Document:

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                                                                     Exhibit 4.2

                    CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

                              OFFICER'S CERTIFICATE

                                 March 18, 2003

I, the undersigned officer of CenterPoint Energy Houston Electric, LLC, a Texas
limited liability company (the "Company"), do hereby certify that I am an
Authorized Officer of the Company as such term is defined in the Indenture (as
defined herein). I am delivering this certificate pursuant to the authority
granted in the Resolutions adopted by written consent of the sole Manager of the
Company dated March 13, 2003, and Sections 105, 201, 301, 401(1) and 402(2)(A)
of the General Mortgage Indenture, dated as of October 10, 2002, as heretofore
supplemented to the date hereof (as heretofore supplemented, the "Indenture"),
between the Company and JPMorgan Chase Bank, as Trustee (the "Trustee"). Terms
used herein and not otherwise defined herein shall have the meanings assigned to
them in the Indenture, unless the context clearly requires otherwise. Based upon
the foregoing, I hereby certify on behalf of the Company as follows:

1.   The terms and conditions of the Securities of the series described in this
Officer's Certificate are as follows (the numbered subdivisions set forth in
this Paragraph 1 corresponding to the numbered subdivisions of Section 301 of
the Indenture):

     (1)  The Securities of the tenth series to be issued under the Indenture
          shall be designated as the "5.70% General Mortgage Bonds, Series J1,
          due 2013" (the "Series J1 Bonds") and the "5.70% General Mortgage
          Bonds, Series J2, due 2013" (the "Series J2 Bonds" and, together with
          the Series J1 Bonds, the "Series J Bonds"). The Series J1 Bonds and
          the Series J2 Bonds shall be treated for all purposes under the
          Indenture as a single class or series of Securities. The Securities of
          the eleventh series to be issued under the Indenture shall be
          designated as the "6.95% General Mortgage Bonds, Series K1, due 2033"
          (the "Series K1 Bonds") and the "6.95% General Mortgage Bonds, Series
          K2, due 2033" (the "Series K2 Bonds" and, together with the Series K1
          Bonds, the "Series K Bonds"). The Series K1 Bonds and the Series K2
          Bonds shall be treated for all purposes under the Indenture as a
          single class or series of Securities.

     (2)  There shall be no limit upon the aggregate principal amount of the
          Series J Bonds that may be authenticated and delivered under the
          Indenture. The Trustee shall authenticate and deliver (i) Series J1
          Bonds for original issue on March 18, 2003 (the "Issue Date") in the
          aggregate principal amount of $450,000,000, upon a Company Order for
          the authentication and delivery thereof and satisfaction of Section
          401 of the Indenture and (ii) Series J2 Bonds from time to time
          thereafter in satisfaction of the Company's obligations under the
          Registration Rights Agreement (as defined in subsection (15) below),
          for issue only in exchange for a like principal amount of Series J1
          Bonds upon the receipt by the Trustee of each of the documents
          specified in the final paragraph of this subsection (2).

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         There shall be no limit upon the aggregate principal amount of the
         Series K Bonds that may be authenticated and delivered under the
         Indenture. The Trustee shall authenticate and deliver (i) Series K1
         Bonds for original issue on March 18, 2003 (the "Issue Date") in the
         aggregate principal amount of $312,275,000, upon a Company Order for
         the authentication and delivery thereof and satisfaction of Section 401
         of the Indenture and (ii) Series K2 Bonds from time to time thereafter
         in satisfaction of the Company's obligations under the Registration
         Rights Agreement, for issue only in exchange for a like principal
         amount of Series K1 Bonds upon the receipt by the Trustee of each of
         the documents specified in the final paragraph of this subsection (2).

         The Company shall deliver to the Trustee in connection with each
         request for the authentication and delivery by the Trustee of Series J2
         Bonds or Series K2 Bonds:

                  (a) a Company Order for the authentication and delivery
                  thereof, specifying the amount of the Securities to be
                  authenticated, the date on which the original issue of such
                  Securities is to be authenticated and the name or names of the
                  initial Holder or Holders;

                  (b) an Opinion of Counsel to the effect that:

                           (A) all conditions and covenants provided for in the
                  Indenture relating to the authentication and delivery by the
                  Trustee of such Securities have been complied with;

                           (B) the form or forms of such Securities have been
                  duly authorized by the Company and have been established in
                  conformity with the provisions of the Indenture;

                           (C) the term or terms of such Securities have been
                  authorized by the Company and have been established in
                  conformity with the provisions of the Indenture;

                           (D) when such Securities are authenticated and
                  delivered by the Trustee and issued and delivered by the
                  Company, they will constitute a valid and legally binding
                  obligation of the Company, enforceable against the Company and
                  entitled to the benefit of the Lien of the Indenture equally
                  and ratably with all other Securities then Outstanding; and

                  (c) an Officer's Certificate to the effect that all conditions
                  and covenants provided for in the Indenture relating to the
                  authentication and delivery by the Trustee of such Securities
                  have been complied with.

(3)      Interest on the Series J Bonds and the Series K Bonds (together, the
         "Bonds") shall be payable to the Persons in whose names such Securities
         are registered at the close of business on the Regular Record Date for
         such interest, except as otherwise expressly provided in the form of
         such Securities attached hereto as Exhibit A.

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(4)   The Series J Bonds shall mature and the principal thereof shall be due and
payable together with all accrued and unpaid interest thereon on March 15, 2013.
The Series K Bonds shall mature and the principal thereof shall be due and
payable together with all accrued and unpaid interest therein on March 15, 2033.

(5)   Subject to subsection (15) below, the Series J Bonds shall bear interest
at the rate of 5.70% per annum and the Series K Bonds shall bear interest at the
rate of 6.95% per annum. Interest shall accrue on the Bonds from the Issue Date,
or the most recent date to which interest has been paid or duly provided for.
The Interest Payment Dates for the Bonds shall be March 15 and September 15 in
each year commencing September 15, 2003, and the Regular Record Dates with
respect to the Interest Payment Dates for the Bonds shall be the fifteenth
calendar day preceding each Interest Payment Date (whether or not a Business
Day); provided however that interest payable at maturity, upon redemption or
when principal is otherwise due will be payable to the Holder to whom principal
is payable.

(6)   The Corporate Trust Office of JPMorgan Chase Bank in Houston, Texas shall
be the place at which (i) the principal of and interest on the Bonds shall be
payable, (ii) registration of transfer of the Bonds may be effected, (iii)
exchanges of the Bonds may be effected and (iv) notices and demands to or upon
the Company in respect of the Bonds and the Indenture may be served; and
JPMorgan Chase Bank shall be the Security Registrar for the Bonds; provided,
however, that the Company reserves the right to change, by one or more Officer's
Certificates, any such place or the Security Registrar; and provided, further,
that the Company reserves the right to designate, by one or more Officer's
Certificates, its principal office in Houston, Texas as any such place or itself
as the Security Registrar; provided, however, that there shall be only a single
Security Registrar for the Bonds.

(7)   The Bonds shall be redeemable, at the option of the Company, at any time
or from time to time, in whole or in part, at a price equal to the greater of
(i) 100% of the principal amount of the Bonds to be redeemed or (ii) the sum of
the present values of the remaining scheduled payments of principal and interest
on the Bonds to be redeemed (not including any portion of such payments of
interest accrued to the Redemption Date) discounted to the Redemption Date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at
the applicable Treasury Rate plus 30 basis points, in the case of the Series J
Bonds, and 35 basis points, in the case of the Series K Bonds (the "Make-Whole
Amount"); plus, in each case, accrued and unpaid interest on the principal
amount being redeemed to the Redemption Date.

     The Make-Whole Amount will be calculated by Credit Suisse First Boston LLC,
Deutsche Bank Securities Inc. or Salomon Smith Barney Inc., as specified by the
Company or, if such firms are unwilling or unable to select the Comparable
Treasury Issue, by an independent investment banking institution of national
standing appointed by the Company (in any such case, an "Independent Investment
Banker"). The Trustee shall

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have no responsibility for the calculation of the Make-Whole Amount and may
conclusively presume the correctness of such calculation.

     For purposes of determining the Make-Whole Amount: "Treasury Rate" means,
with respect to any Redemption Date, the yield, under the heading which
represents the average for the immediately preceding week, appearing in the most
recently published statistical release designated "H.15 (519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded U.S. Treasury
securities adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Comparable Treasury Issue (if
no maturity is within three months before or after the remaining life (as
defined below), yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue will be determined and the
Treasury Rate will be interpolated or extrapolated from such yields on a
straight line basis, rounding to the nearest month); or if such release (or any
successor release) is not published during the week preceding the calculation
date or does not contain such yields, the rate per annum equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue, calculated using
a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such Redemption
Date. The Treasury Rate will be calculated on the third Business Day preceding
the Redemption Date.

     "Comparable Treasury Issue" means the U.S. Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining
term ("remaining life") of the Bonds to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Bonds.

     "Comparable Treasury Price" means (1) the average of five Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the highest
and lowest Reference Treasury Dealer Quotations, or (2) if the Independent
Investment Banker obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such quotations.

     "Reference Treasury Dealer" means (1) Credit Suisse First Boston LLC,
Deutsche Bank Securities Inc. and Salomon Smith Barney Inc. and their respective
successors, provided, however, that if any of the foregoing shall cease to be a
primary U.S. government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company will substitute therefor another Primary Treasury Dealer
and (2) any other primary treasury dealer selected by the Company after
consultation with the Independent Investment Banker.

     "Reference Treasury Dealer Quotations" means with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Independent Investment Banker, of the bid and asked prices for the Comparable
Treasury

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Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Independent Investment Banker at 5:00 p.m., New York City time,
on the third business day preceding such Redemption Date.

     The Trustee will mail a notice of redemption to each holder of Bonds to be
redeemed by first-class mail at least 30 and not more than 60 days prior to the
date fixed for redemption. Unless the Company defaults on payment of the
redemption price, interest will cease to accrue on the Bonds or portions thereof
called for redemption on the Redemption Date. If fewer than all of the Bonds are
to be redeemed, the Trustee will select, not more than 60 days prior to the
Redemption Date, the particular Bonds or portions thereof for redemption from
the outstanding Bonds not previously called by such method as the Trustee deems
fair and appropriate The Trustee may select for redemption Bonds and portions of
Bonds in amounts of $1,000 or whole multiples of $1,000.

(8)    Not applicable.

(9)    Not applicable.

(10)   Not applicable.

(11)   Not applicable.

(12)   Not applicable.

(13)   See subsections (4) and (7) above.

(14)   Not applicable.

(15)   Pursuant to the terms of a registration rights agreement (the
"Registration Rights Agreement") with one or more of the initial purchasers of
the Series J1 Bonds and the Series K1 Bonds, the Company has agreed to file an
exchange offer registration statement to exchange the Series J1 Bonds for Series
J2 Bonds and the Series K1 Bonds for the Series K2 Bonds, which shall be
registered under the Securities Act of 1933, as amended (the "Securities Act")
as evidence of the same underlying indebtedness. The Company has also agreed to
file a shelf registration statement to cover resales of the Bonds, as initially
issued and sold, under certain circumstances. The terms relating to the exchange
of the Series J1 Bonds for the Series J2 Bonds and the Series K1 Bonds for the
Series K2 Bonds are set forth in the Registration Rights Agreement attached
hereto as Exhibit B.

The interest rate borne by the Registrable Securities (as defined in the
Registration Rights Agreement) shall be increased by .25% per annum upon the
occurrence of a Registration Default (as defined in the Registration Rights
Agreement), which rate will increase by an additional .25% per annum if such
Registration Default has not been cured within 90 days after the occurrence
thereof and continuing until all Registration Defaults have been cured
("Additional Interest"); provided that the aggregate amount of any such increase
in the interest rate on the Registrable Securities shall in no event exceed .50%
per annum;

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provided, further, that if the Exchange Offer Registration Statement (as defined
in the Registration Rights Agreement) is not declared effective on or prior to
the 270th calendar day following the Issue Date and the Company shall request
Holders of Registrable Securities to provide the information called for by the
Registration Rights Agreement for inclusion in the Shelf Registration Statement
(as defined in the Registration Rights Agreement), the Registrable Securities
owned by Holders who do not deliver such information to the Company or who do
not provide comments to the Company on the Shelf Registration Statement when
required pursuant to the Registration Rights Agreement shall not be entitled to
any such Additional Interest for any day after the 315th calendar day following
the Issue Date. All accrued Additional Interest shall be paid to Holders of
Registrable Securities in the same manner and at the same time as regular
payments of interest on the Registrable Securities. Following the cure of all
Registration Defaults, the accrual of Additional Interest shall cease and the
interest rate on the Registrable Securities will revert to 5.70% per annum in
respect of the Series J1 Bonds and 6.95% per annum in respect of the Series K1
Bonds.

(16)     Not applicable.

(17) (i) Registrable Securities offered and sold to Qualified Institutional
Buyers (as defined in Rule 144A of the Securities Act) pursuant to Rule 144A of
the Securities Act shall be issuable in whole or in part in the form of one or
more permanent Global Securities in respect of each of the Series J1 Bonds and
the Series K1 Bonds in definitive, fully registered, book-entry form, without
interest coupons (collectively, the "Rule 144A Global Bonds"). The Rule 144A
Global Bonds shall be deposited on the Issue Date with, or on behalf of, the
Depositary. Interests in each of the Rule 144A Global Bonds shall be available
for purchase only by Qualified Institutional Buyers.

     (ii) Registrable Securities offered and sold in offshore transactions to
persons other than "U.S. persons," as defined in Regulation S under the
Securities Act (each, a "Non-U.S. Person") in reliance on Regulation S under the
Securities Act ("Regulation S") shall initially be issuable in whole or in part
in the form of one or more temporary Global Securities in respect of each of the
Series J1 Bonds and the Series K1 Bonds in definitive, fully registered,
book-entry form, without interest coupons (collectively, the "Regulation S
Temporary Global Bonds"). Beneficial interests in each of the Regulation S
Temporary Global Bonds shall be exchanged for beneficial interests in a
corresponding Global Security in respect of each of the Series J1 Bonds and the
Series K1 Bonds respectively (the "Regulation S Permanent Global Bonds" and,
together with the Regulation S Temporary Global Bonds, the "Regulation S Global
Bonds") within a reasonable period after the expiration of the period which
expires immediately after the 40th day following the later of: (a) the
commencement of the offering of the Series J1 Bonds and the Series K1 Bonds to
Persons other than "distributors" (as defined in Regulation S) in reliance upon
Regulation S; and (b) the Issue Date (the "Distribution Compliance Period") upon
certification that the beneficial interests in the Regulation S Temporary Global
Bond relating to the Series J1 Bonds or the Regulation S Temporary Global Bond
relating to the Series K1 Bonds, as relevant, are owned by either Non-U.S.

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Persons or U.S. Persons who purchased such interests pursuant to an exemption
from, or in transactions not subject to, the registration requirements of the
Securities Act.

     (iii) Each of the Rule 144A Global Bonds and the Regulation S Global Bonds
(collectively, the "Global Bonds") shall represent such of the Series J1 Bonds
and the Series K1 Bonds as shall be specified therein and shall each provide
that it shall represent the aggregate principal amount of the Series J1 Bonds
and the Series K1 Bonds from time to time endorsed thereon and that the
aggregate principal amount of the Series J1 Bonds and the Series K1 Bonds
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges or redemptions. Any endorsement of a Global
Bond to reflect the amount, or any increase or decrease in the aggregate
principal amount, of the Series J1 Bonds and the Series K1 Bonds represented
thereby shall be reflected by the Trustee on Schedule A attached to the Series
J1 Bond and the Series K1 Bond, as the case may be, and made by the Trustee in
accordance with written instructions or such other written form of instructions
as is customary for the Depositary, from the Depositary or its nominee on behalf
of any Person having a beneficial interest in the Global Bond.

     (iv) The Depositary Trust Company shall initially serve as Depositary with
respect to the Global Bonds. Such Global Bonds shall bear a legend in
substantially the following form:

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.

(18)  Not applicable.

(19) (i) In addition to the requirements set forth in Section 305 of the
Indenture, Series J Bonds in definitive form and Series K Bonds in definitive
form that are Registrable Securities presented or surrendered for registration
of transfer or exchange pursuant to Section 305 of the Indenture shall be
accompanied by the following additional information and documents, as
applicable, upon which the Security Registrar may conclusively rely:

          (a) if such Registrable Securities are being delivered to the Security
          Registrar by a Holder for registration in the name of such Holder,
          without transfer, a certification from such Holder to that effect (in
          substantially the form of Exhibit B hereto); or

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          (b) if such Registrable Securities are being transferred (1) to a
          Qualified Institutional Buyer in accordance with Rule 144A under the
          Securities Act or (2) pursuant to an exemption from registration in
          accordance with Rule 144 under the Securities Act (and based upon an
          opinion of counsel if the Company or the Trustee so requests) or (3)
          pursuant to an effective registration statement under the Securities
          Act, a certification to that effect from such Holder (in substantially
          the form of Exhibit B hereto); or

          (c) if such Registrable Securities are being transferred to a Non-U.S.
          Person pursuant to an exemption from registration in accordance with
          Rule 904 of Regulation S under the Securities Act, certifications to
          that effect from such transferor (in substantially the form of
          Exhibits B and C hereto) and an opinion of counsel to that effect if
          the Company or the Trustee so requests; or

          (d) if such Registrable Securities are being transferred in reliance
          on and in compliance with another exemption from the registration
          requirements of the Securities Act, a certification to that effect
          from such Holder (in substantially the form of Exhibit B hereto) and
          an opinion of counsel to that effect if the Company or the Trustee so
          requests.

     (ii) (a) The transfer and exchange of Global Bonds or beneficial interests
          therein shall be effected through the Depositary, in accordance with
          Section 305 of the Indenture and subsection (19) hereof (including the
          restrictions on transfer set forth therein and herein) and the rules
          and procedures of the Depositary therefor, which shall include
          restrictions on transfer comparable to those set forth therein and
          herein to the extent required by the Securities Act.

          (b) The transfer and exchange of Global Bonds or beneficial interests
          therein for certificated bonds (or vice versa) shall be effected
          through the Trustee and the Depositary, as the case may be, in
          accordance with Section 305 of the Indenture and subsection (19)
          hereof (including the restrictions on transfer set forth therein and
          herein) and the rules and procedures of the Depositary therefor, which
          shall include restrictions on transfer comparable to those set forth
          therein and herein to the extent required by the Securities Act.

     (iii) Except as permitted by subparagraphs (iv) and (v) of this subsection
(19), until the expiration of the applicable holding period with respect to the
Registrable Securities set forth in Rule 144(k) of the Securities Act, unless
otherwise agreed by the Company and the Holder thereof, each certificate
evidencing the Global Bonds or certificated bonds in definitive form (and all
Series J Bonds and Series K Bonds, as the

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case may be, issued in exchange therefor or substitution thereof) shall bear a
legend in substantially the following form:

     THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
     EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933
     (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR
     OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
     EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED
     THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE
     PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
     THEREUNDER.

     THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
     THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
     ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
     BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
     THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
     (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
     WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
     REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
     AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
     THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV), IN ACCORDANCE WITH
     ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B)
     THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
     PURCHASER OF THE SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO
     ABOVE.

Except as permitted by subparagraphs (iv) and (v) of this subsection (19), each
certificate evidencing the Global Bonds or certificated bonds in definitive form
purchased in reliance on Regulation S (and all Bonds issued in exchange therefor
or substitution thereof) shall bear a legend in substantially the following
form:

     THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
     ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT
     OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE TRANSFERRED IN
     THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON
     EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
     REQUIREMENTS OF THE SECURITIES ACT

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     AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE
     MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.

     (iv) Upon any sale or transfer of a Registrable Security (including any
Registrable Security represented by a Global Bond) pursuant to Rule 144 under
the Securities Act or an effective registration statement under the Securities
Act, which shall be certified to the Trustee and Security Registrar upon which
each may conclusively rely:

          (a) in the case of any Registrable Security represented by a
          certificated bond, the Security Registrar shall permit the Holder
          thereof to exchange such Registrable Security for a certificated bond
          that does not bear the legends set forth in subsection (iii) of
          subparagraph (19) hereof and rescind any restriction on the transfer
          of such Registrable Security; and

          (b) in the case of any Registrable Security represented by a Global
          Bond, such Registrable Security shall not be required to bear the
          legends set forth in subsection (iii) of subparagraph (19) hereof if
          all other interests in such Global Bond have been or are concurrently
          being sold or transferred pursuant to Rule 144 under the Securities
          Act or pursuant to an effective registration statement under the
          Securities Act.

     (v) Notwithstanding the foregoing, upon consummation of the Exchange Offer
(as defined in the Registration Rights Agreement), the Company shall issue and,
upon receipt of a Company Order in accordance with Section 401 of the Indenture,
the Trustee shall authenticate, Series J2 Bonds in exchange for Series J1 Bonds
accepted for exchange in the Exchange Offer and Series K2 Bonds in exchange for
Series K1 Bonds accepted for exchange in the Exchange Offer, which Series J2
Bonds and Series K2 Bonds shall not bear the legends set forth in subsection
(iii) of subparagraph (19) hereof and shall not provide for Additional Interest,
and the Security Registrar shall rescind any restriction on the transfer of such
Series J2 Bonds and Series K2 Bonds, in each case unless the Holder of such
Series J1 Bonds or Series K1 Bonds, as the case may be, (A) is a broker-dealer
tendering Series J1 Bonds or Series K1 Bonds, as the case may be, acquired
directly from the Company or an "affiliate" (as defined in Rule 144 under the
Securities Act) of the Company for its own account, (B) is a Person who has an
arrangement or understanding with any Person to participate in the
"distribution" (within the meaning of the Securities Act) of the Series J2 Bonds
or Series K1 Bonds, as the case may be, (C) is a Person who is an "affiliate"
(as defined in Rule 144 under the Securities Act) of the Company or (D) is a
Person who will not be acquiring the Series J2 Bonds or Series K1 Bonds, as the
case may be, in the ordinary course of such Holder's business. The Company shall
identify to the Trustee such Holders of the Series J Bonds or Series K1 Bonds,
as the case may be, in a written certification signed by an Officer of the
Company and, absent certification from the Company to such effect, the Trustee
shall assume that there are no such Holders.

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     (20) For purposes of the Bonds, "Business Day" shall mean any day, other
     than Saturday or Sunday, on which commercial banks and foreign exchange
     markets are open for business, including dealings in deposits in U.S.
     dollars, in New York.

     (21) Not applicable.

     (22) The Bonds shall have such other terms and provisions as are provided
     in the form thereof attached hereto as Exhibit A, and shall be issued in
     substantially such form.

2.   The undersigned has read all of the covenants and conditions contained in
the Indenture, and the definitions in the Indenture relating thereto, relating
to the issuance of the Bonds and in respect of compliance with which this
certificate is made.

3.   The statements contained in this certificate are based upon the familiarity
of the undersigned with the Indenture, the documents accompanying this
certificate, and upon discussions by the undersigned with officers and employees
of the Company familiar with the matters set forth herein.

4.   In the opinion of the undersigned, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenants and conditions have been complied with.

     In the opinion of the undersigned, such conditions and covenants have been
complied with.

5.   To my knowledge, no Event of Default has occurred and is continuing.

6.   The execution of the Tenth Supplemental Indenture, dated as of the date
hereof, between the Company and the Trustee is authorized or permitted by the
Indenture.

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     IN WITNESS WHEREOF, the undersigned has executed this Officer's Certificate
on this 18th day of March, 2003.

                                    By:    /s/ Marc Kilbride
                                        ----------------------------------------
                                        Name:  Marc Kilbride
                                        Title: Treasurer

Acknowledged and Received on
March 18, 2003

JPMORGAN CHASE BANK,

as Trustee

By: /s/ Carol Logan
   --------------------------
Name:  Carol Logan
Title: Vice President and Trust Officer

                                       12

<PAGE>
                                   EXHIBIT A

                                 FORM OF BONDS

     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
     Houston Electric, LLC 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 HOUSTON ELECTRIC, LLC

            5.70% General Mortgage Bonds, Series [J1] [J2], due 2013
<TABLE>
<CAPTION>
<S>                                                                      <C>
Original Interest Accrual Date: March 18, 2003             Redeemable:       Yes     [X]      No [  ]
Stated Maturity: March 15, 2013                            Redemption Date: At any time.
Interest Rate: 5.70%                                       Redemption Price: the greater of (i) 100% of the
Interest Payment Dates: March 15 and September 15          principal amount of the Bonds and (ii) the Make-
Regular Record Dates:   Fifteenth calendar day before      Whole Amount, as described herein, plus in each
respective Interest Payment Date                           case, accrued and unpaid interest to the Redemption
                                                           Date
</TABLE>

            This Security is not an Original Issue Discount Security

              within the meaning of the within-mentioned Indenture.

                             -----------------------

Initial Principal Amount                         Registered No. R.__
[$     ]*                                        CUSIP [15189X AA6] [U14040 AA4]

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a limited liability company duly
organized and existing under the laws of the State of Texas (herein called the
"Company," which term includes any successor corporation under the Indenture
referred to below), for value received, hereby promises to pay to

                                   ****[ ]****

, or registered assigns, the principal sum of [      ] DOLLARS* on the Stated
Maturity specified above, and to pay interest thereon from the Original Interest
Accrual Date specified above or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually in arrears on
the Interest Payment Dates specified above in each year, commencing on September
15, 2003, and at Maturity, at the Interest Rate per annum specified above, until
the principal hereof is paid or duly provided for. The interest so payable, and
paid or duly provided for, on any Interest Payment Date shall, as provided in
such Indenture, be paid to the Person in

-------------------------------
* Reference is made to Schedule A attached hereto with respect to decreases and
  increases in the aggregate principal amount of securities evidenced by this
  Certificate.

                                       A-1

<PAGE>

whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date specified above (whether or
not a Business Day) next preceding such Interest Payment Date. Notwithstanding
the foregoing, interest payable at Maturity shall be paid to the Person to whom
principal shall be paid. Except as otherwise provided in said Indenture, any
such interest not so paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date and may 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 of which shall be
given to Holders of Securities of this series not less than 15 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 on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.

Payment of the principal of and premium, if any, on this Security and interest
hereon at Maturity shall be made upon presentation of this Security at the
office of the Corporate Trust Administration of JPMorgan Chase Bank, located at
2001 Bryan Street, 9th Floor, Dallas, Texas, 75201 or at such other office or
agency as may be designated for such purpose by the Company from time to time.
Payment of interest on this Security (other than interest at Maturity) shall be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register, except that if such Person shall
be a securities depositary, such payment may be made by such other means in lieu
of check, as shall be agreed upon by the Company, the Trustee and such Person.
Payment of the principal of and premium, if any, and interest on this Security,
as aforesaid, shall be made in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.

This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and issuable in one or more series
under and equally secured by a General Mortgage Indenture, dated as of October
10, 2002, as supplemented and amended (such Indenture as originally executed and
delivered and as supplemented or amended from time to time thereafter, together
with any constituent instruments establishing the terms of particular
Securities, being herein called the "Indenture"), between the Company and
JPMorgan Chase Bank, 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 description of
the property mortgaged, pledged and held in trust, the nature and extent of the
security and the respective rights, limitations of rights, duties and immunities
of the Company, the Trustee and the Holders of the Securities thereunder and of
the terms and conditions upon which the Securities are, and are to be,
authenticated and delivered and secured. The acceptance of this Security shall
be deemed to constitute the consent and agreement by the Holder hereof to all of
the terms and provisions of the Indenture. This Security is one of the series
designated above.

If any Interest Payment Date, any Redemption Date or the Stated Maturity shall
not be a Business Day (as hereinafter defined), payment of the amounts due on
this Security on such date may be made on the next succeeding Business Day; and,
if such payment is made or duly provided for on such Business Day, no interest
shall accrue on such amounts for the period from and after such Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be, to such Business
Day. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.

This Security is subject to redemption, at the option of the Company, at any
time or from time to time, in whole or in part, at a price equal to the greater
of (i) 100% of the principal amount of this Security (or the portion hereof to
be redeemed) or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest on this Security (or such portion to be
redeemed) (not including any portion of such payments of interest accrued to the
Redemption Date) discounted to the Redemption Date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the applicable
Treasury Rate plus 30 basis points (the "Make-Whole Amount"); plus, accrued and
unpaid interest on the principal amount being redeemed to the Redemption Date.

The Make-Whole Amount will be calculated by Credit Suisse First Boston LLC,
Deutsche Bank Securities Inc. or Salomon Smith Barney Inc., as specified by the
Company or, if such firms are unwilling or unable to select the Comparable
Treasury Issue, by an independent investment banking institution of national
standing appointed by the Company (in any such case, an "Independent Investment
Banker"). The Trustee shall have no responsibility for the calculation of the
Make-Whole Amount and may conclusively presume the correctness of such
calculation.

                                       A-2

<PAGE>

For purposes of determining the Make-Whole Amount: "Treasury Rate" means, with
respect to any Redemption Date, the yield, under the heading which represents
the average for the immediately preceding week, appearing in the most recently
published statistical release designated "H.15 (519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded U.S. Treasury
securities adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Comparable Treasury Issue (if
no maturity is within three months before or after the remaining life (as
defined below), yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue will be determined and the
Treasury Rate will be interpolated or extrapolated from such yields on a
straight line basis, rounding to the nearest month); or if such release (or any
successor release) is not published during the week preceding the calculation
date or does not contain such yields, the rate per annum equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue, calculated using
a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such Redemption
Date. The Treasury Rate will be calculated on the third Business Day preceding
the Redemption Date.

     "Comparable Treasury Issue" means the U.S. Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining
term ("remaining life") of this Security to be redeemed that would be utilized,
at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of this Security.

     "Comparable Treasury Price" means (1) the average of five Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the highest
and lowest Reference Treasury Dealer Quotations, or (2) if the Independent
Investment Banker obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such quotations.

     "Reference Treasury Dealer" means (1) Credit Suisse First Boston LLC,
Deutsche Bank Securities Inc. and Salomon Smith Barney Inc. and their respective
successors, provided, however, that if any of the foregoing shall cease to be a
primary U.S. government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company will substitute therefor another Primary Treasury Dealer
and (2) any other Primary Treasury Dealer selected by the Company after
consultation with the Independent Investment Banker.

     "Reference Treasury Dealer Quotations" means with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Independent Investment Banker, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Independent Investment Banker at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.

The Trustee will mail a notice of redemption to each Holder of Securities to be
redeemed by first-class mail at least 30 and not more than 60 days prior to the
date fixed for redemption. Unless the Company defaults on payment of the
redemption price, interest will cease to accrue on the Securities or portions
thereof called for redemption. If fewer than all of the Securities of this
series are to be redeemed, the Trustee will select, not more than 60 days prior
to the Redemption Date, the particular Securities of this series or portions
thereof for redemption from the outstanding Securities of this series not
previously called by such method as the Trustee deems fair and appropriate The
Trustee may select for redemption Securities of this series and portions of
Securities of this series in amounts of $1,000 or whole multiples of $1,000.

The Indenture permits, with certain exceptions as therein provided, the Trustee
to enter into one or more supplemental indentures for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, the Indenture with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series then Outstanding
under the Indenture, considered as one class; provided, however, that if there
shall be Securities of more than one series Outstanding under the Indenture and
if a proposed supplemental indenture shall directly affect the rights of the
Holders of Securities of one or more, but less than all, of such series, then
the consent only of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series so directly affected, considered as one
class, shall be required; and provided, further, that if the Securities of any
series shall have been issued in more than one Tranche and if the proposed
supplemental

                                       A-3

<PAGE>

indenture shall directly affect the rights of the Holders of Securities of one
or more, but less than all, of such Tranches, then the consent only of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of all Tranches so directly affected, considered as one class, shall
be required; and provided, further, that the Indenture permits the Trustee to
enter into one or more supplemental indentures for limited purposes without the
consent of any Holders of Securities. The Indenture also contains provisions
permitting the Holders of a majority in principal amount of the Securities then
Outstanding, on behalf of the Holders of all Securities, 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 therefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.

As provided in the Indenture and subject to certain limitations therein set
forth, this Security or any portion of the principal amount hereof will be
deemed to have been paid for all purposes of the Indenture and to be no longer
Outstanding thereunder, and, at the election of the Company, the Company's
entire indebtedness in respect thereof will be satisfied and discharged, if
there has been irrevocably deposited with the Trustee or any Paying Agent (other
than the Company), in trust, money in an amount which will be sufficient and/or
Eligible Obligations, the principal of and interest on which when due, without
regard to any reinvestment thereof, will provide moneys which, together with
moneys so deposited, will be sufficient to pay when due the principal of and
interest on this Security when due.

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 Corporate
Trust Office of JPMorgan Chase Bank in Dallas, Texas, or such other office or
agency as may be designated by the Company from time to time, 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 of authorized denominations and of like tenor and aggregate
principal amount, will be issued to the designated transferee or transferees.

[Series J1 Certificate - to be used with Rule 144A and Reg S] [THIS SECURITY (OR
ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS
SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.

THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN
THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV), IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO ABOVE.]

[Series J1 Certificate - to be used with Reg S only] [THIS SECURITY (OR ITS
PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL
APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO
THEM IN REGULATION S UNDER THE

                                       A-4

<PAGE>

SECURITIES ACT.]

The Securities of this series are issuable only as registered Securities,
without coupons, and in denominations of $1,000 and integral multiples of $1,000
in excess 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 the same series and Tranche, of
any authorized denominations, as requested by the Holder surrendering the same,
and of like tenor upon surrender of the Security or Securities to be exchanged
at the office of JPMorgan Chase Bank in Dallas, Texas, or such other office or
agency as may be designated by the Company from time to time.

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 absolute 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 are not entitled to the benefit of any sinking fund.

As used herein, "Business Day" shall mean any day, other than Saturday or
Sunday, on which commercial banks and foreign exchange markets are open for
business, including dealings in deposits in U.S. dollars, in New York. All other
terms used in this Security which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.

As provided in the Indenture, no recourse shall be had for the payment of the
principal of or premium, if any, or interest on any Securities, or any part
thereof, or for any claim based thereon or otherwise in respect thereof, or of
the indebtedness represented thereby, or upon any obligation, covenant or
agreement under the Indenture, against, and no personal liability whatsoever
shall attach to, or be incurred by, any incorporator, member, manager,
stockholder, officer, director or employee, as such, past, present or future of
the Company or of any predecessor or successor corporation (either directly or
through the Company or a predecessor or successor corporation), whether by
virtue of any constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly agreed
and understood that the Indenture and all the Securities are solely corporate
obligations and that any such personal liability is hereby expressly waived and
released as a condition of, and as part of the consideration for, the execution
of the Indenture and the issuance of the Securities.

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

[The remainder of this page is intentionally left blank.]

                                       A-5

<PAGE>

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

[Seal]                                 CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

Attest: ___________________________    By: _____________________________________
Name:                                  Name:
Title:                                 Title:

                          CERTIFICATE OF AUTHENTICATION

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

Date of Authentication: March 18, 2003

                                       JPMORGAN CHASE BANK, as Trustee

                                       By: _____________________________________
                                       Name:
                                       Title:

                                       A-6

<PAGE>

                                                                      SCHEDULE A

                             SCHEDULE OF ADJUSTMENTS

     The initial aggregate principal amount of Securities evidenced by the
Certificate to which this Schedule is attached is $[ ]. The notations on the
following table evidence decreases and increases in the aggregate principal
amount of Securities evidenced by such Certificate.

<TABLE>
<CAPTION>

                                                                            Aggregate Principal
                                                                            Amount of Securities
                       Decrease in Aggregate      Increase in Aggregate     Remaining After Such      Notation by
       Date of          Principal Amount of        Principal Amount of          Decrease or             Security
      Adjustment            Securities                Securities                  Increase              Registrar
      ----------       ----------------------     ---------------------     ---------------------     ------------
<S>     <C>                <C>                           <C>                     <C>                        <C>

</TABLE>

                                       A-7

<PAGE>

                FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE

                    OR REGISTRATION OF TRANSFER OF SECURITIES

Re:  5.70% General Mortgage Bonds, Series J1, due 2013, of CenterPoint Energy
     Houston Electric, LLC (the "Company")

     This Certificate relates to $_______ principal amount of Series J1 Bonds
held in *______ book-entry or *______ definitive form by _____________________
(the "Transferor").

     The Transferor has requested the Trustee by written order to exchange or
register the transfer of a Series J1 Bond or Series J1 Bonds.

     In connection with such request and in respect of each such Series J1 Bond,
the Transferor does hereby certify that the Transferor is familiar with the
Indenture, dated as of October 10, 2002 (as amended or supplemented to date, the
"Indenture"), between the Company and JPMorgan Chase Bank (the "Trustee")
relating to the above-captioned Series J1 Bonds and that the transfer of this
Series J1 Bond does not require registration under the Securities Act (as
defined below) because:*

     [ ]  Such Series J1 Bond is being acquired for the Transferor's own account
without transfer.

     [ ]  Such Series J1 Bond is being transferred (i) to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act")), in accordance with Rule 144A under the
Securities Act or (ii) pursuant to an exemption from registration in accordance
with Rule 904 of Regulation S under the Securities Act (and in the case of
clause (ii), based upon an opinion of counsel if the Company or the Trustee so
requests, together with a certification in substantially the form of Exhibit C
to the Officer's Certificate establishing the form, terms, and provisions of the
Series J1 Bonds).

     [ ]  Such Series J1 Bond is being transferred (i) pursuant to an exemption
from registration in accordance with Rule 144 under the Securities Act (and
based upon an opinion of counsel if the Company or the Trustee so requests) or
(ii) pursuant to an effective registration statement under the Securities Act.

     [ ] Such Series J1 Bond is being transferred in reliance on and in
compliance with another exemption from the registration requirements of the
Securities Act (and based upon an opinion of counsel if the Company or the
Trustee so requests).

     You are entitled to rely upon this certificate and you are irrevocably
authorized to produce this certificate or a copy hereof to any interested party
in any administrative or legal proceeding or official inquiry with respect to
the matters covered hereby.

                                      ------------------------------------------
                                      Name of Transferor

                                      By:
                                         ---------------------------------------
                                      Name:
                                      Title:
                                      Address:

Date:
     ------------------------------

--------------------------
* Fill in blank or check appropriate box, as applicable.

                                       A-8

<PAGE>

                FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION

                     WITH TRANSFERS PURSUANT TO REGULATION S

                                                             -------------, ----

JPMorgan Chase Bank
600 Travis Street
Houston, Texas 77002
Attention: Global Trust Services

Ladies and Gentlemen:

     In connection with our proposed sale of certain 5.70% General Mortgage
Bonds, Series J1, due 2013 (the "Series J1 Bonds") of CenterPoint Energy Houston
Electric, LLC (the "Company"), we represent that:

                  (i) the offer or sale of the Series J1 Bonds was made in an
         "offshore transaction";

                  (ii) at the time the buy order was originated, the transferee
         was outside the United States or we and any person acting on our behalf
         reasonably believed that the transferee was outside the United States;

                  (iii) no directed selling efforts have been made by us in the
         United States in contravention of the requirements of Rule 903(a) or
         Rule 904(a) of Regulation S under the U.S. Securities Act of 1933, as
         applicable;

                  (iv) if this transfer of the Series J1 Bond is being made
         prior to the expiration of the Distribution Compliance Period, such
         interest that is being transferred is held immediately thereafter
         through The Euroclear System or Clearstream Banking, societe anonyme;
         and

                  (v) the transaction is not part of a plan or scheme to evade
         the registration requirements of the U.S. Securities Act of 1933.

     You and the Company are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S under the U.S. Securities Act of 1933.

                                     Very truly yours,

                                     Name of Transferor:

                                     By:
                                        ----------------------------------------
                                       Name:
                                       Title:
                                       Address:

                                       A-9

<PAGE>

     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
     Houston Electric, LLC, 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 HOUSTON ELECTRIC, LLC
            6.95% General Mortgage Bonds, Series [K1] [K2], due 2033

<TABLE>
<CAPTION>
<S>                                                           <C>

Original Interest Accrual Date: March 18, 2003             Redeemable:       Yes     [X]      No [  ]
Stated Maturity: March 15, 2033                            Redemption Date: At any time.
Interest Rate: 6.95%                                       Redemption Price: the greater of (i) 100% of the
Interest Payment Dates: March 15 and September 15          principal amount of the Bonds and (ii) the Make-
Regular Record Dates:   Fifteenth calendar day before      Whole Amount, as described herein, plus in each
respective Interest Payment Date                           case, accrued and unpaid interest to the
                                                           Redemption Date
</TABLE>

            This Security is not an Original Issue Discount Security
              within the meaning of the within-mentioned Indenture.

                             -----------------------

Initial Principal Amount                         Registered No. R.__
[$   ]*                                          CUSIP [15189X AB4] [U14040 AB2]

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a limited liability company duly
organized and existing under the laws of the State of Texas (herein called the
"Company," which term includes any successor corporation under the Indenture
referred to below), for value received, hereby promises to pay to

                                   ****[ ]****

, or registered assigns, the principal sum of [ ] DOLLARS* on the Stated
Maturity specified above, and to pay interest thereon from the Original Interest
Accrual Date specified above or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually in arrears on
the Interest Payment Dates specified above in each year, commencing on September
15, 2003, and at Maturity, at the Interest Rate per annum specified above, until
the principal hereof is paid or duly provided for. The interest so payable, and
paid or duly provided for, on any Interest Payment Date shall, as provided in
such Indenture, be paid to

------------------------------
* Reference is made to Schedule A attached hereto with respect to decreases and
  increases in the aggregate principal amount of securities evidenced by this
  Certificate.

                                       A-11

<PAGE>

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 specified
above (whether or not a Business Day) next preceding such Interest Payment Date.
Notwithstanding the foregoing, interest payable at Maturity shall be paid to the
Person to whom principal shall be paid. Except as otherwise provided in said
Indenture, any such interest not so paid or duly provided for shall forthwith
cease to be payable to the Holder on such Regular Record Date and may 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 of
which shall be given to Holders of Securities of this series not less than 15
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
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.

Payment of the principal of and premium, if any, on this Security and interest
hereon at Maturity shall be made upon presentation of this Security at the
office of the Corporate Trust Administration of JPMorgan Chase Bank, located at
2001 Bryan Street, 9th Floor, Dallas, Texas, 75201 or at such other office or
agency as may be designated for such purpose by the Company from time to time.
Payment of interest on this Security (other than interest at Maturity) shall be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register, except that if such Person shall
be a securities depositary, such payment may be made by such other means in lieu
of check, as shall be agreed upon by the Company, the Trustee and such Person.
Payment of the principal of and premium, if any, and interest on this Security,
as aforesaid, shall be made in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.

This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and issuable in one or more series
under and equally secured by a General Mortgage Indenture, dated as of October
10, 2002, as supplemented and amended (such Indenture as originally executed and
delivered and as supplemented or amended from time to time thereafter, together
with any constituent instruments establishing the terms of particular
Securities, being herein called the "Indenture"), between the Company and
JPMorgan Chase Bank, 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 description of
the property mortgaged, pledged and held in trust, the nature and extent of the
security and the respective rights, limitations of rights, duties and immunities
of the Company, the Trustee and the Holders of the Securities thereunder and of
the terms and conditions upon which the Securities are, and are to be,
authenticated and delivered and secured. The acceptance of this Security shall
be deemed to constitute the consent and agreement by the Holder hereof to all of
the terms and provisions of the Indenture. This Security is one of the series
designated above.

If any Interest Payment Date, any Redemption Date or the Stated Maturity shall
not be a Business Day (as hereinafter defined), payment of the amounts due on
this Security on such date may be made on the next succeeding Business Day; and,
if such payment is made or duly provided for on such Business Day, no interest
shall accrue on such amounts for the period from and after such Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be, to such Business
Day. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.

This Security is subject to redemption, at the option of the Company, at any
time or from time to time, in whole or in part, at a price equal to the greater
of (i) 100% of the principal amount of this Security (or the portion hereof to
be redeemed) or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest on this Security (or such portion to be
redeemed) (not including any portion of such payments of interest accrued to the
Redemption Date) discounted to the Redemption Date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the applicable
Treasury Rate plus 35 basis points (the "Make-Whole Amount"); plus, in each
case, accrued and unpaid interest on the principal amount being redeemed to the
Redemption Date.

The Make-Whole Amount will be calculated by Credit Suisse First Boston LLC,
Deutsche Bank Securities Inc. or Salomon Smith Barney Inc., as specified by the
Company or, if such firms are unwilling or unable to select the Comparable
Treasury Issue, by an independent investment banking institution of national
standing appointed by the Company (in any such case, an "Independent Investment
Banker"). The Trustee shall have no responsibility for the calculation of the
Make-Whole Amount and may conclusively presume the correctness of such
calculation.

                                       A-12

<PAGE>

For purposes of determining the Make-Whole Amount: "Treasury Rate" means, with
respect to any Redemption Date, the yield, under the heading which represents
the average for the immediately preceding week, appearing in the most recently
published statistical release designated "H.15 (519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded U.S. Treasury
securities adjusted to constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Comparable Treasury Issue (if
no maturity is within three months before or after the remaining life (as
defined below), yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue will be determined and the
Treasury Rate will be interpolated or extrapolated from such yields on a
straight line basis, rounding to the nearest month); or if such release (or any
successor release) is not published during the week preceding the calculation
date or does not contain such yields, the rate per annum equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue, calculated using
a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such Redemption
Date. The Treasury Rate will be calculated on the third Business Day preceding
the Redemption Date.

     "Comparable Treasury Issue" means the U.S. Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining
term ("remaining life") of this Security to be redeemed that would be utilized,
at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of this Security.

     "Comparable Treasury Price" means (1) the average of five Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the highest
and lowest Reference Treasury Dealer Quotations, or (2) if the Independent
Investment Banker obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such quotations.

     "Reference Treasury Dealer" means (1) Credit Suisse First Boston LLC,
Deutsche Bank Securities Inc. and Salomon Smith Barney Inc. and their respective
successors, provided, however, that if any of the foregoing shall cease to be a
primary U.S. government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company will substitute therefor another Primary Treasury Dealer
and (2) any other Primary Treasury Dealer selected by the Company after
consultation with the Independent Investment Banker.

     "Reference Treasury Dealer Quotations" means with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Independent Investment Banker, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Independent Investment Banker at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.

The Trustee will mail a notice of redemption to each Holder of Securities to be
redeemed by first-class mail at least 30 and not more than 60 days prior to the
date fixed for redemption. Unless the Company defaults on payment of the
redemption price, interest will cease to accrue on the Securities or portions
thereof called for redemption. If fewer than all of the Securities of this
series are to be redeemed, the Trustee will select, not more than 60 days prior
to the Redemption Date, the particular Securities of this series or portions
thereof for redemption from the outstanding Securities of this series not
previously called by such method as the Trustee deems fair and appropriate The
Trustee may select for redemption Securities of this series and portions of
Securities of this series in amounts of $1,000 or whole multiples of $1,000.

The Indenture permits, with certain exceptions as therein provided, the Trustee
to enter into one or more supplemental indentures for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, the Indenture with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series then Outstanding
under the Indenture, considered as one class; provided, however, that if there
shall be Securities of more than one series Outstanding under the Indenture and
if a proposed supplemental indenture shall directly affect the rights of the
Holders of Securities of one or more, but less than all, of such series, then
the consent only of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of all series so directly affected, considered as one
class, shall be required; and provided, further, that if the Securities of any
series shall have been issued in more than one Tranche and if the proposed
supplemental

                                       A-13

<PAGE>

indenture shall directly affect the rights of the Holders of Securities of one
or more, but less than all, of such Tranches, then the consent only of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of all Tranches so directly affected, considered as one class, shall
be required; and provided, further, that the Indenture permits the Trustee to
enter into one or more supplemental indentures for limited purposes without the
consent of any Holders of Securities. The Indenture also contains provisions
permitting the Holders of a majority in principal amount of the Securities then
Outstanding, on behalf of the Holders of all Securities, 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 therefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.

As provided in the Indenture and subject to certain limitations therein set
forth, this Security or any portion of the principal amount hereof will be
deemed to have been paid for all purposes of the Indenture and to be no longer
Outstanding thereunder, and, at the election of the Company, the Company's
entire indebtedness in respect thereof will be satisfied and discharged, if
there has been irrevocably deposited with the Trustee or any Paying Agent (other
than the Company), in trust, money in an amount which will be sufficient and/or
Eligible Obligations, the principal of and interest on which when due, without
regard to any reinvestment thereof, will provide moneys which, together with
moneys so deposited, will be sufficient to pay when due the principal of and
interest on this Security when due.

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 Corporate
Trust Office of JPMorgan Chase Bank in Dallas, Texas, or such other office or
agency as may be designated by the Company from time to time, 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 of authorized denominations and of like tenor and aggregate
principal amount, will be issued to the designated transferee or transferees.

Series K1 Certificate - To be used with Rule 144A and Reg S] [THIS SECURITY (OR
ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS
SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.

THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN
THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV), IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO ABOVE.]

[Series K1 Certificate - To be used with Reg S only] [THIS SECURITY (OR ITS
PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL
APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO
THEM IN REGULATION S UNDER THE

                                       A-14

<PAGE>

SECURITIES ACT.]

The Securities of this series are issuable only as registered Securities,
without coupons, and in denominations of $1,000 and integral multiples of $1,000
in excess 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 the same series and Tranche, of
any authorized denominations, as requested by the Holder surrendering the same,
and of like tenor upon surrender of the Security or Securities to be exchanged
at the office of JPMorgan Chase Bank in Dallas, Texas, or such other office or
agency as may be designated by the Company from time to time.

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 absolute 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 are not entitled to the benefit of any sinking fund.

As used herein, "Business Day" shall mean any day, other than Saturday or
Sunday, on which commercial banks and foreign exchange markets are open for
business, including dealings in deposits in U.S. dollars, in New York. All other
terms used in this Security which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.

As provided in the Indenture, no recourse shall be had for the payment of the
principal of or premium, if any, or interest on any Securities, or any part
thereof, or for any claim based thereon or otherwise in respect thereof, or of
the indebtedness represented thereby, or upon any obligation, covenant or
agreement under the Indenture, against, and no personal liability whatsoever
shall attach to, or be incurred by, any incorporator, member, manager,
stockholder, officer, director or employee, as such, past, present or future of
the Company or of any predecessor or successor corporation (either directly or
through the Company or a predecessor or successor corporation), whether by
virtue of any constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly agreed
and understood that the Indenture and all the Securities are solely corporate
obligations and that any such personal liability is hereby expressly waived and
released as a condition of, and as part of the consideration for, the execution
of the Indenture and the issuance of the Securities.

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

[The remainder of this page is intentionally left blank.]

                                       A-15

<PAGE>

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

[Seal]                                  CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

Attest: _____________________________   By: ____________________________________
Name:                                   Name:
Title:                                  Title:

                          CERTIFICATE OF AUTHENTICATION

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

Date of Authentication: March 18, 2003

                                        JPMORGAN CHASE BANK, as Trustee

                                        By: ____________________________________
                                        Name:
                                        Title:

                                       A-16

<PAGE>

                                                                      SCHEDULE A

                             SCHEDULE OF ADJUSTMENTS

         The initial aggregate principal amount of Securities evidenced by the
Certificate to which this Schedule is attached is $[ ]. The notations on the
following table evidence decreases and increases in the aggregate principal
amount of Securities evidenced by such Certificate.

<TABLE>
<CAPTION>

                                                                            Aggregate Principal
                                                                            Amount of Securities
                       Decrease in Aggregate      Increase in Aggregate     Remaining After Such       Notation by
      Date of           Principal Amount of        Principal Amount of          Decrease or             Security
    Adjustment              Securities                Securities                  Increase              Registrar
    ----------         ---------------------      ---------------------     --------------------       ------------
<S>                           <C>                          <C>                     <C>                     <C>

</TABLE>

                                       A-17

<PAGE>

                FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE
                    OR REGISTRATION OF TRANSFER OF SECURITIES

Re:   6.95% General Mortgage Bonds Series K1, due 2033, of CenterPoint Energy
      Houston Electric, LLC (the "Company")

     This Certificate relates to $_______ principal amount of Series K1 Bonds
held in *______ book-entry or *______ definitive form by _____________________
(the "Transferor").

     The Transferor has requested the Trustee by written order to exchange or
register the transfer of a Series K1 Bond or Series K1 Bonds.

     In connection with such request and in respect of each such Series K1 Bond,
the Transferor does hereby certify that the Transferor is familiar with the
Indenture, dated as of October 10, 2002 (as amended or supplemented to date, the
"Indenture"), between the Company and JPMorgan Chase Bank (the "Trustee")
relating to the above-captioned Series K1 Bonds and that the transfer of this
Series K1 Bond does not require registration under the Securities Act (as
defined below) because:*

     [ ] Such Series K1 Bond is being acquired for the Transferor's own account
without transfer.

     [ ] Such Series K1 Bond is being transferred (i) to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act")), in accordance with Rule 144A under the
Securities Act or (ii) pursuant to an exemption from registration in accordance
with Rule 904 of Regulation S under the Securities Act (and in the case of
clause (ii), based upon an opinion of counsel if the Company or the Trustee so
requests, together with a certification in substantially the form of Exhibit C
to the Officer's Certificate establishing the form, terms, and provisions of the
Series K1 Bonds).

     [ ] Such Series K1 Bond is being transferred (i) pursuant to an exemption
from registration in accordance with Rule 144 under the Securities Act (and
based upon an opinion of counsel if the Company or the Trustee so requests) or
(ii) pursuant to an effective registration statement under the Securities Act.

     [ ] Such Series K1 Bond is being transferred in reliance on and in
compliance with another exemption from the registration requirements of the
Securities Act (and based upon an opinion of counsel if the Company or the
Trustee so requests).

     You are entitled to rely upon this certificate and you are irrevocably
authorized to produce this certificate or a copy hereof to any interested party
in any administrative or legal proceeding or official inquiry with respect to
the matters covered hereby.

                                        Name of Transferor

                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:
                                        Address:

Date:
     ---------------------------------

-----------------------------------
* Fill in blank or check appropriate box, as applicable.

                                       A-18

<PAGE>

                FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
                     WITH TRANSFERS PURSUANT TO REGULATION S

                                                             -------------, ----

JPMorgan Chase Bank
600 Travis Street
Houston, Texas 77002
Attention: Global Trust Services

Ladies and Gentlemen:

     In connection with our proposed sale of certain 6.95% General Mortgage
Bonds due 2033, Series K1 (the "Series K1 Bonds") of CenterPoint Energy Houston
Electric, LLC (the "Company"), we represent that:

                  (i) the offer or sale of the Series K1 Bonds was made in an
         "offshore transaction";

                  (ii) at the time the buy order was originated, the transferee
         was outside the United States or we and any person acting on our behalf
         reasonably believed that the transferee was outside the United States;

                  (iii) no directed selling efforts have been made by us in the
         United States in contravention of the requirements of Rule 903(a) or
         Rule 904(a) of Regulation S under the U.S. Securities Act of 1933, as
         applicable;

                  (iv) if this transfer of the Series K1 Bond is being made
         prior to the expiration of the Distribution Compliance Period, such
         interest that is being transferred is held immediately thereafter
         through The Euroclear System or Clearstream Banking, societe anonyme;
         and

                  (v) the transaction is not part of a plan or scheme to evade
         the registration requirements of the U.S. Securities Act of 1933.

     You and the Company are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S under the U.S. Securities Act of 1933.

                                        Very truly yours,

                                        Name of Transferor:

                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:
                                        Address:

                                       A-19

<PAGE>

                                    EXHIBIT B

                FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE

                    OR REGISTRATION OF TRANSFER OF SECURITIES

Re: *_____% General Mortgage Bonds due *_______, Series *__, of CenterPoint
Energy Houston Electric, LLC (the "Company")

     This Certificate relates to $_____ principal amount of Series *__ Bonds
held in *______ book-entry or *______ definitive form by _____________________
(the "Transferor").

     The Transferor has requested the Trustee by written order to exchange or
register the transfer of a Series *__ Bond or Series *__ Bonds.

     In connection with such request and in respect of each such Series *__
Bond, the Transferor does hereby certify that the Transferor is familiar with
the Indenture, dated as of October 10, 2002 (as amended or supplemented to date,
the "Indenture"), between the Company and JPMorgan Chase Bank (the "Trustee")
relating to the above-captioned Series *__ Bonds and that the transfer of this
Series *__ Bond does not require registration under the Securities Act (as
defined below) because:*

     [ ] Such Series *__ Bond is being acquired for the Transferor's own account
without transfer.

     [ ] Such Series *__ Bond is being transferred (i) to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act")), in accordance with Rule 144A under the
Securities Act or (ii) pursuant to an exemption from registration in accordance
with Rule 904 of Regulation S under the Securities Act (and in the case of
clause (ii), based upon an opinion of counsel if the Company or the Trustee so
requests, together with a certification in substantially the form of Exhibit C
to this Officer's Certificate).

     [ ] Such Series *__ Bond is being transferred (i) pursuant to an exemption
from registration in accordance with Rule 144 under the Securities Act (and
based upon an opinion of counsel if the Company or the Trustee so requests) or
(ii) pursuant to an effective registration statement under the Securities Act.

     [ ] Such Series *__ Bond is being transferred in reliance on and in
compliance with another exemption from the registration requirements of the
Securities Act (and based upon an opinion of counsel if the Company or the
Trustee so requests).

                                      B-1

<PAGE>

     You are entitled to rely upon this certificate and you are irrevocably
authorized to produce this certificate or a copy hereof to any interested party
in any administrative or legal proceeding or official inquiry with respect to
the matters covered hereby.

                                     [INSERT NAME OF TRANSFEROR]

                                      By:
                                         ---------------------------------------
                                         Name:
                                         Title:
                                         Address:

Date:
     ----------------------

                                      B-2

<PAGE>

                                    EXHIBIT C

                FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
                     WITH TRANSFERS PURSUANT TO REGULATION S

                                                             -------------, ----

JPMorgan Chase Bank
600 Travis Street
Suite 1150
Houston, TX 77002
Attention: Global Trust Services

Ladies and Gentlemen:

     In connection with our proposed sale of certain *___% General Mortgage
Bonds due *_______, Series *__ (the "Series *__ Bonds") of CenterPoint Energy
Houston Electric, LLC (the "Company"), we represent that:

     (i) the offer or sale of the Series *__ Bonds was made in an "offshore
transaction";

     (ii) at the time the buy order was originated, the transferee was outside
the United States or we and any person acting on our behalf reasonably believed
that the transferee was outside the United States;

     (iii) no directed selling efforts have been made by us in the United States
in contravention of the requirements of Rule 903(a) or Rule 904(a) of Regulation
S under the U.S. Securities Act of 1933, as applicable;

     (iv) if this transfer of the Series *__ Bond is being made prior to the
expiration of the Distribution Compliance Period, such interest that is being
transferred is held immediately thereafter through The Euroclear System or
Clearstream Banking, societe anonyme; and

     (v) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.

                                      C-1

<PAGE>

     You and the Company are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S under the U.S. Securities Act of 1933.

                                  Very truly yours,

                                  Name of Transferor:

                                  By:
                                     -------------------------------------------
                                      Name:
                                      Title:
                                      Address:

                                      C-2<PAGE>

                                                                     Exhibit 4.1

                       CENTERPOINT ENERGY RESOURCES CORP.

                     (formerly known as NorAm Energy Corp.)

                                       To

                               JPMORGAN CHASE BANK

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

                                     Trustee

                               __________________

                          SUPPLEMENTAL INDENTURE NO. 5

                           Dated as of March 25, 2003

                                _________________

                                  $650,000,000

                          7.875% Senior Notes due 2013

                              Series A and Series B

<PAGE>

                       CENTERPOINT ENERGY RESOURCES CORP.

                     (formerly known as NorAm Energy Corp.)

                          SUPPLEMENTAL INDENTURE NO. 5

                                  $650,000,000

                          7.875% Senior Notes due 2013

                              Series A and Series B

     SUPPLEMENTAL INDENTURE No. 5, dated as of March 25, 2003, between
CENTERPOINT ENERGY RESOURCES CORP., a Delaware corporation formerly known as
NorAm Energy Corp. (the "Company"), and JPMORGAN CHASE BANK (successor to 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 two new series of Securities to be designated as the
"7.875% Senior Notes due 2013, Series A" (the "Series A Notes") and the "7.875%
Senior Notes due 2013, Series B" (the "Series B Notes" and, together with the
Series A Notes, 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. 5.

     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.

                                        1

<PAGE>

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

                                   ARTICLE ONE

                  Relation to Indenture; Additional Definitions

     Section 101. Relation to Indenture. This Supplemental Indenture No. 5
constitutes an integral part of the Original Indenture.

     Section 102. Additional Definitions. For all purposes of this Supplemental
Indenture No. 5:

          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;

          "Additional Interest" has the meaning set forth in Section 204(e)
     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 arising from accelerated
     amortization or otherwise; (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: 600 Travis Street, Suite 1150, Houston, Texas 77002,
     Attention: Institutional Trust Services; telephone: (713) 216-6815;
     telecopy: (713) 577-5200.

                                        2

<PAGE>

          "Distribution Compliance Period" means the period which expires
     immediately after the 40/th/ day following the later of: (a) the
     commencement of the offering of the Notes to Persons other than
     "distributors" (as defined in Regulation S) in reliance upon Regulation S;
     and (b) the date of closing of the offering of the Notes;

          "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;

          "Exchange Offer" means the offer by the Company pursuant to the
     Registration Rights Agreement to the Holders of all outstanding Transfer
     Restricted Securities to exchange all such outstanding Transfer Restricted
     Securities held by such Holders for Series B Notes, in an aggregate
     principal amount equal to the aggregate principal amount of the Transfer
     Restricted Securities tendered in such exchange offer by such Holders;

          "Exchange Offer Registration Statement" has the meaning assigned to
     such term in the Registration Rights Agreement;

          "Global Notes" has the meaning set forth in Section 208(c) hereof;

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

          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 any such corporation, but no other contingent obligation of
     any such corporation in respect of indebtedness incurred by other Persons
     shall for any purpose be deemed to be indebtedness of such corporation;

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

          "Initial Purchasers" means Salomon Smith Barney Inc., Banc One Capital
     Markets, Inc. and Wachovia Securities, Inc., as initial purchasers in the
     offering of the

                                        3

<PAGE>

     Series A Notes pursuant to the Offering Memorandum dated March 18, 2003
     relating thereto;

          "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;

          "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 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.

          "Non-U.S. Person" has the meaning set forth in Section 208(b);

          "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.

                                        4

<PAGE>

          "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 Net Tangible Assets.

          "Qualified Institutional Buyer" has the meaning assigned to such term
     in Rule 144A under the Securities Act;

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

          "Registrable Securities" has the meaning assigned to such term in the
     Registration Rights Agreement;

          "Registration Default" has the meaning assigned to such term in the
     Registration Rights Agreement;

          "Registration Rights Agreement" means that certain Registration Rights
     Agreement, dated as of March 25, 2003, by and among the Company and the
     Initial Purchasers;

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

          "Regulation S" means Regulation S under the Securities Act;

          "Regulation S Global Notes" has the meaning set forth in Section
     208(b) hereof;

                                        5

<PAGE>

          "Regulation S Permanent Global Note" has the meaning set forth in
     Section 208(b) hereof;

          "Regulation S Temporary Global Note" has the meaning set forth in
     Section 208(b) hereof;

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

          "Rule 144A Global Note" has the meaning set forth in Section 208(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;

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

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

          "Shelf Registration Statement" has the meaning assigned to such term
     in the Registration Rights Agreement;

          "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.

          "Transfer Restricted Securities" means the Registrable Securities
     under the Registration Rights Agreement.

                                        6

<PAGE>

          "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. 5; and

          The terms "herein," "hereof," "hereunder" and other words of similar
     import refer to this Supplemental Indenture No. 5.

                                   ARTICLE TWO

                            The Series of Securities

     Section 201. Title of the Securities. The Series A Notes shall be
designated as the "7.875% Notes due 2013, Series A," and the Series B Notes
shall be designated as the "7.875% Notes due 2013, Series B." The Series A Notes
and the Series B Notes shall be treated for all purposes under the Indenture as
a single class or series of Securities.

     Section 202. Limitation on Aggregate Principal Amount. The Trustee shall
authenticate and deliver (i) Series A Notes for original issue on the Issue Date
in the aggregate principal amount of $650,000,000 and (ii) Series B Notes from
time to time thereafter for issue only in exchange for a like principal amount
of Series A Notes, in each case 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 $650,000,000;
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
April 1, 2013 (the "Maturity Date").

     Section 204. Interest and Interest Rates.

     (a)  The Notes shall bear interest at the rate of 7.875% per annum, from
and including March 25, 2003 (the "Issue Date") to, but excluding, the Maturity
Date. Such interest shall be payable semiannually in arrears, on April 1 and
October 1, of each year (each such date, an "Interest Payment Date"), commencing
October 1, 2003.

     (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 March 15 and September 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

                                        7

<PAGE>

registered at the close of business on the Special Record Date for the payment
of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of the Notes not less than 10 days prior to such Special Record
Date, or (ii) be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange or automated quotation system
on which the Notes may be listed or traded, and upon such notice as may be
required by such exchange or automated quotation system, all as more fully
provided in the Indenture.

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

     (d)  Any principal and premium, if any, and any installment of interest,
which is overdue shall bear interest at the rate of 7.875% 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.

     (e)  The interest rate borne by the Registrable Securities will be
increased by .25% per annum upon the occurrence of a Registration Default, which
rate will increase by an additional .25% per annum if such Registration Default
has not been cured within 90 days after the occurrence thereof and will continue
until all Registration Defaults have been cured ("Additional Interest");
provided that the aggregate amount of any such increase in the interest rate on
the Registrable Securities shall in no event exceed .50% per annum; provided,
further, that if the Exchange Offer Registration Statement is not declared
effective on or prior to the 270th calendar day following the Issue Date and the
Company shall request Holders of Registrable Securities to provide the
information called for by the Registration Rights Agreement for inclusion in the
Shelf Registration Statement, the Registrable Securities owned by Holders who do
not deliver such information to the Company or who do not provide comments to
the Company on the Shelf Registration Statement when required pursuant to the
Registration Rights Agreement shall not be entitled to any such Additional
Interest for any day after the 315th calendar day following the Issue Date. All
accrued Additional Interest shall be paid to Holders of Registrable Securities
in the same manner and at the same time as regular payments of interest on the
Registrable Securities. Following the cure of all Registration Defaults, the
accrual of Additional Interest shall cease and the interest rate on the
Registrable Securities will revert to 7.875% per annum.

     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

                                        8

<PAGE>

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 100% of their principal amount plus accrued interest, if any, from
March 25, 2003.

     Section 208. Global Notes.

     (a)  Notes offered and sold to Qualified Institutional Buyers pursuant to
Rule 144A shall be issuable in whole or in part in the form of one or more
permanent Global Securities in definitive, fully registered, book-entry form,
without interest coupons (collectively, the "Rule 144A Global Note"). The Rule
144A Global Note shall be deposited on the Issue Date with, or on behalf of, the
Depositary. Interests in the Rule 144A Global Note shall be available for
purchase only by Qualified Institutional Buyers.

     (b)  Notes offered and sold in offshore transactions to persons other than
"U.S. persons," as defined in Regulation S under the Securities Act (each, a
"Non-U.S. Person") in reliance on Regulation S under the Securities Act shall
initially be issuable in whole or in part in the form of one or more temporary
Global Securities in definitive, fully registered, book-entry form, without
interest coupons (collectively, the "Regulation S Temporary Global Note").
Beneficial interests in the Regulation S Temporary Global Note shall be
exchanged for beneficial interests in a corresponding Global Security (the
"Regulation S Permanent Global Note" and, together with the Regulation S
Temporary Global Note, the "Regulation S Global Notes") within a reasonable
period after the expiration of the Distribution Compliance Period upon
certification that the beneficial interests in the Regulation S Temporary Global
Note are owned by either Non-U.S. Persons or U.S. Persons who purchased such
interests pursuant to an exemption from, or in transactions not subject to, the
registration requirements of the Securities Act.

     (c)  Each of the Rule 144A Global Note and the Regulation S Global Notes
(collectively, the "Global Notes") shall represent such of the Notes as shall be
specified therein and shall each provide that it shall represent the aggregate
principal amount of Notes from time to time endorsed thereon and that the
aggregate principal amount of Notes represented thereby may from time to time be
reduced or increased, as appropriate, to reflect exchanges or redemptions. Any
endorsement of a Global Note to reflect the amount, or any increase or decrease
in the aggregate principal amount, of Notes represented thereby shall be
reflected by the Trustee on Schedule A attached to the Note and made by the
Trustee in accordance with written instructions or such other written form of
instructions as is customary for the Depositary, from the Depositary or its
nominee on behalf of any Person having a beneficial interest in the Global Note.

     (d)  The Depositary Trust Company shall initially serve as Depositary with
respect to the Global Notes. Such Global Notes shall bear the legends set forth
in the form of Security attached as Exhibit A hereto.

                                        9

<PAGE>

     Section 209. Form of Securities. The Global 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 hereof, and (2) the occurrence of any event
          specified in Sections 501(4) (with respect to Article Eight and to any
          such covenants provided pursuant to Section 301(20), 901(2) or 901(7))
          and 501(7) shall be deemed not to be or result in an Event of Default,
          in each case with respect to such Securities as provided in this
          Section 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.

                                       10

<PAGE>

     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:

          (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

                                       11

<PAGE>

     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;

          (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

                                       12

<PAGE>

     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 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 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

                                       16

<PAGE>

issued, assumed or guaranteed at such time) would otherwise be subject to the
foregoing restrictions (not including indebtedness permitted to be secured under
paragraphs (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) of this Section 303 and other than Sale and
Leaseback Transactions as to which application of amounts have been made in
accordance with paragraph (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) 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.

                                       14

<PAGE>

                                  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, including Additional Interest, 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 at the Maturity Date (or portion
thereof) being redeemed; 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 50 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
Business 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 Salomon Smith Barney Inc., or, if such firm is unwilling or unable to make
such calculation, by an independent investment banking institution of national
standing appointed by the Company (in any such case, an "Independent Investment
Banker").

     Section 402. Make-Whole Premium.

     (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,
calculated to the nearest 1/12th of a year (the "Remaining Term"). The
Comparable Treasury Yield shall be determined as of the third Business Day
immediately preceding the applicable Redemption Date.

     (b)  The weekly average yields of United States Treasury Securities shall
be determined by reference to the most recent statistical release published by
the Federal Reserve

                                       15

<PAGE>

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

                            Restrictions on Transfer

     Section 501. Transfer and Exchange.

     (a)  Transfer and Exchange of Notes in Definitive Form. In addition to the
requirements set forth in Section 305 of the Original Indenture, Notes in
definitive form that are Transfer Restricted Securities presented or surrendered
for registration of transfer or exchange pursuant to Section 305 of the Original
Indenture shall be accompanied by the following additional information and
documents, as applicable, upon which the Security Registrar may conclusively
rely:

          (i)  if such Transfer Restricted Securities are being delivered to the
     Security Registrar by a Holder for registration in the name of such Holder,
     without transfer, a certification from such Holder to that effect (in
     substantially the form of Exhibit B hereto); or

                                       16

<PAGE>

          (ii)  if such Transfer Restricted Securities are being transferred (1)
     to a Qualified Institutional Buyer in accordance with Rule 144A under the
     Securities Act or (2) pursuant to an exemption from registration in
     accordance with Rule 144 under the Securities Act (and based upon an
     opinion of counsel if the Company or the Trustee so requests) or (3)
     pursuant to an effective registration statement under the Securities Act, a
     certification to that effect from such Holder (in substantially the form of
     Exhibit B hereto); or

          (iii) if such Transfer Restricted Securities are being transferred to
     a Non-U.S. Person pursuant to an exemption from registration in accordance
     with Rule 904 of Regulation S under the Securities Act, certifications to
     that effect from such transferor (in substantially the form of Exhibits B
     and C hereto) and an opinion of counsel to that effect if the Company or
     the Trustee so requests; or

          (iv)  if such Transfer Restricted Securities are being transferred in
     reliance on and in compliance with another exemption from the registration
     requirements of the Securities Act, a certification to that effect from
     such Holder (in substantially the form of Exhibit B hereto) and an opinion
     of counsel to that effect if the Company or the Trustee so requests.

     (b)  Transfer and Exchange of the Notes.

          (i)   The transfer and exchange of Global Notes or beneficial
     interests therein shall be effected through the Depositary, in accordance
     with Section 305 of the Original Indenture and Article V hereof (including
     the restrictions on transfer set forth therein and herein) and the rules
     and procedures of the Depositary therefor, which shall include restrictions
     on transfer comparable to those set forth therein and herein to the extent
     required by the Securities Act.

          (ii)  The transfer and exchange of Global Notes or beneficial
     interests therein for certificated notes (or vice versa) shall be effected
     through the Trustee and the Depositary, as the case may be, in accordance
     with Section 305 of the Original Indenture and Article Five hereof
     (including the restrictions on transfer set forth therein and herein) and
     the rules and procedures of the Depositary therefor, which shall include
     restrictions on transfer comparable to those set forth therein and herein
     to the extent required by the Securities Act.

     Section 502. Legends.

     (a)  Except as permitted by Sections 502(b) and (c) hereof, each
certificate evidencing the Global Notes or certificated notes in definitive form
(and all Notes issued in exchange therefor or substitution thereof) shall bear a
legend in substantially the following form:

     THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
     EXEMPT FROM REGISTRATION UNDER THE UNITED

                                       17

<PAGE>

     STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS
     SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
     OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER
     OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE
     RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
     ACT PROVIDED BY RULE 144A THEREUNDER.

     THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
     THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
     ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
     BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
     THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
     (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
     WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
     REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
     AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
     THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH
     ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B)
     THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
     PURCHASER OF THE SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN
     (A) ABOVE.

Except as permitted by Sections 502(b) and (c) hereof, each certificate
evidencing the Global Notes or certificated notes offered and sold in reliance
on Regulation S shall bear a legend in substantially the following form:

     THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
     ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT
     OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE TRANSFERRED IN
     THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON
     EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
     REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES
     LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S
     UNDER THE SECURITIES ACT.

Each certificate evidencing the Global Notes also shall bear the legend
specified for Global Notes in the form of Note attached hereto as Exhibit A.

     (b)  Upon any sale or transfer of a Transfer Restricted Security (including
any Transfer Restricted Security represented by a Global Note) pursuant to Rule
144 under the

                                       18

<PAGE>

     Securities Act or an effective registration statement under the Securities
Act, which shall be certified to the Trustee and Security Registrar upon which
each may conclusively rely:

          (i)  in the case of any Transfer Restricted Security represented by a
     certificated note, the Security Registrar shall permit the Holder thereof
     to exchange such Transfer Restricted Security for a certificated note that
     does not bear the legend set forth in Section 502(a) hereof and rescind any
     restriction on the transfer of such Transfer Restricted Security; and

          (ii) in the case of any Transfer Restricted Security represented by a
     Global Note, such Transfer Restricted Security shall not be required to
     bear the legend set forth in Section 502(a) hereof if all other interests
     in such Global Note have been or are concurrently being sold or transferred
     pursuant to Rule 144 under the Securities Act or pursuant to an effective
     registration statement under the Securities Act.

     (c)  Notwithstanding the foregoing, upon consummation of the Exchange
Offer, the Company shall issue and, upon receipt of a Company Order in
accordance with Section 303 of the Original Indenture, the Trustee shall
authenticate Series B Notes in exchange for Series A Notes accepted for exchange
in the Exchange Offer, which Series B Notes shall not bear the legend set forth
in Section 502(a) hereof and shall not provide for Additional Interest, and the
Security Registrar shall rescind any restriction on the transfer of such Notes,
in each case unless the Holder of such Series A Notes (A) is a broker-dealer
tendering Series A Notes acquired directly from the Company or an "affiliate"
(as defined in Rule 144 under the Securities Act) of the Company for its own
account, (B) is a Person who has an arrangement or understanding with any Person
to participate in the "distribution" (within the meaning of the Securities Act)
of the Series B Notes, (C) is a Person who is an "affiliate" (as defined in Rule
144 under the Securities Act) of the Company or (D) is a Person who will not be
acquiring the Series B Notes in the ordinary course of such Holder's business.
The Company shall identify to the Trustee such Holders of the Notes in a written
certification signed by an Officer of the Company and, absent certification from
the Company to such effect, the Trustee shall assume that there are no such
Holders.

     Section 503. Registration Rights Agreement.

     The Company shall perform its obligations under the Registration Rights
Agreement and shall comply in all material respects with the terms and
conditions contained therein including, without limitation, the payment of
Additional Interest.

                                   ARTICLE SIX

                                    REMEDIES

     SECTION 601. Additional Events 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

                                       19

<PAGE>

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

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

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

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

                                  ARTICLE SEVEN

                            Miscellaneous Provisions

     Section 7.01. The Indenture, as supplemented and amended by this
Supplemental Indenture No. 5, is in all respects hereby adopted, ratified and
confirmed.

                                       20

<PAGE>

     Section 7.02. This Supplemental Indenture No. 5 may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.

     Section 7.03. THIS SUPPLEMENTAL INDENTURE NO. 5 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 7.04. If any provision in this Supplemental Indenture No. 5 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 7.05. In case any provision in this Supplemental Indenture No. 5 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.

                                       21

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 5 to be duly executed, as of the day and year first written above.

                                       CENTERPOINT ENERGY RESOURCES CORP.

                                       By: /s/ Marc Kilbride
                                          ---------------------------------
                                       Name: Marc Kilbride
                                       Title: Treasurer

Attest:

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

(SEAL)

                                        JPMORGAN CHASE BANK, as Trustee

                                        By: /s/ Carol Logan
                                           ---------------------------------
                                        Name: Carol Logan
                                        Title: Vice President and Trust Officer

(SEAL)

                                       22

<PAGE>

                                    Exhibit A

                           [FORM OF FACE OF SECURITY]

                                                         [Rule 144A Global Note]
                                                      [Regulation S Global Note]
                                                             [Certificated Note]

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

                   7.875% Senior Notes due 2013, Series [A/B]

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 April 1, 2013, and to

------------------
     * Reference is made to Schedule A attached hereto with respect to decreases
and increases in the aggregate principal amount of Securities evidenced by this
Certificate.

                                       A-1

<PAGE>

pay interest thereon from March 25, 2003 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
on April 1 and October 1 in each year, commencing October 1, 2003, at the rate
of 7.875% 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 7.875% per annum
(to the extent permitted by applicable law), from the dates such amounts are due
until they are paid or made available for payment, and such interest shall be
payable on demand. The amount of interest payable for any period shall be
computed on the basis of twelve 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 March 15 or September 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 may 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.

THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A

                                       A-2

<PAGE>

TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.

THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN
THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.

[INSERT REGULATION S LEGEND, IF A REGULATION S GLOBAL NOTE] [THIS SECURITY (OR
ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL
APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO
THEM IN REGULATION S UNDER THE SECURITIES ACT.]

                  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-3

<PAGE>

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

Dated:  _______________                      CENTERPOINT ENERGY RESOURCES CORP.

                                             By:  ____________________________
                                             Name:
(SEAL)                                       Title:

Attest:

_______________________
Name:
Title:

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

                                             JPMORGAN CHASE BANK,
                                             As Trustee

Date of Authentication:________________

                                             By:_________________________
                                                      Authorized Signatory

                                       A-4

<PAGE>

                          [FORM OF REVERSE OF SECURITY]

                  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 JPMorgan Chase Bank (successor to 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 $650,000,000; 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, including Additional Interest, 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 Securities 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 at the Maturity Date (or portion thereof) being
redeemed; over (ii) the principal amount of the Securities 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 50 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 applicable Redemption Date.

                  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

                                       A-5

<PAGE>

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.

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

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

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

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

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

                  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

                                       A-6

<PAGE>

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.

                  By its acceptance of this Security bearing a legend
restricting transfer, each Holder of this Security acknowledges the restrictions
on transfer of this Security set forth in the Indenture and such legend and
agrees that it will transfer this Security only as provided in the

                                       A-7

<PAGE>

Indenture. In addition to the rights provided to Holders of this Security under
the Indenture, Holders shall have all the rights set forth in that certain
Registration Rights Agreement, dated as of March 25, 2003, among the Company and
the Initial Purchasers, including without limitation the right to receive
Additional Interest as described in Section 2.5 thereof.

                  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-8

<PAGE>

                                                                      SCHEDULE A

                             SCHEDULE OF ADJUSTMENTS

                  The initial aggregate principal amount of Securities evidenced
by the Certificate to which this Schedule is attached is _______________. The
notations on the following table evidence decreases and increases in the
aggregate principal amount of Securities evidenced by such Certificate.

<TABLE>
<CAPTION>
                                                                       Aggregate Principal
                 Decrease in Aggregate     Increase in Aggregate       Amount of Securities       Notation by
 Date of          Principal Amount of       Principal Amount of        Remaining After Such         Security
Adjustment             Securities                Securities            Decrease or Increase        Registrar
----------             ----------                ----------            --------------------        ---------
<S>              <C>                       <C>                         <C>                        <C>
</TABLE>

                                       A-9

<PAGE>

                                    Exhibit B

                FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE
                    OR REGISTRATION OF TRANSFER OF SECURITIES

Re:    7.875% Senior Notes due 2013, Series A, of CenterPoint Energy Resources
       Corp. (the "Company")

             This Certificate relates to $_____ principal amount of Notes held
in **______ book-entry or *______ definitive form by _____________________ (the
"Transferor").

             The Transferor has requested the Trustee by written order to
exchange or register the transfer of a Note or Notes.

             In connection with such request and in respect of each such Note,
the Transferor does hereby certify that the Transferor is familiar with the
Indenture, dated as of February 1, 1998 (as amended or supplemented to date, the
"Indenture"), between the Company and JPMorgan Chase Bank, (the "Trustee")
relating to the above-captioned Notes and that the transfer of this Note does
not require registration under the Securities Act (as defined below) because:*

       [_]   Such Note is being acquired for the Transferor's own account
without transfer.

       [_]   Such Note is being transferred (i) to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act")), in accordance with Rule 144A under the Securities Act
or (ii) pursuant to an exemption from registration in accordance with Rule 904
of Regulation S under the Securities Act (and in the case of clause (ii), based
upon an opinion of counsel if the Company or the Trustee so requests, together
with a certification in substantially the form of Exhibit C to Supplemental
Indenture No. 5 to the Indenture).

       [_]   Such Note is being transferred (i) pursuant to an exemption from
registration in accordance with Rule 144 under the Securities Act (and based
upon an opinion of counsel if the Company or the Trustee so requests) or (ii)
pursuant to an effective registration statement under the Securities Act.

       [_]   Such Note is being transferred in reliance on and in compliance
with another exemption from the registration requirements of the Securities Act
(and based upon an opinion of counsel if the Company or the Trustee so
requests).

--------------
* Fill in blank or check appropriate box, as applicable.
                                       B-1

<PAGE>

             You are entitled to rely upon this certificate and you are
irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.

                                                [INSERT NAME OF TRANSFEROR]

                                                By:_____________________________
                                                Name:
                                                Title:
                                                Address:

Date:_______________________

                                       B-2

<PAGE>

                                    Exhibit C

                FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
                     WITH TRANSFERS PURSUANT TO REGULATION S

                                                             ____________, _____

JPMorgan Chase Bank, as Security Registrar
600 Travis, Suite 1150
Houston, Texas 77002
Attention: Institutional Trust Services

Ladies and Gentlemen:

             In connection with our proposed sale of certain 7.875% Senior Notes
due 2013, Series A (the "Notes"), of CenterPoint Energy Resources Corp. (the
"Company"), we represent that:

             (i)      the offer or sale of the Notes was made in an "offshore
       transaction";

             (ii)     at the time the buy order was originated, the transferee
       was outside the United States or we and any person acting on our behalf
       reasonably believed that the transferee was outside the United States;

             (iii)    no directed selling efforts have been made by us in the
       United States in contravention of the requirements of Rule 903(a) or
       Rule 904(a) of Regulation S under the U.S. Securities Act of 1933, as
       applicable;

             (iv)     if this transfer of the Note is being made prior to the
       expiration of the Distribution Compliance Period, such interest that is
       being transferred is held immediately thereafter through The Euroclear
       System or Clearstream Banking, societe anonyme; and

             (v)      the transaction is not part of a plan or scheme to evade
       the registration requirements of the U.S. Securities Act of 1933.

                                       C-1

<PAGE>

             You and the Company are entitled to rely upon this letter and you
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S under the U.S. Securities Act of 1933.

                                         Very truly yours,

                                         Name of Transferor:

                                         By:________________________________
                                               Name:
                                               Title:
                                               Address:

                                      C-2

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