Exhibit 10.4

Execution Version

INTERCREDITOR AGREEMENT

INTERCREDITOR AGREEMENT dated as of November 25, 2009 among:

CenterPoint Energy Houston Electric, LLC, a Texas limited liability company and
a successor to Reliant Energy, Incorporated (in its individual capacity, the
“Company”),

CenterPoint Energy Transition Bond Company, LLC, a Delaware limited liability
company (the “Initial Transition Bond Issuer”),

Deutsche Bank Trust Company Americas, successor to Bankers Trust Company, a New
York banking corporation, in its capacity as transition bond trustee under the
Indenture dated October 24, 2001 (the “Initial Transition Bond Trustee”),

CenterPoint Energy Houston Electric, LLC, a Texas limited liability company, and
successor to Reliant Energy, Incorporated, in its capacity as the initial
servicer of the Initial Transition Property referred to below (including any
successor in such capacity, the “Initial TC Servicer”),

Wilmington Trust Company, a Delaware banking corporation, in its capacity as
transition bond trustee under the Indenture dated as of December 16, 2005 (the
“Additional Transition Bond Trustee”),

CenterPoint Energy Houston Electric, LLC, a Texas limited liability company, in
its capacity as the initial servicer of the Additional Transition Property
referred to below (including any successor in such capacity, the “Additional TC
Servicer”),

CenterPoint Energy Transition Bond Company II, LLC, a Delaware limited liability
company (the “Additional Transition Bond Issuer”),

Deutsche Bank Trust Company Americas, a New York banking corporation, in its
capacity as transition bond trustee under the Indenture dated as of February 12,
2008 (the “Third Transition Bond Trustee”),

CenterPoint Energy Houston Electric, LLC, a Texas limited liability company, in
its capacity as initial servicer of the Transition (III) Property referred to
below (the “Third TC Servicer”),

CenterPoint Energy Transition Bond Company III, LLC, a Texas limited liability
company (the “Third Transition Bond Issuer”),

Deutsche Bank Trust Company Americas, a New York banking corporation, in its
capacity as trustee under the Indenture dated November 25, 2009 (the
“Restoration Bond Trustee”),

CenterPoint Energy Houston Electric, LLC, a Texas limited liability company, in
its capacity as the initial servicer of the System Restoration Property referred
to below (including any successor in such capacity, the “Restoration Servicer”),

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CenterPoint Energy Restoration Bond Company, LLC, a Delaware limited liability
company (the “Restoration Bond Issuer”),

CenterPoint Energy Houston Electric, LLC, a Texas limited liability company and
a successor to Reliant Energy, Incorporated, in its capacity as collection agent
for the benefit of the Initial TC Servicer, the Additional TC Servicer, the
Third TC Servicer and the Restoration Servicer (the “Utility”),

CenterPoint Energy Houston Electric, LLC, a Texas limited liability company, in
its capacity as the collection agent of the Decommissioning Collections referred
to below (including any successor in such capacity, the “Decommissioning
Collection Agent”), and

CenterPoint Energy Houston Electric, LLC, a Texas limited liability company, in
its capacity as the collection agent of the System Benefit Fee referred to below
(including any successor in such capacity, the “SBF Collection Agent”).

WHEREAS, pursuant to the terms of the Transition Property Sale Agreement dated
October 24, 2001, among the Initial Transition Bond Issuer and Reliant Energy,
Incorporated, in its capacity as Seller (as it may hereafter from time to time
be amended, restated or modified, the “Initial Sale Agreement”), the Company has
sold to the Initial Transition Bond Issuer certain assets known as “Transition
Property” which includes the “Transition Charges” (hereinafter, the “Initial
Transition Property” and the “Initial Transition Charges”); and

WHEREAS, pursuant to the terms of the Indenture dated October 24, 2001, among
the Initial Transition Bond Issuer, the Initial Transition Bond Trustee, and
Bankers Trust Company (now known as Deutsche Bank Trust Company Americas) in its
capacity as Securities Intermediary (as it may hereafter from time to time be
amended, restated or modified and as supplemented from time to time by one or
more Series Supplements, such Series Supplements and Indenture being
collectively referred to herein as the “Initial Indenture”), the Initial
Transition Bond Issuer, among other things, has granted to the Initial
Transition Bond Trustee a security interest in certain of its assets, including
the Initial Transition Property, to secure the Transition Bonds issued pursuant
to the Indenture (the “Initial Transition Bonds”); and

WHEREAS, pursuant to the terms of the Transition Property Servicing Agreement
dated as of October 24, 2001, between the Initial Transition Bond Issuer and the
Initial TC Servicer (as it may hereafter from time to time be amended, restated
or modified, the “Initial Servicing Agreement”), the Initial TC Servicer has
agreed to provide for the benefit of the Initial Transition Bond Issuer
servicing functions with respect to the Initial Transition Charges; and

WHEREAS, pursuant to the terms of the Transition Property Sale Agreement dated
as of December 16, 2005, among the Additional Transition Bond Issuer and
Company, in its capacity as Seller (as it may hereafter from time to time be
amended, restated or modified, the “Additional Sale Agreement”), the Company has
sold to the Additional Transition Bond Issuer certain assets known as
“Transition Property” which includes the “Transition Charges” (hereinafter, the
“Additional Transition Property” and the “Additional Transition Charges”); and

 

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WHEREAS, pursuant to the terms of the Indenture dated as of December 16, 2005,
among the Additional Transition Bond Issuer, the Additional Transition Bond
Trustee, and Deutsche Bank Trust Company Americas, in its capacity as Securities
Intermediary (as it may hereafter from time to time be amended, restated or
modified and as supplemented from time to time by one or more Series
Supplements, such Series Supplements and Indenture being collectively referred
to herein as the “Additional Indenture”), the Additional Transition Bond Issuer,
among other things, has granted to the Additional Transition Bond Trustee a
security interest in certain of its assets, including the Additional Transition
Property, to secure the Transition Bonds issued pursuant to the Additional
Indenture (“Additional Transition Bonds”); and

WHEREAS, pursuant to the terms of the Transition Property Servicing Agreement
dated as of December 16, 2005, between the Additional Transition Bond Issuer and
the Additional TC Servicer (as it may hereafter from time to time be amended,
restated or modified, the “Additional Servicing Agreement”), the Additional
TC Servicer has agreed to provide for the benefit of the Additional Transition
Bond Issuer servicing functions with respect to the Additional Transition
Charges; and

WHEREAS, pursuant to the terms of the Transition Property Sale Agreement dated
as of February 12, 2008, among the Third Transition Bond Issuer and Company, in
its capacity as Seller (as it may hereafter from time to time be amended,
restated or modified, the “Third Sale Agreement”), the Company has sold to the
Third Transition Bond Issuer certain assets known as “Transition Property” which
includes the “Transition Charges” (hereinafter, the “Transition (III) Property”
and the “Transition (III) Charges”); and

WHEREAS, pursuant to the terms of the Indenture dated as of February 12, 2008,
among the Third Transition Bond Issuer and the Third Transition Bond Trustee (as
it may hereafter from time to time be amended, restated or modified and as
supplemented from time to time by one or more Supplements, such Supplements and
Indenture being collectively referred to herein as the “Third Indenture”), the
Third Transition Bond Issuer, among other things, has granted to the Third
Transition Bond Trustee a security interest in certain of its assets, including
the Transition (III) Property, to secure the Transition Bonds issued pursuant to
the Third Indenture (“Third Transition Bonds”); and

WHEREAS, pursuant to the terms of the Transition Property Servicing Agreement
dated as of February 12, 2008, between the Third Transition Bond Issuer and the
Third TC Servicer (as it may hereafter from time to time be amended, restated or
modified, the “Third Servicing Agreement”), the Third TC Servicer has agreed to
provide for the benefit of the Third Transition Bond Issuer servicing functions
with respect to the Transition (III) Charges; and

WHEREAS, pursuant to the terms of the System Restoration Property Sale Agreement
dated as of November 25, 2009, among the Restoration Bond Issuer and Company, in
its capacity as Seller (as it may hereafter from time to time be amended,
restated or modified, the “Restoration Sale Agreement”), the Company has sold to
the Restoration Bond Issuer certain assets known as “System Restoration
Property” which includes the “System Restoration Charges” (hereinafter, the
“Restoration Property” and the “Restoration Charges”); and

 

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WHEREAS, pursuant to the terms of the Indenture dated as of November 25, 2009,
among the Restoration Bond Issuer and the Restoration Bond Trustee (as it may
hereafter from time to time be amended, restated or modified and as supplemented
from time to time by one or more Supplements, such Supplements and Indenture
being collectively referred to herein as the “Restoration Indenture”, and
together with the Initial Indenture, the Additional Indenture, and the Third
Indenture, the “Indentures”), the Restoration Bond Issuer, among other things,
has granted to the Restoration Bond Trustee a security interest in certain of
its assets, including the Restoration Property, to secure the Restoration Bonds
issued pursuant to the Restoration Indenture (“Restoration Bonds”); and

WHEREAS, pursuant to the terms of the System Restoration Property Servicing
Agreement dated as of November 25, 2009, between the Restoration Bond Issuer and
the Restoration Servicer (as it may hereafter from time to time be amended,
restated or modified, the “Restoration Servicing Agreement”), the Restoration
Servicer has agreed to provide for the benefit of the Restoration Bond Issuer
servicing functions with respect to the Restoration Charges; and

WHEREAS, pursuant to the terms of that certain Third Amended and Restated Master
Trust Agreement for the South Texas Project dated as of July 10, 2006 (the
“Decommissioning Trust Agreement”), Mellon Bank, N.A., a national banking
association, as Trustee (the “Decommissioning Trustee”) of “NRG South Texas LP
Decommissioning Master Trust for the South Texas Project” (the “Decommissioning
Trust”), is designated to receive and hold in trust for the benefit of NRG South
Texas LP (or for the benefit of the Decommissioning Trust for the benefit of NRG
South Texas LP) all Contributions (as that term is defined in the
Decommissioning Trust Agreement) from the Company for decommissioning funds
required by federal regulation that are included in the Company’s cost of
service and collections; and

WHEREAS, pursuant to the terms of the Decommissioning Funds Collection Agreement
dated as of June 9, 2005, between Texas Genco, LP (now known as NRG South Texas
LP) and the Decommissioning Collection Agent (as it may hereafter from time to
time be amended, restated or modified, the “Decommissioning Collection
Agreement”), the Decommissioning Collection Agent has agreed to provide for the
benefit of the Decommissioning Trust collection functions with respect to
collections of nuclear decommissioning charges from retail customers
(“Decommissioning Collections”); and

WHEREAS, pursuant to Section 39.903 of the Texas Utilities Code and Substantive
Rule 25.451 promulgated thereunder by the Public Utility Commission of Texas,
the SBF Collection Agent must provide for the benefit of the System Benefit Fund
(as defined in Substantive Rule 25.451) collection functions with respect to the
system benefit fee established by Section 39.903 of the Texas Utilities Code
(the “System Benefit Fee”); and

WHEREAS, the parties hereto wish to agree upon their respective rights relating
to such collections and any bank accounts into which the same may be deposited,
as well as other matters of common interest to them which arise under or result
from the coexistence of the Initial Sale Agreement, the Initial Indenture, the
Initial Servicing Agreement, the Additional Sale Agreement, the Additional
Indenture, the Additional Servicing Agreement, the Third Sale Agreement, the
Third Indenture, the Third Servicing Agreement, the Decommissioning Collection
Agreement and the statutory and regulatory obligations relating to the System
Benefit Fee;

 

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NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:

SECTION 1. Acknowledgment of Ownership Interests and Security Interests. The
Initial Transition Bond Trustee, the Initial Transition Bond Issuer, the Initial
TC Servicer, the Third Transition Bond Trustee, the Third Transition Bond
Issuer, the Third TC Servicer, the Restoration Bond Trustee, the Restoration
Bond Issuer, the Restoration Servicer, the Decommissioning Collection Agent and
the SBF Collection Agent hereby acknowledge the ownership interest of the
Additional Transition Bond Issuer in the Additional Transition Property,
including the Additional Transition Charges and the revenues, collections,
claims, rights, payments, money and proceeds arising therefrom, and the security
interests in favor of the Additional Transition Bond Trustee for the benefit of
itself, the holders of the Additional Transition Bonds and any credit
enhancement provider (as defined in the Additional Indenture) in the Additional
Transition Property.

The Initial Transition Bond Trustee, the Initial Transition Bond Issuer, the
Initial TC Servicer, the Additional Transition Bond Trustee, the Additional
Transition Bond Issuer, the Additional TC Servicer, the Restoration Bond
Trustee, the Restoration Bond Issuer, the Restoration Servicer, the
Decommissioning Collection Agent and the SBF Collection Agent hereby acknowledge
the ownership interest of the Third Transition Bond Issuer in the Transition
(III) Property, including the Transition (III) Charges and the revenues,
collections, claims, rights, payments, money and proceeds arising therefrom, and
the security interests in favor of the Third Transition Bond Trustee for the
benefit of itself, the holders of the Third Transition Bonds and any credit
enhancement provider (as defined in the Third Indenture) in the Transition (III)
Property.

The Additional Transition Bond Trustee, the Additional Transition Bond Issuer,
the Additional TC Servicer, the Third Transition Bond Trustee, the Third
Transition Bond Issuer, the Third TC Servicer, the Restoration Bond Trustee, the
Restoration Bond Issuer, the Restoration Servicer, the Decommissioning
Collection Agent and the SBF Collection Agent hereby acknowledge the ownership
interest of the Initial Transition Bond Issuer in the Initial Transition
Property, including the Initial Transition Charges and the revenues,
collections, claims, rights, payments, money and proceeds arising therefrom, and
the security interests in favor of the Initial Transition Bond Trustee for the
benefit of itself, the holders of the Initial Transition Bonds and any credit
enhancement provider (as defined in the Initial Indenture) in the Initial
Transition Property.

The Initial Transition Bond Trustee, the Initial Transition Bond Issuer, the
Initial TC Servicer, the Additional Transition Bond Trustee, the Additional
Transition Bond Issuer, the Additional TC Servicer, the Third Transition Bond
Trustee, the Third Transition Bond Issuer, the Third TC Servicer, the
Decommissioning Collection Agent and the SBF Collection Agent hereby acknowledge
the ownership interest of the Restoration Bond Issuer in the Restoration
Property, including the Restoration Charges and the revenues, collections,
claims, rights, payments, money and proceeds arising therefrom, and the security
interests in favor of the Restoration Bond Trustee for the benefit of itself,
the holders of the Restoration Bonds and any credit enhancement provider (as
defined in the Restoration Indenture) in the Restoration Property.

 

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The Initial Transition Bond Trustee, the Initial Transition Bond Issuer, the
Initial TC Servicer, the Additional Transition Bond Trustee, the Additional
Transition Bond Issuer, the Additional TC Servicer, the Third Transition Bond
Trustee, the Third Transition Bond Issuer, the Third TC Servicer, the
Restoration Bond Trustee, the Restoration Bond Issuer, the Restoration Servicer,
and the SBF Collection Agent hereby acknowledge the ownership interest of NRG
South Texas LP or the Decommissioning Trustee for the benefit of NRG South Texas
LP in the Decommissioning Collections, including the revenues, collections,
claims, rights, payments, money and proceeds arising therefrom.

The Initial Transition Bond Trustee, the Initial Transition Bond Issuer, the
Initial TC Servicer, the Additional Transition Bond Trustee, the Additional
Transition Bond Issuer, the Additional TC Servicer, the Third Transition Bond
Trustee, the Third Transition Bond Issuer, the Third TC Servicer, the
Restoration Bond Trustee, the Restoration Bond Issuer, the Restoration Servicer,
and the Decommissioning Collection Agent hereby acknowledge the ownership
interest of the SBF Collection Agent for the benefit of the System Benefit Fund
in the System Benefit Fees, including the revenues, collections, claims, rights,
payments, money and proceeds arising therefrom.

SECTION 2. Deposit Accounts. The Initial Transition Bond Issuer, the Initial
Transition Bond Trustee, the Initial TC Servicer, the Additional Transition Bond
Issuer, the Additional Transition Bond Trustee, the Additional TC Servicer, the
Third Transition Bond Issuer, the Third Transition Bond Trustee, the Third TC
Servicer, the Restoration Bond Trustee, the Restoration Bond Issuer, the
Restoration Servicer, the Decommissioning Collection Agent and the SBF
Collection Agent each acknowledge that collections with respect to the Initial
Transition Property, the Additional Transition Property, the Transition (III)
Property, the Restoration Property, the Decommissioning Collections and System
Benefit Fees may from time to time be deposited into one or more designated
accounts of the Utility (the “Deposit Accounts”). Subject to Section 4 below,
the Utility agrees to:

(i) maintain the Deposit Accounts for the benefit of the Initial TC Servicer,
the Initial Transition Bond Trustee, the Initial Transition Bond Issuer, the
Additional TC Servicer, the Additional Transition Bond Trustee, the Additional
Transition Bond Issuer, the Third TC Servicer, the Third Transition Bond
Trustee, the Third Transition Bond Issuer, the Restoration Issuer, the
Restoration Bond Trustee, the Restoration Bond Issuer and the Decommissioning
Collection Agent for the benefit of NRG South Texas LP (or for the benefit of
the Decommissioning Trustee for the benefit of NRG South Texas LP) and the SBF
Collection Agent for the benefit of the System Benefit Fund as their respective
interests may appear;

(ii) allocate and remit funds from the Deposit Accounts: (a) at the times
specified in the respective Indentures and Servicing Agreements to the Initial
Transition Bond Trustee in the case of collections relating to the Initial
Transition Property, to the Additional Transition Bond Trustee in the case of
collections relating to the Additional Transition Property, to the Third
Transition Bond Trustee in the case of collections relating to the

 

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Transition (III) Property and to the Restoration Bond Trustee in the case of
collections relating to Restoration Property, (b) on a weekly basis to the
Decommissioning Trustee in the case of the Decommissioning Collections, and
(c) on a monthly basis to the Texas Comptroller of Public Accounts in the case
of collections relating to System Benefit Fees; provided that: (a) to the extent
the amount remitted by a retail electric provider is insufficient to satisfy any
bill in respect of the Initial Transition Charges, the Additional Transition
Charges, the Transition (III) Charges, the Restoration Charges, the
Decommissioning Collections, the System Benefit Fees and the transmission and
distribution charges and any late-payment penalties associated with any of the
foregoing, such remittance shall first be allocated on a pro rata basis as
between the Initial Transition Charges, the Additional Transition Charges, the
Transition (III) Charges, the Restoration Charges, the Decommissioning
Collections, the System Benefit Fees and the applicable transmission and
distribution charges (other than late-payment penalties associated with any of
the foregoing); and (b) any amount remaining from such remittance shall be
applied pro rata against the late-payment penalties attributable to the Initial
Transition Charges, the Additional Transition Charges, the Transition (III)
Charges, the Restoration Charges, the Decommissioning Collections, the System
Benefit Fees and the applicable transmission and distribution charges; and

(iii) maintain records as to the amounts deposited into the Deposit Accounts,
the amounts remitted therefrom and the allocation as provided in clause
(ii) above.

The Initial Transition Bond Trustee, the Initial Transition Bond Issuer, the
Additional Transition Bond Trustee, the Additional Transition Bond Issuer, the
Third Transition Bond Trustee, the Third Transition Bond Issuer, the Restoration
Bond Trustee, the Restoration Bond Issuer, the Decommissioning Collection Agent
for the benefit of NRG South Texas LP (or for the benefit of the Decommissioning
Trustee for the benefit of NRG South Texas LP) and the SBF Collection Agent
shall each have the right to require an accounting from time to time of
collections, allocations and remittances by the Utility relating to the Deposit
Accounts.

Each of the parties hereto acknowledges the respective security interests of the
others in amounts on deposit in the Deposit Accounts to the extent of their
respective interests as described in this Agreement.

SECTION 3. Time or Order of Attachment. The acknowledgments contained in
Sections 1 and 2 of this Agreement are applicable irrespective of the time or
order of attachment or perfection of security or ownership interests or the time
or order of filing or recording of financing statements or mortgages or filings
under the Texas Electric Choice Plan (as defined in the Initial Indenture) or
the Public Utility Regulatory Act (as defined in the Restoration Indenture).

SECTION 4. Servicing. (a) (i) Pursuant to Section 2 above, the Company, in its
role as Initial TC Servicer, Additional TC Servicer, Third TC Servicer and
Restoration Servicer, shall allocate and remit funds received from retail
electric providers for the Initial Transition Bonds, the Additional Transition
Bonds, the Third Transition Bonds, and the Restoration Bonds, respectively, and
shall control the movement of such funds out of the Deposit Accounts (such
allocation, remittance and deposits hereafter called the “Allocation Services”).
The same entity

 

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must always act as servicer in the performance of the Allocation Services as to
all of the Initial Transition Bonds, the Additional Transition Bonds, the Third
Transition Bonds and the Restoration Bonds. In the event that the Initial
Transition Bond Trustee, Additional Transition Bond Trustee, Third Transition
Bond Trustee or Restoration Bond Trustee is entitled to and desires to exercise
its right to replace the Company as Initial TC Servicer, Additional TC Servicer,
Third TC Servicer or Restoration Servicer, respectively, in its role as the
provider of the Allocation Services, the party desiring to exercise such right
shall promptly give written notice to the other (the “Servicer Notice”) and
consult with the others with respect to the Person who would replace the Company
in such capacities. Any successor in such capacities shall be agreed to by the
Initial Transition Bond Trustee, Additional Transition Bond Trustee, Third
Transition Bond Trustee and Restoration Bond Trustee within ten Business Days of
the date of the Servicer Notice, and such successor shall be subject to
satisfaction of the Rating Agency Condition (as defined below). “Business Day”
means any day other than a Saturday, Sunday, or any holiday for national banks
or any New York banking corporation in Dallas, Texas, New York, New York or
Houston, Texas. The Person named as replacement Initial TC Servicer, Additional
TC Servicer, Third TC Servicer or Restoration Servicer (as the case may be) in
accordance with this Section 4 is referred to herein as the “Replacement
Servicer”.

(ii) In the event that the Initial Transition Bond Trustee, the Additional
Transition Bond Trustee, the Third Transition Bond Trustee or the Restoration
Bond Trustee is entitled to and desires to exercise its rights to redirect
collections relating to the Initial Transition Property, the Additional
Transition Property, the Transition (III) Property or the Restoration Property
(as the case may be), any redirection of funds shall be either to (A) the
Replacement Servicer or (B) if there is no Replacement Servicer, to the
Designated Account with the Designated Account Holder chosen in accordance with
the provisions set forth below, on or before the tenth Business Day occurring
from and after the date of the Servicer Notice. The “Designated Account” shall
be an “Eligible Securities Account” (as defined in the Initial Indenture, the
Additional Indenture, the Third Indenture and the Restoration Indenture) and
shall be held for the benefit of the Initial Transition Bond Trustee, the
Additional Transition Bond Trustee, the Third Transition Bond Trustee, and the
Restoration Bond Trustee, as their interests may appear. The “Designated Account
Holder” shall be a financial institution selected by the Initial Transition Bond
Trustee, the Additional Transition Bond Trustee, the Third Transition Bond
Trustee and the Restoration Bond Trustee, subject to satisfaction of the Rating
Agency Condition, to hold and allocate amounts in the Designated Account for the
benefit of the Initial Transition Bond Trustee, the Additional Transition Bond
Trustee, the Third Transition Bond Trustee and the Restoration Bond Trustee as
their interests may appear as provided in paragraph (b) below. In the event that
the Initial Transition Bond Trustee, the Additional Transition Bond Trustee, the
Third Transition Bond Trustee and the Restoration Bond Trustee are unable to
agree upon a Designated Account Holder on or before the tenth Business Day
occurring from and after the date of the Servicer Notice, a Designated Account
Holder shall be promptly selected by the independent registered public
accounting firm engaged by the Utility at such time, subject to the satisfaction
of the Rating Agency Condition.

(b) Upon exercise by the Initial Transition Bond Trustee, the Additional
Transition Bond Trustee, the Third Transition Bond Trustee or the Restoration
Bond Trustee of its rights to

 

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redirect collections relating to the Initial Transition Property, the Additional
Transition Property, the Transition (III) Property or the Restoration Property,
and in the absence of a Replacement Servicer, the parties agree that all
collections relating to the Initial Transition Property, the Additional
Transition Property, the Transition (III) Property and the Restoration Property
shall be deposited into the Designated Account and that the Designated Account
Holder shall be instructed by the Utility to (i) allocate and remit funds from
such Designated Account, in amounts calculated by the Utility, with such
calculations provided to the Designated Account Holder on a daily basis to the
persons entitled thereto, being the Initial Transition Bond Trustee in the case
of all collections relating to the Initial Transition Property, the Additional
Transition Bond Trustee in the case of all collections relating to the
Additional Transition Property, the Third Transition Bond Trustee in the case of
all collections relating to the Transition (III) Property and the Restoration
Bond Trustee in the case of all collections relating to the Restoration
Property; and (ii) maintain records as to the amounts deposited into such
account, the amounts remitted therefrom and the allocation as provided in clause
(i). The fees and expenses of the Designated Account Holder shall be payable
from amounts deposited into the Designated Account on a pro rata basis as
between collections relating to the Initial Transition Property, Additional
Transition Property, Transition (III) Property and the Restoration Property,
provided that portion of those fees and expenses allocable to collections
relating to the Initial Transition Property, the Additional Transition Property,
the Transition (III) Property, and the Restoration Property shall be payable by
the Initial TC Servicer, the Additional TC Servicer, the Third TC Servicer and
the Restoration Servicer, respectively, from the servicer fees (“Servicer Fees”)
provided for in the Initial Servicing Agreement, the Additional Servicing
Agreement, the Third Servicing Agreement and the Restoration Servicing
Agreement, such payments to be made on the Payment Dates (as defined in the
initial Indenture, the Additional Indenture, the Third Indenture and the
Restoration Indenture) related to such Servicer Fees. The Initial Transition
Bond Trustee, the Initial Transition Bond Issuer, the Additional Transition Bond
Trustee, the Additional Transition Bond Issuer, the Third Transition Bond
Trustee, the Third Transition Bond Issuer, the Restoration Bond Trustee and the
Restoration Bond Issuer shall each have the right to require an accounting from
time to time of collections, allocations and remittances by the Designated
Account Holder.

(c) If a Replacement Servicer cannot be appointed in accordance with
Section 4(a)(i) above, then any of the Initial Transition Bond Trustee, the
Additional Transition Bond Trustee, the Third Transition Bond Trustee or the
Restoration Bond Trustee may exercise its rights under Section 4(a)(ii)(B)
above.

(d) Anything in this Agreement to the contrary notwithstanding, any action taken
by any of the Initial Transition Bond Trustee, the Additional Transition Bond
Trustee, the Third Transition Bond Trustee or the Restoration Bond Trustee to
appoint a Replacement Servicer or designate the Designated Account pursuant to
this paragraph 4 shall be subject to the Rating Agency Condition and the
consent, if required by law or the Financing Order (as defined in the Initial
Indenture or the Additional Indenture), of the Public Utility Commission of
Texas. For the purposes of this Agreement, the “Rating Agency Condition” means,
with respect to any such action, notification to each rating agency then rating
any class or series of the Initial Transition Bonds, the Additional Transition
Bonds, the Third Transition Bonds or the Restoration Bonds of such action, and
the receipt of confirmation from S&P (as defined in the Initial Indenture, the
Additional Indenture and the Third Indenture), that such action will not result
in a reduction or

 

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withdrawal of its then current rating on the Initial Transition Bonds, the
Additional Transition Bonds, the Third Transition Bonds or the Restoration
Bonds. The parties hereto acknowledge and agree that the approval or the consent
of S&P which is required in order to satisfy the Rating Agency Condition is not
subject to any standard of commercial reasonableness, and the parties are bound
to satisfy this condition whether or not S&P is unreasonable or arbitrary.

SECTION 5. Sharing of Information. The parties hereto agree to cooperate with
each other and make available to each other or any Replacement Servicer any and
all records and other data relevant to the Initial Transition Property, the
Additional Transition Property, the Transition (III) Property and the
Restoration Property which it may have in its possession or may from time to
time receive from the Company or any predecessor Initial TC Servicer, Additional
TC Servicer, Third TC Servicer or Restoration Servicer, including, without
limitation, any and all computer programs, data files, documents, instruments,
files and records and any receptacles and cabinets containing the same. The
Company hereby consents to the release of information regarding the Company
pursuant to this Section 5.

SECTION 6. No Joint Venture. Nothing herein contained shall be deemed as
effecting a joint venture among any of the Initial Transition Bond Issuer, the
Initial Transition Bond Trustee, the Additional Transition Bond Issuer, the
Additional Transition Bond Trustee, the Third Transition Bond Issuer, the Third
Transition Bond Trustee, the Restoration Bond Issuer, the Restoration Bond
Trustee, the Decommissioning Collection Agent, the Decommissioning Trustee, NRG
South Texas LP, the SBF Collection Agent and the Company.

SECTION 7. Method of Adjustment and Allocation. Notwithstanding any provision
herein to the contrary, for the purpose of this Agreement only, the Additional
Transition Bond Issuer, the Additional Transition Bond Trustee, the Third
Transition Bond Issuer, the Third Transition Bond Trustee, the Restoration Bond
Issuer and the Restoration Bond Trustee hereby consent and agree to (a) the
method of adjustment of the Initial Transition Charge in accordance with
Section 7 of Annex I to the Initial Servicing Agreement in the form attached
thereto, and (b) the method of calculation and allocation of payments in
accordance with Sections 3.02 and 3.03 of the Initial Servicing Agreement in the
form attached thereto. Notwithstanding any provision herein to the contrary, for
the purpose of this Agreement only, the Initial Transition Bond Issuer, the
Initial Transition Bond Trustee, the Third Transition Bond Issuer, the Third
Transition Bond Trustee, the Restoration Bond Issuer and the Restoration Bond
Trustee hereby consent and agree to (a) the method of adjustment of the
Additional Transition Charge in accordance with Section 7 of Annex I to the
Additional Servicing Agreement in the form attached thereto, and (b) the method
of calculation and allocation of payments in accordance with Sections 3.02 and
3.03 of the Additional Servicing Agreement in the form attached thereto and
irrevocably waive any right to object to or enjoin such adjustment, calculation,
payment or allocation. Notwithstanding any provision herein to the contrary, for
the purpose of this Agreement only, the Initial Transition Bond Issuer, the
Initial Transition Bond Trustee, the Additional Transition Bond Issuer, the
Additional Transition Bond Trustee, the Restoration Bond Issuer and the
Restoration Bond Trustee hereby consent and agree to (a) the method of
adjustment of the Transition (III) Charge in accordance with Section 4.01 of the
Third Servicing Agreement in the form attached thereto, and (b) the method of
calculation and allocation of payments in accordance with Section 6 of Annex I
to the Third Servicing Agreement in the form attached thereto and irrevocably
waive any right to object to or enjoin such adjustment, calculation, payment or
allocation.

 

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Notwithstanding any provision herein to the contrary, for the purpose of this
Agreement only, the Initial Transition Bond Issuer, the Initial Transition Bond
Trustee, the Additional Transition Bond Issuer, the Additional Transition Bond
Trustee, the Third Transition Bond Issuer and the Third Transition Bond Trustee
hereby consent and agree to (a) the method of adjustment of the Restoration
Charge in accordance with Section 4.01 of the Restoration Servicing Agreement in
the form attached thereto, and (b) the method of calculation and allocation of
payments in accordance with Section 6 of Annex I to the Restoration Servicing
Agreement in the form attached thereto and irrevocably waive any right to object
to or enjoin such adjustment, calculation, payment or allocation. Such consent
and agreement shall not relieve the Company of any of its obligations to make
payments in accordance with the terms of the Initial Sale Agreement, the
Additional Sale Agreement and the Third Sale Agreement.

SECTION 8. Termination. This Agreement shall terminate upon the payment in full
of the Initial Transition Bonds, the Additional Transition Bonds, the Third
Transition Bonds and the Restoration Bonds, except that the understandings and
acknowledgments contained in paragraphs 1, 2 and 3 shall survive the termination
of this Agreement.

SECTION 9. Governing Law. This Agreement shall be governed by the laws of the
State of Texas.

SECTION 10. Further Assurances. Each of the parties hereto agrees to execute any
and all agreements, instruments, financing statements, releases and any and all
other documents reasonably requested by any of the other parties hereto in order
to effectuate the intent of this Agreement. In each case where a release is to
be given pursuant to this Agreement, the term release shall include any
documents or instruments necessary to effect a release, as contemplated by this
Agreement. All releases, subordinations and other instruments submitted to the
executing party are to be prepared at no expense to such party.

SECTION 11. Limitation on Rights of Others. This Agreement is solely for the
benefit of the Initial Transition Bond Issuer, the Initial Transition Bond
Trustee for the benefit of itself, the Additional Transition Bond Issuer, the
Additional Transition Bond Trustee for the benefit of itself, the Third
Transition Bond Issuer, the Third Transition Bond Trustee for the benefit of
itself, the Restoration Bond Issuer, the Restoration Bond Trustee for the
benefit of itself, the holders of the Initial Transition Bonds, the Additional
Transition Bonds, the Third Transition Bonds and the Restoration Bonds, the
Decommissioning Collection Agent for the benefit of NRG South Texas LP or the
Decommissioning Trustee for the benefit of NRG South Texas LP, the SBF
Collection Agent for the benefit of the System Benefit Fund and any credit
enhancement provider, and the Company and no other person or entity shall have
any rights, benefits, priority or interest under or because of the existence of
this Agreement.

SECTION 12. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute but one and the same instrument.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.

 

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SECTION 13. Nonpetition Covenant. Notwithstanding any prior termination of this
Agreement, the Initial Indenture, the Additional Indenture, the Third Indenture
or the Restoration Indenture, each of the parties covenants that it shall not,
prior to the date which is one year and one day after payment in full of the
Initial Transition Bonds, the Additional Transition Bonds, the Third Transition
Bonds and the Restoration Bonds, acquiesce, petition or otherwise invoke or
cause any of the Initial Transition Bond Issuer, the Additional Transition Bond
Issuer, the Third Transition Bond Issuer or the Restoration Bond Issuer to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Initial Transition Bond Issuer, the
Additional Transition Bond Issuer, the Third Transition Bond Issuer or the
Restoration Bond Issuer under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Initial Transition Bond Issuer,
the Additional Transition Bond Issuer, the Third Transition Bond Issuer or the
Restoration Bond Issuer or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of the Initial Transition Bond Issuer,
the Additional Transition Bond Issuer, the Third Transition Bond Issuer or the
Restoration Bond Issuer.

SECTION 14. Trustees. Deutsche Bank Trust Company Americas, as Initial
Transition Bond Trustee, in acting hereunder is entitled to all rights,
benefits, protections, immunities and indemnities accorded to it under the
Initial Indenture. Wilmington Trust Company, as Additional Transition Bond
Trustee, in acting hereunder is entitled to all rights, benefits, protections,
immunities and indemnities accorded to it under the Additional Indenture.
Deutsche Bank Trust Company Americas, as Third Transition Bond Trustee, in
acting hereunder is entitled to all rights, benefits, protections, immunities
and indemnities accorded to it under the Third Indenture. Deutsche Bank Trust
Company Americas, as Restoration Bond Trustee, in acting hereunder is entitled
to all rights, benefits, protections, immunities and indemnities accorded to it
under the Restoration Indenture.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.

 

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC as Company By:   /s/ Marc Kilbride  
Marc Kilbride   Vice President and Treasurer

 

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC as Initial TC Servicer By:   /s/ Marc
Kilbride   Marc Kilbride   Vice President and Treasurer

 

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC as Additional TC Servicer By:   /s/
Marc Kilbride   Marc Kilbride   Vice President and Treasurer

 

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC as Third TC Servicer By:  

/s/ Marc Kilbride

 

Marc Kilbride

 

Vice President and Treasurer

 

 

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC as Restoration Servicer By:  

/s/ Marc Kilbride

 

Marc Kilbride

  Vice President and Treasurer

 

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CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC as Decommissioning Collection Agent By:
  /s/ Marc Kilbride   Marc Kilbride   Vice President and Treasurer

 

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC as SBF Collection Agent By:   /s/ Marc
Kilbride   Marc Kilbride   Vice President and Treasurer

 

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC as Utility By:   /s/ Marc Kilbride  
Marc Kilbride   Vice President and Treasurer

 

CENTERPOINT ENERGY TRANSITION BOND COMPANY, LLC By:   /s/ Marc Kilbride   Marc
Kilbride   Manager

 

CENTERPOINT ENERGY TRANSITION BOND COMPANY II, LLC By:   /s/ Marc Kilbride  
Marc Kilbride   Manager

 

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CENTERPOINT ENERGY TRANSITION BOND COMPANY III, LLC By:   /s/ Marc Kilbride  
Marc Kilbride   Vice President and Treasurer

 

CENTERPOINT ENERGY RESTORATION BOND COMPANY, LLC By:   /s/ Marc Kilbride   Marc
Kilbride   Vice President and Treasurer

 

DEUTSCHE BANK TRUST COMPANY AMERICAS (successor to Bankers Trust Company), as
Initial Transition Bond Trustee By:   /s/ Jenna Kaufman   Jenna Kaufman  
Director By:   /s/ Maria Inoa   Maria Inoa   Associate

 

WILMINGTON TRUST COMPANY,

as Additional Transition Bond Trustee

By:   /s/ Yvette L. Howell   Yvette L. Howell   Financial Services Officer

 

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DEUTSCHE BANK TRUST COMPANY AMERICAS, as Third Transition Bond Trustee By:   /s/
Jenna Kaufman   Jenna Kaufman   Director By:   /s/ Maria Inoa   Maria Inoa  
Associate

 

DEUTSCHE BANK TRUST COMPANY AMERICAS, as Restoration Bond Trustee By:   /s/
Jenna Kaufman   Jenna Kaufman   Director By:   /s/ Maria Inoa   Maria Inoa  
Associate

 

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