer Notice, provided that any such sale is made in compliance with applicable federal and
state securities laws and not in violation of any other contractual restrictions to which the
Optionee is bound. Any proposed transfer on terms and conditions different from those described in
the Transfer Notice, as well as any subsequent proposed transfer by the Optionee, shall again be
subject to the Right of First Refusal and shall require compliance with the procedure described in
Subsection (a) above. If the Company exercises its Right of First Refusal, the parties shall
consummate the sale of the Shares on the terms set forth in the Transfer Notice within sixty (60)
days after the date when the Company received the Transfer Notice (or within such longer period as
may have been specified in the Transfer Notice); provided, however, that in the event the Transfer
Notice provided that payment for the Shares was to be made in a form other than cash or cash
equivalents paid at the time of transfer, the Company shall have the option of paying for the
Shares with cash or cash equivalents equal to the present value of the consideration described in
the Transfer Notice.

          (c) Additional or Exchanged Securities and Property. In the event of a merger or
consolidation of the Company with or into another entity, any other corporate reorganization, a
stock split, the declaration of a stock dividend, the declaration of an extraordinary dividend
payable in a form other than stock, a spin-off, an adjustment in conversion ratio, a
recapitalization or a similar transaction affecting the Company’s outstanding securities, any
securities or other property (including cash or cash equivalents) that are by reason of such
transaction exchanged for, or distributed with respect to, any Shares subject to this Section 8
shall immediately be subject to the Right of First Refusal. Appropriate adjustments to reflect the
exchange or distribution of such securities or property shall be made to the number and/or class of
the Shares subject to this Section 8.

          (d) Termination of Right of First Refusal. Any other provision of this Section 8
notwithstanding, in the event that the Stock is readily tradable on an established securities
market when the Optionee desires to transfer Shares, the Company shall have no Right of First
Refusal, and the Optionee shall have no obligation to comply with the procedures prescribed by
Subsections (a) and (b) above.

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          (e) Permitted Transfers. This Section 8 shall not apply to (i) a transfer by
beneficiary designation, will or intestate succession or (ii) a transfer to one or more members of
the Optionee’s Immediate Family or to a trust established by the Optionee for the benefit of the
Optionee and/or one or more members of the Optionee’s Immediate Family, provided in either case
that the Transferee agrees in writing on a form prescribed by the Company to be bound by all
provisions of this Agreement. If the Optionee transfers any Shares acquired under this Agreement,
either under this Subsection (e) or after the Company has failed to exercise the Right of First
Refusal, then this Agreement shall apply to the Transferee to the same extent as to the Optionee.

          (f) Termination of Rights as Stockholder. If the Company makes available, at the
time and place and in the amount and form provided in this Agreement, the consideration for the
Shares to be purchased in accordance with this Section 8, then after such time the person from whom
such Shares are to be purchased shall no longer have any rights as a holder of such Shares (other
than the right to receive payment of such consideration in accordance with this Agreement). Such
Shares shall be deemed to have been purchased in accordance with the applicable provisions hereof,
whether or not the certificate(s) therefor have been delivered as required by this Agreement.

          (g) Assignment of Right of First Refusal. The Company’s Right of First Refusal
shall be freely assignable, in whole or in part. Any person who accepts an assignment of the Right
of First Refusal from the Company shall assume all of the Company’s rights and obligations under
this Section 8.

SECTION 9. LEGALITY OF INITIAL ISSUANCE.

          No Shares shall be issued upon the exercise of this option unless and until the Company has
determined that:

               (i) It and the Optionee have taken any actions required to register the Shares under
the Securities Act or to perfect an exemption from the registration requirements thereof;

               (ii) Any applicable listing requirement of any stock exchange or other securities
market on which Stock is listed has been satisfied; and

               (iii) Any other applicable provision of federal, state or foreign law has been
satisfied.

SECTION 10. NO REGISTRATION RIGHTS.

          The Company may, but shall not be obligated to, register or qualify the sale of Shares under
the Securities Act or any other applicable law. The Company shall not be obligated to take any
affirmative action in order to cause the sale of Shares under this Agreement to comply with any
law.

SECTION 11. RESTRICTIONS ON TRANSFER.

          (a) Securities Law Restrictions. Regardless of whether the offering and sale of
Shares under the Plan have been registered under the Securities Act or have been registered or
qualified under the securities laws of any state, the Company at its discretion may impose
restrictions upon the sale, pledge or other transfer of such Shares (including the placement of
appropriate legends on stock certificates or the imposition of stop-transfer instructions) if, in
the judgment of the Company, such restrictions are necessary or desirable in order to achieve
compliance with the Securities Act, the securities laws of any state or any other law.

          (b) Market Stand-Off. In connection with any underwritten public offering by the
Company of its equity securities pursuant to an effective registration statement filed under the
Securities Act, including the Company’s initial public offering, the Optionee or a Transferee shall
not directly or indirectly sell, make any short sale of, loan, hypothecate, pledge, offer, grant or
sell any option or other contract for the purchase of, purchase any option or other contract for
the sale of, or otherwise dispose of or transfer, or agree to engage in any of the foregoing
transactions with respect to, any Shares acquired under this Agreement without the prior written

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consent of the Company or its underwriters. Such restriction (the “Market Stand-Off”) shall
be in effect for such period of time following the date of the final prospectus for the offering as
may be requested by the Company or such underwriters. In no event, however, shall such period
exceed one hundred eighty (180) days. The Market Stand-Off shall in any event terminate two years
after the date of the Company’s initial public offering. In the event of the declaration of a
stock dividend, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or
a similar transaction affecting the Company’s outstanding securities without receipt of
consideration, any new, substituted or additional securities which are by reason of such
transaction distributed with respect to any Shares subject to the Market Stand-Off, or into which
such Shares thereby become convertible, shall immediately be subject to the Market Stand-Off. In
order to enforce the Market Stand-Off, the Company may impose stop-transfer instructions with
respect to the Shares acquired under this Agreement until the end of the applicable stand-off
period. The Company’s underwriters shall be beneficiaries of the agreement set forth in this
Subsection (b). This Subsection (b) shall not apply to Shares registered in the public offering
under the Securities Act, and the Optionee or a Transferee shall be subject to this Subsection (b)
only if the directors and officers of the Company are subject to similar arrangements.

          (c) Investment Intent at Grant. The Optionee represents and agrees that the Shares
to be acquired upon exercising this option will be acquired for investment, and not with a view to
the sale or distribution thereof.

          (d) Investment Intent at Exercise. In the event that the sale of Shares under the
Plan is not registered under the Securities Act but an exemption is available which requires an
investment representation or other representation, the Optionee shall represent and agree at the
time of exercise that the Shares being acquired upon exercising this option are being acquired for
investment, and not with a view to the sale or distribution thereof, and shall make such other
representations as are deemed necessary or appropriate by the Company and its counsel.

          (e) Legends. All certificates evidencing Shares purchased under this Agreement
shall bear the following legend:

“THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED OR
IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN
AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE
PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO THE COMPANY
CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SHARES AND CERTAIN
REPURCHASE RIGHTS UPON TERMINATION OF SERVICE WITH THE COMPANY. THE SECRETARY OF
THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER
HEREOF WITHOUT CHARGE.”

All certificates evidencing Shares purchased under this Agreement in an unregistered transaction
shall bear the following legend (and such other restrictive legends as are required or deemed
advisable under the provisions of any applicable law):

“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY
TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

          (f) Removal of Legends. If, in the opinion of the Company and its counsel, any
legend placed on a stock certificate representing Shares sold under this Agreement is no longer
required, the holder of such certificate shall be entitled to exchange such certificate for a
certificate representing the same number of Shares but without such legend.

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          (g) Administration. Any determination by the Company and its counsel in connection
with any of the matters set forth in this Section 11 shall be conclusive and binding on the
Optionee and all other persons.

SECTION 12. ADJUSTMENT OF SHARES.

          In the event of any transaction described in Section 8(a) of the Plan, the terms of this
option (including, without limitation, the number and kind of Shares subject to this option and the
Exercise Price) shall be adjusted as set forth in Section 8(a) of the Plan. In the event that the
Company is a party to a merger or consolidation, this option shall be subject to the agreement of
merger or consolidation, as provided in Section 8(b) of the Plan.

SECTION 13. MISCELLANEOUS PROVISIONS.

          (a) Rights as a Stockholder. Neither the Optionee nor the Optionee’s representative
shall have any rights as a stockholder with respect to any Shares subject to this option until the
Optionee or the Optionee’s representative becomes entitled to receive such Shares by filing a
notice of exercise and paying the Purchase Price pursuant to Sections 4 and 5.

          (b) No Retention Rights. Nothing in this option or in the Plan shall confer upon
the Optionee any right to continue in Service for any period of specific duration or interfere with
or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing
or retaining the Optionee) or of the Optionee, which rights are hereby expressly reserved by each,
to terminate his or her Service at any time and for any reason, with or without cause.

          (c) Notice. Any notice required by the terms of this Agreement shall be given in
writing. It shall be deemed effective upon (i) personal delivery, (ii) deposit with the United
States Postal Service, by registered or certified mail, with postage and fees prepaid or (iii)
deposit with Federal Express Corporation, with shipping charges prepaid. Notice shall be addressed
to the Company at its principal executive office and to the Optionee at the address that he or she
most recently provided to the Company in accordance with this Subsection (c).

          (d) Entire Agreement. The Notice of Stock Option Grant, this Agreement and the Plan
constitute the entire contract between the parties hereto with regard to the subject matter hereof.
They supersede any other agreements, representations or understandings (whether oral or written
and whether express or implied) which relate to the subject matter hereof.

          (e) Choice of Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of California, as such laws are applied to contracts entered into and
performed in such State.

SECTION 14. DEFINITIONS.

          (a) “Agreement” shall mean this Stock Option Agreement.

          (b) “Board of Directors” shall mean the Board of Directors of the Company, as
constituted from time to time or, if a Committee has been appointed, such Committee.

          (c) “Code” shall mean the Internal Revenue Code of 1986, as amended.

          (d) “Committee” shall mean a committee of the Board of Directors, as described in
Section 2 of the Plan.

          (e) “Company” shall mean Entone Technologies, Inc., a Delaware corporation.

-8-

 

          (f) “Consultant” shall mean a person who performs bona fide services for the
Company, a Parent or a Subsidiary as a consultant or advisor, excluding Employees and Outside
Directors.

          (g) “Date of Grant” shall mean the date specified in the Notice of Stock Option
Grant, which date shall be the later of (i) the date on which the Board of Directors resolved to
grant this option or (ii) the first day of the Optionee’s Service.

          (h) “Disability” shall mean that the Optionee is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment.

          (i) “Employee” shall mean any individual who is a common-law employee of the
Company, a Parent or a Subsidiary.

          (j) “Exercise Price” shall mean the amount for which one Share may be purchased upon
exercise of this option, as specified in the Notice of Stock Option Grant.

          (k) “Fair Market Value” shall mean the fair market value of a Share, as determined
by the Board of Directors in good faith. Such determination shall be conclusive and binding on all
persons.

          (l) “Immediate Family” shall mean any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law and shall include adoptive relationships.

          (m) “IRS” means the United States Internal Revenue Service.

          (n) “ISO” shall mean an employee incentive stock option described in Section 422(b)
of the Code.

          (o) “Notice of Stock Option Grant” shall mean the document so entitled to which this
Agreement is attached.

          (p) “NSO” shall mean a stock option not described in Sections 422(b) or 423(b) of
the Code.

          (q) “Optionee” shall mean the person named in the Notice of Stock Option Grant.

          (r) “Outside Director” shall mean a member of the Board of Directors who is not an
Employee.

          (s) “Parent” shall mean any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company, if each of the corporations other than the Company
owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.

          (t) “Plan” shall mean the Entone Technologies, Inc. 2003 Stock Plan, as in effect on
the Date of Grant.

          (u) “Purchase Price” shall mean the Exercise Price multiplied by the number of
Shares with respect to which this option is being exercised.

          (v) “Repurchase Period” shall have the meaning given to such term in Section 7.

          (w) “Restricted Share” shall mean a Share that is subject to the Right of
Repurchase.

-9-

 

          (x) “Right of First Refusal” shall mean the Company’s right of first refusal
described in Section 8.

          (y) “Right of Repurchase” shall mean the Company’s right of repurchase described in
Section 7.

          (z) “Securities Act” shall mean the Securities Act of 1933, as amended.

          (aa) “Service” shall mean service as an Employee, Outside Director or Consultant.

          (bb) “Share” shall mean one share of Stock, as adjusted in accordance with Section 8
of the Plan (if applicable).

          (cc) “Stock” shall mean the Common Stock of the Company, with a par value of $0.001
per Share.

          (dd) “Subsidiary” shall mean any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company, if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations in such chain.

          (ee) “Transferee” shall mean any person to whom the Optionee has directly or
indirectly transferred any Share acquired under this Agreement.

          (ff) “Transfer Notice” shall mean the notice of a proposed transfer of Shares
described in Section 8.

-10-<PAGE>

                                                                EXHIBIT 4(f)(11)

                       CENTERPOINT ENERGY RESOURCES CORP.

                     (formerly known as NorAm Energy Corp.)

                                       To

            THE BANK OF NEW YORK TRUST COMPANY, NATIONAL ASSOCIATION

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

                                     Trustee

                                   ----------

                          SUPPLEMENTAL INDENTURE NO. 10

                          Dated as of February 6, 2007

                                   ----------

                                  $150,000,000

                           6.25% Senior Notes due 2037

<PAGE>

                       CENTERPOINT ENERGY RESOURCES CORP.

                     (formerly known as NorAm Energy Corp.)

                          SUPPLEMENTAL INDENTURE NO. 10

                                  $150,000,000

                           6.25% Senior Notes due 2037

     SUPPLEMENTAL INDENTURE No. 10, dated as of February 6, 2007, between
CENTERPOINT ENERGY RESOURCES CORP., a Delaware corporation formerly known as
NorAm Energy Corp. (the "Company"), and THE BANK OF NEW YORK TRUST COMPANY,
NATIONAL ASSOCIATION (successor to JPMorgan Chase Bank, National Association
(formerly Chase Bank of Texas, National Association)), as Trustee (the
"Trustee").

                                    RECITALS

     The Company has heretofore executed and delivered to the Trustee an
Indenture, dated as of February 1, 1998 (the "Original Indenture" and, as
previously and hereby supplemented and amended, the "Indenture"), providing for
the issuance from time to time of one or more series of the Company's
Securities.

     The Company has changed its name from "NorAm Energy Corp." to "CenterPoint
Energy Resources Corp." and all references in the Indenture to the "Company" or
"NorAm Energy Corp." shall be deemed to refer to CenterPoint Energy Resources
Corp.

     Pursuant to the terms of the Indenture, the Company desires to provide for
the establishment of a new series of Securities to be designated as the "6.25%
Senior Notes due 2037" (the "Notes"), the form and substance of such Notes and
the terms, provisions and conditions thereof to be set forth as provided in the
Original Indenture and this Supplemental Indenture No. 10.

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

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

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

                                       -1-

<PAGE>

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

                                  ARTICLE ONE

                  Relation to Indenture; Additional Definitions

     Section 101. Relation to Indenture. This Supplemental Indenture No. 10
constitutes an integral part of the Original Indenture.

     Section 102. Additional Definitions. For all purposes of this Supplemental
Indenture No. 10:

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

          "Acquired Entity" has the meaning set forth in Section 303(k) hereof;

          "Capital Lease" means a lease that, in accordance with accounting
     principles generally accepted in the United States of America, would be
     recorded as a capital lease on the balance sheet of the lessee;

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

          "Consolidated Net Tangible Assets" means the total amount of assets of
     the Company and its Subsidiaries less, without duplication: (a) total
     current liabilities (excluding indebtedness due within 12 months); (b) all
     reserves for depreciation and other asset valuation reserves, but excluding
     reserves for deferred federal income taxes; (c) all intangible assets such
     as goodwill, trademarks, trade names, patents and unamortized debt discount
     and expense carried as an asset; and (d) all appropriate adjustments on
     account of minority interests of other Persons holding common stock of any
     Subsidiary, all as reflected in the Company's most recent audited
     consolidated balance sheet preceding the date of such determination;

          "Corporate Trust Office" means the principal office of the Trustee at
     which at any particular time its corporate trust business shall be
     administered, as follows: (a) for payment, registration and transfer of the
     Securities: 2001 Bryan Street, 9th Floor, Dallas, Texas 75201, Attention:
     Bondholder Communications; telephone (214) 672-5125 or (800) 275-2048;
     telecopy: (214) 672-5873; and (b) for all other communications relating to
     the Securities: 601 Travis Street, 18th Floor, Houston, Texas 77002,
     Attention: Global Corporate Trust; telephone: (713) 483-6603; telecopy:
     (713) 483-6590;

          "Equity Interests" means any capital stock, partnership, joint
     venture, member or limited liability or unlimited liability company
     interest, beneficial interest in a trust or similar entity or other equity
     interest or investment of whatever nature;

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

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

                                      -2-

<PAGE>

          The term "indebtedness," as applied to the Company or any Subsidiary,
     means bonds, debentures, notes and other instruments or arrangements
     representing obligations created or assumed by any such corporation,
     including any and all: (i) obligations for money borrowed (other than
     unamortized debt discount or premium); (ii) obligations evidenced by a note
     or similar instrument given in connection with the acquisition of any
     business, properties or assets of any kind; (iii) obligations as lessee
     under a Capital Lease; and (iv) any amendments, renewals, extensions,
     modifications and refundings of any such indebtedness or obligation listed
     in clause (i), (ii) or (iii) above. All indebtedness secured by a lien upon
     property owned by the Company or any Subsidiary and upon which indebtedness
     any such corporation customarily pays interest, although any such
     corporation has not assumed or become liable for the payment of such
     indebtedness, shall for all purposes hereof be deemed to be indebtedness of
     any such corporation. All indebtedness for borrowed money incurred by other
     Persons which is directly guaranteed as to payment of principal by the
     Company or any Subsidiary shall for all purposes hereof be deemed to be
     indebtedness of the Company or any such Subsidiary, as applicable, but no
     other contingent obligation of the Company or any such Subsidiary in
     respect of indebtedness incurred by other Persons shall for any purpose be
     deemed to be indebtedness of the Company or any such Subsidiary;

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

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

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

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

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

          "Make-Whole Premium" has the meaning set forth in Section 401(b)
     hereof;

          "Maturity Date" has the meaning set forth in Section 203 hereof;

          "Non-Recourse Debt" means (i) any indebtedness for borrowed money
     incurred by any Project Finance Subsidiary to finance the acquisition,
     improvement, installation, design, engineering, construction, development,
     completion, maintenance or operation of, or otherwise to pay costs and
     expenses relating to or providing financing for, any project, which
     indebtedness for borrowed money does not provide for recourse against the
     Company or any Subsidiary of the Company (other than a Project Finance
     Subsidiary and

                                      -3-

<PAGE>

     such recourse as exists under a Performance Guaranty) or any property or
     asset of the Company or any Subsidiary of the Company (other than Equity
     Interests in, or the property or assets of, a Project Finance Subsidiary
     and such recourse as exists under a Performance Guaranty) and (ii) any
     refinancing of such indebtedness for borrowed money that does not increase
     the outstanding principal amount thereof (other than to pay costs incurred
     in connection therewith and the capitalization of any interest or fees) at
     the time of the refinancing or increase the property subject to any lien
     securing such indebtedness for borrowed money or otherwise add additional
     security or support for such indebtedness for borrowed money.

          "Notes" has the meaning set forth in the third paragraph of the
     Recitals hereof;

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

          "Performance Guaranty" means any guaranty issued in connection with
     any Non-Recourse Debt that (i) if secured, is secured only by assets of or
     Equity Interests in a Project Finance Subsidiary, and (ii) guarantees to
     the provider of such Non-Recourse Debt or any other person (a) performance
     of the improvement, installation, design, engineering, construction,
     acquisition, development, completion, maintenance or operation of, or
     otherwise affects any such act in respect of, all or any portion of the
     project that is financed by such Non-Recourse Debt, (b) completion of the
     minimum agreed equity or other contributions or support to the relevant
     Project Finance Subsidiary, or (c) performance by a Project Finance
     Subsidiary of obligations to persons other than the provider of such
     Non-Recourse Debt.

          "Principal Property" means any natural gas distribution property,
     natural gas pipeline or gas processing plant located in the United States,
     except any such property that in the opinion of the Board of Directors is
     not of material importance to the total business conducted by the Company
     and its consolidated Subsidiaries. "Principal Property" shall not include
     any oil or gas property or the production or proceeds of production from an
     oil or gas producing property or the production or any proceeds of
     production of gas processing plants or oil or gas or petroleum products in
     any pipeline or storage field;

          "Project Finance Subsidiary" means any Subsidiary designated by the
     Company whose principal purpose is to incur Non-Recourse Debt and/or
     construct, lease, own or operate the assets financed thereby, or to become
     a direct or indirect partner, member or other equity participant or owner
     in a Person created for such purpose, and substantially all the assets of
     which Subsidiary or Person are limited to (x) those assets being financed
     (or to be financed), or the operation of which is being financed (or to be
     financed), in whole or in part by Non-Recourse Debt, or (y) Equity
     Interests in, or indebtedness or other obligations of, one or more other
     such Subsidiaries or Persons, or (z) indebtedness or other obligations of
     the Company or any Subsidiary or other Persons. At the time of designation
     of any Project Finance Subsidiary, the sum of the net book value of the
     assets of such Subsidiary and the net book value of the assets of all other
     Project Finance Subsidiaries then existing shall not in the aggregate
     exceed 10 percent of Consolidated

                                      -4-

<PAGE>

     Net Tangible Assets.

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

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

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

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

          "Significant Subsidiary" means any Subsidiary of the Company, other
     than a Project Finance Subsidiary, that is a "significant subsidiary" as
     defined in Rule 1-02 of Regulation S-X under the Securities Act of 1933 and
     the Securities Exchange Act of 1934, as such regulation is in effect on the
     date of issuance of the Notes.

          "Subsidiary" of any entity means any corporation, partnership, joint
     venture, limited liability company, trust or estate of which (or in which)
     more than 50% of (i) the issued and outstanding capital stock having
     ordinary voting power to elect a majority of the Board of Directors of such
     corporation (irrespective of whether at the time capital stock of any other
     class or classes of such corporation shall or might have voting power upon
     the occurrence of any contingency), (ii) the interest in the capital or
     profits of such limited liability company, partnership, joint venture or
     other entity or (iii) the beneficial interest in such trust or estate is at
     the time directly or indirectly owned or controlled by such entity, by such
     entity and one or more of its other subsidiaries or by one or more of such
     entity's other subsidiaries.

          "Termination Date" has the meaning set forth in Section 305.

          "Value" with respect to a Sale and Leaseback Transaction has the
     meaning set forth in Section 303 hereof;

     All references herein to Articles and Sections, unless otherwise specified,
refer to the corresponding Articles and Sections of this Supplemental Indenture
No. 10; and

     The terms "herein," "hereof," "hereunder" and other words of similar import
refer to this Supplemental Indenture No. 10.

                                      -5-

<PAGE>

                                   ARTICLE TWO

                            The Series of Securities

     Section 201. Title of the Securities. The Notes shall be designated as the
"6.25% Senior Notes due 2037."

     Section 202. Limitation on Aggregate Principal Amount. The Trustee shall
authenticate and deliver the Notes for original issue on the Issue Date in the
aggregate principal amount of $150,000,000 upon a Company Order for the
authentication and delivery thereof and satisfaction of Sections 301 and 303 of
the Original Indenture. Such order shall specify the amount of the Notes to be
authenticated, the date on which the original issue of Notes is to be
authenticated and the name or names of the initial Holder or Holders. The
aggregate principal amount of Notes that may initially be outstanding shall not
exceed $150,000,000; provided, however, that the authorized aggregate principal
amount of the Notes may be increased above such amount by a Board Resolution to
such effect.

     Section 203. Stated Maturity. The Stated Maturity of the Notes shall be
February 1, 2037 (the "Maturity Date").

     Section 204. Interest and Interest Rates.

     (a) The Notes shall bear interest at the rate of 6.25% per annum, from and
including February 6, 2007 (the "Issue Date") to, but excluding, the Maturity
Date. Such interest shall be payable semiannually in arrears, on February 1 and
August 1, of each year (each such date, an "Interest Payment Date"), commencing
August 1, 2007.

     (b) The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Persons in whose names the Notes
(or one or more Predecessor Securities) are registered at the close of business
on the immediately preceding January 15 and July 15, respectively, whether or
not such day is a Business Day (each such date, a "Regular Record Date"). Any
such interest not so punctually paid or duly provided for shall forthwith cease
to be payable to the Holder on such Regular Record Date and shall either (i) be
paid to the Person in whose name such Note (or one or more Predecessor
Securities) is registered at the close of business on the Special Record Date
for the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of the Notes not less than 10 days prior to
such Special Record Date, or (ii) be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange or automated
quotation system on which the Notes may be listed or traded, and upon such
notice as may be required by such exchange or automated quotation system, all as
more fully provided in the Indenture.

     (c) The amount of interest payable for any period shall be computed on the
basis of a 360-day year of twelve 30-day months. The amount of interest payable
for any partial period shall be computed on the basis of a 360-day year of
twelve 30-day months and the days elapsed in any partial month. In the event
that any date on which interest is payable on a Note is not a Business Day, then
a payment of the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of

                                      -6-

<PAGE>

any such delay) with the same force and effect as if made on the date the
payment was originally payable.

     (d) Any principal and premium, if any, and any installment of interest,
which is overdue shall bear interest at the rate of 6.25% per annum (to the
extent permitted by law), from the dates such amounts are due until they are
paid or made available for payment, and such interest shall be payable on
demand.

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

     Section 206. Place of Registration or Exchange; Notices and Demands With
Respect to the Notes. The place where the Holders of the Notes may present the
Notes for registration of transfer or exchange and may make notices and demands
to or upon the Company in respect of the Notes shall be the Corporate Trust
Office of the Trustee.

     Section 207. Percentage of Principal Amount. The Notes shall be initially
issued at 99.531% of their principal amount plus accrued interest, if any, from
February 6, 2007.

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

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

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

     Section 211. Defeasance and Discharge; Covenant Defeasance.

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

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

          "Upon the Company's exercise of its option (if any) to have this
          Section applied to any Securities or any series of Securities, as the
          case may be, (1) the Company shall be released from its obligations
          under Article Eight and under any covenants provided pursuant to
          Section 301(20), 901(2) or 901(7) for the benefit of the Holders of
          such Securities, including, without limitation, the covenants provided
          for in Article Three of Supplemental Indenture No. 10 to the
          Indenture, and (2) the occurrence of any event

                                      -7-

<PAGE>

          specified in Sections 501(4) (with respect to Article Eight and to any
          such covenants provided pursuant to Section 301(20), 901(2) or 901(7))
          shall be deemed not to be or result in an Event of Default, in each
          case with respect to such Securities as provided in this Section on
          and after the date the conditions set forth in Section 1404 are
          satisfied (hereinafter called "Covenant Defeasance")."

     Section 212. Sinking Fund Obligations. The Company shall have no obligation
to redeem or purchase any Notes pursuant to any sinking fund or analogous
requirement or upon the happening of a specified event or at the option of a
Holder thereof.

                                 ARTICLE THREE

                              Additional Covenants

     Section 301. Maintenance of Properties. The Company shall cause all
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and shall cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly conducted at all times;
provided, however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary.

     Section 302. Payment of Taxes and Other Claims. The Company shall pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.

     Section 303. Restrictions on Liens. The Company shall not pledge, mortgage
or hypothecate, or permit to exist, and shall not cause, suffer or permit any
Subsidiary to pledge, mortgage or hypothecate, or permit to exist, except in
favor of the Company or any Subsidiary, any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, charge, security interest,
encumbrance or lien of any kind whatsoever (including any Capital Lease)
(collectively, a "lien" or "liens") upon, any Principal Property or any Equity
Interest in any Significant Subsidiary owning any Principal Property, at any
time owned by it or a Subsidiary, to secure any indebtedness, without making
effective provisions whereby the Notes shall be equally and ratably secured with
or prior to any and all such indebtedness and any other indebtedness similarly
entitled to be equally and ratably secured; provided, however, that this
provision shall not apply to or prevent the creation or existence of:

                                      -8-

<PAGE>

     (a) undetermined or inchoate liens and charges incidental to construction,
maintenance, development or operation;

     (b) the lien of taxes and assessments for the then current year;

     (c) the lien of taxes and assessments not at the time delinquent;

     (d) the lien of specified taxes and assessments which are delinquent but
the validity of which is being contested at the time by the Company or such
Subsidiary in good faith and by appropriate proceedings;

     (e) any obligations or duties, affecting the property of the Company or
such Subsidiary, to any municipality or public authority with respect to any
franchise, grant, license, permit or similar arrangement;

     (f) the liens of any judgments or attachment in an aggregate amount not in
excess of $10,000,000, or the lien of any judgment or attachment the execution
or enforcement of which has been stayed or which has been appealed and secured,
if necessary, by the filing of an appeal bond;

     (g) any lien on any property held or used by the Company or a Subsidiary in
connection with the exploration for, development of or production of oil, gas,
natural gas (including liquefied gas and storage gas), other hydrocarbons,
helium, coal, metals, minerals, steam, timber, geothermal or other natural
resources or synthetic fuels, such properties to include, but not be limited to,
the Company's or a Subsidiary's interest in any mineral fee interests, oil, gas
or other mineral leases, royalty, overriding royalty or net profits interests,
production payments and other similar interests, wellhead production equipment,
tanks, field gathering lines, leasehold or field separation and processing
facilities, compression facilities and other similar personal property and
fixtures;

     (h) any lien on oil, gas, natural gas (including liquefied gas and storage
gas), and other hydrocarbons, helium, coal, metals, minerals, steam, timber,
geothermal or other natural resources or synthetic fuels produced or recovered
from any property, an interest in which is owned or leased by the Company or a
Subsidiary;

     (i) liens upon any property heretofore or hereafter acquired, constructed
or improved, created at the later of the time of acquisition or commercial
operation thereof, or within one year thereafter (and accessions and proceeds
thereof), to secure all or a portion of the purchase price thereof or the cost
of such construction or improvement, or existing thereon at the date of
acquisition, whether or not assumed by the Company or a Subsidiary, provided
that every such lien shall apply only to the property so acquired or constructed
and fixed improvements thereon (and accessions and proceeds thereof);

     (j) any extension, renewal or refunding, in whole or in part, of any lien
permitted by subparagraph (i) above, if limited to the same property or any
portion thereof subject to, and securing not more than the amount secured by,
the lien extended, renewed or refunded;

                                      -9-

<PAGE>

     (k) liens upon any property of any entity heretofore or hereafter acquired
by any entity that is or becomes a Subsidiary after the date hereof ("Acquired
Entity") provided that every such lien (1) shall either (A) exist prior to the
time the Acquired Entity becomes a Subsidiary or (B) be created at the time the
Acquired Entity becomes a Subsidiary or within one year thereafter to secure all
or a portion of the acquisition price thereof and (2) shall only apply to those
properties owned by the Acquired Entity at the time it becomes a Subsidiary or
thereafter acquired by it from sources other than the Company or any other
Subsidiary;

     (l) the pledge of current assets, in the ordinary course of business, to
secure current liabilities;

     (m) any lien arising by reason of deposits with, or the giving of any form
of security to, any governmental agency or any body created or approved by law
or governmental regulation for any purpose at any time in connection with the
financing of the acquisition or construction of property to be used in the
business of the Company or a Subsidiary or as required by law or governmental
regulation as a condition to the transaction of any business or the exercise of
any privilege or license, or to enable the Company or a Subsidiary to maintain
self-insurance or to participate in any funds established to cover any insurance
risks or in connection with workmen's compensation, unemployment insurance, old
age pensions or other social security, or to share in the privileges or benefits
required for companies participating in such arrangements; the lien reserved in
leases for rent and for compliance with the terms of the lease in the case of
leasehold estates; mechanics' or materialmen's liens, any liens or charges
arising by reason of pledges or deposits to secure payment of workmen's
compensation or other insurance, good faith deposits in connection with tenders,
leases of real estate, bids or contracts (other than contracts for the payment
of money), deposits to secure duties or public or statutory obligations,
deposits to secure, or in lieu of, surety, stay or appeal bonds, and deposits as
security for the payment of taxes or assessments or similar charges;

     (n) any lien of or upon any office equipment, data processing equipment
(including, without limitation, computer and computer peripheral equipment), or
transportation equipment (including, without limitation, motor vehicles,
tractors, trailers, marine vessels, barges, towboats, rolling stock and
aircraft);

     (o) any lien created or assumed by the Company or a Subsidiary in
connection with the issuance of debt securities the interest on which is
excludable from gross income of the holder of such security pursuant to the
Internal Revenue Code, as amended, for the purposes of financing, in whole or in
part, the acquisition or construction of property to be used by the Company or a
Subsidiary; or

     (p) the pledge or assignment of accounts receivable, or the pledge or
assignment of conditional sales contracts or chattel mortgages and evidences of
indebtedness secured thereby, received in connection with the sale by the
Company or such Subsidiary or others of goods or merchandise to customers of the
Company or such Subsidiary.

     In case the Company or any Subsidiary shall propose to pledge, mortgage, or
hypothecate any Principal Property at any time owned by it to secure any
indebtedness, other than as permitted by paragraphs (a) to (p), inclusive, of
this Section 303, the Company shall prior thereto

                                      -10-

<PAGE>

give written notice thereof to the Trustee, and the Company shall or shall cause
such Subsidiary to, prior to or simultaneously with such pledge, mortgage or
hypothecation, by supplemental indenture executed and delivered to the Trustee
(or to the extent legally necessary to another trustee or additional or separate
trustee), in form satisfactory to the Trustee, effectively secure all the Notes
equally and ratably with, or prior to, such indebtedness.

     Notwithstanding the foregoing provisions of this Section 303, the Company
or a Subsidiary may issue, assume or guarantee indebtedness secured by a
mortgage which would otherwise be subject to the foregoing restrictions in an
aggregate amount which, together with all other indebtedness of the Company or a
Subsidiary secured by a mortgage which (if originally issued, assumed or
guaranteed at such time) would otherwise be subject to the foregoing
restrictions (not including indebtedness permitted to be secured under
subdivisions (a) through (p) above) and the Value of all Sale and Leaseback
Transactions in existence at such time (other than any Sale and Leaseback
Transaction which, if such Sale and Leaseback Transaction had been a lien, would
have been permitted by paragraph (i), (j) or (k) of this Section 303) does not
at the time of incurrence of such indebtedness exceed 5% of Consolidated Net
Tangible Assets. "Value" means, with respect to a Sale and Leaseback
Transaction, as of any particular time, the amount equal to the greater of (1)
the net proceeds from the sale or transfer of the property leased pursuant to
such Sale and Leaseback Transaction or (2) the fair value, in the opinion of the
Board of Directors, of such property at the time of entering into such Sale and
Leaseback Transaction, in either case divided first by the number of full years
of the term of the lease and then multiplied by the number of full years of such
term remaining at the time of determination, without regard to any renewal or
extension options contained in the lease.

     For purposes of this Section 303, "Subsidiary" does not include a Project
Finance Subsidiary.

     Section 304. Restrictions on Sale and Leaseback Transactions. The Company
shall not, nor shall it permit any Subsidiary to, enter into any Sale and
Leaseback Transaction unless the net proceeds of such sale are at least equal to
the fair value (as determined by the Board of Directors) of such Principal
Property and either (a) the Company or such Subsidiary would be entitled,
pursuant to the provisions of (1) paragraph (i) or (j) of Section 303 or (2)
paragraph (k) of Section 303, to incur indebtedness secured by a lien on the
Principal Property to be leased without equally and ratably securing the Notes,
or (b) the Company shall, and in any such case the Company covenants that it
will, within 120 days of the effective date of any such arrangement, apply an
amount not less than the fair value (as so determined) of such Principal
Property (i) to the payment or other retirement of Funded Debt incurred or
assumed by the Company which ranks senior to or pari passu with the Notes or of
Funded Debt incurred or assumed by any Subsidiary (other than, in either case,
Funded Debt owned by the Company or any Subsidiary), or (ii) to the purchase at
not more than fair value (as so determined) of Principal Property (other than
the Principal Property involved in such sale). For this purpose, "Funded Debt"
means any indebtedness which by its terms matures at or is extendable or
renewable at the sole option of the obligor thereon without requiring the
consent of the obligee to a date more than 12 months after the date of the
creation of such indebtedness.

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

                                      -11-
<PAGE>

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

                                  ARTICLE FOUR

                        Optional Redemption of the Notes

     Section 401. Redemption Price.

     (a) The Company shall have the right to redeem the Notes, in whole or in
part, at its option at any time from time to time at a price equal to (i) 100%
of the principal amount thereof plus (ii) accrued and unpaid interest thereon,
if any, to (but excluding) the Redemption Date plus (iii) the Make-Whole
Premium, if any (collectively, the "Redemption Price").

     (b) The amount of the Make-Whole Premium with respect to any Note (or
portion thereof) to be redeemed will be equal to the excess, if any, of: (i) the
sum of the present values, calculated as of the Redemption Date, of: (A) each
interest payment that, but for such redemption, would have been payable on the
Note (or portion thereof) being redeemed on each Interest Payment Date occurring
after the Redemption Date (excluding any accrued and unpaid interest for the
period prior to the Redemption Date); and (B) the principal amount that, but for
such redemption, would have been payable on the Note (or portion thereof) being
redeemed at the Maturity Date; over (ii) the principal amount of the Note (or
portion thereof) being redeemed. The present values of interest and principal
payments referred to in clause (i) above will be determined in accordance with
generally accepted principles of financial analysis. Such present values will be
calculated by discounting the amount of each payment of interest or principal
from the date that each such payment would have been payable, but for the
redemption, to the Redemption Date at a discount rate equal to the Comparable
Treasury Yield (as defined below) plus 25 basis points.

     (c) The Make-Whole Premium shall be calculated by an independent investment
banking institution of national standing appointed by the Company; provided,
that if the Company fails to make such appointment at least 45 days prior to the
Redemption Date, or if the institution so appointed is unwilling or unable to
make such calculation, such calculation shall be made by Banc of America
Securities LLC, Deutsche Bank Securities Inc. or J.P. Morgan Securities Inc.,
or, if such firms are unwilling or unable to make such calculation, by a
different independent investment banking institution of national standing
appointed by the Company (in any such case, an "Independent Investment Banker").

     Section 402. Make-Whole Premium Calculation.

     (a) For purposes of determining the Make-Whole Premium, "Comparable
Treasury Yield" means a rate of interest per annum equal to the weekly average
yield to maturity of United States Treasury securities that have a constant
maturity that corresponds to the remaining term to maturity of the Notes to be
redeemed, calculated to the nearest 1/12th of a year (the

                                      -12-

<PAGE>

"Remaining Term"). The Comparable Treasury Yield shall be determined as of the
third Business Day immediately preceding the applicable Redemption Date.

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

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

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

                                  ARTICLE FIVE

                                    REMEDIES

     Section 501. Additional Event of Default; Acceleration of Maturity.

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

          "(7) the default by the Company or any Subsidiary, other than a
          Project Finance Subsidiary, in the payment, when due, after the
          expiration of any applicable grace period, of principal of
          indebtedness for money borrowed,

                                      -13-

<PAGE>

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

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

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

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

                                   ARTICLE SIX

                            Miscellaneous Provisions

     Section 601. The Indenture, as supplemented and amended by this
Supplemental Indenture No. 10, is in all respects hereby adopted, ratified and
confirmed.

     Section 602. This Supplemental Indenture No. 10 may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.

                                      -14-

<PAGE>

     Section 603. THIS SUPPLEMENTAL INDENTURE NO. 10 AND EACH NOTE SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

     Section 604. If any provision in this Supplemental Indenture No. 10 limits,
qualifies or conflicts with another provision hereof which is required to be
included herein by any provisions of the Trust Indenture Act, such required
provision shall control.

     Section 605. In case any provision in this Supplemental Indenture No. 10 or
the Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

     Section 606. The recitals contained herein shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the proper authorization or due
execution hereof or of the Notes by the Company.

                                      -15-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 10 to be duly executed, as of the day and year first written
above.

                                        CENTERPOINT ENERGY RESOURCES CORP.

                                        By: /s/ Gary L. Whitlock
                                            ------------------------------------
                                        Name: Gary L. Whitlock
                                        Title: Executive Vice President and
                                               Chief Financial Officer

Attest:

/s/ Richard B. Dauphin
-------------------------------------
Name: Richard B. Dauphin
Title: Assistant Corporate Secretary

(SEAL)

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

                                        By: /s/ Mauri J. Cowen
                                            ------------------------------------
                                        Name: Mauri J. Cowen
                                        Title: Vice President and Trust Officer

(SEAL)

                                      -16-

<PAGE>

                                    Exhibit A

                           [FORM OF FACE OF SECURITY]

[IF THIS SECURITY IS TO BE A GLOBAL SECURITY -] THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY.

[For as long as this Global Security is deposited with or on behalf of The
Depository Trust Company it shall bear the following legend.] Unless this
certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to CenterPoint Energy Resources Corp.
or its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.

                       CENTERPOINT ENERGY RESOURCES CORP.

                           6.25% Senior Notes due 2037

No. __________                                                      $ __________
                                                              CUSIP No. ________

     CENTERPOINT ENERGY RESOURCES CORP., a corporation duly organized and
existing under the laws of the State of Delaware formerly known as NorAm Energy
Corp. (herein called the "Company," which term includes any successor Person
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to _______________, or registered assigns, the principal sum of
____________________ Dollars on February 1, 2037, and to pay interest thereon
from February 6, 2007 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually on February 1 and
August 1 in each year, commencing August 1, 2007, at the rate of 6.25% per
annum, until the principal hereof is paid or made available for payment,
provided that any principal and premium, and any such installment of interest,
which is overdue shall bear interest at the rate of 6.25% per annum (to the
extent permitted by applicable law), from the dates such amounts are due until
they are paid or made available for payment, and such interest shall be payable
on demand. The amount

                                       A-1

<PAGE>

of interest payable for any period shall be computed on the basis of twelve
30-day months and a 360-day year. The amount of interest payable for any partial
period shall be computed on the basis of a 360-day year of twelve 30-day months
and the days elapsed in any partial month. In the event that any date on which
interest is payable on this Security is not a Business Day, then a payment of
the interest payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of any
such delay) with the same force and effect as if made on the date the payment
was originally payable. A "Business Day" shall mean, when used with respect to
any Place of Payment, each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which banking institutions in that Place of Payment are
authorized or obligated by law or executive order to close. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the
January 15 or July 15 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and shall either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange or automated quotation system on which
the Securities of this series may be listed or traded, and upon such notice as
may be required by such exchange or automated quotation system, all as more
fully provided in said Indenture.

     Payment of the principal of (and premium, if any) and any such interest on
this Security will be made at the Corporate Trust Office of the Trustee, in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts; provided, however, that at
the option of the Company payment of interest may be made (i) by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register or (ii) by wire transfer in immediately available funds at
such place and to such account as may be designated in writing by the Person
entitled thereto as specified in the Security Register.

     Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

                                       A-2

<PAGE>

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

Dated: February 6, 2007                 CENTERPOINT ENERGY RESOURCES CORP.

                                        By:
                                            ------------------------------------
                                        Name: Gary L. Whitlock
(SEAL)                                  Title: Executive Vice President and
                                               Chief Financial Officer

Attest:

-------------------------------------
Name: Richard B. Dauphin
Title: Assistant Corporate Secretary

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

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

Date of Authentication:
                        -------------

                                        By:
                                            ------------------------------------
                                            Authorized Signatory

                                       A-3

<PAGE>

                       [FORM OF REVERSE SIDE OF SECURITY]
                       CENTERPOINT ENERGY RESOURCES CORP.

                           6.25% SENIOR NOTES DUE 2037

     This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of February 1, 1998 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Bank of New York Trust Company,
National Association (successor to JPMorgan Chase Bank, National Association
(formerly Chase Bank of Texas, National Association)), as Trustee (herein called
the "Trustee", which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, initially limited in aggregate principal amount to
$150,000,000; provided, however, that the authorized aggregate principal amount
of the Securities may be increased above such amount by a Board Resolution to
such effect.

     The Company shall have the right to redeem the Securities of this series,
in whole or in part, at its option at any time from time to time at a price
equal to (i) 100% of the principal amount thereof plus (ii) accrued and unpaid
interest thereon, if any, to (but excluding) the Redemption Date plus (iii) the
Make-Whole Premium, if any.

     The amount of the Make-Whole Premium with respect to any Security of this
Series (or portion thereof) to be redeemed will be equal to the excess, if any,
of: (i) the sum of the present values, calculated as of the Redemption Date, of:
(A) each interest payment that, but for such redemption, would have been payable
on the Security of this series (or portion thereof) being redeemed on each
Interest Payment Date occurring after the Redemption Date (excluding any accrued
and unpaid interest for the period prior to the Redemption Date); and (B) the
principal amount that, but for such redemption, would have been payable on the
Security of this series (or portion thereof) being redeemed at February 1, 2037;
over (ii) the principal amount of the Security of this series (or portion
thereof) being redeemed. The present values of interest and principal payments
referred to in clause (i) above will be determined in accordance with generally
accepted principles of financial analysis. Such present values will be
calculated by discounting the amount of each payment of interest or principal
from the date that each such payment would have been payable, but for the
redemption, to the Redemption Date at a discount rate equal to the Comparable
Treasury Yield (as defined below) plus 25 basis points.

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

                                       A-4

<PAGE>

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

     In the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.

     The Securities of this series are not entitled to the benefit of any
sinking fund.

     The Indenture contains provisions for satisfaction and discharge of the
entire indebtedness of this Security upon compliance by the Company with certain
conditions set forth in the Indenture.

     The Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Security or certain restrictive covenants and Events of
Default with respect to this Security, in each case upon compliance with certain
conditions set forth in the Indenture.

     If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.

     The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this

                                       A-5

<PAGE>

Security.

     As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.

     No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.

     As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and any premium and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees. No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.

     Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

     The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

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

                                       A-6

<PAGE>

     THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.

                                       A-7

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