a0660941.htm


    
      
         


      

      
         


        
        

      

      
         


        
           Exhibit
4.1

        

      

    


    


     

    ENTERGY
TEXAS RESTORATION FUNDING, LLC,

     

    Issuer,

     

    and

     

    THE
BANK OF NEW YORK MELLON,

     

    Indenture
Trustee and Securities Intermediary

     

    ______________________________

     

    INDENTURE

     

    Dated
as of November 6, 2009

     

    ______________________________

     

    


     


    TABLE OF
CONTENTS

     

    Page

     

    ARTICLE
I

     

     

    DEFINITIONS
AND INCORPORATION BY REFERENCE

     

    
      	
               
      

            	
              SECTION
      1.01.  Definitions

            


    

    
      	
               
      

            	
              SECTION
      1.02.  Incorporation by Reference of Trust Indenture
      Act

            


    

    
      	
               
      

            	
              SECTION
      1.03.  Rules of
Construction

            


    

     

    ARTICLE
II

     

     

    THE
TRANSITION BONDS

     

    
      	
               
      

            	
              SECTION
      2.01.  Form

            


    

    
      	
               
      

            	
              SECTION
      2.02.  Denominations; Transition
Bonds

            


    

    
      	
               
      

            	
              SECTION
      2.03.  Execution, Authentication and
  Delivery

            


    

    
      	
               
      

            	
              SECTION
      2.04.  Temporary Transition
Bonds

            


    

    
      	
               
      

            	
              SECTION
      2.05.  Registration; Registration of Transfer and Exchange of
      Transition Bonds

            


    

    
      	
               
      

            	
              SECTION
      2.06.  Mutilated, Destroyed, Lost or Stolen Transition
      Bonds

            


    

    
      	
               
      

            	
              SECTION
      2.07.  Persons Deemed
Owner

            


    

    
      	
               
      

            	
              SECTION
      2.08.  Payment of Principal, Premium, if any, and Interest;
      Interest on Overdue Principal; Principal, Premium, if any, and Interest
      Rights Preserved.

            


    

    
      	
               
      

            	
              SECTION
      2.09.  Cancellation

            


    

    
      	
               
      

            	
              SECTION
      2.10.  Outstanding Amount; Authentication and Delivery of
      Transition Bond

            


    

    
      	
               
      

            	
              SECTION
      2.11.  Book-Entry Transition
Bonds

            


    

    
      	
               
      

            	
              SECTION
      2.12.  Notices to Clearing
Agency

            


    

    
      	
               
      

            	
              SECTION
      2.13.  Definitive Transition
Bonds

            


    

    
      	
               
      

            	
              SECTION
      2.14.  CUSIP Number

            


    

    
      	
               
      

            	
              SECTION
      2.15.  Letter of
Representations

            


    

    
      	
               
      

            	
              SECTION
      2.16.  [RESERVED]

            


    

    
      	
               
      

            	
              SECTION
      2.17.  Tax Treatment

            


    

    
      	
               
      

            	
              SECTION
      2.18.  State Pledge

            


    

    
      	
               
      

            	
              SECTION
      2.19.  Security Interests

            


    

     

    ARTICLE
III

     

     

    COVENANTS

     

    
      	
               
      

            	
              SECTION
      3.01.  Payment of Principal, Premium, if any, and
      Interest

            


    

    
      	
               
      

            	
              SECTION
      3.02.  Maintenance of Office or
Agency

            


    

    
      	
               
      

            	
              SECTION
      3.03.  Money for Payments To Be Held in
  Trust

            


    

    
      	
               
      

            	
              SECTION
      3.04.  Existence

            


    

    
      	
               
      

            	
              SECTION
      3.05.  Protection of Transition Bond
  Collateral

            


    

    
      	
               
      

            	
              SECTION
      3.06.  Opinions as to Transition Bond
  Collateral.

            


    

    
      	
               
      

            	
              SECTION
      3.07.  Performance of Obligations; Servicing; SEC
      Filings.

            


    

    
      	
               
      

            	
              SECTION
      3.08.  Certain Negative
Covenants

            


    

    
      	
               
      

            	
              SECTION
      3.09.  Annual Statement as to
  Compliance

            


    

    
      	
               
      

            	
              SECTION
      3.10.  Issuer May Consolidate, etc., Only on Certain
      Terms.

            


    

    
      	
               
      

            	
              SECTION
      3.11.  Successor or
Transferee.

            


    

    
      	
               
      

            	
              SECTION
      3.12.  No Other Business

            


    

    
      	
               
      

            	
              SECTION
      3.13.  No Borrowing

            


    

    
      	
               
      

            	
              SECTION
      3.14.  Servicer’s
Obligations

            


    

    
      	
               
      

            	
              SECTION
      3.15.  Guarantees, Loans, Advances and Other
      Liabilities

            


    

    
      	
               
      

            	
              SECTION
      3.16.  Capital
Expenditures

            


    

    
      	
               
      

            	
              SECTION
      3.17.  Restricted
Payments

            


    

    
      	
               
      

            	
              SECTION
      3.18.  Notice of Events of
Default

            


    

    
      	
               
      

            	
              SECTION
      3.19.  Further Instruments and
Acts

            


    

    
      	
               
      

            	
              SECTION
      3.20.  [RESERVED]

            


    

    
      	
               
      

            	
              SECTION
      3.21.  Inspection

            


    

    
      	
               
      

            	
              SECTION
      3.22.  Sale Agreement, Servicing Agreement, and Administration
      Agreement Covenants.

            


    

    
      	
               
      

            	
              SECTION
      3.23.  Taxes

            


    

     

    ARTICLE
IV

     

     

    SATISFACTION
AND DISCHARGE; DEFEASANCE

     

    
      	
               
      

            	
              SECTION
      4.01.  Satisfaction and Discharge of Indenture;
      Defeasance.

            


    

    
      	
               
      

            	
              SECTION
      4.02.  Conditions to
Defeasance

            


    

    
      	
               
      

            	
              SECTION
      4.03.  Application of Trust
Money

            


    

    
      	
               
      

            	
              SECTION
      4.04.  Repayment of Moneys Held by Paying
  Agent

            


    

     

    ARTICLE
V

     

     

    REMEDIES

     

    
      	
               
      

            	
              SECTION
      5.01.  Events of Default

            


    

    
      	
               
      

            	
              SECTION
      5.02.  Acceleration of Maturity; Rescission and
      Annulment

            


    

    
      	
               
      

            	
              SECTION
      5.03.  Collection of Indebtedness and Suits for Enforcement by
      Indenture Trustee.

            


    

    
      	
               
      

            	
              SECTION
      5.04.  Remedies;
Priorities.

            


    

    
      	
               
      

            	
              SECTION
      5.05.  Optional Preservation of the Transition Bond
      Collateral

            


    

    
      	
               
      

            	
              SECTION
      5.06.  Limitation of
Suits

            


    

    
      	
               
      

            	
              SECTION
      5.07.  Unconditional Rights of Holders To Receive Principal,
      Premium, if any, and Interest

            


    

    
      	
               
      

            	
              SECTION
      5.08.  Restoration of Rights and
  Remedies

            


    

    
      	
               
      

            	
              SECTION
      5.09.  Rights and Remedies
Cumulative

            


    

    
      	
               
      

            	
              SECTION
      5.10.  Delay or Omission Not a
Waiver

            


    

    
      	
               
      

            	
              SECTION
      5.11.  Control by Holders

            


    

    
      	
               
      

            	
              SECTION
      5.12.  Waiver of Past
Defaults

            


    

    
      	
               
      

            	
              SECTION
      5.13.  Undertaking for
Costs

            


    

    
      	
               
      

            	
              SECTION
      5.14.  Waiver of Stay or Extension
  Laws

            


    

    
      	
               
      

            	
              SECTION
      5.15.  Action on Transition
Bonds

            


    

     

    ARTICLE
VI

     

     

    THE
INDENTURE TRUSTEE

     

    
      	
               
      

            	
              SECTION
      6.01.  Duties of Indenture
Trustee.

            


    

    
      	
               
      

            	
              SECTION
      6.02.  Rights of Indenture
Trustee

            


    

    
      	
               
      

            	
              SECTION
      6.03.  Individual Rights of Indenture
  Trustee

            


    

    
      	
               
      

            	
              SECTION
      6.04.  Indenture Trustee’s
Disclaimer

            


    

    
      	
               
      

            	
              SECTION
      6.05.  Notice of
Defaults.

            


    

    
      	
               
      

            	
              SECTION
      6.06.  Reports by Indenture Trustee to
  Holders.

            


    

    
      	
               
      

            	
              SECTION
      6.07.  Compensation and
Indemnity

            


    

    
      	
               
      

            	
              SECTION
      6.08.  Replacement of Indenture Trustee and Securities
      Intermediary.

            


    

    
      	
               
      

            	
              SECTION
      6.09.  Successor Indenture Trustee by
  Merger

            


    

    
      	
               
      

            	
              SECTION
      6.10.  Appointment of Co-Trustee or Separate
      Trustee.

            


    

    
      	
               
      

            	
              SECTION
      6.11.  Eligibility;
Disqualification

            


    

    
      	
               
      

            	
              SECTION
      6.12.  Preferential Collection of Claims Against
      Issuer

            


    

    
      	
               
      

            	
              SECTION
      6.13.  Representations and Warranties of Indenture
      Trustee

            


    

    
      	
               
      

            	
              SECTION
      6.14.  Annual Report by Independent Registered Public
      Accountants

            


    

    
      	
               
      

            	
              SECTION
      6.15.  Custody of Transition Bond
  Collateral

            


    

     

    ARTICLE
VII

     

     

    HOLDERS’
LISTS AND REPORTS

     

    
      	
               
      

            	
              SECTION
      7.01.  Issuer To Furnish Indenture Trustee Names and Addresses
      of Holders

            


    

    
      	
               
      

            	
              SECTION
      7.02.  Preservation of Information; Communications to
      Holders.

            


    

    
      	
               
      

            	
              SECTION
      7.03.  Reports by Issuer.

            


    

    
      	
               
      

            	
              SECTION
      7.04.  Reports by Indenture
Trustee

            


    

     

    ARTICLE
VIII

     

     

    ACCOUNTS,
DISBURSEMENTS AND RELEASES

     

    
      	
               
      

            	
              SECTION
      8.01.  Collection of
Money

            


    

    
      	
               
      

            	
              SECTION
      8.02.  Collection Account and REP Deposit
    Accounts.

            


    

    
      	
               
      

            	
              SECTION
      8.03.  General Provisions Regarding the Collection
      Accounts.

            


    

    
      	
               
      

            	
              SECTION
      8.04.  Release of Transition Bond
  Collateral.

            


    

    
      	
               
      

            	
              SECTION
      8.05.  Opinion of Counsel

            


    

    
      	
               
      

            	
              SECTION
      8.06.  Reports by Independent Registered Public
      Accountants

            


    

     

    ARTICLE
IX

     

     

    SUPPLEMENTAL
INDENTURES

     

    
      	
               
      

            	
              SECTION
      9.01.  Supplemental Indentures Without Consent of
      Holders

            


    

    
      	
               
      

            	
              SECTION
      9.02.  Supplemental Indentures with Consent of
      Holders

            


    

    
      	
               
      

            	
              SECTION
      9.03.  PUCT Condition

            


    

    
      	
               
      

            	
              SECTION
      9.04.  Execution of Supplemental
  Indentures

            


    

    
      	
               
      

            	
              SECTION
      9.05.  Effect of Supplemental
  Indenture

            


    

    
      	
               
      

            	
              SECTION
      9.06.  Conformity with Trust Indenture
  Act

            


    

    
      	
               
      

            	
              SECTION
      9.07.  Reference in Transition Bonds to Supplemental
      Indentures

            


    

     

    ARTICLE
X

     

     

    MISCELLANEOUS

     

    
      	
               
      

            	
              SECTION
      10.01.  Compliance Certificates and Opinions,
    etc.

            


    

    
      	
               
      

            	
              SECTION
      10.02.  Form of Documents Delivered to Indenture
      Trustee

            


    

    
      	
               
      

            	
              SECTION
      10.03.  Acts of Holders.

            


    

    
      	
               
      

            	
              SECTION
      10.04.  Notices, etc., to Indenture Trustee, Issuer and Rating
      Agencies.

            


    

    
      	
               
      

            	
              SECTION
      10.05.  Notices to Holders;
Waiver

            


    

    
      	
               
      

            	
              SECTION
      10.06.  [Intentionally
Omitted.]

            


    

    
      	
               
      

            	
              SECTION
      10.07.  Conflict with Trust Indenture
  Act

            


    

    
      	
               
      

            	
              SECTION
      10.08.  Effect of Headings and Table of
  Contents

            


    

    
      	
               
      

            	
              SECTION
      10.09.  Successors and
Assigns

            


    

    
      	
               
      

            	
              SECTION
      10.10.  Severability

            


    

    
      	
               
      

            	
              SECTION
      10.11.  Benefits of
Indenture

            


    

    
      	
               
      

            	
              SECTION
      10.12.  Legal Holidays

            


    

    
      	
               
      

            	
              SECTION
      10.13.  GOVERNING LAW

            


    

    
      	
               
      

            	
              SECTION
      10.14.  Counterparts

            


    

    
      	
               
      

            	
              SECTION
      10.15.  Recording of
Indenture

            


    

    
      	
               
      

            	
              SECTION
      10.16.  Issuer Obligation

            


    

    
      	
               
      

            	
              SECTION
      10.17.  No Recourse to
Issuer

            


    

    
      	
               
      

            	
              SECTION
      10.18.  Basic Documents

            


    

    
      	
               
      

            	
              SECTION
      10.19.  No Petition

            


    

    
      	
               
      

            	
              SECTION
      10.20.  Securities
Intermediary

            


    

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBITS
AND SCHEDULES

     

    
      	
              EXHIBIT A

            	
              Form
      of Transition Bonds

            


    

    
      	
              EXHIBIT B

            	
              Form
      of Series Supplement

            


    

    
      	
              EXHIBIT C

            	
              Servicing
      Criteria to be Addressed by Indenture Trustee in Assessment of
      Compliance

            


    

     

    APPENDIX

     

    
      	
              APPENDIX A

            	
              Definitions

            


    

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    TRUST INDENTURE ACT CROSS
REFERENCE TABLE

     

    
      	
              TIA Section

            	
              Indenture Section

            
	
              310

            	
              (a)(1)

            	
              6.11

            
	 
      	
              (a)(2)

            	
              6.11

            
	 
      	
              (a)(3)

            	
              6.10(b)(i)

            
	 
      	
              (a)(4)

            	
              N.A.

            
	 
      	
              (a)(5)

            	
              6.11

            
	 
      	
              (b)

            	
              6.11

            
	 
      	
              (c)

            	
              N.A.

            
	
              311

            	
              (a)

            	
              6.12

            
	 
      	
              (b)

            	
              6.12

            
	 
      	
              (c)

            	
              N.A.

            
	
              312

            	
              (a)

            	
              7.01
      and 7.02

            
	 
      	
              (b)

            	
              7.02

            
	 
      	
              (c)

            	
              7.02

            
	
              313

            	
              (a)

            	
              7.04

            
	 
      	
              (b)(1)

            	
              7.04

            
	 
      	
              (b)(2)

            	
              7.04

            
	 
      	
              (c)

            	
              7.04

            
	 
      	
              (d)

            	
              7.04

            
	
              314

            	
              (a)

            	
              3.09,
      4.01, and 7.03(a)

            
	 
      	
              (b)

            	
              3.06
      and 4.01

            
	 
      	
              (c)(1)

            	
              2.10,
      4.01, 8.04(b) and 10.01(a)

            
	 
      	
              (c)(2)

            	
              2.10,
      4.01, 8.04(b) and 10.01(a)

            
	 
      	
              (c)(3)

            	
              2.10
      4.01 and 10.01(a)

            
	 
      	
              (d)

            	
              2.10,
      8.04(b) and 10.01(b)

            
	 
      	
              (e)

            	
              10.01(a)

            
	 
      	
              (f)

            	
              10.01(a)

            
	
              315

            	
              (a)

            	
              6.01(b)(i)(ii)

            
	 
      	
              (b)

            	
              6.05

            
	 
      	
              (c)

            	
              6.01
      (a)

            
	 
      	
              (d)

            	
              6.01(c)(i)-(iii)

            
	 
      	
              (e)

            	
              5.13

            
	
              316

            	
              (a)
      (last sentence)

            	
              Appendix A
      – definition of “Outstanding”

            
	 
      	
              (a)(1)(A)

            	
              5.11

            
	 
      	
              (a)(1)(B)

            	
              5.12

            
	 
      	
              (a)(2)

            	
              Omitted

            
	 
      	
              (b)

            	
              5.07

            
	 
      	
              (c)

            	
              Appendix A
      – definition of “Record Date”

            
	
              317

            	
              (a)(1)

            	
              5.03(a)

            
	 
      	
              (a)(2)

            	
              5.03(c)(iv)

            
	 
      	
              (b)

            	
              3.03

            
	
              318

            	
              (a)

            	
              10.07

            


    

    


    **           “N.A.”  shall
mean “not applicable”.

     

    THIS
CROSS REFERENCE TABLE SHALL NOT, FOR ANY PURPOSE,

     

    BE DEEMED
TO BE PART OF THIS INDENTURE.

     



    This
INDENTURE dated as of November 6, 2009, by and between ENTERGY TEXAS RESTORATION
FUNDING, LLC, a Delaware limited liability company (the “Issuer”), and THE
BANK OF NEW YORK MELLON, a New York banking corporation, in its capacity as
indenture trustee (the “Indenture Trustee”)
for the benefit of the Secured Parties (as defined herein) and in its separate
capacity as a securities intermediary (the “Securities
Intermediary”).

     

    In
consideration of the mutual agreements herein contained, each party agrees as
follows for the benefit of the other and each of the Holders:

     

    RECITALS
OF THE ISSUER

     

    The
Issuer has duly authorized the execution and delivery of this Indenture and the
creation and issuance of the Transition Bonds issuable hereunder, which will be
of substantially the tenor set forth herein and in the Series
Supplement.

     

    The
Transition Bonds shall be non-recourse obligations and shall be secured by and
payable solely out of the proceeds of the Transition Property and the other
Transition Bond Collateral.  If and to the extent that such proceeds
of Transition Property and the other Transition Bond Collateral are insufficient
to pay all amounts owing with respect to the Transition Bonds, then, except as
otherwise expressly provided hereunder, the Holders shall have no Claim in
respect of such insufficiency against the Issuer or the Indenture Trustee, and
the Holders, by their acceptance of the Transition Bonds, waive any such
Claim.

     

    All
things necessary to (a) make the Transition Bonds, when executed by the
Issuer and authenticated and delivered by the Indenture Trustee hereunder and
duly issued by the Issuer, valid obligations, and (b) make this Indenture a
valid agreement of the Issuer, in each case, in accordance with their respective
terms, have been done.

     

    NOW,
THEREFORE, THIS INDENTURE WITNESSETH:

     

    That the
Issuer, in consideration of the premises herein contained and of the purchase of
the Transition Bonds by the Holders and of other good and lawful consideration,
the receipt and sufficiency of which are hereby acknowledged, and to secure,
equally and ratably without prejudice, priority or distinction, except as
specifically otherwise set forth in this Indenture, the payment of the
Transition Bonds, the payment of all other amounts due under or in connection
with this Indenture (including, without limitation, all fees, expenses, counsel
fees, indemnity amounts and other amounts due and owing to the Indenture
Trustee) and the performance and observance of all of the covenants and
conditions contained herein or in such Transition Bonds, has hereby executed and
delivered this Indenture and by these presents does hereby and under the Series
Supplement will convey, grant and assign, transfer and pledge, in and unto the
Indenture Trustee, its successors and assigns forever, for the benefit of the
Secured Parties, all and singular the property described in the Series
Supplement (such property hereinafter referred to as the “Transition Bond
Collateral”).  The Series Supplement will more particularly
describe the obligations of the Issuer secured by the Transition Bond
Collateral.

     

    AND IT IS
HEREBY COVENANTED, DECLARED AND AGREED between the parties hereto that all
Transition Bonds are to be issued, countersigned and delivered and that all of
the Transition Bond Collateral is to be held and applied, subject to the further
covenants, conditions, releases, uses and trusts hereinafter set forth, and the
Issuer, for itself and any successor, does hereby covenant and agree to and with
the Indenture Trustee and its successors in said trust, for the benefit of the
Secured Parties, as follows:

     

    ARTICLE
I

     

    DEFINITIONS
AND INCORPORATION BY REFERENCE

     

    SECTION
1.01. Definitions.  Except
as otherwise specified herein or as the context may otherwise require, the
capitalized terms used herein shall have the respective meanings set forth in
Appendix A
attached hereto and made a part hereof for all purposes of this
Indenture.

     

    SECTION
1.02. Incorporation by Reference
of Trust Indenture Act.  Whenever this Indenture refers to a
provision of the TIA, that provision is incorporated by reference in and made a
part of this Indenture.  The following TIA terms used in this
Indenture have the following meanings:

     

    “indenture
securities” means the Transition Bonds.

     

    “indenture
security holder” means a Holder.

     

    “indenture
to be qualified” means this Indenture.

     

    “indenture
trustee” or “institutional trustee” means the Indenture Trustee.

     

    “obligor”
on the indenture securities means the Issuer and any other obligor on the
indenture securities.

     

    All other
TIA terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule have the meanings assigned
to them by such definitions.

     

    SECTION
1.03. Rules of
Construction.  Unless the context otherwise
requires:

     

    (i) a term has the meaning assigned to
it;

     

    (ii) an accounting term not otherwise
defined has the meaning assigned to it in accordance with generally accepted
accounting principles in the United States of America as in effect from time to
time;

     

    (iii) “or” is not exclusive;

     

    (iv) “including” means including without
limitation;

     

    (v) words in the singular include the
plural and words in the plural include the singular; and

     

    (vi) the words “herein,” “hereof,”
“hereunder” and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision.

     

    ARTICLE
II

     

    THE
TRANSITION BONDS

     

    SECTION
2.01. Form.  The
Transition Bonds and the Indenture Trustee’s certificate of authentication shall
be in substantially the forms set forth in Exhibit A, with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture or by the Series Supplement and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing the Transition Bonds, as evidenced by their execution of the
Transition Bonds.  Any portion of the text of any Transition Bond may
be set forth on the reverse thereof, with an appropriate reference thereto on
the face of the Transition Bond.

     

    The
Transition Bonds shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officers executing the Transition Bonds, as
evidenced by their execution of the Transition Bonds.

     

    Each
Transition Bond shall be dated the date of its authentication.  The
terms of the Transition Bonds set forth in Exhibit A are
part of the terms of this Indenture.

     

    SECTION
2.02. Denominations; Transition
Bonds.  The Transition Bonds shall be issuable in the Minimum
Denomination.

     

    The
Transition Bonds may, at the election of and as authorized by a Responsible
Officer of the Issuer, be issued in one or more Tranches, and shall be
designated generally as the “Transition Bonds” of the Issuer, with such further
particular designations added or incorporated in such title for the Transition
Bonds of any particular Tranche as a Responsible Officer of the Issuer may
determine.  Each Transition Bond shall bear upon its face the
designation so selected for the Tranche to which it belongs.  All
Transition Bonds shall be identical in all respects except for the denominations
thereof, unless the Transition Bonds are comprised of one or more Tranches, in
which case all Transition Bonds of the same Tranche shall be identical in all
respects except for the denominations thereof.  All Transition Bonds
of a particular Tranche shall be in all respects equally and ratably entitled to
the benefits hereof without preference, priority, or distinction on account of
the actual time or times of authentication and delivery, all in accordance with
the terms and provisions of this Indenture.

     

    The
Transition Bonds shall be created by the Series Supplement authorized by a
Responsible Officer of the Issuer and establishing the terms and provisions of
the Transition Bonds.  The several Tranches thereof may differ as
between Tranches, in respect of any of the following matters:

     

    (1) designation of the Tranches
thereof;

     

    (2) the principal amount;

     

    (3) the Transition Bond Interest
Rate;

     

    (4) the Payment Dates;

     

    (5) the Scheduled Payment
Dates;

     

    (6) the Scheduled Final Payment
Date;

     

    (7) the Final Maturity Date;

     

    (8) the Closing Date;

     

    (9) the place or places for the payment of
interest, principal and premium, if any;

     

    (10) the Minimum Denominations;

     

    (11) the Expected Amortization
Schedule;

     

    (12) provisions with respect to the
definitions set forth in Appendix A
hereto;

     

    (13) whether or not the Transition Bonds are
to be Book-Entry Transition Bonds and the extent to which Section 2.11
should apply;

     

    (14) to the extent applicable, the extent to
which payments on the Transition Bonds of any Tranche are subordinate to or
pari passu
in right of payment of principal and interest to other Tranches;

     

    (15) provisions
with respect to application of the proceeds of the Transition Bonds including
the payment of costs of issuing the Transition Bonds; and

     

    (16) any other provisions expressing or
referring to the terms and conditions upon which the Transition Bonds of the
applicable Tranche are to be issued under this Indenture that are not in
conflict with the provisions of this Indenture and as to which the Rating Agency
Condition is satisfied.

     

    SECTION
2.03. Execution, Authentication
and Delivery.  The Transition Bonds shall be executed on behalf
of the Issuer by any of its Responsible Officers.  The signature of
any such Responsible Officer on the Transition Bonds may be manual or
facsimile.

     

    Transition
Bonds bearing the manual or facsimile signature of individuals who were at any
time Responsible Officers of the Issuer shall bind the Issuer, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to
the authentication and delivery of such Transition Bonds or did not hold such
offices at the date of such Transition Bonds.

     

    At any
time and from time to time after the execution and delivery of this Indenture,
the Issuer may deliver Transition Bonds executed by the Issuer to the Indenture
Trustee pursuant to an Issuer Order for authentication; and the Indenture
Trustee shall authenticate and deliver such Transition Bonds as in this
Indenture provided and not otherwise.

     

    No
Transition Bond shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Transition
Bond a certificate of authentication substantially in the form provided for
therein executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Transition Bond shall be
conclusive evidence, and the only evidence, that such Transition Bond has been
duly authenticated and delivered hereunder.

     

    SECTION
2.04. Temporary Transition
Bonds.  Pending the preparation of Definitive Transition Bonds
pursuant to Section 2.13,
the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, Temporary Transition Bonds which are
printed, lithographed, typewritten, mimeographed or otherwise produced, of the
tenor of the Definitive Transition Bonds in lieu of which they are issued and
with such variations not inconsistent with the terms of this Indenture as the
officers executing such Transition Bonds may determine, as evidenced by their
execution of such Transition Bonds.

     

    If
Temporary Transition Bonds are issued, the Issuer will cause Definitive
Transition Bonds to be prepared without unreasonable delay.  After the
preparation of Definitive Transition Bonds, the Temporary Transition Bonds shall
be exchangeable for Definitive Transition Bonds upon surrender of the Temporary
Transition Bonds at the office or agency of the Issuer to be maintained as
provided in Section 3.02,
without charge to the Holder.  Upon surrender for cancellation of any
one or more Temporary Transition Bonds, the Transition Bond Issuer shall execute
and the Indenture Trustee shall authenticate and deliver in exchange therefor a
like principal amount of Definitive Transition Bonds of authorized
denominations.  Until so delivered in exchange, the Temporary
Transition Bonds shall in all respects be entitled to the same benefits under
this Indenture as Definitive Transition Bonds.

     

    SECTION
2.05. Registration; Registration
of Transfer and Exchange of Transition Bonds.  The Issuer shall
cause to be kept a register (the “Transition Bond
Register”) in which the Issuer shall provide for the registration of
Transition Bonds and the registration of transfers of Transition
Bonds.  The Indenture Trustee shall be “Transition Bond
Registrar” for the purpose of registering Transition Bonds and transfers
of Transition Bonds as herein provided.  Upon any resignation of any
Transition Bond Registrar, the Issuer shall promptly appoint a successor or, if
it elects not to make such an appointment, assume the duties of Transition Bond
Registrar.

     

    If a
Person other than the Indenture Trustee is appointed by the Issuer as Transition
Bond Registrar, the Issuer will give the Indenture Trustee prompt written notice
of the appointment of such Transition Bond Registrar and of the location, and
any change in the location, of the Transition Bond Register, and the Indenture
Trustee shall have the right to inspect the Transition Bond Register at all
reasonable times and to obtain copies thereof, and the Indenture Trustee shall
have the right to rely conclusively upon a certificate executed on behalf of the
Transition Bond Registrar by a Responsible Officer thereof as to the names and
addresses of the Holders and the principal amounts and number of such Transition
Bonds (separately stated by Tranche).

     

    Upon
surrender for registration of transfer of any Transition Bond at the office or
agency of the Issuer to be maintained as provided in Section 3.02,
provided that the requirements of Section 8-401 of the UCC are met, the
Issuer shall execute, and the Indenture Trustee shall authenticate and the
Holder shall obtain from the Indenture Trustee, in the name of the designated
transferee or transferees, one or more new Transition Bonds in any Minimum
Denominations, of the same Tranche and aggregate principal amount.

     

    At the
option of the Holder, Transition Bonds may be exchanged for other Transition
Bonds in any Minimum Denominations, of the same Tranche and aggregate principal
amount, upon surrender of the Transition Bonds to be exchanged at such office or
agency as provided in Section 3.02.  Whenever
any Transition Bonds are so surrendered for exchange, the Issuer shall, provided
that the requirements of Section 8-401 of the UCC are met, execute and,
upon any such execution, the Indenture Trustee shall authenticate and the Holder
shall obtain from the Indenture Trustee, the Transition Bonds which the Holder
making the exchange is entitled to receive.

     

    All
Transition Bonds issued upon any registration of transfer or exchange of other
Transition Bonds shall be the valid obligations of the Issuer, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Transition Bonds surrendered upon such registration of transfer or
exchange.

     

    Every
Transition Bond presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by (a) a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by the Holder thereof or such Holder’s attorney duly authorized in
writing, with such signature guaranteed by an institution which is a member of
one of the following recognized Signature Guaranty
Programs:  (i) The Securities Transfer Agent Medallion Program
(STAMP); (ii) The New York Stock Exchange Medallion Program (MSP);
(iii) The Stock Exchange Medallion Program (SEMP); or (iv) such other
guarantee program acceptable to the Indenture Trustee, and (b) such other
documents as the Indenture Trustee may require.

     

    No
service charge shall be made to a Holder for any registration, transfer or
exchange of Transition Bonds, but the Issuer or the Indenture Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge or any fees or expenses of the Indenture Trustee that may be imposed in
connection with any registration of transfer or exchange of Transition Bonds,
other than exchanges pursuant to Sections 2.04 or
2.06 not
involving any transfer.

     

    The
preceding provisions of this Section 2.05
notwithstanding, the Issuer shall not be required to make, and the Transition
Bond Registrar need not register transfers or exchanges (i) of any Transition
Bond that has been submitted within fifteen (15) days preceding the due
date for any payment with respect to such Transition Bond until after such due
date has occurred or (ii) of Unregistered Transition Bonds unless Section 2.16 has
been complied with in connection with such transfer or exchange.

     

    SECTION
2.06. Mutilated, Destroyed, Lost
or Stolen Transition Bonds.  If (i) any mutilated
Transition Bond is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Transition Bond and (ii) there is delivered to the Indenture Trustee
such security or indemnity as may be required by it to hold the Issuer and the
Indenture Trustee harmless, then, in the absence of notice to the Issuer, the
Transition Bond Registrar or the Indenture Trustee that such Transition Bond has
been acquired by a Protected Purchaser, the Issuer shall, provided that the
requirements of Section 8-401 of the UCC are met, execute and, upon the
Issuer’s written request, the Indenture Trustee shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Transition Bond, a replacement Transition Bond of like Tranche, tenor and
principal amount, bearing a number not contemporaneously outstanding; provided, however, that if any
such destroyed, lost or stolen Transition Bond, but not a mutilated Transition
Bond, shall have become or within seven (7) days shall be due and payable,
instead of issuing a replacement Transition Bond, the Issuer may pay such
destroyed, lost or stolen Transition Bond when so due or payable without
surrender thereof.  If, after the delivery of such replacement
Transition Bond or payment of a destroyed, lost or stolen Transition Bond
pursuant to the proviso to the preceding sentence, a Protected Purchaser of the
original Transition Bond in lieu of which such replacement Transition Bond was
issued presents for payment such original Transition Bond, the Issuer and the
Indenture Trustee shall be entitled to recover such replacement Transition Bond
(or such payment) from the Person to whom it was delivered or any Person taking
such replacement Transition Bond from such Person to whom such replacement
Transition Bond was delivered or any assignee of such Person, except a Protected
Purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.

     

    Upon the
issuance of any replacement Transition Bond under this Section 2.06,
the Issuer and/or the Indenture Trustee may require the payment by the Holder of
such Transition Bond of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable expenses
(including the fees and expenses of the Indenture Trustee and the Transition
Bond Registrar) connected therewith.

     

    Every
replacement Transition Bond issued pursuant to this Section 2.06 in
replacement of any mutilated, destroyed, lost or stolen Transition Bond shall
constitute an original additional contractual obligation of the Issuer, whether
or not the mutilated, destroyed, lost or stolen Transition Bond shall be found
at any time or enforced by any Person, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Transition
Bonds duly issued hereunder.

     

    The
provisions of this Section 2.06 are
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Transition Bonds.

     

    SECTION
2.07. Persons Deemed
Owner.  Prior to due presentment for registration of transfer
of any Transition Bond, the Issuer, the Indenture Trustee, the Transition Bond
Registrar and any agent of the Issuer or the Indenture Trustee may treat the
Person in whose name any Transition Bond is registered (as of the day of
determination) as the owner of such Transition Bond for the purpose of receiving
payments of principal of and premium, if any, and interest on such Transition
Bond and for all other purposes whatsoever, whether or not such Transition Bond
be overdue, and neither the Issuer, the Indenture Trustee nor any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the
contrary.

     

    SECTION
2.08. Payment of Principal,
Premium, if any, and Interest; Interest on Overdue Principal; Principal,
Premium, if any, and Interest Rights Preserved.

     

    (a) The
Transition Bonds shall accrue interest as provided in the Series Supplement at
the applicable Transition Bond Interest Rate, and such interest shall be payable
on each applicable Payment Date.  Any installment of interest,
principal or premium, if any, payable on any Transition Bond which is punctually
paid or duly provided for on the applicable Payment Date shall be paid to the
Person in whose name such Transition Bond (or one or more Predecessor Transition
Bonds) is registered on the Record Date for such Payment Date, by check mailed
first-class, postage prepaid to such Person’s address as it appears on the
Transition Bond Register on such Record Date or in such other manner as may be
provided in the Series Supplement except that (i) upon application to the
Indenture Trustee by any Holder owning Transition Bonds of any Tranche in the
principal amount of $10,000,000 or more not later than the applicable Record
Date payment will be made by wire transfer to an account maintained by such
Holder and (ii) with respect to Book-Entry Transition Bonds, payments will
be made by wire transfer in immediately available funds to the account
designated by the Holder of the applicable Global Transition Bond unless and
until such Global Transition Bond is exchanged for Definitive Transition Bonds
(in which event payments shall be made as provided above) and except for the
final installment of principal and premium, if any, payable with respect to such
Transition Bond on a Payment Date which shall be payable as provided
below.  The funds represented by any such checks returned undelivered
shall be held in accordance with Section 3.03.

     

    (b) The
principal of each Transition Bond of each Tranche shall be paid, to the extent
funds are available therefor in the Collection Account, in installments on each
Payment Date specified in the Series Supplement; provided that
installments of principal not paid when scheduled to be paid in accordance with
the Expected Amortization Schedule shall be paid upon receipt of money available
for such purpose, in the order set forth in the Expected Amortization
Schedule.  Failure to pay principal in accordance with such Expected
Amortization Schedule because moneys are not available pursuant to Section 8.02 to
make such payments shall not constitute a Default or Event of Default under this
Indenture; provided, however that failure
to pay the entire unpaid principal amount of the Transition Bonds of a Tranche
upon the Final Maturity Date for the Transition Bonds shall constitute a Default
or Event of Default with respect to the Transition Bonds under this
Indenture.  Notwithstanding the foregoing, the entire unpaid principal
amount of the Transition Bonds shall be due and payable, if not previously paid,
on the date on which an Event of Default shall have occurred and be continuing,
if the Indenture Trustee or the Holders of the Transition Bonds representing not
less than a majority of the Outstanding Amount of the Transition Bonds have
declared the Transition Bonds to be immediately due and payable in the manner
provided in Section 5.02.  All
payments of principal and premium, if any, on the Transition Bonds shall be made
pro rata to the Holders entitled thereto unless otherwise provided in the
Series Supplement with respect to any Tranche of Transition
Bonds.  The Indenture Trustee shall notify the Person in whose name a
Transition Bond is registered at the close of business on the Record Date
preceding the Payment Date on which the Issuer expects that the final
installment of principal of and premium, if any, and interest on such Transition
Bond will be paid.  Such notice shall be mailed no later than five
(5) days prior to such final Payment Date and shall specify that such final
installment will be payable only upon presentation and surrender of such
Transition Bond and shall specify the place where such Transition Bond may be
presented and surrendered for payment of such installment.

     

    (c) If
interest on the Transition Bonds is not paid when due, such defaulted interest
shall be paid (plus interest on such defaulted interest at the applicable
Transition Bond Interest Rate to the extent lawful) to the Persons who are
Holders on a subsequent Special Record Date.  The Issuer shall fix or
cause to be fixed any such Special Record Date and Special Payment Date, and, at
least ten (10) days before any such Special Record Date, the Issuer shall
mail to each affected Holder a notice that states the Special Record Date, the
Special Payment Date and the amount of defaulted interest (plus interest on such
defaulted interest) to be paid.

     

    SECTION
2.09. Cancellation.  All
Transition Bonds surrendered for payment, registration of transfer or exchange
shall, if surrendered to any Person other than the Indenture Trustee, be
delivered to the Indenture Trustee and shall be promptly canceled by the
Indenture Trustee.  The Issuer may at any time deliver to the
Indenture Trustee for cancellation any Transition Bonds previously authenticated
and delivered hereunder which the Issuer may have acquired in any manner
whatsoever, and all Transition Bonds so delivered shall be promptly canceled by
the Indenture Trustee.  No Transition Bonds shall be authenticated in
lieu of or in exchange for any Transition Bonds canceled as provided in this
Section 2.09,
except as expressly permitted by this Indenture.  All canceled
Transition Bonds may be held or disposed of by the Indenture Trustee in
accordance with its standard retention or disposal policy as in effect at the
time.

     

    SECTION
2.10. Outstanding Amount;
Authentication and Delivery of Transition Bonds.  The aggregate
Outstanding Amount of Transition Bonds that may be authenticated and delivered
under this Indenture shall not exceed the aggregate of the amounts of Transition
Bonds that are authorized in the Financing Order.

     

    Transition
Bonds created and established by the Series Supplement may at any time be
executed by the Issuer and delivered to the Indenture Trustee for authentication
and thereupon the same shall be authenticated and delivered by the Indenture
Trustee upon Issuer Request and upon delivery by the Issuer to the Indenture
Trustee, and receipt by the Indenture Trustee, or the causing to occur by the
Issuer, of the following; provided, however, that
compliance with such conditions and delivery of such documents shall only be
required in connection with the original issuance of a Transition Bond or
Transition Bonds:

     

    (1) Issuer
Action.  An Issuer Order authorizing and directing the
authentication and delivery of the Transition Bonds by the Indenture Trustee and
specifying the principal amount of Transition Bonds to be
authenticated.

     

    (2) Authorizations.  Copies
of (x) the Financing Order which shall be in full force and effect and be Final,
(y) certified resolutions of the Managers or Member of the Issuer
authorizing the execution and delivery of the Series Supplement and the
execution, authentication and delivery of such Transition Bonds and (z) a
duly executed Series Supplement for the Transition Bonds to be
issued.

     

    (3) Opinions.

     

    (a) An
Opinion of Counsel of Independent counsel of the Issuer that the Financing Order
is in full force and effect, that the Financing Order is Final and that no other
authorization, approval or consent of any Federal governmental body or bodies at
the time having jurisdiction in the premises is required for the valid issuance,
authentication and delivery of such Transition Bonds, except for such
registrations as are required under the “Blue Sky” and securities laws of any
State or such authorizations, approvals or consents of governmental bodies that
have been obtained and copies of which have been delivered with such Opinion of
Counsel.

     

    (b) An
Opinion of Counsel of Independent counsel of the Issuer that no authorization,
approval or consent of any Delaware, New York or Texas governmental body or
bodies at the time having jurisdiction in the premises is required for the valid
execution and delivery by the Issuer of each of the Basic Documents to which the
Issuer is a party and that is executed and delivered in connection with such
Transition Bond issuance, except for such authorizations, approvals or consents
of governmental bodies that have been obtained and copies of which have been
delivered with such Opinion of Counsel.

     

    (4) Authorizing
Certificate.  An Officer’s Certificate, dated the Closing Date,
of the Issuer certifying that (a) the Issuer has duly authorized the
execution and delivery of this Indenture and the Series Supplement and the
execution and delivery of the Transition Bonds and (b) that the Series
Supplement for the Transition Bonds is in the form attached thereto, which
Series Supplement shall comply with the requirements of Section 2.02.

     

    (5) The Transition Bond
Collateral.  The Issuer shall have made or caused to be made
all filings with the PUCT and the Texas Secretary of State pursuant to the
Financing Order and the Securitization Law and all other filings necessary to
perfect the Grant of the Transition Bond Collateral to the Indenture Trustee and
the Lien of this Indenture.

     

    (6) Certificates of the Issuer
and the Seller.

     

    (a) An
Officer’s Certificate, dated as of the Closing Date:

     

    (i) to the effect that (A) the Issuer
is not in Default under this Indenture and that the issuance of the Transition
Bonds will not result in any Default or in any breach of any of the terms,
conditions or provisions of or constitute a default under the Financing Order
relating to the Transition Bonds or any indenture, mortgage, deed of trust or
other agreement or instrument to which the Issuer is a party or by which it or
its property is bound or any order of any court or administrative agency entered
in any Proceeding to which the Issuer is a party or by which it or its property
may be bound or to which it or its property may be subject and (B) that all
conditions precedent provided in this Indenture relating to the execution,
authentication and delivery of the Transition Bonds have been complied
with;

     

    (ii) to the effect that the Issuer has not
assigned any interest or participation in the Transition Bond Collateral except
for the Grant contained in the Series Supplement; the Issuer has the power and
right to Grant the Transition Bond Collateral to the Indenture Trustee as
security hereunder and thereunder; and the Issuer, subject to the terms of this
Indenture, has Granted to the Indenture Trustee a first priority perfected
security interest in all of its right, title and interest in and to such
Transition Bond Collateral free and clear of any Lien, mortgage, pledge, charge,
security interest, adverse claim or other encumbrance arising as a result of
actions of the Issuer or through the Issuer, except Permitted
Liens;

     

    (iii) to the effect that the Issuer has
appointed the firm of Independent registered public accountants as contemplated
in Section 8.06;

     

    (iv) to the effect that attached thereto are
duly executed, true and complete copies of the Sale Agreement, the Servicing
Agreement, and the Administration Agreement, which are, to the knowledge of the
Issuer, in full force and effect and, to the knowledge of the Issuer, that no
party is in default of its obligations under such agreements; and

     

    (v) stating that all filings with the PUCT,
the Texas Secretary of State and the Delaware Secretary of State pursuant to the
Securitization Law, the UCC and the Financing Order relating to the Transition
Bonds and all UCC financing statements with respect to the Transition Bond
Collateral which are required to be filed by the terms of the Financing Order,
the Securitization Law, the Sale Agreement, the Servicing Agreement and this
Indenture have been filed as required.

     

    (b) An
officer’s certificate from the Seller, dated as of the Closing Date, to the
effect that, in the case of the Transition Property identified in the related
Bill of Sale, immediately prior to the conveyance thereof to the Issuer pursuant
to the Sale Agreement:

     

    (i) the Seller was the original and the
sole owner of such Transition Property, free and clear of any Lien; the Seller
had not assigned any interest or participation in such Transition Property and
the proceeds thereof other than to the Issuer pursuant to the Sale Agreement;
the Seller has the power, authority and right to own, sell and assign such
Transition Property and the proceeds thereof to the Issuer; and the Seller,
subject to the terms of the Sale Agreement, has validly sold and assigned to the
Issuer all of its right, title and interest in and to such Transition Property
and the proceeds thereof, free and clear of any Lien (other than Permitted
Liens) and such sale and assignment is absolute and irrevocable and has been
perfected; and

     

    (ii) the attached copy of the Financing
Order creating such Transition Property is true and complete and is in full
force and effect.

     

    (7) Opinion of Tax
Counsel.  The Seller shall have received and delivered to the
Issuer and the Indenture Trustee an opinion of Independent tax counsel (as
selected by the Seller, and in form and substance reasonably satisfactory to the
Issuer and the Indenture Trustee) to the effect that (a) the Issuer will
not be subject to United States federal income tax as an entity separate from
its sole owner and that the Transition Bonds will be treated as debt of the
Issuer’s sole owner for United States federal income tax purposes and
(b) for United States federal income tax purposes, the issuance of the
Transition Bonds will not result in gross income to the Seller.

     

    (8) Opinion of
Counsel.  Unless otherwise specified in the Series Supplement,
an Opinion or Opinions of Counsel, portions of which may be delivered by one or
more Independent counsel for the Issuer, portions of which may be delivered by
one or more Independent counsel for the Servicer, and portions of which may be
delivered by one or more Independent counsel for the Seller, dated the Closing
Date, in each case subject to the customary exceptions, qualifications and
assumptions contained therein, to the collective effect that:

     

    (a) The
Indenture has been duly qualified under the Trust Indenture Act and no
qualification of the Series Supplement is necessary under the Trust Indenture
Act.

     

    (b) All
instruments furnished to the Indenture Trustee pursuant to the Indenture conform
to the requirements set forth in the Indenture and constitute all of the
documents required to be delivered under the Indenture for the Indenture Trustee
to authenticate and deliver the Transition Bonds.  All conditions
precedent provided for in the Indenture relating to the authentication and
delivery of the Transition Bonds have been complied with.

     

    (c) The
Transition Bonds have been duly authorized, executed and delivered by the Issuer
and when duly authenticated by the Indenture Trustee in accordance with the
provisions of the Indenture and delivered against payment of the purchase price
therefor, as provided in the Underwriting Agreement, the Transition Bonds will
constitute legal, valid and binding obligations of the Issuer entitled to the
benefits provided by the Indenture and the Series Supplement and will be
enforceable against the Issuer in accordance with their terms, except to the
extent enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other laws of general applicability
relating to or affecting the enforcement of creditors’ rights and by the effect
of general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).

     

    (d) Each of
the Indenture, the Series Supplement, the Administration Agreement, the Sale
Agreement, and the Servicing Agreement has been duly authorized, executed and
delivered by the Issuer and is a legal, valid and binding agreement of the
Issuer, enforceable against the Issuer in accordance with its terms, except to
the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other laws of general
applicability relating to or affecting the enforcement of creditors’ rights and
by the effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).  Each of the Administration Agreement, the Sale Agreement, and
the Servicing Agreement has been duly authorized, executed and delivered by ETI
and constitutes a legal, valid and binding agreement of ETI, enforceable against
ETI in accordance with its terms, except to the extent enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other laws of general applicability relating to or affecting the
enforcement of creditors’ rights and by the effect of general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).

     

    (e) (i)  With
respect to the Transition Bond Collateral, upon the giving of value by the
Holders to the Issuer with respect to the Transition Bond Collateral, the
Indenture, together with the Series Supplement, creates in favor of the
Indenture Trustee, for the benefit of the Secured Parties, a valid security
interest under Article 9 of the NY UCC in the Transition Bond Collateral
(to the extent the Transition Bond Collateral is of a type in which a security
interest can be created under Article 9 of the NY UCC) to secure the
payment of the Secured Obligations with respect to the Series
Supplement.  Assuming that the collateral described in the Delaware
Financing Statement is Transition Bond Collateral pursuant to the Indenture,
then insofar as Section 9-509 of the NY UCC is applicable, the Indenture
Trustee is authorized to file the Delaware Financing Statement.

     

    (ii) Under Section 9-305(a)(3) of the
NY UCC, the local law of the Securities Intermediary’s jurisdiction as specified
in Section 8-110(e) of the NY UCC governs perfection, the effect of
perfection or nonperfection and priority in the Securities Account and Security
Entitlements.  Under the Indenture, for purposes of
Section 8-110(e) of the NY UCC, the jurisdiction of the Securities
Intermediary is the State of New York.

     

    (iii) To the extent that the Collection
Account is a Securities Account, the provisions of the Indenture are effective
to perfect by control the security interest of the Indenture Trustee, for the
benefit of the Secured Parties, in the Collection Account and the Issuer’s
Security Entitlements with respect to the Financial Assets credited to the
Collection Account and, subject to and to the extent provided in
Section 9-315 of the NY UCC and the Federal Book-Entry Regulations,
identifiable cash proceeds thereof.  Such security interest will have
priority over any security interest held by a secured party perfected by a means
other than control.

     

    (iv) Insofar as Article 9 of the NY UCC
is applicable, (A) pursuant to Section 9-301 of the NY UCC, the law of
the location of the debtor governs the perfection of a nonpossessory security
interest in the Transition Bond Collateral; (B) pursuant to 9-307 of the NY
UCC, a registered organization that is organized under the law of a State is
deemed to be located in that State for purposes of Section 9-301;
(C) the Issuer is a “registered organization” as defined in
Section 9-102(a)(70) of the NY UCC organized in the State of Delaware; and
(D) therefore, the law of the State of Delaware governs the perfection of a
nonpossessory security interest in the Transition Bond Collateral.

     

    (f) The
Registration Statement covering the Transition Bonds has become effective under
the Securities Act; and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been issued under
the Securities Act and no proceedings for that purpose have been initiated or
are pending or threatened by the SEC.

     

    (g) Neither
the Issuer nor ETI is now and, assuming that the Issuer uses the net proceeds of
the sale of the Transition Bonds for the purpose of acquiring Transition
Property in accordance with the terms of the Sale Agreement following the sale
of the Transition Bonds to the Underwriters pursuant to the Underwriting
Agreement, neither the Issuer nor ETI will be required to register as an
investment company under the Investment Company Act.

     

    (h) No
authorization, approval or consent of any federal governmental body or bodies
having jurisdiction in the premises is required for the valid issuance,
authentication and delivery of the Transition Bonds and for the valid execution
and delivery by the Issuer of each of the Basic Documents except for such
authorizations, approvals or consents of federal governmental bodies that have
been obtained.

     

    (i) Each of
the Sale Agreement, the proviso (relating to Liens in Transition Property
governed by Texas law) to Section 10.13,
and the portions of this Indenture referred to by such proviso, constitutes the
legal, valid and binding obligation of each of ETI and the Issuer, to the extent
each is a party thereto, enforceable against such parties in accordance with its
terms.

     

    (j) In
accordance with the Securitization Law, (i) the rights and interests of ETI
under the Financing Order related to the Transition Bonds, including the right
to impose, collect, and receive the Transition Charges authorized in the
Financing Order related to the Transition Bonds, are assignable and shall become
Transition Property when they are first transferred to the Issuer in connection
with the issuance of Transition Bonds; (ii) upon the transfer by ETI of the
Transition Property to the Issuer, the Issuer shall have all of the rights of
ETI with respect to such Transition Property, including, without limitation, the
right to exercise any and all rights and remedies with respect thereto,
including the right to impose, collect and receive any amounts payable by any
Customer in respect of the Transition Property; (iii) the Financing Order
related to the Transition Bonds approves the issuance by the Issuer of the
Transition Bonds in an aggregate principal amount which equals or exceeds the
initial Outstanding Amount of the Transition Bonds; and (iv) the Transition
Bonds are “transition bonds” within the meaning of Sections 36.403(e) and
39.302(6) of the Securitization Law.

     

    (k) No
governmental approvals are required for the valid issuance, authentication and
delivery of the Transition Bonds or the performance by either ETI or the Issuer
of its respective obligations under the Basic Documents, and the proviso
(relating to Liens in Transition Property governed by Texas law) to Section 10.13,
and the portions of this Indenture referred to by such proviso, to which either
ETI or the Issuer is a party, except for (i) the Financing Order related to
the Transition Bonds and the governmental approvals expressly contemplated
therein and (ii) the filings contemplated by paragraphs (n),
(p) and (bb) below.

     

    (l) A Texas
state court, or a federal court applying Texas conflict-of-law rules, would give
effect to the choice of the laws of New York (to the extent so stated therein)
as the governing law in each of the Indenture, the Series Supplement and the
Underwriting Agreement.

     

    (m) Under the
terms of Section 39.309(c) of the Securitization Law, the transfer of the
Transition Property by ETI to the Issuer is perfected under
Section 39.309(c) of the Securitization Law against all third parties,
including subsequent judicial or other lien creditors.

     

    (n) A valid
and enforceable lien and security interest in the Transition Property has been
created and has attached in favor of the Indenture Trustee (on behalf of the
Secured Parties) by the Financing Order related to the Transition Bonds and the
execution and delivery of this Indenture and the Series Supplement by the Issuer
in connection with the issuance and funding of the Transition
Bonds.  Such Lien has been perfected in accordance with
Section 39.309(b) of the Securitization Law and in accordance with the
Financing Order.  Such Lien has priority in the order of filing and
takes precedence over any subsequent judicial or other lien
creditor.  Based on lien searches conducted in the appropriate office,
such Lien is first priority.

     

    (o) UCC lien
searches identify no secured party who has filed with the Secretary of State of
the State of Texas naming ETI or the Issuer as debtor and describing any of the
Transition Bond Collateral.

     

    (p) The
Transition Property Notices related to the Transition Bonds are in appropriate
form for filing pursuant to the Section 39.309 of the Securitization Law
and pursuant to Chapter 96 of the Rules of the Secretary of State of the
State of Texas with respect to the Transition Property.

     

    (q) The
Issuer has been duly formed and is validly existing in good standing as a
limited liability company under the laws of the State of Delaware, and is in
good standing in the State of Texas.

     

    (r) The LLC
Agreement constitutes a valid and binding agreement of ETI and is enforceable
against ETI, in its capacity as member of the Issuer, in accordance with its
terms.

     

    (s) Under the
LLC Act and the LLC Agreement, the Issuer has the limited liability company
power and authority to execute and deliver each of this Indenture, the Sale
Agreement, the Servicing Agreement, the Underwriting Agreement and the
Transition Bonds and to perform its obligations hereunder or
thereunder.  Under the LLC Act and the LLC Agreement, the execution
and delivery by the Issuer of each of this Indenture, the Sale Agreement, the
Servicing Agreement, the Underwriting Agreement and the Transition Bonds, and
the performance by the Issuer of its obligations hereunder or thereunder, have
been duly authorized by all necessary limited liability company action on the
part of the Issuer.

     

    (t) Neither
the execution or delivery by the Issuer of each of this Indenture, the Sale
Agreement, the Servicing Agreement, the Underwriting Agreement or the Transition
Bonds nor the compliance by the Issuer with the terms hereof or thereof, nor the
consummation by the Issuer of any of the transactions contemplated hereby or
thereby requires the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action with respect to any
Delaware court, or Delaware governmental or Delaware regulatory authority or
Delaware agency under the laws of the State of Delaware, except for the filing
of the Certificate of Formation with the Secretary of State of the State of
Delaware, which Certificate of Formation has been duly filed.

     

    (u) Neither
the execution and delivery by the Issuer of the Indenture, the Sale Agreement,
the Servicing Agreement, the Underwriting Agreement or the Transition Bonds nor
the compliance by the Issuer with the terms hereof or thereof, nor the
consummation by the Issuer of any of the transactions contemplated hereby or
thereby conflicts with or constitutes a breach of or default under the
Certificate of Formation or the LLC Agreement, or violates any law, governmental
rule or regulation of the State of Delaware.

     

    (v) After due
inquiry, limited to, and solely to the extent disclosed thereupon, court dockets
for active cases of the Court of Chancery of the State of Delaware in and for
New Castle County, Delaware, of the Superior Court of the State of Delaware in
and for New Castle County, Delaware, and of the United States District Court
sitting in the State of Delaware, such counsel is not aware of any legal or
governmental proceeding pending against the Issuer.

     

    (w) If
properly presented to a Delaware court, a Delaware court applying Delaware law
would conclude that (i) in order for any Person to file a voluntary
bankruptcy petition on behalf of the Issuer, the affirmative vote of the Member
and the affirmative vote of all the Managers, including the one
(1) Independent Managers, as provided in Section 1.08(b) of the LLC
Agreement, is required and (ii) such provision, contained in
Section 1.08(b) of the LLC Agreement that requires the affirmative vote of
the Member and the affirmative vote of all the Managers, including the one
(1) Independent Managers, in order for a Person to file a voluntary
bankruptcy petition on behalf of the Issuer, constitutes a legal, valid and
binding agreement of the Member, and is enforceable against ETI, in accordance
with its terms.

     

    (x) Under the
LLC Act and the LLC Agreement, the bankruptcy (as defined in the LLC Act) or
dissolution of ETI will not, by itself, cause the Issuer to be dissolved or its
affairs to be wound up.

     

    (y) While
under the LLC Act, on application to a court of competent jurisdiction, a
judgment creditor of the Member may be able to charge ETI’s share of any profits
and losses of the Issuer and ETI’s right to receive distributions of Issuer
assets (“ETI’s
Interest”), to the extent so charged, the judgment creditor has only the
right to receive any distribution or distributions to which the Member would
otherwise have been entitled in respect of such Member’s
Interest.  Under the LLC Act, no creditor of ETI shall have any right
to obtain possession of, or otherwise exercise legal or equitable remedies with
respect to, the property of the Issuer.  Thus, under the LLC Act, a
judgment creditor of ETI may not satisfy its claims against ETI by asserting a
claim against the assets of the Issuer.

     

    (z) Under the
LLC Act (i) the Issuer is a separate legal entity, and (ii) the
existence of the Issuer as a separate legal entity shall continue until the
cancellation of its Certificate of Formation.

     

    (aa) The
Delaware Financing Statements are in an appropriate form for filing in the State
of Delaware under Section 9-502(a) and 9-516 of the Delaware
UCC.

     

    (bb) Insofar
as Article 9 of the Delaware UCC is applicable (without regard to conflict
of laws principles), upon the filing of the Delaware Financing Statements, the
Indenture Trustee will have a perfected security interest in the Issuer’s rights
in that portion of the Transition Bond Collateral described in the Delaware
Financing Statements that may be perfected by the filing of a UCC financing
statement and the proceeds thereof (as defined in Section 9-102(a)(64) of
the Delaware UCC), and such security interest will be prior to any other
security interest granted by the Issuer that is perfected solely by the filing
of financing statements under the Delaware UCC.  Insofar as
Article 9 of the Delaware UCC is applicable (without regard to conflict of
laws principles), the Delaware Secretary of State is the appropriate place to
file a financing statement to perfect a security interest except for
as-extracted collateral or timber to be cut (as described in
Section 9-501(a)(1)(A) of the Delaware UCC) or fixture filings where the
collateral is goods that are or are to become fixtures (as described in
Section 9-501(a)(1)(B) of the Delaware UCC).

     

    (cc) UCC lien
searches have been conducted in the proper filing office and against the proper
debtor necessary to identify those Persons who under the Delaware UCC have on
file financing statements against the Issuer covering the Transition Bond
Collateral.  The UCC lien searches identify no secured party who has
filed a financing statement naming the Issuer as debtor and describing the
Transition Bond Collateral.

     

    (dd) Insofar
as Article 9 of the Delaware UCC is applicable (without regard to conflict
of laws principles), the provisions of the Indenture are sufficient to
constitute authorization by the Issuer of the filing of the Delaware Financing
Statements for purposes of Section 9-509 of the Delaware UCC.

     

    (ee) Insofar
as Article 9 of the Delaware UCC is applicable (without regard to conflict
of laws principles), for purposes of the Delaware UCC, the Issuer is a
“registered organization” (as defined in Section 9-102(a)(70) of the
Delaware UCC).

     

    (9) Accountant’s Certificate or
Letter.  One or more certificates or letters, addressed to the
Issuer complying with the requirements of Section 10.01(a),
of a firm of Independent registered public accountants of recognized national
reputation to the effect that (a) such accountants are Independent with
respect to the Issuer within the meaning of this Indenture, and are independent
public accountants within the meaning of the standards of The American Institute
of Certified Public Accountants, and (b) with respect to the Transition
Bond Collateral, they have applied such procedures as instructed by the
addressee of such certificate or letter.

     

    (10) Rating Agency
Condition.  The Indenture Trustee shall receive evidence
reasonably satisfactory to it that the Rating Agency Condition will be satisfied
with respect to the issuance of such new Transition Bonds.

     

    (11) Requirements of Series
Supplement.  Such other funds, accounts, documents,
certificates, agreements, instruments or opinions as may be required by the
terms of the Series Supplement.

     

    (12) Required Capital
Level.  Evidence that the Required Capital Level has been
credited to the Capital Subaccount.

     

    (13) Other
Requirements.  Such other documents, certificates, agreements,
instruments or opinions as the Indenture Trustee may reasonably
require.

     

    SECTION
2.11. Book-Entry Transition
Bonds.  Unless the Series Supplement provides otherwise, all of
the Transition Bonds shall be issued in Book-Entry Form, and the Issuer shall
execute and the Indenture Trustee shall, in accordance with this Section 2.11 and
the Issuer Order, authenticate and deliver one or more Global Transition Bonds,
evidencing the Transition Bonds which (i) shall be an aggregate original
principal amount equal to the aggregate original principal amount of such
Transition Bonds to be issued pursuant to the applicable Issuer Order,
(ii) shall be registered in the name of the Clearing Agency therefor or its
nominee, which shall initially be Cede & Co., as nominee for The
Depository Trust Company, the initial Clearing Agency, (iii) shall be
delivered by the Indenture Trustee pursuant to such Clearing Agency’s or such
nominee’s instructions, and (iv) shall bear a legend substantially to the
effect set forth in Exhibit A.

     

    Each
Clearing Agency designated pursuant to this Section 2.11
must, at the time of its designation and at all times while it serves as
Clearing Agency hereunder, be a “clearing agency” registered under the Exchange
Act and any other applicable statute or regulation.

     

    No Holder
of the Transition Bonds issued in Book-Entry Form shall receive a Definitive
Transition Bond representing such Holder’s interest in any such Transition
Bonds, except as provided in Section 2.13.  Unless
(and until) certificated, fully registered Transition Bonds (the “Definitive Transition
Bonds”) have been issued to the Holders pursuant to Section 2.13 or
pursuant to the Series Supplement relating thereto:

     

    (a) the
provisions of this Section 2.11
shall be in full force and effect;

     

    (b) the
Issuer, the Servicer, the Paying Agent, the Transition Bond Registrar and the
Indenture Trustee may deal with the Clearing Agency for all purposes (including
the making of distributions on the Transition Bonds and the giving of
instructions or directions hereunder) as the authorized representatives of the
Holders;

     

    (c) to the
extent that the provisions of this Section 2.11
conflict with any other provisions of this Indenture, the provisions of this
Section 2.11
shall control;

     

    (d) the
rights of Holders of the Transition Bonds shall be exercised only through the
Clearing Agency and the Clearing Agency Participants and shall be limited to
those established by law and agreements between such Holders and the Clearing
Agency and/or the Clearing Agency Participants.  Pursuant to the
Letter of Representations, unless and until Definitive Transition Bonds are
issued pursuant to Section 2.13,
the initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit distributions of principal and
interest on the Book-Entry Transition Bonds to such Clearing Agency
Participants; and

     

    (e) whenever
this Indenture requires or permits actions to be taken based upon instruction or
directions of the Holders evidencing a specified percentage of the Outstanding
Amount of the Transition Bonds, the Clearing Agency shall be deemed to represent
such percentage only to the extent that it has received instructions to such
effect from the Holders and/or the Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial interest
in the Transition Bonds and has delivered such instructions to a Responsible
Officer of the Indenture Trustee.

     

    SECTION
2.12. Notices to Clearing
Agency.  Unless and until Definitive Transition Bonds shall
have been issued to Holders pursuant to Section 2.13,
whenever notice, payment, or other communications to the holders of Book-Entry
Transition Bonds is required under this Indenture, the Indenture Trustee, the
Servicer and the Paying Agent, as applicable, shall give all such notices and
communications specified herein to be given to Holders to the Clearing
Agency.

     

    SECTION
2.13. Definitive Transition
Bonds.  If (a) (i) the Issuer advises the Indenture
Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities under any Letter of Representations and
(ii) the Issuer is unable to locate a qualified successor Clearing Agency,
(b) the Issuer, at its option, advises the Indenture Trustee in writing
that it elects to terminate the book-entry system through the Clearing Agency or
(c) after the occurrence of an Event of Default hereunder, Holders holding
Transition Bonds aggregating not less than a majority of the aggregate
Outstanding Amount of the Transition Bonds maintained as Book-Entry Transition
Bonds advise the Indenture Trustee, the Issuer and the Clearing Agency (through
the Clearing Agency Participants) in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best interests
of the Holders, the Issuer shall notify the Clearing Agency, the Indenture
Trustee and all such Holders in writing of the occurrence of any such event and
of the availability of Definitive Transition Bonds to the Holders requesting the
same.  Upon surrender to the Indenture Trustee of the Global
Transition Bonds by the Clearing Agency accompanied by registration instructions
from such Clearing Agency for registration, the Issuer shall execute, and the
Indenture Trustee shall authenticate and deliver, Definitive Transition Bonds in
accordance with the instructions of the Clearing Agency.  None of the
Issuer, the Transition Bond Registrar, the Paying Agent or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be fully protected in relying on, such
instructions.  Upon the issuance of Definitive Transition Bonds, the
Indenture Trustee shall recognize the Holders of the Definitive Transition Bonds
as Holders hereunder.

     

    Definitive
Transition Bonds will be transferable and exchangeable at the offices of the
Transition Bonds Registrar.  With respect to any transfer of such
Definitive Transition Bonds, the new Definitive Transition Bonds registered in
the names specified by the transferee and the original transferor shall be
available at the offices of such transfer agent.

     

    SECTION
2.14. CUSIP
Number.  The Issuer in issuing any Transition Bond may use a
“CUSIP” number and, if so used, the Indenture Trustee shall use the CUSIP number
provided to it by the Issuer in any notices to the Holders thereof as a
convenience to such Holders; provided, that any
such notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the Transition Bonds
and that reliance may be placed only on the other identification numbers printed
on the Transition Bonds.  The Issuer shall promptly notify the
Indenture Trustee in writing of any change in the CUSIP number with respect to
any Transition Bond.

     

    SECTION
2.15. Letter of
Representations.  Notwithstanding anything to the contrary in
this Indenture or the Series Supplement, the parties hereto shall comply with
the terms of each Letter of Representations applicable to such
party.

     

    SECTION
2.16. [RESERVED]

     

    SECTION
2.17. Tax
Treatment.  The Issuer and the Indenture Trustee, by entering
into this Indenture, and the Holders and any Persons holding a beneficial
interest in any Transition Bond, by acquiring any Transition Bond or interest
therein, (a) express their intention that, solely for the purposes of
federal taxes and, to the extent consistent with applicable state, local and
other tax law, solely for the purposes of state, local and other taxes, the
Transition Bonds qualify under applicable tax law as indebtedness of the Member
secured by the Transition Bond Collateral and (b) solely for the purposes
of federal taxes and, to the extent consistent with applicable state, local and
other tax law, solely for purposes of state, local and other taxes, so long as
any of the Transition Bonds are outstanding, agree to treat the Transition Bonds
as indebtedness of the Member secured by the Transition Bond Collateral unless
otherwise required by appropriate taxing authorities.

     

    SECTION
2.18. State
Pledge.  Under the laws of the State of Texas in effect on the
Closing Date, the State of Texas has agreed for the benefit of the Holders and
the Indenture Trustee, pursuant to Sections 39.310 and 36.403 of the
Securitization Law, as follows:

     

    “Transition
bonds are not a debt or obligation of the state and are not a charge on its full
faith and credit or taxing power.  The state pledges, however, for the
benefit and protection of financing parties and the electric utility, that it
will not take or permit any action that would impair the value of transition
property, or, except as permitted by Section 39.307, reduce, alter, or
impair the transition charges to be imposed, collected, and remitted to
financing parties, until the principal, interest and premium, and any other
charges incurred and contracts to be performed in connection with the related
transition bonds have been paid and performed in full.  Any party
issuing transition bonds is authorized to include this pledge in any
documentation relating to those bonds.”

     

    The
Issuer hereby acknowledges that the purchase of any Transition Bond by a Holder
or the purchase of any beneficial interest in a Transition Bond by any Person
and the Indenture Trustee’s obligations to perform hereunder are made in
reliance on such agreement and pledge by the State of Texas.

     

    SECTION
2.19. Security
Interests.  The Issuer hereby makes the following
representations and warranties.

     

    (a) Other
than the security interests granted to the Indenture Trustee pursuant to this
Indenture, the Issuer has not pledged, granted, sold, conveyed or otherwise
assigned any interests or security interests in the Transition Bond Collateral
and no security agreement, financing statement or equivalent security or Lien
instrument listing the Issuer as debtor covering all or any part of the
Transition Bond Collateral is on file or of record in any jurisdiction, except
such as may have been filed, recorded or made by the Issuer in favor of the
Indenture Trustee on behalf of the Secured Parties in connection with this
Indenture;

     

    (b) This
Indenture constitutes a valid and continuing lien on, and first priority
perfected security interest in, the Transition Bond Collateral in favor of the
Indenture Trustee on behalf of the Secured Parties, which lien and security
interest is prior to all other Liens and is enforceable as such as against
creditors of and purchasers from the Issuer in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws affecting
creditors’ rights generally or by general equitable principles, whether
considered in a proceeding at law or in equity and by an implied covenant of
good faith and fair dealing;

     

    (c) With
respect to all Transition Bond Collateral, this Indenture, together with the
Series Supplement, creates a valid and continuing first priority perfected
security interest (as defined in the UCC and as such term is used in the
Securitization Law) in such Transition Bond Collateral, which security interest
is prior to all other Liens and is enforceable as such as against creditors of
and purchasers from the Issuer in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors’ rights
generally or by general equitable principles, whether considered in a proceeding
at law or in equity and by an implied covenant of good faith and fair
dealing;

     

    (d)   The
Issuer has good and marketable title to the Transition Bond Collateral free and
clear of any Lien, claim or encumbrance of any Person other than Permitted
Liens;

     

    (e) All of
the Transition Bond Collateral constitutes either Transition Property or
accounts, deposit accounts, investment property or general intangibles (as each
such term is defined in the UCC) except that proceeds of the Transition Bond
Collateral may also take the form of instruments;

     

    (f) The
Issuer has taken, or caused the Servicer to take, all action necessary to
perfect the security interest in the Transition Bond Collateral granted to the
Indenture Trustee, for the benefit of the Secured Parties;

     

    (g) The
Issuer has filed (or has caused the Servicer to file) all appropriate financing
statements in the proper filing offices in the appropriate jurisdictions under
applicable law in order to perfect the security interest in the Transition Bond
Collateral granted to the Indenture Trustee;

     

    (h) The
Issuer has not authorized the filing of and is not aware, after due inquiry, of
any financing statements against the Issuer that include a description of the
Transition Bond Collateral other than those filed in favor of the Indenture
Trustee;

     

    (i) The
Issuer is not aware of any judgment or tax Lien filings against the
Issuer;

     

    (j) The
Collection Account (including all subaccounts thereof) constitutes a “securities
account” within the meaning of the UCC;

     

    (k) The
Issuer has taken all steps necessary to cause the Securities Intermediary of
each such securities account to identify in its records the Indenture Trustee as
the person having a security entitlement against the Securities Intermediary in
such securities account, the Collection Account is not in the name of any person
other than the Indenture Trustee, and the Issuer has not consented to the
Securities Intermediary to comply with entitlement orders of any person other
than the Indenture Trustee;

     

    (l) All of
the Transition Bond Collateral constituting investment property has been and
will have been credited to the Collection Account or a subaccount thereof, and
the Securities Intermediary for the Collection Account has agreed to treat all
assets credited to the Collection Account as “financial assets” within the
meaning of the UCC.  Accordingly, the Indenture Trustee has a first
priority perfected security interest in the Collection Account, all funds and
financial assets on deposit therein, and all securities entitlements relating
thereto; and

     

    (m) The
representations and warranties set forth in this Section 2.19
shall survive the execution and delivery of this Indenture and the issuance of
any Transition Bonds, shall be deemed re-made on each date on which any funds in
the Collection Account are distributed to Issuer or otherwise released from the
Lien of this Indenture and may not be waived by any party hereto except pursuant
to a supplemental indenture executed in accordance with Article IX and
as to which the Rating Agency Condition has been satisfied.

     

    ARTICLE
III

     

    COVENANTS

     

    SECTION
3.01. Payment of Principal,
Premium, if any, and Interest.  The principal of and premium,
if any, and interest on the Transition Bonds shall be duly and punctually paid
by the Issuer, or the Servicer on behalf of the Issuer, in accordance with the
terms of the Transition Bonds and this Indenture; provided that except
on the Final Maturity Date or upon the acceleration of the Transition Bonds
following the occurrence of an Event of Default, the Issuer shall only be
obligated to pay the principal of such Transition Bonds on each Payment Date
therefor to the extent moneys are available for such payment pursuant to Section 8.02.  Amounts
properly withheld under the Code or other tax laws by any Person from a payment
to any Holder of interest or principal or premium, if any, shall be considered
as having been paid by the Issuer to such Holder for all purposes of this
Indenture.

     

    SECTION
3.02. Maintenance of Office or
Agency.  The Issuer shall maintain in the Borough of Manhattan,
the City of New York, an office or agency at the Corporate Trust Office where
Transition Bonds may be surrendered for registration of transfer or
exchange.  The Issuer hereby initially appoints the Indenture Trustee
to serve as its agent for the foregoing purposes.  The Issuer shall
give prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency.  If at any time
the Issuer shall fail to maintain any such office or agency or shall fail to
furnish the Indenture Trustee with the address thereof, such surrenders may be
made at the office of the Indenture Trustee located at the Corporate Trust
Office, and the Issuer hereby appoints the Indenture Trustee as its agent to
receive all such surrenders.

     

    SECTION
3.03. Money for Payments To Be
Held in Trust.  As provided in Section 8.02(a),
all payments of amounts due and payable with respect to any Transition Bonds
that are to be made from amounts withdrawn from the Collection Account pursuant
to Section 8.02(d)
shall be made on behalf of the Issuer by the Indenture Trustee or by another
Paying Agent, and no amounts so withdrawn from the Collection Account for
payments with respect to any Transition Bonds shall be paid over to the Issuer
except as provided in this Section 3.03 and
Section 8.02.

     

    The
Issuer will cause each Paying Agent other than the Indenture Trustee to execute
and deliver to the Indenture Trustee an instrument in which such Paying Agent
shall agree with the Indenture Trustee (and if the Indenture Trustee acts as
Paying Agent, it hereby so agrees), subject to the provisions of this Section 3.03,
that such Paying Agent will:

     

    (i) hold all sums held by it for the
payment of amounts due with respect to the Transition Bonds in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;

     

    (ii) give the Indenture Trustee written
notice of any Default by the Issuer of which it has actual knowledge in the
making of any payment required to be made with respect to the Transition
Bonds;

     

    (iii) at any time during the continuance of
any such Default, upon the written request of the Indenture Trustee, forthwith
pay to the Indenture Trustee all sums so held in trust by such Paying
Agent;

     

    (iv) immediately resign as a Paying Agent
and forthwith pay to the Indenture Trustee all sums held by it in trust for the
payment of Transition Bonds if at any time the Paying Agent determines that it
has ceased to meet the standards required to be met by a Paying Agent at the
time of such determination; and

     

    (v) comply with all requirements of the
Code and other tax laws with respect to the withholding from any payments made
by it on any Transition Bonds of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting requirements in connection
therewith.

     

    The
Issuer may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, by Issuer Order direct any
Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which the sums were held by such Paying Agent; and upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such money.

     

    Subject
to applicable laws with respect to escheat of funds, any money held by the
Indenture Trustee or any Paying Agent in trust for the payment of any amount due
with respect to any Transition Bond and remaining unclaimed for two
(2) years after such amount has become due and payable shall be discharged
from such trust and be paid to the Issuer on an Issuer Request; and, subject to
Section 10.16,
the Holder of such Transition Bond shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof (but only to the extent of
the amounts so paid to the Issuer), and all liability of the Indenture Trustee
or such Paying Agent with respect to such trust money shall thereupon cease;
provided, however, that the
Indenture Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Issuer, cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than thirty (30) days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the
Issuer.  The Indenture Trustee may also adopt and employ, at the
expense of the Issuer, any other reasonable means of notification of such
repayment (including mailing notice of such repayment to Holders whose right to
or interest in moneys due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the last address of
record for each such Holder).

     

    SECTION
3.04. Existence.  The
Issuer shall keep in full effect its existence, rights and franchises as a
limited liability company under the laws of the State of Delaware (unless it
becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other State or of the United States of America, in which case the
Issuer will keep in full effect its existence, rights and franchises under the
laws of such other jurisdiction) and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
other Basic Documents, the Transition Bonds, the Transition Bond Collateral and
each other instrument or agreement referenced herein or therein.

     

    SECTION
3.05. Protection of Transition
Bond Collateral.  The Issuer shall from time to time execute
and deliver all such supplements and amendments hereto and all filings with the
PUCT or the Texas Secretary of State pursuant to the Financing Order or to the
Securitization Law and all financing statements, continuation statements,
instruments of further assurance and other instruments, and shall take such
other action necessary or advisable to:

     

    (i) maintain or preserve the Lien and
security interest (and the priority thereof) of this Indenture and the Series
Supplement or carry out more effectively the purposes hereof;

     

    (ii) perfect, publish notice of or protect
the validity of any Grant made or to be made by this Indenture;

     

    (iii) enforce any of the Transition Bond
Collateral;

     

    (iv) preserve and defend title to the
Transition Bond Collateral and the rights of the Indenture Trustee and the
Holders in such Transition Bond Collateral against the Claims of all Persons and
parties, including, without limitation, the challenge by any party to the
validity or enforceability of the Financing Order, any Tariff, the Transition
Property or any proceeding relating thereto and institute any action or
proceeding necessary to compel performance by the PUCT or the State of Texas of
any of its obligations or duties under the Securitization Law, the State Pledge,
or the Financing Order or any Tariff; or

     

    (v) pay any and all taxes levied or
assessed upon all or any part of the Transition Bond Collateral.

     

    The
Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact to
execute or authorize, as the case may be, any filings with the PUCT or the Texas
Secretary of State, financing statements, continuation statements or other
instrument required pursuant to this Section 3.05, it
being understood that the Indenture Trustee shall have no such obligation or any
duty to prepare such documents.

     

    SECTION
3.06. Opinions as to Transition
Bond Collateral.

     

    (a) On the
Closing Date, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel of Independent counsel of the Issuer either stating that, in the opinion
of such counsel, such action has been taken with respect to the recording and
filing of this Indenture, any indentures supplemental hereto, and any other
requisite documents, and with respect to the execution and filing of any filings
with the PUCT or the Texas Secretary of State pursuant to the Securitization Law
and the Financing Order and any financing statements and continuation
statements, as are necessary to perfect and make effective the Lien, and the
first priority perfected security interest created by this Indenture and the
Series Supplement, and no other Lien or security interest is equal or prior to
the Lien and security interest of the Indenture Trustee in the Transition Bond
Collateral, and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make effective such Lien
and security interest.

     

    (b) Within
ninety (90) days after the beginning of each calendar year beginning with
the calendar year beginning January 1, 2011, the Issuer shall furnish to
the Indenture Trustee an Opinion of Counsel of Independent counsel of the Issuer
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and with respect to the execution and filing of any filings with the PUCT or the
Texas Secretary of State pursuant to the Securitization Law and the Financing
Order and any financing statements and continuation statements as are necessary
to maintain the Lien and the first priority perfected security interest created
by this Indenture and the Series Supplement, and reciting the details of such
action or stating that, in the opinion of such counsel, no such action is
necessary to maintain such Lien and security interest.  Such Opinion
of Counsel shall also describe the recording, filing, re-recording and refiling
of this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any filings with the PUCT or the Texas
Secretary of State, financing statements and continuation statements that will,
in the opinion of such counsel, be required within the twelve-month period
following the date of such opinion to maintain the Lien and the first priority
perfected security interest created by this Indenture and the Series
Supplement.

     

    (c) Prior to
the effectiveness of any amendment to the Sale Agreement or the Servicing
Agreement, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel of Independent counsel of the Issuer either (i) stating that, in
the opinion of such counsel, all filings, including UCC financing statements and
other filings with the PUCT and the Texas Secretary of State pursuant to the
Securitization Law or the Financing Order, have been executed and filed that are
necessary fully to preserve and protect the Lien and security interest of the
Issuer and the Indenture Trustee in the Transition Property and the Transition
Bond Collateral, respectively, and the proceeds thereof, and reciting the
details of such filings or referring to prior Opinions of Counsel in which such
details are given, or (ii) stating that, in the opinion of such counsel, no
such action shall be necessary to preserve and protect such Lien and security
interest.

     

    SECTION
3.07. Performance of Obligations;
Servicing; SEC Filings.

     

    (a) The
Issuer (i) shall diligently pursue any and all actions to enforce its
rights under each instrument or agreement included in the Transition Bond
Collateral and (ii) shall not take any action and shall use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person’s covenants or obligations under any such
instrument or agreement or that would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any such instrument or agreement, except, in each case, as
expressly provided in this Indenture, the Series Supplement, the Sale Agreement,
the Servicing Agreement or such other instrument or agreement.

     

    (b) The
Issuer may contract with other Persons to assist it in performing its duties
under this Indenture, and any performance of such duties by a Person identified
to the Indenture Trustee herein or in an Officer’s Certificate shall be deemed
to be action taken by the Issuer.  Initially, the Issuer has
contracted with the Servicer to assist the Issuer in performing its duties under
this Indenture.

     

    (c) The
Issuer shall punctually perform and observe all of its obligations and
agreements contained in this Indenture, the Series Supplement, the other Basic
Documents and in the instruments and agreements included in the Transition Bond
Collateral, including filing or causing to be filed all filings with the PUCT or
the Texas Secretary of State pursuant to the Securitization Law or the Financing
Order, all UCC financing statements and continuation statements required to be
filed by it by the terms of this Indenture, the Series Supplement, the Sale
Agreement and the Servicing Agreement in accordance with and within the time
periods provided for herein and therein.

     

    (d) If the
Issuer shall have knowledge of the occurrence of a Servicer Default under the
Servicing Agreement, the Issuer shall promptly give written notice thereof to
the Indenture Trustee and the Rating Agencies, and shall specify in such notice
the response or action, if any, the Issuer has taken or is taking with respect
to such default.  If a Servicer Default shall arise from the failure
of the Servicer to perform any of its duties or obligations under the Servicing
Agreement with respect to the Transition Property, the Transition Bond
Collateral or the Transition Charges, the Issuer shall take all reasonable steps
available to it to remedy such failure.

     

    (e) As
promptly as possible after the giving of notice of termination to the Servicer
and the Rating Agencies of the Servicer’s rights and powers pursuant to Section 7.01 of the
Servicing Agreement, the Indenture Trustee shall, at the written direction of
the Holders evidencing not less than a majority of the Outstanding Amount of the
Transition Bonds, appoint a successor Servicer (the “Successor Servicer”),
and such Successor Servicer shall accept its appointment by a written assumption
in a form acceptable to the Issuer and the Indenture Trustee.  A
Person shall qualify as a Successor Servicer only if such Person satisfies the
requirements of the Servicing Agreement.  If within thirty
(30) days after the delivery of the notice referred to above, a new
Servicer shall not have been appointed, the Indenture Trustee may petition the
PUCT or a court of competent jurisdiction to appoint a Successor
Servicer.  In connection with any such appointment, ETI may make such
arrangements for the compensation of such Successor Servicer as it and such
successor shall agree, subject to the limitations set forth in Section 8.02
and in the Servicing Agreement.

     

    (f) Upon any
termination of the Servicer’s rights and powers pursuant to the Servicing
Agreement, the Indenture Trustee shall promptly notify the Issuer, the Holders
and the Rating Agencies.  As soon as a Successor Servicer is
appointed, the Indenture Trustee shall notify the Issuer, the Holders and the
Rating Agencies of such appointment, specifying in such notice the name and
address of such Successor Servicer.

     

    (g) The
Issuer shall (or shall cause the Sponsor to) post on its website (or the
Sponsor’s or an affiliate’s website) and file with or furnish to the SEC in
periodic reports and other reports as are required from time to time under
Section 13 or Section 15(d) of the Exchange Act (without regard to the
number of Holders of Transition Bonds to the extent permitted by and consistent
with the Issuer’s and the Sponsor’s obligations under applicable law) the
following information with respect to the Outstanding Transition Bonds to the
extent such information is reasonably available to the Issuer:

     

    (i) statements of any remittances of
Transition Charges made to the Indenture Trustee (to be included in a
Form 10-D or Form 10-K);

     

    (ii) a statement reporting the balances in
the Collection Account and in each subaccount of the Collection Account as of
the end of each quarter or the most recent date available (to be included in a
Form 10-D or Form 10-K);

     

    (iii) a statement showing the balance of
Outstanding Transition Bonds that reflects the actual periodic payments made on
the Transition Bonds versus the expected periodic payments (to be included in
the next Form 10-D or Form 10-K filed);

     

    (iv) the Semi-Annual Servicer’s Certificate
and the Monthly Servicer’s Certificate which are required to be submitted
pursuant to the Servicing Agreement (to be filed with a Form 10-D,
Form 10-K or Form 8-K);

     

    (v) the text (or a link to the website
where a reader can find the text) of each filing of a True-Up Adjustment and the
results of each such filing following the issuance of the Transition
Bonds;

     

    (vi) any change in the long-term or
short-term credit ratings of the Servicer assigned by the Rating Agencies (to be
filed or furnished in a Form 8-K);

     

    (vii) material legislative or regulatory
developments directly relevant to the Outstanding Transition Bonds (to be filed
or furnished in a Form 8-K); and

     

    (viii) a quarterly statement either affirming
that, to the Issuer’s or the Sponsor’s knowledge, as applicable, in all material
respects, for each materially significant REP, if any (to be included in each
Form 10-D and each Form 10-K) (A) each such REP has been billed
in compliance with the requirements outlined in the Financing Order,
(B) each such REP has made payments in compliance with the requirements
outlined in the Financing Order, and (C) each such REP satisfies the
creditworthiness requirements of the Financing Order, or if clauses (A),
(B) and (C) has not occurred,
such quarterly statements shall describe the Servicer’s actions.

     

    (h) The
Issuer shall make all filings required under the Securitization Law relating to
the transfer of the ownership or security interest in the Transition Property
other than those required to be made by the Seller or the Servicer pursuant to
the Basic Documents.

     

    SECTION
3.08. Certain Negative
Covenants.  So long as any Transition Bonds are Outstanding,
the Issuer shall not:

     

    (i) except as expressly permitted by this
Indenture and the other Basic Documents, sell, transfer, exchange or otherwise
dispose of any of the properties or assets of the Issuer, including those
included in the Transition Bond Collateral, unless directed to do so by the
Indenture Trustee in accordance with Article V;

     

    (ii)            claim
any credit on, or make any deduction from the principal or premium, if any, or
interest payable in respect of, the Transition Bonds (other than amounts
properly withheld from such payments under the Code or other tax laws) or assert
any claim against any present or former Holder by reason of the payment of the
taxes levied or assessed upon any part of the Transition Bond
Collateral;

     

    (iii) terminate its existence or dissolve or
liquidate in whole or in part, except in a transaction permitted by Section 3.10;

     

    (iv) (A) permit the validity or
effectiveness of this Indenture or the other Basic Documents to be impaired, or
permit the Lien of this Indenture and the Series Supplement to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person to be
released from any covenants or obligations with respect to the Transition Bonds
under this Indenture except as may be expressly permitted hereby,
(B) permit any Lien (other than the Lien of this Indenture or the Series
Supplement) to be created on or extend to or otherwise arise upon or burden the
Transition Bond Collateral or any part thereof or any interest therein or the
proceeds thereof (other than tax liens arising by operation of law with respect
to amounts not yet due) or (C) permit the Lien of the Series Supplement not
to constitute a valid first priority perfected security interest in the
Transition Bond Collateral;

     

    (v) enter into any swap, hedge or similar
financial instrument;

     

    (vi) elect to be classified as an
association taxable as a corporation for federal income tax purposes or
otherwise take any action, file any tax return, or make any election
inconsistent with the treatment of the Issuer, for purposes of federal taxes
and, to the extent consistent with applicable state tax law, state income and
franchise tax purposes, as a disregarded entity that is not separate from the
sole owner of the Issuer;

     

    (vii) change its name, identity or structure
or the location of its chief executive office, unless at least ten
(10) days’ prior to the effective date of any such change the Issuer
delivers to the Indenture Trustee such documents, instruments or agreements,
executed by the Issuer, as are necessary to reflect such change and to continue
the perfection of the security interest of this Indenture and the Series
Supplement;

     

    (viii) take any action which is subject to the
Rating Agency Condition without satisfying the Rating Agency
Condition;

     

    (ix) voluntarily suspend or terminate its
filing obligations with the SEC as described in Section 3.07(g);
or

     

    (x) issue any transition bonds under the
Securitization Law or any similar law (other than the Transition
Bonds).

     

    SECTION
3.09. Annual Statement as to
Compliance.  The Issuer will deliver to the Indenture Trustee
and the Rating Agencies not later than March 31 of each year (commencing
with March 31, 2010), an Officer’s Certificate stating, as to the
Responsible Officer signing such Officer’s Certificate, that:

     

    (i) a review of the activities of the
Issuer during the preceding twelve (12) months ended December 31 (or,
in the case of the first such Officer’s Certificate, since the Closing Date) and
of performance under this Indenture has been made; and

     

    (ii) to the best of such Responsible
Officer’s knowledge, based on such review, the Issuer has in all material
respects complied with all conditions and covenants under this Indenture
throughout such twelve-month period (or such shorter period in the case of the
first such Officer’s Certificate), or, if there has been a default in the
compliance of any such condition or covenant, specifying each such default known
to such Responsible Officer and the nature and status thereof.

     

    SECTION
3.10. Issuer May Consolidate,
etc., Only on Certain Terms.

     

    (a) The
Issuer shall not consolidate or merge with or into any other Person,
unless:

     

    (i) the Person (if other than the Issuer)
formed by or surviving such consolidation or merger shall (A) be a Person
organized and existing under the laws of the United States of America or any
State, (B) expressly assume, by an indenture supplemental hereto, executed
and delivered to the Indenture Trustee, in form and substance satisfactory to
the Indenture Trustee, the performance or observance of every agreement and
covenant of this Indenture and the Series Supplement on the part of the Issuer
to be performed or observed, all as provided herein and in the Series
Supplement, and (C) assume all obligations and succeed to all rights of the
Issuer under the Sale Agreement, the Servicing Agreement and each other Basic
Document to which the Issuer is a party;

     

    (ii) immediately after giving effect to such
merger or consolidation, no Default, Event of Default or Servicer Default shall
have occurred and be continuing;

     

    (iii) the Rating Agency Condition shall have
been satisfied with respect to such merger or consolidation;

     

    (iv) the Issuer shall have delivered to ETI,
the Indenture Trustee and the Rating Agencies an opinion or opinions of
Independent tax counsel (as selected by the Issuer, in form and substance
reasonably satisfactory to ETI and the Indenture Trustee, and which may be based
on a ruling from the Internal Revenue Service (unless the Internal Revenue
Service has announced that it will not rule on the issues described in this
paragraph)) to the effect that, as a result of the consolidation or merger,
(a) the Issuer will not be subject to United States federal income tax as
an entity separate from its sole owner and that the Transition Bonds will be
treated as debt of the Issuer’s sole owner for United States federal income tax
purposes and (b) for United States federal income tax purposes, the
issuance of the Transition Bonds will not result in gross income to the
Seller;

     

    (v) any action as is necessary to maintain
the Lien and the first priority perfected security interest in the Transition
Bond Collateral created by this Indenture and the Series Supplement shall have
been taken as evidenced by an Opinion of Counsel of Independent counsel of the
Issuer delivered to the Indenture Trustee; and

     

    (vi) the Issuer shall have delivered to the
Indenture Trustee an Officer’s Certificate and an Opinion of Counsel of
Independent counsel of the Issuer each stating that such consolidation or merger
and such supplemental indenture comply with this Indenture, the Series
Supplement and that all conditions precedent herein provided for in this Section 3.10(a)
with respect to such transaction have been complied with (including any filing
required by the Exchange Act).

     

    (b) Except as
specifically provided herein, the Issuer shall not sell, convey, exchange,
transfer or otherwise dispose of any of its properties or assets included in the
Transition Bond Collateral, to any Person, unless:

     

    (i) the Person that acquires the properties
and assets of the Issuer, the conveyance or transfer of which is hereby
restricted shall (A) be a United States citizen or a Person organized and
existing under the laws of the United States of America or any State,
(B) expressly assumes, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form and substance satisfactory to the
Indenture Trustee, the performance or observance of every agreement and covenant
of this Indenture on the part of the Issuer to be performed or observed, all as
provided herein and in the Series Supplement, (C) expressly agrees by means
of such supplemental indenture that all right, title and interest so sold,
conveyed, exchanged, transferred or otherwise disposed of shall be subject and
subordinate to the rights of Holders, (D) unless otherwise provided in the
supplemental indenture referred to in clause (B)
above, expressly agrees to indemnify, defend and hold harmless the Issuer and
the Indenture Trustee against and from any loss, liability or expense arising
under or related to this Indenture, the Series Supplement and the Transition
Bonds, (E) expressly agrees by means of such supplemental indenture that
such Person (or if a group of Persons, then one specified Person) shall make all
filings with the SEC (and any other appropriate Person) required by the Exchange
Act in connection with the Transition Bonds and (F) if such sale,
conveyance, exchange, transfer or disposal relates to the Issuer’s rights and
obligations under the Sale Agreement or the Servicing Agreement, assume all
obligations and succeed to all rights of the Issuer under the Sale Agreement and
the Servicing Agreement, as applicable;

     

    (ii) immediately after giving effect to such
transaction, no Default, Event of Default or Servicer Default shall have
occurred and be continuing;

     

    (iii) the Rating Agency Condition shall have
been satisfied with respect to such transaction;

     

    (iv) the Issuer shall have delivered to ETI,
the Indenture Trustee and the Rating Agencies an opinion or opinions of
Independent tax counsel (as selected by the Issuer, in form and substance
reasonably satisfactory to ETI and the Indenture Trustee, and which may be based
on a ruling from the Internal Revenue Service) to the effect that, as a result
of the disposition, (a) the Issuer will not be subject to United States
federal income tax as an entity separate from its sole owner and that the
Transition Bonds will be treated as debt of the Issuer’s sole owner for United
States federal income tax purposes and (b) for United States federal income
tax purposes, the issuance of the Transition Bonds will not result in gross
income to the Seller;

     

    (v) any action as is necessary to maintain
the Lien and the first priority perfected security interest in the Transition
Bond Collateral created by this Indenture and the Series Supplement shall have
been taken as evidenced by an Opinion of Counsel of Independent counsel of the
Issuer delivered to the Indenture Trustee; and

     

    (vi) the Issuer shall have delivered to the
Indenture Trustee an Officer’s Certificate and an Opinion of Counsel of
Independent counsel of the Issuer each stating that such sale, conveyance,
exchange, transfer or other disposition and such supplemental indenture comply
with this Indenture and the Series Supplement and that all conditions precedent
herein provided for in this Section 3.10(b)
with respect to such transaction have been complied with (including any filing
required by the Exchange Act).

     

    SECTION
3.11. Successor or
Transferee.

     

    (a) Upon any
consolidation or merger of the Issuer in accordance with Section 3.10(a),
the Person formed by or surviving such consolidation or merger (if other than
the Issuer) shall succeed to, and be substituted for, and may exercise every
right and power of, the Issuer under this Indenture with the same effect as if
such Person had been named as the Issuer herein.

     

    (b) Except as
set forth in Section 6.07,
upon a sale, conveyance, exchange, transfer or other disposition of all the
assets and properties of the Issuer in accordance with Section 3.10(b),
the Issuer will be released from every covenant and agreement of this Indenture
and the other Basic Documents to be observed or performed on the part of the
Issuer with respect to the Transition Bonds and the Transition Property
immediately following the consummation of such acquisition upon the delivery of
written notice to the Indenture Trustee from the Person acquiring such assets
and properties stating that the Issuer is to be so released.

     

    SECTION
3.12. No Other
Business.  The Issuer shall not engage in any business other
than financing, purchasing, owning and managing the Transition Property and the
other Transition Bond Collateral and the issuance of the Transition Bonds in the
manner contemplated by the Financing Order and this Indenture and the Basic
Documents and activities incidental thereto.

     

    SECTION
3.13. No
Borrowing.  The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Transition Bonds and any other indebtedness
expressly permitted by or arising under the Basic Documents.

     

    SECTION
3.14. Servicer’s
Obligations.  The Issuer shall enforce the Servicer’s
compliance with and performance of all of the Servicer’s material obligations
under the Servicing Agreement.

     

    SECTION
3.15. Guarantees, Loans, Advances
and Other Liabilities.  Except as otherwise contemplated by the
Sale Agreement, the Servicing Agreement or this Indenture, the Issuer shall not
make any loan or advance or credit to, or guarantee (directly or indirectly or
by an instrument having the effect of assuring another’s payment or performance
on any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other
Person.

     

    SECTION
3.16. Capital
Expenditures.  Other than the purchase of Transition Property
from the Seller on the Closing Date and other than expenditures made out of
available funds in an aggregate amount not to exceed $25,000 in any calendar
year, the Issuer shall not make any expenditure (by long-term or operating lease
or otherwise) for capital assets (either realty or personalty).

     

    SECTION
3.17. Restricted
Payments.  Except as provided in Section 8.04(c), the
Issuer shall not, directly or indirectly, (a) pay any dividend or make any
distribution (by reduction of capital or otherwise), whether in cash, property,
securities or a combination thereof, to any owner of an interest in the Issuer
or otherwise with respect to any ownership or equity interest or similar
security in or of the Issuer, (b) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or similar security or
(c) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that, if no
Event of Default shall have occurred and be continuing or would be caused
thereby, the Issuer may make, or cause to be made, any such distributions to any
owner of an interest in the Issuer or otherwise with respect to any ownership or
equity interest or similar security in or of the Issuer using funds distributed
to the Issuer pursuant to Section 8.02(e)(x)
to the extent that such distributions would not cause the balance of the Capital
Subaccount to decline below the Required Capital Level.  The Issuer
will not, directly or indirectly, make payments to or distributions from the
Collection Account except in accordance with this Indenture and the other Basic
Documents.

     

    SECTION
3.18. Notice of Events of
Default.  The Issuer agrees to give the Indenture Trustee, the
PUCT and the Rating Agencies prompt written notice of each Default or Event of
Default hereunder as provided in Section 5.01,
and each default on the part of the Seller or the Servicer of its obligations
under the Sale Agreement or the Servicing Agreement, respectively.

     

    SECTION
3.19. Further Instruments and
Acts.  Upon request of the Indenture Trustee, the Issuer shall
execute and deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the purpose of this
Indenture and to maintain the first priority perfected security interest of the
Indenture Trustee in the Transition Bond Collateral.

     

    SECTION
3.20. [RESERVED]

     

    SECTION
3.21. Inspection.  The
Issuer agrees that, on reasonable prior notice, it will permit any
representative of the Indenture Trustee, during the Issuer’s normal business
hours, to examine all the books of account, records, reports and other papers of
the Issuer, to make copies and extracts therefrom, to cause such books to be
audited annually by Independent registered public accountants, and to discuss
the Issuer’s affairs, finances and accounts with the Issuer’s officers,
employees and Independent registered public accountants, all at such reasonable
times and as often as may be reasonably requested.  The Indenture
Trustee shall and shall cause its representatives to hold in confidence all such
information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations
hereunder.  Notwithstanding anything herein to the contrary, the
preceding sentence shall not be construed to prohibit (a) disclosure of any
and all information that is or becomes publicly known, or information obtained
by the Indenture Trustee from sources other than the Issuer, provided such
parties are rightfully in possession of such information, (b) disclosure of
any and all information (i) if required to do so by any applicable statute,
law, rule or regulation, (ii) pursuant to any subpoena, civil investigative
demand or similar demand or request of any court or regulatory authority
exercising its proper jurisdiction, (iii) in any preliminary or final
offering circular, registration statement or other document a copy of which has
been filed with the SEC or (iv) to any affiliate, independent or internal
auditor, agent, employee or attorney of the Indenture Trustee having a need to
know the same, provided that such parties agree to be bound by the
confidentiality provisions contained in this Section 3.21, or
(c) any other disclosure authorized by the Issuer.

     

    SECTION
3.22. Sale Agreement, Servicing
Agreement, and Administration Agreement Covenants.

     

    (a) The
Issuer agrees to take all such lawful actions to enforce its rights under the
Sale Agreement, the Servicing Agreement and the Administration Agreement to
compel or secure the performance and observance by the Seller, the Servicer, the
Administrator and ETI of each of their respective obligations to the Issuer
under or in connection with the Sale Agreement, the Servicing Agreement and the
Administration Agreement in accordance with the terms thereof.  So
long as no Event of Default occurs and is continuing, but subject to Section 3.22(f),
the Issuer may exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with the Sale Agreement,
the Servicing Agreement and the Administration Agreement; provided that such
action shall not adversely affect the interests of the Holders in any material
respect.

     

    (b) If an
Event of Default occurs and is continuing, the Indenture Trustee may, and at the
direction (which direction shall be in writing) of Holders of a majority of the
Outstanding Amount of the Transition Bonds of all Tranches affected thereby
shall, exercise all rights, remedies, powers, privileges and claims of the
Issuer against the Seller, ETI, the Administrator and the Servicer, as the case
may be, under or in connection with the Sale Agreement, the Servicing Agreement
and the Administration Agreement, including the right or power to take any
action to compel or secure performance or observance by the Seller, ETI, the
Administrator or the Servicer of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Sale Agreement, the Servicing Agreement and the
Administration Agreement, and any right of the Issuer to take such action shall
be suspended.

     

    (c) Except as
set forth in Section 3.22(e),
with the prior written consent of the Indenture Trustee and the consent of the
PUCT pursuant to Section 9.03,
the Administration Agreement, the Sale Agreement and the Servicing Agreement may
be amended in accordance with the provisions thereof, so long as the Rating
Agency Condition is satisfied in connection therewith, at any time and from time
to time, without the consent of the Holders of Transition Bonds; provided that such
amendment, as evidenced by an Opinion of Counsel of Independent counsel of the
Issuer, shall not adversely affect the interest of any Holder of Transition
Bonds in any material respect.

     

    (d) Except as
set forth in Section 3.22(e),
if the Issuer, the Seller, ETI, the Administrator, the Servicer or any other
party to the respective agreement proposes to amend, modify, waive, supplement,
terminate or surrender, or agree to any amendment, modification, waiver,
supplement, termination or surrender of, the terms of the Sale Agreement, the
Administration Agreement, or the Servicing Agreement, or waive timely
performance or observance by the Seller, ETI, the Administrator or the Servicer
under the Sale Agreement, the Administration Agreement or the Servicing
Agreement, in each case in such a way as would materially and adversely affect
the interests of any Holder of Transition Bonds, the Issuer shall first notify
the Rating Agencies of the proposed amendment, modification, waiver, supplement,
termination or surrender and shall promptly notify the Indenture Trustee and the
PUCT in writing and the Indenture Trustee shall notify the Holders of the
Transition Bonds of the proposed amendment, modification, waiver, supplement,
termination or surrender and whether the Rating Agency Condition has been
satisfied with respect thereto.  The Indenture Trustee shall consent
to such proposed amendment, modification, waiver, supplement, termination or
surrender only with the prior written consent of the Holders of a majority of
the Outstanding Amount of Transition Bonds of the Tranches materially and
adversely affected thereby and, if the proposed amendment, modification, waiver,
supplement, termination or surrender would increase ongoing qualified costs as
defined in the Financing Order, the consent of the PUCT pursuant to Section 9.03.  If
any such amendment, modification, waiver, supplement, termination or surrender
shall be so consented to by the Indenture Trustee or such Holders, the Issuer
agrees to execute and deliver, in its own name and at its own expense, such
agreements, instruments, consents and other documents as shall be necessary or
appropriate in the circumstances.

     

    (e) If the
Issuer or the Servicer proposes to amend, modify, waive, supplement, terminate
or surrender, or to agree to any amendment, modification, supplement,
termination, waiver or surrender of, the process for True-Up Adjustments, the
Issuer shall notify the PUCT and the Indenture Trustee in writing and the
Indenture Trustee shall notify the Holders of the Transition Bonds of such
proposal and the Indenture Trustee shall consent thereto only with the consent
of the PUCT pursuant to Section 9.03 and
the prior written consent of the Holders of a majority of the Outstanding Amount
of Transition Bonds of the Tranches affected thereby and only if the Rating
Agency Condition has been satisfied with respect thereto.

     

    (f) Promptly
following a default by the Seller under the Sale Agreement, by the Administrator
under the Administration Agreement or the occurrence of a Servicer Default under
the Servicing Agreement, and at the Issuer’s expense, the Issuer agrees to take
all such lawful actions as the Indenture Trustee may request to compel or secure
the performance and observance by each of the Seller, ETI, the Administrator or
the Servicer of their obligations under and in accordance with the Sale
Agreement, the Servicing Agreement and the Administration Agreement, as the case
may be, in accordance with the terms thereof, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with such agreements to the extent and in the manner directed
by the Indenture Trustee, including the transmission of notices of any default
by the Seller, ETI, the Administrator or the Servicer, respectively, thereunder
and the institution of legal or administrative actions or Proceedings to compel
or secure performance of their obligations under the Sale Agreement, the
Servicing Agreement or the Administration Agreement, as applicable.

     

    Before
consenting to any amendment, modification, supplement, termination, waiver or
surrender under Sections 3.22(d)
or (e), the
Indenture Trustee shall be entitled to receive, and subject to Sections 6.01
and 6.02, shall
be fully protected in relying upon, an Opinion of Counsel stating that such
action is authorized or permitted by this Indenture.

     

    SECTION
3.23. Taxes.  So
long as any of the Transition Bonds are Outstanding, the Issuer shall pay or
cause to be paid all taxes, assessments and governmental charges imposed upon it
or any of its properties or assets or with respect to any of its franchises,
business, income or property before any penalty accrues thereon if the failure
to pay any such taxes, assessments and governmental charges would, after any
applicable grace periods, notices or other similar requirements, result in a
Lien on the Transition Bond Collateral; provided that no such
tax need be paid if the Issuer is contesting or causing to be contested the same
in good faith by appropriate proceedings promptly instituted and diligently
conducted and if the Issuer has established appropriate reserves as shall be
required in conformity with generally accepted accounting
principles.

     

    ARTICLE
IV

     

    SATISFACTION
AND DISCHARGE; DEFEASANCE

     

    SECTION
4.01. Satisfaction and Discharge
of Indenture; Defeasance.

     

    (a) This
Indenture shall cease to be of further effect with respect to the Transition
Bonds and the Indenture Trustee, on reasonable written demand of and at the
expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to the Transition
Bonds, when:

     

    (i) either

     

    (A) all Transition Bonds theretofore
authenticated and delivered (other than (1) Transition Bonds that have been
destroyed, lost or stolen and that have been replaced or paid as provided in
Section 2.06 and
(2) Transition Bonds for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust, as provided in the last paragraph of
Section 3.03)
have been delivered to the Indenture Trustee for cancellation; or

     

    (B) either (1) the Scheduled Final
Payment Date has occurred with respect to all Transition Bonds not theretofore
delivered to the Indenture Trustee for cancellation or (2) such Transition
Bonds will be due and payable on their respective Scheduled Final Payment Dates
within one year, and in any such case, the Issuer has irrevocably deposited or
caused to be irrevocably deposited in trust with the Indenture Trustee
(i) cash and/or (ii) U.S. Government Obligations which through the
scheduled payments of principal and interest in respect thereof in accordance
with their terms are in an amount sufficient to pay principal, interest and
premium, if any, on such Transition Bonds not theretofore delivered to the
Indenture Trustee for cancellation and all other sums payable hereunder by the
Issuer with respect to such Transition Bonds when scheduled to be paid and to
discharge the entire indebtedness on such Transition Bonds when
due;

     

    (ii) the Issuer has paid or caused to be
paid all other sums payable hereunder by the Issuer with respect to the
Transition Bonds; and

     

    (iii) the Issuer has delivered to the
Indenture Trustee an Officer’s Certificate, an Opinion of Counsel of Independent
counsel of the Issuer and (if required by the TIA or the Indenture Trustee) an
Independent Certificate from a firm of registered public accountants, each
meeting the applicable requirements of Section 10.01(a)
and each stating that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture with respect to Transition
Bonds have been complied with.

     

    (b) Subject
to Sections 4.01(c)
and 4.02, the
Issuer at any time may terminate (i) all its obligations under this
Indenture with respect to the Transition Bonds (“Legal Defeasance
Option”) or (ii) its obligations under Sections 3.04,
3.05, 3.06, 3.07, 3.08, 3.09, 3.10, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17, 3.18 and 3.19 and the
operation of Section 5.01(iii)
(“Covenant Defeasance
Option”) with respect to the Transition Bonds.  The Issuer may
exercise the Legal Defeasance Option with respect to the Transition Bonds
notwithstanding its prior exercise of the Covenant Defeasance
Option.

     

    If the
Issuer exercises the Legal Defeasance Option, the maturity of the Transition
Bonds may not be accelerated because of an Event of Default.  If the
Issuer exercises the Covenant Defeasance Option, the maturity of the Transition
Bonds may not be accelerated because of an Event of Default specified in Section 5.01(iii).

     

    Upon
satisfaction of the conditions set forth herein to the exercise of the Legal
Defeasance Option or the Covenant Defeasance Option, the Indenture Trustee, on
reasonable written demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of the obligations
that are terminated pursuant to such exercise.

     

    (c) Notwithstanding
Sections 4.01(a)
and 4.01(b)
above, (i) rights of registration of transfer and exchange,
(ii) substitution of mutilated, destroyed, lost or stolen Transition Bonds,
(iii) rights of Holders to receive payments of principal, premium, if any,
and interest, (iv) Sections 4.03
and 4.04,
(v) the rights, obligations and immunities of the Indenture Trustee
hereunder (including the rights of the Indenture Trustee under Section 6.07 and
the obligations of the Indenture Trustee under Section 4.03)
and (vi) the rights of Holders as beneficiaries hereof with respect to the
property deposited with the Indenture Trustee payable to all or any of them,
shall survive until the Transition Bonds as to which this Indenture or certain
obligations hereunder have been satisfied and discharged pursuant to Section 4.01(a)
or 4.01(b) have
been paid in full.  Thereafter the obligations in Sections 6.07
and 4.04 shall
survive.

     

    SECTION
4.02. Conditions to
Defeasance.  The Issuer may exercise the Legal Defeasance
Option or the Covenant Defeasance Option with respect to any of the Transition
Bonds only if:

     

    (a) the
Issuer has irrevocably deposited or caused to be irrevocably deposited in trust
with the Indenture Trustee (i) cash and/or (ii) U.S. Government
Obligations which through the scheduled payments of principal and interest in
respect thereof in accordance with their terms are in an amount sufficient to
pay principal, interest and premium, if any, on the Transition Bonds not
therefore delivered to the Indenture Trustee for cancellation and all other sums
payable hereunder by the Issuer with respect to the Transition Bonds when
scheduled to be paid and to discharge the entire indebtedness on the Transition
Bonds when due;

     

    (b) the
Issuer delivers to the Indenture Trustee a certificate from a nationally
recognized firm of Independent registered public accountants expressing its
opinion that the payments of principal and interest when due and without
reinvestment of the deposited U.S. Government Obligations plus any deposited
cash without investment will provide cash at such times and in such amounts
(but, in the case of the Legal Defeasance Option only, not more than such
amounts) as will be sufficient to pay in respect of the Transition Bonds
(i) principal in accordance with the Expected Amortization Schedule
therefor, (ii) interest when due and (iii) all other sums payable
hereunder by the Issuer with respect to such Transition Bonds;

     

    (c) in the
case of the Legal Defeasance Option, ninety-five (95) days pass after the
deposit is made and during the ninety-five (95)-day period no Default specified
in Section 5.01(v)
or (vi) occurs
which is continuing at the end of the period;

     

    (d) no
Default has occurred and is continuing on the day of such deposit and after
giving effect thereto;

     

    (e) in the
case of an exercise of the Legal Defeasance Option, the Issuer shall have
delivered to the Indenture Trustee an Opinion of Counsel of Independent tax
counsel of the Issuer stating that (i) the Issuer has received from, or
there has been published by, the Internal Revenue Service a ruling, or
(ii) since the date of execution of this Indenture, there has been a change
in the applicable federal income tax law, in either case to the effect that, and
based thereon such opinion shall confirm that, the Holders of the Transition
Bonds will not recognize income, gain or loss for federal income tax purposes as
a result of such legal defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such legal defeasance had not occurred;

     

    (f) in the
case of an exercise of the Covenant Defeasance Option, the Issuer shall have
delivered to the Indenture Trustee an Opinion of Counsel of Independent tax
counsel of the Issuer to the effect that the Holders of the Transition Bonds
will not recognize income, gain or loss for federal income tax purposes as a
result of such covenant defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such covenant defeasance had not occurred;

     

    (g) the
Issuer delivers to the Indenture Trustee an Officer’s Certificate and an Opinion
of Counsel, each stating that all conditions precedent to the satisfaction and
discharge of the Transition Bonds to the extent contemplated by this Article IV have
been complied with;

     

    (h) the
Issuer delivers to the Indenture Trustee an Opinion of Counsel of Independent
counsel of the Issuer to the effect that (i) in a case under the Bankruptcy
Code in which ETI (or any of its Affiliates, other than the Issuer) is the
debtor, the court would hold that the deposited moneys or U.S. Government
Obligations would not be in the bankruptcy estate of ETI (or any of its
Affiliates, other than the Issuer, that deposited the moneys or U.S. Government
Obligations); and (ii) in the event ETI (or any of its Affiliates, other
than the Issuer, that deposited the moneys or U.S. Government Obligations) were
to be a debtor in a case under the Bankruptcy Code, the court would not
disregard the separate legal existence of ETI (or any of its Affiliates, other
than the Issuer, that deposited the moneys or U.S. Government Obligations) and
the Issuer so as to order substantive consolidation under the Bankruptcy Code of
the Issuer’s assets and liabilities with the assets and liabilities of ETI or
such other Affiliate; and

     

    (i) the
Rating Agency Condition shall have been satisfied with respect to the exercise
of any Legal Defeasance Option or Covenant Defeasance Option.

     

    Notwithstanding
any other provision of this Section 4.02, no
delivery of moneys or U.S. Government Obligations to the Indenture Trustee shall
terminate any obligation of the Issuer to the Indenture Trustee under this
Indenture or the Series Supplement or any obligation of the Issuer to apply such
moneys or U.S. Government Obligations under Section 4.03
until such Transition Bonds shall have been redeemed in accordance with the
provisions of this Indenture and the Series Supplement.

     

    SECTION
4.03. Application of Trust
Money.  All moneys or U.S. Government Obligations deposited
with the Indenture Trustee pursuant to Section 4.01 or
4.02 shall be
held in trust and applied by it, in accordance with the provisions of the
Transition Bonds and this Indenture, to the payment, either directly or through
any Paying Agent, as the Indenture Trustee may determine, to the Holders of the
particular Transition Bonds for the payment of which such moneys have been
deposited with the Indenture Trustee, of all sums due and to become due thereon
for principal, premium, if any, and interest; but such moneys need not be
segregated from other funds except to the extent required herein or in the
Servicing Agreement or required by law.  Notwithstanding anything to
the contrary in this Article IV, the
Indenture Trustee shall deliver or pay to the Issuer from time to time upon
Issuer Request any moneys or U.S. Government Obligations held by it pursuant to
Section 4.02
which, in the opinion of a nationally recognized firm of Independent registered
public accountants expressed in a written certification thereof delivered to the
Indenture Trustee (and not at the cost or expense of the Indenture Trustee), are
in excess of the amount thereof which would be required to be deposited for the
purpose for which such moneys or U.S. Government Obligations were deposited,
provided that
any such payment shall be subject to the satisfaction of the Rating Agency
Condition.

     

    SECTION
4.04. Repayment of Moneys Held by
Paying Agent.  In connection with the satisfaction and
discharge of this Indenture or the Covenant Defeasance Option or Legal
Defeasance Option with respect to the Transition Bonds, all moneys then held by
any Paying Agent other than the Indenture Trustee under the provisions of this
Indenture with respect to such Transition Bonds shall, upon demand of the
Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.03 and
thereupon such Paying Agent shall be released from all further liability with
respect to such moneys.

     

    ARTICLE
V

     

    REMEDIES

     

    SECTION
5.01. Events of
Default.  “Event of Default”
with respect to the Transition Bonds, wherever used herein, means any one or
more of the following events (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

     

    (i) default in the payment of any interest
on any Transition Bond when the same becomes due and payable (whether such
failure to pay interest is caused by a shortfall in Transition Charges received
or otherwise), and such default shall continue for a period of five
(5) Business Days; or

     

    (ii) default in the payment of the then
unpaid principal of any Transition Bond of any Tranche on the Final Maturity
Date for such Tranche; or

     

    (iii) default in the observance or
performance of any covenant or agreement of the Issuer made in this Indenture
(other than defaults specified in clauses (i) or
(ii) above),
and such default shall continue or not be cured, for a period of thirty
(30) days after the earlier of (A) the date that there shall have been
given, by registered or certified mail, to the Issuer by the Indenture Trustee
or to the Issuer and the Indenture Trustee by the Holders of at least 25 percent
of the Outstanding Amount of the Transition Bonds, a written notice specifying
such default and requiring it to be remedied and stating that such notice is a
“Notice of
Default” hereunder or (B) the date that the Issuer has actual
knowledge of the default; or

     

    (iv) any representation or warranty of the
Issuer made in this Indenture or in any certificate or other writing delivered
pursuant hereto or in connection herewith proving to have been incorrect in any
material respect as of the time when the same shall have been made, and the
circumstance or condition in respect of which such misrepresentation or warranty
was incorrect shall not have been eliminated or otherwise cured, within thirty
(30) days after the earlier of (A) the date that there shall have been
given, by registered or certified mail, to the Issuer by the Indenture Trustee
or to the Issuer and the Indenture Trustee by the Holders of at least 25 percent
of the Outstanding Amount of the Transition Bonds, a written notice specifying
such incorrect representation or warranty and requiring it to be remedied and
stating that such notice is a “Notice of Default”
hereunder or (B) the date the Issuer has actual knowledge of the default,
or

     

    (v) the filing of a decree or order for
relief by a court having jurisdiction in the premises in respect of the Issuer
or any substantial part of the Transition Bond Collateral in an involuntary case
or proceeding under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
the Issuer or for any substantial part of the Transition Bond Collateral, or
ordering the winding-up or liquidation of the Issuer’s affairs, and such decree
or order shall remain unstayed and in effect for a period of ninety
(90) consecutive days; or

     

    (vi) the commencement by the Issuer of a
voluntary case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by the Issuer to
the entry of an order for relief in an involuntary case or proceeding under any
such law, or the consent by the Issuer to the appointment or taking possession
by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the Transition Bond
Collateral, or the making by the Issuer of any general assignment for the
benefit of creditors, or the failure by the Issuer generally to pay its debts as
such debts become due, or the taking of action by the Issuer in furtherance of
any of the foregoing; or

     

    (vii) any act or failure to act by the State
of Texas or any of its agencies (including the PUCT), officers or employees
which violates or is not in accordance with the State Pledge; or

     

    (viii) any other event designated as such in
the Series Supplement.

     

    The
Issuer shall deliver to a Responsible Officer of the Indenture Trustee and to
the Rating Agencies, within five (5) days after a Responsible Officer of
the Issuer has knowledge of the occurrence thereof, written notice in the form
of an Officer’s Certificate of any event (I) which is an Event of Default
under clauses (i),
(ii), (v), (vi), (vii), or (viii) or
(II) which with the giving of notice, the lapse of time, or both, would
become an Event of Default under clause (iii) or
(iv),
including, in each case, the status of such Event of Default and what action the
Issuer is taking or proposes to take with respect thereto.

     

    SECTION
5.02. Acceleration of Maturity;
Rescission and Annulment.  If an Event of Default (other than
an Event of Default under clause (vii) of
Section 5.01)
should occur and be continuing, then and in every such case the Indenture
Trustee or the Holders representing not less than a majority of the Outstanding
Amount of the Transition Bonds may declare the Transition Bonds to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if given by Holders), and upon any such declaration the unpaid
principal amount of the Transition Bonds, together with accrued and unpaid
interest thereon through the date of acceleration, shall become immediately due
and payable.

     

    At any
time after such declaration of acceleration of maturity has been made and before
a judgment or decree for payment of the money due has been obtained by the
Indenture Trustee as hereinafter in this Article V
provided, the Holders representing not less than a majority of the Outstanding
Amount of the Transition Bonds, by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its consequences
if:

     

    (i) the Issuer has paid or deposited with
the Indenture Trustee a sum sufficient to pay:

     

    (A) all payments of principal of and
premium, if any, and interest on all Transition Bonds due and owing at such time
as if such Event of Default had not occurred and was not continuing and all
other amounts that would then be due hereunder or upon the Transition Bonds if
the Event of Default giving rise to such acceleration had not occurred;
and

     

    (B) all sums paid or advanced by the
Indenture Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its agents and counsel;
and

     

    (ii) all Events of Default, other than the
nonpayment of the principal of the Transition Bonds that have become due solely
by such acceleration, have been cured or waived as provided in Section 5.12.

     

    No such
rescission shall affect any subsequent default or impair any right consequent
thereto.

     

    SECTION
5.03. Collection of Indebtedness
and Suits for Enforcement by Indenture Trustee.

     

    (a) If an
Event of Default under Section 5.01(i)
or (ii) has
occurred and is continuing, subject to Section 10.19,
the Indenture Trustee, in its own name and as trustee of an express trust, may
institute a Proceeding for the collection of the sums so due and unpaid, and may
prosecute such Proceeding to judgment or final decree, and, subject to the
limitations on recourse set forth herein, may enforce the same against the
Issuer or other obligor upon such Transition Bonds and collect in the manner
provided by law out of the property of the Issuer or other obligor upon such
Transition Bonds, wherever situated the moneys payable, or the related
Transition Bond Collateral and the proceeds thereof, the whole amount then due
and payable on the Transition Bonds for principal, premium, if any, and
interest, with interest upon the overdue principal and premium, if any, and, to
the extent payment at such rate of interest shall be legally enforceable, upon
overdue installments of interest, at the respective rate borne by the Transition
Bonds or the applicable Tranche and in addition thereto such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.

     

    (b) If an
Event of Default (other than Event of Default under clause (vii) of
Section 5.01)
occurs and is continuing, the Indenture Trustee shall, as more particularly
provided in Section 5.04, in
its discretion, proceed to protect and enforce its rights and the rights of the
Holders, by such appropriate Proceedings as the Indenture Trustee shall deem
most effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture and
the Series Supplement or by law, including foreclosing or otherwise enforcing
the Lien of the Transition Bond Collateral securing the Transition Bonds or
applying to a court of competent jurisdiction for sequestration of revenues
arising with respect to the Transition Property.

     

    (c) If an
Event of Default under Section 5.01(v)
or (vi) has
occurred and is continuing, the Indenture Trustee, irrespective of whether the
principal of any Transition Bonds shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Indenture Trustee shall have made any demand pursuant to the provisions of this
Section 5.04,
shall be entitled and empowered, by intervention in any Proceedings related to
such Event of Default or otherwise:

     

    (i) to file and prove a claim or claims for
the whole amount of principal, premium, if any, and interest owing and unpaid in
respect of the Transition Bonds and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee (including any claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their respective agents,
attorneys and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee, except as a result of negligence or bad faith) and of the
Holders allowed in such Proceedings;

     

    (ii) unless prohibited by applicable law and
regulations, to vote on behalf of the Holders in any election of a trustee in
bankruptcy, a standby trustee or Person performing similar functions in any such
Proceedings;

     

    (iii) to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute all
amounts received with respect to the claims of the Holders and of the Indenture
Trustee on their behalf; and

     

    (iv) to file such proofs of claim and other
papers and documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee or the Holders allowed in any judicial
proceeding relative to the Issuer, its creditors and its property.

     

    and any
trustee, receiver, liquidator, custodian or other similar official in any such
Proceeding is hereby authorized by each of such Holders to make payments to the
Indenture Trustee, and, in the event that the Indenture Trustee shall consent to
the making of payments directly to such Holders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation to the
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each predecessor Indenture
Trustee except as a result of negligence or bad faith.

     

    (d) Nothing
herein contained shall be deemed to authorize the Indenture Trustee to authorize
or consent to or vote for or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Transition
Bonds or the rights of any Holder thereof or to authorize the Indenture Trustee
to vote in respect of the claim of any Holder in any such proceeding except, as
aforesaid, to vote for the election of a trustee in bankruptcy or similar
Person.

     

    (e) All
rights of action and of asserting claims under this Indenture, or under any of
the Transition Bonds, may be enforced by the Indenture Trustee without the
possession of any of the Transition Bonds or the production thereof in any trial
or other Proceedings relative thereto, and any such action or proceedings
instituted by the Indenture Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders of the Transition Bonds.

     

    (f) In any
Proceedings brought by the Indenture Trustee (and also any Proceedings involving
the interpretation of any provision of this Indenture to which the Indenture
Trustee shall be a party), the Indenture Trustee shall be held to represent all
the Holders of the Transition Bonds, and it shall not be necessary to make any
Holder a party to any such Proceedings.

     

    SECTION
5.04. Remedies;
Priorities.

     

    (a) If an
Event of Default (other than an Event of Default under clause (vii) of
Section 5.01)
shall have occurred and be continuing, the Indenture Trustee may do one or more
of the following (subject to Section 5.05):

     

    (i) institute Proceedings in its own name
and as trustee of an express trust for the collection of all amounts then
payable on the Transition Bonds or under this Indenture with respect thereto,
whether by declaration of acceleration or otherwise, and, subject to the
limitations on recovery set forth herein, enforce any judgment obtained, and
collect from the Issuer or any other obligor moneys adjudged due upon such
Transition Bonds;

     

    (ii) institute Proceedings from time to time
for the complete or partial foreclosure of this Indenture with respect to the
Transition Bond Collateral;

     

    (iii) exercise any remedies of a secured
party under the UCC, the Securitization Law or any other applicable law and take
any other appropriate action to protect and enforce the rights and remedies of
the Indenture Trustee and the Holders of the Transition Bonds;

     

    (iv) at the written direction of the Holders
of a majority of the Outstanding Amount of the Transition Bonds, sell the
Transition Bond Collateral or any portion thereof or rights or interest therein,
at one or more public or private sales called and conducted in any manner
permitted by law; and

     

    (v) exercise all rights, remedies, powers,
privileges and claims of the Issuer against the Seller, the Administrator, ETI
or the Servicer under or in connection with, and pursuant to the terms of, the
Sale Agreement, the Administration Agreement or the Servicing
Agreement;

     

    provided, however, that the
Indenture Trustee may not sell or otherwise liquidate any portion of the
Transition Bond Collateral following such an Event of Default, other than an
Event of Default described in Section 5.01(i),
or (ii), with
respect to the Transition Bonds unless (A) the Holders of 100 percent of
the Outstanding Amount of the Transition Bonds consent thereto, (B) the
proceeds of such sale or liquidation distributable to the Holders are sufficient
to discharge in full all amounts then due and unpaid upon the Transition Bonds
for principal, premium, if any, and interest after taking into account payment
of all amounts due prior thereto pursuant to the priorities set forth in Section 8.02(e)
or (C) the Indenture Trustee determines that the Transition Bond Collateral
will not continue to provide sufficient funds for all payments on the Transition
Bonds as they would have become due if the Transition Bonds had not been
declared due and payable, and the Indenture Trustee obtains the written consent
of Holders of 66-2/3 percent of the Outstanding Amount of the Transition
Bonds.  In determining such sufficiency or insufficiency with respect
to clause (B) and
(C), the
Indenture Trustee may, but need not, obtain and conclusively rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Transition Bond Collateral for such purpose.

     

    (b) If an
Event of Default under clause (vii) of
Section 5.01
shall have occurred and be continuing, the Indenture Trustee, for the benefit of
the Secured Parties, shall be entitled and empowered to the extent permitted by
applicable law, to institute or participate in Proceedings necessary to compel
performance of or to enforce the State Pledge and to collect any monetary
damages incurred by the Holders or the Indenture Trustee as a result of any such
Event of Default, and may prosecute any such Proceeding to final judgment or
decree.  Such remedy shall be the only remedy that the Indenture
Trustee may exercise if the only Event of Default that has occurred and is
continuing is an Event of Default under Section 5.01(vii).

     

    (c) If the
Indenture Trustee collects any money pursuant to this Article V, it
shall pay out such money in accordance with the priorities set forth in Section 8.02(e).

     

    SECTION
5.05. Optional Preservation of the
Transition Bond Collateral.  If the Transition Bonds have been
declared to be due and payable under Section 5.02
following an Event of Default and such declaration and its consequences have not
been rescinded and annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the related Transition Bond Collateral.  It is
the desire of the parties hereto and the Holders that there be at all times
sufficient funds for the payment of principal of and premium, if any, and
interest on the Transition Bonds, and the Indenture Trustee shall take such
desire into account when determining whether or not to maintain possession of
the Transition Bond Collateral.  In determining whether to maintain
possession of the Transition Bond Collateral or sell or liquidate the same, the
Indenture Trustee may, but need not, obtain and conclusively rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Transition Bond Collateral for such purpose.

     

    SECTION
5.06. Limitation of
Suits.  Notwithstanding any provision hereof to the contrary,
no Holder of any Transition Bond shall have any right to institute any
Proceeding, judicial or otherwise, to avail itself of any remedies provided in
the Securitization Law or to avail itself of the right to foreclose on the
Transition Bond Collateral or otherwise enforce the Lien and the security
interest on the Transition Bond Collateral with respect to this Indenture and
the Series Supplement, or for the appointment of a receiver or trustee, or for
any other remedy hereunder, unless:

     

    (i) such Holder previously has given
written notice to the Indenture Trustee of a continuing Event of
Default;

     

    (ii) the Holders of not less than a majority
of the Outstanding Amount of the Transition Bonds have made written request to
the Indenture Trustee to institute such Proceeding in respect of such Event of
Default in its own name as Indenture Trustee hereunder;

     

    (iii) such Holder or Holders have offered to
the Indenture Trustee indemnity satisfactory to it against the costs, expenses
and liabilities to be incurred in complying with such request;

     

    (iv) the Indenture Trustee for sixty
(60) days after its receipt of such notice, request and offer of indemnity
has failed to institute such Proceedings; and

     

    (v) no direction inconsistent with such
written request has been given to the Indenture Trustee during such sixty-day
period by the Holders of a majority of the Outstanding Amount of the Transition
Bonds;

     

    it being
understood and intended that no one or more Holders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this Indenture
to affect, disturb or prejudice the rights of any other Holders or to obtain or
to seek to obtain priority or preference over any other Holders or to enforce
any right under this Indenture, except in the manner herein
provided.

     

    In the
event the Indenture Trustee shall receive conflicting or inconsistent requests
and indemnity from two or more groups of Holders, each representing less than a
majority of the Outstanding Amount of the Transition Bonds, the Indenture
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.

     

    SECTION
5.07. Unconditional Rights of
Holders To Receive Principal, Premium, if any, and
Interest.  Notwithstanding any other provisions in this
Indenture, the Holder of any Transition Bond shall have the right, which is
absolute and unconditional, (a) to receive payment of (i) the interest, if
any, on such Transition Bond on the due dates thereof expressed in such
Transition Bond or in this Indenture or (ii) the unpaid principal, if any,
of such Transition Bonds on the Final Maturity Date therefor and (b) to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.

     

    SECTION
5.08. Restoration of Rights and
Remedies.  If the Indenture Trustee or any Holder has
instituted any Proceeding to enforce any right or remedy under this Indenture
and such Proceeding has been discontinued or abandoned for any reason or has
been determined adversely to the Indenture Trustee or to such Holder, then and
in every such case the Issuer, the Indenture Trustee and the Holders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Indenture Trustee and the Holders shall continue as though no
such Proceeding had been instituted.

     

    SECTION
5.09. Rights and Remedies
Cumulative.  No right or remedy herein conferred upon or
reserved to the Indenture Trustee or to the Holders is intended to be exclusive
of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or
otherwise.  The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

     

    SECTION
5.10. Delay or Omission Not a
Waiver.  No delay or omission of the Indenture Trustee or any
Holder to exercise any right or remedy accruing upon any Default or Event of
Default shall impair any such right or remedy or constitute a waiver of any such
Default or Event of Default or an acquiescence therein.  Every right
and remedy given by this Article V or by
law to the Indenture Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee or by
the Holders, as the case may be.

     

    SECTION
5.11. Control by
Holders.  The Holders of not less than a majority of the
Outstanding Amount of the Transition Bonds of an affected Tranche or Tranches
shall have the right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee with respect to the
Transition Bonds of such Tranche or Tranches or exercising any trust or power
conferred on the Indenture Trustee with respect to such Tranche or Tranches;
provided
that:

     

    (i) such direction shall not be in conflict
with any rule of law or with this Indenture and shall not involve the Indenture
Trustee in any personal liability or expense;

     

    (ii) subject to other conditions specified
in Section 5.04,
any direction to the Indenture Trustee to sell or liquidate any Transition Bond
Collateral shall be by the Holders representing not less than 100 percent of the
Outstanding Amount of the Transition Bonds;

     

    (iii) if the conditions set forth in Section 5.05
have been satisfied and the Indenture Trustee elects to retain the Transition
Bond Collateral pursuant to Section 5.05,
then any direction to the Indenture Trustee by Holders representing less than
100 percent of the Outstanding Amount of the Transition Bonds to sell or
liquidate the Transition Bond Collateral shall be of no force and effect;
and

     

    (iv) the
Indenture Trustee may take any other action deemed proper by the Indenture
Trustee that is not inconsistent with such direction;

     

    provided, however, that, the
Indenture Trustee’s duties shall be subject to Section 6.01,
and the Indenture Trustee need not take any action that it determines might
involve it in liability or might materially adversely affect the rights of any
Holders not consenting to such action.  Furthermore and without
limiting the foregoing, the Indenture Trustee shall not be required to take any
action for which it reasonably believes that it will not be indemnified to its
satisfaction against any cost, expense or liabilities.

     

    SECTION
5.12. Waiver of Past
Defaults.  Prior to the declaration of the acceleration of the
maturity of the Transition Bonds as provided in Section 5.02,
the Holders representing not less than a majority of the Outstanding Amount of
the Transition Bonds of an affected Tranche, together with the PUCT, may waive
any past Default or Event of Default and its consequences except a Default
(a) in payment of principal of or premium, if any, or interest on any of
the Transition Bonds or (b) in respect of a covenant or provision hereof
which cannot be modified or amended without the consent of the Holder of each
Transition Bond of all Tranches affected.  In the case of any such
waiver, the Issuer, the Indenture Trustee and the Holders shall be restored to
their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other Default or impair any right consequent
thereto.

     

    Upon any
such waiver, such Default shall cease to exist and be deemed to have been cured
and not to have occurred, and any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereto.

     

    SECTION
5.13. Undertaking for
Costs.  All parties to this Indenture agree, and each Holder of
any Transition Bond by such Holder’s acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys’ fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13
shall not apply to (a) any suit instituted by the Indenture Trustee,
(b) any suit instituted by any Holder, or group of Holders, in each case
holding in the aggregate more than ten (10) percent of the Outstanding
Amount of the Transition Bonds or (c) any suit instituted by any Holder for
the enforcement of the payment of (i) interest on any Transition Bond on or
after the due dates expressed in such Transition Bond and in this Indenture or
(ii) the unpaid principal, if any, of any Transition Bond on or after the
Final Maturity Date therefor.

     

    SECTION
5.14. Waiver of Stay or Extension
Laws.  The Issuer covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or plead or in any manner
whatsoever, claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this Indenture; and the Issuer (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Indenture Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.

     

    SECTION
5.15. Action on Transition
Bonds.  The Indenture Trustee’s right to seek and recover
judgment on the Transition Bonds or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture.  Neither the Lien of this Indenture nor any
rights or remedies of the Indenture Trustee or the Holders shall be impaired by
the recovery of any judgment by the Indenture Trustee against the Issuer or by
the levy of any execution under such judgment upon any portion of the Transition
Bond Collateral or any other assets of the Issuer.

     

    ARTICLE
VI

     

    THE
INDENTURE TRUSTEE

     

    SECTION
6.01. Duties of Indenture
Trustee.

     

    (a) If an
Event of Default has occurred and is continuing, the Indenture Trustee shall
exercise the rights and powers vested in it by this Indenture and use the same
degree of care and skill in their exercise as a prudent person would exercise or
use under the circumstances in the conduct of such person’s own
affairs.

     

    (b) Except
during the continuance of an Event of Default:

     

    (i) the Indenture Trustee undertakes to
perform such duties and only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and

     

    (ii) in the absence of bad faith on its
part, the Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and conforming to
the requirements of this Indenture.

     

    (c) The
Indenture Trustee may not be relieved from liability for its own negligent
action, its own bad faith, its own negligent failure to act or its own willful
misconduct, except that:

     

    (i) this paragraph (c)
does not limit the effect of paragraph (b) of
this Section 6.01;

     

    (ii) the Indenture Trustee shall not be
liable for any error of judgment made in good faith by a Responsible Officer
unless it is proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and

     

    (iii) the Indenture Trustee shall not be
liable with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it hereunder.

     

    (d) Every
provision of this Indenture that in any way relates to the Indenture Trustee is
subject to paragraphs (a),
(b) and (c) of this Section 6.01.

     

    (e) The
Indenture Trustee shall not be liable for interest on any money received by it
except as the Indenture Trustee may agree in writing with the
Issuer.

     

    (f) Money
held in trust by the Indenture Trustee need not be segregated from other funds
held by the Indenture Trustee except to the extent required by law or the terms
of this Indenture, the Sale Agreement, the Servicing Agreement or the
Administration Agreement.

     

    (g) No
provision of this Indenture shall require the Indenture Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayments of such funds or
indemnity satisfactory to it against such risk or liability is not reasonably
assured to it.

     

    (h) Every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Indenture Trustee shall be subject to the
provisions of this Section 6.01 and
to the provisions of the TIA.

     

    (i) In the
event that the Indenture Trustee is also acting as Paying Agent or Transition
Bond Registrar hereunder, the protections of this Article VI shall
also be afforded to the Indenture Trustee in its capacity as Paying Agent or
Transition Bond Registrar.

     

    (j) Except
for the express duties of the Indenture Trustee with respect to the
administrative functions set forth in the Basic Documents, the Indenture Trustee
shall have no obligation to administer, service or collect Transition Property
or to maintain, monitor or otherwise supervise the administration, servicing or
collection of the Transition Property.

     

    (k) Under no
circumstance shall the Indenture Trustee be liable for any indebtedness of the
Issuer, the Servicer or the Seller evidenced by or arising under the Transition
Bonds or the Basic Documents.

     

    (l) On or
before March 31 of each fiscal year ending December 31, the Indenture
Trustee shall (i) deliver to the Issuer a report (in form and substance
reasonably satisfactory to the Issuer and addressed to the Issuer and signed by
an authorized officer of the Indenture Trustee) regarding the Indenture
Trustee’s assessment of compliance, during the immediately preceding fiscal year
ending December 31, with each of the applicable servicing criteria
specified on Exhibit C hereto
as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122
of Regulation AB and (ii) deliver to the Issuer a report of an Independent
registered public accounting firm reasonably acceptable to the Issuer that
attests to and reports on, in accordance with Rules 1-02(a)(3) and 2-02(g) of
Regulation S-X under the Securities Act and the Exchange Act, the assessment of
compliance made by the Indenture Trustee and delivered pursuant to clause (i).

     

    SECTION
6.02. Rights of Indenture
Trustee.  (a) The Indenture Trustee may conclusively rely and
shall be fully protected in relying on any document believed by it to be genuine
and to have been signed or presented by the proper person.  The
Indenture Trustee need not investigate any fact or matter stated in such
document.

     

    (b) Before
the Indenture Trustee acts or refrains from acting, it may require and shall be
entitled to receive an Officer’s Certificate or an Opinion of Counsel of
Independent counsel of the Issuer (at no cost or expense to the Indenture
Trustee) that such action is required or permitted hereunder.  The
Indenture Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officer’s Certificate or Opinion of
Counsel.

     

    (c) The
Indenture Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys or a
custodian or nominee, and the Indenture Trustee shall not be responsible for any
misconduct or negligence on the part of, or for the supervision of, any such
agent, attorney, custodian or nominee appointed with due care by it
hereunder.

     

    (d) The
Indenture Trustee shall not be liable for any action it takes or omits to take
in good faith which it believes to be authorized or within its rights or powers;
provided, however, that the
Indenture Trustee’s conduct does not constitute willful misconduct, negligence
or bad faith.

     

    (e) The
Indenture Trustee may consult with counsel, and the advice or opinion of counsel
with respect to legal matters relating to this Indenture and the Transition
Bonds shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.

     

    (f) The
Indenture Trustee shall be under no obligation to take any action or exercise
any of the rights or powers vested in it by this Indenture or any other Basic
Document, or to institute, conduct or defend any litigation hereunder or
thereunder or in relation hereto or thereto, at the request, order or direction
of any of the Bondholders pursuant to the provisions of this Indenture and the
Series Supplement or otherwise, unless it shall have grounds to believe in its
discretion that security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby is to its satisfaction
assured to it.

     

    SECTION
6.03. Individual Rights of
Indenture Trustee.  The Indenture Trustee in its individual or
any other capacity may become the owner or pledgee of Transition Bonds and may
otherwise deal with the Issuer or its Affiliates with the same rights it would
have if it were not Indenture Trustee.  Any Paying Agent, Transition
Bond Registrar, co-registrar or co-paying agent or agent appointed under Section 3.02 may
do the same with like rights.  However, the Indenture Trustee must
comply with Sections 6.11
and 6.12.

     

    SECTION
6.04. Indenture Trustee’s
Disclaimer.  The Indenture Trustee shall not be responsible for
and makes no representation (other than as set forth in Section 6.13) as
to the validity or adequacy of this Indenture or the Transition Bonds, it shall
not be accountable for the Issuer’s use of the proceeds from the Transition
Bonds, and it shall not be responsible for any statement of the Issuer in the
Indenture or in any document issued in connection with the sale of the
Transition Bonds or in the Transition Bonds other than the Indenture Trustee’s
certificate of authentication.  The Indenture Trustee shall not be
responsible for the form, character, genuineness, sufficiency, value or validity
of any of the Transition Bond Collateral, or for or in respect of the Transition
Bonds (other than the certificate of authentication for the Transition Bonds) or
the Basic Documents and the Indenture Trustee shall in no event assume or incur
any liability, duty or obligation to any Holder, other than as expressly
provided in this Indenture.  The Indenture Trustee shall not be liable
for the default or misconduct of the Issuer, the Seller, the Servicer or any
other Person under the Basic Documents or otherwise, and the Indenture Trustee
shall have no obligation or liability to perform the obligations of such
Persons.

     

    SECTION
6.05. Notice of
Defaults.

     

    (a) If a
Default occurs and is continuing and if it is actually known to a Responsible
Officer of the Indenture Trustee, the Indenture Trustee shall mail to the PUCT,
each Rating Agency and each Bondholder notice of the Default within ninety
(90) days after actual notice of such Default was received by a Responsible
Officer of the Indenture Trustee.  Except in the case of a Default in
payment of principal of and premium, if any, or interest on any Transition Bond,
the Indenture Trustee may withhold the notice if and so long as a committee of
its Responsible Officers in good faith determines that withholding the notice is
in the interests of Holders.  Except for an Event of Default under
Sections 5.01(i)
or (ii) that occur
at a time when the Indenture Trustee is acting as the Paying Agent, and except
as provided in the first sentence of this Section 6.05, in
no event shall the Indenture Trustee be deemed to have knowledge of a
Default.

     

    (b) If a
Default occurs and is continuing and if it is actually known to a Responsible
Officer of the Indenture Trustee, the Indenture Trustee shall promptly, but no
more frequently than monthly, mail to the PUCT notice of any legal fees or other
expenses incurred by the Indenture Trustee in defending or prosecuting any
actual or threatened litigation, including any administrative proceeding, in
respect of the Transition Bonds or the Transition Bond Collateral.

     

    SECTION
6.06. Reports by Indenture Trustee
to Holders.

     

    (a) So long
as Transition Bonds are Outstanding and the Indenture Trustee is the Transition
Bond Registrar and Paying Agent, upon the written request of any Holder or the
Issuer, within the prescribed period of time for tax reporting purposes after
the end of each calendar year, it shall deliver to each relevant current or
former Holder such information in its possession as may be required to enable
such Holder to prepare its federal income and any applicable local or state tax
returns.  If the Transition Bond Registrar and Paying Agent is other
than the Indenture Trustee, such Transition Bond Registrar and Paying Agent,
within the prescribed period of time for tax reporting purposes after the end of
each calendar year, shall deliver to each relevant current or former Holder such
information in its possession as may be required to enable such Holder to
prepare its federal income and any applicable local or state tax
returns.

     

    (b) With
respect to the Transition Bonds, on or prior to the Payment Date or Special
Payment Date therefor, the Indenture Trustee will deliver to the PUCT and each
Holder of the Transition Bonds on such Payment Date or Special Payment Date a
statement as provided and prepared by the Servicer which will include (to the
extent applicable) the following information (and any other information so
specified in the Series Supplement) as to the Transition Bonds with respect to
such Payment Date or Special Payment Date or the period since the previous
Payment Date, as applicable:

     

    (i) the amount of the payment to Holders
allocable to principal, if any;

     

    (ii) the amount of the payment to Holders
allocable to interest;

     

    (iii) the aggregate Outstanding Amount of
such Transition Bonds, before and after giving effect to any payments allocated
to principal reported under clause (i)
above;

     

    (iv) the difference, if any, between the
amount specified in clause (iii)
above and the Outstanding Amount specified in the related Expected Amortization
Schedule;

     

    (v) any other transfers and payments to be
made on such Payment Date or Special Payment Date, including amounts paid to the
Indenture Trustee and to the Servicer; and

     

    (vi) the amounts on deposit in the
applicable Capital Subaccount and the applicable Excess Funds Subaccount, after
giving effect to the foregoing payments.

     

    (c) The
Issuer shall send a copy of each of the Certificate of Compliance delivered to
it pursuant to Section 3.03 of the Servicing Agreement and the Annual
Accountant’s Report delivered to it pursuant to Section 3.04 of the
Servicing Agreement to the Rating Agencies.  A copy of such
certificate and report may be obtained by any Holder by a request in writing to
the Indenture Trustee.

     

    (d) The
Indenture Trustee may consult with counsel, and the advice or opinion of such
counsel with respect to legal matters relating to this Indenture and the
Transition Bonds shall be full and complete authorization and protection from
liability with respect of any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such
counsel.

     

    SECTION
6.07. Compensation and
Indemnity.  The Issuer shall pay to the Indenture Trustee from
time to time reasonable compensation for its services.  The Indenture
Trustee’s compensation shall not be limited by any law on compensation of a
trustee of an express trust.  The Issuer shall reimburse the Indenture
Trustee for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its
services.  Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Indenture Trustee’s agents, counsel,
accountants and experts.  The Issuer shall indemnify and hold harmless
the Indenture Trustee and its officers, directors, employees and agents against
any and all cost, damage, loss, liability, tax or expense (including reasonable
attorney’s fees and expenses) incurred by it in connection with the
administration and the enforcement of this Indenture, the Series Supplement and
the Basic Documents and the Indenture Trustee’s rights, powers and obligations
under this Indenture, the Series Supplement and the Basic Documents and the
performance of its duties hereunder and obligations under or pursuant to this
Indenture, the Series Supplement and the Basic Documents.  The
Indenture Trustee shall notify the Issuer as soon as is reasonably practicable
of any claim for which it may seek indemnity.  Failure by the
Indenture Trustee to so notify the Issuer shall not relieve the Issuer of its
obligations hereunder.  The Issuer shall defend the claim and the
Indenture Trustee may have separate counsel and the Issuer shall pay the
reasonable fees and expenses of such counsel.  The Issuer need not
reimburse any expense or indemnify against any loss, liability or expense
incurred by the Indenture Trustee through the Indenture Trustee’s own willful
misconduct, negligence or bad faith.  The rights of the Indenture
Trustee set forth in this Section 6.07 are
subject to and limited by the priority of payments set forth in Section 8.02(e).

     

    The
payment obligations to the Indenture Trustee pursuant to this Section 6.07
shall survive the discharge of this Indenture and the Series Supplement or the
earlier resignation or removal of the Indenture Trustee.  When the
Indenture Trustee incurs expenses after the occurrence of a Default specified in
Section 5.01(v)
or (vi) with
respect to the Issuer, the expenses are intended to constitute expenses of
administration under the Bankruptcy Code or any other applicable federal or
state bankruptcy, insolvency or similar law.

     

    SECTION
6.08. Replacement of Indenture
Trustee and Securities Intermediary.

     

    (a) The
Indenture Trustee may resign at any time upon thirty (30) days’ prior
written notice to the Issuer subject to clause (c)
below.  The Holders of a majority of the Outstanding Amount of the
Transition Bonds may remove the Indenture Trustee by so notifying the Indenture
Trustee and may appoint a successor Indenture Trustee.  The Issuer
shall remove the Indenture Trustee if:

     

    (i) the Indenture Trustee fails to comply
with Section 6.11;

     

    (ii) the Indenture Trustee is adjudged a
bankrupt or insolvent;

     

    (iii) a receiver or other public officer
takes charge of the Indenture Trustee or its property;

     

    (iv) the Indenture Trustee otherwise becomes
incapable of acting; or

     

    (v) the Indenture Trustee fails to provide
to the Issuer any information reasonably requested by the Issuer pertaining to
the Indenture Trustee and necessary for the Issuer or the Sponsor to comply with
its reporting obligations under the Exchange Act and Regulation AB and such
failure is not resolved to the Issuer’s and the Indenture Trustee’s mutual
satisfaction within a reasonable period of time.

     

    Any
removal or resignation of the Indenture Trustee shall also constitute a removal
or resignation of the Securities Intermediary.

     

    (b) If the
Indenture Trustee gives notice of resignation or is removed or if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture Trustee
in such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee and Securities
Intermediary.

     

    (c) A
successor Indenture Trustee shall deliver a written acceptance of its
appointment as the Indenture Trustee and as the Securities Intermediary to the
retiring Indenture Trustee and to the Issuer.  Thereupon the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee and Securities Intermediary, as applicable, under this
Indenture.  No resignation or removal of the Indenture Trustee
pursuant to this Section 6.08
shall become effective until acceptance of the appointment by a successor
Indenture Trustee having the qualifications set forth in Section 6.11.  The
successor Indenture Trustee shall mail a notice of its succession to
Holders.  The retiring Indenture Trustee shall promptly transfer all
property held by it as Indenture Trustee (including unless otherwise agreed by
the successor Indenture Trustee, all REP Deposit Accounts held by the Indenture
Trustee) to the successor Indenture Trustee.

     

    (d) If a
successor Indenture Trustee does not take office within sixty (60) days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority in Outstanding Amount
of the Transition Bonds may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.

     

    (e) If the
Indenture Trustee fails to comply with Section 6.11,
any Holder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture
Trustee.

     

    (f) Notwithstanding
the replacement of the Indenture Trustee pursuant to this Section 6.08,
the Issuer’s obligations under Section 6.07
shall continue for the benefit of the retiring Indenture Trustee.

     

    SECTION
6.09. Successor Indenture Trustee
by Merger.  If the Indenture Trustee consolidates with, merges
or converts into, or transfers all or substantially all its corporate trust
business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation or banking association without
any further act shall be the successor Indenture Trustee; provided, however,
that if such successor Indenture Trustee is not eligible under Section 6.11,
then the successor Indenture Trustee shall be replaced in accordance with Section 6.08.  Notice
of any such event shall be promptly given to each Rating Agency by the successor
Indenture Trustee and any agent in Ireland appointed pursuant to Section 3.02.

     

    In case
at the time such successor or successors by merger, conversion, consolidation or
transfer shall succeed to the trusts created by this Indenture any of the
Transition Bonds shall have been authenticated but not delivered, any such
successor to the Indenture Trustee may adopt the certificate of authentication
of any predecessor trustee, and deliver such Transition Bonds so authenticated;
and in case at that time any of the Transition Bonds shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Transition Bonds either in the name of any predecessor hereunder or in the name
of the successor to the Indenture Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Transition
Bonds or in this Indenture provided that the certificate of the Indenture
Trustee shall have.

     

    SECTION
6.10. Appointment of Co-Trustee or
Separate Trustee.

     

    (a) Notwithstanding
any other provisions of this Indenture, at any time, for the purpose of meeting
any legal requirement of any jurisdiction in which any part of the trust created
by this Indenture or the Transition Bond Collateral may at the time be located,
the Indenture Trustee shall have the power and may execute and deliver all
instruments to appoint one or more Persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of the
trust created by this Indenture or the Transition Bond Collateral, and to vest
in such Person or Persons, in such capacity and for the benefit of the Secured
Parties, such title to the Transition Bond Collateral, or any part hereof, and,
subject to the other provisions of this Section 6.10,
such powers, duties, obligations, rights and trusts as the Indenture Trustee may
consider necessary or desirable.  No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 6.11 and
no notice to Holders of the appointment of any co-trustee or separate trustee
shall be required under Section 6.08.

     

    (b) Every
separate trustee and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and
conditions:

     

    (i) all rights, powers, duties and
obligations conferred or imposed upon the Indenture Trustee shall be conferred
or imposed upon and exercised or performed by the Indenture Trustee and such
separate trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed the
Indenture Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations (including the
holding of title to the Transition Bond Collateral or any portion thereof in any
such jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Indenture
Trustee;

     

    (ii) no trustee hereunder shall be
personally liable by reason of any act or omission of any other trustee
hereunder; and

     

    (iii) the Indenture Trustee may at any time
accept the resignation of or remove any separate trustee or
co-trustee.

     

    (c) Any
notice, request or other writing given to the Indenture Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them.  Every instrument appointing
any separate trustee or co-trustee shall refer to this Indenture and the
conditions of this Article VI.  Each
separate trustee and co-trustee, upon its acceptance of the trusts conferred,
shall be vested with the estates or property specified in its instrument of
appointment, either jointly with the Indenture Trustee or separately, as may be
provided therein, subject to all the provisions of this Indenture, specifically
including every provision of this Indenture relating to the conduct of,
affecting the liability of, or affording protection to, the Indenture
Trustee.  Every such instrument shall be filed with the Indenture
Trustee.

     

    (d) Any
separate trustee or co-trustee may at any time constitute the Indenture Trustee,
its agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Indenture on
its behalf and in its name.  If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Indenture Trustee, to the extent permitted by law, without the appointment of a
new or successor trustee.

     

    SECTION
6.11. Eligibility;
Disqualification.  The Indenture Trustee shall at all times
satisfy the requirements of TIA § 310(a)(1) and § 310(a)(5) and
Section 26(a)(1) of the Investment Company Act.  The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and it shall have
a long term debt rating of “Baa3” or better by Moody’s “BBB-” or better by
Standard & Poor’s and, if Fitch provides a rating thereon, “BBB-” or
better by Fitch.  The Indenture Trustee shall comply with TIA
§ 310(b), including the optional provision permitted by the second sentence
of TIA § 310(b)(9); provided, however, that there
shall be excluded from the operation of TIA § 310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA § 310(b)(1) are
met.

     

    SECTION
6.12. Preferential Collection of
Claims Against Issuer.  The Indenture Trustee shall comply with
TIA § 311(a), excluding any creditor relationship listed in TIA
§ 311(b).  An Indenture Trustee who has resigned or been removed
shall be subject to TIA § 311(a) to the extent indicated
therein.

     

    SECTION
6.13. Representations and
Warranties of Indenture Trustee.  The Indenture Trustee hereby
represents and warrants that:

     

    (a) the
Indenture Trustee is a banking corporation validly existing and in good standing
under the laws of the State of New York; and

     

    (b) the
Indenture Trustee has full power, authority and legal right to execute, deliver
and perform this Indenture and the Basic Documents to which the Indenture
Trustee is a party and has taken all necessary action to authorize the
execution, delivery, and performance by it of this Indenture and such Basic
Documents.

     

    SECTION
6.14. Annual Report by Independent
Registered Public Accountants.  In the event the firm of
Independent registered public accountants requires the Indenture Trustee to
agree or consent to the procedures performed by such firm pursuant to
Section 3.05 of the Servicing Agreement, the Indenture Trustee shall
deliver such letter of agreement or consent in conclusive reliance upon the
direction of the Issuer in accordance with Section 3.05 of the Servicing
Agreement.  In the event such firm requires the Indenture Trustee to
agree to the procedures performed by such firm, the Issuer shall direct the
Indenture Trustee in writing to so agree; it being understood and agreed that
the Indenture Trustee will deliver such letter of agreement in conclusive
reliance upon the direction of the Issuer, and the Indenture Trustee makes no
independent inquiry or investigation to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures.

     

    SECTION
6.15. Custody of Transition Bond
Collateral.  The Indenture Trustee shall hold such of the
Transition Bond Collateral (and any other collateral that may be granted to the
Indenture Trustee) as consists of instruments, deposit accounts, negotiable
documents, money, goods, letters of credit, and advices of credit in the State
of New York.  The Indenture Trustee shall hold such of the Transition
Bond Collateral as constitute investment property through the Securities
Intermediary (which, as of the date hereof, is The Bank of New York
Mellon).  The initial Securities Intermediary, hereby agrees (and each
future Securities Intermediary shall agree) with the Indenture Trustee that
(a) such investment property shall at all times be credited to a securities
account of the Indenture Trustee, (b) the Securities Intermediary shall
treat the Indenture Trustee as entitled to exercise the rights that comprise
each financial asset credited to such securities account, (c) all property
credited to such securities account shall be treated as a financial asset,
(d) the Securities Intermediary shall comply with entitlement orders
originated by the Indenture Trustee without the further consent of any other
person or entity, (e) the Securities Intermediary will not agree with any
person other than the Indenture Trustee to comply with entitlement orders
originated by such other person, (f) such securities accounts and the
property credited thereto shall not be subject to any Lien, or right of set-off
in favor of the Securities Intermediary or anyone claiming through it (other
than the Indenture Trustee), and (g) such agreement shall be governed by
the internal laws of the State of New York.  Terms used in the
preceding sentence that are defined in the UCC and not otherwise defined herein
shall have the meaning set forth in the UCC.  Except as permitted by
this Section 6.15, or
elsewhere in this Indenture, the Indenture Trustee shall not hold Transition
Bond Collateral through an agent or a nominee.

     

    ARTICLE
VII

     

    HOLDERS’
LISTS AND REPORTS

     

    SECTION
7.01. Issuer To Furnish Indenture
Trustee Names and Addresses of Holders.  The Issuer will
furnish or cause to be furnished to the Indenture Trustee (a) not more than
five (5) days after the earlier of (i) each Record Date and (ii) six
(6) months after the last Record Date, a list, in such form as the
Indenture Trustee may reasonably require, of the names and addresses of the
Bondholders as of such Record Date, (b) at such other times as the
Indenture Trustee may request in writing, within thirty (30) days after
receipt by the Issuer of any such request, a list of similar form and content as
of a date not more than ten (10) days prior to the time such list is
furnished; provided, however, that so long
as the Indenture Trustee is the Transition Bond Registrar, no such list shall be
required to be furnished.

     

    SECTION
7.02. Preservation of Information;
Communications to Holders.

     

    (a) The
Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders contained in the most recent
list furnished to the Indenture Trustee as provided in Section 7.01 and
the names and addresses of Holders received by the Indenture Trustee in its
capacity as Transition Bond Registrar.  The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.01
upon receipt of a new list so furnished.

     

    (b) Holders
may communicate pursuant to TIA § 312(b) with other Holders with respect to
their rights under this Indenture or under the Transition Bonds.  In
addition, upon the written request of any Holder or group of Holders of
Transition Bonds evidencing not less than 10 percent of the Outstanding Amount
of the Transition Bonds, the Indenture Trustee shall afford the Holder or
Holders making such request a copy of a current list of Holders of the
Transition Bonds for purposes of communicating with other Holders with respect
to their rights hereunder.

     

    (c) The
Issuer, the Indenture Trustee and the Transition Bond Registrar shall have the
protection of TIA § 312(c).

     

    SECTION
7.03. Reports by
Issuer.

     

    (a) The
Issuer shall:

     

    (i) so long as the Issuer or the Sponsor is
required to file such documents with the SEC, provide to the Indenture Trustee,
within fifteen (15) days after the Issuer is required to file the same with
the SEC, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC may
from time to time by rules and regulations prescribe) which the Issuer or the
Sponsor may be required to file with the SEC pursuant to Section 13 or
15(d) of the Exchange Act;

     

    (ii) provide to the Indenture Trustee, file
with the SEC, in accordance with rules and regulations prescribed from time to
time by the SEC such additional information, documents and reports with respect
to compliance by the Issuer with the conditions and covenants of this Indenture
as may be required from time to time by such rules and regulations;
and

     

    (iii) supply to the Indenture Trustee (and
the Indenture Trustee shall transmit by mail to all Holders described in TIA
§ 313(c)), such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a)
as may be required by rules and regulations prescribed from time to time by the
SEC.

     

    (b) Unless
the Issuer otherwise determines, the fiscal year of the Issuer shall end on
December 31 of each year.

     

    SECTION
7.04. Reports by Indenture
Trustee.  If required by TIA § 313(a), within sixty
(60) days after December 31 of each year, commencing with the year
after the issuance of the Transition Bonds, the Indenture Trustee shall mail to
each Bondholder as required by TIA § 313(c) a brief report dated as of such
date that complies with TIA § 313(a).  The Indenture Trustee also
shall comply with TIA § 313(b); provided, however, that the
initial report so issued shall be delivered not more than twelve
(12) months after the Closing Date.

     

    A copy of
each report at the time of its mailing to Holders shall be filed by the Servicer
with the SEC and each stock exchange, if any, on which the Transition Bonds are
listed.  The Issuer shall notify the Indenture Trustee in writing if
and when the Transition Bonds are listed on any stock exchange.

     

    ARTICLE
VIII

     

    ACCOUNTS,
DISBURSEMENTS AND RELEASES

     

    SECTION
8.01. Collection of
Money.  Except as otherwise expressly provided herein, the
Indenture Trustee may demand payment or delivery of, and shall receive and
collect, directly and without intervention or assistance of any fiscal agent or
other intermediary, all money and other property payable to or receivable by the
Indenture Trustee pursuant to this Indenture and the other Basic
Documents.  The Indenture Trustee shall apply all such money received
by it as provided in this Indenture.  Except as otherwise expressly
provided in this Indenture, if any default occurs in the making of any payment
or performance under any agreement or instrument that is part of the Transition
Bond Collateral, the Indenture Trustee may take such action as may be
appropriate to enforce such payment or performance, subject to Article VI,
including the institution and prosecution of appropriate
Proceedings.  Any such action shall be without prejudice to any right
to claim a Default or Event of Default under this Indenture and any right to
proceed thereafter as provided in Article V.

     

    SECTION
8.02. Collection Account and REP
Deposit Accounts.

     

    (a) Prior to
the Closing Date, the Issuer shall open or cause to be opened, at the Indenture
Trustee’s office located at the Corporate Trust Office, or at another Eligible
Institution, a segregated trust account in the Indenture Trustee’s name for the
deposit of TC Collections and all other amounts received with respect to the
Transition Bond Collateral (the “Collection
Account”).  The Collection Account will consist of three
subaccounts:  a general subaccount (the “General Subaccount”),
an excess funds subaccount (the “Excess Funds
Subaccount”) and a capital subaccount (the “Capital Subaccount”
and, together with the General Subaccount and the Excess Funds Subaccount, the
“Subaccounts”);
provided that the Series Supplement may provide for the establishment of a cost
of issuance subaccount to provide for the application of Transition Bond
proceeds to the payment of the costs of issuing the Transition
Bonds.  For administrative purposes, the Subaccounts may, but need
not, be established by the Indenture Trustee as separate
accounts.  Such separate accounts will be recognized individually as a
Subaccount and collectively as the “Collection Account.”  Prior to or
concurrently with the issuance of the Transition Bonds, the Member shall deposit
into the Capital Subaccount an amount equal to the Required Capital Level for
the Transition Bonds.  All amounts in the Collection Account not
allocated to any other subaccount shall be allocated to the General
Subaccount.  Prior to the initial Payment Date, all amounts in the
Collection Account (other than funds deposited into the Capital Subaccount, up
to the Required Capital Level for the Transition Bonds) shall be allocated to
the General Subaccount.  All references to the Collection Account
shall be deemed to include reference to all subaccounts contained
therein.  Withdrawals from and deposits to each of the foregoing
subaccounts of the Collection Account shall be made as set forth in Section 8.02(d)
and (e).  The
Collection Account shall at all times be maintained in an Eligible Account, will
be under the sole dominion and exclusive control of the Indenture Trustee, and
only the Indenture Trustee shall have access to the Collection Account for the
purpose of making deposits in and withdrawals from the Collection Account in
accordance with this Indenture.  Funds in the Collection Account shall
not be commingled with any other moneys.  All moneys deposited from
time to time in the Collection Account, all deposits therein pursuant to this
Indenture, and all investments made in Eligible Investments as directed in
writing by the Issuer with such moneys, including all income or other gain from
such investments, shall be held by the Indenture Trustee in the Collection
Account as part of the Transition Bond Collateral as herein
provided.  The Indenture Trustee shall have no liability in respect of
losses incurred as a result of the liquidation of any Eligible Investment prior
to its stated maturity or its date of redemption or the failure of the Issuer or
the Servicer to provide timely written investment direction.

     

    (b) The
Securities Intermediary hereby confirms that (i) the Collection Account is,
or at inception will be established as, a “securities account” as such term is
defined in Section 8-501(a) of the UCC, (ii) it is a “securities
intermediary” (as such term is defined in Section 8-102(a) (14) of the UCC)
and is acting in such capacity with respect to such accounts, and (iii) the
Indenture Trustee for the benefit of the Secured Parties is the sole
“entitlement holder” (as such term is defined in Section 8-102(a)(7) of the
UCC) with respect to such accounts and no other Person shall have the right to
give “entitlement orders” (as such term is defined in Section 8-102(a)(8))
with respect to such accounts.  The Securities Intermediary hereby
further agrees that each item of property (whether investment property,
financial asset, security, instrument or cash) received by it will be credited
to the Collection Account and shall be treated by it as a “financial asset”
within the meaning of Section 8-102(a)(9) of the
UCC.  Notwithstanding anything to the contrary, New York State shall
be deemed to be the location and jurisdiction of the Securities Intermediary for
purposes of Section 8-110 of the UCC, and the Collection Account (as well
as the securities entitlements related thereto) shall be governed by the laws of
the State of New York.

     

    (c) The
Indenture Trustee shall have sole dominion and exclusive control over all moneys
in the Collection Account and shall apply such amounts therein as provided in
this Section 8.02.  The
Indenture Trustee shall also pay from the Collection Account any amounts
requested to be paid by or to the Servicer pursuant to Section 6.11(c)(ii)
of the Servicing Agreement.

     

    (d) TC
Collections shall be deposited in the General Subaccount as provided in Section 6.11 of
the Servicing Agreement.  All deposits to and withdrawals from the
Collection Account, all allocations to the subaccounts of the Collection Account
and any amounts to be paid to the Servicer under Section 8.02(c)
shall be made by the Indenture Trustee in accordance with the written
instructions provided by the Servicer in the Monthly Servicer’s Certificate, the
Semi-Annual Servicer’s Certificate or upon other written notice provided by the
Servicer pursuant to Section 6.11(c)(ii)
of the Servicing Agreement, as applicable.

     

    (e) On each
Payment Date for the Transition Bonds, the Indenture Trustee shall apply all
amounts on deposit in the Collection Account, including all net earnings
thereon, to pay the following amounts, in accordance with the Semi-Annual
Servicer’s Certificate, in the following priority:

     

    (i) all amounts owed by the Issuer to the
Indenture Trustee (including legal fees and expenses) shall be paid to the
Indenture Trustee (subject to Section 6.07) in
an amount not to exceed annually the amount set forth in the Series
Supplement;

     

    (ii) the Servicing Fee for such Payment Date
and all unpaid Servicing Fees for prior Payment Dates shall be paid to the
Servicer;

     

    (iii) the Administration Fee for such Payment
Date shall be paid to the Administrator and the Independent Manager Fee for such
Payment Date shall be paid to the Independent Manager;

     

    (iv) all other Operating Expenses for such
Payment Date not described above shall be paid to the parties to which such
Operating Expenses are owed;

     

    (v) Periodic Interest for such Payment
Date, including any overdue Periodic Interest (together with, to the extent
lawful, interest on such overdue Periodic Interest at the applicable Transition
Bond Interest Rate), with respect to the Transition Bonds shall be paid to the
Holders of the Transition Bonds;

     

    (vi) principal due and payable on the
Transition Bonds as a result of an Event of Default or on the Final Maturity
Date of the Transition Bonds shall be paid to the Holders of the Transition
Bonds;

     

    (vii) Periodic Principal for such Payment
Date, including any overdue Periodic Principal, with respect to the Transition
Bonds shall be paid to the Holders of the Transition Bonds in the order provided
in the Series Supplement;

     

    (viii) any other unpaid Operating Expenses,
fees, expenses and indemnity amounts owed to the Indenture Trustee;

     

    (ix) the amount, if any, by which the
Required Capital Level with respect to the Transition Bonds exceeds the amount
in the Capital Subaccount as of such Payment Date shall be allocated to the
Capital Subaccount;

     

    (x) if there is a positive balance after
making the foregoing allocations, provided that no Event of Default has occurred
or is continuing, an amount not to exceed the lesser of such balance and the
investment earnings on the Capital Subaccount shall be paid to the
Issuer;

     

    (xi) the balance, if any, shall be allocated
to the Excess Funds Subaccount for distribution on subsequent Payment Dates;
and

     

    (xii) after principal of and premium, if any,
and interest on all Transition Bonds, and all of the other foregoing amounts,
have been paid in full, including, without limitation, amounts due and payable
to the Indenture Trustee under Section 6.07 or
otherwise, the balance (including all amounts then held in the Capital
Subaccount and the Excess Funds Subaccount), if any, shall be paid to the
Issuer, free from the Lien of this Indenture and the Series
Supplement.

     

    All
payments to the Holders pursuant to clauses (v),
(vi) and (vii) above shall be
made to such Holders pro rata based on the respective amounts of interest
and/or principal owed, unless, in the case of Transition Bonds comprised of two
or more Tranches, the Series Supplement provides otherwise.  Payments
in respect of principal of and premium, if any, and interest on any Tranche of
Transition Bonds will be made on a pro rata basis among all the Holders of
such Tranche.  In the case of an Event of Default, then, in accordance
with Section
5.04(c), moneys will be applied pursuant to clauses (v) and (vi), in such order,
on a pro rata basis, based upon the interest or the principal owed.

     

    The
amounts paid during any calendar year pursuant to clauses (i) and
(iv) may
not exceed the amounts set forth in the Series Supplement.

     

    (f) If on any
Payment Date funds on deposit in the General Subaccount are insufficient to make
the payments contemplated by clauses
(i) through (viii) of Section 8.02(e),
the Indenture Trustee shall (i) first, draw from
amounts on deposit in the Excess Funds Subaccount and (ii) second, draw from
amounts on deposit in the Capital Subaccount, in each case, up to the amount of
such shortfall in order to make the payments contemplated by clauses (i)
through (viii)
of Section 8.02(e).  In
addition, if on any Payment Date funds on deposit in the General Subaccount are
insufficient to make the allocations contemplated by clause (ix)
above, the Indenture Trustee shall draw from amounts on deposit in the Excess
Funds Subaccount to make such allocations.

     

    (g) The
Indenture Trustee, shall, if in the future directed by the Servicer under Section 3.05(e)
of the Servicing Agreement, maintain one or more segregated accounts in the
Indenture Trustee’s name (the “REP Deposit
Accounts”) at its office located at the Corporate Trust Office, or at
another Eligible Institution, for REP deposits provided pursuant to the
Financing Order or any Tariff, each such account for the benefit of the
Indenture Trustee.  Pursuant to and in accordance with the Financing
Order, amounts received from any REP as a security deposit shall be deposited
into the applicable REP Deposit Account.  To the extent permitted by
the Financing Order, any Tariff and PUCT Regulations, the REP Deposit Accounts
shall at all times be maintained in Eligible Accounts, shall be subject to a
perfected first priority security interest in favor of the Indenture Trustee for
the benefit of the Secured Parties, and shall be under the sole dominion and
exclusive control of the Indenture Trustee.  Funds in the REP Deposit
Accounts shall not be commingled with any other moneys.  All or a
portion of the funds in the REP Deposit Accounts shall be invested in Eligible
Investments and reinvested by the Indenture Trustee in Eligible Investments
pursuant to the written direction of the Servicer (or, absent such direction, in
accordance with Section 8.03(c));
provided, however, that
(i) such Eligible Investments shall not mature or be redeemed later than
the Business Day prior to the next Payment Date for the Transition Bonds and
(ii) such Eligible Investments shall not be sold, liquidated or otherwise
disposed of at a loss prior to the maturity or the date of redemption
thereof.  All moneys deposited from time to time in the REP Deposit
Accounts and all investments made in Eligible Investments with such moneys,
including all income or other gain from such investments, shall be held by the
Indenture Trustee in a REP Deposit Account as part of the Transition Bond
Collateral as herein provided and shall only be allocated and released upon the
direction of the Servicer in accordance with Section 3.05(e)
of the Servicing Agreement as required or permitted by this Indenture, the
Financing Order, any Tariff, or other applicable PUCT
Regulations.  Any loss resulting from investment made in Eligible
Investments with moneys in a REP Deposit Account shall be charged to such REP
Deposit Account.  The Indenture Trustee shall release property from a
REP Deposit Account only as and to the extent directed by the Servicer pursuant
to the Financing Order and the Servicing Agreement and as required or permitted
by this Indenture.  The Indenture Trustee shall have no liability in
respect of losses incurred as a result of the liquidation of any Eligible
Investment prior to its stated maturity or its date of redemption or the failure
of the Issuer or the Servicer to provide timely written investment
direction.

     

    SECTION
8.03. General Provisions Regarding
the Collection Accounts.

     

    (a) So long
as no Default or Event of Default shall have occurred and be continuing, all or
a portion of the funds in the Collection Account shall be invested in Eligible
Investments and reinvested by the Indenture Trustee upon Issuer Order; provided, however, that
(i) such Eligible Investments shall not mature or be redeemed later than
the Business Day prior to the next Payment Date or Special Payment Date, if
applicable, for the Transition Bonds and (ii) such Eligible Investments
shall not be sold, liquidated or otherwise disposed of at a loss prior to the
maturity or the date of redemption thereof.  All income or other gain
from investments of moneys deposited in the Collection Account shall be
deposited by the Indenture Trustee in the Collection Account, and any loss
resulting from such investments shall be charged to the Collection
Account.  The Issuer will not direct the Indenture Trustee to make any
investment of any funds or to sell any investment held in the Collection Account
unless the security interest Granted and perfected in such account will continue
to be perfected in such investment or the proceeds of such sale, in either case
without any further action by any Person, and, in connection with any direction
to the Indenture Trustee to make any such investment or sale, if requested by
the Indenture Trustee, the Issuer shall deliver to the Indenture Trustee an
Opinion of Counsel of Independent counsel of the Issuer (at the Issuer’s cost
and expense) to such effect.  In no event shall the Indenture Trustee
be liable for the selection of Eligible Investments or for investment losses
incurred thereon.  The Indenture Trustee shall have no liability in
respect of losses incurred as a result of the liquidation of any Eligible
Investment prior to its stated maturity or its date of redemption or the failure
of the Issuer or the Servicer to provide timely written investment
direction.  The Indenture Trustee shall have no obligation to invest
or reinvest any amounts held hereunder in the absence of written investment
direction pursuant to an Issuer Order.

     

    (b) Subject
to Section 6.01(c),
the Indenture Trustee shall not in any way be held liable by reason of any
insufficiency in the Collection Account resulting from any loss on any Eligible
Investment included therein except for losses attributable to the Indenture
Trustee’s failure to make payments on such Eligible Investments issued by the
Indenture Trustee, in its commercial capacity as principal obligor and not as
trustee, in accordance with their terms.

     

    (c) If
(i) the Issuer shall have failed to give written investment directions for
any funds on deposit in the Collection Account to the Indenture Trustee by
11:00 a.m. Eastern Time (or such other time as may be agreed by the Issuer
and Indenture Trustee) on any Business Day; or (ii) a Default or Event of
Default shall have occurred and be continuing with respect to the Transition
Bonds but the Transition Bonds shall not have been declared due and payable
pursuant to Section 5.02,
then the Indenture Trustee shall, to the fullest extent practicable, invest and
reinvest funds in the Collection Account in one or more money market funds
described under clause (d) of
the definition of “Eligible Investments” pursuant to the most recent written
investment directions delivered by the Issuer to the Indenture Trustee with
respect to such type of Eligible Investments; provided that if the
Issuer has never delivered written investment directions to the Indenture
Trustee, the Indenture Trustee shall not invest or reinvest such funds in any
investments.

     

    (d) The
parties hereto acknowledge that the Servicer may, pursuant to the Servicing
Agreement, select Eligible Investments on behalf of the Issuer.

     

    SECTION
8.04. Release of Transition Bond
Collateral.

     

    (a) So long
as the Issuer is not in default hereunder and no Default hereunder would occur
as a result of such action, the Issuer, through the Servicer, may collect, sell
or otherwise dispose of written-off receivables, at any time and from time to
time in the ordinary course of business, without any notice to, or release or
consent by, the Indenture Trustee, but only as and to the extent permitted by
the Basic Documents; provided, however, that any and
all proceeds of such dispositions shall become Transition Bond Collateral and be
deposited to the General Subaccount immediately upon receipt thereof by the
Issuer or any other Person, including the Servicer.  Without limiting
the foregoing, the Servicer, may, at any time and from time to time without any
notice to, or release or consent by, the Indenture Trustee, sell or otherwise
dispose of any Transition Bond Collateral which is part of a Bill previously
written-off as a defaulted or uncollectible account in accordance with the terms
of the Servicing Agreement and the requirements of the proviso in the
immediately preceding sentence.

     

    (b) The
Indenture Trustee may, and when required by the provisions of this Indenture
shall, execute instruments to release property from the Lien of this Indenture,
or convey the Indenture Trustee’s interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this
Indenture.  No party relying upon an instrument executed by the
Indenture Trustee as provided in this Article VIII
shall be bound to ascertain the Indenture Trustee’s authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
moneys.  The Indenture Trustee shall release property from the Lien of
this Indenture pursuant to this Section 8.04(b)
only upon receipt of an Issuer Request accompanied by an Officer’s Certificate,
an Opinion of Counsel of Independent counsel of the Issuer (at the Issuer’s cost
and expense) and (if required by the TIA) Independent Certificates in accordance
with TIA §§ 314(c) and 314(d)(1) meeting the applicable requirements of
Section 10.01.

     

    (c) The
Indenture Trustee shall, at such time as there are no Transition Bonds
Outstanding and all sums payable to the Indenture Trustee pursuant to Section 6.07 or
otherwise have been paid, release any remaining portion of the Transition Bond
Collateral that secured the Transition Bonds from the Lien of this Indenture,
release to the Issuer or any other Person entitled thereto any funds or
investments then on deposit in or credit to the Collection Account and, subject
to the instructions of the Servicer, shall release the REP Deposit Accounts in
accordance with Section 8.02.

     

    SECTION
8.05. Opinion of
Counsel.  The Indenture Trustee shall receive at least seven
(7) days’ notice when requested by the Issuer to take any action pursuant
to Section 8.04,
accompanied by copies of any instruments involved, and the Indenture Trustee
shall also require, as a condition to such action, an Opinion of Counsel of
Independent counsel of the Issuer, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with and such action
will not materially and adversely impair the security for the Transition Bonds
or the rights of the Holders in contravention of the provisions of this
Indenture and the Series Supplement; provided, however, that such
Opinion of Counsel shall not be required to express an opinion as to the fair
value of the Transition Bond Collateral.  Counsel rendering any such
opinion may rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the Indenture
Trustee in connection with any such action.

     

    SECTION
8.06. Reports by Independent
Registered Public Accountants.  As of the Closing Date, the
Issuer shall appoint a firm of Independent registered public accountants of
recognized national reputation for purposes of preparing and delivering the
reports or certificates of such accountants required by this Indenture and the
Series Supplement.  In the event such firm requires the Indenture
Trustee to agree to the procedures performed by such firm, the Issuer shall
direct the Indenture Trustee in writing to so agree; it being understood and
agreed that the Indenture Trustee will deliver such letter of agreement in
conclusive reliance upon the direction of the Issuer, and the Indenture Trustee
makes no independent inquiry or investigation to, and shall have no obligation
or liability in respect of, the sufficiency, validity or correctness of such
procedures.  Upon any resignation by, or termination by the Issuer of,
such firm the Issuer shall provide written notice thereof to the Indenture
Trustee and shall promptly appoint a successor thereto that shall also be a firm
of Independent registered public accountants of recognized national
reputation.  If the Issuer shall fail to appoint a successor to a firm
of Independent registered public accountants that has resigned or been
terminated within fifteen (15) days after such resignation or termination,
the Indenture Trustee shall promptly notify the Issuer of such failure in
writing.  If the Issuer shall not have appointed a successor within
ten (10) days thereafter the Indenture Trustee shall promptly appoint a
successor firm of Independent registered public accountants of recognized
national reputation; provided that the
Indenture Trustee shall have no liability with respect to such
appointment.  The fees of such Independent registered public
accountants and its successor shall be payable by the Issuer.

     

    ARTICLE
IX

     

    Supplemental
Indentures

     

    SECTION
9.01. Supplemental Indentures
Without Consent of Holders.

     

    (a) Without
the consent of the Holders of any Transition Bonds but with prior notice to the
Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Order, and, if the contemplated amendment may in the judgment of the PUCT
increase ongoing Qualified Costs, with the consent of the PUCT pursuant to Section 9.03
(which consent shall not be required with regard to the Series Supplement), at
any time and from time to time, may enter into one or more indentures
supplemental hereto (which shall conform to the provisions of the TIA as in
force at the date of the execution thereof), in form satisfactory to the
Indenture Trustee, for any of the following purposes:

     

    (i) to correct or amplify the description
of any property, including, without limitation, the Transition Bond Collateral,
at any time subject to the Lien of this Indenture, or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required to be
subjected to the Lien of this Indenture and the Series Supplement;

     

    (ii) to evidence the succession, in
compliance with the applicable provisions hereof, of another person to the
Issuer, and the assumption by any such successor of the covenants of the Issuer
herein and in the Transition Bonds;

     

    (iii) to add to the covenants of the Issuer,
for the benefit of the Secured Parties, or to surrender any right or power
herein conferred upon the Issuer;

     

    (iv) to convey, transfer, assign, mortgage
or pledge any property to or with the Indenture Trustee;

     

    (v) to cure any ambiguity, to correct or
supplement any provision herein or in any supplemental indenture, including the
Series Supplement, which may be inconsistent with any other provision herein or
in any supplemental indenture, including the Series Supplement, or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided that
(i) such action shall not, as evidenced by an Opinion of Counsel of
Independent counsel of the Issuer, adversely affect in any material respect the
interests of the Holders of the Transition Bonds and (ii) the Rating Agency
Condition shall have been satisfied with respect thereto;

     

    (vi) to evidence and provide for the
acceptance of the appointment hereunder by a successor trustee with respect to
the Transition Bonds and to add to or change any of the provisions of this
Indenture as shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of Article VI;

     

    (vii) to modify, eliminate or add to the
provisions of this Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar or successor
federal statute hereafter enacted and to add to this Indenture such other
provisions as may be expressly required by the TIA;

     

    (viii) to set forth the terms of any Tranche
that has not theretofore been authorized by the Series Supplement;

     

    (ix) to qualify the Transition Bonds for
registration with a Clearing Agency; or

     

    (x) to satisfy any Rating Agency
requirements.

     

    The
Indenture Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.

     

    (b) The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also
without the consent of any of the Holders of the Transition Bonds, with the
consent of the PUCT pursuant to Section 9.03,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Transition Bonds under this Indenture; provided, however, that
(i) such action shall not, as evidenced by an Opinion of Counsel of
nationally recognized counsel of the Issuer experienced in structured finance
transactions, adversely affect in any material respect the interests of the
Holders and (ii) the Rating Agency Condition shall have been satisfied with
respect thereto.

     

    SECTION
9.02. Supplemental Indentures with
Consent of Holders.  The Issuer and the Indenture Trustee, when
authorized by an Issuer Order, also may, with the consent of the PUCT pursuant
to Section 9.03,
with prior notice to the Rating Agencies and with the consent of the Holders of
not less than a majority of the Outstanding Amount of the Transition Bonds of
each Tranche to be affected, by Act of such Holders delivered to the Issuer and
the Indenture Trustee, enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Transition Bonds under this Indenture;
provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Transition Bond of each Tranche affected thereby:

     

    (i) change the date of payment of any
installment of principal of or premium, if any, or interest on any Transition
Bond of such Tranche, or reduce the principal amount thereof, the interest rate
thereon or premium, if any, with respect thereto, change the provisions of this
Indenture and the Series Supplement relating to the application of collections
on, or the proceeds of the sale of, the Transition Bond Collateral to payment of
principal of or premium, if any, or interest on the Transition Bonds, or change
any place of payment where, or the coin or currency in which, any Transition
Bond or the interest thereon is payable, or impair the right to institute suit
for the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to
the payment of any such amount due on the Transition Bonds on or after the
respective due dates thereof;

     

    (ii) reduce the percentage of the
Outstanding Amount of the Transition Bonds or of a Tranche thereof, the consent
of the Holders of which is required for any such supplemental indenture, or the
consent of the Holders of which is required for any waiver of compliance with
certain provisions of this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture;

     

    (iii) reduce the percentage of the
Outstanding Amount of the Transition Bonds required to direct the Indenture
Trustee to direct the Issuer to sell or liquidate the Transition Bond Collateral
pursuant to Section 5.04;

     

    (iv) modify any provision of this Section 9.02
except to increase any percentage specified herein or to provide that those
provisions of this Indenture referenced in this Section 9.02
cannot be modified or waived without the consent of the Holder of each
Outstanding Transition Bond affected thereby;

     

    (v) modify any of the provisions of this
Indenture in such manner as to affect the calculation of the amount of any
payment of interest, principal or premium, if any, due on any Transition Bond on
any Payment Date (including the calculation of any of the individual components
of such calculation) or change the Expected Amortization Schedules or Final
Maturity Dates of any Tranche of Transition Bonds;

     

    (vi) decrease the Required Capital
Level;

     

    (vii) permit the creation of any Lien ranking
prior to or on a parity with the Lien of this Indenture with respect to any part
of the Transition Bond Collateral or, except as otherwise permitted or
contemplated herein, terminate the Lien of this Indenture on any property at any
time subject hereto or deprive the Holder of any Transition Bond of the security
provided by the Lien of this Indenture; or

     

    (viii) cause any material adverse federal
income tax consequence to the Seller, the Issuer, the Managers, the Indenture
Trustee or the then existing Holders.

     

    It shall
not be necessary for any Act of Holders under this Section 9.02 to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.

     

    Promptly
after the execution by the Issuer and the Indenture Trustee of any supplemental
indenture pursuant to this Section 9.02,
the Issuer shall mail to the Rating Agencies and the Holders of the Transition
Bonds to which such supplemental indenture relates a notice setting forth in
general terms the substance of such supplemental indenture.  Any
failure of the Issuer to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.

     

    SECTION
9.03. PUCT
Condition.  Notwithstanding anything to the contrary in Section 9.01 or
9.02, no
supplemental indenture (other than the Series Supplement) shall be effective
unless the process set forth in this Section 9.03 has
been followed.

     

    (a) At least
thirty-one (31) days prior to the effectiveness of any such supplemental
indenture and after obtaining the other necessary approvals set forth in Section 9.01 or
9.02, as
applicable, except for the consent of the Indenture Trustee and the Holders if
the consent of the Holders is required or sought by the Indenture Trustee in
connection with such supplemental indenture, the Issuer shall have delivered to
the PUCT’s executive director and general counsel written notification of any
proposed supplemental indenture, which notification shall contain:

     

    (i) a reference to Docket
No. 37247;

     

    (ii) an Officer’s Certificate stating that
the proposed supplemental indenture has been approved by all parties to this
Indenture; and

     

    (iii) a statement identifying the person to
whom the PUCT or its staff is to address any response to the proposed
supplemental indenture or to request additional time.

     

    (b) The PUCT
or its staff shall, within thirty (30) days of receiving the notification
complying with Section 9.03(a)
above, either:

     

    (i)            provide
notice of its determination that the proposed supplemental indenture will not
under any circumstances have the effect of increasing the ongoing Qualified
Costs related to the Transition Bonds,

     

    (ii) provide notice of its consent or lack
of consent to the person specified in Section 9.03(a)(iii)
above, or

     

    (iii) be conclusively deemed to have
consented to the proposed supplemental indenture,

     

    unless,
within thirty (30) days of receiving the notification complying with Section 9.03(a)
above, the PUCT or its staff delivers to the office of the person specified in
Section 9.03(a)(iii)
above a written statement requesting an additional amount of time not to exceed
thirty (30) days in which to consider whether to consent to the proposed
supplemental indenture.  If the PUCT or its staff requests an
extension of time in the manner set forth in the preceding sentence, then the
PUCT shall either provide notice of its consent or lack of consent or notice of
its determination that the proposed supplemental indenture will not under any
circumstances increase ongoing Qualified Costs to the person specified in Section 9.03(a)(iii)
above no later than the last day of such extension of time or be conclusively
deemed to have consented to the proposed supplemental indenture on the last day
of such extension of time.  Any supplemental indenture requiring the
consent of the PUCT shall become effective on the later of (i) the date proposed
by the parties to such supplemental indenture and (ii) the first day after
the expiration of the thirty (30)-day period provided for in this Section 9.03(b),
or, if such period has been extended pursuant hereto, the first day after the
expiration of such period as so extended.

     

    (c) Following
the delivery of a notice to the PUCT by the Issuer under Section 9.03(a)
above, the Issuer shall have the right at any time to withdraw from the PUCT
further consideration of any notification of a proposed supplemental
indenture.  Such withdrawal shall be evidenced by the prompt written
notice thereof by the Issuer to the PUCT, the Indenture Trustee and the
Servicer.

     

    SECTION
9.04. Execution of Supplemental
Indentures.  In executing any supplemental indenture permitted
by this Article IX or
the modifications thereby of the trust created by this Indenture, the Indenture
Trustee shall be entitled to receive, and subject to Sections 6.01
and 6.02, shall
be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture.  The Indenture Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the Indenture Trustee’s
own rights, duties, liabilities or immunities under this Indenture or
otherwise.

     

    SECTION
9.05. Effect of Supplemental
Indenture.  Upon the execution of any supplemental indenture
pursuant to the provisions hereof, this Indenture shall be and be deemed to be
modified and amended in accordance therewith with respect to each Tranche of
Transition Bonds affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Holders shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.

     

    SECTION
9.06. Conformity with Trust
Indenture Act.  Every amendment of this Indenture and every
supplemental indenture executed pursuant to this Article IX shall
conform to the requirements of the TIA as then in effect so long as this
Indenture shall then be qualified under the TIA.

     

    SECTION
9.07. Reference in Transition
Bonds to Supplemental Indentures.  Transition Bonds
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may,
and if required by the Indenture Trustee shall, bear a notation in form approved
by the Indenture Trustee as to any matter provided for in such supplemental
indenture.  If the Issuer or the Indenture Trustee shall so determine,
new Transition Bonds so modified as to conform, in the opinion of the Indenture
Trustee and the Issuer, to any such supplemental indenture may be prepared and
executed by the Issuer and authenticated and delivered by the Indenture Trustee
in exchange for Outstanding Transition Bonds.

     

    ARTICLE
X

     

    Miscellaneous

     

    SECTION
10.01. Compliance Certificates and
Opinions, etc.

     

    (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer’s Certificate stating that all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have been
complied with, (ii) an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent, if any, have been complied with and
(iii) (if required by the TIA) an Independent Certificate from a firm of
registered public accountants meeting the applicable requirements of this Section 10.01,
except that, in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture, no additional certificate or opinion need be furnished.

     

    Every
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:

     

    (i) a statement that each signatory of such
certificate or opinion has read or has caused to be read such covenant or
condition and the definitions herein relating thereto;

     

    (ii) a brief statement as to the nature and
scope of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;

     

    (iii) a statement that, in the opinion of
each such signatory, such signatory has made such examination or investigation
as is necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with;
and

     

    (iv) a statement as to whether, in the
opinion of each such signatory, such condition or covenant has been complied
with.

     

    (b) (i)  Prior
to the deposit of any Transition Bond Collateral or other property or securities
with the Indenture Trustee that is to be made the basis for the release of any
property or securities subject to the Lien of this Indenture, the Issuer shall,
in addition to any obligation imposed in Section 10.01(a)
or elsewhere in this Indenture, furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within ninety (90) days of such deposit)
to the Issuer of the Transition Bond Collateral or other property or securities
to be so deposited.

     

    (ii) Whenever the Issuer is required to
furnish to the Indenture Trustee an Officer’s Certificate certifying or stating
the opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to the Issuer of the
securities to be so deposited and of all other such securities made the basis of
any such withdrawal or release since the commencement of the then-current fiscal
year of the Issuer, as set forth in the certificates delivered pursuant to clause (i) above
and this clause (ii), is
ten percent or more of the Outstanding Amount of the Transition Bonds, but such
a certificate need not be furnished with respect to any securities so deposited,
if the fair value thereof to the Issuer as set forth in the related Officer’s
Certificate is less than the lesser of (A) $25,000 or (B) one percent of
the Outstanding Amount of the Transition Bonds.

     

    (iii) Whenever any property or securities are
to be released from the Lien of this Indenture other than pursuant to Section 8.02(e),
the Issuer shall also furnish to the Indenture Trustee an Officer’s Certificate
certifying or stating the opinion of each person signing such certificate as to
the fair value (within ninety (90) days of such release) of the property or
securities proposed to be released and stating that in the opinion of such
person the proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.

     

    (iv) Whenever the Issuer is required to
furnish to the Indenture Trustee an Officer’s Certificate certifying or stating
the opinion of any signatory thereof as to the matters described in clause (iii)
above, the Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property with respect to the Transition Bonds, or
securities released from the Lien of this Indenture (other than pursuant to
Section 8.02(e))
since the commencement of the then-current calendar year, as set forth in the
certificates required by clause (iii)
above and this clause (iv),
equals 10 percent or more of the Outstanding Amount of the Transition Bonds, but
such certificate need not be furnished in the case of any release of property or
securities if the fair value thereof as set forth in the related Officer’s
Certificate is less than the lesser of (A) $25,000 or (B) one percent of
the then Outstanding Amount of the Transition Bonds.

     

    (v) Notwithstanding Section 2.16 or
any other provision of this Section 10.01,
the Indenture Trustee may (A) collect, liquidate, sell or otherwise dispose
of the Transition Property and the other Transition Bond Collateral as and to
the extent permitted or required by the Basic Documents and (B) make cash
payments out of each Collection Account as and to the extent permitted or
required by the Basic Documents.

     

    SECTION
10.02. Form of Documents Delivered
to Indenture Trustee.  In any case where several matters are
required to be certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or covered by the
opinion of, only one such Person, or that they be so certified or covered by
only one document, but one such Person may certify or give an opinion with
respect to some matters and one or more other such Persons as to other matters,
and any such Person may certify or give an opinion as to such matters in one or
several documents.

     

    Any
certificate or opinion of a Responsible Officer of the Issuer may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his or her certificate or opinion is
based are erroneous.  Any such certificate of a Responsible Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer or the Issuer stating that the information with respect to such
factual matters is in the possession of the Servicer or the Issuer, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.

     

    Whenever
in this Indenture, in connection with any application or certificate or report
to the Indenture Trustee, it is provided that the Issuer shall deliver any
document as a condition of the granting of such application, or as evidence of
the Issuer’s compliance with any term hereof, it is intended that the truth and
accuracy, at the time of the granting of such application or at the effective
date of such certificate or report (as the case may be), of the facts and
opinions stated in such document shall in such case be conditions precedent to
the right of the Issuer to have such application granted or to the sufficiency
of such certificate or report.  The foregoing shall not, however, be
construed to affect the Indenture Trustee’s right to rely conclusively upon the
truth and accuracy of any statement or opinion contained in any such document as
provided in Article VI.

     

    Where any
Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this
Indenture, they may, but need not, be consolidated and form one
instrument.

     

    SECTION
10.03. Acts of
Holders.

     

    (a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agents duly appointed in writing;
and except as herein otherwise expressly provided such action shall become
effective when such instrument or instruments are delivered to the Indenture
Trustee, and, where it is hereby expressly required, to the
Issuer.  Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders
signing such instrument or instruments.  Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01)
conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section 10.03.

     

    (b) The fact
and date of the execution by any Person of any such instrument or writing may be
proved in any manner that the Indenture Trustee deems sufficient.

     

    (c) The
ownership of Transition Bonds shall be proved by the Transition Bond
Register.

     

    (d) Any
request, demand, authorization, direction, notice, consent, waiver or other
action by the Holder of any Transition Bonds shall bind the Holder of every
Transition Bond issued upon the registration thereof or in exchange therefor or
in lieu thereof, in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Issuer in reliance thereon, whether or not notation
of such action is made upon such Transition Bond.

     

    SECTION
10.04. Notices, etc., to Indenture
Trustee, Issuer and Rating Agencies.

     

    (a) Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other documents provided or permitted by this Indenture to be made
upon, given or furnished to or filed with:

     

    (i) the Indenture Trustee by any Holder or
by the Issuer shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing by facsimile transmission, first-class mail or
overnight delivery service to or with the Indenture Trustee at the Corporate
Trust Office,

     

    (ii) the Issuer by the Indenture Trustee or
by any Holder shall be sufficient for every purpose hereunder if in writing and
mailed, first-class, postage prepaid, to the Issuer addressed
to:  Entergy Texas Restoration Funding, LLC at Capital Center,
919 Congress Avenue, Suite 840-C, Austin, Texas 78701,
Attention:  Manager, Telephone:  (512) 487-3982,
Facsimile:  (512) 487-3958, or at any other address previously
furnished in writing to the Indenture Trustee by the Issuer.  The
Issuer shall promptly transmit any notice received by it from the Holders to the
Indenture Trustee, or

     

    (iii) the PUCT by the Seller, the Issuer or
the Indenture Trustee shall be sufficient for every purpose hereunder if in
writing and mailed, first-class, postage prepaid, to the PUCT addressed
to:  to 1701 N. Congress Avenue, P.O. Box 13326, Austin, Texas
78711-3326, Attention of Executive Director, telephone: (512) 936-7040,
facsimile:  (512) 936-7036 and General Counsel, telephone: (512)
936-7261, Facsimile: (512) 936-7268.

     

    (b) Notices
required to be given to the Rating Agencies by the Issuer or the Indenture
Trustee shall be in writing, facsimile, personally delivered or mailed by
certified mail, or email in the case of Standard & Poor’s, return receipt
requested to:

     

    (i) in the case of Moody’s,
to:  Moody’s Investors Service, Inc., ABS Monitoring Department,
7 World Trade Center at 250 Greenwich Street, New York, New York 10007,
Telephone:  (212) 553-3686, Facsimile
(212) 553-0573,

     

    (ii) in the case of Standard &
Poor’s, to:  Standard & Poor’s Ratings Services, a Standard
& Poor’s Financial Services LLC business, 55 Water Street, 41st Floor, New
York, New York 10041, Attention:  Structured Credit Surveillance
Group, 41st Floor, Telephone:  (212) 438-2000,
Facsimile:  (212) 438-2665; monthly reports should be sent to
servicerreports@sandp.com,

     

    (iii) in the case of Fitch, to Fitch Ratings,
One State Street Plaza, New York, New York 10004, Attention:  ABS
Surveillance, Telephone:  (212) 908-0500,
Facsimile:  (212) 908-0355, and

     

    (iv) as to each of the foregoing, at such
other address as shall be designated by written notice to the other
parties.

     

    SECTION
10.05. Notices to Holders;
Waiver.  Where this Indenture provides for notice to Holders of
any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class, postage prepaid to
each Holder affected by such event, at such Holder’s address as it appears on
the Transition Bond Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice.  In
any case where notice to Holders is given by mail, neither the failure to mail
such notice nor any defect in any notice so mailed to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders, and
any notice that is mailed in the manner herein provided shall conclusively be
presumed to have been duly given.

     

    Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by any Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such
notice.  Waivers of notice by Holders shall be filed with the
Indenture Trustee but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such a waiver.

     

    In case,
by reason of the suspension of regular mail service as a result of a strike,
work stoppage or similar activity, it shall be impractical to mail notice of any
event of Holders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving
of such notice.

     

    Where
this Indenture provides for notice to the Rating Agencies, failure to give such
notice shall not affect any other rights or obligations created hereunder, and
shall not under any circumstance constitute a Default or Event of
Default.

     

    SECTION
10.06. [Intentionally
Omitted.]

     

    SECTION
10.07. Conflict with Trust
Indenture Act.  If any provision hereof limits, qualifies or
conflicts with another provision hereof that is required to be included in this
Indenture by any of the provisions of the TIA, such required provision shall
control.

     

    The
provisions of TIA §§ 310 through 317 that impose duties on any person
(including the provisions automatically deemed included herein unless expressly
excluded by this Indenture) are a part of and govern this Indenture, whether or
not physically contained herein.

     

    SECTION
10.08. Effect of Headings and Table
of Contents.  The Article and Section headings herein and the
Table of Contents are for convenience only and shall not affect the construction
hereof.

     

    SECTION
10.09. Successors and
Assigns.  All covenants and agreements in this Indenture and
the Transition Bonds by the Issuer shall bind its successors and assigns,
whether so expressed or not.  All agreements of the Indenture Trustee
in this Indenture shall bind its successors.

     

    SECTION
10.10. Severability.  Any
provision in this Indenture or in the Transition Bonds that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remainder of such provision (if any) or the remaining provisions hereof (unless
such construction shall be unreasonable), and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     

    SECTION
10.11. Benefits of
Indenture.  Nothing in this Indenture or in the Transition
Bonds, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Holders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Transition Bond Collateral, any benefit or any legal or equitable right,
remedy or claim under this Indenture.

     

    SECTION
10.12. Legal
Holidays.  In any case where the date on which any payment is
due shall not be a Business Day, then (notwithstanding any other provision of
the Transition Bonds or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.

     

    SECTION
10.13. GOVERNING
LAW.  THIS INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW AND SECTIONS 9-301 THROUGH 9-306 OF THE NY UCC), AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS; PROVIDED THAT THE
CREATION, ATTACHMENT AND PERFECTION OF ANY LIENS CREATED HEREUNDER IN TRANSITION
PROPERTY, AND ALL RIGHTS AND REMEDIES OF THE INDENTURE TRUSTEE AND THE HOLDERS
WITH RESPECT TO SUCH TRANSITION PROPERTY, SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF TEXAS.

     

    SECTION
10.14. Counterparts.  This
Indenture may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.

     

    SECTION
10.15. Recording of
Indenture.  If this Indenture is subject to recording in any
appropriate public recording offices, such recording is to be effected by the
Issuer and at its expense accompanied by an Opinion of Counsel at the Issuer’s
cost and expense (which may be counsel to the Indenture Trustee or any other
counsel reasonably acceptable to the Indenture Trustee or, if requested by the
Indenture Trustee, Independent counsel of the Issuer) to the effect that such
recording is necessary either for the protection of the Holders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.

     

    SECTION
10.16. Issuer
Obligation.  No recourse may be taken, directly or indirectly,
with respect to the obligations of the Issuer or the Indenture Trustee on the
Transition Bonds or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Indenture
Trustee or the Managers in their respective individual capacities, (ii) any
owner of a membership interest in the Issuer (including ETI) or (iii) any
shareholder, partner, owner, beneficiary, agent, officer, or employee of the
Indenture Trustee, the Managers or any owner of a membership interest in the
Issuer (including ETI) in its respective individual capacity, or of any
successor or assign of any of them in their respective individual or corporate
capacities, except as any such Person may have expressly agreed in writing (it
being understood that none of the Indenture Trustee, the Managers or ETI has any
such obligations in their respective individual or corporate
capacities).

     

    SECTION
10.17. No Recourse to
Issuer.  Notwithstanding any provision of this Indenture or the
Series Supplement to the contrary, Holders shall have no recourse against the
Issuer, but shall look only to the Transition Bond Collateral with respect to
any amounts due to the Holders hereunder and under the Transition
Bonds.

     

    SECTION
10.18. Basic
Documents.  The Indenture Trustee is hereby authorized to
execute and deliver the Servicing Agreement and to execute and deliver any other
Basic Document which it is requested to acknowledge.

     

    SECTION
10.19. No
Petition.  The Indenture Trustee, by entering into this
Indenture, each Holder, by accepting a Transition Bond (or interest therein)
issued hereunder, hereby covenant and agree that they shall not, prior to the
date which is one year and one day after the termination of this Indenture,
acquiesce, petition or otherwise invoke or cause the Issuer or any Manager to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Issuer under any insolvency law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Issuer or any substantial part of its respective
property, or ordering the dissolution, winding up or liquidation of the affairs
of the Issuer.  Nothing in this paragraph shall preclude, or be deemed
to estop, such Holder or the Indenture Trustee (A) from taking or omitting
to take any action prior to such date in (i) any case or proceeding
voluntarily filed or commenced by or on behalf of the Issuer under or pursuant
to any such law or (ii) any involuntary case or proceeding pertaining to
the Issuer which is filed or commenced by or on behalf of a Person other than
such Holder and is not joined in by such Holder (or any person to which such
holder shall have assigned, transferred or otherwise conveyed any part of the
obligations of the Issuer hereunder) under or pursuant to any such law, or
(B) from commencing or prosecuting any legal action which is not an
involuntary case or proceeding under or pursuant to any such law against the
Issuer or any of its properties.

     

    SECTION
10.20. Securities
Intermediary.  The Securities Intermediary, in acting under
this Indenture, is entitled to all rights, benefits, protections, immunities and
indemnities accorded The Bank of New York Mellon, a New York banking
corporation, in its capacity as Indenture Trustee under this
Indenture.

     

    


    [SIGNATURE PAGE FOLLOWS]



    IN
WITNESS WHEREOF, the Issuer, the Indenture Trustee and Securities Intermediary
have caused this Indenture to be duly executed by their respective officers
thereunto duly authorized and duly attested, all as of the day and year first
above written.

     

    
      	 
      	
               

              ENTERGY
      TEXAS RESTORATION FUNDING, LLC, as Issuer

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:
      /s/ Steven C. McNeal

              Name:  Steven
      C. McNeal

              Title:  Vice
      President and Treasurer

            
	 
      	 
      
	 
      	 
      
	 
      	
              THE
      BANK OF NEW YORK MELLON, a New York banking corporation, as Indenture
      Trustee and as Securities Intermediary

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:  /s/ Jared Fischer

              Name:  Jared
      Fischer

              Title:  Senior
      Associate

            
	 
      	 
      
	 
      	 
      


    

    




    STATE OF
LOUISIANA       )

                                                      
) ss:

    COUNTY OF
ORLEANS       )

     

    On the
28th day of October 2009, before me, Jennifer Favalora, a Notary Public in and
for said county and state, personally appeared Steven C. McNeal, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person and officer whose name is subscribed to the within instrument and
acknowledged to me that such person executed the same in such person’s
authorized capacity, and that by the signature on the instrument The Bank of New
York Mellon, a New York banking association, and the entity upon whose behalf
the person acted, executed this instrument.

     

    WITNESS
my hand and official seal.

     

     

    /s/ Jennifer
Favalora

    Jennifer
B. Favalora

                                                                                                   
Notary Public (ID# 57639)

    Commission
Issued For Life

     

    




    STATE OF
NEW
YORK              )

                                                            
) ss:

    COUNTY OF
NEW
YORK          )

     

    On the
3rd day
of November, 2009, before me, Jonathan Kaplan, a Notary Public in and for said
county and state, personally appeared Jared Fischer, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he executed
the same in his capacity as a manager of Entergy Texas Restoration
Funding, LLC, and that by his signature on the instrument Entergy Texas
Restoration Funding, LLC, a Delaware limited liability company and the
entity upon whose behalf such person acted, executed this
instrument.

     

    WITNESS
my hand and official seal.

     

     

    /s/ Jonathan
Kaplan

    Jonathan
Kaplan

    Notary
Public (No. 01KA6178956)

    My
commission expires:  12/17/2011

     

    




    EXHIBIT A

     

    FORM OF TRANSITION
BOND

     

    UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE
REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.  UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY SECURITY 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.

     

    REGISTERED
No. _____ $________

     

    SEE
REVERSE FOR CERTAIN DEFINITIONS

     

    CUSIP
NO.

     

    THE
PRINCIPAL OF THIS TRANCHE [ - ] TRANSITION BOND (“THIS
TRANCHE [ - ] TRANSITION BOND”)
WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS TRANCHE [ - ] TRANSITION BOND AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.  THE HOLDER OF
THIS TRANSITION BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK
ONLY TO THE TRANSITION BOND COLLATERAL, AS DESCRIBED IN THE INDENTURE AND THE
SERIES SUPPLEMENT REFERRED TO ON THE REVERSE HEREOF, FOR PAYMENT OF ANY
AMOUNTS DUE HEREUNDER.  ALL OBLIGATIONS OF THE ISSUER OF THIS TRANCHE
[ - ] TRANSITION BOND UNDER THE
TERMS OF THE INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL
HEREOF OR AS OTHERWISE PROVIDED IN ARTICLE IV OF
THE INDENTURE.  THE HOLDER OF THIS TRANCHE [ - ] TRANSITION BOND HEREBY
COVENANTS AND AGREES THAT PRIOR TO THE DATE WHICH IS ONE (1) YEAR AND ONE
(1) DAY AFTER THE PAYMENT IN FULL OF THE TRANCHE [ - ] TRANSITION BONDS, IT WILL NOT
INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE ISSUER
ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION
PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR
ANY STATE OF THE UNITED STATES.  NOTHING IN THIS PARAGRAPH SHALL
PRECLUDE, OR BE DEEMED TO ESTOP, SUCH HOLDER (A) FROM TAKING OR OMITTING TO
TAKE ANY ACTION PRIOR TO SUCH DATE IN (I) ANY CASE OR PROCEEDING
VOLUNTARILY FILED OR COMMENCED BY OR ON BEHALF OF THE ISSUER UNDER OR PURSUANT
TO ANY SUCH LAW OR (II) ANY INVOLUNTARY CASE OR PROCEEDING PERTAINING TO
THE ISSUER WHICH IS FILED OR COMMENCED BY OR ON BEHALF OF A PERSON OTHER THAN
SUCH HOLDER AND IS NOT JOINED IN BY SUCH HOLDER (OR ANY PERSON TO WHICH SUCH
HOLDER SHALL HAVE ASSIGNED, TRANSFERRED OR OTHERWISE CONVEYED ANY PART OF THE
OBLIGATIONS OF THE ISSUER HEREUNDER) UNDER OR PURSUANT TO ANY SUCH LAW, OR
(B) FROM COMMENCING OR PROSECUTING ANY LEGAL ACTION WHICH IS NOT AN
INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE
ISSUER OR ANY OF ITS PROPERTIES.

     

    ENTERGY
TEXAS RESTORATION FUNDING, LLC TRANSITION BONDS,

     

    Tranche
[ - ].

     

    
      	
              
                INTEREST

                RATE

              

            	
              
                ORIGINAL
      PRINCIPAL

                AMOUNT

              

            	
              
                FINAL
      MATURITY

                DATE

              

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      


    

    Entergy
Texas Restoration Funding, LLC, a limited liability company created under
the laws of the State of Delaware (herein referred to as the “Issuer”), for value
received, hereby promises to pay to [  ], or registered assigns, the
Original Principal Amount shown above [in semi-annual
installments] on the
Payment Dates and in the amounts specified on the reverse hereof or, if less,
the amounts determined pursuant to Section 8.02 of
the Indenture, in each year, commencing on the date determined as provided on
the reverse hereof and ending on or before the Final Maturity Date shown above
and to pay interest, at the Interest Rate shown above, on each __________ and
__________ or if any such day is not a Business Day, the next succeeding
Business Day, commencing on [ ] and continuing until the
earlier of the payment in full of the principal hereof and the Final Maturity
Date (each a “Payment
Date”), on the principal amount of this Tranche [ - ] Transition Bond (hereinafter
referred to as this “Tranche [ - ] Transition
Bond”).  Interest on this Tranche [ - ] Transition Bond will accrue
for each Payment Date from the most recent Payment Date on which interest has
been paid to but excluding such Payment Date or, if no interest has yet been
paid, from the date of issuance.  Interest will be computed on the
basis of [specify method
of computation].  Such principal of
and interest on this Tranche [ - ] Transition Bond shall be paid
in the manner specified on the reverse hereof.

     

    The
principal of and interest on this Tranche [ - ] Transition Bond are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts.  All payments
made by the Issuer with respect to this Tranche [ - ] Transition Bond shall be
applied first to interest due and payable on this Tranche [ - ] Transition Bond as provided
above and then to the unpaid principal of and premium, if any, on this Tranche
[ - ] Transition Bond, all in the
manner set forth in the Indenture.

     

    Reference
is made to the further provisions of this Tranche [ - ] Transition Bond set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Tranche [ - ] Transition Bond.

     

    Unless
the certificate of authentication hereon has been executed by the Indenture
Trustee whose name appears below by manual signature, this Tranche [ - ] Transition Bond shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.

     

    IN
WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or
in facsimile, by its Responsible Officer.

     

    


     

    
      	
              Date:

            	
              ENTERGY
      TEXAS RESTORATION FUNDING, LLC

            
	 
      	 
      
	 
      	
              By:  _________________________________

              Name:

              Title:

               

            


    

    
 

    
 

    


    INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION

     

    Dated:  [___________,
_____]

     

    This is
one of the Tranche [ -
] Transition Bonds,
designated above and referred to in the within-mentioned Indenture.

     

    
      	 
      	
              THE
      BANK OF NEW YORK MELLON, as Indenture Trustee

            
	 
      	 
      
	 
      	
              By:  _________________________________

              Name:

              Title:

               

            


    

    




    REVERSE
OF TRANSITION BOND* 1

     

    This
Tranche [ - ] Transition Bond is one of a
duly authorized issue of Transition Bonds of the Issuer (herein called the
“Transition
Bonds”), issued or which are issuable in one or more Tranches, and the
Transition Bonds consists of [  ] Tranches, including this
Tranche [ - ] Transition Bond (herein called
the “Tranche
[ - ] Transition Bonds”),
all issued and to be issued under that certain Indenture dated as of November 6,
2009, (as supplemented by the Series Supplement (as defined below), the “Indenture”), between
the Issuer and The Bank of New York Mellon, a New York banking corporation, in
its capacity as indenture trustee (the “Indenture Trustee”,
which term includes any successor indenture trustee under the Indenture) and in
its separate capacity as securities intermediary (the “Securities Intermediary”,
which term includes any successor securities intermediary under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Holders of the Transition
Bonds.  For purposes herein, “Series Supplement” means that certain
Series Supplement dated as of November 6, 2009 between the Issuer and the
Indenture Trustee.  All terms used in this Tranche [ - ] Transition Bond that are
defined in the Indenture, as amended, restated, supplemented or otherwise
modified from time to time, shall have the meanings assigned to such terms in
the Indenture.

     

    The
Tranche [ - ] Transition Bonds and the other
Tranches of the Transition Bonds (all of such Tranches being referred to herein
as the “Transition
Bonds”) are and will be equally and ratably secured by the Transition
Bond Collateral pledged as security therefor as provided in the
Indenture.

     

    The
principal of this Tranche [ - ] Transition Bond shall be
payable on each Payment Date only to the extent that amounts in the Collection
Account are available therefor, and only until the outstanding principal balance
thereof on the preceding Payment Date (after giving effect to all payments of
principal, if any, made on the preceding Payment Date) has been reduced to the
principal balance specified in the Expected Amortization Schedule which is
attached to the Series Supplement as Schedule A, unless payable earlier
because an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Bondholders representing not less than a majority of
the Outstanding Amount of the Transition Bonds have declared such Transition
Bonds to be immediately due and payable in accordance with Section 5.02 of
the Indenture (unless such declaration shall have been rescinded and annulled in
accordance with Section 5.02 of
the Indenture).  However, actual principal payments may be made in
lesser than expected amounts and at later than expected times as determined
pursuant to Section 8.02 of
the Indenture.  The entire unpaid principal amount of this Tranche
[ - ] Transition Bond shall be due
and payable on the Final Maturity Date hereof.  Notwithstanding the
foregoing, the entire unpaid principal amount of the Transition Bonds shall be
due and payable, if not then previously paid, on the date on which an Event of
Default shall have occurred and be continuing and the Indenture Trustee or the
Holders of the Transition Bonds representing not less than a majority of the
Outstanding Amount of the Transition Bonds have declared the Transition Bonds to
be immediately due and payable in the manner provided in Section 5.02 of
the Indenture (unless such declaration shall have been rescinded and annulled in
accordance with Section 5.02 of
the Indenture).  All principal payments on the Tranche [ - ] Transition Bonds shall be made
pro rata to the Tranche [ - ] Holders entitled thereto based
on the respective principal amounts of the Tranche [ - ] Transition Bonds held by
them.

     

    Payments
of interest on this Tranche [ - ] Transition Bond due and
payable on each Payment Date, together with the installment of principal or
premium, if any, shall be made by check mailed first-class, postage prepaid, to
the Person whose name appears as the Registered Holder of this Tranche [ - ] Transition Bond (or one or
more Predecessor Transition Bonds) on the Transition Bond Register as of the
close of business on the Record Date or in such other manner as may be provided
in the Indenture or the Series Supplement, except that (i) upon application
to the Indenture Trustee by any Holder owning a Global Transition Bond
evidencing this Tranche [
- ] Transition Bond in the
principal amount of $10,000,000 or more not later than the applicable Record
Date payment will be made by wire transfer to an account maintained by such
Holder and (ii) if this Tranche [ - ] Transition Bond is held in
Book-Entry Form, payments will be made by wire transfer in immediately available
funds to the account designated by the Holder of the applicable Global
Transition Bond evidencing this Tranche [ - ] Transition Bond unless and
until such Global Transition Bond is exchanged for Definitive Transition Bonds
(in which event payments shall be made as provided above) and except for the
final installment of principal and premium, if any, payable with respect to this
Tranche [ - ] Transition Bond on a Payment
Date which shall be payable as provided below.  Such checks shall be
mailed to the Person entitled thereto at the address of such Person as it
appears on the Transition Bond Register as of the applicable Record Date without
requiring that this Tranche [ - ] Transition Bond be submitted
for notation of payment.  Any reduction in the principal amount of
this Tranche [ - ] Transition Bond (or any one or
more Predecessor Transition Bonds) effected by any payments made on any Payment
Date shall be binding upon all future Holders of this Tranche [ - ] Transition Bond and of any
Transition Bond issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not noted hereon.  If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Tranche [ - ] Transition Bond on a Payment
Date, then the Indenture Trustee, in the name of and on behalf of the Issuer,
will notify the Person who was the Registered Holder hereof as of the Record
Date preceding such Payment Date by notice mailed no later than five
(5) days prior to such final Payment Date and shall specify that such final
installment will be payable only upon presentation and surrender of this Tranche
[ - ] Transition Bond and shall
specify the place where this Tranche [ - ] Transition Bond may be
presented and surrendered for payment of such installment.

     

    The
Issuer shall pay interest on overdue installments of interest at the Transition
Bond Interest Rate to the extent lawful.

     

    This
Transition Bond is a “transition bond” as such term is defined in the
Securitization Law.  Principal and interest due and payable on this
Transition Bond are payable from and secured primarily by Transition Property
created and established by a Financing Order obtained from the Public Utility
Commission of Texas pursuant to the Securitization Law.  Transition
Property consists of the rights and interests of the Seller in the Financing
Order, including the right to impose, collect and recover certain charges
(defined in the Securitization Law as “Transition Charges”)
to be included in regular electric utility bills of existing and future electric
service customers within the service territory of Entergy Texas, Inc., a
Texas electric utility, or its successors or assigns, as more fully described in
the Financing Order.

     

    The
Securitization Law provides that:  “Transition bonds are not a debt or
obligation of the state and are not a charge on its full faith and credit or
taxing power.  The state pledges, however, for the benefit and
protection of financing parties and the electric utility, that it will not take
or permit any action that would impair the value of transition property, or,
except as permitted by Section 39.307, reduce, alter, or impair the
transition charges to be imposed, collected, and remitted to financing parties,
until the principal, interest and premium, and any other charges incurred and
contracts to be performed in connection with the related transition bonds have
been paid and performed in full.  Any party issuing transition bonds
is authorized to include this pledge in any documentation relating to those
bonds.”

     

    As a
result of the foregoing pledge, the State of Texas may not, except as provided
in the succeeding sentence, in any way reduce, alter or impair the Transition
Charges until the Transition Bonds, together with interest thereon, are fully
paid and discharged.  Notwithstanding the immediately preceding
sentence, the State of Texas would be allowed to effect a temporary impairment
of the Holders’ rights if it could be shown that such impairment was necessary
to advance a significant and legitimate public purpose.

     

    The
Issuer and ETI hereby acknowledge that the purchase of this Transition Bond by
the Holder hereof or the purchase of any beneficial interest herein by any
Person are made in reliance on the foregoing pledge.

     

    As
provided in the Indenture and subject to certain limitations set forth therein,
the transfer of this Tranche [  -  ] Transition Bond may be
registered on the Transition Bond Register upon surrender of this Tranche [  -  ] Transition Bond for
registration of transfer at the office or agency designated by the Issuer
pursuant to the Indenture, duly endorsed by, or accompanied by (a) a
written instrument of transfer in form satisfactory to the Indenture Trustee
duly executed by the Holder hereof or such Holder’s attorney duly authorized in
writing, with such signature guaranteed by an institution which is a member of
one of the following recognized Signature Guaranty
Programs:  (i) The Securities Transfer Agent Medallion Program
(STAMP); (ii)The New York Stock Exchange Medallion Program (MSP); (iii) The
Stock Exchange Medallion Program (SEMP); or (iv) in such other guarantee
program acceptable to the Indenture Trustee, and (b) such other documents
as the Indenture Trustee may require, and thereupon one or more new Tranche
[  -  ] Transition Bonds of Minimum
Denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees.  No service charge will be
charged for any registration of transfer or exchange of this Tranche [  -  ] Transition Bond, but the
transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange, other than exchanges pursuant to Sections 2.04 or
2.06 of the
Indenture not involving any transfer.

     

    Each
Transition Bond holder, by acceptance of a Transition Bond, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer or the Indenture Trustee on the Transition Bonds or
under the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Managers in their
respective individual capacities, (ii) any owner of a membership interest
in the Issuer (including ETI) or (iii) any shareholder, partner, owner,
beneficiary, agent, officer or employee of the Indenture Trustee, the Managers
or any owner of a membership interest in the Issuer (including ETI) in its
respective individual or corporate capacities, or of any successor or assign of
any of them in their individual or corporate capacities, except as any such
Person may have expressly agreed in writing (it being understood that none of
the Indenture Trustee, the Managers or ETI has any such obligations in their
respective individual or corporate capacities).

     

    Prior to
the due presentment for registration of transfer of this Tranche [  -  ] Transition Bond, the Issuer,
the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may
treat the Person in whose name this Tranche [  -  ] Transition Bond is registered
(as of the day of determination) as the owner hereof for the purpose of
receiving payments of principal of and premium, if any, and interest on this
Tranche [  -  ] Transition Bond and for all
other purposes whatsoever, whether or not this Tranche [  -  ] Transition Bond be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent shall be
affected by notice to the contrary.

     

    The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and the
rights of the Holders of the Transition Bonds under the Indenture at any time by
the Issuer with the consent of the Bondholders representing not less than a
majority of the Outstanding Amount of all Transition Bonds at the time
outstanding of each Tranche to be affected.  The Indenture also
contains provisions permitting the Bondholders representing specified
percentages of the Outstanding Amount of the Transition Bonds, on behalf of the
Holders of all the Transition Bonds, to waive compliance by the Issuer 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 Tranche [ -
] Transition Bond (or any
one of more Predecessor Transition Bonds) shall be conclusive and binding upon
such Holder and upon all future Holders of this Tranche [ - ] Transition Bond and of any
Transition Bond issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Tranche [ -
] Transition
Bond.  The Indenture also permits the Indenture Trustee to amend or
waive certain terms and conditions set forth in the Indenture without the
consent of Holders of the Transition Bonds issued thereunder.

     

    The
Indenture contains provisions for defeasance at any time of (a) the entire
indebtedness of the Issuer on this Tranche [ - ] Transition Bond and
(b) certain restrictive covenants and the related Events of Default, upon
compliance by the Issuer with certain conditions set forth herein, which
provisions apply to this Tranche [ - ] Transition Bond.

     

    The term
“Issuer” as used in this Tranche [ - ] Transition Bond includes any
successor to the Issuer under the Indenture.

     

    The
Issuer is permitted by the Indenture, under certain circumstances, to merge or
consolidate, subject to the rights of the Indenture Trustee and the Bondholders
under the Indenture.

     

    The
Tranche [ - ] Transition Bonds are issuable
only in registered form in denominations as provided in the Indenture and the
Series Supplement subject to certain limitations therein set forth.

     

    THIS
TRANCHE [ - ] TRANSITION BOND, THE INDENTURE
AND THE SERIES SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER
THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND SECTIONS
9-301 THROUGH 9-306 OF THE NY UCC), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS; PROVIDED
THAT THE CREATION, ATTACHMENT AND PERFECTION OF ANY LIENS CREATED UNDER THE
INDENTURE IN TRANSITION PROPERTY, AND ALL RIGHTS AND REMEDIES OF THE INDENTURE
TRUSTEE AND THE HOLDERS WITH RESPECT TO SUCH TRANSITION PROPERTY, SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF TEXAS.

     

    No
reference herein to the Indenture and no provision of this Tranche [ - ] Transition Bond or of the
Indenture shall alter or impair the obligation, which is absolute and
unconditional, to pay the principal of and interest on this Tranche [ - ] Transition Bond at the times,
place, and rate, and in the coin or currency herein prescribed.

     

    The
Holder of this Tranche [ -
] Transition Bond by the
acceptance hereof agrees that, notwithstanding any provision of the Indenture or
the Series Supplement to the contrary, the Holder shall have no recourse against
the Issuer, but shall look only to the Transition Bond Collateral, with respect
to any amounts due to the Holder under this Tranche [ - ] Transition Bond.

     

    The
Issuer and the Indenture Trustee, by entering into the Indenture, and the
Holders and any Persons holding a beneficial interest in any Tranche [ - ] Transition Bond, by acquiring
any Tranche [ - ] Transition Bond or interest
therein, (i) express their intention that, solely for the purpose of
federal taxes and, to the extent consistent with applicable state, local and
other tax law, solely for the purpose of state, local and other taxes, the
Tranche [ - ] Transition Bonds qualify under
applicable tax law as indebtedness of the sole owner of the Issuer secured by
the Transition Bond Collateral and (ii) solely for purposes of federal
taxes and, to the extent consistent with applicable state, local and other tax
law, solely for purposes of state, local and other taxes, so long as any of the
Tranche [ - ] Transition Bonds are
outstanding, agree to treat the Tranche [ - ] Transition Bonds as
indebtedness of the sole owner of the Issuer secured by the Transition Bond
Collateral unless otherwise required by appropriate taxing
authorities.

     

    

      

    

     

      *           The
form of the reverse of a Transition Bond is substantially as follows, unless
otherwise specified in the Series Supplement.

       

    



    ABBREVIATIONS

     

    The
following abbreviations, when used in the inscription of the face of this
Tranche [ - ] Transition Bond, shall be
construed as though they were written out in full according to applicable laws
or regulations.

     

    
      	
              TEN
      COM

            	
              as
      tenants in common

               

            
	
              TEN
      ENT

            	
              as
      tenants by the entireties

               

            
	
              JT
      TEN

            	
              as
      joint tenants with right of survivorship and not as tenants

              in
      common

               

            
	
              UNIF
      GIFT MIN ACT

            	
              ___________________
      Custodian ______________________

              (Custodian)                                                      (minor)

            
	 
      	
              Under
      Uniform Gifts to Minor Act (____________________)

              (State)

               

            


    

    Additional
abbreviations may also be used though not in the above list.

     



    ASSIGNMENT

     

    Social
Security or taxpayer I.D.  or other identifying number of assignee
____________

     

    FOR VALUE
RECEIVED, the undersigned2 hereby sells, assigns and transfers
unto

     

    (name and
address of assignee)

     

    the
within Tranche [ - ] Transition Bond and all rights
thereunder, and hereby irrevocably constitutes and appoints ________________,
attorney, to transfer said Tranche [ - ] Transition Bond on the books
kept for registration thereof, with full power of substitution in the
premises.

     

    
      	
              Dated:  [___________,
      _____]

            	
              ______________________________________

              Signature
      Guaranteed:

               

            
	 
      	
               

              ______________________________________

            


    

    

      

    

     

      2           TRANSITION
BOND:  The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Tranche
[  -  ] Transition Bond in every particular, without
alteration, enlargement or any change whatsoever.

       

      NOTE:  Signature(s) must be
guaranteed by an institution which is a member of one of the following
recognized Signature Guaranty Programs:  (i) The Securities Transfer
Agent Medallion Program (STAMP), (ii) The New York Stock Exchange Medallion
Program (MSP), (iii) the Stock Exchange Medallion Program (SEMP) or (iv) such
other guarantee program acceptable to the Indenture Trustee.

       

    



    EXHIBIT B

     

    FORM OF
SERIES SUPPLEMENT

     

    This
SERIES SUPPLEMENT dated as of [__________, 2009] (this “Supplement”), by and
between ENTERGY TEXAS RESTORATION FUNDING, LLC, a limited liability company
created under the laws of the State of Delaware (the “Issuer”), and THE
BANK OF NEW YORK MELLON, a New York banking corporation (“BNYM”), in its
capacity as indenture trustee (the “Indenture Trustee”)
for the benefit of the Secured Parties under the Indenture dated as of November
6, 2009 by and between the Issuer and BNYM, in its capacity as Indenture Trustee
and in its separate capacity as securities intermediary (the “Indenture”).

     

    PRELIMINARY
STATEMENT

     

    Section 9.01 of
the Indenture provides, among other things, that the Issuer and the Indenture
Trustee may at any time enter into an indenture supplemental to the Indenture
for the purposes of authorizing the issuance by the Issuer of the Transition
Bonds and specifying the terms thereof.  The Issuer has duly
authorized the creation of the Transition Bonds with an initial aggregate
principal amount of [$_____] to be known as Entergy Texas Restoration
Funding, LLC Transition Bonds (the “Transition Bonds”),
and the Issuer and the Indenture Trustee are executing and delivering this
Supplement in order to provide for the Transition Bonds.

     

    All terms
used in this Supplement that are defined in the Indenture, either directly or by
reference therein, have the meanings assigned to them therein, except to the
extent such terms are defined or modified in this Supplement or the context
clearly requires otherwise.  In the event that any term or provision
contained herein shall conflict with or be inconsistent with any term or
provision contained in the Indenture, the terms and provisions of this
Supplement shall govern.

     

    GRANTING
CLAUSE

     

    With
respect to the Transition Bonds, the Issuer hereby Grants to the Indenture
Trustee, as Indenture Trustee for the benefit of the Secured Parties of the
Transition Bonds, all of the Issuer’s right, title and interest (whether now
owned or hereafter acquired or arising) in and to (a) the Transition
Property created under and pursuant to the Financing Order, and transferred by
the Seller to the Issuer pursuant to the Sale Agreement (including, to the
fullest extent permitted by law, the right to impose, collect and receive
Transition Charges, all revenues, collections, claims, rights, payments, money
or proceeds of or arising from the Transition Charges authorized in the
Financing Order and any Tariffs filed pursuant thereto and any contractual
rights to collect such Transition Charges from Customers and REPs), (b) all
Transition Charges related to such Transition Property, (c) the Sale
Agreement and each Bill of Sale executed in connection therewith and all
property and interests in property transferred under the Sale Agreement and such
Bills of Sale with respect to such Transition Property and the Transition Bonds,
(d) the Servicing Agreement, the Administration Agreement and any
subservicing, agency, intercreditor, administration or collection agreements
executed in connection therewith, to the extent related to the foregoing
Transition Property and the Transition Bonds, (e) the Collection Account,
all subaccounts thereof and all amounts of cash, instruments, investment
property or other assets on deposit therein or credited thereto from time to
time and all financial assets and securities entitlements carried therein or
credited thereto, (f) all rights to compel the Servicer to file for and
obtain adjustments to the Transition Charges in accordance with
Section 36.402 and Section 39.307 of the Securitization Law, the
Financing Order or any Tariff filed in connection therewith, (g) all
deposits, guarantees, surety bonds, letters of credit and other forms of credit
support provided by or on behalf of REPs pursuant to the Financing Order or such
Tariff, including investment earnings thereon and all amounts on deposit in the
REP Deposit Accounts, (h) all present and future claims, demands, causes
and choses in action in respect of any or all of the foregoing, whether such
claims, demands, causes and choses in action constitute Transition Property,
accounts, general intangibles, instruments, contract rights, chattel paper or
proceeds of such items or any other form of property, (i) all accounts,
chattel paper, deposit accounts, documents, general intangibles, goods,
instruments, investment property, letters of credit, letters-of-credit rights,
money, commercial tort claims and supporting obligations related to the
foregoing, and (j) all payments on or under, and all proceeds in respect
of, any or all of the foregoing; it being understood that the
following do not constitute Transition Bond
Collateral:  (i) cash that has been released pursuant to
Section 8.02(e)(x)
of the Indenture and, following retirement of all Outstanding Transition Bonds,
cash that has been released pursuant to Section 8.02(e)(xii)
of the Indenture and (ii) amounts deposited with the Issuer on the Closing
Date, for payment of costs of issuance with respect to the Transition Bonds
(together with any interest earnings thereon), it being understood that such
amounts described in clauses (i) and
(ii) above
shall not be subject to Section 3.17 of
the Indenture.

     

    The
foregoing Grant is made in trust to secure the payment of principal of and
premium, if any, interest on, and any other amounts owing in respect of, the
Transition Bonds and all fees, expenses, indemnity amounts, counsel fees and
other amounts due and payable to the Indenture Trustee (collectively, the “Secured Obligations”)
equally and ratably without prejudice, priority or distinction, except as
expressly provided in the Indenture, to secure compliance with the provisions of
the Indenture with respect to the Transition Bonds, all as provided in the
Indenture and to secure the performance by the Issuer of all of its obligations
under the Indenture.  The Indenture and this Series Supplement
constitutes a security agreement within the meaning of the Securitization Law
and under the UCC to the extent that the provisions of the UCC are applicable
hereto.

     

    The
Indenture Trustee, as indenture trustee on behalf of the Secured Parties of the
Transition Bonds, acknowledges such Grant and accepts the trusts under this
Supplement and the Indenture in accordance with the provisions of this
Supplement and the Indenture.

     

    SECTION 1.  Designation.  The
Transition Bonds shall be designated generally as the Transition Bonds and
further denominated as Tranches [ ] through [ ].

     

    SECTION 2.  Initial Principal Amount;
Transition Bond Interest Rate; Scheduled Payment Date; Final Maturity
Date.  The Transition Bonds of each Tranche shall have the
initial principal amount, bear interest at the rates per annum and shall have
the Scheduled Payment Dates and the Final Maturity Dates set forth
below:

     

    
      	
              Tranche

            	
              Initial

              Principal

              Amount

            	
              Transition
      Bond

              Interest

              Rate

            	
              Scheduled

              Payment

              Date

            	
              Final

              Maturity

              Date

            


    

    


    The
Transition Bond Interest Rate shall be computed on the basis of a 360-day year
of twelve 30-day months.

     

    SECTION 3.  Authentication Date; Payment
Dates; Expected Amortization Schedule for Principal; Periodic Interest; No
Premium; Other Terms.

     

    (a)           Authentication
Date.  The Transition Bonds that are authenticated and
delivered by the Indenture Trustee to or upon the order of the Issuer on [  ] (the “Closing Date”) shall
have as their date of authentication [   ].

     

    (b)           Payment
Dates.  The Payment Dates for the Transition Bonds are
__________ and __________ of each year or, if any such date is not a Business
Day, the next succeeding Business Day, commencing on [  ] and continuing until the
earlier of repayment of the Tranche [  ] Transition Bonds in full and
the Final Maturity Date for the Tranche [  ] Transition Bonds.

     

    (c)           Expected Amortization
Schedule for Principal.  Unless an Event of Default shall have
occurred and be continuing on each Payment Date, the Indenture Trustee shall
distribute to the Holders of record as of the related Record Date amounts
payable pursuant to Section 8.02(e)
of the Indenture as principal, in the following order and
priority:  [(1)
to the holders of the Tranche [  ] Transition Bonds, until the
Outstanding Amount of such Tranche of Transition Bonds thereof has been reduced
to zero; (2) to the holders of the Tranche [  ] Transition Bonds, until the
Outstanding Amount of such Tranche of Transition Bonds thereof has been reduced
to zero; and (3) to the holders of the Tranche [  ] Transition Bonds, until the
Outstanding Amount of such Tranche of Transition Bonds thereof has been reduced
to zero; (4)] provided, however, that in no
event shall a principal payment pursuant to this Section 3(c) on
any Tranche on a Payment Date be greater than the amount necessary to reduce the
Outstanding Amount of such Tranche of Transition Bonds to the amount specified
in the Expected Amortization Schedule which is attached as Schedule A
hereto for such Tranche and Payment Date.

     

    (d)           Periodic
Interest.  Periodic Interest will be payable on each Tranche of
the Transition Bonds on each Payment Date in an amount equal to [one-half] of the product of (i) the
applicable Transition Bond Interest Rate and (ii) the Outstanding Amount of
the related Tranche of Transition Bonds as of the close of business on the
preceding Payment Date after giving effect to all payments of principal made to
the Holders of the related Tranche of Transition Bonds on such preceding Payment
Date; provided,
however, that
with respect to the Initial Payment Date, or, if no payment has yet been made,
interest on the outstanding principal balance will accrue from and including the
Closing Date to, but excluding, the following Payment Date.

     

    [(e)           Book-Entry Transition
Bonds.  The Transition Bonds shall [not] be Book-Entry Transition Bonds
and the applicable provisions of Section 2.11 of
the Indenture shall [not] apply to such Transition
Bonds.]

     

    (f)           Waterfall
Cap.  The amount payable with respect to the Transition Bonds
pursuant to Section 8.02(e)(i)
of the Indenture shall not exceed $1,000,000 annually.

     

    SECTION 4.  Minimum
Denominations.  The Transition Bonds shall be issuable in the
Minimum Denomination and integral multiples thereof.

     

    SECTION 5.  Certain Defined
Terms.  Article I of the
Indenture provides that the meanings of certain defined terms used in the
Indenture shall, when applied to the Transition Bonds, be as defined in Appendix A to
the Indenture.  Additionally, Article II of
the Indenture provides that certain terms will have the meanings specified in
this Supplement.  With respect to the Transition Bonds, the following
definitions shall apply:

     

    “Initial Payment Date”
shall mean the first Payment Date for a Tranche of the Transition Bonds
specified in the Expected Amortization Schedule which is attached as Schedule A
hereto.

     

    “Minimum Denomination”
shall mean $100,000.

     

    “Payment Date” has the
meaning set forth in Section 3(b) of
this Supplement.

     

    “Periodic Interest”
has the meaning set forth in Section 3(d) of
this Supplement.

     

    “Transition Bond Interest
Rate” has the meaning set forth in Section 2 of
this Supplement.

     

    SECTION 6.  Delivery and Payment for the
Transition Bonds; Form of the Transition Bonds.  The Indenture
Trustee shall deliver the Transition Bonds to the Issuer when authenticated in
accordance with Section 2.03 of
the Indenture.  The Transition Bonds of each Tranche shall be in the
form of Exhibits A-1
through A-3 hereto.

     

    SECTION 7.  Ratification of
Agreement.  As supplemented by this Supplement, the Indenture
is in all respects ratified and confirmed and the Indenture, as so supplemented
by this Supplement, shall be read, taken, and construed as one and the same
instrument.  This Supplement amends, modifies and supplemented the
Indenture only in so far as it relates to the Transition Bonds.

     

    SECTION 8.  Counterparts.  This
Supplement may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all of such counterparts shall
together constitute but one and the same instrument.

     

    SECTION 9.  GOVERNING
LAW.  THIS SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW AND SECTIONS 9-301 THROUGH
9-306 OF THE NY UCC), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS; PROVIDED
THAT THE CREATION, ATTACHMENT AND PERFECTION OF ANY LIENS CREATED UNDER THE
INDENTURE IN TRANSITION PROPERTY, AND ALL RIGHTS AND REMEDIES OF THE INDENTURE
TRUSTEE AND THE HOLDERS WITH RESPECT TO SUCH TRANSITION PROPERTY, SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF TEXAS.

     

    SECTION 10.  Issuer
Obligation.  No recourse may be taken directly or indirectly,
by the Holders with respect to the obligations of the Issuer on the Transition
Bonds, under the Indenture or under this Supplement or any certificate or other
writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Managers in their respective individual capacities,
(ii) any owner of a beneficial interest in the Issuer (including ETI) or
(iii) any shareholder, partner, owner, beneficiary, agent, officer,
director, employee or agent of the Indenture Trustee, the Managers or any owner
of a beneficial interest in the Issuer (including ETI) in its individual
capacity, or of any successor or assign of any of them in their respective
individual or corporate capacities, except as any such Person may have expressly
agreed (it being understood that none of the Indenture Trustee, the Managers and
ETI have any such obligations in their respective individual or corporate
capacities).

     

    SECTION 11.  Application of Transition
Bond Proceeds; Costs of Issuance Account.  The proceeds of the
Transition Bond Proceeds shall be applied to pay the costs of issuing the
Transition Bonds and to purchase the Transition Property, as directed in an
Officer’s Certificate.  The Indenture Trustee shall, pursuant to an
Issuer Order, deposit the amounts directed to be applied to the payment of the
costs of issuance into a segregated trust account (the “Costs of Issuance
Account”).  Amounts in the Costs of Issuance Account shall be applied
from time to time as directed by an Officer’s Certificate, to pay costs of
issuing the Transition Bonds, and, upon payment of all such costs, for deposit
into the General Subaccount and applied as a credit against Transition Charges
as required by the Financing Order.  Pending such application, amounts
in the Costs of Issuance Account may be invested in the same manner and subject
to the same restrictions as amounts in the General Subaccount, provided that any
amount earned, or gains or losses, shall be credited to the Costs of Issuance
Account.

     



    IN
WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the first day of the month and year first above
written.

     

    
      	 
      	
               

              ENTERGY
      TEXAS RESTORATION FUNDING, LLC, as Issuer

               

            
	 
      	
              By:  __________________________________

              Name:

              Title:

               

            
	 
      	 
      
	 
      	 
      
	 
      	
              THE
      BANK OF NEW YORK MELLON, a New York banking corporation, as Indenture
      Trustee

               

            
	 
      	 
      
	 
      	
              By:  __________________________________

              Name:

              Title:

               

            


    

    




    SCHEDULE
A

     

    EXPECTED
AMORTIZATION SCHEDULE

     

    


     

    OUTSTANDING
PRINCIPAL BALANCE OF EACH TRANCHE

     

    


    
      	
              PAYMENT DATE

            	
              TRANCHE

            	
              TRANCHE

            	
              TRANCHE

            
	
              Closing
      Date

            	
              $

            	
              $

            	
              $

            
	
              ________ ___,
      200_

            	 
      	 
      	 
      
	
              ________ ___,
      200_

            	 
      	 
      	 
      
	
              ________ ___,
      200_

            	 
      	 
      	 
      
	
              ________ ___,
      200_

            	 
      	 
      	 
      


    

    




    EXHIBIT C

     

    SERVICING CRITERIA TO BE
ADDRESSED

    BY INDENTURE TRUSTEE IN
ASSESSMENT OF COMPLIANCE

    


    


    
      	
              Reg
      AB Reference

            	
              Servicing
      Criteria

            	
              Applicable
      Indenture Trustee

              Responsibility

            
	 
      	
              General
      Servicing Considerations

            	 
      
	
              1122(d)(1)(i)

            	
              Policies
      and procedures are instituted to monitor any performance or other triggers
      and events of default in accordance with the transaction
      agreements.

            	 
      
	
              1122(d)(1)(ii)

            	
              If
      any material servicing activities are outsourced to third parties,
      policies and procedures are instituted to monitor the third party’s
      performance and compliance with such servicing activities.

            	 
      
	
              1122(d)(1)(iii)

            	
              Any
      requirements in the transaction agreements to maintain a back-up servicer
      for the pool assets are maintained.

            	 
      
	
              1122(d)(1)(iv)

            	
              A
      fidelity bond and errors and omissions policy is in effect on the party
      participating in the servicing function throughout the reporting period in
      the amount of coverage required by and otherwise in accordance with the
      terms of the transaction agreements.

            	 
      
	 
      	
              Cash
      Collection and Administration

            	 
      
	
              1122(d)(2)(i)

            	
              Payments
      on pool assets are deposited into the appropriate custodial bank accounts
      and related bank clearing accounts no more than two (2) business days
      following receipt, or such other number of days specified in the
      transaction agreements.

            	
              X

            
	
              1122(d)(2)(ii)

            	
              Disbursements
      made via wire transfer on behalf of an obligor or to an investor are made
      only by authorized personnel.

            	
              X

            
	
              1122(d)(2)(iii)

            	
              Advances
      of funds or guarantees regarding collections, cash flows or distributions,
      and any interest or other fees charged for such advances, are made,
      reviewed and approved as specified in the transaction
      agreements.

            	 
      
	
              1122(d)(2)(iv)

            	
              The
      related accounts for the transaction, such as cash reserve accounts or
      accounts established as a form of overcollateralization, are separately
      maintained (e.g., with respect to commingling of cash) as set forth in the
      transaction agreements.

            	
              X

            
	
              1122(d)(2)(v)

            	
              Each
      custodial account is maintained at a federally insured depository
      institution as set forth in the transaction agreements.  For
      purposes of this criterion, “federally insured depository institution”
      with respect to a foreign financial institution means a foreign financial
      institution that meets the requirements of Rule 13k-1(b)(1) of the
      Securities Exchange Act.

            	 
      
	
              1122(d)(2)(vi)

            	
              Unissued
      checks are safeguarded so as to prevent unauthorized
    access.

            	 
      
	
              1122(d)(2)(vii)

            	
              Reconciliations
      are prepared on a monthly basis for all asset-backed securities related
      bank accounts, including custodial accounts and related bank clearing
      accounts.  These reconciliations are (A) mathematically
      accurate; (B) prepared within thirty (30) calendar days after
      the bank statement cutoff date, or such other number of days specified in
      the transaction agreements; (C) reviewed and approved by someone
      other than the person who prepared the reconciliation; and
      (D) contain explanations for reconciling items.  These
      reconciling items are resolved within ninety (90) calendar days of
      their original identification, or such other number of days specified in
      the transaction agreements.

            	 
      
	 
      	
              Investor
      Remittances and Reporting

            	 
      
	
              1122(d)(3)(i)

            	
              Reports
      to investors, including those to be filed with the SEC, are maintained in
      accordance with the transaction agreements and applicable SEC
      requirements.  Specifically, such reports (A) are prepared
      in accordance with timeframes and other terms set forth in the transaction
      agreements; (B) provide information calculated in accordance with the
      terms specified in the transaction agreements; (C) are filed with the
      SEC as required by its rules and regulations; and (D) agree with
      investors’ or the trustee’s records as to the total unpaid principal
      balance and number of pool assets serviced by the
servicer.

            	 
      
	
              1122(d)(3)(ii)

            	
              Amounts
      due to investors are allocated and remitted in accordance with timeframes,
      distribution priority and other terms set forth in the transaction
      agreements.

            	
              X

            
	
              1122(d)(3)(iii)

            	
              Disbursements
      made to an investor are posted within two (2) business days to the
      servicer’s investor records, or such other number of days specified in the
      transaction agreements.

            	
              X

            
	
              1122(d)(3)(iv)

            	
              Amounts
      remitted to investors per the investor reports agree with cancelled
      checks, or other form of payment, or custodial bank
      statements.

            	
              X

            
	 
      	
              Pool
      Asset Administration

            	 
      
	
              1122(d)(4)(i)

            	
              Collateral
      or security on pool assets is maintained as required by the transaction
      agreements or related pool asset documents.

            	
              X*

            
	
              1122(d)(4)(ii)

            	
              Pool
      assets and related documents are safeguarded as required by the
      transaction agreements.

            	 
      
	
              1122(d)(4)(iii)

            	
              Any
      additions, removals or substitutions to the asset pool are made, reviewed
      and approved in accordance with any conditions or requirements in the
      transaction agreements.

            	 
      
	
              1122(d)(4)(iv)

            	
              Payments
      on pool assets, including any payoffs, made in accordance with the related
      pool asset documents are posted to the servicer’s obligor records
      maintained no more than two (2) business days after receipt, or such
      other number of days specified in the transaction agreements, and
      allocated to principal, interest or other items (e.g., escrow) in
      accordance with the related pool asset documents.

            	 
      
	
              1122(d)(4)(v)

            	
              The
      servicer’s records regarding the pool assets agree with the servicer’s
      records with respect to an obligor’s unpaid principal
    balance.

            	 
      
	
              1122(d)(4)(vi)

            	
              Changes
      with respect to the terms or status of an obligor’s pool assets (e.g.,
      loan modifications or re-agings) are made, reviewed and approved by
      authorized personnel in accordance with the transaction agreements and
      related pool asset documents.

            	 
      
	
              1122(d)(4)(vii)

            	
              Loss
      mitigation or recovery actions (e.g., forbearance plans, modifications and
      deeds in lieu of foreclosure, foreclosures and repossessions, as
      applicable) are initiated, conducted and concluded in accordance with the
      timeframes or other requirements established by the transaction
      agreements.

            	 
      
	
              1122(d)(4)(viii)

            	
              Records
      documenting collection efforts are maintained during the period a pool
      asset is delinquent in accordance with the transaction
      agreements.  Such records are maintained on at least a monthly
      basis, or such other period specified in the transaction agreements, and
      describe the entity’s activities in monitoring delinquent pool assets
      including, for example, phone calls, letters and payment rescheduling
      plans in cases where delinquency is deemed temporary (e.g., illness or
      unemployment).

            	 
      
	
              1122(d)(4)(ix)

            	
              Adjustments
      to interest rates or rates of return for pool assets with variable rates
      are computed based on the related pool asset documents.

            	 
      
	
              1122(d)(4)(x)

            	
              Regarding
      any funds held in trust for an obligor (such as escrow
      accounts):  (A) such funds are analyzed, in accordance with
      the obligor’s pool asset documents, on at least an annual basis, or such
      other period specified in the transaction agreements; (B) interest on
      such funds is paid, or credited, to obligors in accordance with applicable
      pool asset documents and state laws; and (C) such funds are returned
      to the obligor within thirty (30) calendar days of full repayment of
      the related pool assets, or such other number of days specified in the
      transaction agreements.

            	 
      
	
              1122(d)(4)(xi)

            	
              Payments
      made on behalf of an obligor (such as tax or insurance payments) are made
      on or before the related penalty or expiration dates, as indicated on the
      appropriate bills or notices for such payments, provided that such support
      has been received by the servicer at least thirty (30) calendar days
      prior to these dates, or such other number of days specified in the
      transaction agreements.

            	 
      
	
              1122(d)(4)(xii)

            	
              Any
      late payment penalties in connection with any payment to be made on behalf
      of an obligor are paid from the servicer’s funds and not charged to the
      obligor, unless the late payment was due to the obligor’s error or
      omission.

            	 
      
	
              1122(d)(4)(xiii)

            	
              Disbursements
      made on behalf of an obligor are posted within two (2) business days
      to the obligor’s records maintained by the servicer, or such other number
      of days specified in the transaction agreements.

            	 
      
	
              1122(d)(4)(xiv)

            	
              Delinquencies,
      charge-offs and uncollectible accounts are recognized and recorded in
      accordance with the transaction agreements.

            	 
      
	
              1122(d)(4)(xv)

            	
              Any
      external enhancement or other support, identified in Item 1114(a)(1)
      through (3) or Item 1115 of Regulation AB, is maintained as set forth
      in the transaction agreements.

            	 
      


    

    


    *With
respect to its custodial functions relating to the Collection Account and the
REP Deposit Account.



    APPENDIX
A

     

    DEFINITIONS

     

    This is
Appendix A to
the Indenture.

     

    A.                           Defined
Terms.  As used in the Indenture, the Sale Agreement, the LLC
Agreement, the Servicing Agreement, the Series Supplement or any other Basic
Document as hereinafter defined, as the case may be (unless the context requires
a different meaning), the following terms have the following
meanings:

     

    “Act” is defined in
Section 10.03(a) of the Indenture.

     

    “Actual TC
Collections” means, with respect to Billed TCs in any Reconciliation
Period, the amount of such Billed TCs (less the amounts held back under the
Tariffs by an applicable REP to reflect potential write-offs calculated for such
Reconciliation Period), as adjusted for actual system write-off percentages
experienced in the Reconciliation Period.

     

    “Administration
Agreement” means the Administration Agreement, dated as of November 6,
2009 by and between Entergy Texas and the Issuer, as the same may be amended,
restated, supplemented or otherwise modified from time to time.

     

    “Administration Fee”
is defined in Section 2 of the Administration Agreement.

     

    “Affiliate” means,
with respect to any specified Person, any other Person controlling or controlled
by or under common control with such specified Person.  For the
purposes of this definition, “control” when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.

     

    “Agency Office” means
the office of the Issuer maintained pursuant to Section 3.02 of the
Indenture.

     

    “Amendatory Tariff”
means a revision to service riders or any other notice filing filed with the
PUCT in respect of a Tariff pursuant to a True-Up Adjustment.

     

    “Annual Accountant’s
Report” is defined in Section 3.04 of the Servicing
Agreement.

     

    “Annual True-Up
Adjustment” means each adjustment to the Transition Charges made pursuant
to the terms of the related Tariff in accordance with Section 4.01(b)(i) of the
Servicing Agreement.

     

    “Annual True-Up Adjustment
Date” means the first billing cycle of November of each year, commencing
on October 29, 2010.

     

    “Applicable REP”
means, with respect to each Customer taking service from a REP, the REP, if any,
responsible for billing and collecting all charges to such Customer, including
the Transition Charges.

     

    “Application” means
the Application of ETI for a Financing Order to securitize qualified costs filed
by Entergy Texas with the PUCT on July 16, 2009 pursuant to the Securitization
Law.

     

    “Bankruptcy Code”
means Title 11 of the United States Code (11 U.S.C. § 101 et seq.), as amended
from time to time.

     

    “Basic Documents”
means the Indenture, the Administration Agreement, the Sale Agreement, the
Certificate of Formation, the LLC Agreement, the Servicing Agreement, the Series
Supplement, the Letter of Representations, the Underwriting Agreement and all
other documents and certificates delivered in connection therewith.

     

    “Benefit Plan” means,
with respect to any Person, any defined benefit plan (as defined in Section
3(35) of ERISA) that (a) is or was at any time during the past six years
maintained by such Person or any ERISA Affiliate of such person, or to which
contributions by any such Person are or were at any time during the past six (6)
years required to be made or under which such Person has or could have any
liability or (b) is subject to the provisions of Title IV of ERISA.

     

    “Bill of Sale” means a
bill of sale substantially in the form of Exhibit A to the Sale
Agreement.

     

    “Billed TCs” is
defined in Annex
I to the Servicing Agreement.

     

    “Billing Period” means
the period created by dividing the calendar year into twelve (12) consecutive
periods of approximately twenty-one (21) Servicer Business Days.

     

    “Bills” means each of
the regular monthly bills, summary bills, opening bills and closing bills issued
to Customers by ETI or REPs or to REPs by ETI on its own behalf and in its
capacity as Servicer.

     

    “Book-Entry Form”
means, with respect to any Transition Bond that such Transition Bond is not
certificated and the ownership and transfers thereof shall be made through book
entries by a Clearing Agency as described in Section 2.11 of the Indenture and
the Series Supplement pursuant to which such Transition Bond was
issued.

     

    “Book-Entry Transition
Bonds” means any Transition Bonds issued in Book-Entry Form; provided, however, that after
the occurrence of a condition whereupon book-entry registration and transfer are
no longer permitted and Definitive Transition Bonds are to be issued to the
Holder of such Transition Bonds, such Transition Bonds shall no longer be
“Book-Entry Transition Bonds”.

     

    “Business Day” means
any day other than a Saturday, a Sunday or a day on which banking institutions
in Dallas, Texas or New York, New York are, or DTC is, authorized or obligated
by law, regulation or executive order to remain closed.

     

    “Calculation Period”
means initially, the period commencing on the Closing Date and ending on the
last day of the billing cycle of October, 2010 and, thereafter, each period of
twelve (12) Collection Periods ending immediately preceding the next Annual
True-Up Adjustment Date; provided, that, if an
Interim True-Up Adjustment is required, then the Calculation Period for such
Interim True-Up Adjustment shall mean the period of six (6) Collection Periods
commencing with the period during which such Interim True-Up Adjustment is
implemented and ending on the date immediately preceding the next Annual True-Up
Adjustment Date; provided further, that, if a
quarterly Interim True-Up Adjustment is required, then the Calculation Period
for such quarterly Interim True-Up Adjustment shall mean the period of three (3)
Collection Periods commencing with the period during which such quarterly
Interim True-Up Adjustment is implemented and ending on the date immediately
preceding the next quarterly Interim True-Up Adjustment Date.

     

    “Capital Contribution”
means the amount of cash contributed to the Issuer  by ETI as
specified in the LLC Agreement.

     

    “Capital Subaccount”
is defined in Section 8.02(a) of the Indenture.

     

    “Certificate of
Compliance” means the certificate referred to in Section 3.03 of the
Servicing Agreement and substantially in the form of Exhibit B attached to
the Servicing Agreement.

     

    “Certificate of
Formation” means the Certificate of Formation filed with the Secretary of
State of the State of Delaware on August 12, 2009 pursuant to which the Issuer
was formed.

     

    “Claim” means a
“claim” as defined in Section 101(5) of the Bankruptcy Code.

     

    “Clearstream” means
Clearstream Banking, Luxembourg, S.A.

     

    “Clearing Agency”
means an organization registered as a “clearing agency” pursuant to Section 17A
of the Exchange Act.

     

    “Clearing Agency
Participant” means a securities broker, dealer, bank, trust company,
clearing corporation or other financial institution or other Person for whom
from time to time a Clearing Agency effects book entry transfers and pledges of
securities deposited with the Clearing Agency.

     

    “Closing Date” means
November 6, 2009.

     

    “Code” means the
Internal Revenue Code of 1986, as amended.

     

    “Collection Account”
means the account established by the Issuer and maintained by the Indenture
Trustee in accordance with Section 8.02(a) of the Indenture and any subaccounts
contained therein.

     

    “Collection Period”
means any period commencing on the first Servicer Business Day of any Billing
Period and ending on the last Servicer Business Day of such Billing
Period.

     

    “Corporate Trust
Office” means the principal office of the Indenture Trustee at which, at
any particular time, its corporate trust business shall be administered, which
office as of the Closing Date is located at 101 Barclay Street, Floor 4W, New
York, New York 10286, Attention: Corporate Trust - ABS Group, Telephone: (212)
815-8139, Facsimile: (212) 815-3883 or at such other address as the Indenture
Trustee may designate from time to time by notice to the Holders of Transition
Bonds and the Issuer, or the principal corporate trust office of any successor
trustee by like notice.

     

    “Covenant Defeasance
Option” is defined in Section 4.01(b) of the Indenture.

     

    “Customers” means all
existing and future retail customers of ETI in the Service Area who are
obligated to pay Transition Charges pursuant to the Financing Order or any
Tariff.

     

    “Daily Remittance” is
defined in Section 6.11(a) of the Servicing Agreement.

     

    “Days Sales
Outstanding” is defined in Annex I to the
Servicing Agreement.

     

    “Default” means any
occurrence that is, or with notice or the lapse of time or both would become, an
Event of Default as defined in Section 5.01 of the Indenture.

     

    “Definitive Transition
Bonds” means Transition Bonds issued in definitive form in accordance
with  Section 2.13 of the Indenture.

     

    “Delaware Financing
Statements” means one or more Uniform Commercial Code financing
statements to be filed in the appropriate filing office in the State of
Delaware.

     

    “Delaware UCC” means
the Uniform Commercial Code as in effect on the date hereof in the State of
Delaware.

     

    “Depositing REP” means
a REP who provides a cash deposit pursuant to Section 3.05(e) of the Servicing
Agreement.

     

    “DTC” means The
Depository Trust Company or any successor thereto.

     

    “Eligible Account”
means a segregated non-interest-bearing trust account with either (a) an
Eligible Institution or (b) the corporate trust department of a depository
institution organized under the laws of the United States of America or any
State (or any domestic branch of a foreign bank), having corporate trust powers
and acting as trustee for funds deposited in such account, so long as any of the
securities of such depository institution shall have a credit rating from each
Rating Agency in one of its generic rating categories which such Rating Agency
defines as investment grade from time to time.  At the Closing Date,
the lowest investment-grade rating is BBB- from Fitch, Baa3 from Moody’s and
BBB- from S&P.

     

    “Eligible Institution”
means:

     

    (a)           the
corporate trust department of the Indenture Trustee or a subsidiary thereof, so
long as the Indenture Trustee or a subsidiary thereof have a credit rating from
each Rating Agency in one of its generic rating categories which signifies
investment grade; or

     

    (b)           a
depository institution organized under the laws of the United States of America
or any State (or any domestic branch of a foreign bank), which (i) has either
(A) a short-term issuer rating of AAA by S&P and A2 by Moody’s, and, if
rated by Fitch, AAA by Fitch or (B) a long-term issuer rating of A-1+ by S&P
and P-1 by Moody’s or any other long-term or, short-term rating acceptable to
the Rating Agencies and (ii) whose deposits are insured by the
FDIC.

     

    If so
qualified under clause (b) above, the Indenture Trustee may be considered an
Eligible Institution for the purposes of clause (a) of this
definition.

     

    “Eligible Investments”
mean instruments or investment property, which shall not include any structured
finance assets (including instruments commonly known as RMBS, CMBS or CDO’s),
which evidence:

     

    (a)                      direct
obligations of, or obligations fully and unconditionally guaranteed as to timely
payment by, the United States of America;

     

    (b)                      time
deposits and certificates of deposit of depository institutions meeting the
requirements of clause (b) of the definition of Eligible
Institution;

     

    (c)                      commercial
paper (other than commercial paper of ETI or any of its Affiliates) having, at
the time of the investment or contractual commitment to invest therein, a rating
from each of the Rating Agencies from which a rating is available in the highest
investment category granted thereby;

     

    (d)                      investments
in money market funds having a rating in the highest investment category granted
thereby (including funds for which the Indenture Trustee or any of its
Affiliates is investment manager or advisor) from Moody’s, Standard & Poor’s
and Fitch, if rated by Fitch; or

     

    (e)                      any
other investment permitted by each of the Rating Agencies;

     

    in each
case maturing not later than the Business Day immediately preceding the next
Payment Date or Special Payment Date, if applicable (for the avoidance of doubt,
investments in money market funds or similar instruments which are redeemable on
demand shall be deemed to satisfy the foregoing
requirement).  Notwithstanding the foregoing, any securities or
investments which mature in 32 days or more shall not be “Eligible Investments”
unless the issuer thereof has a short-term issuer rating of at least A1 from
Moody’s and A+ from S&P, any securities or investments described in clauses
(b) through (d) above which have maturities of less than or equal to 3 months
shall not be “Eligible Investments” unless the issuer thereof has a short-term
and long-term issuer debt rating of at least A1/P-1 from Moody’s and any
securities or investments described in clauses (b) through (d) above which have
maturities of more than 3 months shall not be an “Eligible Investment” unless
the issuer thereof has a long-term and short-term issuer rating of at least
Aa3/P-1 from Moody’s.

     

    “Entergy Texas” or
“ETI” means
Entergy Texas, Inc. and its successor and assigns.

     

    “ERCOT” means the
Electric Reliability Council of Texas or any successor thereto.

     

    “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended.

     

    “ERISA Affiliate”
means with respect to any Person at any time, each trade or business (whether or
not incorporated) that would, at that time, be treated together with such Person
as a single employer under Section 401 of ERISA or Section 414(b), (c), (m) or
(o) of the Code.

     

    “Estimated TC
Collections” means the sum of the payments in respect of Transition
Charges which are estimated to have been received by the Servicer, directly or
indirectly (including through a REP), from or on behalf of Customers, calculated
in accordance with Annex I of the
Servicing Agreement.

     

    “Euroclear” means the
Euroclear System.

     

    “Event of Default” is
defined in Section 5.01 of the Indenture.

     

    “Excess Funds
Subaccount” is defined in Section 8.02(a) of the Indenture.

     

    “Excess Remittance”
means the amount, if any, calculated for a particular Reconciliation Period, by
which all Estimated TC Collections remitted to the Collection Account during
such Reconciliation Period exceed Actual TC Collections received by the Servicer
during such Reconciliation Period.

     

    “Exchange Act” means
the Securities Exchange Act of 1934, as amended.

     

    “Expected Amortization
Schedule” means, the expected amortization schedule set forth in the
Series Supplement.

     

    “FDIC” means the
Federal Deposit Insurance Corporation or any successor thereto.

     

    “Federal Book-Entry
Regulations” means 31 C.F.R. Part 357 et seq. (Department of
Treasury).

     

    “Federal Book-Entry
Securities” means securities issued in book-entry form by the United
States Treasury.

     

    “Federal Funds Rate”
means, for any period, a fluctuating interest rate per annum equal for each day
during such period to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Servicer from three (3) federal funds brokers of recognized standing
selected by it.

    


    “FERC” means the
Federal Energy Regulatory Commission or any successor thereto.

     

    “Final” means, with
respect to any Financing Order, that such Financing Order has become final, is
not being appealed and that the time for filing an appeal therefrom has
expired.

     

    “Final Maturity Date”
means, with respect to any Tranche of Transition Bonds, the Final Maturity Date
therefor, as specified in the Series Supplement.

     

    “Financial Asset”
means “financial asset” as set forth in Section 8-102(a)(9) of the NY
UCC.

     

    “Financing Order”
means the Final Financing Order issued on September 11, 2009 by the PUCT
pursuant to the Securitization Law, Docket No. 37247, authorizing the creation
of the Transition Property pledged as collateral.

     

    “Fitch” means Fitch,
Inc. or any successor thereto.

     

    “General Subaccount”
is defined in Section 8.02(a) of the Indenture.

     

    “Global Transition
Bond” means a Transition Bond evidencing all or any part of the
Transition Bonds to be issued to the Holders thereof in Book-Entry Form, which
Global Transition Bond shall be issued to the Clearing Agency, or its nominee,
in accordance with Section 2.11 of the Indenture and the Series Supplement
pursuant to which the Transition Bond is issued.

     

    “Governmental
Authority” means any nation or government, any federal, state, local or
other political subdivision thereof and any court, administrative agency or
other instrumentality or entity exercising executive, legislative, judicial,
regulatory or administrative function of government.

     

    “Grant” means
mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey,
grant, transfer, create, and grant a lien upon and a security interest in and
right of set-off against, deposit, set over and confirm pursuant to the
Indenture and the Series Supplement.  A Grant of the Transition Bond
Collateral or of any other agreement or instrument included therein shall
include all rights, powers and options (but none of the obligations) of the
Granting party thereunder, including the immediate and continuing right to claim
for, collect, receive and give receipt for payments in respect of the Transition
Bond Collateral and all other moneys payable thereunder, to give and receive
notices and other communications, to make waivers or other agreements, to
exercise all rights and options, to bring Proceedings in the name of the
Granting party or otherwise and generally to do and receive anything that the
Granting party is or may be entitled to do or receive thereunder or with respect
thereto.

     

    “Holder” or
“Bondholder” means the Person in whose name a Transition Bond is
registered on the Transition Bond Register.

     

    “Indenture” means the
Indenture, dated as of November 6, 2009, by and between the Issuer and the
Indenture Trustee as originally executed and, as from time to time supplemented
or amended by the Series Supplement or one or more indentures supplemental
thereto entered into pursuant to the applicable provisions of the Indenture, as
so supplemented or amended, or both, and shall include the forms and terms of
the Transition Bonds established thereunder.

     

    “Indenture Trustee”
means The Bank of New York Mellon, a New York banking corporation, as indenture
trustee for the benefit of the Secured Parties, or any successor indenture
trustee under the Indenture.

     

    “Independent” means,
when used with respect to any specified Person, that the Person (a) is in fact
independent of the Issuer, any other obligor on the Transition Bonds, the
Seller, the Servicer and any Affiliate of any of the foregoing Persons, (b) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller, the Servicer or any
Affiliate of any of the foregoing Persons and (c) is not connected with the
Issuer, any such other obligor, the Seller, the Servicer or any Affiliate of any
of the foregoing Persons as an officer, employee, promoter, underwriter,
trustee, partner, director (other than as an independent director or manager) or
person performing similar functions.

     

    “Independent
Certificate” means a certificate or opinion to be delivered to the
Indenture Trustee under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 10.01 of the Indenture, made by an
Independent appraiser or other expert appointed by an Issuer Order and consented
to by the Indenture Trustee, and such opinion or certificate shall state that
the signer has read the definition of “Independent” in the Indenture and that
the signer is Independent within the meaning thereof.

     

    “Independent Manager”
is defined in Section 4.01 of the LLC Agreement.

     

    “Independent Manager
Fee” is defined in Section 4.01(a) of the LLC Agreement.

     

    “Indirect Participant”
means a securities broker, dealer, bank, trust company or other Person that
clears through or maintains a custodial relationship with a Clearing Agency
Participant, either directly or indirectly.

     

    “Initial Tariff” means
the initial Tariff filed with the PUCT to evidence the Transition Charges
pursuant to the Financing Order.

     

    “Insolvency Event”
means, with respect to a specified Person, (a) the filing of a decree or order
for relief by a court having jurisdiction in the premises in respect of such
Person or any substantial part of its property in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official for such Person or for any substantial
part of its property, or ordering the winding-up or liquidation of such Person’s
affairs, and such decree or order shall remain unstayed and in effect for a
period of sixty (60) consecutive days; or (b) the commencement by such Person of
a voluntary case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by such Person to
the entry of an order for relief in an involuntary case under any such law, or
the consent by such Person to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or the
making by such Person of any general assignment for the benefit of creditors, or
the failure by such Person generally to pay its debts as such debts become due,
or the taking of action by such Person in furtherance of any of the
foregoing.

     

    “Insolvency Law” means
any applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect.

     

    “Interim True-Up
Adjustment” means each adjustment to the Transition Charges made pursuant
to the terms of the related Tariff and in accordance with Section 4.01(b)(iii)
of the Servicing Agreement.

     

    “Interim True-Up Adjustment
Date” means the effective date of any Interim True-Up
Adjustment.

     

    “Internal Revenue
Code” means the Internal Revenue Code of 1986, as amended.

     

    “Internal Revenue
Service” means the Internal Revenue Service of the United States of
America.

     

    “Investment Company
Act” means the Investment Company Act of 1940, as amended.

     

    “Investment Earnings”
means investment earnings on funds deposited in the Collection Account net of
losses and investment expenses.

     

    “Issuance Advice
Letter” means the Issuance Advice Letter filed with the PUCT pursuant to
the Financing Order with respect to the Transition Charges.

     

    “Issuer” means Entergy
Texas Restoration Funding, LLC, a Delaware limited liability company, named as
such in the Indenture until a successor replaces it and, thereafter, means the
successor and, for purposes of any provision contained herein and required by
the TIA, each other obligor on the Transition Bonds.

     

    “Issuer Order” and
“Issuer
Request” mean a written order or request signed in the name of the Issuer
by any one of its Responsible Officers and delivered to the Indenture Trustee or
Paying Agent, as applicable.

     

    “kWh” means
kilowatt-hour.

     

    “Legal Defeasance
Option” is defined in Section 4.01(b) of the Indenture.

     

    “Letter of
Representations” means any applicable agreement between  the
Issuer and the applicable Clearing Agency, with respect to such Clearing
Agency’s rights and obligations (in its capacity as a Clearing Agency) with
respect to any Book-Entry Transition Bonds, as the same may be amended,
supplemented, restated or otherwise modified from time to time.

     

    “Lien” means a
security interest, lien, mortgage, charge, pledge, claim, equity or encumbrance
of any kind.

     

    “LLC Act” means the
Delaware Limited Liability Company Act, as amended.

     

    “LLC Agreement” means
the Amended and Restated Limited Liability Company Agreement of Entergy Texas
Restoration Funding, LLC, dated as of October 16, 2009, as the same may be
amended, restated, supplemented or otherwise modified from time to
time.

     

    “Manager” means each
manager of the Issuer under the LLC Agreement.

     

    “Member” has the
meaning specified in the first paragraph of the LLC Agreement.

     

    “Minimum Denomination”
means, with respect to any Transition Bond, the minimum denomination therefor
specified in the Series Supplement, which minimum denomination shall be not less
than $100,000, except for one transition bond of each tranche which may be of a
smaller denomination, and, except as otherwise provided in the Series
Supplement, integral multiples thereof.

     

    “Monthly Servicer’s
Certificate” means a certificate, substantially in the form of Exhibit A to the
Servicing Agreement, completed and executed by a Responsible Officer of the
Servicer pursuant to Section 3.01(b)(iii) of the Servicing
Agreement.

     

    “Moody’s” means
Moody’s Investors Service, Inc. or any successor thereto.

     

    “MWh” means
megawatt-hour.

     

    “Net TC Write-Offs”
means, for any  Reconciliation Period, an amount equal to the product
of (i) the Net Write-Off Percentage for such period times (ii) total Billed TCs
attributable to such Reconciliation Period.

     

    “Net Write-Off
Percentage” for any Reconciliation Period means the Servicer’s actual
system wide charge-off percentage, as adjusted for recoveries on previously
written-off bills.

     

    “Non-Standard True-Up
Adjustment” means any special adjustment to the Transition Charges to
reallocate the amounts of such Transition Charges among TC Customer Classes
pursuant to the terms of the related Tariff under the heading “Non-Standard
True-Up Procedure” and in accordance with Section 4.01(b)(ii) of the
Servicing Agreement.

     

    “Non-Standard True-Up
Adjustment Date” means the earlier of (i) the date revised Transition
Charges are approved and effective pursuant to a final order of the PUCT in the
related Non-Standard True-Up Adjustment proceeding and (ii) the first billing
cycle of November of the applicable year.

     

    “Non-U.S. Holder”
means a holder of Transition Bonds that is not a U.S. Holder, but does not
include (i) an entity or arrangement treated as a partnership for U.S. federal
income tax purposes, (ii) a former citizen of the United States or (iii) a
former resident of the United States.

     

    “Notice of Default” is
defined in Section 5.01 of the Indenture.

     

    “NY UCC” means the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.

     

    “Officer’s
Certificate” means a certificate signed by a Responsible Officer of the
Issuer under the circumstances described in, and otherwise complying with, the
applicable requirements of Section 10.01 of the Indenture, and delivered to the
Indenture Trustee.

     

    “Operating Expenses”
means all unreimbursed fees, costs and expenses of the Issuer, including all
amounts owed by the Issuer to the Indenture Trustee, or any Manager, the
Servicing Fee, the Administration Fee, legal and accounting fees, Rating Agency
fees, any franchise taxes owed on investment income in the Collection Account,
and costs and expenses of the Issuer and (to the extent payable from Transition
Charges under the Securitization Law) of ETI.

     

    “Opinion of Counsel”
means one or more written opinions of counsel who may, except as otherwise
expressly provided in the Basic Documents, be employees of or counsel to the
party providing such opinion of counsel, which counsel shall be reasonably
acceptable to the party receiving such opinion of counsel, and shall be in form
and substance reasonably acceptable to such party.

     

    “Outstanding” means,
as of the date of determination, all Transition Bonds theretofore authenticated
and delivered under this Indenture except:

     

    (a)                 Transition
Bonds theretofore canceled by the Transition Bond Registrar or delivered to the
Transition Bond Registrar for cancellation;

     

    (b)                 Transition
Bonds or portions thereof the payment for which money in the necessary amount
has been theretofore irrevocably deposited with the Indenture Trustee or any
Paying Agent in trust for the Holders of such Transition Bonds; and

     

    (c)                 Transition
Bonds in exchange for or in lieu of other Transition Bonds which have been
issued pursuant to the Indenture unless proof satisfactory to the Indenture
Trustee is presented that any such Transition Bonds are held by a Protected
Purchaser;

     

    provided that in
determining whether the Holders of the requisite Outstanding Amount of the
Transition Bonds or any Tranche thereof have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any Basic
Document, Transition Bonds owned by the Issuer, any other obligor upon the
Transition Bonds, the Member, the Seller, the Servicer or any Affiliate of any
of the foregoing Persons shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Indenture Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Transition Bonds that the Indenture Trustee actually knows to be
so owned shall be so disregarded.  Transition Bonds so owned that have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Indenture Trustee the pledgee’s right so
to act with respect to such Transition Bonds and that the pledgee is not the
Issuer, any other obligor upon the Transition Bonds, the Member, the Seller, the
Servicer or any Affiliate of any of the foregoing Persons.

     

    “Outstanding Amount”
means the aggregate principal amount of all Transition Bonds or, if the context
requires, all Transition Bonds of a Tranche, Outstanding at the date of
determination.

     

    “Paying Agent” means
with respect to the Indenture, the Indenture Trustee and any other Person
appointed as a paying agent for the Transition Bonds pursuant to the
Indenture.

     

    “Payment Date” means,
with respect to any Tranche of Transition Bonds, the dates specified in the
Series Supplement; provided that if any
such date is not a Business Day, the Payment Date shall be the Business Day
immediately succeeding such date.

     

    “Periodic Billing
Requirement” means, for any Calculation Period, the aggregate amount of
Transition Charges calculated by the Servicer as necessary to be billed during
such period in order to collect the Periodic Payment Requirement on or before
the end of the Collection Period immediately preceding the next Annual True-Up
Adjustment Date.

     

    “Periodic Billing Requirement
Allocation Factors” or “PBRAF”  means,
for any Calculation Period, the percentages of the Period Billing Requirement
allocable to each Transition Charge rate class as established by the applicable
Tariff.

     

    “Periodic Interest”
means, with respect to any Payment Date, the periodic interest for such Payment
Date as specified in the Series Supplement.

     

    “Periodic Payment
Requirement” for any Calculation Period means the total dollar amount of
TC Collections reasonably calculated by the Servicer in accordance with Section
4.01 of the Servicing Agreement as necessary to be received during such period
(after giving effect to the allocation and distribution of amounts on deposit in
the Excess Funds Subaccount at the time of calculation and which will be
available for payments on the Transition Bonds at the end of such Calculation
Period and including any shortfalls in the Periodic Payment Requirement for any
prior Calculation Period) in order to ensure that, as of the last Payment Date
occurring in such Calculation Period, (1) all accrued and unpaid interest on the
Transition Bonds then due shall have been paid in full, (2) the Outstanding
Amount of the Transition Bonds is equal to the Projected Unrecovered Balance,
(3) the balance on deposit in the Capital Subaccount equals the aggregate
Required Capital Level and (4) all other fees and expenses due and owing and
required or allowed to be paid under Section 8.02 of the Indenture as of such
date shall have been paid in full; provided that, with
respect to any Annual True-Up Adjustment or Interim True-Up Adjustment occurring
after the last Scheduled Final Payment Date for any Transition Bonds, the
Periodic Payment Requirement shall be calculated to ensure that sufficient
Transition Charges will be collected to retire such Transition Bonds in full as
of the earlier of (x) the Payment Date preceding the next Annual True-Up
Adjustment Date and (y) the Final Maturity Date for such Transition
Bonds.

     

    “Periodic Principal”
means, with respect to any Payment Date, the excess, if any, of the Outstanding
Amount of the Transition Bonds over the outstanding Projected Unrecovered
Balance specified for such Payment Date on the Expected Amortization
Schedule.

     

    “Permitted Lien” means
the Lien created by the Indenture.

     

    “Permitted Successor”
is defined in Section 5.02 of the Sale Agreement.

     

    “Person” means any
individual, corporation, limited liability company, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.

     

    “Predecessor Transition
Bond” means, with respect to any particular Transition Bond, every
previous Transition Bond evidencing all or a portion of the same debt as that
evidenced by such particular Transition Bond, and, for the purpose of this
definition, any Transition Bond authenticated and delivered under Section 2.06
of the Indenture in lieu of a mutilated, lost, destroyed or stolen Transition
Bond shall be deemed to evidence the same debt as the mutilated, lost, destroyed
or stolen Transition Bond.

     

    “Proceeding” means any
suit in equity, action at law or other judicial or administrative
proceeding.

     

    “Projected Unrecovered
Balance” means, as of any Payment Date, the projected outstanding
principal amount of the Transition Bonds for such Payment Date set forth in the
Expected Amortization Schedule.

     

    “Protected Purchaser”
has the meaning specified in Section 8-303 of the UCC.

     

    “PUCT” means the
Public Utility Commission of Texas, or any Governmental Authority succeeding to
the duties of such agency.

     

    “PUCT Regulations”
means the regulations, including proposed or temporary regulations, promulgated
under the Utilities Code.

     

    “Qualified Costs”
means all qualified costs as defined in Sections 39.302 and 36.403(d) of the
Securitization Law.

     

    “Rating Agency”, with
respect to any Tranche of Transition Bonds, means any of Moody’s, Standard &
Poor’s or Fitch which provides a rating with respect to such Transition
Bonds.  If no such organization or successor is any longer in
existence, “Rating Agency” shall be a nationally recognized statistical rating
organization or other comparable Person designated by the Issuer, notice of
which designation shall be given to the Indenture Trustee and the
Servicer.

     

    “Rating Agency
Condition” means, with respect to any action, the notification in writing
to each Rating Agency of such action, and written confirmation from Standard
& Poor’s to the Servicer, the Indenture Trustee and the Issuer that such
action will not result in a suspension, reduction or withdrawal of the then
current rating by such Rating Agency of any Tranche of Transition
Bonds.

     

    “Reconciliation
Period” means, with respect to any Collection Period, the twelve-month
period ending the last day of such Collection Period preceding the delivery of
the Monthly Servicer’s Certificate required under Section 6(e)(i) of Annex I to
the Servicing Agreement; provided, that the
initial Reconciliation Period shall commence on the Closing Date and that a
shorter Reconciliation Period may be established pursuant to Section 8.01(b) of
the Servicing Agreement.

     

    “Record Date” means,
with respect to a Payment Date, in the case of Definitive Transition Bonds, the
close of business on the last day of the calendar month preceding the calendar
month in which such Payment Date occurs, and in the case of Book-Entry
Transition Bonds, the close of business one Business Day prior to the applicable
Payment Date.

     

    “Registered Holder”
means the Person in whose name a Transition Bond is registered on the Transition
Bond Register.

     

    “Registration
Statement” means the registration statement, Form S-3 Registration Nos.
333-161911 and No. 333-161911-01, filed with the SEC under the Securities Act
relating to the offering and sale of the Transition Bonds, and including all
amendments thereto.

     

    “Regulation AB” means
the rules of the SEC promulgated under Subpart 229.1100 – Asset Backed
Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be
amended from time to time.

     

    “Remittance
Requirement” means, with respect to any Third-Party Collector, the
requirement that such Third-Party Collector remit Transition Charges to the
Servicer within a prescribed number of days of billing by the Servicer in
accordance with, if applicable, the Financing Order, Tariffs, other tariffs and
any other PUCT Regulations.

     

    “Remittance Shortfall”
means the amount, if any, calculated for a particular Reconciliation Period, by
which Actual TC Collections received by the Servicer during such Reconciliation
Period exceed all Estimated TC Collections remitted to the Collection Account
during such Reconciliation Period.

     

    “REP” means a retail
electric provider as defined in Section 31.002(17) of the Utilities Code
and shall include any REP that acts as the provider of last resort.

     

    “REP Credit
Requirements” means the credit and collection policies applicable to REPs
under the Financing Order, Tariffs and other PUCT Regulations.

     

    “REP Deposit Accounts”
is defined in Section 8.02(g) of the Indenture.

     

    “REP Deposit
Requirements” means the deposit, credit rating and alternative credit
support requirements applicable to REPs under the Financing Order, Tariffs and
other PUCT Regulations.

     

    “Required Capital
Level” means, with respect to the Transition Bonds, an amount equal to
0.50% of the initial principal amount of the Transition Bonds, or such other
amount as may be permitted or required under the Financing Order and applicable
Internal Revenue Service rulings, deposited into the Capital Subaccount by the
Member prior to or upon the issuance of the Transition Bonds.

     

    “Requirement of Law”
means any foreign, federal, state or local laws, statutes, regulations, rules,
codes or ordinances enacted, adopted, issued or promulgated by any Governmental
Authority or common law.

     

    “Responsible Officer”
means with respect to (a) the Issuer, any Manager or any duly authorized
officer; (b) the Indenture Trustee, any officer within the Corporate Trust
Office of such trustee (including the President, any Vice President, Assistant
Vice President, Secretary or Assistant Treasurer, Trust Officer or any other
officer of the Indenture Trustee customarily performing functions similar to
those performed by persons who at the time shall be such officers, respectively,
and that has direct responsibility for the administration of the Indenture and
also, with respect to a particular matter, any other officer to whom such matter
is referred to because of such officer’s knowledge and familiarity with the
particular subject); (c) any corporation (other than the Indenture
Trustee), the Chief Executive Officer, the President, any Vice President, the
Chief Financial Officer, the Treasurer, the Assistant Treasurer or any other
duly authorized officer of such Person who has been authorized to act in the
circumstances; (d) any partnership, any general partner thereof; and (e) any
other Person (other than an individual or the Indenture Trustee), any duly
authorized officer or member of such Person, as the context may require, who is
authorized to act in matters relating to such Person.

     

    “Restricted Plan”
means (a) an “employee benefit plan” as defined in and subject to Title I of
ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code, (c)
an entity whose underlying assets include the assets of such employee benefit
plan or plan or (d) a governmental or church plan which is subject to any
federal, state or local law that is substantially similar to the provisions of
Section 406 of ERISA or Section 4975 of the Code.

     

    “Retirement of the Transition
Bonds” means any day on which the final distribution is made to the
Indenture Trustee in respect of the last Outstanding Transition
Bonds.

     

    “Sale Agreement” means
the Transition Property Purchase and Sale Agreement, dated as of November 6,
2009, by and between Entergy Texas and the Issuer, as the same may be amended,
restated, supplemented or otherwise modified from time to time.

     

    “Scheduled Final Payment
Date” means, with respect to each Tranche of Transition Bonds, the date
when all interest and principal is scheduled to be paid with respect to that
Tranche in accordance with the Expected Amortization Schedule, as specified in
the Series Supplement therefor.  For the avoidance of doubt, the
Scheduled Final Payment Date with respect to any Tranche shall be the last
Scheduled Payment Date set forth in the Expected Amortization Schedule relating
to such Tranche.

     

    “Scheduled Payment
Date” is defined in the Series Supplement with respect to each Tranche of
Transition Bonds.

     

    “SEC” means the U.S.
Securities and Exchange Commission.

     

    “Secretary of State”
means the Secretary of State of the State of Delaware or the Secretary of State
of the State of Texas, as the case may be, or any Governmental Authority
succeeding to the duties of such offices.

     

    “Secured Obligations”
is defined in the Series Supplement.

     

    “Secured Parties”
means, with respect to the Transition Bonds, the Indenture Trustee, the relevant
Bondholders and any credit enhancer described in the Series
Supplement.

     

    “Securities Account”
means the Collection Account (to the extent it constitutes a securities account
as defined in the NY UCC and Federal Book-Entry Regulations).

     

    “Securities Act” means
the Securities Act of 1933, as amended.

     

    “Securities
Intermediary” means The Bank of New York Mellon, a New York banking
corporation, solely in the capacity of a “securities intermediary” as defined in
the NY UCC and Federal Book-Entry Regulations or any successor securities
intermediary under the Indenture.

     

    “Securitization Law”
means S.B. 769, effective April 2009, codified as Sections 36.401-36.406 of
Subchapter I of Chapter 36 of the Texas Utilities Code, together with Subchapter
G of Chapter 39 of the Texas Utilities Code, Sections
39.301-39.313.

     

    “Security Entitlement”
means “security entitlement” (as defined in Section 8-102(a)(17) of the NY UCC)
with respect to Financial Assets now or hereafter credited to the Securities
Account and, with respect to Federal Book-Entry Regulations, with respect to
Federal Book-Entry Securities now or hereafter credited to the Securities
Account, as applicable.

     

    “Seller” is defined in
the Preamble to the Sale Agreement.

     

    “Semi-Annual Servicer’s
Certificate” means a certificate, substantially in the form of Exhibit B to the
Servicing Agreement, completed and executed by a Responsible Officer of the
Servicer pursuant to Section 4.01(c)(ii) of the Servicing
Agreement.

     

    “Series Supplement”
means an indenture supplemental to the Indenture that authorizes the issuance of
the Transition Bonds, a form of which is attached as Exhibit B to the
Indenture.

     

    “Service Area” means
Entergy Texas’ certificated service area as it existed on September 11,
2009.

     

    “Servicer” means
Entergy Texas, as Servicer under the Servicing Agreement, or any successor
Servicer to the extent permitted under the Servicing Agreement.

     

    “Servicer Business
Day” means any day other than a Saturday, Sunday or holiday on which the
Servicer maintains normal office hours and conducts business.

     

    “Servicer Default” is
defined in Section 7.01 of the Servicing Agreement.

     

    “Servicing Agreement”
means the Transition Property Servicing Agreement, dated as of November 6, 2009,
by and between the Issuer and Entergy Texas, as the same may be amended,
restated, supplemented or otherwise modified from time to time.

     

    “Servicing Fee” means
the fee payable to the Servicer on each Payment Date for services rendered
during the period from, but not including, the preceding Payment Date (or from
the Closing Date in the case of the first Payment Date) to and including the
current Payment Date, determined pursuant to Section 6.06 of the Servicing
Agreement.

     

    “Servicing Standard”
means the obligation of the Servicer to calculate, apply, remit and reconcile
proceeds of the Transition Property, including TC Payments, and all other
Transition Bond Collateral for the benefit of the Issuer and the Holders (i)
with the same degree of care and diligence as the Servicer applies with respect
to payments owed to it for its own account, (ii) in accordance with all
applicable procedures and requirements established by the PUCT for collection of
electric utility tariffs and (iii) in accordance with the other terms of the
Servicing Agreement.

     

    “Special Member” is
defined in Section 1.02 of the LLC Agreement.

     

    “Special Payment”
means with respect to any Tranche of Transition Bonds, any payment of principal
of or interest on (including any interest accruing upon default), or any other
amount in respect of, the Transition Bonds of such Tranche that is not actually
paid within five (5) days of the Payment Date applicable thereto.

     

    “Special Payment Date”
means the date on which a Special Payment is to be made by the Indenture Trustee
to the Holders.

     

    “Special Record Date”
means with respect to any Special Payment Date, the close of business on the
fifteenth (15th) day
(whether or not a Business Day) preceding such Special Payment
Date.

     

    “Sponsor” means
Entergy Texas, in its capacity as “sponsor” of the Transition Bonds within the
meaning of Regulation AB.

     

    “Standard & Poor’s or
S&P” means Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor thereto.

     

    “State” means any one
of the fifty states of the United States of America or the District of
Columbia.

     

    “State Pledge” means
the pledge of the State of Texas as set forth in Section 39.310 of the
Securitization Law.

     

    “Subaccounts” is
defined in Section 8.02(a) of the Indenture.

     

    “Successor Servicer”
is defined in Section 3.07(e) of the Indenture.

     

    “Tariff” means any
rate tariff filed with the PUCT pursuant to the Securitization Law to evidence
the Transition Charges.

     

    “TC Collections” means
the Transition Charges received by the Servicer to be remitted to the Collection
Account.

     

    “TC Customer Class”
means each customer class identified as a separate rate class in any
Tariff.

     

    “TC Payments” means
the payments made by Customers based on the Transition Charges.

     

    “Temporary Transition
Bonds” means Transition Bonds executed by the Issuer, and upon the
receipt of an Issuer Order, authenticated and delivered by the Indenture Trustee
pending the preparation of Definitive Transition Bonds pursuant to Section 2.04
of the Indenture.

     

    “Termination Notice”
is defined in Section 7.01 of the Servicing Agreement.

     

    “Texas UCC” means the
Uniform Commercial Code as in effect on the date hereof in the State of
Texas.

     

    “Third-Party
Collector” means each third party, including each REP, which, pursuant to
any Tariff, any other tariffs filed with the PUCT, or any agreement with ETI, is
obligated to bill, pay or collect Transition Charges.

     

    “Tranche” means, with
respect to the Transition Bonds, any one of the tranches of the Transition
Bonds.

     

    “Transition Bonds”
means the Transition Bonds authorized by the Financing Order and issued under
the Indenture.

     

    “Transition Bond
Collateral” has the meaning specified in the preamble of the
Indenture.

     

    “Transition Bond Interest
Rate” means, with respect to any Tranche of Transition Bonds, the rate at
which interest accrues on the Transition Bonds of such Tranche, as specified in
the Series Supplement.

     

    “Transition Bond
Register” means the register maintained pursuant to Section 2.05 of the
Indenture, providing for the registration of the Transition Bonds and transfers
and exchanges thereof.

     

    “Transition Bond
Registrar” means the registrar at any time of the Transition Bond
Register, appointed pursuant to Section 2.05 of the Indenture.

     

    “Transition Charges”
means any transition charges as defined in Sections 39.302(7) and 36.403(f) of
the Securitization Law authorized pursuant to the Financing Order.

     

    “Transition Property”
means all transition property as defined in Section 39.302(8) of the
Securitization Law created in favor of ETI pursuant to the Financing Order,
including the right to impose, collect and receive the Transition Charges
authorized in the Financing Order, and sold or otherwise conveyed to the Issuer
under the Sale Agreement.  As used in the Basic Documents, unless the
context requires otherwise, the term “Transition Property” when used with
respect to ETI includes the contract rights of ETI that exist prior to the time
that such rights are first transferred in connection with the issuance of the
Transition Bonds, at which time they become transition property in accordance
with Section 39.304 of the Securitization Law.

     

    “Transition Property
Notices” means transition property notices filed with the Secretary of
State of the State of Texas pursuant to Section 39.309 of the Securitization
Law.

     

    “Transition Property
Records” is defined in Section 5.01 of the Servicing
Agreement.

     

    “Treasury Regulations”
means the regulations, including proposed or temporary regulations, promulgated
under the Code.  References herein to specific provisions of proposed
or temporary regulations shall include analogous provisions of final Treasury
Regulations or other successor Treasury Regulations.

     

    “True-Up Adjustment”
means any Annual True-Up Adjustment, Interim True-Up Adjustment or Non-Standard
True-Up Adjustment, as the case may be.

     

    “Trust Indenture Act”
or “TIA” means
the Trust  Indenture Act of 1939, as amended by the Trust Indenture
Reform Act of 1990, as in force on the Closing Date, unless otherwise
specifically provided.

     

    “UCC” means, unless
the context otherwise requires, the Uniform Commercial Code, as in effect in the
relevant jurisdiction, as amended from time to time.

     

    “Underwriters” means
the underwriters who purchase Transition Bonds of any Tranche from the Issuer
and resell such Transition Bonds in a public offering.

     

    “Underwriting
Agreement” means the Underwriting Agreement, dated October 29, 2009, by
and among Entergy Texas, the Underwriters and the Issuer, as the same may be
amended, supplemented or modified from time to time.

     

    “Unrecovered Balance”
means, as of any Payment Date, the sum of the Outstanding Amount of the
Transition Bonds less the amount in the Excess Funds Subaccount available to
make principal payments on the Transition Bonds.

     

    “Utilities Code” means
the Texas Utilities Code, as amended from time to time.

     

    “U.S. Government
Obligations” means direct obligations (or certificates representing an
ownership interest in such obligations) of the United States of America
(including any agency or instrumentality thereof) for the payment of which the
full faith and credit of the United States of America is pledged and which are
not callable at the option of the issuer thereof.

     

    B.           Other
Terms.  All accounting terms not specifically defined herein
shall be construed in accordance with United States generally accepted
accounting principles.  To the extent that the definitions of
accounting terms in any Basic Document are inconsistent with the meanings of
such terms under generally accepted accounting principles or regulatory
accounting principles, the definitions contained in such Basic Document shall
control.  As used in the Basic  Documents, the term “including” means
“including without limitation,” and other forms of the verb “to include” have
correlative meanings.  All references to any Person shall include such
Person’s permitted successors.

     

    C.           Computation of Time
Periods.  Unless otherwise stated in any of the Basic
Documents, as the case may be, in the computation of a period of time from a
specified date to a later specified date, the word “from” means “from and
including” and the words “to” and “until” each means “to but
excluding”.

     

    D.           Reference;
Captions.  The words “hereof”, “herein” and “hereunder” and
words of similar import when used in any Basic Document shall refer to such
Basic Document as a whole and not to any particular provision of such Basic
Document; and references to “Section”, “subsection”, “Schedule” and “Exhibit” in any Basic
Document are references to Sections, subsections, Schedules and Exhibits in or
to such Basic Document unless otherwise specified in such Basic
Document.  The various captions (including the tables of contents) in
each Basic  Document are provided solely for convenience of reference
and shall not affect the meaning or interpretation of any Basic
Document.

     

    E.           The
definitions contained in this Appendix A are
applicable to the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter forms of such
terms.