Document:

Officer's Certificate dated September 9, 2003

 Exhibit 4.3 
  
 CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC 
  
 OFFICER’S CERTIFICATE 
  
 September 9, 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
September 2, 2003, and Sections 105, 201, 301, 401(1), 401(5), 402(2)(A), 403(2)(A), 403(2)(B) and 1403 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 thirteenth series to be issued under the Indenture shall be designated as the “5.75% General Mortgage Bonds, Series M, due 2014” (the “Series M Bonds”) and the “5.75%
General Mortgage Bonds, Series M2, due 2014” (the “Series M2 Bonds” and, together with the Series M Bonds, the “Bonds”). The Series M Bonds and the Series M2 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 Bonds that may be authenticated and delivered under the Indenture. The Trustee shall authenticate and deliver (i) Series M Bonds for original
issue on September 9, 2003 (the “Issue Date”) in the aggregate principal amount of $300,000,000, upon a Company Order for the authentication and delivery thereof and satisfaction of Section 401 of the Indenture and (ii) Series M2 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 M 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 M2 Bonds:

  

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 (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 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 valid and legally binding obligations 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 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 (as specified in (5) below), except as otherwise expressly provided in the form of such Securities attached hereto as
Exhibit A. 
  
 (4)    The Bonds shall
mature and the principal thereof shall be due and payable together with all accrued and unpaid interest thereon on January 15, 2014. 
  
 (5)    Subject to subsection (15) below, the Bonds shall bear interest at the rate of 5.75% 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 January 15 and July 15 in each year commencing January 15, 2004, 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, 
  

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 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 Dallas, Texas shall be the place at which (i) the principal of and premium, if any, and interest on the Bonds shall be payable, (ii) registration of transfer of the Bonds may be effected, and
 (iii) exchanges of the
Bonds may be effected; and the Corporate Trust Office of JPMorgan Chase Bank in Houston, Texas shall be the place at which 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) (a) at the applicable Treasury Rate plus 20 basis points, or (b) in the case of a Special Redemption (as defined below), at the applicable Treasury Rate plus 50 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 Banc of America Securities LLC, Deutsche Bank Securities Inc. or Wachovia Capital Markets,
LLC, 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. 
  
 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 
  

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 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) Banc of America Securities LLC and Deutsche Bank Securities Inc. and their respective successors and (2) any other three Primary Treasury Dealers selected by the Company after consultation
with the Independent Investment Banker; 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. 
  
 “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. 
  
 “Special Redemption” means a redemption during the
period beginning on March 1, 2005 and ending on February 28, 2007 if and to the extent the Company utilizes amounts derived from proceeds from the issuance of transition or other securitization bonds issued, pursuant to required authorization under
the Texas Electric Choice Plan, by 
  

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 a special purpose entity to monetize the value of the right to recover through non-bypassable transition
charges to customers taking delivery service from the Company, the Company’s generation related regulatory assets and stranded costs. 
  
 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 subsection (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 M Bonds, the Company has agreed to file an exchange offer registration statement to exchange the Series M Bonds for Series M2 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 M Bonds for the Series M2 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 
  

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 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 (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 5.75% per annum in respect of the Series M 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 M 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 M 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 M Bonds (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 M Bonds to Persons other than
“distributors” (as defined in Regulation S) in reliance upon Regulation S; and (b) the Issue Date (the “Distribution 
  

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 Compliance Period”) upon certification that the beneficial interests in the Regulation S Temporary
Global Bond relating to the Series M Bonds, 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.

  
 (iii)    Each of the Rule
144A Global Bonds and the Regulation S Global Bonds (collectively, the “Global Bonds”) shall represent such of the Series M Bonds as shall be specified therein and shall each provide that it shall represent the aggregate principal amount
of the Series M Bonds from time to time endorsed thereon and that the aggregate principal amount of the Series M 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 M Bonds represented thereby shall be reflected by the Trustee on Schedule A attached to the Series M Bond 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, 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 
  

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 transfer, a certification from such Holder to that effect (in substantially the form of Exhibit C
hereto); or 
  
 (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 C
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 C and D 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)  (a)    Except as permitted by subparagraphs (iv) and (v) of this subsection (19) or as set forth
in subparagragh (iii)(b) below, 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 Bonds, issued in exchange therefor or substitution thereof) shall bear a legend in substantially the following form: 
  

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 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. 
  
 (b)    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 AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED 
  

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 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(2) of the Indenture, the Trustee shall authenticate, Series M2 Bonds in exchange for Series M Bonds accepted for exchange in the Exchange Offer, which Series M2 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 M2 Bonds, unless the Holder of such Series M Bonds, (A) is a broker-dealer tendering Series M Bonds
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 M Bonds, (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 M2 Bonds, in the ordinary course of such Holder’s business. The Company shall identify to the Trustee such Holders of the Bonds, 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. 
  
 (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, New York. 
  

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 (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
Twelfth Supplemental Indenture, dated as of the date hereof, between the Company and the Trustee is authorized or permitted by the Indenture. 
  
 7.    First Mortgage Bonds, Medium-Term Note 10% Series due February 1, 2028, in the aggregate principal amount of $150,000,000 (the “First
Mortgage Bonds”), have heretofore been authenticated and delivered and as of the date of this certificate, constitute Retired Securities. $75,000,000 aggregate principal amount of such First Mortgage Bonds are the basis for the authentication
and delivery of $75,000,000 aggregate principal amount of the Bonds. The retirement of the First Mortgage Bonds occurred on March 18, 2003, after the delivery to the Trustee of the Initial Expert’s Certificate. No First Mortgage Bonds have been
used as the basis for the authentication and delivery of any First Mortgage Securities. 
  
  

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 IN WITNESS WHEREOF, the undersigned has executed this Officer’s Certificate on this 9th day of September, 2003. 
  

	 
		
	 	 	 /S/    MARC
KILBRIDE

	 	 	 Marc Kilbride
 Vice President and Treasurer

  
 Acknowledged and Received on

 September 9, 2003 
  
 JPMORGAN CHASE BANK, 
 as Trustee 
  

	
	 /S/    CAROL
LOGAN

	 Carol Logan
 Vice President and Trust Officer

  
  
  
  

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 EXHIBIT A 
  
 FORM OF BONDS 
  
  

 A-1 

 [THIS IS A FORM OF GLOBAL BOND. BRACKETED ITALICIZED LANGUAGE INDICATES PROVISIONS IN THE REGULATION S
GLOBAL BOND WHICH ARE DIFFERENT THAN THE RULE 144A GLOBAL BOND] 
  
 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. 
  
 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 
 5.75% General Mortgage Bonds, Series M, due 2014 
  

	 Original Interest Accrual Date: September 9, 2003
	  	Redeemable:     Yes     x     No      ̈
	 Stated Maturity: January 15, 2014
	  	Redemption Date: At any time.
	 Interest Rate: 5.75%
 Interest Payment Dates: January 15 and July 15
 Regular Record Dates: Fifteenth calendar day before
 respective Interest Payment Date
	  	Redemption Price: the greater of (i) 100% of the principal amount of this Security or the portion hereof to be redeemed and (ii) the applicable Make-Whole Amount, as described
herein, plus in each case, accrued and unpaid interest to the Redemption Date on the principal amount being redeemed

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

  

	 Initial Principal Amount
	  	Registered No. R-1 [Registered No. R-2]
	 $295,000,000 [$5,000,000]
	  	CUSIP 15189X AF 5 [CUSIP U14040 AD 8]

  
 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 
  
 ****CEDE & Co.**** 
  
 , or registered assigns, the principal sum of TWO HUNDRED NINETY-FIVE MILLION DOLLARS*
[FIVE MILLION 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 January 15, 2004, and at Maturity, at the Interest Rate per annum specified above, until the principal hereof is paid 

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

 1 

 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 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 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 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) (a) at the applicable Treasury Rate plus 20 basis points, or (b) in the case of a Special Redemption (as defined below), at the applicable Treasury Rate plus 50 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 Banc of America Securities LLC, Deutsche Bank Securities Inc., or Wachovia Capital Markets, LLC, 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 
  

 2 

 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. 
  
 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) Banc of America Securities LLC and Deutsche Bank Securities Inc. and their respective successors and (2) any other three Primary Treasury Dealers selected by the Company after consultation with the Independent Investment
Banker; 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.

  
 “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. 
  
 “Special Redemption” means a redemption during the period beginning on March 1, 2005 and ending on February 28,
2007 if and to the extent the Company utilizes amounts derived from proceeds from the issuance of transition or other securitization bonds issued, pursuant to required authorization under the Texas Electric Choice Plan, by a special purpose entity
to monetize the value of the right to recover through non-bypassable transition charges to customers taking delivery service from the Company, the Company’s generation related regulatory assets and stranded costs. 
  
 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
on the Redemption Date. 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. 
  

 3 

 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 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. 
  
 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 
  

 4 

 HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO ABOVE. 
  
 [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.] 
  
 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, 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.] 
  

 5 

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

	 	 	 	 	CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
			
	 Attest:                                     
                                        
         
	 	 	 	                                      
                                        
                                        
   
	 Name:
 Title:
	 	 	 	 Name:
 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:
                                ,
20         
  

	JPMORGAN CHASE BANK, as Trustee
	
	 
	

	 Name:
 Title:

  

 6 

 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. 
  

	 Date of
 Adjustment

	 	 Decrease in Aggregate
 Principal Amount of
 Securities

	 	 Increase in Aggregate
 Principal Amount of
 Securities

	  	 Aggregate Principal
 Amount of Securities
 Remaining After
 Such Decrease or
 Increase

	  	 Notation by
 Security
 Registrar

  

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

	Re:	 	5.75% General Mortgage Bonds, Series M, due 2014 (the “Series M Bonds”), of CenterPoint Energy Houston Electric, LLC (the “Company”) 

  
 This Certificate relates to
$             principal amount of Series M 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 M Bond or Series
M Bonds. 
  
 In connection with such request and in respect of
each such Series M 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 M Bonds and that the transfer of this Series M Bond does not require registration under the Securities Act (as defined below) because:* 
  
  ̈    Such Series M Bond is being acquired for the Transferor’s own account without transfer. 
  
  ̈    Such Series M 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 D to the Officer’s Certificate establishing the form, terms, and provisions of the Series M Bonds). 
  
  ̈    Such Series M 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. 
  
 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. 

 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 5.75% General Mortgage Bonds, Series M, due 2014 (the “Series M Bonds”) of CenterPoint Energy
Houston Electric, LLC (the “Company”), we represent that: 
  
 (i)    the offer or sale of the Series M 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 M 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, société 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:

 EXHIBIT B 
  
 REGISTRATION RIGHTS AGREEMENT 
  
  

 B-1 

 REGISTRATION RIGHTS AGREEMENT 
  
 This Registration Rights Agreement (this “Agreement”) is made and entered into this 9th day of September, 2003
among CenterPoint Energy Houston Electric, LLC, a Texas limited liability company (the “Company”), Banc of America Securities LLC, Deutsche Bank Securities Inc. and Wachovia Capital Markets, LLC, as representatives (the
“Representatives”) of the initial purchasers (the “Initial Purchasers”) listed on Schedule I to the Purchase Agreement (defined below). 
  
 This Agreement is made pursuant to the Purchase Agreement dated September 3, 2003, among the Company and the Initial Purchasers (the “Purchase
Agreement”), which provides for the sale by the Company to the Initial Purchasers of an aggregate of $300,000,000 principal amount of the Company’s 5.75% General Mortgage Bonds, Series M, due 2014 (the “Securities”). In order to
induce the Initial Purchasers to enter into the Purchase Agreement, the Company has agreed to provide to the Initial Purchasers and their direct and indirect transferees the registration rights set forth in this Agreement. The execution and delivery
of this Agreement is a condition to the closing under the Purchase Agreement. 
  
 In consideration of the foregoing, the parties hereto agree as follows: 
  
 1.    Definitions.    As used in this Agreement, the following capitalized defined terms shall have the
following meanings: 
  
 “1933 Act” shall mean the
Securities Act of 1933, as amended from time to time. 
  
 “1934 Act” shall mean the Securities Exchange Act of 1934, as amended from time to time. 
  
 “Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in The City of
New York are authorized or obligated by law or executive order to close and which shall be a “business day” as defined under Rule 14d-1 of the General Rules and Regulations under the Securities Exchange Act of 1934. 
  
 “Company” shall have the meaning set forth in the preamble and
shall also include the Company’s successors. 
  
 “Depositary” shall mean The Depository Trust Company, or any other depositary for the Securities appointed by the Company; provided, however, that such depositary must have an address in the Borough of Manhattan, in
the City of New York. 
  
 “Exchange Offer” shall mean
the exchange offer by the Company of Exchange Securities for Registrable Securities pursuant to Section 2.1 hereof. 
  
 “Exchange Offer Registration Statement” shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all 

 amendments and supplements to such registration statement, including the Prospectus contained therein, all exhibits
thereto and all documents incorporated by reference therein. 
  
 “Exchange Period” shall have the meaning set forth in Section 2.1 hereof. 
  
 “Exchange Securities” shall mean the general mortgage bonds issued by the Company under the Indenture containing terms identical to the Securities in all material respects (except for references to certain
interest rate provisions, restrictions on transfers and restrictive legends), to be offered to Holders of Securities in exchange for Registrable Securities pursuant to the Exchange Offer. 
  
 “Expiration Date” shall mean the date on which all the Participating Broker-Dealers have sold all Exchange
Securities held by them. 
  
 “Holder” shall mean an
Initial Purchaser, for so long as it owns any Registrable Securities, and each of its successors, assigns and direct and indirect transferees who become owners of Registrable Securities under the Indenture and each Participating Broker-Dealer that
holds Exchange Securities for so long as such Participating Broker-Dealer is required to deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of such Exchange Securities. 
  
 “Indenture” shall mean the General Mortgage Indenture, dated as of
October 10, 2002, between the Company and JPMorgan Chase Bank, as trustee, as the same may be amended, supplemented, waived or otherwise modified from time to time in accordance with the terms thereof. 
  
 “Initial Purchaser” or “Initial Purchasers” shall have
the meaning set forth in the preamble. 
  
 “Majority
Holders” shall mean the Holders of a majority of the aggregate principal amount of Outstanding (as defined in the Indenture) Registrable Securities or such smaller amount of Registrable Securities for which action is to be taken;
provided that whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company and other obligors on the Securities or any Affiliate (as defined
in the Indenture) of the Company shall be disregarded in determining whether such consent or approval was given by the Holders of such required percentage amount. 
  
 “Participating Broker-Dealer” shall mean any Initial Purchaser, and any other broker-dealer who acquired the
Registrable Securities for its own account as a result of market-making or other trading activities and exchanges Registrable Securities in the Exchange Offer for Exchange Securities. 
  
 “Person” shall mean any individual, corporation, partnership, joint venture, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision thereof. 
  
 “Prospectus” shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by 
  

 2 

 any prospectus supplement, including any such prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other amendments and supplements to a prospectus, including post-effective amendments, and in each case including all material incorporated by reference
therein. 
  
 “Purchase Agreement” shall have the meaning
set forth in the preamble. 
  
 “Registrable Securities”
shall mean the Securities; provided, however, that Securities shall cease to be Registrable Securities when (i) a Registration Statement with respect to such Securities shall have been declared effective under the 1933 Act and such
Securities shall have been disposed of pursuant to such Registration Statement, (ii) such Securities have been sold to the public pursuant to Rule 144 under the 1933 Act or may be sold pursuant to Rule 144(k) (or any similar provision then in force,
but not Rule 144A) under the 1933 Act, (iii) such Securities shall have ceased to be outstanding or (iv) the Exchange Offer is consummated (except in the case of Securities purchased from the Company and continued to be held by the Initial
Purchasers). 
  
 “Registration Expenses” shall mean any
and all expenses incident to performance of or compliance by the Company with this Agreement, including, without limitation: (i) all SEC, stock exchange or National Association of Securities Dealers, Inc. (“NASD”) registration and filing
fees, including, if applicable, the reasonable fees and expenses of any “qualified independent underwriter” (and its counsel) that is required to be retained by any holder of Registrable Securities in accordance with the rules and
regulations of the NASD, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws and compliance with the rules of the NASD (including reasonable fees and disbursements of counsel for any underwriters
or Holders in connection with blue sky qualification of any of the Exchange Securities or Registrable Securities and any filings with the NASD), (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus, any amendments or supplements thereto, any underwriting agreements, securities sales agreements and other documents relating to the performance of and compliance with this Agreement, (iv) all
fees and expenses incurred in connection with the listing, if any, of any of the Registrable Securities on any securities exchange or exchanges, (v) all rating agency fees, (vi) the fees and disbursements of counsel for the Company and of the
independent public accountants of the Company, including the expenses of any special audits or “cold comfort” letters required by or incident to such performance and compliance, (vii) the fees and expenses of the Trustee, and any escrow
agent or custodian, (viii) the reasonable fees and disbursements of one firm, at any one time, of legal counsel selected by the Representatives or the Majority Holders to represent the Holders of Registrable Securities and (ix) any reasonable fees
and disbursements of the underwriters customarily required to be paid by issuers or sellers of securities and the fees and expenses of any special experts retained by the Company in connection with any Registration Statement, but excluding
underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder. 
  
 “Registration Statement” shall mean any registration statement of the Company which covers any of the Exchange Securities or Registrable
Securities pursuant to the provisions of this Agreement, and all amendments and supplements to any such Registration Statement, 
  

 3 

 including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein. 
  
 “SEC” shall mean the United States Securities and Exchange Commission or any successor agency or governmental body performing the functions currently performed by the United States Securities and Exchange Commission. 

 
 “Securities” shall have the meaning set forth in the preamble.

  
 “Shelf Registration” shall mean a registration
effected pursuant to Section 2.2 hereof. 
  
 “Shelf
Registration Statement” shall mean a “shelf” registration statement of the Company pursuant to the provisions of Section 2.2 of this Agreement which covers all of the Registrable Securities on an appropriate form under Rule 415 under
the 1933 Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein. 
  
 “TIA” shall mean the Trust Indenture Act of 1939, as amended. 
  
 “Trustee” shall mean the trustee with respect to the Securities under the Indenture. 
  
 2.    Registration Under the 1933 Act. 
  

2.1    Exchange Offer.    The Company shall, for the benefit of the Holders, at the Company’s cost,
use its reasonable commercial efforts (A) to file with the SEC the Exchange Offer Registration Statement not later than 180 days following the original issuance of the Securities with respect to a proposed Exchange Offer and the issuance and
delivery to the Holders, in exchange for the Registrable Securities, of a like principal amount of Exchange Securities, (B) to cause the Exchange Offer Registration Statement to be declared effective under the 1933 Act within 270 days of the
original issuance of the Securities, (C) to keep the Exchange Offer Registration Statement effective until the closing of the Exchange Offer and (D) unless the Exchange Offer would not be permitted by applicable law or SEC policy, to cause the
Exchange Offer to be consummated within 315 days following the original issuance of the Securities. The Exchange Securities will be issued under the Indenture. Upon the effectiveness of the Exchange Offer Registration Statement, the Company shall
promptly commence the Exchange Offer, it being the objective of such Exchange Offer to enable each Holder eligible and electing to exchange Registrable Securities for Exchange Securities (assuming that such Holder (A) is not an affiliate of the
Company within the meaning of Rule 405 under the 1933 Act (an “Affiliate”), (B) is not a broker-dealer tendering Registrable Securities acquired directly from the Company or one of its Affiliates for its own account, (C) acquired the
Exchange Securities in the ordinary course of such Holder’s business and (D) at the time of the consummation of the Exchange Offer has no arrangements or understandings with any Person to participate in the Exchange Offer for the purpose of
distributing the Exchange Securities) to transfer such Exchange Securities from and after their receipt without any limitations or restrictions under the 1933 Act and without material restrictions under the securities laws of a substantial portion
of the several states of the United States. 
  

 4 

 In connection with the Exchange Offer, the Company will: 
  
 (A)    as promptly as practicable after
the Exchange Offer Registration Statement has been declared effective by the SEC, mail to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related
documents; 
  
 (B)    keep the
Exchange Offer open for acceptance for a period of not less than 20 Business Days after the date notice thereof is mailed to the Holders (or longer if required by applicable law) (such period referred to herein as the “Exchange Period”);

  
 (C)    utilize the
services of the Depositary for the Exchange Offer; 
  
 (D)    notify each Holder that any Holder electing to have a Registrable Security exchanged pursuant to the Exchange Offer will be required to surrender such Registrable Security, together with the appropriate letters of
transmittal, to the institution and at the address and in the manner specified in the notice prior to 5:00 p.m. (Eastern Time) on the last Business Day of the Exchange Period; 
  
 (E)    permit Holders to (i) withdraw tendered Registrable Securities at any time prior
to 5:00 p.m. (Eastern Time) on the last Business Day of the Exchange Period, by sending to the institution specified in the notice a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of
Registrable Securities delivered for exchange and a statement that such Holder is withdrawing such Holder’s election to have such Securities exchanged and (ii) tender Registrable Securities according to customary guaranteed delivery procedures
if such Holder cannot deliver such Registrable Securities or complete the procedures relating thereto on a timely basis prior to 5:00 p.m. (Eastern Time) on the last Business Day of the Exchange Period; 
  
 (F)    notify each Holder that any
Registrable Security not tendered will remain outstanding and continue to accrue interest, but will not retain any rights under this Agreement (except in the case of the Initial Purchasers and Participating Broker Dealers as provided herein); and

  
 (G)    otherwise comply in
all material respects with all applicable laws relating to the Exchange Offer. 
  
 As soon as practicable after the close of the Exchange Offer the Company shall: 
  
 (A)    accept for exchange all Registrable Securities duly tendered and not validly withdrawn pursuant to the Exchange
Offer in accordance with the terms of the Exchange Offer Registration Statement and the letter of transmittal which shall be an exhibit thereto; 
  
 (B)    deliver or cause to be delivered all Registrable Securities accepted for exchange to the Trustee for
cancellation; and 
  

 5 

 (C)    cause the Trustee promptly to authenticate and deliver
Exchange Securities, to each Holder of Registrable Securities so accepted for exchange in a principal amount equal to the principal amount of the Registrable Securities of such Holder so accepted for exchange. 
  
 Interest on each Exchange Security will accrue from the last date on which
interest was paid on the Registrable Securities surrendered in exchange therefor or, if no interest has been paid on the Registrable Securities, from the date of original issuance. The Exchange Offer shall not be subject to any conditions, other
than (A) that the Exchange Offer, or the making of any exchange by a Holder, does not violate applicable law or any applicable interpretation of the staff of the SEC, (B) the valid tendering of Registrable Securities in accordance with the Exchange
Offer, (C) that each Holder of Registrable Securities exchanged in the Exchange Offer shall have represented that (i) it is not an affiliate of the Company within the meaning of Rule 405 under the 1933 Act, (ii) it is not a broker-dealer tendering
Registrable Securities acquired directly from the Company or one of its Affiliates for its own account, (iii) all of the Exchange Securities to be received by it shall be acquired in the ordinary course of its business and (iv) at the time of the
consummation of the Exchange Offer it shall have no arrangement or understanding with any Person to participate in the distribution (within the meaning of the 1933 Act) of the Exchange Securities, and shall have made such other representations as
may be reasonably necessary under applicable SEC rules, regulations or interpretations to render the use of Form S-4 or other appropriate form under the 1933 Act available and (D) that no action or proceeding shall have been instituted or threatened
in any court or by or before any governmental agency with respect to the Exchange Offer which, in the Company’s judgment, would reasonably be expected to impair the ability of the Company to proceed with the Exchange Offer. The Company shall
use its reasonable commercial efforts to inform the Initial Purchasers of the names and addresses of the Holders to whom the Exchange Offer is made, and the Initial Purchasers shall have the right, subject to applicable securities laws, to contact
such Holders and otherwise facilitate the tender of Registrable Securities in the Exchange Offer. 
  
 The Company shall use its reasonable commercial efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the
Prospectus contained therein, in order to permit such Prospectus to be lawfully delivered by all persons subject to the prospectus delivery requirements of the 1933 Act for such period of time as such persons must comply with such requirements in
order to resell the Exchange Securities; provided, however, that (i) in the case where such prospectus and any amendment or supplement thereto must be delivered by a Participating Broker-Dealer, such period shall terminate at the
earlier to occur of (i) the expiration of 180 days following the Exchange Offer and (ii) the Expiration Date. 
  
 The Company shall not be obligated to keep the Exchange Offer Registration Statement effective or to permit the use of any Prospectus forming a part of
the Exchange Offer Registration Statement if (i) the Company determines, in its reasonable judgment, upon advice of counsel that the continued effectiveness and use of the Exchange Offer Registration Statement would (x) require the disclosure of
material information which the Company has a bona fide business reason for preserving as confidential or (y) interfere with any financing, acquisition, corporate reorganization or other material transaction involving the Company or any of its
subsidiaries; and provided, further, that the failure to keep the Exchange Offer Registration Statement effective and usable for offers and sales of Registrable Securities for such reasons 
  

 6 

 shall last no longer than 45 consecutive calendar days or no more than an aggregate of 90 calendar days during any
consecutive twelve-month period (whereafter a Registration Default, as hereinafter defined, shall occur) and (ii) the Company promptly thereafter complies with the requirements of Section 3(L) hereof, if applicable; any such period during which the
Company is excused from keeping the Exchange Offer Registration Statement effective and usable for offers and sales of Registrable Securities is referred to herein as a “Exchange Offer Suspension Period”; an Exchange Offer Suspension
Period shall commence on and include the date that the Company gives notice to the Holders that the Exchange Offer Registration Statement is no longer effective or the Prospectus included therein is no longer usable for offers and sales of
Registrable Securities as a result of the application of the proviso of the foregoing sentence, stating the reason therefor, and shall end on the earlier to occur of the date on which each seller of Registrable Securities covered by the Exchange
Offer Registration Statement either receives the copies of the supplemented or amended Prospectus or is advised in writing by the Company that use of the Prospectus may be resumed. 
  
 The Company acknowledges that pursuant to current interpretations by the SEC’s staff of Section 5 of the 1933 Act, in
the absence of applicable exemption therefrom, (i) each Holder which is a broker-dealer electing to exchange Securities for Exchange Securities (an “Exchanging Dealer”), is required to deliver a prospectus containing information
substantially in the form set forth in (a) Annex A hereto, (b) Annex B hereto in the “Exchange Offer Procedures” section and the “Purpose of the Exchange Offer” section, (c) Annex C hereto in the “Plan of Distribution”
section of such prospectus in connection with a sale of any such Exchange Securities received by such Exchanging Dealer pursuant to the Exchange Offer and to include in the Letter of Transmittal delivered pursuant to the Exchange Offer, the
information set forth in Annex D hereto and (ii) an Initial Purchaser that elects to sell Exchange Securities acquired in an exchange for Securities constituting any portion of an unsold allotment, is required to deliver a prospectus containing the
information required by Item 507 or Item 508 of Regulation S-K under the 1933 Act, as applicable, in connection with such sale.  
  
 2.2    Shelf Registration.    In the event that (A) the Company reasonably determines that changes in law,
SEC rules or regulations or applicable interpretations thereof by the staff of the SEC do not permit the Company to effect the Exchange Offer as contemplated by Section 2.1 hereof, (B) for any other reason, the Exchange Offer is not consummated
within 315 days after the original issuance of the Securities or (C) an Initial Purchaser notifies the Company within 20 Business Days following the consummation of the Exchange Offer that (i) it is not permitted by applicable law, SEC rules or
regulations or applicable interpretations thereof by the staff of the SEC to participate in the Exchange Offer, (ii) it may not resell Exchange Securities with the Prospectus included as part of the Exchange Offer Registration Statement or (iii) it
is a broker-dealer and owns Registrable Securities acquired directly from the Company or one of the Company’s Affiliates, then in case of each of clauses (A) through (C) the Company shall, at its cost, in lieu of effecting (or, in the case of
clause (C), in addition to effecting) the registration of the Exchange Securities pursuant to the Exchange Offer Registration Statement: 
  
 (A)    as promptly as practicable, file with the SEC, and thereafter shall use its reasonable commercial efforts to
cause to be declared effective no later than 345 days after the original issuance of the Securities, a Shelf Registration Statement relating to the offer and sale of the Registrable Securities by the Holders from time to time in 
  

 7 

 accordance with the methods of distribution elected by the Majority Holders participating in the Shelf
Registration and set forth in such Shelf Registration Statement; 
  
 (B)    use its reasonable commercial efforts to keep the Shelf Registration Statement continuously effective in order to permit the Prospectus forming a part thereof to be usable by Holders for a
period of two years from the date of the original issuance of the Securities (plus the number of days in any Suspension Period), or until all of the Registrable Securities have been sold pursuant thereto; provided, however, that the Company
shall not be obligated to keep the Shelf Registration Statement effective or to permit the use of any Prospectus forming a part of the Shelf Registration Statement if (i) the Company determines, in its reasonable judgment, upon advice of counsel
that the continued effectiveness and use of the Shelf Registration Statement would (x) require the disclosure of material information which the Company has a bona fide business reason for preserving as confidential or (y) interfere with any
financing, acquisition, corporate reorganization or other material transaction involving the Company or any of its subsidiaries; and provided, further, that the failure to keep the Shelf Registration Statement effective and usable for
offers and sales of Registrable Securities for such reasons shall last no longer than 45 consecutive calendar days or no more than an aggregate of 90 calendar days during any consecutive twelve-month period (whereafter a Registration Default, as
hereinafter defined, shall occur) and (ii) the Company promptly thereafter complies with the requirements of Section 3(L) hereof, if applicable; any such period during which the Company is excused from keeping the Shelf Registration Statement
effective and usable for offers and sales of Registrable Securities is referred to herein as a “Suspension Period”; a Suspension Period shall commence on and include the date that the Company gives notice to the Holders that the Shelf
Registration Statement is no longer effective or the Prospectus included therein is no longer usable for offers and sales of Registrable Securities as a result of the application of the proviso of the foregoing sentence, stating the reason therefor,
and shall end on the earlier to occur of the date on which each seller of Registrable Securities covered by the Shelf Registration Statement either receives the copies of the supplemented or amended Prospectus or is advised in writing by the Company
that use of the Prospectus may be resumed. 
  
 The Company shall
not permit any securities other than Registrable Securities to be included in the Shelf Registration Statement. The Company further agrees, if necessary, to supplement or amend the Shelf Registration Statement, as required by Section 3(B) below, and
to furnish to the Holders of Registrable Securities copies of any such supplement or amendment promptly after its being used or filed with the SEC. 
  
 2.3    Expenses.    The Company shall pay all Registration Expenses in connection with the registration
pursuant to Section 2.1 or 2.2 hereof. Each Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder’s Registrable Securities pursuant to the Shelf Registration
Statement. 
  
 2.4    Effectiveness.

  
 (A)    The Company will be
deemed not to have used its reasonable commercial efforts to cause the Exchange Offer Registration Statement or the Shelf Registration 
  

 8 

 Statement, as the case may be, to become, or to remain, effective during the requisite period if the
Company voluntarily takes any action that would, or omits to take any action (other than any action specifically permitted by the last paragraph of Section 2.1 or by Section 2.2(B) hereof) which omission would, result in any such Registration
Statement not being declared effective or in the Holders of Registrable Securities covered thereby not being able to exchange or offer and sell such Registrable Securities during that period as and to the extent contemplated hereby, unless such
action is required by applicable law. 
  
 (B)    An Exchange Offer Registration Statement pursuant to Section 2.1 hereof or a Shelf Registration Statement pursuant to Section 2.2 hereof will not be deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that if, after it has been declared effective, the offering of Registrable Securities pursuant to an Exchange Offer Registration Statement or a Shelf Registration Statement is interfered with by
any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Registration Statement will be deemed not to have become effective during the period of such interference, until the offering of
Registrable Securities pursuant to such Registration Statement may legally resume. 
  
 2.5    Interest.    In the event that (A) the Exchange Offer Registration Statement is not filed with the SEC on or prior to the 180th day following the date of original
issuance of the Securities, (B) the Exchange Offer Registration Statement is not declared effective on or prior to the 270th calendar day following the date of original issuance of the Securities, (C) the Exchange Offer is not consummated or a Shelf
Registration Statement is not declared effective, in either case, on or prior to the 315th calendar day following the date of original issuance of the Securities or (D) the Exchange Offer Registration Statement or the Shelf Registration Statement is
filed and declared effective but shall thereafter either be withdrawn by the Company or becomes subject to an effective stop order suspending the effectiveness of such registration statement, except as specifically permitted by the last paragraph of
Section 2.1 or Section 2.2(B) hereof, in each case without being succeeded within 30 days by an amendment thereto or an additional registration statement filed and declared effective (each such event referred to in clauses (A) through (D) above, a
“Registration Default”), the interest rate borne by the Registrable Securities shall be increased (“Additional Interest”) by one-fourth of one percent (0.25%) per annum upon the occurrence of each Registration Default, which rate
will increase by an additional one-fourth of one percent (0.25%) per annum if such Registration Default has not been cured within 90 days after occurrence thereof and continuing until all Registration Defaults have been cured, provided that
the aggregate amount of any such increase in the interest rate on the Registrable Securities shall in no event exceed one-half of one percent (0.50%) per annum; and provided, further, that if the Exchange Offer Registration Statement
is not declared effective on or prior to the 270th calendar day following the original issuance of the Securities and the Company shall request Holders of Securities to provide information required by the applicable rules of the SEC for inclusion in
the Shelf Registration Statement, then Registrable Securities owned by Holders who do not deliver such information to the Company or who do not provide comments on the Shelf Registration Statement when reasonably requested by the Company will not be
entitled to any such increase in the interest rate for any day after the 315th day following the date of original issuance of the Securities. All accrued Additional Interest shall be paid to Holders of Registrable Securities in the same manner and
at the same time as regular payments 
  

 9 

 of interest on the Registrable Securities. Following the cure of all Registration Defaults, the accrual of Additional
Interest will cease and the interest rate on the Registrable Securities will revert to the original rate. 
  
 3.    Registration Procedures.    In connection with the obligations of the Company with respect to
Registration Statements pursuant to Sections 2.1 and 2.2 hereof, the Company shall: 
  
 (A)    prepare and file with the SEC a Registration Statement, within the relevant time period specified in Section 2,
on the appropriate form under the 1933 Act, which form shall (i) be selected by the Company, (ii) in the case of a Shelf Registration, be available for the sale of the Registrable Securities by the selling Holders thereof and (iii) comply as to form
in all material respects with the requirements of the applicable form and include or incorporate by reference all financial statements required by the SEC to be filed therewith or incorporated by reference therein, and use its reasonable commercial
efforts to cause such Registration Statement to become effective and remain effective in accordance with Section 2 hereof; 
  
 (B)    use reasonable commercial efforts to cause (i) any Registration Statement and any amendment thereto, when it
becomes effective, not to contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (ii) subject to the last paragraph of Section 2.1
and Section 2.2(B), any Prospectus forming part of any Registration Statement, and any supplement to such Prospectus (as amended or supplemented from time to time), not to include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; 
  
 (C)    prepare and file with the SEC such amendments and post-effective amendments to
each Registration Statement as may be necessary under applicable law to keep such Registration Statement effective for the applicable period; and cause each Prospectus to be supplemented by any required prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 (or any similar provision then in force) under the 1933 Act and comply with the provisions of the 1933 Act, the 1934 Act and the rules and regulations thereunder applicable to them with respect to the disposition of
all securities covered by each Registration Statement during the applicable period in accordance with the intended method or methods of distribution reasonably requested by the selling Holders thereof (including sales by any Participating
Broker-Dealer); 
  
 (D)    in
the case of a Shelf Registration, (i) notify each Holder of Registrable Securities, at least fifteen (15) calendar days prior to filing, that a Shelf Registration Statement with respect to the Registrable Securities is being filed and advising such
Holders that the distribution of Registrable Securities will be made in accordance with the methods reasonably requested by the Majority Holders participating in the Shelf Registration, (ii) furnish to each Holder of Registrable Securities and to
each underwriter of an underwritten offering of Registrable Securities, if any, without charge, as many copies of each Prospectus, including each preliminary Prospectus, and any amendment or 
  

 10 

 supplement thereto, and such other documents as such Holder or underwriter may reasonably request,
including financial statements and schedules and, if the Holder so requests, all exhibits in order to facilitate the public sale or other disposition of the Registrable Securities and (iii) hereby consent to the use of the Prospectus or any
amendment or supplement thereto by each of the selling Holders of Registrable Securities in connection with the offering and sale of the Registrable Securities covered by the Prospectus or any amendment or supplement thereto, save and except during
any Suspension Period; 
  
 (E)    use its reasonable commercial efforts to register or qualify the Registrable Securities under such state securities or blue sky laws of such jurisdictions as any Holder of Registrable Securities covered by a
Registration Statement and each underwriter of an underwritten offering of Registrable Securities shall reasonably request by the time the applicable Registration Statement is declared effective by the SEC, and do any and all other acts and things
which may be reasonably necessary or advisable to enable each such Holder and underwriter to consummate the disposition in each such jurisdiction of such Registrable Securities owned by such Holder; provided, however, that the Company
shall not be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(E) or (ii) take any action which would subject it to general
service of process or taxation in any such jurisdiction where it is not then so subject; 
  
 (F)    notify promptly each Holder of Registrable Securities under a Shelf Registration or any Participating
Broker-Dealer who has notified the Company that it is utilizing the Prospectus contained in the Exchange Offer Registration Statement as provided in Section 3(G) hereof and, if requested by such Holder or Participating Broker-Dealer, confirm such
advice in writing promptly (i) when a Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, (ii) of any request by the SEC or any state securities authority for post-effective
amendments and supplements to a Registration Statement and Prospectus or for additional information after the Registration Statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) in the case of a Shelf Registration, if, between the effective date of the Shelf Registration Statement and the closing of any sale
of Registrable Securities covered thereby, the representations and warranties of the Company contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to the offering cease to be true and
correct in all material respects, (v) of the happening of any event or the discovery of any facts during the period the Shelf Registration Statement is effective which makes any statement made in such Registration Statement or the related Prospectus
untrue in any material respect or which requires the making of any changes in such Registration Statement or Prospectus in order to make the statements therein not misleading,
 (vi) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Registrable Securities or the Exchange Securities, as the case may be, for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose and (vii) of any determination by
the 
  

 11 

 Company that a post-effective amendment to a Registration Statement would be appropriate; 
  
 (G)    (1) in the case of the Exchange
Offer Registration Statement (a) include in the Exchange Offer Registration Statement a section entitled “Plan of Distribution,” which section shall be reasonably acceptable to the Representatives on behalf of the Participating
Broker-Dealers, and which shall contain a summary statement of the positions taken or policies made by the staff of the SEC with respect to the potential “underwriter” status of any broker-dealer that holds Registrable Securities acquired
for its own account as a result of market-making activities or other trading activities and that will be the beneficial owner (as defined in Rule 13d-3 under the 1934 Act) of Exchange Securities to be received by such broker-dealer in the Exchange
Offer, including a statement that any such broker-dealer who receives Exchange Securities for Registrable Securities pursuant to the Exchange Offer may be deemed a statutory underwriter and must deliver a prospectus meeting the requirements of the
1933 Act in connection with any resale of such Exchange Securities, (b) furnish to each Participating Broker-Dealer who has delivered to the Company the notice referred to in Section 3(F), without charge, as many copies of each Prospectus included
in the Exchange Offer Registration Statement, including any preliminary prospectus, and any amendment or supplement thereto, as such Participating Broker-Dealer may reasonably request, (c) hereby consent to the use of the Prospectus forming part of
the Exchange Offer Registration Statement or any amendment or supplement thereto, by any Person subject to the prospectus delivery requirements of the SEC, including all Participating Broker-Dealers, in connection with the sale or transfer of the
Exchange Securities covered by the Prospectus or any amendment or supplement thereto for up to 180 days following the Exchange Offer except during any Exchange Offer Suspension Period, and (d) include in the transmittal letter or similar
documentation to be executed by an exchange offeree in order to participate in the Exchange Offer (i) the following provision: 
  
 “If the exchange offeree is a broker-dealer holding Registrable Securities acquired for its own account as a result of market-making activities or
other trading activities, it will deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of Exchange Securities received in respect of such Registrable Securities pursuant to the Exchange Offer,” 

 
 and (ii) a statement to the effect that a broker-dealer by making the
acknowledgment described in clause (i) and by delivering a Prospectus in connection with the exchange of Registrable Securities, the broker-dealer will not be deemed to admit that it is an underwriter within the meaning of the 1933 Act; and (2) in
the case of any Exchange Offer Registration Statement, the Company agrees to deliver to any Participating Broker-Dealers upon the effectiveness of the Exchange Offer Registration Statement (a) an opinion of counsel or opinions of counsel
substantially in the form attached hereto as Annex E, (b) officers’ certificates substantially in the form customarily delivered by the Company in its public offerings of debt securities and (c) a comfort letter or comfort letters in customary
form to the extent permitted by Statement on Auditing Standards No. 72 of the American Institute of Certified Public Accountants (or if such a comfort letter is 
  

 12 

 not permitted, an agreed upon procedures letter in customary form) from the Company’s independent
certified public accountants (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements are, or are required to be, included in
the Registration Statement) at least as broad in scope and coverage as the comfort letter or comfort letters delivered to the Initial Purchasers in connection with the initial sale of the Securities to the Initial Purchasers; 
  
 (H)    (i) in the case of an Exchange
Offer, furnish counsel for the Initial Purchasers and (ii) in the case of a Shelf Registration, furnish counsel for the Holders of Registrable Securities, copies of any comment letters received from the SEC or any other request by the SEC or any
state securities authority for amendments or supplements to a Registration Statement and Prospectus or for additional information; 
  
 (I)    make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of a
Registration Statement as soon as practicable and provide prompt notice to legal counsel for the Holders of the withdrawal of any such order; 
  
 (J)    in the case of a Shelf Registration, furnish to each Holder of Registrable Securities, and each underwriter, if
any, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment thereto, including financial statements and schedules (without documents incorporated therein by reference and all exhibits thereto,
unless requested); 
  
 (K)    in the case of a Shelf Registration, cooperate with the selling Holders of Registrable Securities to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold to
the extent not held with the Depositary through Cede & Co., to remove any restrictive legends, and enable such Registrable Securities to be in such denominations (consistent with the provisions of the Indenture) and registered in such names as
the selling Holders or the underwriters, if any, may reasonably request at least three Business Days prior to the closing of any sale of Registrable Securities; 
  

(L)    upon the occurrence of any event or the discovery of any facts, each as contemplated by Sections 3(F)(ii),
(iii), (v), (vi) and (vii) hereof and subject to the provisions of the second paragraph immediately following Section 3(U) hereof, as promptly as practicable after the occurrence of such an event, use its reasonable commercial efforts to prepare a
supplement or post-effective amendment to the Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the
Registrable Securities or Participating Broker-Dealers, such Prospectus will not contain at the time of such delivery any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or will remain so qualified. At such time as such public disclosure is otherwise made or the Company determines that such disclosure is not necessary, in each case to correct any misstatement
of a material 
  

 13 

 fact or to include any omitted material fact, the Company agrees promptly to notify each Holder of such
determination and to furnish each Holder such number of copies of the Prospectus as amended or supplemented, as such Holder may reasonably request; 
  
 (M)    obtain a CUSIP number for all Exchange Securities or Registrable Securities, as the case may be, not later than
the effective date of a Registration Statement, and provide the Trustee with certificates for the Exchange Securities or the Registrable Securities, as the case may be, in a form eligible for deposit with the Depositary; 
  
 (N)    unless the Indenture, as its
relates to the Exchange Securities or the Registrable Securities, as the case may be, has already been so qualified, use its reasonable commercial efforts to (i) cause the Indenture to be qualified under the TIA in connection with the registration
of the Exchange Securities or Registrable Securities, as the case may be, (ii) cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of
the TIA and (iii) execute, and use its reasonable commercial efforts to cause the Trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable the
Indenture to be so qualified in a timely manner; 
  
 (O)    in the case of a Shelf Registration, enter into agreements (including underwriting agreements) and take all other customary and appropriate actions in order to expedite or facilitate the disposition of such
Registrable Securities and in such connection whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration: 
  
 (i)    make such representations and warranties to the Holders of such Registrable
Securities and the underwriters, if any, in form, substance and scope as has been customarily made by the Company to underwriters in similar offerings of debt securities of the Company; 
  
 (ii)    obtain opinions of counsel of the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any, and the Holders of a majority in principal amount of the Registrable Securities being sold) addressed to each selling Holder and the
underwriters, if any, covering the matters customarily covered in opinions requested in sales of securities or underwritten offerings of the Company; 
  
 (iii)    obtain “cold comfort” letters and updates thereof from the Company’s independent certified
public accountants (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements are, or are required to be, included in the
Registration Statement) addressed to the underwriters, if any, and use reasonable efforts to have such letter addressed to the selling Holders of Registrable Securities (to the extent consistent with 
  

 14 

 Statement on Auditing Standards No. 72 of the American Institute of Certified Public Accounts), such
letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters to underwriters in connection with similar underwritten offerings of the Company; 
  
 (iv)    if an underwriting agreement is
entered into, cause the same to set forth indemnification provisions and procedures substantially equivalent to the indemnification provisions and procedures set forth in Section 4 hereof with respect to the underwriters and all other parties to be
indemnified pursuant to said Section; and 
  
 (v)    deliver such documents and certificates as may be reasonably requested and as are customarily delivered in similar offerings to the Holders of a majority in principal amount of the Registrable Securities being
sold and the managing underwriters, if any; 
  
 the above shall be
done at (i) the effectiveness of such Registration Statement (and each post-effective amendment thereto) and (ii) each closing under any underwriting or similar agreement as and to the extent required thereunder; 
  
 (P)    in the case of a Shelf
Registration or if a Prospectus is required to be delivered by any Participating Broker-Dealer in the case of an Exchange Offer, make available for inspection by representatives of the Holders of the Registrable Securities, any underwriters
participating in any disposition pursuant to a Shelf Registration Statement, any Participating Broker-Dealer and any counsel or accountant retained by any of the foregoing, all financial and other records, pertinent corporate documents and
properties of the Company reasonably requested by any such persons, and cause the respective officers, directors, employees and any other agents of the Company to supply all information reasonably requested by any such representative, underwriter,
special counsel or accountant in connection with a Registration Statement, and make such representatives of the Company available for discussion of such documents as shall be reasonably requested by the Initial Purchasers in order to enable such
persons to conduct a reasonable investigation within the meaning of Section 11 of the 1933 Act; provided, however, that such persons shall first agree in writing with the Company that any information that is reasonably and in good
faith designated by the Company in writing as confidential at the time of delivery of such information shall be kept confidential by such persons, unless (i) disclosure of such information is required by court or administrative order or is necessary
to respond to inquiries of regulatory authorities, (ii) disclosure of such information is required by law (including any disclosure requirements pursuant to federal securities laws in connection with the filing of the Shelf Registration Statement or
the use of any Prospectus), (iii) such information becomes generally available to the public other than as a result of a disclosure or failure to safeguard such information by such persons or (iv) such information becomes available to such persons
from a source other than the Company and its subsidiaries and such source is not known by such persons to be bound by a confidentiality agreement; and provided, further, that the foregoing inspection and information gathering shall be
coordinated by (x) the managing underwriter in connection with any underwritten offering pursuant to a Shelf 
  

 15 

 Registration, (y) the Holder or Holders designated by the participating Majority Holders in connection
with any nonunderwritten offering pursuant to a Shelf Registration or (z) the Participating Broker-Dealer holding the largest amount of Registrable Securities in the case of use of a Prospectus included in the Exchange Offer Registration Statement,
together with one counsel designated by and on behalf of such persons; 
  
 (Q)    (i) in the case of an Exchange Offer Registration Statement, within a reasonable time prior to the filing of any Exchange Offer Registration Statement, any Prospectus forming a part thereof,
any amendment to an Exchange Offer Registration Statement or amendment or supplement to such Prospectus, provide copies of such document to the Initial Purchasers and to counsel to the Holders of Registrable Securities and make such changes in any
such document prior to the filing thereof as the Initial Purchasers or counsel to the Holders of Registrable Securities may reasonably request and, except as otherwise required by applicable law, not file any such document in a form to which the
Initial Purchasers on behalf of the Holders of Registrable Securities and counsel to the Holders of Registrable Securities shall not have previously been advised and furnished a copy of or to which the Initial Purchasers on behalf of the Holders of
Registrable Securities or counsel to the Holders of Registrable Securities shall reasonably object (which objection shall be made within a reasonable period of time), and make the representatives of the Company available for discussion of such
documents as shall be reasonably requested by the Initial Purchasers; and (ii) in the case of a Shelf Registration, a reasonable time prior to filing any Shelf Registration Statement, any Prospectus forming a part thereof, any amendment to such
Shelf Registration Statement or amendment or supplement to such Prospectus, provide copies of such document to the Holders of Registrable Securities, to the Initial Purchasers, to counsel for the Holders and to the underwriter or underwriters of an
underwritten offering of Registrable Securities, if any, make such changes in any such document prior to the filing thereof as the Initial Purchasers, the counsel to the Holders or the underwriter or underwriters reasonably request and not file any
such document in a form to which the Majority Holders, the Initial Purchasers on behalf of the Holders of Registrable Securities, counsel for the Holders of Registrable Securities or any underwriter shall not have previously been advised and
furnished a copy of or to which the Majority Holders, the Initial Purchasers on behalf of the Holders of Registrable Securities, counsel to the Holders of Registrable Securities or any underwriter shall reasonably object (which objection shall be
made within a reasonable period of time), and make the representatives of the Company available for discussion of such document as shall be reasonably requested by the Holders of Registrable Securities, the Initial Purchasers on behalf of such
Holders, counsel for the Holders of Registrable Securities or any underwriter; 
  
 (R)    use its reasonable commercial efforts to (a) if the Securities have been rated prior to the initial sale of such Securities, confirm such ratings will apply to the Securities covered by a
Registration Statement, or (b) if the Securities were not previously rated, cause the Securities covered by a Registration Statement to be rated with the appropriate rating agencies, if so requested by Holders of a majority in aggregate principal
amount of Securities covered by such Registration Statement, or by the managing underwriters, if any. 
  

 16 

 (S)    otherwise comply with all applicable rules and regulations of
the SEC and make available to its security holders, as soon as reasonably practicable, an earnings statement covering at least 12 months which shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder; 
  
 (T)    cooperate and assist in any
filings required to be made with the NASD and, in the case of a Shelf Registration, in the performance of any due diligence investigation by any underwriter and its counsel (including any “qualified independent underwriter” that is
required to be retained in accordance with the rules and regulations of the NASD); and 
  
 (U)    upon consummation of an Exchange Offer, obtain a customary opinion of counsel to the Company addressed to the
Trustee for the benefit of all Holders of Registrable Securities participating in the Exchange Offer, and which includes an opinion substantially to the effect that (i) the Company has duly authorized, executed and delivered the Exchange Securities
and the related supplemental indenture and (ii) each of the Exchange Securities and related indenture constitute a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its respective terms (with
customary exceptions). 
  
 In the case of a Shelf Registration
Statement, the Company may (as a condition to such Holder’s participation in the Shelf Registration) require each Holder of Registrable Securities to furnish to the Company such information regarding the Holder and the proposed distribution by
such Holder of such Registrable Securities as the Company may from time to time reasonably require for inclusion in the Shelf Registration Statement and request in writing. 
  
 In the case of a Shelf Registration Statement, each Holder agrees, and in the case of the Exchange Offer Registration
Statement, each Participating Broker-Dealer agrees, that, upon receipt of any notice from the Company of (a) the happening of any event or the discovery of any facts, each of the kind described in Sections 3(F)(ii), (iii) or (v) hereof or (b) the
Company’s determination, in its reasonable judgment, upon advice of counsel, that the continued effectiveness and use of the Shelf Registration Statement or the Prospectus included in the Shelf Registration Statement or the Exchange Offer
Registration Statement would (x) require the disclosure of material information, which the Company has a bona fide business reason for preserving as confidential, or (y) interfere with any financing, acquisition, corporate reorganization or
other material transaction involving the Company or any of its subsidiaries, such Holder or Participating Broker-Dealer, as the case may be, will forthwith discontinue disposition of Registrable Securities pursuant to such Registration Statement or
Prospectus until the receipt by such Holder or Participating Broker-Dealer, as the case may be, of either copies of the supplemented or amended Prospectus contemplated by Section 3(L) hereof, and, if so directed by the Company, such Holder or
Participating Broker-Dealers will deliver to the Company (at its expense) all copies in its possession of the Prospectus covering such Registrable Securities current at the time of receipt of such notice, or notice in writing from the Company that
such Holder or Participating Broker-Dealers may resume disposition of Registrable Securities pursuant to such Registration Statement or Prospectus. If the Company shall give any such notice described in clause (a) above to suspend the disposition of
Registrable Securities pursuant to a Registration Statement as a result of the happening of any event or the discovery of 
  

 17 

 any facts, each of the kind described in Section 3(F)(ii), (iii) and (v) hereof, the Company shall be deemed to have used
its reasonable commercial efforts to keep such Registration Statement effective during such Suspension Period provided that the Company shall use its reasonable commercial efforts to file and have declared effective (if an amendment) as soon as
practicable an amendment or supplement to such Registration Statement. The Company shall extend the period during which such Registration Statement shall be maintained effective or the Prospectus used pursuant to this Agreement by the number of days
during the period from and including the date of the giving of the notice described in clauses (a) and (b) above to and including the date when the Holders or Participating Broker-Dealers shall have received copies of the supplemented or amended
Prospectus necessary to resume such dispositions or notification that they may resume such disposition under an existing Prospectus. 
  
 If any of the Registrable Securities covered by any Shelf Registration Statement are to be sold in an underwritten offering, the underwriter or
underwriters and manager or managers that will manage such offering will be selected by the Majority Holders of such Registrable Securities included in such offering and shall be reasonably acceptable to the Company. No Holder of Registrable
Securities may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder’s Registrable Securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. 
  
 4.    Indemnification; Contribution. 

 
 (A)    In the event of a Shelf Registration Statement
or in connection with any prospectus delivery pursuant to an Exchange Offer Registration Statement by an Initial Purchaser or Participating Broker-Dealer, the Company agrees to indemnify and hold harmless the Initial Purchasers, each Holder, each
Participating Broker-Dealer, each Person who participates as an underwriter (any such Person being an “Underwriter”) and each Person, if any, who controls any Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act (collectively, the “Section 4 Persons”), against any losses, claims, damages, liabilities or expenses (including the reasonable cost of investigating and defending against
any claims therefore and counsel fees incurred in connection therewith as such expenses are incurred), joint or several, which may be based upon either the 1933 Act, or the 1934 Act, or any other statute or at common law, on the ground or alleged
ground that any Registration Statement (or any amendment or supplement thereto) pursuant to which Exchange Securities or Registrable Securities were registered under the 1933 Act or any Prospectus included therein (or any amendment or supplement
thereto) included or allegedly included an untrue statement of material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, unless such statement or omission was
made in reliance upon, and in conformity with, written information furnished to the Company by any such Section 4 Person specifically for use in the preparation thereof; provided that in no case is the Company to be liable with respect to any
claims made against any Section 4 Person unless such Section 4 Person shall have notified the Company in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been
served upon such Section 4 Person, but 
  

 18 

 failure to notify the Company of any such claim shall not relieve it from any liability which it may have to such Section
4 Person otherwise than on account of the indemnity agreement contained in this paragraph; and provided, further, that the foregoing indemnity with respect to any Prospectus, including any preliminary prospectus or preliminary
prospectus supplement, shall not inure to the benefit of any Section 4 Person if a copy of the Prospectus (as amended or supplemented, exclusive of the material incorporated by reference) had not been sent or given by or on behalf of such Section 4
Person to the Person asserting any such losses, claims, damages or liabilities concurrently with or prior to delivery of the written confirmation of the sale of Exchange Securities or Registrable Securities, as the case may be, to such Person and
the untrue statement or omission of a material fact contained in any such Prospectus was corrected in the Prospectus (as amended or supplemented) if the Company had previously furnished copies thereof to such Section 4 Persons. 
  
 The Company will be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense of any suit brought to enforce any such liability, but, if the Company elects to assume the defense, such defense shall be conducted by counsel chosen by it. In the event that the Company elects to
assume the defense of any such suit and retains such counsel, each Section 4 Person may retain additional counsel but shall bear the fees and expenses of such counsel unless (i) the Company shall have specifically authorized the retaining of such
counsel or (ii) the parties to such suit include the Section 4 Person or Section 4 Persons and such persons have been advised by such counsel that one or more legal defenses may be available to it or them which may not be available to the Company,
in which case the Company shall not be entitled to assume the defense of such suit on behalf of such Section 4 Person, notwithstanding its obligation to bear the reasonable fees and expenses of such counsel, it being understood, however, that the
Company shall not, in connection with any one such suit or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at any time for all such Section 4 Persons, which firm shall be designated in writing by the Initial Purchasers. The Company shall not be liable to indemnify any Person for any
settlement of any such claim effected without the Company’s prior written consent. This indemnity agreement will be in addition to any liability, which the Company might otherwise have. 
  
 (B)    Each Section 4 Person agrees severally and not
jointly to indemnify and hold harmless the Company, each of the Company’s directors, each of the Company’s officers who have signed the Registration Statement and each person, if any, who controls the Company within the meaning of the 1933
Act or the 1934 Act, against any losses, claims, damages, liabilities or expenses (including the reasonable cost of investigating and defending against any claims therefor and counsel fees incurred in connection therewith as such expenses are
incurred), joint or several, which may be based upon the 1933 Act, or any other statute or at common law, on the ground or alleged ground that any Registration Statement (or any amendment or supplement thereto) pursuant to which Exchange Securities
or Registrable Securities were registered under the 1933 Act or any Prospectus included therein (or any amendment or supplement thereto) included or allegedly included an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein not misleading, but only insofar as any such statement or omission was made in reliance upon, and in conformity with, written information furnished to the Company by
such 
  

 19 

 Section 4 Person specifically for use in the preparation thereof; provided that in no case is such Section 4
Person to be liable with respect to any claims made against the Company or any such director, officer or controlling person unless the Company or any such director, officer or controlling person shall have notified such Section 4 Person in writing
within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon the Company or any such director, officer or controlling person, but failure to notify such Section 4
Person of any such claim shall not relieve it from any liability which it may have to the Company or any such director, officer or controlling person otherwise than on account of the indemnity agreement contained in this paragraph. Notwithstanding
any other provision of this subsection (B), with respect to any amount due to an indemnified person under this subsection (B), such Section 4 Person shall not be liable for any amount in excess of the amount by which the net proceeds received by
such Section 4 Person from the sale of Exchange Securities or Registrable Securities pursuant to a Registration Statement exceeds the amount of damages which such Section 4 Person has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. 
  
 Such
Section 4 Person will be entitled to participate at its own expense in the defense, or, if it so elects, to assume the defense of any suit brought to enforce any such liability, but, if such Section 4 Person elects to assume the defense, such
defense shall be conducted by counsel chosen by it. In the event that such Section 4 Person elects to assume the defense of any such suit and retain such counsel, the Company or such director, officer or controlling person, defendant or defendants
in the suit, may retain additional counsel but shall bear the fees and expenses of such counsel unless (i) such Section 4 Person shall have specifically authorized the retaining of such counsel or (ii) the parties to such suit include the Company or
any such director, officer, trustee or controlling person and such Section 4 Person and the Company or such director, officer, trustee or controlling person have been advised by such counsel that one or more legal defenses may be available to it or
them which may not be available to such Section 4 Person, in which case such Section 4 Person shall not be entitled to assume the defense of such suit on behalf of the Company or such director, officer, trustee or controlling person, notwithstanding
its obligation to bear the reasonable fees and expenses of such counsel, it being understood, however, that such Section 4 Person shall not, in connection with any one such suit or proceeding or separate but substantially similar or related actions
or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one a separate firm of attorneys at any time for all of the Company and any such
director, officer or controlling person, which firm shall be designated in writing by the Company. Such Section 4 Person shall not be liable to indemnify any person for any settlement of any such claim effected without such Section 4 Person’s
prior written consent. This indemnity agreement will be in addition to any liability which such Section 4 Person might otherwise have. 
  
 (C)    If the indemnification provided for in this Section 4 is unavailable or insufficient to hold harmless an indemnified party
under subsections (A) or (B) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to in
subsection (A) or (B) above in such proportion as is appropriate to reflect the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions that resulted
in such losses, claims, damages or 
  

 20 

 liabilities (or actions in respect thereof) as well as any other relevant equitable considerations. The relative fault of
the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the
one hand or such Holder or such other indemnified party, as the case may be, on the other, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid by
an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (C) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim which is the subject of this subsection (C). Notwithstanding any other provision of this subsection (C), the Holders of the Securities and the Exchange Securities shall not be required
to contribute any amount in excess of the amount by which the net proceeds received by such Holders from the sale of such securities pursuant to a Registration Statement exceeds the amount of damages which such Holders have otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The obligations of the Holders of the Securities and Exchange Securities in this subsection (C) to contribute are several in proportion to the net proceeds
received from the sale of such securities by such Holder and not joint. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this subsection (C), each person, if any, who controls such indemnified party within the meaning of the 1933 Act or the 1934 Act shall have the same rights to contribution as such indemnified party
and each person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act shall have the same rights to contribution as the Company. 
  

5.    Miscellaneous. 
  
 5.1    Rule 144 and Rule 144A.    For so long as the Company is subject to the reporting requirements of
Section 13 or 15 of the 1934 Act, the Company covenants that it will file the reports required to be filed by it under the 1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by the SEC thereunder. If the
Company ceases to be so required to file such reports, the Company covenants that it will upon the request of any Holder of Registrable Securities (A) make publicly available such information as is necessary to permit sales pursuant to Rule 144
under the 1933 Act, (B) deliver such information to a prospective purchaser as is necessary to permit sales pursuant to Rule 144A under the 1933 Act and (C) take such further action that is reasonable in the circumstances, in each case, to the
extent required from time to time to enable such Holder to sell its Registrable Securities without registration under the 1933 Act within the limitation of the exemptions provided by (i) Rule 144 under the 1933 Act, as such Rule may be amended from
time to time, (ii) Rule 144A under the 1933 Act, as such Rule may be amended from time to time or (iii) any similar rules or regulations hereafter adopted by the SEC. Upon the request of any Holder of Registrable Securities, the Company will deliver
to such Holder a written statement as to whether it has complied with such requirements. 
  
 5.2    No Inconsistent Agreements.    The Company has not entered into and the Company will not after the date of this Agreement enter into any agreement which is
inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise 
  

 21 

 conflicts with the provisions hereof. The rights granted to the Holders hereunder do not and will not for the term of
this Agreement in any way conflict with the rights granted to the holders of the Company’s other issued and outstanding securities under any such agreements. 
  
 5.3    Amendments and Waivers.    The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company has obtained the written consent of Holders of at least a majority in
aggregate principal amount of the outstanding Registrable Securities affected by such amendment, modification, supplement, waiver or departure. Without the consent of the Holder of each Security however, no modification may change the provisions
relating to the payment of Additional Interest. 
  
 5.4    Notices.    All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, registered first-class mail, telex, telecopier, or any
courier guaranteeing overnight delivery (a) if to a Holder, at the most current address given by such Holder to the Company by means of a notice given in accordance with the provisions of this Section 5.4, which address initially is the address set
forth in the Purchase Agreement with respect to the Initial Purchasers; and (b) if to the Company, initially at the Company’s address set forth in the Purchase Agreement, and thereafter at such other address of which notice is given in
accordance with the provisions of this Section 5.4. 
  
 All such
notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; two Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt
is acknowledged, if telecopied; and on the next Business Day if timely delivered to an air courier guaranteeing overnight delivery. 
  
 Copies of all such notices, demands or other communications shall be concurrently delivered by the person giving the same to the Trustee under the
Indenture, at the address specified in such Indenture. 
  
 5.5    Successor and Assigns.    This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation
and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase
Agreement or the Indenture. If any transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and
by taking and holding such Registrable Securities such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, including the restrictions on resale set forth in this
Agreement and, if applicable, the Purchase Agreement, and such person shall be entitled to receive the benefits hereof. 
  
 5.6    Third Party Beneficiaries.    The Initial Purchasers (even if the Initial Purchasers are not Holders
of Registrable Securities) shall be third party beneficiaries to the agreements made hereunder between the Company, on the one hand, and the Holders, on the 
  

 22 

 other hand, and shall have the right to enforce such agreements directly to the extent they deem such enforcement
necessary or advisable to protect their rights or the rights of Holders hereunder. Each Holder of Registrable Securities shall be a third party beneficiary to the agreements made hereunder between the Company, on the one hand, and the Initial
Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights hereunder. 
  
 5.7    Specific Performance.    Without limiting the remedies available to
the Initial Purchasers and the Holders, the Company acknowledges that any failure by the Company to comply with its obligations under Sections 2.1 through 2.4 hereof may result in material irreparable injury to the Initial Purchasers or the Holders
for which there is no adequate remedy at law, that it would not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Company’s obligations under Sections 2.1 through 2.4 hereof. 
  
 5.8    Restriction on Resales.    Until the expiration of two years after the original issuance of the Securities, the Company will not, and will cause its
“affiliates” (as such term is defined in Rule 144(a)(1) under the 1933 Act) not to, resell any Securities which are “restricted securities” (as such term is defined under Rule 144(a)(3) under the 1933 Act) that have been
reacquired by any of them and shall immediately upon any purchase of any such Securities submit such Securities to the Trustee for cancellation. 
  
 5.9    Counterparts.    This Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed signature page of this Agreement by facsimile or
any other rapid transmission device designed to produce a written record of the communication transmitted shall be as effective as delivery of a manually executed counterpart thereof. 
  
 5.10    Headings.    The headings in this Agreement are for the convenience
of reference only and shall not limit or otherwise affect the meaning hereof. 
  
 5.11    GOVERNING LAW.    THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICT OF LAWS THEREOF. 
  
 5.12    Severability.    In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. 
  
 5.13    Entire Agreement.    This Agreement and the Purchase Agreement
represent the entire agreement among the parties hereto with respect to the subject matter hereof and supercedes and replaces any and all prior agreements and understandings, whether oral or written, with respect thereto. 
  

 23 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

  

	 CENTERPOINT ENERGY HOUSTON
     ELECTRIC, LLC

		
	 By:
	 	 
	 	

	 	 	 Name:
 Title:

  
 CONFIRMED AND ACCEPTED

 as of the date first above written: 
  

	BANC OF AMERICA SECURITIES LLC, for itself and as representative of the Initial Purchasers
		
	By:	 	 
	 	

	 	 	 Name:
 Title:

  

	DEUTSCHE BANK SECURITIES INC., for itself and as representative of the Initial Purchasers
		
	By:	 	 
	 	

	 	 	 Name:
 Title:

		
	By:	 	 
	 	

	 	 	 Name:
 Title:

  

	WACHOVIA CAPITAL MARKETS, LLC, for itself and as representative of the Initial Purchasers
		
	By:	 	 
	 	

	 	 	 Name:
 Title:

  

 24 

 ANNEX A 
  
 Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus
in connection with any resale of such Exchange Securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning
of the 1933 Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Securities where such Securities were acquired by
such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date (as defined herein), it will make this Prospectus available to any broker-dealer
for use in connection with any such resale. See “Plan of Distribution.” 

 ANNEX B 
  
 Each broker-dealer that receives Exchange Securities for its own account in exchange for Securities, where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. See “Plan of Distribution.” 
  

 2 

 ANNEX C 
  
 PLAN OF DISTRIBUTION 
  
 Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus
in connection with any resale of such Exchange Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Securities
where such Securities were acquired as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date, it will make this Prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale. In addition, until                 , 200 , all dealers effecting transactions in the Exchange
Securities may be required to deliver a prospectus.(1) 
  
 The Company will not receive any proceeds from any sale of Exchange Securities by broker-dealers. Exchange Securities
received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange
Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such Exchange Securities. Any broker-dealer that resells Exchange Securities that were received by it for
its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Securities may be deemed to be an “underwriter” within the meaning of the 1933 Act and any profit on any such
resale of Exchange Securities and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the 1933 Act. The Letter of Transmittal states that, by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the 1933 Act. 
  
 For a period of 180 days after the Expiration Date the Company will promptly send additional copies of this Prospectus and any amendment or supplement to
this Prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the Holders of the Securities) other
than commissions or concessions of any brokers or dealers and will indemnify the Holders of the Securities (including any broker-dealers) against certain liabilities, including liabilities under the 1933 Act. 
  
  

 1 In addition, the legend required by
Item 502(b) of Regulation S-K will appear on the inside front cover page of the Exchange Offer prospectus below the Table of Contents. 
  

 3 

 ANNEX D 
  
  ̈ CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. 
  
 Name:
                                        
                                        
            
  
 Address:
                                        
                                        
        
  
  
 If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Securities.
If the undersigned is a broker-dealer that will receive Exchange Securities for its own account in exchange for Securities that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a
prospectus in connection with any resale of such Exchange Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the 1933 Act.

  
  

 4 

 ANNEX E 
  
 FORM OF OPINION OF COUNSEL 
  
 The Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended. 
  
 The Registration Statement has become effective under the 1933 Act, and, to the best of our knowledge, no stop order
suspending the effectiveness of the Registration Statement or any part thereof has been issued and no proceedings for that purpose have been instituted and are pending or are threatened by the SEC under the 1933 Act. 
  
 The Exchange Offer Registration Statement and the Prospectus (except for (A)
the financial statements, including the notes and schedules, if any thereto (except to the extent such notes describe legal and governmental proceedings to which the Company is a party and are incorporated by reference into one or more items of a
report that is incorporated by reference or included in therein other than an item that requires financial statements to be provided) or the auditor’s reports on the audited portions thereof, (B) the other accounting, financial and statistical
data, and (C) the exhibits thereto, as to which we have not been asked to comment) comply as to form in all material respects with the applicable requirements of the 1933 Act and the applicable rules and regulations promulgated under the 1933 Act.

  
 We have participated in conferences with certain officers and
other representatives of the Company, representatives of the independent public accountants of the Company, representatives of the [Initial Purchasers] [Holders] and counsel for the [Initial Purchasers] [Holders], at which the contents of the
Registration Statement and the Prospectus and related matters were discussed. Although we have not undertaken to determine independently, and do not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in
or incorporated by reference in the Registration Statement or the Prospectus, we advise you that, on the basis of the foregoing (relying as to materiality to a large extent upon statements and other representations of officers and other
representatives of the Company), no facts have come to our attention that lead us to believe that the Registration Statement and any amendment made thereto prior to the date hereof (except for (A) the financial statements, including the notes and
schedules, if any thereto or the auditor’s reports on the audited portions thereof, (B) the other accounting, financial and statistical data, and (C) the exhibits thereto, as to which we have not been asked to comment), as of the time the
Registration Statement became effective or such amendment was filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, and any amendment or supplement thereto made prior to the date hereof (except for (A) the financial statements, including the notes and schedules, if any thereto or the auditor’s reports on the audited portions thereof, (B)
the other accounting, financial and statistical data, and (C) the exhibits thereto, as to which we have not been asked to comment), as of the date of the Prospectus or such amendment or supplement contained any 

 untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading. 
  

 2 

 EXHIBIT C 
  
 FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE 
 OR REGISTRATION OF TRANSFER OF SECURITIES 
  
 Re:    5.75% General Mortgage Bonds, Series M, due 2014 (the “Series M Bonds”), of CenterPoint Energy Houston Electric, LLC (the “Company”) 
  
 This Certificate relates to
$         principal amount of Series M 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 M Bond or Series M Bonds. 
  
 In connection with such request and in respect of each such Series M 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 M Bonds and that the transfer of this Series M Bond does not require registration under the Securities Act (as defined below) because:* 
  
  ̈    Such Series M Bond is being acquired for the Transferor’s own account without transfer. 
  
  ̈    Such Series M 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 D to this Officer’s Certificate). 
  
  ̈    Such Series M 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. 
  
  

 C-1 

 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:
	 	 /s/

	 Name:
 Title:
 Address:

  

		
	 Date:
	 	/
	 	

	 	 	 

  

 C-2 

 EXHIBIT D 
  
 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 5.75% General Mortgage Bonds,
Series M, due 2014, (the “Series M Bonds”) of CenterPoint Energy Houston Electric, LLC (the “Company”), we represent that: 
  
 (i)    the offer or sale of the Series M 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 M 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, société 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. 
  

 D-1 

 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:
	 	 /s/

	 Name:
 Title:
 Address:

  

 D-2Securities Purchase Agreement by and among Viisage Tech., Inc. and the purchaser

 Exhibit 10.1 
  
 SECURITIES PURCHASE AGREEMENT 
  
 THIS SECURITIES PURCHASE AGREEMENT is made as of September 8, 2003, by and among Viisage Technology, Inc. (the “Company”), a
corporation organized under the laws of the State of Delaware, with its principal offices at 30 Porter Road, Littleton, Massachusetts 01460, and the purchasers whose names and addresses are set forth on the signature page hereof (each, a
“Seligman Purchaser” and collectively, the “Seligman Purchasers”). 
  
 IN CONSIDERATION of the mutual covenants contained in this Agreement, the Company and the Seligman Purchasers agree as follows: 
  
 SECTION 1. Authorization of Sale of the Securities. Subject to the
terms and conditions of this Agreement, the Company has authorized the sale of up to 3,973,510 shares (the “Securities”) of common stock, par value $.001 per share (the “Common Stock”), of the Company.

  
 SECTION 2. 
  
 2.1 Agreement to Sell and Purchase the Securities. At the First
Closing (as defined in Section 3.1), the Company will sell to each Seligman Purchaser, and each Seligman Purchaser will buy from the Company, upon the terms and conditions hereinafter set forth, the number of shares of Common Stock set forth
opposite such Seligman Purchaser’s name below at the purchase price shown opposite such Seligman Purchaser’s name below: 
  

	 Seligman Purchaser

	  	Number of Shares
to Be Purchased

	  	Price Per Share

	  	 Aggregate
 Price

	 Seligman Communications and Information Fund, Inc.
	  	1,787,378	  	$	3.775	  	$	6,747,351.95
				
	 Seligman New Technologies Fund, Inc.
	  	61,252	  	$	3.775	  	$	231,226.30
				
	 Seligman New Technologies Fund II, Inc.
	  	344,370	  	$	3.775	  	$	1,299,996.75

  
 At the Second Closing
(as defined in Section 3.1), the Company will sell to the Seligman Purchasers and the Seligman Purchasers will buy from the Company, upon the terms and conditions hereinafter set forth, an aggregate of 456,007 shares of Common Stock at a purchase
price of $3.775 per share. J. & W. Seligman & Co. Incorporated shall notify the Company no later than three business days prior to the Second Closing of the number of Second Closing Securities to be purchased by each Seligman Purchaser.

  
 The Company is entering into this same form of purchase
agreement with certain other investors (the “Other Purchasers”) and expects to complete sales of the Securities to them on the First Closing Date (as defined in Section 3.1). The Securities to be sold to the Seligman
Purchasers and the Other Purchasers on the First Closing Date are hereinafter referred to as the “First Closing Securities”), and the Securities to be sold to the Seligman Purchasers on the Second Closing Date (as defined in
Section 3.1) are hereinafter referred to as the “Second Closing Securities”). The Seligman Purchasers and the Other Purchasers are hereinafter sometimes collectively referred to as the “Purchasers,”
and individually as a “Purchaser,” and this Agreement and the agreements executed by the Other Purchasers 

 are hereinafter sometimes collectively referred to as the “Agreements.” The term
“Placement Agents” shall mean Needham & Company, Inc. and Adams, Harkness & Hill Inc. 
  
 2.2 Independent Nature of Purchasers’ Obligations and Rights. The rights and obligations of each Purchaser under each Agreement are several
and not joint with the rights and obligations of each other Purchaser and a Purchaser shall not be responsible in any way for the performance of the obligations of any other Purchaser under any Agreement. Nothing contained herein or in any
Agreement, and no action taken by any Purchaser pursuant thereto, shall constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in
concert with respect to such obligations or the transactions contemplated by the Agreements. Except as provided herein and under Delaware law, each Purchaser shall be entitled to independently protect and enforce its rights, including without
limitation the rights arising out of this Agreement or out of the Other Agreements, and it shall not be necessary for the other Purchasers to be joined as an additional party in any proceeding for such purpose. 
  
 SECTION 3. Closing and Delivery of the Securities. 
  
 3.1 Closing. The purchase and sale of the First Closing Securities
(the “First Closing”) shall occur as soon as practicable after the execution of the Agreements by the Company and the Purchasers on a date mutually agreed upon by the Company and the Purchasers (the “First Closing
Date”) at the offices of the Company’s counsel. The purchase and sale of the Second Closing Securities (the “Second Closing”) shall occur as soon as practicable after the consummation of the Company’s
acquisition of the outstanding share capital of ZN Vision Technologies AG (“ZN”) pursuant to that certain Securities Purchase Agreement dated March 28, 2003 by and among the Company, ZN and certain other parties (the
“ZN Closing”), on a date mutually agreed upon by the Company and the Seligman Purchasers (the “Second Closing Date”) at the offices of the Company’s counsel, provided that in no event shall the
Second Closing Date be more than two (2) business days after the date of the ZN Closing. 
  
 3.2 Delivery of the Securities. At the First Closing and the Second Closing, the Company shall deliver to each Seligman Purchaser one or more stock certificates registered in the name of such Seligman
Purchaser, or in such nominee name(s) as designated by such Seligman Purchaser in the Stock Certificate Questionnaire attached hereto as Exhibit A, representing the Securities to be purchased at such Closing by such Seligman Purchaser as set
forth in Section 2 above or in the notice provided by J. & W. Seligman & Co. Incorporated to the Company pursuant to Section 2.1, as applicable, and bearing the legend specified in Section 5.7 hereof referring to the fact that the Securities
were sold in reliance upon the exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”) provided by Section 4(2) thereof and Rule 506 thereunder. The Company will promptly substitute one
or more replacement certificates without the legend at such time as the Registration Statement (as defined in Section 4.3) becomes effective. 
  
 3.3 Conditions to Closing. (a) The Company’s obligation to complete the purchase and sale of the First Closing Securities pursuant to this
Agreement and deliver such stock certificate(s) to any Seligman Purchaser at the First Closing shall be subject to the following conditions, any one or more of which may be waived by the Company: (i) receipt by the Company from such Seligman
Purchaser of same-day funds in the full amount of the purchase price for the First Closing Securities to be purchased by such Seligman Purchaser as set forth in Section 2 above; (ii) completion of purchases and sales under the Agreements with all of
the Other Purchasers; (iii) the accuracy as of the First Closing of the representations and warranties made by such Seligman Purchaser in this Agreement in all material respects (unless any such representation and warranty is qualified by
materiality, in which case it shall be 
  

 2 

 true and correct in all respects) and the fulfillment of those undertakings of such Seligman Purchaser in this Agreement
to be fulfilled prior to the First Closing; and (iv) receipt by the Company of a completed version of Exhibit A, Exhibit B and Exhibit C-1 or C-2 (as applicable) attached hereto from such Seligman Purchaser. 

 
 (b) The Company’s obligation to complete the purchase and sale of the
Second Closing Securities pursuant to this Agreement and deliver such stock certificate(s) to any Seligman Purchaser at the Second Closing shall be subject to the following conditions, any one or more of which may be waived by the Company: (i)
receipt by the Company from such Seligman Purchaser of same-day funds in the full amount of the purchase price for the Second Closing Securities to be purchased by such Seligman Purchaser as set forth in the notice provided by J. & W. Seligman
& Co. Incorporated to the Company pursuant to Section 2.1; and (ii) the accuracy as of the Second Closing of the representations and warranties made by such Seligman Purchaser in this Agreement in all material respects (unless any such
representation and warranty is qualified by materiality, in which case it shall be true and correct in all respects) and the fulfillment of those undertakings of such Seligman Purchaser in this Agreement to be fulfilled prior to the Second Closing.

  
 (b) Each Seligman Purchaser’s obligation to accept
delivery of such stock certificate(s) and to pay for the First Closing Securities evidenced thereby shall be subject to the following conditions: (i) the Company, shall have obtained gross proceeds of at least $12,000,000 from the sale of the First
Closing Securities at the First Closing, less the gross amount to be invested by clients of J & W Seligman & Co. Incorporated at the Second Closing; (ii) the accuracy as of the First Closing of the representations and warranties made by the
Company in this Agreement in all material respects (unless any such representation and warranty is qualified by materiality, in which case it shall be true and correct in all respects) and the fulfillment of those undertakings of the Company in this
Agreement to be fulfilled prior to the First Closing and the receipt by such Seligman Purchaser of a certificate signed by the Chief Executive Officer and Chief Financial Officer of the Company to such effect; (iii) the receipt of the opinion
described in Section 4.21 dated as of the First Closing Date; and (iv) on the First Closing Date, no legal action, suit or proceeding shall be pending or threatened which seeks to restrain or prohibit the transactions contemplated by the Agreements.

  
 (c) Each Seligman Purchaser’s obligation to accept
delivery of such stock certificate(s) and to pay for the Second Closing Securities evidenced thereby shall be subject to the following conditions: (i) the accuracy as of the Second Closing of the representations and warranties made by the Company in
this Agreement in all material respects (unless any such representation and warranty is qualified by materiality, in which case it shall be true and correct in all respects) and the fulfillment of those undertakings of the Company in this Agreement
to be fulfilled prior to the Second Closing, and the receipt by such Seligman Purchaser of a certificate signed by the Chief Executive Officer and Chief Financial Officer of the Company to such effect; (ii) the receipt of the opinion described in
Section 4.21 dated as of the Second Closing Date; (iii) on the Second Closing Date, no legal action, suit or proceeding shall be pending or threatened which seeks to restrain or prohibit the transactions contemplated by the Agreements; and (iv) on
the Second Closing Date, the aggregate number of shares of Common Stock purchased and to be purchased by the Seligman Purchasers under this Agreement shall not exceed nine and one-half percent (9.5%) of the then outstanding shares of Common Stock.
In the event that purchase of the Second Closing Securities would cause the Seligman Purchasers, collectively, to exceed the foregoing 9.5% threshold, then the number of shares of Second Closing Securities to be purchased by the Seligman Purchasers
at the Second Closing shall automatically be reduced to that number of shares which will not cause the Seligman Purchasers, collectively, to exceed the foregoing 9.5% threshold. 
  

 3 

 SECTION 4. Representations, Warranties and Covenants of the Company. The Company hereby represents
and warrants to, and covenants with, each Seligman Purchaser, as follows: 
  
 4.1 Organization and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and the Company is qualified to do
business as a foreign corporation and is in good standing in each jurisdiction in which qualification is required under applicable law, except where failure to so qualify would not have a Material Adverse Effect (as defined herein). Each of the
Subsidiaries (as defined in Rule 405 under the Securities Act) of the Company are listed on Schedule 4.1 to this Agreement along with the Company’s percentage ownership of each Subsidiary and each Subsidiary’s jurisdiction of
incorporation. Each Subsidiary is duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and is qualified to do business as a foreign corporation and is in good standing in each jurisdiction in
which qualification is required under applicable law, except where failure to so qualify would not have a Material Adverse Effect. The Company and each of its Subsidiaries has all requisite corporate power and authority to own and operate its
properties and to carry on its business as now conducted and as presently proposed to be conducted. 
  
 4.2 Authorized Capital Stock. The Company’s authorized capital stock consists of 45,000,000 shares of Common Stock, of which 20,361,405 shares
were issued and outstanding as of August 26, 2003, and 2,000,000 shares of preferred stock, par value $.001 per share, of which no shares were outstanding as of August 26, 2003. The Company has not issued any shares since August 26, 2003 other than
(i) shares of Common Stock pursuant to employee or director equity incentive plans or purchase plans approved by the Company’s Board of Directors and described in the SEC Documents (as defined below) and (ii) upon the exercise of options and
warrants outstanding on such date. As of August 26, 2003, the Company had reserved (i) 4,807,100 shares of Common Stock for issuance under the 1996 Management Stock Option Plan (the “Management Plan”), 576,916 shares of
Common Stock for issuance under the 1996 Director Stock Option Plan (the “Director Plan”), 800,000 shares of Common Stock for issuance under the 2001 Stock in Lieu of Cash Compensation for Directors Plan (the “Cash
Plan”), and 340,000 shares of Common Stock for issuance under the 1997 Employee Stock Purchase Plan (the “Purchase Plan”, and together with the Management Plan, the Director Plan and the Cash Plan, the
“Plans”), including 2,534,371 shares issuable upon the exercise of stock options issued by the Company pursuant to the Management Plan, 374,792 shares issuable upon the exercise of stock options issued by the Company pursuant
to the Director Plan, 4,160 shares issuable upon the exercise of stock options issued by the Company pursuant to the Purchase Plan outstanding on August 26, 2003 and (ii) 812,469 shares of Common stock for issuance upon the exercise of outstanding
warrants to purchase Common Stock. The issued and outstanding shares of the Company’s Common Stock have been duly authorized and validly issued, are fully paid and nonassessable, have been issued in compliance with all federal and state
securities laws, were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities, and conform in all material respects to the description thereof contained in Amendment No. 2 to the
Registration Statement on Form S-1 (File No. 333-88497) as filed with the SEC on November 11, 1999 (the “Form S-1”), except that the Company is authorized to issue 45,000,000 shares of Common Stock as set forth above and no
shares of Series A Preferred Stock are currently authorized or outstanding. Except as set forth above, there are no outstanding options or warrants to purchase, or any preemptive rights or other rights to subscribe for or to purchase, any securities
or obligations convertible into, or any contracts or commitments to issue or sell, shares of capital stock or other equity interest in the Company. The description of the Company’s stock, stock bonus and other stock plans or arrangements and
the options or other rights granted and exercised thereunder, set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002 and the Company’s Proxy Statement for its 2003 Annual Meeting of Stockholders
accurately and fairly describes the Plans. With respect to each Subsidiary, (i) the Company owns 100% of the 
  

 4 

 Subsidiary’s capital stock free and clear of any pledge, lien security interest, encumbrance, claim or equitable
interest, other than as described on Schedule 4.1 to this Agreement, (ii) all the issued and outstanding shares of the Subsidiary’s capital stock have been duly authorized and validly issued, are fully paid and nonassessable, have been
issued in compliance with applicable federal and state securities laws, and were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities, and (iii) there are no outstanding options or
warrants to purchase, or any preemptive rights or other rights to subscribe for or to purchase, any securities or obligations convertible into, or any contracts or commitments to issue or sell, shares of the Subsidiary’s capital stock or any
such options, rights, convertible securities or obligations. Except with respect to the commitment of Lau Technologies to vote its shares of Common Stock in favor of (i) the issuance of Common Stock to shareholders of ZN in connection with the
Company’s acquisition of the outstanding share capital of ZN and (ii) the election of the ZN stockholder’s nominee for director of the Company as long as such nominee is not an employee of the Company, there are no stockholder agreements,
voting agreements or other similar agreements with respect to the Common Stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders. 
  
 4.3 Issuance, Sale and Delivery of the Securities. The issuance of the
Securities has been duly authorized and, when issued, delivered and paid for in the manner set forth in the Agreements, the Securities will be duly authorized, validly issued, fully paid and nonassessable, and will conform to the description thereof
set forth in the Form S-1. No preemptive rights or other rights to subscribe for or purchase exist with respect to the issuance and sale of the Securities by the Company pursuant to the Agreements. No stockholder of the Company has any right (which
has not been waived or has not expired by reason of lapse of time following notification of the Company’s intent to file the registration statement to be filed by the Company pursuant to Section 7.1 hereof (the “Registration
Statement”)) to require the Company to register the sale of any shares owned by such stockholder under the Securities Act in the Registration Statement. No further approval or authorization of the stockholders or the Board of Directors
of the Company or others will be required for the issuance and sale of the Securities to be sold by the Company . 
  
 4.4 Due Execution, Delivery and Performance of the Agreements. The Company has all requisite legal right, corporate power and authority to enter
into the Agreements and perform the transactions contemplated thereby. The Agreements have been duly authorized and validly executed and delivered by the Company. The execution and delivery of the Agreements by the Company and the consummation of
the transactions contemplated thereby, including the issuance of the Securities, will not (i) conflict with or otherwise violate any provision of the organizational documents of the Company and (ii) result in the creation of any lien, charge,
security interest or encumbrance upon any assets of the Company pursuant to the terms or provisions of, or will not conflict with, result in the breach or violation of, or constitute, either by itself or upon notice or the passage of time or both, a
default under any agreement, mortgage, deed of trust, lease, franchise, license, indenture, permit or other instrument to which the Company or any Subsidiary is a party or by which the Company or its properties, or any Subsidiary or such
Subsidiary’s properties, may be bound or affected or, to the Company’s knowledge, any statute or any authorization, judgment, decree, order, rule or regulation of any court or any regulatory body, administrative agency or other
governmental body applicable to the Company or any Subsidiary or any of their respective properties, in the case of (ii) which would have a material adverse effect on the financial condition, properties, business or results of operations of the
Company and its Subsidiaries (a “Material Adverse Effect”). No consent, approval, authorization or other order of, or registration, qualification or filing with, any court, regulatory body, administrative agency or other
governmental body or other person is required for the execution and delivery of the Agreements or the consummation of the transactions contemplated by the Agreements (including the issuance of the Securities) other than such as have been made or
obtained and except for compliance with the blue sky laws and federal securities 
  

 5 

 laws applicable to the offering of the Securities. Any forms, notices or other documents required to be filed under blue
sky laws and federal securities law prior or subsequent to the First Closing Date or the Second Closing Date, as the case may be, shall be filed on a timely basis prior to or as so required. Assuming the valid execution of the Agreements by the
respective Purchasers, the Agreements constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and except as the indemnification and contribution agreements of the Company in Section 7.3 hereof may be legally unenforceable. 
  
 4.5 Accountants. To the Company’s knowledge, BDO Seidman, LLP, who have expressed their opinion with
respect to the consolidated financial statements to be incorporated by reference from the Company’s Annual Report on Form 10-K for the year ended December 31, 2002 into the Registration Statement and the prospectus which will form a part
thereof, are independent accountants as required by the Securities Act and the rules and regulations promulgated thereunder (the “Rules and Regulations”). 
  
 4.6 No Defaults. Neither the Company nor any Subsidiary is (i) in violation of any provision of its certificate of
incorporation or bylaws, or other organizational documents, or (ii) in violation of any law, administrative regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to the Company or any
Subsidiary, which violation, (in the case of (ii)), individually or in the aggregate would be reasonably likely to have a Material Adverse Effect, or is in breach of or default with respect to any provision of any bond, debenture, note, agreement,
mortgage, deed of trust, lease, franchise, license, indenture, permit or other instrument to which it is a party or by which it or any of its properties are bound; and there does not exist any state of fact or condition which, with notice or lapse
of time or both, would constitute a breach or default on the part of the Company as defined in such documents, except such breaches or defaults which individually or in the aggregate would not reasonably be expected to have a Material Adverse
Effect. 
  
 4.7 Contracts. Except as set forth in
Schedule 4.7, the contracts described in the SEC Documents as being in effect on the date thereof are in full force and effect on the date hereof, except for contracts, the termination or expiration of which would not be reasonably likely to
have a Material Adverse Effect; and the Company is not, nor to the Company’s knowledge is any other party, in breach of or default under any of such contracts which breach or default would be reasonably likely to have a Material Adverse Effect.

  
 4.8 No Actions. Except as disclosed in the
Company’s Quarterly Report on Form 10-Q for the quarter ended June 29, 2003, there are no legal or governmental actions, suits or proceedings pending or, to the Company’s knowledge, threatened to which the Company or any Subsidiary is or
may be a party or of which property owned or leased by the Company or any Subsidiary is or may be the subject, or related to environmental or discrimination matters, or instituted by the SEC, The Nasdaq Stock Market, Inc., any state securities
commission or other governmental or regulatory agency, which actions, suits or proceedings, individually or in the aggregate, might prevent or might reasonably be expected to materially and adversely affect the transactions contemplated by this
Agreement or result in a Material Adverse Effect and no labor disturbance by the employees of the Company or any Subsidiary exists or, to the Company’s knowledge, is threatened which might reasonably be expected to have a Material Adverse
Effect. Except as disclosed in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 29, 2003, neither the Company nor any Subsidiary is a party to or subject to the 
  

 6 

 provisions of any material injunction, judgment, decree or order of any court, regulatory body, administrative agency or
other governmental body. 
  
 4.9 Properties. Each of the
Company and its Subsidiaries has good and marketable title to all the properties and assets reflected as owned by it in the consolidated financial statements included in Company’s most recently filed Form 10-Q other than those that have been
disposed of in the ordinary course of business, subject to no lien, mortgage, pledge, charge or encumbrance of any kind except (i) those, if any, reflected in such consolidated financial statements (including the notes thereto), or (ii) those which
are not material in amount and do not adversely affect the use made and proposed to be made of such property by the Company or any Subsidiary. All properties and assets that are leased by the Company or any Subsidiary are held under valid and
binding leases subject to no lien, pledge, change or other encumbrance of any kind other than liens in favor of the Company’s lenders as set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002 and the
Company’s Preliminary Proxy Statement filed on July 3, 2003, as amended (excluding in each case all exhibits thereto and any documents incorporated therein by reference), and the Company or such Subsidiary, as applicable, is in compliance with
such leases. The Company or a Subsidiary owns or leases all such properties as are necessary in all material respects to its operations as now conducted and as presently proposed to be conducted. 
  
 4.10 No Material Change. Since June 29, 2003 and except as
specifically disclosed in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 29, 2003 or the Company’s Preliminary Proxy Statement filed on July 3, 2003, as amended (excluding in each case all exhibits thereto and any
documents incorporated therein by reference), (i) neither the Company nor any Subsidiary has incurred any material liabilities or obligations, indirect, or contingent, or entered into any material verbal or written agreement or other transaction
which is not in the ordinary course of business or which could reasonably be expected to result in a material reduction in the future earnings of the Company or any Subsidiary; (ii) neither the Company nor any Subsidiary has sustained any material
loss or interference with its respective businesses or properties from fire, flood, windstorm, accident, other calamity or otherwise whether or not covered by insurance; (iii) the Company has not paid or declared any dividends or other distributions
with respect to its capital stock and neither the Company nor any Subsidiary is in default in the payment of principal or interest on any outstanding debt obligations; (iv) there has not been any change in the capital stock of the Company other than
the sale of the Securities under the Agreements and shares or options issued pursuant to the Plans or upon the exercise of warrants outstanding on such date, or in indebtedness material to the Company (other than in the ordinary course of business);
(v) there has not been any Material Adverse Effect; and (vi) there has not been any material adverse change in the financial condition, properties, business or results of operations of the Company and its Subsidiaries considered as one enterprise.

  
 4.11 Intellectual Property. Except as otherwise
disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002 and the Company’s Preliminary Proxy Statement filed on July 3, 2003, as amended (excluding in each case all exhibits thereto and any documents
incorporated therein by reference): 
  
 (a) Each of the Company
and its Subsidiaries owns, or is validly licensed or otherwise has the right to use all patents, patent applications, trademarks, trademark rights, trade names, trade name rights, domain names, service marks, service mark rights, copyrights, trade
secrets, technical know-how and other proprietary intellectual property rights (collectively, “Intellectual Property”) that are necessary to the conduct of the business of the Company and its Subsidiaries, taken as a whole,
as now conducted or, to the knowledge of the Company, as proposed to be conducted, in each case, to the knowledge of the Company, free and clear of all liens (other than liens in favor of the Company’s lenders 
  

 7 

 as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002 and the Company’s
Preliminary Proxy Statement filed on July 3, 2003, as amended), except where the failure to own, license or have the right to use such Intellectual Property would not have a Material Adverse Effect. 
  
 (b) To the knowledge of the Company, neither the Company nor any of its
Subsidiaries is infringing or has any knowledge of any asserted infringement by the Company or any of its Subsidiaries (including with respect to the manufacture, use or sale by the Company or any of its Subsidiaries of their respective commercial
products) of the rights of any person with regard to any Intellectual Property which, individually or in the aggregate, would have a Material Adverse Effect and nor has the Company nor any of its Subsidiaries received any notice of any such
infringement. As of the date of this Agreement, to the knowledge of the Company, no person or persons are infringing on the rights of the Company or any of its Subsidiaries with respect to any Intellectual Property right in a manner which,
individually or in the aggregate, would have a Material Adverse Effect. 
  
 (c) No claims are pending or, to the knowledge of the Company, threatened with regard to the ownership by the Company or any of its Subsidiaries of any of their respective Intellectual Property which, individually or in the aggregate, would
have a Material Adverse Effect. 
  
 (d) All patents, trademarks
and applications therefor owned by the Company or any of its Subsidiaries that are material to the business of the Company or its Subsidiaries have been duly registered, filed with or issued by each appropriate governmental authority, all necessary
affidavits of continuing use have been filed and all necessary material maintenance fees have been timely paid to continue all such rights in effect, except where the failure to timely pay would not have a Material Adverse Effect. To the
Company’s knowledge, none of the Company’s patents have been declared invalid or unenforceable, in whole or in part, by any governmental authority. Each inventor named on the patents and patent applications of the Company or any of its
Subsidiaries has executed an agreement assigning his, her or its entire right, title and interest in and to such patent or patent application, and the inventions embodied and claimed therein, to the Company or a Subsidiary of the Company, or
otherwise is under a duty or obligation to so assign such right, title and interest. 
  
 (e) The Company uses, and has used, commercially reasonable efforts to maintain the confidentiality of its trade secrets. 
  
 4.12 Compliance. The Company has conducted and is conducting its business in compliance with all statutes, laws, ordinances, decrees, orders, rules
and regulations of any governmental body or regulatory authority applicable to it including, without limitation, all applicable local, state and federal environmental laws and regulations, except where the failure to be so in compliance would not
have a Material Adverse Effect. 
  
 4.13 Taxes. The Company
and each of its Subsidiaries has filed all necessary federal, state, local and foreign income and franchise tax returns in compliance with all applicable laws and all such returns were true, correct and complete when filed and the Company and each
of its Subsidiaries has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a material tax deficiency which has been or might be asserted or threatened against . 
  
 4.14 Transfer Taxes. On the First Closing Date and the Second Closing
Date, as the case may be, all stock transfer or other taxes (other than income taxes) which are required to be paid in connection with the sale and transfer of the Securities to be sold to the Seligman Purchasers hereunder 
  

 8 

 will be, or will have been, fully paid or provided for by the Company and all laws imposing such taxes will be or will
have been fully complied with. 
  
 4.15 Investment Company.
The Company is not and immediately after receipt of payment for the Securities will not be an “investment company”, an entity “controlled” by an “investment company” or an “affiliated person” of, or
“promoter” or “principal underwriter” for an investment company, in each case, within the meaning of the Investment Company Act of 1940, as amended and shall conduct its business in a manner so that it will not become subject to
such Act. 
  
 4.16 Private Offering. Assuming the
correctness of the representations and warranties of the Seligman Purchasers in Section 5 hereof, the offer and sale of the Securities hereunder is exempt from registration under the Securities Act. The Company has not distributed and will not
distribute prior to the Second Closing Date any offering material in connection with the offering and sale of the Securities other than the Confidential Private Placement Memorandum dated July 21, 2003 prepared by the Company in connection with the
offering of the Securities (the “Private Placement Memorandum”) and any amendment or supplement thereto. The Company has not in the past nor will it hereafter take any action independent of the Placement Agents to sell, offer
for sale or solicit offers to buy any securities of the Company which would bring the offer, issuance or sale of the Securities, as contemplated by this Agreement, within the provisions of Section 5 of the Securities Act, unless such offer, issuance
or sale was or shall be within the exemptions of Section 4 of the Securities Act. 
  
 4.17 Insurance. The Company maintains insurance of the types and in the amounts that the Company reasonably believes is adequate for its business, including, but not limited to, insurance covering all real and
personal property owned or leased by the Company against theft, damage, destruction, acts of vandalism and all other risks customarily insured against by similarly situated companies, all of which insurance is in full force and effect. 

 
 4.18 Corrupt Practices. Neither the Company nor any of its
Subsidiaries nor, to the knowledge of the Company, any agent or other person acting on behalf of the Company or any of its Subsidiaries, has (i) directly or indirectly, used any corporate funds for unlawful contributions, gifts, entertainment or
other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds, (iii)
failed to disclose fully any contribution made by the Company or any of its Subsidiaries or made by any person acting on their behalf and of which the Company or any of its Subsidiaries is aware which is in violation of law, or (iv) violated in any
material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended. 
  
 4.19 Additional Information. The Company has filed in a timely manner all documents that the Company was required to file under the Exchange Act during the 12 months preceding the date of this Agreement. The
Company represents and warrants that the information contained in the following documents, which are all the documents that the Company was required by the Exchange Act to file during the 12 months preceding this Agreement and which the Placement
Agent has furnished to the Seligman Purchasers, or will furnish prior to the First Closing, did not, as of their respective dates, contain any untrue statement of material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading: 
  
 (a) the Company’s Annual Report on Form 10-K for the year ended December 31, 2002; 
  

 9 

 (b) the Company’s Quarterly Reports on Form 10-Q for the fiscal quarters ended June 30, 2002,
September 29, 2002, March 30, 2003 and June 29, 2003; 
  
 (c) the
Company’s Definitive Proxy Statement for the 2003 Annual Meeting of Stockholders; 
  
 (d) the Company’s Preliminary Proxy Statement filed on July 3, 2003, as amended; 
  
 (e) Amendment No. 1 and Amendment No. 2 to Registration Statement on Form S-3 (File No. 333-97165); 
  
 (f) Rule 424(b)(3) Supplements to Registration Statement on Form S-3 (File
No. 333-76560); 
  
 (g) the Company’s Current Report on Form
8-K filed March 31, 2003; 
  
 (h) the Company’s Current
Report on Form 8-K filed June 4, 2003; 
  
 (i) Soliciting Material
pursuant to Section 240.14a-12 filed July 8, 2003; and 
  
 (j) the
Company’s Current Report on Form 8-K filed August 5, 2003. 
  
 4.20 SEC Documents. As of the date of filing of each of the documents described in Section 4.19 (collectively the “SEC Documents”), each such document complied in all material respects with the requirements of
the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to such document. As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and published rules and regulations of the SEC with respect thereto. Such financial statements (including the related notes) have been prepared in accordance with generally accepted accounting
principles in the United States consistently applied during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may
exclude footnotes, may be condensed or summary statements and may be subject to normal year end adjustments which are not expected to be material in amount), are consistent with the books and records of the Company and its Subsidiaries and fairly
present the consolidated financial position of the Company and its Subsidiaries as of the dates indicated and the results of operations and cash flows for the periods then ended. The financial information in the Private Placement Memorandum has been
prepared on a basis consistent with the financial statements of the Company. The Company satisfies the requirements for the use of Form S-3 for registration of the resale of the Securities and does not have any knowledge or reason to believe that it
does not satisfy such requirements or any knowledge of any fact which would reasonably result in its not satisfying such requirements. 
  
 4.21 Legal Opinions. Prior to the First Closing and the Second Closing, Choate, Hall & Stewart, counsel to the Company, will deliver its legal
opinion in the form set forth as Exhibit E hereto. 
  
 4.22
Nasdaq Compliance and Listing. The Company’s Common Stock is registered pursuant to Section 12(g) of the Exchange Act and is listed on the Nasdaq National Market, and the Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from the Nasdaq National 
  

 10 

 Market nor has the Company received any notification that the SEC or the Nasdaq National Market is terminating such
registration or listing. The Company and the Common Stock meet the criteria for continued listing and trading on the Nasdaq National Market. The Company shall comply with all requirements of the National Association of Securities Dealers, Inc. with
respect to the issuance of the Securities and the listing thereof on the Nasdaq National Market. In furtherance thereof, the Company shall use its best efforts to take such actions as may be necessary and as soon as practicable after the First
Closing Date to file with the Nasdaq National Market an application or other document required by the Nasdaq National Market and pay all applicable fees for the listing of the Securities with the Nasdaq National Market and shall provide evidence of
such filing to the Purchasers. 
  
 4.23 Price of Common
Stock. The Company has not taken or caused or knowingly permitted to be taken and will not take or cause or knowingly permit to be taken, any action designed to or that might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale of the Securities. 
  
 4.24 Permits. The Company has all franchises, permits, licenses and any similar authority necessary for the conduct of its business, the lack of
which is reasonably likely to have a Material Adverse Effect. The Company is not in default in any material respect under any of such franchises, permits, licenses or other similar authority. 
  
 4.25 ERISA Matters. The Company is in compliance in all material
respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (“ERISA”); no “reportable
event” (as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which the Company or any Subsidiary would have any liability; neither the Company nor any Subsidiary has incurred or expects to
incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan” or (ii) Section 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the “Internal Revenue Code”); and each “pension plan” for which the Company would have any liability that is intended to be qualified under Section 401(a) of the internal Revenue Code is
so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which could be reasonably expected to cause the loss of such qualification. 
  
 4.26 Full Disclosure. Neither this Agreement nor the Private Placement Memorandum, when read together, contains any
untrue statement of a material fact or omits a material fact necessary to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading. As of the First Closing Date and other than the
transaction contemplated by this Agreement, there is no fact or circumstance existing which, to the knowledge of the Company, requires the Company to file a report with the SEC on Form 8-K and for which the Company has not filed such Form 8-K with
the SEC prior to the First Closing Date, and the Company has no present intention to file a Form 8-K for any existing fact or circumstance known to the Company other than with respect to the closing of the acquisition of the outstanding share
capital of ZN. 
  
 4.27 Other Investor Agreements. The
Other Agreements are in substantially the same form as this Agreement except with respect to investor specific information including, but not limited to, the number of Securities purchased. 
  
 4.28 Use of Proceeds. The Company will use the net proceeds from the
sale of the Securities for working capital and other general corporate purposes. 
  

 11 

 4.29 Form D Filing. The Company agrees to file one or more Form Ds with respect to the sale of the
Securities under the Agreements on a timely basis as required under Regulation D under the Securities Act to claim the exemption provided by Rule 506 of Regulation D and to provide a copy thereof to the Purchasers promptly after such filing.

  
 SECTION 5. Representations, Warranties and Covenants of the
Seligman Purchasers. Each Seligman Purchaser hereby represents and warrants to, and covenants with, the Company, in each case as to itself only, as follows: 
  
 5.1 Investment Representations and Covenants. (i) such Seligman Purchaser is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to investments in shares representing an investment decision like that involved in the purchase of the Securities, including investments in securities issued by the Company and
investments in comparable companies, and has requested, received, reviewed and considered all information it deems relevant in making an informed decision to purchase the Securities; (ii) such Seligman Purchaser is acquiring the Securities purchased
by it pursuant to this Agreement in the ordinary course of its business and for its own account for investment only and with no present intention of distributing any of such Securities or any arrangement or understanding with any other persons
regarding the distribution of such Securities within the meaning of Section 2(11) of the Securities Act; (iii) such Seligman Purchaser will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to
buy, purchase or otherwise acquire or take a pledge of) any of the Securities except in compliance with the Securities Act, applicable state securities laws and the respective Rules and Regulations; (iv) such Seligman Purchaser has completed or
caused to be completed the Stock Certificate Questionnaire attached hereto as Exhibit A, the Registration Statement Questionnaire attached hereto as Exhibit B, for use in preparation of the Registration Statement and the Certificate
attached hereto as Exhibit C-1 or C-2, as applicable, and the answers thereto are true and correct as of the date hereof and will be true and correct as of the effective date of the Registration Statement, provided that such Seligman
Purchaser shall be entitled to update such information by providing notice thereof to the Company before the effective date of the Registration Statement; (v) such Seligman Purchaser will notify the Company immediately of any change in any of such
information until such time as such Seligman Purchaser has sold all of its Securities or until the Company is no longer required to keep the Registration Statement effective; (vi) such Seligman Purchaser has, in connection with its decision to
purchase the Securities purchased by it pursuant to this Agreement, relied solely upon the SEC Documents, the Private Placement Memorandum, other publicly available information and the representations and warranties of the Company contained herein;
and (vii) such Seligman Purchaser is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act. Such Seligman Purchaser understands that its acquisition of the Securities has not been registered under the
Securities Act or registered or qualified under any state securities laws in reliance on specific exemptions therefrom, which exemptions may depend upon, among other things, the bona fide nature of such Seligman Purchaser’s investment intent as
expressed herein. 
  
 5.2 Compliance with Resale
Requirements. Unless such sale is pursuant to an applicable exemption from the Securities Act, such Seligman Purchaser hereby covenants with the Company not to make any sale of the Securities without satisfying the prospectus delivery
requirement under the Securities Act. In connection with any sale of the Securities under the Registration Statement, such Seligman Purchaser shall deliver to the Company’s transfer agent a certificate in the form of Exhibit D executed by an
authorized officer of such Seligman Purchaser. Such Seligman Purchaser acknowledges that there may occasionally be times when the Company must suspend the use of the prospectus forming a part of the Registration as set forth in Section 7.2. Such
Seligman Purchaser covenants to notify the Company within a reasonable period of time of the sale of all of its Securities. 
  

 12 

 5.3 Authorization; Validity of Agreement. Such Seligman Purchaser further represents and warrants
to, and covenants with, the Company that (i) such Seligman Purchaser has full right, power, authority and capacity to enter into this Agreement and to consummate the transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement, and (ii) upon the execution and delivery of this Agreement, this Agreement shall constitute a valid and binding obligation of such Seligman Purchaser enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and except as the indemnification and contribution agreements of such Seligman Purchaser in Section 7.3 hereof may be legally
unenforceable. 
  
 5.4 Requirements of Foreign
Jurisdictions. Such Seligman Purchaser acknowledges, represents and agrees that no action has been or will be taken in any jurisdiction outside the United States by the Company or the Placement Agents that would permit an offering of the
Securities, or possession or distribution of offering materials in connection with the issue of the Securities, in any jurisdiction outside the United States where action for that purpose is required. The Placement Agents are not authorized to make
any representation or use any information in connection with the issue, placement, purchase and sale of the Securities. 
  
 5.5 Restriction on Short Sales and Hedging. Such Seligman Purchaser will not, prior to the effectiveness of the Registration Statement, sell, offer
to sell, solicit offers to buy, dispose of, loan, pledge or grant any right with respect to (collectively, a “Disposition”), the Common Stock in violation of the Securities Act, nor will such Seligman Purchaser engage in any
hedging or other transaction which is designed to or could reasonably be expected to lead to or result in a Disposition of Common Stock by such Seligman Purchaser or any other person or entity in violation of the Securities Act. 
  
 5.6 No Legal, Tax or Investment Advice. Such Seligman Purchaser
understands that nothing in this Agreement, the SEC Documents, the Private Placement Memorandum or any other materials presented to such Seligman Purchaser in connection with the purchase and sale of the Securities constitutes legal, tax or
investment advice. Such Seligman Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of Securities. 
  
 5.7 Restrictive Legend. Such Seligman Purchaser understands that,
until such time as the Registration Statement has been declared effective, the Securities may bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of the certificates for the
Securities to prevent transfers not in accordance with the Securities Act): 
  
 “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.” 
  
 SECTION 6. Survival of Representations,
Warranties and Agreements. Notwithstanding any investigation made by any party to this Agreement or by the Placement Agent, all 
  

 13 

 covenants, agreements, representations and warranties made by the Company and the Seligman Purchasers herein and in the
certificates for the Securities delivered pursuant hereto shall survive the execution of this Agreement, the delivery to the Seligman Purchasers of the Securities being purchased and the payment therefor. 
  
 SECTION 7. Registration of the Securities; Compliance with the Securities
Act. 
  
 7.1 Registration Procedures and Expenses. The
Company shall: 
  
 (a) subject to receipt of necessary
information from the Purchasers, as soon as practicable, but in no event later than five (5) business days following the Second Closing Date (the “Filing Date”) prepare and file with the SEC the Registration Statement on Form
S-3 relating to the sale of Securities (including any shares of capital stock issued or issuable, from time to time, upon any reclassification, share combination, share subdivision, stock split, share dividend, merger, consolidation or similar
transaction or event with respect to the Securities or otherwise as a distribution on, in exchange for or with respect to any of the foregoing, in each case held at the relevant time by the Purchasers) by the Purchasers from time to time through The
Nasdaq Stock Market or the facilities of any national securities exchange on which the Company’s Common Stock is then traded or in privately-negotiated transactions. The Company shall amend the Registration Statement from time to time or file
an additional registration statement on Form S-3 as necessary to include Penalty Shares (as defined below), if any. The Securities and the Penalty Shares, if any, are hereinafter referred to collectively as the “Registrable
Securities”; 
  
 (b) use its commercially reasonable
efforts, subject to receipt of necessary information from the Purchasers after prompt request from the Company to the Purchasers to provide such information, to cause the SEC to declare the Registration Statement effective as promptly as practicable
after it is filed with the SEC but in no event later than (90) calendar days after the date of this Agreement (the “Required Effective Date”). The Company’s reasonable efforts will include, but not be limited to,
promptly responding to all comments received from the staff of the SEC. If the Company receives notification from the SEC that the Registration Statement will receive no action or review from the SEC, then the Company will, subject to its rights
under Section 7.2, use its commercially reasonable efforts to cause the Registration Statement to become effective within five (5) business days after such SEC notification. On the date that the Registration Statement has been declared effective by
the SEC, the Company will notify the Seligman Purchasers in writing of such effectiveness; 
  
 (c) subject to receipt of necessary information from the Purchasers, prepare and file with the SEC (and promptly notify the Purchasers of such filing) such amendments and supplements to the Registration Statement and
the prospectus used in connection therewith as may be necessary to keep the Registration Statement effective and free from any material misstatement or omission to state a material fact until the earlier of (i) twenty-four months after the effective
date of the Registration Statement, as extended by the length of any Suspension (as defined below) or (ii) such time as all Registrable Securities have been sold; 
  
 (d) promptly furnish to the Purchasers with respect to the Registrable Securities registered under the Registration
Statement such number of copies of prospectuses, including preliminary prospectuses, in conformity with the provisions of the Securities Act and such other documents as the Purchasers may reasonably request, in order to facilitate the public sale or
other disposition of all or any of the Registrable Securities by the Purchasers; 
  

 14 

 (e) file documents required of the Company for normal blue sky clearance in states specified in writing
by the Purchasers; provided, however, that the Company shall not be required to qualify to do business or consent to service of process in any jurisdiction in which it is not now so qualified or has not so consented except as required
by the Securities Act; and 
  
 (f) bear all expenses in connection
with the procedures in paragraphs (a) through (e) of this Section 7.1 and the registration of the Registrable Securities pursuant to the Registration Statement, including reasonable fees for a single counsel representing all of the Purchasers in
connection with the Registration Statement, but not including fees and expenses, if any, of other advisers to the Seligman Purchasers or the Other Purchasers or underwriting discounts, brokerage fees and commissions incurred by the Seligman
Purchasers or the Other Purchasers, if any. 
  
 7.2 Transfer of
Securities After Registration; Suspension. (a) Each Seligman Purchaser agrees that it will not effect any disposition of the Securities or its right to purchase the Securities that would constitute a sale within the meaning of the Securities
Act, except as contemplated in the Registration Statement referred to in Section 7.1 or as otherwise permitted by the Securities Act or applicable law, and that it will promptly notify the Company of any changes in the information set forth in the
Registration Statement regarding such Seligman Purchaser or its Plan of Distribution. 
  
 (b) In the event: (i) of any request by the SEC or any other federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements to a Registration
Statement or related Prospectus or for additional information; (ii) of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose; (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; or (iv) of any event or circumstance which necessitates the making of any changes in the Registration Statement or Prospectus, or any document incorporated or deemed to be incorporated
therein by reference, so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or any omission to state a material fact required to be stated therein or necessary to make the statements therein
not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or any omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; then the Company shall promptly deliver a certificate in writing to the Seligman Purchasers (the “Suspension Notice”) to the effect of the foregoing and, upon
receipt of such Suspension Notice, the Seligman Purchasers will refrain from selling any Registrable Securities pursuant to the Registration Statement (a “Suspension”) until the Seligman Purchasers’ receipt of copies of
a supplemented or amended Prospectus prepared and filed by the Company, or until they are advised in writing by the Company that the current Prospectus may be used, and has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in any such Prospectus. In the event of any Suspension, the Company will use commercially reasonable efforts to cause the use of the Prospectus so suspended to be resumed as soon as reasonably
practicable within 20 business days after the delivery of a Suspension Notice to the Seligman Purchasers. In addition to and without limiting any other remedies (including, without limitation, at law or at equity) available to the Seligman
Purchasers, the Seligman Purchasers shall be entitled to specific performance in the event the Company fails to comply with the provisions of this Section 7.2(b). 
  

 15 

 7.3 Indemnification. For the purpose of this Section 7.3: 
  
 (i) the term “Purchaser” shall mean J & W
Seligman & Co. Incorporated, each Seligman Purchaser, and their respective directors, officers, employees, agents and controlling persons (within the meaning of the Securities Act); and 
  
 (ii) the term “Registration Statement” shall
include the Prospectus in the form first filed with the SEC pursuant to Rule 424(b) of the Securities Act or filed as part of the Registration Statement at the time of effectiveness if no Rule 424(b) filing is required and any exhibit, supplement or
amendment included in or relating to the Registration Statement referred to in Section 7.1. 
  
 (a) The Company agrees to indemnify and hold harmless each of the Purchasers, against any losses, claims, damages, liabilities or expenses, joint or several, to which such Purchasers may become subject, under the
Securities Act, the Exchange Act, or any other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Company), insofar
as such losses, claims, damages, liabilities or expenses (or actions in respect thereof ) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, including the
financial statements and schedules, and all other documents filed as a part thereof, including any information deemed to be a part thereof as of the time of effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant to Rule 434, of the Rules
and Regulations promulgated under the Securities Act or arise out of or are based upon the omission or alleged omission to state in any of them a material fact required to be stated therein or necessary to make the statements in any of them, in the
light of the circumstances under which they were made, not misleading, or arise out of or are based in whole or in part on any inaccuracy in the representations and warranties of the Company contained in this Agreement, or any failure of the Company
to perform any undertaking included in the Registration Statement, or any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law and will reimburse each Purchaser for any legal and other
expenses as such expenses are reasonably incurred by such Purchaser in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss, claim, damage, liability or expense arises out of or is based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission made in the
Registration Statement, or any amendment or supplement thereto in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Purchaser expressly for use therein, or (ii) the failure of such Purchaser to
comply with the covenants and agreements contained in Sections 5.2 or 7.2 hereof respecting sale of the Securities (unless such failure shall be a result of the Company breaching any of its obligations to such Purchaser hereunder), (iii) the
inaccuracy of any representations made by such Purchaser herein, or (iv) any statement or omission in any Prospectus that is corrected in any subsequent Prospectus that was received by such Purchaser at least twenty-four hours prior to the pertinent
sale or sales by such Purchaser. 
  
 (b) Each Seligman Purchaser
will indemnify and hold harmless the Company, each of its directors, each of its officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of the Securities Act, against any losses, claims,
damages, liabilities or expenses to which the Company, each of its directors, each of its officers who signed the Registration Statement or controlling person may become subject, under the Securities Act, the Exchange Act, or any other federal or
state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such Seligman Purchaser) insofar as such losses, claims, damages, liabilities or
expenses (or actions in 
  

 16 

 respect thereof as contemplated below) arise out of or are based upon (i) any failure by such Seligman Purchaser to
comply with the covenants and agreements contained in Sections 5.2 or 7.2 hereof respecting the sale of the Securities (unless such failure shall be a result of the Company breaching any of its obligations to such Seligman Purchaser hereunder) or
(ii) any untrue or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus, or any amendment or supplement thereto or the omission or alleged omission to state a material fact required to be stated in
the Registration Statement, the Prospectus, or any amendment or supplement thereto or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Prospectus, or any amendment or supplement thereto in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Seligman Purchaser expressly for use therein or (iii) the failure by such Seligman Purchaser to deliver in connection with any sale or sales of Securities by such Seligman Purchaser a subsequent
Prospectus that corrects any statement or omission in any Prospectus if such subsequent Prospectus was received by such Seligman Purchaser at least twenty-four hours prior to the pertinent sale or sales of Securities by such Seligman Purchaser, and
will reimburse the Company, each of its directors, each of its officers who signed the Registration Statement or controlling person for any legal and other expense reasonably incurred by the Company, each of its directors, each of its officers who
signed the Registration Statement or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that no Seligman
Purchaser shall be liable for any amount, individually or in the aggregate under this Section 7, in excess of the net proceeds (the “Net Proceeds”) received by such Seligman Purchaser with respect to such Seligman
Purchaser’s sale of the Securities. 
  
 (c) Promptly after
receipt by an indemnified party under this Section 7.3 of notice of the threat or commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 7.3 promptly
notify the indemnifying party in writing thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party for contribution or otherwise under the indemnity agreement
contained in this Section 7.3 except to the extent it is materially prejudiced as a result of such failure. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it may wish, jointly with all other indemnifying parties similarly notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party, based on the opinion of its counsel, shall have reasonably
concluded that there may be a conflict between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties which
are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action
on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of its election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying
party will not be liable to such indemnified party under this Section 7.3 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed
such counsel in connection with the assumption of legal defenses in accordance with the proviso to the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate
counsel, approved by such indemnifying party in the case of paragraph (a), representing the indemnified parties who are parties to such action) or (ii) the 
  

 17 

 indemnified party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of action, in each of which cases the reasonable fees and expenses of counsel shall be at the expense of the indemnifying party. In no event, shall any indemnifying party be
liable in respect of any amounts paid in settlement of any action or claim unless the indemnifying party shall have approved the terms of such settlement; provided that such consent shall not be unreasonably be withheld. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is a party and indemnification could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. 
  
 (d) If the indemnification provided for in this Section 7.3 is required by its terms but is for any reason held to be
unavailable to or otherwise insufficient to hold harmless an indemnified party under paragraphs (a), (b) or (c) of this Section 7.3 in respect to any losses, claims, damages, liabilities or expenses referred to herein, then each applicable
indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of any losses, claims, damages, liabilities or expenses referred to herein in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and the indemnified party on the other in connection with the statements or omissions or inaccuracies which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact or the inaccurate or the alleged inaccurate representation and/or warranty relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in paragraph (c) of this Section 7.3, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The provisions set forth in paragraph (c) of
this Section 7.3 with respect to the notice of the threat or commencement of any threat or action shall apply if a claim for contribution is to be made under this paragraph (d); provided, however, that no additional notice shall be
required with respect to any threat or action for which notice has been given under paragraph (c) for purposes of indemnification. The Company and each Purchaser agree that it would not be just and equitable if contribution pursuant to this Section
7.3 were determined solely by pro rata allocation (even if the Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph.
Notwithstanding the provisions of this Section 7.3, no Seligman Purchaser shall be required to contribute any amount in excess of the amount by which the Net Proceeds exceeds the amount of any damages that such Seligman Purchaser has otherwise been
required to pay by reason of all such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The Seligman Purchasers’ obligations to contribute pursuant to this Section 7.3 are several and not joint. 
  
 (e) The obligations of the Company and the Seligman Purchasers under this Section 7 shall survive the completion of any
offering of Registrable Securities in the Registration Statement. 
  
 7.4 Termination of Conditions and Obligations. The restrictions imposed by Section 5 or this Section 7 upon the transferability of the Securities shall cease and terminate as to any particular 
  

 18 

 number of the Securities when such Securities shall have been effectively registered under the Securities Act and sold or
otherwise disposed of in accordance with the intended method of disposition set forth in the Registration Statement or at such time as an opinion of counsel reasonably satisfactory to the Company shall have been rendered to the effect that such
Securities may be sold under Rule 144 or under another exemption from registration under the Securities Act. 
  
 7.5 Information Available. So long as the Registration Statement is effective covering the resale of Registrable Securities owned by the Seligman
Purchasers, the Company will furnish to the Seligman Purchasers: 
  
 (a) as soon as practicable after available (but in the case of the Company’s Annual Report to Stockholders, within 120 days after the end of each fiscal year of the Company), one copy of (i) its Annual Report to Stockholders (which
Annual Report shall contain financial statements audited in accordance with generally accepted accounting principles by a national firm of certified public accountants), (ii) if not included in substance in the Annual Report to Stockholders, its
Annual Report on Form 10-K, (iii) its quarterly reports on Form 10-Q, (iv) a full copy of the Registration Statement and (v) its reports or Form 8-K (the foregoing, in each case, excluding exhibits); 
  
 (b) upon the reasonable request of a Seligman Purchaser, a reasonable number
of copies of the Prospectuses to supply to any other party requiring such Prospectuses; and 
  
 (c) the Company, upon the reasonable request of any Seligman Purchaser, will meet with such Seligman Purchaser or a representative thereof at the Company’s headquarters to discuss information relevant for
disclosure in the Registration Statement covering the Registrable Securities; provided that the Company shall not be required to disclose any confidential information or to meet with a Seligman Purchaser or its representative until and unless such
Seligman Purchaser and/or its representative shall have entered into a confidentiality agreement with the Company in form and substance reasonably satisfactory to the Company. 
  
 7.6 Delay in Effectiveness of Registration Statement. If the Registration Statement is not declared effective by the
SEC by the Required Effective Date, then for each fifteen (15) day period following the Required Effective Date, until but excluding the date the SEC declares the Registration Statement effective, the Company shall, for each such 15-day period, pay
each Seligman Purchaser with respect to any such failure, as liquidated damages and not as a penalty, either (at the Company’s discretion): (a) an amount in cash or other immediately available funds equal to 1.5% of the purchase price paid by
such Seligman Purchaser for its Securities pursuant to this Agreement or (b) a number of validly issued, fully paid and nonassessable additional shares of Common Stock (the “Penalty Shares”) determined by dividing (i) the
amount otherwise payable pursuant to the preceding clause (a), by (ii) 2.69; and for any such period, such payment shall be made no later than the first business day of the calendar month next succeeding the month in which such period ends. Any
payments made pursuant to this Section 7.6. shall not constitute the Seligman Purchasers’ exclusive remedy for such events. Notwithstanding the foregoing provisions, in no event shall the Company be obligated to pay such liquidated damages to
more than one Seligman Purchaser in respect of the same Securities for the same period of time. 
  
 7.7 Rule 144. For a period of two years following the date hereof, the Company agrees with each holder of Registrable Securities to: 
  
 (a) comply with the requirements of Rule 144(c) under the Securities Act
with respect to current public information about the Company; 
  

 19 

 (b) use its best efforts to file with the SEC in a timely manner all reports and other documents required
of the Company under the Securities Act and the Exchange Act; and 
  
 (c) furnish to any holder of Registrable Securities upon request (i) a written statement by the Company as to its compliance with the requirements of said Rule 144(c) and the reporting requirements of the Securities Act and the Exchange
Act, (ii) a copy of the most recent annual or quarterly report of the Company and (iii) such other publicly filed reports and documents of the Company as such holder may reasonably require to avail itself of any similar rule or regulation of the SEC
allowing it to sell any such securities without registration. 
  
 SECTION 8. Broker’s Fee. The Seligman Purchasers acknowledge that the Company intends to pay to the Placement Agents a fee in respect of the sale of the Securities to the Purchasers. Each of the parties hereto hereby represents
that, on the basis of any actions and agreements by it, there are no other brokers or finders entitled to compensation in connection with the sale of the Securities to the Purchasers. 
  
 SECTION 9. Notices. All notices, requests, consents and other communications hereunder shall be in writing, shall be
mailed by first-class registered or certified airmail, facsimile (with receipt confirmed by telephone) or nationally recognized overnight express courier postage prepaid, and shall be deemed given when so mailed and shall be delivered as addressed
as follows: 
  
 if to the Company, to: 
  
 Viisage Technology, Inc. 
 30 Porter Road 
 Littleton, MA 01460 
 Attention: Bernard C. Bailey 
  
 with a copy to: 
  
 Viisage Technology, Inc. 
 30 Porter Road 
 Littleton, MA 01460 
 Attention: Elliot J. Mark 
  
 and 
  
 Choate, Hall & Stewart 
 Exchange Place 
 53 State Street 
 Boston, MA 02109 
 Attention: Charles J. Johnson, Esq. 
  
 or to such other person at such other place as the Company shall designate to the Seligman Purchasers in writing; and 
  

 20 

 if to a Seligman Purchaser, at its address as set forth on the signature page of this Agreement, or at
such other address or addresses as may have been furnished to the Company in writing. 
  
 SECTION 10. Changes. With the exception of Section 7 hereof, this Agreement may not be modified or amended except pursuant to an instrument in writing signed by the Company and the Seligman Purchasers. With
respect to Section 7 hereof, with the written consent of the Company and holders of more than 75% of the Registrable Securities then outstanding and held by all Purchasers, the terms of the Agreement may be waived or amended and any such waiver or
amendment shall be binding upon the Company and all holders of Securities. 
  
 SECTION 11. Headings. The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this Agreement. 
  
 SECTION 12. Severability. In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 
  
 SECTION 13. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving effect to the principles of conflicts of laws. 
  
 SECTION 14. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties. 
  
 SECTION 15. Confidential Information. Each Seligman Purchaser
represents to the Company that, at all times during the Company’s offering of the Securities, such Seligman Purchaser has maintained in confidence all non-public information regarding the Company received by such Seligman Purchaser from the
Company or its agents (including without limitation the Placement Agents), and covenants that it will continue to maintain in confidence such information until such information becomes generally publicly available other than through a violation of
this provision by such Seligman Purchaser or its agents. 
  
 SECTION 16. Expenses. Each of the Company and the Purchasers shall bear its own expenses in connection with the preparation and negotiation of the Agreements, provided that, notwithstanding the foregoing, the Company agrees to pay
the reasonable fees and disbursements of counsel to the Seligman Purchasers in connection with the negotiation, documentation and consummation of this Agreement and the transactions contemplated hereby, not to exceed $20,000. 
  
 [signature page follows] 
  

 21 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized
representatives as of the day and year first above written. 
  

	 VIISAGE TECHNOLOGY, INC.

		
	 By
	 	 /s/ William K. Aulet

	 Name:
	 	 William K. Aulet

	 Title:
	 	Senior Vice President and Chief Financial Officer

  

	 SELIGMAN COMMUNICATIONS AND
 INFORMATION FUND, INC.

		
	 By:
	 	 J. & W. Seligman & Co. Incorporated,
 its investment advisor

  

		
	 By:
	 	 /s/ Gregory M. Cote

	 	 	 Name: Gregory M. Cote

	 	 	 Title: Senior Vice President

  

	SELIGMAN NEW TECHNOLOGIES FUND, INC.
		
	 By:
	 	 J. & W. Seligman & Co. Incorporated,
 its investment advisor

  

		
	 By:
	 	 /s/ Gregory M. Cote

	 	 	 Name: Gregory M. Cote

	 	 	 Title: Senior Vice President

  

	SELIGMAN NEW TECHNOLOGIES FUND II, INC.
		
	 By:
	 	 J. & W. Seligman & Co. Incorporated,
 its investment advisor

  

		
	 By:
	 	 /s/ Gregory M. Cote

	 	 	 Name: Gregory M. Cote

	 	 	 Title: Senior Vice President

  

	 Address:
	 	c/o J&W Seligman & Co. Incorporated
	 	 	100 Park Avenue
	 	 	NY, NY 10017
	 Telephone:
	 	 (212) 850-1864

	 Telecopier:
	 	 (212) 922-5731

  

 22 

 SUMMARY INSTRUCTION SHEET FOR PURCHASER 
  
 (to be read in conjunction with the entire Securities Purchase Agreement)

  

	A.	 	Complete the following items ON EACH OF THE TWO COPIES of the Securities Purchase Agreement: 

  

	 	1.	 	Signature Page: Provide the information regarding the Purchaser requested on the signature page. The agreement must be executed by an individual authorized to bind the Purchaser.

  

	 	2.	 	Exhibit A - Stock Certificate Questionnaire: Provide the information requested by the Stock Certificate Questionnaire. 

  

	 	3.	 	Exhibit B - Registration Statement Questionnaire: Provide the information requested by the Registration Statement Questionnaire. 

  

	 	4.	 	Exhibits C-1 and C-2 – Purchaser Certificate: Provide the information requested by the Certificate for Individual Purchasers or the Certificate for Corporate, Partnership,
Trust, Foundation and Joint Purchasers, as applicable. 

  

	B.	 	Return the properly completed and signed Securities Purchase Agreement signature pages and Exhibits A, B and C-1 or C-2 (as applicable) to: 

  
 Viisage Technology, Inc. 
 30 Porter Road 
 Littleton, MA 01460 
 Attention: Elliot J. Mark 
  

	C.	 	Instructions regarding the transfer of funds for the purchase of Securities will be sent by facsimile to the Purchaser by the Placement Agents at a later date.

  

	D.	 	To resell the Securities after the Registration Statement covering the Securities is effective, as described in the Securities Purchase Agreement: 

  

	 	1.	 	provided that a Suspension of the Registration Statement is not then in effect pursuant to the terms of the Securities Purchase Agreement, the Purchaser must arrange for the
delivery of a current Prospectus to the buyer (prospectuses must be obtained from the Company at the Purchaser’s request); and 

  

	 	2.	 	the Purchaser must send a letter in the form of Exhibit D to the Securities Purchase Agreement to the Company’s transfer agent, with a copy to the Company, so that the
Securities may be properly transferred. 

  

 23 

 EXHIBIT A 
  

STOCK CERTIFICATE QUESTIONNAIRE 
  
 Pursuant to Section 3.2 of the Securities Purchase Agreement, please provide us with the following information: 
  

	 1.
	  	The exact name that your Securities are to be Registered in (this is the name that will appear on your stock certificate(s)). You may use a nominee name if
appropriate:
	 	  	  

	 2.
	  	The relationship between the Purchaser of the Securities and the Registered Holder listed in response to item 1 above:
	 	  	  

	 3.
	  	The mailing address of the Registered Holder listed in response to item 1 above:
	 	  	  

	 4.
	  	The Social Security Number or Tax Identification Number of the Registered Holder listed in response to item 1 above:
	 	  	  

  

 24 

 EXHIBIT B 
  

REGISTRATION STATEMENT QUESTIONNAIRE 
  
 In connection with the preparation of the Registration Statement, please provide us with the following information: 
  

	 1.
	  	Pursuant to the “Selling Stockholder” section of the Registration Statement, please state your or your organization’s name exactly as it should appear in the
Registration Statement:
	 	  	  

		
	 2.
	  	Please provide the number of shares of Viisage Technology, Inc. Common Stock that you or your organization will own immediately after the First Closing and, if applicable, the
Second Closing, including those purchased by you or your organization pursuant to this Agreement and those shares of Common Stock purchased by you or your organization through other transactions:
	 	  	  

		
	 3.
	  	The Purchaser represents that, except as set forth below, (a) it has had no position, office or other material relationship within the past three years with the Company or persons
known to it to be affiliates of the Company, (b) neither it, nor any group of which it is a member or to which it is related, beneficially owns (including the right to acquire or vote) any securities of the Company, and (c) it has no direct or
indirect affiliation or association with any NASD member as of the date hereof.
		
	 	  	 Exceptions (if left blank, response will be deemed “none”):

		
	 	  	  

		
	 	  	  

		
	 	  	  

  

 25 

 EXHIBIT C-1 
  
 CERTIFICATE FOR INDIVIDUAL PURCHASERS 
  
 If the investor is an individual Purchaser (or married couple) the Purchaser must complete, date and sign this Certificate.

  
 This certificate does not constitute an offer to sell or a
solicitation of an offer to buy any security. By signing this Certificate, the undersigned will be authorizing the Company to provide a completed copy of this Certificate to such parties as the Company deems appropriate in order to ensure that the
offer and sale of the Securities will not result in a violation of the Securities Act or the securities laws of any state and that the undersigned otherwise satisfies the suitability standards applicable to purchasers of the Securities. 

 
 CERTIFICATE 
  
 I certify that the representations and responses below are true and accurate:

  
 The undersigned represents that it is an “accredited
investor” as such term is defined in Regulation D promulgated under the Securities Act. In order for the Company to offer and sell the Securities in conformance with state and federal securities laws, the following information must be obtained
regarding your investor status. Please initial each category applicable to you as an investor in the Company. 
  
              (1) A natural person whose net worth, either individually or jointly with
such person’s spouse exceeds $1,000,000. 
  
              (2) A natural person who had an income in excess of $200,000, or joint income with the person’s spouse in excess of $300,000, in 2001 and 2002, and
reasonably expects to have individual income reaching the same level in 2003. 
  
              (3) An executive officer or director of the Company. 
  

	 Dated:
	 	  

	
	 Name(s) of Purchaser

	
	  

	Signature
	
	  

	Signature

  

 26 

 EXHIBIT C-2 
  
 CERTIFICATE FOR CORPORATE, PARTNERSHIP,  
 TRUST, FOUNDATION AND JOINT PURCHASERS 
  
 If the investor is a corporation, partnership, trust, pension plan, foundation, joint purchasers (other than a married couple) or other entity, an
authorized officer, partner, or trustee must complete, date and sign this Certificate. 
  
 This certificate does not constitute an offer to sell or a solicitation of an offer to buy any security. By signing this Certificate, the undersigned will be authorizing the Company to provide a completed copy of this
Certificate to such parties as the Company deems appropriate in order to ensure that the offer and sale of the Securities will not result in a violation of the Securities Act or the securities laws of any state and that the undersigned otherwise
satisfies the suitability standards applicable to purchasers of the Securities. 
  
 CERTIFICATE 
  
 The
undersigned certifies that the representations and responses below are true and accurate. 
  
 (a) The person signing on behalf of the undersigned has the authority to exercise and deliver the Securities Purchase Agreement on behalf of the Purchaser, and to take other sections with respect thereto. 

 
 (b) Indicate the form of entity of the undersigned: 
  
 ____________________________________ Limited Partnership

  
 ____________________________________ General Partnership 
  
 ____________________________________ Corporation 
  
                                      
                                        
      Revocable Trust (identify each grantor and indicate under what circumstances the trust is revocable by the grantor:
                                 
  
                                       
                                        
                                        
                                        
                                        
                  
                                       
                                        
                                        
                                        
                                        
                  
                                       
                                        
                                        
                                        
                                        
                  
                                       
                                        
                                        
                                        
                                        
                  
                                       
                                        
      (Continue on a separate piece of paper, if necessary.) 
                                       
                                        
      Other Type of Trust (indicate type of trust and, for trusts other than pension trust, name the guarantors and beneficiaries:
                                 
  
                                       
                                        
                                        
                                        
                                        
                  
  
                                       
                                        
                                        
                                        
                                        
                  
  

 27 

 __________________________________________________________________________________________ 
  
 __________________________________________________________________________________________ 
  
 ____________________________________. (Continue on a separate piece of paper, if necessary.) 
  
 ____________________________________ Other form of organization (indicate form of organization
(            ) 
  
 (c) The undersigned represents that it is an “accredited investor” as such term is defined in Regulation D promulgated under the Securities Act. In order for the Company to offer and sell the Securities in
conformance with state and federal securities laws, the following information must be obtained regarding your investor sums. Please initial each category applicable to you as an investor in the Company. 
  
              1. A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the
Securities Act whether acting in its individual or fiduciary capacity; 
  
              2. A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; 
  
              3. An insurance company as defined in
Section 2(13) of the Securities Act; 
  
              4. As investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act;

  
              5. A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of
1958; 
  
              6. A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of $5,000,000; 
  
              7. An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made
by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if
a self-directed plan, with investment decisions made solely by persons that are accredited investors; 
  
              8. A private business development company as defined in Section 202(a)(23)
of the Investment Advisers Act of 1940; 
  
              9. An organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the Securities, with total assets in excess of $5,000,000; 
  
              10. A trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in
the Company; 
  

 28 

              11. An entity in which
all of the equity owners qualify under any of the above subparagraphs. If the undersigned belongs to this investor category only, list the equity owners of the undersigned, and the investor category which each such equity owner satisfies:

  
 __________________________________________________________________________________________ 
  
 __________________________________________________________________________________________ 
  
 __________________________________________________________________________________________ 
  
 __________________________________________________________________________________________ 
 (Continue on a separate piece of paper, if necessary.) 
  

	 	 	 Dated:
                     , 2003

	  

	 	 	 Name of investor

	
	  

	 	 	 Signature and title of authorized
 officer, partner or trustee

  

 29 

 EXHIBIT D 
  

VIISAGE TECHNOLOGY, INC. 
 CERTIFICATE OF SUBSEQUENT SALE 
  
 [TRANSFER AGENT] 
 [ADDRESS] 
  

	 	RE:	 	Sale of Securities of Viisage Technology, Inc. (the “Company”) pursuant to the prospectus dated
                    ,          (the “Prospectus”) 

  
 Dear Sir/Madam: 
  
 The undersigned hereby certifies, in connection with the sale of shares of Common Stock of the Company included in the table of Selling
Stockholders in the Prospectus, that the undersigned has sold the Securities pursuant to the Prospectus and in a manner described under the caption “Plan of Distribution” in the Prospectus and that such sale complies with all applicable
securities laws, including, without limitation, the Prospectus delivery requirements of the Securities Act of 1933, as amended. 
  

	Selling Stockholder (the beneficial
owner):                                     
                                        
                                        
                             
	Record Holder (e.g., if held in name of nominee):
                                       
                                        
                                        
                
	Restricted Stock Certificate No.(s):
                                       
                                        
                                        
                                      
 
	Number of Securities Sold:
                                       
                                        
                                        
                                        
              
	Date of
Sale:                                      
                                        
                                        
                                        
                                        
 

  
 In the event that you receive a stock
certificate(s) representing more shares of Common Stock than have been sold by the undersigned, then you should return to the undersigned a newly issued certificate for such excess shares in the name of the Record Holder and, if required by counsel
for the Company, BEARING A RESTRICTIVE LEGEND. Further, if required by counsel for the Company, you should place a stop transfer on your records with regard to such certificate. 
  

	 Very truly yours,

	
	 By:                                      
                                        
                  

	
	 Print
Name:                                       
                                        
 

	
	 Title:                                     
                                        
               

  
 Dated:______________________

  

	cc:	 	Viisage Technology, Inc. 

 30 Porter Road 
 Littleton, MA 01460 
 Attention: Elliot J.
Mark 
  

 30 

 EXHIBIT E 
  

FORM OF OPINION OF CHOATE, HALL & STEWART LLP 
  
 September         , 2003 
  
 ADAMS, HARKNESS & HILL, INC. 
 60 State Street 
 Boston, MA 02109 
  
 NEEDHAM & CO., INC. 
 One Post Office Square 
 Boston, MA 02109 
  
 Ladies and Gentlemen: 
  
 We have acted as counsel to Viisage Technology, Inc., a Delaware corporation (the “Company”), in connection with
the preparation, execution and delivery of Purchase Agreements (the “Purchase Agreements”) each dated today, among the Company and each of the Purchasers identified therein, and in connection with the transactions contemplated thereby.

  
 This opinion is being delivered to you pursuant to Section
4.21 of the Purchase Agreements. Capitalized terms used in this opinion which are not otherwise defined have the meanings set forth in the Purchase Agreements. 
  

In connection with this opinion, we have examined the Purchase Agreements, the Certificate of Incorporation (the “Certificate of
Incorporation”) and the bylaws (the “Bylaws”), of the Company. We have also examined the originals or copies, certified or otherwise identified to our satisfaction, of such corporate records, certificates of public officials,
documents, other certificates and other instruments, and we have made such other investigations, as in our judgment are necessary or appropriate to enable us to render the opinions expressed below. In delivering our opinion, we have assumed the
genuineness of all signatures on original or certified copies, the conformity to original or certified copies of all copies submitted to us as conformed or reproduction copies and the legal capacity of natural persons. 
  
 We have assumed, for the purposes of this opinion, that each of the
Purchasers has the authority and power to enter into and perform their respective obligations under the Purchase Agreements, and that each of the Purchase Agreements has been duly authorized, executed and delivered by the Purchaser party thereto and
constitute its legal, valid and binding obligation. 
  
 As to
matters of fact relevant to this opinion, we have relied upon and have assumed the truthfulness of the representations contained in the Purchase Agreements and have made no independent investigation with respect thereto. As to matters which are
stated to be to our knowledge, we are referring to the actual knowledge only of those attorneys at Choate, Hall & 
  

 31 

 Stewart who have represented the Company in connection with the transactions contemplated by the Purchase Agreements.

  
 We note that the Purchase Agreements provide that they shall
be governed by and construed in accordance with the laws of the State of New York. The opinions expressed herein are limited to the effect on the subject transactions of the laws of The Commonwealth of Massachusetts (without giving effect to
conflicts of laws principles), the Delaware General Corporation Law and the Federal laws of the United States. Solely for the purpose of rendering our opinion set forth in paragraph 7 below as to the enforceability of the Purchase Agreements, we
have assumed that, notwithstanding the choice of law provisions of the Purchase Agreements calling for the application of laws other than those of The Commonwealth of Massachusetts, the laws of The Commonwealth of Massachusetts would be applied to
the Purchase Agreements. 
  
 With respect to the matters set forth
in paragraphs 2 and 3 below, we are relying exclusively on certificates of recent date from the Secretary of State of Massachusetts and the Secretary of State of New Hampshire. With respect to the matters set forth in paragraph 3, we have not opined
as to VIDS Acquisition Corporation, a Delaware corporation, and Viisage Australia, LTD, an Australian corporation, because we understand from the Company that these entities do not conduct any business. 
  
 Our opinion contained in paragraph 7 below as to the enforceability of the
Purchase Agreement is subject to the qualifications and limitations (a) that enforceability may be subject to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, equitable subordination, marshaling or other similar laws or
doctrines now or hereafter in effect relating to creditors’ rights and remedies generally, and (ii) the application of principles of equity (regardless of whether considered at a proceeding in equity or at law), including without limitation the
principle that equitable remedies, such as the remedy of specific performance, are subject to the discretion of the court before which any proceeding therefor may be brought, (b) that we express no opinion as to the enforceability of any provision
contained in the Purchase Agreements (i) providing for rights of indemnity and/or contribution under federal or state securities laws or regulations, common law or otherwise, (ii) purporting to waive (or having the effect of waiving) any rights
under the Constitution or laws of the United States of America or any state that may not be waived, (iii) providing for, or having the effect of, releasing any person prospectively from liability for its own wrongful or negligent acts, or breach of
such documents and instruments, or (iv) specifying the jurisdiction the laws of which shall be applicable thereto or specifying or limiting the jurisdictions before the courts of which cases relating to the Purchase Agreements may be brought, (v) to
the effect that rights and remedies are not exclusive, that every right or remedy is cumulative and may be exercised in addition to or with any other right or remedy and does not preclude recourse to one or more other rights or remedies, (vi)
relating to the effect of invalidity or unenforceability of any provision of the Purchase Agreements on the validity or enforceability of any other provision thereof, (vii) requiring the payment of penalties, consequential damages or liquidated
damages, or (vii) provides that the terms of the Purchase Agreements may not be waived or modified except in writing. 
  
 For purposes of our opinion contained in paragraph 9, we have assumed that all of the conditions to the Second Closing are set forth in (i) the Purchase
Agreements and (ii) the letter 
  

 32 

 agreement dated today between the Purchasers and the Company relating, among other things, to the execution and delivery
of lock-up agreements to the Purchasers. 
  
 Based upon and
subject to the foregoing, it is our opinion that: 
  
 1. The
Company has been duly organized and is validly existing and in good standing under the laws of the State of Delaware. 
  
 2. The Company is duly qualified to transact business as a foreign corporation and is in corporate good standing in Massachusetts. 
  
 3. Biometrica Systems, Inc. (the “Subsidiary”) has been duly
organized and is validly existing and in good standing under the laws of the State of New Hampshire. 
  
 4. Each of the Company and the Subsidiary has all requisite corporate power and authority necessary to own its properties and to conduct its businesses in
the manner presently to our knowledge conducted. 
  
 5. The
Securities to be purchased by the Purchasers at the Closings have been duly authorized, and, when issued, delivered and paid for in the manner set forth in the Purchase Agreements, the Securities will be duly authorized, validly issued, fully paid
and nonassessable, and will conform in all material respects to the description thereof set forth in the Form S-1. To our knowledge, (a) no preemptive rights or other rights to subscribe for or purchase exist with respect to the issuance and sale of
the Securities by the Company pursuant to the Purchase Agreements and (b) no stockholder of the Company has any right (which has not been waived or has not expired by reason of lapse of time following notification of the Company’s intent to
file the registration statement to be filed by the Company pursuant to Section 7.1 of the Purchase Agreements (the “Registration Statement”)) to require the Company to register the sale of any shares owned by such stockholder under the
Securities Act in the Registration Statement. 
  
 6. No further
approval or authorization of the stockholders or the Board of Directors of the Company will be required for the issuance and sale of the Securities to be sold by the Company to the Purchasers pursuant to the Purchase Agreements. 
  
 7. The Company has the requisite corporate power and authority to execute and
deliver the Purchase Agreements, and to perform its obligations thereunder. Each of the Purchase Agreements (a) has been duly authorized by all necessary corporate action on behalf of the Company, (b) has been validly executed and delivered by the
Company and (c) is the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms. 
  
 8. The execution and delivery of the Purchase Agreements by the Company and the consummation of the transactions contemplated thereby, including the
issuance of the Securities, will not conflict with or otherwise violate any provision of the Certificate of Incorporation or By-laws of the Company. 
  

 33 

 9. Based in part on the representations and warranties of the Purchasers in the Purchase Agreements, the
offering, sale, issuance and delivery of the Securities pursuant to the Purchase Agreements do not require registration under the Securities Act or registration or qualification, or any filing to perfect an exemption, under any state securities
laws, except for filings required by state securities laws which are required to be made after the issuance and sale to the Purchasers of the Securities, which filings the Company has informed us will be timely made. 
  
 This opinion is for your use and benefit and for the use and benefit of the
Purchasers only in connection with the transactions contemplated by the Purchase Agreements and may not be furnished by you or any Purchaser to any other person or used for any other purpose without our prior written consent. This opinion may be
relied upon by the Purchasers as though it was addressed to each of them. This opinion is delivered as of the date set forth above, and we disclaim any obligation to advise you of any changes to this opinion based on changes of law, facts or
circumstances occurring after the date of this opinion. 
  
 Very truly yours, 
  
 CHOATE, HALL & STEWART 
  

 34 

 Schedule 4.1 
  
 Subsidiaries 
  

	 Entity

	 	 Jurisdiction

	 	 Ownership

	 Biometrica Systems, Inc.
	 	New Hampshire	 	100%
	 VIDS Acquisition Corporation
	 	Delaware	 	100%
	 Viisage Australia, Ltd.
	 	Australia	 	  50%

 Schedule 4.7 
  
 Contracts 
  
 On July 31, 2003 the superior court for Fulton County, Georgia issued a preliminary injunction stopping Georgia’s Department of Motor Vehicle Safety from continuing
to work with the Company to install a new drivers’ license system for the state of Georgia. This injunction is the result of a law suit filed in March 2003 by one of the Company’s competitors, Digimarc ID Systems LLC. The suit claims that
the Department of Motor Vehicle Safety did not comply with its own bid process when selecting a vendor for the digital drivers’ license program. The merits of Digimarc’s claims against the Department of Motor Vehicle Safety are to be
addressed in further court proceedings. The Department of Motor Vehicle Safety has confirmed that the Company’s contract with them remains in place.

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