# EDGAR Filing Document

**Accession Number:** 0000048732
**File Stem:** 0001104659-25-084064
**Filing Date:** 2025-8
**Character Count:** 1602230
**Document Hash:** 2931b93b33ec349f0d756b548799d4c4
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-25-084064.hdr.sgml**: 20250827

**ACCESSION NUMBER**: 0001104659-25-084064

**CONFORMED SUBMISSION TYPE**: SF-1/A

**PUBLIC DOCUMENT COUNT**: 8

**FILED AS OF DATE**: 20250827

**DATE AS OF CHANGE**: 20250827

**ABS ASSET CLASS**: Other

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CenterPoint Energy Restoration Bond Co II, LLC
- **CENTRAL INDEX KEY:** 0002072436
- **STANDARD INDUSTRIAL CLASSIFICATION:** ASSET-BACKED SECURITIES [6189]
- **ORGANIZATION NAME:** Office of Structured Finance
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** SF-1/A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-288206
- **FILM NUMBER:** 251266140

**BUSINESS ADDRESS:**
- **STREET 1:** 1111 LOUISIANA STREET
- **STREET 2:** SUITE 4600
- **CITY:** HOUSTON
- **STATE:** TX
- **ZIP:** 77002
- **BUSINESS PHONE:** 713-207-7414

**MAIL ADDRESS:**
- **STREET 1:** 1111 LOUISIANA STREET
- **STREET 2:** SUITE 4600
- **CITY:** HOUSTON
- **STATE:** TX
- **ZIP:** 77002
**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CENTERPOINT ENERGY HOUSTON ELECTRIC LLC
- **CENTRAL INDEX KEY:** 0000048732
- **STANDARD INDUSTRIAL CLASSIFICATION:** ELECTRIC SERVICES [4911]
- **ORGANIZATION NAME:** 01 Energy & Transportation
- **EIN:** 223865106
- **STATE OF INCORPORATION:** TX
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** SF-1/A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-288206-01
- **FILM NUMBER:** 251266141

**BUSINESS ADDRESS:**
- **STREET 1:** 1111 LOUISIANA
- **CITY:** HOUSTON
- **STATE:** TX
- **ZIP:** 77002
- **BUSINESS PHONE:** 7132073000

**MAIL ADDRESS:**
- **STREET 1:** 1111 LOUISIANA
- **CITY:** HOUSTON
- **STATE:** TX
- **ZIP:** 77002

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** RELIANT ENERGY INC
- **DATE OF NAME CHANGE:** 19990513

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** HOUSTON INDUSTRIES INC
- **DATE OF NAME CHANGE:** 19970807

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** HOUSTON LIGHTING & POWER CO
- **DATE OF NAME CHANGE:** 19920703

**[**TABLE OF CONTENTS**](#TOC)

As filed with the U.S. Securities and Exchange Commission on August 27, 2025

Registration Nos. 333-288206

and 333-288206-01

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Amendment No. 2 to

FORM SF-1 REGISTRATION STATEMENT

 *UNDER THE SECURITIES ACT OF 1933* 

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC <br> (Exact name of registrant, sponsor and depositor as specified in its charter) (Exact name of registrant and issuing entity as specified in its charter)

---

| | |
|:---|:---|
| Texas  | Delaware  |
| (State or other jurisdiction of incorporation or organization)  | (State or other jurisdiction of incorporation or organization)  |
| 0000048732  | 0002072436  |
| (Central Index Key Number)  | (Central Index Key Number)  |
| 22-3865106  | 39-2616236  |
| (I.R.S. Employer Identification Number)  | (I.R.S. Employer Identification Number)  |
| 1111 Louisiana Street Houston, Texas 77002 (713) 207-1111  | 1111 Louisiana Street Suite 4654B Houston, Texas 77002 (713) 207-7414  |
| (Address, including zip code, and telephone number, including area code, of depositor's principal executive offices)  | (Address, including zip code, and telephone number, including area code, of issuing entity's principal executive offices)  |

---

Monica Karuturi Executive Vice President and General Counsel CenterPoint Energy, Inc. 1111 Louisiana Street Houston, Texas 77002 (713) 207-1111

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 *With Copies to:* 

Timothy S. Taylor Clinton W. Rancher Jamie L. Yarbrough Baker Botts L.L.P. 910 Louisiana Street Houston, Texas 77002-4995 (713) 229-1234 Michael F. Fitzpatrick, Jr. Adam R. O'Brian Hunton Andrews Kurth LLP 200 Park Avenue New York, NY 10166 (212) 309-1071

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

------**

[**TABLE OF CONTENTS**](#TOC)

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

#### Subject to completion, dated August 27, 2025

#### PRELIMINARY PROSPECTUS

### $401,521,000 Series 2025-A Senior Secured System Restoration Bonds

### CenterPoint Energy Houston Electric, LLC
***Sponsor, Depositor and Initial Servicer*** 

***Central Index Key Number:* 0000048732** 

### CenterPoint Energy Restoration Bond Company II, LLC
***Issuing Entity*** 

***Central Index Key Number:* 0002072436** 

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Tranche**  | **Expected <br> weighted <br> average <br> life <br> (years)**  | **Principal <br> amount <br> offered\***  | **Scheduled <br> final <br> payment <br> date**  | **Final <br> maturity <br> date**  | **Interest <br> rate<sup>(1)</sup>**  | **Initial <br> price <br> to <br> public**  | **Underwriting <br> discounts <br> and <br> commissions**  | **Proceeds <br> to <br> issuing <br> entity <br> (before <br> expenses)**  | **CUSIP**  | **ISIN**  |
| A-1 |  | $240913000% |  |  |  |  | &nbsp;&nbsp;&nbsp;&nbsp;% |  | $— |  |
| A-2  |  | $160608000% |  |  |  |  | &nbsp;&nbsp;&nbsp;&nbsp;% |  | $— |  |

---

\*

Principal amounts are approximate and subject to change.

(1) Interest on the system restoration bonds will accrue from , 2025. If delivery of the system restoration bonds is delayed after that date, the purchasers will pay accrued interest starting from , 2025.

The total initial price to the public is $. The total amount of the underwriting discounts and commissions is $. The total amount of proceeds to the issuing entity before deduction of expenses (estimated to be $) is $. The distribution frequency is semi-annually. The first scheduled payment date is , 2026.

 **Investing in the Series 2025-A Senior Secured System Restoration Bonds involves risks. Please read "Risk Factors" beginning on page [21](#tRIFA) to read about factors you should consider before buying the system restoration bonds.** 

CenterPoint Energy Houston Electric, LLC ("**CenterPoint Houston**"), as "**depositor**", is offering up to $401,521,000 aggregate principal amount of Series 2025-A Senior Secured System Restoration Bonds (the "**system restoration bonds**") in two tranches to be issued by CenterPoint Energy Restoration Bond Company II, LLC, a Delaware limited liability company (the "**issuing entity**" or "**us**") and wholly owned subsidiary of CenterPoint Houston. CenterPoint Houston is the "**seller**," the "**initial servicer**" and the "**sponsor**" with regard to the system restoration bonds. The system restoration bonds are senior secured obligations of the issuing entity and will be secured by the system restoration property (the "**system restoration property**") consisting of the right to impose, collect and receive system restoration charges (the "**system restoration charges**") from retail electric providers ("**REPs**") serving all existing and future retail customers located within CenterPoint Houston's certificated service area as it existed as of June 5, 2025 (the date the financing order was issued) and that take service at distribution voltage, and other entities which, under the terms of the financing order or the tariffs approved thereby, are required to bill, pay or collect system restoration charges. The securitization provisions of the Texas Public Utility Regulatory Act, as codified in Title II of the Texas Utilities Code (the "**Public Utility Regulatory Act**"), mandate that system restoration charges be adjusted annually to correct any over-collections or under-collections of the preceding 12 months and to ensure the expected recovery of amounts sufficient to timely provide all payments of debt service and other required amounts and charges in connection with the system restoration bonds, and the financing order issued by the Public Utility Commission of Texas (the "**PUCT**") further permits such true-ups to occur more frequently, if necessary, to correct any forecasted under-collection of system restoration charges to assure timely payment of the system restoration bonds, as described further in this prospectus. There will also be true-up adjustments at least quarterly for the system restoration bonds remaining outstanding during the year immediately preceding the scheduled final payment date for the longest maturing tranche of the system restoration bonds. The primary forms of credit enhancement for the system restoration bonds will be

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[**TABLE OF CONTENTS**](#TOC)

provided by such true-up mechanism, as well as by general, excess funds and capital subaccounts held under the indenture governing the system restoration bonds.

Each system restoration bond will be entitled to interest on and of each year, beginning on , 2026. The first scheduled payment date is , 2026. Interest on the system restoration bonds will accrue from the date of issuance. On each payment date, scheduled principal payments shall be paid sequentially in accordance with the expected sinking fund schedule in this prospectus, but only to the extent funds are available in the collection account after payment of certain fees and expenses and after payment of interest.

The system restoration bonds represent obligations only of the issuing entity, CenterPoint Energy Restoration Bond Company II, LLC, and are secured only by the assets of the issuing entity, consisting principally of the system restoration property and related assets to support its obligations under the system restoration bonds. Please read "Description of the System Restoration Bonds — The Security for the System Restoration Bonds," and "Description of the System Restoration Property" in this prospectus. The system restoration property includes the right to impose, collect and receive system restoration charges from REP's serving existing and future retail customers that take service at distribution voltage and are located within CenterPoint Houston's certificated service area as it existed on the date the financing order was issued, and other entities which are required to bill, pay or collect system restoration charges under the terms of the financing order, in amounts sufficient to provide for the timely recovery of CenterPoint Houston's scheduled principal and interest and other qualified costs in connection with the system restoration bonds detailed in the financing order, as described further in this prospectus. CenterPoint Houston and its affiliates, other than the issuing entity, are not liable for any payments on the system restoration bonds. The system restoration bonds are not a debt or obligation of the State of Texas, the PUCT or any other governmental agency or instrumentality and are not a charge on the full faith and credit or the taxing power of the State of Texas or any governmental agency or instrumentality.

The PUCT guarantees that it will act pursuant to its irrevocable financing order dated June 5, 2025 (the "**financing order**"), as expressly authorized by the Public Utility Regulatory Act to ensure that expected system restoration charge revenues are sufficient to pay on a timely basis scheduled principal and interest on the system restoration bonds and other costs, including fees and expenses, in connection with the system restoration bonds. The financing order provides that the true-up mechanism, and all other obligations of the State of Texas and PUCT set forth in the financing order are direct, explicit, irrevocable and unconditional upon issuance of the system restoration bonds and are legally enforceable against the State of Texas and the PUCT in accordance with Texas law.

All matters relating to the structuring and pricing of the system restoration bonds have been considered jointly by CenterPoint Houston and the PUCT or its designated representative.

 **Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.** 

The underwriters expect to deliver the system restoration bonds through the book-entry facilities of The Depository Trust Company for the accounts of its participants, including Clearstream Banking S.A. and Euroclear Banks SA/NV, as operator of the Euroclear System, against payment on or about , 2025. There currently is no secondary market for the system restoration bonds, and we cannot assure you that one will develop.

---

| | |
|:---|:---|
| **Citigroup** <br> *Structuring advisor and joint bookrunner*  | **Barclays** <br> *Joint bookrunner*  |
| **Academy Securities <br> *Co-Manager***  | **Academy Securities <br> *Co-Manager***  |

---

The date of this prospectus is , 2025.

------

[**TABLE OF CONTENTS**](#TOC)

#### **TABLE OF CONTENTS**

---

| | |
|:---|:---|
| | **Page**  |
| [ABOUT THIS PROSPECTUS](#tATP)  | [iv](#tATP) |
| [CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION](#tCSRF)  | [iv](#tCSRF) |
| [PROSPECTUS SUMMARY OF TERMS](#tPSOT)  | [1](#tPSOT) |
| [SUMMARY OF RISK FACTORS](#tSORF)  | [18](#tSORF) |
| [RISK FACTORS](#tRIFA)  | [21](#tRIFA) |
| &nbsp;&nbsp;&nbsp; [RISKS ASSOCIATED WITH POTENTIAL JUDICIAL, LEGISLATIVE OR REGULATORY <br> ACTIONS](#tRAWP)  | [21](#tRAWP) |
| &nbsp;&nbsp;&nbsp; [SERVICING RISKS](#tSERI)  | [24](#tSERI) |
| &nbsp;&nbsp;&nbsp; [WEATHER-RELATED DAMAGE AND OTHER NATURAL DISASTER RISKS](#tWDAO)  | [27](#tWDAO) |
| &nbsp;&nbsp;&nbsp; [RISKS TO THE ELECTRIC TRANSMISSION AND DISTRIBUTION INDUSTRY](#tRTTE)  | [27](#tRTTE) |
| &nbsp;&nbsp;&nbsp; [RISKS ASSOCIATED WITH THE UNUSUAL NATURE OF THE SYSTEM RESTORATION PROPERTY](#tRAWT)  | [27](#tRAWT) |
| &nbsp;&nbsp;&nbsp; [RISKS ASSOCIATED WITH POTENTIAL BANKRUPTCY PROCEEDINGS OF THE SELLER OR THE SERVICER](#tRAWP1)  | [28](#tRAWP1) |
| &nbsp;&nbsp;&nbsp; [RISKS ASSOCIATED WITH POTENTIAL BANKRUPTCY PROCEEDINGS OR DEFAULTS OF REPs](#tRAWP2)  | [31](#tRAWP2) |
| &nbsp;&nbsp;&nbsp; [OTHER RISKS ASSOCIATED WITH AN INVESTMENT IN THE SYSTEM RESTORATION BONDS](#tORAW)  | [33](#tORAW) |
| [REVIEW OF THE SYSTEM RESTORATION PROPERTY](#tROTS1)  | [39](#tROTS1) |
| [DESCRIPTION OF THE SYSTEM RESTORATION PROPERTY](#tDOTS1)  | [43](#tDOTS1) |
| &nbsp;&nbsp;&nbsp; [Creation of the System Restoration Property; Financing Order](#tCOTS)  | [43](#tCOTS) |
| &nbsp;&nbsp;&nbsp; [Tariff; System Restoration Charges](#tTSRC)  | [43](#tTSRC) |
| &nbsp;&nbsp;&nbsp; [Billing and Collection Terms and Conditions](#tBACT)  | [44](#tBACT) |
| [THE SECURITIZATION ACT](#tTSA2)  | [46](#tTSA2) |
| &nbsp;&nbsp;&nbsp; [Overview of the Securitization Act](#tOOTS)  | [46](#tOOTS) |
| &nbsp;&nbsp;&nbsp; [CenterPoint Houston and Other Utilities May Securitize Qualified Costs](#tCHAO)  | [46](#tCHAO) |
| [CENTERPOINT HOUSTON'S FINANCING ORDER](#tCHFO)  | [50](#tCHFO) |
| [RETAIL ELECTRIC PROVIDERS](#tREP)  | [54](#tREP) |
| [THE DEPOSITOR, SELLER, INITIAL SERVICER AND SPONSOR](#tTDSI)  | [59](#tTDSI) |
| &nbsp;&nbsp;&nbsp; [About CenterPoint Houston](#tACH)  | [59](#tACH) |
| &nbsp;&nbsp;&nbsp; [Municipalization](#tMUN)  | [62](#tMUN) |
| &nbsp;&nbsp;&nbsp; [Servicing Experience](#tSEEX)  | [63](#tSEEX) |
| &nbsp;&nbsp;&nbsp; [Customer Classes and Electric Energy Consumption](#tCCAE)  | [63](#tCCAE) |
| &nbsp;&nbsp;&nbsp; [Forecasting Electricity Consumption](#tFEC)  | [64](#tFEC) |
| &nbsp;&nbsp;&nbsp; [Relationships with Retail Electric Providers](#tRWRE)  | [65](#tRWRE) |
| &nbsp;&nbsp;&nbsp; [Credit Policy; Billing Process; Collections Process](#tCPBP)  | [66](#tCPBP) |
| &nbsp;&nbsp;&nbsp; [Write-off Experience](#tWADE)  | [68](#tWADE) |
| &nbsp;&nbsp;&nbsp; [Delinquency Experience](#tDEEX8)  | [69](#tDEEX8) |
| &nbsp;&nbsp;&nbsp; [Average Days Sales Outstanding](#tADSO)  | [69](#tADSO) |
|  [CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC, THE ISSUING ENTITY](#tCERB)  | [70](#tCERB) |
| &nbsp;&nbsp;&nbsp; [General](#tS001)  | [70](#tS001) |
| &nbsp;&nbsp;&nbsp; [Restricted Purposes](#tS002)  | [71](#tS002) |
| &nbsp;&nbsp;&nbsp; [Our Relationship with CenterPoint Houston](#tS003)  | [71](#tS003) |

---

i

------

[**TABLE OF CONTENTS**](#TOC2)

---

| | |
|:---|:---|
| | **Page**  |
| &nbsp;&nbsp;&nbsp; [Our Relationship with the PUCT](#tS004)  | [71](#tS004) |
| &nbsp;&nbsp;&nbsp; [Managers and Officers](#tS005)  | [72](#tS005) |
| &nbsp;&nbsp;&nbsp; [Manager Fees and Limitation on Liabilities](#tS006)  | [73](#tS006) |
| &nbsp;&nbsp;&nbsp; [We are a Separate and Distinct Legal Entity from CenterPoint Houston](#tS007)  | [74](#tS007) |
| &nbsp;&nbsp;&nbsp; [Administration Agreement](#tS008)  | [74](#tS008) |
| [THE SYSTEM RESTORATION CHARGES](#tTSRC1)  | [75](#tTSRC1) |
| [DESCRIPTION OF THE SYSTEM RESTORATION BONDS](#tDOTS)  | [76](#tDOTS) |
| &nbsp;&nbsp;&nbsp; [General](#tGEN)  | [76](#tGEN) |
| &nbsp;&nbsp;&nbsp; [Payments of Interest and Principal on the System Restoration Bonds](#tPOIA)  | [76](#tPOIA) |
| &nbsp;&nbsp;&nbsp; [Redemption of the System Restoration Bonds](#tROTS)  | [80](#tROTS) |
| &nbsp;&nbsp;&nbsp; [System Restoration Bonds Will Be Issued in Book-Entry Form](#tSRBW)  | [80](#tSRBW) |
| &nbsp;&nbsp;&nbsp; [Definitive Certificated System Restoration Bonds](#tDCSR)  | [83](#tDCSR) |
| &nbsp;&nbsp;&nbsp; [Registration and Transfer of the System Restoration Bonds](#tRATO)  | [84](#tRATO) |
| &nbsp;&nbsp;&nbsp; [The Security for the System Restoration Bonds](#tTSFT)  | [84](#tTSFT) |
| &nbsp;&nbsp;&nbsp; [The Collection Account for the System Restoration Bonds](#tTCAF)  | [85](#tTCAF) |
| &nbsp;&nbsp;&nbsp; [How Funds in the Collection Account Will Be Allocated](#tHFIT)  | [88](#tHFIT) |
| &nbsp;&nbsp;&nbsp; [How Funds in the Subaccounts Will Be Used upon Repayment of the System Restoration <br> Bonds](#tHFIT1)  | [90](#tHFIT1) |
| &nbsp;&nbsp;&nbsp; [Reports to the Holders of the System Restoration Bonds](#tRTTH)  | [90](#tRTTH) |
| &nbsp;&nbsp;&nbsp; [Website](#tWEB)  | [90](#tWEB) |
| &nbsp;&nbsp;&nbsp; [We and the Trustee May Modify the Indenture](#tWATT)  | [91](#tWATT) |
| &nbsp;&nbsp;&nbsp; [What Constitutes an Event of Default on the System Restoration Bonds](#tWCAE)  | [94](#tWCAE) |
| &nbsp;&nbsp;&nbsp; [Our Covenants](#tOUCO)  | [97](#tOUCO) |
| &nbsp;&nbsp;&nbsp; [Access to the List of Holders of the System Restoration Bonds](#tATTL)  | [99](#tATTL) |
| &nbsp;&nbsp;&nbsp; [We Must File an Annual Compliance Statement](#tWMFA)  | [99](#tWMFA) |
| &nbsp;&nbsp;&nbsp; [The Trustee Must Provide an Annual Report to All Holders of the System Restoration Bonds](#tTTMP)  | [99](#tTTMP) |
| &nbsp;&nbsp;&nbsp; [What Will Trigger Satisfaction and Discharge of the Indenture](#tWWTS)  | [100](#tWWTS) |
| &nbsp;&nbsp;&nbsp; [Our Legal Defeasance and Covenant Defeasance Options](#tOLDA)  | [100](#tOLDA) |
| &nbsp;&nbsp;&nbsp; [No Recourse to Others](#tNRTO)  | [101](#tNRTO) |
| &nbsp;&nbsp;&nbsp; [Governing Law](#tGOLA)  | [102](#tGOLA) |
| [THE TRUSTEE](#tTHTR)  | [103](#tTHTR) |
|  [WEIGHTED AVERAGE LIFE AND YIELD CONSIDERATIONS FOR THE SYSTEM RESTORATION BONDS](#tWALA)  | [106](#tWALA) |
| [ESTIMATED ANNUAL FEES AND EXPENSES](#tEAFA)  | [108](#tEAFA) |
| [THE SALE AGREEMENT](#tTSA)  | [109](#tTSA) |
| &nbsp;&nbsp;&nbsp; [CenterPoint Houston's Sale and Assignment of the System Restoration Property](#tCHSA)  | [109](#tCHSA) |
| &nbsp;&nbsp;&nbsp; [Conditions to the Sale of the System Restoration Property](#tCTTS)  | [110](#tCTTS) |
| &nbsp;&nbsp;&nbsp; [CenterPoint Houston's Representations and Warranties](#tCHRA)  | [110](#tCHRA) |
| &nbsp;&nbsp;&nbsp; [CenterPoint Houston's Covenants](#tCHC)  | [114](#tCHC) |
| &nbsp;&nbsp;&nbsp; [CenterPoint Houston's Obligation to Indemnify Us and the Trustee and to Take Legal Action](#tCHOT)  | [117](#tCHOT) |
| &nbsp;&nbsp;&nbsp; [Successors to CenterPoint Houston](#tSTCH)  | [118](#tSTCH) |
| &nbsp;&nbsp;&nbsp; [Amendment](#tAME)  | [119](#tAME) |
| [THE SERVICING AGREEMENT](#tTSA1)  | [120](#tTSA1) |
| &nbsp;&nbsp;&nbsp; [Servicing Procedures](#tSEPR)  | [120](#tSEPR) |

---

ii

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[**TABLE OF CONTENTS**](#TOC3)

---

| | |
|:---|:---|
| | **Page**  |
| &nbsp;&nbsp;&nbsp; [Adjustment Process for the System Restoration Charges](#tAPFT)  | [122](#tAPFT) |
| &nbsp;&nbsp;&nbsp; [Remittances to Collection Account](#tRTCA)  | [123](#tRTCA) |
| &nbsp;&nbsp;&nbsp; [Servicer Compensation](#tS009)  | [124](#tS009) |
| &nbsp;&nbsp;&nbsp; [CenterPoint Houston's Representations and Warranties as Servicer](#tCHRA1)  | [125](#tCHRA1) |
| &nbsp;&nbsp;&nbsp; [The Servicer Will Indemnify Us, Other Entities and the PUCT in Limited Circumstances](#tTSWI)  | [126](#tTSWI) |
| &nbsp;&nbsp;&nbsp; [Limitation on Liability of Servicer and Others](#tLOLO)  | [127](#tLOLO) |
| &nbsp;&nbsp;&nbsp; [The Servicer Will Provide Statements to Us and the Trustee](#tTSWP)  | [127](#tTSWP) |
| &nbsp;&nbsp;&nbsp; [The Servicer Will Provide Assessments Concerning Compliance with the Servicing Agreement](#tTSWP1)  | [128](#tTSWP1) |
| &nbsp;&nbsp;&nbsp; [Matters Regarding CenterPoint Houston as the Servicer](#tMRCH)  | [128](#tMRCH) |
| &nbsp;&nbsp;&nbsp; [Events Constituting a Default by the Servicer](#tECAD)  | [130](#tECAD) |
| &nbsp;&nbsp;&nbsp; [The Trustee's Rights if the Servicer Defaults](#tTTRI)  | [130](#tTTRI) |
| &nbsp;&nbsp;&nbsp; [Waiver of Past Defaults](#tWOPD)  | [131](#tWOPD) |
| &nbsp;&nbsp;&nbsp; [The Replacement of CenterPoint Houston as Servicer with a Successor Servicer](#tTROC)  | [131](#tTROC) |
| &nbsp;&nbsp;&nbsp; [The Obligations of a Successor Servicer](#tTOOA)  | [131](#tTOOA) |
| &nbsp;&nbsp;&nbsp; [Amendment](#tAME1)  | [131](#tAME1) |
| [HOW A BANKRUPTCY MAY AFFECT YOUR INVESTMENT](#tHABM)  | [132](#tHABM) |
| [USE OF PROCEEDS](#tUOP)  | [136](#tUOP) |
| [PLAN OF DISTRIBUTION](#tPOD)  | [137](#tPOD) |
| &nbsp;&nbsp;&nbsp; [The Underwriters' Sales Price for the System Restoration Bonds](#tTUSP)  | [137](#tTUSP) |
| &nbsp;&nbsp;&nbsp; [No Assurance as to Resale Price or Resale Liquidity for the System Restoration Bonds](#tNAAT)  | [137](#tNAAT) |
| &nbsp;&nbsp;&nbsp; [Various Types of Underwriter Transactions that May Affect the Price of the System Restoration Bonds](#tVTOU)  | [137](#tVTOU) |
| [AFFILIATIONS AND CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS](#tAACR)  | [139](#tAACR) |
| [MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES](#tMUFI)  | [140](#tMUFI) |
| &nbsp;&nbsp;&nbsp; [General](#tGEN1)  | [140](#tGEN1) |
| &nbsp;&nbsp;&nbsp; [Income Tax Status of the System Restoration Bonds and Us as Issuing Entity](#tITSO)  | [140](#tITSO) |
| &nbsp;&nbsp;&nbsp; [Tax Consequences to U.S. Holders](#tTCTU)  | [141](#tTCTU) |
| &nbsp;&nbsp;&nbsp; [Tax Consequences to Non-U.S. Holders](#tTCTN)  | [142](#tTCTN) |
| [ERISA CONSIDERATIONS](#tERCO)  | [145](#tERCO) |
| &nbsp;&nbsp;&nbsp; [General](#tGEN2)  | [145](#tGEN2) |
| &nbsp;&nbsp;&nbsp; [Regulation of Assets Included in a Plan](#tROAI)  | [145](#tROAI) |
| &nbsp;&nbsp;&nbsp; [Prohibited Transaction Exemptions](#tPTE)  | [146](#tPTE) |
| &nbsp;&nbsp;&nbsp; [Consultation with Counsel](#tCWC)  | [147](#tCWC) |
| [LEGAL PROCEEDINGS](#tLEPR)  | [148](#tLEPR) |
| [RATINGS FOR THE SYSTEM RESTORATION BONDS](#tRFTS)  | [149](#tRFTS) |
| [WHERE YOU CAN FIND MORE INFORMATION](#tWYCF)  | [150](#tWYCF) |
| [INCORPORATION BY REFERENCE](#tIBR)  | [151](#tIBR) |
| [INVESTMENT COMPANY ACT OF 1940 AND VOLCKER RULE MATTERS](#tICAO)  | [152](#tICAO) |
| [RISK RETENTION](#tRIRE)  | [153](#tRIRE) |
| [LEGAL MATTERS](#tLEMA)  | [154](#tLEMA) |
| [OFFERING RESTRICTIONS IN CERTAIN JURISDICTIONS](#tORIC)  | [155](#tORIC) |
| &nbsp;&nbsp;&nbsp; [NOTICE TO RESIDENTS OF UNITED KINGDOM](#tNTRO)  | [155](#tNTRO) |
| &nbsp;&nbsp;&nbsp; [NOTICE TO RESIDENTS OF CANADA](#tNTRO1)  | [155](#tNTRO1) |
| [GLOSSARY OF DEFINED TERMS](#tGODT)  | [156](#tGODT) |

---

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#### ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement filed with the U.S. Securities and Exchange Commission or "**SEC**". This prospectus provides information about us, the system restoration bonds and CenterPoint Houston, as depositor, sponsor and initial servicer. This prospectus describes the terms of the system restoration bonds offered hereby. You should carefully review this prospectus, any free writing prospectus the issuing entity files with the SEC, and the information, if any, contained in the documents referenced in this prospectus under the heading "Where You Can Find More Information."

References in this prospectus to the terms "**we**," "**us**," "**our**" or "**the issuing entity**" mean CenterPoint Energy Restoration Bond Company II, LLC. References to "**CenterPoint Houston**," "**the sponsor**," "**the initial servicer**," "**the depositor**" or "**the seller**" mean CenterPoint Energy Houston Electric, LLC, a Texas limited liability company. References to "**CenterPoint Energy**" mean CenterPoint Energy, Inc., a Texas corporation and the ultimate parent company of CenterPoint Houston. References to "**Utility Holding**" mean Utility Holding, LLC, a Delaware limited liability company and sole member of CenterPoint Houston. Utility Holding is a direct wholly owned subsidiary of CenterPoint Energy. References to "**the system restoration bonds**" mean our Series 2025-A Senior Secured System Restoration Bonds offered pursuant to this prospectus. References to "**the servicer**" refer to CenterPoint Houston and any successor servicer under the servicing agreement referred to in this prospectus. References to the "**Securitization Act**" mean Subchapter I of Chapter 36 of the Public Utility Regulatory Act, as codified in Title II of the Texas Utilities Code, as amended from time to time, adopted and effective in August 2009, that allows for the securitization of system restoration costs, together with Subchapter G of Chapter 39 of the Public Utility Regulatory Act. Unless the context otherwise requires, references to "**CenterPoint Houston's service territory**" mean the geographic certificated service area of CenterPoint Houston as it existed on June 5, 2025 (the date the financing order was issued). Unless the context otherwise requires, the terms "**customer**" or "**retail customer**" mean a retail customer taking service at distribution voltage within CenterPoint Houston's service area as of the date of the financing order, or that becomes a retail customer for electric services within such area after the date of the financing order, and is still located within such area. We also refer to the Public Utility Commission of Texas as the "**PUCT**." Unless the context implies otherwise, references in this prospectus to the "**financing order**" are to the financing order issued by the PUCT in CenterPoint Houston's Docket No. 57559 on June 5, 2025. You can find a glossary of some of the other defined terms we use in this prospectus on page [156](#tGODT) of this prospectus.

We have included cross-references to sections in this prospectus where you can find further related discussions. You can also find references to key topics in the table of contents.

You should rely only on the information contained in this prospectus. Neither we nor any underwriter, agent, dealer, salesperson, the PUCT or CenterPoint Houston has authorized anyone else to provide you with any different information. Neither we nor any underwriter, agent, dealer, salesperson, the PUCT or CenterPoint Houston take any responsibility for, nor provide any assurance as to the reliability of, any different information that others may give you. If anyone provides you with different or inconsistent information, you should not rely on it. We are not offering to sell the system restoration bonds in any jurisdiction where the offer or sale is not permitted. The information in this prospectus is current only as of the date of this prospectus.

We expect to deliver the system restoration bonds against payment for the system restoration bonds on or about the date specified in the last paragraph of the cover page of this prospectus, which will be the business day following the date of pricing of the system restoration bonds. Since trades in the secondary market generally settle in one business day, purchasers who wish to trade system restoration bonds on the date of pricing or the succeeding business days will be required, by virtue of the fact that the system restoration bonds initially will settle in T + , to specify alternative settlement arrangements to prevent a failed settlement.

#### CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
In this prospectus, we make statements concerning our expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts. These statements may be "forward-looking statements" within the meaning of the Securities

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Act of 1933, as amended (the "**Securities Act**"), and the Securities Exchange Act of 1934, as amended (the "**Exchange Act**"). The forward-looking statements relate to our ability to pay principal and interest on the system restoration bonds when scheduled to be paid, the ability of our servicer to collect system restoration charges, the value of the system restoration property, the outcome of regulatory, administrative and legal proceedings, market conditions and other matters. Actual results may differ materially from those expressed or implied by these statements. You can generally identify our forward-looking statements by the words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "objective," "plan," "potential," "predict," "projection," "should," "target," "will" or other similar words.

We have based our forward-looking statements on beliefs and assumptions based on information reasonably available at the time the statements are made. We caution you that assumptions, beliefs, expectations, intentions and projections about future events may and often do vary materially from actual results. Therefore, we cannot assure you that actual results will not differ materially from those expressed or implied by our forward-looking statements.

The following are some of the factors that could cause actual results to differ from those expressed or implied by our forward-looking statements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • industrial, commercial and residential growth in CenterPoint Houston's service territory and changes in market demand, including in relation to the expansion of data centers, energy export facilities, including hydrogen facilities, electrification of industrial processes and transport and logistics, as well as the effects of energy efficiency measures and demographic patterns, and CenterPoint Houston's ability to appropriately estimate and effectively manage business opportunities relating to such matters;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston's ability to successfully construct, operate, repair, maintain and restart electric generating facilities, temporary emergency electric energy facilities ("**TEEEF**") and electric transmission facilities, as applicable, including in the event of a widespread outage and in relation to complying with applicable environmental and safety standards and the implementation of a well-balanced energy and resource mix, as appropriate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • economic conditions in CenterPoint Houston's service territory, including potential for recession, changes to inflation and interest rates, and their effect on sales, prices and costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • weather variations and other natural phenomena, including the impact of severe weather events on CenterPoint Houston's operations, capital, legislation and/or regulations, such as seen in connection with the extreme and unprecedented winter weather event in February 2021 (also known as Winter Storm Uri) resulting in electricity generation supply shortages, including in Texas, and natural gas supply shortages and increased wholesale prices of natural gas in the United States, primarily due to prolonged freezing temperatures (the "**February 2021 Winter Storm Event**"), the May 16, 2024 storm that the National Weather Service has officially named "the Houston Derecho" and a wave of strong thunderstorms that caused extensive damage to the Houston area on May 28, 2024 (collectively, the "**May 2024 Storms**") and Hurricane Beryl;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • non-payment for CenterPoint Houston's services due to financial distress of retail customers and the ability of CenterPoint Houston's customers, including REPs, to satisfy their obligations to CenterPoint Houston, and the negative impact on such ability related to adverse economic conditions and severe weather events;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • public health threats, and their effect on CenterPoint Houston's operations, business and financial condition, the electric utility industry and the communities that CenterPoint Houston serves, U.S. and world financial markets and supply chains, potential regulatory actions and changes in electric customer and stakeholder behavior relating thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • federal, state and local legislative, executive and regulatory actions or developments affecting various aspects of CenterPoint Houston's business, including, among others, any actions resulting from the May 2024 Storms and/or Hurricane Beryl, energy deregulation or re-regulation, changes in regulation, legislation and governmental action pertaining to trade (including tariffs, bans, retaliatory trade measures taken against the United States or related governmental action), the implementation of budget and spending cuts to federal government agencies and programs, policies incentivizing the

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development or utilization of alternative sources of generation (including distributed generation), health care, finance and actions regarding the rates CenterPoint Houston charges;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • direct or indirect effects on CenterPoint Houston's facilities, resources, operations, reputation and financial condition resulting from terrorism, cyberattacks or intrusions, data security breaches or other attempts to disrupt its business or the businesses of third parties, or other catastrophic events such as fires, earthquakes, explosions, leaks, floods, droughts, hurricanes, tornadoes, derecho events, ice storms and other severe weather events, wildfires, pandemic health events, geopolitical conflict or other occurrences;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • actions by credit rating agencies, including any potential downgrades to credit ratings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the impact of unplanned facility outages or other closures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • inability of various counterparties, including REPs, to meet their obligations to CenterPoint Houston;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • timely and appropriate regulatory actions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • changes in technology, including with respect to efficient battery storage or the emergence or growth of new, developing or alternative sources of generation, and their adoption by consumers, and CenterPoint Houston's ability to anticipate and adapt to technological changes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the accuracy of the servicer's estimates of growth in CenterPoint Houston's retail customer base; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the accuracy of the servicer's forecast of retail customers, electric energy usage and/or the payment of system restoration charges.

These and other factors may affect the value of the system restoration bonds. We urge you to consider these factors and to review carefully the section captioned "Risk Factors" in this prospectus for a more complete discussion of the risks associated with an investment in the system restoration bonds.

You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date on which it is made, and we and CenterPoint Houston undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

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#### PROSPECTUS SUMMARY OF TERMS
The following section is only a summary of selected information and does not provide you with all the information you will need to make your investment decision. There is more detailed information in this prospectus. To understand all of the terms of the offering of the system restoration bonds, carefully read this entire prospectus. **You should carefully consider the Risk Factors beginning on page [21](#tRIFA) of this prospectus before you invest in the system restoration bonds.** 

Securities offered:

$401,521,000 Series 2025-A Senior Secured System Restoration Bonds, scheduled to pay principal semi-annually in accordance with the expected amortization schedule. Only the system restoration bonds are being offered through this prospectus.

---

| | |
|:---|:---|
| **Tranche**  | **Principal <br> Amount\***  |
| A-1 | $240913000 |
| A-2 | $160608000 |

---

\*

Principal amounts are approximate and subject to change

Issuing Entity and Capital Structure:

CenterPoint Energy Restoration Bond Company II, LLC is a direct, wholly owned subsidiary of CenterPoint Houston and a limited liability company formed under Delaware law. We were formed solely to purchase and own the system restoration property, to issue the system restoration bonds, and to perform activities incidental thereto. Please read "CenterPoint Energy Restoration Bond Company II, LLC, The Issuing Entity" in this prospectus.

In addition to the system restoration property, our assets will include a capital investment by CenterPoint Houston (and not from the proceeds of the sale of the system restoration bonds) which will be equal to 0.50% of the original principal amount of the system restoration bonds (to be held in the capital subaccount). We will also have an excess funds subaccount to retain, until the next payment date, any amounts collected and remaining after all scheduled payments on the system restoration bonds have been timely made.

Our Relationship with the PUCT:

Pursuant to the financing order:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the PUCT or its designated representative has a decision-making role co-equal with CenterPoint Houston with respect to the structuring and pricing of the system restoration bonds and all matters related to the structuring and pricing of the system restoration bonds will be determined through a joint decision of CenterPoint Houston and the PUCT or its designated representative;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston is directed to take all necessary steps to ensure that the PUCT or its designated representative is provided sufficient and timely information to allow the PUCT or its designated representative to fully participate in and exercise its decision-making authority over the proposed securitization; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the servicer will file periodic adjustments to the system restoration charges with the PUCT on our behalf.

We have agreed that certain reports concerning system restoration charge collections will be provided to the PUCT.

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Issuing Entity's address:

1111 Louisiana Street, Suite 4654B, Houston, Texas 77002

Issuing Entity's telephone number:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (713) 207-7414

Depositor, Seller, Initial Servicer and Sponsor:

CenterPoint Houston provides electric transmission service to transmission service customers in the Electric Reliability Council of Texas ("**ERCOT**") region and distribution service to REPs serving, as of December 31, 2024, approximately 2.8 million metered customers in the Texas Gulf Coast area that includes the city of Houston. CenterPoint Houston is an indirect, wholly owned subsidiary of CenterPoint Energy, Inc., a public utility holding company.

CenterPoint Houston, acting as the initial servicer, and any successor servicer, referred to in this prospectus as the "**servicer**," will service the system restoration property securing the system restoration bonds under a servicing agreement with us. Please read the section entitled "The Depositor, Seller, Initial Servicer and Sponsor" in this prospectus. Neither CenterPoint Houston nor any other affiliate (other than us) is an obligor on the system restoration bonds.

CenterPoint Houston's

address:

1111 Louisiana Street, Houston, Texas 77002

CenterPoint Houston's phone number:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (713) 207-1111

Trustee:

U.S. Bank Trust Company, National Association. Please read "The Trustee" in this prospectus for a description of the trustee's duties and responsibilities under the indenture.

Purpose of transaction:

This issuance of the system restoration bonds will enable CenterPoint Houston to recover certain distribution-related system restoration costs approved by the PUCT that were incurred due to the May 2024 Storms. Please read "The Securitization Act" and "CenterPoint Houston's Financing Order" in this prospectus.

Transaction overview:

The Securitization Act was enacted by the Texas Legislature to permit electric utilities, through the issuance of system restoration bonds, secured by system restoration property, to recover certain distribution-related system restoration costs incurred by an electric utility due to any activity or activities conducted by or on behalf of the electric utility in connection with the restoration of service and infrastructure associated with electric power outages affecting customers of the electric utility as the result of any tropical storm or hurricane, ice or snow storm, flood, or other weather-related event or natural disaster that occurred in calendar year 2008 or thereafter and other "qualified costs" through the issuance of system restoration bonds pursuant to and supported by an irrevocable financing order issued by the PUCT. System restoration costs include mobilization, staging, and construction, reconstruction, replacement, or repair of electric generation, transmission, distribution, or general plant facilities.

The total expected up-front qualified costs incurred in connection with the securitization is approximately $ million. Please read "CenterPoint Houston's Financing Order" for a discussion of the qualified costs authorized in the financing order, which we refer to in this prospectus as "**qualified costs**."

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Under the Securitization Act and the financing order, CenterPoint Houston's retail customers will pay system restoration charges, which are nonbypassable charges included in their monthly bills. The system restoration charges will fund payments of principal and interest on the system restoration bonds, as well as other qualified costs.

The amount and terms for collections of the system restoration charges are governed by the financing order. The Securitization Act permits an electric utility to transfer its rights and interests under a financing order, including the right to impose, collect and receive system restoration charges, to a special purpose entity formed by the electric utility to issue debt securities secured by the right to receive revenues arising from the system restoration charges. The electric utility's right to receive the system restoration charges, all revenues and collections resulting from the system restoration charges and its other rights and interests under a financing order, upon transfer to the issuing entity, constitute system restoration property. Under the Securitization Act, system restoration property does not come into existence until an electric utility first transfers to an assignee or pledges in connection with the issuance of system restoration bonds its rights under a financing order. However, for convenience of reference in this prospectus, the transfer of CenterPoint Houston's rights under the financing order is sometimes referred to as the sale or purchase of the system restoration property.

On June 5, 2025, the PUCT issued the financing order. Accordingly, the PUCT: (1) approved the securitization on the terms described in the financing order; (2) authorized, subject to the terms of the financing order, CenterPoint Houston to securitize and to cause the issuance of system restoration bonds with a principal amount equal to the sum of (a) the Securitizable Balance (as defined below) at the time the system restoration bonds are issued (estimated to be equal to $396,325,134 as of September 2, 2025), plus (b) up-front qualified costs not to exceed $5.2 million (including legal fees and expenses of counsel for CenterPoint Houston, the issuing entity, the underwriters and the trustee, fees for CenterPoint Houston's financial advisor, accounting fees, printing fees and miscellaneous administrative costs), plus (c) other up-front qualified costs consisting of (i) the cost of original issue discount, credit enhancements and other arrangements to enhance marketability as described in the financing order, (ii) rating agency fees, (iii) SEC registration fees, (iv) the cost of the PUCT's financial advisor and its legal counsel and any additional costs incurred by CenterPoint Houston to comply with the requests and recommendations of the PUCT's financial advisor and (v) any costs incurred by CenterPoint Houston if the financing order is appealed; (3) authorized CenterPoint Houston to impose on, and collect from, REPs serving all existing and future retail customers that are served at distribution voltage and are located within CenterPoint Houston's service territory and other entities which, under the terms of the financing order or the tariffs approved thereby, are required to bill, pay or collect system restoration charges, system restoration charges in an amount sufficient to provide for the timely recovery of its aggregate qualified costs detailed in the financing order (including payment of principal and interest on the system restoration bonds); (4) required REPs and other entities responsible for collecting system restoration charges from retail customers under the financing order to pay to CenterPoint Houston the system restoration charges billed to them whether or not they collect the system restoration charges from their customers;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (5) authorized, subject to the terms of the financing order, the recovery of actual ongoing qualified costs through system restoration charges, subject to certain caps on the servicing fees and administrative fees set forth in the financing order; (6) approved the structure of the proposed securitization financing through an issuance advice letter process; (7) approved the adjustment mechanism set forth in the financing order to account for over-collections and under-collections of system restoration charges to ensure the billing of system restoration charges necessary to generate the collection of amounts sufficient to timely provide all scheduled payments of principal and interest and any other amounts due in connection with the system restoration bonds; and (8) approved the forms of tariff, as provided in the financing order, to implement system restoration charges and any credits in connection with accumulated deferred federal income taxes for the benefit of retail customers.

The primary transactions underlying the issuance and sale of the system restoration bonds are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston will transfer and sell the system restoration property to us in exchange for the net proceeds from the sale of the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we will sell the system restoration bonds, which will be secured primarily by the system restoration property, to the underwriters named in this prospectus, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston will act as the initial servicer of the system restoration property.

The system restoration bonds are not obligations of the trustee, our managers, CenterPoint Houston or of any of their affiliates other than us. The system restoration bonds are also not debt or obligations of the State of Texas, the PUCT or any other public subdivision, agency or instrumentality of the State of Texas.

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#### Parties to Transaction and Responsibilities
The following chart represents a general summary of the parties to the transactions underlying the offering of the system restoration bonds, their roles and their various relationships to the other parties:

![[MISSING IMAGE: fc_responsibilities-4c.jpg]](fc_responsibilities-4c.jpg)

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#### Flow of Funds
The following chart represents a general summary of the flow of funds:

![[MISSING IMAGE: fc_flowoffunds-4c.jpg]](fc_flowoffunds-4c.jpg)

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The security for the system restoration bonds:

The system restoration bonds will be secured by the trust estate under the indenture. The principal asset of the trust estate will be the system restoration property. The Securitization Act and financing order provide for the creation and establishment of the system restoration property, which is a present property right for purposes of contracts concerning the sale or pledge of property, in favor of CenterPoint Houston, its transferees and other financing parties, to impose, collect and receive system restoration charges approved in the financing order, as well as to obtain periodic adjustments to such charges as provided in the financing order. In addition, the system restoration property consists of all revenue, collections, claims, rights to payments, payments, money and proceeds arising from the aforementioned rights and interests.

The indenture's trust estate will also consist of, among other items:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • our rights under the sale agreement pursuant to which we will acquire the system restoration property, under an administration agreement and under the bill of sale delivered by CenterPoint Houston pursuant to the sale agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • our rights under the servicing agreement and any subservicing, agency or collection agreements executed in connection with the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the collection account for the system restoration bonds and all subaccounts of the collection account,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • all rights to compel the servicer to file for and obtain periodic adjustments to the system restoration charges in accordance with the Securitization Act and the financing order,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • 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 system restoration property, accounts, general intangibles, instruments, contract rights, chattel paper or proceeds of such items or any other form of property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • all accounts, chattel paper, deposit accounts, documents, general intangibles, instruments, investment property, letters of credit, letters-of-credit rights, money, commercial tort claims and supporting obligations related to the foregoing, other than any cash released to us by the trustee on any payment date to be distributed to CenterPoint Houston as a return of its invested capital in us, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • all payments on or under and all proceeds in respect of any or all of the foregoing.

The subaccounts consist of a capital subaccount, which will be funded at closing in the amount of 0.50% of the initial aggregate principal amount of the system restoration bonds, a general subaccount, into which the servicer will deposit all system restoration charge collections, and an excess funds subaccount, into which we will transfer any amounts collected and remaining on a payment date after all payments to the holders of the system restoration bonds and other parties have been made. Amounts on deposit in each of these subaccounts will be

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available to make payments on the system restoration bonds on each payment date. For a description of the system restoration property, please read "Description of the System Restoration Property" in this prospectus.

For a description of the system restoration bonds, please read "Description of the System Restoration Bonds" in this prospectus.

The system restoration property:

In general terms, all of the rights, title and interests of CenterPoint Houston that are transferred to us pursuant to the sale agreement are referred to in this prospectus as the "**system restoration property**." The system restoration property includes all of CenterPoint Houston's rights and interest under the financing order, including, without limitation, (i) the right to impose, collect, and receive system restoration charges approved in the financing order, (ii) the right under the financing order to obtain periodic adjustments of system restoration charges, and (iii) all revenue collections, payments, money, and proceeds arising out of the foregoing rights and interests under the financing order.

The system restoration property is the principal collateral securing the system restoration bonds. System restoration charges authorized in the financing order are irrevocable and not subject to reduction, impairment, or adjustment by further act of the PUCT, except with respect to annual and interim true-up adjustments to the system restoration charges. See "CenterPoint Houston's Financing Order — Statutory True-Ups" in this prospectus. All revenues and collections resulting from system restoration charges are part of the system restoration property.

We will purchase the system restoration property from CenterPoint Houston to support the issuance of the system restoration bonds. CenterPoint Houston, as the initial servicer, will collect the applicable system restoration charges from REPs, which are entities certified under Texas law that provide electricity and related services to retail customers within CenterPoint Houston's service territory, and will remit the collections to the trustee. The REPs will in turn bill and collect the system restoration charges from its retail customers. Each REP will include the system restoration charges in its bills to its retail customers but is not required to show the system restoration charges as a separate line item or footnote. However, each REP will be required to provide annual written notice to its retail customers that system restoration charges have been included in the customers' bills.

Please read "CenterPoint Houston's Financing Order — Statutory True-Ups" in this prospectus, as well as the chart entitled "Parties to Transaction and Responsibilities," "The Securitization Act" and "Description of the System Restoration Property — Creation of the System Restoration Property; Financing Order" in this prospectus.

Each REP will be required to pay the system restoration charges on or before the 35th calendar day after it receives the bill from the servicer, less an agreed allowance for expected uncollectible amounts, whether or not the REP has collected all amounts owed to it by its retail customers. Prior to the date on which the REP remits the system restoration charges to the servicer, the system restoration charges may be commingled with the REP's other funds. Please read "Risk

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Factors — Risks Associated with Potential Bankruptcy Proceedings or Defaults of REPs," "Retail Electric Providers" and "How a Bankruptcy May Affect Your Investment — Bankruptcy of a REP" in this prospectus.

The servicer will have only limited rights to collect the system restoration charges directly from retail customers if a REP does not remit such payments to the servicer, but will have certain rights against the REP. Please read "Retail Electric Providers" in this prospectus. For information on how electric service to retail customers may be terminated, please read "Risk Factors — Servicing Risks — Limits on rights to terminate service might make it more difficult to collect the system restoration charges" in this prospectus. Because the amount of system restoration charge collections will largely depend on the amount of electricity consumed by customers at distribution voltage within CenterPoint Houston's service territory, the amount of collections may vary substantially from year to year. Please read "The Depositor, Seller, Initial Servicer and Sponsor" in this prospectus.

State pledge:

The State of Texas has pledged in the Securitization Act that it will not take or permit any action that would impair the value of the system restoration property, or, except as permitted in connection with a true-up adjustment authorized by the Securitization Act, reduce, alter or impair the system restoration charges until the principal, interest and premium, and any other charges incurred and contracts to be performed in connection with the system restoration bonds, are fully repaid or discharged. The system restoration bonds are not a debt or an obligation of the State of Texas, the PUCT or any other governmental agency or instrumentality and are not a charge on the full faith and credit or the taxing power of the State of Texas or any governmental agency or instrumentality. No voter initiative or referendum process exists in Texas, unlike in some other states. Please read "The Securitization Act — CenterPoint Houston and Other Utilities May Securitize Qualified Costs" in this prospectus.

Statutory true-up mechanism for payment of scheduled principal and interest:

The Securitization Act mandates that system restoration charges on all retail customers be reviewed and adjusted at least annually, within 45 days of the anniversary date of the issuance of the system restoration bonds, to (i) correct any under-collections or over-collection of system restoration charges during the preceding 12 months and (ii) ensure the expected recovery of amounts sufficient to timely provide all payments of debt service and other required amounts and charges in connection with the system restoration bonds. The servicing agreement provides that the servicer will update the data and assumptions underlying the calculation of the system restoration charges semi-annually. In addition, the irrevocable financing order permits such true-ups to occur more frequently at any time during the term of the system restoration bonds to correct any forecasted under-collection of system restoration charges to assure timely payment of the system restoration bonds, including the replenishment of any funds drawn from the capital subaccount. In the financing order, the PUCT guarantees that it will act under the financing order as expressly authorized by the Securitization Act to ensure that expected system restoration charge revenues are sufficient to pay on a timely basis scheduled principal and interest on the system restoration bonds and

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other costs, including fees and expenses, in connection with the system restoration bonds. There will also be true-up adjustments at least quarterly for the system restoration bonds beginning the year immediately preceding the scheduled final payment date for the longest maturing tranche of the system restoration bonds.

The financing order provides that the statutory true-up mechanism and all other obligations of the State of Texas and the PUCT set forth in the financing order are direct, explicit, irrevocable and unconditional upon issuance of the system restoration bonds, and are legally enforceable against the State of Texas and the PUCT in accordance with Texas law. Please read "The System Restoration Charges," "CenterPoint Houston's Financing Order" and "The Servicing Agreement — Adjustment Process for the System Restoration Charges" in this prospectus.

Nonbypassable system restoration charges:

The Securitization Act mandates that the imposition and collection of system restoration charges authorized in the financing order must be nonbypassable. The nonbypassable system restoration charges will be collected from REPs serving all existing and future retail customers that are served at distribution voltage and are located within CenterPoint Houston's service territory as it existed on the date the financing order was issued, and other entities which, under the terms of the financing order or the tariffs approved thereby, are required to bill, pay or collect system restoration charges.

The financing order provides that CenterPoint Houston and any other entity providing electric transmission or distribution services and any REP providing services to any retail customer are entitled to collect and must remit, in accordance with the financing order, the system restoration charges from such retail customers, including certain customers in a multiply-certificated service area that switch service providers and certain retail consumers that switch to certain new on-site generation, and such retail consumers are required to pay such system restoration charges. A customer within CenterPoint Houston's service territory may not avoid system restoration charges by switching to another electric utility, electric cooperative or municipally-owned utility after the date the financing order was issued. Any customers in a multiply-certificated service area will still be responsible for paying system restoration charges if they choose to switch to a different service provider on or after the date the financing order was issued. A customer may not avoid the payment of system restoration charges by switching to new on-site generation (except as specified in the Public Utility Regulatory Act).

The PUCT will ensure that such obligations are undertaken and performed by CenterPoint Houston, any other entity providing electric transmission or distribution services within CenterPoint Houston's service territory as it existed on the date the financing order was issued and any REP providing services to any retail customer within such service territory. Please read "The System Restoration Charges," "CenterPoint Houston's Financing Order" and "The Servicing Agreement — Adjustment Process for the System Restoration Charges" in this prospectus.

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Initial system restoration charge as a percentage of average residential customer's total electricity bill:

CenterPoint Houston estimates that on an annualized basis the initial system restoration charges would represent approximately % of the total bill received by a 1,000 kWh residential customer based on rates as of , 2025.

Payment Dates:

Interest on the system restoration bonds is payable semi-annually on and . Interest will be calculated on a 30/360 basis. The first scheduled interest and principal payment date is , 2026.

Interest Payments:

Interest is due on each payment date. Interest will accrue with respect to each tranche of the system restoration bonds from the date we issue the system restoration bonds at the interest rates specified for such tranche in the table below.

---

| | |
|:---|:---|
| **Tranche**  | **Interest Rate**  |
| A-1 | &nbsp;&nbsp;&nbsp;% |
| A-2 | &nbsp;&nbsp;&nbsp;% |

---

If any payment date is not a business day, payments scheduled to be made on such date may be made on the next succeeding business day and no interest shall accrue upon such payment during the intervening period.

On each payment date, we will pay interest on each tranche of the system restoration bonds equal to the following amounts:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • if there has been a payment default, any interest payable but unpaid on any prior payment dates, together with interest on such unpaid interest, if any, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • accrued interest on the principal balance of each tranche of the system restoration bonds from the close of business on the preceding payment date, or the date of the original issuance of the system restoration bonds, as applicable, after giving effect to all payments of principal made on the preceding payment date, if any.

We will pay interest on each tranche of the system restoration bonds before we pay the principal of the system restoration bonds. Please read "Description of the System Restoration Bonds — Payments of Interest and Principal on the System Restoration Bonds" in this prospectus. If there is a shortfall in the amounts available in the collection account to make interest payments, the trustee will distribute interest pro rata to each tranche of the system restoration bonds based on the amount of interest payable on each outstanding tranche. We will calculate interest on the basis of a 360-day year consisting of twelve 30-day months.

Principal Payments and Record Dates and Payment

Sources:

On each payment date for the system restoration bonds, referred to in this prospectus as a "**payment date**," we will pay amounts of principal and interest then due or scheduled to be paid on the system restoration bonds from amounts available in the collection account and the related subaccounts held by the trustee. We will make these payments to the

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holders of record of the system restoration bonds on each record date, referred to in this prospectus as a "**record date**." These available amounts, which will include the applicable system restoration charges collected by the servicer and remitted to the trustee since the last payment date, are described in greater detail under "Description of the System Restoration Bonds — The Collection Account for the System Restoration Bonds" in this prospectus. The trustee will pay the principal of the system restoration bonds in the amounts and on the payment dates specified in the expected amortization schedule described in this prospectus, but only to the extent system restoration charge collections received from the servicer and amounts available from trust accounts held by the trustee are sufficient to make principal payments after payment of amounts having a higher priority of payment. Please read "Description of the System Restoration Bonds — How Funds in the Collection Account Will Be Allocated" in this prospectus.

Failure to pay a scheduled principal payment on any payment date or the entire outstanding amount of the system restoration bonds of any tranche by the scheduled final payment date for the tranche will not result in a default. The failure to pay the entire outstanding principal balance of the system restoration bonds of any tranche will result in a default only if such payment has not been made by the final maturity date for the tranche.

If there is a shortfall in the amounts available to make principal payments on the system restoration bonds that are due and payable, on or after a tranche's final maturity date or upon an acceleration following an event of default, the trustee will distribute principal from the collection account pro rata to each tranche of the system restoration bonds based on the principal amount then due and payable on the payment date; and if there is a shortfall in the remaining amounts available to make principal payments on the system restoration bonds that are scheduled to be paid, and if more than one tranche is scheduled to be paid on such payment date, the trustee will distribute principal from the collection account sequentially in the numerical order of such tranches.

Weighted Average Life:

Prepayment is not permitted. Extension risk is possible but is expected to be statistically remote. Please read "Weighted Average Life and Yield Considerations for the System Restoration Bonds" in this prospectus.

Scheduled Final Payment Date and Final Maturity Date:

The scheduled final payment date and the final maturity date of each tranche of the system restoration bonds are as set forth in the table below.

---

| | | |
|:---|:---|:---|
| **Tranche**  | **Scheduled Final <br> Payment Date**  | **Final Maturity <br> Date**  |
| A-1 |  |  |
| A-2  |  |  |

---

Optional Redemption:

None. Non-call for the life of the system restoration bonds.

Mandatory Redemption:

None. We are not required to redeem the system restoration bonds at any time prior to maturity.

Priority of Payments:

On each payment date for the system restoration bonds, the trustee will allocate or pay all amounts on deposit in the general subaccount

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of the collection account in the following order of priority in accordance with the related written statement from the servicer:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.

payment of the trustee's fees, plus expenses and any outstanding indemnity amounts not to exceed $200,000 in any 12-month period, provided, however, that such cap shall be disregarded and inapplicable upon the acceleration of the system restoration bonds following the occurrence of an event of default,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.

payment of the servicing fee with respect to such payment date, plus any unpaid servicing fees from prior payment dates,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.

payment of the due and unpaid administration fee, which will be a fixed amount specified in the administration agreement between us and CenterPoint Houston, and the due and unpaid fees of our independent manager, which will be in an amount specified in an agreement between us and our independent manager,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.

payment of all of our other ordinary periodic operating expenses relating to the system restoration bonds for such payment date, such as accounting and audit fees, rating agency fees, legal fees and certain reimbursable costs of the servicer under the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.

payment of the interest then due on the system restoration bonds, including any past-due interest (together with, to the extent lawful, interest on such past due interest at the applicable bond interest rate),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.

payment of the principal due to be paid on the system restoration bonds at the final maturity date for such tranche or as a result of an acceleration upon an event of default,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.

payment of the principal then scheduled to be paid on the system restoration bonds in accordance with the expected sinking fund schedule, including any previously unpaid scheduled principal,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.

payment of any of our remaining unpaid operating expenses and any remaining amounts owed pursuant to the basic documents, including all remaining expenses and indemnity amounts owed to the trustee, paid to the parties, pro rata, to which such expenses or amounts are owed,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.

replenishment of the amount, if any, by which the initial balance of the capital subaccount exceeds the amount in the capital subaccount as of such payment date,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10.

the return on the invested capital then due and payable, which shall be the sum of the actual amounts earned from investments of CenterPoint Houston's capital contribution which has been deposited into the capital subaccount, plus any return on the invested capital not paid on any prior payment date, shall be paid to CenterPoint Houston,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.

allocation of the remainder, if any, to the excess funds subaccount, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12.

after the system restoration bonds have been paid in full and discharged, and all of the other foregoing amounts have been paid in full, the balance, together with all amounts in the capital

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subaccount and the excess funds subaccount, released to us free of the lien of the indenture, which funds, less an amount equal to the initial deposit into the capital subaccount plus any unpaid return on invested capital, will be distributed to CenterPoint Houston and credited to retail customers by CenterPoint Houston to its retail customers in accordance with Section 39.262(g) of the Public Utility Regulatory Act.

The amount of the servicer's fee referred to in clause 2 above will be 0.075% of the aggregate initial principal amount of the system restoration bonds (for so long as CenterPoint Houston is the servicer) on an annualized basis. The priority of distributions for the collected system restoration charges, as well as available amounts in the subaccounts, are described in more detail under "Description of the System Restoration Bonds — How Funds in the Collection Account Will Be Allocated" in this prospectus.

Credit Enhancement:

The primary forms of credit enhancement are the true-up mechanism and the capital subaccount.

*True-up Mechanism*. System restoration charges are required to be corrected at least annually to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • correct any under-collection or over-collection of system restoration charges relating to the system restoration bonds, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • ensure the billing of system restoration charges necessary to generate the collection of amounts sufficient to timely provide all scheduled payments of principal and interest and any other amounts due in connection with the system restoration bonds during the period for which such adjusted system restoration charges are in effect.

The servicer may also make interim true-up adjustments more frequently under certain circumstances. Please read "CenterPoint Houston's Financing Order — Statutory True-Ups" in this prospectus.

*Collection Account.* Under the indenture, the trustee will hold a collection account for the system restoration bonds, divided into various subaccounts. The primary subaccounts for credit enhancement purposes are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the general subaccount — the trustee will deposit into the general subaccount all system restoration charge collections remitted to it by the servicer with respect to the system restoration bonds and investment earnings on amounts in the general subaccount;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the capital subaccount — CenterPoint Houston will deposit an amount equal to 0.50% of the original principal amount of the system restoration bonds into the capital subaccount on the date of issuance of the system restoration bonds; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the excess funds subaccount — any excess amount of collected system restoration charges held after the payment on a payment date of scheduled principal, interest and ongoing qualified costs, and investment earnings on amounts in the excess funds subaccount of the system restoration bonds will be held in the excess funds subaccount.

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Each of these subaccounts for the system restoration bonds will be available to make payments on the system restoration bonds on each payment date.

Reports to Holders of the System Restoration

Bonds:

Pursuant to the indenture, the trustee will deliver or make available electronically to each holder of the system restoration bonds a statement provided and prepared by the servicer containing information concerning, among other things, us and the trust estate securing the system restoration bonds. Unless and until the system restoration bonds are issued in definitive certificated form, the reports for the system restoration bonds will be provided to DTC. The reports will be available to beneficial owners of the system restoration bonds on the reporting website of the trustee or upon written request to the trustee or the servicer. These reports will not be examined and reported upon by an independent public accountant. In addition, no independent public accountant will provide an opinion thereon. Furthermore, if required by the Trust Indenture Act, the trustee will be required to transmit a brief annual report to all holders of the system restoration bonds containing information concerning the trustee. Please read "Description of the System Restoration Bonds — Reports to Holders of the System Restoration Bonds" and "— The Trustee Must Provide an Annual Report to All Holders of the System Restoration Bonds" in this prospectus.

Servicing Compensation:

We will pay the servicer on each payment date the servicing fee with respect to the system restoration bonds. As long as CenterPoint Houston or any affiliated entity acts as servicer, this fee will be 0.075% of the initial principal amount of the system restoration bonds on an annualized basis, plus reimbursement for certain of its out-of-pocket costs (including filing fees, expenses for attorneys, accountants, printing or other professional services, and rating agency fees). There are no limits on the amount of out-of-pocket or reimbursable expenses under the servicing agreement. We expect that such expenses will be less than $0.4 million per year. If a successor servicer is appointed, the servicing fee will be agreed upon by the successor servicer and the trustee (in accordance with direction from the holders of the system restoration bonds), but will not, unless the PUCT consents, exceed 0.60% of the initial principal amount of the system restoration bonds on an annualized basis. In no event will the trustee be liable for any servicing fee in its individual capacity.

Federal Income Tax Status:

Baker Botts L.L.P. expects to issue an opinion, that, for U.S. federal income tax purposes (i) the issuance of the system restoration bonds will be a "qualifying securitization" within the meaning of Revenue Procedure 2005-62, 2005-2 CB 507 ("**Revenue Procedure 2005-62**"), as modified by Revenue Procedure 2024-15, 2024-12 IRB 717 ("**Revenue Procedure 2024-15**"), (ii) we will not be treated as a taxable entity separate and apart from Utility Holding and (iii) based on Revenue Procedure 2005-62, as modified by Revenue Procedure 2024-15, the system restoration bonds will constitute indebtedness of Utility Holding. Each beneficial owner of a system restoration bond, by acquiring a beneficial interest, agrees to treat such system restoration bond as indebtedness of Utility Holding, secured by the trust estate securing the system restoration bonds for federal (and, to the extent applicable, state) income tax purposes unless otherwise required by appropriate

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taxing authorities. Please read "Material U.S. Federal Income Tax Consequences" in this prospectus.

ERISA Considerations:

Employee benefit plans, plans or other arrangements that are subject to ERISA, Section 4975 of the Internal Revenue Code or applicable similar law and investors acting on behalf of, or using assets of, such employee benefit plans, plans or arrangements may acquire the system restoration bonds subject to specified conditions. The acquisition, holding or disposition of the system restoration bonds could be treated as a direct or indirect prohibited transaction under ERISA and/or Section 4975 of the Internal Revenue Code or, in the case of an employee benefit plan, plan or arrangement subject to applicable similar law, a violation of applicable similar law. Accordingly, by purchasing and holding the system restoration bonds, each investor that is or is acting on behalf of, or using assets of, such an employee benefit plan, plan or arrangement subject to ERISA, Section 4975 of the Internal Revenue Code or applicable similar law will be deemed to certify by virtue of its acquisition of any system restoration bonds that the acquisition, holding and subsequent disposition of the system restoration bonds will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Internal Revenue Code or, in the case of an employee benefit plan, plan or arrangement subject to applicable similar law, a violation of applicable similar law. For further information, please read "ERISA Considerations" in this prospectus.

Credit ratings:

The system restoration bonds are expected to receive credit ratings from two nationally recognized statistical rating organizations. See "Ratings for the System Restoration Bonds" in this prospectus.

Use of proceeds:

Upon the issuance and sale of the system restoration bonds, we will use the net proceeds to pay to CenterPoint Houston the purchase price of CenterPoint Houston's rights under the financing order, which are system restoration property.

The net proceeds from the sale of the system restoration property (after payment of certain transaction costs) will be used by CenterPoint Houston to reduce its recoverable system restoration costs incurred in connection with the May 2024 Storms. Please read "Use of Proceeds" in the prospectus.

1940 Act Registration:

We expect to rely on an exclusion from the definition of "investment company" under the Investment Company Act of 1940, as amended (the "**1940 Act**"), contained in Rule 3a-7 under the 1940 Act, although there may be additional exclusions or exemptions available to us. We are being structured so as not to constitute a "covered fund" for purposes of the Volcker Rule under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "**Dodd-Frank Act**").

Risk retention:

The system restoration bonds are not subject to the 5% risk retention requirements imposed by Section 15G of the Exchange Act due to the exemption provided in Rule 19(b)(8) of the risk retention regulations in 17 C.F.R. Part 246 of the Exchange Act, or Regulation RR. For information regarding the requirements of the EU Securitization Regulation as to risk retention and other matters, please read "Risk Factors — Other Risks Associated with an Investment in the System Restoration Bonds — Regulatory provisions affecting certain investors could adversely affect the liquidity and the regulatory treatment of investments in the system restoration bonds" in this prospectus.

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Minimum denomination:

$2,000, or integral multiples of $1,000 in excess thereof, except for one bond of each tranche, which may be of a smaller denomination.

Expected settlement:

, 2025, settling flat. DTC, Clearstream and Euroclear.

Risk factors:

#### You should consider carefully the risk factors beginning on page 21 of this prospectus before you invest in the system restoration bonds.

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#### SUMMARY OF RISK FACTORS
Set forth below is a summary of the material risk factors which you should consider before deciding whether to invest in the system restoration bonds. These risks can affect the timing or ultimate payment of the system restoration bonds and the value of your investment in the system restoration bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • You may experience material payment delays or incur a loss on your investment in the system restoration bonds because the source of funds for payment is limited.

#### Risks associated with potential judicial, legislative or regulatory actions
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • We and CenterPoint Houston are not obligated to indemnify you for changes in law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Future judicial action could reduce the value of your investment in the system restoration bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Future state legislative action could reduce the value of your investment in the system restoration bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • The PUCT might attempt to take actions that could reduce the value of your investment in the system restoration bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • The servicer may not fulfill its obligations to act on behalf of the holders of the system restoration bonds to protect bondholders from actions by the PUCT or the State of Texas, or the servicer may be unsuccessful in any such attempt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • A municipal entity might assert the right to acquire portions of CenterPoint Houston's electric distribution facilities and avoid payment of the system restoration charges.

#### Servicing risks
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Your investment in the system restoration bonds depends on CenterPoint Houston or its successor or assignee acting as servicer of the system restoration property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Inaccurate forecasting of electricity consumption or unanticipated delinquencies or write-offs might reduce scheduled payments on the system restoration bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • If we have to replace CenterPoint Houston as the servicer, we may experience difficulties finding and using a replacement servicer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • It might be difficult to collect system restoration charges from REPs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Competitive metering services might result in unexpected problems in receiving accurate metering data.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Limits on rights to terminate service might make it more difficult to collect the system restoration charges.

#### Weather-related damage and other natural disaster risks
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Weather-related damage or damage from other natural disasters to CenterPoint Houston's operations could impair payments on the system restoration bonds.

#### Risks to the electric transmission and distribution industry
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Alternatives to purchasing electricity through CenterPoint Houston's distribution facilities may be more widely utilized by retail customers in the future.

#### Risks associated with the unusual nature of the system restoration property
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Future adjustments to the system restoration charges by customer class might result in insufficient collections.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • We will not receive system restoration charges in respect of electric service provided more than 15 years from the date of issuance of the system restoration bonds.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Foreclosure of the trustee's lien on the system restoration property might not be practical, and acceleration of the system restoration bonds before maturity might have little practical effect.

#### Risks associated with potential bankruptcy proceedings of the seller or the servicer
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • The servicer will commingle the system restoration charges with other revenues it collects, which might obstruct access to the system restoration charges in case of the servicer's bankruptcy and reduce the value of your investment in the system restoration bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • The bankruptcy of CenterPoint Houston or any successor seller might result in losses or delays in payments on the system restoration bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • The sale of the system restoration property might be construed as a financing and not a sale in a case of CenterPoint Houston's bankruptcy, which might delay or limit payments on the system restoration bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • If the servicer enters bankruptcy proceedings, the remittance by the servicer of the collections of certain system restoration charges prior to the date of bankruptcy might constitute preferences, which means these funds might be unavailable to pay amounts owed on the system restoration bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Claims against CenterPoint Houston or any successor seller might be limited in the event of a bankruptcy of CenterPoint Houston or such successor seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • The bankruptcy of CenterPoint Houston or any successor seller might limit the remedies available to the trustee.

#### Risks associated with potential bankruptcy proceedings or defaults of REPs
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • REPs may commingle the system restoration charges with other revenues they collect. This may cause losses on or reduce the value of your investment in the system restoration bonds in the event a REP enters bankruptcy proceedings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • If a REP enters bankruptcy proceedings, any cash deposit of the REP held by the trustee might not be available to cover amounts owed by the REP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • If a REP enters bankruptcy proceedings, payments including collections of system restoration charges made by that REP to the servicer prior to the bankruptcy might constitute preferences, which means these funds might be unavailable to pay amounts owed on the system restoration bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • If a REP defaults with respect to the payment of the system restoration charges owed to the servicer, any cash deposit or other collateral of the REP held by the trustee might not cover amounts owed by the REP.

#### Other risks associated with an investment in the system restoration bonds
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston's indemnification obligations under the sale agreement and the servicing agreement are limited and might not be sufficient to protect your investment in the system restoration bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Credit ratings do not indicate the expected rate of payment of principal on the system restoration bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Changes in CenterPoint Houston's credit ratings might affect the market value of the system restoration bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • The absence of a secondary market for the system restoration bonds might limit your ability to resell the system restoration bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • You might receive principal payments for a tranche of the system restoration bonds later than you expect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston or its affiliates may cause the issuance, by another subsidiary or affiliated entity, of additional system restoration bonds or similar bonds secured by additional system restoration property or similar property (including transition property under the Securitization Act) that, in each case, includes a nonbypassable charge on customers.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston's operations are subject to risks beyond its control, including cyber-security intrusions, terrorist attacks or other catastrophic events, which could limit CenterPoint Houston's operations and ability to service the system restoration property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • If the investment of collected system restoration charges and other funds held by the trustee in the collection account results in investment losses or the investments become illiquid, you may receive payment of principal and interest on the system restoration bonds later than you expect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • Regulatory provisions affecting certain investors could adversely affect the liquidity and the regulatory treatment of investments in the system restoration bonds.

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#### RISK FACTORS
 *Please carefully consider all the information we have included or incorporated by reference in this prospectus, including the risks described below and in "Cautionary Statement Regarding Forward-Looking Information," before deciding whether to invest in the system restoration bonds.* 

 ***You may experience material payment delays or incur a loss on your investment in the system restoration bonds because the source of funds for payment is limited.***

The only source of funds for payment of the system restoration bonds will be our assets, which consist of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the system restoration property securing the system restoration bonds, including the right to impose, collect and receive the system restoration charges and our rights under the financing order to the statutory true-up mechanism;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the funds on deposit in the accounts held by the trustee; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • our rights under various contracts we describe in this prospectus.

The system restoration bonds are not a charge on the full faith and credit or taxing power of the State of Texas or any governmental agency or instrumentality, nor will the system restoration bonds be insured or guaranteed by CenterPoint Houston, including in its capacity as the sponsor, depositor, seller or initial servicer, or by its ultimate parent, CenterPoint Energy, or any of their respective affiliates (other than us), the trustee or any other person or entity. The system restoration bonds will be non-recourse obligations, secured only by the trust estate of the indenture. Delays in payment on the system restoration bonds might result in a reduction in the market value of the system restoration bonds and, therefore, the value of your investment in the system restoration bonds. Thus, for payment of the system restoration bonds, you must rely solely upon the collections of the system restoration charges and funds on deposit in the accounts held by the trustee. Our organizational documents restrict our right to acquire other assets unrelated to the transactions described in this prospectus. Please read "CenterPoint Energy Restoration Bond Company II, LLC, The Issuing Entity" in this prospectus.

#### RISKS ASSOCIATED WITH POTENTIAL JUDICIAL, LEGISLATIVE OR REGULATORY ACTIONS

#### We and CenterPoint Houston are not obligated to indemnify you for changes in law.
Neither we nor CenterPoint Houston, nor any affiliate, successor or assignee will indemnify you for any changes in the law, including any federal preemption or repeal or amendment of the Securitization Act, that might affect the value of the system restoration bonds. CenterPoint Houston will agree in the sale agreement to institute any legal or administrative action or proceeding as may be reasonably necessary to block or overturn any attempts to cause a repeal or modification of, or supplement to, the Securitization Act, the financing order (including through a subsequent determination of the PUCT extending the time period of the financing order), the issuance advice letter or the rights of the holders of the system restoration bonds by legislative enactment or constitutional amendment that would be materially adverse to us, the trustee or the holders of the system restoration bonds. However, we cannot assure you that CenterPoint Houston would be able to take this action or that any such action would be successful. Although CenterPoint Houston or any successor assignee might be required to indemnify us if legal action based on the law in effect at the time of the issuance of the system restoration bonds invalidates the system restoration property, such indemnification obligations do not apply for any changes in law after the date the system restoration bonds are issued, whether such changes in law are effected by means of any legislative enactment, any constitutional amendment or any final and non-appealable judicial decision. Please read "The Sale Agreement — CenterPoint Houston's Covenants" in this prospectus.

#### Future judicial action could reduce the value of your investment in the system restoration bonds.
The system restoration property is the creation of the Securitization Act and the financing order that has been issued by the PUCT to CenterPoint Houston pursuant to the Securitization Act. There is uncertainty associated with investing in bonds payable from an asset that depends for its existence on legislation

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because there is limited judicial or regulatory experience implementing and interpreting the legislation. The Securitization Act or any financing order or any provisions thereof might be directly contested in courts or otherwise become the subject of litigation. Because the system restoration property is a creation of the Securitization Act and the financing order, any judicial determination affecting the validity of or interpreting the Securitization Act or the financing order, the system restoration property or our ability to make payments on the system restoration bonds might have an adverse effect on the value of the system restoration bonds or cause a delay in the recovery of your investment. The Securitization Act or the financing order might be directly contested in courts or otherwise become the subject of litigation. In June 2001, the Supreme Court of the State of Texas upheld the constitutionality of certain provisions of the Securitization Act. Notwithstanding that decision, a federal or state court could be asked in the future to determine whether the relevant provisions of the Securitization Act are unlawful or invalid. If the Securitization Act is invalidated, the financing order authorizing us to issue these securities might also be invalidated. If an invalidation of any relevant underlying legislative provision or any financing order provision were to result from such litigation, you might lose some or all of your investment or might experience delays in recovering your investment. Please read "The Securitization Act — CenterPoint Houston and Other Utilities May Securitize Qualified Costs — Constitutional Matters" in this prospectus.

Other states have passed laws with financing provisions similar to some provisions of the Securitization Act, and some of these laws have been challenged by judicial actions or utility commission proceedings. To date, none of these challenges has succeeded, but future judicial challenges might be made. An unfavorable decision regarding another state's law would not automatically invalidate the Securitization Act or the financing order, but it might provoke a challenge to the Securitization Act or the financing order, establish a legal precedent for a successful challenge to the Securitization Act or the financing order or heighten awareness of the political and other risks of the system restoration bonds, and in that way may limit the liquidity and value of the system restoration bonds. Therefore, legal activity in other states may indirectly affect the value of your investment in the system restoration bonds.

#### Future state legislative action could reduce the value of your investment in the system restoration bonds.
Despite the State's pledge in the Securitization Act not to (i) take or permit certain actions that would impair the value of the system restoration property or (ii) reduce, alter or impair (except for annual and interim true-up adjustments) the system restoration charges, the Texas legislature might attempt to repeal or amend the Securitization Act in a manner that limits or alters the system restoration property so as to reduce its value. For a description of the State's pledge, please read "The Securitization Act — CenterPoint Houston and Other Utilities May Securitize Qualified Costs" in this prospectus. As of the date of this prospectus, we are not aware of any pending legislation in the Texas legislature that would affect provisions of the Securitization Act applicable to the securitization of the system restoration bonds.

It might be possible for the Texas legislature to repeal or amend the Securitization Act notwithstanding the State's pledge if the legislature acts in order to serve a significant and legitimate public purpose, such as protecting the public health and safety, or responding to a national or regional catastrophe or emergency affecting CenterPoint Houston's service area, or if such action or inaction otherwise is in the valid exercise of the State's police power. Any such action, as well as the costly and time-consuming litigation that likely would ensue, might adversely affect the price and liquidity, the dates of payment of interest and principal and the weighted average lives of the system restoration bonds. Moreover, the outcome of any litigation cannot be predicted. Accordingly, you might incur a loss on or delay in recovery of your investment in the system restoration bonds.

Except as described in "The Sale Agreement — CenterPoint Houston's Obligation to Indemnify Us and the Trustee and to Take Legal Action" in this prospectus, neither we, CenterPoint Houston, nor any of its successors, assignees or affiliates will indemnify you for any change in law, including any amendment or repeal of the Securitization Act, that might affect the value of the system restoration bonds.

If an action of the Texas legislature or the PUCT adversely affecting the system restoration property or the ability to collect system restoration charges were considered a "taking" under the United States or Texas Constitutions, the State of Texas might be obligated to pay compensation in an amount equal to the estimated value of the system restoration property at the time of the taking. However, even in that event,

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there is no assurance that any amount provided as compensation would be sufficient for you to recover fully your investment in the system restoration bonds or to offset interest lost pending such recovery.

Unlike the citizens of some other states, the citizens of the State of Texas currently do not have the constitutional right to adopt or revise state laws by initiative or referendum. Thus, absent an amendment to the Texas Constitution, the Securitization Act cannot be amended or repealed by direct action of the electorate of the State of Texas.

The enforcement of any rights against the State of Texas or the PUCT under the State's pledge may be subject to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against state and local governmental entities in Texas. These limitations might include, for example, the necessity to exhaust administrative remedies prior to bringing suit in a court, or limitations on type and locations of courts in which the State of Texas or the PUCT may be sued, or limitations on awards or collection of damages.

#### The PUCT might attempt to take actions that could reduce the value of your investment in the system restoration bonds.
The Securitization Act provides that the financing order is irrevocable and not subject to reduction, impairment or adjustment by further act of the PUCT, except with respect to annual and interim true-up adjustments to the system restoration charges. In addition, the State has pledged in the Securitization Act that it will not take or permit any action that would impair the value of the system restoration property or reduce, alter or impair (except for annual and interim true-up adjustments) the system restoration charges to be imposed, collected and remitted to financing parties under the Securitization Act, until the principal, interest and premium and other charges incurred in connection with the system restoration bonds have been paid or performed in full. However, the PUCT retains the power to adopt, revise or rescind rules or regulations affecting CenterPoint Houston or a successor utility. The PUCT also retains the power to interpret the financing order granted to CenterPoint Houston, and in that capacity might be called upon to rule on the meanings of provisions of the financing order that might need further elaboration. Any new or amended regulations, standards or orders from the PUCT might adversely affect the ability of the servicer to assess late fees, impose deposit requirements or collect the system restoration charges in full and on a timely basis. For example, the PUCT has in recent years (i) imposed a temporary moratorium on executing disconnects of electric service for non-pay orders from REPs and (ii) temporarily required CenterPoint Houston to suspend wire charges to REPs with respect to certain retail customers. The PUCT may in the future change standards or regulations applicable to CenterPoint Houston or the REPs in a manner that affects collections of system restoration charges, which could delay payments of principal and interest on the system restoration bonds or negatively impact the rating of the system restoration bonds or their price and, accordingly, the amortization of the system restoration bonds and their weighted average lives.

The servicer is required to file with the PUCT, on our behalf, certain adjustments of the system restoration charges. Please read "CenterPoint Houston's Financing Order — Statutory True-Ups" and "— Adjustments to Allocation of the System Restoration Charges" in this prospectus. True-up adjustment procedures have been challenged in the past and may be challenged in the future. Challenges to or delays in the true-up process might adversely affect the market perception and valuation of the system restoration bonds. Also, any litigation might materially delay system restoration charge collections due to delayed implementation of true-up adjustments and might result in missing payments or payment delays and lengthened weighted average life of the system restoration bonds.

 ***The servicer may not fulfill its obligations to act on behalf of the holders of the system restoration bonds to protect bondholders from actions by the PUCT or the State of Texas, or the servicer may be unsuccessful in any such attempt.***

The servicer will agree in the servicing agreement to take any action or proceeding reasonably necessary to compel performance by the PUCT and the State of Texas of any of their obligations or duties under the Securitization Act or the financing order, including any actions reasonably necessary to block or overturn any attempts to cause a repeal of, or modification of, or supplement to the Securitization Act or the financing order or the rights of holders of the system restoration bonds in the system restoration property by legislative enactment, constitutional amendment or other means that would be materially adverse to the holders of

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the system restoration bonds. The servicer, however, may not be able to take those actions for a number of reasons, including due to legal or regulatory restrictions, financial constraints and practical difficulties in successfully challenging any such legislative enactment or constitutional amendment. Additionally, any action the servicer is able to take may not be successful. Any such failure to perform its obligations or to successfully compel performance by the PUCT or the State of Texas could negatively affect the rights of the holders of the system restoration bonds and result in a loss of their investment in the system restoration bonds.

#### A municipal entity might assert the right to acquire portions of CenterPoint Houston's electric distribution facilities and avoid payment of the system restoration charges.
Texas law may authorize certain local municipalities to seek to acquire portions of CenterPoint Houston's electric distribution facilities through the power of eminent domain for use as part of municipally-owned utility systems. Although there are no recorded cases in Texas indicating that the power of eminent domain has been used by municipalities in Texas in recent times to acquire electric distribution systems, there can be no assurance that one or more municipalities will not seek to acquire some or all of CenterPoint Houston's electric distribution facilities while the system restoration bonds remain outstanding. The Securitization Act specifies that system restoration charges approved by a PUCT order shall be collected by an electric utility as well as its "successors." In the servicing agreement, CenterPoint Houston will covenant to assert in an appropriate forum that any municipality that acquires any portion of CenterPoint Houston's electric distribution facilities must be treated as a successor to CenterPoint Houston under the Securitization Act and the financing order and that retail customers in such municipalities remain responsible for payment of system restoration charges. However, the involved municipality might assert that it should not be treated as a successor to CenterPoint Houston for these purposes and that its distribution customers are not responsible for payment of system restoration charges. In any such cases, there can be no assurance that the system restoration charges will be collected from customers of municipally-owned utilities who were formerly customers of CenterPoint Houston. Any decrease in the retail customer base from which system restoration charges are collected might result in missing payments or payment delays and lengthened weighted average life of the system restoration bonds.

#### SERVICING RISKS

#### Your investment in the system restoration bonds depends on CenterPoint Houston or its successor or assignee acting as servicer of the system restoration property.
CenterPoint Houston, as initial servicer, will be responsible for, among other things, calculating, billing and collecting the system restoration charges from REPs, submitting filings to the PUCT to adjust these charges, monitoring the trust estate securing the system restoration bonds and taking certain actions in the event of non-payment by a REP. The trustee's receipt of collections in respect of the system restoration charges, which will be used to make payments on the system restoration bonds, will depend in part on the skill and diligence of the servicer in performing these functions. Difficulties or failures in the servicer's handling of the system restoration property could result in a shortfall in funds to pay the system restoration bonds. The systems that the servicer has in place for system restoration charge billings and collections, together with the regulations of the PUCT governing REPs, might, in particular circumstances, cause the servicer to experience difficulty in performing these functions in a timely and completely accurate manner. If the servicer fails to make system restoration charge collections for any reason, then the servicer's payments to the trustee in respect of the system restoration charges might be delayed or reduced. In that event, our payments on the system restoration bonds might be delayed or reduced.

#### Inaccurate forecasting of electricity consumption or unanticipated delinquencies or write-offs might reduce scheduled payments on the system restoration bonds.
The system restoration charges are generally assessed based on forecasted customer usage, *e.g.*, kilowatt-hours of electricity consumed by retail customers. The amount and the rate of system restoration charge collections will depend in part on the actual electricity usage and the amount of collections and write-offs for each customer rate class. If the servicer inaccurately forecasts electricity consumption or uses inaccurate electric customer delinquency or write-off data when setting or adjusting the system restoration charges, or if the effectiveness of the adjustments is delayed for any reason, there could be a shortfall or material

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delay in system restoration charge collections, which might result in missed or delayed payments of principal and interest and lengthened weighted average life of one of the tranches of the system restoration bonds. Please read "CenterPoint Houston's Financing Order — Statutory True-Ups" and "— Adjustments to Allocation of the System Restoration Charges" in this prospectus.

Inaccurate forecasting of electricity consumption by the servicer might result from, among other things: unanticipated weather or economic conditions, resulting in less electricity consumption than forecast; general economic conditions, including inflation, causing retail customers to leave CenterPoint Houston's service territory or reduce their electricity consumption; the occurrence of a natural disaster, such as a hurricane, derecho, wildfire, tornado or winter storm, or an act of terrorism, cyberattack or other catastrophic event, including pandemics, unexpectedly disrupting electrical service or reducing electricity consumption and demand; changes in the market structure of the electric industry; electric customers consuming less electricity than anticipated because of increased energy prices, increased conservation efforts, worse economic conditions or unanticipated increases in electric usage efficiency; or customers switching to alternative sources of energy, including self-generation of electric power.

The servicer's use of inaccurate delinquency or write-off rates might also result from, among other things, unexpected deterioration of the economy or the occurrence of a natural disaster or extreme weather, an act of terrorism, cyberattack or other catastrophic event or the unanticipated declaration of a moratorium on terminating electric service to customers in the event of such occurrences, any of which would cause greater delinquencies or write-offs than expected or force CenterPoint Houston or REPs to grant additional payment relief to more retail customers, or any other change in law that makes it more difficult for REPs to terminate service to nonpaying retail customers or that requires REPs to apply more lenient credit standards in accepting retail customers.

#### If we have to replace CenterPoint Houston as the servicer, we may experience difficulties finding and using a replacement servicer.
If CenterPoint Houston ceases to service the system restoration property, it might be difficult to find a successor servicer. Under the financing order, the annual servicing fee payable to a successor servicer is capped and the payment of compensation in excess of the cap is dependent upon PUCT approval. Also, any successor servicer might have less experience and ability than CenterPoint Houston and might experience difficulties in collecting system restoration charges and determining appropriate adjustments to the system restoration charges and billing and/or payment arrangements may change, resulting in delays or disruptions in collections. A successor servicer might charge fees that, while permitted under the financing order, are substantially higher than the fees paid to CenterPoint Houston as the initial servicer. Although a true-up adjustment may be required to allow for the increase in fees, there could be a gap between the incurrence of those fees and the implementation of the true-up adjustment to adjust for the increase that might adversely affect distributions from the collection account. In the event of the commencement of a case by or against the servicer under the Bankruptcy Code or similar laws, we and the trustee might be prevented from effecting a transfer of servicing due to operation of the Bankruptcy Code. Any of these factors and others might delay the timing of payments and may reduce the value of your investment in the system restoration bonds. Please read "The Servicing Agreement" in this prospectus.

#### It might be difficult to collect system restoration charges from REPs.
As required by the Securitization Act, retail customers will pay the system restoration charges to REPs who supply them with electric power. The REPs are responsible for billing retail customers and will be obligated to remit payments of the system restoration charges, less a specified percentage allowance for charge-offs of delinquent customer accounts, within 35 days of billing from the servicer, even if they do not collect the system restoration charges from retail customers. Please read "Retail Electric Providers" in this prospectus. Because the REPs will bill retail customers for the system restoration charges, we will have to rely on a relatively small number of entities for the collection of the bulk of the system restoration charges. A significant portion of CenterPoint Houston's billed receivables from REPs are due from affiliates of NRG Energy, Inc. ("**NRG**") and Vistra Energy Corp. ("**Vistra**"). CenterPoint Houston's aggregate billed receivables balance from REPs as of December 31, 2024 was $263 million. Approximately 37% and 21% of this amount was owed by affiliates of NRG and Vistra, respectively.

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Failure by the REPs to remit system restoration charges to the servicer might cause delays in payments on the system restoration bonds and adversely affect your investment in the system restoration bonds. Adverse economic conditions or financial difficulties of one or more REPs could impair the ability of these REPs to remit payments of the system restoration charges or could cause them to delay such payments. The servicer will not pay any shortfalls resulting from the failure of any REP to forward system restoration charge collections.

Adjustments to the system restoration charges and any credit support provided by a REP, while available to compensate for a failure by a REP to pay the system restoration charges to the servicer, might not be sufficient to protect the value of your investment in the system restoration bonds. Please read "CenterPoint Houston's Financing Order — Statutory True-Ups" in this prospectus.

The Securitization Act provides for one or more REPs in each area to be designated the "provider of last resort" for that area or a specified customer class. The provider of last resort is required to offer basic electric service to retail customers in its designated area, regardless of the creditworthiness of the customer. The provider of last resort might face greater difficulty in bill collection than other REPs and therefore the servicer may face greater difficulty in collecting system restoration charges from the provider of last resort.

REPs may issue a single bill to individual retail customers that includes all charges related to the purchase of electricity, without separately itemizing the system restoration charge component of the bill. A REP's use of a consolidated bill might increase the risk that customers who have claims against the REP will attempt to offset those claims against system restoration charges or increase the risk that, in the event of a bankruptcy of a REP, a bankruptcy court would find that the REP has an interest in the system restoration property and would make it more difficult to terminate the services of a bankrupt REP or collect system restoration charges from its customers.

#### Competitive metering services might result in unexpected problems in receiving accurate metering data.
Non-residential retail customers that are required by ERCOT to have an interval data recorder meter may choose to own the settlement and billing meters that are used to measure electric energy delivered to their location or to have those meters owned by a REP, the transmission and distribution utility or another person authorized by the customer. As of June 30, 2025, no retail customers had a competitively owned data recorder meter. Should third parties begin to perform those metering services in CenterPoint Houston's service territory, there might be problems converting to the third party's metering system, taking accurate meter readings and collecting and processing accurate metering data. Inaccurate metering data might lead to inaccuracies in the calculation and imposition of system restoration charges and might give rise to disputes between the servicer and REPs regarding payments and payment shortfalls resulting in missing or delayed payments of principal and interest and lengthened weighted average life of the system restoration bonds.

#### Limits on rights to terminate service might make it more difficult to collect the system restoration charges.
The financing order expressly provides that the REP or provider of last resort has the right to direct the servicer to terminate transmission and distribution service to the retail customer for nonpayment of system restoration charges to the extent permitted by and pursuant to PUCT rules. Moreover, in the event that the servicer is billing retail customers for system restoration charges, the servicer has the right to terminate transmission and distribution service to the retail customer for non-payment of system restoration charges under the applicable rules of the PUCT. Nonetheless, Texas statutory requirements and the rules and regulations of the PUCT, which may change from time to time, regulate and control the right to disconnect service. For example, REPs generally may not terminate service to a customer (1) on a holiday or weekend day or the day immediately preceding a holiday or weekend, (2) during certain extreme weather conditions, (3) if such disconnection would cause a person to become seriously ill or more seriously ill, (4) if such customer is an energy assistance client under certain circumstances or (5) if the customer is a master-metered apartment complex unless certain notices are given. To the extent these retail customers do not pay for their electric service, REPs will not be able to collect system restoration charges from these retail customers. Although REPs will have to pay the servicer the system restoration charges on behalf of those customers (subject to any charge-off allowance and reconciliation rights), required service to non-paying end-use customers could affect the ability of REPs to make such payment.

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#### WEATHER-RELATED DAMAGE AND OTHER NATURAL DISASTER RISKS

#### Weather-related damage or damage from other natural disasters to CenterPoint Houston's operations could impair payments on the system restoration bonds.
CenterPoint Houston's service territory was impacted by the February 2021 Winter Storm Event, the May 2024 Storms and Hurricane Beryl in July 2024, disrupting CenterPoint Houston's operations. Future storms or other adverse weather-related events, such as tornadoes, thunderstorms, ice storms, windstorms, hurricanes, derechos, wildfires flooding, earthquakes and prolonged droughts, could have similar effects. Transmission, distribution and usage of electricity could be interrupted temporarily, reducing the collections of system restoration charges. There could be longer-lasting weather-related adverse effects on residential and commercial development and economic activity in CenterPoint Houston's service territory, which could cause the per-kWh- or per-billing-kVA-based system restoration charge to be greater than expected. Legislative action adverse to the holders of the system restoration bonds might be taken in response, and such legislation, if challenged as violative of the State of Texas's pledge, might be defended on the basis of public necessity. Please read "The Securitization Act — CenterPoint Houston and Other Utilities May Securitize Qualified Costs — The State Pledge" and "Risk Factors — Risks Associated with Potential Judicial, Legislative or Regulatory Actions — Future state legislative action could reduce the value of your investment in the system restoration bonds" in this prospectus.

#### RISKS TO THE ELECTRIC TRANSMISSION AND DISTRIBUTION INDUSTRY

#### Alternatives to purchasing electricity through CenterPoint Houston's distribution facilities may be more widely utilized by retail customers in the future.
Broader use of distributed generation by retail customers may result from customers' changing perceptions of the merits of utilizing existing generation technology, tax or other economic incentives or from technological developments resulting in smaller-scale, more fuel efficient, more environmentally friendly and/or more cost effective distributed generation. Moreover, an increase in distributed generation may result if extreme weather conditions result in shortages of grid-supplied energy or if other factors cause grid-supplied energy to be less reliable. Increased use of distributed generation by retail customers may reduce the amount of energy actually delivered to such customers through CenterPoint Houston's facilities. Retail customers within CenterPoint Houston's service territory who switch to an on-site power production facility with a rated capacity of 10 megawatts ("**MW**") or less must pay system restoration charges associated with any energy delivered through CenterPoint Houston's facilities but are not required to pay system restoration charges on such on-site generation under the Securitization Act and the financing order. Therefore, more widespread use of distributed generation might allow greater numbers of retail customers to reduce or eliminate their payment of system restoration charges causing system restoration charges to remaining customers to increase.

#### RISKS ASSOCIATED WITH THE UNUSUAL NATURE OF THE SYSTEM RESTORATION PROPERTY

#### Future adjustments to the system restoration charges by customer class might result in insufficient collections.
The retail customers who pay the system restoration charges are divided into customer classes. System restoration charges will be allocated among customer classes and assessed in accordance with the formula specified in the financing order. A shortfall in collections of the system restoration charges in one customer class may be corrected by making adjustments to the system restoration charges payable by that customer class and any other customer class. If enough retail customers in a customer class fail to pay the system restoration charges or cease to be customers, the servicer might have to substantially increase the system restoration charges for the remaining customers in that customer class and for other customer classes. These increases could lead to further unanticipated failures by the remaining retail customers to pay the system restoration charges, thereby increasing the risk of a shortfall in funds to pay the system restoration bonds.

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 ***We will not receive system restoration charges in respect of electric service provided more than 15 years from the date of issuance of the system restoration bonds.***

System restoration charges are not permitted to be collected on electricity delivered after the 15th anniversary of the issuance of the system restoration bonds. If collections from system restoration charges for electricity delivered through the 15th anniversary of the system restoration bonds, or from any credit enhancement mechanisms, are not sufficient to repay the system restoration bonds in full, no other funds will be available to pay the unpaid balance due on the system restoration bonds.

 ***Foreclosure of the trustee's lien on the system restoration property might not be practical, and acceleration of the system restoration bonds before maturity might have little practical effect.***

Under the Securitization Act and the indenture, the trustee or the holders of the system restoration bonds have the right to foreclose or otherwise enforce the lien on the system restoration property securing the system restoration bonds. However, in the event of foreclosure, there is likely to be a limited market, if any, for the system restoration property. Therefore, foreclosure might not be a realistic or practical remedy. Moreover, although principal of the system restoration bonds will be due and payable upon acceleration of the system restoration bonds before maturity, system restoration charges likely would not be accelerated and the nature of our business will result in the principal of the system restoration bonds being paid as funds become available. If there is an acceleration of the system restoration bonds, all outstanding tranches of the system restoration bonds will be paid pro rata; therefore, some tranches might be paid earlier than expected and some tranches might be paid later than expected.

#### RISKS ASSOCIATED WITH POTENTIAL BANKRUPTCY PROCEEDINGS OF THE SELLER OR THE SERVICER
 *For a detailed discussion of the following bankruptcy risks, please read "How a Bankruptcy May Affect Your Investment" in this prospectus.* 

 ***The servicer will commingle the system restoration charges with other revenues it collects, which might obstruct access to the system restoration charges in case of the servicer's bankruptcy and reduce the value of your investment in the system restoration bonds.***

The servicer will initially be required to remit system restoration charge collections to the trustee on our behalf each business day based on estimated daily system charge collections, using an average balance of days outstanding on retail customer bills, which remittance will be within two business days after such payments are estimated to have been received. The servicer will not segregate the system restoration charges from the other funds it collects from retail customers or REPs or its general funds. The system restoration charges will be segregated only when the servicer pays them to the trustee.

Despite this requirement, the servicer might fail to remit the full amount of the system restoration charges to the trustee or might fail to do so on a timely basis. This failure, whether voluntary or involuntary, might materially reduce the amount of system restoration charge collections available to make payments on the system restoration bonds.

The Securitization Act provides that the priority of a lien and security interest perfected under the Securitization Act is not impaired by the commingling of funds arising from system restoration charges with other funds of the servicer. In a bankruptcy of the servicer, however, a bankruptcy court might rule that federal bankruptcy law does not recognize our right to collections of the system restoration charges that are commingled with other funds of the servicer as of the date of bankruptcy. If so, the collections of the system restoration charges held by the servicer as of the date of bankruptcy would not be available to pay amounts owed on the system restoration bonds. In this case, we would have only a general unsecured claim against the servicer for those amounts. This decision could cause material delays in payments of principal or interest, or losses, on your system restoration bonds and could materially reduce the value of your investment in the system restoration bonds, particularly if it occurred in the 15th year following the issuance of the system restoration bonds after the completion of which no system restoration charges can be charged. Please read "How a Bankruptcy May Affect Your Investment" in this prospectus.

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#### The bankruptcy of CenterPoint Houston or any successor seller might result in losses or delays in payments on the system restoration bonds.
The Securitization Act and the financing order provide that as a matter of Texas state law:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the rights and interests of a selling utility or its successor under a financing order, including the right to impose, collect and receive the system restoration charges authorized in the financing order, are contract rights of the seller,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the seller may make a present transfer of its rights under a financing order, including the right to impose, collect and receive future system restoration charges that retail customers do not yet owe,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • upon the transfer to us, the rights will become system restoration property, and system restoration property constitutes a present property right, even though the imposition and collection of system restoration charges depends on further acts that have not yet occurred, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • a transfer of the system restoration property from the seller or its affiliate, to us, under an agreement that expressly states the transfer is a sale or other absolute transfer, is a true sale of the system restoration property and not a pledge of the system restoration property to secure a financing by the seller.

Please read "The Securitization Act" in this prospectus. These provisions are important to maintaining payments on the system restoration bonds in accordance with their terms during any bankruptcy of CenterPoint Houston. In addition, the transaction has been structured with the objective of keeping us legally separate from CenterPoint Houston and its affiliates in the event of a bankruptcy of CenterPoint Houston or any such affiliates.

A bankruptcy court generally follows state property law on issues such as those addressed by the state law provisions described above. However, a bankruptcy court does not follow state law if it determines that the state law is contrary to a paramount federal bankruptcy policy or interest. If a bankruptcy court in a CenterPoint Houston bankruptcy refused to enforce one or more of the state property law provisions described above, the effect of this decision on you as a beneficial owner of the system restoration bonds might be similar to the treatment you would receive in a CenterPoint Houston bankruptcy if the system restoration bonds had been issued directly by CenterPoint Houston. A decision by the bankruptcy court that, despite our separateness from CenterPoint Houston, our assets and liabilities and those of CenterPoint Houston should be substantively consolidated would have a similar effect on you as a holder of the system restoration bonds.

We have taken steps together with CenterPoint Houston, as the seller of the system restoration property, to reduce the risk that in the event the seller or an affiliate of the seller were to become the debtor in a bankruptcy case, a court would order that our assets and liabilities be substantively consolidated with those of CenterPoint Houston or an affiliate. Nonetheless, these steps might not be completely effective, and thus if CenterPoint Houston or one of its affiliates were to become a debtor in a bankruptcy case, a court might order that our assets and liabilities be substantively consolidated with those of CenterPoint Houston or such affiliate. This might cause material delays in payment of, or losses on, your system restoration bonds and might materially reduce the value of your investment in the system restoration bonds. For example:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • without permission from the bankruptcy court, the trustee might be prevented from taking actions against CenterPoint Houston or recovering or using funds on your behalf or replacing CenterPoint Houston as the servicer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the bankruptcy court might order the trustee to exchange the system restoration property for other property of lower value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • tax or other government liens on CenterPoint Houston's property might have priority over the trustee's lien and might be paid from collected system restoration charges before payments on the system restoration bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the trustee's lien might not be properly perfected in the collected system restoration property prior to or as of the date of CenterPoint Houston's bankruptcy, with the result that the system restoration bonds would represent only general unsecured claims against CenterPoint Houston;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the bankruptcy court might rule that neither our property interest nor the trustee's lien extends to system restoration charges in respect of electricity consumed after the commencement of CenterPoint Houston's bankruptcy case, with the result that the system restoration bonds would represent only general unsecured claims against CenterPoint Houston;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we and CenterPoint Houston might be relieved of any obligation to make any payments on the system restoration bonds during the pendency of the bankruptcy case and might be relieved of any obligation to pay interest accruing after the commencement of the bankruptcy case;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston might be able to alter the terms of the system restoration bonds as part of its plan of reorganization;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the bankruptcy court might rule that the system restoration charges should be used to pay, or that we should be charged for, a portion of the cost of providing electric service;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the bankruptcy court might rule that the remedy provisions of the sale agreement are unenforceable, leaving us with an unsecured claim for actual damages against CenterPoint Houston that may be difficult to prove or, if proven, to collect in full;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • if the servicer defaults or enters bankruptcy proceedings, it might be difficult to find a successor servicer and payments on the system restoration bonds might be suspended;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the mere fact of a servicer or seller bankruptcy proceeding might have an adverse effect on the resale market for the system restoration bonds and on the value of the system restoration bonds; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the servicer will commingle the system restoration charges with other revenues it collects, which might obstruct access to the system restoration charges in case of the bankruptcy of the servicer and reduce the value of your investment in the system restoration bonds.

Please read "How a Bankruptcy May Affect Your Investment" in this prospectus.

 ***The sale of the system restoration property might be construed as a financing and not a sale in a case of CenterPoint Houston's bankruptcy, which might delay or limit payments on the system restoration bonds.***

The Securitization Act provides that the characterization of a transfer of system restoration property as a sale or other absolute transfer will apply regardless of the treatment of the transfer as a financing for tax, financial reporting or other purposes. We and CenterPoint Houston will treat the transaction as a sale under applicable law, although for financial reporting and federal and state income and franchise tax purposes the transaction is intended to be treated as a financing. In the event of a bankruptcy of CenterPoint Houston, a party in interest in the bankruptcy might assert that the sale of the system restoration property to us was a financing transaction and not a "sale or other absolute transfer" and that the treatment of the transaction for financial reporting and tax purposes as a financing and not a sale lends weight to that position. If a court were to characterize the transaction as a financing, we expect that we would, on behalf of ourselves and the trustee, be treated as a secured creditor of CenterPoint Houston in the bankruptcy proceedings, although a court might determine that we only have an unsecured claim against CenterPoint Houston. See "— The servicer will commingle the system restoration charges with other revenues it collects, which might obstruct access to the system restoration charges in case of the servicer's bankruptcy and reduce the value of your investment in the system restoration bonds" above. Even if we had a security interest in the system restoration property, we might not have access to the related system restoration charge collections during the bankruptcy and would be subject to the risks of a secured creditor in a bankruptcy case, including the possible bankruptcy risks described in the immediately preceding risk factor. As a result, repayment of the system restoration bonds might be significantly delayed and a plan of reorganization in the bankruptcy might permanently modify the amount and timing of payments to us of the system restoration charge collections and therefore the amount and timing of funds available to us to pay holders of the system restoration bonds.

 ***If the servicer enters bankruptcy proceedings, the remittance by the servicer of the collections of certain system restoration charges prior to the date of bankruptcy might constitute preferences, which means these funds might be unavailable to pay amounts owed on the system restoration bonds.***

In the event of a bankruptcy of the servicer, a party in interest might take the position that a remittance of funds prior to bankruptcy of the servicer pursuant to the servicing agreement or any future intercreditor

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agreement, if applicable, constitutes a preference under bankruptcy law if the remittance of those funds was deemed to be paid on account of a preexisting debt. If a court were to hold that the remittance of funds constitutes a preference, any such remittance within 90 days of the filing of the bankruptcy petition could be avoidable, and the funds could be required to be returned to the bankruptcy estate of the servicer. To the extent that collections of system restoration charges have been commingled with the general funds of the servicer, the risk that a court would hold that a remittance of funds was a preference would increase. Also, we or the servicer may be considered an "insider" with any REP that is affiliated with us or the servicer. If the servicer or we are considered to be an "insider" of the REP, any such remittance made within one year of the filing of the bankruptcy petition could be avoidable as well if the court were to hold that such remittance constitutes a preference. In either case, we or the trustee would merely be an unsecured creditor of the servicer. If any funds were required to be returned to the bankruptcy estate of the servicer, we would expect that the amount of any future system restoration charges would be increased through the statutory true-up mechanism to recover such amount, though this would not eliminate the risk of payment delays or losses on your investment in the system restoration bonds.

#### Claims against CenterPoint Houston or any successor seller might be limited in the event of a bankruptcy of CenterPoint Houston or such successor seller.
If the seller were to become a debtor in a bankruptcy case, claims, including indemnity claims, by us against the seller under the sale agreement and the other documents executed in connection with the sale agreement could be unsecured claims and would be disposed of in the bankruptcy case. In addition, the bankruptcy court might estimate any contingent claims that we have against the seller and, if it determines that the contingency giving rise to these claims is unlikely to occur, estimate the claims at a lower amount. A party in interest in the bankruptcy of CenterPoint Houston might challenge the enforceability of the indemnity provisions in the sale agreement. If a court were to hold that the indemnity provisions were unenforceable, we would be left with a claim for actual damages against the seller based on breach of contract principles, which would be subject to estimation and/or calculation by the court. We cannot give any assurance as to the result if any of the above-described actions or claims were made. Furthermore, we cannot give any assurance as to what percentage of their claims, if any, unsecured creditors would receive in any bankruptcy proceeding involving CenterPoint Houston.

#### The bankruptcy of CenterPoint Houston or any successor seller might limit the remedies available to the trustee.
Upon an event of default for the system restoration bonds under the indenture, the Securitization Act permits the trustee to enforce the security interest in the system restoration property in accordance with the terms of the indenture. In this capacity, the trustee is permitted to request the PUCT or a court of competent jurisdiction for an order of sequestration and payment to all holders of the system restoration bonds of all revenues arising with respect to the system restoration property. There can be no assurance, however, that the PUCT or a court of competent jurisdiction would issue this order after a CenterPoint Houston bankruptcy in light of the automatic stay provisions of Section 362 of the Bankruptcy Code. In that event, the trustee would be required to seek an order from the bankruptcy court lifting the automatic stay to permit this action by the Texas court, and an order requiring an accounting and segregation of the revenues arising from the system restoration property. There can be no assurance that a court would grant either order.

#### RISKS ASSOCIATED WITH POTENTIAL BANKRUPTCY PROCEEDINGS OR DEFAULTS OF REPs
 ***REPs may commingle the system restoration charges with other revenues they collect. This may cause losses on or reduce the value of your investment in the system restoration bonds in the event a REP enters bankruptcy proceedings.***

A REP is not required to segregate from its general funds the system restoration charges it collects, but will be required to remit to the servicer amounts billed to it for system restoration charges, less an amount relating to expected customer charge-offs, within 35 calendar days of the billing by the servicer. A REP nevertheless might fail to remit the full amount of the system restoration charges owed to the servicer or

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might fail to do so on a timely basis. This failure, whether voluntary or involuntary, might materially reduce the amount of system restoration charge collections available on the next payment date to make timely payments on the system restoration bonds.

The Securitization Act provides that our rights to the system restoration property are not impaired by the commingling of these funds with other funds. In a bankruptcy of a REP, however, a bankruptcy court might rule that federal bankruptcy law takes precedence over the Securitization Act and does not recognize our right to receive the collected system restoration charges that are commingled with other funds of a REP as of the date of bankruptcy. If so, the collections of the system restoration charges held by a REP as of the date of bankruptcy would not be available to pay amounts owed on the system restoration bonds. In this case, we would have only a general unsecured claim against the REP for those amounts. This decision might cause material delays in payments of principal or interest or losses on your system restoration bonds and could materially reduce the value of your investment in the system restoration bonds, particularly if it occurred in the 15th year of the system restoration bonds after the completion of which no system restoration charges can be charged. Please read "How a Bankruptcy May Affect Your Investment" in this prospectus.

 ***If a REP enters bankruptcy proceedings, any cash deposit of the REP held by the trustee might not be available to cover amounts owed by the REP.***

If a REP does not have the credit rating required by the financing order, it may nevertheless qualify to act as a REP if, among other alternatives, it provides a cash deposit equal to two months' maximum expected system restoration charge collections. Please read "Retail Electric Providers" in this prospectus. That cash deposit will be held by the trustee for the REP and as trustee under the indenture, with the servicer able to access the amounts if the REP fails to pay system restoration charges within 45 days after a billing date. If the REP becomes bankrupt, the trustee would be stayed from applying that cash deposit to cover amounts owed by the REP absent relief from the bankruptcy court, and the trustee might be required to return that cash deposit to the REP's bankruptcy estate if the bankruptcy court determines there is no valid right of set-off or recoupment. In that case, we might only have an unsecured claim for any amounts owed by the REP in the REP's bankruptcy proceedings. Fourteen REPs with which CenterPoint Houston has done business filed for bankruptcy in June 2002, March 2003, December 2005, August 2006, April 2014, March 2021, March 2021, March 2021 (and again in May 2024), March 2021, April 2021, March 2021, March 2021, March 2021 and March 2021, respectively. A number of these filings followed the February 2021 Winter Storm Event. There is no assurance that CenterPoint Houston will be able to recover all or a portion of amounts owing from any bankrupt REPs in the future. For additional information regarding the bankruptcies of these REPs, please read "The Depositor, Seller, Initial Servicer and Sponsor — Relationships With Retail Electric Providers" in this prospectus.

 ***If a REP enters bankruptcy proceedings, payments including collections of system restoration charges made by that REP to the servicer prior to the bankruptcy might constitute preferences, which means these funds might be unavailable to pay amounts owed on the system restoration bonds.***

In the event of a bankruptcy of a REP, a party in interest might take the position that the remittance of funds by the REP to the servicer, pursuant to the financing order, prior to bankruptcy constitutes a preference under bankruptcy law if the remittance of those funds was deemed to be paid on account of a preexisting debt. If a court were to hold that the remittance of funds constitutes preferences, any remittance of such funds made within 90 days of the filing of the bankruptcy petition might be avoidable, and the funds might be required to be returned to the bankruptcy estate of the REP by us or the servicer. To the extent that collections of system restoration charges have been commingled with the general funds of the REP, the risk that a court would hold that a remittance of funds was a preference would increase. Also, we or the servicer might be considered an "insider" with any REP that is affiliated with us or the servicer. If the servicer or we are considered to be an "insider" of the REP, any such remittance made within one year of the filing of the bankruptcy petition could be avoidable as well if the court were to hold that such remittance constitutes a preference. In either case, we or the servicer would merely be an unsecured creditor of the REP. If any funds were required to be returned to the bankruptcy estate of the REP, we would expect that the amount of any future system restoration charges would be increased through the statutory true-up

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mechanism to recover the amount returned, though this would not eliminate the risk of payment delays or losses on your investment in the system restoration bonds.

Furthermore, the mere fact of a REP bankruptcy proceeding could have an adverse effect on the resale market for the system restoration bonds and on the value of the system restoration bonds. Please read "How a Bankruptcy May Affect Your Investment" in this prospectus.

 ***If a REP defaults with respect to the payment of system restoration charges owed to the servicer, any cash deposit or other collateral of the REP held by the trustee might not cover amounts owed by the REP.***

If a REP does not have the credit rating required by the financing order, the REP must provide a cash deposit or other collateral which is reviewed as often as each quarter to ensure that the amount of such collateral equals or exceeds two months' maximum expected system restoration charge collections. If a REP defaults with respect to the payment of system restoration charges, the amount of such collateral may be inadequate as a result of factors that include (a) an increase in a REP's number of customers or the electric usage of its customers shortly before the default, (b) the length of time between the initial payment default by a REP and the date all of such REP's retail customers are transferred to another REP, and (c) deficiencies in the collateral documentation or a failure of a guarantor, letter of credit provider or surety to honor a demand for payment.

#### OTHER RISKS ASSOCIATED WITH AN INVESTMENT IN THE SYSTEM RESTORATION BONDS
 ***CenterPoint Houston's indemnification obligations under the sale agreement and the servicing agreement are limited and might not be sufficient to protect your investment in the system restoration bonds.***

CenterPoint Houston is obligated under the sale agreement to indemnify us and the trustee, for itself and on behalf of the holders of the system restoration bonds, only in specified circumstances and will not be obligated to repurchase or replace any system restoration property in the event of a breach of any of its representations, warranties or covenants regarding the system restoration property. Similarly, CenterPoint Houston is obligated under the servicing agreement to indemnify us, the trustee, for itself and on behalf of the holders of the system restoration bonds, and the PUCT only in specified circumstances. Please read "The Sale Agreement" and "The Servicing Agreement" in this prospectus.

Neither the trustee nor the holders of the system restoration bonds will have the right to accelerate payments on the system restoration bonds as a result of a breach under the sale agreement or the servicing agreement, absent an event of default under the indenture as described in "Description of the System Restoration Bonds — What Constitutes an Event of Default on the System Restoration Bonds" in this prospectus. Furthermore, CenterPoint Houston might not have sufficient funds available to satisfy its indemnification obligations under these agreements, and the amount of any indemnification paid by CenterPoint Houston might not be sufficient for you to recover all of your investment in the system restoration bonds. In addition, if CenterPoint Houston becomes obligated to indemnify holders of the system restoration bonds, the ratings on the system restoration bonds will likely be downgraded as a result of the circumstances causing the breach and the fact that holders of the system restoration bonds will be unsecured creditors of CenterPoint Houston with respect to any of these indemnification amounts. CenterPoint Houston will not indemnify any person for any loss, damages, liability, obligation, claim, action, suit or payment resulting solely from a downgrade in the ratings on the system restoration bonds, or for any consequential damages, including any loss of market value of the system restoration bonds resulting from a default or a downgrade of the ratings of the system restoration bonds. Please read "The Sale Agreement — CenterPoint Houston's Representations and Warranties" and "— CenterPoint Houston's Obligation to Indemnify Us and the Trustee and to Take Legal Action" in this prospectus.

#### Credit ratings do not indicate the expected rate of payment of principal on the system restoration bonds.
We expect that the system restoration bonds will receive credit ratings from two nationally recognized statistical rating organizations ("**NRSRO**"). A rating is not a recommendation to buy, sell or hold the system restoration bonds.

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The ratings merely analyze the probability that we will repay the total principal amount of the system restoration bonds at the final maturity date (which is later than the scheduled final payment date) and will make timely interest payments. The ratings are not an indication that the rating agencies believe that principal payments are likely to be paid on time according to the expected sinking fund schedule.

Under Rule 17g-5 of the Exchange Act, NRSROs providing CenterPoint Houston, as the sponsor, with the requisite certification will have access to all information posted on a website by CenterPoint Houston for the purpose of determining the initial rating and monitoring the rating after the closing date in respect of the system restoration bonds. As a result, an NRSRO other than an NRSRO hired by CenterPoint Houston (the "**hired NRSRO**") may issue ratings on the system restoration bonds ("**Unsolicited Ratings**"), which may be lower, and could be significantly lower, than the ratings assigned by the hired NRSROs. The Unsolicited Ratings may be issued prior to, or after, the issuance date of the system restoration bonds. Issuance of any Unsolicited Rating will not affect the issuance of the system restoration bonds. Issuance of an Unsolicited Rating lower than the ratings assigned by the hired NRSRO on the system restoration bonds might adversely affect the value of the system restoration bonds and, for regulated entities, could affect the status of the system restoration bonds as a legal investment or the capital treatment of the system restoration bonds. Investors in the system restoration bonds should consult with their legal counsel regarding the effect of the issuance of a rating by a non-hired NRSRO that is lower than the rating of a hired NRSRO. None of CenterPoint Houston, us, the underwriters or any of their affiliates will have any obligation to inform you of any Unsolicited Ratings assigned after the date of this prospectus. In addition, if we or CenterPoint Houston fail to make available to a non-hired NRSRO any information provided to any hired rating agency for the purpose of assigning or monitoring the ratings on the system restoration bonds, a hired NRSRO could withdraw its ratings on the system restoration bonds, which could adversely affect the market value of the system restoration bonds and/or limit your ability to resell the system restoration bonds.

#### Changes in CenterPoint Houston's credit ratings might affect the market value of the system restoration bonds.
Although CenterPoint Houston is not an obligor on the system restoration bonds, a downgrading of the credit ratings on the debt of CenterPoint Houston might have an adverse effect on the market value of the system restoration bonds. Credit ratings may change at any time. A NRSRO has the authority to revise or withdraw its rating based solely upon its own judgment.

#### The absence of a secondary market for the system restoration bonds might limit your ability to resell the system restoration bonds.
The underwriters for the system restoration bonds might assist in resales of the system restoration bonds, but they are not required to do so. A secondary market for the system restoration bonds might not develop. If a secondary market does develop, it might not continue or it might not be sufficiently liquid to allow you to resell any of the system restoration bonds. We do not anticipate that the system restoration bonds will be listed on any securities exchange. Please read "Plan of Distribution" in this prospectus.

#### You might receive principal payments for a tranche of the system restoration bonds later than you expect.
The amount and the rate of collection of the system restoration charges for the system restoration bonds, together with the related system restoration charge adjustments, will generally determine whether there is a delay in the scheduled repayments for any tranche of the system restoration bond principal. If the servicer collects the system restoration charges at a slower rate than expected, it might have to request adjustments of the system restoration charges. If those adjustments are not timely and accurate, you might experience a delay in payments of principal and interest and a decrease in the value of your investment in such tranche of the system restoration bonds. Please read "Description of the System Restoration Bonds" in this prospectus.

 ***CenterPoint Houston or its affiliates may cause the issuance, by another subsidiary or affiliated entity, of additional system restoration bonds or similar bonds secured by additional system restoration property or similar property (including transition property under the Securitization Act) that, in each case, includes a nonbypassable charge on customers.***

CenterPoint Houston has previously sold property created pursuant to other financing orders to other subsidiaries of CenterPoint Houston in connection with the issuance of other system restoration bonds,

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and CenterPoint Houston may do so again in the future. For example, CenterPoint Houston intends to seek recovery of distribution-related costs incurred in connection with Hurricane Beryl through the issuance and sale of additional system restoration bonds. Any new issuance of system restoration bonds by another subsidiary or affiliated entity of CenterPoint Houston may include terms and provisions that would be unique to that particular issuance. Although CenterPoint Houston will not enter into an intercreditor agreement in connection with the issuance of the system restoration bonds, CenterPoint Houston has covenanted in the sale agreement that the satisfaction of the rating agency condition and the execution and delivery of an intercreditor agreement are conditions precedent to the sale of additional system restoration property or similar property (including transition property) consisting of nonbypassable charges payable by customers comparable to the system restoration property to another subsidiary or affiliated entity. Please read "Sale Agreement — CenterPoint Houston's Covenants" in this prospectus.

A future intercreditor agreement executed for such purposes may provide, among other things, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the servicer that allocates and remits funds received from REPs for the system restoration bonds and for future system restoration bonds issued by affiliated entities and places such funds into deposit accounts (such allocation, remittance and deposits hereafter referred to as the "**allocation services**") must be the same entity under the servicing agreement and the servicing agreements relating to such future system restoration bonds, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the trustee of the system restoration bonds, acting upon the vote of holders of the system restoration bonds representing a majority of the outstanding principal amount of the system restoration bonds, and the trustees of the future system restoration bonds issued by affiliated entities must appoint a replacement servicer that performs the allocation services.

In the event of a default by the servicer under any servicing agreement relating to the system restoration bonds or any future system restoration bonds issued by an affiliated entity, if a replacement servicer is not appointed, no trustee would be able to replace CenterPoint Houston or any successor as servicer. Instead, under such future intercreditor agreement, any trustee could upon such a default require all collections by the servicers to be deposited directly into a designated account with a financial institution selected by the trustees, subject to satisfaction of the rating agency condition. The financial institution holding the designated account would then be responsible for allocating the collections in the account between system restoration charges relating to the system restoration bonds and any future system restoration charges for the system restoration bonds issued by such affiliated entities.

In the event a customer or REP does not pay in full all amounts owed under any bill, including system restoration charges for the system restoration bonds and system restoration charges on other similar bonds, we expect that any future intercreditor agreement would provide that the amount remitted would first be apportioned ratably among the system restoration charges and other fees and charges (including amounts billed and due in respect of system restoration charges associated with similar bonds issued under future financing orders), other than late fees, and second, any remaining portion of the remittance will be allocated to late fees. However, if a dispute arises with respect to the allocation of such system restoration charges or other delays occur on account of the administrative burdens of making such allocation, we cannot assure you that any new issuance of system restoration bonds or similar bonds by another subsidiary or affiliated entity of CenterPoint Houston would not cause reductions or delays in payment of principal and interest on the system restoration bonds.

In addition, actions taken by the holders of other similar bonds (including any other system restoration bonds) might conflict with the interests of the beneficial owners of the system restoration bonds, and could result in an outcome unfavorable to you.

 ***CenterPoint Houston's operations are subject to risks beyond its control, including cyber-security intrusions, terrorist attacks or other catastrophic events, which could limit CenterPoint Houston's operations and ability to service the system restoration property.***

CenterPoint Houston operates in an industry that requires the use of sophisticated information technology systems and network infrastructure, which control an interconnected system of distribution and transmission systems shared with third parties. Due to increased technology advances, CenterPoint Houston and its affiliates have become more reliant on technology to effectively operate their businesses,

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including to help run their financial and operations organizations in part to integrate data and reporting activities across CenterPoint Houston and its affiliates. A successful physical or cyber-security intrusion may occur despite CenterPoint Houston's security measures or those of its affiliates or the third parties they work with. Despite the implementation of security measures, all assets and systems are potentially vulnerable to disability, failures, or unauthorized access due to physical or cyber-security intrusions caused by human error, bugs, terrorist attacks, or other malicious acts. If CenterPoint Houston's or its affiliates' assets or systems (including those it shares with third parties or otherwise uses) were to fail, be physically damaged, or be breached, and were not recovered in a timely manner, CenterPoint Houston may be unable to perform critical business functions, including the distribution of electricity and the metering and billing of retail customers and REPs, all of which could materially affect CenterPoint Houston's ability to bill and collect system restoration charges or otherwise service the system restoration property.

 ***If the investment of collected system restoration charges and other funds held by the trustee in the collection account results in investment losses or the investments become illiquid, you may receive payment of principal and interest on the system restoration bonds later than you expect.***

Funds held by the trustee in the collection account and cash collateral provided by REPs will be invested in eligible investments at the written direction of the servicer. Eligible investments include commercial paper, money market funds and repurchase obligations with respect to United States treasuries, among other items. Although the eligible investments as defined in the indenture governing the system restoration bonds have traditionally been viewed as highly liquid with a low probability of loss, illiquidity and losses have been experienced by investors in certain eligible investments as a result of disruptions in the financial markets in recent years. If investment losses or illiquidity is experienced, you might experience a delay in payments of principal and interest on the system restoration bonds and a decrease in the value of your investment in the system restoration bonds.

#### Regulatory provisions affecting certain investors could adversely affect the liquidity and the regulatory treatment of investments in the system restoration bonds.
European Union ("**EU**") legislation comprising Regulation (EU) 2017/2402 (as amended, the "**EU Securitization Regulation**") and certain related regulatory technical standards, implementing technical standards and official guidance (together, the "**European Securitization Rules**") imposes certain restrictions and obligations with regard to securitizations (as such term is defined for purposes of the EU Securitization Regulation). The European Securitization Rules are in force throughout the EU (and are expected also to be implemented in the non-EU member states of the EEA).

Pursuant to the European Securitization Rules, EU Institutional Investors investing in a securitisation (as so defined) must, amongst other things, verify that (a) certain credit-granting requirements are satisfied, (b) the originator, sponsor or original lender retains on an ongoing basis a material net economic interest which, in any event, shall not be less than 5%, determined in accordance with Article 6 of the EU Securitization Regulation, and discloses that risk retention, (c) the originator, sponsor or relevant securitization special purpose entity has, where applicable, made available information as required by Article 7 of the EU Securitization Regulation and (d) they have carried out a due-diligence assessment that enables the EU Institutional Investors to assess the risks involved, considering at least (i) the risk characteristics of the securitisation position and the underlying exposures and (ii) all the structural features of the securitization that can materially impact the performance of the securitisation position. EU Institutional Investors include: (a) insurance undertakings and reinsurance undertakings as defined in Directive 2009/138/EC, as amended; (b) institutions for occupational retirement provision falling within the scope of Directive (EU) 2016/2341 (subject to certain exceptions), and certain investment managers and authorized entities appointed by such institutions; (c) alternative investment fund managers as defined in Directive 2011/61/EU which manage and/or market alternative investment funds in the EU; (d) certain internally managed investment companies authorized in accordance with Directive 2009/65/EC, and managing companies as defined in that Directive; (e) credit institutions as defined in Regulation (EU) No 575/2013 (CRR) (and certain consolidated affiliates thereof); and (f) investment firms as defined in CRR (and certain consolidated affiliates thereof).

With respect to the United Kingdom (UK), relevant UK-established or UK-regulated persons (as described below) are subject to the restrictions and obligations of the UK Securitization Framework (as

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defined below). The UK Securitization Rules comprise: (a) the United Kingdom ("**UK**")'s Securitisation Regulations 2024 (S1 2024/102); (b) the UK's Financial Conduct Authority ("**FCA**")'s securitisation sourcebook of the handbook of rules sand guidance adopted by the FCA; (c) the UK's Prudential rulebook published by the PRA; and (d) relevant provisions of the FSMA.

The UK Securitization Framework places certain conditions on investments in a "securitisation" (as defined in the UK Securitization Framework) by a UK Institutional Investor. UK Institutional Investors include: (a) an insurance undertaking as defined in section 417(1) of the Financial Services And Markets Act 2000 (as amended, the "**FSMA**"); (b) a reinsurance undertaking as defined in section 417(1) of the FSMA; (c) the trustees or managers of an occupational pension scheme as defined in section 1(1) of the Pension Schemes Act 1993 that has its main administration in the UK, or a fund manager of such a scheme appointed under section 34(2) of the Pensions Act 1995 that, in respect of activity undertaken pursuant to that appointment, is authorized for the purposes of section 31 of the FSMA; (d) an alternative investment fund manager as defined in regulation 4(1) of the Alternative Investment Fund Managers Regulation 2013 that markets or manages alternative investments funds (as defined in regulation 3 of the Alternative Investment Fund Managers Regulation 2013) in the UK; (e) a management company as defined in section 237(2) of the FSMA; (f) an undertaking for collective investment in transferable securities as defined by section 236A of the FSMA, which is an authorized open ended investment company as defined in section 237(3) of the FSMA; (g) a CRR firm as defined in Regulation (EU) No 575/2013, as it forms part of UK domestic law by virtue of the EUWA (the "**UK CRR**"); (h) an FCA investment form as defined by Article 4(1)(2aB) of the UK CRR, and (i) certain consolidated affiliates, wherever established or located, of entities that are subject to the UK CRR.

Prior to investing in (or otherwise holding an exposure to) a "securitisation position" (as defined in the UK Securitization Framework), a UK Institutional Investor, other than the originator, sponsor or original lender (each as defined in the UK Securitization Framework), must, among other things: (a) verify that, where the originator or original lender is established in a third country (i.e. not within the UK), the originator or original lender grants all the credits giving rise to the underlying exposures on the basis of sound and well-defined criteria and clearly established processes for approving, amending, renewing and financing those credits and has effective systems in place to apply those criteria and processes to ensure that credit granting is based on a thorough assessment of the obligor's creditworthiness; (b) verify that, if established in the third country (i.e. not within the UK), the originator, sponsor or original lender retains on an ongoing basis a material net economic interest that, in any event, shall not be less than 5%, determined in accordance with the UK Securitization Framework, and discloses the risk retention to the affected investors; (c) verify that, where established in a third country (i.e. not within the UK), the originator, sponsor or relevant securitization special purpose entity, where applicable, made available information that is substantially the same as that which it would have made available under the UK Securitization Framework (which sets out certain transparency requirements) if it had been established in the UK and has done so with such frequency and modalities as are substantially the same as those with which it would have made information available if it had been established in the UK; and (d) carry out a due-diligence assessment that enables the UK Institutional Investors to assess the risks involved, considering at least (i) the risk characteristics of the securitisation position and the underlying exposures and (ii) all the structural features of the securitization that can materially impact the performance of the securitisation position.

We and CenterPoint Houston do not believe that the system restoration bonds fall within the definition of a "securitization" for purposes of the EU Securitization Regulation or the UK Securitization Regulation as there is no tranching of credit risk associated with exposures under the transactions described in this prospectus. Therefore, we and CenterPoint Houston believe such transactions are not subject to the European Securitization Rules or the UK Securitization Rules and the UK Securitization Framework. As such, neither we nor CenterPoint Houston, nor any other party to the transactions described in this prospectus, intend, or are required under the transaction documents, to retain a material net economic interest in respect of such transactions, or to take, or to refrain from taking, any other action, in a manner prescribed or contemplated by the European Securitization Rules or the UK Securitization Rules and the UK Securitization Framework. In particular, no such Person undertakes to take, or to refrain from taking, any action for purposes of compliance by any investor (or any other Person) with any requirement of the European Securitization Rules or the UK Securitization Rules and the UK Securitization Framework to which such investor (or other Person) may be subject at any time.

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However, if a competent authority were to take a contrary view and determine that the transactions described in this prospectus do constitute a securitization for purposes of the EU Securitization Regulation or the UK Securitization Regulation, then any failure by an EU Institutional Investor or a UK Institutional Investor (as applicable) to comply with any applicable European Securitization Rules or UK Securitization Rules and the UK Securitization Framework (as applicable) with respect to an investment in the system restoration bonds may result in the imposition of a penalty regulatory capital charge on that investment or of other regulatory sanctions and remedial measures.

Consequently, the system restoration bonds may not be a suitable investment for EU Institutional Investors or UK Institutional Investors. As a result, the price and liquidity of the system restoration bonds in the secondary market may be adversely affected.

Prospective investors are responsible for analyzing their own legal and regulatory position and are advised to consult with their own advisors and any relevant regulator or other authority regarding the scope, applicability and compliance requirements of the European Securitization Rules and the UK Securitization Rules and the UK Securitization Framework, and the suitability of the system restoration bonds for investment. Neither we nor CenterPoint Houston, nor any other party to the transactions described in this prospectus, make any representation as to any such matter, or have any liability to any investor (or any other Person) for any non-compliance by any such Person with the European Securitization Rules, the UK Securitization Rules and the UK Securitization Framework or any other applicable legal, regulatory or other requirements.

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#### REVIEW OF THE SYSTEM RESTORATION PROPERTY
Pursuant to the rules of the SEC, CenterPoint Houston, as sponsor, has performed, as described below, a review of the system restoration property underlying the system restoration bonds. As required by these rules, the review was designed and effected to provide reasonable assurance that disclosure regarding the system restoration property is accurate in all material respects. CenterPoint Houston did not engage a third party in conducting its review.

The system restoration bonds will be secured under the indenture by the indenture's trust estate. The principal asset of the indenture's trust estate is the system restoration property. The system restoration property is a present property right for purposes of contracts concerning the sale or pledge of property, authorized and created pursuant to the Securitization Act and an irrevocable financing order. The system restoration property includes the right to impose, collect and receive nonbypassable system restoration charges in amounts sufficient to pay on a timely basis scheduled principal and interest on the system restoration bonds, including financing and other qualified costs, in connection with the system restoration bonds. The system restoration charges are payable by retail customers within CenterPoint Houston's service territory that, subject to certain limitations specified in the Securitization Act and the financing order, consume electricity that is delivered through CenterPoint Houston's transmission and distribution system or produced by new on-site generation. During the twelve months ended December 31, 2024, approximately 31% of CenterPoint Houston's total deliveries in its certificated service territory were to residential retail customers and approximately 69% were to non-residential retail customers.

The system restoration property is not a static pool of receivables or assets. System restoration charges authorized in the financing order are irrevocable and not subject to reduction, impairment, or adjustment by further act of the PUCT, except with respect to annual true-up adjustments to correct any over-collections or under-collections during the preceding 12 months and to ensure the billing of system restoration charges necessary to generate the collections of amounts sufficient to timely provide all scheduled payments of debt service and other required amounts and charges in connection with the system restoration bonds and interim true-up adjustments to correct any forecasted under-collection of system restoration charges to assure timely payment of the system restoration bonds, including the replenishment of any funds drawn from the capital subaccount. There is no specified "cap" on the level of the system restoration charges that may be imposed on retail customers in CenterPoint Houston's service territory to meet scheduled principal of and interest on the system restoration bonds. All revenues and collections resulting from system restoration charges provided for in the financing order are part of the system restoration property. The system restoration property is described in more detail under "Description of the System Restoration Property" in this prospectus.

In the financing order, the PUCT, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • orders that CenterPoint Houston, as servicer, shall collect from all REPs required to bill, pay or collect system restoration charges under the financing order, system restoration charges in an amount sufficient to provide for the timely payment of principal and interest on the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • orders that upon the transfer of the system restoration property to us by CenterPoint Houston, we shall have all of the rights, title and interest of CenterPoint Houston with respect to the system restoration property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • orders that the financing order constitutes a legal financing order for CenterPoint Houston under the Securitization Act, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • guarantees that it will act under the financing order as expressly authorized by the Securitization Act to ensure that expected system restoration charge revenues are sufficient to pay on a timely basis scheduled principal and interest on the system restoration bonds and other costs, including fees and expenses, in connection with the system restoration bonds.

Please read "The Securitization Act" and "CenterPoint Houston's Financing Order" in this prospectus for more information.

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The characteristics of the system restoration property are unlike the characteristics of assets underlying mortgage and other commercial asset securitizations because the system restoration property is a creature of statute and state regulatory commission proceedings. Because the nature and characteristics of the system restoration property and many elements of the system restoration bonds securitization are set forth and constrained by the Securitization Act, CenterPoint Houston, as sponsor, does not select the assets to be securitized in ways common to many securitizations. Moreover, the system restoration bonds do not contain origination or underwriting elements similar to typical mortgage or other loan transactions involved in other forms of asset-backed securities. The Securitization Act and the PUCT require the imposition on, and collection of system restoration charges from, existing and future retail customers located within CenterPoint Houston's service territory, subject to limited exceptions. Because the system restoration charges are assessed against all such customers and the true-up adjustment mechanism adjusts for the impact of customer defaults, the collectability of the system restoration charges is not ultimately dependent upon the credit quality of particular CenterPoint Houston electric customers, as would be the case in the absence of the true-up adjustment mechanism.

The review by CenterPoint Houston of the system restoration property underlying the system restoration bonds has involved a number of discrete steps and elements as described in more detail below. First, CenterPoint Houston has analyzed and applied the Securitization Act's requirements for securitization of system restoration costs in seeking approval of the PUCT for the issuance of the financing order and in its proposal with respect to the characteristics of the system restoration property to be created pursuant to the financing order. In preparing this proposal, CenterPoint Houston analyzed the terms of the five previous securitizations it sponsored, applicable securitization provisions of the Public Utility Regulatory Act and the practical experience gained in structuring, issuing and servicing the bonds issued in those prior securitizations. CenterPoint Houston worked with its counsel and its structuring advisor in preparing the application for a financing order and with the PUCT on the terms of the financing order. Moreover, CenterPoint Houston worked with its counsel, its structuring advisor and counsel to the underwriters in preparing the legal agreements that provide for the terms of the system restoration bonds and the security for the system restoration bonds. CenterPoint Houston has analyzed economic issues and practical issues for the scheduled payment of the system restoration bonds and reviewed its prior securitization experience in terms of impacts of economic factors, potentials for disruptions due to weather or catastrophic events and its own forecasts for customer growth as well as the historic accuracy of its prior forecasts.

In light of the unique nature of the system restoration property, CenterPoint Houston has taken (or prior to the offering of the system restoration bonds, will take) the following actions in connection with its review of the system restoration property and the preparation of the disclosure for inclusion in this prospectus describing the system restoration property, the system restoration bonds and the proposed securitization:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewed the Securitization Act and the rules and regulations of the PUCT as they relate to the system restoration property in connection with the preparation and filing of the application with the PUCT for the approval of the financing order in order to confirm that the application and proposed financing order satisfied applicable statutory and regulatory requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • actively participated in the proceeding before the PUCT relating to the approval of the requested financing order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • compared the financing order, as issued by the PUCT, to the Securitization Act and the rules and regulations of the PUCT as they relate to the system restoration property to confirm that the financing order met such requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • compared the proposed terms of the system restoration bonds to the applicable requirements in the Securitization Act, the financing order and the regulations of the PUCT to confirm that they met such requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • prepared and reviewed the agreements to be entered into in connection with the issuance of the system restoration bonds and compared such agreements to the applicable requirements in the Securitization Act, the financing order and the regulations of the PUCT to confirm that they met such requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewed the disclosure in this prospectus regarding the Securitization Act, the financing order and the agreements to be entered into in connection with the issuance of the system restoration bonds, and

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compared such descriptions to the Securitization Act, the financing order and such agreements to confirm the accuracy of such descriptions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • consulted with legal counsel to assess if there is a basis upon which the holders of the system restoration bonds (or the trustee acting on their behalf) could successfully challenge the constitutionality of any legislative action by the State of Texas that could repeal or amend the Securitization Act that could substantially impair the value of the system restoration property, or substantially reduce, alter or impair the system restoration charges;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewed the process and procedures in place for it, as servicer, to perform its obligations under the servicing agreement, including without limitation, billing and collecting the system restoration charges, forecasting system restoration charge revenues, preparing and filing applications for true-up adjustments to the system restoration charges and enforcing REP credit standards, and reviewed its experience and performance of such obligations as servicer under the five previous securitizations which it sponsored under the applicable securitization provisions of the Public Utility Regulatory Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewed the operation of the true-up mechanism for adjusting system restoration charge levels to meet the scheduled payments on the system restoration bonds and in this context took into account its experience with the PUCT in implementing the true-up mechanism for the five prior securitizations for which it was the sponsor; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • with the assistance of its structuring advisor and the underwriters, prepared financial models in order to set the initial system restoration charges at a level sufficient to pay on a timely basis scheduled principal and interest on the system restoration bonds.

In connection with the preparation of such models, CenterPoint Houston:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewed (i) the historical retail electric usage and customer growth within its service territory and (ii) forecasts of expected energy sales and customer growth;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reviewed its historical collection of system restoration charges and transition charges with respect to the Series 2001-1 Transition Bonds issued by CenterPoint Energy Transition Bond Company, LLC (f/k/a Reliant Energy Transition Bond Company LLC) ("**Transition Bond Company I**"), the Senior Secured Transition Bonds, Series A, issued by CenterPoint Energy Transition Bond Company II, LLC ("**Transition Bond Company II**"), the 2008 Senior Secured Transition Bonds issued by CenterPoint Energy Transition Bond Company III, LLC ("**Transition Bond Company III**"), the Senior Secured System Restoration Bonds issued by CenterPoint Energy Restoration Bond Company, LLC ("**Restoration Bond Company I**") and the 2012 Senior Secured Transition Bonds issued by CenterPoint Energy Transition Bond Company IV, LLC ("**Transition Bond Company IV**"), and reviewed the resulting payment history and annual true-up adjustment experiences with respect to these bonds; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • analyzed the sensitivity of the weighted average life of the transition bonds and system restoration bonds listed above in relation to variances in actual energy consumption levels (retail electric sales at distribution voltage) from forecasted levels and in relation to the true-up mechanism in order to assess the probability that the weighted average life of the system restoration bonds may be extended as a result of such variances, and in the context of the operation of the true-up mechanism for adjustment of system restoration charges to address under-collections or over-collections in light of scheduled payments on the system restoration bonds.

As a result of this review, CenterPoint Houston has concluded that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the system restoration property, the financing order and the agreements to be entered into in connection with the issuance of the system restoration bonds meet in all material respects the applicable statutory and regulatory requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the disclosure in this prospectus regarding the Securitization Act, the financing order and the agreements to be entered into in connection with the issuance of the system restoration bonds is as of its date, accurate in all material respects;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the servicer has adequate processes and procedures in place to perform its obligations under the servicing agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • system restoration charge revenues, as adjusted from time to time as provided in the Securitization Act and the financing order, are expected to be sufficient to pay on a timely basis scheduled principal and interest on the system restoration bonds; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the design and scope of CenterPoint Houston's review of the system restoration property as described above is effective to provide reasonable assurance that the disclosure regarding the system restoration property in this prospectus is accurate in all material respects.

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#### DESCRIPTION OF THE SYSTEM RESTORATION PROPERTY

#### Creation of the System Restoration Property; Financing Order
System restoration property is known as "transition property" and system restoration charges are known as "transition charges" in the Public Utility Regulatory Act. The Public Utility Regulatory Act defines transition property as the rights and interests of an electric utility or successor under a financing order, including the right to impose, collect and receive transition charges established in the financing order. Transition property or system restoration property becomes property at the time that it is first transferred to an assignee or pledged in connection with the issuance of transition or system restoration bonds, such as the system restoration bonds, although until such time it remains a contract right pursuant to the Public Utility Regulatory Act. The system restoration bonds will be secured by the system restoration property, as well as the other items included in the trust estate under the indenture described under "Description of the System Restoration Bonds — The Security for the System Restoration Bonds" in this prospectus.

In addition to the right to impose, collect and receive the system restoration charges, the financing order:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • authorizes the transfer of the system restoration property to us and the issuance of the system restoration bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • establishes procedures for periodic true-up adjustments to the system restoration charges to correct any over-collections or under-collections;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • implements guidelines for REPs who collect the system restoration charges; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • provides that the financing order is irrevocable and not subject to reduction, impairment, or adjustment by further act of the PUCT (except for the periodic adjustments to the system restoration charges).

A form of issuance advice letter and a form of tariff are attached to the financing order. We will complete and file the issuance advice letter with the PUCT no later than the end of the first business day after the pricing of the system restoration bonds. We will complete and file the tariff with the PUCT before the issuance of the system restoration bonds. The issuance advice letter will confirm to the PUCT the interest rate and expected sinking fund schedule for the system restoration bonds and sets forth the actual dollar amount of the initial system restoration charges as described below under "CenterPoint Houston's Financing Order — Issuance Advice Letter." The PUCT's review of the issuance advice letter will be limited to confirming the arithmetic accuracy of the calculations and to compliance with the Securitization Act, the financing order and the specific requirements contained in the issuance advice letter.

#### Tariff; System Restoration Charges
The tariff establishes the initial system restoration charges. It also implements the minimum requirements for REPs, which collect system restoration charges, the procedures for periodic adjustments to the system restoration charges, the procedures for REPs to remit system restoration charge payments and the annual procedures allowing REPs to reconcile remittances with actual write-offs. In no event will system restoration charges provided for in the tariff be assessed for services provided after 15 years from the issuance of the system restoration bonds. The system restoration charges and the final terms of the system restoration bonds will be effective as of the date the system restoration bonds are issued unless before noon on the fourth business day after pricing the PUCT issues an order finding the proposed issuance does not comply with the requirements in the financing order. We will provide notice to REPs of the rates associated with the initial system restoration charges as soon as practicable after submittal of the issuance advice letter to the PUCT.

The system restoration charges will be payable by all existing and future retail customers located within CenterPoint Houston's service territory served at distribution voltage, subject to certain exceptions. For more information on these exceptions, please read "The Securitization Act — CenterPoint Houston and Other Utilities May Securitize Qualified Costs" in this prospectus.

For purposes of billing system restoration charges, each retail customer will be designated as a customer belonging to one of the system restoration charge customer classes set forth below. Under the

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terms of the financing order, CenterPoint Houston will initially allocate the system restoration charges among the system restoration charge customer classes as follows:

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| | |
|:---|:---|
| **System Restoration Charge Customer Class**  | **Allocation Factor**  |
| Residential  | 55.4597% |
| Secondary Service ≤ 10 kW  | 1.5261% |
| Secondary Service >10 kW  | 31.7972% |
| Primary Service  | 2.4092% |
| Lighting Service  | 8.8078% |
| **Total** | **100.0000%** |

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The nonbypassable system restoration charge applicable to each system restoration charge customer class for any period will be determined based on the allocation percentage of such class, the amount necessary to make payments of principal and interest on the system restoration bonds for the related period, and the currently forecast billing units (*i.e.*, class-specific energy or demand billing units) for the related period (as adjusted for under-recovery or over-recovery in a prior period).

In the case of "Secondary Service Greater Than 10 kW" and "Primary Service" customers, demand metered rates will be applicable to customers in those distribution rate classes billed on a demand basis. All other retail customers will be billed on a kilowatt-hour, non-demand metered basis. Each new retail customer within CenterPoint Houston's service territory will be assigned to the appropriate customer class.

The system restoration charges will be adjusted annually, or more frequently under certain circumstances, by the servicer in accordance with its filings with the PUCT. CenterPoint Houston estimates that, on an annualized basis, the initial system restoration charges (i) would represent approximately % of the total bill received by a 1,000 kWh residential customer served at distribution voltage of the largest REP in CenterPoint Houston's service territory as of , 2025; and (ii) would represent approximately % of the total bill received by a 1,000 kWh residential customer served at distribution voltage in CenterPoint Houston's service territory as of , 2025 (based on the average of offered rates at distribution voltage published on the PUCT website for REPs operating in CenterPoint Houston's service territory).

#### Billing and Collection Terms and Conditions
System restoration charges will be assessed by the servicer, for our benefit as owner of the system restoration property, based on a retail customer's actual consumption of electricity or electric demand from time to time. System restoration charges will be collected by the servicer from each REP that collects system restoration charges from retail customers as part of its normal collection activities. System restoration charges will be deposited by the servicer into the collection account under the terms of the indenture and the servicing agreement. The servicer will deposit in the collection accounts payments of system restoration charges on each business day based on estimated collections in accordance with the procedures described below under "The Servicing Agreement — Remittances to Collection Account."

REPs are responsible for billing, collecting and paying to the servicer the retail customer's system restoration charges. Each REP will be responsible for paying system restoration charges billed to retail customers of the REP, whether or not the retail customers pay the REP, less a specified percentage allowance for charge-offs and except as otherwise provided in tariffs to be filed with the PUCT, subject to limited rights of refund and credit as described in "Retail Electric Providers" in this prospectus. Such percentage will initially be based on the same charge-off percentage used by the REP to remit payments to the servicer in connection with the most recently established system restoration charges related to the system restoration bonds issued by CenterPoint Energy Restoration Bond Company, LLC on November 25, 2009 but then will be recalculated annually for each REP in conjunction with the true-up adjustment process.

The obligation to pay system restoration charges is not subject to any right of set-off in connection with the bankruptcy of the seller or any other entity. System restoration charges are "nonbypassable" in accordance with the provisions set forth in the Securitization Act and the financing order. If a retail customer pays only a portion of its bill, a pro-rata amount (based on all charges billed to such retail customer) of

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system restoration charge revenues will be deemed to be collected. If a retail customer fails to pay all or any portion of the system restoration charges, the REP who is billing such customer may transfer billing and collection rights to the designated provider of last resort for such customer or may direct CenterPoint Houston or its successor transmission and distribution utility to terminate service to such non-paying customer in accordance with the financing order and PUCT guidelines.

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#### THE SECURITIZATION ACT

#### Overview of the Securitization Act
The Securitization Act was enacted by the Texas legislature in April 2009 and became effective on April 16, 2009. The Securitization Act amended the Public Utility Regulatory Act to, among other things, provide for recovery of system restoration costs incurred by electric utilities as a result of hurricanes, tropical storms, ice or snow storms, floods and other weather-related events and natural disasters occurring in calendar year 2008 or after, permit electric utilities to recover the Securitizable Balance and up-front "qualified costs" through the issuance of system restoration bonds pursuant to and supported by an irrevocable financing order issued by the PUCT, and permit the PUCT to impose an irrevocable nonbypassable system restoration charge on all retail customers, subject to limited exceptions, within a utility's certificated service territory for payment of system restoration bonds.

For electric utilities (including CenterPoint Houston) whose service territories are part of ERCOT, system restoration costs related to the utility's distribution system may be securitized, and retail customers served at distribution voltage are required to pay the system restoration charges.

Pursuant to the Securitization Act, securitization of system restoration costs will be accomplished using the same procedures, standards and protections for securitization authorized by the 1999 utility restructuring amendments to the Public Utility Regulatory Act, as subsequently amended, for securitization of transition costs through the issuance of transition bonds to the extent those provisions do not conflict with the Securitization Act.

#### CenterPoint Houston and Other Utilities May Securitize Qualified Costs
*We May Issue System Restoration Bonds to Recover CenterPoint Houston's Qualified Costs.* The Securitization Act authorizes the PUCT to issue financing orders approving the issuance of system restoration bonds to recover certain qualified costs of an electric utility. A utility, its successors or a third-party assignee of a utility may obtain securitization financing through the issuance of system restoration bonds. Under the Securitization Act, proceeds of system restoration bonds must be used to reduce the amount of recoverable system restoration costs including but not limited to the refinancing or retirement of the electric utility's debt or equity. The system restoration bonds are secured by, and payable from, system restoration property, which includes the right to impose, collect and receive system restoration charges. The system restoration bonds may have a maximum maturity of 15 years. The amounts of system restoration charges must be functionalized and allocated to customer classes in the same manner as the corresponding facilities and related expenses are functionalized and allocated in the utility's current base rates. The system restoration charges may be based on the energy consumption, and for some classes, the energy demand, of the customer classes. System restoration charges can be imposed only when and to the extent that system restoration bonds are issued.

The Securitization Act contains a number of provisions designed to facilitate the securitization of qualified costs.

*Creation of System Restoration Property.* Under the Securitization Act, system restoration property is created when the rights and interests of an electric utility or successor under a financing order, including the right to impose, collect and receive system restoration charges authorized in the financing order, are first transferred to an assignee, such as us, or pledged in connection with the issuance of system restoration bonds. System restoration property is known as "transition property" in the Public Utility Regulatory Act.

*A Financing Order is Irrevocable.* A financing order, once effective, together with the system restoration charges authorized in the financing order, is irrevocable and not subject to reduction, impairment or adjustment by the PUCT except for adjustments pursuant to the Securitization Act in order to correct over-collections or under-collections and to provide that sufficient funds are available to provide on a timely basis for payments of debt service and other required amounts in connection with the related series of system restoration bonds. Although a financing order is irrevocable, the Securitization Act allows applicants to apply for one or more new financing orders to provide for retiring and refunding system restoration bonds if such retirement or refunding would result in lower system restoration charges.

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*The State Pledge.* Under the Securitization Act, the State of Texas has pledged, for the benefit and protection of the holders of the system restoration bonds and the electric utilities covered by the Securitization Act, that it will not take or permit any action that would impair the value of the system restoration property or, except for adjustments discussed in "CenterPoint Houston's Financing Order — Statutory True-Ups" in this prospectus, reduce, alter or impair the system restoration charges to be imposed, collected and remitted to the holders of the system restoration bonds, until the principal, interest and premium, if any, and any other charges incurred and contracts to be performed in connection with the system restoration bonds have been paid and performed in full. For a description of risks related to the enforcement of this pledge, please read "Risk Factors — Risks Associated with Potential Judicial, Legislative or Regulatory Actions" in this prospectus.

*Constitutional Matters.* To date, no U.S. federal or Texas cases addressing the repeal or amendment of securitization provisions analogous to those contained in the Securitization Act have been decided. There have been cases in which U.S. federal courts have applied the Contract Clause of the United States Constitution and Texas courts have applied the Contract Clause of the Texas Constitution to strike down legislation regarding similar matters, such as legislation reducing or eliminating taxes, public charges or other sources of revenues servicing other types of bonds issued by public instrumentalities or private issuers, or otherwise substantially impairing or eliminating the security for bonds or other indebtedness. Based upon this case law, Baker Botts L.L.P., as counsel to CenterPoint Houston and us, expects to deliver an opinion letter prior to the closing of the offering of the system restoration bonds to the effect that the pledge described above creates a binding contractual obligation for purposes of the Contract Clauses of the United States Constitution and the Texas Constitution, and provides a basis upon which the holders of the system restoration bonds (or the trustee acting on their behalf) could challenge successfully, under the Contract Clauses of the United States Constitution and the Texas Constitution, the constitutionality of any action by the State of Texas of a legislative character, including the repeal or amendment of the Securitization Act, that a court would determine violates the pledge described above in a way that would substantially impair the value of the system restoration property, or substantially reduce, alter or impair the system restoration charges, unless such action is a reasonable exercise of the sovereign powers of the State of Texas and of a character reasonable and appropriate to the public purpose justifying such action. It may be possible for the Texas legislature to repeal or amend the Securitization Act, or for the PUCT to amend or revoke the financing order notwithstanding the State's pledge, if the legislature or the PUCT acts in order to serve a significant and legitimate public purpose, such as protecting the public health and safety or responding to a national or regional catastrophe affecting CenterPoint Houston's service territory, or if the legislature otherwise acts in the valid exercise of the state's police power.

In addition, any action of the Texas legislature adversely affecting the system restoration property or the ability to collect the system restoration charges may be considered a "taking" under the United States Constitution or the Texas Constitution. Baker Botts L.L.P. has advised us that it is not aware of any U.S. federal or Texas court cases addressing the applicability of the Takings Clause of the United States Constitution or the Texas Constitution in a situation analogous to that which could be involved in an amendment or repeal of the Securitization Act. It is possible that a court would decline even to apply a Takings Clause analysis to a claim based on an amendment or repeal of the Securitization Act, since, for example, a court might determine that a Contract Clause analysis rather than a Takings Clause analysis should be applied. Assuming a Takings Clause analysis were applied under the United States Constitution or the Texas Constitution, Baker Botts L.L.P. expects to render an opinion letter prior to the closing of the offering of the system restoration bonds to the effect that under existing case law, if a court concludes that the system restoration property is protected by the Takings Clause of the United States Constitution or the Texas Constitution, it would find a compensable taking if the State of Texas were to enact a law that, without paying just compensation to the holders of the system restoration bonds (i) permanently appropriates the system restoration property or denies all economically productive use of the system restoration property; (ii) destroys the system restoration property, other than in response to emergency conditions; or (iii) substantially impairs the value of the system restoration property, if the law unduly interferes with such bondholders' reasonable investment-backed expectations. In examining whether action of the Texas legislature amounts to a regulatory taking, both U.S. federal and Texas courts will consider the character of the governmental action and whether such action substantially advances the State's legitimate governmental interests, the economic impact of the governmental action on the holders of the system restoration bonds, and the extent to which the governmental action interferes with distinct investment-backed expectations. There

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is no assurance, however, that, even if a court were to award just compensation, it would be sufficient for you to recover fully your investment in the system restoration bonds. It is also possible that sovereign immunity may prevent an award of just compensation, at least for a claim under the Takings Clause of the U.S. Constitution in federal court. In that event, however, injunctive relief would still be available to prevent the enforcement of the law that would constitute a taking without just compensation.

In connection with the foregoing, Baker Botts L.L.P. has advised us that issues relating to the Contract Clause and the Takings Clause of the United States Constitution and the Texas Constitution, are essentially decided on a case-by-case basis and that the courts' determinations, in most cases, appear to be strongly influenced by the facts and circumstances of the particular case. Baker Botts L.L.P. has further advised us that there are no reported controlling judicial precedents that are directly on point. The opinion letters described above will be subject to the qualifications included in them. The degree of impairment necessary to meet the standards for relief under a Takings Clause analysis or Contract Clause analysis could be substantially in excess of what a holder of the system restoration bonds would consider material.

We will file a copy of each of the Baker Botts L.L.P. opinion letters as an exhibit to the registration statement of which this prospectus is a part, or to one of our periodic filings with the SEC.

For a discussion of risks associated with potential judicial, legislation or regulatory actions, please read "Risk Factors — Risks Associated with Potential Judicial, Legislative or Regulatory Actions" in this prospectus.

*The PUCT May Adjust System Restoration Charges.* The Securitization Act requires the PUCT to provide in all financing orders a mechanism requiring that system restoration charges relating to the system restoration bonds authorized in such financing order be reviewed and adjusted at least annually, within 45 days of the anniversary of the date of the issuance of such system restoration bonds, to correct any over-collections or under-collections during the preceding 12 months, and to provide for the expected recovery of amounts sufficient to timely provide all payments of debt service and other required amounts and charges in connection with such system restoration bonds. In addition to annual true-up adjustments, the financing order authorizes interim true-up adjustments be made by the servicer more frequently at any time during the term of the system restoration bonds to correct any forecasted under-collection of system restoration charges to assure timely payment of the system restoration bonds, including the replenishment of any funds drawn from the capital subaccount.

*System Restoration Charges Are Nonbypassable.* The Securitization Act provides that the system restoration charges are nonbypassable. "Nonbypassable" with respect to system restoration charges means that a utility and any applicable REPs are entitled to collect and must remit system restoration charges attributable to all existing and future retail customers located within the utility's service territory as it existed on the date of the financing order, including certain customers in a multiply-certificated service area that switch service providers and certain retail consumers that switch to new on-site generation. Any such existing or future retail customer within such area may not avoid paying system restoration charges by switching to another electric utility, electric cooperative, or municipally-owned utility after the date the financing order was issued. Any customers in a multiply-certificated service area will still be responsible for paying system restoration charges if they choose to switch to a different service provider on or after the date the financing order was issued. If a customer commences taking energy from new on-site generation that materially reduces the customer's use of energy delivered through CenterPoint Houston's facilities, the customer will pay system restoration charges with respect to the output of the on-site generation utilized to meet the internal electrical requirements of the customer. Any reduction equivalent to more than 12.5% of the customer's annual average use of energy delivered through CenterPoint Houston's facilities will be considered material for this purpose. CenterPoint Houston is generally entitled to collect system restoration charges attributable to non-exempted customers even if they are receiving distribution service from another utility or choose to operate new on-site generation (except as specified in the Public Utility Regulatory Act). CenterPoint Houston and any successor servicer will bill and collect system restoration charges from the REPs in CenterPoint Houston's service territory. Each REP will be required to pay the system restoration charges on or before the 35th calendar day after it receives the bill from the servicer, less approved allowance for uncollectable amounts, whether or not the REP has collected all amounts owed to it by its customers.

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The financing order specifies that the PUCT will ensure that such obligations are undertaken and performed by CenterPoint Houston, any other entity providing electric transmission or distribution services within CenterPoint Houston's service territory as it existed on the date the financing order was issued and any REP providing services to any retail customer within such service territory.

*The Securitization Act Protects the Holders' of the System Restoration Bonds Lien on System Restoration Property.* The Securitization Act provides that a valid and enforceable lien and security interest in the system restoration property may be created only by a financing order and the execution and delivery of a security agreement in connection with the issuance of the system restoration bonds. The security interest automatically attaches from the time value is received by us and, on perfection through the filing of a notice with the Secretary of State of Texas, the security interest will be a continuously perfected lien and security interest in the system restoration property.

Upon perfection, the statutorily created lien attaches both to the system restoration property and to all proceeds of the system restoration property, whether the system restoration charges have accrued or not, and shall have priority in the order of filing and take precedence over any subsequent judicial or other lien creditor. The Securitization Act provides that the transfer of an interest in the system restoration property will be perfected against all third parties, including subsequent judicial or other lien creditors, when:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the financing order becomes effective,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • transfer documents have been delivered to the assignee, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • a notice of the transfer has been filed with the Secretary of the State of Texas.

If the notice of the transfer is filed within 10 days after the delivery of transfer documentation, perfection is retroactive to the date value was received. Otherwise, the transfer is perfected against third parties as of the date the notice is filed. The Securitization Act provides that priority of security interests in system restoration property will not be impaired by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • commingling of funds arising from the system restoration charges with other funds, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • modifications to the financing order resulting from any true-up adjustment.

Please read "Risk Factors — Risks Associated with the Unusual Nature of the System Restoration Property" in this prospectus.

*The Securitization Act Characterizes the Transfer of System Restoration Property as a True Sale.* The Securitization Act provides that an electric utility's or an assignee's transfer of system restoration property is a "true sale" under Texas law and is not a secured transaction and that legal and equitable title passes to the transferee, if the agreement governing that transfer expressly states that the transfer is a sale or other absolute transfer. Please read "The Sale Agreement" and "Risk Factors — Risks Associated with Potential Bankruptcy Proceedings of the Seller or the Servicer" in this prospectus.

*Tax Exemption.* The Securitization Act provides that transactions involving the transfer and ownership of system restoration property and the receipt of system restoration charges are exempt from state and local income, sales, franchise, gross receipts and other taxes or similar charges.

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#### CENTERPOINT HOUSTON'S FINANCING ORDER
*Background.* The PUCT issued the financing order on June 5, 2025, authorizing CenterPoint Houston to securitize (1) the system restoration cost amount related to distribution operations approved by the PUCT, including carrying costs through the date costs are securitized ($396,325,134 as of September 2, 2025), minus (2) any insurance proceeds, government grants, and other sources of funding that have been received by CenterPoint Houston that compensate CenterPoint Houston for the distribution-related system restoration costs received by CenterPoint Houston at the time of the application for the financing order (such balance, the "**Securitizable Balance**"), plus (3) up-front qualified costs. CenterPoint Houston expects to receive insurance proceeds and may receive government grants and/or other funding that compensate CenterPoint Houston for some of the May 2024 Storms distribution-related system restoration costs approved by the PUCT, but has not yet settled the outstanding insurance claim or received any government grants or other funding. The right to receive insurance proceeds, government grants or other funding will be retained by CenterPoint Houston and neither the right to receive proceeds, grants or funding nor any proceeds, grants or funding received by CenterPoint Houston will become a part of the system restoration property owned by us. Any government grants, other funding or final insurance settlements received by CenterPoint Houston will be taken into account by the PUCT in CenterPoint Houston's next base rate case or any subsequent proceeding and may be applied to reduce other rates charged by CenterPoint Houston; however, the Securitization Act and the financing order prohibit application of any such amounts in a manner that would reduce the system restoration charges or otherwise affect the stream of revenues available to service the system restoration bonds.

Pursuant to the financing order,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the PUCT or its designated representative has a decision-making role co-equal with CenterPoint Houston with respect to the structuring and pricing of the system restoration bonds and all matters related to the structuring and pricing of the system restoration bonds will be determined through a joint decision of CenterPoint Houston and the PUCT or its designated representative,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston is directed to take all necessary steps to ensure that the PUCT or its designated representative is provided sufficient and timely information to allow the PUCT or its designated representative to fully participate in and exercise its decision-making authority over the proposed securitization, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the servicer will file periodic adjustments to the system restoration charges with the PUCT on our behalf.

We have also agreed that certain reports concerning system restoration charge collections will be provided to the PUCT.

We have filed the financing order with the SEC as an exhibit to the registration statement of which this prospectus forms a part. This summary does not purport to be complete and is subject to and qualified by reference to the provisions of the financing order.

In the financing order, the PUCT guarantees that it will act pursuant to the irrevocable financing order as expressly authorized by the Securitization Act to ensure that expected system restoration charge revenues relating to the system restoration bonds are sufficient to pay on a timely basis scheduled principal and interest on the system restoration bonds and other costs, including fees and expenses, in connection with the system restoration bonds. The financing order, pursuant to the provisions of the Securitization Act, is irrevocable and is not subject to reduction, impairment or adjustment by further act of the PUCT, except as contemplated by the periodic true-up adjustments approved in the financing order. The financing order also provides that the true-up mechanism and all other obligations of the State of Texas and the PUCT set forth in the financing order that relate to the system restoration bonds are direct, explicit, irrevocable and unconditional upon issuance of the system restoration bonds and are legally enforceable against the State of Texas and the PUCT in accordance with Texas law.

*Collection of System Restoration Charges.* The financing order authorizes CenterPoint Houston acting as servicer, and any subsequent servicer, to collect system restoration charges from the REPs serving retail customers at distribution voltage in CenterPoint Houston's service territory and other entities which,

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under the terms of the financing order or the tariffs approved thereby, are required to bill, pay or collect system restoration charges, in an amount sufficient to permit the timely recovery of its aggregate qualified costs, which include principal and interest and certain ongoing fees and expenses associated with the system restoration bonds. There is no "cap" on the level of the system restoration charges that may be imposed on retail customers at distribution voltage in CenterPoint Houston's service territory to meet scheduled principal and interest on the system restoration bonds. However, we may not charge system restoration charges for the system restoration bonds for electricity delivered after the 15th anniversary of the date of issuance of the system restoration bonds.

*Issuance Advice Letter.* No later than the end of the first business day following the pricing date for the system restoration bonds and prior to their issuance, CenterPoint Houston is required to file with the PUCT an issuance advice letter, which will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • demonstrate compliance with the statutory financial tests and terms of the financing order,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • evidence the actual terms on which the system restoration bonds will be issued,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • show the actual dollar amount of the initial system restoration charges,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • identify the system restoration property we will purchase,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • identify us,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • certify that, based on information reasonably available, the structuring and pricing of the system restoration bonds will result in the lowest system restoration bond charges in compliance with market conditions and the terms of the financing order, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • update the benefit analysis to verify that the final structure of the securitization satisfies the statutory financial tests.

Both the issuance advice letter and the accompanying compliance tariff become effective on the date of issuance of the system restoration bonds unless the PUCT issues an order prior to noon on the fourth business day after the pricing date of the system restoration bonds, that the proposed issuance does not comply with the requirements of the Securitization Act or the financing order. The PUCT's review of the issuance advice letter will be limited to confirming the arithmetic accuracy of the calculations and to compliance with the Securitization Act, the financing order and the specific requirements contained in the issuance advice letter.

*Tariff.* We are required, prior to the issuance of the system restoration bonds, to complete and file a tariff in the form attached to the financing order. The tariff establishes the initial system restoration charges. It also implements the minimum requirements for REPs, which collect the system restoration charges, the procedures for periodic adjustments to the system restoration charges, the procedures for REPs to remit system restoration charge payments and the annual procedures allowing REPs to reconcile remittances with actual charge — offs.

*Allocation*. Under the terms of the financing order, CenterPoint Houston will initially allocate the qualified costs among its system restoration charge customer classes served at distribution voltage as follows (each allocation factor percentage has been rounded to four decimal places):

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| | |
|:---|:---|
| **System Restoration Charge Customer Class**  | **Allocation Factor**  |
| Residential  | 55.4597% |
| Secondary Service ≤ 10 kW  | 1.5261% |
| Secondary Service > 10 kW  | 31.7972% |
| Primary Service  | 2.4092% |
| Lighting Service  | 8.8078% |

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The allocation factors for each class are subject to adjustment prior to the issuance of the system restoration bonds and will be subject to periodic adjustment after any such issuance. Please read "— Adjustments to Allocation of the System Restoration Charges" below.

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*Statutory True-Ups.* In the financing order, the PUCT guarantees that it will act pursuant to its irrevocable financing order, dated June 5, 2025, as expressly authorized by the Securitization Act to ensure that expected system restoration charge revenues are sufficient to pay on a timely basis scheduled principal and interest on the system restoration bonds and other costs, including fees and expenses in connection with the system restoration bonds. The Securitization Act mandates and the financing order provides that the system restoration charges will be reviewed and adjusted at least annually, and the financing order permits interim true-ups, if necessary, to correct any forecasted under-collection of system restoration charges to assure timely payment of the system restoration bonds, including the replenishment of any funds drawn from the capital subaccount. The financing order requires CenterPoint Houston and any successor servicer to make periodic adjustment filings pursuant to the following statutory true-up mechanism and reconciliation procedures.

True-up adjustments will be based upon the cumulative differences between the periodic payment requirement, which is discussed in the paragraph below (including scheduled principal and interest payments on the system restoration bonds), and the amount of system restoration charge remittances to the trustee. In order to provide for adequate revenues from the system restoration charges and to avoid large over-collections and under-collections over time, the servicer will reconcile the system restoration charges using its most recent forecast of electricity deliveries (*i.e.*, forecasted billing units) and estimates of transaction-related expenses. The calculation of the system restoration charges will reflect both a projection of uncollectible system restoration charges and payment lags between the billing and collection of the system restoration charges based upon the servicer's and the REP's most recent experience regarding collection of system restoration charges. The calculation of the system restoration charges will also take into account any amounts due to any REPs as a result of the reconciliation of the remittances and collections. There is no "cap" on the level of the system restoration charges that may be imposed on retail customers at distribution voltage in CenterPoint Houston's service territory to meet scheduled principal and interest on the system restoration bonds.

Pursuant to the Securitization Act, the servicer is required to make a filing with the PUCT for an adjustment at least annually (i) to correct any under-collection or over-collection of the system restoration charges, and (ii) to ensure the expected recovery of amounts sufficient to timely provide all payments of debt service and other required amounts and charges in connection with the system restoration bonds (including but not limited to ongoing fees and expenses, amounts required to be deposited in or allocated to any collection account or subaccount relating to the system restoration bonds, trustee indemnities, payments due in connection with any expenses incurred by the trustee or the servicer to enforce the rights of the holders of the system restoration bonds and all other payments that may be required under the waterfall of payments described under "Description of The System Restoration Bonds — How Funds in the Collection Account Will Be Allocated" or otherwise in the waterfall of payments set forth in this prospectus) during the period for which such adjusted system restoration charges are to be in effect. These amounts are referred to as the "**periodic payment requirement**."

The financing order also authorizes more frequent interim true-up adjustments. The procedures for interim true-up adjustments to the system restoration charges are set forth within the financing order and the servicing agreement. Pursuant to the servicing agreement, at the beginning of CenterPoint Houston's billing cycle for and , beginning in 2025, and at least every three months beginning twelve months prior to the last scheduled final payment date of the system restoration bonds, the servicer shall update the data and assumptions underlying the calculation of the system restoration charges, and interim true-ups as required in the servicing agreement will be performed as necessary to ensure that the amount collected from system restoration charges is sufficient to pay principal and interest on the system restoration bonds and ensure timely and complete payment of other required amounts and charges in connection with the system restoration bonds. Additionally, interim true-up adjustments may be made by the servicer more frequently at any time during the term of the system restoration bonds (i) if the servicer forecasts that the amount to be collected from system restoration charges during the current calculation period will be insufficient to make all scheduled payments of principal, interest and other amounts in respect of the system restoration bonds and ensure timely and complete payment of other required amounts and charges in connection with the system restoration bonds during such period, (ii) to replenish any funds drawn from the capital subaccount and (iii) generally to correct any forecasted under-collection of system restoration charges to assure timely payment of the system restoration bonds.

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For more discussion of the true-up mechanism, please read "The Servicing Agreement — Adjustment Process for the System Restoration Charges" in this prospectus.

*Adjustments to Allocation of the System Restoration Charges.* In the financing order, the PUCT requires CenterPoint Houston and any successor servicer to request periodic adjustments to the allocation percentages of the system restoration charges, which are referred to as the Periodic Billing Requirement Allocation Factors ("**PBRAFs**"), among various classes of customers. The PBRAFs may be adjusted to reflect load losses that a system restoration charge class or group of system restoration charge classes may suffer or to reflect certain changes to the allocation methodology that may be ordered by the PUCT. Adjustments to the PBRAFs will take place at the same time as the annual true-up adjustments described above; however, any such adjustment will be filed with the PUCT at least 90 days before the date of the proposed true-up adjustment will become effective. The filing shall contain the proposed changes to the system restoration charge rates, justification for such changes as necessary to specifically address the cause(s) of the adjustment and a statement of the proposed adjustment date. Concurrently with such filing with the PUCT, the servicer will notify all parties to the financing order of the filing of the proposed adjustment, and the PUCT will conduct a contested case proceeding on adjustments to the PBRAFs pursuant to Section 39.003 of the Public Utility Regulatory Act. The scope of the proceeding will be limited to determining whether the proposed adjustments to the PBRAFs comply with the financing order. In any true-up proceeding that involves the adjustment of the PBRAFs, all parties in the proceeding will have the right to challenge the reasonableness of the forecasts of billing determinants proposed as a basis for adjusting the PBRAFs. The PUCT will issue a final order by the proposed adjustment date stated in the filing; however, in the event that the PUCT cannot issue an order by that date, the servicer will be permitted to implement its proposed changes. Any modifications subsequently ordered by the PUCT will be made by the servicer in the next true-up filing.

*Binding on Successors.* The financing order, along with the system restoration charges authorized in the financing order, is binding on:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any successor to CenterPoint Houston that provides transmission and distribution service directly to retail customers in CenterPoint Houston's service territory,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any other entity that provides transmission or distribution services to retail customers within CenterPoint Houston's service territory, and any successor to such other entity,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • each REP that sells electric energy at distribution voltage to retail customers located within CenterPoint Houston's certificated service area or any such REP's successor,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any other entity responsible for billing and collecting system restoration charges on our behalf, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any successor to the PUCT.

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#### RETAIL ELECTRIC PROVIDERS
As part of the restructuring of the Texas electric industry within ERCOT in the early 2000's, retail customers of CenterPoint Houston began purchasing electricity and related services from REPs rather than CenterPoint Houston in January 2002. Since that time, only REPs have been allowed to sell electricity to retail customers formerly served by electric utilities. Each retail customer may choose a REP from among those who have been certified under standards set by the PUCT. The discussion in this section is limited to the REPs and retail customers in CenterPoint Houston's service territory.

CenterPoint Houston and any successor servicer will bill and collect system restoration charges from the REPs in CenterPoint Houston's service territory. The REPs will in turn bill and collect the system restoration charges from retail customers in CenterPoint Houston's service territory. Each REP will be required to pay the system restoration charges on or before the 35th calendar day after it receives the bill from the servicer, less an approved allowance for uncollectible amounts, whether or not the REP has collected all amounts owed to it by its retail customers. Please read "— Payment of System Restoration Charges" below. Prior to the date on which the REP remits the system restoration charges to the servicer, the system restoration charges may be commingled with the REP's other funds. Please read "Risk Factors — Risks Associated with Potential Bankruptcy Proceedings or Defaults of REPs" and "How a Bankruptcy May Affect Your Investment — Bankruptcy of a REP" in this prospectus.

Each REP will deliver a combined bill to each retail customer for the electric power sold by it to the retail customer, for the related transmission and distribution service (which includes municipal franchise fees) provided by the electric utility, for the system restoration charge, for charges associated with any other outstanding system restoration bonds, and for other charges approved by the PUCT. Each REP will collect the combined amount from its retail customers and will remit the appropriate portion of such combined amount, net of an estimated allowance for charge-offs and other amounts it is entitled to retain, to CenterPoint Houston, the servicer, the servicer of any other outstanding system restoration bonds, if any, and to other parties, if any, entitled to receive a portion of such amount. Please read "Risk Factors — Servicing Risks — It might be difficult to collect system restoration charges from REPs" in this prospectus. The REP will have custody of the system restoration charges collected from its retail customers until remitted to the servicer and may commingle the system restoration charges with its other funds. Please read "Risk Factors — Risks Associated with Potential Bankruptcy Proceedings or Defaults of REPs" and "How a Bankruptcy May Affect Your Investment — Bankruptcy of a REP" in this prospectus.

*Rating, Deposit and Related Requirements for REPs.* The financing order provides that each REP that does not maintain a long-term, unsecured credit rating of not less than "BBB-" and "Baa3" (or the equivalent) from S&P and Moody's, respectively, must provide:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • a cash deposit of two months' maximum expected system restoration charge collections,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • an affiliate guarantee, surety bond or letter of credit from an entity with a long-term, unsecured credit rating of not less than "BBB-" and "Baa3" (or the equivalent) from S&P and Moody's, respectively, providing for payment of such amount of system restoration charge collections in the event that the REP defaults in its payment obligations, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • a combination of any of the foregoing.

A REP that does not have or maintain the requisite credit rating may select which alternate form of deposit, credit support or combination thereof it will utilize. The trustee must be a beneficiary of any affiliate guarantee, surety bond or letter of credit.

*Loss of Rating.* If the long-term, unsecured credit rating from either S&P or Moody's of a REP that did not previously provide the alternate form of deposit, credit support or combination thereof or of any provider of an affiliate guarantee, surety bond or letter of credit is suspended, withdrawn or downgraded below "BBB-" or "Baa3" (or the equivalent), the REP must provide an alternate form of deposit, credit support or combination thereof, or new forms thereof, in each case from providers with the requisite ratings, within 10 business days following such suspension, withdrawal or downgrade. A REP failing to make such provision must comply with the provisions set forth below in "— Remedies Upon REP Default."

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*Computation of Deposit, etc.* The computation of the size of a required deposit must be agreed upon by the servicer and the REP and reviewed no more frequently than quarterly to ensure that the deposit accurately reflects two months' maximum system restoration charge collections. Within 10 business days following such review, (1) the REP must remit to the trustee the amount of any shortfall in such required deposit or (2) the servicer must instruct the trustee in writing to remit to the REP any amount in excess of such required deposit. A REP failing to so remit any such shortfall must comply with the provisions set forth below in "— Remedies Upon REP Default." REP cash deposits will be held by the trustee, maintained in segregated accounts, and invested at the written direction of the servicer or the REP making the deposit, in short-term, high-quality investments, as permitted by the rating agencies rating the system restoration bonds. Investment earnings on REP cash deposits will be considered part of such cash deposits so long as they remain on deposit with the trustee. At the instruction of the servicer, cash deposits will be remitted with investment earnings to the REP at the end of the term of the system restoration bonds unless otherwise utilized for the payment of the REP's obligations for system restoration charges. Once the deposit is no longer required, the servicer must promptly (but not later than 30 days after such event) instruct the trustee in writing to remit the amount in the segregated accounts to the REP.

*Billing and Collection Standards*. REPs must comply with the billing, collection and remittance procedures and information access requirements established by the financing order. These standards relate only to the billing and collection of system restoration charges authorized under the financing order and do not apply to collection of any other nonbypassable charges or other charges. The standards apply to all REPs other than REPs that may, in the future, contract with CenterPoint Houston to have CenterPoint Houston bill and collect system restoration charges from retail customers. REPs may contract with parties other than CenterPoint Houston to bill and collect system restoration charges from retail customers, but such REPs will remain subject to these standards. If the PUCT later determines that different standards are to be applied to REPs in particular areas (*e.g.*, payment terms), then those new standards, with appropriate modifications to related provisions, may replace the specific portions of the standards approved in the financing order, but only if each of the rating agencies that have rated the system restoration bonds provides prior written confirmation to the PUCT that such modifications will not cause a suspension, withdrawal or downgrade of its ratings on the system restoration bonds. Upon adoption of any amendment to the rules governing these REP standards, the PUCT's staff will initiate a proceeding to investigate the need to modify the standards adopted in the financing order to conform to that rule, provided that such modifications may not be implemented absent prior written confirmation from each of the rating agencies that have rated the system restoration bonds that such modifications will not cause a suspension, withdrawal or downgrade of the ratings on the system restoration bonds.

*Payment of System Restoration Charges*. On a daily basis, the servicer will bill each REP for system restoration charges owed by the REP's retail customers. Each REP collects amounts billed to its retail customers and is required to remit the system restoration charges, net of an estimated allowance for charge-offs, to the servicer. Payments of system restoration charges are due 35 calendar days following each billing by the servicer to the REP, without regard to whether or when the REP receives payment from its retail customers. The servicer must accept payment by electronic funds transfer, wire transfer, check or any combination thereof. Payment will be considered received on the date the electronic funds transfer or wire transfer is received by the servicer, or the date the check clears.

A 5% penalty is to be charged on amounts received after 35 calendar days; however, a 10 calendar-day grace period will be allowed before the REP is considered to be in default. A REP in default must comply with the provisions set forth below in "— Remedies Upon REP Default." The 5% penalty will be a one-time assessment measured against the current amount overdue from the REP to the servicer. The "current amount" consists of the total unpaid system restoration charges existing on the 36th calendar day after the billing by the servicer. Any and all such penalty payments that are collected will be transferred to the trustee to be applied against system restoration charge obligations. If there is a shortfall in a REP's payment of an amount billed, including system restoration charges for the system restoration bonds, the amount paid shall first be allocated ratably among the system restoration charges relating to the system restoration bonds and other fees and charges (including charges relating to other outstanding system restoration bonds, if any, delivery charges, charges associated with leasing and operating TEEEF, an energy efficiency cost recovery charge and nuclear decommissioning charges) other than late fees, and second, any remaining portion of the payment will be allocated to late fees. A REP will not be obligated to pay the overdue system restoration

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charges of another REP. If a REP agrees to assume the responsibility for the payment of overdue system restoration charges as a condition of receiving the customers of another REP that has decided to terminate service to those customers for any reason, the new REP will not be assessed the 5% penalty upon such system restoration charges; however, the prior REP will not be relieved of the previously assessed penalties.

If a REP defaults in the payment of system restoration charges, the REP must implement one of the courses of action described below under "— Remedies Upon REP Default."

*Remedies Upon REP Default.* After the 10 calendar-day grace period (the 46th day after the billing date) referred to above under the heading "— Payment of System Restoration Charges," the servicer will have the option to seek recourse against any cash deposit, affiliate guarantee, surety bond, letter of credit or combination thereof provided by the REP, if any, and will avail itself of such legal remedies as may be appropriate to collect any remaining unpaid system restoration charges and associated penalties due the servicer after the application of the REP's deposit or alternate form of credit support. In addition, a REP that is in default with respect to the requirements set forth above in "— Rating, Deposit and Related Requirements for REPs" and "— Payment of System Restoration Charges" must, subject to the limitations and requirements of applicable bankruptcy laws if the REP is a debtor in bankruptcy, select and implement one of the following options:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • allow its billing and collection responsibilities to be immediately assumed by another REP of the retail customer's choosing or by the applicable provider of last resort;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • immediately implement other mutually suitable and agreeable arrangements with the servicer consistent with the terms of the servicing agreement and rating agency requirements to avoid a suspension, withdrawal or downgrade of the ratings of the system restoration bonds; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • arrange that all amounts owed by retail customers for services rendered be timely billed and immediately paid directly into a lock-box controlled by the servicer with such amounts to be applied first to pay system restoration charges before remaining amounts are released to the REP and with all costs associated with the lock-box to be borne solely by the REP.

Historically, the REPs that have been in default with respect to the requirements noted above have selected the second option.

If a REP that is in default fails to immediately select and implement one of the foregoing options or, after so selecting one of the foregoing options, fails to adequately meet its responsibilities thereunder, then the servicer is required to immediately implement the first option listed above, subject to the limitations and requirements of applicable bankruptcy laws if the REP is a debtor in bankruptcy. Upon re-establishment of compliance with the requirements set forth above in "— Rating, Deposit, and Related Requirements of REPs" and "— Payment of System Restoration Charges" and the payment of all past-due amounts and associated penalties, the REP will no longer be required to comply with the obligations described in this paragraph.

*Interest of REPs (Including the Provider of Last Resort) in Funds Held by Servicer.* Any interest that a REP (including the provider of last resort) may have in any funds in the hands of the servicer will be junior and subordinate to any and all rights of the trustee or us to such funds.

*Billing by Providers of Last Resort.* The Public Utility Regulatory Act provides for one or more REPs in each area to be designated the "provider of last resort" for that area or a specified customer class. The provider of last resort is required to offer basic electric service to retail customers in its designated area, regardless of the creditworthiness of the customer. The provider of last resort might face greater difficulty in bill collection than other REPs and therefore the servicer may face greater difficulty in collecting system restoration charges from the provider of last resort.

The provider of last resort appointed by the PUCT must meet the minimum credit rating or deposit and credit support requirements described above in "— Rating, Deposit and Related Requirements for REPs" in addition to any other standards that may be adopted by the PUCT. If the provider of last resort defaults or is not eligible to provide billing and collection services, responsibility for billing and collection of system restoration charges will immediately be transferred to and assumed by the servicer until a new provider of last resort can be named by the PUCT or the retail customer requests the services of another

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certified REP. Retail customers may never be directly re-billed by the successor REP, the provider of last resort or the servicer for any amount of system restoration charges they have paid their REP (although future system restoration charges will reflect REP and other system-wide charge-offs). If the amount of the penalty detailed above in "— Payment of System Restoration Charges" is the sole remaining past-due amount after the 45th calendar day, then the REP will not be required to comply with the courses of action described above under "— Remedies Upon REP Default" unless the penalty is not paid within an additional 30 calendar days.

*Disputes.* In the event that a REP disputes any amount of billed system restoration charges, the REP must pay the disputed amount under protest according to the timelines detailed above in "— Payment of System Restoration Charges." The REP and the servicer must first attempt to informally resolve the dispute, but if they fail to do so within 30 calendar days, either party may file a complaint with the PUCT. If the REP is successful in the dispute process (informal or formal), the REP will be entitled to interest on the disputed amount paid to the servicer at the PUCT-approved interest rate. Disputes about the date of receipt of system restoration charge payments and related penalties or the size of a required REP deposit will be handled in a like manner. Any interest paid by the servicer on disputed amounts may not be recovered through system restoration charges if it is determined that the servicer's claim to the funds is clearly unfounded. No interest will be paid by the servicer if it is determined that the servicer has received inaccurate metering data from another entity providing competitive metering services.

*Metering Data.* Under the Public Utility Regulatory Act, non-residential retail customers that are required by ERCOT to have an interval data recorder meter are able to choose to own the settlement and billing meters that are used to measure electric energy delivered to their location or to have those meters owned by a REP, the transmission and distribution utility or another person authorized by the customer. As of June 30, 2025, no retail customers had a competitively owned data recorder meter. Whether or not the retail customer chooses an alternative meter owner, until the PUCT authorizes otherwise, CenterPoint Houston will continue to provide metering services related to the installation and removal of meters, meter maintenance, meter testing and calibration, data collection and data management, including the transfer of meter data to ERCOT. As of June 30, 2025, CenterPoint Houston continued to provide all metering services. The PUCT's rules require ERCOT to file with the PUCT quarterly updates as to the operational readiness of the support systems necessary for the PUCT to authorize an entity other than the transmission and distribution utility to provide these metering services. For residential and nonresidential retail customers other than those required by ERCOT to have an interval data recorder meter within CenterPoint Houston's service territory, metering services shall continue to be provided by CenterPoint Houston.

If the servicer is providing the metering services, metering data will be provided to the REP at the same time as the billing. If the servicer is not providing the metering services, the entity providing the metering services will be responsible for complying with PUCT rules and ensuring that the servicer and the REP receive timely and accurate metering data in order for the servicer to meet its obligations under the servicing agreement and the financing order with respect to billings and true-ups.

*Charge-Off Allowance.* The REP will be allowed to hold back an allowance for charge-offs in its payments to the servicer. Such charge-off rate will be recalculated each year in connection with the annual true-up procedure. For the initial year of the system restoration bonds, REPs will be allowed to remit payments to the servicer in connection with the most recently established system restoration charges related to the system restoration bonds issued by CenterPoint Energy Restoration Bond Company, LLC on November 25, 2009, which bonds have been fully repaid and are no longer outstanding. On an annual basis in connection with the true-up process, the REP and the servicer will be responsible for reconciling the amounts held back with amounts actually written off as uncollectible in accordance with the terms agreed to by the REP and the servicer, provided that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the REP's right to reconciliation for charge-offs will be limited to retail customers whose service has been permanently terminated and whose entire accounts (*i.e.*, all amounts due to the REP for its own account as well as the portion representing system restoration charges) have been written off;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the REP's recourse will be limited to a credit against future system restoration charge payments unless the REP and the servicer agree to alternative arrangements, but in no event will the REP have recourse to the trustee, us or our funds for such payments; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the REP provides information on a timely basis to the servicer so that the servicer can include the REP's default experience and any subsequent credits into its calculation of the adjusted system restoration charge rates for the next system restoration charge billing period and the REP's rights to credit will not take effect until after such adjusted system restoration charges have been implemented.

*Service Termination.* In the event that the servicer is billing retail customers for system restoration charges, the servicer will have the right to terminate transmission and distribution service to the retail customer for non-payment by the retail customer pursuant to applicable PUCT rules. In the event that a REP or provider of last resort is billing customers for system restoration charges, the REP or provider of last resort will have the right to transfer the customer to the provider of last resort (or to another certified REP) or to direct the servicer to terminate transmission and distribution service to the retail customer for non-payment in accordance with applicable PUCT rules. Under current rules of the PUCT, any non-paying residential or small non-residential retail customers are subject to disconnection by any REP. Non-paying large non-residential retail customers can be disconnected by any REP if the customer's contract does not preclude disconnection.

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#### THE DEPOSITOR, SELLER, INITIAL SERVICER AND SPONSOR

#### About CenterPoint Houston
*Background Information.* CenterPoint Houston is a transmission and distribution electric utility that provides electric transmission service to transmission service customers in the ERCOT region and distribution service to REPs serving the Texas Gulf Coast area that includes the city of Houston. CenterPoint Houston is an indirect, wholly owned subsidiary of CenterPoint Energy, a public utility holding company.

*Service Territory*. CenterPoint Houston provides electric transmission and distribution service to approximately 2.8 million metered customers in its service territory, which has a population of over 7.5 million people. The map below sets forth CenterPoint Houston's service territory as of June 30, 2025.

![[MISSING IMAGE: mp_serviceterritory-4clr.jpg]](mp_serviceterritory-4clr.jpg)

There are no other electric transmission and distribution utilities offering delivery services to the public in CenterPoint Houston's service area. For another provider of transmission and distribution services to provide such services in CenterPoint Houston's territory, it would be required to obtain a Certificate of Convenience and Necessity from the PUCT and, depending on the location of the facilities, may also be required to obtain franchises from one or more municipalities.

*Customers*. CenterPoint Houston serves nearly all of the Houston/Galveston metropolitan area near the Texas Gulf Coast. CenterPoint Houston's customers consist of REPs, which sell electricity to metered customers in CenterPoint Houston's certificated service area, and municipalities, electric cooperatives and other distribution companies located outside CenterPoint Houston's certificated service area. Each REP is licensed by, and must meet minimum creditworthiness criteria established by, the PUCT. CenterPoint Houston does not have long-term contracts with any of its customers, but rather operates using a continuous billing cycle, with meter readings being conducted and invoices being distributed to REPs each business day.

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The table below reflects the number of REPs and metered customers in CenterPoint Houston's service area as of December 31, 2024:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **REPs**  | **Residential**  | **Commercial/<br>Industrial**  | **Total Customers**  |
| Texas Gulf Coast  | 67 | 2506284 | 312059 | 2818343 |

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*Electric Transmission and Distribution*. CenterPoint Houston's revenues are primarily derived from rates that it collects from each REP for serving the electricity demand of retail customers based on the amount of electricity it delivers on behalf of that REP. On behalf of REPs, CenterPoint Houston delivers electricity from power plants to substations, from one substation to another and to retail customers taking power at or above 69 kV in locations throughout CenterPoint Houston's certificated service territory. CenterPoint Houston constructs and maintains transmission facilities and provides transmission services under tariffs approved by the PUCT.

CenterPoint Houston's distribution network receives electricity from the transmission grid through power distribution substations and delivers electricity for REPs in its certificated service area by carrying lower-voltage power from the substation to the retail customer through distribution feeders. CenterPoint Houston's operations include construction and maintenance of distribution facilities, metering services, outage response services and call center operations. CenterPoint Houston provides distribution services under tariffs approved by the PUCT. PUCT rules and market protocols govern the commercial operations of distribution companies and other market participants. Rates for these services are established pursuant to rate proceedings conducted before municipalities that have original jurisdiction and the PUCT.

CenterPoint Houston's revenues and results of operations are subject to seasonality, weather conditions and other changes in electricity usage, with revenues generally being higher during the warmer months when more electricity is used for cooling purposes.

*Temporary Generation*. As allowed by a law enacted by the Texas legislature in 2021 after the February 2021 Winter Storm Event, and amended in 2023, CenterPoint Houston is leasing certain TEEEF that can aid in restoring power to customers during certain significant power outages that are impacting its distribution system. In June 2025, CenterPoint Houston entered into agreements to release certain of its TEEEF to the San Antonio area prior to the summer of 2025 for a period of up to two years, during which CenterPoint Houston would not receive revenue or profit from ERCOT and would not charge Houston-area customers for these TEEEF units. As of June 30, 2025, CenterPoint Houston leased 505 MW of TEEEF.

CenterPoint Houston does not make direct retail or wholesale sales of electric energy or own or operate any power generating facilities capable of serving customers other than leased TEEEF.

*Properties*. All of CenterPoint Houston's properties are located in Texas. Its properties consist primarily of high-voltage electric transmission lines and poles, distribution lines, substations, service centers, service wires, telecommunications networks and meters.

As of December 31, 2024, CenterPoint Houston owned and operated the following electric transmission and distribution lines:

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| | | |
|:---|:---|:---|
| **Description**  | **Overhead Lines**  | **Underground Lines**  |
|  | **(in Circuit Miles)**  | **(in Circuit Miles)**  |
| **Transmission lines:** |  |  |
| 69 kV  | 109 | 2 |
| 138 kV  | 2347 | 24 |
| 345 kV  | 1445 |  |
| &nbsp;&nbsp;&nbsp; Total  | 3901 | 26 |
| **Distribution lines**  | 29327 | 27000 |

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A substation is a facility that transforms electricity from a higher voltage to a lower voltage or vice versa. Generally, this facility is the interface between the transmission system and the distribution grid. As

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of December 31, 2024, CenterPoint Houston had 243 substations with aggregate transformer capacity of 73,667 megavolt amperes.

Service centers consist of office buildings, warehouses and repair facilities that are used in the business of transmitting and distributing electricity. As of December 31, 2024, CenterPoint Houston had 13 service centers located on 362 acres of land.

Most of CenterPoint Houston's transmission and distribution lines have been constructed over lands of others pursuant to easements or along public highways and streets under franchise agreements and as permitted by law. CenterPoint Houston holds non-exclusive franchises from certain incorporated municipalities in its service territory. In exchange for the payment of fees, these franchises give CenterPoint Houston the right to use the streets and public rights-of-way of these municipalities to construct, operate and maintain its transmission and distribution system and to use that system to conduct its electric delivery business and for other purposes that the franchises permit. The terms of the franchises, with various expiration dates, typically range from 30 to 40 years.

*ERCOT Market Framework.* CenterPoint Houston is a member of ERCOT, which serves as the independent system operator and regional reliability coordinator for member electric power systems in most of Texas. ERCOT membership is open to consumer groups, investor and municipally owned electric utilities, rural electric cooperatives, independent generators, power marketers and REPs. The ERCOT market includes much of the State of Texas, other than a portion of the panhandle, a portion of the eastern part of the state bordering on Louisiana and the area in and around El Paso. The ERCOT market represents approximately 90% of the demand for power in Texas and is one of the largest power markets in the United States. The ERCOT market includes an aggregate net generating capacity of more than 100,000 MW. There are limited direct current interconnections between the ERCOT market and other power markets in the United States.

The ERCOT market operates under the reliability standards developed by the North American Electric Reliability Council, approved by the Federal Energy Regulatory Commission and enforced by the Texas Reliability Entity. The PUCT has primary jurisdiction over the ERCOT market to ensure the adequacy and reliability of electricity supply across the state's main interconnected power transmission grid. The ERCOT independent system operator ("**ERCOT ISO**") is responsible for operating the bulk electric power supply system in the ERCOT market. Its responsibilities include ensuring that electricity production and delivery are accurately accounted for among the generation resources and wholesale buyers and sellers. Unlike certain other regional power markets, the ERCOT market is not a centrally dispatched power pool, and the ERCOT ISO does not procure energy on behalf of its members other than to maintain the reliable operations of the transmission system. Members who sell and purchase power are responsible for contracting sales and purchases of power bilaterally. The ERCOT ISO also serves as agent for procuring ancillary services for those members who elect not to provide their own ancillary services.

CenterPoint Houston's transmission business, along with those of other owners of transmission facilities in Texas, supports the operation of the ERCOT ISO. The transmission business has planning, design, construction, operation and maintenance responsibility for the portion of the transmission grid and for the load-serving substations it owns, primarily within its certificated area. CenterPoint Houston participates with the ERCOT ISO and other ERCOT utilities to plan, design, obtain regulatory approval for and construct new transmission lines necessary to increase bulk power transfer capability and to remove existing constraints on the ERCOT transmission grid.

*Area Economic Profile*. Although the city's economy has experienced diversification in recent years, Houston's economy is still primarily centered around its key roles in international energy sectors. These roles include (1) an operations center for global exploration and drilling activities of major oil and natural gas firms, (2) one of the world's largest concentrations of petrochemical and refining facilities, (3) home office and base of operations for several of the world's largest industrial and petrochemical construction firms and (4) a major distribution and processing center for the natural gas industry. Other important sectors of the Houston economy include the Port of Houston and airports, the Johnson Space Center and the Texas Medical Center. Together, Houston's energy and nonenergy sectors provide the city with a strong technical and engineering employment base.

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*Forecasted Growth in Number of Customers and Electricity Consumption*. For the five years ending December 31, 2030, CenterPoint Houston estimates that the number of electric customers will grow at an annual rate of approximately 1.2% and energy sales (in KWh) will grow at an annual rate of approximately 1.1%. During the ten years ended December 31, 2024, the number of residential customers increased at a compound annual growth rate of 1.9% and the combined number of non-residential customers increased at a compound annual growth rate of 1.3%. During the same ten-year period, weather-adjusted energy sales to residential customers increased at a compound annual growth rate of 1.2% and weather-adjusted energy sales to non-residential customers increased at a compounded annual growth rate of 3.1%.

*Relationship with CenterPoint Energy*. CenterPoint Houston is an indirect wholly owned subsidiary of CenterPoint Energy. CenterPoint Energy, through its subsidiaries, owns and operates electric transmission, distribution and generation facilities and natural gas distribution systems. CenterPoint Energy's electric and natural gas businesses operate in four states across the U.S. midcontinent. CenterPoint Energy also has the following indirect wholly owned natural gas utility subsidiaries: CenterPoint Energy Resources Corp., Indiana Gas Company, Inc., Vectren Energy Delivery of Ohio, LLC, as well as an indirect wholly owned electric transmission and distribution and power generation utility subsidiary, Southern Indiana Gas and Electric Company ("**SIGECO**"). As of June 30, 2025, CenterPoint Energy had a market capitalization of approximately $24.0 billion with total assets of approximately $44.1 billion. As of December 31, 2024, CenterPoint Houston represented approximately 55% of CenterPoint Energy's consolidated rate base of $28.0 billion.

*Executive Offices.* CenterPoint Houston's principal executive offices are located at 1111 Louisiana Street, Houston, Texas 77002. The phone number at this address is (713) 207-1111.

*Where to Find Information About CenterPoint Houston.* CenterPoint Houston is required to file periodic reports with the SEC. These SEC filings are available to the public over the internet at the SEC's website at *www.sec.gov*. CenterPoint Houston maintains a website at *https://investors.centerpointenergy.com*, where it posts its SEC filings. Except as specifically provided in this prospectus, no other information contained on that website constitutes part of this prospectus.

#### Municipalization
Texas law may authorize certain local municipalities to seek to acquire portions of CenterPoint Houston's electric distribution facilities through the power of eminent domain for use as part of municipally-owned utility systems. Although the power of eminent domain has not been used by municipalities in Texas in recent times to acquire electric distribution systems, there can be no assurance that one or more municipalities will not seek to acquire some or all of CenterPoint Houston's electric distribution facilities while the system restoration bonds are outstanding. The Public Utility Regulatory Act specifies that system restoration charges approved by a PUCT financing order shall be collected by an electric utility as well as its "successors." In the servicing agreement, CenterPoint Houston has covenanted to assert in an appropriate forum that any municipality that acquires any portion of CenterPoint Houston's electric distribution facilities must be treated as a successor to CenterPoint Houston under the Public Utility Regulatory Act and the financing order and that retail customers in such municipalities remain responsible for payment of system restoration charges. However, the involved municipality might assert that it should not be treated as a successor to CenterPoint Houston for these purposes and that its customers are not responsible for payment of system restoration charges. In any such cases, there can be no assurance that the system restoration charges will be collected from customers of municipally-owned utilities who were formerly customers of CenterPoint Houston.

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#### Servicing Experience
Since 2001, CenterPoint Houston has sponsored and acted as servicer for five separate series of utility rate tariff bonds similar to the system restoration bonds totaling more than $5.4 billion of initial principal amount, as listed below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • $748,897,000 initial principal amount of Transition Bonds, Series 2001-1 issued by Transition Bond Company I on October 24, 2001;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • $1,851,000,000 initial principal amount of Senior Secured Transition Bonds, Series A issued by Transition Bond Company II on December 16, 2005;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • $488,472,000 initial principal amount of 2008 Senior Secured Transition Bonds issued by Transition Bond Company III on February 12, 2008;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • $664,859,000 initial principal amount of Senior Secured System Restoration Bonds issued by Restoration Bond Company I on November 25, 2009; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • $1,695,000,000 initial principal amount of 2012 Senior Secured Transition Bonds issued by Transition Bond Company IV on January 19, 2012.

All five of the series of CenterPoint Houston utility rate tariff bonds have been paid in full as of the date of this prospectus. From the date of issuance of such bonds to their final maturity, CenterPoint Houston filed on a timely basis all true-up filings required for such bonds, and the issuing entity of such bonds satisfied on a timely basis all interest payments on such bonds and made all principal payments on such bonds in accordance with their expected amortization schedule.

Additionally, SIGECO, an indirect wholly owned subsidiary of CenterPoint Energy, is sponsoring and acting as servicer for a series of securitization bonds issued in June 2023 in an initial principal amount of $341,450,000 (the "**SIGECO Securitization Bonds**"). From the date of issuance of the SIGECO Securitization Bonds to the most recent payment date with respect to such bonds, SIGECO filed on a timely basis all true-up filings required for such bonds, and the issuing entity of such bonds satisfied on a timely basis all interest payments on such bonds and made all principal payments on such bonds in accordance with their expected amortization schedule.

#### Customer Classes and Electric Energy Consumption
The following tables show transmission and distribution retail tariff delivery revenue, average number of metered retail customers and retail electric usage for CenterPoint Houston's retail customer classes for the five preceding years. Transmission and distribution retail tariff delivery revenue includes customer charge, meter charge, transmission service charge, distribution service charge, transmission cost recovery factor and distribution cost recovery factor. Transmission and distribution retail tariff delivery revenue excludes, among other things, revenue associated with wholesale electricity sales and TEEEF. There can be no assurances that the transmission and distribution retail tariff delivery revenue, average number of metered retail electric customers and retail electricity usage, or the composition of any of the foregoing, will remain at or near the levels reflected in the following tables. Please read "Risk Factors — Servicing Risks" in this prospectus.

#### Transmission and Distribution Retail Delivery Tariff Revenue by Customer Class ($ in millions) <sup>(1)</sup>

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
| | **2020**  | **2021**  | **2022**  | **2023**  | **2024**  |
| **Residential**  | $1259 | $1198 | $1440 | $1472 | $1517 |
| **Non-Residential**  | 1135 | 1175 | 1329 | 1314 | 1485 |
| **Total**  | $2394 | $2373 | $2769 | $2786 | $3002 |

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(1) Represents CenterPoint Houston's revenues for transmission and distribution retail delivery tariff charges billed to REPs.

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#### Average Number of Retail Electric Customers by Customer Class <sup>(1)</sup>

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
| | **2020**  | **2021**  | **2022**  | **2023**  | **2024**  |
| **Residential**  | 2277414 | 2334695 | 2383284 | 2430804 | 2485470 |
| **Non-Residential**  | 311057 | 316842 | 320334 | 323172 | 326715 |
| **Total**  | 2588471 | 2651537 | 2703618 | 2753976 | 2812185 |

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(1) Calculated as the average of the end-of-month customer counts for the applicable period.

#### Retail Electric Usage by Customer Class\* (as measured by billed MWh)

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
| | **2020**  | **2021**  | **2022**  | **2023**  | **2024**  |
| **Residential**  | 31328591 | 30564353 | 33484769 | 34066485 | 32947341 |
| **Non-Residential**  | 63395366 | 65698133 | 66725753 | 69059490 | 73389677 |
| **Total**  | 94723957 | 96262486 | 100210522 | 103125975 | 106337018 |

---

**\***

Numbers not exact due to rounding.

It is expected that the City of Houston will pay about 3% of the total system restoration charges. The portion of the system restoration charges that is paid by each other retail customer is expected to be less than 1% of the total system restoration charges.

CenterPoint Houston will bill system restoration charges according to rate schedules for each customer class. For the system restoration charges assessed to individual rate schedules as of the issuance date of the system restoration bonds and any adjustment thereto, in each case giving effect to the issuance of system restoration bonds on that date, please read "The System Restoration Charges" in this prospectus.

#### Forecasting Electricity Consumption
CenterPoint Houston creates a consumption forecast separately for each retail customer class. CenterPoint Houston breaks the forecast into two parts: a customer forecast and a use per customer forecast. These two parts are then multiplied together by CenterPoint Houston to calculate forecasted usage in MWh.

*Customer Forecast*. For residential retail customers, CenterPoint Houston uses either a forecast of population or households in its service territory as an exogenous driver. For commercial retail customers, CenterPoint Houston uses employment in various commercial sectors as a driver for growth. Seasonal patterns in customer additions are also considered.

*Use Per Customer*. CenterPoint Houston's retail residential use per customer forecast is based on a statistically adjusted end use model ("**SAE**"). This method combines a traditional statistical regression model with detailed end use information including efficiency standard changes over time. This results in an economic model that captures both short-term energy use impacts as well as long-term structural changes. CenterPoint Houston's model combines appliance saturation rates, efficiency, income, fuel price and household size with heating and cooling degree days (for heating and cooling) and billing days (for other) to create a term for heating, cooling and other.

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CenterPoint Houston's retail commercial use per customer forecast is also based on an SAE model for the commercial sector. This reflects efficiency trends and square footage estimates by building type and end use. This is then calibrated to CenterPoint Houston commercial sales. The economic drivers for the commercial sector are employment and output in manufacturing and non-manufacturing sectors. The economic data comes from S&P Global (formerly IHS Markit) forecast for Houston-The Woodlands-Sugar Land (metro level) and Texas (state level).

CenterPoint Houston's large retail industrial customer and volume forecast are created separately in which customer specific data is the basis and then combined into rate classes. The forecast is based on the current state plus known changes expected in the coming years and growth based on an econometric regression.

The table below compares actual usage in MWh for a particular year to the forecast for such year which is part of the most recent five-year corporate planning forecast, usually prepared during the preceding year. We cannot assure you that the future variance between actual and expected consumption in the aggregate or by customer class will be similar to the historical experience set forth below.

#### Annual Forecast Variance For Electric Consumption (MWh)\*†

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **2020**  | **2021**  | **2022**  | **2023**  | **2024**  |
| **Residential** |  |  |  |  |  |
| Forecast  | 30203503 | 30746527 | 30444203 | 31985032 | 32657055 |
| Actual  | 31244444 | 30650030 | 33675901 | 33830427 | 31420744 |
| Variance  | 3.4% | -0.3% | 10.6% | 5.8% | -3.8% |
| **Non-Residential** |  |  |  |  |  |
| Forecast  | 60531982 | 61756020 | 67759531 | 70040683 | 66849734 |
| Actual  | 62523492 | 66248423 | 66386175 | 70031506 | 73238450 |
| Variance  | 3.3% | 7.3% | -2.0% | 0.0% | 9.6% |
| **Total** |  |  |  |  |  |
| Forecast  | 90735486 | 92502547 | 98203734 | 102025715 | 99506789 |
| Actual  | 93767936 | 96898453 | 100062076 | 103861933 | 104659194 |
| Variance  | 3.3% | 4.8% | 1.9% | 1.8% | 5.2% |

---

\*

Forecast sales are weather normalized. Numbers not exact due to rounding.

†

Table compares actual usage in MWh for a particular year to the forecast for such year which is a part of the most recent five-year corporate planning forecast.

#### Relationships with Retail Electric Providers
REPs are CenterPoint Houston's primary customers in its service territory. As of June 30, 2025, there were 66 REPs certified by the PUCT to furnish electricity and other retail services to retail customers at distribution voltage in CenterPoint Houston's service territory. During the twelve months ended June 30, 2025, CenterPoint Houston billed (through the REPs) approximately 72,787 million kilowatt-hours (kWh) of electric energy to retail customers at distribution voltage in CenterPoint Houston's service territory. Of that amount, approximately 25,616 million kWh, or 35.2%, were delivered to retail customers served by NRG, approximately 14,278 million kWh, or 19.6%, to retail customers served by Vistra, and the remaining approximately 32,893 million kWh, or 45.2%, to retail customers served by the 64 remaining REPs. See "Retail Electric Providers" in this prospectus.

As of the date of this prospectus, neither CenterPoint Houston nor its ultimate parent CenterPoint Energy directly or indirectly owns or controls or is owned or controlled by any REP. In the future, either company may directly or indirectly own or control a REP.

In certain cases, retail customers who do not pay their bills may be moved by a REP to a provider of last resort or to another certified REP. The PUCT periodically designates one or more REPs to serve as the

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provider of last resort for specified classes of retail customers. In the event that a REP exits the retail market, the PUCT has a process to assign customers to providers of last resort. Providers of last resort are assigned on a voluntary or non-voluntary basis, on a two-year cycle.

 *Percentage Concentration of CenterPoint Houston's Revenues and Receivables with REPs* 

A significant portion of CenterPoint Houston's billed receivables from REPs are due from affiliates of NRG and Vistra. CenterPoint Houston's aggregate billed receivables balance from REPs as of December 31, 2024 was $263 million. Approximately 37% and 21% of this amount was owed by affiliates of NRG and Vistra, respectively. CenterPoint Houston's revenues from major external customers are as follows:

---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31,**  | **Year Ended December 31,**  | **Year Ended December 31,**  |
| | **2024**  | **2023**  | **2022**  |
|  | **(in millions)**  | **(in millions)**  | **(in millions)**  |
| Affiliates of NRG  | $1169 | $1106 | $1046 |
| Affiliates of Vistra  | 605 | 539 | 489 |

---

 *Historical Collections from REPs* 

Each REP in CenterPoint Houston's service territory is obligated to collect and remit system restoration charges to the servicer as described below. Accordingly, CenterPoint Houston depends on these REPs to remit payments on a timely basis. Since January 2002, other than the bankruptcies described below and minor delays and payment discrepancies, the REPs providing service in CenterPoint Houston's service territory generally have made timely payments of transition charges and system restoration charges to CenterPoint Houston and have generally been cooperative in coordinating billing and payment systems with CenterPoint Houston's and the State of Texas' systems.

Fourteen REPs with which CenterPoint Houston has done business filed for bankruptcy in June 2002, March 2003, December 2005, August 2006, April 2014, March 2021, March 2021, March 2021 (and again in May 2024), March 2021, April 2021, March 2021, March 2021, March 2021 and March 2021, respectively. A number of these filings followed the February 2021 Winter Storm Event. CenterPoint Houston recovered all of the pre-petition balance of transition charges and system restoration charges owed by the REPs which filed for bankruptcy in 2021 and 2024 from payments and cash deposits provided by these REPs. For additional information regarding REPs' obligations to make cash deposits in order to provide retail electric service and collect system restoration charges within CenterPoint Houston's service territory, please read "Retail Electric Providers — Rating, Deposit and Related Requirements for REPs" in this prospectus. For discussions of potential difficulties in collecting system restoration charges from REPs and risks associated with the bankruptcy of a REP, please read "Risk Factors — Servicing Risks — It might be difficult to collect transition charges from retail electric providers" and "— Risks Associated with Potential Bankruptcy Proceedings or Defaults of REPs" in this prospectus, respectively.

In addition, in nineteen other instances, REPs defaulted on their payments, but did not declare bankruptcy. In each instance, the REP's transition charge collateral or system restoration charge collateral, as applicable, was applied to the amounts owed, and all transition charges and system restoration charges owed by these REPs were collected. A REP's collateral is reviewed as often as each quarter to ensure that the collateral accurately reflects two months' maximum collections. Please read "Retail Electric Providers — Rating, Deposit and Related Requirements for REPs" in this prospectus for more information.

#### Credit Policy; Billing Process; Collections Process
CenterPoint Houston does not directly bill retail customers. All retail customers are billed by their REPs. The servicer will bill a retail customer's REP for the system restoration charges attributable to that customer and the REPs will be obligated to remit to the servicer payments of the system restoration charges as described under "Retail Electric Providers — Payment of System Restoration Charges."

 *Credit Policy for Retail Customers* 

In accordance with the PUCT's regulations, REPs may require deposits from certain applicants for service of existing customers' accounts to protect the REP against losses. Deposits may be obtained from non-residential customers and residential customers who cannot demonstrate credit worthiness. The maximum

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allowable amount of a deposit for a residential customer is either the sum of the next two months' estimated billings or one-fifth of the projected annual billings to the customer. The REP is required to pay interest annually on deposits. The REP must refund the deposit when the retail customer has paid bills for service for 12 consecutive billings (in the case of residential customers) or 24 consecutive billings (in the case of non-residential customers) without having any late payments. Once the REP is no longer the REP of record for a retail customer or if service is not established with the REP, the REP shall either transfer the deposit to the customer's new REP or promptly refund the deposit with interest to the customer, as agreed upon by the customer and both REPs.

 *The Billing Process* 

REPs issue a single bill to retail customers purchasing electricity from the REP. This single bill includes all charges related to purchasing electricity from the REP, transmission and distribution services from CenterPoint Houston, the applicable system restoration charges and any other charges authorized by the PUCT.

REPs bill their customers once every month, and we expect that an approximately equal number of bills will be distributed each business day. A REP shall state a payment due date on the bill which shall not be less than 16 days after issuance. If the due date falls on a holiday or weekend, the due date for payment purposes is the next business day. A bill not paid on or before the due date is considered delinquent. The REP may charge a one-time penalty not to exceed 5.0% on a delinquent bill for electric service. No such penalty shall apply to residential or small commercial customers served by the provider of last resort, or to customers receiving a low-income discount pursuant to the Public Utility Regulatory Act. The one-time penalty, not to exceed 5.0%, may not be applied to any balance to which the penalty has already been applied. Based on qualifications, retail customers may be eligible for the REP's level or average payment plan, an average monthly payment program that allows bills for electric service to be paid in equal monthly payments, or a deferred payment plan in which past due bills may be paid in installments over a specified time period. Failure to make timely payments while on any bill payment assistance plan allows the REP to remove customers from that payment plan, begin account collection activities including the initiation of termination of service.

Subject to PUCT standards and regulations, CenterPoint Houston may from time to time make changes to its customary billing and collection practices. Under the servicing agreement, any changes CenterPoint Houston institutes to customary billing and collection practices will apply to the servicing of the system restoration property so long as CenterPoint Houston is the servicer. CenterPoint Houston expects that any such changes would be designed to enhance its ability to make timely recovery of amounts billed. CenterPoint Houston may also be required to make changes to its customary practices to comply with or address mandates from the State of Texas or the PUCT. For example, the PUCT has in recent years (i) imposed a temporary moratorium on executing disconnects of electric service for non-pay orders from REPs and (ii) temporarily required CenterPoint Houston to suspend wire charges to REPs with respect to certain retail customers. The PUCT may in the future change standards or regulations applicable to CenterPoint Houston or the REPs in a manner that affects collections of system restoration charges, which could delay payments of principal and interest on the system restoration bonds.

 *The Collection Process* 

Retail electric customers served at distribution voltage will pay the system restoration charges to REPs who supply them with electric power as part of their single bill for electric service. The REPs will be obligated to remit to the servicer payments of the system restoration charges as described under "Retail Electric Providers — Payment of System Restoration Charges." The servicer will have rights only under very limited circumstances to collect system restoration charges directly from retail customers. The servicer will not pay any shortfalls resulting from the failure of any REP to forward system restoration charge collections. If a REP defaults in the payment of system restoration charges, the REP must implement one of the courses of action described under "Retail Electric Providers — Remedies Upon REP Default."

CenterPoint Houston historically received, and expects that REPs will receive, the majority of retail customer payments through a variety of channels, including U.S. Mail, paystations, EFT and credit/debt cards; however, other payment options are also available. These options include payment by electronic fund

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transfers or credit/debit cards. REPs may change their collection policies and procedures, consistent with PUCT guidelines and the financing order, from time to time.

Texas statutory requirements and the rules and regulations of the PUCT, which may change from time to time, regulate and control the right of a REP to disconnect service. For example, REPs generally may not terminate service to a retail customer (1) on a holiday or weekend day or the day immediately preceding a holiday or weekend, (2) during certain extreme weather conditions, (3) if such disconnection would cause a person to become seriously ill or more seriously ill, (4) if such customer is an energy assistance client under certain circumstances, or (5) if such customer is a master-metered apartment complex unless certain notices are given.

#### Write-off Experience
The following table sets forth information relating to the net write-off experience with respect to payments owed to REPs that CenterPoint Houston serves. The information in the table is derived solely from data provided to the servicer by REPs. In the table below, the column labeled "TC2" reflects write-off experience with respect to payments of transition charges relating to the transition bonds issued by Transition Bond Company II (which were fully repaid in 2019), columns labeled "TC3" reflect write-off experience with respect to payments of transition charges relating to the transition bonds issued by Transition Bond Company III (which were fully repaid in 2020), columns labeled "TC4" reflect write-off experience with respect to payments of transition charges relating to transition bonds issued by Transition Bond Company IV (which were fully repaid in 2024) and columns labeled "SRC" reflect write-off experience with respect to payments of system restoration charges relating to system restoration bonds issued by Restoration Bond Company I (which were fully repaid in 2022). Write-offs are not expected to impact our ability to pay principal and interest on the system restoration bonds because of the true-up mechanism.

#### Net Write-Offs of Payments Owed to REPs\*† ($ in millions)

---

| | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **12 months ended May 31,**  | **12 months ended May 31,**  | **12 months ended May 31,**  | **12 months ended May 31,**  | **12 months ended May 31,**  | **12 months ended May 31,**  | **12 months ended May 31,**  | **12 months ended May 31,**  | **12 months ended May 31,**  | **12 months ended May 31,**  | **12 months ended May 31,**  | **12 months ended May 31,**  | **12 months ended May 31,**  |
| | **2019**  | **2019**  | **2019**  | **2019**  | **2020**  | **2020**  | **2020**  | **2021**  | **2021**  | **2022**  | **2022**  | **2023**  | **2024**  |
| | SRC | TC2 | TC3 | TC4 | SRC | TC3 | TC4 | SRC | TC4 | SRC | TC4 | TC4 | TC4 |
| Residential customers  | 1.9001% | 2.2816% | 2.9691% | 1.9637% | 2.9809% | 3.4126% | 2.5945% | 1.8597% | 1.8592% | 2.6651% | 2.6714% | 3.5335% | 3.2491% |
| Non-residential customers  | 0.3941% | 0.2196% | 0.2282% | 0.2317% | 0.5137% | 0.3359% | 0.2562% | 0.3011% | 0.1567% | 0.7114% | 0.4464% | 0.3382% | 0.3417% |

---

\*

Numbers not exact due to rounding.

†

The information in this table was reported to CenterPoint Houston by the REPs as a part of CenterPoint Houston's annual charge-off reconciliation process.

The following table sets forth information relating to the annual net write-offs for CenterPoint Houston, including net write-offs of retail customers billings for distribution revenues reported to CenterPoint Houston by the REPs as part of CenterPoint Houston's annual charge-off reconciliation process.

#### Net Write-Offs as a Percentage of Retail Delivery Tariff Billings in CenterPoint Houston's Service Territory\* ($ in millions)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **As of December 31,**  | **2020**  | **2021**  | **2022**  | **2023**  | **2024**  |
|  Retail Delivery Tariff Billings Excluding <br> Charge-Off Allowances  | $2627 | $2627 | $3048 | $3150 | $3318 |
| Net Write-Offs  | $4.1 | $12.3 | $1.8 | $3.4 | $4.1 |
| Percentage of Retail Delivery Tariff Billings  | 0.16% | 0.47% | 0.06% | 0.11% | 0.12% |

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\*

Numbers not exact due to rounding.

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#### Delinquency Experience
The following table sets forth information relating to the delinquency experience of CenterPoint Houston for REPs for the past five years:

#### Delinquencies as a Percentage of Billings <sup>(1)(2)</sup>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **As of December 31,**  | **2020**  | **2021**  | **2022**  | **2023**  | **2024**  |
| 36 – 65 days past billed  | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| 66 – 95 days past billed  | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| 96+ days past billed  | 0.00% | 0.31% | 0.00% | 0.01% | 0.05% |
| Total  | 0.00% | 0.31% | 0.00% | 0.01% | 0.05% |

---

(1) Payments are not delinquent until the 36th day after billing by the servicer. Please read "Retail Electric Providers — Payment of System Restoration Charges" and "Retail Electric Providers — Remedies Upon REP Default" in this prospectus.

(2) Delinquencies in 2020 – 2024 did not impact payments of principal and interest on previous transition bonds and system restoration bonds for which CenterPoint Houston acted as servicer because of REP deposits and other collateral.

CenterPoint Houston does not believe that the delinquency experience with respect to system restoration charge collections will differ substantially from the approximate rates indicated above.

#### Average Days Sales Outstanding
The following table sets forth information relating to CenterPoint Houston's average days sales outstanding for all REPs in its service territory for the past five years. Days sales outstanding is a measure of the average number of days that CenterPoint Houston takes to collect its revenue from the REPs. The average number of days for the collection of system restoration charges relating to the system restoration bonds is expected to be similar to CenterPoint Houston's revenue collection experience with the REPs. The days sales outstanding numbers in the following table were generally calculated using a formula which CenterPoint Houston calculates as follows: the number of days in the calendar year divided by the receivable turnover ratio rounded to the nearest day. For the Average Days Sales Outstanding, the receivable turnover ratio will be calculated as total billed electric sales for the calendar year divided by the average of the twelve month end receivables balances for the same calendar year.

#### Average Days Sales Outstanding\*

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| | |
|:---|:---|
| **YEAR**  | **Average Days <br> Sales <br> Outstanding**  |
| 2020  | 35 |
| 2021  | 35 |
| 2022  | 35 |
| 2023  | 35 |
| 2024  | 35 |

---

\*

Rounded to the nearest day.

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#### CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC, THE ISSUING ENTITY

#### General
We are a special purpose limited liability company formed under the Delaware Limited Liability Company Act pursuant to a limited liability company agreement executed by our sole member, CenterPoint Houston, and the filing of a certificate of formation with the Secretary of State of the State of Delaware. We were formed on June 5, 2025.

We have been organized as a wholly owned special purpose limited liability company subsidiary of CenterPoint Houston for the limited purposes described under "— Restricted Purposes" below. At the time of the issuance of the system restoration bonds, our assets will consist primarily of the system restoration property and the other collateral held under the indenture and the series supplement for the system restoration bonds.

Our limited liability company agreement will be amended and restated prior to the issuance date and references in this prospectus to the LLC Agreement mean our amended and restated limited liability company agreement. The LLC Agreement restricts us as the issuing entity from engaging in activities other than those described in this section. Other than purchasing the system restoration property and issuing the system restoration bonds, we have no business operations, but we will pay our sole member CenterPoint Houston for its out-of-pocket expenses incurred by it in connection with its services to us in accordance with the LLC Agreement. Selected provisions of the LLC Agreement, a copy of which has been filed as an exhibit to the registration statement of which this prospectus is a part, are summarized below. On the date of issuance of the system restoration bonds, our capital will be equal to 0.50% of the initial aggregate principal amount of the system restoration bonds issued on the issuance date or such other amount as may allow the system restoration bonds to achieve the desired security rating and treat the system restoration bonds as debt under applicable guidance issued by the Internal Revenue Service, which we also refer to as the IRS.

As of the date of this prospectus, we have not carried on any business activities and have no operating history. Our fiscal year end is December 31.

Our assets will consist of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the system restoration property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • our rights under the financing order, including the statutory true-up mechanism,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • our rights under the sale agreement and the bill of sale delivered by CenterPoint Houston under the sale agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • our rights under the servicing agreement, the administration agreement and any subservicing, agency or collection agreements executed in connection therewith,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the collection account and all subaccounts of the collection account,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • our rights in 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 a tariff,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • all of our other property, such as 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 (other than any cash released to us by the trustee on any payment date to be distributed to CenterPoint Houston as a return of its invested capital in us), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • all payments on or under and all proceeds in respect of any of the foregoing.

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The indenture provides that the system restoration property, as well as our other assets, will be pledged by us to the trustee to secure our obligations in respect of the system restoration bonds. Pursuant to the indenture, the collected system restoration charges remitted to the trustee by the servicer must be used to pay principal of and interest on the system restoration bonds and our other obligations specified in the indenture.

#### Restricted Purposes
We have been created for the sole purposes of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • financing, purchasing, owning, administering, managing and servicing the system restoration property and the other items included in the trust estate under the indenture for the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • authorizing, executing, issuing, delivering and registering the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • making payments on the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • distributing amounts released to us,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • managing, assigning, pledging, collecting amounts due on, or otherwise dealing in system restoration property and the other items included in the trust estate under the indenture for the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • negotiating, executing, assuming and performing our obligations under the basic documents,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • pledging our interest in the system restoration property and the other items included in the trust estate under the indenture for the system restoration bonds to the trustee under the indenture and the series supplement in order to secure the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • filing with the SEC the registration statement to which this prospectus relates, including any pre-effective or post-effective amendments thereto and any registration statement filed pursuant to Rule 462(b) under the Securities Act (including any prospectus supplement, prospectus and exhibits contained therein) and file such applications, reports, surety bonds, irrevocable consents, appointments of attorney for service of process and other papers and documents necessary or desirable to register the system restoration bonds under the securities or "Blue Sky" laws of various jurisdictions, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • performing activities that are necessary, suitable or convenient to accomplish these purposes.

The LLC Agreement and the indenture do not permit us to engage in any activities not directly related to these purposes, including issuing securities (other than the system restoration bonds), borrowing money or making loans to other persons. The list of permitted activities set forth in the LLC Agreement may not be altered, amended or repealed without the affirmative vote of a majority of our managers, which vote must include the affirmative vote of our independent manager. The LLC Agreement and the indenture will prohibit us from issuing any system restoration bonds other than the system restoration bonds being offered pursuant to this prospectus.

#### Our Relationship with CenterPoint Houston
On the issuance date for the system restoration bonds, CenterPoint Houston will sell the system restoration property to us pursuant to the sale agreement between us and CenterPoint Houston. CenterPoint Houston will service the system restoration property pursuant to the servicing agreement between us and CenterPoint Houston related to the system restoration bonds. CenterPoint Houston will provide certain administrative services to us pursuant to the administration agreement between us and CenterPoint Houston.

#### Our Relationship with the PUCT
Pursuant to the financing order,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the PUCT or its designated representative has a decision-making role co-equal with CenterPoint Houston with respect to the structuring and pricing of the system restoration bonds and all matters

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related to the structuring and pricing of the system restoration bonds will be determined through a joint decision of CenterPoint Houston and the PUCT or its designated representative,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston is directed to take all necessary steps to ensure that the PUCT or its designated representative is provided sufficient and timely information to allow the PUCT or its designated representative to fully participate in and exercise its decision-making authority over the proposed securitization, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the servicer will file periodic adjustments to the system restoration charges with the PUCT on our behalf.

We have agreed that certain reports concerning system restoration charge collections will be provided to the PUCT.

#### Managers and Officers
Pursuant to the LLC Agreement, our business will be managed initially by three or more managers (with such number being increased or decreased from time to time in the sole and absolute discretion of CenterPoint Houston as permitted by the LLC Agreement), with one being an independent manager, in each case appointed from time to time by CenterPoint Houston or, in the event CenterPoint Houston transfers its interest in us, by the owner or owners of us. Prior to the issuance of the system restoration bonds, we will have at least one independent manager, who, among other things, is an individual who (1) has prior experience as an independent director, independent manager or independent member for special-purpose entities, (2) is employed by a nationally recognized company that provides professional independent managers and other corporate services in the ordinary course of its business, (3) is duly appointed as an independent manager and (4) is not and has not been for at least five years from the date of his or her appointment, and while serving as an independent manager will not be, any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • a member, partner, or equity holder, manager, director, officer, agent, consultant, attorney, accountant, advisor or employee of us, CenterPoint Houston or any of their respective equity holders or affiliates (other than as an independent manager or special member of us or similar role for a special purpose bankruptcy-remote entity); provided, that the indirect or beneficial ownership of stock of CenterPoint Houston or its affiliates through a mutual fund or similar diversified investment vehicle with respect to which the owner does not have discretion or control over the investments held by such diversified investment vehicle shall not preclude such owner from being an independent manager;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • a creditor, supplier or service provider (including provider of professional services) to us, CenterPoint Houston or any of their respective equity holders or affiliates (other than a nationally-recognized company that routinely provides professional independent managers and other corporate services to us, CenterPoint Houston or any of their affiliates in the ordinary course of its business);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • a family member of any of the foregoing; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • a person who controls (whether directly, indirectly or otherwise) any of the foregoing.

A natural person who otherwise satisfies the foregoing requirements and satisfies the first requirement listed above by reason of being the independent manager or independent director of a special purpose entity affiliated with us shall be qualified to serve as an independent manager of us, provided that such fees that such individual earns in any given year constitute in the aggregate less than five percent of such individual's annual income for the year.

CenterPoint Houston, as our sole member, will appoint the independent manager prior to the issuance of the system restoration bonds. Bernard J. Angelo is expected to be appointed as the independent manager. None of our managers or officers has been involved in any legal proceedings which are specified in Item 401(f) of the SEC's Regulation S-K. None of our managers or officers beneficially own any equity interest in us.

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The following is a list of our managers and executive officers as of the date of this prospectus and Bernard J. Angelo, who is expected to be appointed as the independent manager by CenterPoint Houston, as our sole member, prior to the issuance of the system restoration bonds:

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| | | |
|:---|:---|:---|
| **Name**  | **Age**  | **Background**  |
| Jesus Soto, Jr. (President and Manager) | 58 | Manager and President of CenterPoint Energy Restoration Bond Company II, LLC since August 25, 2025. Executive Vice President and Chief Operating Officer of CenterPoint Energy since August 11, 2025. Mr. Soto previously served as Executive Vice President, Utility Performance Solutions of Quanta Services, Inc. from October 2023 to July 2025. He also served as Chief Operating Officer for Mears Group, Inc. from September 2019 to September 2023 and as Senior Vice President of Gas Operations for PG&E Corporation from May 2012 to July 2019. Prior to joining PG&E, he served as Vice President of Operations Services and Vice President of Engineering and Construction for the Pipeline Group of El Paso Corporation. |
| Kristie L. Colvin (Vice President, Chief Accounting Officer and Manager) | 61 | Manager and Vice President and Chief Accounting Officer of CenterPoint Energy Restoration Bond Company II, LLC since June 5, 2025. Senior Vice President and Chief Accounting Officer of CenterPoint Energy, Inc. since October 2023. Other offices previously held at CenterPoint Energy, Inc. include Senior Vice President Regulatory Planning, Reporting and Electric Services from March 2022 until October 2023, Senior Vice President, Finance from December 2021 until March 2022, Senior Vice President and Chief Accounting Officer from September 2014 until December 2021 and, in addition to this role, Interim Executive Vice President and Chief Financial Officer from April 2020 to September 2020, Division Vice President Finance, Regulated Operations from July 2010 until September 2014, and Senior Director, Financial Planning and Performance Measurement from August 2007 through June 2010. |
| Patricia L. Martin (Vice President, Treasurer and Manager) | 52 | Manager and Vice President and Treasurer of CenterPoint Energy Restoration Bond Company II, LLC since June 5, 2025. Vice President and Treasurer of CenterPoint Energy, Inc. since April 2024. Ms. Martin served in various roles of increasing responsibility at Xcel Energy from 2016 to 2024, including as Assistant Treasurer from 2019 to 2024. |
| Bernard J. Angelo (Independent Manager) | 55 | Mr. Angelo joined Global Securitization Services, LLC in April 1997. He actively assists clients and their legal counsel during the structuring phase of their transactions. Mr. Angelo has extensive experience in managing commercial paper and medium term note programs, as well as both the business and legal side of structured finance. Fortune 1000 companies have selected Mr. Angelo to serve as independent director for their SPV subsidiaries established to finance commercial real estate, energy infrastructure and many classes of financial assets. |

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#### Manager Fees and Limitation on Liabilities
We will not compensate our managers, other than the independent manager, for their services on behalf of us. We will pay the annual fees of the independent manager from our revenues and will reimburse the independent manager for reasonable out-of-pocket expenses. These expenses include the reasonable compensation, expenses and disbursements of the agents, representatives, experts and counsel that the independent manager may employ in connection with the exercise and performance of his or her rights and duties under the LLC Agreement.

The LLC Agreement provides that to the extent permitted by law, the managers will not be personally liable for any of our debts, obligations or liabilities. The LLC Agreement further provides that, except as

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described below, to the fullest extent permitted by law, we will indemnify the managers against any liability incurred in connection with their services as managers for us if they acted in good faith and in a manner which they reasonably believed to be in or not opposed to our best interests. With respect to a criminal action, the managers will be indemnified unless they had reasonable cause to believe their conduct was unlawful. We will not indemnify any manager for any judgment, penalty, fine or other expense directly caused by such manager's fraud, gross negligence or willful misconduct, or, in the case of an independent manager, bad faith or willful misconduct. In addition, unless ordered by a court, we will not indemnify the managers if a final adjudication establishes that their acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and were material to the cause of action. We will pay any indemnification amounts owed to the managers out of funds in the accounts held under the indenture for the system restoration bonds, subject to the priority of payments described under "Description of the System Restoration Bonds — How Funds in the Collection Account Will Be Allocated" in this prospectus.

#### We are a Separate and Distinct Legal Entity from CenterPoint Houston
The LLC Agreement provides that we may not file a voluntary petition for relief under the Bankruptcy Code, without the affirmative vote of CenterPoint Houston, our sole member, and the affirmative vote of all of our managers, including the independent manager. CenterPoint Houston has agreed that it will not cause us to file a voluntary petition for relief under the Bankruptcy Code. This does not guarantee, however, that we will not become a debtor under the Bankruptcy Code. The LLC Agreement requires us, except for financial reporting purposes (to the extent required by generally accepted accounting principles) and for U.S. federal income tax purposes, and, to the extent consistent with applicable state law, state income and franchise tax purposes, to maintain our existence separate from CenterPoint Houston including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • taking all necessary steps to continue our identity as a separate legal entity,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • making it apparent to third persons that we are an entity with assets and liabilities distinct from those of CenterPoint Houston, affiliates of CenterPoint Houston or any other Person, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • making it apparent to third persons that we are not a division of CenterPoint Houston or any of its affiliated entities or any other Person.

Our principal place of business is 1111 Louisiana Street, Suite 4654B, Houston, Texas 77002, and our telephone number at such address is (713) 207-7414.

#### Administration Agreement
CenterPoint Houston will, pursuant to an administration agreement between CenterPoint Houston and us, provide administrative services to us, including services relating to the preparation of financial statements, required filings with the SEC, any tax returns we might be required to file under applicable law, qualifications to do business, and minutes of our managers' meetings. We will pay CenterPoint Houston a fixed fee of $100,000 per annum, payable in installments of $50,000 (which amount will be prorated for the period beginning on the date of issuance of the system restoration bonds until the initial payment date) on each payment date for performing these services, plus we will reimburse CenterPoint Houston for all costs and expenses for services performed by unaffiliated third parties and actually incurred by CenterPoint Houston in performing such services.

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#### THE SYSTEM RESTORATION CHARGES
CenterPoint Houston will be the initial servicer of the system restoration bonds. Billing of retail customers by REPs is expected to begin on the business day following the issuance of the system restoration bonds. The servicer of the system restoration bonds will make annual adjustments to the system restoration charges to (a) correct any under-collections or over-collections of system restoration charges during the preceding 12 months and (b) ensure the expected recovery of amounts sufficient to timely provide all payments of debt service and other required amounts and charges in connection with the system restoration during the period for which such adjusted system restoration charges are to be in effect. True-up adjustment may be made by the servicer more frequently at any time during the term of the system restoration bonds to correct any forecasted under-collection of system restoration charges in order to ensure timely payment of the system restoration bonds, including the replenishment of any funds drawn from the capital subaccount. In the event an interim true-up is necessary, CenterPoint Houston will file with the PUCT an application for true-up adjustment of the system restoration charges. In accordance with the financing order, the PUCT generally has at least 15 days after the date of a true-up adjustment filing to confirm mathematical accuracy of the adjustments.

The system restoration charges will be calculated on a per kWh or kVA basis, as applicable. The system restoration charges will be adjusted at least annually pursuant to the true-up adjustment mechanism. The system restoration charges will be based on the amount necessary to provide for the timely recovery of qualified costs approved in the financing order (including payment of principal and interest on the system restoration bonds and ongoing costs related to the system restoration bonds), allocated among each system restoration charge customer rate class based upon the allocation methodology and calculated for each customer rate class based upon forecasted consumption by such class during the related payment period.

The system restoration charges will be collected over the expected life of the system restoration bonds until all of the system restoration bonds and related ongoing qualified costs are paid in full.

The initial system restoration charges listed in the table below will be imposed on retail customers served at distribution voltage in CenterPoint Houston's service territory at the applicable rate for the system restoration charge customer class determined pursuant to the financing order. These system restoration charges may be adjusted annually, or more frequently under certain circumstances, by the servicer in accordance with its filings with the PUCT. Please read "CenterPoint Houston's Financing Order" in this prospectus.

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| | |
|:---|:---|
| **System Restoration Charge Customer Rate Class**  | **Initial System Restoration <br> Charge Rate**  |
| Residential  | $ per kWh |
| Secondary ≤ 10kVA  | $ per kWh |
| Secondary > 10 kVA  | $ per billing kVA  |
| Primary Service  | $ per billing kVA  |
| Lighting Services  | $ per kWh |

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#### Initial System Restoration Charges
Under the terms of the financing order, CenterPoint Houston will initially allocate the system restoration charges among the system restoration charge customer rate classes served at distribution voltage based on the same manner as CenterPoint Houston's corresponding facilities and related expenses are functionalized and allocated in CenterPoint Houston's current base rates, as shown in the table below.

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| | |
|:---|:---|
| **System Restoration Charge Customer Rate Class**  | **Allocation <br> Factor**  |
| Residential  | 55.4597% |
| Secondary ≤ 10kVA  | 1.5261% |
| Secondary > 10 kVA  | 31.7972% |
| Primary Service  | 2.4092% |
| Lighting Services  | 8.8078% |
| **Total System Restoration Charges**  | **100.00000%** |

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The allocation factors for each class will be subject to annual adjustment after the issuance of the system restoration bonds. Please read "CenterPoint Houston's Financing Order — Statutory True-Ups" and "— Adjustments to Allocation of the System Restoration Charges" in this prospectus.

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#### DESCRIPTION OF THE SYSTEM RESTORATION BONDS

#### General
We have summarized selected provisions of the indenture and the system restoration bonds below. This summary is subject to the terms and provisions of the indenture and the series supplement for the system restoration bonds, forms of which we have filed with the SEC as an exhibit to the registration statement of which this prospectus forms a part. You should carefully read the summary below and the terms and provisions of the indenture that may be important to you before investing in the system restoration bonds. Please read "Where You Can Find More Information" in this prospectus.

The system restoration bonds are not a debt, liability or other obligation of the State of Texas and are not a charge on its full faith and credit or taxing power, the PUCT or any other political subdivision, governmental agency, authority or instrumentality of the State of Texas and do not represent an interest in or legal obligation of CenterPoint Houston or any of its affiliates other than us. None of CenterPoint Energy, CenterPoint Houston or any of their affiliates will guarantee or insure the system restoration bonds. The financing order authorizing the issuance of the system restoration bonds does not constitute a pledge of the full faith and credit of the State of Texas, the PUCT or any other political subdivision of the State of Texas. The issuance of the system restoration bonds under the Securitization Act will not directly, indirectly or contingently obligate the State of Texas, the PUCT or any other political subdivision of the State of Texas to levy or to pledge any form of taxation for the system restoration bonds or to make any appropriation for their payment.

We will issue the system restoration bonds and secure their payment under an indenture that we will enter into with the trustee. We will issue the system restoration bonds in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof, except that we may issue one bond in each tranche in a smaller denomination. The initial principal amount, scheduled final payment date, final maturity date and interest rate for each tranche of the system restoration bonds are stated in the table below. In no event shall the scheduled final payment date for any tranche of the system restoration bonds exceed years from the date of issuance of the system restoration bonds. The legal final maturity of any tranche of the system restoration bonds shall not exceed years from the date of issuance of the system restoration bonds.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Tranche**  | **Expected <br> Weighted <br> Average Life <br> (Years)**  | **Principal <br> Amount <br> Offered\***  | **Scheduled <br> Final <br> Payment Date**  | **Final <br> Maturity <br> Date**  | **Interest <br> Rate**  |
| A-1 |  | $240913000% |  |  |  |
| A-2 |  | $160608000% |  |  |  |

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\*

Preliminary, subject to change.

The scheduled final payment date for each tranche of the system restoration bonds is the date when the outstanding principal balance of that tranche will be reduced to zero if we make payments according to the expected sinking fund schedule for that tranche. The final maturity date for each tranche of the system restoration bonds is the date when we are required to pay the entire remaining unpaid principal balance, if any, of all outstanding system restoration bonds of that tranche. The failure to pay principal of any tranche of system restoration bonds by the final maturity date for that tranche is an event of default for the system restoration bonds, but the failure to pay principal of any tranche of the system restoration bonds by the respective scheduled final payment date of that tranche will not be an event of default. Please read "— Payments of Interest and Principal on the System Restoration Bonds" and "— What Constitutes an Event of Default on the System Restoration Bonds" in this prospectus.

#### Payments of Interest and Principal on the System Restoration Bonds
Interest will accrue on the principal balance of a tranche of the system restoration bonds at the interest rate of % with regard to the A-1 tranche, and % with regard to the A-2 tranche. Beginning , 2026, we will make payments on the system restoration bonds semi-annually on and

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of each year, or, if that day is not a business day, the following business day (each, a "**payment date**"). Interest payments on the system restoration bonds will be made from collections of the system restoration charges, including amounts available in the excess funds subaccount and, if necessary, the amounts available in the capital subaccount.

On each payment date, we will pay interest on each tranche of the system restoration bonds equal to the following amounts:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any interest payable but unpaid on any prior payment date, together with interest on such unpaid interest, if any, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • accrued interest on the principal balance of each tranche of the system restoration bonds from the close of business on the preceding payment date, or the date of the original issuance of the system restoration bonds, after giving effect to all payments of principal made on the preceding payment date, if any.

We will pay interest on the system restoration bonds before we pay principal on the system restoration bonds. If there is a shortfall in the amounts available in the collection account to make interest payments on the system restoration bonds, the trustee will distribute interest pro rata to each tranche of the system restoration bonds based on the amount of interest payable on each such outstanding tranche. We will calculate the interest on the system restoration bonds on the basis of a 360-day year consisting of twelve 30-day months.

The failure to pay accrued interest on a tranche of the system restoration bonds on any payment date (even if the failure is caused by a shortfall in system restoration charges received) will result in an event of default of the system restoration bonds unless such failure is cured within five business days. If interest is not paid within that five-business day period, we will pay such defaulted interest (plus interest on such defaulted interest at the applicable interest rate to the extent lawful) to the persons who are holders of the system restoration bonds on a special record date (as defined in the indenture). The special record date will be at least 15 business days prior to the date on which the trustee is to make a special payment (a special payment date). We will fix or cause to fix any special record date and special payment date and, at least 10 days before such special record date, we will send to each affected holder of the system restoration bonds 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. An event of default under any tranche of the system restoration bonds will automatically trigger an event of default under the system restoration bonds. See "— What Constitutes an Event of Default on the System Restoration Bonds" below.

On any payment date with respect to the system restoration bonds, we generally will pay principal on a tranche of the system restoration bonds only until the outstanding principal balance of such tranche has been reduced to the principal balance specified for that payment date in the expected amortization schedule for that tranche, but only to the extent funds are available. Accordingly, principal of any tranche of the system restoration bonds may be paid later, but generally not sooner, than reflected in the expected amortization schedule for such tranche, except in the case of an acceleration. Please read "Risk Factors — Other Risks Associated with an Investment in the System Restoration Bonds" and "Weighted Average Life and Yield Considerations for the System Restoration Bonds" in this prospectus.

The trustee will retain in the excess funds subaccount for payment on later payment dates any collections of system restoration charges in excess of amounts payable as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • fees and expenses of the servicer (including the servicing fee), the administrator, the independent manager and the trustee,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • payment of any other operating expenses,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • payments of interest and principal on the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • allocations to the capital subaccount, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the return on invested capital then due and payable to CenterPoint Houston.

If the trustee receives insufficient collections of system restoration charges for the system restoration bonds for any payment date, and amounts in the collection account (and the applicable subaccounts of that

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collection account) are not sufficient to make up the shortfall, principal of a tranche of the system restoration bonds may be paid later than expected, as described in this prospectus. The failure to make a scheduled payment of principal on a tranche of the system restoration bonds because there are not sufficient funds in the collection account does not constitute a default or an event of default under the indenture, except for the failure to make the scheduled payment of principal due upon the final maturity of that tranche of the system restoration bonds.

The trustee will pay on each payment date to the holders of a particular tranche of the system restoration bonds, to the extent of available funds in the collection account, all payments of principal and interest then due on such system restoration bonds (other than a special payment date as defined in the indenture). The trustee will make each such payment to the holders of the system restoration bonds, other than the final payment, on the applicable payment date. If the system restoration bonds are ever issued in definitive certificated form, however, the final payment with respect to a tranche of the system restoration bonds will be made only upon presentation and surrender of such system restoration bond at the office or agency of the trustee specified in the notice given by the trustee with respect to such final payment. The trustee will transmit notice of the final payment to the holders of the system restoration bonds no later than five days prior to the final payment date, specifying that such final payment will be payable only upon presentation and surrender of such system restoration bond and the place where such system restoration bond may be presented and surrendered for payment.

The system restoration bonds will originally be issued in book-entry form, and we do not expect that the system restoration bonds will be issued in definitive certificated form. At the time, if any, we issue the system restoration bonds in the form of definitive certificated system restoration bonds and not to DTC or its nominee, the trustee will make payments as described below under "— Definitive Certificated System Restoration Bonds."

On each payment date, the amount to be paid as principal on the system restoration bonds of a tranche will equal without duplication:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the unpaid principal amount of such tranche due on the final maturity date of that tranche, plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the unpaid principal amount of such tranche due upon acceleration following an event of default, plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the unpaid and previously scheduled payments of principal on such tranche, plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the principal scheduled to be paid on such tranche on that payment date;

but only to the extent funds are available in the collection account (including all applicable subaccounts) after payment of certain of our fees and ordinary periodic operating expenses and after payment of interest as described in the section above. To the extent funds are so available, we will make scheduled payments of principal on the system restoration bonds of each tranche in the following order:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.

to the holders of the Tranche A-1 system restoration bonds, until the principal balance of that tranche has been reduced to zero, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.

then to the holders of the Tranche A-2 system restoration bonds, until the principal balance of that tranche has been reduced to zero.

However, we will not pay principal of any tranche of the system restoration bonds on any payment date if making the payment would reduce the principal balance of that tranche to an amount lower than the amount specified in the expected amortization schedule below for that tranche on that payment date. Any excess funds remaining in the collection account after payment of principal, interest, applicable fees and expenses and payments to the applicable subaccounts of the collection account will be retained in the excess funds subaccount until applied on a subsequent payment date.

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The entire unpaid principal amount of a tranche of the system restoration bonds will be due and payable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • on the final maturity date of that tranche, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • if an event of default under the indenture occurs and is continuing and the trustee or the holders of not less than a majority of the outstanding amount of the system restoration bonds have declared the system restoration bonds to be immediately due and payable.

If there is a shortfall in the amounts available to make principal payments on a tranche of the system restoration bonds that are due and payable at that tranche's final maturity date or upon an acceleration following an event of default under the indenture, the trustee will distribute principal from the collection account pro rata to each tranche of the system restoration bonds based on the principal amount of that tranche then due and payable on the payment date; and if there is a shortfall in the remaining amounts available to make principal payments on the system restoration bonds that are scheduled to be paid, and if more than one tranche is scheduled to be paid on such payment date, the trustee will distribute principal from the collection account sequentially in the numerical order of such tranches.

However, the nature of our business will result in payment of principal upon an acceleration of the system restoration bonds being made only as funds become available. Please read "Risk Factors — Risks Associated with the Unusual Nature of the System Restoration Property" and "— You may experience material payment delays or incur a loss on your investment in the system restoration bonds because the source of funds for payment is limited" in this prospectus.

If any special payment date or other date specified herein for distribution of any payments to the holders of the system restoration bonds is not a business day, payments scheduled to be made on such special payment date or other date may be made on the next business day, and no interest will accrue upon such payment during the intervening period. "**Business day**" means any day other than a Saturday, a Sunday or a day on which banking institutions in New York, New York, Chicago, Illinois or Houston, Texas are, or DTC is, required or authorized by law or executive order to remain closed.

Neither we nor CenterPoint Houston makes any representation or warranty that any amounts actually collected arising from system restoration charges will in fact be sufficient to meet payment obligations on the system restoration bonds or that assumptions made in calculating system restoration charges will in fact be realized.

The expected amortization schedule below sets forth the principal balance that is scheduled to remain outstanding on each payment date for each tranche of the system restoration bonds from the issuance date to the scheduled final payment date. Similarly, the expected sinking fund schedule below sets forth the corresponding principal payment that is scheduled to be made on each payment date for each tranche of the system restoration bonds from the issuance date to the scheduled final payment date. In establishing these schedules, we have made the assumptions specified in the bullet points under the weighted average life sensitivity table below under "Weighted Average Life and Yield Considerations for the System Restoration Bonds," among other assumptions.

#### Expected Amortization Schedule Outstanding Principal Balance\*

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| | | |
|:---|:---|:---|
| **Payment Date**  | **Tranche A-1 <br> Amount**  | **Tranche A-2 <br> Amount**  |
| Initial Principal Amount  | $240913000 | $160608000 |

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\*

Preliminary, subject to change.

On each payment date, the trustee will make principal payments to the extent the principal balance of a tranche of the system restoration bonds exceeds the amount indicated for that tranche on that payment date

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in the table above and to the extent of funds available in the collection account after payment of certain of our fees and expenses and after payment of interest. If sufficient funds are available on each payment date, principal payments will be in the amounts indicated for each payment date in the expected sinking fund schedule below.

#### Expected Sinking Fund Schedule\*

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| | | |
|:---|:---|:---|
| **Date**  | **Tranche A-1**  | **Tranche A-2**  |
| **Total Payments**  | $240913000 | $160608000 |

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\*

Preliminary, subject to change.

We cannot assure you that principal payments will be made or that the principal balance of any tranche of the system restoration bonds will be reduced at the rates indicated in the schedules above. Principal payments and the actual reduction in principal balances of a tranche of the system restoration bonds may occur more slowly. Principal payments and the actual reduction of principal balances of a tranche of the system restoration bonds will not occur more quickly than indicated in the above schedules, except that the total outstanding principal balance of and interest accrued on the system restoration bonds may be accelerated upon an event of default under the indenture. The system restoration bonds will not be in default if principal is not paid as specified in the schedules above unless the principal of any tranche of the system restoration bonds is not paid in full on or before the final maturity date of that tranche.

#### Redemption of the System Restoration Bonds
There are no redemption rights associated with the system restoration bonds.

#### System Restoration Bonds Will Be Issued in Book-Entry Form
The system restoration bonds will be available to investors only in the form of book-entry system restoration bonds. You may hold your bonds through DTC in the United States, Clearstream Banking, Luxembourg, S.A., referred to as Clearstream, or Euroclear in Europe. You may hold the system restoration bonds directly with one of these systems if you are a participant in the system or indirectly through organizations that are participants.

 *The Role of DTC, Clearstream and Euroclear.* 

Cede & Co., as nominee for DTC, will hold the global bond or bonds representing the system restoration bonds. Clearstream and Euroclear will hold omnibus positions on behalf of the Clearstream customers and Euroclear participants, respectively, through customers' securities accounts in Clearstream's and Euroclear's names on the books of their respective depositaries. These depositaries will, in turn, hold these positions in customers' securities accounts in the depositaries' names on the books of DTC.

*The Function of DTC.* DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("**Direct Participants**") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly owned subsidiary of DTCC. DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed

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Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("**Indirect Participants**"). The DTC Rules applicable to its participants are on file with the SEC. More information about DTC can be found at www.dtcc.com and www.dtc.org. The contents of such websites do not constitute a part of this prospectus or the registration statement of which this prospectus forms a part.

*The Function of Clearstream.* Clearstream is incorporated under the laws of Luxembourg. Clearstream holds securities for its customers and facilitates the clearance and settlement of securities transactions between Clearstream customers through electronic book-entry changes in accounts of Clearstream customers, thereby eliminating the need for physical movement of securities. Transactions may be settled by Clearstream in any of various currencies, including United States dollars. Clearstream provides to its customers, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream also deals with domestic securities markets in various countries through established depositary and custodial relationships. Clearstream is registered as a bank in Luxembourg and therefore is subject to regulation by the Luxembourg Commission de Surveillance du Secteur Financier, which supervises Luxembourg banks. Clearstream's customers are world-wide financial institutions including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations, among others, and may include the underwriters of the system restoration bonds. Clearstream's U.S. customers are limited to securities brokers and dealers and banks. Clearstream has customers located in various countries. Indirect access to Clearstream is also available to other institutions that clear through or maintain a custodial relationship with an account holder of Clearstream. Clearstream has established an electronic bridge with Euroclear to facilitate settlement of trades between Clearstream and Euroclear.

*The Function of Euroclear.* The Euroclear System ("**Euroclear**") was created in 1968 in Brussels. Euroclear holds securities and book-entry interests in securities for Euroclear participants and facilitates the clearance and settlement of securities transactions between Euroclear participants, and between Euroclear participants and participants of certain other securities intermediaries through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of securities and any risk from lack of simultaneous transfers of securities and cash. Such transactions may be settled in any of various currencies, including United States dollars. Euroclear includes various other services, including, among other things, safekeeping, administration, clearance and settlement, securities lending and borrowing and interfaces with domestic markets in several countries generally similar to the arrangements for cross-market transfers with DTC described below. Euroclear is operated by Euroclear Bank SA/NV. Euroclear participants include central banks and other banks, securities brokers and dealers and other professional financial intermediaries and may include the underwriters of the system restoration bonds. Indirect access to Euroclear is also available to other firms that clear through or maintain a custodial relationship with a Euroclear participant, either directly or indirectly.

*Terms and Conditions of Euroclear.* Securities clearance accounts and cash accounts with Euroclear are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of Euroclear, and applicable Belgian law (collectively, the "**Terms and Conditions**"). These Terms and Conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear and receipts of payments with respect to securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific securities to specific securities clearance accounts. Euroclear acts under the Terms and Conditions only on behalf of Euroclear participants and has no record of or relationship with persons holding through Euroclear participants.

*The Rules for Transfers Among DTC, Clearstream or Euroclear Participants.* Transfers between DTC participants will occur in accordance with DTC rules. Transfers between Clearstream customers or Euroclear participants will occur in the ordinary way in accordance with their applicable rules and operating procedures and will be settled using procedures applicable to conventional securities held in registered form.

Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through Clearstream customers or Euroclear participants, on the other, will be effected through DTC in accordance with DTC rules on behalf of the relevant European international

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clearing system by its depositary; however, those cross-market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in that system in accordance with its rules and procedures and within its established deadlines, which will be based on European time. The relevant European international clearing system will, if the transaction meets its settlement requirements, deliver instructions to its depositary to take action to effect final settlement on its behalf by delivering or receiving system restoration bonds in DTC and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Clearstream customers and Euroclear participants may not deliver instructions directly to Clearstream's and Euroclear's depositaries.

Because of time-zone differences, credits of securities in Clearstream or Euroclear as a result of a transaction with a participant will be made during the subsequent securities settlement processing, dated the business day following the DTC settlement date, and those credits or any transactions in those securities settled during that processing will be reported to the relevant Clearstream customer or Euroclear participant on that business day. Cash received in Clearstream or Euroclear as a result of sales of securities by or through a Clearstream customer or a Euroclear participant to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant Clearstream or Euroclear cash account only as of the business day following settlement in DTC.

*DTC will be the Holder of the System Restoration Bonds.* Holders of the system restoration bonds that are not Direct Participants or Indirect Participants but desire to purchase, sell or otherwise transfer ownership of, or other interest in, system restoration bonds may do so only through Direct Participants and Indirect Participants. In addition, holders of the system restoration bonds will receive all distributions of principal of and interest on the system restoration bonds from the trustee through the participants, who in turn will receive them from DTC. Under a book-entry format, holders of the system restoration bonds may experience some delay in their receipt of payments because payments will be remitted by the trustee to Cede & Co., as nominee for DTC. DTC will forward those payments to its Direct Participants, who thereafter will forward them to Indirect Participants or holders of the system restoration bonds. It is anticipated that the only "bondholder" will be Cede & Co., as nominee of DTC. The trustee will not recognize holders of the system restoration bonds as holders, as that term is used in the indenture, and holders of the system restoration bonds will be permitted to exercise the rights of holders only indirectly through the participants, who in turn will exercise the rights of holders of the system restoration bonds through DTC.

Under the rules, regulations and procedures creating and affecting DTC and its operations, DTC is required to make book-entry transfers of book-entry certificates among participants on whose behalf it acts with respect to the system restoration bonds and is required to receive and transmit distributions of principal and interest on the system restoration bonds. Direct Participants and Indirect Participants with whom holders of the system restoration bonds have accounts with respect to the system restoration bonds similarly are required to make book-entry transfers and receive and transmit those payments on behalf of their respective holders of the system restoration bonds. Accordingly, although the holders of the system restoration bonds will not possess system restoration bonds, holders of the system restoration bonds will receive payments and will be able to transfer their interests.

Because DTC can act only on behalf of participants, who in turn act on behalf of indirect participants and certain banks, the ability of a holder of the system restoration bonds to pledge system restoration bonds to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of those bonds, may be limited due to the lack of a physical certificate for those system restoration bonds.

DTC has advised us that it will take any action permitted to be taken by a holder of the system restoration bonds under the indenture only at the direction of one or more participants to whose account with DTC the system restoration bonds are credited. Additionally, DTC has advised us that it will take those actions with respect to specified percentages of the collateral amount only at the direction of and on behalf of participants whose holdings include interests that satisfy those specified percentages. DTC may take conflicting actions with respect to other interests to the extent that those actions are taken on behalf of participants whose holdings include those interests.

Except as required by law, none of any underwriter, the servicer, CenterPoint Houston, the trustee, us or any other party will have any liability for any aspect of the records relating to or payments made on account

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of beneficial interests in the certificates held by Cede & Co., as nominee for DTC, or for maintaining, supervising or reviewing any records relating to such beneficial interests.

*How System Restoration Bond Payments will be Credited by Clearstream and Euroclear.* Distributions with respect to system restoration bonds held through Clearstream or Euroclear will be credited to the cash accounts of Clearstream customers or Euroclear participants in accordance with the relevant system's rules and procedures, to the extent received by its depositary. Those distributions will be subject to tax reporting in accordance with relevant U.S. tax laws and regulations. Please read "Material U.S. Federal Income Tax Consequences" in this prospectus. Clearstream or the Euroclear operator, as the case may be, will take any other action permitted to be taken by a holder of the system restoration bonds under the indenture on behalf of a Clearstream customer or Euroclear participant only in accordance with its relevant rules and procedures and subject to its depositary's ability to effect those actions on its behalf through DTC.

Although DTC, Clearstream and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of the system restoration bonds among participants of DTC, Clearstream and Euroclear, they are under no obligation to perform or continue to perform those procedures, and those procedures may be discontinued at any time.

#### Definitive Certificated System Restoration Bonds
*The Circumstances that will Result in the Issuance of Definitive Certificated System Restoration Bonds.* The system restoration bonds will be issued in fully registered, certificated form to beneficial owners of system restoration bonds or other intermediaries, rather than to DTC or its nominee, only under the circumstances provided in the indenture, which includes any event where:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we advise the trustee in writing that DTC is no longer willing or able to properly discharge its responsibilities under any letter of representation executed by us in favor of DTC, and we are unable to locate a qualified successor,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we, at our option, advise the trustee in writing that we elect to terminate the book-entry system through DTC, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • after the occurrence of an event of default under the indenture, holders of the system restoration bonds representing not less than a majority of the outstanding amount of the system restoration bonds maintained in book-entry form advise us, the trustee and DTC through the financial intermediaries and the DTC participants in writing that the continuation of a book-entry system through DTC, or a successor to DTC, is no longer in the holders' of the system restoration bonds best interest.

*The Delivery of Definitive Certificated System Restoration Bonds.* Upon the occurrence of any event described in the immediately preceding paragraph (unless otherwise specified), we will be required to notify DTC, the trustee, and all affected beneficial owners of system restoration bonds in writing of the occurrence of the event and of the availability through DTC of definitive certificated system restoration bonds to such owners of system restoration bonds. Upon surrender by DTC to the trustee of the global bond or bonds in the possession of DTC that had represented the applicable system restoration bonds and receipt of instructions for re-registration, the trustee will authenticate and deliver definitive certificated system restoration bonds to the beneficial owners, and the trustee will recognize the holders of the definitive certificated system restoration bonds as holders under the indenture.

*The Payment Mechanism for Definitive Certificated System Restoration Bonds.* Payments of principal of, and interest on, definitive certificated system restoration bonds will be made by the trustee, as paying agent, in accordance with the procedures set forth in the indenture. These payments will be made directly to holders of definitive certificated system restoration bonds in whose names the definitive certificated system restoration bonds were registered at the close of business on the related record date. The trustee will make the final payment for each tranche of the system restoration bonds, however, only upon presentation and surrender of the system restoration bonds of that tranche at the office or agency of the trustee specified in the notice given by the trustee of the final payment. The trustee will transmit notice of the final payment

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to the holders of the system restoration bonds no later than five days prior to the final payment date, specifying the date set for the final payment and the amount of the payment.

*The Transfer or Exchange of Definitive Certificated System Restoration Bonds.* Definitive certificated system restoration bonds will be transferable and exchangeable at the offices of the transfer agent and registrar, which will initially be U.S. Bank Trust Company, National Association. No service charge will be imposed for any registration of transfer or exchange, but we and the transfer agent and registrar may require payment of a sum sufficient to cover any tax or other governmental charge imposed in connection with the transfer or exchange.

#### Registration and Transfer of the System Restoration Bonds
We will only issue the system restoration bonds in definitive form under limited circumstances as described above, which will be transferable and exchangeable as described above under "— Definitive Certificated System Restoration Bonds." There will be no service charge for any registration or transfer of the system restoration bonds, but the trustee may require the owner to pay a sum sufficient to cover any tax or other governmental charge.

We will issue the system restoration bonds in the minimum initial denominations and integral multiples set forth in this prospectus.

The trustee will make payments of interest and principal on each payment date to the holders of the system restoration bonds in whose names the system restoration bonds were registered on the applicable record date.

#### The Security for the System Restoration Bonds
To secure the payment of principal, premium, if any, and interest on, and any other amounts owed in respect of, the system restoration bonds pursuant to the indenture, we will grant to the trustee for the benefit of the holders of the system restoration bonds a security interest in all of our right, title and interest, whether now owned or later acquired, in and to the following collateral, which collectively constitutes the trust estate under the indenture:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the system restoration property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • all system restoration charges related to the system restoration property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • our rights under the sale agreement and the bill of sale delivered by CenterPoint Houston pursuant to the sale agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • our rights under the servicing agreement, the administration agreement and any subservicing, agency or collection agreements executed in connection with the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • our rights in the collection account and all subaccounts of the collection account, including the general subaccount, the capital subaccount and the excess funds subaccount and all cash, instruments, investment property or other assets on deposit therein or credited thereto from time to time or purchased with funds from the collection account, and all financial assets and securities entitlements carried therein or credited thereto,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • all rights to compel the servicer to file for and obtain periodic adjustments to the system restoration charges in accordance with the Securitization Act and the financing order,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • all of our other property, other than any cash released to us by the trustee on any payment date to be distributed to CenterPoint Houston as a return of its invested capital in us,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • all present and future claims, demands, causes and choses in action in respect of any or all of the foregoing, whether such claims, demand causes and choses in action constitute energy transition property, accounts, general intangibles, instruments, contract rights, chattel paper or proceeds of such items or any other form of property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • all payments on or under and all proceeds in respect of any or all of the foregoing, including all proceeds of the conversion, voluntary or involuntary, into cash or other liquid property of any or all

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of the foregoing, all cash proceeds, accounts, accounts receivable, general intangibles, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, payment intangibles, letter-of-credit rights, investment property, commercial tort claims, documents, rights to payment of any and every kind, and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • all payments on or under, and all proceeds in respect of, any or all of the foregoing.

The security interest does not extend to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • cash that has been released pursuant to the terms of the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • amounts deposited with us for payment of costs of issuance with respect to the system restoration bonds (together with any interest earnings thereon), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • proceeds from the sale of the system restoration bonds that are required to pay the purchase price for the system restoration property, paid pursuant to the sale agreement, and the costs of the issuance of the system restoration bonds.

Section 39.309(b) of the Securitization Act provides that a valid and enforceable lien and security interest in system restoration property will attach and be perfected by the means set forth in Section 39.309. Specifically, Section 39.309(b) provides that a valid and enforceable lien and security interest in system restoration property may be created only by a financing order and the execution and delivery of a security agreement with a financing party in connection with issuance of financing instruments such as the system restoration bonds. The lien and security interest attach automatically at the time when value is received for the instruments. Upon perfection by filing notice with the Secretary of State of Texas under Section 39.309(d) of the Securitization Act, the lien and security interest will be a continuously perfected lien and security interest in the system restoration property and all proceeds of the property, whether accrued or not, and will have priority in the order of filing and take precedence over any subsequent judicial or other lien creditor.

The system restoration bonds will be non-recourse obligations and will be secured by and payable solely out of the system restoration property and the other assets of the trust estate securing the system restoration bonds. If and to the extent the system restoration property and the other assets of the trust estate are insufficient to pay all amounts owing with respect to the system restoration bonds, then the holders of the system restoration bonds will generally have no claim in respect of such insufficiency against us or any other person. By the acceptance of the system restoration bonds, the holders of the system restoration bonds waive any such claim. In addition, the indenture provides that, prior to the date that is one year and one day after the payment in full of the system restoration bonds, the trustee and the holders of the system restoration bonds will not institute against or join any other person in instituting against us any bankruptcy, reorganization, insolvency, liquidation or similar proceedings. By the acceptance of the system restoration bonds, the holders of the system restoration bonds are deemed to have agreed to this covenant.

#### The Collection Account for the System Restoration Bonds
Under the indenture, we will establish a collection account with the trustee or at another eligible institution for the system restoration bonds. The collection account will be under the sole dominion and exclusive control of the trustee. Funds received from collections of the applicable system restoration charges will be deposited into the collection account. The collection account for the system restoration bonds will be divided into the following subaccounts, which need not be separate bank accounts:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the general subaccount,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the capital subaccount, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the excess funds subaccount.

For administrative purposes, the subaccounts may be established by the trustee as separate accounts that will be recognized individually as subaccounts and collectively as the collection account. Unless otherwise provided in the indenture, amounts in the collection account for the system restoration bonds not

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allocated to any other subaccount by the servicer will be allocated to the general subaccount. Unless the context indicates otherwise, references in this prospectus to the collection account for the system restoration bonds include all of the subaccounts contained therein. All monies deposited from time to time in the collection account, all deposits therein pursuant to the indenture, and all investments made in eligible investments with these monies will be held by the trustee in the collection account as part of the trust estate of the indenture. The following institutions are eligible institutions for the establishment of the collection account:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the corporate trust department of the trustee or an affiliate thereof, so long as the trustee or such affiliate have (i) either a short-term deposit or issuer rating from Moody's of at least "P-1" or a long-term unsecured debt or issuer rating from Moody's of at least "A2" and (ii) a short-term deposit or issuer rating from S&P of at least "A-1" or a long-term unsecured debt or issuer rating from S&P of at least "A", or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • a depository institution organized under the laws of the United States of America or any state (or any domestic branch of a foreign bank) (i) that has either (A) a long-term unsecured debt or issuer rating of "AA-" or higher by S&P and "A2" or higher by Moody's, or (B) a short-term (bank deposit) or issuer rating of "A-1" or higher by S&P and "P-1" or higher by Moody's and (ii) whose deposits are insured by the Federal Deposit Insurance Corporation.

If an eligible institution then being utilized for any purposes under the indenture or the series supplement no longer meets the definition of eligible institution, then we will replace such eligible institution within 60 days of such eligible institution no longer meeting the definition of eligible institution.

*Appropriate Investments for Funds in the Collection Account.* So long as no default or event of default has occurred and is continuing, all or a portion of the funds in the collection account for the system restoration bonds must be invested by the trustee in accordance with the written direction of the servicer in any of the following, each of which is referred to as an eligible investment:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.

demand or time deposits of, unsecured certificates of deposit of, money market deposit accounts of or bankers' acceptances issued by, any depository institution (including the trustee or its affiliates, acting in a commercial capacity) incorporated or organized under the laws of the United States of America or any state thereof, and subject to the supervision and examination by U.S. federal or state banking authorities, so long as the commercial paper or other short-term debt obligations of such depository institution are, at the time of deposit, rated at least "A-1" and "P-1" or their equivalents by each of S&P and Moody's, or such lower rating as will not result in the downgrading or withdrawal of the ratings of the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.

commercial paper (including commercial paper of the trustee or its affiliates, acting in a commercial capacity, and other than commercial paper issued by CenterPoint Houston or any of its affiliates) having, at the time of investment or contractual commitment to invest, a rating of least "A-1" and "P-1" or their equivalents by each of S&P and Moody's or such lower rating as will not result in the downgrading or withdrawal of the ratings of the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.

investments in money market funds having a rating in the highest investment category granted thereby (including funds for which the trustee or any of its affiliates is investment manager or advisor) from Moody's and S&P,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.

repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or certain of its agencies or instrumentalities, entered into with eligible institutions,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.

repurchase obligations with respect to any security or whole loan entered into with an eligible institution or with a registered broker-dealer acting as principal and that meets certain ratings criteria:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i) a broker-dealer (acting as principal) registered as a broker or dealer under Section 15 of the Exchange Act, the unsecured short-term debt obligations of which are rated at least "P-1" by Moody's and "A-1+" by S&P at the time of entering into such repurchase obligation, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii) an unrated broker-dealer, acting as principal, that is a wholly-owned subsidiary of a non-bank or bank holding company the unsecured short-term debt obligations of which are rated at least "P-1" by Moody's and "A-1+" by S&P at the time of purchase so long as the obligations of such unrated broker-dealer are unconditionally guaranteed by such non-bank or bank holding company, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.

any other investment permitted by each of the rating agencies.

Notwithstanding the foregoing: (1) no securities or investments which mature in 30 days or more will be eligible investments unless the issuer thereof has either a short-term unsecured debt rating of at least "P-1" from Moody's or a long-term unsecured debt rating of at least "A1" from Moody's; (2) no securities or investments described in clauses (2) through (4) above which have maturities of more than 30 days but less than or equal to 3 months will be eligible investments unless the issuer thereof has a long-term unsecured debt rating of at least "A1" from Moody's and a short-term unsecured debt rating of at least "P-1" from Moody's; (3) no securities or investments described in clauses (2) through (4) above which have maturities of more than 3 months will be eligible investments unless the issuer thereof has a long-term unsecured debt rating of at least "A1" from Moody's and a short-term unsecured debt rating of at least "P-1" from Moody's; (4) no securities or investments described in clauses (2) through (4) above which have a maturity of 60 days or less will be eligible investments unless such securities have a rating from S&P of at least "A-1"; and (5) no securities or investments described in clauses (2) through (4) above which have a maturity of 365 days or less will be eligible investments unless such securities have a rating from S&P of at least "AA-", "A-1+" or "AAAm".

*Remittances to the Collection Account.* On each remittance date, the servicer will remit estimated system restoration charge collections or collected system restoration charges, as the case may be, any indemnity amounts and any other proceeds of the trust estate securing the system restoration bonds to the trustee for deposit in the collection account. Indemnity amount means any amount paid by the servicer or CenterPoint Houston to the trustee, for the trustee or on behalf of the holders of the system restoration bonds, in respect of indemnification obligations pursuant to the servicing agreement or the sale agreement. Please read "The Servicing Agreement" and "The Sale Agreement" in this prospectus.

*General Subaccount.* Collected system restoration charges and any indemnity amounts remitted to the trustee will be deposited into the general subaccount. On each payment date, the trustee will allocate amounts in the general subaccount among the other subaccounts as described below under "— How Funds in the Collection Account Will Be Allocated." Amounts in the general subaccount will be invested in the eligible investments described above.

*Capital Subaccount.* Upon the issuance of the system restoration bonds, CenterPoint Houston will make a capital contribution to us in an amount not to be less than 0.50% of the original principal amount of the system restoration bonds, which amount shall not come from the proceeds of the sale of the system restoration bonds. We will pay this amount to the trustee for deposit into the capital subaccount which will be invested in eligible investments by the trustee in accordance with the written direction of the servicer. The trustee will draw on amounts in the capital subaccount to the extent that, in allocating funds in accordance with clauses 1 through 8 in "— How Funds in the Collection Account Will Be Allocated," below, amounts on deposit in the general subaccount and the excess funds subaccount are insufficient to make scheduled payments on the system restoration bonds and payments of fees and expenses specified in clauses 1 through 8. The trustee will allocate collected system restoration charges available on any payment date that are not necessary to pay amounts described in clauses 1 through 8 in "— How Funds in the Collection Account Will Be Allocated," below, to the capital subaccount in an amount sufficient to replenish any amounts drawn from the capital subaccount (other than distributed investment earnings on the capital subaccount) and any shortfall of investment earnings on the capital subaccount. On each payment date, any investment earnings on the capital subaccount relating to amounts above the actual amount of CenterPoint Houston's capital contribution shall be allocated to the excess funds subaccount.

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*Excess Funds Subaccount.* The trustee will allocate collected system restoration charges available on any payment date that are not necessary to pay clauses 1 through 10 in "— How Funds in the Collection Account Will Be Allocated," below, to the excess funds subaccount. The trustee will invest amounts in the excess funds subaccount in eligible investments in accordance with the written direction of the servicer. On each payment date, the trustee will draw on the excess funds subaccount in allocating funds in accordance with clauses 1 through 10 in "— How Funds in the Collection Account Will Be Allocated," below, to the extent that amounts on deposit in the general subaccount are insufficient to make scheduled payments on the system restoration bonds and payments of fees and expenses specified in clauses 1 through 10.

#### How Funds in the Collection Account Will Be Allocated
Amounts remitted by the servicer to the trustee with respect to the system restoration bonds, including any amounts received by us relating to the indemnification obligations payable by the seller pursuant to the sale agreement or the servicer pursuant to the servicing agreement and all investment earnings on amounts in the general subaccount of the collection account will be deposited into the general subaccount. Investment earnings on amounts in the capital subaccount (other than investment earnings relating to amounts above the actual amount of CenterPoint Houston's capital contribution that are allocated to the excess funds subaccount) and the excess funds subaccount will be deposited into the capital subaccount and the excess funds subaccount, respectively.

On each payment date for the system restoration bonds, the trustee will allocate or pay all amounts on deposit in the general subaccount of the collection account for the system restoration bonds in the following order of priority in accordance with the related written statement from the servicer:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.

payment of the trustee's fees, plus expenses and any outstanding indemnity amounts not to exceed $200,000 in any 12-month period, provided, however, that such cap shall be disregarded and inapplicable upon the acceleration of the system restoration bonds following the occurrence of an event of default,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.

payment of the servicing fee with respect to such payment date, plus any unpaid servicing fees from prior payment dates,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.

payment of the due and unpaid administration fee, which will be a fixed amount specified in the administration agreement between us and CenterPoint Houston, and the due and unpaid fees of our independent manager, which will be in an amount specified in an agreement between us and our independent manager,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.

payment of all of our other ordinary periodic operating expenses relating to the system restoration bonds for such payment date, such as accounting and audit fees, rating agency fees, legal fees and certain reimbursable costs of the servicer under the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.

payment of the interest then due on the system restoration bonds, including any past due interest (together with, to the extent lawful, interest on such past due interest at the applicable bond interest rate),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.

payment of the principal due to be paid on the system restoration bonds at the final maturity date for such tranche or as a result of an acceleration upon an event of default,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.

payment of the principal then scheduled to be paid on the system restoration bonds in accordance with the expected sinking fund schedule, including any previously unpaid scheduled principal,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.

payment of any of our remaining unpaid operating expenses and any remaining amounts owed pursuant to the basic documents, including all remaining expenses and indemnity amounts owed to the trustee, paid to the parties, pro rata, to which such expenses or amounts are owed,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.

replenishment of the amount, if any, by which the initial balance of the capital subaccount exceeds the amount in the capital subaccount as of such payment date,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10.

the return on the invested capital then due and payable, which shall be the sum of the actual amounts earned from investments of CenterPoint Houston's capital contribution which has been

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deposited into the capital subaccount, plus any return on the invested capital not paid on any prior payment date, shall be paid to CenterPoint Houston,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.

allocation of the remainder, if any, to the excess funds subaccount, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12.

after the system restoration bonds have been paid in full and discharged, and all of the other foregoing amounts have been paid in full, the balance, together with all amounts in the capital subaccount and the excess funds subaccount, released to us free from the lien of the indenture, which funds, less an amount equal to the initial deposit into the capital subaccount plus any unpaid return on invested capital, will be distributed to CenterPoint Houston and credited by CenterPoint Houston to its retail customers in accordance with Section 39.262(g) of the Public Utility Regulatory Act.

The amount of the annual servicer's fee referred to in clause 2 above shall be 0.075% of the initial principal amount of the system restoration bonds and shall be prorated based on the fraction of a calendar year during which the servicer provides services. In the event that a successor servicer not an affiliate of CenterPoint Houston is appointed, the amount of the annual servicer's fee shall be agreed by the successor servicer and the trustee (in accordance with written direction from the holders of the system restoration bonds evidencing at least a majority of the outstanding amount of the system restoration bonds), but shall not exceed 0.60% of the system restoration bond balance on the date of the servicing agreement without the consent of the PUCT, and shall be prorated based on the fraction of a calendar year during which the successor servicer provides services. The amount of the annual administration fee referred to in clause 3 above shall be fixed at $100,000.

Interest means, for any payment date for the system restoration bonds, the sum, without duplication, of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • an amount equal to the interest accrued on that tranche of the system restoration bonds at the applicable interest rate from the prior payment date or, with respect to the first payment date, the amount of interest accrued since the issuance date, with respect to that tranche,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any unpaid interest plus, to the fullest extent permitted by law, any interest accrued on this unpaid interest, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • if the system restoration bonds have been declared due and payable, all accrued and unpaid interest thereon.

Principal means, with respect to any payment date and any tranche of the system restoration bonds, the sum, without duplication, of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the amount of principal of that tranche due as a result of the occurrence and continuance of an event of default and acceleration of the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the amount of principal of that tranche due on the final maturity date of that tranche,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any unpaid and previously scheduled payments of principal of that tranche and overdue payments of principal of that tranche, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the amount of principal of that tranche scheduled to be paid on such payment date in accordance with the expected sinking fund schedule.

If on any payment date funds in the general subaccount are insufficient to make the allocations or payments contemplated by clauses 1 through 9 of the first paragraph of this subsection with respect to the system restoration bonds, the trustee, in accordance with the related written statement from the servicer, will draw from amounts on deposit in the following subaccounts in the following order up to the amount of the shortfall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.

from the excess funds subaccount for allocations and payments contemplated in clauses 1 through 9, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.

from the capital subaccount for allocations and payments contemplated by clauses 1 through 8.

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If, on any payment date, available collections of system restoration charges allocable to the system restoration bonds, together with available amounts in the related subaccounts, are not sufficient to pay interest due on all outstanding system restoration bonds on that payment date, amounts available will be allocated pro rata based on the amount of interest payable on each tranche of the system restoration bonds. If, on any payment date, remaining collections of system restoration charges allocable to the system restoration bonds, together with available amounts in the subaccounts, are not sufficient to pay principal due and payable at a tranche's final maturity date or upon an acceleration following an event of default under the indenture, amounts available will be allocated pro rata based on the principal amount of each tranche of the system restoration bonds then due and payable. If, on any payment date, remaining collections of system restoration charges allocable to the system restoration bonds, together with available amounts in the subaccounts, are not sufficient to pay principal scheduled to be paid, and if more than one tranche of the system restoration bonds is scheduled to be paid on such payment date, the trustee will distribute principal from the collection account sequentially in the numerical order of such tranches. If the trustee uses amounts on deposit in the capital subaccount to pay those amounts or make those transfers, as the case may be, subsequent adjustments to the system restoration charges will take into account, among other things, the need to replenish those amounts (plus any deficiency in the amount of investment earnings on the capital subaccount allowed by the financing order).

#### How Funds in the Subaccounts Will Be Used upon Repayment of the System Restoration Bonds
Upon the payment in full of all system restoration bonds authorized in the financing order and the discharge of all obligations, including financing costs, all remaining amounts in the collection account (including investment earnings) shall be released by the trustee to us for distribution to CenterPoint Houston. With regard to the amounts in the capital subaccount of the collection account, all such funds shall be released to us for distribution to, and retention by, CenterPoint Houston. Until such funds are returned by us to CenterPoint Houston, CenterPoint Houston may earn a rate of return on its capital investment in us equal to the actual amounts earned from investments on CenterPoint Houston's capital contribution deposited into the capital subaccount.

#### Reports to the Holders of the System Restoration Bonds
On or before each payment date, the trustee will make available on its website (currently located at *https://pivot.usbank.com*) to each of the holders of the system restoration bonds a statement provided and prepared by the servicer. This statement will include, to the extent applicable, the following information, as well as any other information so specified in the series supplement, as to the system restoration bonds with respect to that payment date or the period since the previous payment date, as applicable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the amount of the payment to the holders of the system restoration bonds allocable to principal, if any,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the amount of the payment to the holders of the system restoration bonds allocable to interest,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the aggregate outstanding amount of the system restoration bonds, before and after giving effect to any payments allocated to principal reported above,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the difference, if any, between the aggregate outstanding amount specified immediately above and the outstanding amount specified in the sinking fund schedule,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any other transfers and payments to be made on such payment date, including amounts paid to the trustee and to the servicer, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the amounts on deposit in the capital subaccount and the excess funds subaccount, after giving effect to the foregoing payments.

#### Website
We will, to the extent permitted by and consistent with our obligations under applicable law, cause to be posted on the website associated with CenterPoint Houston:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the final prospectus for the system restoration bonds,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • a statement reporting the balances in the collection account and in each subaccount as of all payment dates and as of the end of the year,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the semi-annual servicer's certificate as required to be submitted pursuant to the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the monthly servicer's certificate as required to be submitted pursuant to the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the text (or a link to the website where a reader can find the text) of each filing of a system restoration charge adjustment and the results of each such filing,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any change in the long-term or short-term credit ratings of the servicer assigned by the rating agencies,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any material legislative enactment or regulatory order or rule directly relevant to the outstanding system restoration bonds, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any reports and other information that we are required to file with the SEC under the Exchange Act.

#### We and the Trustee May Modify the Indenture
*Modifications of the Indenture That Do Not Require Consent of Holders of the System Restoration Bonds.* Without the consent of any of the holders of the outstanding system restoration bonds but with prior notice to the rating agencies and, with respect to amendments that would increase ongoing qualified costs, with the consent or deemed consent of the PUCT (other than with respect to the series supplement establishing the system restoration bonds), we and the trustee may execute a supplemental indenture for any of the following purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • to correct or amplify the description of the trust estate, or to better assure, convey and confirm unto the trustee the trust estate, or to subject additional property to the lien of the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • to evidence the succession, in compliance with the applicable provisions of the indenture, of another entity to us, and the assumption by any applicable successor of our covenants contained in the indenture and in the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • to add to our covenants, for the benefit of the secured parties (as defined in the indenture), or to surrender any right or power therein conferred upon us,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • to convey, transfer, assign, mortgage or pledge any property to or with the trustee,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • to cure any ambiguity or mistake, to correct or supplement any provision of the indenture or series supplement which may be inconsistent with any other provision of the indenture or in any supplemental indenture, including the series supplement, or the final prospectus or to make any other provisions with respect to matters or questions arising under the indenture or series supplement; provided, however, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • this action shall not adversely affect in any material respect the interests of any holder of the system restoration bonds or to surrender any right or power therein conferred upon us, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the rating agency condition shall have been satisfied with respect thereto,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • to evidence and provide for the acceptance of the appointment under the indenture by a successor trustee with respect to the system restoration bonds and to add to or change any of the provisions of the indenture as shall be necessary to facilitate the administration of the trust estate under the indenture by more than one trustee, pursuant to the requirements specified in the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • to qualify the system restoration bonds for registration with a clearing agency,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • to modify, eliminate or add to the provisions of the indenture to the extent necessary to effect the qualification of the indenture under the Trust Indenture Act and to add to the indenture any other provisions as may be expressly required by the Trust Indenture Act,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • to satisfy any rating agency requirements, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • to authorize the appointment of any person for any tranche of the system restoration bonds required or advisable with the listing of any such tranche of the system restoration bonds on any

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stock exchange and otherwise amend the indenture to incorporate changes requested or required by any governmental authority, stock exchange authority or person for any tranche of the system restoration bonds in connection with such listing.

*Additional Modifications to the Indenture That Do Not Require the Consent of Holders of the System Restoration Bonds.* We and the trustee may also, without the consent of any of the holders of the system restoration bonds but, with respect to amendments that would increase ongoing qualified costs, with the consent or deemed consent of the PUCT, execute one or more other agreements supplemental to the indenture as long as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the supplemental agreement does not adversely affect in any material respect the interests of any holder of the system restoration bonds, as evidenced by an officer's certificate, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the rating agency condition shall have been satisfied with respect thereto.

Any such amendment that may have the effect of increasing ongoing qualified costs may be provided by us to the PUCT, along with a statement as to the possible effect of the amendment on the ongoing qualified costs, and such amendment shall become effective on the later of (i) the date proposed by the parties to the proposed amendment or (ii) 31 days after such submission to the PUCT, unless such commission issues an order disapproving the amendment within a 30-day period.

*Modifications to the Indenture That Require the Approval of the Holders of the System Restoration Bonds.* We and the trustee also may, 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 system restoration bonds of each tranche to be affected by the supplemental indenture and, with respect to amendments that would increase ongoing qualified costs, with the consent or deemed consent of the PUCT, execute a supplemental indenture to add any provisions to, or change in any manner or eliminate any of the provisions of, the indenture or modify in any manner the rights of the holders of the system restoration bonds under the indenture. Any such amendment that may have the effect of increasing ongoing qualified costs shall be provided by us to the PUCT, along with a statement as to the possible effect of the amendment on the ongoing qualified costs, and such amendment shall become effective on the later of (i) the date proposed by the parties to the proposed amendment or (ii) 31 days after such submission to the PUCT, unless such commission issues an order disapproving the amendment within a 30-day period. Under no circumstance may the supplemental indenture, without the consent of the holder of each outstanding system restoration bond of each tranche affected thereby:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • change the date of payment of any installment of principal of or premium, if any, or interest on the system restoration bonds of such tranche, or reduce the principal amount thereof, the interest rate thereon or the premium, if any, with respect thereto,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • change the provisions of the indenture and the series supplement relating to the application of collections on, or the proceeds of the sale of, the trust estate of the indenture to payment of principal of or premium, if any, or interest on the system restoration bonds of such tranche, or change any place of payment where, or the coin or currency in which, any system restoration bond of such tranche or any interest thereon is payable,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reduce the percentage of the aggregate amount of the outstanding system restoration bonds or a tranche thereof, the consent of the holders of the system restoration bonds of which is required for any supplemental indenture, or the consent of the holders of the system restoration bonds of which is required for any waiver of compliance with those certain provisions of the indenture specified therein or of certain defaults specified therein and their consequences provided for in the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reduce the percentage of the outstanding amount of the system restoration bonds required to direct the trustee to direct us to sell or liquidate the trust estate of the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • modify any provision of the section of the indenture relating to the consent of holders of the system restoration bonds with respect to supplemental indentures or any provision of the other basic documents similarly specifying the rights of the holders of the system restoration bonds to consent to modification thereof, except to increase any percentage specified therein or to provide that those

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provisions of the indenture or the basic documents specified in the indenture cannot be modified or waived without the consent of each outstanding holder of the system restoration bonds affected thereby,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • modify any of the provisions of the indenture in a manner as to affect the calculation of the amount of any payment of interest, principal or premium, if any, due and payable on any system restoration bond on any payment date (including the calculation of any of the individual components of such calculation) or change the expected sinking fund schedule or expected amortization schedule or final maturity date of the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • decrease the required capital amount with respect to the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • permit the creation of any lien ranking prior to or on a parity with the lien of the indenture with respect to any of the trust estate securing the system restoration bonds or, except as otherwise permitted or contemplated in the indenture, terminate the lien of the indenture on any property at any time subject thereto or deprive the holder of any system restoration bond of the security provided by the lien of the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • cause any material adverse U.S. federal income tax consequence to us, CenterPoint Houston, the managers, the trustee or the then-existing holders of the system restoration bonds, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • impair the right to institute suit for the enforcement of the provisions of the indenture regarding payment or application of funds.

*Enforcement of the Sale Agreement, the Administration Agreement and the Servicing Agreement.* The indenture provides that we will take all lawful actions to enforce our rights under the sale agreement, the administration agreement, the servicing agreement and other basic documents. The indenture also provides that we will take all lawful actions to compel or secure the performance and observance by CenterPoint Houston, the administrator and the servicer of their respective obligations to us under or in connection with the sale agreement, the administration agreement, the servicing agreement, and other basic documents. So long as no event of default occurs and is continuing, we may exercise any and all rights, remedies, powers and privileges lawfully available to us under or in connection with the sale agreement, the administration agreement, the servicing agreement and other basic documents; provided that such action shall not adversely affect the interests of the holders of the system restoration bonds in any material respect. However, if we or the servicer propose to amend, modify, waive, supplement, terminate or surrender in any material respect, or agree to any material amendment, modification, supplement, termination, waiver or surrender of, the process for adjusting the system restoration charges, we must notify the trustee, the holders of the system restoration bonds and, when required, the PUCT in writing of such proposal (or, if pursuant to a request by us, the trustee shall notify the holders of the system restoration bonds of such proposal). In addition, the trustee may consent to this proposal only with the written consent of the holders of not less than a majority of the outstanding amount of the system restoration bonds or tranche affected thereby and only if the rating agency condition is satisfied. In addition, any proposed amendment of the indenture, the sale agreement or the servicing agreement that would increase ongoing qualified costs requires the prior written consent or deemed consent of the PUCT.

If an event of default occurs and is continuing, the trustee may, and, at the written direction of the holders of not less than a majority of the outstanding amount of the system restoration bonds of the tranches affected thereby, shall exercise all of our rights, remedies, powers, privileges and claims against CenterPoint Houston, the administrator and servicer, under or in connection with the sale agreement, administration agreement and servicing agreement, and any right of ours to take this action shall be suspended.

*Modifications to the Sale Agreement, the Administration Agreement and the Servicing Agreement.* The sale agreement, the administration agreement and the servicing agreement, may be amended, 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 the system restoration bonds but with the consent of the trustee and, with respect to amendments that would increase qualified financing costs, with the consent or deemed consent of the PUCT. The trustee shall provide such consent upon receiving evidence of satisfaction of the rating agency condition and an opinion of counsel evidencing that the amendment is in accordance with the terms of the agreement being amended. Furthermore, any amendment to any such agreement that may have the

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effect of increasing ongoing qualified costs shall be provided by us to the PUCT, along with a statement as to the possible effect of the amendment on the ongoing qualified costs. The amendment shall become effective on the later of (i) the date proposed by the parties to the proposed amendment or (ii) 31 days after such submission to the PUCT unless such commission issues an order disapproving the amendment within a 30-day period.

 *Notification of the Rating Agencies, the Trustee, the Paying Agent, the System Restoration Bond Registrar and the Holders of the System Restoration Bonds of Any Modification.* 

If we, CenterPoint Houston or the servicer or any other party to the applicable agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • proposes to amend, modify, waive, supplement, terminate or surrender, or agree to any other amendment, modification, waiver, supplement, termination or surrender of, the terms of the sale agreement, the administration agreement or the servicing agreement, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • waives timely performance or observance by CenterPoint Houston, the administrator or the servicer or any other party under the sale agreement, the administration agreement or the servicing agreement,

in each case in a way which would materially and adversely affect the interests of holders of the system restoration bonds, we must first notify the rating agencies of the proposed action and must promptly notify the trustee, the paying agent (if not the trustee) the system restoration bond registrar (if not the trustee) and the holders of the system restoration bonds in writing of the proposed action and whether the rating agency condition has been satisfied with respect thereto (or, if pursuant to a request by us, the trustee shall notify the holders of the system restoration bonds on our behalf). The trustee will consent to this proposed amendment, modification, supplement or waiver only if the rating agency condition is satisfied and only with the prior written consent of the holders of not less than a majority of the outstanding principal amount of the system restoration bonds of the tranche materially and adversely affected thereby and, if such action would increase ongoing qualified costs, the consent or deemed consent of the PUCT.

#### What Constitutes an Event of Default on the System Restoration Bonds
An event of default with respect to the system restoration bonds is defined in the indenture as being:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.

a default in the payment of any interest on any system restoration bond when the same becomes due and payable and the continuation of this default for five business days,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.

a default in the payment of the then unpaid principal of any tranche of the system restoration bonds on the final maturity date for that tranche,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.

a default in the observance or performance of any of our covenants or agreements made in the indenture, other than those specifically dealt with in clause 1 or 2 above, or any of our representations or warranties made in the indenture or the series supplement or in any certificate or other writing delivered pursuant to the indenture or in connection with the indenture proving to have been incorrect in any material respect as of the time when made, and if such default continues or is not cured for a period of 30 days after the earlier of (a) written notice of the default is given to us by the trustee or to us and the trustee by the holders of at least 25% of the outstanding principal amount of the system restoration bonds or (b) the date we have actual notice of the default,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.

the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of us or any substantial part of the trust estate in an involuntary case or proceeding under any applicable U.S. 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 us or for any substantial part of the trust estate, or ordering the winding-up or liquidation of our affairs, and such decree or order remains unstayed and in effect for a period of 90 consecutive days,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.

the commencement by us of a voluntary case under any applicable U.S. federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by us to the entry of an order for relief in an involuntary case or proceeding under any such law, or the consent by us to the

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appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of us or our property for any substantial part of the trust estate, or the making by us of any general assignment for the benefit of creditors, or the failure by us generally to pay our debts as such debts become due, or the taking of action by us in furtherance of any of the foregoing, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.

any act or failure to act by the State of Texas or any of its agencies (including the PUCT), officers or employees that violates or is not in accordance with the pledge of the State of Texas.

*Remedies Available Following an Event of Default.* If an event of default with respect to the system restoration bonds, other than event number 6 above, occurs and is continuing, the trustee or holders holding not less than a majority of the outstanding principal amount of the system restoration bonds may declare the unpaid principal balance of system restoration bonds, together with accrued interest, to be immediately due and payable. This declaration may, under the circumstances specified therein, be rescinded by the holders of not less than a majority of the outstanding principal amount of the system restoration bonds. The nature of our business will result in payment of principal upon such a declaration being made as funds become available. Please read "Risk Factors — Risks Associated with the Unusual Nature of the System Restoration Property — Foreclosure of the trustee's lien on the system restoration property might not be practical, and acceleration of the system restoration bonds before maturity might have little practical effect" and "— You may experience material payment delays or incur a loss on your investment in the system restoration bonds because the source of funds for payment is limited" in this prospectus.

In addition to acceleration of the system restoration bonds described above, the trustee may exercise one or more of the following remedies upon an event of default (other than event number 6 above):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the trustee may institute proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the system restoration bonds or under the indenture with respect to the system restoration bonds, whether by declaration of acceleration or otherwise, and, subject to the limitations on recovery set forth in the indenture, enforce any judgment obtained, and collect from us moneys adjudged due, upon the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the trustee may institute proceedings from time to time for the complete or partial foreclosure of the indenture with respect to the trust estate,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the trustee may exercise any remedies of a secured party under the Texas UCC or the Public Utility Regulatory Act or any other applicable law and take any other appropriate action to protect and enforce the rights and remedies of the trustee and the holders of the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • at the written direction of the holders of not less than a majority of the outstanding principal amount of the system restoration bonds, the trustee may either sell all or a portion of the trust estate or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by applicable law provided that certain conditions set forth in the indenture are met, or elect that we maintain possession of all or a portion of the trust estate securing the system restoration bonds pursuant to the terms of the indenture and continue to apply the system restoration charges as if there had been no declaration of acceleration, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the trustee may exercise all of our rights, remedies, powers, privileges and claims against the seller, administrator or the servicer under or in connection with the administration agreement, the sale agreement or the servicing agreement.

If event of default number 6 above occurs, the trustee, for the benefit of the trustee and the holders, may to the extent allowed by applicable law institute or participate in proceedings necessary to compel performance of or to enforce the pledge of the State of Texas and to collect any monetary damages incurred by the holders of the system restoration bonds or the trustee as a result of such event of default. This is the only remedy the trustee may exercise if this event of default has occurred.

*When the Trustee Can Sell the Trust Estate.* If the system restoration bonds have been declared to be due and payable following an event of default, the trustee may, at the written direction of the holders of not less than a majority of the outstanding principal amount of the system restoration bonds, either:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • subject to the paragraph immediately below, sell all or a portion of the trust estate securing the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • elect to have us maintain possession of the trust estate securing the system restoration bonds, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • take such other remedial action as the trustee, at the written direction of the holders of not less than a majority in principal amount of the system restoration bonds then outstanding and declared to have been due and payable, may continue to apply distributions on the trust estate securing the system restoration bonds as if there had been no declaration of acceleration.

The trustee is prohibited from selling the trust estate securing the system restoration bonds following an event of default unless the final payment date of the system restoration bonds has occurred or the system restoration bonds have been declared due and payable and:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the holders of 100% of the principal amount of the system restoration bonds consent to the sale,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the proceeds of the sale or liquidation are sufficient to pay in full the principal, premium, if any, and accrued interest on the outstanding system restoration bonds and all financing costs, including all fees, expenses and indemnities due and owing to the trustee, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the trustee determines that funds provided by the trust estate securing the system restoration bonds would not be sufficient on an ongoing basis to make all payments on the system restoration bonds as these payments would have become due if the system restoration bonds had not been declared due and payable, and the trustee obtains the written consent of the holders of at least two-thirds (2/3) of the aggregate outstanding principal amount of the system restoration bonds.

*Right of Holders of the System Restoration Bonds to Direct Proceedings.* Subject to the provisions for indemnification and the limitations contained in the indenture, the holders of not less than a majority in principal amount of the outstanding system restoration bonds (or, if less than all tranches are affected, the affected tranches) will have the right to direct the time, method and place of conducting any proceeding or any remedy available to the trustee or exercising any trust or power conferred on the trustee; provided that, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • this direction does not conflict with any rule of applicable law or with the indenture or the series supplement and shall not involve the trustee in any personal liability or expense,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any direction to the trustee to sell or liquidate any of the trust estate securing the system restoration bonds shall be by the holders of the system restoration bonds representing not less than 100% of the outstanding system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • so long as the conditions specified in the indenture have been satisfied and the trustee elects to retain the trust estate securing the system restoration bonds pursuant to the indenture and elects not to sell or liquidate that trust estate, any direction to the trustee to sell or liquidate the trust estate securing the system restoration bonds or any portion thereof by the holders representing less than 100% of the outstanding amount of the system restoration bonds, shall be of no force and effect, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the trustee may take any other action deemed proper by the trustee that is not inconsistent with this direction.

However, in case an event of default occurs and is continuing, the trustee will be under no obligation to exercise any of the rights or powers under the indenture at the request or direction of any of the holders of the system restoration bonds if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • it reasonably believes it will not be indemnified to its satisfaction against any cost, expense or liabilities, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • it determines that this action might involve it in liability or materially adversely affect the rights of any holder of the system restoration bonds not consenting to such action.

*Waiver of Default.* Prior to acceleration of the maturity of the system restoration bonds or any tranche thereof, the holders of not less than a majority of the outstanding principal amount of the system restoration bonds may, subject to certain conditions specified in the indenture, waive any default with respect

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to the system restoration bonds. However, they may not waive a default in the payment of principal of or premium, if any, or interest on any of the system restoration bonds or a default in respect of a covenant or provision of the indenture that cannot be modified without the waiver or consent of all of the holders of the affected tranches of outstanding system restoration bonds.

*Limitation of Proceedings.* Under the indenture, no holder of the system restoration bonds will have the right to institute any proceeding, judicial or otherwise, or to avail itself of the right to foreclose on the system restoration property or otherwise enforce the lien in the system restoration property pursuant to Section 39.309 of the Securitization Act, unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the holder previously has given to the trustee written notice of a continuing event of default,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the holders of not less than a majority of the outstanding principal amount of the system restoration bonds have made written request of the trustee to institute the proceeding in its own name as trustee,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the holder or holders have offered the trustee security or indemnity satisfactory to the trustee against the costs, expenses and liabilities to be incurred in complying with the request,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the trustee for 60 days after its receipt of the notice, request and offer of indemnity has failed to institute the proceeding, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • no direction inconsistent with this written request has been given to the trustee during the 60-day period referred to above by the holders of not less than a majority of the outstanding principal amount of the system restoration bonds.

In addition, each of the trustee, the holders and the servicer will covenant that it will not, prior to the date that is one year and one day after the termination of the indenture and the payment in full of all system restoration bonds and any other amounts owed under the indenture, acquiesce, petition or otherwise invoke or cause us or any manager to invoke against us or against our managers or our member or members any bankruptcy, reorganization or other proceeding under any federal or state bankruptcy, insolvency or similar law. By purchasing system restoration bonds, each holder of the system restoration bonds will be deemed to have made this covenant.

#### Our Covenants
*Consolidation, Merger or Sale of Assets.* We will keep in effect our existence, rights and franchises as a limited liability company under Delaware law, provided that we may consolidate or merge with or into another entity or sell substantially all of our assets to another entity if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the entity formed by or surviving the consolidation or merger or to whom substantially all of our assets are sold is organized and existing under the laws of the United States or any state thereof and expressly assumes by a supplemental indenture the performance or observance of every agreement and covenant of the indenture and the series supplement on our part to be performed or observed, all as provided in the indenture and the series supplement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the entity formed by or surviving the consolidation or merger or to whom substantially all of our assets are sold expressly assumes all obligations and succeeds to all of our rights under the sale agreement, the administration agreement, the servicing agreement and any other basic document specified in the indenture to which we are a party (or under which we have rights) pursuant to an assignment and assumption agreement executed and delivered to the trustee,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • no default or event of default will have occurred and be continuing immediately after giving effect to the merger, consolidation or sale,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • prior notice will have been given to the rating agencies and the rating agency condition will have been satisfied with respect to the merger, consolidation or sale,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we shall have delivered to CenterPoint Houston, the trustee and the rating agencies an opinion of outside tax counsel to the effect that the merger, consolidation or sale will have no material adverse U.S. federal or state income tax consequence to us, CenterPoint Houston, the trustee or any holder of the system restoration bonds,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we shall have delivered to the trustee an officer's certificate and opinion of external counsel each stating that such consolidation or merger and such supplemental indenture comply with the indenture and the series supplement and that all conditions precedent to such transaction listed above have been complied with.

*Additional Covenants.* We will from time to time execute and deliver all documents, make all filings and take any other action necessary or advisable to, among other things, maintain and preserve the lien and security interest of the indenture and the priority thereof. We will not, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • except as expressly permitted by the indenture, the series supplement, or other basic documents, sell, transfer, convey, exchange or otherwise dispose of any of our properties or assets, including those included in the trust estate unless in accordance with the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • claim any credit on, or make any deduction from the principal or premium, if any, or interest payable in respect of, the system restoration bonds, other than amounts properly withheld from such payments under the Internal Revenue Code, the Treasury Regulations promulgated thereunder or other tax laws or assert any claim against any present or former holder of the system restoration bonds because of the payment of taxes levied or assessed upon any part of the trust estate,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • terminate our existence, dissolve or liquidate in whole or in part, except as otherwise permitted by the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • permit the validity or effectiveness of the indenture or other basic documents to be impaired or the lien to be amended, hypothecated, subordinated, terminated or discharged,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • permit any person to be released from any covenants or obligations with respect to the system restoration bonds except as expressly permitted by the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • permit any lien, charge, security interest, pledge, equity or other encumbrance, other than the lien of the indenture, to be created on or extend to or otherwise arise upon or burden the trust estate 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),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • permit the lien of the indenture not to constitute a valid first priority perfected security interest in the trust estate securing the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • elect to be classified as an association taxable as a corporation for U.S. federal income tax purposes or otherwise take any action inconsistent with our treatment for U.S. federal income tax purposes as a disregarded entity not separate from our sole owner for U.S. federal income tax purposes,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • change our name, identity or structure or the location of our chief executive office or state of formation, unless, at least 10 business days prior to the effective date of any such change, we deliver to the trustee, with copies to the rating agencies, such documents, instruments or agreements, executed by us, as are necessary to reflect such change and to continue the perfection of the security interest of the indenture and the series supplement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • take any action which is the subject of a rating agency condition without satisfying the rating agency condition,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • except to the extent permitted by applicable law, voluntarily suspend or terminate our filing obligations with the SEC as described in the indenture, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • issue any debt obligations other than system restoration bonds permitted by the indenture.

We may not engage in any business other than financing, purchasing, owning, administering, managing and servicing system restoration property and the assets in the trust estate and the issuance of the system restoration bonds in the manner contemplated by the financing order and the indenture and other basic documents and activities incidental thereto.

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We may not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except for the system restoration bonds permitted by the indenture and any other indebtedness expressly permitted by or arising under the basic documents. Also, we may 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 doing so or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stock 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, except as otherwise contemplated by the indenture, the sale agreement, or the servicing agreement. We will not make any expenditure for capital assets or lease any capital asset other than the system restoration property purchased from CenterPoint Houston pursuant to, and in accordance with, the sale agreement. Except in accordance with the indenture, we shall not, directly or indirectly, pay any dividend or make any distribution to any member in respect of its membership interest, redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or similar security or set aside or otherwise segregate any amounts for any such purpose; provided, however, that, if no event of default has occurred and is continuing or would be caused thereby, we may make or cause to be made distributions to any member in respect of its membership interest pursuant to the indenture to the extent that such distributions would not cause the balance of the capital subaccount to decline below the required capital amount. We will not, directly or indirectly, make payments to or distributions from the collection account except in accordance with the indenture and other basic documents.

The servicer will deliver to the trustee the annual accountant's report, compliance certificates and reports regarding distributions and other statements required by the servicing agreement. Please read "The Servicing Agreement" in this prospectus.

#### Access to the List of Holders of the System Restoration Bonds
Any holder of the system restoration bonds, or group of holders of the system restoration bonds, owning at least 10% of the outstanding amount of the system restoration bonds may, by written request to the trustee, obtain access to the list of all holders of the system restoration bonds maintained by the trustee for the purpose of communicating with other holders of the system restoration bonds with respect to their rights under the indenture or the system restoration bonds; provided, that the trustee gives prior written notice to us of such request.

#### We Must File an Annual Compliance Statement
We will deliver to the trustee and each rating agency not later than March 31 of each year (commencing with March 31, 2026), an officer's certificate stating, as to the responsible officer signing such officer's certificate, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • a review of our activities during the preceding twelve months ended December 31 (or, in the case of the first such officer's certificate, since the date of the indenture) and of performance under the indenture has been made; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • to the best of such responsible officer's knowledge, based on such review, we have in all material respects complied with all conditions and covenants under the indenture throughout such period, or, if there has been a default in the compliance of any such condition or covenant, specifying each such default known to the responsible officer and the nature and status thereof.

#### The Trustee Must Provide an Annual Report to All Holders of the System Restoration Bonds
If required by the Trust Indenture Act, the trustee will be required to transmit each year to all holders of the system restoration bonds a brief report. This report may state, in accordance with the requirements of the Trust Indenture Act, among other items:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the trustee's eligibility and qualification to continue as the trustee under the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any amounts advanced by it under the indenture,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the amount, interest rate and maturity date of specific indebtedness owed by us to the trustee in the trustee's individual capacity,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the property and funds physically held by the trustee, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any action taken by it that materially affects the system restoration bonds and that has not been previously reported.

#### What Will Trigger Satisfaction and Discharge of the Indenture
The indenture will cease to be of further effect with respect to the system restoration bonds, and the trustee, on our reasonable written demand and at our expense, will execute instruments acknowledging satisfaction and discharge of the indenture with respect to the system restoration bonds, when:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • either (i) all system restoration bonds which have already been authenticated and delivered, with certain exceptions set forth in the indenture, have been delivered to the trustee for cancellation or (ii) either (A) scheduled final payment date has occurred with respect to all system restoration bonds that have not been delivered to the trustee for cancellation or (B) the system restoration bonds will be due and payable on their respective scheduled final payment dates within one year, and we have irrevocably deposited in trust with the trustee cash and/or U.S. government obligations specified in the indenture, in an amount sufficient to make payments of principal of, premium, if any, and interest on the system restoration bonds not theretofore delivered to the trustee for cancellation, ongoing qualified costs and all other sums payable to us pursuant to the indenture with respect to the system restoration bonds when scheduled to be paid and to discharge the entire indebtedness on those system restoration bonds not previously delivered to the trustee when due,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we have paid or caused to be paid all other sums payable by us under the indenture with respect to the system restoration bonds, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we have delivered to the trustee an officer's certificate, an opinion of external counsel, and if required by the Trust Indenture Act or the trustee, a certificate from a firm of independent certified public accountants, each stating that there has been compliance with the conditions precedent in the indenture or relating to the satisfaction and discharge of the indenture with respect to the system restoration bonds.

#### Our Legal Defeasance and Covenant Defeasance Options
We may, at any time, terminate:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • all of our obligations under the indenture with respect to the system restoration bonds, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • our obligations to comply with some of the covenants in the indenture, including some of the covenants described above under "— Our Covenants."

The legal defeasance option is our right to terminate at any time our obligations under the indenture with respect to the system restoration bonds. The covenant defeasance option is our right at any time to terminate our obligations to comply with some of the covenants in the indenture. We may exercise the legal defeasance option with respect to the system restoration bonds notwithstanding our prior exercise of the covenant defeasance option. If we exercise the legal defeasance option, the system restoration bonds will be entitled to payment only from the funds or other obligations set aside under the indenture for payment thereof on the scheduled final payment date therefor as described below. The system restoration bonds will not be subject to payment through acceleration prior to the scheduled final payment date. If we exercise the covenant defeasance option, the final payment of the system restoration bonds may not be accelerated because of an event of default relating to a default in the observance or performance of our covenants or as described above in "— What Constitutes an Event of Default on the System Restoration Bonds."

We may exercise the legal defeasance option or the covenant defeasance option with respect to system restoration bonds only if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we have irrevocably deposited or caused to be irrevocably deposited in trust with the trustee cash and/or U.S. government obligations specified in the indenture that through the scheduled payments

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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 system restoration bonds not theretofore delivered to the trustee for cancellation and ongoing qualified costs and all other sums payable under the indenture by us with respect to the system restoration bonds when scheduled to be paid and to discharge the entire indebtedness on the system restoration bonds when due,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we deliver to the trustee a certificate from a nationally recognized firm of independent registered public accountants expressing its opinion that the payments of principal of and interest on the deposited U.S. government obligations when due and without reinvestment plus any cash deposited in the defeasance subaccount will provide cash at times and in sufficient amounts to pay in respect of the system restoration bonds principal in accordance with the expected sinking fund schedule therefor, interest when due and ongoing qualified costs and all other sums payable by us under the indenture with respect to the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • in the case of the legal defeasance option, 95 days pass after the deposit is made and during the 95-day period no default relating to events of our bankruptcy, insolvency, receivership or liquidation occurs and is continuing at the end of the period,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • no default has occurred and is continuing on the day of this deposit and after giving effect thereto,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • in the case of an exercise of the legal defeasance option, we shall have delivered to the trustee an opinion of external counsel stating that we have received from, or there has been published by, the Internal Revenue Service a ruling, or since the date of execution of the indenture, there has been a change in the applicable federal income tax law, and in either case confirming that the holders of the system restoration bonds will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such legal defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the legal defeasance had not occurred,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • in the case of an exercise of the covenant defeasance option, we shall have delivered to the trustee an opinion of external counsel to the effect that the holders of the system restoration bonds will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such covenant defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the covenant defeasance had not occurred,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we deliver to the trustee a certificate of one of our officers and an opinion of counsel, each stating that all conditions precedent to the legal defeasance option or the covenant defeasance option, as applicable, have been complied with as required by the indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we deliver to the trustee an opinion of external counsel to the effect that (a) in a case under the Bankruptcy Code in which CenterPoint Houston (or any of its affiliates, other than us) is the debtor, the court would hold that the deposited moneys or U.S. government obligations would not be in the bankruptcy estate of CenterPoint Houston (or any of its affiliates, other than us, that deposited the moneys or U.S. government obligations); and (b) in the event CenterPoint Houston (or any of its affiliates, other than us, 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 CenterPoint Houston (or any of its affiliates, other than us, that deposited the moneys or U.S. government obligations) and us so as to order substantive consolidation under the Bankruptcy Code of our assets and liabilities with the assets and liabilities of CenterPoint Houston or such other affiliate, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • each rating agency has notified us and the trustee that the exercise of the proposed defeasance option will not result in a downgrade or withdrawal of the then current rating of any then outstanding system restoration bonds.

#### No Recourse to Others
No recourse may be taken, directly or indirectly, by the holders of the system restoration bonds with respect to our obligations on the system restoration bonds, under the indenture or the series supplement or any certificate or other writing delivered in connection therewith, against (1) us, other than from the trust

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estate securing the system restoration bonds, (2) any owner of a beneficial interest in us (including CenterPoint Houston) or (3) any shareholder, partner, owner, beneficiary, agent, officer, director or employee of the trustee, the managers or any owner of a beneficial interest in us (including CenterPoint Houston) in its individual capacity, or of any successor or assign or any of them in their respective individual or corporate capacities, except as any such person may have expressly agreed in writing.

Notwithstanding any provision of the indenture or the series supplement to the contrary, holders of the system restoration bonds shall look only to the trust estate securing the system restoration bonds with respect to any amounts due to the holders of the system restoration bonds under the indenture and the system restoration bonds, and, in the event such trust estate securing the system restoration bonds is insufficient to pay in full the amounts owed on the system restoration bonds, shall have no recourse against us in respect of such insufficiency. Each holder of a system restoration bond by accepting a system restoration bond specifically confirms the non-recourse nature of these obligations and waives and releases all such liability. The waiver and release are part of consideration for issuance of the system restoration bonds.

#### Governing Law
The indenture will be governed by and construed in accordance with the laws of the State of Texas and the obligations, rights and remedies of the parties thereunder shall be determined in accordance with such laws.

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#### THE TRUSTEE
U.S. Bank Trust Company, National Association, a national banking association ("U.S. Bank Trust Co."), will be the trustee, and will act as the paying agent and registrar for the system restoration bonds. U.S. Bank National Association ("U.S. Bank N.A.") made a strategic decision to reposition its corporate trust business by transferring substantially all of its corporate trust business to its affiliate, U.S. Bank Trust Co., a non-depository trust company (U.S. Bank N.A. and U.S. Bank Trust Co. are collectively referred to herein as "U.S. Bank"). Upon U.S. Bank Trust Co.'s succession to the business of U.S. Bank N.A., it became a wholly owned subsidiary of U.S. Bank N.A. The trustee will maintain the accounts of the issuing entity in the name of the trustee at U.S. Bank N.A.

U.S. Bancorp, with total assets exceeding $686 billion as of June 30, 2025, is the parent company of U.S. Bank N.A., the fifth largest commercial bank in the United States. As of June 30, 2025, U.S. Bancorp operated over 2,000 branch offices in 26 states. A network of specialized U.S. Bancorp offices across the nation provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses, and institutions.

U.S. Bank has one of the largest corporate trust businesses in the country with office locations in 44 domestic and 3 international cities. The indenture will be administered from U.S. Bank's corporate trust office located at 190 South LaSalle Street, 7th Floor, Chicago, Illinois 60603, Attention: CenterPoint Energy Restoration Bond Company II, LLC, and its office for certificate transfer purposes is at 111 Fillmore Avenue East, St. Paul, Minnesota 55107, Attention: Bondholder Services.

U.S. Bank has provided corporate trust services since 1924. As of June 30, 2025, U.S. Bank was acting as trustee with respect to over 152,000 issuances of securities with an aggregate outstanding principal balance of over $6.6 trillion. This portfolio includes corporate and municipal bonds, mortgage-backed and asset-backed securities and collateralized debt obligations.

The trustee shall make each monthly statement available to the holders of the system restoration bonds via the trustee's internet website at https://pivot.usbank.com. Holders of the system restoration bonds with questions may direct them to the trustee's bondholder services group at (800) 934-6802.

U.S. Bank serves or has served as trustee, paying agent and registrar on several issues of utility securitization securities.

U.S. Bank N.A. and other large financial institutions have been sued in their capacity as trustee or successor trustee for certain residential mortgage-backed securities ("RMBS") trusts. The complaints, primarily filed by investors or investor groups against U.S. Bank N.A. and similar institutions, allege the trustees caused losses to investors as a result of alleged failures by the sponsors, mortgage loan sellers and servicers to comply with the governing agreements for these RMBS trusts. Plaintiffs generally assert causes of action based upon the trustees' purported failures to enforce repurchase obligations of mortgage loan sellers for alleged breaches of representations and warranties, notify securityholders of purported events of default allegedly caused by breaches of servicing standards by mortgage loan servicers and abide by a heightened standard of care following alleged events of default.

U.S. Bank N.A. denies liability and believes that it has performed its obligations under the RMBS trusts in good faith, that its actions were not the cause of losses to investors, that it has meritorious defenses, and it has contested and intends to continue contesting the plaintiffs' claims vigorously. However, U.S. Bank N.A. cannot assure you as to the outcome of any of the litigation, or the possible impact of these litigations on the trustee or the RMBS trusts.

On March 9, 2018, a law firm purporting to represent fifteen Delaware statutory trusts (the "DST") that issued securities backed by student loans (the "Student Loans") filed a lawsuit in the Delaware Court of Chancery against U.S. Bank N.A. in its capacities as indenture trustee and successor special servicer, and three other institutions in their respective transaction capacities, with respect to the DSTs and the Student Loans. This lawsuit is captioned The National Collegiate Student Loan Master Trust I, et al. v. U.S. Bank National Association, et al., C.A. No. 2018-0167-JRS (Del. Ch.) (the "NCMSLT Action"). The complaint, as amended on June 15, 2018, alleged that the DSTs have been harmed as a result of purported misconduct or omissions by the defendants concerning administration of the trusts and special servicing of the

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Student Loans. Since the filing of the NCMSLT Action, certain Student Loan borrowers have made assertions against U.S. Bank N.A. concerning special servicing that appear to be based on certain allegations made on behalf of the DSTs in the NCMSLT Action.

U.S. Bank N.A. has filed a motion seeking dismissal of the operative complaint in its entirety with prejudice pursuant to Chancery Court Rules 12(b)(1) and 12(b)(6) or, in the alternative, a stay of the case while other prior filed disputes involving the DSTs and the Student Loans are litigated. On November 7, 2018, the Court ruled that the case should be stayed in its entirety pending resolution of the first-filed cases. On January 21, 2020, the Court entered an order consolidating for pretrial purposes the NCMSLT Action and three other lawsuits pending in the Delaware Court of Chancery concerning the DSTs and the Student Loans, which remains pending.

U.S. Bank N.A. denies liability in the NCMSLT Action and believes it has performed its obligations as indenture trustee and special servicer in good faith and in compliance in all material respects with the terms of the agreements governing the DSTs and that it has meritorious defenses. It has contested and intends to continue contesting the plaintiffs' claims vigorously.

The trustee may resign at any time upon 30 days' notice by so notifying us. The holders of not less than a majority in of the outstanding principal amount of the system restoration bonds may remove the trustee by so notifying the trustee in writing no less than 31 days prior to the date of removal and may appoint a successor trustee. We will remove the trustee by written notice if the trustee ceases to be eligible to continue in this capacity under the indenture, the trustee is adjudged bankrupt or insolvent, a receiver or other public officer takes charge of the trustee or its property, the trustee becomes incapable of acting or the trustee fails to provide us with any information reasonably requested pertaining to the trustee and necessary for us to comply with our reporting obligations under the Exchange Act or Regulation AB, and such failure is not resolved within a reasonable period of time. If the trustee gives notice of resignation or is removed or a vacancy exists in the office of trustee for any reason, we will be obligated promptly to appoint a successor trustee eligible under the indenture. We are responsible, initially, for payment of the expenses associated with any such removal or resignation, but any such expenses will be treated as an operating expense and paid out of the general subaccount on a payment date in accordance with the priority of payments set forth in "Description of the System Restoration Bonds — How Funds in the Collection Account Will Be Allocated" in this prospectus. No resignation or removal of the trustee will become effective until acceptance of the appointment by a successor trustee. The trustee shall at all times satisfy the requirements of certain provisions of the 1940 Act and have a combined capital and surplus of at least $50 million and a long-term debt or issuer rating from Moody's and S&P in one of its generic rating categories that specifies investment grade. If the trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business or assets to, another entity, the resulting, surviving or transferee entity shall without any further action be the successor trustee; *provided*, *however*, that if such successor trustee is not eligible under the indenture, the successor trustee will be replaced in accordance with the terms of the indenture. We and our affiliates may, from time to time, maintain various banking, investment banking and trust relationships with the trustee and its affiliates. Please read "The Sale Agreement" and "The Servicing Agreement" in this prospectus for further information.

The trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers, provided that its conduct does not constitute willful misconduct, negligence or bad faith. The trustee shall not be deemed to have notice or knowledge of any default or event of default unless a responsible officer of the trustee has actual knowledge thereof or the trustee has received written notice thereof pursuant to the indenture. The trustee shall not be required to take any action it is directed to take under the indenture if the trustee determines in good faith that the action so directed is in conflict with applicable law or with the indenture and series supplement, or would involve the trustee in personal liability or expense. We have agreed to indemnify the trustee and its officers, directors, employees and agents against any and all cost, damage, loss, liability, tax or expense (including reasonable attorneys' fees and expenses) incurred by it in connection with the administration and enforcement of the indenture (including the enforcement of the indemnification obligations therein), the series supplement and the other basic documents and the performance of its duties under the indenture, the series supplement and the other basic documents, *provided* that we are not required to pay any expense or indemnify against any loss, liability or expense incurred by the trustee through the trustee's own willful misconduct, negligence

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or bad faith. Please read "Prospectus Summary of Terms — Priority of Payments" and "Description of the System Restoration Bonds — How Funds in the Collection Account Will Be Allocated" in this prospectus for further information.

We, CenterPoint Houston and our respective affiliates may from time to time enter into normal banking and trustee relationships with U.S. Bank Trust Company, National Association and its affiliates. U.S. Bank Trust Company, National Association and its affiliates, among other relationships, are (i) lenders under the revolving credit facilities and term loans of CenterPoint Houston, CenterPoint Energy and their affiliates, (ii) the trustee under the indentures governing various debt securities of affiliates of CenterPoint Energy, including CenterPoint Houston, and (iii) issuing and paying agents under the commercial paper programs of CenterPoint Energy and its affiliates. No relationships currently exist between CenterPoint Houston, us and our respective affiliates, on the one hand, and U.S. Bank Trust Company, National Association and its affiliates, on the other hand, that would be outside the ordinary course of business or on terms other than would be obtained in an arm's length transaction with an unrelated third party.

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#### WEIGHTED AVERAGE LIFE AND YIELD CONSIDERATIONS FOR THE SYSTEM RESTORATION BONDS
The rate of principal payments, the amount of each interest payment and the actual final payment date of each tranche of the system restoration bonds and the weighted average life thereof will depend primarily on the timing of receipt of collected system restoration charges by the trustee and the true-up mechanism. The aggregate amount of collected system restoration charges and the rate of principal amortization on the system restoration bonds will depend, in part, on actual electricity usage and electricity demands, and the rate of delinquencies and write-offs by the REPs. The system restoration charges are required to be adjusted from time to time based in part on the actual rate of collected system restoration charges. However, we can give no assurance that the servicer will be able to forecast accurately actual electricity usage or implement adjustments to the system restoration charges that will cause collected system restoration charges to be received at any particular rate. Please read "Risk Factors — Servicing Risks," "— Other Risks Associated with an Investment in the System Restoration Bonds" and "CenterPoint Houston's Financing Order — Statutory True-Ups" in this prospectus.

If the servicer receives system restoration charges at a slower rate than expected, the system restoration bonds may be retired later than expected. Except in the event of the acceleration of the final payment date of the system restoration bonds after an event of default, however, the system restoration bonds will not be paid at a rate faster than that contemplated in the expected amortization schedule of the system restoration bonds even if the receipt of collected system restoration charges is accelerated. Instead, receipts in excess of the amounts necessary to amortize the system restoration bonds in accordance with the expected amortization schedule, to pay interest and related fees and expenses and to fund subaccounts of the collection account will be allocated to the excess funds subaccount. Acceleration of the final maturity date after an event of default in accordance with the terms thereof may result in payment of principal earlier than the related scheduled final payment dates. A payment on a date that is earlier than forecast might result in a shorter weighted average life, and a payment on a date that is later than forecast might result in a longer weighted average life. In addition, if a larger portion of the delayed payments on the system restoration bonds is received in later years, the system restoration bonds may have a longer weighted average life.

#### Weighted Average Life Sensitivity
Weighted average life refers to the average amount of time from the date of issuance of a security until each dollar of principal of the security has been repaid to the investor. The rate of principal payments on each tranche of the system restoration bonds, the aggregate amount of each interest payment on each tranche of the system restoration bonds and the actual final payment date of each tranche of the system restoration bonds will depend on the timing of the servicer's receipt of system restoration charges. Changes in the expected weighted average lives of the tranches of the system restoration bonds in relation to variances in actual electricity consumption levels from forecast levels are shown below. Severe stress cases on electricity consumption result in very minor changes, if any, in the weighted average lives of each tranche.

The system restoration bonds may be retired later than expected. Except in the event of an acceleration of the expected amortization schedule of the system restoration bonds after an event of default, the system restoration bonds will not be paid at a rate faster than that contemplated in the expected amortization schedule for the system restoration bonds even if the receipt of system restoration charges collections is accelerated. Instead, receipts in excess of the amounts necessary to amortize the system restoration bonds in accordance with the expected amortization schedule, to pay interest, ongoing transaction costs and any other related fees and expenses, and to replenish draws on deficiencies in the capital subaccount will be allocated to the excess funds subaccount. Amounts on deposit in the excess funds subaccount will be taken into consideration in calculating the next true-up adjustment. Acceleration of the final maturity date of the system restoration bonds after an event of default in accordance with the terms thereof may result in payment of principal earlier than the scheduled final payment date. A payment on a date that is earlier than forecast might result in a shorter weighted average life, and a payment on a date that is later than forecast might result in a longer weighted average life. In addition, if a larger portion of the delayed payments on the system restoration bonds is received in later years, the system restoration bonds may have a longer weighted average life.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **-5% <br> (Standard Deviations from Mean)**  | **-5% <br> (Standard Deviations from Mean)**  | **-15% <br> (Standard Deviations from Mean)**  | **-15% <br> (Standard Deviations from Mean)**  |
| **Tranche**  | **Expected Weighted <br> Average Life <br> (Years)**  | **Weighted <br> Average Life <br> (Years)**  | **Change (Days)**  | **Weighted <br> Average Life <br> (Years)**  | **Change (Days)**  |
| A-1 |  |  |  |  |  |
| A-2 |  |  |  |  |  |

---

There can be no assurance that the weighted average lives of the various tranches of the system restoration bonds will be as shown in the above table.

For the purposes of preparing the chart above, the following assumptions, among others, have been made: (i) the forecast error is constant over the life of the system restoration bonds and is equal to an overestimate of electric customer counts of 5% (standard deviations from the mean) or 15% (standard deviations from the mean) as stated in the chart above, (ii) the servicer makes timely and accurate filings to true-up the system restoration charges annually, (iii) customer charge-off rates are held constant at approximately % for the residential class and approximately % for all other classes of customers, (iv) REPs remit all system restoration charges 35 calendar days after such charges are billed, (v) the system restoration bonds are issued on , 2025, (vi) there is no acceleration of the final maturity date of the system restoration bonds, and (vii) operating expenses are equal to projections. There can be no assurance that the weighted average lives of the system restoration bonds will be as shown above.

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#### ESTIMATED ANNUAL FEES AND EXPENSES
Estimated initial annual fees and expenses payable from the system restoration charges are shown below. For the priorities in application of funds under the indenture and the series supplement, please refer to "Description of the System Restoration Bonds — How Funds in the Collection Account Will Be Allocated" in this prospectus.

As set forth in the table below, we are obligated to pay fees to the trustee, CenterPoint Houston, as servicer, CenterPoint Houston, as administrator and our independent manager. We are also obligated to pay CenterPoint Houston an annual return on its invested capital as described below. The following table illustrates these arrangements:

---

| | | |
|:---|:---|:---|
| **Recipient**  | **Source of payment**  | **Estimated fees and expenses payable**  |
| Trustee | System restoration charges and investment earnings | $4,000 per annum, plus certain additional expenses and indemnities, if applicable |
| Servicer | System restoration charges and investment earnings | $301,141 per annum (so long as CenterPoint Houston is servicer), payable in installments of $150,570 on each payment date (which shall be prorated for the first payment date), plus reimbursable expenses |
| Administrator | System restoration charges and investment earnings | $100,000 per annum payable in installments of $50,000 on each payment date (which shall be prorated for the first payment date), plus reimbursable expenses |
| Independent manager  | System restoration charges and investment earnings | $3,500 per annum |

---

Pursuant to the financing order, CenterPoint Houston shall also be entitled to receive an annual return on its invested capital, which shall equal the actual amounts earned from investments of CenterPoint Houston's capital contribution which has been deposited into the capital subaccount (which contribution shall be 0.5% of the original principal amount of the system restoration bonds).

If CenterPoint Houston or any of its affiliates is not the servicer, an amount agreed upon by the successor servicer and the trustee (in accordance with direction from the holders of the system restoration bonds), provided, that the fee will not, unless the PUCT consents, exceed 0.60% of the initial principal amount of the system restoration bonds on an annualized basis.

The system restoration charges will also be used by the trustee for the payment of our other qualified costs and expenses relating to the system restoration bonds, such as accounting and audit fees, rating agency fees and legal fees.

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#### THE SALE AGREEMENT
The following summary describes particular material terms and provisions of the sale agreement pursuant to which we will purchase the system restoration property from CenterPoint Houston. We have filed the form of the sale agreement with the SEC as an exhibit to the registration statement of which this prospectus forms a part, and we urge you to read such document in its entirety.

#### CenterPoint Houston's Sale and Assignment of the System Restoration Property
In connection with the issuance of the system restoration bonds, CenterPoint Houston, as the seller, will offer and sell the system restoration property to us pursuant to the terms and conditions of the sale agreement. The sale of the system restoration property to us by CenterPoint Houston will be financed through the corresponding issuance of the system restoration bonds. Pursuant to the sale agreement, CenterPoint Houston will sell, transfer, assign, set over and otherwise convey to us concurrently with the issuance and sale of the system restoration bonds to the underwriters, without recourse, except as expressly provided therein, its rights, title and interests under the financing order. The system restoration property will represent all rights and interests of CenterPoint Houston under the financing order that are sold and transferred to us pursuant to the sale agreement and the related bill of sale, including the right to impose, collect and receive the system restoration charges authorized in the financing order with respect to the system restoration bonds, to file for periodic adjustments to such charges as provided in the financing order and all revenue and collections arising from the foregoing rights and interests. The system restoration property does not include the rights of CenterPoint Houston to earn and receive a rate of return on its invested capital in us, to receive administration and servicer fees or to use CenterPoint Houston's proceeds from the sale of the system restoration property to us. We will apply the net proceeds that we receive from the sale of the system restoration bonds to the purchase of the system restoration property. System restoration property is known as "transition property" in the Securitization Act.

As provided by the Securitization Act, our purchase of the system restoration property from CenterPoint Houston will be pursuant to the sale agreement, which will expressly provide that such transfer is a sale, will be a true sale, and is not a secured transaction, and all title to the system restoration property, both legal and equitable, will pass to us. Under the Securitization Act, such sale will constitute a true sale under state law whether or not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • we have any recourse against CenterPoint Houston,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston retains any equity interest in the system restoration property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston acts as a collector of the system restoration charges, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston treats the transfer as a financing for tax, financial reporting or other purposes.

Under the Securitization Act, all rights and interests under the financing order will become system restoration property upon transfer of such rights to us by CenterPoint Houston in connection with the issuance of the system restoration bonds. The system restoration property will constitute our present property right for purposes of contracts concerning the sale or pledge of property.

Upon the execution and delivery of the sale agreement and bill of sale and the filing of a notice with the Secretary of State of the State of Texas in accordance with the rules prescribed under the Securitization Act, our purchase of the system restoration property from CenterPoint Houston will be perfected as against all third persons, including subsequent judicial or other lien creditors. In accordance with the Securitization Act, a valid and enforceable lien and security interest in the system restoration property will be created upon the issuance of the financing order and the execution and delivery of the sale agreement. The lien and security interest attaches automatically from the time that value is received for the system restoration bonds and, on perfection through the timely filing of a notice with the Secretary of State of the State of Texas in accordance with the rules prescribed under the Securitization Act, will be a continuously perfected lien and security interest in the system restoration property and all proceeds of the system restoration property.

The records and computer systems of CenterPoint Houston will reflect the sale and assignment of CenterPoint Houston's rights and interests under the financing order to us. However, we expect that the

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system restoration bonds will be reflected as debt on CenterPoint Houston's financial statements. In addition, we anticipate that the system restoration bonds will be treated as debt of Utility Holding for U.S. federal income tax purposes. Please read "Material U.S. Federal Income Tax Consequences" in this prospectus.

#### Conditions to the Sale of the System Restoration Property
CenterPoint Houston's obligation to sell, and our obligation to purchase, the system restoration property on the issuance date, are both subject to and conditioned upon the satisfaction or waiver of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • on or prior to the issuance date, CenterPoint Houston must deliver to us a duly executed bill of sale identifying the system restoration property to be conveyed on that date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • as of the issuance date, the representations and warranties of CenterPoint Houston in the sale agreement must be true and correct in all material respects and no material breach by CenterPoint Houston of its covenants in the sale agreement shall exist, and CenterPoint Houston shall have delivered to us and the trustee an officer's certificate to such effect and no default by the servicer under the servicing agreement shall have occurred and be continuing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • as of the issuance date, we must have sufficient funds available to pay the purchase price for the system restoration property to be conveyed, all conditions set forth in the indenture to the issuance of the system restoration bonds must have been satisfied or waived, and CenterPoint Houston is not insolvent and will not have been made insolvent by the sale of the system restoration property and CenterPoint Houston is not aware of any pending insolvency with respect to itself;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston must deliver to each rating agency and to us any opinion of counsel requested by the ratings agencies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston must deliver to the trustee and to us an officer's certificate confirming the satisfaction of each of these conditions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston shall have received the purchase price in funds immediately available on the issuance date.

#### CenterPoint Houston's Representations and Warranties
In the sale agreement, CenterPoint Houston will make representations and warranties to us, as of the issuance date, to the effect, among other things, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.

subject to clause 9 below (assumptions used in calculating the system restoration charges as of the issuance date), all written information, as amended or supplemented from time to time, provided by CenterPoint Houston to us with respect to the system restoration property (including the financing order and the issuance advice letter) is correct in all material respects;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.

it is the intention of the parties to the sale agreement that, other than for specified tax purposes, the sale, transfer, assignment, setting over and conveyance of the system restoration property contemplated by the sale agreement constitutes a sale or other absolute transfer of all right, title and interest of CenterPoint Houston in, to and under the financing order transferred to us whereupon (subject to the effectiveness of the issuance advice letter) such rights and interests shall become the system restoration property; upon execution and delivery of the sale agreement and the related bill of sale and payment of the purchase price, CenterPoint Houston will have no right, title or interest in, to or under the system restoration property; and that the system restoration

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property would not be a part of the estate of CenterPoint Houston, as debtor, in the event of the filing of a bankruptcy petition by or against CenterPoint Houston under any bankruptcy law; no portion of the system restoration property has been sold, transferred, assigned, pledged or otherwise conveyed by CenterPoint Houston to any person other than us, and, to CenterPoint Houston's knowledge, no security arrangement, financing statement or equivalent security or lien instrument listing CenterPoint Houston, as debtor, and all or a portion of the system restoration property, as the trust estate securing the system restoration bonds, is on file or of record in Texas, except such as may have been filed or recorded in favor of us or the trustee in connection with the basic documents;

&nbsp;&nbsp;&nbsp;&nbsp;3. a. CenterPoint Houston is the sole owner of all of the rights and interests under the financing order being sold to us on the issuance date,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; b.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; c.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.

the financing order has been issued by the PUCT in accordance with the Securitization Act, the financing order and the process by which it was issued comply with all applicable laws, rules and regulations of the State of Texas and the federal laws of the United States, and the financing order is final, non-appealable and in full force and effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.

as of the date of issuance of the system restoration bonds, the system restoration bonds will be entitled to the protections provided by the Securitization Act and the financing order, and the financing order and the system restoration charges authorized therein will have become irrevocable and not subject to reduction, impairment or adjustment by further action of the PUCT, except as permitted by Section 39.307 of the Securitization Act, and the issuance advice letter has been filed in accordance with the financing order. The PUCT has not issued any order prior to noon on the fourth business day after submission of the issuance advice letter that the system restoration bonds do not comply with ordering paragraph 5 of the financing order and the initial system restoration charges and the final terms of the system restoration bonds set forth in the issuance advice letter have become effective. No other approval, authorization, consent, order or other action of, or filing with any governmental authority is required in connection with the creation of the system restoration property, except those that have been obtained or made;

&nbsp;&nbsp;&nbsp;&nbsp;6. a. under the Securitization Act, the State of Texas has pledged that it will not take or permit any action that would impair the value of system restoration property or, except as permitted in Section 39.307 of the Securitization Act, reduce, alter or impair system restoration charges to be imposed, collected, and remitted to financing parties under the Securitization Act until the principal, interest and premium, if any, and any other charges incurred and contracts to be performed in connection with the related system restoration bonds have been paid and performed in full

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; b.

under the laws of the State of Texas and the federal laws of the United States, a reviewing court of competent jurisdiction would hold that (x) the State of Texas could not constitutionally

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take any action of a legislative character, including the repeal or amendment of the Securitization Act, which would substantially limit, alter or impair the system restoration property or other rights vested in the holders of the system restoration bonds pursuant to the financing order, or substantially alter, impair or reduce the value or amount of the system restoration property, unless that action is a reasonable exercise of the State of Texas's sovereign powers based on reasonable conditions and of a character reasonable and appropriate to the emergency or other significant and legitimate public purpose justifying that action, and, (y) under the takings clauses of the State of Texas and United States Constitutions, if the court concludes that the system restoration property is protected by the takings clauses, the State of Texas could not repeal or amend the Securitization Act or take any other action in contravention of its pledge referred to in subsection (a) above without paying just compensation to the holders of the system restoration bonds, as determined by a court of competent jurisdiction, if doing so would constitute a permanent appropriation of a substantial property interest of the holders of the system restoration bonds in the system restoration property and deprive the holders of the system restoration bonds of their reasonable expectations arising from their investments in the system restoration bonds; however, there is no assurance that, even if a court were to award just compensation, it would be sufficient to pay the full amount of principal and of interest on the system restoration bonds, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.

there is no order by any court providing for the revocation, alteration, limitation or other impairment of the Securitization Act, the financing order or issuance advice letter, the system restoration property or the system restoration charges or any rights arising under any of them or that seeks to enjoin the performance of any obligations under the financing order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.

under the laws of the State of Texas and the federal laws of the United States in effect on the issuance date, no other approval, authorization, consent, order or other action of, or filing with any court, federal or state regulatory body, administrative agency or governmental instrumentality is required in connection with the creation or transfer of CenterPoint Houston's rights and interests related to the system restoration bonds under the financing order and our purchase of the system restoration property from CenterPoint Houston, except those that have been obtained or made;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.

based on information available to CenterPoint Houston on the issuance date, the assumptions used in calculating the system restoration charges in the issuance advice letter are reasonable and made in good faith; however, notwithstanding the foregoing, CenterPoint Houston makes no representation or warranty, express or implied, that amounts actually collected arising from the system restoration charges will in fact be sufficient to meet the payment obligations on the system restoration bonds or that the assumptions used in calculating such system restoration charges will in fact be realized;

&nbsp;&nbsp;&nbsp;&nbsp;10. a. the transfer of CenterPoint Houston's rights and interests related to the system restoration bonds under the financing order and our purchase of the system restoration property from CenterPoint Houston pursuant to the sale agreement, the system restoration property will constitute a present property right,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; b.

upon the effectiveness of the issuance advice letter, the transfer of CenterPoint Houston's rights and interests under the financing order and our purchase of the system restoration property from CenterPoint Houston pursuant to the sale agreement, the system restoration property will include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1)

the right to impose, collect and receive the system restoration charges, including the right to receive system restoration charges in amounts and at times sufficient to pay principal and interest on the system restoration bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2)

all rights and interest of CenterPoint Houston under the financing order, except the rights of CenterPoint Houston to earn and receive a rate of return on its invested capital in us, to receive administration and servicer fees, or to use its remaining portion of the purchase price proceeds from the sale of the system restoration property to us,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (3)

the rights to file for periodic adjustments of the system restoration charges as provided in the financing order, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (4)

all revenues and collections resulting from the system restoration charges;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; c.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.

CenterPoint Houston is a limited liability company duly organized and in good standing under the laws of the State of Texas, with limited liability company power and authority to own its properties and conduct its business as currently owned or conducted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12.

CenterPoint Houston has the limited liability power and authority to obtain the financing order and to execute and deliver the sale agreement and to carry out its terms, to own the rights and interests under the financing order, and to sell and assign the rights and interests under the financing order to us, whereupon (subject to the effectiveness of the issuance advice letter) such rights and interests will become the system restoration property, and the execution, delivery and performance of the sale agreement have been duly authorized by CenterPoint Houston by all necessary limited liability company action;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.

the sale agreement constitutes a legal, valid and binding obligation of CenterPoint Houston, enforceable against CenterPoint Houston in accordance with its terms, subject to customary exceptions relating to bankruptcy, creditors' rights and equitable principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 15.

except for filings under the UCC as enacted in Delaware and each other applicable jurisdiction and the Securitization Act, no approval, authorization, consent, order or other action of, or filing with, any court, federal or state regulatory body, administrative agency or governmental instrumentality is required under any applicable law, rule or regulation in connection with the execution and delivery by CenterPoint Houston of the sale agreement, the performance by CenterPoint Houston of the transactions contemplated by the sale agreement or the fulfillment by CenterPoint Houston of the terms of the sale agreement, except those that have been obtained or made and those that CenterPoint Houston, in its capacity as servicer under the servicing agreement, is required to make in the future pursuant to the servicing agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 16.

except as disclosed in this prospectus, there are no proceedings pending, and to CenterPoint Houston's knowledge, (a) there are no proceedings threatened and (b) there are no investigations pending or threatened before any court, federal or state regulatory body, administrative agency or governmental instrumentality having jurisdiction over CenterPoint Houston or its properties involving or related to CenterPoint Houston or us or, to CenterPoint Houston's knowledge, to any other person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; a.

asserting the invalidity of the sale agreement, any of the other basic documents, the system restoration bonds, the Securitization Act or the financing order,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; b.

seeking to prevent the issuance of the system restoration bonds or the consummation of the transactions contemplated by the sale agreement or any of the other basic documents,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; c.

seeking any determination or ruling that could reasonably be expected to materially and adversely affect the performance by CenterPoint Houston of its obligations under, or the validity or enforceability of, the sale agreement or any of the other basic documents or the system restoration bonds, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; d.

challenging CenterPoint Houston's treatment of the system restoration bonds as debt of Utility Holding for federal or state income, gross receipts or franchise tax purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 17.

after giving effect to the sale of the system restoration property under the sale agreement, CenterPoint Houston:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; a.

is solvent and expects to remain solvent,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; b.

is adequately capitalized to conduct its business and affairs considering its size and the nature of its business and intended purposes,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; c.

is not engaged and does not expect to engage in a business for which its remaining property represents an unreasonably small portion of its capital,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; d.

reasonably believes that it will be able to pay its debts as they become due, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; e.

is able to pay its debts as they become due and does not intend to incur, or believes that it will incur, indebtedness that it will not be able to repay at its maturity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 18.

CenterPoint Houston is duly qualified to do business as a foreign limited liability company in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business requires such qualifications, licenses or approvals (except where the failure to so qualify or obtain such licenses and approvals would not be reasonably likely to have a material adverse effect on CenterPoint Houston's business, operations, assets, revenues or properties); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 19.

CenterPoint Houston is not aware of any judgment or tax lien filings against us or CenterPoint Houston that would result in a lien on the system restoration property.

The representations and warranties made by CenterPoint Houston survive the sale of the system restoration property to us and the pledge thereof on the issuance date to the trustee. Any change in the law occurring after the issuance date that renders any of the representations and warranties untrue does not constitute a breach under the sale agreement.

CenterPoint Houston makes no representation or warranty, express or implied, as to the solvency of any REP or customer on any issuance date or as to the future solvency of any REP or customer.

#### CenterPoint Houston's Covenants
In the sale agreement, CenterPoint Houston will make the following covenants:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.

subject to its rights to assign its rights and obligations under the sale agreement, so long as any of the system restoration bonds are outstanding, CenterPoint Houston will (i) keep in full force and effect its existence and remain in good standing under the laws of the state of its organization, and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or will be necessary to protect the validity and enforceability of the sale agreement and each other instrument or agreement to which CenterPoint Houston is a party necessary to the proper administration of the sale agreement and the transactions contemplated by the sale agreement and (ii) continue to operate its distribution system in order to provide electric services to retail electric customers served at distribution voltage in CenterPoint Houston's certificated service area, provided that this clause (ii) shall not prohibit CenterPoint Houston from selling, assigning or otherwise divesting its distribution system or any part thereof in accordance with the sale agreement and the financing order;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.

except for the conveyances under the sale agreement or any lien under Section 39.309 of the Securitization Act for the benefit of us, the trustee and the holders of the system restoration bonds, CenterPoint Houston may not sell, pledge, assign or transfer to any other person, or grant, create, incur, assume or suffer to exist any lien on, any of the system restoration property, whether now existing or hereafter created, or any interest therein. CenterPoint Houston may not at any time assert any lien against or with respect to the system restoration property, and CenterPoint Houston shall defend the right, title and interest of us and of the trustee, as our assignee, in, to and under the system restoration property against all claims of third parties claiming through or under CenterPoint Houston;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.

in the event that CenterPoint Houston receives collections in respect of the system restoration charges or the proceeds thereof other than in its capacity as the servicer, CenterPoint Houston agrees to pay to the servicer, on our behalf, all payments received by it in respect thereof, as soon as practicable after receipt thereof; prior to such remittance to CenterPoint Houston by us, we agree that such amounts are held by it in trust for us and the trustee. If CenterPoint Houston becomes a party to any future trade receivables purchase and sale arrangement or similar arrangement under which it sells all or any portion of its accounts receivables, CenterPoint Houston and the other parties to such arrangement shall enter into an intercreditor agreement in connection therewith and the terms of the documentation evidencing such trade receivables purchase and sale arrangement or similar arrangement shall expressly exclude the system restoration charges from any receivables or other assets pledged or sold under such arrangement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.

CenterPoint Houston agrees to comply with its organizational or governing documents and all laws, treaties, rules, regulations and determinations of any court or federal or state regulatory body, administrative agency or governmental instrumentality applicable to it, except to the extent that failure to so comply would not materially adversely affect our or the trustee's interests in the system restoration property or under the basic documents to which CenterPoint Houston is a party or CenterPoint Houston's performance of its obligations under the sale agreement or under any of the other basic documents to which CenterPoint Houston is a party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.

so long as any of the system restoration bonds are outstanding, CenterPoint Houston:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; a.

will treat the system restoration bonds as our debt and not debt of CenterPoint Houston, except for financial reporting, federal or state regulatory or tax purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; b.

will disclose in its financial statements that we are, and it is not, the owner of the system restoration property and that our assets are not available to pay creditors of CenterPoint Houston or its affiliates (other than us);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; c.

unless, and to the extent, required by applicable law or by any court or federal or state regulatory body, administrative agency or governmental instrumentality, will disclose the effects of all transactions between us and CenterPoint Houston in accordance with generally accepted accounting principles; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; d.

will not own or purchase any of the system restoration bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.

so long as any of the system restoration bonds are outstanding:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; a.

in all proceedings relating directly or indirectly to the system restoration property, CenterPoint Houston will affirmatively certify and confirm that it has sold all of its rights and interests under the financing order to us (other than for financial reporting or tax purposes), and will not make any statement or reference in respect of the system restoration property that is inconsistent with our ownership (other than for financial reporting or tax purposes);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; b.

CenterPoint Houston will not take any action in respect of the system restoration property except solely in its capacity as servicer thereof pursuant to the servicing agreement or as contemplated by the basic documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; c.

neither we nor CenterPoint Houston will take any action, file any tax return, or make any election inconsistent with the treatment of us, for purposes of U.S. federal income tax and, to the extent consistent with applicable state, local and other tax law, for purposes of state, local and other taxes, as a disregarded entity that is not separate from our sole owner for U.S. federal income tax purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; d.

if CenterPoint Houston enters into a sale agreement selling to any other affiliate property consisting of nonbypassable charges payable by REPs comparable to those sold by CenterPoint Houston pursuant to the sale agreement, the rating agency condition will be satisfied with respect to the system restoration bonds prior to or coincident with such sale and CenterPoint Houston shall enter into an intercreditor agreement with us, the trustee, the issuing entity of such additional bonds and the trustee for such additional bonds; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; e.

neither CenterPoint Houston nor a subsidiary of CenterPoint Houston will issue bonds similar to the system restoration bonds or other bonds supported by nonbypassable charges payable by REPs comparable to those sold by CenterPoint Houston pursuant to the sale agreement without the rating agency condition being satisfied with respect to the system restoration bonds prior to or coincident with such issuance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.

CenterPoint Houston agrees that, upon the sale by CenterPoint Houston of all of its rights and interests under the financing order to us pursuant to the sale agreement, any payment to the servicer by any person responsible for remitting system restoration charges to the servicer under the terms of the financing order or the Securitization Act or the applicable tariff shall discharge such person's obligations in respect of the system restoration property to the extent of such payment, notwithstanding any objection or direction to the contrary by CenterPoint Houston;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.

CenterPoint Houston will execute and file such filings, and cause to be executed and filed such filings in such manner and in such places as may be required by law fully to preserve, maintain and protect our and the trustee's interests in the system restoration property, including all filings required under the Securitization Act and the UCC as enacted in Delaware and each other applicable jurisdiction, relating to the transfer of the ownership of the rights and interests under the financing order by CenterPoint Houston to us and the pledge of the system restoration property by us to the trustee. CenterPoint Houston will deliver (or cause to be delivered) to us and the trustee file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10.

CenterPoint Houston will institute any action or proceeding reasonably necessary to compel performance by the PUCT or the State of Texas of any of their obligations or duties under the Securitization Act, the financing order or the issuance advice letter relating to the transfer of the rights and interests under the financing order by CenterPoint Houston to us, and shall notify the trustee of the institution of any such action. CenterPoint Houston agrees to take such legal or administrative actions, including defending against or instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, in each case as may be reasonably necessary:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; a.

to protect us and the holders of the system restoration bonds from claims, state actions or other actions or proceedings of third parties which, if successfully pursued, would result in a breach of any representation or warranty of CenterPoint Houston described above under the caption "— CenterPoint Houston's Representations and Warranties"; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; b.

so long as CenterPoint Houston is also the servicer, to block or overturn any attempts to cause a repeal of, modification of or supplement to the Securitization Act, the financing order, the issuance advice letter or the rights of the holders of the system restoration bonds by legislative enactment or constitutional amendment that would be materially adverse to us, the trustee or the holders of the system restoration bonds.

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The costs of any such actions or proceedings would be reimbursed by us to CenterPoint Houston from amounts on deposit in the collection account as an operating expense in accordance with the terms of the indenture. CenterPoint Houston's obligations pursuant to this covenant survive and continue notwithstanding that the payment of operating expenses pursuant to the indenture may be delayed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11.

so long as any of the system restoration bonds are outstanding, CenterPoint Houston will pay all material taxes, assessments and governmental charges imposed upon it or any of its properties or assets or with respect to any of its franchises, businesses, 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 system restoration property; provided that no such tax need be paid if CenterPoint Houston or any of its affiliates is contesting the same in good faith by appropriate proceedings promptly instituted and diligently conducted and if CenterPoint Houston or such affiliate has established appropriate reserves as shall be required in conformity with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12.

CenterPoint Houston will comply with all filing requirements imposed upon it in its capacity as seller of the system restoration property under the financing order, including making any post-closing filings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13.

even if the sale agreement or the indenture providing for the system restoration bonds is terminated, CenterPoint Houston will not, prior to the date that is one year and one day after the termination of the indenture, petition or otherwise invoke or cause us to invoke the process of any court or federal or state regulatory body, administrative agency or governmental instrumentality for the purpose of commencing or sustaining an involuntary case against us under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of ours, or any substantial part of the property of ours or ordering the winding up or liquidation of our affairs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14.

CenterPoint Houston agrees not to withdraw the filing of the issuance advice letter with the PUCT;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 15.

CenterPoint Houston agrees to make all reasonable efforts to keep the applicable tariff in full force and effect at all times;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 16.

promptly after obtaining knowledge thereof, in the event of a breach in any material respect (without regard to any materiality qualifier contained in such representation, warranty or covenant) of any of CenterPoint Houston's representations, warranties or covenants contained in the sale agreement, CenterPoint Houston shall promptly notify us, the trustee and the rating agencies of such breach. For the avoidance of doubt, any breach which would adversely affect scheduled payments on the system restoration bonds will be deemed to be a material breach;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 17.

CenterPoint Houston will use the proceeds from the sale of the system restoration property to us in accordance with the applicable provisions of the financing order; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 18.

upon the reasonable request of us, CenterPoint Houston shall execute and deliver such further instruments and do such further acts as may be reasonably necessary to carry out more effectually the provisions and purposes of the sale agreement.

#### CenterPoint Houston's Obligation to Indemnify Us and the Trustee and to Take Legal Action
Under the sale agreement, CenterPoint Houston is obligated to indemnify us and the trustee, for itself and on behalf of the holders of the system restoration bonds and related parties specified therein, against:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.

any and all taxes, other than any taxes imposed on the holders of the system restoration bonds solely as a result of their ownership of the system restoration bonds, that may at any time be imposed on or asserted against any such person under existing law as of the issuance date as a result of the sale and assignment of CenterPoint Houston's rights and interests under the financing order by CenterPoint Houston to us, the acquisition or holding of the system restoration property

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by us or the issuance and sale by us of the system restoration bonds, including any sales, gross receipts, tangible personal property, privilege, franchise or license taxes, but excluding any taxes imposed as a result of a failure of such person to properly withhold or remit taxes imposed with respect to payments on any system restoration bond, in the event and to the extent such taxes are not recoverable as qualified costs, it being understood that the holders of the system restoration bonds shall be entitled to enforce their rights against CenterPoint Houston solely through a cause of action brought for their benefit by the trustee in accordance with the terms of the indenture; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.

any and all liabilities, obligations, claims, actions, suits or payments of any kind whatsoever that may be imposed on or asserted against any such person, which may include, without limitation, an amount equal to principal and interest on the system restoration bonds as a measure of CenterPoint Houston's indemnification obligations, together with any reasonable costs and expenses incurred by such person, in each case as a result of CenterPoint Houston's breach of any of its representations, warranties or covenants contained in the sale agreement.

However, CenterPoint Houston is not required to indemnify the trustee or related parties against any liability, obligation, claim, action, suit or payment of any kind arising out of the willful misconduct, negligence or bad faith of any such person. CenterPoint Houston is not required to indemnify a party for any amount paid or payable by such party in the settlement of any action, proceeding or investigation without the prior written consent of CenterPoint Houston, which consent shall not be unreasonably withheld.

These indemnification obligations will rank equally in right of payment with other general unsecured obligations of CenterPoint Houston. The indemnities described above will survive the resignation or removal of the trustee and the termination of the sale agreement and include reasonable fees and expenses of investigation and litigation (including reasonable attorneys' fees and expenses). The representations and warranties described above under the caption "— CenterPoint Houston's Representations and Warranties" are made under existing law as in effect as of the date of issuance of the system restoration bonds. CenterPoint Houston will not indemnify any party for any changes of law after the issuance of the system restoration bonds or for any liability resulting solely from a downgrade in the ratings on the system restoration bonds.

*CenterPoint Houston's Limited Obligation to Undertake Legal Action.* As described in clause 10 above under "— CenterPoint Houston's Covenants," the sale agreement will require CenterPoint Houston to institute any action or proceeding reasonably necessary to compel performance by the PUCT or the State of Texas of any of their obligations or duties under the Securitization Act, the financing order or the issuance advice letter with respect to the system restoration property. Except for the foregoing and subject to CenterPoint Houston's further covenant to fully preserve, maintain and protect our interests in the system restoration property, CenterPoint Houston will not be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its obligations under the sale agreement and that in its opinion may involve it in any expense or liability.

#### Successors to CenterPoint Houston
The sale agreement will provide that any person which succeeds by merger, conversion, consolidation, sale or other similar transaction to all or substantially all of the electric distribution business of CenterPoint Houston will be the successor to CenterPoint Houston with respect to CenterPoint Houston's ongoing obligations under the sale agreement without the execution or filing of any document or any further act by any of the parties to the sale agreement. The sale agreement will further require that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • immediately after giving effect to any transaction referred to in this paragraph, no representation, warranty or covenant made in the sale agreement will have been breached in any material respect, and no servicer default, and no event that, after notice or lapse of time, or both, would become a servicer default will have occurred and be continuing,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the rating agencies specified in the sale agreement will have received prior written notice of the transaction, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • officer's certificates and opinions of counsel specified in the sale agreement will have been delivered to us and the trustee.

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#### Amendment
The sale agreement may be amended in writing by the parties thereto, if notice of the amendment is provided by us to each rating agency and the rating agency condition has been satisfied, with the consent of the trustee (given upon receipt of an opinion of counsel) and, in the case of any amendment that increases ongoing qualified costs as defined in the financing order, the PUCT has consented thereto or shall have been conclusively deemed to have consented thereto. Promptly after the execution of any such amendment or consent, we will furnish written notification of the substance of such amendment or consent to each of the rating agencies.

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#### THE SERVICING AGREEMENT
The following summary describes the material terms and provisions of the servicing agreement pursuant to which the servicer will undertake to service the system restoration property. We have filed the form of the servicing agreement with the SEC as an exhibit to the registration statement of which this prospectus forms a part, and we urge you to read such document in its entirety.

#### Servicing Procedures
*General.* The servicer, as our agent to the extent provided in the servicing agreement, will manage, service, administer and make collections and remittances in respect of the system restoration property. The servicer's duties will include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • calculating the system restoration charges and billing the REPs for the system restoration charges;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • obtaining meter reads and collecting the system restoration charges from REPs or, pursuant to the terms of any future intercreditor agreement, from an agent appointed by the servicer or an account designated under any such intercreditor agreement to collect the system restoration charges, as applicable, and posting all collections and late-payment penalties assessed against REPs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • responding to inquiries by retail customers, REPs, the PUCT or any federal, local or other state governmental authority with respect to the system restoration property and system restoration charges;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • accounting for collected system restoration charges and late-payment penalties received from REPs, investigating and resolving delinquencies, processing and depositing collections, making periodic remittances to the trustee and furnishing periodic reports to us, the trustee, the PUCT and the rating agencies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • providing certified calculations and other information reasonably requested by agents appointed by the servicer to collect the charges to enable the agents to perform collection services properly under any future intercreditor agreement and monitoring the collections of the agents for compliance with any such intercreditor agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • providing information reasonably requested by us in connection with the allocation of collections between system restoration charges and system restoration property on one hand, and other charges and fees on the other;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • monitoring payments by each REP, reviewing reports provided by each REP and monitoring compliance by each REP with the credit standards and deposit obligations set forth in the financing order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • notifying each REP of any defaults by such REP in its payment obligations and other obligations (including its credit standards), under Schedule SRC, and enforcing against such REP at the earliest date permitted by the financing order and Schedule SRC any remedies provided by such Schedule SRC, the financing order or other applicable law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • making all filings with the PUCT and taking all other actions necessary to perfect our ownership interests in and the trustee's lien on the system restoration property and other items included in the trust estate under the indenture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • selling, as our agent, defaulted or written-off accounts in accordance with the servicer's usual and customary practices,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • taking necessary action in connection with adjustments to the system restoration charges and allocation of the system restoration charges among various classes of customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • performing any other duties specified for a servicer under the financing order, Schedule SRC or applicable law; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • reconciling, within 30 calendar days after bank statement cutoff dates or such later time as is consistent with the servicer's usual and customary practices that does not materially impair the ability of the servicer to correct errors, all bank account debits and credits for bank accounts that are

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held in our name or the name of the servicer (as servicer under the servicing agreement) that relate to the trust estate securing the system restoration bonds.

Please read "CenterPoint Houston's Financing Order" in this prospectus. The servicer is required to notify us, the trustee and the rating agencies in writing when it becomes aware of any laws, orders, directions or PUCT regulations, orders or directions promulgated after the execution of the servicing agreement that have a material adverse effect on the servicer's ability to perform its duties under the servicing agreement. The servicer is also authorized to execute and deliver documents and to make filings and participate in proceedings on our behalf.

In the servicing agreement, the servicer will agree, among other things, that, in servicing the system restoration property, except where the failure to comply with any of the following would not materially and adversely affect our or the trustee's respective interests in the system restoration property:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • it will manage, service, administer and remit collections in respect of the system restoration property with reasonable care and in material compliance with applicable requirements of law, including all applicable PUCT regulations, using the same degree of care and diligence that the servicer exercises with respect to similar assets for its own account and, if applicable, for others;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • it will follow standards, policies and procedures in performing its duties as servicer that are customary in the electric transmission and distribution industry or that the PUCT has mandated and that are consistent with the provisions of the financing order, Schedule SRC and existing law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • it will use all reasonable efforts, consistent with its customary servicing procedures, to enforce and maintain our and the trustee's rights in respect of the system restoration property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • it will calculate the system restoration charges and PBRAFs in compliance with the Securitization Act, the financing order, any PUCT order related to the system restoration charge allocation and any applicable tariffs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • it will provide all reports to such parties to any future intercreditor agreement regarding to which we are a party regarding the system restoration charges, PBRAFs in compliance with the Securitization Act, the financing order, any PUCT order related to system restoration charge allocation and any applicable tariff;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • it will comply with all requirements of law, including all applicable PUCT regulations, applicable to and binding on it relating to the system restoration property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • it will file all reports with the PUCT required by the financing order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • it will petition the PUCT for adjustments to the system restoration charges and PBRAFs that the servicer determines to be necessary in accordance with the financing order; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • it will make all filings required under the Securitization Act or the UCC to maintain the perfected security interest of the trustee in the trust estate securing the system restoration bonds and use all reasonable efforts to otherwise enforce and maintain the trustee's rights in respect of the system restoration property and the trust estate securing the system restoration bonds.

The duties of the servicer set forth in the servicing agreement are qualified by the financing order, the Securitization Act and any PUCT regulations or orders in effect at the time those duties are to be performed.

*Servicer Obligation to Undertake Legal Action.* The servicer is required, subject to applicable law, to negotiate for the retention of legal counsel and such other experts as may be needed to institute and maintain any action or proceeding on our behalf or in our name, reasonably necessary to compel performance by the PUCT or the State of Texas of any of their obligations or duties under the Securitization Act and the financing order or any future intercreditor agreement to which we are a party with respect to the system restoration property, and the servicer agrees to assist us and our legal counsel in taking such legal or administrative actions, including defending against or instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, as may be reasonably necessary to attempt to block or overturn any attempts to cause a repeal of, modification of or supplement to the Securitization Act or the financing order, or the rights of holders of the system restoration bonds by legislative enactment, constitutional amendment or other means that would be materially adverse to the holders of the system restoration bonds.

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#### Adjustment Process for the System Restoration Charges
*Annual True-Ups and Filings*. Among other things, the servicing agreement will require the servicer to file adjustment requests annually and, if necessary, semi-annually (or quarterly in the and years) to ensure the expected recovery of amounts sufficient to provide timely payment of principal and interest on the system restoration bonds. For more information on the true-up process, please refer to "CenterPoint Houston's Financing Order — Statutory True-Ups" in this prospectus. These adjustment requests will be based on actual collected system restoration charges and updated assumptions by the servicer as to projected future usage of electricity by retail customers, expected write-offs and future payments and expenses relating to the system restoration property and the system restoration bonds. The servicer agrees to calculate these adjustments to result in system restoration charges estimated to provide for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • amortization of the remaining outstanding principal amount in accordance with the expected amortization schedule and payment of interest when due,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the replenishment of any amounts drawn from the capital subaccount,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the servicer's reconciliation of past overpayments and underpayments by any REP of system restoration charges arising out of the REP's right to hold back certain payments of system restoration charges in expectation of future write-offs from customers who do not pay their electric bills,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the servicer's recovery of any interest paid to a REP arising out of a dispute between the servicer and such REP in which the servicer's claim to the funds in dispute was not clearly unfounded, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the payment of the fees and expenses of the servicer, the trustee, our independent manager and the administrator and other fees, expenses, charges and costs authorized in the financing order.

In addition to filing requests for adjustments to the system restoration charges, the servicer may be required in some years to file a request to adjust the allocation of the system restoration charges among the system restoration charge customer classes, according to the methodology set forth in the tariff established by the PUCT.

In the servicing agreement, the servicer will agree to file adjustment requests on each calculation date for us as specified in the servicing agreement. In accordance with the financing order, the PUCT has 15 days from the servicer's filing to confirm the mathematical accuracy of the servicer's adjustment. Any necessary corrections to the true-up adjustment, due to mathematical errors in the calculation of such adjustment, will be made in future true-up adjustment filings. Any adjustment to the allocation of system restoration charges among system restoration charge customer classes must be made in conjunction with the annual true-up. Any such adjustment must be filed with the PUCT at least 90 days before the date the proposed adjustment will become effective. The PUCT will conduct a contested case proceeding on the allocation adjustment pursuant to the Public Utility Regulatory Act. The PUCT will issue a final order by the proposed adjustment date stated in the filing. The adjustments to the system restoration charges are expected to occur on each adjustment date.

*Interim True-Ups.* In addition to the annual adjustment process, the servicer may implement an additional true-up adjustment under the servicing agreement at any time:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • if the servicer forecasts that system restoration charge collections during the current calculation period will be insufficient to make all scheduled payments of principal, interest and other amounts in respect of the system restoration bonds on a timely basis during such calculation period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • to replenish any funds drawn from the capital subaccount; and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • generally to correct any under-collection or over-collection of system restoration charges in order to assure timely payment of the system restoration bonds.

*Reconciliation of Charge-Off Allowances*. Under the financing order, REPs will be entitled to hold back an allowance for charge-offs from their payments of the system restoration charges to the servicer. In connection with the annual adjustment process, the servicer and each REP will be responsible for reconciling the amounts held back with the amounts actually written off as uncollectible during that time in accordance with the terms agreed to by the REP and the servicer. If the REP has held back less than the amount

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actually written off as uncollectible during that time, it will be entitled to a credit, in the amount of the hold-back shortfall, toward the REP's future payments of the system restoration charges. If the REP has held back more than the amount actually written off as uncollectible during that time, the charge-off allowance will be adjusted so that the REP will pay the servicer the amount of such underpayment over the twelve months following the adjustment.

#### Remittances to Collection Account
*Collections*. Each REP in CenterPoint Houston's service territory will include the applicable system restoration charges in its bill to retail customers. The servicer or its agent will bill each REP for the applicable system restoration charges attributable to the REP's retail customers at least monthly. Pursuant to the financing order, each REP must remit to the servicer the amount of applicable system restoration charges attributable to its retail customers (less an allowance for charge-offs of delinquent customer accounts) within 35 calendar days of the servicer's bill for such charges regardless of whether payments have been received by the REPs from such retail customers. In addition, in the event a REP fails to pay the servicer in full within 35 calendar days of the date the applicable system restoration charges are billed to such REP, the servicer will assess a late-payment penalty against the REP in the amount of five percent of the outstanding balance of such system restoration charges payable by the REP. All late-payment penalties will be remitted to the collection account to be applied against system restoration charge obligations. A grace period of 10 days from the 35th calendar day after the payment due date will be allowed before the REP is considered to be in default. Please read "Risk Factors — Risks Associated with Potential Bankruptcy Proceedings of the Seller or the Servicer" in this prospectus.

The servicer will apply payments received to each retail customer or each REP's account in proportion to the charges contained on the outstanding bill to such customer or REP. If there is a shortfall in a customer's or REP's payment of an amount billed, the amount paid will first be apportioned ratably among the system restoration charges relating to the system restoration bonds and other fees and charges (including amounts billed and due in respect of system restoration charges associated with system restoration bonds issued under other financing orders), other than late fees, and second, any remaining portion of the payment will be allocated to late fees owed to CenterPoint Houston or any successor.

For a description of the allocation of the deposits, please read "Description of the System Restoration Bonds — How Funds in the Collection Account Will Be Allocated." Until system restoration charge collections are remitted to the collection account, the servicer will not be required to segregate them from its general funds. Please read "Risk Factors — Risks Associated with Potential Bankruptcy Proceedings of the Seller or the Servicer" in this prospectus.

*Monitoring of Third-Party Collectors*. Until the retirement of the system restoration bonds, the servicer will take all actions with respect to each third party (including each REP, which is obligated to bill, pay or collect system restoration charges) (each such third party, a "**third-party collector**") required to be taken by the servicer as set forth, if applicable, if any agreement with the servicer, the financing order, and applicable law, and implement such additional procedures and policies as are necessary to ensure that the obligations of all third-party collectors in connection with system restoration charges are properly enforced. Such procedures and policies include, among other things, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • maintaining adequate records for enforcing compliance by all third-party collectors with their obligations with respect to system restoration charges, including compliance with certain remittance requirements and REP credit requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • applying such terms with respect with respect to credit and collection policies applicable to bills submitted to third-party collectors as may be reasonably necessary to prevent the rating of the system restoration bonds from being downgraded, withdrawn or suspended;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • use all reasonable efforts, subject to applicable law, to collect all amounts owed in respect of system restoration charges and late-payment penalties (as and when the same shall become due) to the extent permitted by the financing order, and follow procedures no less stringent as it follows with respect to collection activities that the Servicer conducts for itself or others;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • ensure that each REP remits all system restoration charges which it is obligated to remit to the servicer;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • in the event a REP provides any of a cash deposit, a surety bond or affiliate guarantee or a letter of credit (each, a "**REP deposit**") pursuant to the financing order, cooperate with the REP as required by the financing order to ensure that the REP deposit accurately reflects up to two months' maximum system restoration charge collections;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • attempt to resolve disputes with the REP under the process specified in the financing order; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • adhere to the instructions of a REP that bills customers for system restoration charges to terminate transmission and distribution service to a retail customer for nonpayment by the retail customer pursuant to the financing order.

*Remittances to the Trustee.* On each servicer business day, the servicer will remit system restoration charges to the trustee, but in no event later than the second servicer business day after such payments are estimated to have been received, based on estimated daily system restoration charge collections on such servicer business day in respect of all previously billed system restoration charges, which remittance will be calculated using a weighted average balance of days outstanding on customer bills less an allowance for estimated write-offs as provided in the servicing agreement. All calculations of collections and any changes to the procedures used to calculate the estimated collections will be made by the servicer in good faith and in a manner reasonably intended to provide estimates and calculations that are at least as accurate as those that would be provided utilizing the initial procedures. Prior to, or concurrently with each such remittance to the general subaccount of the collection account, the servicer shall provide written notice to the trustee of such remittance.

The servicer shall also, promptly upon receipt, remit to the collection account any other proceeds of the system restoration property that it may receive from time to time. In the servicing agreement, the servicer will agree and acknowledge that it holds all system restoration charge payments collected by it or any other proceeds for the system restoration property received by it for the benefit of the trustee and the holders of the system restoration bonds and that all such amounts will be remitted by the servicer without any surcharge, fee, offset, charge or other deduction, except in connection with shortfalls or excess collections in the collection period of the preceding reconciliation period and for late fees. The servicer shall not make any claim to reduce its obligation to remit all system restoration charge payments collected by it in accordance with the servicing agreement, except in connection with shortfalls or excess collections in the collection period of the preceding reconciliation period and for late fees.

Prior to each daily remittance, the servicer may invest collected system restoration charges at its own risk and for its own benefit. Unless otherwise directed to do so by us, the servicer shall be responsible for selecting eligible investments in which the funds in the collection account shall be invested pursuant to the indenture. So long as the servicer faithfully makes all daily remittances of collected system restoration charges, as provided for in the servicing agreement, no actual or deemed investment earnings shall be payable in respect of such over-remittances or under-remittances.

Although the servicer will remit collected system restoration charges to the trustee, the servicer is not obligated to make any payments on the system restoration bonds.

#### Servicer Compensation
The servicer will be entitled to receive an aggregate annual servicing fee for all of the system restoration bonds outstanding in an amount equal to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • 0.075% of the aggregate initial principal amount of the system restoration bonds for so long as CenterPoint Houston or any of its affiliates or permitted successors is the servicer, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • if a successor servicer that is not an affiliate of CenterPoint Houston is appointed, an amount agreed upon by the successor servicer and the trustee (in accordance with direction from the holders of the system restoration bonds), provided that the annual servicing fee shall not exceed 0.60% of the aggregate initial principal amount of the system restoration bonds without the consent of the PUCT.

The servicing fee shall be paid semi-annually, with half of the servicing fee being paid on each payment date, except for the amount to be paid on the first payment date, in which case the servicing fee then due

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will be calculated based on the number of days that the servicing agreement has been in effect. In addition, the servicer shall be entitled to be reimbursed by us for certain of its out-of-pocket costs, including filing fees and fees and expenses for attorneys, accountants, printing and other professional services incurred to meet our obligations under the basic documents, as well as rating agency fees. There are no limits on the amount of out-of-pocket or reimbursable expenses under the servicing agreement, and they will be recovered as ongoing qualified costs through the collection of the system restoration charges and paid to the servicer in accordance with the payment waterfall in the indenture. We expect that such expenses will be less than $0.4 million per year. In the event that a successor servicer is appointed, the servicing fee will be prorated based on the fraction of a calendar year during which each servicer provides any of the services set forth in the servicing agreement. The servicing fee for the system restoration bonds will be subject to the priority of payments as described under "Description of the System Restoration Bonds — How Funds in the Collection Account Will Be Allocated" in this prospectus. The servicing fee for the system restoration bonds will be paid prior to the payment of or provision for any amounts in respect of interest on and principal of the system restoration bonds.

#### CenterPoint Houston's Representations and Warranties as Servicer
In the servicing agreement, the servicer will represent and warrant to us, as of the date of the servicing agreement and as of such other dates as expressly provided below, among other things, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the servicer is a limited liability company duly organized and validly existing under the laws of the State of Texas, with the requisite power and authority to own its properties, to conduct its business as such business is presently conducted and to execute, deliver and carry out the terms of the servicing agreement and has the requisite power, authority and legal right to service the system restoration property and to hold the system restoration property records as custodian,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the servicer is duly qualified to do business and is in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which it is required to do so (except where the failure to so qualify would not be reasonably likely to have a material adverse effect on the servicer's business, operations, assets, revenues or properties or adversely affect the servicing of the system restoration property),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the servicer's execution, delivery and performance of the terms of the servicing agreement have been duly authorized by all necessary action on the part of the servicer under its organizational or governing documents and laws,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the servicing agreement constitutes a legal, valid and binding obligation of the servicer, enforceable against the servicer in accordance with its terms, subject to applicable bankruptcy, receivership, insolvency, reorganization, moratorium, fraudulent transfer or conveyance and other laws relating to or affecting creditors' rights generally from time to time in effect and certain equitable principles (regardless of whether considered in a proceeding in equity or at law),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the consummation of the transactions contemplated by the servicing agreement (to the extent applicable to the servicer's responsibilities thereunder) and the fulfillment of the terms will not conflict with, or result in any breach of any of the terms and provisions of, or constitute a material default under the servicer's organizational documents, or any material indenture or any material agreement to which the servicer is a party or by which it or any of its property is bound or result in the creation or imposition of any lien upon any of its properties (other than any lien that may be granted in favor of the trustee for the benefit of the holders of the system restoration bonds under the basic documents or any lien created pursuant to the Securitization Act), or violate any existing law or any existing order, rule or regulation applicable to the servicer,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • no governmental approvals, authorizations, consents, orders or other actions or filings with any governmental authority are required for the servicer to execute, deliver and perform its obligations under the servicing agreement except those that have previously been obtained or made, those that are required to be made by the servicer in the future and those that the servicer may need to file in the future to continue the effectiveness of any financing statements,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • there are no proceedings pending or, to the servicer's knowledge, threatened before any court, federal or state regulatory body, administrative agency or other governmental instrumentality having

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jurisdiction over the servicer or its properties involving or relating to the servicer or us or, to the servicer's knowledge, any other person, asserting the invalidity of the servicing agreement or any of the other basic documents, seeking any determination or ruling that might materially and adversely affect the performance by the servicer of its obligations under, or the validity or enforceability against the servicer of, the servicing agreement, any of the other basic documents or the system restoration bonds, relating to the servicer and which might materially and adversely affect the federal income tax or state income, gross receipts or franchise tax attributes of the system restoration bonds, or seeking to prevent the issuance of the system restoration bonds or the consummation of any of the transactions contemplated by the servicing agreement or any of the other basic documents, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • each report and certificate delivered in connection with any filing made with the PUCT by the servicer on our behalf with respect to the system restoration charges or system restoration charge adjustments will constitute a representation and warranty by the servicer that such report or certificate, as the case may be, is true and correct in all material respects, and to the extent that such report or certificate is based upon or contains assumptions, forecasts or other predictions of future events, the representation and warranty of the servicer with respect thereto will be limited to the representation and warranty that such assumptions, forecasts or other predictions of future events are reasonable based upon historical performance and the facts known to the servicer on the date such report or certificate is delivered.

The servicer is not responsible for any decision made or not made, ruling, action or delay of the PUCT, except those caused by the servicer's failure to file required applications or other filings in a timely and correct manner or other breach of its duties under the servicing agreement. The servicer also is not liable for the calculation of the system restoration charges and adjustments, including any inaccuracy in the assumptions made in the calculation, so long as the servicer has acted in good faith and has not acted in a grossly negligent manner.

#### The Servicer Will Indemnify Us, Other Entities and the PUCT in Limited Circumstances
Under the servicing agreement, the servicer shall indemnify for, and defend and hold harmless, us, the trustee (for itself and on behalf of the holders of the system restoration bonds), the independent manager and each of their respective trustees, members, managers, officers, directors, employees and agents, from and against any and all reasonable costs, reasonable expenses, obligations, payments, claims, losses, damages and liabilities of any kind whatsoever imposed on, incurred by or asserted against any such person as a result of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the servicer's willful misconduct, bad faith or gross negligence in the performance of its duties or observance of its covenants under the servicing agreement or the servicer's reckless disregard of its obligations and duties under the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the servicer's material breach of any of its representations or warranties that results in a servicer default under the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • litigation and related expenses relating to the servicer's status and obligations as servicer (other than any proceedings the servicer is required to institute under the servicing agreement), or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the reasonable fees, costs and expenses (including legal fees, costs and expenses) of enforcing the indemnification obligations of the servicer.

The servicer will not be liable to any such party, however, for any reasonable costs, reasonable expenses, obligations, payments, claims, losses, damages and liabilities of any kind whatsoever, resulting from the bad faith, willful misconduct or negligence of the party seeking indemnification or resulting from a breach of a representation or warranty made by such party to the servicer in any basic document that gives rise to the servicer's breach.

Under the servicing agreement, the servicer shall also indemnify for, and defend and hold harmless, the PUCT (for the benefit of the customers), us, the trustee (for itself and on behalf of the holders of the system restoration bonds) and each of their respective trustees, members, managers, officers, directors, employees and agents, from and against any and all reasonable costs, reasonable expenses, obligations, payments, claims,

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losses, damages and liabilities of any kind whatsoever imposed on, incurred by or asserted against any such person as a result of any increase in servicing fees that becomes payable pursuant to the provisions of the servicing agreement relating to the appointment of a successor servicer that is not an affiliate of CenterPoint Houston as a result of a default resulting from the servicer's willful misconduct, bad faith or negligence in performance of its duties or observance of its covenants under the servicing agreement or termination for cause of CenterPoint Houston or an affiliate servicer.

#### Limitation on Liability of Servicer and Others
Except as expressly provided in the servicing agreement, neither the servicer, nor any of its directors, officers, employees or agents will be liable to us, our managers, the holders of the system restoration bonds, the trustee or any other person, for any action taken or for refraining from taking any action pursuant to the servicing agreement or for good faith errors in judgment. However, the servicer and any such person shall not be protected against any liability that would otherwise be imposed by reason of willful misconduct, bad faith or gross negligence in the performance of its duties under the servicing agreement. The servicer and any of its directors, officers, employees or agents may rely in good faith on the advice of counsel or on any document, prima facie properly executed and submitted by any person respecting any matters under the servicing agreement. In addition, the servicing agreement will provide that the servicer is under no obligation to appear in, prosecute, or defend any proceeding, except as provided in the servicing agreement.

#### The Servicer Will Provide Statements to Us and the Trustee
The servicing agreement will provide that, for each calculation date for the system restoration bonds, which will be either 15 or 90 days before each annual true-up filing is made by the servicer with the PUCT, the servicer will provide to us, the trustee and the rating agencies, a statement indicating, with respect to the system restoration property:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the system restoration bond balance and the projected system restoration bond balance as of the immediately preceding payment date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the amount on deposit in the capital subaccount and the amount required to be on deposit in the capital subaccount as of the immediately preceding payment date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the amount on deposit in the excess funds subaccount as of the immediately preceding payment date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the projected system restoration bond balance and the servicer's projection of the system restoration bond balance on the payment date immediately preceding the next succeeding adjustment date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the required capital subaccount balance and the servicer's projection of the amount on deposit in the capital subaccount for the payment date immediately preceding the next succeeding adjustment date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the servicer's projection of the amount on deposit in the excess funds subaccount for the payment date immediately preceding the next succeeding adjustment date.

Not later than five servicer business days prior to each payment date or special payment date, the servicer will deliver a written report to us, the trustee and the rating agencies, which shall include all of the following information as to the system restoration bonds with respect to such payment date or special payment date or the period since the previous payment date, as appliable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the system restoration bond balance and the projected system restoration bond balance as of the immediately preceding payment date,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the amounts available on deposit in the collection account as of the cutoff date, the actual remittances since the cutoff date and the total amounts available to the trustee for payment of the system restoration bonds and ongoing qualified costs,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • allocation of available amounts that are allocable to payment of principal and interest on the system restoration bonds,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the outstanding amount of the system restoration bonds prior to, and after giving effect to the payment on the payment date and the difference, if any, between the outstanding amount specified in the expected amortization schedule and the outstanding amount of the system restoration bonds after giving effect to the payment on such payment date,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • all other transfers to be made on the payment date, including amounts to be paid to the trustee and to the servicer, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • estimated amounts on deposit in the capital subaccount and the excess funds subaccount before and after giving effect to the foregoing payments.

The trustee will transmit (or make electronically available) such report to the holders of the system restoration bonds on each payment date.

#### The Servicer Will Provide Assessments Concerning Compliance with the Servicing Agreement
The servicing agreement will provide that the servicer will furnish annually to us, the trustee and the rating agencies, on or before March 31 of each year, beginning March 31, 2026, to and including the March 31 following the final maturity date of the system restoration bonds, certificates by an officer of the servicer (a) containing and certifying statements of compliance required by Item 1123 of Regulation AB of the SEC and (b) containing and certifying its statements and assessment of compliance with specified servicing criteria as required by Item 1122(a) of Regulation AB of the SEC, during the preceding 12 months ended December 31 (or preceding period since the closing date of the issuance of the system restoration bonds in the case of the first statement), including a statement that to the best of such officer's knowledge, the servicer has fulfilled its obligations under the servicing agreement for the preceding calendar year, or the relevant portion thereof, or, if there has been a default in the fulfillment of any relevant obligation, stating that there has been a default and describing each default. The servicer has agreed to give us, the trustee and each rating agency written notice of any servicer default under the servicing agreement promptly after having obtained actual knowledge thereof, but in no event later than five servicer business days.

The servicing agreement will provide that a firm of independent certified public accountants will furnish to us, the trustee and the rating agencies, on or before March 31 of each year, beginning March 31, 2026, or, if earlier, on the date on which our annual report on Form 10-K is required to be filed, a statement as to compliance by the servicer during the preceding twelve months ended December 31, or the relevant portion thereof, with procedures relating to the servicing of system restoration property. This report, which is referred to in this prospectus as the "**annual accountant's report**," will state that the accounting firm has performed certain procedures, agreed between the servicer and such accountants, in connection with the servicer's compliance with its obligations under the sale agreement during the preceding calendar year, identifying the results of the procedures and including any exceptions to the procedures relating to the servicing of the system restoration property.

#### Matters Regarding CenterPoint Houston as the Servicer
CenterPoint Houston shall not resign from its obligation and duties as servicer under the servicing agreement unless it delivers to us, the trustee, the PUCT and each rating agency written notice of such resignation at the earliest practicable time, and any such determination shall be evidenced by an opinion of counsel to such effect. No such resignation shall become effective until a successor servicer has assumed the servicing obligations and duties of the servicer in accordance with the servicing agreement.

Upon written notice to the trustee and the rating agencies, the servicer may assign a portion of its obligations under the servicing agreement to an assignee in accordance with any future intercreditor agreement to which we are a party with respect to the obligations to maintain and process any account into which initial collections may be deposited and process payments in respect of system restoration charges or under certain other conditions set forth in the servicing agreement.

Under the servicing agreement, any person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • into which CenterPoint Houston may be merged, converted or consolidated and which succeeds to all or substantially all of the electric distribution business of CenterPoint Houston (or, if CenterPoint

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Houston's distribution business is split, any entity which provides distribution service directly to a majority of the retail customers in CenterPoint Houston's certificated service area as it existed on the date of the issuance of the financing order);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • which results from the division of the CenterPoint Houston into two or more entities and which succeeds to all or substantially all of the electric distribution business of CenterPoint Houston (or, if CenterPoint Houston's distribution business is split, any entity which provides distribution service directly to a majority of the retail customers in CenterPoint Houston's certificated service area as it existed on the date of the issuance of the financing order);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • which may result from any merger, conversion or consolidation to which the servicer shall be a party and which succeeds to all or substantially all of the electric distribution business of CenterPoint Houston (or, if the CenterPoint Houston's distribution business is split, any entity which provides distribution service directly to a majority of the retail customers in CenterPoint Houston's certificated service area as it existed on the date of the issuance of the financing order);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • which may purchase or otherwise succeed to the properties and assets of CenterPoint Houston substantially as a whole and which purchases or otherwise succeeds to all or substantially all of the electric distribution business of CenterPoint Houston (or, if CenterPoint Houston's distribution business is split, any entity which provides distribution service directly to a majority of the retail customers in CenterPoint Houston's certificated service area as it existed on the date of the issuance of the financing order); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • which may otherwise purchase or succeed to all or substantially all of the electric distribution business of CenterPoint Houston (or, if CenterPoint Houston's distribution business is split, any entity which provides distribution service directly to a majority of the retail customers in CenterPoint Houston's certificated service area as it existed on the date of the issuance of the financing order),

which executes an agreement of assumption to perform every obligation of the servicer under the servicing agreement and undertakes to collect, account and remit amounts in respect of the system restoration charges from REPS and retail customers for the benefit and account of us (or our financing party), shall be the successor to the servicer under the servicing agreement without the execution or filing of any document or any further act by any of the parties under the servicing agreement, provided however, that certain conditions are met and that such person executed an agreement of assumption to perform all of the obligations of the servicer. These conditions include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • immediately after giving effect to such transaction referred to above, the representations and warranties made by the servicer in the servicing agreement shall be true and correct and no servicer default, and no event that, after notice or lapse of time, or both, would become a servicer default, will have occurred and be continuing,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • an officer's certificate and an opinion of counsel will have been delivered to us and the trustee stating that the transaction referred to above and such agreement of assumption referred to above comply with the servicing agreement and all conditions to transfer under the servicing agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the servicer shall have delivered to us and the trustee an opinion of counsel either stating that (i) in the opinion of such counsel, all filings to be made by the servicer, including filings with the PUCT pursuant to the Securitization Act and the UCC as enacted in Delaware and each other applicable jurisdiction that are necessary fully to preserve and protect the interests of each of us and the trustee in the system restoration property have been executed and filed and are in full force and effect, and reciting the details of such filings, or (ii) in the opinion of such counsel, no such action is necessary to preserve and protect such interests,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • prior written notice of such transaction will have been received by the rating agencies, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the servicer has delivered to us, the trustee and the rating agencies an opinion of independent tax counsel that, for U.S. federal income tax purposes, such transaction will not result in a material adverse federal income tax consequence to us or the holders of the system restoration bonds.

The servicing agreement will permit the servicer to appoint any person to perform any or all of its obligations under the servicing agreement. However, unless the appointed person is an affiliate of CenterPoint Houston, the appointment must satisfy the rating agency condition. In all cases where an agent is appointed, the servicer will remain obligated and liable to us under the servicing agreement.

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#### Events Constituting a Default by the Servicer
Servicer defaults under the servicing agreement will include, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any failure by the servicer to remit to the collection account, on our behalf, any remittance required to be remitted pursuant to the servicing agreement that continues unremedied for five servicer business days after written notice of such failure is received by the servicer from us or from the trustee or after discovery of such failure by a responsible officer of the servicer,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any failure on the part of the servicer or, so long as the servicer is CenterPoint Houston or an affiliate thereof, any failure on the part of CenterPoint Houston, as the case may be, to observe or to perform, in any material respect, any covenant or agreement of the servicer set forth in the servicing agreement or any other basic document to which it is a party, which failure materially and adversely affects the holders and continues unremedied for 60 days after written notice of this failure has been given to the servicer by us or the trustee or after discovery of this failure by a responsible officer of the servicer, as the case may be,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any failure by the servicer to perform its obligations to make system restoration charge adjustment filings in the time and manner set forth in the servicing agreement, which failure continues unremedied for a period of five servicer business days,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • any representation or warranty made by the servicer in the servicing agreement or any other basic document proves to have been incorrect in a material respect when made, which has a material adverse effect on holders and which continues unremedied for 60 days after written notice of this failure, requiring the same to be remedied, has been given to the servicer by us or the trustee or such failure is discovered by a responsible officer of the servicer, as the case may be, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • certain events of bankruptcy, insolvency or liquidation of the servicer.

#### The Trustee's Rights if the Servicer Defaults
In the event a servicer default under the servicing agreement remains unremedied, the trustee, upon the instruction of either (i) the holders of at least a majority of the outstanding principal amount of the system restoration bonds or (ii) the PUCT, shall, by written notice to the servicer, terminate all the rights and obligations of the servicer under the servicing agreement, other than the servicer's indemnification obligation and obligation to continue performing its functions as servicer until a successor servicer is appointed. However, the trustee's obligation to give a termination notice upon instruction of the PUCT is subject to and dependent upon the satisfaction of the rating agency condition in connection therewith.

Under the servicing agreement, the servicer's indemnity obligations to us, the trustee and the independent manager will survive its replacement as servicer. After the termination of the responsibilities and rights of the predecessor servicer as described above, the trustee may, and at the written direction of the holders of the system restoration bonds evidencing at least a majority of the outstanding principal amount of the system restoration bonds, shall, appoint a successor servicer (selected by the directing holders of the system restoration bonds) which satisfies criteria specified by the rating agencies rating the system restoration bonds, and the successor servicer shall accept its appointment by a written assumption in form acceptable to us and the trustee. If, within 30 days after the delivery of the written termination notice, a new servicer has not been appointed and accepted such appointment, the trustee may petition the PUCT or a court of competent jurisdiction to appoint a successor servicer under the servicing agreement. In no event will the trustee be liable for any appointment of a successor servicer; nor shall the trustee be responsible in its individual capacity for payment of the fee paid to a successor servicer.

In addition, when a servicer defaults, the system restoration bondholders (subject to the provisions of the indenture) and the trustee will be entitled to (x) apply to a state district court located in Travis County, Texas, for sequestration and payment to the trustee of revenues arising with respect to the system restoration property, (y) foreclose on or otherwise enforce the lien on and security interests in the system restoration property and (z) apply to the PUCT for an order that amounts arising from the system restoration charges be transferred to a separate account for the benefit of the holders of the system restoration bonds. Upon a servicer default based upon the commencement of a case by or against the servicer under the bankruptcy or insolvency laws, the trustee may be prevented from effecting a transfer of servicing. Please read "Risk

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Factors — Risks Associated with Potential Bankruptcy Proceedings of the Seller or the Servicer" and "How a Bankruptcy May Affect Your Investment" in this prospectus.

#### Waiver of Past Defaults
The trustee, with the written consent of the holders of the system restoration bonds evidencing at least a majority of outstanding principal amount of the system restoration bonds, may waive in writing any default by the servicer in the performance of its obligations under the servicing agreement and its consequences, except a default in making any required deposits to the collection account in accordance with the servicing agreement. The servicing agreement provides that no waiver will impair the rights of the holders of the system restoration bonds relating to subsequent defaults.

#### The Replacement of CenterPoint Houston as Servicer with a Successor Servicer
Upon an event of default under the servicing agreement or CenterPoint Houston's resignation pursuant to the terms of the servicing agreement, CenterPoint Houston may be replaced as the servicer under the terms of the servicing agreement. No entity may replace CenterPoint Houston as the servicer unless (i) such entity is permitted under PUCT regulations to perform the duties of the servicer pursuant to the Securitization Act, the financing order and the servicing agreement, (ii) either (A) the PUCT has approved the appointment of the successor servicer or (B) 45 days have elapsed since the PUCT received notice of appointment of the successor servicer and the PUCT has neither approved nor disapproved that appointment, (iii) the rating agency condition is satisfied and (iv) such entity enters into a servicing agreement with us having substantially the same provisions as the servicing agreement. The successor servicer will succeed to all the responsibilities, duties and liabilities of CenterPoint Houston under the servicing agreement and will be entitled to similar compensation arrangements. CenterPoint Houston shall continue to perform its functions as servicer under the servicing agreement and shall be entitled to receive the requisite portion of the servicing fee until a successor servicer shall have assumed in writing the obligations of CenterPoint Houston.

#### The Obligations of a Successor Servicer
Pursuant to the provisions of the servicing agreement, if for any reason a third party assumes or succeeds to the role of the servicer under the servicing agreement, the servicing agreement will require the predecessor servicer to cooperate with us, the trustee and the successor servicer in terminating the predecessor servicer's rights and responsibilities under the servicing agreement, including the transfer to the successor servicer of all documentation pertaining to the system restoration property and all cash amounts then held by the predecessor servicer for remittance or subsequently acquired by the predecessor servicer. The servicing agreement will provide that the predecessor servicer will be liable for all reasonable costs and expenses incurred in connection with transferring servicing responsibilities to the successor servicer in the event the successor servicer is appointed as a result of a servicer default. In all other cases, those costs and expenses will be paid by the party incurring them. The predecessor servicer is obligated, on an ongoing basis, to cooperate with us and the successor servicer and provide whatever information is, and take whatever actions are, reasonably necessary to assist the successor servicer in performing its obligations under the servicing agreement.

#### Amendment
The servicing agreement may be amended by the parties thereto, if the rating agency condition has been satisfied, with the consent of the trustee (given upon receipt of an opinion of counsel) and, with respect to amendments that would increase ongoing qualified costs as defined in the financing order, the consent or deemed consent of the PUCT. The servicing agreement will provide that to the extent that the PUCT adopts rules or regulations permitted by the financing order or the Securitization Act the effect of which is to modify or supplement any provision of the servicing agreement related to REP standards, the servicing agreement will be deemed to have been so modified or supplemented on the effective date of such rule or regulation without the necessity of any further action by any party to the servicing agreement. The servicer will notify us, the rating agencies and the trustee of any such PUCT rules or regulations and the corresponding modification of or supplement to the servicing agreement promptly upon obtaining knowledge thereof.

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#### HOW A BANKRUPTCY MAY AFFECT YOUR INVESTMENT
*Challenge to True Sale Treatment.* CenterPoint Houston will represent and warrant that the transfer of the system restoration property in accordance with the sale agreement constitutes a true and valid sale and assignment of the system restoration property by CenterPoint Houston to us. It will be a condition of closing for the sale of system restoration property pursuant to the sale agreement that CenterPoint Houston will take the appropriate actions under the Securitization Act, including filing a notice of transfer of an interest in the system restoration property, to perfect this sale. The Securitization Act provides that a transfer of system restoration property by an electric utility to an assignee which the parties have in the governing documentation expressly stated to be a sale or other absolute transfer, in a transaction approved in a financing order, shall be treated as an absolute transfer of all the transferor's right, title and interest, as in a "true sale" under applicable creditors' rights principles, and not as a pledge or other financing, of the system restoration property. We and CenterPoint Houston will treat such a transaction as a sale under applicable law. However, we expect that the system restoration bonds will be reflected as debt on CenterPoint Houston's consolidated financial statements. In addition, we anticipate that the system restoration bonds will be treated as debt of Utility Holding for U.S. federal income tax purposes. See "The Securitization Act — CenterPoint Houston and Other Utilities May Securitize Qualified Costs" and "Material U.S. Federal Income Tax Consequences" in this prospectus. In the event of a bankruptcy of a party to the sale agreement, if a party in interest in the bankruptcy were to take the position that the transfer of the system restoration property to us pursuant to the sale agreement was a financing transaction and not a true sale under applicable creditors' rights principles, there can be no assurance that a court would not adopt this position. Even if a court did not ultimately recharacterize the transaction as a financing transaction, the mere commencement of a bankruptcy of CenterPoint Houston and the attendant possible uncertainty surrounding the treatment of the transaction could result in delays in payments on the system restoration bonds.

In that regard, we note that the bankruptcy court in *In re: LTV Steel Company, Inc., et al.*, 274 B.R. 278 (Bankr. N. D. Oh. 2001) issued an interim order that observed that a debtor, LTV Steel Company, which had previously entered into securitization arrangements with respect both to its inventory and its accounts receivable may have "at least some equitable interest in the inventory and receivables, and that this interest is property of the Debtor's estate… sufficient to support the entry of" an interim order permitting the debtor to use proceeds of the property sold in the securitization. 274 B.R. at 285. The court based its decision in large part on its view of the equities of the case.

LTV and the securitization investors subsequently settled their dispute over the terms of the interim order and the bankruptcy court entered a final order in which the parties admitted and the court found that the pre-petition transactions constituted "true sales." The court did not otherwise overrule its earlier ruling. The LTV memorandum opinion serves as an example of the pervasive equity powers of bankruptcy courts and the importance that such courts may ascribe to the goal of reorganization, particularly where the assets sold are integral to the ongoing operation of the debtor's business.

Even if no creditor challenges the sale of the system restoration property to us as a true sale, a bankruptcy filing by CenterPoint Houston could trigger a bankruptcy filing by us with similar negative consequences for bondholders. In a 2009 bankruptcy case, *In re General Growth Properties, Inc.*, 406 B.R. 171 (Bankr. S.D.N.Y. 2009), General Growth Properties, Inc., along with many of its direct and indirect subsidiaries, filed for bankruptcy protection. Those subsidiaries included entities that had been organized as special purpose, bankruptcy-remote vehicles. The bankruptcy court upheld the validity of the filings of these special purpose subsidiaries as bankruptcy debtors and allowed the subsidiaries, over the objections of their own creditors, to use the creditors' cash collateral to fund loans to the parent debtor, General Growth Properties, Inc., for its general corporate purposes. The creditors received court-determined adequate protection in the form of current interest payments and replacement liens to mitigate any diminution in value resulting from the use of the cash collateral, but the opinion serves as a reminder that bankruptcy courts might subordinate legal rights of creditors to the interests of facilitation of the reorganization of a debtor.

We and CenterPoint Houston have attempted to mitigate the impact of a possible recharacterization of the sale of system restoration property as a financing transaction under applicable creditors' rights principles. The sale agreement will provide that if the transfer of the system restoration property is thereafter recharacterized by a court as a financing transaction and not a true sale, the transfer by CenterPoint Houston will be deemed to have granted to us on behalf of ourselves and the trustee a security interest in all

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CenterPoint Houston's right, title and interest in and to the system restoration property and all proceeds thereof. In addition, the indenture will require the filing of a notice of security interest in the system restoration property and the proceeds thereof in accordance with the Securitization Act. As a result of this filing, we would be a secured creditor of CenterPoint Houston and entitled to recover against the trust estate of the indenture or its value. This does not, however, eliminate the risk of payment delays or losses and other adverse effects caused by a CenterPoint Houston bankruptcy. Further, if, for any reason, a system restoration property notice is not filed under the Securitization Act or we fail to otherwise perfect our interest in the system restoration property, and the transfer is thereafter deemed not to constitute a true sale, we would be an unsecured creditor of CenterPoint Houston.

The Securitization Act provides that the creation, granting, perfection and enforcement of liens and security interests in system restoration property are governed by the Securitization Act and not by the Texas Business & Commerce Code. Under the Securitization Act, a valid and enforceable lien and security interest in system restoration property may be created only by a financing order issued under the Securitization Act and the execution and delivery of a security agreement with a holder of system restoration bonds or a trustee or agent for the holder in connection with the issuance of system restoration bonds. The lien and security interest attaches automatically from the time value is received for the system restoration bonds. Upon perfection through the filing of notice with the Secretary of State of Texas pursuant to rules established by the Secretary of State of Texas, the security interest shall be a continuously perfected lien and security interest in the system restoration property, with priority in the order of filing and take precedence over any subsequent judicial or other lien creditor. If this notice is filed within ten days after value is received for the system restoration bonds, the security interest will be perfected retroactive to the date value was received, otherwise, the security interest will be perfected as of the date of filing.

None of this, however, eliminates the risk of payment delays and other adverse effects caused by a CenterPoint Houston bankruptcy. Further, if, for any reason, a system restoration property notice is not filed under the Securitization Act or we fail to otherwise perfect our interest in the system restoration property sold pursuant to the sale agreement, and the transfer is thereafter deemed not to constitute a true sale, we would be an unsecured creditor of CenterPoint Houston.

*Consolidation of CenterPoint Houston and Us.* If CenterPoint Houston were to become a debtor in a bankruptcy case, a party in interest might attempt to substantively consolidate the assets and liabilities of CenterPoint Houston and us. We and CenterPoint Houston have taken steps to attempt to minimize this risk. Please read "CenterPoint Energy Restoration Bond Company II, LLC, The Issuing Entity" in this prospectus. However, no assurance can be given that if CenterPoint Houston were to become a debtor in a bankruptcy case, a court would not order that our assets and liabilities be substantively consolidated with those of CenterPoint Houston. Substantive consolidation would result in payment of the claims of the beneficial owners of the system restoration bonds to be subject to substantial delay and potentially to adjustment in timing and/or amount.

*Status of the System Restoration Property as Current Property.* CenterPoint Houston will represent in the sale agreement, and the Securitization Act provides, that the system restoration property sold pursuant to the sale agreement constitutes a present property right on the date that it is first transferred or pledged in connection with the issuance of the system restoration bonds. Nevertheless, no assurance can be given that, in the event of a bankruptcy of CenterPoint Houston, a court would not rule that the system restoration property comes into existence only as CenterPoint Houston's retail customers use electricity.

If a court were to accept the argument that the system restoration property comes into existence only as retail customers use electricity, no assurance can be given that a security interest in favor of the holders of the system restoration bonds would attach to the system restoration charges in respect of electricity consumed after the commencement of the bankruptcy case or that the system restoration property has been sold to us. If it were determined that the system restoration property had not been sold to us, and the security interest in favor of the holders of the system restoration bonds did not attach to the system restoration charges in respect of electricity consumed after the commencement of the bankruptcy case, then we would have an unsecured claim against CenterPoint Houston. If so, there would be delays and/or reductions in payments on the system restoration bonds. Whether or not a court determined that the system restoration property had been sold to us pursuant to the sale agreement, no assurances can be given that a

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court would not rule that any system restoration charges relating to electricity consumed after the commencement of the bankruptcy could not be transferred to us or the trustee.

In addition, in the event of a bankruptcy of CenterPoint Houston, a party in interest in the bankruptcy could assert that we should pay, or that we should be charged for, a portion of CenterPoint Houston's costs associated with the distribution of electricity, consumption of which gave rise to the system restoration charge receipts used to make payments on the system restoration bonds.

Regardless of whether CenterPoint Houston is the debtor in a bankruptcy case, if a court were to accept the argument that the system restoration property sold pursuant to the sale agreement comes into existence only as customers use electricity, a tax or government lien or other nonconsensual lien on property of CenterPoint Houston arising before the system restoration property came into existence could have priority over our interest in the system restoration property. Adjustments to the system restoration charges may be available to mitigate this exposure, although there may be delays in implementing these adjustments.

*Estimation of Claims; Challenges to Indemnity Claims.* If CenterPoint Houston were to become a debtor in a bankruptcy case, claims, including indemnity claims, by us or the trustee against CenterPoint Houston as seller under the sale agreement and the other documents executed in connection therewith could be unsecured claims and would be subject to being discharged in the bankruptcy case. In addition, a party in interest in the bankruptcy may request that the bankruptcy court estimate any contingent claims that we or the trustee have against CenterPoint Houston. That party may then take the position that these claims should be estimated at zero or at a low amount because the contingency giving rise to these claims is unlikely to occur. If a court were to hold that the indemnity provisions were unenforceable, we would be left with a claim for actual damages against CenterPoint Houston based on breach of contract principles. The actual amount of these damages would be subject to estimation and/or calculation by the court.

No assurances can be given as to the result of any of the above-described actions or claims. Furthermore, no assurance can be given as to what percentage of their claims, if any, unsecured creditors would receive in any bankruptcy proceeding involving CenterPoint Houston.

*Enforcement of Rights by the Trustee.* Upon an event of default under the indenture, the Securitization Act permits the trustee to enforce the security interest in the system restoration property sold pursuant to the sale agreement in accordance with the terms of the indenture. In this capacity, the trustee is permitted to request the PUCT or a Travis County, Texas district court to order the sequestration and payment to the holders of the system restoration bonds of all revenues arising from the system restoration charges. There can be no assurance, however, that the PUCT or a district court judge would issue such an order, including if seller is a debtor in bankruptcy, in light of the automatic stay provisions of Section 362 of the Bankruptcy Code. In that event, the trustee may under the indenture seek an order from the bankruptcy court lifting the automatic stay with respect to this action by the PUCT or a district court judge and an order requiring an accounting and segregation of the revenues arising from the system restoration property sold pursuant to the sale agreement. There can be no assurance that a court would grant either order.

*Bankruptcy of the Servicer.* The servicer is entitled to commingle the system restoration charges that it receives with its own funds until each date on which the servicer is required to remit funds to the trustee as specified in the servicing agreement. The Securitization Act provides that the priority of a lien created under the Securitization Act is not impaired by the commingling of system restoration charges arising with respect to the system restoration property with funds of the electric utility. In the event of a bankruptcy of the servicer, a party in interest in the bankruptcy might assert, and a court might rule, that the system restoration charges commingled by the servicer with its own funds and held by the servicer, prior to and as of the date of bankruptcy were property of the servicer as of that date, and are therefore property of the servicer's bankruptcy estate, rather than our property. If the court so rules, then the court could rule that the trustee has only a general unsecured claim against the servicer for the amount of commingled system restoration charges held as of that date and could not recover the commingled system restoration charges held as of the date of the bankruptcy.

However the court rules on the ownership of the commingled system restoration charges, the automatic stay arising upon the bankruptcy of the servicer could delay the trustee from receiving the commingled system restoration charges held by the servicer as of the date of the bankruptcy until the court grants relief from

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the stay. A court ruling on any request for relief from the stay could be delayed pending the court's resolution of whether the commingled system restoration charges are our property or are property of the servicer, including resolution of any tracing of proceeds issues.

The servicing agreement will provide that the trustee, as our assignee, together with the other persons specified therein, may appoint a successor servicer that satisfies the rating agency condition. The servicing agreement will also provide that the trustee, together with the other persons specified therein, may petition the PUCT or a court of competent jurisdiction to appoint a successor servicer that meets this criterion. However, the automatic stay in effect during a servicer bankruptcy might delay or prevent a successor servicer's replacement of the servicer. Even if a successor servicer may be appointed and may replace the servicer, a successor may be difficult to obtain and may not be capable of performing all of the duties that CenterPoint Houston as servicer was capable of performing. Furthermore, should the servicer enter into bankruptcy, it may be permitted to stop acting as servicer.

*Bankruptcy of a REP.* A REP is not required to segregate the system restoration charges it collects from its general funds. The Securitization Act provides that our rights to the system restoration property are not impaired by the commingling of these funds with other funds. In a bankruptcy of a REP, however, a bankruptcy court might rule that federal bankruptcy law takes precedence over the Securitization Act and does not recognize our right to receive the collected system restoration charges that are commingled with other funds of a REP prior to or as of the date of bankruptcy, including system restoration charges associated with other issuances of system restoration bonds, as applicable. If so, the collected system restoration charges held by a REP as of the date of bankruptcy would not be available to us to pay amounts owed on the system restoration bonds. In this case, we would have only a general unsecured claim against that REP for those amounts.

In addition, the bankruptcy of a REP may cause a delay in or prohibition of enforcement of various rights against the REP, including rights to require payments by the REP, rights to enforce against the REP deposit account or any other security deposits of the REP held by the trustee, rights to retain preferential payments made by the REP prior to bankruptcy, rights to require the REP to comply with financial provisions of the Securitization Act or other state laws, rights to terminate contracts with the REP and rights that are conditioned on the bankruptcy, insolvency or financial condition of the REP. Such a bankruptcy could also cause a possible disgorgement of any security deposits of the REP held by the trustee.

Other risks relating to bankruptcy may be found in "Risk Factors — Risks Associated with Potential Bankruptcy Proceedings or Defaults of REPs" in this prospectus.

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#### USE OF PROCEEDS
Upon the issuance of the system restoration bonds, we will use the net proceeds from the sale of the system restoration bonds to pay to CenterPoint Houston the purchase price of CenterPoint Houston's rights under the financing order, which are system restoration property.

CenterPoint Houston will use the net proceeds from the sale of the system restoration property (after payment of certain transaction costs) to reduce its recoverable system restoration costs incurred in connection with the May 2024 Storms. The expected accounting entries will result in removal of the regulatory asset representing the distribution portion of recoverable system restoration costs from CenterPoint Houston's books. The Securitizable Balance relating to such costs is currently estimated to be approximately $ million and the other up-front qualified costs in connection with the system restoration bonds are currently estimated to be approximately $ million.

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#### PLAN OF DISTRIBUTION
Subject to the terms and conditions in the underwriting agreement among us, CenterPoint Houston and the underwriters, for whom Citigroup Global Markets Inc. and Barclays Capital Inc. are acting as representatives, we have agreed to sell to the underwriters, and the underwriters have severally agreed to purchase, the principal amount of the system restoration bonds listed opposite each underwriter's name below:

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| | | |
|:---|:---|:---|
| **Underwriter**  | **Tranche A-1**  | **Tranche A-2**  |
| Citigroup Global Markets Inc.  | $— | $— |
| Barclays Capital Inc.  | $— | $— |
| Academy Securities, Inc.  | $— | $— |
| Total  | $240913000 | $160608000 |

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Under the underwriting agreement, the underwriters will take and pay for all of the system restoration bonds we offer, if any are taken. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated.

#### The Underwriters' Sales Price for the System Restoration Bonds
The system restoration bonds sold by the underwriters to the public will be initially offered at the prices to the public set forth on the cover of this prospectus. The underwriters propose initially to offer the system restoration bonds to dealers at such prices, less a selling concession not to exceed the percentage listed below for each tranche. The underwriters may allow, and dealers may reallow, a discount not to exceed the percentage listed below for each tranche.

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| | | |
|:---|:---|:---|
| | **Selling <br> Concession**  | **Reallowance <br> Discount**  |
| Tranche A-1  | &nbsp;&nbsp;&nbsp;% | &nbsp;&nbsp;&nbsp;&nbsp;% |
| Tranche A-2  | &nbsp;&nbsp;&nbsp;% | &nbsp;&nbsp;&nbsp;&nbsp;% |

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After the initial public offering, the public offering prices, selling concessions and reallowance discounts may change.

#### No Assurance as to Resale Price or Resale Liquidity for the System Restoration Bonds
The system restoration bonds are a new issue of securities with no established trading market. They will not be listed on any securities exchange. The underwriters have advised us that they intend to make a market in the system restoration bonds, but they are not obligated to do so and may discontinue market making at any time without notice. We cannot assure you that a liquid trading market will develop for the system restoration bonds.

#### Various Types of Underwriter Transactions that May Affect the Price of the System Restoration Bonds
The underwriters may engage in overallotment transactions, stabilizing transactions, syndicate covering transactions and penalty bids with respect to the system restoration bonds in accordance with Regulation M under the Exchange Act. Overallotment transactions involve syndicate sales in excess of the offering size, which create a syndicate short position. Stabilizing transactions are bids to purchase the system restoration bonds, which are permitted, so long as the stabilizing bids do not exceed a specific maximum price. Syndicate covering transactions involve purchases of the system restoration bonds in the open market after the distribution has been completed in order to cover syndicate short positions. Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the system restoration bonds originally sold by the syndicate member are purchased in a syndicate covering transaction. These overallotment transactions, stabilizing transactions, syndicate covering transactions and penalty bids may cause the prices of the system restoration bonds to be higher than they would otherwise be. Neither we, CenterPoint Houston, the trustee, our managers nor any of the underwriters represent that the underwriters will engage in

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any of these transactions or that these transactions, if commenced, will not be discontinued without notice at any time. Furthermore, recently adopted Rule 192 under the Securities Act prohibits CenterPoint Houston and the underwriters from entering into transactions that would involve or result in any material conflict of interest with respect to any investor.

Certain of the underwriters and their affiliates have in the past provided, and may in the future from time to time provide, investment banking and general financing and banking services to CenterPoint Houston and its affiliates for which they have in the past received, and in the future may receive, customary fees. In addition, each underwriter may from time to time take positions in the system restoration bonds.

We estimate that the registrants' total expenses of the offering will be approximately $3.6 million.

We and CenterPoint Houston have agreed to indemnify the underwriters against some liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities.

The underwriters are offering the system restoration bonds, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters, including the validity of the system restoration bonds and other conditions contained in the underwriting agreement, such as receipt of ratings confirmations, officer's certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject offers in whole or in part.

We expect to deliver the system restoration bonds against payment for the system restoration bonds on or about the date specified in the last paragraph of the cover page of this prospectus, which will be the business day following the date of pricing of the system restoration bonds. Since trades in the secondary market generally settle in one business day, purchasers who wish to trade system restoration bonds on the date of pricing or the succeeding business day will be required, by virtue of the fact that the system restoration bonds initially will settle in T + , to specify alternative settlement arrangements to prevent a failed settlement.

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#### AFFILIATIONS AND CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We are a wholly owned subsidiary of CenterPoint Houston. One of the underwriters, Citigroup Global Markets Inc., also provided advisory services to CenterPoint Houston in connection with the financing order proceeding and expects to receive a $150,000 fee for such services. Each of the sponsor, the initial servicer and the depositor may maintain other banking relationships in the ordinary course with U.S. Bank Trust Company, National Association, the trustee, and any of its affiliates. Please read "The Trustee" in this prospectus.

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#### MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

#### General
The following is a general discussion of the anticipated material U.S. federal income tax consequences of the purchase, ownership and disposition of the system restoration bonds. Except as specifically provided below with respect to non-U.S. holders (as defined below), this discussion does not address the tax consequences to persons other than initial purchasers who are U.S. holders (as defined below) that acquire system restoration bonds at original issue for cash equal to the issue price of those bonds and hold their system restoration bonds as capital assets within the meaning of Section 1221 of the Internal Revenue Code, and it does not address all of the tax consequences relevant to investors that are subject to special treatment under the U.S. federal income tax laws (*e.g.*, life insurance companies, tax-exempt organizations, financial institutions, dealers in securities, S corporations, taxpayers subject to the alternative minimum tax provisions of the Internal Revenue Code, broker-dealers and persons who hold the system restoration bonds as part of a hedge, straddle, "synthetic security" or other integrated investment, risk reduction or constructive sale transaction). This discussion also does not address U.S. federal taxes other than income tax or the consequences to holders of the system restoration bonds under state, local or foreign tax laws.

This summary is based on current provisions of the Internal Revenue Code, the Treasury Regulations promulgated and proposed thereunder, judicial decisions and published administrative rulings and pronouncements of the IRS and interpretations thereof. All of these authorities and interpretations are subject to change, and any change may apply retroactively and affect the accuracy of the opinions, statements and conclusions set forth in this discussion. We have not, and do not intend to seek, any ruling from the IRS with respect to the statements made and conclusions reached in this summary.

 *U.S. Holder and Non-U.S. Holder Defined* 

A "**U.S. holder**" means a beneficial owner of a system restoration bond that, for U.S. federal income tax purposes, is (i) a citizen or individual resident of the United States, (ii) a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source, or (iv) a trust, if (A) a court in the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust, or (B) it has a valid election in place to be treated as a United States person. A "**non-U.S. holder**" means a beneficial owner of a system restoration bond 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.

If an entity or arrangement treated as a partnership for U.S. federal income tax purposes is a holder of a system restoration bond, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partners are encouraged to consult their tax advisors about the particular U.S. federal income tax consequences applicable to them. Similarly, former citizens and former residents of the United States are encouraged to consult their tax advisors about the particular U.S. federal income tax consequences that may be applicable to them.

ALL PROSPECTIVE INVESTORS ARE ENCOURAGED TO CONSULT THEIR TAX ADVISERS REGARDING THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF SYSTEM RESTORATION BONDS IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT OF ANY FOREIGN, STATE, LOCAL OR OTHER LAWS.

#### Income Tax Status of the System Restoration Bonds and Us as Issuing Entity
Based upon guidance from the IRS and certain representations from us, including a representation by us that we will not make, or allow there to be made, any election to the contrary, Baker Botts L.L.P. expects to render its opinion that for U.S. federal income tax purposes (i) the issuance of the system restoration bonds will be a "qualifying securitization" within the meaning of Revenue Procedure 2005-62, as modified

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by Revenue Procedure 2024-15, (ii) we will not be treated as a taxable entity separate and apart from Utility Holding and (iii) based on Revenue Procedure 2005-62, as modified by Revenue Procedure 2024-15, the system restoration bonds will constitute indebtedness of Utility Holding.

#### Tax Consequences to U.S. Holders
 *Payments of Interest* 

Interest on the system restoration bonds will be taxable as ordinary income when received or accrued by U.S. holders, depending upon their method of accounting. This discussion assumes that the system restoration bonds will not be considered to be issued with original issue discount ("**OID**"). OID is generally defined as any excess of the stated price the U.S. holder will receive upon redemption of the bond at the bond's maturity, less the price the U.S. holder pays to purchase the bond, if this difference is equal to or greater than a de minimis amount.

 *Sale or Other Taxable Disposition of the System Restoration Bonds* 

If there is a sale, exchange, redemption, retirement or other taxable disposition of a system restoration bond, a U.S. holder generally will recognize taxable gain or loss equal to the difference between (a) the amount of cash and the fair market value of any other property received (other than amounts attributable to, and taxable as, accrued stated interest) and (b) the holder's adjusted tax basis in the system restoration bond. A U.S. holder's adjusted tax basis in a system restoration bond generally will equal its cost, reduced by any payments reflecting principal previously received with respect to the bond. Gain or loss generally will be capital gain or loss if the system restoration bond is held as a capital asset and will be long-term capital gain or loss if the system restoration bond was held for more than one year at the time of disposition. The deductibility of capital losses is subject to certain limitations. If a U.S. holder sells a system restoration bond between interest payment dates, a portion of the amount received will reflect interest that has accrued on the system restoration bond but that has not yet been paid by the sale date and, to the extent that amount has not already been included in the U.S. holder's income, it will be treated as ordinary interest income and not as capital gain.

 *3.8% Tax on "Net Investment Income"* 

Certain U.S. holders will be subject to an additional 3.8% tax on all or a portion of their "net investment income," which may include the interest payments and any taxable gain realized with respect to a system restoration bond, to the extent of their net investment income that, when added to their other modified adjusted gross income, exceeds $200,000 for an unmarried individual, $250,000 for a married individual filing a joint return (or a surviving spouse), or $125,000 for a married individual filing a separate return. U.S. holders are encouraged to consult their tax advisors with respect to this tax.

 *Information Reporting and Backup Withholding* 

Payments of stated interest and the proceeds of a disposition of system restoration bonds may be reported to the IRS. These information reporting requirements do not apply with respect to certain exempt U.S. holders, such as corporations, that have certified to that status as required.

Backup withholding (currently at a rate of 24%) may apply to payments of the foregoing amounts, unless a U.S. holder timely provides the applicable withholding agent with its taxpayer identification number, certified under penalties of perjury, as well as certain other information, or otherwise establishes an exemption from backup withholding. Backup withholding will also apply if a U.S. holder is notified by the IRS that the U.S. holder is subject to backup withholding because of its failure to report payment of interest and dividends properly, or if the U.S. holder otherwise fails to comply with the applicable backup withholding rules.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a credit against a U.S. holder's U.S. federal income tax liability, if any, and may entitle a U.S. holder to a refund, provided the required information is timely furnished to the IRS.

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#### Tax Consequences to Non-U.S. Holders
 *Withholding Tax on Interest Payments* 

Subject to the discussion below (see "— Reporting and Backup Withholding" and "— The Foreign Account Tax Compliance Act"), payments of interest income on the system restoration bonds to a non-U.S. holder generally will be exempt from U.S. federal income and withholding tax under the "portfolio interest" exemption if the interest is not effectively connected with the non-U.S. holder's U.S. trade or business, the non-U.S. holder properly certifies as to its non-U.S. status, as described below, and the non-U.S. holder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • does not actually or constructively own 10% or more of the total combined voting power of all classes of CenterPoint Energy stock that are entitled to vote;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • is not a bank whose receipt of interest is in connection with an extension of credit made pursuant to a loan agreement entered into in the ordinary course of business; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • is not a "controlled foreign corporation" for U.S. federal income tax purposes that is related to us or Utility Holding actually or constructively.

The portfolio interest exemption applies only if the non-U.S. holder appropriately certifies as to its non-U.S. status to the applicable withholding agent and that withholding agent does not have actual knowledge or reason to know that the non-U.S. holder in fact a United States person. A holder generally can meet this certification requirement by timely providing a properly executed IRS Form W-8BEN or W-8BEN-E, as applicable (or appropriate substitute or successor form) to the applicable withholding agent. If the non-U.S. holder holds the system restoration bonds through a financial institution or other agent acting on its behalf, it may be required to provide appropriate certifications to its agent. The agent then generally will be required to provide appropriate certifications to the applicable withholding agent, either directly or through other intermediaries.

If the non-U.S. holder cannot satisfy the requirements described above, payments of interest made to the non-U.S. holder will be subject to U.S. federal withholding tax, currently at a 30% rate, unless (1) it provides the applicable withholding agent with a properly executed IRS Form W-8BEN or W-8BEN-E, as applicable (or appropriate substitute or successor form) claiming an exemption from (or a reduction of) withholding under an applicable income tax treaty or (2) the payments of interest are effectively connected with its conduct of a trade or business in the United States and it meets the certification requirements described below (see "— Income or Gain Effectively Connected with a U.S. Trade or Business").

 *Disposition of the System Restoration Bonds* 

Subject to the discussion below (see "— Reporting and Backup Withholding" and "— The Foreign Account Tax Compliance Act"), a non-U.S. holder generally will not be subject to U.S. federal income or withholding tax on gain realized on the sale, redemption, exchange, retirement or other taxable disposition of system restoration bonds, unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the gain is effectively connected with the conduct by the non-U.S. holder of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by the non-U.S. holder in the United States); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the non-U.S. holder is an individual who is present in the United States for 183 days or more during the taxable year and certain other requirements are met.

If you are a non-U.S. holder described in the first bullet point above, you generally will be subject to U.S. federal income tax as described below (see "— Income or Gain Effectively Connected with a U.S. Trade or Business"). If you are a non-U.S. holder described in the second bullet point above, you generally will be subject to U.S. federal income tax at a 30% rate (or a lower applicable income tax treaty rate) on the gain derived from the sale, redemption, exchange, retirement or other taxable disposition, which may be offset by certain U.S.-source capital losses, unless an applicable income tax treaty provides otherwise.

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system restoration bonds, this amount will generally be taxed in the same manner as described above in "— Withholding Tax on Interest Payments."

 *Income or Gain Effectively Connected with a U.S. Trade or Business* 

If any interest on the system restoration bonds or gain from a sale, redemption, exchange, retirement or other taxable disposition of the system restoration bonds is effectively connected with a U.S. trade or business conducted by a non-U.S. holder, then the non-U.S. holder generally will be subject to U.S. federal income tax on such interest or gain on a net income basis in the same manner as a U.S. holder (unless an applicable income tax treaty provides otherwise). If interest on the system restoration bonds or gain from a sale, redemption, exchange, retirement or other taxable disposition is effectively connected income, the U.S. federal withholding tax described will generally not apply (assuming appropriate certification is provided) unless an applicable income tax treaty provides otherwise. A non-U.S. holder generally can meet the certification requirements by providing a properly executed IRS Form W-8ECI (or other applicable form) to the applicable withholding agent. In addition, if the non-U.S. holder is a corporation for U.S. federal income tax purposes, that portion of its earnings and profits that is attributable to such effectively connected income or gain, subject to certain adjustments, may be subject to a "branch profits tax" at a 30% rate (or a lower applicable income tax treaty rate).

 *Reporting and Backup Withholding* 

Payments to a non-U.S. holder of interest on a system restoration bond, and amounts withheld from such payments, if any, generally will be required to be reported to the IRS, and such information may also be made available to the tax authorities of the country in which a non-U.S. holder is a tax resident under the provisions of an applicable income tax treaty or agreement. Backup withholding generally will not apply to payments of interest to a non-U.S. holder if the certification described in "— Withholding Tax on Interest Payments" above is provided by the non-U.S. holder, or the non-U.S. holder otherwise establishes an exemption.

Proceeds from a disposition of a system restoration bond effected by the U.S. office of a U.S. or non-U.S. broker will be subject to information reporting requirements and backup withholding unless a non-U.S. holder properly certifies, under penalties of perjury, as to its non-U.S. status and certain other conditions are met, or an exemption is otherwise established. Information reporting and backup withholding generally will not apply to any proceeds from a disposition of a system restoration bond effected outside the United States by a non-U.S. office of a broker, unless such broker has certain connections to the United States, in which case information reporting, but not backup withholding, may apply unless certain other conditions are met, or an exemption is otherwise established.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a credit against a non-U.S. holder's U.S. federal income tax liability, if any, and may entitle a non-U.S. holder to a refund, provided the required information is timely furnished to the IRS.

 *The Foreign Account Tax Compliance Act* 

The Foreign Account Tax Compliance Act ("**FATCA**") generally imposes a U.S. federal withholding tax (separate and apart from, but without duplication of, the withholding tax described above) at a rate of 30% on payments of U.S. source interest on, and the gross proceeds from a disposition of, certain debt obligations paid to certain non-U.S. entities, including certain foreign financial institutions and investment funds (including, in some instances, where such an entity is acting as an intermediary), unless such non-U.S. entity complies with certain withholding and reporting requirements. Pursuant to proposed Treasury Regulations (upon which taxpayers are permitted to rely until they are revoked or final Treasury Regulations are issued), this withholding tax generally will not apply to the gross proceeds from a sale or other disposition of instruments, such as the system restoration bonds, that produce U.S. source interest. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States with respect to these rules may be subject to different rules. Under certain circumstances, a beneficial owner of a system restoration bond may be eligible for a refund or credit of such taxes. Prospective purchasers are encouraged to consult their tax advisors regarding the application of FATCA in their particular circumstances.

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The preceding discussion of certain U.S. federal income tax consequences is for general information only and is not tax advice. Each prospective investor should consult its own tax advisor regarding the particular U.S. federal, state, local and non-U.S. tax consequences of acquiring, owning and disposing of the system restoration bonds, including the consequences of any proposed change in applicable laws.

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#### ERISA CONSIDERATIONS

#### General
The Employee Retirement Income Security Act of 1974, known as ERISA, and Section 4975 of the Internal Revenue Code impose certain requirements on employee benefit plans, plans and other arrangements subject to ERISA or Section 4975 of the Internal Revenue Code. ERISA and the Internal Revenue Code also impose certain requirements on fiduciaries of such plans in connection with the investment of the assets of the plans. For purposes of this discussion, "plans" include employee benefit plans, plans and other plans and arrangements that are subject to ERISA or Section 4975 of the Code that provide retirement income, including individual retirement accounts and annuities and Keogh plans, some collective investment funds and insurance company general or separate accounts in which the assets of those employee benefit plans, plans, accounts or arrangements are invested, as well as employee benefit plans, plans or arrangements that are subject to applicable similar law (as defined below). A fiduciary of an investing plan that is subject to ERISA is any person who in connection with the assets of the plan:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • has discretionary authority or control over the management or disposition of assets, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • provides investment advice for a fee or other compensation.

Some plans, such as governmental plans, and certain church plans, and the fiduciaries of those plans, are not subject to ERISA requirements or Section 4975 of the Code. Accordingly, assets of these plans may be invested in the system restoration bonds without regard to the ERISA considerations described below, subject to the provisions of other applicable federal, state and local law that are similar to the provisions of Title I of ERISA and Section 4975 of the Code ("**applicable similar law**"). In addition, any such governmental and church plans may be subject to other provisions of federal law, including, for example, a plan which is qualified and exempt from taxation under Sections 401(a) and 501(a) of the Internal Revenue Code, which is subject to the prohibited transaction rules in Section 503 of the Internal Revenue Code.

ERISA imposes certain general fiduciary requirements on fiduciaries of a plan to which it applies, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • investment prudence and diversification, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the investment of the assets of the plan in accordance with the documents governing the plan.

Section 406 of ERISA and Section 4975 of the Internal Revenue Code also prohibit a broad range of transactions involving the assets of a plan subject to ERISA or Section 4975 of the Code and persons who have certain specified relationships to the plan, referred to as "**parties in interest**," as defined under ERISA or "**disqualified persons**" as defined under Section 4975 of the Internal Revenue Code unless a statutory or administrative exemption is available. The types of transactions that are prohibited include but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • sales, exchanges or leases of property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • loans or other extensions of credit; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the furnishing of goods or services.

Certain persons that participate in a prohibited transaction may be subject to an excise tax under Section 4975 of the Internal Revenue Code or a penalty imposed under Section 502(i) of ERISA, unless a statutory or administrative exemption is available. In addition, the persons involved in the prohibited transaction may have to cancel or unwind the transaction and a fiduciary of the plan may have to pay an amount to the plan for any losses realized by the plan or profits realized by these persons. In addition, an individual retirement account involved in a prohibited transaction (if the prohibited transaction involves the owner of the account or its beneficiary) may be disqualified which would result in adverse tax consequences to the owner of the account.

#### Regulation of Assets Included in a Plan
A fiduciary's investment of the assets of a plan subject to ERISA or Section 4975 of the Internal Revenue Code (each an "**ERISA plan**") in the system restoration bonds may cause our assets to be deemed

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to be "plan assets" of the ERISA plan. United States Department of Labor regulations at 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA (collectively, the "**plan asset regulations**"), provide that the underlying assets of an entity will be deemed to be "plan assets" of an ERISA plan that purchases an interest in the entity if the interest that is purchased by the ERISA plan is an equity interest for purposes of ERISA, equity participation by "benefit plan investors" is "significant" within the meaning of the plan asset regulations and none of the other exceptions contained in the plan asset regulations applies. Under the plan asset regulations, a "**benefit plan investor**" refers to an ERISA plan or any entity that is deemed to hold "plan assets" of such a plan by virtue of such plan's investment in the entity. An equity interest is defined in the plan asset regulations as an interest in an entity other than an instrument which is treated as indebtedness under applicable local law and which has no substantial equity features. Although there is no authority directly on point, it is anticipated that the system restoration bonds will be treated as indebtedness under local law without any substantial equity features for purposes of the plan asset regulations.

If the system restoration bonds were deemed to be equity interests in us and none of the exceptions contained in the plan asset regulations were applicable, then our assets would be considered to be "plan assets" of any ERISA plans that acquire the system restoration bonds. The extent to which the system restoration bonds are owned by benefit plan investors will not be monitored. If our assets were deemed to constitute "plan assets" pursuant to the plan asset regulations, transactions we might enter into, or may have entered into in the ordinary course of business, might constitute non-exempt prohibited transactions under ERISA and or Section 4975 of the Internal Revenue Code.

In addition, the acquisition, holding or disposition of the system restoration bonds by or on behalf of an ERISA plan could give rise to a prohibited transaction if we or the trustee, CenterPoint Houston, any other servicer, any underwriter or certain of their affiliates is or becomes a "party in interest" or "disqualified person" with respect to an investing ERISA plan. Each purchaser of the system restoration bonds will be deemed to have represented and warranted by virtue of its acquisition of any system restoration bonds that either (i) it is not and is not acting on behalf of, an ERISA plan or (ii) its acquisition, holding and disposition of the system restoration bonds will not result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Internal Revenue Code. Similarly, any purchaser or transferee of the system restoration bonds that is or is acting on behalf of, or using assets of, a plan subject to applicable similar law, will be deemed to have represented and warranted by virtue of its acquisition of system restoration bonds, that the acquisition, holding and disposition of the system restoration bonds will not result in a violation of applicable similar law.

Before acquiring any system restoration bonds by or on behalf of an ERISA plan or a plan subject to applicable similar law, you should consider whether the acquisition, holding and disposition of the system restoration bonds might constitute or result in a prohibited transaction under ERISA or Section 4975 of the Internal Revenue Code or, the case of a plan that is subject to applicable similar law, a violation of applicable similar law and, if so, whether one or more prohibited transaction exemptions or similar law exceptions, as the case may be, might apply to the acquisition, holding and disposition of the system restoration bonds.

#### Prohibited Transaction Exemptions
If you are a fiduciary of an ERISA plan, before acquiring any system restoration bonds, you should consider the availability of one of the Department of Labor's prohibited transaction class exemptions, referred to as PTCEs, or one of the statutory exemptions provided by ERISA or Section 4975 of the Internal Revenue Code, which include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • PTCE 75-1, which exempts certain transactions between a plan and certain broker-dealers, reporting dealers and banks;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • PTCE 84-14, which exempts certain transactions effected on behalf of a plan by a "qualified professional asset manager";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • PTCE 90-1, which exempts certain transactions between insurance company separate accounts and parties in interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • PTCE 91-38, which exempts certain transactions between bank collective investment funds and parties in interest;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • PTCE 95-60, which exempts certain transactions between insurance company general accounts and parties in interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • PTCE 96-23, which exempts certain transactions effected on behalf of a plan by an "in-house asset manager"; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • the statutory service provider exemption provided by Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Internal Revenue Code, which exempts certain transactions between plans and parties in interest that are not fiduciaries with respect to the transaction.

We cannot provide any assurance that any of these class exemptions or statutory exemptions will apply with respect to any particular investment in the system restoration bonds by, or on behalf of, an ERISA plan or, even if it were deemed to apply, that any exemption would apply to all transactions that may occur in connection with the investment. Even if one of these class exemptions or statutory exemptions were deemed to apply, the system restoration bonds may not be acquired with assets of any ERISA plan if we or the trustee, CenterPoint Houston, any other servicer, any underwriter or any of their affiliates:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • has investment discretion over the assets of the plan used to purchase the system restoration bonds; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • has authority or responsibility to give, or regularly gives, investment advice regarding the assets of the plan used to purchase the system restoration bonds, for a fee and under an agreement or understanding that the advice will serve as a primary basis for investment decisions for the assets of the plan, and will be based on the particular investment needs of the plan.

#### Consultation with Counsel
The sale of the system restoration bonds to an ERISA plan or a plan subject to applicable similar law will not constitute a representation by us or the trustee, CenterPoint Houston, any other servicer, any underwriter or any of their affiliates that such an investment meets all relevant legal requirements relating to investments by such plans generally or by any particular plan, or that such an investment is appropriate for such plans generally or for a particular plan.

If you are a fiduciary which proposes to purchase the system restoration bonds on behalf of or with assets of an ERISA plan or a plan subject to applicable similar law, you should consider your general fiduciary obligations under ERISA, or applicable similar law, and you should consult with your legal counsel as to the potential applicability of ERISA or the Internal Revenue Code (and the availability of any prohibited transaction exemption available thereunder) or, in the case of a plan subject to applicable similar law, any applicable similar law considerations, to any investment.

This summary is based on current provisions of ERISA, the Internal Revenue Code, the regulations thereunder and other related guidance. All of these authorities and interpretations are subject to change, and any change may apply retroactively and affect the accuracy of the opinions, statements and conclusions set forth in this discussion.

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#### LEGAL PROCEEDINGS
There are no legal or governmental proceedings pending against us, the sponsor, seller, or servicer, or of which any property of the foregoing is subject, that is material to the holders of the system restoration bonds. See "The Trustee" in this prospectus for a discussion of certain legal proceedings involving certain affiliates of the trustee.

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#### RATINGS FOR THE SYSTEM RESTORATION BONDS
We expect that the system restoration bonds will receive credit ratings from two NRSROs. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning NRSRO. Each rating should be evaluated independently of any other rating. No person or entity is obligated to maintain the rating on the system restoration bonds and, accordingly, we can give no assurance that the ratings assigned to any tranche of the system restoration bonds upon initial issuance will not be lowered or withdrawn by a NRSRO at any time thereafter. If a rating of any tranche of the system restoration bonds is lowered or withdrawn, the liquidity of this tranche of the system restoration bonds may be adversely affected. In general, ratings address credit risk and do not represent any assessment of any particular rate of principal payments on the system restoration bonds other than the payment in full of such tranche of the system restoration bonds by the final maturity date for such tranche, as well as the timely payment of interest.

Under Rule 17g-5 under the Exchange Act, NRSROs providing the sponsor with the requisite certification will have access to all information posted on a website by the sponsor for the purpose of determining the initial rating and monitoring the rating after the system restoration bonds issuance date. As a result, an NRSRO other than the NRSROs hired by the sponsor may issue Unsolicited Ratings, which may be lower, and could be significantly lower, than the ratings assigned by the hired NRSROs. The Unsolicited Ratings may be issued prior to, or after, the system restoration bonds issuance date. Issuance of any Unsolicited Rating will not affect the issuance of the system restoration bonds. Issuance of an Unsolicited Rating lower than the ratings assigned by the hired NRSROs on the system restoration bonds might adversely affect the value of the system restoration bonds and, for regulated entities, could affect the status of the system restoration bonds as a legal investment or the capital treatment of the system restoration bonds. Investors in the system restoration bonds should consult with their legal counsel regarding the effect of the issuance of a rating by a non-hired NRSRO that is lower than the rating of a hired NRSRO.

A portion of the fees paid by CenterPoint Houston to a NRSRO that is hired to assign a rating on the system restoration bonds is contingent upon the issuance of the system restoration bonds. In addition to the fees paid by CenterPoint Houston to a NRSRO at closing, CenterPoint Houston will pay a fee to the NRSRO for ongoing surveillance for so long as the system restoration bonds are outstanding. However, no NRSRO is under any obligation to continue to monitor or provide a rating on the system restoration bonds.

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#### WHERE YOU CAN FIND MORE INFORMATION
To the extent that we are required by law to file such reports and information with the SEC under the Exchange Act, we will file annual and current reports and other information with the SEC. We are incorporating by reference any future filings we or the sponsor, but solely in its capacity as our sponsor, make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering of the system restoration bonds, excluding any information that is furnished to, and not filed with, the SEC. These reports will be filed under our own name as issuing entity. Under the indenture, we may voluntarily suspend or terminate our filing obligations as the issuing entity with the SEC, to the extent permitted by applicable law.

This prospectus is part of a registration statement we and CenterPoint Houston have filed with the SEC relating to the system restoration bonds. This prospectus describes the material terms of some of the documents we have filed as exhibits to the registration statement. However, this prospectus does not contain all of the information contained in the registration statement and the exhibits. Any statements contained in this prospectus concerning the provisions of any document filed as an exhibit to the registration statement or otherwise filed with the SEC are qualified in their entirety by reference to the respective exhibit.

Information filed with the SEC can be inspected at the SEC's Internet site located at http://www.sec.gov. You may also obtain a copy of our filings with the SEC at no cost, by writing to or telephoning us at the following address:

CenterPoint Energy Restoration Bond Company II, LLC

1111 Louisiana Street, Suite 4654B

Houston, Texas 77002

(713) 207-7414

Our SEC Securities Act file number is 333-288206 and 333-288206-01.

We or CenterPoint Houston, as depositor, will also file with the SEC all of the periodic reports we or the depositor are required to file under the Exchange Act and the rules, regulations or orders of the SEC thereunder; however, neither we nor CenterPoint Houston, as depositor, intend to file any such reports relating to the system restoration bonds following completion of the reporting period required by Rule 15d-1 or Regulation 15D under the Exchange Act, unless required by law. Unless specifically stated in the report, the reports and any information included in the report will neither be examined nor reported on by an independent public accountant. A more detailed description of the information to be included in these periodic reports, please read "Description of the System Restoration Bonds — Website."

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#### INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" into this prospectus information we or the depositor file with the SEC. This means we can disclose important information to you by referring you to the documents containing the information. The information we incorporate by reference is considered to be part of this prospectus, unless we update or supersede that information with information that we or the depositor file subsequently that is incorporated by reference into this prospectus. We are incorporating into this prospectus any future distribution report on Form 10-D, current report on Form 8-K or any amendment to any such report which we or CenterPoint Houston, solely in its capacity as our depositor, make with the SEC until the offering of the system restoration bonds is completed. These reports will be filed under our own name as issuing entity. Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference in this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or in any separately filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes that statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute part of this prospectus.

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#### INVESTMENT COMPANY ACT OF 1940 AND VOLCKER RULE MATTERS
We expect to rely on an exclusion from the definition of "investment company" under the 1940 Act, contained in Rule 3a-7 promulgated under the 1940 Act, although there may be additional exclusions or exemptions available to us. As a result of such exclusion, we will not be subject to regulation as an "investment company" under the 1940 Act.

In addition, we are being structured so as not to constitute a "covered fund" for purposes of the Volcker Rule under the Dodd-Frank Act. As part of the Dodd-Frank Act, federal law prohibits a "banking entity," which is broadly defined to include banks, bank holding companies and affiliates thereof, from engaging in proprietary trading or holding ownership interests in certain private funds. The definition of "covered fund" in the regulations adopted to implement the Volcker Rule includes (generally) any entity that would be an investment company under the 1940 Act but for the exclusion provided under Sections 3(c)(1) or 3(c)(7) thereunder. Because we expect to rely on Rule 3a-7 under the 1940 Act, we expect to not be considered a "covered fund" within the meaning of the Volcker Rule regulations.

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#### RISK RETENTION
This offering of the system restoration bonds is a public utility securitization exempt from the risk retention requirements imposed by Section 15G of the Exchange Act due to the exemption provided in Rule 19(b)(8) of Regulation RR.

For information regarding the requirements of the EU Securitization Regulation as to risk retention and other matters, please read "Risk Factors — Other Risks Associated with an Investment in the System Restoration Bonds — Regulatory provisions affecting certain investors could adversely affect the liquidity and the regulatory treatment of investments in the system restoration bonds" in this prospectus.

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#### LEGAL MATTERS
Certain legal matters relating to us and the issuance of the system restoration bonds will be passed upon for CenterPoint Houston and us by Baker Botts L.L.P., Houston, Texas, counsel to CenterPoint Houston and us. Certain other legal matters relating to the issuance of the system restoration bonds will be passed on by Richards, Layton & Finger, P.A., Wilmington, Delaware, special Delaware counsel to us, and Hunton Andrews Kurth LLP, New York, New York, counsel to the underwriters. Certain legal matters relating to the federal income tax consequences of the issuance of the system restoration bonds will be passed upon for us by Baker Botts L.L.P. From time to time, Hunton Andrews Kurth LLP acts as counsel to CenterPoint Energy and its affiliates on certain matters.

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#### OFFERING RESTRICTIONS IN CERTAIN JURISDICTIONS

#### NOTICE TO RESIDENTS OF UNITED KINGDOM
IN THE UNITED KINGDOM, THIS PROSPECTUS IS BEING COMMUNICATED ONLY TO, AND IS DIRECTED ONLY AT, (1) PERSONS WHICH HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND WHICH FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (AS AMENDED, THE "**ORDER**"); (2) PERSONS WHICH FALL WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER; OR (3) PERSONS TO WHICH IT MAY OTHERWISE LAWFULLY BE COMMUNICATED OR DIRECTED (EACH SUCH PERSON, A "**RELEVANT PERSON**"). ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS PROSPECTUS RELATES, INCLUDING THE SYSTEM RESTORATION BONDS, IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS PROSPECTUS MUST NOT BE ACTED ON OR RELIED ON BY ANY PERSON WHICH IS NOT A RELEVANT PERSON.

EACH OF THE UNDERWRITERS HAS REPRESENTED AND AGREED THAT (I) IT HAS ONLY COMMUNICATED OR CAUSED TO BE COMMUNICATED AND WILL ONLY COMMUNICATE OR CAUSE TO BE COMMUNICATED AN INVITATION OR INDUCEMENT TO ENGAGE IN INVESTMENT ACTIVITY (WITHIN THE MEANING OF SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED (THE "**FSMA**")) RECEIVED BY IT IN CONNECTION WITH THE ISSUE OR SALE OF THE SYSTEM RESTORATION BONDS IN CIRCUMSTANCES IN WHICH SECTION 21(1) OF THE FSMA DOES NOT APPLY TO THE ISSUING ENTITY; AND (II) IT HAS COMPLIED AND WILL COMPLY WITH ALL APPLICABLE PROVISIONS OF THE FSMA WITH RESPECT TO ANYTHING DONE BY IT IN RELATION TO THE SYSTEM RESTORATION BONDS IN, FROM OR OTHERWISE INVOLVING THE UNITED KINGDOM.

#### NOTICE TO RESIDENTS OF CANADA
THE SYSTEM RESTORATION BONDS MAY BE SOLD IN CANADA ONLY TO PURCHASERS PURCHASING, OR DEEMED TO BE PURCHASING, AS PRINCIPAL THAT ARE ACCREDITED INVESTORS, AS DEFINED IN NATIONAL INSTRUMENT 45-106 PROSPECTUS EXEMPTIONS OR SUBSECTION 73.3(1) OF THE SECURITIES ACT (ONTARIO), AND ARE PERMITTED CLIENTS, AS DEFINED IN NATIONAL INSTRUMENT 31-103 REGISTRATION REQUIREMENTS, EXEMPTIONS AND ONGOING REGISTRANT OBLIGATIONS. ANY RESALE OF THE SYSTEM RESTORATION BONDS MUST BE MADE IN ACCORDANCE WITH AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE PROSPECTUS REQUIREMENTS OF APPLICABLE SECURITIES LAWS.

SECURITIES LEGISLATION IN CERTAIN PROVINCES OR TERRITORIES OF CANADA MAY PROVIDE A PURCHASER WITH REMEDIES FOR RESCISSION OR DAMAGES IF THIS PROSPECTUS (INCLUDING ANY AMENDMENT THERETO) CONTAINS A MISREPRESENTATION, PROVIDED THAT THE REMEDIES FOR RESCISSION OR DAMAGES ARE EXERCISED BY THE PURCHASER WITHIN THE TIME LIMIT PRESCRIBED BY THE SECURITIES LEGISLATION OF THE PURCHASER'S PROVINCE OR TERRITORY. THE PURCHASER SHOULD REFER TO ANY APPLICABLE PROVISIONS OF THE SECURITIES LEGISLATION OF THE PURCHASER'S PROVINCE OR TERRITORY FOR PARTICULARS OF THESE RIGHTS OR CONSULT WITH A LEGAL ADVISOR.

PURSUANT TO SECTION 3A.3 OF NATIONAL INSTRUMENT 33-105 UNDERWRITING CONFLICTS (NI 33-105), THE UNDERWRITERS ARE NOT REQUIRED TO COMPLY WITH THE DISCLOSURE REQUIREMENTS OF NI 33-105 REGARDING UNDERWRITER CONFLICTS OF INTEREST IN CONNECTION WITH THIS OFFERING.

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#### GLOSSARY OF DEFINED TERMS
The following definitions are used in this prospectus:

*1940 Act* means the Investment Company Act of 1940, as amended.

*Adjustment request* with regard to the system restoration charges means a request filed by the servicer with the PUCT requesting modifications to the system restoration charges.

*Applicable similar law* means, with regard to ERISA considerations, other applicable federal, state and local law that is similar to the provisions of Title I of ERISA and Section 4975 of the Internal Revenue Code.

*Bankruptcy Code* means Title 11 of the United States Code, as amended.

*Basic documents* means the administration agreement, the sale agreement, the servicing agreement, the indenture, the series supplement, the bill of sale given by CenterPoint Houston, as the seller, to us, the system restoration bonds, and our Certificate of Formation and Limited Liability Company Agreement, in each case, as amended to the date of this prospectus.

*Business day* means any day other than a Saturday, a Sunday or a day on which banking institutions in New York, New York, Chicago, Illinois or Houston, Texas, are, or DTC is, required or authorized by law or executive order to remain closed.

*Capital subaccount* means that subaccount of the collection account into which the seller will contribute capital in an amount equal to 0.50% of the initial principal amount of the system restoration bonds.

*Clearstream* means Clearstream Banking, Luxembourg, S.A.

*Collection account* means the one or more segregated trust accounts relating to the system restoration bonds designated the collection account and held by the trustee under the indenture. The collection account shall initially be divided into subaccounts, which need not be separate accounts: a general subaccount, a capital subaccount and an excess funds subaccount, as specified in the series supplement.

*Depositor* means CenterPoint Houston.

*Direct Participants* means DTC's participants.

*Dodd-Frank* Act means the Dodd-Frank Wall Street Reform and Consumer Protection Act.

 *DTC means The Depository Trust Company, New York, New York, and its nominee holder, Cede & Co.* 

*DTCC* means The Depository Trust & Clearing Corporation.

*EEA* means the European Economic Area.

*ERCOT* means the Electric Reliability Council of Texas.

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

*EU* means the European Union.

*EU Securitization Regulation* means EU legislation comprising Regulation (EU) 2017/2402.

*Euroclear* means the Euroclear System.

*European Securitization Rules* means the EU Securitization Regulation together with certain related regulatory technical standards, implementing technical standards and official guidance.

*Excess funds subaccount* means that subaccount of the collection account into which funds collected by the servicer in excess of amounts necessary to make the payments specified on a given payment date.

*Exchange Act* means the Securities Exchange Act of 1934, as amended.

*FATCA* means the Foreign Account Tax Compliance Act.

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*February 2021 Winter Storm Event* means the extreme and unprecedented winter weather event in February 2021 (also known as Winter Storm Uri) resulting in electricity generation supply shortages, including in Texas, and natural gas supply shortages and increased wholesale prices of natural gas in the United States, primarily due to prolonged freezing.

*Financing order* means the order issued by the PUCT on June 5, 2025 to CenterPoint Houston in Docket No. 57559, which, among other things, governs the amount of the system restoration bonds that may be issued and terms for collections of the system restoration charges.

*General subaccount* means that subaccount that will hold funds held in the collection account that are not held in the other subaccounts of the collection account.

*Hired NRSRO* means an NRSRO hired by CenterPoint Houston.

*Indenture* means the indenture to be entered into between us, the trustee and the securities intermediary, providing for the issuance of the system restoration bonds, as the same may be amended and supplemented from time to time by one or more indentures supplemental thereto.

*Indirect Participants* means participants accessing the DTC system, including both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly.

*Internal Revenue Code* means the Internal Revenue Code of 1986, as amended.

*IRS* means the Internal Revenue Service of the United States.

*Issuance date* means the date the system restoration bonds are issued and sold to the underwriters.

*Issuing entity* means CenterPoint Energy Restoration Bond Company II, LLC.

*May 2024 Storms* refers to, collectively, the May 16, 2024 storm that the National Weather Service has officially named "the Houston Derecho" and a wave of strong thunderstorms that caused extensive damage to the Houston area on May 28, 2024.

*Moody's* means Moody's Investors Service, Inc. or any successor in interest. References to Moody's are effective so long as Moody's is a rating agency.

*New on-site generation* means electric generation capacity greater than 10 megawatts capable of being lawfully delivered to a site without use of utility distribution or transmission facilities and which was not, on or before the date the financing order was issued, either (A) a fully operational facility, or (B) a project supported by substantially complete filings for all necessary site-specific environmental permits under the rules of the Texas Commission on Environmental Quality.

*Nonbypassable* refers to the right of the servicer to collect the system restoration charges from all existing and future retail customers located within CenterPoint Houston's service territory as it existed on the date of the financing order, even if those customers elect to purchase electricity from another supplier or switch to new on-site generation (except as specified in the Public Utility Regulatory Act) or if the utility goes out of business and its service area is acquired by another utility or is municipalized.

*NRG* means NRG Energy, Inc.

*NRSRO* means a nationally recognized statistical rating organization.

*OID* means original issue discount.

*Payment date* means the date or dates on which interest and principal are to be payable on the system restoration bonds.

*PBRAF* means the Periodic Billing Requirement Allocation Factor.

*Plan asset regulations* means United States Department of Labor regulations at 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA.

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*Public Utility Regulatory Act* means the Texas Public Utility Regulatory Act, as codified in Title II of the Texas Utilities Code.

*PUCT* means the Public Utility Commission of Texas.

*Qualified costs* means: (1) the system restoration costs determined by the PUCT pursuant to Docket No. 57271 (the proceeding to determine the amount of CenterPoint Houston's system restoration costs eligible for recovery and securitization), net of any insurance proceeds, government grants, or other sources of funding that compensate CenterPoint Houston for system restoration costs incurred by CenterPoint Houston at the time of the application for the financing order, with carrying costs on the unrecovered balance at CenterPoint Houston's weighted average cost of capital of 7.716%; (2) costs of issuing, supporting and servicing the system restoration bonds and any costs of retiring and refunding existing debt and equity securities; (3) costs to the PUCT of acquiring professional services for the purposes of evaluating the proposed securitization transaction; and (4) costs associated with ancillary agreements such as bond insurance policies, letters of credit, reserve accounts, surety bonds, swap arrangements, hedging arrangements, liquidity or credit support arrangements or other financial arrangements entered into in connection with the issuance or payment of the system restoration bonds.

*Rating agencies* means Moody's and S&P. If no such organization or successor is any longer in existence, "rating agency" shall be a NRSRO or other comparable person designated by us, written notice of which designation shall be given to the trustee, the PUCT and the servicer.

*Rating agency condition* means, with respect to any action, at least ten business days' prior written notification to each rating agency of such action, and written confirmation from each of S&P and Moody's to the trustee and us 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 the system restoration bonds and that prior to the taking of the proposed action no other rating agency shall have provided written notice to us that such action has resulted or would result in the suspension, reduction or withdrawal of the then current rating of any such tranche of the system restoration bonds; *provided*, that, if within such ten business day period, any rating agency (other than S&P) has neither replied to such notification nor responded in a manner that indicates that such rating agency is reviewing and considering the notification, then (i) the requesting party shall be required to confirm that such rating agency has received the rating agency condition request, and if it has, promptly request the related rating agency condition confirmation and (ii) if the rating agency neither replies to such notification nor responds in a manner that indicates it is reviewing and considering the notification within five business days following such second request, the applicable rating agency condition requirement shall not be deemed to apply to such rating agency. For the purposes of this definition, any confirmation, request, acknowledgment or approval that is required to be in writing may be in the form of electronic mail or a press release (which may contain a general waiver of a rating agency's right to review or consent).

*Record date* means the date or dates with respect to each payment date on which it is determined the person in whose name each system restoration bond is registered will be paid on the respective payment date.

*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.

*REP* means a retail electric provider under the financing order or any other entity, which, under the terms of the financing order or the Utilities Code, may be obligated to pay, bill or collect the system restoration charges, other than retail customers.

*Retail customer* means each person from whom CenterPoint Houston is authorized to recover qualified costs pursuant to the Securitization Act, any PUCT regulation or the financing order, but does not include REPs.

*Revenue Procedure 2005-62* means Revenue Procedure 2005-62, 2005-2 CB 507.

*Revenue Procedure 2024-15* means Revenue Procedure 2024-15, 2024-12 IRB 717.

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*Sale agreement* means the system restoration property sale agreement to be entered into between us and CenterPoint Houston, pursuant to which CenterPoint Houston sells and we purchase the system restoration property.

*SEC* means the U.S. Securities and Exchange Commission.

*Securities Act* means the Securities Act of 1933, as amended.

*Securities Intermediary* means U.S. Bank National Association or any successor securities intermediary under the indenture.

*Securitizable Balance* means the balance of (1) the system restoration cost amount related to distribution operations approved by the PUCT, including carrying costs through the date costs are securitized ($396,325,134 as of September 2, 2025), minus (2) any insurance proceeds, government grants, and other sources of funding that have been received by CenterPoint Houston that compensate CenterPoint Houston for the distribution-related system restoration costs received by CenterPoint Houston at the time of the application for the financing order.

*Securitization Act* means Subchapter I of Chapter 36 of the Public Utility Regulatory Act, as codified in Title II of the Texas Utilities Code, as amended from time to time, adopted and effective in August 2009, that allows for the securitization of system restoration costs, together with Subchapter G of Chapter 39 of the Public Utility Regulatory Act.

*Seller* means CenterPoint Houston.

*Servicer* means CenterPoint Houston, acting as the initial servicer, and any successor or assignee servicer, which will service the system restoration property under the servicing agreement.

*Servicer business day* means any day other than a Saturday, a Sunday or a day on which banking institutions in New York, New York, Chicago Illinois or Houston, Texas are required or authorized by law or executive order to remain closed, on which the servicer maintains normal office hours and conducts business.

*Servicing agreement* means the servicing agreement to be entered into between us and CenterPoint Houston, as the same may be amended and supplemented from time to time, pursuant to which CenterPoint Houston, as the initial servicer, undertakes to service the system restoration property.

*Sponsor* means CenterPoint Houston.

*System restoration bonds* means the Series 2025-A Senior Secured System Restoration Bonds offered pursuant to this prospectus.

*System restoration charges* means the nonbypassable amounts to be charged for the use or availability of electric services, approved by the PUCT in the financing order to recover qualified costs that may be collected by CenterPoint Houston, its successor, assignees or other collection agents as provided in the financing order.

*System restoration property* means the rights and interests of CenterPoint Houston or its successor under the financing order once those rights are first transferred to the issuing entity or pledged in connection with the issuance of the system restoration bonds, including the right to impose, collect and receive through system restoration charges payable by retail electric customers which take service at distribution voltage within CenterPoint Houston's certificated service area as it existed on the date of the financing order, an amount sufficient to cover the qualified costs, the right to receive system restoration charges in amounts and at times sufficient to pay principal and interest and make other deposits in connection with the system restoration bonds and all revenues and collections resulting from system restoration charges, except the rights of CenterPoint Houston to earn and receive a rate of return on its invested capital in the issuing entity, to receive administration and servicer fees, or to use CenterPoint Houston's remaining portion of the Purchase Price (as defined in the sale agreement), and all revenue, collections, payments, money and proceeds arising out of those rights and interests. System restoration property is known as "transition property" in the Securitization Act.

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*S&P* means S&P Global Ratings or any successor in interest. References to S&P are effective so long as S&P is a rating agency.

*TEEEF* means temporary emergency electric energy facilities.

*Terms and Conditions* with regard to Euroclear means the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of Euroclear, and applicable Belgian law.

*Texas UCC* means the Uniform Commercial Code as enacted in the State of Texas, as codified in Title I of the Texas Business & Commerce Code.

*Treasury Regulations* means proposed or issued regulations promulgated from time to time under the Internal Revenue Code.

*True-up mechanism* means a mechanism required by the financing order whereby the servicer will apply to the PUCT for adjustments to the system restoration charges based on actual collected system restoration charges and updated assumptions by the servicer as to future collections of system restoration charges.

*Trust Indenture Act* means the Trust Indenture Act of 1939, as amended.

*Trustee* means U.S. Bank Trust Company, National Association or any successor trustee under the indenture.

*UCC* means the Uniform Commercial Code.

*Unsolicited Ratings* means ratings on the system restoration bonds issued by an NRSRO other than the hired NRSRO.

*Utilities Code* means the Texas Utilities Code, as amended from time to time.

 *Vistra means Vistra Energy Corp.* 

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### $401,521,000 Series 2025-A Senior Secured System Restoration Bonds

### CenterPoint Energy Houston Electric, LLC

#### Sponsor, Depositor and Initial Servicer

### CenterPoint Energy Restoration Bond Company II, LLC

#### Issuing Entity

---

| | |
|:---|:---|
| **Citigroup** <br> *Structuring advisor and joint bookrunner*  | **Barclays** <br> *Joint bookrunner*  |
| **Academy Securities <br> *Co-Manager***  | **Academy Securities <br> *Co-Manager***  |

---

Through and including , 2025 (the 90th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and when offering an unsold allotment or subscription.

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#### PART II

#### Information not Required in Prospectus

#### Item 12. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses expected to be incurred by the registrants in connection with the issuance and distribution of the securities being registered by this prospectus, other than underwriting discounts and commissions. All amounts are estimated except the Securities and Exchange Commission registration fee.

---

| | |
|:---|:---|
| Securities and Exchange Commission registration fee  | $61472.87 |
| Printing expenses  | 50000.00 |
| Trustee fees and expenses  | 25000.00 |
| Legal fees and expenses  | 2375000.00 |
| Accounting fees and expenses  | 185000.00 |
| Rating Agencies' fees and expenses  | 532016.00 |
| Structuring Agent fees and expenses  | 150000.00 |
| PUCT Financial Advisor fees and expenses  | 50000.00 |
| Miscellaneous fees and expenses  | 161294.00 |
| Total  | $3589782.87 |

---

#### Item 13. Indemnification of Directors and Officers

#### CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC
Section 18-108 of the Delaware Limited Liability Company Act provides that subject to such standards and restrictions, if any, as are set forth in its limited liability company agreement, a limited liability company may, and has the power to, indemnify and hold harmless any member, manager, or other person from and against any and all claims and demands whatsoever. The LLC Agreement provides that we shall, to the fullest extent permitted by applicable law, indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Issuing Entity) by reason of the fact that he or she is or was a manager, member, officer, controlling person, legal representative or agent of us, or is or was serving at the request of us as a member, manager, director, officer, partner, shareholder, controlling person, legal representative or agent of another limited liability company, partnership, corporation, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement in connection with such action, suit or proceeding, in each case, actually and reasonably incurred by such person, if such person acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interests of us, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such conduct was unlawful; *provided* that such person shall not be entitled to indemnification if such judgment, penalty, fine or other expense was directly caused by such person's fraud, gross negligence or willful misconduct. The LLC Agreement provides that expenses incurred in defending or investigating a threatened or pending action, suit or proceeding may be paid by us in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the person who was or is a manager, member, officer, controlling person, legal representative or agent, or is or was serving at the request of the company as a member, manager, director, officer, partner, shareholder, controlling person, legal representative or agent of another limited liability company, corporation, partnership, joint venture, trust or other enterprise, to repay such amount if it shall ultimately be determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by us as authorized in the LLC Agreement.

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#### CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
The Texas Business Organizations Code (the "**TBOC**") and Article VIII of CenterPoint Houston's Amended and Restated Limited Liability Company Agreement (the "**CEHE LLC Agreement**") provide CenterPoint Houston with broad powers and authority to indemnify its member, managers and officers and to purchase and maintain insurance for such purposes. Pursuant to such statutory and CEHE LLC Agreement provisions, CenterPoint Houston has purchased insurance against certain costs of indemnification that may be incurred by it and by its member, manager and officers. CenterPoint Houston provides liability insurance for its manager and officers which provides for coverage against loss from claims made against its manager and officers in their capacity as such, including, subject to certain exceptions, liabilities under the federal securities laws.

Additionally, Section 7.12 of the CEHE LLC Agreement provides that a manager of CenterPoint Houston is not liable to CenterPoint Houston or its member for monetary damages for breach of fiduciary duty as a manager, except that Section 7.12 does not eliminate or limit the liability of a manager for any acts or omissions that involve intentional misconduct, fraud or a knowing violation of law or for a distribution in violation of Texas law as a result of the willful or grossly negligent act or omission of the manager.

Section 7.12 also provides that any subsequent amendments to Texas statutes that further limit the liability of managers will inure to the benefit of the managers. Any repeal or modification of Section 7.12 shall not adversely affect any right of protection of a manager of CenterPoint Houston existing at the time of the repeal or modification.

#### Item 14. Exhibits
List of Exhibits

---

| | |
|:---|:---|
| **EXHIBIT <br> NO.** | **DESCRIPTION OF EXHIBIT**  |
| &nbsp;&nbsp; 1.1\* | [Form of Underwriting Agreement](tm2517786d7_ex1-1.htm)  |
| &nbsp;&nbsp; 3.1\*\* | [Certificate of Formation of CenterPoint Energy Restoration Bond Company II, LLC](http://www.sec.gov/Archives/edgar/data/48732/000110465925061199/tm2517786d2_ex3-1.htm)  |
| &nbsp;&nbsp; 3.2\*\* | [Limited Liability Company Agreement of CenterPoint Energy Restoration Bond Company II, LLC](http://www.sec.gov/Archives/edgar/data/48732/000110465925061199/tm2517786d2_ex3-2.htm)  |
| &nbsp;&nbsp; 3.3\*\* | [Form of Amended and Restated Limited Liability Company Agreement of CenterPoint Energy Restoration Bond Company II, LLC](http://www.sec.gov/Archives/edgar/data/48732/000110465925061199/tm2517786d2_ex3-3.htm)  |
| &nbsp;&nbsp; 4.1\* | [Form of Indenture between CenterPoint Energy Restoration Bond Company II, LLC, the Trustee and the Securities Intermediary (including the forms of the System Restoration Bonds and form of Series Supplement)](tm2517786d7_ex4-1.htm) |
| &nbsp;&nbsp; 5.1\*\*\* | [Opinion of Baker Botts L.L.P. with respect to legality of the securities being offered](https://www.sec.gov/Archives/edgar/data/48732/000110465925077627/tm2517786d4_ex5-1.htm)  |
| &nbsp;&nbsp; 8.1\*\*\* | [Opinion of Baker Botts L.L.P. with respect to federal income tax matters](https://www.sec.gov/Archives/edgar/data/48732/000110465925077627/tm2517786d4_ex8-1.htm)  |
| 10.1\* | [Form of System Restoration Property Servicing Agreement between CenterPoint Energy Restoration Bond Company II, LLC and CenterPoint Houston, as Servicer](tm2517786d7_ex10-1.htm)  |
| 10.2\* | [Form of System Restoration Property Sale Agreement between CenterPoint Energy Restoration Bond Company II, LLC and CenterPoint Houston, as Seller](tm2517786d7_ex10-2.htm)  |
| 10.3\*\* | [Form of Administration Agreement between CenterPoint Energy Restoration Bond Company II, LLC and CenterPoint Houston, as Administrator](http://www.sec.gov/Archives/edgar/data/48732/000110465925061199/tm2517786d2_ex10-3.htm)  |
| 10.4\*\*\* | [Services and Indemnity Agreement by and among Bernard J. Angelo, the independent manager of CenterPoint Energy Restoration Bond Company II, LLC, Global Securitization Services, LLC, CenterPoint Energy Restoration Bond Company II, LLC and CenterPoint Houston](https://www.sec.gov/Archives/edgar/data/48732/000110465925077627/tm2517786d4_ex10-4.htm)  |
| 23.1\*\*\* | Consent of Baker Botts L.L.P. (included as part of its opinions filed as Exhibits [5.1](https://www.sec.gov/Archives/edgar/data/48732/000110465925077627/tm2517786d4_ex5-1.htm) and [8.1](https://www.sec.gov/Archives/edgar/data/48732/000110465925077627/tm2517786d4_ex8-1.htm)) |
| 24.1\* | [Power of Attorney of CenterPoint Energy Restoration Bond Company II, LLC (included on the signature pages to this Registration Statement)](#tSIG2)  |
| 24.2\* | [Power of Attorney of CenterPoint Houston (included on the signature pages to this Registration Statement)](#tSIG1)  |

---

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---

| | |
|:---|:---|
| **EXHIBIT <br> NO.** | **DESCRIPTION OF EXHIBIT**  |
| 25.1\*\* | [Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of U.S. Bank Trust Company, National Association](http://www.sec.gov/Archives/edgar/data/48732/000110465925061199/tm2517786d2_ex25-1.htm)  |
| 99.1\*\* | [Financing Order of the PUCT](http://www.sec.gov/Archives/edgar/data/48732/000110465925061199/tm2517786d2_ex99-1.htm)  |
| 99.2\*\*\* | [Form of Opinion of Baker Botts L.L.P. with respect to certain U.S. and Texas constitutional matters](https://www.sec.gov/Archives/edgar/data/48732/000110465925077627/tm2517786d4_ex99-2.htm)  |
| 99.3\*\* | [Consent of Manager Nominee](http://www.sec.gov/Archives/edgar/data/48732/000110465925061199/tm2517786d2_ex99-3.htm)  |
| 107\*\* | [Filing Fee Table](http://www.sec.gov/Archives/edgar/data/48732/000110465925061199/tm2517786d2_ex-filingfees.htm)  |

---

\*

Filed herewith.

\*\*

Previously filed with the Registration Statement on Form SF-1 of CenterPoint Energy Houston Electric, LLC and CenterPoint Energy Restoration Bond Company II, LLC (File Nos. 333-288206 and 333-288206-01) on June 20, 2025.

\*\*\*

Previously filed with Amendment No. 1 to the Registration Statement on Form SF-1 of CenterPoint Energy Houston Electric, LLC and CenterPoint Energy Restoration Bond Company II, LLC (File Nos. 333-288206 and 333-288206-01) on August 13, 2025.

#### Item 15. Undertakings
The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement in accordance with Item 1100(c)(1) of Regulation AB (17 CFR 229.1100(c)(1)) shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

The undersigned registrants hereby undertake to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the SEC under Section 305(b)(2) of the Trust Indenture Act

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, each registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by a registrant of expenses incurred or paid by a director, officer or controlling person of such registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, each registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

The undersigned registrants hereby undertake that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1)

For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2)

For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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#### SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form SF-1 and has duly caused this amendment no. 2 to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on the 27th day of August, 2025.

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

/s/ Jesus Soto, Jr.

Jesus Soto, Jr.

President, Chief Executive Officer and Manager

Each of the persons whose signatures appear below constitute and appoint Monica Karuturi and Kristie L. Colvin, and each of them, his or her true and lawful attorneys-in-fact and agents with full and several power of substitution, for him or her and his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) and supplements to this Registration Statement, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their substitutes, may lawfully do or cause to be done.

Pursuant to the requirements of the Securities Act of 1933, this amendment no. 2 to the registration statement has been signed by the following persons in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature**  | **Title**  | **Date**  |
| /s/ Jesus Soto, Jr. <br>Jesus Soto, Jr.  | President, Chief Executive Officer and <br> Manager <br> (Principal Executive Officer)  | August 27, 2025  |
| /s/ Christopher A. Foster <br>Christopher A. Foster  | Executive Vice President and Chief Financial <br> Officer <br> (Principal Financial Officer)  | August 27, 2025  |
| /s/ Kristie L. Colvin <br>Kristie L. Colvin  | Senior Vice President and Chief Accounting <br> Officer <br> (Principal Accounting Officer)  | August 27, 2025  |

---

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Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form SF-1 and has duly caused this amendment no. 2 to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on the 27th day of August, 2025.

CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC

By:

/s/ Jesus Soto, Jr.

Jesus Soto, Jr.

President and Manager

Each of the persons whose signatures appear below constitute and appoint Monica Karuturi and Kristie L. Colvin, and each of them, his or her true and lawful attorneys-in-fact and agents with full and several power of substitution, for him or her and his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) and supplements to this Registration Statement, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their substitutes, may lawfully do or cause to be done.

Pursuant to the requirements of the Securities Act of 1933, this amendment no. 2 to the registration statement has been signed by the following persons in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature**  | **Title**  | **Date**  |
| **Managers:** |  |  |
| /s/ Patricia L. Martin <br>Patricia L. Martin  | Vice President, Treasurer and Manager  | August 27, 2025  |
| /s/ Kristie L. Colvin <br>Kristie L. Colvin  | Vice President, Chief Accounting Officer <br> and Manager  | August 27, 2025  |
| /s/ Jesus Soto, Jr. <br>Jesus Soto, Jr.  | President and Manager  | August 27, 2025  |

---

------

## Exhibit 1.1

**Exhibit 1.1**

CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

$401,521,000 Series 2025-A SENIOR SECURED SYSTEM RESTORATION BONDS

UNDERWRITING AGREEMENT

[ ], 2025

To the Representatives named in Schedule I hereto<br> of the Underwriters named in Schedule II hereto

Ladies and Gentlemen:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Introduction</u>. CenterPoint Energy Restoration Bond Company II, LLC, a Delaware limited liability company (the "<u>Issuer</u>"), proposes to issue and sell $401,521,000 aggregate principal amount of its Series 2025-A Senior Secured System Restoration Bonds (the "<u>Bonds</u>"), identified in Schedule I hereto. The Issuer and CenterPoint Energy Houston Electric, LLC, a Texas limited liability company ("<u>CEHE</u>"), hereby confirm their agreement with the several Underwriters (as defined below) as set forth herein.

The term "Underwriters" as used herein shall be deemed to mean the entity or several entities named in Schedule II hereto and any underwriter substituted as provided in Section 7 hereof and the term "<u>Underwriter</u>" shall be deemed to mean any one of such Underwriters. If the entity or entities listed in Schedule I hereto as representatives (the "<u>Representatives</u>") are the same as the entity or entities listed in Schedule II hereto, then the terms "Underwriters" and "Representatives", as used herein, shall each be deemed to refer to such entity or entities. All obligations of the Underwriters hereunder are several and not joint. If more than one entity is named in Schedule I hereto, any action under or in respect of this underwriting agreement ("<u>Underwriting Agreement</u>") may be taken by such entities jointly as the Representatives or by one of the entities acting on behalf of the Representatives and such action will be binding upon all the Underwriters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Description of the Bonds</u>. The Bonds will be issued pursuant to an indenture to be dated as of [Closing Date], 2025, as supplemented by a series supplement thereto (as so supplemented, the "<u>Indenture</u>"), between the Issuer and U.S. Bank Trust Company, National Association, a national banking association, as indenture trustee (the "<u>Indenture Trustee</u>"), and U.S. Bank National Association, as securities intermediary (the "<u>Securities Intermediary</u>"). The Bonds will be senior secured obligations of the Issuer and will be supported by system restoration property (as more fully described in the Financing Order issued on June 5, 2025 (the "<u>Financing Order</u>") by the Public Utility Commission of Texas (the "<u>Texas Commission</u>") relating to the Bonds, the "<u>System Restoration Property</u>"), to be sold to the Issuer by CEHE pursuant to the System Restoration Property Sale Agreement, to be dated on or about [Closing Date], 2025 between CEHE and the Issuer (the "<u>Sale Agreement</u>"). The System Restoration Property securing the Bonds will be serviced pursuant to the System Restoration Property Servicing Agreement, to be dated on or about [Closing Date], 2025 between CEHE, as servicer, and the Issuer, as owner of the System Restoration Property sold to it pursuant to the Sale Agreement (the "<u>Servicing Agreement</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Representations and Warranties of the Issuer</u>. The Issuer represents and warrants to the several Underwriters that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Bonds have been registered on Form SF-1 pursuant to guidance from the Securities and Exchange Commission (the "<u>Commission</u>") and in accordance with such guidance the Issuer and the Bonds meet the requirements for the use of Form SF-1 under the Securities Act of 1933, as amended (the "<u>Securities Act</u>"). The Issuer, in its capacity as co-registrant and issuing entity with respect to the Bonds, and CEHE, in its capacity as co-registrant and as sponsor for the Issuer, have filed with the Commission a registration statement on such form on June 20, 2025 (Registration Nos. 333-288206 and 333-288206-01), as amended by Amendment No. 1 thereto dated August 13, 2025 and Amendment No. 2 thereto dated August 27, 2025, including a prospectus, for the registration under the Securities Act of up to $401,521,000 aggregate principal amount of the Bonds. Such registration statement, as amended ("<u>Registration Statement Nos. 333-288206 and 333-288206-01</u>"), has been declared effective by the Commission and no stop order suspending such effectiveness has been issued under the Securities Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Issuer, threatened by the Commission. References herein to the term "Registration Statement" shall be deemed to refer to Registration Statement Nos. 333-288206 and 333-288206-01, including any amendment thereto, and any information in a prospectus as amended or supplemented as of the Effective Date (as defined below), deemed or retroactively deemed to be a part thereof pursuant to Rule 430A under the Securities Act ("<u>Rule 430A</u>") that has not been superseded or modified. "Registration Statement" without reference to a time means the Registration Statement as of the Applicable Time (as defined below), which the parties agree is the time of the first contract of sale (as used in Rule 159 under the Securities Act) for the Bonds, and shall be considered the "Effective Date" of the Registration Statement relating to the Bonds. Information contained in a form of prospectus (as amended or supplemented as of the Effective Date) that is deemed retroactively to be a part of the Registration Statement pursuant to Rule 430A shall be considered to be included in the Registration Statement as of the time specified in Rule 430A. The final prospectus relating to the Bonds, as filed with the Commission pursuant to Rule 424(b) under the Securities Act, is referred to herein as the "<u>Final Prospectus</u>", and the most recent preliminary prospectus, dated [ ], 2025, that omitted information to be included upon pricing in a form of prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act and that was used after the initial effectiveness of the Registration Statement and prior to the Applicable Time is referred to herein as the "<u>Pricing Prospectus</u>". The Pricing Prospectus and the Issuer Free Writing Prospectuses (as defined below) identified in Section B of Schedule III hereto, considered together with the Intex File (as defined below), are referred to herein as the "<u>Pricing Package</u>".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i) At the earliest time after the filing of the Registration Statement that the Issuer or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act) of the Bonds and (ii) at the date hereof, the Issuer was not and is not an "ineligible issuer," as defined under Rule 405 under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) At the time the Registration Statement initially became effective, at the time of each amendment (whether by post-effective amendment, incorporated report or form of prospectus) and on the Effective Date relating to the Bonds, the Registration Statement fully complied, and the Final Prospectus, both as of its date and at the Closing Date, and the Indenture, at the Closing Date, will fully comply in all material respects with the applicable provisions of the Securities Act and the Trust Indenture Act of 1939, as amended (the "<u>Trust Indenture Act</u>"), respectively, and, in each case, the applicable instructions, rules and regulations of the Commission thereunder; the Registration Statement, at each of the aforementioned dates, did not and will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading (except for such statements contained in any such documents that are subject to completion or may change based on market conditions or pricing-related information that has been omitted from the Pricing Prospectus in accordance with Rule 430A); the Final Prospectus, both as of its date and at the Closing Date, will not contain an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the foregoing representations and warranties in this paragraph (c) shall not apply to statements or omissions made in reliance upon and in conformity with any Underwriter Provided Information as defined in Section 11(b) below or to any statements in or omissions from any Statements of Eligibility on Form T-1 (or amendments thereto) of the Indenture Trustee under the Indenture filed as exhibits to the Registration Statement or to any statements or omissions made in the Registration Statement or the Final Prospectus relating to The Depository Trust Company's ("<u>DTC</u>") Book-Entry System that are based solely on information contained in published reports of DTC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) As of the Applicable Time and, if applicable, on the date of its filing, the Pricing Prospectus and each Issuer Free Writing Prospectus did not include any untrue statement of a material fact or omit (with respect to each Issuer Free Writing Prospectus and the Intex File, when taken together with the Pricing Prospectus) to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (except for such statements contained in any such documents that are subject to completion or may change based on market conditions or pricing-related information that has been omitted from the Pricing Prospectus in accordance with Rule 430A). The Pricing Package, at the Applicable Time, did not, and at all subsequent times through the completion of the offer and the sale of the Bonds on the Closing Date, will not include, any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. The two preceding sentences do not apply to statements in or omissions from the Pricing Prospectus, the Pricing Term Sheet (as defined below) or any other Issuer Free Writing Prospectus in reliance upon and in conformity with any Underwriter Provided Information. "Issuer Free Writing Prospectus" means any "issuer free writing prospectus," as defined in Rule 433(h) under the Securities Act, relating to the Bonds, in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Issuer's records pursuant to Rule 433(g) under the Securities Act. References to the term "Free Writing Prospectus" shall mean a free writing prospectus, as defined in Rule 405 under the Securities Act. "Intex File" means the files available at the Intex deal titled "[ ]" concerning the characteristics of the Bonds or the System Restoration Property. References to the term "Applicable Time" mean [ ] PM, Eastern Time, on the date hereof, except that if, subsequent to such Applicable Time, the Issuer, CEHE and the Underwriters have determined that the information contained in the Pricing Prospectus or any Issuer Free Writing Prospectus issued prior to such Applicable Time included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and the Issuer, CEHE and the Underwriters have agreed to terminate the old purchase contracts and have entered into new purchase contracts with purchasers of the Bonds, then "Applicable Time" will refer to the first of such times when such new purchase contracts are entered into. The Issuer represents, warrants and agrees that it has treated and agrees that it will treat each of the free writing prospectuses listed on Schedule III hereto as an Issuer Free Writing Prospectus, and that each such Issuer Free Writing Prospectus has fully complied and will fully comply with the applicable requirements of Rules 164 and 433 under the Securities Act, including timely Commission filing where required, legending and record keeping.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the offer and sale of the Bonds on the Closing Date or until any earlier date that the Issuer or CEHE notified or notifies the Representatives as described in the next sentence, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development the result of which is that such Issuer Free Writing Prospectus conflicts or would conflict with the information then contained in the Registration Statement or includes or would include an untrue statement of a material fact or, when considered together with the Pricing Prospectus, omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, (i) CEHE or the Issuer has promptly notified or will promptly notify the Representatives and (ii) CEHE or the Issuer has promptly amended or will promptly amend or supplement such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission. The foregoing two sentences do not apply to statements in or omissions from any Issuer Free Writing Prospectus in reliance upon and in conformity with any Underwriter Provided Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Issuer has been duly formed and is validly existing as a limited liability company in good standing under the Delaware Limited Liability Company Act, as amended, with full limited liability company power and authority to execute, deliver and perform its obligations under this Underwriting Agreement, the Bonds, the Sale Agreement, the Servicing Agreement, the Indenture, the amended and restated limited liability company agreement of the Issuer to be dated on or about the Closing Date, 2025 (the "<u>LLC Agreement</u>"), the administration agreement to be dated on or about [Closing Date], 2025 between the Issuer and CEHE (the "<u>Administration Agreement</u>") and the other agreements and instruments contemplated by the Pricing Prospectus (collectively, the "<u>Issuer Documents</u>") and to own its properties and conduct its business as described in the Registration Statement and the Pricing Prospectus; the Issuer is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except where failure to so qualify or to be in good standing would not have a material adverse effect on the financial condition, business or results of operations (a "<u>Material Adverse Effect</u>") of the Issuer; the Issuer has not conducted and will conduct no business in the future that would be inconsistent with the description of the Issuer's business set forth in the Pricing Prospectus; the Issuer is not a party to or bound by any agreement or instrument other than the Issuer Documents and other agreements or instruments incidental to its formation and the Rating Agency Letters (as defined below); the Issuer has no material liabilities or obligations other than those arising out of the transactions contemplated by the Issuer Documents and as described in the Pricing Prospectus; CEHE is the beneficial owner of all of the limited liability company interests of the Issuer; and based on current law, the Issuer is not classified as an association taxable as a corporation for United States federal income tax purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The issuance and sale of the Bonds by the Issuer, the purchase of the System Restoration Property by the Issuer from CEHE and the consummation of the transactions herein contemplated by the Issuer, and the fulfillment of the terms hereof on the part of the Issuer to be fulfilled, will not result in a breach, violation or constitute a default under (i) the Issuer's certificate of formation, as amended to date, or the LLC Agreement (collectively, the "<u>Issuer Charter Documents</u>"), (ii) any indenture, mortgage, deed of trust, loan or credit agreement, note, contract, franchise, lease or other agreement or instrument to which the Issuer is a party or (iii) any existing statute or any order, rule or regulation of any court or government agency or body having jurisdiction over the Issuer or any of its properties, except (in the case of clauses (ii) and (iii)) as would not have a Material Adverse Effect on the Issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) This Underwriting Agreement has been duly authorized, executed and delivered by the Issuer, which has the necessary limited liability company power and authority to execute, deliver and perform its obligations under this Underwriting Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Issuer (i) is not in violation of the Issuer Charter Documents, (ii) is not in default and no event has occurred which, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any agreement, indenture, mortgage, loan agreement or instrument to which it is a party or by which it is bound or to which any of the property or assets of CEHE or any subsidiary are subject, except for any such defaults that would not, individually or in the aggregate, have a Material Adverse Effect on the Issuer, and (iii) is not in violation of any law, ordinance, governmental rule, regulation or court decree to which it or its property may be subject, except for any such violations that would not, individually or in the aggregate, have a Material Adverse Effect on the Issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) The Indenture has been duly authorized by the Issuer, and, on the Closing Date, will have been duly executed and delivered by the Issuer and when executed and delivered by the Indenture Trustee will be a valid and binding instrument, enforceable against the Issuer in accordance with its terms except as enforcement thereof may be limited by laws and principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing) affecting the enforcement of creditors' rights, including, without limitation, bankruptcy, reorganization, insolvency arrangement, fraudulent transfer or conveyance, moratorium, receivership, assignment for the benefit of creditors laws (collectively, the "<u>Enforceability Exceptions</u>"). On the Closing Date, the Indenture will (i) comply as to form in all material respects with the requirements of the Trust Indenture Act and (ii) conform in all material respects to the description thereof in the Pricing Prospectus and Final Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) The Bonds have been duly authorized by the Issuer for issuance and sale to the Underwriters pursuant to this Underwriting Agreement and, when executed by the Issuer and authenticated by the Indenture Trustee in accordance with the Indenture and delivered to the Underwriters against payment therefor in accordance with the terms of this Underwriting Agreement, will constitute valid and binding obligations of the Issuer entitled to the benefits of the Indenture and enforceable against the Issuer in accordance with their terms, except as the enforceability thereof may be limited by the Enforceability Exceptions, and the Bonds conform in all material respects to the description thereof in the Pricing Prospectus and Final Prospectus. The Issuer has all requisite limited liability company power and authority to issue, sell and deliver the Bonds in accordance with and upon the terms and conditions set forth in this Underwriting Agreement and in the Pricing Prospectus and Final Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) There are no legal or governmental actions, suits or proceedings pending or, to the Issuer's knowledge, threatened (i) against the Issuer or (ii) which has as the subject thereof any property owned or leased by the Issuer, except for such actions, suits or proceedings that, if determined adversely to the Issuer, would not reasonably be expected to result in a Material Adverse Effect on the Issuer or materially adversely affect the consummation of the offering of the Bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Other than any necessary action of the Texas Commission, any filings required under Subchapter I of Chapter 36 and Subchapter G of Chapter 39 of the Texas Public Utility Regulatory Act, as codified in Title II of the Texas Utilities Code (collectively, the "Securitization Act"), or the Financing Order or as otherwise set forth or contemplated in the Pricing Prospectus, including the filing of the issuance advice letter and certification contemplated by Ordering Paragraph 5 of the Financing Order, no approval, authorization, consent or order of any public board or body (except such as have been already obtained and other than in connection or in compliance with the provisions of applicable blue-sky laws or securities laws of any state, as to which the Issuer makes no representations or warranties), is legally required for the issuance and sale by the Issuer of the Bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) The Issuer is not, and, after giving effect to the sale and issuance of the Bonds and the application of the proceeds thereof as described in the Pricing Prospectus, will not be an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "<u>1940 Act</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) The Issuer will rely on an exclusion or exemption from the definition of "investment company" under the 1940 Act under Rule 3a-7 under the Investment Company Act, although there may be additional exclusions or exemptions available to the Issuer. The Issuer is not a "covered fund" for purposes of regulations adopted to implement Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) The nationally recognized accounting firm which has performed certain procedures with respect to certain statistical and structural information contained in the Pricing Prospectus and the Final Prospectus, are independent public accountants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Each of the Sale Agreement, the Servicing Agreement, the Administration Agreement and LLC Agreement will have been prior to the Closing Date duly authorized by the Issuer and, when executed and delivered by the Issuer and the other parties thereto, will constitute a valid and legally binding obligation of the Issuer, enforceable against the Issuer in accordance with its terms, except as the enforceability thereof may be limited by the Enforceability Exceptions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) The Issuer has complied with the written representations, acknowledgements and covenants (the "<u>17g-5 Representations</u>") relating to compliance with Rule 17g-5 under the Securities Exchange Act of 1934, as amended (the "<u>Exchange Act</u>"), set forth in the (i) undertaking letter, dated as of [ ], 2025, by CEHE to Moody's (as defined below) and (ii) undertaking letter, dated [ ], 2025, by CEHE to S&P (as defined below, and together with Moody's, the "<u>Rating Agencies</u>") and the Issuer (collectively, the "<u>Rating Agency Letters</u>"), other than (x) any noncompliance of the 17g-5 Representations that would not have a material adverse effect on the rating of the Bonds or the Bonds or (y) any noncompliance arising from the breach by an Underwriter of the representations and warranties and covenants set forth in Section 13 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) The Issuer will comply, and has complied, in all material respects, with its diligence and disclosure obligations in respect to the Bonds under Rule 193 of the Securities Act and Items 1111(a)(7) and 1111(a)(8) of Regulation AB.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) The Bonds are not subject to the risk retention requirements imposed by Section 15G of the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Representations and Warranties of CEHE</u>. CEHE represents and warrants to the several Underwriters that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) CEHE, in its capacity as co-registrant and sponsor for the Issuer and with respect to the Bonds, meets the requirements to use Form SF-1 under the Securities Act and has filed with the Commission Registration Statement Nos. 333-288206 and 333-288206-01 for the registration under the Securities Act of up to $401,521,000 aggregate principal amount of the Bonds. Registration Statement Nos. 333-288206 and 333-288206-01 have been declared effective by the Commission and no stop order suspending such effectiveness has been issued under the Securities Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of CEHE, threatened by the Commission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i) At the earliest time after the filing of the Registration Statement that the Issuer or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act) of the Bonds and (ii) at the date hereof, CEHE was not and is not an "ineligible issuer," as defined in Rule 405 under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) At the time the Registration Statement initially became effective, at the time of each amendment (whether by post-effective amendment, incorporated report or form of prospectus) and on the Effective Date relating to the Bonds, the Registration Statement fully complied, and the Final Prospectus, both as of its date and at the Closing Date, and the Indenture, at the Closing Date, will fully comply in all material respects with the applicable requirements of the Securities Act and the Trust Indenture Act, respectively, and, in each case, the applicable instructions, rules and regulations of the Commission thereunder; the Registration Statement, at each of the aforementioned dates, did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; the Final Prospectus, both as of its date and at and at the Closing Date, will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, that the foregoing representations and warranties in this paragraph (c) shall not apply to statements or omissions made in reliance upon and in conformity with any Underwriter Provided Information or to any statements in or omissions from any Statement of Eligibility on Form T-1, or amendments thereto, of the Indenture Trustee under the Indenture filed as exhibits to the Registration Statement or to any statements or omissions made in the Registration Statement or the Final Prospectus relating to DTC's Book-Entry System that are based solely on information contained in published reports of DTC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) As of the Applicable Time and, if applicable, on the date of its filing, the Pricing Prospectus and each Issuer Free Writing Prospectus did not include any untrue statement of a material fact or omit (with respect to each Issuer Free Writing Prospectus and the Intex File, when taken together with the Pricing Prospectus) to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (except for such statements contained in any such documents that are subject to completion or may change based on market conditions or pricing-related information that has been omitted from the Pricing Prospectus in accordance with Rule 430A). The Pricing Package, at the Applicable Time, did not, and at all subsequent times through the completion of the offer and the sale of the Bonds on the Closing Date, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. The two preceding sentences do not apply to statements in or omissions from the Pricing Prospectus, the Pricing Term Sheet or any other Issuer Free Writing Prospectus in reliance upon and in conformity with any Underwriter Provided Information. CEHE represents, warrants and agrees that it has treated and agrees that it will treat each of the free writing prospectuses listed on Schedule III hereto as an Issuer Free Writing Prospectus, and that each such Issuer Free Writing Prospectus has fully complied and will fully comply with the applicable requirements of Rules 164 and 433 under the Securities Act, including timely Commission filing where required, legending and record keeping.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the offer and sale of the Bonds on the Closing Date or until any earlier date that the Issuer or CEHE notified or notifies the Representatives as described in the next sentence, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development the result of which is that such Issuer Free Writing Prospectus conflicts or would conflict with the information then contained in the Registration Statement or includes or would include an untrue statement of a material fact or, when considered together with the Pricing Prospectus, omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, (i) CEHE or the Issuer has promptly notified or will promptly notify the Representatives and (ii) CEHE or the Issuer has promptly amended or will promptly amend or supplement such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission. The foregoing two sentences do not apply to statements in or omissions from any Issuer Free Writing Prospectus in reliance upon and in conformity with any Underwriter Provided Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) CEHE has been duly formed and is validly existing as a limited liability company in good standing under the laws of the jurisdiction of its formation, has the limited liability company power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as set forth in or contemplated by the Pricing Prospectus, except where the failure to be in good standing would not have a Material Adverse Effect on CEHE and its subsidiaries considered as a whole, and has all requisite power and authority to sell System Restoration Property as described in the Pricing Prospectus and to otherwise perform its obligations under any Issuer Document to which it is a party. CEHE is the beneficial owner of all of the limited liability company interests of the Issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) CEHE has no significant subsidiaries within the meaning of Rule 1-02(w) of Regulation S-X.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The transfer by CEHE of all of its rights and interests under the Financing Order relating to the Bonds to the Issuer as provided in the Sale Agreement, the execution, delivery and compliance by CEHE with all of the provisions of the Issuer Documents to which CEHE is a party, and the consummation of the transactions herein contemplated by CEHE, and the fulfillment of the terms hereof on the part of CEHE to be fulfilled, will not result in (i) a breach of any of the terms or provisions of, or constitute a default under, CEHE's Restated Certificate of Formation or Amended and Restated Limited Liability Company Agreement (collectively, the "<u>CEHE Charter Documents</u>"), or (ii) a breach of any of the terms of, or constitute a default under, any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease or other agreement or instrument to which CEHE is now a party, except, in the case of clause (ii), as would not have a Material Adverse Effect on CEHE and its subsidiaries considered as a whole.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) This Underwriting Agreement has been duly authorized, executed and delivered by CEHE, which has the necessary limited liability company power and authority to execute, deliver and perform its obligations under this Underwriting Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) CEHE (i) is not in violation of the CEHE Charter Documents, (ii) is not in default and no event has occurred which, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties is subject, except for any such defaults that would not, individually or in the aggregate, have a Material Adverse Effect on CEHE and its subsidiaries considered as a whole, or (iii) is not in violation of any law, ordinance, governmental rule, regulation or court decree to which it or its property may be subject, except for any such violations that would not, individually or in the aggregate, have a Material Adverse Effect on CEHE and its subsidiaries considered as a whole.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) There are no legal or governmental actions, suits or proceedings pending or, to CEHE's knowledge, threatened (i) against CEHE or (ii) which has as the subject thereof any property owned or leased by CEHE, except for such actions, suits or proceedings that, if determined adversely to CEHE, would not reasonably be expected to result in a Material Adverse Effect on CEHE and its subsidiaries considered as a whole or materially adversely affect the consummation of the offering of the Bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) The operations of CEHE and its subsidiaries are and, since January 1, 2006, have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements and the money laundering statutes and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the "<u>Money Laundering Laws</u>") and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving CEHE or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of CEHE, threatened.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Neither CEHE nor any of its subsidiaries, nor, to the knowledge of CEHE, any manager, officer, agent, employee or affiliate of CEHE or any of its subsidiaries is currently subject to any sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department ("<u>OFAC</u>"); and CEHE will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Other than any necessary action of the Texas Commission, any filings required under the Securitization Act or the Financing Order or as otherwise set forth or contemplated in the Pricing Prospectus including the filing of the issuance advice letter and certification contemplated by Ordering Paragraph 5 of the Financing Order, no approval, authorization, consent or order of any public board or body (except such as have been already obtained and other than in connection or in compliance with the provisions of applicable blue-sky laws or securities laws of any state, as to which CEHE makes no representations or warranties), is legally required for the issuance and sale by the Issuer of the Bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) CEHE is not and after giving effect to the sale and issuance of the Bonds, neither CEHE nor the Issuer will be, an "investment company" within the meaning of the 1940 Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) Relying on an exclusion or exemption from the definition of "investment company" under the 1940 Act and Rule 3a-7 under the Investment Company Act, although additional exclusions or exemptions may be available, the Issuer is not a "covered fund" for purposes of the regulations adopted to implement Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Each of the Sale Agreement, the Servicing Agreement and the Administration Agreement will have been prior to the Closing Date duly and validly authorized by CEHE and, when executed and delivered by CEHE and the other parties thereto, will constitute a valid and legally binding obligation of CEHE, enforceable against CEHE in accordance with its terms, except as the enforceability thereof may be limited by the Enforceability Exceptions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) There are no Texas transfer taxes related to the transfer of the System Restoration Property or the issuance and sale of the Bonds to the Underwriters pursuant to this Underwriting Agreement required to be paid at or prior to the Closing Date by CEHE or the Issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) The nationally recognized accounting firm referenced in Section 3(p) and Section 9(s) is a firm of independent public accountants with respect to CEHE as required by the Securities Act and the rules and regulations of the Commission thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) CEHE, in its capacity as sponsor with the respect to the Bonds, has caused the Issuer to comply with the 17g-5 Representations, other than (x) any noncompliance of the 17g-5 Representations that would not have a material adverse effect on the rating of the Bonds or the Bonds or (y) any noncompliance arising from the breach by an Underwriter of the representations and warranties and covenants set forth in Section 13 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) CEHE will comply, and has complied, in all material respects, with its diligence and disclosure obligations in respect to the Bonds under Rule 193 of the Securities Act and Items 1111(a)(7) and 1111(a)(8) of Regulation AB.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The Bonds are not subject to the risk retention requirements imposed by Section 15G of the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Investor Communications.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Issuer and CEHE represent and agree that, unless they obtain the prior consent of the Representatives, and each Underwriter represents and agrees that, unless it obtains the prior consent of the Issuer and CEHE and the Representatives, it has not made and will not make any offer relating to the Bonds that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a "free writing prospectus," required to be filed by the Issuer or CEHE, as applicable, with the Commission or retained by the Issuer or CEHE, as applicable, under Rule 433 under the Securities Act; provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Pricing Term Sheet and each other Free Writing Prospectus identified in Schedule III hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) CEHE and the Issuer (or the Representatives at the direction of the Issuer) will prepare a final pricing term sheet relating to the Bonds (the "<u>Pricing Term Sheet</u>"), containing only information that describes the final pricing terms of the Bonds and otherwise in a form consented to by the Representatives. The Issuer and CEHE will file the Pricing Term Sheet within the period required by Rule 433(d)(5)(ii) under the Securities Act following the date such final pricing terms have been established for all classes of the offering of the Bonds. The Pricing Term Sheet is an Issuer Free Writing Prospectus for purposes of this Underwriting Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each Underwriter may provide to investors one or more of the Free Writing Prospectuses, including the Pricing Term Sheet, and such other Written Communications (as defined herein), subject to the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) An Underwriter shall not convey or deliver any Written Communication to any person or entity in connection with the initial offering of the Bonds, unless such Written Communication (A) constitutes a prospectus satisfying the requirements of Rule 430A under the Securities Act or (B)(i) is made in reliance on Rule 134 under the Securities Act, is an Issuer Free Writing Prospectus listed on Schedule III hereto or is an Underwriter Free Writing Prospectus (as defined below) and (ii) such Written Communication is preceded or accompanied by a prospectus satisfying the requirements of Section 10(a) of the Securities Act. "<u>Written Communication</u>" has the same meaning as that term is defined in Rule 405 under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) An "<u>Underwriter Free Writing Prospectus</u>" means any free writing prospectus that contains only preliminary or final terms of the Bonds and is not required to be filed by CEHE or the Issuer pursuant to Rule 433 under the Securities Act and that contains information substantially the same as the information contained in the Pricing Prospectus or Pricing Term Sheet (including, without limitation, (i) the class, size, rating, price, CUSIPs, coupon, yield, spread, benchmark, status and/or legal maturity date of the Bonds, the weighted average life, expected first and final scheduled payment dates, trade date, settlement date, transaction parties, credit enhancement, logistical details related to the location and timing of access to the roadshow, ERISA eligibility, legal investment status and payment window of one or more tranches of Bonds and (ii) a column or other entry showing the status of the subscriptions for the Bonds, both for the Bonds as a whole and for each Underwriter's retention, and/or expected pricing parameters of the Bonds).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Each Underwriter shall comply with all applicable laws and regulations in connection with the use of Free Writing Prospectuses and the Pricing Term Sheet, including but not limited to Rules 164 and 433 under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) All Free Writing Prospectuses provided to investors, whether or not filed with the Commission, shall bear a legend including substantially the following statement:

CenterPoint Energy Restoration Bond Company II, LLC (the "Issuing Entity") and CenterPoint Energy Houston Electric, LLC ("<u>CEHE</u>") have filed a registration statement (including a prospectus) with the Commission for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the Issuing Entity and CEHE have filed with the Commission for more complete information about the Issuing Entity and CEHE and the offering. You may get these documents for free by visiting EDGAR on the Commission's web site at www.sec.gov. Alternatively, the Issuing Entity, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling Citigroup Global Markets Inc. toll-free at 1-800-831-9146 or by calling Barclays Capital Inc. toll-free at 1-888-603-5847.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The Issuer and the Representatives shall have the right to require additional specific legends or notations to appear on any Free Writing Prospectus, the right to require changes regarding the use of terminology and the right to determine the types of information appearing therein with the approval of, in the case of the Issuer, the Representatives and, in the case of the Representatives, the Issuer (which in either case shall not be unreasonably withheld).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) Each Underwriter covenants with the Issuer and CEHE that after the Final Prospectus is available such Underwriter shall not distribute any written information concerning the Bonds to an investor unless such information is preceded or accompanied by the Final Prospectus or by notice to the investor that the Final Prospectus is available for free by visiting EDGAR on the Commission's website at www.sec.gov.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) Each Underwriter covenants that if an Underwriter shall use an Underwriter Free Writing Prospectus that contains information in addition to (x) "issuer information", including information with respect to CEHE, as defined in Rule 433(h)(2) under the Securities Act or (y) the information in the Pricing Package, the liability arising from its use of such additional information shall be the sole responsibility of the Underwriter using such Underwriting Free Writing Prospectus unless the Underwriter Free Writing Prospectus (or any information contained therein) was consented to in advance by CEHE; provided, however, that, for the avoidance of doubt, this clause (vii) shall not be interpreted as tantamount to the indemnification obligations contained in Section 11(b) hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) No Underwriter shall be responsible for any errors or omissions in an Underwriter Free Writing Prospectus to the extent that such error or omission related to or was derived from any information provided by the Issuer or CEHE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Purchase and Sale</u>. On the basis of the representations and warranties herein contained, and subject to the terms and conditions herein set forth, the Issuer shall sell to each of the Underwriters, and each Underwriter shall purchase from the Issuer, at the time and place herein specified, severally and not jointly, at the purchase price set forth in Schedule I hereto, the principal amount of the Bonds set forth opposite such Underwriter's name in Schedule II hereto. The Underwriters agree to make a public offering of the Bonds. The Issuer shall pay (in the form of a discount to the principal amount of the offered Bonds) to the Underwriters a commission equal to $[ ].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Time and Place of Closing; Substitution of Underwriters</u>. Delivery of the Bonds against payment of the aggregate purchase price therefor by wire transfer in federal funds shall be made at the place, on the date and at the time specified in Schedule I hereto, or at such other place, time and date as shall be agreed upon in writing by the Issuer and the Representatives. The hour and date of such delivery and payment are herein called the "<u>Closing Date</u>". The Bonds shall be delivered to DTC or to U.S. Bank National Association, as custodian for DTC, in fully registered global form registered in the name of Cede & Co., for the respective accounts specified by the Representatives not later than the close of business on the business day preceding the Closing Date or such other time as may be agreed upon by the Representatives. The Issuer agrees to make the Bonds available to the Representatives for checking purposes not later than 1:00 P.M. New York Time on the last business day preceding the Closing Date at the place specified for delivery of the Bonds in Schedule I hereto, or at such other place as the Issuer may specify.

If any Underwriter shall fail or refuse to purchase and pay for the aggregate principal amount of Bonds that such Underwriter has agreed to purchase and pay for hereunder, the Issuer shall immediately give notice to the other Underwriters of the default of such Underwriter, and the other Underwriters shall have the right within 24 hours after the receipt of such notice to determine to purchase, or to procure one or more others, who are members of the Financial Industry Regulatory Authority ("<u>FINRA</u>") (or, if not members of FINRA, who are not eligible for membership in FINRA and who agree (i) to make no sales within the United States, its territories or its possessions or to persons who are citizens thereof or residents therein and (ii) in making sales to comply with FINRA's Conduct Rules) and satisfactory to the Issuer, to purchase, upon the terms herein set forth, the aggregate principal amount of Bonds that the defaulting Underwriter had agreed to purchase. If any non-defaulting Underwriter or Underwriters shall determine to exercise such right, such Underwriter or Underwriters shall give written notice to the Issuer of the determination in that regard within 24 hours after receipt of notice of any such default, and thereupon the Closing Date shall be postponed for such period, not exceeding three business days, as the Issuer shall determine. If in the event of such a default no non-defaulting Underwriter shall give such notice, then this Underwriting Agreement may be terminated by the Issuer, upon like notice given to the non-defaulting Underwriters, within a further period of 24 hours. If in such case the Issuer shall not elect to terminate this Underwriting Agreement it shall have the right, irrespective of such default:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to require each non-defaulting Underwriter to purchase and pay for the respective aggregate principal amount of Bonds that it had agreed to purchase hereunder as hereinabove provided and, in addition, the aggregate principal amount of Bonds that the defaulting Underwriter shall have so failed to purchase up to an aggregate principal amount of Bonds equal to one-ninth (1/9) of the aggregate principal amount of Bonds that such non-defaulting Underwriter has otherwise agreed to purchase hereunder, and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) to procure one or more persons, reasonably acceptable to the Representatives, who are members of FINRA (or, if not members of FINRA, who are not eligible for membership in FINRA and who agree (i) to make no sales within the United States, its territories or its possessions or to persons who are citizens thereof or residents therein and (ii) in making sales to comply with FINRA's Conduct Rules), to purchase, upon the terms herein set forth, either all or a part of the aggregate principal amount of Bonds that such defaulting Underwriter had agreed to purchase or that portion thereof that the remaining Underwriters shall not be obligated to purchase pursuant to the foregoing clause (a).

In the event the Issuer shall exercise its rights under (a) and/or (b) above, the Issuer shall give written notice thereof to the non-defaulting Underwriters within such further period of 24 hours, and thereupon the Closing Date shall be postponed for such period, not exceeding three business days, as the Issuer shall determine.

In the computation of any period of 24 hours referred to in this Section 7, there shall be excluded a period of 24 hours in respect of each Saturday, Sunday or legal holiday that would otherwise be included in such period of time.

Any action taken by the Issuer or CEHE under this Section 7 shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Underwriting Agreement. Termination of this Underwriting Agreement pursuant to Section 7 shall be without any liability on the part of the Issuer, CEHE or any non-defaulting Underwriter, except as otherwise provided in Sections 8(a)(vi) and 11 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Covenants.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Covenants of the Issuer</u>. The Issuer covenants and agrees with the several Underwriters that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Issuer will upon request promptly deliver to the Representatives and Counsel for the Underwriters (as defined below) a conformed copy of the Registration Statement, certified by an officer of the Issuer to be in the form as originally filed and all amendments thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Issuer will deliver to the Underwriters, as soon as practicable after the date hereof, as many copies of the Pricing Prospectus and Final Prospectus as they may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Issuer will cause or has caused the Final Prospectus to be filed with the Commission pursuant to Rule 424 under the Securities Act as soon as practicable and will advise the Underwriters of any stop order suspending the effectiveness of the Registration Statement or preventing the use of the Registration Statement, or the institution of any proceeding therefor of which the Issuer shall have received notice. The Issuer will use its reasonable best efforts to prevent the issuance of any such stop order and, if issued, to obtain as soon as possible the withdrawal thereof. The Issuer has complied and will comply with Rule 433 and Rule 163B under the Securities Act in connection with the offering of the Bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) If, during such period of time (not exceeding nine months) after the Final Prospectus has been filed with the Commission pursuant to Rule 424 under the Securities Act as in the opinion of Counsel for the Underwriters a prospectus covering the Bonds is required by law to be delivered in connection with sales by an Underwriter or dealer (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), any event relating to or affecting the Issuer, the Bonds or the System Restoration Property or of which the Issuer shall be advised in writing by the Representatives shall occur that in the Issuer's reasonable judgment after consultation with Counsel for the Underwriters should be set forth in a supplement to, or an amendment of the Pricing Package or the Final Prospectus in order to make the Pricing Package or the Final Prospectus not misleading in the light of the circumstances when it is delivered to a purchaser (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Issuer will, at its expense, amend or supplement the Pricing Package or the Final Prospectus by either (A) preparing and furnishing to the Underwriters at the Issuer's expense a reasonable number of copies of a supplement or supplements or an amendment or amendments to the Pricing Package or the Final Prospectus or (B) making an appropriate filing pursuant to Section 13 or Section 15 of the Exchange Act, which will supplement or amend the Pricing Package or the Final Prospectus so that, as supplemented or amended, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances when the Pricing Package or the Final Prospectus is delivered to a purchaser (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), not misleading; provided that should such event relate solely to the activities of any of the Underwriters, then such Underwriters shall assume the expense of preparing and furnishing any such amendment or supplement. The Issuer will also fulfill its obligations set out in Section 3(e) above. The Issuer will advise the Underwriters promptly in writing when any supplement to the Pricing Package, the Final Prospectus or any amendment to the Final Prospectus has been filed or distributed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The Issuer will furnish such proper information as may be lawfully required and otherwise cooperate in qualifying the Bonds for offer and sale under the blue-sky laws of the states of the United States as the Representatives may designate; provided that the Issuer shall not be required to qualify as a foreign limited liability company or dealer in securities, to file any consents to service of process under the laws of any jurisdiction, or meet any other requirements deemed by the Issuer to be unduly burdensome.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) The Issuer or CEHE will, except as herein provided, pay or cause to be paid all expenses and taxes (except transfer taxes) in connection with (i) the preparation and filing by it of the Registration Statement, Pricing Prospectus and Final Prospectus (including any amendments and supplements thereto) and any Issuer Free Writing Prospectuses, (ii) the issuance and delivery of the Bonds as provided in Section 7 hereof (including, without limitation, certain reasonable fees and disbursements of Counsel for the Underwriters and all trustee, rating agency and Texas Commission advisor fees), (iii) the qualification of the Bonds under blue-sky laws (including counsel fees not to exceed $15,000), and (iv) the printing and delivery to the Underwriters of reasonable quantities of the Registration Statement and, except as provided in Section 8(a)(iv) hereof, of the Pricing Package and Final Prospectus. If the obligation of the Underwriters to purchase the Bonds terminates in accordance with the provisions of Sections 7 (but excluding terminations arising thereunder out of an Underwriter default), 9, 10 or 12 hereof, the Issuer or CEHE (i) will reimburse the Underwriters for the reasonable fees and disbursements of Counsel for the Underwriters, and (ii) will reimburse the Underwriters for their reasonable out-of-pocket expenses, such out-of-pocket expenses in an aggregate amount not exceeding $200,000, incurred in contemplation of the performance of this Underwriting Agreement. The Issuer shall not in any event be liable to any of the several Underwriters for damages on account of loss of anticipated profits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) During the period from the date of this Underwriting Agreement to the date that is five days after the Closing Date, the Issuer will not, without the prior written consent of the Representatives, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce the offering of, any asset-backed securities (other than the Bonds).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) To the extent, if any, that any rating necessary to satisfy the condition set forth in Section 9(w) of this Underwriting Agreement is conditioned upon the furnishing of documents or the taking of other actions by the Issuer on or after the Closing Date, the Issuer shall furnish such documents and take such other actions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) For a period from the date of this Underwriting Agreement until the retirement of the Bonds or until such time as the Underwriters shall cease to maintain a secondary market in the Bonds, whichever occurs first, the Issuer shall file with the Commission, and to the extent permitted by and consistent with the Issuer's obligations under applicable law, make available on the website associated with the Issuer's parent, such periodic reports, if any, as are required (without regard to the number of holders of Bonds to the extent permitted by and consistent with the Issuer's obligations under applicable law) from time to time under Section 13 or Section 15(d) of the Exchange Act; provided that the Issuer shall not voluntarily suspend or terminate its filing obligations with the Commission unless permitted under applicable law and the terms of the Issuer Documents. The Issuer shall also, to the extent permitted by and consistent with the Issuer's obligations under applicable law, include in the periodic and other reports to be filed with the Commission as provided above or posted on the website associated with the Issuer's parent, such information as required by Section 3.07(g) of the Indenture with respect to the Bonds. To the extent that the Issuer's obligations are terminated or limited by an amendment to Section 3.07(g) of the Indenture, or otherwise, such obligations shall be correspondingly terminated or limited hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) The Issuer and CEHE will not file any amendment to the Registration Statement or amendment or supplement to the Final Prospectus or amendment or supplement to the Pricing Package during the period when a prospectus relating to the Bonds is required to be delivered under the Securities Act, without prior notice to the Underwriters, or to which Hunton Andrews Kurth LLP, who are acting as counsel for the Underwriters ("<u>Counsel for the Underwriters</u>"), shall reasonably object by written notice to CEHE and the Issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) So long as any of the Bonds are outstanding, the Issuer will furnish to the Representatives, if and to the extent not posted on EDGAR or on the Issuer or its affiliate's website, (A) as soon as available, a copy of each report of the Issuer filed with the Commission under the Exchange Act or mailed to the holders of the System Restoration Bonds (to the extent such reports are not publicly available on the Commission's website), (B) upon request, a copy of any filings with the Texas Commission pursuant to the Financing Order including, but not limited to, any issuance advice letter or any semi-annual, interim or quarterly true-up adjustment filings, and (C) from time to time, any information concerning the Issuer as the Representatives may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) So long as the Bonds are rated by any Rating Agency, the Issuer will comply with the 17g-5 Representations, other than (x) any noncompliance of the 17g-5 Representations that would not have a material adverse effect on the rating of the Bonds or the Bonds or (y) any noncompliance arising from the breach by an Underwriter of the representations and warranties and covenants set forth in Section 13 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Covenants of CEHE</u>. CEHE covenants and agrees with the several Underwriters that, to the extent that the Issuer has not already performed such act pursuant to Section 8(a):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) To the extent permitted by applicable law and the agreements and instruments that bind CEHE, CEHE will use its reasonable best efforts to cause the Issuer to comply with the covenants set forth in Section 8(a) hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) CEHE will use its reasonable best efforts to prevent the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or preventing the use of the Registration Statement, and, if issued, to obtain as soon as possible the withdrawal thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) If, during such period of time (not exceeding nine months) after the Final Prospectus has been filed with the Commission pursuant to Rule 424 under the Securities Act as in the opinion of Counsel for the Underwriters a prospectus covering the Bonds is required by law to be delivered in connection with sales by an Underwriter or dealer (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), any event relating to or affecting CEHE, the Bonds or the System Restoration Property or of which CEHE shall be advised in writing by the Representatives shall occur that in CEHE's reasonable judgment after consultation with Counsel for the Underwriters should be set forth in a supplement to, or an amendment of, the Pricing Package or the Final Prospectus in order to make the Pricing Package or the Final Prospectus not misleading in the light of the circumstances when it is delivered to a purchaser (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), CEHE will cause the Issuer, at CEHE's or the Issuer's expense, to amend or supplement the Pricing Package or the Final Prospectus by either (A) preparing and furnishing to the Underwriters at CEHE's or the Issuer's expense a reasonable number of copies of a supplement or supplements or an amendment or amendments to the Pricing Package or the Final Prospectus or (B) causing the Issuer to make an appropriate filing pursuant to Section 13 or Section 15 of the Exchange Act, which will supplement or amend the Pricing Package or the Final Prospectus so that, as supplemented or amended, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances when the Pricing Package or the Final Prospectus is delivered to a purchaser (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), not misleading; provided that should such event relate solely to the activities of any of the Underwriters, then such Underwriters shall assume the expense of preparing and furnishing any such amendment or supplement. CEHE will also fulfill its obligations set out in Section 4(e). CEHE will cause Issuer to advise the Underwriters promptly in writing when any supplement to the Pricing Package, the Final Prospectus, or any amendment to the Final Prospectus has been filed or distributed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) To the extent not paid by the Issuer pursuant to Section 8(a)(vi) hereof, CEHE will, except as herein provided, pay or cause to be paid all expenses and taxes (except transfer taxes) in connection with (i) the preparation and filing by it of the Registration Statement, Pricing Prospectus and Final Prospectus (including any amendments and supplements thereto) and any Issuer Free Writing Prospectuses, (ii) the issuance and delivery of the Bonds as provided in Section 7 hereof (including, without limitation, certain reasonable fees and disbursements of Counsel for the Underwriters and all trustee, rating agency and Texas Commission advisor fees), (iii) the qualification of the Bonds under blue-sky laws (including counsel fees not to exceed $15,000), (iv) the printing and delivery to the Underwriters of reasonable quantities of the Registration Statement and, except as provided in Section 8(a)(iv) hereof, of the Pricing Package and Final Prospectus. If the obligation of the Underwriters to purchase the Bonds terminates in accordance with the provisions of Sections 7 (but excluding terminations arising thereunder out of an Underwriter default), 9, 10 or 12 hereof, CEHE, to the extent not paid by the Issuer pursuant to Section 8(a)(vi), (i) will reimburse the Underwriters for the reasonable fees and disbursements of Counsel for the Underwriters, and (ii) will reimburse the Underwriters for their reasonable out-of-pocket expenses, such out-of-pocket expenses in an aggregate amount not exceeding $200,000, less any amounts paid by the Issuer pursuant to Section 8(a)(vi), incurred in contemplation of the performance of this Underwriting Agreement. CEHE shall not in any event be liable to any of the several Underwriters for damages on account of loss of anticipated profits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) During the period from the date of this Underwriting Agreement to the date that is five days after the Closing Date, CEHE will not, without the prior written consent of the Representatives, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce the offering of, any asset-backed securities (other than the Bonds).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) CEHE will cause the proceeds for the issuance and sale of the Bonds to be applied for the purposes described in the Pricing Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) As soon as practicable, but not later than 16 months, after the date hereof, CEHE will make generally available (by posting on its website or otherwise) to its security holders, an earnings statement (which need not be audited) that will satisfy the provisions of Section 11(a) of the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) To the extent, if any, that any rating necessary to satisfy the condition set forth in Section 9(w) of this Underwriting Agreement is conditioned upon the furnishing of documents or the taking of other actions by CEHE on or after the Closing Date, CEHE shall furnish such documents and take such other actions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) The initial System Restoration Charge will be calculated in accordance with the Financing Order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) CEHE will not file any amendment to the Registration Statement or amendment or supplement to the Final Prospectus or amendment or supplement to the Pricing Package during the period when a prospectus relating to the Bonds is required to be delivered under the Securities Act, without prior notice to the Underwriters or to which Counsel for the Underwriters shall reasonably object by written notice to CEHE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) So long as any of the Bonds are outstanding, CEHE, in its capacity as sponsor with respect to the Bonds, will cause the Issuer to furnish to the Representatives, if and to the extent not posted on EDGAR or CEHE or its affiliate's website, (A) upon request, a copy of any filings with the Texas Commission pursuant to the Financing Order including, but not limited to any issuance advice letter, any semi-annual, interim or quarterly true-up adjustment filings, and (B) from time to time, any public financial information in respect of CEHE, or any material information regarding the System Restoration Property to the extent it is reasonably available concerning the Issuer as the Representatives may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) So long as the Bonds are rated by a Rating Agency, CEHE, in its capacity as sponsor with respect to the Bonds, will cause the Issuer to comply with the 17g-5 Representations, other than (x) any noncompliance of the 17g-5 Representations that would not have a material adverse effect on the rating of the Bonds or the Bonds or (y) any noncompliance arising from the breach by an Underwriter of the representations and warranties and covenants set forth in Section 13 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Conditions to the Obligations of the Underwriters</u>. The obligations of the Underwriters to purchase the Bonds shall be subject to the accuracy of the representations and warranties on the part of the Issuer and CEHE contained in this Underwriting Agreement, on the part of CEHE contained in Article III of the Sale Agreement, and on the part of CEHE contained in Section 6.01 of the Servicing Agreement as of the Closing Date, to the accuracy of the statements of the Issuer and CEHE made in any certificates pursuant to the provisions hereof, to the performance by the Issuer and CEHE of their obligations hereunder, and to the following additional conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Final Prospectus shall have been filed with the Commission pursuant to Rule 424 under the Securities Act prior to 5:30 P.M., New York time, on the second business day after the date of this Underwriting Agreement. In addition, all material required to be filed by the Issuer or CEHE pursuant to Rule 433(d) under the Securities Act that was prepared by either of them or that was prepared by any Underwriter and timely provided to the Issuer or CEHE shall have been filed with the Commission within the applicable time period prescribed for such filing by such Rule 433(d) under the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No stop order suspending the effectiveness of the Registration Statement shall be in effect, and no proceedings for that purpose shall be pending before, or threatened by, the Commission on the Closing Date; and the Underwriters shall have received one or more certificates, dated the Closing Date and signed by an officer of CEHE and the Issuer, as appropriate, to the effect that no such stop order is in effect and that no proceedings for such purpose are pending before, or to the knowledge of CEHE or the Issuer, as the case may be, threatened by, the Commission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Hunton Andrews Kurth LLP, as Counsel for the Underwriters, shall have furnished to the Representatives their written opinion, dated the Closing Date, with respect to the issuance and sale of the Bonds, the Indenture, the other Issuer Documents, the Registration Statement and other related matters and a written letter, dated the Closing Date, regarding negative assurance; and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Richards, Layton & Finger, P.A., Delaware counsel for the Issuer, shall have furnished to the Representatives their written opinion, in form and substance reasonably satisfactory to the Representatives, dated the Closing Date, regarding the filing of a voluntary bankruptcy petition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Richards, Layton & Finger, P.A., Delaware counsel for the Issuer, shall have furnished to the Representatives their written opinion, in form and substance reasonably satisfactory to the Representatives, dated the Closing Date, regarding certain Delaware Uniform Commercial Code matters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Richards, Layton & Finger, P.A., Delaware counsel for the Issuer, shall have furnished to the Representatives their written opinion, in form and substance reasonably satisfactory to the Representatives, dated the Closing Date, regarding other corporate matters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Baker Botts L.L.P., counsel for the Issuer and CEHE, shall have furnished to the Representatives their written opinion, in form and substance reasonably satisfactory to the Representatives, regarding securities laws and other matters, including with regards to negative assurance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Baker Botts L.L.P., counsel for the Issuer and CEHE, shall have furnished to the Representatives their written opinion, in form and substance reasonably satisfactory to the Representatives, dated the Closing Date, regarding certain bankruptcy and creditors rights issues relating to the Issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Baker Botts L.L.P., counsel for the Issuer and CEHE, shall have furnished to the Representatives their written opinion, in form and substance reasonably satisfactory to the Representatives, dated the Closing Date, as to certain Federal tax matters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Baker Botts L.L.P., counsel for the Issuer and CEHE, shall have furnished to the Representatives their written opinion, in form and substance reasonably satisfactory to the Representatives, dated the Closing Date, as to certain Federal constitutional matters and certain Texas constitutional matters relating to the System Restoration Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Baker Botts L.L.P., counsel for the Issuer and CEHE, shall have furnished to the Representatives their written opinion, in form and substance reasonably satisfactory to the Representatives, dated the Closing Date, with respect to additional corporate and creditors rights matters relating to the Issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Baker Botts L.L.P., counsel for the Issuer and CEHE, shall have furnished to the Representatives their written opinion, in form and substance reasonably satisfactory to the Representatives, dated the Closing Date, regarding certain Texas regulatory issues.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Baker Botts L.L.P., counsel for CEHE and the Issuer, shall have furnished to the Representatives their written opinion, in form and substance reasonably satisfactory to the Representatives, dated the Closing Date, with respect to the characterization of the transfer of the System Restoration Property by CEHE to the Issuer as a "true sale" for Texas law purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Baker Botts L.L.P., counsel for CEHE and the Issuer, shall have furnished to the Representatives their written opinion, in form and substance reasonably satisfactory to the Representatives, regarding various issues, including enforceability, certain Texas regulatory law matters, including security interest creation, perfection and priority issues under the Securitization Act and the Texas Uniform Commercial Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) Emmet Marvin & Martin, LLP, counsel for the Indenture Trustee, shall have furnished to the Representatives their written opinion, in form and substance reasonably satisfactory to the Representatives, dated the Closing Date, regarding certain matters relating to the Indenture.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) Baker Botts L.L.P., counsel for the Issuer and CEHE, shall have furnished to the Representatives their written opinion, dated the Closing Date, in form and substance reasonably satisfactory to the Representatives, to the effect that the System Restoration Property is not subject to the lien of CEHE's Mortgage and Deed of Trust, dated as of November 1, 1944.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Baker Botts L.L.P., counsel for the Issuer and CEHE, shall have furnished to the Representatives their written opinion, in form and substance reasonably satisfactory to the Representatives, dated the Closing Date, regarding the consequences of the abolishment of the PUCT or the repeal of the Securitization Act by operation of the Texas Sunset Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) Monica Karuturi, Executive Vice President and General Counsel of CEHE, shall have furnished to the Representatives her written opinion, in form and substance reasonably satisfactory to the Representatives, dated the Closing Date, with respect to certain corporate matters relating to CEHE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) On or before the date of this Underwriting Agreement and on or before the Closing Date, a nationally recognized accounting firm reasonably acceptable to the Representatives shall have furnished to the Representatives one or more reports regarding certain calculations and computations relating to the Bonds, in form or substance reasonably satisfactory to the Representatives, in each case in respect of which the Representatives shall have made specific requests therefor and shall have provided acknowledgment or similar letters to such firm reasonably necessary in order for such firm to issue such reports.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) Subsequent to the respective dates as of which information is given in each of the Registration Statement, the Pricing Prospectus and the Final Prospectus, there shall not have been any change specified in the letters required by subsection (x) of this Section 9 which is, in the judgment of the Representatives, so material and adverse as to make it impracticable or inadvisable to proceed with the offering or the delivery of the Bonds as contemplated by the Registration Statement and the Final Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) The LLC Agreement, the Administration Agreement, the Sale Agreement, the Servicing Agreement and the Indenture and any amendment or supplement to any of the foregoing shall have been executed and delivered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Since the respective dates as of which information is given in each of the Registration Statement and in the Pricing Prospectus and as of the Closing Date there shall have been no (i) material adverse change in the business, property or financial condition of CEHE and its subsidiaries, taken as a whole, whether or not in the ordinary course of business, or of the Issuer or (ii) adverse development concerning the business or assets of CEHE and its subsidiaries, taken as a whole, or of the Issuer, which would be reasonably likely to result in a material adverse change in the prospective business, property or financial condition of CEHE and its subsidiaries, taken as a whole, whether or not in the ordinary course of business, or of the Issuer, or (iii) development which would be reasonably likely to result in a material adverse change in the System Restoration Property, the Bonds or the Financing Order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) At the Closing Date, (i) the Bonds shall be rated at least the ratings set forth in the Pricing Term Sheet by Moody's Investors Service, Inc. ("<u>Moody's</u>") and S&P Global Ratings, a division of S&P Global Inc. ("<u>S&P</u>"), respectively, and the Issuer shall have delivered to the Underwriters a letter from each such rating agency, or other evidence satisfactory to the Underwriters, confirming that the Bonds have such ratings, and (ii) none of Moody's and S&P shall have, since the date of this Underwriting Agreement, downgraded or publicly announced that it has under surveillance or review, with possible negative implications, its ratings of the Bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) The Issuer and CEHE shall have furnished or caused to be furnished to the Representatives at the Closing Date certificates of officers of CEHE and the Issuer, reasonably satisfactory to the Representatives, as to the accuracy of the representations and warranties of the Issuer and CEHE herein, in the Sale Agreement, the Servicing Agreement and the Indenture at and as of the Closing Date, as to the performance by the Issuer and CEHE of all of their obligations hereunder to be performed at or prior to such Closing Date, as to the matters set forth in subsections (b) and (v) of this Section and as to such other matters as the Representatives may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) An issuance advice letter, in a form consistent with the provisions of the Financing Order, shall have been filed with the Texas Commission and shall have become effective and the certification contemplated by Ordering Paragraph 5 of the Financing Order shall have been filed with the Texas Commission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z) On or prior to the Closing Date, the Issuer shall have delivered to the Representatives evidence, in form and substance reasonably satisfactory to the Representatives, that appropriate filings have been or are being made in accordance with the Securitization Act, the Financing Order and other applicable law reflecting the grant of a security interest by the Issuer in the collateral relating to the Bonds to the Indenture Trustee, including the filing of the requisite financing statements in the Uniform Commercial Code records of the office of the Secretary of State of the State of Texas.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) On or prior to the Closing Date, CEHE shall have funded the capital subaccount of the Issuer with cash in an amount equal to $[ ].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) The Issuer and CEHE shall have furnished or caused to be furnished or agree to furnish to the Rating Agencies at the Closing Date such opinions and certificates as the Rating Agencies shall have reasonably requested prior to the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) On or prior to the Closing Date, the Issuer shall have delivered to the Representatives evidence, in form and substance reasonably satisfactory to the Representatives, of (i) a certificate that attaches a true, correct and complete copy of the Financing Order and certifies such copy to be the act and deed of the Texas Commission and (ii) a certificate that states the Financing Order has not been altered, rescinded, amended, modified, revoked or supplemented as of the Closing Date.

Any opinion letters delivered on the Closing Date to the Rating Agencies beyond those being delivered to the Underwriters above shall either (x) include the Underwriters as addressees or (y) be accompanied by reliance letters addressed to the Underwriters referencing such letters.

If any of the conditions specified in this Section 9 shall not have been fulfilled when and as provided in this Underwriting Agreement, or if any of the opinion letters and certificates mentioned above or elsewhere in this Underwriting Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Representatives and Counsel for the Underwriters, all obligations of the Underwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the Representatives. Notice of such cancellation shall be given to the Issuer in writing or by telephone or facsimile confirmed in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Conditions of Issuer's Obligations</u>. The obligation of the Issuer to deliver the Bonds shall be subject to the conditions that no stop order suspending the effectiveness of the Registration Statement shall be in effect at the Closing Date and no proceeding for that purpose shall be pending before, or threatened by, the Commission at the Closing Date and the issuance advice letter described in Section 9(y) shall have become effective. In case these conditions shall not have been fulfilled, this Underwriting Agreement may be terminated by the Issuer upon notice thereof to the Underwriters. Any such termination shall be without liability of any party to any other party except as otherwise provided in Sections 8(a)(vi) and 11 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Indemnification and Contribution.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) CEHE and the Issuer, jointly and severally, agree to indemnify and hold harmless each Underwriter, its affiliates, the directors and officers of each Underwriter and each person, if any, who controls each Underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, liabilities or expenses (including the reasonable cost of investigating and defending against any claims therefor and counsel fees incurred in connection therewith as such expenses are incurred), joint or several, which may be based upon either the Securities Act, or the Exchange Act, or any other statute or at common law, on the ground or alleged ground that the Registration Statement (or any amendment or supplement thereto), the Pricing Prospectus, the Free Writing Prospectuses identified on Schedule III, the Pricing Package, the Final Prospectus, any other Issuer Free Writing Prospectus (or any such document, as from time to time amended, or deemed to be amended, supplemented or modified) or any other information prepared by or on behalf of CEHE or the Issuer and provided to the Underwriters that includes or allegedly includes an untrue statement of material fact or omits or allegedly omits to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, unless such statement or omission was made in reliance upon, and in conformity with, written information furnished to CEHE or the Issuer by, or through the Representatives on behalf of, any Underwriter specifically for use in the preparation thereof, it being understood and agreed that the only such information consists of the information described as such in subsection (b) below; provided that in no case is CEHE or the Issuer to be liable with respect to any claims made against any Underwriter, or any such affiliate, director, officer or controlling person unless such Underwriter or such affiliate, director, officer or controlling person shall have notified CEHE or the Issuer in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Underwriter or such affiliate, director, officer or controlling person, but failure to notify CEHE or the Issuer of any such claim (i) shall not relieve CEHE or the Issuer from liability under this paragraph unless and to the extent CEHE or the Issuer did not otherwise learn of such claim and such failure results in the forfeiture by CEHE or the Issuer of substantial rights and defenses and (ii) shall not relieve CEHE or the Issuer from any liability which it may have to such Underwriter or such affiliate, director, officer or controlling person otherwise than on account of the indemnity agreement contained in this paragraph.

Each of CEHE and the Issuer will be entitled to participate at its own expense in the defense, or, if it so elect, to assume the defense of any suit brought to enforce any such liability, but, if CEHE or the Issuer elect to assume the defense, such defense shall be conducted by counsel chosen by it; provided, however, that such counsel shall be reasonably satisfactory to the Underwriters. In the event that CEHE and the Issuer elect to assume the defense of any such suit and retains such counsel, the Underwriter or Underwriters or affiliate or affiliates, director or directors, officer or officers controlling person or persons, defendant or defendants in the suit, may retain additional counsel but shall bear the fees and expenses of such counsel unless (i) CEHE and the Issuer shall have specifically authorized the retaining of such counsel or (ii) the parties to such suit include the Underwriter or Underwriters or affiliate or affiliates, director or directors, officer or officers or controlling person or persons and the Underwriter or Underwriters or affiliate or affiliates, director or directors, officer or officers or controlling person or persons and CEHE and the Issuer have been advised by such counsel that one or more legal defenses may be available to it or them which may not be available to CEHE or the Issuer, in which case CEHE and the Issuer shall not be entitled to assume the defense of such suit on behalf of such Underwriter or Underwriters or affiliate or affiliates, director or directors, officer or officers or controlling person or persons, notwithstanding their obligation to bear the reasonable fees and expenses of such counsel, it being understood, however, that CEHE and the Issuer shall not, in connection with any one such suit or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (and not more than one local counsel in each jurisdiction) at any time for all such Underwriter or Underwriters or affiliate or affiliates director or directors, officer or officers or controlling person or persons, which firm shall be designated in writing by the Representatives. Neither CEHE nor the Issuer shall be liable to indemnify any person for any settlement of any such claim effected without CEHE's or the Issuer's, as the case may be, prior written consent, which consent shall not be unreasonably withheld. Neither CEHE nor the Issuer shall, without the prior written consent of the Underwriter or Underwriters or affiliate or affiliates, director or directors, officer or officers or controlling person or persons, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any Underwriter or affiliate, director, officer or controlling person is or could have been a party and indemnity was or could have been sought hereunder by such Underwriter or affiliate, director, officer or controlling person, unless such settlement, compromise or consent (x) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding and (y) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any Underwriter or affiliate, director, officer or controlling person. This indemnity agreement will be in addition to any liability which CEHE and/or the Issuer might otherwise have.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Underwriter agrees severally and not jointly to indemnify and hold harmless CEHE and the Issuer, their managers, each of their officers who have signed the Registration Statement, and each person, if any, who controls CEHE within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, liabilities or expenses (including the reasonable cost of investigating and defending against any claims therefor and counsel fees incurred in connection therewith as such expenses are incurred), joint or several, which may be based upon the Securities Act, or any other statute or at common law, on the ground or alleged ground that the Registration Statement, the Pricing Prospectus, the Free Writing Prospectuses identified on Schedule III, the Pricing Package, the Final Prospectus, any other Issuer Free Writing Prospectus (or any such document, as from time to time amended, or deemed to be amended, supplemented or modified) or any other information prepared by or on behalf of CEHE or the Issuer and provided to the Underwriters includes or allegedly includes an untrue statement of a material fact or omits or allegedly omits to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, but only insofar as any such statement or omission was made in reliance upon, and in conformity with, written information furnished to CEHE by, or through the Representatives on behalf of, such Underwriter specifically for use in the preparation thereof, it being understood and agreed that the only such information furnished by any Underwriter consists of the Underwriter Provided Information in Schedule IV of this Underwriting Agreement (the "Underwriter Provided Information"), *provided* that in no case is such Underwriter to be liable with respect to any claims made against CEHE, the Issuer or any such manager, officer or controlling person unless CEHE, the Issuer or any such manager, officer or controlling person shall have notified such Underwriter in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon CEHE, the Issuer or any such manager, officer or controlling person, but failure to notify such Underwriter of any such claim (i) shall not relieve such Underwriter from liability under this paragraph unless and to the extent such Underwriter did not otherwise learn of such action and such failure results in the forfeiture by such Underwriter of substantial rights and defenses and (ii) shall not relieve such Underwriter from any liability which it may have to CEHE, the Issuer or any such manager, officer or controlling person otherwise than on account of the indemnity agreement contained in this paragraph. Such Underwriter will be entitled to participate at its own expense in the defense, or, if it so elects, to assume the defense of any suit brought to enforce any such liability, but, if such Underwriter elects to assume the defense, such defense shall be conducted by counsel chosen by it; provided, however, that such counsel shall be reasonably satisfactory to CEHE and the Issuer. In the event that such Underwriter elects to assume the defense of any such suit and retain such counsel, CEHE, the Issuer or such manager, officer or controlling person, defendant or defendants in the suit, may retain additional counsel but shall bear the fees and expenses of such counsel unless (i) such Underwriter shall have specifically authorized the retaining of such counsel or (ii) the parties to such suit include CEHE, the Issuer or any such manager, officer or controlling person and such Underwriter and CEHE, the Issuer or such manager, officer or controlling person have been advised by such counsel that one or more legal defenses may be available to it or them which may not be available to such Underwriter, in which case such Underwriter shall not be entitled to assume the defense of such suit on behalf of CEHE, the Issuer or such manager, officer or controlling person, notwithstanding its obligation to bear the reasonable fees and expenses of such counsel, it being understood, however, that such Underwriter shall not, in connection with any one such suit or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (and not more than one local counsel in each jurisdiction) at any time for all of CEHE, the Issuer or any such manager, officer or controlling person, which firm shall be designated in writing by CEHE or the Issuer. Such Underwriter shall not be liable to indemnify any person for any settlement of any such claim effected without such Underwriter's prior written consent, which consent shall not be unreasonably withheld. No Underwriter shall, without the prior written consent of CEHE, the Issuer or any such manager, officer or controlling person, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which CEHE, the Issuer or any such manager, officer or controlling person is or could have been a party and indemnity was or could have been sought hereunder by CEHE, the Issuer or manager, officer or controlling person, unless such settlement, compromise or consent (x) includes an unconditional release of CEHE, the Issuer or manager, officer or controlling person from all liability on claims that are the subject matter of such action, suit or proceeding and (y) does not include a statement as to or an admission of fault, culpability or failure to act by or on behalf of CEHE, the Issuer or any such manager, officer or controlling person. This indemnity agreement will be in addition to any liability which such Underwriter might otherwise have.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If the indemnification provided for in this Section 11 is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by CEHE and the Issuer on the one hand and the Underwriters on the other from the offering of the Bonds or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of CEHE and the Issuer on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by CEHE and the Issuer on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by CEHE and the Issuer bear to the total discounts and commissions received by the Underwriters from CEHE and/or the Issuer under this Underwriting Agreement. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by CEHE, the Issuer or the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (c) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (c). Notwithstanding the provisions of this subsection (c), no Underwriter shall be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the offering of the Bonds exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations in this subsection (c) to contribute are several in proportion to their respective purchase obligations and not joint.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Termination</u>. This Underwriting Agreement may be terminated, at any time prior to the Closing Date with respect to the Bonds by the Representatives by written notice to the Issuer if after the date hereof and at or prior to the Closing Date (a) there shall have occurred any general suspension of trading in securities on the New York Stock Exchange ("<u>NYSE</u>") or there shall have been established by the NYSE, or by the Commission any general limitation on prices for such trading or any general restrictions on the distribution of securities, or a general banking moratorium declared by New York or federal authorities or (b) there shall have occurred any (i) material outbreak or escalation of hostilities (including, without limitation, an act of terrorism) or (ii) declaration by the United States of war or national or international calamity or crisis, including, but not limited to, a material escalation of hostilities or a calamity that existed prior to the date of this Underwriting Agreement or (iii) material adverse change in the financial markets in the United States, and the effect of any such event specified in clause (a) or (b) above on the financial markets of the United States shall be such as to materially and adversely affect, in the reasonable judgment of the Representatives, their ability to proceed with the public offering or the delivery of the Bonds on the terms and in the manner contemplated by the Final Prospectus. Any termination hereof pursuant to this Section 12 shall be without liability of any party to any other party except as otherwise provided in Sections 8(a)(vi) and 11 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Representations, Warranties and Covenants of the Underwriters</u>. The Underwriters, severally and not jointly, represent, warrant and agree with the Issuer and CEHE that, unless the Underwriters obtained, or will obtain, the prior written consent of the Issuer or CEHE, the Representatives (x) have not delivered, and will not deliver, any Rating Information (as defined below) to any Rating Agency until and unless the Issuer or CEHE advises the Underwriters that such Rating Information is posted to a password-protected website maintained by the Servicer pursuant to paragraph (a)(3)(iii)(B) of Rule 17g-5 under the Exchange Act in the same form as it will be provided to such Rating Agency, and (y) have not participated, and will not participate, with any Rating Agency in any oral communication of any Rating Information without the participation of a representative of the Issuer or CEHE. For purposes of this Section 13, "<u>Rating Information</u>" means any information provided to a Rating Agency for the purpose of determining an initial credit rating on the Bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Absence of Fiduciary Relationship</u>. Each of the Issuer and CEHE acknowledges and agrees that the Underwriters are acting solely in the capacity of an arm's length contractual counterparty to the Issuer and CEHE with respect to the offering of the Bonds contemplated hereby (including in connection with determining the terms of the offering) and not as a financial advisor or a fiduciary to, or an agent of, the Issuer or CEHE. Additionally, none of the Underwriters is advising the Issuer or CEHE as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Issuer and CEHE shall consult with their own advisors concerning such matters and shall be responsible for making their own independent investigation and appraisal of the transactions contemplated hereby, and the Underwriters shall have no responsibility or liability to the Issuer or CEHE with respect thereto. Any review by the Underwriters of the Issuer or CEHE, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Underwriters and shall not be on behalf of the Issuer or CEHE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>Notices</u>. All communications hereunder will be in writing and may be given by United States mail, courier service, e-mail, telecopy, telefax or facsimile (confirmed by telephone or in writing in the case of notice by e-mail, telecopy, telefax or facsimile) or any other customary means of communication, and any such communication shall be effective when delivered, or if mailed, three days after deposit in the United States mail with proper postage for ordinary mail prepaid, and if sent to the Representatives, to it at the address specified in Schedule I hereto; and if sent to CEHE, to it at 1111 Louisiana Street, Houston, Texas 77002 Attention: Treasurer, Email: patricia.martin@centerpointenergy.com; and if sent to the Issuer, to it at 1111 Louisiana Street, Suite 4654B, Houston, Texas 77002, Attention: Manager, Email: patricia.martin@centerpoint.com. The parties hereto, by notice to the others, may designate additional or different addresses for subsequent communications.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>Successors</u>. This Underwriting Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, managers and directors and controlling persons referred to in Section 11 hereof, and no other person will have any right or obligation hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <u>Applicable Law</u>.

THIS UNDERWRITING AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS UNDERWRITING AGREEMENT, THE RELATIONSHIPS OF THE PARTIES AND/OR THE INTERPRETATIONS AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW). EACH OF THE PARTIES HERETO HEREBY AGREES TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.

TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS UNDERWRITING AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. <u>Counterparts</u>. This Underwriting Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. Delivery of an executed signature page of this Underwriting Agreement by facsimile or any other rapid transmission device designed to produce a written record of the communication transmitted shall be as effective as delivery of a manually executed counterpart thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. The words "execution," "executed," "signed," signature," and words of like import in this Underwriting Agreement or in any other certificate, agreement or document related to this Underwriting Agreement shall include images of manually executed signatures transmitted by facsimile, email or other electronic format (including, without limitation, "pdf," "tif" or "jpg") and other electronic signatures (including, without limitation, DocuSign and AdobeSign). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. <u>Integration</u>. This Underwriting Agreement supersedes all prior agreements and understandings (whether written or oral) among the Issuer, CEHE and the Underwriters, or any of them, with respect to the subject matter hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. <u>Recognition of the U.S. Special Resolution Regimes</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Underwriting Agreement, and any interest and obligation in or under this Underwriting Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Underwriting Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Underwriting Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Underwriting Agreement were governed by the laws of the United States or a state of the United States.

"BHC Act Affiliate" has the meaning assigned to the term "affiliate" in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).

"Covered Entity" means any of the following:

(i) a "covered entity" as that term is defined in, and interpreted in accordance with, 12 C.F.R.
 § 252.82(b);

(ii) a "covered bank" as that term is defined in, and interpreted in accordance with, 12 C.F.R.
 § 47.3(b); or

(iii) a "covered FSI" as that term is defined in, and interpreted in accordance with, 12 C.F.R.
 § 382.2(b).

"Default Rights" has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

"U.S. Special Resolution Regime" means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among CEHE, the Issuer and the several Underwriters.

---

| |
|:---|
| Very truly yours, |
| CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC |
| By: |
| Name: |
| Title: |
| CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC |
| By: |
| Name: |
| Title: |

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| | |
|:---|:---|
| The foregoing Underwriting Agreement is hereby confirmed and accepted by the Representatives on behalf of the Underwriters as of the date specified in Schedule I hereto. | The foregoing Underwriting Agreement is hereby confirmed and accepted by the Representatives on behalf of the Underwriters as of the date specified in Schedule I hereto. |
| CITIGROUP GLOBAL MARKETS INC. | CITIGROUP GLOBAL MARKETS INC. |
| By: |  |
| Name: | Steffen Lunde |
| Title: | Director |
| Barclays Capital Inc. | Barclays Capital Inc. |
| By: |  |
| Name: | Eric Chang |
| Title: | Managing Director |

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SCHEDULE I

Underwriting Agreement dated [ ], 2025

Registration Statement Nos. 333-288206 and 333-288206-01

Representatives: Citigroup Global Markets Inc. and Barclays Capital Inc.

c/o Citigroup Global Markets Inc.

Address: 388 Greenwich Street, Trading - 6th Floor

New York, New York 10013

Attention: Steffen Lunde

c/o Barclays Capital Inc.

Address: 745 Seventh Avenue

New York, New York 10019

Attention: Eric Chang

Title, Purchase Price and Description of Bonds:

Title: CenterPoint Energy Restoration Bond Company II, LLC Series 2025-A Senior Secured System Restoration Bonds,

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Principal <br> Amount<br> Offered | Interest Rate | Initial Price to<br> Public | Underwriting<br> Discounts and<br> Commissions | Proceeds to<br> Issuer (Before<br> Expenses) |
| Tranche A-1 Bond | $240913000 | [ ]% | [ ]% | [0.400]% | [ ]% |
| Tranche A-2 Bond | $160608000 | [ ]% | [ ]% | [0.400]% | [ ]% |

---

---

| | |
|:---|:---|
| Original Issue Discount (if any): | $[ ] |
| Redemption provisions: |  |
| Other provisions: |  |
| Closing Date, Time and Location: | [Closing Date], 2025, 9:00 a.m.; offices of Baker Botts L.L.P., 910 Louisiana Street, Houston, Texas 77002-4995 and simultaneously in the offices of Hunton Andrews Kurth LLP, 200 Park Avenue, New York, New York 10166 |

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SCHEDULE II

Principal Amount of Bonds to be Purchased

---

| | | |
|:---|:---|:---|
| Underwriter | Tranche A-1 | Tranche A-2 |
| Citigroup Global Markets Inc. | $[ ] | $[ ] |
| Barclays Capital Inc. | [ ] | [ ] |
| Academy Securities, Inc. | [ ] | [ ] |
| **Total** | $**240913000** | $**160608000** |

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SCHEDULE III

Schedule of Issuer Free Writing Prospectuses

A. Free Writing Prospectuses not required to be filed

Electronic Road Show, [ ] through [ ]

Intex File

Information consistent with the Preliminary Prospectus and Final Prospectus included in the Bloomberg pricing message, dated [ ]

B. Free Writing Prospectuses required to be filed pursuant to Rule 433

Preliminary Term Sheet, dated [ ], 2025

Pricing Term Sheet, dated [ ], 2025

SCHEDULE IV

Descriptive List of Underwriter Provided Information

A. <u>Pricing Prospectus</u>

(a) under the heading "PLAN OF DISTRIBUTION" in the Preliminary Prospectus: (i) the paragraph immediately under "The Underwriters' Sale Price for the System Restoration Bonds"; (ii) the third sentence under the caption "No Assurance as to Resale Price or Resale Liquidity for the System Restoration Bonds"; (iii) the entire first full paragraph under the caption "Various Types of Underwriter Transactions that May Affect the Price of the System Restoration Bonds" (except the last sentence thereof); and (iv) the second sentence of the second full paragraph and the last sentence of the fifth full paragraph under the caption "Various Types of Underwriter Transactions that May Affect the Price of the System Restoration Bonds"; and (b) under the heading "OTHER RISKS ASSOCIATED WITH AN INVESTMENT IN THE SYSTEM RESTORATION BONDS" in the Preliminary Prospectus, the first sentence under the caption "The absence of a secondary market for the system restoration bonds might limit your ability to resell the system restoration bonds."

B. <u>Final Prospectus</u>

(a) under the heading "PLAN OF DISTRIBUTION" in the Prospectus: (i) the paragraph immediately under "The Underwriters' Sale Price for the System Restoration Bonds"; (ii) the third sentence under the caption "No Assurance as to Resale Price or Resale Liquidity for the System Restoration Bonds"; (iii) the entire first full paragraph under the caption "Various Types of Underwriter Transactions that May Affect the Price of the System Restoration Bonds" (except the last sentence thereof); and (iv) the second sentence of the second full paragraph and the last sentence of the fifth full paragraph under the caption "Various Types of Underwriter Transactions that May Affect the Price of the System Restoration Bonds"; and (b) under the heading "OTHER RISKS ASSOCIATED WITH AN INVESTMENT IN THE SYSTEM RESTORATION BONDS" in the Prospectus, the first sentence under the caption "The absence of a secondary market for the system restoration bonds might limit your ability to resell the system restoration bonds."

## Exhibit 4.1

**Exhibit 4.1**

**INDENTURE**

**by and between**

**CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC, Issuer**

**and**

**U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, Indenture Trustee**

**and**

**U.S. BANK NATIONAL ASSOCIATION**

**Securities Intermediary**

**Dated as** **of ____________ __, 2025**

<u>**TABLE OF CONTENTS**</u>

<u>Page</u>

---

| | | |
|:---|:---|:---|
| ARTICLE I Definitions AND RULES OF CONSTRUCTION; Incorporation by Reference | ARTICLE I Definitions AND RULES OF CONSTRUCTION; Incorporation by Reference | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 1.01. | Definitions and Rules of Construction | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 1.02. | Incorporation by Reference of Trust Indenture Act | 2 |
| ARTICLE II The SYSTEM RESTORATION Bonds | ARTICLE II The SYSTEM RESTORATION Bonds | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.01. | Form | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.02. | Denominations; System Restoration Bonds | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.03. | Execution, Authentication and Delivery | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.04. | Temporary System Restoration Bonds | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.05. | Registration; Registration of Transfer and Exchange of System Restoration Bonds | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.06. | Mutilated, Destroyed, Lost or Stolen System Restoration Bonds | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.07. | Persons Deemed Owner | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.08. | Payment of Principal, Premium, if any, and Interest; Interest on Overdue Principal; Principal, Premium, if any, and Interest Rights Preserved | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.09. | Cancellation | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.10. | Outstanding Amount; Authentication and Delivery of System Restoration Bonds | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.11. | Book-Entry System Restoration Bonds | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.12. | Notices to Clearing Agency | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.13. | Definitive System Restoration Bonds | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.14. | CUSIP Number | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.15. | Letter of Representations | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.16. | Tax Treatment | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.17. | State Pledge | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.18. | Security Interests | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2.19. | Non-Recourse Obligations | 16 |
| ARTICLE III Covenants | ARTICLE III Covenants | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.01. | Payment of Principal, Premium, if any, and Interest | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.02. | Maintenance of Office or Agency | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.03. | Money for Payments To Be Held in Trust | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.04. | Existence | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.05. | Protection of Trust Estate | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.06. | Opinions as to Trust Estate | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.07. | Performance of Obligations; Servicing; SEC Filings | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.08. | Certain Negative Covenants | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.09. | Annual Statement as to Compliance | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.10. | Issuer May Consolidate, etc., Only on Certain Terms | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.11. | Successor or Transferee | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.12. | No Other Business | 26 |

---

i

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.13. | No Borrowing | 26.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.14. | Servicer's Obligations | 27.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.15. | Guarantees, Loans, Advances and Other Liabilities | 27.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.16. | Capital Expenditures | 27.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.17. | Restricted Payments | 27.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.18. | Notice of Events of Default | 27.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.19. | Further Instruments and Acts | 27.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.20. | Inspection | 28.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.21. | Economic Sanctions | 28.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.22. | [Reserved] | 28.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.23. | Sale Agreement, Servicing Agreement and Administration Agreement Covenants | 29.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.24. | Taxes | 30.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.25. | Notices from Holders | 31.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.26. | Volcker Rule | 31.0 |
| ARTICLE IV Satisfaction and Discharge; Defeasance | ARTICLE IV Satisfaction and Discharge; Defeasance | 31.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 4.01. | Satisfaction and Discharge of Indenture; Defeasance | 31.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 4.02. | Conditions to Defeasance | 33.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 4.03. | Application of Trust Money | 34.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 4.04. | Repayment of Moneys Held by Paying Agent | 34.0 |
| ARTICLE V Remedies | ARTICLE V Remedies | 35.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.01. | Events of Default | 35.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.02. | Acceleration of Maturity; Rescission and Annulment | 36.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.03. | Collection of Indebtedness and Suits for Enforcement by Indenture Trustee | 37.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.04. | Remedies; Priorities | 39.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.05. | Optional Preservation of the Trust Estate | 40.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.06. | Limitation of Suits | 40.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.07. | Unconditional Rights of Holders To Receive Principal, Premium, if any, and Interest | 41.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.08. | Restoration of Rights and Remedies | 41.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.09. | Rights and Remedies Cumulative | 41.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.10. | Delay or Omission Not a Waiver | 42.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.11. | Control by Holders | 42.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.12. | Waiver of Past Defaults | 42.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.13. | Undertaking for Costs | 43.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.14. | Waiver of Stay or Extension Laws | 43.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5.15. | Action on System Restoration Bonds | 43.0 |
| ARTICLE VI The Indenture Trustee | ARTICLE VI The Indenture Trustee | 44.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.01. | Duties of Indenture Trustee | 44.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.02. | Rights of Indenture Trustee | 46.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.03. | Individual Rights of Indenture Trustee | 49.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.04. | Indenture Trustee's Disclaimer | 49.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.05. | Notice of Defaults | 49.0 |

---

ii

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.06. | Reports by Indenture Trustee to Holders | 50.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.07. | Compensation and Indemnity | 51.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.08. | Replacement of Indenture Trustee and Securities Intermediary | 51.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.09. | Successor Indenture Trustee by Merger | 53.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.10. | Appointment of Co-Trustee or Separate Trustee | 53.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.11. | Eligibility; Disqualification | 54.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.12. | Preferential Collection of Claims Against Issuer | 55.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.13. | Representations and Warranties of Indenture Trustee | 55.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.14. | Annual Report by Independent Registered Public Accountants | 55.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.15. | Custody of Trust Estate | 55.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6.16. | FATCA | 56.0 |
| ARTICLE VII Holders' Lists and Reports | ARTICLE VII Holders' Lists and Reports | 56.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 7.01. | Issuer To Furnish Indenture Trustee Names and Addresses of Holders | 56.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 7.02. | Preservation of Information; Communications to Holders | 56.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 7.03. | Reports by Issuer | 57.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 7.04. | Reports by Indenture Trustee | 57.0 |
| ARTICLE VIII Accounts, Disbursements and Releases | ARTICLE VIII Accounts, Disbursements and Releases | 58.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 8.01. | Collection of Money | 58.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 8.02. | Collection Account | 58.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 8.03. | General Provisions Regarding the Collection Account | 62.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 8.04. | Release of Trust Estate | 63.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 8.05. | Opinion of Counsel | 63.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 8.06. | Reports by Independent Registered Public Accountants | 64.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 8.07. | REP Deposit Accounts | 64.0 |
| ARTICLE IX SUPPLEMENTAL INDENTURES | ARTICLE IX SUPPLEMENTAL INDENTURES | 65.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.01. | Supplemental Indentures Without Consent of Holders | 65.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.02. | Supplemental Indentures with Consent of Holders | 67.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.03. | Texas Commission Condition | 68.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.04. | Execution of Supplemental Indentures | 69.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.05. | Effect of Supplemental Indenture | 69.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.06. | Conformity with Trust Indenture Act | 69.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9.07. | Reference in System Restoration Bonds to Supplemental Indentures | 69.0 |
| ARTICLE X MISCELLANEOUS | ARTICLE X MISCELLANEOUS | 70.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.01. | Compliance Certificates and Opinions, etc. | 70.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.02. | Form of Documents Delivered to Indenture Trustee | 71.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.03. | Acts of Holders | 72.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.04. | Notices, etc., to Indenture Trustee, Issuer and Rating Agencies | 73.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.05. | Notices to Holders; Waiver | 74.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.06. | Conflict with Trust Indenture Act | 74.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.07. | Successors and Assigns | 74.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.08. | Severability | 75.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.09. | Benefits of Indenture | 75.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.10. | Legal Holidays | 75.0 |

---

iii

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.11. | GOVERNING LAW | 75 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.12. | Counterparts | 75 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.13. | Recording of Indenture | 75 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.14. | No Recourse to Issuer | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.15. | Basic Documents | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.16. | No Petition | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.17. | Securities Intermediary | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.18. | Rule 17g-5 Compliance | 77 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.19. | Submission to Non-Exclusive Jurisdiction; Waiver of Jury Trial | 77 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10.20. | Certain Tax Laws | 77 |

---

<u>EXHIBITS</u>

Exhibit A Form of System Restoration Bonds <br> Exhibit B Form of Series Supplement <br> Exhibit C Servicing Criteria to be Addressed by Indenture Trustee in Assessment of Compliance

<u>APPENDIX</u>

Appendix A Definitions and Rules of Construction

iv

**<u>TRUST INDENTURE ACT CROSS REFERENCE TABLE</u>**

---

| | |
|:---|:---|
| **<u>Trust Indenture Act <br> Section</u>** | **<u>Indenture Section</u>** |
| 310 (a)(1) | 6.11 |
| (a)(2) | 6.11 |
| (a)(3) | 6.10(b)(i) |
| (a)(4) | Not applicable |
| (a)(5) | 6.11 |
| (b) | 6.11 |
| 311 (a) | 6.12 |
| (b) | 6.12 |
| 312 (a) | 7.01 and 7.02 |
| (b) | 7.02(b) |
| (c) | 7.02(c) |
| 313 (a) | 7.04 |
| (b)(1) | 7.04 |
| (b)(2) | 7.04 |
| (c) | 7.03(a) and 7.04 |
| (d) | Not applicable |
| 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, 4.02 and 10.01(a) |
| (d) | 8.04(b) and 10.01 |
| (e) | 10.01(a) |
| (f) | 10.01(a) |

---

v

---

| | | |
|:---|:---|:---|
| **<u>Trust Indenture Act <br> Section</u>** | **<u>Trust Indenture Act <br> Section</u>** | **<u>Indenture Section</u>** |
| 315 | (a) | 6.01(b)(i) and 6.01(b)(ii) |
|  | (b) | 6.05 |
|  | (c) | 6.01(a) |
|  | (d) | 6.01(c)(i), 6.01(c)(ii) and 6.01(c)(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) | Not applicable |
|  | (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) | 10.06 |
|  | (b) | 10.06 |
|  | (c) | 10.06 |

---

This CROSS-REFERENCE table shall not, for any purpose, be deemed to be part of this Indenture.

vi

This INDENTURE, dated as of _____________ __, 2025, is by and between CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC, a Delaware limited liability company, and U.S. Bank Trust Company, National Association, in its capacity as indenture trustee for the benefit of the Secured Parties and U.S. Bank National Association in its capacity as a securities intermediary.

In consideration of the mutual agreements herein contained, each party hereto agrees as follows for the benefit of the other party hereto 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 System Restoration Bonds issuable hereunder, which will be of substantially the tenor set forth in the Series Supplement to this Indenture duly executed and delivered by the Issuer and the Indenture Trustee.

The System Restoration Bonds shall be non-recourse obligations and shall be secured by the Trust Estate, of which the principal asset is the System Restoration Property, and shall be payable solely out of the System Restoration Property and other assets in the Trust Estate. If and to the extent that the proceeds of the System Restoration Property are insufficient to pay all amounts owing with respect to the System Restoration 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 System Restoration Bonds, waive any such Claim.

All things necessary to (a) make the System Restoration 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 System Restoration 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 System Restoration Bonds, the payment of all other amounts due under or in connection with this Indenture (including all fees, expenses, counsel fees 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 the System Restoration Bonds, has hereby executed and delivered this Indenture and by these presents does hereby and by the Series Supplement will convey, grant, assign, transfer and pledge, in each case, in and unto the Indenture Trustee, its successors and assigns forever, for the benefit of the Secured Parties, all of the Issuer's right, title and interest in, to and under any and all of the property described in the Series Supplement (such property herein referred to as "Trust Estate"). The Series Supplement will more particularly describe the obligations of the Issuer secured by the Trust Estate.

AND IT IS HEREBY COVENANTED, DECLARED AND AGREED between the parties hereto that the System Restoration Bonds are to be issued, countersigned and delivered and that all of the Trust Estate 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 RULES OF CONSTRUCTION; Incorporation by Reference

SECTION 1.01. <u>Definitions and Rules of Construction</u>. Capitalized terms used but not otherwise defined in this Indenture shall have the respective meanings given to such terms in <u>Appendix A</u>, which is hereby incorporated by reference into this Indenture as if set forth fully in this Indenture. Not all terms defined in <u>Appendix A</u> are used in this Indenture. The rules of construction set forth in <u>Appendix A</u> shall apply to this Indenture and are hereby incorporated by reference into this Indenture as if set forth fully in this Indenture.

SECTION 1.02. <u>Incorporation by Reference of Trust Indenture Act</u>. Whenever this Indenture refers to a provision of the Trust Indenture Act, that provision is incorporated by reference in and made a part of this Indenture. Certain Trust Indenture Act terms have been defined in this Indenture as follows:

"indenture securities" means the System Restoration 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 Trust Indenture Act terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions.

ARTICLE II

The SYSTEM RESTORATION Bonds

SECTION 2.01. <u>Form</u>. The System Restoration Bonds and the Indenture Trustee's certificate of authentication shall be in substantially the forms set forth in <u>Exhibit A</u>, 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 Responsible Officers of the Issuer executing the System Restoration Bonds, as evidenced by their execution of the System Restoration Bonds.

The System Restoration Bonds shall be typewritten, printed, lithographed or engraved or otherwise produced, all as determined by the Responsible Officers of the Issuer executing the System Restoration Bonds, as evidenced by their execution of the System Restoration Bonds.

Each System Restoration Bond shall be dated the date of its authentication.

SECTION 2.02. <u>Denominations; System Restoration Bonds</u>. The System Restoration Bonds shall be issuable in the Authorized Denominations specified in the Series Supplement.

The System Restoration Bonds shall, at the election of and as authorized by a Responsible Officer of the Issuer, and set forth in the Series Supplement, be issued in one or more tranches, and shall be designated generally as the "Series 2025-A Senior Secured System Restoration Bonds" of the Issuer, with such further particular designations added or incorporated in such title for the System Restoration Bonds of any particular tranche as a Responsible Officer of the Issuer may determine. All System Restoration Bonds shall be identical in all respects except for the denominations thereof, the Holder thereof, the numbering thereon and the legends thereon, unless the System Restoration Bonds are comprised of one or more tranches, in which case all of the System Restoration Bonds of the same tranche shall be identical in all respects except for the denominations thereof, the Holder thereof, the numbering thereon, the legends thereon and the CUSIP number thereon. All System Restoration 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) designation of the tranches thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the principal amount of each tranche;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Bond Interest Rate of each tranche thereof or the formula, if any, used to calculate Bond Interest Rate or Bond Interest Rates for each tranche thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Payment Dates for each tranche thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the Scheduled Payment Dates for each tranche;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the Scheduled Final Payment Date of each tranche;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) the Final Maturity Date of each tranche;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) the issuance date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Authorized Denominations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) the Expected Sinking Fund Schedule and the Expected Amortization Schedule of each tranche;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) the place or places for the payment of interest, principal and premium, if different than set forth in <u>Section 2.08</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) any additional Secured Parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) the identity of the Indenture Trustee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) the Trust Estate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) whether or not the System Restoration Bonds are to be Book-Entry System Restoration Bonds and the extent to which <u>Section 2.11</u> should apply; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) any other terms of the System Restoration Bonds (or tranches thereof) that are not inconsistent with the provisions of this Indenture.

SECTION 2.03. <u>Execution, Authentication and Delivery</u>. The System Restoration Bonds shall be executed on behalf of the Issuer by any of its Responsible Officers. The signature of any such Responsible Officer on the System Restoration Bonds may be manual, electronic or facsimile.

System Restoration Bonds bearing the manual, electronic 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 the System Restoration Bonds or did not hold such offices at the date of the System Restoration Bonds.

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

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

The words "execution," signed," signature," and words of like import in this Indenture and the Series Supplement shall include images of manually executed signatures transmitted by facsimile, email or other electronic format (including, without limitation, "pdf," "tif" or "jpg") and other electronic signatures (including without limitation, DocuSign and AdobeSign). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the UCC.

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

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

SECTION 2.05. <u>Registration; Registration of Transfer and Exchange of System Restoration Bonds</u>. The Issuer shall cause to be kept a register (the "<u>System Restoration Bond Register</u>") in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of System Restoration Bonds and the registration of transfers of System Restoration Bonds. U.S. Bank Trust Company, National Association shall be the initial "<u>System Restoration Bond Registrar</u>" for the purpose of registering the System Restoration Bonds and transfers of System Restoration Bonds as herein provided. Upon any resignation of any System Restoration Bond Registrar, the Issuer shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of System Restoration Bond Registrar.

If a Person other than the Indenture Trustee is appointed by the Issuer as System Restoration Bond Registrar, the Issuer will give the Indenture Trustee and the Paying Agent, if not the Indenture Trustee, prompt written notice of the appointment of such System Restoration Bond Registrar and of the location, and any change in the location, of the System Restoration Bond Register, and the Indenture Trustee and any such Paying Agent shall have the right to inspect the System Restoration 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 System Restoration Bond Registrar by a Responsible Officer thereof as to the names and addresses of the Holders and the principal amounts and number of the System Restoration Bonds (separately stated by tranche).

Upon surrender for registration of transfer of any System Restoration Bond at the office or agency of the Issuer to be maintained as provided in <u>Section 3.02</u>, 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 System Restoration Bonds in any Authorized Denominations, of the same tranche and aggregate principal amount.

At the option of the Holder, System Restoration Bonds may be exchanged for other System Restoration Bonds in any Authorized Denominations, of the same tranche and aggregate principal amount, upon surrender of the System Restoration Bonds to be exchanged at such office or agency as provided in <u>Section 3.02</u>. Whenever System Restoration 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 System Restoration Bonds that the Holder making the exchange is entitled to receive.

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

Every System Restoration 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 that is a member of: (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 signature guaranty program acceptable to the Indenture Trustee; and (b) such other documents as the Indenture Trustee may require.

Each transferee of any System Restoration Bond in definitive form that is presented for registration will be required to represent and warrant (or in the case of a System Restoration Bond held in Book-Entry Form will be deemed to represent and warrant by virtue of its acquisition of the System Restoration Bond) on each day from and including the date of its acquisition of the System Restoration Bond through and including the date of disposition of any such System Restoration Bond that either (i) it is not and is not acting on behalf of, or using plan assets of, (a) an ERISA Plan or any governmental, church or non-U.S. plan that is subject to any Similar Law or (ii) its acquisition, holding and disposition of the System Restoration Bond, in the case of an ERISA Plan, will not constitute or result in a non-exempt prohibited transaction in violation of Section 406 of ERISA or Section 4975 of the Code or, in the case of a governmental, church or non-U.S. plan subject to Similar Law, will not result in or constitute a violation of such Similar Law.

No service charge shall be made to a Holder for any registration of transfer or exchange of System Restoration 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 System Restoration Bonds, other than exchanges pursuant to <u>Section 2.04</u> or <u>Section 2.06</u> not involving any transfer.

The preceding provisions of this <u>Section 2.05</u> notwithstanding, the Issuer shall not be required to make, and the System Restoration Bond Registrar need not register, transfers or exchanges of any System Restoration Bond that has been submitted within fifteen (15) days preceding the due date for any payment with respect to such System Restoration Bond until after such due date has occurred.

SECTION 2.06. <u>Mutilated, Destroyed, Lost or Stolen System Restoration Bonds</u>. If (a) any mutilated System Restoration Bond is surrendered to the Indenture Trustee or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any System Restoration Bond and (b) 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 System Restoration Bond Registrar or the Indenture Trustee that such System Restoration 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 System Restoration Bond, a replacement System Restoration Bond of like tranche and principal amount, bearing a number not contemporaneously outstanding; <u>provided</u>, <u>however</u>, that, if any such destroyed, lost or stolen System Restoration Bond, but not a mutilated System Restoration Bond, shall have become or within seven (7) days shall be due and payable, instead of issuing a replacement System Restoration Bond, the Issuer may pay such destroyed, lost or stolen System Restoration Bond when so due or payable without surrender thereof. If, after the delivery of such replacement System Restoration Bond or payment of a destroyed, lost or stolen System Restoration Bond pursuant to the proviso to the preceding sentence, a Protected Purchaser of the original System Restoration Bond in lieu of which such replacement System Restoration Bond was issued presents for payment such original System Restoration Bond, the Issuer and the Indenture Trustee shall be entitled to recover such replacement System Restoration Bond (or such payment) from the Person to whom it was delivered or any Person taking such replacement System Restoration Bond from such Person to whom such replacement System Restoration 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 System Restoration Bond under this <u>Section 2.06</u>, the Issuer and/or the Indenture Trustee may require the payment by the Holder of such System Restoration 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 System Restoration Bond Registrar and its counsel) in connection therewith.

Every replacement System Restoration Bond issued pursuant to this <u>Section 2.06</u> in replacement of any mutilated, destroyed, lost or stolen System Restoration Bond shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen System Restoration 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 System Restoration Bonds duly issued hereunder.

The provisions of this <u>Section 2.06</u> 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 System Restoration Bonds.

SECTION 2.07. <u>Persons Deemed Owner</u>. Prior to due presentment for registration of transfer of any System Restoration Bond, the Issuer, the Indenture Trustee, the System Restoration Bond Registrar and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name any System Restoration Bond is registered (as of the day of determination) as the owner of such System Restoration Bond for the purpose of receiving payments of principal of and premium, if any, and interest on such System Restoration Bond and for all other purposes whatsoever, whether or not such System Restoration Bond be overdue, and none of the Issuer, the Indenture Trustee or any agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The System Restoration Bonds shall accrue interest as provided in the Series Supplement at the applicable 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 System Restoration Bond that is punctually paid or duly provided for on the applicable Payment Date shall be paid to the Person in whose name such System Restoration Bond (or one or more Predecessor System Restoration Bonds) is registered on the Record Date for the applicable Payment Date by check mailed first-class, postage prepaid, to the Person whose name appears as the Registered Holder (or by wire transfer to an account maintained by such Holder) in accordance with payment instructions delivered to the Indenture Trustee by such Holder, and, with respect to Book-Entry System Restoration Bonds, payments will be made by wire transfer in immediately available funds to the account designated by the Holder of the applicable Global System Restoration Bond unless and until such Global System Restoration Bond is exchanged for Definitive System Restoration Bonds (in which event payments shall be made as provided in this <u>Section 2.08(a)</u>) and except for the final installment of principal and premium, if any, payable with respect to such System Restoration Bond on a Payment Date, which shall be payable as provided below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The principal of each System Restoration 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; <u>provided</u>, that installments of principal not paid when scheduled to be paid in accordance with the Expected Sinking Fund Schedule shall be paid upon receipt of money available for such purpose, in the order set forth in the Expected Sinking Fund Schedule. Failure to pay principal in accordance with such Expected Sinking Fund Schedule because moneys are not available pursuant to <u>Section 8.02</u> to make such payments shall not constitute a Default or Event of Default under this Indenture; <u>provided</u>, <u>however</u>, that failure to pay the entire unpaid principal amount of the System Restoration Bonds of a tranche upon the Final Maturity Date for the System Restoration Bonds of such tranche shall constitute an Event of Default under this Indenture as set forth in <u>Section 5.01</u>. Notwithstanding the foregoing, the entire unpaid principal amount of the System Restoration 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 representing a majority of the Outstanding Amount of System Restoration Bonds have declared the System Restoration Bonds to be immediately due and payable in the manner provided in <u>Section 5.02</u>. All payments of principal and premium, if any, on the System Restoration Bonds shall be made pro rata to the Holders entitled thereto unless otherwise provided in the Series Supplement. Upon written notice from the Issuer, the Indenture Trustee shall notify the Person in whose name a System Restoration 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 the System Restoration Bond will be paid. Such notice shall be sent 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 System Restoration Bond and shall specify the place where such System Restoration Bond may be presented and surrendered for payment of such installment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If interest on the System Restoration Bonds is not paid when due, such defaulted interest shall be paid (plus interest on such defaulted interest at the applicable Bond Interest Rate to the extent lawful) to the Persons who are Holders on a subsequent Special Record Date, which date shall be at least fifteen (15) Business Days prior to the Special Payment 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 send 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. <u>Cancellation</u>. All System Restoration 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 System Restoration Bonds previously authenticated and delivered hereunder that the Issuer may have acquired in any manner whatsoever, and all System Restoration Bonds so delivered shall be promptly canceled by the Indenture Trustee. No System Restoration Bonds shall be authenticated in lieu of or in exchange for any System Restoration Bonds canceled as provided in this <u>Section 2.09</u>, except as expressly permitted by this Indenture. All canceled System Restoration 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. <u>Outstanding Amount; Authentication and Delivery of System Restoration Bonds</u>. The aggregate Outstanding Amount of System Restoration Bonds that may be authenticated and delivered under this Indenture shall not exceed the aggregate of the amount of System Restoration Bonds that are authorized in the Financing Order, but otherwise shall be unlimited.

System Restoration Bonds 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 of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Issuer Action</u>. An Issuer Order authorizing and directing the authentication and delivery of the System Restoration Bonds by the Indenture Trustee and specifying the principal amount of System Restoration Bonds to be authenticated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Authorizations</u>. Copies of (i) the Financing Order, which shall be in full force and effect and be final, (ii) 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 the System Restoration Bonds and (iii) the Series Supplement duly executed by the Issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Authorizing Certificate</u>. An Officer's Certificate, dated the Closing Date, certifying that (i) the Issuer has duly authorized the execution and delivery of this Indenture and the Series Supplement and the execution and delivery of the System Restoration Bonds and (ii) the Series Supplement is in the form attached thereto and complies with the requirements of <u>Section 2.02</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>The Trust Estate</u>. The Issuer shall have made or caused to be made all filings with the Texas Commission and the Secretary of State of the State of Texas pursuant to the Financing Order and the Securitization Act and all other filings necessary to perfect the Grant of the Trust Estate to the Indenture Trustee and the Lien of this Indenture and the Series Supplement, including UCC financing statements in Delaware and Texas, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Certificates of the Issuer and the Seller</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) An Officer's Certificate, dated as of the Closing Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) to the effect that (1) the Issuer is not in Default under this Indenture and that the issuance of the System Restoration 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 or any indenture, mortgage, credit agreement or other agreement or instrument to which the Issuer is a party or by which it or its properties 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 properties may be bound or to which it or its properties may be subject and (2) all conditions precedent provided in this Indenture relating to the execution, authentication and delivery of the System Restoration Bonds have been complied with;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) to the effect that the Issuer has appointed the firm of Independent registered public accountants as contemplated in <u>Section 8.06</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) to the effect that the Sale Agreement, the Servicing Agreement and the Administration Agreement are, to the knowledge of the Issuer (and assuming such agreements are enforceable against all parties thereto other than the Issuer and CEHE), in full force and effect and, to the knowledge of the Issuer, that no party is in default of its obligations under such agreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) certifying that the System Restoration Bonds have received the ratings from the Rating Agencies if required by the Underwriting Agreement as a condition to the issuance of the System Restoration Bonds; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F) stating that (i) all conditions precedent provided for in this Indenture relating to (a) the authentication and delivery of the System Restoration Bonds, and (b) the execution of the Series Supplement to this Indenture dated as of the date of this Indenture, have been complied with, (ii) the execution of the Series Supplement to this Indenture dated as of the date of this Indenture is authorized or permitted by this Indenture, and (iii) the Issuer has delivered the documents required under this <u>Section 2.10</u> and has otherwise satisfied the requirements set out in this <u>Section 2.10</u>, including, but not limited to, complying with <u>Section 2.10(f)(i)</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) An officer's certificate from the Seller, dated as of the Closing Date, to the effect that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) immediately prior to the conveyance pursuant to the Sale Agreement of all of the Seller's right, title and interest in, to and under the Financing Order that will comprise the System Restoration Property upon transfer to the Issuer pursuant to the Sale Agreement, the attached copy of the Financing Order, creating the System Restoration Property is true and complete and is in full force and effect; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) the Required Capital Amount has been deposited or caused to be deposited by the Seller with the Indenture Trustee for crediting to the Capital Subaccount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Requirements of Series Supplement</u>. Such other funds, accounts, documents, certificates, agreements, instruments or opinions as may be required by the terms of the Series Supplement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Other Requirements</u>. Such other documents, certificates, agreements, instruments or opinions as the Indenture Trustee may reasonably require.

SECTION 2.11. <u>Book-Entry System Restoration Bonds</u>. Unless the Series Supplement provides otherwise, all of the System Restoration Bonds shall be issued in Book-Entry Form, and the Issuer shall execute and the Indenture Trustee shall, in accordance with this <u>Section 2.11</u> and the Issuer Order, authenticate and deliver one or more Global System Restoration Bonds, evidencing the System Restoration Bonds, which (a) shall be an aggregate original principal amount equal to the aggregate original principal amount of the System Restoration Bonds to be issued pursuant to the Issuer Order, (b) 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, (c) shall be delivered by the Indenture Trustee pursuant to such Clearing Agency's or such nominee's instructions and (d) shall bear a legend substantially to the effect set forth in <u>Exhibit A</u> to the Form of Series Supplement.

Each Clearing Agency designated pursuant to this <u>Section 2.11</u> 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 System Restoration Bonds issued in Book-Entry Form shall receive a Definitive System Restoration Bond representing such Holder's interest in any of the System Restoration Bonds, except as provided in <u>Section 2.13</u>. Unless (and until) certificated, fully registered System Restoration Bonds (the "<u>Definitive System Restoration Bonds</u>") have been issued to the Holders pursuant to <u>Section 2.13</u> or pursuant to the Series Supplement relating thereto:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the provisions of this <u>Section 2.11</u> shall be in full force and effect;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) to the extent that the provisions of this <u>Section 2.11</u> conflict with any other provisions of this Indenture, the provisions of this <u>Section 2.11</u> shall control;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the rights of Holders shall be exercised only through the Clearing Agency and the Clearing Agency Participants and shall be limited to those established by applicable 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 System Restoration Bonds are issued pursuant to <u>Section 2.13</u>, the initial Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit distributions of principal of and interest on the Book-Entry System Restoration Bonds to such Clearing Agency Participants; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) 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 System Restoration 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 System Restoration Bonds and has delivered such instructions to a Responsible Officer of the Indenture Trustee.

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

SECTION 2.13. <u>Definitive System Restoration Bonds</u>. 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 a majority of the Outstanding Amount of System Restoration Bonds maintained as Book-Entry System Restoration 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 System Restoration Bonds to the Holders requesting the same. Upon surrender to the Indenture Trustee of the Global System Restoration 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 System Restoration Bonds in accordance with the instructions of the Clearing Agency. None of the Issuer, the System Restoration 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 System Restoration Bonds, the Indenture Trustee shall recognize the Holders of the Definitive System Restoration Bonds as Holders hereunder without need for any consent or acknowledgement from the Holders.

Definitive System Restoration Bonds will be transferable and exchangeable at the offices of the System Restoration Bond Registrar.

SECTION 2.14. <u>CUSIP Number</u>. The Issuer in issuing any System Restoration Bonds 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; <u>provided</u>, 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 System Restoration Bonds and that reliance may be placed only on the other identification numbers printed on the System Restoration Bonds. The Issuer shall promptly notify the Indenture Trustee in writing of any change in the CUSIP number with respect to any System Restoration Bond.

SECTION 2.15. <u>Letter of Representations</u>. The Issuer shall comply with the terms of each Letter of Representations applicable to the Issuer.

SECTION 2.16. <u>Tax Treatment</u>. The Issuer and the Indenture Trustee, by entering into this Indenture, and the Holders and any Persons holding a beneficial interest in any System Restoration Bond, by acquiring any System Restoration Bond or interest therein, (a) express their intention that, solely for the purposes of U.S. federal income tax and, to the extent consistent with applicable state, local and other tax law, solely for the purposes of state, local and other taxes, the System Restoration Bonds qualify under applicable tax law as indebtedness of Utility Holding secured by the Trust Estate and (b) solely for the purposes of U.S. federal income tax 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 System Restoration Bonds are outstanding, agree to treat the System Restoration Bonds as indebtedness of Utility Holding secured by the Trust Estate unless otherwise required by appropriate taxing authorities.

SECTION 2.17. <u>State Pledge</u>. Each System Restoration Bond shall state that the Securitization Act provides that the State of Texas pledges "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 the transition property, or except as permitted . . . [through the Transition Charge Adjustment Process] . . . 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."

The Issuer hereby acknowledges that the purchase of any System Restoration Bond by a Holder or the purchase of any beneficial interest in a System Restoration 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. <u>Non-Recourse Obligations</u>. The System Restoration Bonds shall be non-recourse obligations and shall be only secured by the Trust Estate, of which the principal asset is the System Restoration Property, and shall be payable solely out of the System Restoration Property and other assets in the Trust Estate. If and to the extent that the proceeds of the System Restoration Property are insufficient to pay all amounts owing with respect to the System Restoration 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 System Restoration Bonds, waive any such Claim.

ARTICLE III

Covenants

SECTION 3.01. <u>Payment of Principal, Premium, if any, and Interest</u>. The principal of and premium, if any, and interest on the System Restoration 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 System Restoration Bonds and this Indenture and the Series Supplement; <u>provided</u>, that, except on a Final Maturity Date of a tranche or upon the acceleration of the System Restoration Bonds following the occurrence of an Event of Default, the Issuer shall only be obligated to pay the principal of such System Restoration Bonds on each Payment Date therefor to the extent moneys are available for such payment pursuant to <u>Section 8.02</u>. Amounts properly withheld under the Code, the Treasury regulations promulgated thereunder 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. <u>Maintenance of Office or Agency</u>. The Issuer shall initially maintain in St. Paul, Minnesota an office or agency where System Restoration Bonds may be surrendered for registration of transfer or exchange. 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. The Issuer hereby initially appoints the System Restoration Bond Registrar to serve as its agent for the foregoing purposes, and the Corporate Trust Office of the Indenture Trustee shall serve as the offices provided above in this <u>Section 3.02</u>. 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 of the Indenture Trustee, and the Issuer hereby appoints the Indenture Trustee as its agent to receive all such surrenders.

SECTION 3.03. <u>Money for Payments To Be Held in Trust</u>. As provided in <u>Section 8.02(a)</u>, all payments of amounts due and payable with respect to any System Restoration Bonds that are to be made from amounts withdrawn from the Collection Account pursuant to <u>Section 8.02(e)</u> 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 System Restoration Bonds shall be paid over to the Issuer except as provided in this <u>Section 3.03</u> and <u>Section 8.02</u>.

Each Paying Agent shall meet the eligibility criteria set forth for the Indenture Trustee under <u>Section 6.11</u>. 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 <u>Section 3.03</u>, that such Paying Agent will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) hold all sums held by it for the payment of amounts due with respect to the System Restoration 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) give the Indenture Trustee, unless the Indenture Trustee is the Paying Agent, the Texas Commission and the Rating Agencies 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 System Restoration Bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) immediately, with notice to the Rating Agencies, resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of System Restoration 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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) comply with all requirements of the Code, the Treasury regulations promulgated thereunder and other tax laws with respect to the withholding from any payments made by it on any System Restoration 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, pay, or 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 escheatment 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 System Restoration Bond and remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust and be paid to the Issuer upon receipt of an Issuer Request; and, subject to <u>Section 10.14</u>, the Holder of such System Restoration 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; <u>provided</u>, <u>however</u>, 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 written direction and 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. <u>Existence</u>. 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 System Restoration Bonds, the Trust Estate and each other instrument or agreement referenced herein or therein.

SECTION 3.05. <u>Protection of Trust Estate</u>. The Issuer shall from time to time execute and deliver all such supplements and amendments hereto and all filings with the Secretary of State of the State of Delaware and the Secretary of State of the State of Texas, as applicable, pursuant to the Financing Order or to the Securitization Act and all financing statements, continuation statements, instruments of further assurance and other instruments, and shall take such other action necessary or advisable, to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) maintain or preserve the Lien (and the priority thereof) of this Indenture and the Series Supplement or carry out more effectively the purposes hereof;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) enforce any of the Trust Estate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) preserve and defend title to the Trust Estate and the rights of the Indenture Trustee and the Holders in the Trust Estate against the Claims of all Persons, including a challenge by any party to the validity or enforceability of the Financing Order, the System Restoration Property or any Proceeding relating thereto and institute any action or proceeding necessary to compel performance by the Texas Commission or the State of Texas of any of its obligations or duties under the Securitization Act, the State Pledge, or the Financing Order, as the case may be; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) pay any and all taxes levied or assessed upon all or any part of the Trust Estate.

The Indenture Trustee is specifically permitted and authorized, but not required to file financing statements covering the Trust Estate, including financing statements that describe the Trust Estate as "all assets" or "all personal property" of the Issuer; <u>provided</u>, <u>however</u>, that such authorization shall not be deemed to be an obligation and it being understood and agreed that the Indenture Trustee shall not be responsible for filing any financing statement and shall have no obligation or duty to prepare, authorize, execute or file such documents.

SECTION 3.06. <u>Opinions as to Trust Estate</u>.

SECTION 3.07. <u>Performance of Obligations; Servicing; SEC Filings</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Issuer (i) shall diligently pursue any and all actions to enforce its rights under each instrument or agreement included in the Trust Estate 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Issuer may contract with other Persons selected with due care 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 the instruments and agreements included in the Trust Estate, including filing or causing to be filed all filings with the Texas Commission, the Secretary of State of the State of Delaware and the Secretary of State of the State of Texas, as applicable, pursuant to the Securitization Act or the Financing Order, all UCC financing statements and all 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 Servicer 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 System Restoration Property or the System Restoration Charges, the Issuer shall take all reasonable steps available to it to remedy such failure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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, in accordance with Section 7.04 of the Servicing Agreement, at the written direction either (a) of the Holders evidencing a majority of the Outstanding Amount of the System Restoration Bonds, or (b) of the Texas Commission, appoint a Successor Servicer with the Issuer's prior written consent thereto (which shall not be unreasonably withheld), and such Successor Servicer shall accept its appointment by a written assumption in a form acceptable to the Issuer. A Person shall qualify as a Successor Servicer only if such Person satisfies the requirements of the Servicing Agreement and the Financing Order relating to a Successor Servicer. 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, at the expense of the Issuer, petition the Texas Commission or a court of competent jurisdiction to appoint a Successor Servicer. In connection with any such appointment, CEHE 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 6.07 of the Servicing Agreement and in the Financing Order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 Texas Commission, the Holders and the Rating Agencies of such termination. As soon as a Successor Servicer is appointed, the Indenture Trustee shall notify the Issuer, the Texas Commission, the Holders and the Rating Agencies of such appointment, specifying in such notice the name and address of such Successor Servicer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Issuer shall (or shall cause CEHE to) post on its website (which for this purpose may be the website of any direct or indirect parent company of the Issuer) and, to the extent consistent with the Issuer's and CEHE's obligations under applicable law, 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, the following information (other than any such information filed with the SEC and publicly available to investors unless the Issuer specifically requests such items to be posted) with respect to the Outstanding System Restoration Bonds, in each case to the extent such information is reasonably available to the Issuer:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a statement reporting the balances in the Collection Account and in each Subaccount of the Collection Account as of all Payment Dates (to be included on the next Form 10-D filed) and as of the end of each year (to be included on the next Form 10-K filed);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Semi-Annual Servicer's Certificate as required to be submitted pursuant to the Servicing Agreement (to be filed with a Form 10-D, Form 10-K or Form 8-K, or successor forms thereto);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Monthly Servicer's Certificate as required to be submitted pursuant to the Servicing Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the text (or a link to the website where a reader can find the text) of each filing of a System Restoration Charge Adjustment and the results of each such filing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) any change in the long-term or short-term credit ratings of the Servicer assigned by the Rating Agencies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) material legislative enactment or regulatory order or rule directly relevant to the Outstanding System Restoration Bonds (to be filed or furnished in a Form 8-K); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) any reports and other information that the Issuer is required to file with the SEC under the Exchange Act, including but not limited to periodic and current reports related to the System Restoration Bonds consistent with the disclosure and reporting regime established in Regulation AB.

Notwithstanding the foregoing, nothing herein shall preclude the Issuer from voluntarily suspending or terminating its filing obligations as Issuer with the SEC to the extent permitted by applicable law. Any such reports or information delivered to the Indenture Trustee for purposes of this <u>Section 3.07(g)</u> is for informational purposes only, and the Indenture Trustee's receipt of such reports or information shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer's compliance with any of its covenants hereunder (as to which the Indenture Trustee is entitled to conclusively rely on an Officer's Certificate).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Issuer shall direct the Indenture Trustee to post on the Indenture Trustee's website for investors (based solely on information set forth in the Semi-Annual Servicer's Certificate) with respect to the Outstanding System Restoration Bonds, to the extent such information is set forth in the Semi-Annual Servicer's Certificate, a statement showing the balance of Outstanding System Restoration Bonds that reflects the actual payments made on the System Restoration Bonds during the applicable period.

The address of the Indenture Trustee's website for investors is https://pivot.usbank.com. The Indenture Trustee shall immediately notify the Issuer, the Holders and the Rating Agencies of any change to the address of the website for investors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Issuer shall make all filings required under the Financing Order relating to the transfer of the ownership or security interest in the System Restoration Property other than those required to be made by the Seller or the Servicer pursuant to the Basic Documents.

SECTION 3.08. <u>Certain Negative Covenants</u>. So long as System Restoration Bonds are Outstanding, the Issuer shall not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) except as expressly permitted by this Indenture and the other Basic Documents, sell, transfer, convey, exchange or otherwise dispose of any of the properties or assets of the Issuer, including those included in the Trust Estate, unless in accordance with <u>Article V</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) claim any credit on, or make any deduction from the principal or premium, if any, or interest payable in respect of, the System Restoration Bonds (other than amounts properly withheld from such payments under the Code, the Treasury regulations promulgated thereunder 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 Trust Estate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) terminate its existence or dissolve or liquidate in whole or in part, except in a transaction permitted by <u>Section 3.10</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) (i) permit the validity or effectiveness of this Indenture or the other Basic Documents to be impaired, or permit the Lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the System Restoration Bonds under this Indenture except as may be expressly permitted hereby, (ii) permit any Lien (other than the Lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Estate 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 (iii) permit the Lien of this Indenture not to constitute a valid first priority perfected security interest in the Trust Estate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) elect to be classified as an association taxable as a corporation for U.S. 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 U.S. federal income tax purposes 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 for U.S. federal income tax purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) change its name, identity or structure or the location of its chief executive office or state of formation, unless at least ten (10) Business Days prior to the effective date of any such change the Issuer delivers to the Indenture Trustee (with copies to the Rating Agencies) 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) take any action that is subject to a Rating Agency Condition without satisfying the Rating Agency Condition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) except to the extent permitted by applicable law, voluntarily suspend or terminate its filing obligations with the SEC as described in <u>Section 3.07(g)</u>; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) issue any debt obligations other than the System Restoration Bonds.

SECTION 3.09. <u>Annual Statement as to Compliance</u>. The Issuer will deliver to the Indenture Trustee and the Rating Agencies not later than March 31 of each year (commencing with March 31, 2026), an Officer's Certificate stating, as to the Responsible Officer signing such Officer's Certificate, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) 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 date hereof) and of performance under this Indenture has been made; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) 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 12-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. <u>Issuer May Consolidate, etc., Only on Certain Terms</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Issuer shall not consolidate or merge with or into any other Person or sell substantially all of the assets of the Issuer to any other Person, unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Person (if other than the Issuer) formed by or surviving such consolidation or merger or to whom substantially all of the assets of the Issuer are sold 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) expressly assume all obligations and succeeds to all rights of the Issuer under the Sale Agreement, the Administration Agreement, the Servicing Agreement and the other Basic Documents to which the Issuer is a party (or under which the Issuer has rights) pursuant to an assignment and assumption agreement executed and delivered to the Indenture Trustee;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) prior notice shall be given to the Rating Agencies and the Rating Agency Condition shall have been satisfied with respect to such merger, consolidation or sale;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the Issuer shall have delivered to CEHE, the Indenture Trustee and the Rating Agencies an opinion or opinions of outside tax counsel (as selected by the Issuer, in form and substance reasonably satisfactory to CEHE and the Indenture Trustee, and which may be based on a ruling from the Internal Revenue Service) to the effect that the consolidation, merger or sale will not result in a material adverse U.S. federal or state income tax consequence to the Issuer, CEHE, the Indenture Trustee or the then-existing Holders;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 Trust Estate, to any Person, unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Person that acquires the properties and assets of the Issuer, the conveyance or transfer of which is hereby restricted, (A) shall 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 <u>Section 3.10(b)(i)(B)</u>, 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 System Restoration 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 Trust Estate and the System Restoration 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, assumes all obligations and succeeds to all rights of the Issuer under the Sale Agreement and the Servicing Agreement, as applicable;

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the Issuer shall have delivered to CEHE, the Indenture Trustee and the Rating Agencies an opinion or opinions of outside tax counsel (as selected by the Issuer, in form and substance reasonably satisfactory to CEHE, and which may be based on a ruling from the Internal Revenue Service) to the effect that the disposition will not result in a material adverse U.S. federal or state income tax consequence to the Issuer, CEHE, the Indenture Trustee or the then-existing Holders;

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

SECTION 3.11. <u>Successor or Transferee</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Upon any consolidation or merger of the Issuer in accordance with <u>Section 3.10(a)</u>, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Except as set forth in <u>Section 6.07</u>, upon a sale, conveyance, exchange, transfer or other disposition of all the assets and properties of the Issuer in accordance with <u>Section 3.10(b)</u>, 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 System Restoration Bonds and the System Restoration 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. <u>No Other Business</u>. The Issuer shall not engage in any business other than financing, purchasing, owning, administering, managing and servicing the System Restoration Property and the assets in the Trust Estate and the issuance of the System Restoration Bonds in the manner contemplated by the Financing Order and this Indenture and the other Basic Documents and activities incidental thereto.

SECTION 3.13. <u>No Borrowing</u>. The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except for the System Restoration Bonds permitted by this Indenture and any other indebtedness expressly permitted by or arising under the Basic Documents.

SECTION 3.14. <u>Servicer's Obligations</u>. 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. <u>Guarantees, Loans, Advances and Other Liabilities</u>. 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. <u>Capital Expenditures</u>. Other than the purchase of System Restoration Property from the Seller under the Sale Agreement, 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. <u>Restricted Payments</u>. Except as provided in <u>Section 8.04(c)</u>, 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; <u>provided</u>, <u>however</u>, 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 <u>Section 8.02(e)(x)</u> to the extent that such distributions would not cause the balance of the Capital Subaccount to decline below the Required Capital Amount. 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. <u>Notice of Events of Default</u>. The Issuer agrees to give the Indenture Trustee, the Texas Commission and the Rating Agencies prompt written notice in the form of an Officer's Certificate of each Default or Event of Default hereunder as provided in <u>Section 5.01</u>, and upon the actual knowledge of a Responsible Officer of the Issuer thereof 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. <u>Further Instruments and Acts</u>. Upon request of the Indenture Trustee or as required by applicable law, 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 Trust Estate.

SECTION 3.20. <u>Inspection</u>. 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 hold and shall cause its representatives to hold in confidence all such information except to the extent disclosure may be required by applicable 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 prospectus, registration statement or other document a copy of which has been filed with the SEC, (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 <u>Section 3.20</u>, or (v) to any Rating Agency or (c) any other disclosure authorized by the Issuer.

SECTION 3.21. <u>Economic Sanctions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Issuer covenants and represents that neither it nor any of its subsidiaries, managers, officers or affiliates they control are the target or subject of any sanctions enforced by the U.S. Government, (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State), the United Nations Security Council, the European Union, His Majesty's Treasury, or other relevant sanctions authority (collectively "<u>Sanctions</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Issuer covenants and represents that neither it nor any of its subsidiaries, managers, officers or affiliates they control will directly or indirectly use any payments made pursuant to this Indenture or any of the other Basic Documents, (i) to fund or facilitate any activities of or business with any person who, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) to fund or facilitate any activities of or business with any country or territory that is the target or subject of Sanctions, or (iii) in any other manner that will result in a violation of Sanctions by any person.

SECTION 3.22. <u>[Reserved]</u>

SECTION 3.23. <u>Sale Agreement, Servicing Agreement and Administration Agreement Covenants</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Issuer agrees to take all such lawful actions to enforce its rights under the Sale Agreement, the Servicing Agreement, the Administration Agreement and the other Basic Documents, and to compel or secure the performance and observance by the Seller, the Servicer and the Administrator of each of their respective obligations to the Issuer under or in connection with the Sale Agreement, the Servicing Agreement, the Administration Agreement and the other Basic Documents in accordance with the terms thereof. So long as no Event of Default occurs and is continuing, but subject to <u>Section 3.23(f)</u>, 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; <u>provided</u>, that such action shall not adversely affect the interests of the Holders in any material respect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 the Holders of not less than a majority of the Outstanding Amount of the System Restoration Bonds of all tranches affected thereby, shall, exercise all rights, remedies, powers, privileges and claims of the Issuer against the Seller, 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, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as set forth in <u>Section 3.23(e)</u>, 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, and with the consent of the Indenture Trustee; <u>provided</u>, that the Indenture Trustee shall provide such consent upon receipt of an Officer's Certificate evidencing satisfaction of such Rating Agency Condition, an Opinion of Counsel of external counsel of the Issuer evidencing that such amendment is in accordance with the provisions of such Basic Document and, if the amendment increases ongoing qualified costs as defined in the Financing Order, satisfaction of the Texas Commission Condition (as described in <u>Section 9.03</u> hereof or as applicable in the relevant section of such other Basic Document).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Except as set forth in <u>Section 3.23(e)</u>, if the Issuer, the Seller, 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, the Administrator, the Servicer or any other party 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, 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, the Paying Agent (if not the Indenture Trustee), the System Restoration Bond Registrar (if not the Indenture Trustee) and the Holders in writing of the proposed amendment, modification, waiver, supplement, termination or surrender and whether the Rating Agency Condition has been satisfied with respect thereto (or, pursuant to an Issuer Request, the Indenture Trustee shall so notify the Holders on the Issuer's behalf). The Indenture Trustee shall consent to such proposed amendment, modification, waiver, supplement, termination or surrender only if the Rating Agency Condition is satisfied and only with the (i) prior written consent of the Holders of not less than a majority of the Outstanding Amount of System Restoration Bonds or tranche materially and adversely affected thereby and (ii) if such proposed amendment, modification, waiver, supplement, termination or surrender increases ongoing qualified costs as defined in the Financing Order, satisfaction of the Texas Commission Condition (as described in <u>Section 9.03</u> or as applicable in the relevant section of such other Basic Document). 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) If the Issuer or the Servicer proposes to amend, modify, waive, supplement, terminate or surrender in any material respect, or to agree to any material amendment, modification, waiver, supplement, termination or surrender of, the process for System Restoration Charge Adjustments, the Issuer shall notify the Indenture Trustee and the Holders and, when required, the Texas Commission in writing of such proposal (or, pursuant to an Issuer Request, the Indenture Trustee shall so notify the Holders on the Issuer's behalf), and the Indenture Trustee shall consent thereto with the prior written consent of the Holders of not less than a majority of the Outstanding Amount of System Restoration Bonds or tranche affected thereby and only (i) if the Rating Agency Condition has been satisfied with respect thereto and (ii) if such proposed amendment, modification, waiver, supplement, termination or surrender increases ongoing qualified costs as defined in the Financing Order, satisfaction of the Texas Commission Condition (as described in <u>Section 9.03</u>).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Promptly following a default by the Seller under the Sale Agreement or 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, 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, 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.

SECTION 3.24. <u>Taxes</u>. So long as any of the System Restoration Bonds are Outstanding, the Issuer shall pay 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 Trust Estate; <u>provided</u>, that no such tax need be paid if the Issuer is contesting 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.

SECTION 3.25. <u>Notices from Holders</u>. The Issuer shall promptly transmit any notice received by it from the Holders to the Indenture Trustee.

SECTION 3.26. <u>Volcker Rule</u>. The Issuer is structured so as not to be a "covered fund" under the regulations adopted to implement Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly known as the "Volcker Rule."

ARTICLE IV

Satisfaction and Discharge; Defeasance

SECTION 4.01. <u>Satisfaction and Discharge of Indenture; Defeasance</u>.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) all System Restoration Bonds theretofore authenticated and delivered (other than (1) System Restoration Bonds that have been destroyed, lost or stolen and that have been replaced or paid as provided in <u>Section 2.06</u> and (2) System Restoration 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 <u>Section 3.03</u>) have been delivered to the Indenture Trustee for cancellation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) either (1) the Scheduled Final Payment Date has occurred with respect to all System Restoration Bonds not theretofore delivered to the Indenture Trustee for cancellation or (2) the System Restoration 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 that through the scheduled payments of principal and interest in respect thereof in accordance with their terms are in an amount sufficient to pay principal of, premium, if any, and interest on the System Restoration Bonds not theretofore delivered to the Indenture Trustee for cancellation, ongoing qualified costs as defined in the Financing Order and all other sums payable hereunder by the Issuer with respect to the System Restoration Bonds when scheduled to be paid and to discharge the entire indebtedness on the System Restoration Bonds when due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) pursuant to <u>Section 10.04</u>, the Issuer has delivered to the Indenture Trustee an Officer's Certificate, an Opinion of Counsel of external counsel of the Issuer and (if required by the Trust Indenture Act or the Indenture Trustee) a certificate from a firm of Independent registered public accountants, each meeting the applicable requirements of <u>Section 10.01(a)</u> and each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture with respect to the System Restoration Bonds have been complied with.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to <u>Section 4.01(c)</u> and <u>Section 4.02</u>, the Issuer at any time may terminate (i) all its obligations under this Indenture with respect to the System Restoration Bonds ("<u>Legal Defeasance Option</u>") or (ii) its obligations under <u>Section 3.04</u>, <u>Section 3.05</u>, <u>Section 3.06</u>, <u>Section 3.07</u>, <u>Section 3.08</u>, <u>Section 3.09</u>, <u>Section 3.10</u>, <u>Section 3.12</u>, <u>Section 3.13</u>, <u>Section 3.14</u>, <u>Section 3.15</u>, <u>Section 3.16</u>, <u>Section 3.17</u>, <u>Section 3.18</u> and <u>Section 3.19</u> and the operation of <u>Section 5.01(c)</u> with respect to the System Restoration Bonds ("<u>Covenant Defeasance Option</u>"). The Issuer may exercise the Legal Defeasance Option with respect to the System Restoration Bonds notwithstanding its prior exercise of the Covenant Defeasance Option.

If the Issuer exercises the Legal Defeasance Option, the maturity of the System Restoration Bonds may not be accelerated because of an Event of Default. If the Issuer exercises the Covenant Defeasance Option, the maturity of the System Restoration Bonds may not be accelerated because of an Event of Default specified in <u>Section 5.01(c)</u>.

Upon satisfaction of the conditions set forth herein to the exercise of the Legal Defeasance Option or the Covenant Defeasance Option of the System Restoration Bonds, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding <u>Section 4.01(a)</u> and <u>Section 4.01(b)</u>, (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen System Restoration Bonds, (iii) rights of Holders to receive payments of principal, premium, if any, and interest, (iv) <u>Section 4.03</u> and <u>Section 4.04</u>, (v) the rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee under <u>Section 6.07</u> and the obligations of the Indenture Trustee under <u>Section 4.03</u>) 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, each shall survive until the System Restoration Bonds as to which this Indenture relates or certain obligations hereunder have been satisfied and discharged pursuant to <u>Section 4.01(a)</u> or <u>Section 4.01(b)</u>. Thereafter the obligations, rights, indemnities and immunities in <u>Section 6.07</u> and <u>Section 4.04</u> shall survive.

SECTION 4.02. <u>Conditions to Defeasance</u>. The Issuer may exercise the Legal Defeasance Option or the Covenant Defeasance Option with respect to the System Restoration Bonds only if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 that 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 System Restoration Bonds not therefore delivered to the Indenture Trustee for cancellation and ongoing qualified costs as defined in the Financing Order and all other sums payable hereunder by the Issuer with respect to the System Restoration Bonds when scheduled to be paid and to discharge the entire indebtedness on the System Restoration Bonds when due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 of and interest on the deposited U.S. Government Obligations when due and without reinvestment plus any deposited cash 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 System Restoration Bonds (i) principal in accordance with the Expected Sinking Fund Schedule therefor, (ii) interest when due and (iii) ongoing qualified costs as defined in the Financing Order and all other sums payable hereunder by the Issuer with respect to the System Restoration Bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in the case of the Legal Defeasance Option, ninety-five (95) days after the deposit is made and during the ninety-five (95)-day period no Default specified in <u>Section 5.01(e)</u> or <u>Section 5.01(f)</u> occurs that is continuing at the end of the period;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 external 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 U.S. federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such legal defeasance and will be subject to U.S. 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 external counsel of the Issuer to the effect that the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such covenant defeasance and will be subject to U.S. 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 Legal Defeasance Option or the Covenant Defeasance Option, as applicable, have been complied with as required by this <u>Article IV</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) the Issuer delivers to the Indenture Trustee an Opinion of Counsel of external counsel of the Issuer to the effect that: (i) in a case under the Bankruptcy Code in which CEHE (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 CEHE (or any of its Affiliates, other than the Issuer, that deposited the moneys or U.S. Government Obligations); and (ii) in the event CEHE (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 CEHE (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 CEHE or such other Affiliate; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 <u>Section 4.02</u>, 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 <u>Section 4.03</u> until principal of and premium, if any, and interest on the System Restoration Bonds shall have been paid in accordance with the provisions of this Indenture and the Series Supplement.

SECTION 4.03. <u>Application of Trust Money</u>. All moneys or U.S. Government Obligations deposited with the Indenture Trustee pursuant to <u>Section 4.01</u> or <u>Section 4.02</u> shall be held in trust and applied by it, in accordance with the provisions of the System Restoration 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 System Restoration 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 applicable law. Notwithstanding anything to the contrary in this <u>Article IV</u>, 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 <u>Section 4.02</u> that, 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 that would be required to be deposited for the purpose for which such moneys or U.S. Government Obligations were deposited; <u>provided</u>, that any such payment shall be subject to the satisfaction of the Rating Agency Condition.

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

ARTICLE V

Remedies

SECTION 5.01. <u>Events of Default</u>. "<u>Event of Default</u>" 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):

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) default in the payment of the then unpaid principal of any System Restoration Bond on the Final Maturity Date, or, if applicable, any tranche on the Final Maturity Date for such tranche;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) default in the observance or performance of any covenant or agreement of the Issuer made in this Indenture (other than defaults specified in <u>Section 5.01(a)</u> or <u>Section 5.01(b)</u>), and such default shall continue or not be cured, for a period of thirty (30) days after the earlier of (i) 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 twenty-five (25%) percent of the Outstanding Amount of the System Restoration 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 (ii) the date that the Issuer has actual knowledge of the default;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any representation or warranty of the Issuer made in this Indenture, the Series Supplement or in any certificate or other writing delivered pursuant hereto or the Series Supplement 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 representation or warranty was incorrect shall not have been eliminated or otherwise cured, within thirty (30) days after the earlier of (i) 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 twenty-five (25%) percent of the Outstanding Amount of the System Restoration 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 (ii) the date the Issuer has actual knowledge of the default;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) 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 Trust Estate in an involuntary case or Proceeding under any applicable U.S. 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 Trust Estate, 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the commencement by the Issuer of a voluntary case under any applicable U.S. 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 Trust Estate, 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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any act or failure to act by the State of Texas or any of its agencies (including the Texas Commission), officers or employees that violates the State Pledge or is not in accordance with the State Pledge.

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) that is an Event of Default under <u>Section 5.01(a)</u>, <u>Section 5.01(b)</u>, <u>Section 5.01(f)</u>, or <u>Section 5.01(g)</u> or (ii) that with the giving of notice, the lapse of time, or both, would become an Event of Default under <u>Section 5.01(c)</u>, <u>Section 5.01(d)</u> or <u>Section 5.01(e)</u>, including, in each case, the status of such Default or Event of Default and what action the Issuer is taking or proposes to take with respect thereto.

SECTION 5.02. <u>Acceleration of Maturity; Rescission and Annulment</u>. If an Event of Default (other than an Event of Default under <u>Section 5.01(g)</u>) 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 System Restoration Bonds may declare the System Restoration Bonds to be immediately due and payable, by a notice in writing to the Issuer (and to the Indenture Trustee and the Texas Commission if given by Holders), and upon any such declaration the unpaid principal amount of the System Restoration 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 <u>Article V</u> provided, the Holders representing not less than a majority of the Outstanding Amount of the System Restoration Bonds, by written notice to the Issuer, the Texas Commission and the Indenture Trustee, may rescind and annul such declaration and its consequences if:

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) all payments of principal of and premium, if any, and interest on all System Restoration 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 System Restoration Bonds if the Event of Default giving rise to such acceleration had not occurred and was not continuing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, indemnities and expenses of the Indenture Trustee; <u>provided</u>, that, the Indenture Trustee shall not be obligated to pay or advance any sums hereunder from its own funds after an Event of Default, disbursements and advances of the Indenture Trustee and its agents and counsel; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) all Events of Default, other than the nonpayment of the principal of the System Restoration Bonds that has become due solely by such acceleration, have been cured or waived as provided in <u>Section 5.12</u>.

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

SECTION 5.03. <u>Collection of Indebtedness and Suits for Enforcement by Indenture Trustee</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If an Event of Default under <u>Section 5.01(a)</u> or <u>Section 5.01(b)</u> has occurred and is continuing, subject to <u>Section 10.16</u>, 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 the System Restoration Bonds and collect in the manner provided by applicable law out of the property of the Issuer or other obligor upon the System Restoration Bonds wherever situated the moneys payable, or the Trust Estate and the proceeds thereof, the whole amount then due and payable on the System Restoration 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 System Restoration 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If an Event of Default (other than an Event of Default under <u>Section 5.01(g)</u>) occurs and is continuing, the Indenture Trustee shall, as more particularly provided in <u>Section 5.04</u>, proceed to protect and enforce its rights and the rights of the Holders, by such appropriate Proceedings as the Indenture Trustee (subject to <u>Section 5.11</u>) 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 applicable law, including foreclosing or otherwise enforcing the Lien of the Trust Estate or applying to the Texas Commission or a court of competent jurisdiction for sequestration of revenues arising with respect to the System Restoration Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If an Event of Default under <u>Section 5.01(e)</u> or <u>Section 5.01(f)</u> has occurred and is continuing, the Indenture Trustee, irrespective of whether the principal of any System Restoration 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 <u>Section 5.03</u>, shall be entitled and empowered, by intervention in any Proceedings related to such Event of Default or otherwise:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 System Restoration 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 System Restoration 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) All rights of action and of asserting claims under this Indenture, or under any of the System Restoration Bonds, may be enforced by the Indenture Trustee without the possession of any of the System Restoration 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.

SECTION 5.04. <u>Remedies; Priorities</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If an Event of Default (other than an Event of Default under <u>Section 5.01(g)</u>) shall have occurred and be continuing, the Indenture Trustee may do one or more of the following (subject to <u>Section 5.05</u>):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the System Restoration 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 the System Restoration Bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Estate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) exercise any remedies of a secured party under the UCC, the Securitization Act 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) at the written direction of the Holders of not less than a majority of the Outstanding Amount of the System Restoration Bonds, either sell all or a portion of the Trust Estate or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by applicable law, or elect that the Issuer maintain possession of all or a portion of the Trust Estate pursuant to <u>Section 5.05</u> and at the written direction of the Holders of not less than a majority of the Outstanding Amount of the System Restoration Bonds then Outstanding and declared to have been due and payable, continue to apply the System Restoration Charges and apply distributions on the Trust Estate as if there had been no declaration of acceleration; and

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

<u>provided</u>, <u>however</u>, that the Indenture Trustee may not sell or otherwise liquidate any portion of the Trust Estate following such an Event of Default, other than an Event of Default described in <u>Section 5.01(a)</u> or <u>Section 5.01(b)</u>, unless (A) the Holders of one hundred (100%) percent of the Outstanding Amount of the System Restoration 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 System Restoration 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 <u>Section 8.02(e)</u> or (C) the Indenture Trustee determines that the Trust Estate will not continue to provide sufficient funds for all payments on the System Restoration Bonds as they would have become due if the System Restoration Bonds had not been declared due and payable, and the Indenture Trustee obtains the written consent of Holders of at least two-thirds (2/3) of the Outstanding Amount of the System Restoration Bonds. In determining such sufficiency or insufficiency with respect to clause (B) above and clause (C) above, 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 Trust Estate for such purpose, at the Issuer's expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If an Event of Default under <u>Section 5.01(g)</u> 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 <u>Section 5.01(g)</u>.

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

SECTION 5.05. <u>Optional Preservation of the Trust Estate</u>. If the System Restoration Bonds have been declared to be due and payable under <u>Section 5.02</u> 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 all or a portion of the Trust Estate. 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 System Restoration Bonds, and the Indenture Trustee shall take such desire into account when determining whether or not to maintain possession of the Trust Estate. In determining whether to maintain possession of the Trust Estate 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 Trust Estate for such purpose.

SECTION 5.06. <u>Limitation of Suits</u>. No Holder of any System Restoration Bond shall have any right to institute any Proceeding, judicial or otherwise, to avail itself of any remedies provided in the Securitization Act or to avail itself of the right to foreclose on the Trust Estate or otherwise enforce the Lien and the security interest on the Trust Estate 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:

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Holders of not less than a majority of the Outstanding Amount of the System Restoration 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;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) 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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) no direction inconsistent with such written request has been given to the Indenture Trustee during such sixty (60)-day period by the Holders of not less than a majority of the Outstanding Amount of the System Restoration 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 (2) or more groups of Holders, each representing less than a majority of the Outstanding Amount of the System Restoration Bonds, the Indenture Trustee in its sole discretion may file a petition with a court of competent jurisdiction to resolve such conflict or determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture.

SECTION 5.07. <u>Unconditional Rights of Holders To Receive Principal, Premium, if any, and Interest</u>. Notwithstanding any other provisions in this Indenture, the Holder of any System Restoration Bond shall have the right, which is absolute and unconditional, (a) to receive payment of (i) the interest, if any, on such System Restoration Bond on the due dates thereof expressed in such System Restoration Bond or in this Indenture or (ii) the unpaid principal, if any, of the System Restoration Bonds on the Final Maturity Date or, if applicable, the Final Maturity Date for such tranche 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. <u>Restoration of Rights and Remedies</u>. 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. <u>Rights and Remedies Cumulative</u>. 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 applicable 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. <u>Delay or Omission Not a Waiver</u>. 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 <u>Article V</u> or by applicable 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. <u>Control by Holders</u>. The Holders of not less than a majority of the Outstanding Amount of the System Restoration Bonds (or, if less than all tranches are affected, the affected tranche) 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 System Restoration Bonds of such tranche or tranches or exercising any trust or power conferred on the Indenture Trustee with respect to the System Restoration Bonds of such tranche or tranches; <u>provided</u>, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) such direction shall not be in conflict with any rule of applicable law or with this Indenture or the Series Supplement and shall not involve the Indenture Trustee in any personal liability or expense;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) subject to other conditions specified in <u>Section 5.04</u>, any direction to the Indenture Trustee to sell or liquidate any of the Trust Estate shall be by the Holders representing not less than one hundred (100%) percent of the Outstanding Amount of the System Restoration Bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) if the conditions set forth in <u>Section 5.05</u> have been satisfied and the Indenture Trustee elects to retain the Trust Estate pursuant to <u>Section 5.05</u>, then any direction to the Indenture Trustee by Holders representing less than one hundred (100%) percent of the Outstanding Amount of the System Restoration Bonds to sell or liquidate the Trust Estate or any portion thereof shall be of no force and effect; and

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

<u>provided</u>, <u>however</u>, that the Indenture Trustee's duties shall be subject to <u>Section 6.01</u>, 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. <u>Waiver of Past Defaults</u>. Prior to the declaration of the acceleration of the maturity of the System Restoration Bonds as provided in <u>Section 5.02</u>, the Holders representing not less than a majority of the Outstanding Amount of the System Restoration Bonds, by written notice to the Indenture Trustee, 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 System Restoration Bonds or (b) in respect of a covenant or provision hereof that cannot be modified or amended without the consent of the Holder of each System Restoration 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 Event of 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. <u>Undertaking for Costs</u>. All parties to this Indenture agree, and each Holder of any System Restoration 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 <u>Section 5.13</u> 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 System Restoration Bonds or (c) any suit instituted by any Holder for the enforcement of the payment of (i) interest on any System Restoration Bond on or after the due dates expressed in such System Restoration Bond and in this Indenture or (ii) the unpaid principal, if any, of any System Restoration Bond on or after the Final Maturity Date for the System Restoration Bonds or, if applicable, the Final Maturity Date for such tranche therefor.

SECTION 5.14. <u>Waiver of Stay or Extension Laws</u>. 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. <u>Action on System Restoration Bonds</u>. The Indenture Trustee's right to seek and recover judgment on the System Restoration 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 Trust Estate or any other assets of the Issuer.

ARTICLE VI

The Indenture Trustee

SECTION 6.01. <u>Duties of Indenture Trustee</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Indenture Trustee, the Indenture Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) this <u>Section 6.01(c)</u> does not limit the effect of <u>Section 6.01(b)</u>;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to <u>Section 6.01(a)</u>, <u>Section 6.01(b)</u> and <u>Section 6.01(c)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 <u>Section 6.01</u> and to the provisions of the Trust Indenture Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) In the event that U.S. Bank Trust Company, National Association is also acting as Paying Agent or System Restoration Bond Registrar hereunder, the protections of this <u>Article VI</u> shall also be afforded to U.S. Bank Trust Company, National Association in its capacity as Paying Agent or System Restoration Bond Registrar, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 the System Restoration Property or to maintain, monitor or otherwise supervise the administration, servicing or collection of the System Restoration Charges.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 System Restoration Bonds or the Basic Documents. None of the provisions of this Indenture shall in any event require the Indenture Trustee to perform or be responsible for the performance of any of the Servicer's obligations under the Basic Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Commencing with March 15, 2026, on or before March 15th of each fiscal year ending December 31, so long as the Issuer is required to file Exchange Act reports, 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 preceding fiscal year ended December 31, with each of the applicable servicing criteria specified on <u>Exhibit C</u> as required under Rule 13a-18 and Rule 15d-18 under 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 Rule 1-02(a)(3) and Rule 2-02(g) of Regulation S-X under the Securities Act of 1933, as amended, and the Exchange Act, the assessment of compliance made by the Indenture Trustee and delivered pursuant to <u>Section 6.01(l)(i)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) The Indenture Trustee shall not be required to take any action it is directed to take under this Indenture if the Indenture Trustee determines in good faith that the action so directed is inconsistent with this Indenture, any other Basic Document or applicable law, or would involve the Indenture Trustee in personal liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) In no event shall the Indenture Trustee be liable for failure to perform its duties hereunder or under any other Basic Document if such failure is a direct result of another party's failure to perform its obligations hereunder or thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) Any discretion, permissive right or privilege of the Indenture Trustee hereunder shall not be deemed to be or otherwise construed as a duty or obligation.

SECTION 6.02. <u>Rights of Indenture Trustee</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Indenture Trustee may conclusively rely and shall be fully protected in relying on any document (including electronic documents and communications delivered in accordance with the terms of this Indenture) 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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, which counsel may be an employee of or counsel to the Issuer or the Seller and which shall be reasonably satisfactory to the Indenture Trustee, or, in the Indenture Trustee's sole judgment, external 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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. The Indenture Trustee shall give prompt written notice to the Issuer, in which case the Issuer shall then give prompt written notice to the Rating Agencies, of the appointment of any such agent, custodian or nominee to whom it delegates any of its express duties under this Indenture; <u>provided</u>, that the Indenture Trustee shall not be obligated to give such notice (i) if the Issuer or the Holders have directed the Indenture Trustee to appoint such agent, custodian or nominee (in which event the Issuer shall give prompt notice to the Rating Agencies of any such direction) or (ii) of the appointment of any agents, custodians or nominees made at any time that an Event of Default of the Issuer has occurred and is continuing.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Indenture Trustee may consult with counsel, accountants and other experts, and the advice or opinion of such counsel with respect to legal matters and such accountants or other experts with respect to other matters relating to this Indenture and the System Restoration 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, accountants and other experts. Any reasonable fees of counsel, accountants, and other experts incurred by the Indenture Trustee shall be payable to the Indenture Trustee from amounts held in the Collection Account in accordance with the provisions set forth in <u>Section 8.02(e)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 at the request, order or direction of any of the Holders pursuant to the provisions of this Indenture and the Series Supplement, or to institute, conduct or defend any litigation hereunder or thereunder or in relation hereto or thereto, or to investigate any matter at the request, order or direction of any of the Holders pursuant to the provisions of this Indenture and the Series Supplement or otherwise, unless requested to do so by Holders holding not less than 25% of the Outstanding Amount of the System Restoration Bonds and such Holders shall have offered to the Indenture Trustee such security or indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Indenture Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by an Issuer Request or an Issuer Order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Whenever in the administration of this Indenture the Indenture Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Indenture Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officer's Certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) The Indenture Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) In no event shall the Indenture Trustee be responsible or liable for punitive, special, indirect or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Indenture Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) In no event shall the Indenture Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, epidemics or pandemics, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services, it being understood that the Indenture Trustee shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) The Indenture Trustee shall not be deemed to have notice of any Servicer Default, Default or Event of Default unless it has actual knowledge or written notice of any event which is in fact such a Default is received by a Responsible Officer of the Indenture Trustee at the Corporate Trust Office of the Indenture Trustee, and such notice references the System Restoration Bonds and this Indenture.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) The rights, privileges, protections, immunities and benefits given to the Indenture Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Indenture Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) Beyond the exercise of reasonable care in the custody thereof, the Indenture Trustee will have no duty as to any Trust Estate in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto. The Indenture Trustee will be deemed to have exercised reasonable care in the custody of the Trust Estate in its possession if the Trust Estate is accorded treatment substantially equal to that which it accords its own property, and the Indenture Trustee will not be liable or responsible for any loss or diminution in the value of any of the Trust Estate by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Indenture Trustee in good faith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) The Indenture Trustee will not be responsible for the existence, genuineness or value of any of the Trust Estate or for the validity, sufficiency, perfection, priority or enforceability of the Liens in any of the Trust Estate, except to the extent such action or omission constitutes negligence or willful misconduct on the part of the Indenture Trustee. The Indenture Trustee shall not be responsible for the validity of the title of any grantor to the collateral, for insuring the Trust Estate or for the payment of taxes, charges, assessments or Liens upon the Trust Estate or otherwise as to the maintenance of the Lien of the Trust Estate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) In the event that the Indenture Trustee is required to acquire title to an asset for any reason, or take any managerial action of any kind in regard thereto, in order to carry out any obligation for the benefit of another, which in the Indenture Trustee's sole discretion may cause the Indenture Trustee, as applicable, to be considered an "owner or operator" under any environmental laws or otherwise cause the Indenture Trustee to incur, or be exposed to, any environmental liability or any liability under any other federal, state or local law, the Indenture Trustee reserves the right, instead of taking such action, either to resign as Indenture Trustee or to arrange for the transfer of the title or control of the asset to a court appointed receiver. The Indenture Trustee will not be liable to any person for any environmental claims or any environmental liabilities or contribution actions under any federal, state or local law, rule or regulation by reason of the Indenture Trustee's actions and conduct as authorized, empowered and directed hereunder or relating to any kind of discharge or release or threatened discharge or release of any hazardous materials into the environment.

SECTION 6.03. <u>Individual Rights of Indenture Trustee</u>. The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of System Restoration 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, System Restoration Bond Registrar, co-registrar or co-paying agent or agent appointed under <u>Section 3.02</u> may do the same with like rights. However, the Indenture Trustee must comply with <u>Section 6.11</u> and <u>Section 6.12</u>.

SECTION 6.04. <u>Indenture Trustee's Disclaimer</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Indenture Trustee shall not be responsible for and makes no representation (other than as set forth in <u>Section 6.13</u>) as to the validity or adequacy of this Indenture or the System Restoration Bonds, it shall not be accountable for the Issuer's use of the proceeds from the System Restoration Bonds, and it shall not be responsible for any statement of the Issuer in this Indenture or in any document issued in connection with the sale of the System Restoration Bonds or in the System Restoration 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 Trust Estate (or for the perfection or priority of the Liens thereon), or for or in respect of the validity or sufficiency of the System Restoration Bonds (other than the certificate of authentication for the System Restoration 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 or the Servicer under the Basic Documents or otherwise, and the Indenture Trustee shall have no obligation or liability to perform the obligations of the Issuer or such Persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Indenture Trustee shall not be responsible for (i) the validity of the title of the Issuer to the Trust Estate, (ii) insuring the Trust Estate or (iii) the payment of taxes, charges, assessments or Liens upon the Trust Estate or otherwise as to the maintenance of the Trust Estate. The Indenture Trustee shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Indenture or any of the other Basic Documents. The Indenture Trustee shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Trust Estate.

SECTION 6.05. <u>Notice of Defaults</u>. If a Default occurs and is continuing and if it is actually known to a Responsible Officer of the Indenture Trustee or a Responsible Officer of the Indenture Trustee has been notified in writing of such Default, the Indenture Trustee shall deliver to each Rating Agency and each Holder notice of the Default within ten (10) Business Days after actual notice of such Default was received by a Responsible Officer of the Indenture Trustee (provided that the Indenture Trustee shall give the Rating Agencies prompt notice of any payment default in respect of the System Restoration Bonds). Except in the case of a Default in payment of principal of and premium, if any, or interest on any System Restoration Bond, the Indenture Trustee may withhold the notice of the Default if and so long as a committee of its Responsible Officers in good faith determines that withholding such notice is in the interests of Holders. In no event shall the Indenture Trustee be deemed to have knowledge of a Default (other than a Default in payment of principal of and premium, if any, or interest on any System Restoration Bond) unless a Responsible Officer of the Indenture Trustee shall have actual knowledge of a Default or shall have received written notice thereof.

SECTION 6.06. <u>Reports by Indenture Trustee to Holders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) So long as System Restoration Bonds are Outstanding and the Indenture Trustee is the System Restoration 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, the Indenture Trustee 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 U.S. federal income and any applicable local or state tax returns. If the System Restoration Bond Registrar and Paying Agent is other than the Indenture Trustee, such System Restoration 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 U.S. federal income and any applicable local or state tax returns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) On or prior to each Payment Date or Special Payment Date therefor, the Indenture Trustee will make available electronically on its reporting website to each Holder 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 System Restoration Bonds with respect to such Payment Date or Special Payment Date or the period since the previous Payment Date, as applicable:

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the aggregate Outstanding Amount of the System Restoration Bonds, before and after giving effect to any payments allocated to principal reported under <u>Section 6.06(b)(i)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the difference, if any, between the amount specified in <u>Section 6.06(b)(iii)</u> and the Outstanding Amount specified in the related Expected Sinking Fund Schedule;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Issuer shall send a copy of each of the Certificate of Compliance delivered to it pursuant to Section 3.03(a) of the Servicing Agreement and the Annual Accountant's Report delivered to it pursuant to Section 3.04(a) of the Servicing Agreement to the Rating Agencies, the Indenture Trustee and to the Servicer for posting on the 17g-5 Website in accordance with Rule 17g-5 under the Exchange Act. A copy of such certificate and report may be obtained by any Holder by a request in writing to the Indenture Trustee.

SECTION 6.07. <u>Compensation and Indemnity</u>. The Issuer shall pay to the Indenture Trustee from time to time reasonable compensation for its services. The Indenture Trustee's compensation shall not, to the extent permitted by applicable law, 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, disbursements and advances 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 from and against any and all cost, damage, loss, liability, tax or expense (including reasonable fees and expenses of its counsel, accountants or other experts and any reasonable out-of-pocket expenses) directly or indirectly incurred by the Indenture Trustee or such Persons in connection with the administration and the enforcement of this Indenture (including this <u>Section 6.07</u>), the Series Supplement and the other Basic Documents and the Indenture Trustee's rights, powers, duties and obligations under this Indenture (including the Issuer's indemnification obligations under this Section 6.07), the Series Supplement and the other Basic Documents and the performance of its duties hereunder, including the cost and expense of defending itself against any claim or liability in connection with the exercise of such duties, and thereunder and obligations under or pursuant to this Indenture, the Series Supplement and the other Basic Documents other than any such tax on the compensation of the Indenture Trustee for its services as Indenture Trustee. 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, the Indenture Trustee may have separate counsel, and the Issuer shall pay the reasonable fees and expenses of such counsel. Notwithstanding the foregoing or any other provision of this Indenture, 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 payment obligations to the Indenture Trustee pursuant to this <u>Section 6.07</u> shall survive the termination or satisfaction and 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 <u>Section 5.01(e)</u> or <u>Section 5.01(f)</u> with respect to the Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Code or any other applicable U.S. federal or state bankruptcy, insolvency or similar law.

SECTION 6.08. <u>Replacement of Indenture Trustee and Securities Intermediary</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Indenture Trustee may resign at any time upon thirty (30) days' prior written notice to the Issuer subject to <u>Section 6.08(c)</u>. The Holders of not less than a majority of the Outstanding Amount of the System Restoration Bonds may remove the Indenture Trustee by so notifying the Indenture Trustee in writing not less than thirty-one (31) days prior to the date of removal and may appoint a successor Indenture Trustee. The Issuer shall remove the Indenture Trustee if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Indenture Trustee fails to comply with <u>Section 6.11</u>;

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

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 CEHE to comply with its respective 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, the Paying Agent and/or the Securitization Bond Registrar if the Securities Intermediary, the Paying Agent and/or the Securitization Bond Registrar are the same Person or an Affiliate of the Person serving as the Indenture Trustee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 successor Securities Intermediary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each of the successor Indenture Trustee and the successor Securities Intermediary shall deliver a written acceptance of its appointment as the Indenture Trustee and as the Securities Intermediary, as applicable, to the retiring Indenture Trustee, the retiring Securities Intermediary and to the Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee and the successor Securities Intermediary shall have all the rights, powers and duties of the Indenture Trustee and Securities Intermediary, as applicable, under this Indenture and the other Basic Documents. No resignation or removal of the Indenture Trustee pursuant to this <u>Section 6.08</u> shall become effective until acceptance of the appointment by a successor Indenture Trustee having the qualifications set forth in <u>Section 6.11</u>. Notice of any such appointment shall be promptly given to each Rating Agency by the successor Indenture Trustee. The successor Indenture Trustee shall send a notice of its succession to Holders. The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) If a successor Indenture Trustee or a successor Securities Intermediary does not take office within sixty (60) days after the retiring Indenture Trustee or the retiring Securities Intermediary, as the case may be, resigns or is removed, the retiring Indenture Trustee or the retiring Securities Intermediary, as the case may be, the Issuer or the Holders of a majority in Outstanding Amount of the System Restoration Bonds may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee or a successor Securities Intermediary, as the case may be.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Notwithstanding the replacement of the Indenture Trustee or the Securities Intermediary pursuant to this <u>Section 6.08</u>, the Issuer's obligations under <u>Section 6.07</u> shall continue for the benefit of the retiring Indenture Trustee and the retiring Securities Intermediary.

SECTION 6.09. <u>Successor Indenture Trustee by Merger</u>. 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; <u>provided</u>, <u>however</u>, that, if such successor Indenture Trustee is not eligible under <u>Section 6.11</u>, then the successor Indenture Trustee shall be replaced in accordance with <u>Section 6.08</u>. Notice of any such event shall be promptly given to each Rating Agency by the successor Indenture Trustee.

SECTION 6.10. <u>Appointment of Co-Trustee or Separate Trustee</u>.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 applicable 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 Trust Estate 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;

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 <u>Article VI</u>. 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Any separate trustee or co-trustee may at any time constitute the Indenture Trustee, its agent or its attorney-in-fact with full power and authority, to the extent not prohibited by applicable 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 applicable law, without the appointment of a new or successor indenture trustee.

SECTION 6.11. <u>Eligibility; Disqualification</u>. The Indenture Trustee shall at all times satisfy the requirements of Section 310(a)(1) of the Trust Indenture Act, Section 310(a)(5) of the Trust Indenture Act and Rule 3a-7 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 shall have a long-term debt or issuer rating from each of Moody's and S&P in one of its generic rating categories that signifies investment grade. The Indenture Trustee shall comply with Section 310(b) of the Trust Indenture Act, including the optional provision permitted by the second sentence of Section 310(b)(9) of the Trust Indenture Act; <u>provided</u>, <u>however</u>, that there shall be excluded from the operation of Section 310(b)(1) of the Trust Indenture Act any indenture or indentures under which other securities of the Issuer are outstanding if the requirements for such exclusion set forth in Section 310(b)(1) of the Trust Indenture Act are met.

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

SECTION 6.13. <u>Representations and Warranties of Indenture Trustee</u>. The Indenture Trustee hereby represents and warrants as of the date hereof that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Indenture Trustee is a national banking association validly existing and in good standing under the laws of the United States of America; and

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

SECTION 6.14. <u>Annual Report by Independent Registered Public Accountants</u>. The Indenture Trustee hereby covenants that it will cooperate in a reasonable manner with any request made in good faith by the Issuer or the Servicer in connection with the attestation by the firm of Independent registered public accountants performing the procedures required under Section 3.04 of the Servicing Agreement, it being understood and agreed that the Indenture Trustee will so cooperate in conclusive reliance upon the direction of the Issuer or the Servicer, 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. <u>Custody of Trust Estate</u>. The Indenture Trustee shall hold such of the Trust Estate (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 Trust Estate as constitute investment property through the Securities Intermediary (which, as of the date hereof, is U.S. Bank National Association). The initial Securities Intermediary hereby agrees (and each future Securities Intermediary shall agree) with the Indenture Trustee that (a) such investment property (other than cash) shall at all times be credited to a securities account in the name 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 (other than cash) 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, (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 <u>Section 6.15</u> or elsewhere in this Indenture, the Indenture Trustee shall not hold the Trust Estate through an agent or a nominee.

SECTION 6.16. <u>FATCA</u>. The Issuer agrees (i) to provide the Indenture Trustee with such reasonable information as it has in its possession to enable the Indenture Trustee to determine whether any payments pursuant to the Indenture are subject to the withholding requirements described in Applicable FATCA Law, and (ii) that the Indenture Trustee shall be entitled to make any withholding or deduction from payments under the Indenture to the extent necessary to comply with Applicable FATCA Law, for which the Indenture Trustee shall not have any liability.

ARTICLE VII

Holders' Lists and Reports

SECTION 7.01. <u>Issuer To Furnish Indenture Trustee Names and Addresses of Holders</u>. 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 Holders as of such Record Date, and (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; <u>provided</u>, <u>however</u>, that, so long as the Indenture Trustee is the System Restoration Bond Registrar, no such list shall be required to be furnished.

SECTION 7.02. <u>Preservation of Information; Communications to Holders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 <u>Section 7.01</u> and the names and addresses of Holders received by the Indenture Trustee in its capacity as System Restoration Bond Registrar. The Indenture Trustee may destroy any list furnished to it as provided in <u>Section 7.01</u> upon receipt of a new list so furnished.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Holders may communicate pursuant to Section 312(b) of the Trust Indenture Act with other Holders with respect to their rights under this Indenture or under the System Restoration Bonds. In addition, upon the written request of any Holder or group of Holders or of all Outstanding System Restoration Bonds evidencing at least ten (10) percent of the Outstanding Amount of the System Restoration Bonds, as applicable, the Indenture Trustee shall afford the Holder or Holders making such request a copy of a current list of Holders for purposes of communicating with other Holders with respect to their rights hereunder; <u>provided</u>, that the Indenture Trustee gives prior written notice to the Issuer of such request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Issuer, the Indenture Trustee and the System Restoration Bond Registrar shall have the protection of Section 312(c) of the Trust Indenture Act.

SECTION 7.03. <u>Reports by Issuer</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Issuer shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) so long as the Issuer or CEHE 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) that the Issuer or CEHE may be required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) provide to the Indenture Trustee and 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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) provide to the Indenture Trustee (and the Indenture Trustee shall transmit to all Holders described in Section 313(c) of the Trust Indenture Act (or make available electronically on its reporting website)), such summaries of any information, documents and reports required to be filed by the Issuer pursuant to <u>Section 7.03(a)(i)</u> and <u>Section 7.03(a)(ii)</u> as may be required by rules and regulations prescribed from time to time by the SEC.

Except as may be provided by Section 313(c) of the Trust Indenture Act, the Issuer may fulfill its obligation to provide the materials described in this <u>Section 7.03(a)</u> by providing such materials in electronic format, and the Issuer shall be deemed to have provided such materials to the Indenture Trustee if such materials are available on the SEC's EDGAR website (or any successor SEC website).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on December 31 of each year, and the Issuer will promptly notify the Indenture Trustee regarding any change in fiscal year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Delivery of such reports, information and documents to the Indenture Trustee is for informational purposes only and the Indenture Trustee's receipt of such shall not constitute actual or constructive notice or knowledge of any information contained therein or determinable from information contained therein, including the Issuer's compliance with any of its covenants hereunder (as to which the Indenture Trustee is entitled to rely exclusively on Officer's Certificates).

SECTION 7.04. <u>Reports by Indenture Trustee</u>. If required by Section 313(a) of the Trust Indenture Act, within sixty (60) days after March 31 of each year, commencing with March 31, 2026, the Indenture Trustee shall transmit to each Holder as required by Section 313(c) of the Trust Indenture Act a brief report dated as of such date that complies with Section 313(a) of the Trust Indenture Act. The Indenture Trustee also shall comply with Section 313(b) of the Trust Indenture Act; <u>provided</u>, <u>however</u>, that the initial report if required to be so issued shall be transmitted not more than twelve (12) months after the initial issuance of the System Restoration Bonds.

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

ARTICLE VIII

Accounts, Disbursements and Releases

SECTION 8.01. <u>Collection of Money</u>. 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 within two (2) Business Days. 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 Trust Estate, the Indenture Trustee may take such action as may be appropriate to enforce such payment or performance, subject to <u>Article VI</u>, 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 <u>Article V</u>.

SECTION 8.02. <u>Collection Account</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On or prior to the Closing Date, the Issuer shall open or cause to be opened with the Securities Intermediary, or at another Eligible Institution, one or more segregated non-interest bearing trust accounts in the Indenture Trustee's name for the deposit of System Restoration Charges and all other amounts received with respect to the Trust Estate (the "<u>Collection Account</u>"). The Securities Intermediary shall hold the Collection Account for the benefit of the Holders, the Indenture Trustee and the other persons indemnified hereunder. Initially the Collection Account shall be divided into three subaccounts, which need not be separate accounts: a general subaccount (the "<u>General Subaccount</u>"); an excess funds subaccount (the "<u>Excess Funds Subaccount</u>"); and a capital subaccount (the "<u>Capital Subaccount</u>"). For administrative purposes, the Subaccounts may be established by the Securities Intermediary as separate accounts. Such separate Subaccounts will be recognized individually as a Subaccount and collectively as the "Collection Account". Prior to or concurrently with the issuance of the System Restoration Bonds, the Member shall deposit into the Capital Subaccount an amount equal to the Required Capital Amount, which amount shall not come from the proceeds of the sale of the System Restoration Bonds. Unless otherwise provided herein, 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 Amount) 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 Subaccounts of the Collection Account shall be made as set forth in <u>Sections 8.02(d)</u> and <u>8.02(e)</u>. The Collection Account shall at all times be maintained in an Eligible Account and 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 Trust Estate as herein provided. The Indenture Trustee and the Securities Intermediary 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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, (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 (iv) 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, the State of New York shall be deemed to be the 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 <u>Section 8.02</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) SRC Collections and other System Restoration Charges collected by the Servicer shall be deposited in the General Subaccount as provided in Section 6.12 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 <u>Section 8.02(e)</u> shall be made by the Indenture Trustee in accordance with the written instructions provided by the Servicer in the Semi-Annual Servicer's Certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) On each Payment Date for the System Restoration Bonds, the Indenture Trustee shall apply all amounts on deposit in the Collection Account, including all Investment Earnings thereon, in accordance with the related Semi-Annual Servicer's Certificate, in the following priority:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) payment of the Indenture Trustee's fees, expenses and outstanding indemnity amounts shall be paid to the Indenture Trustee (subject to <u>Section 6.07</u>) in an amount not to exceed $200,000.00 in any 12-month period (the "<u>Indenture Trustee Cap</u>"); <u>provided</u>, <u>however</u>, that the Indenture Trustee Cap shall be disregarded and inapplicable upon the acceleration of the System Restoration Bonds following the occurrence of an Event of Default;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) payment of the Servicing Fee with respect to such Payment Date, plus any unpaid Servicing Fees for prior Payment Dates shall be paid to the Servicer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) payment of 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 Managers, and in each case with any unpaid Administration Fees or Independent Manager Fees from prior Payment Dates;

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) payment of the principal due to be paid on the System Restoration Bonds on the Final Maturity Date for such tranche or as a result of an acceleration upon an Event of Default shall be paid to the Holders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) payment of the principal then scheduled to be paid on such Payment Date in accordance with the Expected Sinking Fund Schedule, including any principal that was scheduled to be paid on a prior Payment Date but was not paid as scheduled, with respect to the System Restoration Bonds shall be paid to the Holders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) payment of any other unpaid Operating Expenses (including any such amounts owed to the Indenture Trustee, but unpaid due to the limitation in <u>Section 8.02(e)(i)</u>) and any remaining amounts owed pursuant to the Basic Documents shall be paid to the parties, pro rata, to which such Operating Expenses or remaining amounts are owed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) replenishment of the amount, if any, by which the Required Capital Amount exceeds the amount in the Capital Subaccount as of such Payment Date shall be allocated to the Capital Subaccount;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) the Return on Invested Capital then due and payable shall be paid to CEHE;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) the balance, if any, shall be allocated to the Excess Funds Subaccount; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) after the System Restoration Bonds have been paid in full and discharged, and all of the other foregoing amounts are paid in full, together with all amounts due and payable to the Indenture Trustee under <u>Section 6.07</u> 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, which amounts (other than an amount equal to the Required Capital Amount plus any unpaid Return on Invested Capital) will be distributed to CEHE and credited by CEHE to its customers in accordance with Section 39.262(g) of the Public Utility Regulatory Act.

All payments to the Holders pursuant to <u>Section 8.02(e)(v)</u> and <u>Section 8.02(e)(vi)</u> shall be made to such Holders pro rata based on the respective amounts of interest and/or principal owed, unless, the Series Supplement provides otherwise. Payments in respect of principal of and premium, if any, and interest on any tranche of System Restoration Bonds will be made on a pro rata basis among all the Holders of such tranche. Periodic principal payments scheduled to be paid on multiple tranches shall be paid in sequential order in accordance with <u>Section 8.02(e)(vii)</u>. In the case of an Event of Default, then, in accordance with <u>Section 5.04(c)</u>, in respect of any application of moneys pursuant to <u>Section 8.02(e)(v)</u> or <u>Section 8.02(e)(vi)</u>, moneys will be applied pursuant to <u>Section 8.02(e)(v)</u> and <u>Section 8.02(e)(vi)</u>, as the case may be, in such order, on a pro rata basis, based upon the interest or the principal owed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) If on any Payment Date, or, for any amounts payable under <u>Section 8.02(e)(i)</u>, <u>Section 8.02(e)(ii)</u>, <u>Section 8.02(e)(iii)</u> and <u>Section 8.02(e)(iv)</u>, on any Business Day, funds on deposit in the General Subaccount are insufficient to make the payments contemplated by <u>Section 8.02(e)(i)</u>, <u>Section 8.02(e)(ii)</u>, <u>Section 8.02(e)(iii)</u>, <u>Section 8.02(e)(iv)</u>, <u>Section 8.02(e)(v)</u>, <u>Section 8.02(e)(vi)</u>, <u>Section 8.02(e)(vii), Section 8.02(e)(viii)</u> and <u>Section 8.02(e)(ix),</u> the Indenture Trustee shall (i) <u>first</u>, draw from amounts on deposit in the Excess Funds Subaccount, and (ii) <u>second</u>, 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 <u>Section 8.02(e)(i)</u>, <u>Section 8.02(e)(ii)</u>, <u>Section 8.02(e)(iii)</u>, <u>Section 8.02(e)(iv)</u>, <u>Section 8.02(e)(v)</u>, <u>Section 8.02(e)(vi)</u>, <u>Section 8.02(e)(vii)</u> and <u>Section 8.02(e)(viii)</u>. In addition, if on any Payment Date funds on deposit in the General Subaccount are insufficient to make the allocations contemplated by <u>Section 8.02(e)(ix)</u>, the Indenture Trustee shall draw any amounts on deposit in the Excess Funds Subaccount to make such allocations to the Capital Subaccount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) On any Business Day upon which the Indenture Trustee receives a written request from the Administrator stating that any Operating Expense payable by the Issuer (but only as described in <u>Section 8.02(e)(i)</u>, <u>Section 8.02(e)(ii)</u>, <u>Section 8.02(e)(iii)</u> and <u>Section 8.02(e)(iv)</u>) will become due and payable prior to the next Payment Date, and setting forth the amount and nature of such Operating Expense, as well as any supporting documentation that the Indenture Trustee may reasonably request, the Indenture Trustee, upon receipt of such information, will make payment of such Operating Expenses on or before the date such payment is due from amounts on deposit in the General Subaccount, the Excess Funds Subaccount and the Capital Subaccount, in that order and only to the extent required to make such payment.

SECTION 8.03. <u>General Provisions Regarding the Collection Account</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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; <u>provided</u>, <u>however</u>, that such Eligible Investments shall not mature or be redeemed later than the Business Day prior to the next Payment Date or Special Payment Date for the related tranche, if applicable, for the System Restoration Bonds. All income or other gain from investments of moneys deposited in the Collection Account shall be deposited by the Indenture Trustee in such 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 any 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 external 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 and specific written investment direction. The Indenture Trustee shall have no obligation to invest or reinvest any amounts held hereunder (other than amounts held in any REP Deposit Account) in the absence of written investment direction pursuant to an Issuer Order or, with respect to any REP Deposit Account, written investment direction from the Depositing REP or the Servicer, in any such case of no written investment direction, such amounts shall remain uninvested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to <u>Section 6.01(c)</u>, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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. New York City 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 System Restoration Bonds but the System Restoration Bonds shall not have been declared due and payable pursuant to <u>Section 5.02</u>, then the Indenture Trustee shall, to the fullest extent practicable, invest and reinvest funds in such Collection Account in Eligible Investments specified in the most recent written investment directions delivered by the Issuer to the Indenture Trustee; <u>provided</u>, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The parties hereto acknowledge that the Servicer may, pursuant to the Servicing Agreement, select Eligible Investments on behalf of the Issuer; <u>provided</u>, <u>however</u>, that any such investment direction on behalf of the Issuer must be given in writing to the Indenture Trustee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Except as otherwise provided hereunder or agreed in writing among the parties hereto, the Issuer shall retain the authority to institute, participate and join in any plan of reorganization, readjustment, merger or consolidation with respect to the issuer of any Eligible Investments held hereunder, and, in general, to exercise each and every other power or right with respect to each such asset or investment as Persons generally have and enjoy with respect to their own assets and investment, including power to vote upon any Eligible Investments.

SECTION 8.04. <u>Release of Trust Estate</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) So long as the Issuer is not in Default hereunder and no Default or Event of 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; <u>provided</u>, <u>however</u>, that any and all proceeds of such dispositions shall become part of the Trust Estate 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 part of the Trust Estate 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 preceding sentence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to the payment of its fees and expenses pursuant to <u>Section 6.07</u>, 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 <u>Article VIII</u> 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 <u>Section 8.04(b)</u> only upon receipt of an Issuer Request accompanied by an Officer's Certificate, an Opinion of Counsel of external counsel of the Issuer (at the Issuer's cost and expense) and (if required by the Trust Indenture Act) Independent Certificates in accordance with Section 314(c) of the Trust Indenture Act and Section 314(d)(1) of the Trust Indenture Act meeting the applicable requirements of <u>Section 10.01</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Indenture Trustee shall, at such time as there are no System Restoration Bonds Outstanding, and all other Financing Costs (as defined in the Financing Order) are paid in full, and all sums due and payable to the Indenture Trustee pursuant to <u>Section 6.07</u> or otherwise have been paid, release any remaining portion of the Trust Estate from the Lien of this Indenture and release to the Issuer or any other Person entitled thereto any funds or investments then on deposit in or credited to the Collection Account consistent with <u>Section 8.02(e)(xii)</u>.

SECTION 8.05. <u>Opinion of Counsel</u>. The Indenture Trustee shall receive at least seven (7) days' notice when requested by the Issuer to take any action pursuant to <u>Section 8.04</u>, 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 external 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 System Restoration Bonds or the rights of the Holders in contravention of the provisions of this Indenture and the Series Supplement; <u>provided</u>, <u>however</u>, that such Opinion of Counsel shall not be required to express an opinion as to the fair value of the Trust Estate. 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. <u>Reports by Independent Registered Public Accountants</u>. As of the date hereof, 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 or to agree to limit the distribution of any such report, 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.

SECTION 8.07. <u>REP Deposit Accounts</u>. Pursuant to the written direction of the Servicer, the Issuer shall open, at the Indenture Trustee's Corporate Trust Office, or at another Eligible Institution, one or more segregated non-interest-bearing trust accounts in the Indenture Trustee's name (each, a "<u>REP Deposit Account</u>"), each such account for the benefit of one Depositing REP with respect to the Bonds. Pursuant to and in accordance with the Financing Order, amounts received from any REP as a security deposit with respect to the Bonds shall be deposited into the applicable REP Deposit Account. The REP Deposit Accounts shall at all times be maintained in an Eligible Securities Account and only the Indenture Trustee shall have access to the REP Deposit Accounts for the purpose of making deposits in and withdrawals from the REP Deposit Accounts in accordance with this Indenture, the Servicing Agreement and the Financing Order. Funds in the REP Deposit Accounts shall not be commingled by the Issuer with any other moneys, and shall not be commingled by the Indenture Trustee. All or a portion of the funds in the REP Deposit Accounts shall be invested in Eligible Investments and reinvested by the Indenture Trustee pursuant to the written direction of the Servicer or the REP making the deposit. All income or other gain from investments of moneys deposited in any REP Deposit Account shall be deposited by the Indenture Trustee into such REP Deposit Account, and any loss resulting from such investments shall be charged to such REP Deposit Account. In addition, each Depositing REP shall be responsible for the payment of income taxes with respect to such investments. The Indenture Trustee shall not in any way be held liable for the selection of Eligible Investments for the REP Deposit Accounts or for investment losses incurred thereon. The Indenture Trustee shall have no obligation to invest or reinvest any amounts held in any REP Deposit Account in the absence of timely and specific written investment direction from the Servicer and appropriate documents from the applicable Depositing REP. The Indenture Trustee shall release property from any REP Deposit Account only as and to the extent directed by the Servicer pursuant to the Financing Order and the Servicing Agreement.

ARTICLE IX

SUPPLEMENTAL INDENTURES

SECTION 9.01. <u>Supplemental Indentures Without Consent of Holders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Without the consent of the Holders of any System Restoration Bonds but with prior notice to the Rating Agencies, and, with the consent of the Texas Commission pursuant to <u>Section 9.03</u> if such supplemental indenture increases ongoing qualified costs as defined in the Financing Order (which consent shall not be required with regard to the Series Supplement), the Issuer and the Indenture Trustee, when authorized by an Issuer Order, 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 Trust Indenture Act as in force at the date of the execution thereof), in form satisfactory to the Indenture Trustee, for any of the following purposes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) to correct or amplify the description of any property 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, or to subject to the Lien of this Indenture additional property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 System Restoration Bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) to cure any ambiguity or mistake, to correct or supplement any provision herein or in any supplemental indenture, including the Series Supplement, that may be inconsistent with any other provision herein or in any supplemental indenture, including the Series Supplement or the final prospectus relating to the offering of the System Restoration Bonds filed with the SEC on __________ __, 2025, or to make any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; <u>provided</u>, that (A) such action shall not, as evidenced by an Officer's Certificate, adversely affect in any material respect the interests of the Holders or surrender any right or power therein conferred upon the Issuer and (B) the Rating Agency Condition shall have been satisfied with respect thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) to evidence and provide for the acceptance of the appointment hereunder by a successor trustee with respect to the System Restoration 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 <u>Article VI</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 Trust Indenture Act and to add to this Indenture such other provisions as may be expressly required by the Trust Indenture Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) to qualify the System Restoration Bonds for registration with a Clearing Agency;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) to satisfy any Rating Agency requirements; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) to authorize the appointment of any Person for any tranche of the System Restoration Bonds required or advisable with the listing of any tranche of the System Restoration Bonds on any stock exchange and otherwise amend this Indenture to incorporate changes requested or required by any government authority, stock exchange authority or Person for any tranche of the System Restoration Bonds in connection with such listing.

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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also without the consent of any of the Holders, 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 under this Indenture; <u>provided</u>, <u>however</u>, 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. <u>Supplemental Indentures with Consent of Holders</u>. The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may, 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 System Restoration Bonds of each tranche to be affected, by Act of such Holders delivered to the Issuer and the Indenture Trustee, and, with the consent of the Texas Commission pursuant to <u>Section 9.03</u> if such supplemental indenture increases ongoing qualified costs as defined in the Financing Order (which consent shall not be required with regard to the Series Supplement), 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 under this Indenture; <u>provided</u>, <u>however</u>, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding System Restoration Bond of each tranche affected thereby:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) change the date of payment of any installment of principal of or premium, if any, or interest on any System Restoration Bond of such tranche, or reduce the principal amount thereof, the interest rate thereon or the premium, if any, with respect thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) 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 Trust Estate to payment of principal of or premium, if any, or interest on the System Restoration Bonds of such tranche, or change any place of payment where, or the coin or currency in which, any System Restoration Bond of such tranche or the interest thereon is payable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) reduce the percentage of the Outstanding Amount of the System Restoration 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) reduce the percentage of the Outstanding Amount of the System Restoration Bonds required to direct the Indenture Trustee to direct the Issuer to sell or liquidate the Trust Estate pursuant to <u>Section 5.04</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) modify any provision of this <u>Section 9.02</u> or any provision of the other Basic Documents similarly specifying the rights of the Holders to consent to modification thereof, except to increase any percentage specified herein or to provide that those provisions of this Indenture or the other Basic Documents referenced in this <u>Section 9.02</u> cannot be modified or waived without the consent of the Holder of each Outstanding System Restoration Bond affected thereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) 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 and payable on any System Restoration Bond on any Payment Date (including the calculation of any of the individual components of such calculation) or change the Expected Sinking Fund Schedule or Final Maturity Date of System Restoration Bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) decrease the Required Capital Amount with respect to the System Restoration Bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) 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 Trust Estate 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 System Restoration Bond of the security provided by the Lien of this Indenture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) cause any material adverse U.S. federal income tax consequence to the Seller, the Issuer, the Managers, the Indenture Trustee or the then-existing Holders; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) impair the right to institute suit for the enforcement of the provisions of this Indenture regarding payment or application of funds.

It shall not be necessary for any Act of Holders under this <u>Section 9.02</u> 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 <u>Section 9.02</u>, the Issuer shall send to the Rating Agencies a copy of such supplemental indenture and to the Holders to which such supplemental indenture relates either a copy of such supplemental indenture or a notice setting forth in general terms the substance of such supplemental indenture. Any failure of the Issuer to send 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. <u>Texas Commission Condition</u>. Notwithstanding anything to the contrary in <u>Section 9.01</u> or <u>Section 9.02</u>, no indenture or indentures supplemental to this Indenture (other than the Series Supplement which shall not be subject to the Texas Commission Condition (as described in this <u>Section 9.03</u>)) shall be effective if such supplemental indenture or indentures increases ongoing qualified costs as defined in the Financing Order, except upon satisfaction of the conditions precedent in this <u>Section 9.03</u>. To the extent the consent of the Texas Commission is required to effect any amendment to, modification of, or supplemental indenture to this Indenture or any provision of this Indenture,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Issuer may request the consent of the Texas Commission by delivering to the Texas Commission's executive director and general counsel a written request for such consent, which request shall contain:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a reference to Docket No. 57559 and a statement as to the possible effect of the amendment, modification or supplemental indenture on ongoing qualified costs (as defined in the Financing Order);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) an Officer's Certificate stating that the proposed amendment, modification or supplemental indenture, as the case may be, has been approved by all parties to this Indenture; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) a statement identifying the person to whom the Texas Commission or its staff is to address its consent to the proposed amendment, modification or supplemental indenture or request additional time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Texas Commission shall, within thirty (30) days of receiving the request for consent complying with <u>Section 9.03(a)</u>, either

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) provide notice of its consent or lack of consent to the person specified in <u>Section 9.03(a)(iii)</u>, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) be conclusively deemed to have consented to the proposed amendment, modification or supplemental indenture,

unless, within thirty (30) days of receiving the request for consent complying with <u>Section 9.03(a)</u>, the Texas Commission or its staff delivers to the office of the person specified in <u>Section 9.03(a)(iii)</u> 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 amendment, modification or supplemental indenture. If the Texas Commission or its staff requests an extension of time in the manner set forth in the preceding sentence, then the Texas Commission shall either provide notice of its consent or lack of consent to the person specified in <u>Section 9.03(a)(iii)</u> no later than the last day of such extension of time or be conclusively deemed to have consented to the proposed amendment, modification or supplemental indenture on the last day of such extension of time. Any amendment, modification or supplemental indenture requiring the consent of the Texas Commission shall become effective on the later of (i) the date proposed by the parties to such amendment, modification or supplemental indenture and (ii) the first day after the expiration of the thirty (30)-day period provided for in <u>Section 9.03(b)(ii)</u>, or, if such period has been extended pursuant thereto, the first day after the expiration of such period as so extended

SECTION 9.04. <u>Execution of Supplemental Indentures</u>. In executing any supplemental indenture permitted by this <u>Article IX</u> or the modifications thereby of the Trust Estate, the Indenture Trustee shall be entitled to receive and be fully protected in relying upon an Opinion of Counsel stating that the execution of such supplemental indenture is authorized and permitted by this Indenture and all conditions precedent, if any, provided for in this Indenture relating to such supplemental indenture or modification have been satisfied. The Indenture Trustee and the Securities Intermediary may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee's or the Securities Intermediary's own rights, duties, liabilities or immunities under this Indenture or otherwise.

SECTION 9.05. <u>Effect of Supplemental Indenture</u>. 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 System Restoration 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. <u>Conformity with Trust Indenture Act</u>. Every amendment of this Indenture and every supplemental indenture executed pursuant to this <u>Article IX</u> shall conform to the requirements of the Trust Indenture Act as then in effect so long as this Indenture shall then be qualified under the Trust Indenture Act.

SECTION 9.07. <u>Reference in System Restoration Bonds to Supplemental Indentures</u>. System Restoration Bonds authenticated and delivered after the execution of any supplemental indenture pursuant to this <u>Article IX</u> 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 shall so determine, new System Restoration Bonds so modified as to conform, in the opinion of 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 System Restoration Bonds.

ARTICLE X

MISCELLANEOUS

SECTION 10.01. <u>Compliance Certificates and Opinions, etc.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 the amendment is authorized and permitted and all such conditions precedent, if any, have been complied with and (iii) (if required by the Trust Indenture Act) an Independent Certificate from a firm of registered public accountants meeting the applicable requirements of this <u>Section 10.01</u>, 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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Prior to the deposit of any 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 <u>Section 10.01(a)</u> or elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's Certificate certifying or stating the opinion of each individual signing such certificate as to the fair value (within ninety (90) days of such deposit) to the Issuer of the Trust Estate or other property or securities to be so deposited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) 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 <u>Section 10.01(b)</u>, 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 <u>Section 10.01(b)</u> and this <u>Section 10.01(c)</u>, is ten (10%) percent or more of the Outstanding Amount of the System Restoration 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 (1%) percent of the Outstanding Amount of the System Restoration Bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Whenever any property or securities are to be released from the Lien of this Indenture other than pursuant to <u>Section 8.02(e)</u>, the Issuer shall also furnish to the Indenture Trustee an Officer's Certificate certifying or stating the opinion of each individual 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) 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 <u>Section 10.01(d)</u>, 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 with respect thereto, or securities released from the Lien of this Indenture (other than pursuant to <u>Section 8.02(e)</u>) since the commencement of the then-current calendar year, as set forth in the certificates required by <u>Section 10.01(d)</u> and this <u>Section 10.01(e)</u>, equals ten (10%) percent or more of the Outstanding Amount of the System Restoration 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 (1%) percent of the then Outstanding Amount of the System Restoration Bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Notwithstanding any other provision of this <u>Section 10.01</u>, the Indenture Trustee may (A) collect, liquidate, sell or otherwise dispose of the System Restoration Property and other assets in the Trust Estate as and to the extent permitted or required by the Basic Documents and (B) make cash payments out of the Collection Account as and to the extent permitted or required by the Basic Documents.

SECTION 10.02. <u>Form of Documents Delivered to Indenture Trustee</u>. 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 <u>Article VI</u>.

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. <u>Acts of Holders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 <u>Section 6.01</u>) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this <u>Section 10.03</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The ownership of System Restoration Bonds shall be proved by the System Restoration Bond Register.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any System Restoration Bond shall bind the Holder of every System Restoration 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 System Restoration Bond.

SECTION 10.04. <u>Notices, etc., to Indenture Trustee, Issuer and Rating Agencies</u>. Any notice, report or other communication given hereunder shall be in writing and shall be effective (i) upon receipt when sent through the mails, registered or certified mail, return receipt requested, postage prepaid, with such receipt to be effective the date of delivery indicated on the return receipt, (ii) upon receipt when sent by an overnight courier, (iii) on the date personally delivered to an authorized officer of the party to which sent or (iv) on the date transmitted by facsimile or other electronic transmission with a confirmation of receipt in all cases, addressed as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) in the case of the Issuer, to CenterPoint Energy Restoration Bond Company II, LLC, 1111 Louisiana Street, Suite 4664B, Houston, Texas 77002, Attention: Manager;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in the case of the Indenture Trustee, the Paying Agent and the System Restoration Bond Registrar, to the Corporate Trust Office of the Indenture Trustee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in the case of Moody's, to Moody's Investors Service, Inc., ABS/RMBS Monitoring Department, 24th Floor, 7 World Trade Center, 250 Greenwich Street, New York, New York 10007, Email: <u>ABSCORMonitoring@moodys.com</u> (for notices) and servicerreports@moodys.com (for servicer reports and all other reports) (all notices and reports to be delivered to Moody's in writing by email); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) in the case of S&P, to Standard & Poor's Ratings Group, Inc., Structured Credit Surveillance, 55 Water Street, New York, New York 10041, Telephone: (212) 438-8991, Email: servicer_reports@spglobal.com (all such notices to be delivered to S&P in writing by email).

Each party hereto may, by notice given in accordance herewith to the other party or parties hereto, designate any further or different address to which subsequent notices, reports and other communications shall be sent. Any notice to or other communication with the Texas Commission shall be sent by electronic delivery to <u>connie.corona@puc.texas.gov</u> and <u>shelah.cisneros@puc.texas.gov</u> or to such other email address or physical address as the Texas Commission shall have provided to the Issuer or the Servicer.

The Indenture Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by the Issuer by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods; <u>provided</u>, <u>however</u>, that (a) subsequent to such transmission of written instructions, upon request, the Issuer shall provide the originally executed instructions or directions to the Indenture Trustee in a timely manner, and (b) such originally executed instructions or directions shall be signed by an authorized representative of the Issuer providing such instructions or directions. If the Issuer elects to give the Indenture Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Indenture Trustee in its discretion elects to act upon such instructions, the Indenture Trustee's understanding of such instructions shall be deemed controlling. The Indenture Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Indenture Trustee's reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Issuer agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Indenture Trustee, including without limitation the risk of the Indenture Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.

SECTION 10.05. <u>Notices to Holders; Waiver</u>. 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, or otherwise delivered in accordance with The Depository Trust Company's procedures, to each Holder affected by such event, at such Holder's address as it appears on the System Restoration 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. <u>Conflict with Trust Indenture Act</u>. 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 Trust Indenture Act, such required provision shall control.

The provisions of Sections 310 through 317 of the Trust Indenture Act 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 10.07. <u>Successors and Assigns</u>. All covenants and agreements in this Indenture and the System Restoration 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 10.08. <u>Severability</u>. Any provision in this Indenture or in the System Restoration Bonds that is prohibited, invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, invalidity, illegality 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, invalidity, illegality or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 10.09. <u>Benefits of Indenture</u>. Nothing in this Indenture or in the System Restoration 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 Trust Estate, any benefit or any legal or equitable right, remedy or claim under this Indenture.

SECTION 10.10. <u>Legal Holidays</u>. 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 System Restoration Bonds or this Indenture) payment need not be made on such date, but may be made on the next 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 10.11. <u>GOVERNING LAW</u>. **THIS INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.**

SECTION 10.12. <u>Counterparts</u>. 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. The Issuer and Indenture Trustee agree that this Indenture may be electronically signed, that any digital or electronic signatures (including pdf, facsimile or electronically imaged signatures provided by DocuSign or any other digital signature provider as specified in writing to the Indenture Trustee) appearing on this Indenture are the same as handwritten signatures for the purposes of validity, enforceability and admissibility, and that delivery of any such electronic signature to, or a signed copy of, this Indenture may be made by facsimile, email or other electronic transmission. The Issuer agrees to assume all risks arising out of the use of digital signatures and electronic methods of submitting such signatures to the Indenture Trustee, including without limitation the risk of the Indenture Trustee acting upon documents with unauthorized signatures and the risk of interception and misuse by third parties.

SECTION 10.13. <u>Recording of Indenture</u>. 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, 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. For the avoidance of doubt, the Indenture Trustee shall not be responsible or liable for recording this Indenture.

SECTION 10.14. <u>No Recourse to Issuer</u>. No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer or the Indenture Trustee on the System Restoration Bonds or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (a) the Issuer, other than from the Trust Estate, (b) any owner of a membership interest in the Issuer (including CEHE) or (c) any shareholder, partner, owner, beneficiary, agent, officer, director or employee of the Indenture Trustee, the Managers or any owner of a membership interest in the Issuer (including CEHE) 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. Notwithstanding any provision of this Indenture or the Series Supplement to the contrary, Holders shall look only to the Trust Estate with respect to any amounts due to the Holders hereunder and under the System Restoration Bonds and, in the event the Trust Estate is insufficient to pay in full the amounts owed on the System Restoration Bonds, shall have no recourse against the Issuer in respect of such insufficiency. Each Holder by accepting a System Restoration Bond specifically confirms the non-recourse nature of these obligations and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the System Restoration Bonds.

SECTION 10.15. <u>Basic Documents</u>. The Indenture Trustee is hereby authorized and directed to execute and deliver the Servicing Agreement and the Sale Agreement and to execute and deliver any other Basic Document that it is requested to acknowledge and accept.

SECTION 10.16. <u>No Petition</u>. The Indenture Trustee, by entering into this Indenture, and each Holder, by accepting a System Restoration Bond (or interest therein) issued hereunder, hereby covenant and agree that they shall not, prior to the date that is one year and one day after the termination of this Indenture and the payment in full of the System Restoration Bonds, all Financing Costs (as defined in the Financing Order) and any other amount owed under the Indenture by the Issuer, acquiesce, petition or otherwise invoke or cause the Issuer or any Manager to invoke or otherwise join with any Person to invoke the process of any court or government authority for the purpose of commencing or sustaining an involuntary case against the Issuer under any U. S. federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer for any substantial part of its property, or ordering the dissolution, winding up or liquidation of the affairs of the Issuer. Nothing in this <u>Section 10.16</u> 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 that 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 that is not an involuntary case or Proceeding under or pursuant to any such law against the Issuer or any of its properties.

SECTION 10.17. <u>Securities Intermediary</u>. The Securities Intermediary, in acting under this Indenture, is entitled to all rights, benefits, protections, immunities and indemnities accorded to U.S. Bank Trust Company, National Association, in its capacity as Indenture Trustee under this Indenture.

SECTION 10.18. <u>Rule 17g-5 Compliance</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Indenture Trustee agrees that any notice, report, request for satisfaction of the Rating Agency Condition, document or other information provided by the Indenture Trustee to any Rating Agency under this Indenture or any other Basic Document to which it is a party for the purpose of determining or confirming the credit rating of the System Restoration Bonds or undertaking credit rating surveillance of the System Restoration Bonds shall be provided, substantially concurrently, to the Servicer for posting on the 17g-5 Website. The Servicer shall be responsible for posting all of the information on the 17g-5 Website.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Indenture Trustee will not be responsible for creating or maintaining the 17g-5 Website, posting any information to the 17g-5 Website or assuring that the 17g-5 Website complies with the requirements of this Indenture, Rule 17g-5 under the Exchange Act or any other law or regulation. In no event shall the Indenture Trustee be deemed to make any representation in respect of the content of the 17g-5 Website or compliance by the 17g-5 Website with this Indenture, Rule 17g-5 under the Exchange Act or any other law or regulation. The Indenture Trustee shall have no obligation to engage in or respond to any oral communications with respect to the transactions contemplated hereby, any transaction documents relating hereto or in any way relating to the System Restoration Bonds or for the purposes of determining the initial credit rating of the System Restoration Bonds or undertaking credit rating surveillance of the System Restoration Bonds with any Rating Agency or any of its respective officers, directors or employees. The Indenture Trustee shall not be responsible or liable for the dissemination of any identification numbers or passwords for the 17g-5 Website, including by the Servicer, the Rating Agencies, a NRSRO, any of their respective agents or any other party. Additionally, the Indenture Trustee shall not be liable for the use of the information posted on the 17g-5 Website, whether by the Servicer, the Rating Agencies, an NRSRO or any other third party that may gain access to the 17g-5 Website or the information posted thereon.

SECTION 10.19. <u>Submission to Non-Exclusive Jurisdiction; Waiver of Jury Trial</u>. **Each of the Issuer and the Indenture Trustee and each Holder (by its acceptance of the System Restoration Bonds) hereby irrevocably submits to the non-exclusive jurisdiction of (A) any Texas State court and any New York State court sitting in The Borough of Manhattan in The City of New York or (B) any U.S. federal court sitting in Texas and any U.S. federal court sitting in The Borough of Manhattan in The City of New York in respect of any suit, action or proceeding arising out of or relating to this Indenture and the System Restoration Bonds and irrevocably accepts for itself and in respect of its respective property, generally and unconditionally, jurisdiction of the aforesaid courts. Each of the Issuer, the Indenture Trustee and each Holder (by its acceptance of the System Restoration Bonds) irrevocably waives, to the fullest extent that it may effectively do so under applicable law, trial by jury.**

SECTION 10.20. <u>Certain Tax Laws</u>. In order to comply with applicable tax laws, rules and regulations (inclusive of directives, guidelines and interpretations promulgated by competent authorities) in effect from time to time to which a foreign financial institution, issuer, trustee, paying agent, holder or other institution is or has agreed to be subject related to the Basic Documents, the Issuer agrees (a) to provide to the Indenture Trustee sufficient information about Holders or other applicable parties and/or transactions (including any modification to the terms of such transactions) so as to enable the Indenture Trustee to determine whether it has tax-related obligations under such applicable tax laws, rules and regulations (inclusive of directives, guidelines and interpretations promulgated by competent authorities) and (b) that the Indenture Trustee shall be entitled to make any withholding or deduction from payments under the Basic Documents to the extent necessary to comply with such applicable tax laws, rules and regulations (inclusive of directives, guidelines and interpretations promulgated by competent authorities) for which the Indenture Trustee shall not have any liability.

{SIGNATURE PAGE FOLLOWS}

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

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| | |
|:---|:---|
| CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC,<br> as Issuer | CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC,<br> as Issuer |
| By: |  |
|  | Name: |
|  | Title: |
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,<br> as Indenture Trustee | U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,<br> as Indenture Trustee |
| By: |  |
|  | Name: |
|  | Title: |
| U.S. BANK NATIONAL ASSOCIATION,<br> as Securities Intermediary | U.S. BANK NATIONAL ASSOCIATION,<br> as Securities Intermediary |
| By: |  |
|  | Name: |
|  | Title: |

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*Signature Page to Indenture*

<u>EXHIBIT A</u>

FORM OF SYSTEM RESTORATION BOND

See attached.

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 HEREON 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 OR ENTITY IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

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| | |
|:---|:---|
| No. {_____} | ${__________} |

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Tranche {__} CUSIP No.: {__________}

THE PRINCIPAL OF THIS SERIES 2025-A, TRANCHE {__} SENIOR SECURED SYSTEM RESTORATION BOND, (THIS "<u>SYSTEM RESTORATION BOND</u>") WILL BE PAID IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS SYSTEM RESTORATION BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE. THE HOLDER OF THIS SYSTEM RESTORATION BOND HAS NO RECOURSE TO THE ISSUER HEREOF AND AGREES TO LOOK ONLY TO THE TRUST ESTATE, AS DESCRIBED IN THE INDENTURE, FOR PAYMENT OF ANY AMOUNTS DUE HEREUNDER. ALL OBLIGATIONS OF THE ISSUER OF THIS SYSTEM RESTORATION BOND UNDER THE TERMS OF THE INDENTURE WILL BE RELEASED AND DISCHARGED UPON PAYMENT IN FULL HEREOF OR AS OTHERWISE PROVIDED IN <u>SECTION 3.11(b)</u> OR <u>ARTICLE IV</u> OF THE INDENTURE. THE HOLDER OF THIS SYSTEM RESTORATION BOND HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE THAT IS ONE YEAR AND ONE DAY AFTER THE PAYMENT IN FULL OF THIS SYSTEM RESTORATION BOND, 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 THAT 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 THAT IS NOT AN INVOLUNTARY CASE OR PROCEEDING UNDER OR PURSUANT TO ANY SUCH LAW AGAINST THE ISSUER OR ANY OF ITS PROPERTIES.

NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF TEXAS IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, OR INTEREST ON, THIS SERIES 2025-A SENIOR SECURED SYSTEM RESTORATION BOND, TRANCHE {__}.

CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC<br> SERIES 2025-A SENIOR SECURED SYSTEM RESTORATION BONDS, TRANCHE {__}

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;BOND<br> INTEREST<br> RATE | &nbsp;&nbsp;ORIGINAL <br> PRINCIPAL<br> AMOUNT | &nbsp;&nbsp;SCHEDULED<br> FINAL<br> PAYMENT <br> DATE | &nbsp;&nbsp;FINAL <br> MATURITY<br> DATE |
| &nbsp;&nbsp;{____}% | &nbsp;&nbsp;${__________} | &nbsp;&nbsp;{__________}, 20{__} | &nbsp;&nbsp;{__________}, 20{__} |

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CenterPoint Energy Restoration Bond Company II, LLC, a limited liability company created under the laws of the State of Delaware (herein referred to as the "<u>Issuer</u>"), 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 below or, if less, the amounts determined pursuant to <u>Section 8.02</u> of the Indenture, in each year, commencing on the date determined as provided below and ending on or before the Final Maturity Date shown above and to pay interest, at the Bond Interest Rate shown above, on each {__________} and {__________} or, if any such day is not a Business Day, the next Business Day, commencing on {__________}, 2025 and continuing until the earlier of the payment in full of the principal hereof and the Final Maturity Date (each, a "<u>Payment Date</u>"), on the principal amount of this System Restoration Bond. Interest on this System Restoration 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 a 360-day year of twelve 30-day months. Such principal of and interest on this System Restoration Bond shall be paid in the manner specified below.

The principal of and interest on this System Restoration 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 System Restoration Bond shall be applied first to interest due and payable on this System Restoration Bond as provided above and then to the unpaid principal of and premium, if any, on this System Restoration Bond, all in the manner set forth in the Indenture.

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual, electronic or facsimile signature, this System Restoration Bond shall not be entitled to any benefit under the Indenture referred to below or be valid or obligatory for any purpose.

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

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| | | |
|:---|:---|:---|
| Date: {__________}, 20{__} | CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC,<br> as Issuer | CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC,<br> as Issuer |
|  | By: |  |
|  |  | Name: |
|  |  | Title: |

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INDENTURE TRUSTEE'S<br> CERTIFICATE OF AUTHENTICATION

Dated: {__________}, 20{__}

This is one of the Series 2025-A, Tranche {__} Senior Secured System Restoration Bonds, designated above and referred to in the within-mentioned Indenture.

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| | |
|:---|:---|
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,<br> as Indenture Trustee | U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,<br> as Indenture Trustee |
| By: |  |
|  | Name: |
|  | Title: |

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This Senior Secured System Restoration Bond, Series 2025-A, tranche {__} is one of a duly authorized issue of Series 2025-A Senior Secured System Restoration Bonds of the Issuer (herein called the "<u>Series 2025-A Bonds</u>"), which Series are issuable in one or more tranches. The Series 2025-A Bonds consist of {__} tranches, including the Tranche {__} Series 2025-A Senior Secured Bonds, which include this Senior Secured Bond (herein called the "<u>Tranche {__} System Restoration Bonds</u>"), all issued and to be issued under that certain Indenture dated as of ____________ __, 2025 (as supplemented by the Series Supplement (as defined below), the "<u>Indenture</u>"), between the Issuer and U.S. Bank Trust Company, National Association, in its capacity as indenture trustee (the "<u>Indenture Trustee</u>", which term includes any successor indenture trustee under the Indenture) and U.S. Bank National Association in its capacity as a securities intermediary (the "<u>Securities Intermediary</u>", 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 Series 2025-A Bonds. For purposes herein, "<u>Series Supplement</u>" means that certain Series Supplement dated as of ____________ __, 2025 between the Issuer and the Indenture Trustee. All terms used in this Tranche {__} System Restoration 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.

All tranches of the Series 2025-A Bonds are equally and ratably secured by the Trust Estate pledged as security therefor as provided in the Indenture.

The principal of this Tranche {__} System Restoration Bond shall be payable on each Payment Date only to the extent that amounts in the Collection Account for the Series 2025-A Bonds 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 that is attached to the Series Supplement as <u>Schedule A</u>, unless payable earlier because an Event of Default shall have occurred and be continuing and the Indenture Trustee or the Holders representing a majority of the Outstanding Amount of the Series 2025-A Bonds have declared the Series 2025-A Bonds to be immediately due and payable in accordance with <u>Section 5.02</u> of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with <u>Section 5.02</u> 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 <u>Section 8.02</u> of the Indenture. The entire unpaid principal amount of this Tranche {__} System Restoration Bond shall be due and payable on the Final Maturity Date hereof. Notwithstanding the foregoing, the entire unpaid principal amount of the Series 2025-A 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 Series 2025-A Bonds representing a majority of the Outstanding Amount of the Series 2025-A Bonds have declared the Series 2025-A Bonds to be immediately due and payable in the manner provided in <u>Section 5.02</u> of the Indenture (unless such declaration shall have been rescinded and annulled in accordance with <u>Section 5.02</u> of the Indenture). All principal payments on the Tranche {__} System Restoration Bonds shall be made pro rata to the Holders of the Tranche {__} System Restoration Bonds entitled thereto based on the respective principal amounts of the Tranche {__} System Restoration Bonds held by them.

Payments of interest on this Tranche {__} System Restoration 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 {__} System Restoration Bond (or one or more Predecessor Tranche {__} System Restoration Bonds) on the System Restoration 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 (a) upon application to the Indenture Trustee by any Holder owning a Global System Restoration Bond evidencing this Tranche {__} System Restoration Bond not later than the applicable Record Date, payment will be made by wire transfer to an account maintained by such Holder, and (b) if this Tranche {__} System Restoration 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 System Restoration Bond evidencing this Tranche {__} System Restoration Bond unless and until such Global System Restoration Bond is exchanged for Definitive System Restoration 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 {__} System Restoration 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 System Restoration Bond Register as of the applicable Record Date without requiring that this Tranche {__} System Restoration Bond be submitted for notation of payment. Any reduction in the principal amount of this Tranche {__} System Restoration Bond (or any one or more Predecessor Tranche {__} System Restoration Bonds) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Tranche {__} System Restoration Bond and of any Tranche {__} System Restoration 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 {__} System Restoration 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 sent 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 {__} System Restoration Bond and shall specify the place where this Tranche {__} System Restoration Bond may be presented and surrendered for payment of such installment.

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

This Tranche {__} System Restoration Bond is a "transition bond" as such term is defined in the Securitization Act. Principal and interest on this Tranche {__} System Restoration Bond are payable from and secured primarily by the System Restoration Property authorized by the Financing Order. System restoration property is known as "transition property" in the Securitization Act. Section 39.310 of the Securitization Act provides that the State of Texas pledges "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 the transition property, or except as permitted . . . [through the Transition Charge Adjustment Process] . . . 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."

The Issuer acknowledges that the purchase of this Tranche {__} System Restoration Bond by the Holder hereof or the purchase of any beneficial interest herein by any Person are made in reliance on the foregoing pledge by the State of Texas.

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Tranche {__} System Restoration Bond may be registered on the System Restoration Bond Register upon surrender of this Tranche {__} System Restoration 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) such other signature guaranty program acceptable to the Indenture Trustee, and (b) such other documents as the Indenture Trustee may require, and thereupon one or more new Tranche {__} System Restoration Bonds of Authorized 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 {__} System Restoration 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 <u>Section 2.04</u> or <u>Section 2.06</u> of the Indenture not involving any transfer.

Each Holder, by acceptance of a Tranche {__} System Restoration 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 Tranche {__} System Restoration Bonds or under the Indenture or any certificate or other writing delivered in connection therewith, against (a) the Issuer, other than from the trust estate securing the Series 2025-A Bonds, (b) any owner of a membership interest in the Issuer (including CEHE) or (c) 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 CEHE) 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. Each Holder by accepting a Tranche {__} System Restoration Bond specifically confirms the non-recourse nature of these obligations and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Tranche {__} System Restoration Bonds.

Prior to the due presentment for registration of transfer of this Tranche {__} System Restoration 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 {__} System Restoration 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 {__} System Restoration Bond and for all other purposes whatsoever, whether or not this Tranche {__} System Restoration Bond be overdue, and none of the Issuer, the Indenture Trustee or 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 under the Indenture at any time by the Issuer with the consent of the Holders representing a majority of the Outstanding Amount of all Series 2025-A System Restoration Bonds at the time outstanding of each tranche to be affected and upon the satisfaction of the Rating Agency Condition and the Texas Commission Condition. The Indenture also contains provisions permitting the Holders representing specified percentages of the Outstanding Amount of the Series 2025-A System Restoration Bonds, on behalf of the Holders of all the Series 2025-A System Restoration Bonds, with the satisfaction of the Texas Commission Condition, 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 {__} System Restoration Bond (or any one of more Predecessor Tranche {__} System Restoration Bonds) shall be conclusive and binding upon such Holder and upon all future Holders of this Tranche {__} System Restoration Bond and of any Tranche {__} System Restoration 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 {__} System Restoration 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 issued thereunder, but with the satisfaction of the Texas Commission Condition.

The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Issuer on a Series 2025-A System Restoration Bond and (b) certain restrictive covenants and the related Events of Default, upon compliance by the Issuer with certain conditions set forth in the Indenture, which provisions apply to this Tranche {__} System Restoration Bond.

The term "Issuer" as used in this Tranche {__} System Restoration 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 Holders under the Indenture.

The Tranche {__} System Restoration 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 {__}** **System Restoration Bond, the Indenture and the Series Supplement shall be construed in accordance with the laws of the State of Texas, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.**

**Each Holder (by its acceptance of this** **Tranche {__} System Restoration Bond) hereby irrevocably submits to the non-exclusive jurisdiction of (A) any Texas State court and any New York State court sitting in The Borough of Manhattan in The City of New York or (B) any U.S. federal court sitting in Texas and any U.S. federal court sitting in The Borough of Manhattan in The City of New York in respect of any suit, action or proceeding arising out of or relating to this Indenture and this Tranche {__} System Restoration Bond and irrevocably accepts for itself and in respect of its respective property, generally and unconditionally, jurisdiction of the aforesaid courts. Each Holder (by its acceptance of this Tranche {__} System Restoration Bond) irrevocably waives, to the fullest extent that it may effectively do so under applicable law, trial by jury.**

No reference herein to the Indenture and no provision of this Tranche {__} System Restoration 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 {__} System Restoration Bond at the times, place and rate and in the coin or currency herein prescribed.

The Issuer and the Indenture Trustee, by entering into the Indenture, and the Holders and any Persons holding a beneficial interest in any Tranche {__} System Restoration Bond, by acquiring any Tranche {__} System Restoration Bond or interest therein, (a) express their intention that, solely for the purpose of U.S. federal income tax 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 {__} System Restoration Bonds qualify under applicable tax law as indebtedness of Utility Holding secured by the Trust Estate and (b) solely for purposes of U.S. federal income tax 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 {__} System Restoration Bonds are outstanding, agree to treat the Tranche {__} System Restoration Bonds as indebtedness of Utility Holding secured by the Trust Estate unless otherwise required by appropriate taxing authorities.

ABBREVIATIONS

The following abbreviations, when used above on this Series 2025-A System Restoration Bond, shall be construed as though they were written out in full according to applicable laws or regulations.

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| | |
|:---|:---|
| 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 |

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| | | | |
|:---|:---|:---|:---|
| UNIF GIFT MIN ACT | | Custodian | ______________________________ |
|  | (Custodian) |  | (minor) |
|  | Under Uniform Gifts to Minor Act |  | (_____________________________) |
|  |  |  | (State) |

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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 undersigned hereby sells, assigns and transfers unto

(name and address of assignee)

the within Tranche {__} System Restoration Bond and all rights thereunder, and hereby irrevocably constitutes and appoints ____________, attorney, to transfer said Tranche {__} System Restoration Bond on the books kept for registration thereof, with full power of substitution in the premises.

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| | |
|:---|:---|
| Dated: ________________ | |
|  | Signature Guaranteed: |

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The signature to this assignment must correspond with the name of the registered owner as it appears on the within Tranche {__} System Restoration Bond in every particular, without alteration, enlargement or any change whatsoever.

NOTE: Signature(s) must be guaranteed by an institution that is a member of: (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 signature guaranty program acceptable to the Indenture Trustee.

<u>EXHIBIT B</u>

FORM OF SERIES SUPPLEMENT

See attached.

This SERIES SUPPLEMENT, dated as of ___________ __, 2025 (this "<u>Supplement</u>"), is by and between CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC, a limited liability company created under the laws of the State of Delaware (the "<u>Issuer</u>"), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, in its capacity as indenture trustee (the "<u>Indenture Trustee</u>") for the benefit of the Secured Parties under the Indenture dated as of ___________ __, 2025 (the "<u>Indenture</u>"), by and between the Issuer and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, in its capacity as Indenture Trustee and U.S. BANK NATIONAL ASSOCIATION in its capacity as a Securities Intermediary.

PRELIMINARY STATEMENT

<u>Section 9.01</u> 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 System Restoration Bonds and specifying the terms thereof. The Issuer has duly authorized the creation of the System Restoration Bonds with an initial aggregate principal amount of ${__________} to be known as Series 2025-A Senior Secured System Restoration Bonds (the "<u>Series 2025-A System Restoration Bonds</u>"), and the Issuer and the Indenture Trustee are executing and delivering this Supplement in order to provide for the Series 2025-A System Restoration 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 Series 2025-A System Restoration Bonds, the Issuer hereby Grants to the Indenture Trustee, as Indenture Trustee for the benefit of the Secured Parties of the Series 2025-A System Restoration Bonds, all of the Issuer's right, title and interest (whether now owned or hereafter acquired or arising) in and to (a) the System Restoration Property created under and pursuant to the Financing Order and the Securitization Act, and transferred by the Seller to the Issuer on the date hereof pursuant to the Sale Agreement (including, to the fullest extent permitted by applicable law, the right to impose, bill, charge, collect and receive the System Restoration Charges, the right to obtain periodic adjustments to the System Restoration Charges, and all revenue, collections, claims, rights to payments, payments, money and proceeds arising out of the rights and interests created under the Financing Order), (b) all System Restoration Charges related to the System Restoration Property, (c) the Sale Agreement and the Bill of Sale executed in connection therewith and all property and interests in property transferred under the Sale Agreement and the Bill of Sale with respect to the System Restoration Property and the Series 2025-A System Restoration Bonds, (d) the Servicing Agreement, the Administration Agreement and any subservicing, agency, administration or collection agreements executed in connection therewith, to the extent related to the System Restoration Property and the Series 2025-A System Restoration Bonds, (e) the Collection Account for the Series 2025-A System Restoration Bonds, all Subaccounts thereof and all amounts of cash, instruments, investment property or other assets on deposit therein or credited thereto from time to time or purchased with funds from the Collection Account and all financial assets and securities entitlements carried therein or credited thereto, (f) all rights to compel the Servicer to file for and obtain periodic adjustments to the System Restoration Charges in accordance with the Securitization Act and the Financing Order, (g) all of the other property of the Issuer, other than any cash released to the Issuer by the Indenture Trustee semi-annually from earnings on the Capital Subaccount, (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 System Restoration Property, accounts, general intangibles, instruments, contract rights, chattel paper or proceeds of such items or any other form of property, (i) all payments on or under and all proceeds in respect of any or all of the foregoing, including all proceeds of the conversion, voluntary or involuntary, into cash or other liquid property of any or all of the foregoing, all cash proceeds, accounts, accounts receivable, general intangibles, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, payment intangibles, letter-of-credit rights, investment property, commercial tort claims, documents, rights to payment of any and every kind, and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing, and (j) all payments on or under, and all proceeds in respect of, any or all of the foregoing (the "<u>Trust Estate</u>"), **it being understood that the following do not constitute the Trust Estate**: (x) cash that has been released pursuant to the terms of the Indenture, including <u>Section 8.02(e)(x)</u> of the Indenture and, following retirement of all Outstanding Series 2025-A System Restoration Bonds, pursuant to <u>Section 8.02(e)(xii)</u> of the Indenture, (y) amounts deposited with the Issuer on the Closing Date, for payment of costs of issuance with respect to the Series 2025-A System Restoration Bonds (together with any interest earnings thereon) or (z) proceeds from the sale of the Series 2025-A System Restoration Bonds required to pay the purchase price for the System Restoration Property and paid pursuant to the Sale Agreement and upfront Financing Costs (as defined in the Financing Order), it being understood that such amounts described in <u>clause (x)</u> and <u>clause (y)</u> above shall not be subject to <u>Section 3.17</u> of the Indenture. This Supplement covers the foregoing described portion of the System Restoration Property described in the Financing Order.

The foregoing Grant is made in trust to secure 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 Series 2025-A System Restoration 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 Supplement constitute a security agreement within the meaning of the Securitization Act and under the UCC to the extent that the provisions of the UCC are applicable hereto. The Issuer authorizes the Indenture Trustee (but the Indenture Trustee is not required) to file financing statements covering the Trust Estate, either as described above or by using more general terms as permitted by Section 9-504 of the Texas UCC; <u>provided</u>, <u>however</u>, that such authorization shall not be deemed an obligation.

The Indenture Trustee, as indenture trustee on behalf of the Holders, 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. <u>Designation</u>. The Series 2025-A System Restoration Bonds shall be designated generally as the 2025-A Senior Secured System Restoration Bonds, and further denominated as tranches {__} through {__}.

SECTION 2. <u>Initial Principal Amount; Bond Interest Rate; Scheduled Final Payment Date; Final Maturity Date; Required Capital Amount</u>. The Series 2025-A System Restoration Bonds of each tranche shall have the initial principal amount, bear interest at the rates per annum (the "<u>Bond Interest Rate</u>") and shall have the Scheduled Final Payment Dates and the Final Maturity Dates set forth below:

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| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp; Weighted <br> Average<br> Life | &nbsp;&nbsp; Initial<br> Principal<br> Amount | &nbsp;&nbsp; Bond<br> Interest<br> Rate | &nbsp;&nbsp; Scheduled<br> Final Payment<br> Date | &nbsp;&nbsp; Final<br> Maturity<br> Date |
| &nbsp;&nbsp;{__} | &nbsp;&nbsp;${__________} | &nbsp;&nbsp;{____}% | &nbsp;&nbsp;{_____}, 20{__} | &nbsp;&nbsp;{_____}, 20{__} |
| &nbsp;&nbsp;{__} | &nbsp;&nbsp;${__________} | &nbsp;&nbsp;{____}% | &nbsp;&nbsp;{_____}, 20{__} | &nbsp;&nbsp;{_____}, 20{__} |

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

The Required Capital Amount for the Series 2025-A System Restoration Bonds shall be equal to 0.50% of the initial principal amount thereof.

SECTION 3. <u>Authentication Date; Payment Dates; Expected Amortization Schedule for Principal; Periodic Interest; Book-Entry System Restoration Bonds</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Authentication Date</u>. The Series 2025-A System Restoration Bonds that are authenticated and delivered by the Indenture Trustee to or upon the order of the Issuer on ___________, 2025 (the "<u>Closing Date</u>") shall have as their date of authentication ___________, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Payment Dates</u>. The "<u>Payment Dates</u>" for the Series 2025-A System Restoration Bonds are ____________ and ___________ of each year or, if any such date is not a Business Day, the next Business Day, commencing on ___________, 2025 and continuing until the earlier of repayment of the Series 2025-A System Restoration Bonds in full and the Final Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Expected Sinking Fund Schedule for Principal</u>. 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 <u>Section 8.02(e)</u> of the Indenture as principal, in the following order and priority: {(1) to the holders of the Series 2025-A, Tranche {__} System Restoration Bonds, until the Outstanding Amount of the Series 2025-A, Tranche {__} System Restoration Bonds thereof has been reduced to zero; and (2) to the holders of the Series 2025-A, Tranche {__} System Restoration Bonds, until the Outstanding Amount of the Series 2025-A, Tranche {__} System Restoration Bonds thereof has been reduced to zero; <u>provided</u>, <u>however</u>, that in no event shall a principal payment pursuant to this <u>Section 3(c)</u> on any tranche on a Payment Date be greater than the amount necessary to reduce the Outstanding Amount of such tranche of Series 2025-A System Restoration Bonds to the amount specified in the Expected Amortization Schedule that is attached as <u>Schedule A</u> hereto for such tranche and Payment Date}.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Periodic Interest</u>. "<u>Periodic Interest</u>" will be payable on each tranche of the Series 2025-A System Restoration Bonds on each Payment Date in an amount equal to one-half of the product of (i) the applicable Bond Interest Rate and (ii) the Outstanding Amount of the related tranche of Series 2025-A System Restoration 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 Series 2025-A System Restoration Bonds on such preceding Payment Date; <u>provided</u>, <u>however</u>, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Book-Entry System Restoration Bonds</u>. The Series 2025-A System Restoration Bonds shall be Book-Entry System Restoration Bonds, and the applicable provisions of <u>Section 2.11</u> of the Indenture shall apply to the Series 2025-A System Restoration Bonds.

SECTION 4. <u>Authorized Denominations</u>. The Series 2025-A System Restoration Bonds shall be issuable in denominations of $2,000 and integral multiples of $1,000 in excess thereof, except for one bond, which may be a smaller denomination (the "<u>Authorized Denominations</u>").

SECTION 5. <u>Delivery and Payment for the Series 2025-A System Restoration Bonds; Form of the Series 2025-A System Restoration Bonds</u>. The Indenture Trustee shall deliver the Series 2025-A System Restoration Bonds to the Issuer when authenticated in accordance with <u>Section 2.03</u> of the Indenture. The Series 2025-A System Restoration Bonds of each tranche shall be in the form of Exhibits {__} hereto.

SECTION 6. <u>Ratification of Indenture</u>. 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 supplements the Indenture only insofar as it relates to the Series 2025-A System Restoration Bonds.

SECTION 7. <u>Counterparts</u>. 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 8. <u>Governing Law</u>. **This Supplement shall be governed by and construed in accordance with the laws of the State of Texas, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.**

SECTION 9. <u>Issuer Obligation</u>. No recourse may be taken directly or indirectly by the Holders with respect to the obligations of the Issuer on the Series 2025-A System Restoration Bonds, under the Indenture or this Supplement or any certificate or other writing delivered in connection herewith or therewith, against (a) the Issuer, other than from the trust estate securing the Series 2025-A System Restoration Bonds, (b) any owner of a beneficial interest in the Issuer (including CEHE) or (c) any shareholder, partner, owner, beneficiary, officer, director, employee or agent of the Indenture Trustee, the Managers or any owner of a beneficial interest in the Issuer (including CEHE) 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 in writing. Each Holder by accepting a Series 2025-A System Restoration Bond specifically confirms the non-recourse nature of these obligations and waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Series 2025-A System Restoration Bonds.

SECTION 10. <u>Indenture Trustee Disclaimer</u>. The Indenture Trustee is not responsible for the validity or sufficiency of this Supplement or for the recitals contained herein.

SECTION 11. <u>Submission to Non-Exclusive Jurisdiction; Waiver of Jury Trial</u>. **Each of the Issuer and the Indenture Trustee and each Holder (by its acceptance of the Series 2025-A System Restoration Bonds) hereby irrevocably submits to the non-exclusive jurisdiction of (A) any Texas State court and any New York State court sitting in The Borough of Manhattan in The City of New York or (B) any U.S. federal court sitting in Texas and any U.S. federal court sitting in The Borough of Manhattan in The City of New York in respect of any suit, action or Proceeding arising out of or relating to this Supplement and the Series 2025-A System Restoration Bonds and irrevocably accepts for itself and in respect of its respective property, generally and unconditionally, jurisdiction of the aforesaid courts. Each of the Issuer, the Indenture Trustee and each Holder (by its acceptance of the Series 2025-A System Restoration Bonds) irrevocably waives, to the fullest extent that it may effectively do so under applicable law, trial by jury.**

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 day and year first above written.

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| | |
|:---|:---|
| CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC,<br> as Issuer | CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC,<br> as Issuer |
| By: |  |
|  | Name: |
|  | Title: |
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,<br> not in its individual capacity but solely as Indenture Trustee | U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,<br> not in its individual capacity but solely as Indenture Trustee |
| By: |  |
|  | Name: |
|  | Title: |

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SCHEDULE A<br> TO SERIES SUPPLEMENT

Expected SINKING FUND Schedule

Expected Amortization Schedule

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| | | |
|:---|:---|:---|
| Date | &nbsp;&nbsp; Tranche A-1 | &nbsp;&nbsp; Tranche A-2 |
| Closing Date | &nbsp;&nbsp;${__________} | &nbsp;&nbsp;${__________} |
| {__________}, 202_ | &nbsp;&nbsp;${__________} | &nbsp;&nbsp;${__________} |
| {__________}, 202_ | &nbsp;&nbsp;${__________} | &nbsp;&nbsp;${__________} |
| {__________}, 202_ | &nbsp;&nbsp;${__________} | &nbsp;&nbsp;${__________} |

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EXHIBIT A<br> TO SERIES SUPPLEMENT

FORM OF TRANCHE A-1 OF SERIES 2025-A SENIOR SECURED SYSTEM RESTORATION BONDS

{__________}

EXHIBIT B<br> TO SERIES SUPPLEMENT

FORM OF TRANCHE A-2 OF SERIES 2025-A SENIOR SYSTEM RESTORATION BONDS

{__________}

<u>EXHIBIT C</u>

SERVICING CRITERIA TO BE ADDRESSED<br> BY INDENTURE TRUSTEE IN ASSESSMENT OF COMPLIANCE

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Regulation AB<br> Reference** | &nbsp;&nbsp;**Servicing Criteria** | &nbsp;&nbsp;**Applicable Indenture<br> Trustee Responsibility** |
|  | &nbsp;&nbsp;**General Servicing Considerations** |  |
| &nbsp;&nbsp;1122(d)(1)(i) | &nbsp;&nbsp;Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements. |  |
| &nbsp;&nbsp;1122(d)(1)(ii) | &nbsp;&nbsp;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. |  |
| &nbsp;&nbsp;1122(d)(1)(iii) | &nbsp;&nbsp;Any requirements in the transaction agreements to maintain a back-up servicer for the pool assets are maintained. |  |
| &nbsp;&nbsp;1122(d)(1)(iv) | &nbsp;&nbsp;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. |  |
| &nbsp;&nbsp;1122(d)(1)(v) | &nbsp;&nbsp;Aggregation of information, as applicable, is mathematically accurate and the information conveyed accurately reflects the information. |  |
|  | &nbsp;&nbsp;**Cash Collection and Administration** |  |
| &nbsp;&nbsp;1122(d)(2)(i) | &nbsp;&nbsp;Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days of receipt, or such other number of days specified in the transaction agreements. | &nbsp;&nbsp;**X** |
| &nbsp;&nbsp;1122(d)(2)(ii) | &nbsp;&nbsp;Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel. | &nbsp;&nbsp;**X** |
| &nbsp;&nbsp;1122(d)(2)(iii) | &nbsp;&nbsp;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. |  |
| &nbsp;&nbsp;1122(d)(2)(iv) | &nbsp;&nbsp;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. | &nbsp;&nbsp;**X** |
| &nbsp;&nbsp;1122(d)(2)(v) | &nbsp;&nbsp;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) under the Exchange Act. | &nbsp;&nbsp;**X** |
| &nbsp;&nbsp;1122(d)(2)(vi) | &nbsp;&nbsp;Unissued checks are safeguarded so as to prevent unauthorized access. |  |
| &nbsp;&nbsp;1122(d)(2)(vii) | &nbsp;&nbsp;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 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 90 calendar days of their original identification, or such other number of days specified in the transaction agreements. |  |
|  | &nbsp;&nbsp;**Investor Remittances and Reporting** |  |
| &nbsp;&nbsp;1122(d)(3)(i) | &nbsp;&nbsp;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. |  |
| &nbsp;&nbsp;1122(d)(3)(ii) | &nbsp;&nbsp;Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements. | &nbsp;&nbsp;**X** |
| &nbsp;&nbsp;1122(d)(3)(iii) | &nbsp;&nbsp;Disbursements made to an investor are posted within two business days to the servicer's investor records, or such other number of days specified in the transaction agreements. | &nbsp;&nbsp;**X** |

---

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Regulation AB<br> Reference** | &nbsp;&nbsp;**Servicing Criteria** | &nbsp;&nbsp;**Applicable Indenture<br> Trustee Responsibility** |
| &nbsp;&nbsp;1122(d)(3)(iv) | &nbsp;&nbsp;Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements. | &nbsp;&nbsp;**X** |
|  | &nbsp;&nbsp;**Pool Asset Administration** |  |
| &nbsp;&nbsp;1122(d)(4)(i) | &nbsp;&nbsp;Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents. |  |
| &nbsp;&nbsp;1122(d)(4)(ii) | &nbsp;&nbsp;Pool assets and related documents are safeguarded as required by the transaction agreements. |  |
| &nbsp;&nbsp;1122(d)(4)(iii) | &nbsp;&nbsp;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. |  |
| &nbsp;&nbsp;1122(d)(4)(iv) | &nbsp;&nbsp;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 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. |  |
| &nbsp;&nbsp;1122(d)(4)(v) | &nbsp;&nbsp;The servicer's records regarding the pool assets agree with the servicer's records with respect to an obligor's unpaid principal balance. |  |
| &nbsp;&nbsp;1122(d)(4)(vi) | &nbsp;&nbsp;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. |  |
| &nbsp;&nbsp;1122(d)(4)(vii) | &nbsp;&nbsp;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. |  |
| &nbsp;&nbsp;1122(d)(4)(viii) | &nbsp;&nbsp;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). |  |
| &nbsp;&nbsp;1122(d)(4)(ix) | &nbsp;&nbsp;Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents. |  |
| &nbsp;&nbsp;1122(d)(4)(x) | &nbsp;&nbsp;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 30 calendar days of full repayment of the related pool assets, or such other number of days specified in the transaction agreements. |  |
| &nbsp;&nbsp;1122(d)(4)(xi) | &nbsp;&nbsp;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 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements. |  |
| &nbsp;&nbsp;1122(d)(4)(xii) | &nbsp;&nbsp;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. |  |
| &nbsp;&nbsp;1122(d)(4)(xiii) | &nbsp;&nbsp;Disbursements made on behalf of an obligor are posted within two business days to the obligor's records maintained by the servicer, or such other number of days specified in the transaction agreements. |  |
| &nbsp;&nbsp;1122(d)(4)(xiv) | &nbsp;&nbsp;Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements. |  |
| &nbsp;&nbsp;1122(d)(4)(xv) | &nbsp;&nbsp;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. |  |

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**<u>APPENDIX A</u>**

**DEFINITIONS AND RULES OF CONSTRUCTION**

This is <u>Appendix A</u> to the Indenture.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Defined Terms</u>. As used in the Indenture, the following terms have the following meanings:

"<u>17g-5 Website</u>" means the password-protected website on which the Servicer shall post any notice, report, request for satisfaction of the Rating Agency Condition, document or other information provided by the Indenture Trustee to any Rating Agency under the Indenture or any other Basic Document to which it is a party for the purpose of determining or confirming the credit rating of the System Restoration Bonds or undertaking credit rating surveillance.

"<u>Accounts</u>" means, collectively, the Collection Account (and each sub-account thereof, including, without limitation, the General Subaccount, the Capital Subaccount and the Excess Funds Subaccount) and each REP Deposit Account.

"<u>Act</u>" means an instrument or instruments embodying and evidencing a request, demand, authorization, direction, notice, consent, waiver or other action provided by the Indenture to be given or taken by Holders.

"<u>Administration Agreement</u>" means the Administration Agreement, dated as of the date of the Indenture, by and between the Administrator and the Issuer, as the same may be amended and supplemented from time to time.

"<u>Administration Fee</u>" is defined in Section 2 of the Administration Agreement.

"<u>Administrator</u>" means CEHE under the Administration Agreement and each successor to or assignee of CEHE in the same capacity.

"<u>Affiliate</u>" 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 specified 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.

"<u>Applicable FATCA Law</u>" means Sections 1471 through 1474 of the Code and any regulations, or agreements thereunder or official interpretations thereof.

"<u>Authorized Denominations</u>" means denominations of $2,000 and integral multiples of $1,000 in excess thereof, which the Series 2025-A System Restoration Bonds shall be issuable in, except for one bond, which may be a smaller denomination.

"<u>Bankruptcy Code</u>" means Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.).

"<u>Basic Documents</u>" means the Indenture, the Series Supplement, the Certificate of Formation, the LLC Agreement, the Administration Agreement, the Sale Agreement, the Bill of Sale, the Servicing Agreement, the Letter of Representations and the Underwriting Agreement.

"<u>Bill of Sale</u>" has the meaning assigned to that term in the Sale Agreement.

Appendix A-1

"<u>Bond Interest Rate</u>" means the rates per annum at which the System Restoration Bonds will bear interest, as set forth in the Series Supplement.

"<u>Book-Entry Form</u>" means, with respect to any System Restoration Bond, that such System Restoration Bond is not certificated and the ownership and transfers thereof shall be made through book entries by a Clearing Agency as described in <u>Section 2.11</u> of the Indenture and the Series Supplement.

"<u>Book-Entry System Restoration Bonds</u>" means any System Restoration Bond issued in Book-Entry Form; <u>provided</u>, <u>however</u>, that, after the occurrence of a condition whereupon book-entry registration and transfer are no longer permitted and Definitive System Restoration Bonds are to be issued to the Holder of such System Restoration Bonds, such System Restoration Bonds shall no longer be "Book-Entry System Restoration Bonds".

"<u>Business Day</u>" means any day other than a Saturday, a Sunday or a day on which banking institutions in New York, New York, Chicago, Illinois or Houston, Texas, are, or The Depository Trust Company is, required or authorized by law or executive order to remain closed.

"<u>Capital Subaccount</u>" means the capital subaccount established by the Indenture Trustee pursuant to <u>Section 8.02(a)</u> of the Indenture.

"<u>CEHE</u>" means CenterPoint Energy Houston Electric, LLC, a Texas limited liability company.

"<u>Certificate of Formation</u>" means the Certificate of Formation of the Issuer filed with the Secretary of State of the State of Delaware on June 5, 2025 pursuant to which the Issuer was formed.

"<u>Claim</u>" means a "claim" as defined in Section 101(5) of the Bankruptcy Code.

"<u>Clearing Agency</u>" means an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act.

"<u>Clearing Agency Participant</u>" means a broker, dealer, bank, 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.

"<u>Closing Date</u>" means the date on which the System Restoration Bonds are originally issued in accordance with <u>Section 2.10</u> of the Indenture and the Series Supplement.

"<u>Code</u>" means Internal Revenue Code.

"<u>Collection Account</u>" means the collection account established by the Indenture Trustee pursuant to <u>Section 8.02(a)</u> of the Indenture.

"<u>Corporate Trust Office of the Indenture Trustee</u>" means the office of the Indenture Trustee at which at any particular time its corporate trust business shall be administered, which, office (for all purposes other than registration of transfers of System Restoration Bonds) as of the Closing Date is located at U.S. Bank Trust Company, National Association, 190 S. LaSalle Street, 7th Floor, Chicago, Illinois 60603 , Attention: CenterPoint Energy Restoration Bond Company II, LLC, and for registration of transfers of System Restoration Bonds, the office is located at U.S. Bank Trust Company, National Association, 111 Fillmore Avenue East, St. Paul, Minnesota 55107 , Attention: Bondholder Services, or at such other address as the Indenture Trustee may designate from time to time by notice to the Holders of the System Restoration Bonds and the Issuer, or the principal corporate trust office of any successor trustee by like notice.

Appendix A-2

"<u>Covenant Defeasance Option</u>" has the meaning set forth in <u>Section 4.01(b)</u> of the Indenture.

"<u>Customers</u>" means each Person from whom CEHE is authorized to recover qualified costs as defined in and pursuant to the Public Utility Regulatory Act, any PUCT Regulation or the Financing Order, but shall not include REPs.

"<u>Default</u>" means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.

"<u>Definitive System Restoration Bonds</u>" has the meaning set forth in <u>Section 2.11</u> of the Indenture.

"<u>Depositing REP</u>" means a REP who provides the Indenture Trustee with a cash deposit pursuant to the Financing Order.

"<u>Eligible Account</u>" means a segregated non-interest-bearing trust account with an Eligible Institution.

"<u>Eligible Institution</u>" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the corporate trust department of the Indenture Trustee or an Affiliate thereof, so long as the Indenture Trustee or such Affiliate have (i) either a short-term deposit or issuer rating from Moody's of at least "P-1" or a long-term unsecured debt or issuer rating from Moody's of at least "A2" and (ii) a short-term deposit or issuer rating from S&P of at least "A-1" or a long-term unsecured debt or issuer rating from S&P of at least "A"; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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) (i) that has either (A) a long-term unsecured debt or issuer rating of "AA-" or higher by S&P and "A2" or higher by Moody's, or (B) a short-term (bank deposit) or issuer rating of "A-1" or higher by S&P and "P-1" or higher by Moody's, and (ii) whose deposits are insured by the Federal Deposit Insurance Corporation.

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. In addition, if an Eligible Institution then being utilized for any purposes under the Indenture or the Series Supplement no longer meets the definition of Eligible Institution, then the Issuer shall replace such Eligible Institution within sixty (60) days of such Eligible Institution no longer meeting the definition of Eligible Institution.

"<u>Eligible Investments</u>" mean instruments or investment property which evidence:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) direct obligations of, or obligations fully and unconditionally guaranteed as to timely payment by, the United States of America;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) demand or time deposits of, unsecured certificates of deposit of, money market deposit accounts of or bankers' acceptances issued by, any depository institution (including the Indenture Trustee or its Affiliates, acting in a commercial capacity) incorporated or organized under the laws of the United States of America or any State thereof and subject to the supervision and examination by U.S. federal or State banking authorities, so long as the commercial paper or other short-term debt obligations of such depository institution are, at the time of deposit, rated at least "A-1" and "P-1" or their equivalents by each of S&P and Moody's, or such lower rating as will not result in the downgrading or withdrawal of the ratings of the System Restoration Bonds;

Appendix A-3

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) commercial paper (including commercial paper of the Indenture Trustee or its Affiliates, acting in a commercial capacity, and other than commercial paper of CEHE or any of its Affiliates), having, at the time of investment or contractual commitment to invest, a rating of at least "A-1" and "P-1" or their equivalents by each of S&P and Moody's or such lower rating as will not result in the downgrading or withdrawal of the ratings of the System Restoration Bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) investments in money market funds which have 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 and S&P;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or certain of its agencies or instrumentalities, entered into with Eligible Institutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) repurchase obligations with respect to any security or whole loan entered into with an Eligible Institution or with a registered broker/dealer acting as principal and that meets certain ratings criteria:

(a) a broker/dealer (acting as principal) registered as a broker or dealer under Section 15 of the Exchange Act (any such broker/dealer being referred to in this definition as a "broker/dealer"), the unsecured short-term debt obligations of which are rated at least "P-1" by Moody's and "A-1+" by S&P at the time of entering into such repurchase obligation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) an unrated broker/dealer, acting as principal, that is a wholly-owned subsidiary of a non-bank or bank holding company the unsecured short-term debt obligations of which are rated at least "P-1" by Moody's and "A-1+" by S&P at the time of purchase so long as the obligations of such unrated broker/dealer are unconditionally guaranteed by such non-bank or bank holding company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) any other investment permitted by each of the Rating Agencies.

Appendix A-4

Notwithstanding the foregoing: (a) no securities or investments which mature in thirty (30) days or more will be Eligible Investments unless the Issuer thereof has either a short-term unsecured debt rating of at least "P-1" from Moody's or a long-term unsecured debt rating of at least "A1" from Moody's; (b) no securities or investments described in clauses (2) through (4) above which have maturities of more than thirty (30) days but less than or equal to 3 months will be Eligible Investments unless the Issuer thereof has a long-term unsecured debt rating of at least "A1" from Moody's and a short-term unsecured debt rating of at least "P-1" from Moody's; (c) no securities or investments described in clauses (2) through (4) above which have maturities of more than 3 months will be Eligible Investments unless the Issuer thereof has a long-term unsecured debt rating of at least "A1" from Moody's and a short-term unsecured debt rating of at least "P-1" from Moody's; (d) no securities or investments described in clauses (2) through (4) above which have a maturity of sixty (60) days or less will be Eligible Investments unless such securities have a rating from S&P of at least "A-1"; and (e) no securities or investments described in clauses (2) through (4) above which have a maturity of three hundred sixty five (365) days or less will be Eligible Investments unless such securities have a rating from S&P of at least "AA-", "A-1+" or "AAAm".

"<u>Eligible Securities Account</u>" means either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a segregated non-interest-bearing trust account with an Eligible Institution or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a segregated non-interest-bearing trust account with 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 unsecured securities of such depository institution shall have a credit rating from each Rating Agency in one of its generic rating categories which signifies investment grade.

"<u>ERISA</u>" is the Employee Retirement Income Security Act of 1974, as amended.

"<u>ERISA Plan</u>" is a plan subject to ERISA or Section 4975 of the Code.

"<u>Event of Default</u>" has the meaning set forth in <u>Section 5.01</u> of the Indenture.

"<u>Excess Funds Subaccount</u>" means the excess funds subaccount established by the Indenture Trustee pursuant to <u>Section 8.02(a)</u> of the Indenture.

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended.

"<u>Expected Amortization Schedule</u>" means the expected amortization schedule in Schedule A to the Series Supplement.

"<u>Expected Sinking Fund Schedule</u>" means the expected sinking fund schedule in Schedule A to the Series Supplement.

"<u>Federal Book-Entry Regulations</u>" means 31 C.F.R. Part 357 <u>et seq</u>. (Department of Treasury).

Appendix A-5

"<u>Final Maturity Date</u>" means, with respect to each tranche of System Restoration Bonds, the final maturity date of such tranche of the System Restoration Bonds as specified in the Series Supplement.

"<u>Financing Order</u>" means the Financing Order issued by the Texas Commission on June 5, 2025 in Docket No. 57559 pursuant to the Securitization Act.

"<u>General Subaccount</u>" means the general subaccount established by the Indenture Trustee pursuant to <u>Section 8.02(a)</u> of the Indenture.

"<u>Global System Restoration Bonds</u>" means one or more bonds evidencing the System Restoration Bonds, which (a) shall be an aggregate original principal amount equal to the aggregate original principal amount of the System Restoration Bonds to be issued pursuant to the Issuer Order, (b) shall be registered in the name of the Clearing Agency therefor or its nominee, (c) shall be delivered by the Indenture Trustee pursuant to such Clearing Agency's or such nominee's instructions and (d) shall bear a legend substantially to the effect set forth in <u>Exhibit A</u> to the Form of Series Supplement.

"<u>Grant</u>" means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, grant, transfer, create, grant a lien upon, 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 Trust Estate 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 Trust Estate 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.

"<u>Holders</u>" means the Person in whose name a System Restoration Bond is registered on the System Restoration Bond Register.

"<u>Indenture</u>" means the Indenture, dated as of the date hereof, by and between the Issuer and U.S. Bank Trust Company, National Association, as Indenture Trustee and U.S. Bank National Association, as Securities Intermediary.

"<u>indenture securities</u>" means the System Restoration Bonds.

"<u>indenture security holder</u>" means a Holder.

"<u>indenture to be qualified</u>" means the Indenture.

"<u>indenture trustee</u>" or "<u>institutional trustee</u>" means the Indenture Trustee.

"<u>Indenture Trustee</u>" means U.S. Bank Trust Company, National Association, a national banking association, as indenture trustee for the benefit of the Secured Parties, or any other indenture trustee for the benefit of the Secured Parties, under the Indenture.

Appendix A-6

"<u>Indenture Trustee Cap</u>" has the meaning set forth in <u>Section 8.02(e)(i)</u> of the Indenture.

"<u>Independent</u>" means, when used with respect to any specified Person, that the Person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) is in fact independent of the Issuer, any other obligor upon the System Restoration Bonds, the Servicer and any Affiliate of any of the foregoing Persons,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Servicer or any Affiliate of any of the foregoing Persons and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) is not connected with the Issuer, any such other obligor, the Servicer or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

"<u>Independent Certificate</u>" means a certificate to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of <u>Section 10.01</u> 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 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.

"<u>Independent Manager Fee</u>" means the annual fee paid to each Independent Manager as determined in accordance with the LLC Agreement which shall initially be $3,500 per annum.

"<u>Independent Manager</u>" is defined in Appendix A of the LLC Agreement.

"<u>Investment Company Act</u>" means the Investment Company Act of 1940, as amended.

"<u>Investment Earnings</u>" means investment earnings on funds deposited in the Collection Account net of losses and investment expenses.

"<u>Issuer</u>" means CenterPoint Energy Restoration Bond Company II, LLC, a Delaware limited liability company, or any successor thereto pursuant to the Indenture.

"<u>Issuer Order</u>" means a written order signed in the name of the Issuer by any one of its Responsible Officers and delivered to the Indenture Trustee or the Paying Agent, as applicable.

"<u>Issuer Request</u>" means a written request signed in the name of the Issuer by any one of its Responsible Officers and delivered to the Indenture Trustee or the Paying Agent, as applicable.

"<u>Legal Defeasance Option</u>" has the meaning set forth in <u>Section 4.01(b)</u> of the Indenture.

"<u>Letter of Representations</u>" means any agreement between the Issuer and an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act, pertaining to the System Restoration Bonds, as the same may be amended, supplemented, restated or otherwise modified from time to time.

Appendix A-7

"<u>Lien</u>" means a security interest, lien, charge, pledge, equity or encumbrance of any kind.

"<u>LLC Agreement</u>" means the Amended and Restated Limited Liability Company Agreement of CenterPoint Energy Restoration Bond Company II, LLC, dated as of the date hereof.

"<u>Manager</u>" means each manager of the Issuer under the LLC Agreement.

"<u>Member</u>" has the meaning specified in the first paragraph of the LLC Agreement.

"<u>Monthly Servicer's Certificate</u>" is defined in Section 3.01(b)(i) of the Servicing Agreement.

"<u>Moody's</u>" means Moody's Investors Service, Inc. or any successor in interest. References to Moody's are effective so long as Moody's is a rating agency.

"<u>NY UCC</u>" means the Uniform Commercial Code as in effect on the date hereof in the State of New York.

"<u>NRSRO</u>" means a nationally recognized statistical rating organization.

"<u>obligor</u>" means, on the System Restoration Bonds, the Issuer and any other obligor on the System Restoration Bonds.

"<u>Officer's Certificate</u>" means a certificate signed by a Responsible Officer of the Issuer under the circumstances described in, and otherwise complying with, the applicable requirements of <u>Section 10.01</u> of the Indenture, and delivered to the Indenture Trustee.

"<u>Operating Expenses</u>" means, with respect to the Issuer, all fees, costs and expenses owed by the Issuer with respect to the System Restoration Bonds, including all amounts owed by the Issuer to the Indenture Trustee (including any indemnity payments to the Indenture Trustee), the Servicing Fee, the Administration Fee, the costs and expenses incurred by the Seller in connection with the performance of the Seller's obligations under Section 4.08 of the Sale Agreement, the costs and expenses incurred by the Servicer in connection with the performance of the Servicer's obligations under Section 5.02(d) of the Servicing Agreement, the Independent Manager Fee, administrative expenses, including external legal and external accounting fees, Reimbursable Expenses (as defined in the Servicing Agreement), ratings maintenance fees, and all other costs and expenses recoverable by the Issuer under the terms of the Financing Order.

"<u>Opinion of Counsel</u>" means one or more written opinions of counsel who may be an employee of or counsel to the party or parties receiving such opinion of counsel, and which opinion shall be reasonably acceptable to such party or parties. As to any factual matter involved in an opinion of counsel, such counsel may rely, to the extent they deem such reliance proper, upon a certificate or certificates setting forth such matters which have been signed by an official, officer, general partner or authorized representative of a particular government authority, corporation, company or other Person.

Appendix A-8

"<u>Outstanding</u>" with respect to System Restoration Bonds means, as of the date of determination, all System Restoration Bonds theretofore authenticated and delivered under the Indenture except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) System Restoration Bonds theretofore canceled by the System Restoration Bond Registrar or delivered to the System Restoration Bond Registrar for cancellation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) System Restoration Bonds or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Indenture Trustee or any Paying Agent in trust for the Holders of such System Restoration Bonds; <u>provided</u>, <u>however</u>, that if such System Restoration Bonds are to be redeemed, notice of such redemption has been duly given pursuant to the Indenture or provision therefor, satisfactory to the Indenture Trustee; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) System Restoration Bonds in exchange for or in lieu of other System Restoration Bonds which have been authenticated and delivered pursuant to the Indenture unless proof satisfactory to the Indenture Trustee is presented that any such System Restoration Bonds are held by a bona fide purchaser;

<u>provided</u> that in determining whether the Holders of the requisite Outstanding Amount of the System Restoration Bonds have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any Basic Document, System Restoration Bonds owned by the Issuer, any other obligor upon the System Restoration Bonds, CEHE 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 fully protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only System Restoration Bonds that a Responsible Officer of the Indenture Trustee knows to be so owned shall be so disregarded. System Restoration 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 System Restoration Bonds and that the pledgee is not the Issuer, any other obligor upon the System Restoration Bonds, the Servicer or any Affiliate of any of the foregoing Persons.

"<u>Outstanding Amount</u>" means the aggregate principal amount of all Outstanding System Restoration Bonds, or, if the context requires, all Outstanding System Restoration Bonds of a tranche, Outstanding at the date of determination.

"<u>Outstanding System Restoration Bonds</u>" means the System Restoration Bonds Outstanding at the date of determination.

"<u>Paying Agent</u>" means the entity so designated in <u>Section 3.03</u> of the Indenture or any other Person that meets the eligibility standards for the Indenture Trustee specified in <u>Section 6.11</u> of the Indenture and is authorized by the Issuer to make the payments of principal of or premium, if any, or interest on the System Restoration Bonds on behalf of the Issuer.

"<u>Payment Date</u>" has the meaning set forth in Section 3(b) of the Series Supplement.

"<u>Periodic Interest</u>" means the interest payable on the System Restoration Bonds on each Payment Date in an amount equal to one-half of the product of (i) the applicable Bond Interest Rate and (ii) the Outstanding Amount of the System Restoration 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 System Restoration Bonds on such preceding Payment Date; <u>provided</u>, <u>however</u>, 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.

Appendix A-9

"<u>Person</u>" means any individual, corporation, estate, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), business trust, limited liability company, unincorporated organization or government or any agency or political subdivision thereof.

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

"<u>Proceeding</u>" means any suit in equity, action at law or other judicial or administrative proceeding.

"<u>Protected Purchaser</u>" means has the meaning specified in Section 8-303 of the Texas UCC.

"<u>Public Utility Regulatory Act</u>" means the Texas Public Utility Regulatory Act, as codified in Title II of the Utilities Code.

"<u>PUCT Regulation</u>" means any regulation, rule, order or directive promulgated, issued or adopted by the Texas Commission.

"<u>Rating Agency</u>" means any rating agency rating the System Restoration Bonds, at the time of issuance at the request of the Issuer, which initially shall be Moody's and S&P. 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, written notice of which designation shall be given to the Indenture Trustee, the Texas Commission and the Servicer.

"<u>Rating Agency Condition</u>" means, with respect to any action, at least ten (10) Business Days' prior written notification to each Rating Agency of such action, and written confirmation from each of S&P and Moody's to 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 the System Restoration Bonds and that prior to the taking of the proposed action no other Rating Agency shall have provided written notice to the Issuer that such action has resulted or would result in the suspension, reduction or withdrawal of the then current rating of any such tranche of the System Restoration Bonds; <u>provided</u>, that, if within such ten (10) Business Day period, any Rating Agency (other than S&P) has neither replied to such notification nor responded in a manner that indicates that such Rating Agency is reviewing and considering the notification, then (i) the Issuer shall be required to confirm that such Rating Agency has received the Rating Agency Condition request, and if it has, promptly request the related Rating Agency Condition confirmation and (ii) if the Rating Agency neither replies to such notification nor responds in a manner that indicates it is reviewing and considering the notification within five (5) Business Days following such second (2<sup>nd</sup>) request, the applicable Rating Agency Condition requirement shall not be deemed to apply to such Rating Agency. For the purposes of this definition, any confirmation, request, acknowledgment or approval that is required to be in writing may be in the form of electronic mail or a press release (which may contain a general waiver of a Rating Agency's right to review or consent).

Appendix A-10

"<u>Record Date</u>" means one Business Day prior to the applicable Payment Date.

"<u>Registered Holder</u>" means the Person in whose name a System Restoration Bond is registered on the System Restoration Bond Register.

"<u>Regulation AB</u>" means the rules of the SEC promulgated under Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123.

"<u>REP</u>" means a retail electric provider under the Financing Order or any other entity which, under the terms of the Financing Order or the Utilities Code, may be obligated to pay, bill or collect the System Restoration Charges, other than Customers.

"<u>REP Deposit Account</u>" has the meaning specified in <u>Section 8.07</u> of the Indenture.

"<u>Required Capital Amount</u>" means the amount specified as such in the Series Supplement therefor.

"<u>Responsible Officer</u>" means, with respect to the Indenture Trustee, any officer within the Corporate Trust Office of the Indenture Trustee, including any Vice President, Director, Managing Officer, associate, Assistant Vice President, Secretary, Assistant Secretary, or any other officer of the Indenture Trustee having 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 because of such officer's knowledge of and familiarity with the particular subject, and with respect to the Issuer, any officer, including President, Vice President, Secretary, Assistant Secretary, Treasurer or Assistant Treasurer, of the Issuer, or any Manager.

"<u>Return on Invested Capital</u>" means, for any Payment Date, the sum of (i) the actual amounts earned from investments, payable to CEHE, on its capital contribution in the Issuer which amount has been deposited by the Issuer into the Capital Subaccount plus (ii) any Return on Invested Capital not paid on any prior Payment Date.

"<u>S&P</u>" means S&P Global Ratings, a division of S&P Global Inc. or any successor in interest. References to S&P are effective so long as S&P is a rating agency.

"<u>Sale Agreement</u>" means the System Restoration Property Sale Agreement dated as of the date hereof, relating to the System Restoration Property, between the Seller and the Issuer, as the same may be amended and supplemented from time to time.

"<u>Sanctions</u>" has the meaning set forth in <u>Section 3.21(a)</u> of the Indenture.

"<u>Scheduled Final Payment Date</u>" means, with respect to the System Restoration Bonds, the date with respect to each tranche when all interest and principal is scheduled to be paid in accordance with the Expected Sinking Fund Schedule, as specified in the Series Supplement. For the avoidance of doubt, the Scheduled Final Payment Date shall be the last Scheduled Payment Date set forth in the Expected Sinking Fund Schedule. The "last Scheduled Final Payment Date" means the Scheduled Final Payment Date of the latest maturing tranche of System Restoration Bonds.

Appendix A-11

"<u>Scheduled Payment Dates</u>" means, with respect to each tranche of System Restoration Bonds, each Payment Date on which principal for such tranche is to be paid in accordance with the Expected Sinking Fund Schedule for such tranche.

"<u>SEC</u>" means the U.S. Securities and Exchange Commission.

"<u>Secured Parties</u>" means the Indenture Trustee, the Holders and any credit enhancer described in the Series Supplement.

"<u>Securities Intermediary</u>" means U.S. Bank National Association, a national banking association, 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.

"<u>Securitization Act</u>" means Subchapter I of Chapter 36 of the Public Utility Regulatory Act, adopted and effective in August 2009, that allows for the securitization of system restoration costs, together with Subchapter G of Chapter 39 of the Public Utility Regulatory Act.

"<u>Seller</u>" means CEHE, or its successor, in its capacity as seller of the System Restoration Property to the Issuer pursuant to the Sale Agreement.

"<u>Semi-Annual Servicer's Certificate</u>" is defined in Section 4.01(g)(i) of the Servicing Agreement.

"<u>Series Supplement</u>" means an indenture supplemental to the Indenture in the form attached as <u>Exhibit B</u> to the Indenture that authorizes the issuance of System Restoration Bonds.

"<u>Servicer</u>" means CEHE, initially, or any Successor Servicer, as the case may be.

"<u>Servicer Default</u>" is defined in Section 7.01 of the Servicing Agreement.

"<u>Servicing Agreement</u>" means the System Restoration Property Servicing Agreement, dated as of the date hereof, by and between the Issuer and CEHE, and acknowledged and accepted by the Indenture Trustee, relating to the System Restoration Property as the same may be amended and supplemented from time to time.

"<u>Servicing Fee</u>" means the fee payable by the Issuer to the Servicer on each Payment Date with respect to the System Restoration Bonds, in an amount specified in Section 6.07 of the Servicing Agreement.

"<u>Similar Law</u>" is any federal, state, local or other laws or regulations that are substantially similar to Title I of ERISA or Section 4975 of the Code.

"<u>Special Payment Date</u>" means the date on which, with respect to the System Restoration Bonds, any payment of principal of or interest (including any interest accruing upon default) on, or any other amount in respect of, the System Restoration Bonds that is not actually paid within five (5) days of the Payment Date applicable thereto is to be made by the Indenture Trustee to the Holders.

"<u>Special Record Date</u>" means the date at least fifteen (15) Business Days prior to the Special Payment Date.

"<u>SRC Collections</u>" means amounts constituting good funds collected by the Servicer in respect of the System Restoration Charges and the System Restoration Property.

"<u>State Pledge</u>" means the pledge of the State of Texas as set forth in Section 39.310 of the Securitization Act.

Appendix A-12

"<u>Subaccount</u>" means, individually, the General Subaccount, the Excess Funds Subaccount, and the Capital Subaccount.

"<u>Successor Servicer</u>" means (i) a successor to CEHE pursuant to Section 6.03 of the Servicing Agreement or (ii) a successor Servicer appointed by the Indenture Trustee pursuant to Section 7.04 of the Servicing Agreement which in each case will succeed to all the rights and duties of the Servicer under the Servicing Agreement.

"<u>System Restoration Bond Register</u>" means the register provided by the Issuer pursuant to <u>Section 2.05</u> of the Indenture.

"<u>System Restoration Bond Registrar</u>" means the Indenture Trustee for the purpose of registering the System Restoration Bonds and transfers of System Restoration Bonds pursuant to <u>Section 2.05</u> of the Indenture.

"<u>System Restoration Bonds</u>" means any of the Senior Secured System Restoration Bonds issued by the Issuer pursuant to the Indenture.

"<u>System Restoration Charge Adjustment</u>" means each adjustment to System Restoration Charges related to the System Restoration Property made in accordance with Section 4.01 of the Servicing Agreement and Annex I to the Servicing Agreement.

"<u>System Restoration Charges</u>" means the nonbypassable amounts to be charged for the use or availability of electric services, approved by the Texas Commission in the Financing Order to recover qualified costs (as defined in the Financing Order) that may be collected by CEHE, its successors, assignees or other collection agents as provided for in the Financing Order.

"<u>System Restoration Property</u>" means the rights and interests of the Seller or its successor under the Financing Order once those rights are first transferred to the Issuer or pledged in connection with the issuance of the System Restoration Bonds, including the right to impose, collect and receive through System Restoration Charges payable by retail electric customers which take service at distribution voltage within Seller's certificated service area as it existed on the date of the Financing Order, an amount sufficient to cover the qualified costs (as defined in the Financing Order), the right to receive System Restoration Charges in amounts and at times sufficient to pay principal and interest and make other deposits in connection with the System Restoration Bonds and all revenues and collections resulting from System Restoration Charges, except the rights of CEHE to earn and receive a rate of return on its invested capital in the Issuer, to receive administration and servicer fees, or to use CEHE's remaining portion of the Purchase Price (as defined in the Sale Agreement), and all revenue, collections, payments, money and proceeds arising out of those rights and interests. System Restoration Property is known as "transition property" in the Securitization Act.

"<u>Temporary System Restoration Bonds</u>" means System Restoration Bonds executed and, upon the receipt of an Issuer Order, authenticated and delivered by the Indenture Trustee pending the preparation of Definitive System Restoration Bonds pursuant to <u>Section 2.04</u> of the Indenture.

"<u>Texas Commission</u>" means the Public Utility Commission of Texas or any successor entity thereto.

"<u>Texas Commission Condition</u>" has the meaning set forth in <u>Section 9.03</u> of the Indenture.

Appendix A-13

"<u>Texas UCC</u>" means the Uniform Commercial Code as in effect in the State of Texas.

"<u>Trust Estate</u>" has the meaning set forth in the Series Supplement.

"<u>Trust Indenture Act</u>" means the Trust Indenture Act of 1939 as in force on the Closing Date, unless otherwise specifically provided.

"<u>UCC</u>" means the Uniform Commercial Code as in effect in the relevant jurisdiction.

"<u>Underwriting Agreement</u>" means the underwriting agreement entered into by the Issuer, CEHE and the underwriters parties thereto in connection with the issuance of the System Restoration Bonds in accordance with the Financing Order.

"<u>U.S. Government Obligations</u>" 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 that are not callable at the option of the issuer thereof.

"<u>Utilities Code</u>" means the Texas Utilities Code, as amended from time to time.

"<u>Utility Holding</u>" means Utility Holding, LLC, a Delaware limited liability company and sole member of CEHE.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Other Terms</u>. 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 the Indenture are inconsistent with the meanings of such terms under generally accepted accounting principles or regulatory accounting principles, the definitions contained in the Indenture shall control. As used in the Indenture, the term "<u>including</u>" 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Computation of Time Periods</u>. Unless otherwise stated in the Indenture, in the computation of a period of time from a specified date to a later specified date, the word "<u>from</u>" means "from and including" and the words "<u>to</u>" and "<u>until</u>" each means "to but excluding".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Reference; Captions</u>. The words "<u>hereof</u>", "<u>herein</u>" and "<u>hereunder</u>" and words of similar import when used in the Indenture shall refer to the Indenture as a whole and not to any particular provision of the Indenture; and references to "<u>Section</u>", "<u>subsection</u>", "<u>Schedule</u>" and "<u>Exhibit</u>" in the Indenture are references to Sections, subsections, Schedules and Exhibits in or to the Indenture unless otherwise specified in the Indenture. The various captions (including the tables of contents) in the Indenture are provided solely for convenience of reference and shall not affect the meaning or interpretation of the Indenture.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. <u>Number; Gender</u>. The definitions contained in this <u>Appendix A</u> 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.

Appendix A-14

## Exhibit 10.1

**Exhibit 10.1**

**SYSTEM RESTORATION PROPERTY SERVICING AGREEMENT**

**by and between**

**CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC**

**Issuer**

**and**

**CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC**

**Servicer**

**Dated as of ________ __, 2025**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION | ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION | 1 |
| Section 1.01 | DEFINITIONS AND RULES OF CONSTRUCTION | 1 |
| ARTICLE II APPOINTMENT AND AUTHORIZATION OF SERVICER | ARTICLE II APPOINTMENT AND AUTHORIZATION OF SERVICER | 2 |
| Section 2.01 | APPOINTMENT OF THE SERVICER; ACCEPTANCE OF APPOINTMENT | 2 |
| Section 2.02 | AUTHORIZATION | 2 |
| Section 2.03 | DOMINION AND CONTROL OVER SYSTEM RESTORATION PROPERTY | 2 |
| ARTICLE III ROLE OF THE SERVICER | ARTICLE III ROLE OF THE SERVICER | 3 |
| Section 3.01 | DUTIES OF THE SERVICER | 3 |
| Section 3.02 | SERVICING AND MAINTENANCE STANDARDS | 7 |
| Section 3.03 | ANNUAL REPORTS ON COMPLIANCE WITH REGULATION AB | 8 |
| Section 3.04 | ANNUAL REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM REPORT | 9 |
| Section 3.05 | MONITORING OF THIRD-PARTY COLLECTORS | 10 |
| ARTICLE IV SERVICES RELATED TO SYSTEM RESTORATION CHARGE ADJUSTMENTS AND PBRAF ADJUSTMENTS | ARTICLE IV SERVICES RELATED TO SYSTEM RESTORATION CHARGE ADJUSTMENTS AND PBRAF ADJUSTMENTS | 14 |
| Section 4.01 | SYSTEM RESTORATION CHARGE ADJUSTMENTS | 14 |
| Section 4.02 | LIMITATION OF LIABILITY | 19 |
| ARTICLE V THE SYSTEM RESTORATION PROPERTY | ARTICLE V THE SYSTEM RESTORATION PROPERTY | 20 |
| Section 5.01 | CUSTODY OF SYSTEM RESTORATION PROPERTY RECORDS | 20 |
| Section 5.02 | DUTIES OF SERVICER AS CUSTODIAN | 20 |
| Section 5.03 | CUSTODIAN'S INDEMNIFICATION | 22 |
| Section 5.04 | EFFECTIVE PERIOD AND TERMINATION | 22 |
| ARTICLE VI THE SERVICER | ARTICLE VI THE SERVICER | 22 |
| Section 6.01 | REPRESENTATIONS AND WARRANTIES OF THE SERVICER | 22 |
| Section 6.02 | INDEMNITIES OF THE SERVICER; RELEASE OF CLAIMS | 25 |
| Section 6.03 | MERGER, CONVERSION OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF, THE SERVICER | 28 |
| Section 6.04 | ASSIGNMENT OF THE SERVICER'S OBLIGATIONS | 30 |
| Section 6.05 | LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS | 30 |
| Section 6.06 | CEHE NOT TO RESIGN AS SERVICER | 31 |
| Section 6.07 | SERVICING COMPENSATION | 31 |
| Section 6.08 | COMPLIANCE WITH APPLICABLE LAW | 32 |
| Section 6.09 | ACCESS TO CERTAIN RECORDS AND INFORMATION REGARDING SYSTEM RESTORATION PROPERTY | 32 |
| Section 6.10 | APPOINTMENTS | 33 |
| Section 6.11 | NO SERVICER ADVANCES | 33 |

---

i

---

| | | |
|:---|:---|:---|
| Section 6.12 | REMITTANCES | 33.0 |
| Section 6.13 | MAINTENANCE OF OPERATIONS | 34.0 |
| ARTICLE VII SERVICER DEFAULT | ARTICLE VII SERVICER DEFAULT | 34.0 |
| Section 7.01 | SERVICER DEFAULT | 34.0 |
| Section 7.02 | NOTICE OF SERVICER DEFAULT | 36.0 |
| Section 7.03 | WAIVER OF PAST DEFAULTS | 36.0 |
| Section 7.04 | APPOINTMENT OF SUCCESSOR | 37.0 |
| Section 7.05 | COOPERATION WITH SUCCESSOR | 37.0 |
| ARTICLE VIII MISCELLANEOUS PROVISIONS | ARTICLE VIII MISCELLANEOUS PROVISIONS | 37.0 |
| Section 8.01 | AMENDMENT | 37.0 |
| Section 8.02 | NOTICES | 38.0 |
| Section 8.03 | ASSIGNMENT | 39.0 |
| Section 8.04 | LIMITATIONS ON RIGHTS OF OTHERS | 39.0 |
| Section 8.05 | SEVERABILITY | 39.0 |
| Section 8.06 | SEPARATE COUNTERPARTS | 40.0 |
| Section 8.07 | HEADINGS | 40.0 |
| Section 8.08 | GOVERNING LAW | 40.0 |
| Section 8.09 | PLEDGE TO THE TRUSTEE | 40.0 |
| Section 8.10 | NONPETITION COVENANTS | 40.0 |
| Section 8.11 | TERMINATION | 40.0 |
| Section 8.12 | TEXAS COMMISSION CONSENT | 41.0 |
| Section 8.13 | TERMINATION | 41.0 |
| Section 8.14 | EFFECT OF SUBSEQUENT PUCT REGULATIONS | 42.0 |
| Section 8.15 | RULE 17g-5 COMPLIANCE | 42.0 |
| Section 8.16 | TRUSTEE ACTIONS | 42.0 |

---

<u>ANNEXES, EXHIBITS AND SCHEDULES</u>

Annex I – Servicing Procedures

Exhibit A – Form of Monthly Servicer's Certificate

Exhibit B – Form of Semi-Annual Servicer's Certificate

Exhibit C-1 – Form of Servicer's Annual Compliance Certificate

Exhibit C-2 – Form of Certificate of Compliance

Schedule 4.01(a) – Expected Amortization Schedule

<u>APPENDIX</u>

Appendix A – Definitions and Rules of Construction

ii

This SYSTEM RESTORATION PROPERTY SERVICING AGREEMENT (this "Agreement"), dated as of ______ __, 2025, is between CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC, a Delaware limited liability company (the "Issuer"), and CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a Texas limited liability company ("CEHE"), as the servicer of the System Restoration Property (together with each successor to CEHE in such capacity pursuant to <u>Section 6.03</u> or <u>Section 7.04</u>, the "Servicer"), and acknowledged and accepted by U.S. Bank Trust Company, National Association, a national banking association, not in its individual capacity but solely as indenture trustee (the "Trustee").

RECITALS

WHEREAS, pursuant to the Securitization Act and the Financing Order, CEHE, in its capacity as seller under the Sale Agreement (the "Seller"), and the Issuer are concurrently entering into the Sale Agreement pursuant to which the Seller is selling and the Issuer is purchasing the System Restoration Property created pursuant to the Securitization Act and the Financing Order;

WHEREAS, in connection with its ownership of the System Restoration Property and in order to collect the associated System Restoration Charges, the Issuer desires to engage the Servicer to carry out the functions described herein and the Servicer desires to be so engaged;

WHEREAS, the Issuer desires to engage the Servicer to act on its behalf in obtaining System Restoration Charge Adjustments and PBRAF Adjustments from the Texas Commission and the Servicer desires to be so engaged;

WHEREAS, the System Restoration Charges initially will be commingled with other funds collected by the Servicer; and

WHEREAS, the Financing Order calls for the Servicer to execute a servicing agreement with the Issuer pursuant to which the Servicer will be required, among other things, to impose and collect the System Restoration Charges for the benefit and account of the Issuer, to make periodic System Restoration Charge Adjustments and PBRAF Adjustments as required or allowed by the Financing Order, and to account for and remit the System Restoration Charges to the Trustee on behalf and for the account of the Issuer in accordance with the remittance procedures contained herein without any deduction or surcharge of any kind.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained and intending to be legally bound hereby, the parties hereto agree as follows:

**ARTICLE I**

**DEFINITIONS AND RULES OF CONSTRUCTION**

Section 1.01 DEFINITIONS AND RULES OF CONSTRUCTION.

Capitalized terms used but not otherwise defined in this Agreement shall have the respective meanings given to such terms in <u>Appendix A</u>, which is hereby incorporated by reference into this Agreement as if set forth fully in this Agreement. Not all terms defined in <u>Appendix A</u> are used in this Agreement. The rules of construction set forth in <u>Appendix A</u> shall apply to this Agreement and are hereby incorporated by reference into this Agreement as if set forth fully in this Agreement.

**ARTICLE II**

**APPOINTMENT AND AUTHORIZATION OF SERVICER**

Section 2.01 APPOINTMENT OF THE SERVICER; ACCEPTANCE OF APPOINTMENT.

The Issuer hereby appoints the Servicer, as an independent contractor, and the Servicer hereby accepts such appointment, to perform the Servicer's obligations pursuant to this Agreement on behalf of and for the benefit of the Issuer or any assignee thereof in accordance with the terms of this Agreement. This appointment and the Servicer's acceptance thereof may not be revoked except in accordance with the express terms of this Agreement.

Section 2.02 AUTHORIZATION.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) execute and deliver, on behalf of itself and/or the Issuer, as the case may be, any and all instruments, documents or notices, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) on behalf of itself and/or the Issuer, as the case may be, make any filing and participate in Proceedings of any kind with any Governmental Authorities, including with the Texas Commission.

The Issuer shall execute and deliver to the Servicer such documents as have been prepared by the Servicer for execution by the Issuer and shall furnish the Servicer with such other documents as may be in the Issuer's possession, in each case as the Servicer may determine to be necessary or appropriate to enable it to carry out its servicing and other duties hereunder. Upon the Servicer's written request, the Issuer shall furnish the Servicer with any powers of attorney or other documents necessary or appropriate to enable the Servicer to carry out its duties hereunder.

Section 2.03 DOMINION AND CONTROL OVER SYSTEM RESTORATION PROPERTY.

Notwithstanding any other provision contained herein, the Servicer and the Issuer agree that the Issuer shall have dominion and control over the System Restoration Property, and the Servicer, in accordance with the terms hereof, is acting solely as the servicing agent of and custodian for the Issuer with respect to the System Restoration Property and the System Restoration Property Records. The Servicer hereby agrees that it shall not take any action that is not authorized by this Agreement, the Securitization Act or the Financing Order, that is not consistent with its customary procedures and practices, or that shall impair the rights of the Issuer or the Trustee (on behalf of the Holders) in the System Restoration Property, in each case unless such action is required by applicable law or court or regulatory order.

**ARTICLE III**

**ROLE OF THE SERVICER**

Section 3.01 DUTIES OF THE SERVICER.

The Servicer, as agent for the Issuer (to the extent provided herein), shall have the following duties:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Duties of Servicer Generally*. The Servicer shall manage, service, administer, and make collections and remittances in respect of the System Restoration Property. The Servicer's duties in general shall include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) calculating the System Restoration Charges and billing the REPs for the System Restoration Charges;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) obtaining meter reads and providing such metering information to the REPs, as necessary (unless another entity assumes metering responsibilities in accordance with the Financing Order, PUCT Regulations, applicable tariffs or the Public Utility Regulatory Act);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) collecting payments of System Restoration Charges and payments with respect to System Restoration Property from all persons or entities responsible for remitting System Restoration Charges and other payments with respect to System Restoration Property to the Servicer under the Financing Order, the Securitization Act, PUCT Regulations or applicable tariffs; <u>provided</u>, <u>however</u>, the Issuer and the Servicer acknowledge and agree that pursuant to any future intercreditor agreement, payments in respect of System Restoration Charges and System Restoration Property may be deposited initially into an account held and processed by CEHE in its capacity as the "Utility" (as such term may be defined and set forth more fully in any such intercreditor agreement) for the benefit of the Servicer, and that CEHE in its individual capacity may be replaced as the holder of such account by a "Successor Servicer" or "Designated Account Holder" as those terms may be defined and set forth more fully in any such intercreditor agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) posting all SRC Collections remitted to the Servicer and posting all late-payment penalties assessed against REPs (as described in <u>Section 3.05(c)(ii)</u>);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) responding to inquiries by Customers, REPs, the Texas Commission or any other Governmental Authority with respect to the System Restoration Property and the System Restoration Charges;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) accounting for SRC Collections and late-payment penalties received from REPs, investigating and resolving delinquencies (including, where permitted by the Financing Order, Schedule SRC and/or PUCT Regulations, terminating distribution service for nonpayment of charges by end-use customers), processing and depositing collections, making periodic remittances to the Trustee and furnishing periodic and current reports to the Issuer, the Trustee and each Rating Agency;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) providing certified calculations and other information reasonably requested by agents appointed by the Servicer to collect the System Restoration Charges to enable the agents to perform collection services properly under any future intercreditor agreement and monitoring the collections of the agents for compliance with any such intercreditor agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) providing information reasonably requested by the Issuer in connection with the allocation of collections between System Restoration Charges and System Restoration Property on one hand, and other charges and fees on the other;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) monitoring payments by each REP, reviewing reports provided by each REP and monitoring compliance by each REP with the credit standards and deposit obligations set forth in the Financing Order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) notifying each REP of any defaults by such REP in its payment obligations and other obligations (including its credit standards) under Schedule SRC, and enforcing against such REP at the earliest date permitted by the Financing Order and Schedule SRC any remedies provided by such Schedule SRC, the Financing Order or other applicable law and regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) making all filings with the Texas Commission and taking all other actions as may be necessary to perfect the Issuer's ownership interests in and the Trustee's Lien on the Trust Estate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) selling, as the agent for the Issuer, as its interest may appear, defaulted or written-off accounts in accordance with the Servicer's usual and customary practices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) taking all necessary action in connection with System Restoration Charge Adjustments and PBRAF Adjustments as is set forth herein;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) performing such other duties as may be specified for a servicer under the Financing Order, Schedule SRC, the Securitization Act or other applicable law; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) reconciling, within 30 calendar days after bank statement cutoff date or such later time as is consistent with the Servicer's usual and customary practices that does not materially impair the ability of the Servicer to correct errors, all bank account debits and credits for bank accounts that are held in the name of the Servicer (as Servicer hereunder) or of the Issuer that relate to the Trust Estate or the Bonds.

Anything to the contrary notwithstanding, the duties of the Servicer set forth in this Agreement shall be qualified in their entirety by, and the Servicer shall at all times comply with, the Financing Order, the Securitization Act and any PUCT Regulations, orders or directions and the U.S. federal securities laws and the rules and regulations promulgated thereunder, including Regulation AB and Rule 17g-5, as in effect at the time such duties are to be performed. Without limiting the generality of this <u>Section 3.01(a)</u>, in furtherance of the foregoing, the Servicer hereby agrees that it shall also have, and shall comply with, the duties and responsibilities relating to data acquisition, usage and bill calculation, billing, customer service functions, collections, payment processing and remittance set forth in <u>Annex I</u>, as it may be amended from time to time. For the avoidance of doubt, the term "usage" when used herein refers to both kilowatt hour consumption and kilowatt demand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Reporting Functions*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) *Monthly Servicer's Certificate*. On or before the 25<sup>th</sup> calendar day of each month (or if such day is not a Servicer Business Day, on the immediately succeeding Servicer Business Day), beginning with ________ __, 2025, the Servicer shall prepare and deliver to the Issuer, the Trustee and the Rating Agencies a written report substantially in the form of <u>Exhibit A</u> (a "Monthly Servicer's Certificate") setting forth certain information relating to the Billed SRCs collected and remitted by the Servicer during the Billing Period preceding such date; <u>provided</u>, <u>however</u>, that, for any month in which the Servicer is required to deliver a Semi-Annual Servicer's Certificate pursuant to <u>Section 4.01(f)(ii)(A)</u>, the Servicer shall prepare and deliver the Monthly Servicer's Certificate no later than the date of delivery of such Semi-Annual Servicer's Certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) *Notification of Laws and Regulations*. The Servicer shall immediately notify the Issuer, the Trustee, and the Rating Agencies in writing when it becomes aware of any Requirement of Law or PUCT Regulations, orders or directions hereafter promulgated that have a material adverse effect on the Servicer's ability to perform its duties under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) *Other Information*. Upon the reasonable request of the Issuer, the Trustee, the Texas Commission or any Rating Agency, the Servicer shall provide to the Issuer, the Trustee, the Texas Commission or such Rating Agency, as the case may be, any public financial information in respect of the Servicer, or any material information regarding the System Restoration Property to the extent it is reasonably available to the Servicer, as may be reasonably necessary and permitted by applicable law to enable the Issuer, the Trustee, the Texas Commission or such Rating Agency to review the performance by the Servicer hereunder; provided however, that any such request by the Trustee shall not create any obligation for the Trustee to monitor the performance of the Servicer. In addition, so long as any of the Bonds are outstanding, the Servicer shall provide to the Issuer, to the Texas Commission and to the Trustee, within a reasonable time after written request therefor, any information available to the Servicer or reasonably obtainable by it that is necessary to calculate the System Restoration Charges applicable to each Customer Class.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) *Preparation of Reports*. The Servicer shall prepare and deliver such additional reports as required under this Agreement, including a copy of each Semi-Annual Servicer's Certificate described in <u>Section 4.01(f)(ii)(A)</u>, the Annual Compliance Certificate described in <u>Section 3.03(a)</u>, and the Annual Accountant's Report described in <u>Section 3.04(a)</u>. In addition, the Servicer shall prepare, procure, deliver and/or file, or cause to be prepared, procured, delivered or filed, any reports, attestations, exhibits, certificates or other documents required to be delivered or filed with the SEC (and/or any other Governmental Authority) by the Issuer or the "sponsor" of the Issuer under the U.S. federal securities or other applicable laws or in accordance with the Basic Documents, including, but without limiting the generality of foregoing, filing with the SEC, if applicable and required by applicable law, a copy or copies of (A) the Monthly Servicer's Certificates described in <u>Section 3.01(b)(i)</u> (under Form 10-D or any other applicable form), (B) the Semi-Annual Servicer's Certificates described in <u>Section 4.01(f)(ii)(A)</u> (under Form 10-D or any other applicable form), (C) the annual statements of compliance, attestation reports and other certificates described in <u>Section 3.03</u>, and (D) the Annual Accountant's Report (and any attestation required under Regulation AB) described in <u>Section 3.04</u>. In addition, the appropriate officer or officers of the Servicer shall (in its separate capacity as Servicer) sign the Issuer's annual report on Form 10-K (and any other applicable SEC or other reports, attestations, certifications and other documents), to the extent that the Servicer's signature is required by, and consistent with, the U.S. federal securities laws and/or any other applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Opinions of Counsel*.

The Servicer shall obtain on behalf of the Issuer and deliver to the Issuer and to the Trustee:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) promptly after the execution and delivery of this Agreement and of each amendment hereto, an Opinion of Counsel from external counsel of the Issuer either (A) to the effect that, in the opinion of such counsel, all filings, including filings with the Texas Commission and the Secretary of State of the State of Texas and all filings pursuant to the UCC, that are necessary under the UCC and the Securitization Act to perfect or maintain, as applicable, the Liens of the Trustee in the System Restoration Property have been authorized, executed and filed, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) to the effect that, in the opinion of such counsel, no such action shall be necessary to maintain, preserve, protect and perfect such Liens; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) within ninety (90) days after the beginning of each calendar year beginning with 2026, an Opinion of Counsel, which counsel may be an employee of or counsel to the Issuer or the Servicer and which shall be reasonably satisfactory to the Trustee, dated as of a date during such 90-day period, either (A) to the effect that, in the opinion of such counsel, all filings, including filings with the Texas Commission and the Secretary of State of the State of Texas and all filings pursuant to the UCC, have been authorized, executed and filed that are necessary under the UCC and the Securitization Act to maintain the Liens of the Trustee in the Trust Estate, including the System Restoration Property, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) to the effect that, in the opinion of such counsel, no such action shall be necessary to maintain, preserve, protect and perfect such Liens.

Each Opinion of Counsel referred to in <u>Section 3.01(c)(i)</u> or <u>Section 3.01(c)(ii)</u> shall specify any action necessary (as of the date of such opinion) to be taken in the following year to perfect or maintain, as applicable, such interest or Lien.

Section 3.02 SERVICING AND MAINTENANCE STANDARDS.

The Servicer will monitor payments and impose collection policies on REPs, as permitted under the Financing Order and the applicable PUCT Regulations. On behalf of the Issuer, the Servicer shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) manage, service, administer and remit collections in respect of the System Restoration Property with reasonable care and in material compliance with applicable Requirements of Law, including all applicable PUCT Regulations, using the same degree of care and diligence that the Servicer exercises with respect to similar assets for its own account and, if applicable, for others;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) follow standards, policies and procedures in performing its duties as Servicer that are customary in the electric transmission and distribution industry or that the Texas Commission has mandated and that are consistent with the terms and provisions of the Financing Order, Schedule SRC and existing law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) use all reasonable efforts, consistent with its customary servicing procedures, to enforce and maintain the Issuer's and the Trustee's rights in respect of the System Restoration Property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) calculate System Restoration Charges and PBRAFs in compliance with the Securitization Act, the Financing Order, any Texas Commission order related to System Restoration Charge allocation and any applicable tariffs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) provide all reports to such parties to any future intercreditor agreement to which the Issuer is a party regarding the System Restoration Charges and PBRAFs as are necessary to effect collection, allocation and remittance of payments in respect of System Restoration Charges and other collected funds in accordance with this Agreement and such intercreditor agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) comply with all Requirements of Law, including all applicable PUCT Regulations, applicable to and binding on it relating to the System Restoration Property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) file all reports with the Texas Commission required by the Financing Order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) petition the Texas Commission for adjustments to the System Restoration Charges and PBRAFs that the Servicer determines to be necessary in accordance with the Financing Order; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) make all filings required under the Securitization Act or the UCC to maintain the perfected security interest of the Trustee in the Trust Estate and use all reasonable efforts to otherwise enforce and maintain the Trustee's rights in respect of the System Restoration Property and the Trust Estate,

except where the failure to comply with any of the foregoing would not materially and adversely affect the Issuer's or the Trustee's respective interests in the System Restoration Property.

The Servicer shall follow such customary and usual practices and procedures as it shall deem necessary or advisable in its servicing of all or any portion of the System Restoration Property, which, in the Servicer's judgment, may include the taking of legal action, at the Issuer's expense but subject to the priority of payments set forth in Section 8.02(e) of the Indenture.

Section 3.03 ANNUAL REPORTS ON COMPLIANCE WITH REGULATION AB.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Servicer shall deliver to the Issuer, the Trustee and the Rating Agencies, on or before March 31 of each year, beginning March 31, 2026, to and including the March 31 succeeding the Final Maturity Date of the Bonds, certificates from a Responsible Officer of the Servicer (A) containing, and certifying as to, the statements of compliance required by Item 1123 (or any successor or similar items or rule) of Regulation AB, as then in effect (the "Annual Compliance Certificate") which may be in the form of, or shall include the form attached hereto as <u>Exhibit C-1</u>, and (B) containing, and certifying as to, the statements and assessment of compliance required by Item 1122(a) (or any successor or similar items or rule) of Regulation AB, as then in effect (the "Certificate of Compliance") which may be in the form of, or shall include the form attached hereto as <u>Exhibit C-2</u> hereto, in each case with such changes as may be required to conform to applicable U.S. federal securities law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Servicer shall use commercially reasonable efforts to obtain from each other party participating in the servicing function any additional certifications as to the statements and assessment required under Item 1122 (or any successor or similar items or rule) or Item 1123 (or any successor or similar items or rule) of Regulation AB to the extent required in connection with the filing of the Issuer's annual report on Form 10-K; <u>provided</u>*,* <u>however</u>, that a failure to obtain such certifications shall not be a breach of the Servicer's duties hereunder. The parties acknowledge that the Trustee's certifications shall be limited to the Item 1122 certifications described in <u>Exhibit C</u> of the Indenture.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The initial Servicer, in its capacity as "sponsor" of the Issuer (in such capacity, the "Sponsor"), shall post on its or its parent company'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, the information described in Section 3.07(g) of the Indenture to the extent such information is reasonably available to the Sponsor. The covenants of the initial Servicer, in its capacity as Sponsor, pursuant to this <u>Section 3.03(c)</u> shall survive the resignation, removal or termination of the initial Servicer as Servicer hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Except to the extent permitted by applicable law, the Issuer, shall not voluntarily suspend or terminate its filing obligations under Section 13 or Section 15(d) of the Exchange Act as an issuing entity with the SEC.

Section 3.04 ANNUAL REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM REPORT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Servicer shall cause a registered independent public accounting firm (which may also provide other services to the Servicer or the Seller) to prepare annually, and the Servicer shall deliver annually to the Issuer, the Trustee and the Rating Agencies on or before the earlier of (i) March 31 of each year, beginning March 31, 2026, to and including the March 31 succeeding the Retirement of all Bonds, or (ii) with respect to each calendar year during which the Issuer's annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations thereunder, the date on which the Issuer's annual report on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and regulations thereunder, a report addressed to the Servicer (the "Annual Accountant's Report"), which may be included as part of the Servicer's assessment of compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB during the immediately preceding calendar year ended December 31 (or, in the case of the first Annual Accountant's Report, to be delivered on or before March 31, 2026, the period of time from the date of this Agreement until December 31, 2025), in accordance with paragraph (b) of Rule 13a-18 and Rule 15d-18 of the Exchange Act and Item 1122 of Regulation AB, identifying the results of such procedures and including any exceptions noted. In the event that such accounting firm requires the Trustee or the Issuer to agree or consent to the procedures performed by such firm, the Issuer shall direct the Trustee in writing to so agree; it being understood and agreed that the Trustee shall deliver such letter of agreement or consent in conclusive reliance upon the direction of the Issuer, and the Trustee shall not make any independent inquiry or investigation as to, and shall have no obligation or liability in respect of the sufficiency, validity or correctness of such procedures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Annual Accountant's Report shall also indicate that the accounting firm providing such report is independent of the Servicer in accordance with the rules of the Public Company Accounting Oversight Board and shall include any attestation report required under Item 1122(b) of Regulation AB (or any successor or similar items or rule), as then in effect. The costs of the Annual Accountant's Report shall be reimbursable as an Operating Expense under the Indenture.

Section 3.05 MONITORING OF THIRD-PARTY COLLECTORS. From time to time, until the Retirement of the Bonds, the Servicer shall, in accordance with the Servicing Standard, take all actions with respect to Third-Party Collectors required to be taken by the Servicer as set forth, if applicable, in any agreement with the Servicer, the Financing Order, the Tariff and any other PUCT Regulations in effect from time to time and implement such additional procedures and policies as are necessary to ensure that the obligations of all Third-Party Collectors in connection with System Restoration Charges are properly enforced in accordance with, if applicable, the terms of any agreement with the Servicer, the Financing Order, the Tariff and any other PUCT Regulations in effect from time to time. Such procedures and policies shall include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Maintenance of Records and Information*. In addition to any actions required by the Tariff, PUCT Regulations or other applicable law, the Servicer shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) maintain adequate records for promptly identifying and contacting each Third-Party Collector;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) maintain records of end-user Customers which are billed by Third-Party Collectors to permit prompt transfer of the customers to another Third-Party Collector in the event of default by the defaulting Third-Party Collector;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) maintain adequate records for enforcing compliance by all Third-Party Collectors with their obligations with respect to System Restoration Charges, including compliance with all Remittance Requirements and REP Credit Requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) provide to each Third-Party Collector such information necessary for such Third-Party Collector to confirm the Servicer's calculation of System Restoration Charges and remittances, including, if applicable, charge-off amounts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) cause payments in respect of System Restoration Property to be posted to such records as Servicer maintains that identify obligations of end-user Customers and Third-Party Collectors, generally within two Business Days of receipt of same, subject to extension of time to segregate and identify payments where necessary because of the manner of payment or aggregation of payments with other payment, and reflect such payments in such records as the Servicer maintains that identify allocation of funds to obligations under the Bonds.

The Servicer shall update the records described above no less frequently than quarterly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Credit and Collection Policies*. The Servicer shall, to the fullest extent permitted under the Financing Order, the Public Utility Regulatory Act and PUCT Regulations, apply such terms with respect to credit and collection policies applicable to Bills submitted to Third-Party Collectors as may be reasonably necessary to prevent the then-current rating of the Bonds from being downgraded, withdrawn or suspended. The Servicer shall periodically review the need for modified or additional terms based upon, among other things, (i) the amount of SRC Collections received through REPs relative to the Periodic Billing Requirement, (ii) the historical payment and default experience of each REP and (iii) such other credit and collection policies to which the REPs are subject, and if permitted by the Financing Order and applicable law, will set out any such modified or additional terms in a supplemental Tariff filed with the Texas Commission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Monitoring of Performance and Payment by REPs*. In addition to any actions required by the Tariff, PUCT Regulations or other applicable law, the Servicer shall undertake to do the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Servicer shall use all reasonable efforts, subject to applicable law, to collect all amounts owed in respect of System Restoration Charges and late-payment penalties (as set forth in <u>Section 3.05(c)(ii)</u>) as and when the same shall become due) to the extent permitted by the Financing Order, shall follow procedures no less stringent as it follows with respect to collection activities that the Servicer conducts for itself or others. The Servicer shall not change the amount of or reschedule the due date of any scheduled payment of System Restoration Charges, except as contemplated in this Agreement or as required by applicable law or court or Texas Commission order. The Servicer shall enforce at the earliest possible date the obligations with respect to the System Restoration Charges of each REP and each other Person owing or collecting System Restoration Charges, provided that any REP shall be entitled to hold back from its payment of System Restoration Charges to the Servicer an allowance for charge-offs according to the procedure and calculations set forth in the Financing Order, Schedule SRC and <u>Annex I</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Each REP must pay System Restoration Charges within 35 days following the date of each billing by the Servicer to such REP ("REP Billing Day"), without regard to whether or when the REP receives payment from its retail customers. The Servicer shall accept payment by electronic funds transfer, wire transfer, and/or check. Payment will be considered received the date the electronic funds transfer or wire transfer is received by the Servicer or, if payment is made by check, the date the check clears. The Servicer shall assess and collect a 5% late-payment penalty (the "Penalty") on all System Restoration Charges billed to an REP but not paid by that REP by the close of business on the 35th day after the REP Billing Day. Any and all such Penalty payments that are collected shall be transferred to the Trustee for deposit in the Collection Account and shall be applied against system restoration charge obligations. An REP shall not be obligated to pay the overdue System Restoration Charges of another REP. If an REP agrees to assume the responsibility for the payment of overdue System Restoration Charges as a condition of receiving the customers of another REP that has decided to terminate service to those customers for any reason, the new REP shall not be assessed the Penalty upon such System Restoration Charges; <u>provided</u>, <u>however</u>, that the prior REP shall not be relieved of the previously assessed Penalties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Servicer shall work with REPs to resolve any disputes using the dispute resolution procedures established in Schedule SRC and any PUCT Regulations, in accordance with the Servicing Standard.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *Enforcement of REP Obligations*. The Servicer shall, in accordance with the terms of Schedule SRC, ensure that each REP remits all System Restoration Charges which it is obligated to remit to the Servicer. If an REP fails to remit payment in full of all System Restoration Charges that it is obligated to remit by the day that is 45 calendar days after the REP Billing Day, the Servicer shall, in addition to assessing the Penalty against such REP described in <u>Section 3.05(c)(ii)</u>, direct the Trustee by written instruction to deliver to the Servicer from such REP's REP Deposit (by making a withdrawal from a deposit account, a demand under a surety bond or a guarantee, and/or a draw under a letter of credit, as applicable) the lesser of the amount of System Restoration Charges such REP has failed to remit or the amount of the REP Deposit. Upon receipt of same, the Servicer shall cause the amount received from the Trustee to be deposited in the Collection Account. The Servicer shall notify the REP of such withdrawal, demand and/or draw from the REP Deposit to the Collection Account and instruct the REP to remit, or otherwise restore, immediately the amount of such withdrawal, demand and/or draw to the Trustee for replenishment of such REP's REP Deposit. The Servicer shall avail itself of such legal remedies as may be appropriate to collect any remaining unpaid System Restoration Charges and associated penalties due to the Servicer after application of the REP Deposit, in accordance with the Financing Order and Schedule SRC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) If an REP is in default pursuant to Section 9 of Schedule SRC and Finding of Fact 55 of the Financing Order (such default an "REP Default"), the Servicer shall perform such duties as are required of the Servicer therein, including but not limited to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) in the event the REP in REP Default seeks to implement alternative arrangements with the Servicer regarding the billing and collection of System Restoration Charges pursuant to Section 9 of Schedule SRC and Finding of Fact 55 of the Financing Order, the Servicer shall consider proposals from such REP but shall not accept any proposal, and no proposal shall be deemed mutually suitable and agreeable, other than the options set forth in Section 9 of Schedule SRC unless (i) the Servicer is directed promptly in writing by the Trustee to accept a proposal of such REP following the written direction of such approval of such proposal by the Majority Holders, (ii) such proposal would not materially and adversely affect the interests of the Holders and (iii) the Rating Agency Condition has been satisfied; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) in the event the REP in REP Default fails to immediately select and implement an alternative method of billing and collecting System Restoration Charges as specified in Section 9 of Schedule SRC and Finding of Fact 55 of the Financing Order or fails to adequately meet its responsibilities thereunder, the Servicer shall immediately allow the appropriate Provider of Last Resort or another qualified REP of a Customer's choosing to immediately assume responsibility for the billing and collection of System Restoration Charges from such Customer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) In the event the appropriate Provider of Last Resort defaults or is ineligible to provide billing and collection of System Restoration Charges when requested by a Customer or the Servicer, as applicable, the Servicer shall assume responsibility for billing and collection of System Restoration Charges until a new Provider of Last Resort is named by the Texas Commission or the Customer requests the services of another REP, in accordance with Schedule SRC and PUCT Regulations. In any case, the Servicer shall enforce the obligations, and exercise its remedies against, each REP including any Provider of Last Resort, as permitted under the Financing Order and Schedule SRC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) In addition to the obligations set forth in <u>Section 3.05(g)</u>, the Servicer shall have the rights and obligations to terminate electric service for non-payment of System Restoration Charges under the circumstances set forth in Schedule SRC and PUCT Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *Maintenance of REP Deposit Accounts*. In the event an REP provides any of (A) a cash deposit to the Trustee in the form of up to two months' maximum expected system restoration charge collections, (B) a surety bond or affiliate guarantee or (C) a letter of credit (each, an "REP Deposit") pursuant to the Financing Order and Schedule SRC,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Servicer shall agree with the REP as to the size of the initial REP Deposit,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) no more frequently than quarterly, upon the request of either the REP or the Servicer, the Servicer shall cooperate with the REP as required by the Financing Order and Schedule SRC to ensure that the REP Deposit accurately reflects up to two months' maximum system restoration charge collections. Within 10 days following the review by the REP and Servicer of the size of the REP Deposit, either the REP shall remit to the Trustee the amount of any shortfall in the REP Deposit as confirmed to the Trustee by the Servicer in writing or the Servicer shall instruct the Trustee in writing to remit or release to the REP any portion of the REP Deposit no longer required to be on deposit, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Servicer shall instruct the Trustee in writing to remit to the REP the REP Deposit, plus any investment earnings thereon, except such portion of the REP Deposit as was utilized in satisfaction of the REP's obligations to remit billed System Restoration Charges within 30 days of the date on which the REP Deposit is no longer required under the Financing Order or Schedule SRC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) In the event an REP disputes any amount of billed System Restoration Charges, the Servicer shall require the REP to pay the disputed amount under protest within the time for payment set forth in <u>Section 3.05(c)(ii)</u>. The Servicer shall attempt to resolve informally the dispute with the REP, or any dispute related to the date of receipt of System Restoration Charge payments, Penalties, or the size of the required REP Deposit. If the REP and the Servicer cannot reach an informal resolution to the dispute, either party may file a complaint with the Texas Commission as set forth in the Financing Order and Schedule SRC. If the REP prevails in the informal dispute process or before the Texas Commission, the Servicer shall provide the REP with a refund of the disputed amount paid to the Servicer plus interest at a rate approved by the Texas Commission. As provided in the Financing Order, Schedule SRC and <u>Section 4.01(b)(i)(C)</u>, interest paid by the Servicer shall be recoverable through System Restoration Charges if the Servicer's claim to the funds is not clearly unfounded. In addition, as provided in the Financing Order and Schedule SRC, the Servicer shall not be required to pay interest to the REP if the Servicer has received inaccurate metering data from another entity providing competitive metering services pursuant to the Public Utility Regulatory Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The Servicer shall adhere to the instructions of an REP that bills Customers for System Restoration Charges to terminate transmission and distribution service to a Customer for nonpayment by the Customer pursuant to the Financing Order and Schedule SRC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) *Affiliated Third-Party Collectors*. In performing its obligations under this <u>Section 3.05</u>, the Servicer shall deal with any Third-Party Collectors which are Affiliates of the Servicer on terms which are no more favorable in the aggregate to such affiliated Third-Party Collector than those used by the Servicer in its dealings with Third-Party Collectors that are not affiliates of the Servicer.

**ARTICLE IV**

**SERVICES RELATED TO SYSTEM RESTORATION CHARGE ADJUSTMENTS AND PBRAF ADJUSTMENTS**

Section 4.01 SYSTEM RESTORATION CHARGE ADJUSTMENTS.

From time to time, until the Retirement of the Bonds, the Servicer shall identify the need for annual System Restoration Charge Adjustments and interim System Restoration Charge Adjustments and shall take all reasonable action to obtain and implement such System Restoration Charge Adjustments, all in accordance with the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Expected Amortization Schedule*. The Expected Amortization Schedule for the Bonds is attached hereto as <u>Schedule 4.01(a)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *System Restoration Charge Adjustments*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) *Annual System Restoration Charge Adjustments and Filings*. Prior to each Calculation Date, the Servicer shall update the data and assumptions underlying the calculation of the System Restoration Charges, including projected electricity usage during the next Calculation Period for each Customer Class and including interest and estimated expenses and fees of the Issuer to be paid during such period, the Weighted Average Days Outstanding and write-offs, and shall calculate:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the PBRAF Adjustments to be made in accordance with the methodology set forth in Schedule SRC, as may be modified from time to time by order from the Texas Commission,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the Bond Balance as of each Calculation Date (a written copy of which shall be delivered by the Servicer to the Trustee and the Texas Commission within five business days following such Calculation Date), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) the System Restoration Charge Adjustment with respect to the System Restoration Property for the twelve-month period preceding and including the next upcoming Adjustment Date, such that the Servicer projects that SRC Collections therefrom will be sufficient so that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. the Bond Balance on the Payment Date immediately preceding the next Adjustment Date will equal the Projected Bond Balance as of such date or, if earlier with respect to any Tranche of Bonds, by the Expected Final Payment Date therefor, taking into account any amounts on deposit in the Excess Funds Subaccount,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. the amount on deposit in the Capital Subaccount on the Payment Date immediately preceding the next Adjustment Date, or if earlier with respect to the Bonds or any Tranche thereof, by the Expected Final Payment Date therefor, will equal the Required Capital Amount, taking into account any amounts on deposit in the Excess Funds Subaccount and taking into account any prior withdrawals of interest or earnings on deposits in the Capital Subaccount used to meet payment obligations on the Bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. the SRC Collections will provide for amortization of the remaining outstanding principal amount of the Bonds in accordance with the Expected Amortization Schedule therefor and payment of interest on the Bonds when due,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** the Servicer can reconcile past overpayments and underpayments by all REPs of System Restoration Charges arising out of hold-backs for charge-offs in accordance with Section 6 of <u>Annex I</u>,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. the Servicer can recover out of SRC Collections the interest paid to all REPs arising out of a dispute between the Servicer and any REP resolved pursuant to <u>Section 3.05(f)</u> for which the Servicer's claim to the funds in dispute was not clearly unfounded, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. the fees and expenses of the Servicer, the Trustee, the Independent Manager and the Administrator and other fees, expenses, charges and costs authorized in the Financing Order will be paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Prior to each Calculation Date, the Servicer shall make annual reconciliation filings with the Texas Commission for that Calculation Date. The Servicer shall promptly thereafter provide notice and a copy of such filings to each Rating Agency. The Servicer's Calculation Date filings shall include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) any PBRAF Adjustments to take effect on the next Adjustment Date (in which case, the Servicer shall provide notice of such filing to all parties in Texas Commission Docket No. 57559 and shall participate in a contested case proceeding at the Texas Commission, the purpose of which will be to determine whether any proposed adjustment complies with the Financing Order, as set forth therein), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) a Tariff supplement setting forth System Restoration Charge Adjustments to become effective on the next Adjustment Date and supporting data, including the calculation of the System Restoration Charge Adjustments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Interim System Restoration Charge Adjustments and Filings*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) At the beginning of CEHE's billing cycle for [month] and [month], beginning in [month] 202[5], and at least every three months beginning twelve months prior to the last Scheduled Final Payment Date, the Servicer shall (A) update the data and assumptions underlying the calculation of the System Restoration Charges, including projected electricity usage during the next Calculation Period for each Customer Class and including interest and estimated expenses and fees of the Issuer to be paid during such period, the rate of delinquencies and write-offs; (B) determine the Periodic Payment Requirement and Periodic Billing Requirement for the next Calculation Period based on such updated data and assumptions; and (C) based upon such updated data and requirements, forecast whether SRC Collections together with available fund balances in the Excess Funds Subaccount, will be sufficient, (i) to make on a timely basis all scheduled payments of interest, principal and other amounts payable in respect of each Outstanding Tranche of System Restoration Bonds during such Calculation Period and (ii) to maintain the Capital Subaccount at the Required Capital Level. If the Servicer determines that SRC Collections will not be sufficient for such purposes, the Servicer shall, no later than fifteen (15) days prior to the end of each such thirty (30) day period (1) determine the System Restoration Charges to be allocated to each Customer Class during the next Calculation Period based on such Periodic Billing Requirement and the terms of the Financing Order and the Tariff, and in doing so the Servicer shall use the method of allocating System Restoration Charges then in effect; (2) make all required notice and other filings with the Texas Commission to reflect the revised System Restoration Charges, including any amendment to the Tariff; and (3) take all reasonable actions and make all reasonable efforts to effect such Interim True-Up Adjustment and to enforce the provisions of the Securitization Law and the Financing Order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) In addition to the True-Up Adjustments described above in <u>Section 4.01(b)</u>, the Servicer may implement an additional True-Up Adjustment (in the same manner as provided for in <u>Section 4.01(c)(i)</u>) at any time (a) if the Servicer forecasts that SRC Collections during the current Calculation Period will be insufficient to make all scheduled payments of principal, interest, and other amounts in respect of the System Restoration Bonds on a timely basis during such Calculation Period; (b) to replenish any funds drawn from the Capital Subaccount; and/or (c) generally to correct any forecasted under-collection of System Restoration Charges in order to assure timely payment of the System Restoration Bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In the event an interim System Restoration Charge Adjustment is necessary, the interim System Restoration Charge Adjustment will be implemented fifteen (15) days from the filing date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) On each Adjustment Date and Interim Adjustment Date, the Servicer shall

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) take all reasonable actions and make all reasonable efforts in order to effectuate all adjustments approved by the Texas Commission to the System Restoration Charges and/or PBRAFs, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) promptly send to the Trustee copies of all material notices and documents relating to such adjustments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *Reports*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) For each Calculation Date, the Servicer shall provide to the Issuer, the Trustee and the Rating Agencies a statement indicating:

&nbsp;&nbsp;&nbsp;&nbsp;(A) the Bond Balance and the Projected Bond Balance as of the immediately preceding Payment Date,

&nbsp;&nbsp;&nbsp;&nbsp;(B) the amount on deposit in the Capital Subaccount and the Required Capital Amount as of the immediately preceding Payment Date;

&nbsp;&nbsp;&nbsp;&nbsp;(C) the amount on deposit in the Excess Funds Subaccount as of the immediately preceding Payment Date;

&nbsp;&nbsp;&nbsp;&nbsp;(D) the Projected Bond Balance and the Servicer's projection of the Bond Balance on the Payment Date immediately preceding the next succeeding Adjustment Date;

&nbsp;&nbsp;&nbsp;&nbsp;(E) the required Capital Subaccount balance and the Servicer's projection of the amount on deposit in the Capital Subaccount for the Payment Date immediately preceding the next succeeding Adjustment Date; and

&nbsp;&nbsp;&nbsp;&nbsp;(F) the Servicer's projection of the amount on deposit in the Excess Funds Subaccount for the Payment Date immediately preceding the next succeeding Adjustment Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) *Servicer Certificates*.

&nbsp;&nbsp;&nbsp;&nbsp;(A) Not later than five (5) Servicer Business Days prior to each Payment Date or Special Payment Date, the Servicer shall deliver a written report substantially in the form of <u>Exhibit B</u> (the "<u>Semi-Annual Servicer's Certificate</u>") to the Issuer, the Trustee and the Rating Agencies, which shall include the information in <u>Exhibit B</u> as to the System Restoration Bonds with respect to such Payment Date or Special Payment Date or the period since the previous Payment Date, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;(B) In the event the Servicer, on behalf of the Issuer, shall request that the Trustee make a distribution from the Collection Account for the purposes set forth in Section 8.2(e)(i), (e)(ii) or (e)(iii) of the Indenture on a date that is not a Payment Date or Special Payment Date, the Servicer shall deliver a written report to the Issuer and the Trustee substantially in the form of the Semi-Annual Servicer Certificate (the "Servicer Certificate"), provided that only the information pertinent to the requested distribution shall require to be included in such written report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) *Reports to Customers*.

&nbsp;&nbsp;&nbsp;&nbsp;(A) After each revised System Restoration Charge has gone into effect pursuant to a System Restoration Charge Adjustment, the Servicer shall, to the extent and in the manner and time frame required by applicable PUCT Regulations, if any, cause to be prepared and delivered to Customers any required notices announcing such revised System Restoration Charges.

&nbsp;&nbsp;&nbsp;&nbsp;(B) The Servicer shall comply with the requirements of the Financing Order and the Tariff with respect to the identification of System Restoration Charges on Bills. In addition, at least once each year, the Servicer shall (to the extent that it does not separately identify the System Restoration Charges as being owned by the Issuer in the Bills regularly sent to Customers or REPs) cause to be prepared and delivered to such Customers and REPs a notice stating, in effect, that the System Restoration Property and the System Restoration Charges are owned by the Issuer and not the Seller. Unless prohibited by applicable PUCT Regulations, the Servicer shall use reasonable efforts to cause each REP, at least once each year, to include similar notices in the bills sent by such REP to Customers indicating additionally that the System Restoration Charges are not owned by such REP (to the extent that such REP does not include such information in the Bills regularly sent to Customers). Such notice shall be included either as an insert to or in the text of the Bills delivered to such Customers or shall be delivered to Customers by electronic means or such other means as the Servicer or the REPs may from time to time use to communicate with its respective Customers.

&nbsp;&nbsp;&nbsp;&nbsp;(C) Except to the extent that applicable PUCT Regulations make the REPs responsible for such costs, or the REPs have otherwise agreed to pay such costs, the Servicer shall pay from its own funds all costs of preparation and delivery incurred in connection with <u>Section 4.01(f)(iii)(A)</u> and <u>Section 4.01(f)(iii)(B)</u>, including printing and postage costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) *REP Reports*. The Servicer shall provide to the Rating Agencies, upon request, any publicly available reports filed by the Servicer with the Texas Commission (or otherwise made publicly available by the Servicer) relating to REPs and any other non-confidential and non-proprietary information relating to REPs reasonably requested by the Rating Agencies to the extent such information is reasonably available to the Servicer.

Section 4.02 LIMITATION OF LIABILITY

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Issuer and the Servicer expressly agree and acknowledge that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) In connection with any System Restoration Charge Adjustment, the Servicer is acting solely in its capacity as the servicing agent of the Issuer hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) None of the Servicer, the Issuer or the Trustee is responsible in any manner for, and shall have no liability whatsoever as a result of, any action, decision, ruling or other determination made or not made, or any delay (other than any delay resulting from the Servicer's failure to make any filings required by <u>Section 4.01</u> in a timely and correct manner or any breach by the Servicer of its duties under this Agreement that adversely affects the System Restoration Property or the System Restoration Charge Adjustments), by the Texas Commission in any way related to the System Restoration Property or in connection with any System Restoration Charge Adjustment, the subject of any filings under <u>Section 4.01</u>, any proposed System Restoration Charge Adjustment or the approval of any revised System Restoration Charges and the scheduled adjustments thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Except to the extent that the Servicer is liable under <u>Section 6.02</u>, the Servicer shall have no liability whatsoever relating to the calculation of any revised System Restoration Charges and the scheduled adjustments thereto, including as a result of any inaccuracy of any of the assumptions made in such calculation regarding expected energy usage volumes and the Weighted Average Days Outstanding, write-offs and estimated expenses and fees of the Issuer so long as the Servicer has acted in good faith and has not acted in a grossly negligent manner in connection therewith, nor shall the Servicer have any liability whatsoever as a result of any Person, including the Holders, not receiving any payment, amount or return anticipated or expected or in respect of any Bond generally, except only to the extent that the same is caused by the Servicer's gross negligence, willful misconduct or bad faith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding the foregoing, this <u>Section 4.02</u> shall not relieve the Servicer of liability for any misrepresentation by the Servicer under <u>Section 6.01</u> or for any breach by the Servicer of its other obligations under this Agreement.

**ARTICLE V**

**THE SYSTEM RESTORATION PROPERTY**

Section 5.01 CUSTODY OF SYSTEM RESTORATION PROPERTY RECORDS.

To assure uniform quality in servicing the System Restoration Property and to reduce administrative costs, the Issuer hereby revocably appoints the Servicer, and the Servicer hereby accepts such appointment, to act as the agent of the Issuer as custodian of any and all documents and records that the Servicer shall keep on file, in accordance with its customary procedures, relating to the System Restoration Property, including copies of the Financing Order, the Issuance Advice Letter and Tariffs relating thereto, Schedule SRC and all documents filed with the Texas Commission in connection with any System Restoration Charge Adjustment and computational records relating thereto (collectively, the "System Restoration Property Records"), which are hereby constructively delivered to the Trustee, as pledgee of the Issuer with respect to all System Restoration Property.

Section 5.02 DUTIES OF SERVICER AS CUSTODIAN.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Safekeeping*. The Servicer shall hold the System Restoration Property Records on behalf of the Issuer and maintain such accurate and complete accounts, records and computer systems pertaining to the System Restoration Property Records as shall enable the Issuer and the Trustee, as applicable, to comply with this Agreement, the Sale Agreement and the Indenture. In performing its duties as custodian, the Servicer shall act with reasonable care, using that degree of care and diligence that the Servicer exercises with respect to comparable assets that the Servicer services for itself or, if applicable, for others. The Servicer shall promptly report to the Issuer, the Trustee and the Rating Agencies any material failure on its part to hold the System Restoration Property Records and maintain its accounts, records and computer systems as herein provided and promptly take appropriate action to remedy any such failure. Nothing herein shall be deemed to require an initial review or any periodic review by the Issuer or the Trustee of the System Restoration Property Records. The Servicer's duties to hold the System Restoration Property Records set forth in this <u>Section 5.02</u>, to the extent the System Restoration Property Records have not been previously transferred to a successor Servicer pursuant to <u>Article VII</u>, shall terminate one (1) year and one (1) day after the earlier of the date on which (i) the Servicer is succeeded by a successor Servicer in accordance with <u>Article VII</u> and (ii) the first date on which no Bonds are Outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Maintenance and Access to Records*. The Servicer shall maintain the System Restoration Property Records at 1111 Louisiana Street, Houston, Texas 77002, or at such other office as shall be specified to the Issuer and to the Trustee by written notice at least thirty (30) days prior to any change in location. The Servicer shall make available for inspection, audit and copying to the Issuer, the Texas Commission and the Trustee or their respective duly authorized representatives, attorneys or auditors the System Restoration Property Records at such times during normal business hours as the Issuer, the Texas Commission or the Trustee shall reasonably request and that do not unreasonably interfere with the Servicer's normal operations. Nothing in this <u>Section 5.02(b)</u> shall affect the obligation of the Servicer to observe any applicable law (including any PUCT Regulation) prohibiting disclosure of information regarding the REPs or Customers, and the failure of the Servicer to provide access to such information as a result of such obligation shall not constitute a breach of this <u>Section 5.02(b)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Release of Documents*. Upon instruction from the Trustee in accordance with the Indenture, the Servicer shall release any System Restoration Property Records to the Trustee, the Trustee's agent or the Trustee's designee, as the case may be, at such place or places as the Trustee may designate, as soon as practicable. Nothing in this <u>Section 5.02(c)</u> shall affect the obligation of the Servicer to observe any applicable law (including any PUCT Regulation) prohibiting disclosure of information regarding REPs or Customers, and the failure of the Servicer to provide access to such information as a result of such obligation shall not constitute a breach of this <u>Section 5.02(c)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *Litigation to Defend System Restoration Property*. To the extent not undertaken by the Seller pursuant to Section 4.07 of the Sale Agreement, the Servicer shall negotiate for the retention of legal counsel and such other experts as may be needed to institute and maintain any action or proceeding, on behalf of and in the name of the Issuer, reasonably necessary to compel performance by the Texas Commission or the State of Texas of any of their obligations or duties under the Securitization Act and the Financing Order or any future intercreditor agreement to which the Issuer is a party with respect to the System Restoration Property, and the Servicer agrees to assist the Issuer and its legal counsel in taking such legal or administrative actions, including defending against or instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, as may be reasonably necessary to attempt to block or overturn any attempts to cause a repeal of, modification of or supplement to the Securitization Act or the Financing Order, or the rights of Holders by legislative enactment, constitutional amendment or other means that would be materially adverse to the Holders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *Additional Litigation to Defend System Restoration Property*. In addition to <u>Section 5.02(d)</u>, the Servicer shall, at its own expense, institute any action or proceeding necessary to compel performance by the Texas Commission or the State of Texas of any of their respective obligations or duties under the Securitization Act or the Financing Order with respect to the System Restoration Property, and to compel performance by REPs with any of their respective obligations or duties under the Tariff or any agreement with the Servicer entered into pursuant to the Tariff. In any proceedings related to the exercise of the power of eminent domain by any municipality to acquire a portion of CEHE's electric distribution facilities, the Servicer shall assert that the court ordering such condemnation must treat such municipality as a successor to CEHE under the Securitization Act and the Financing Order. The costs of any action pursuant to this <u>Section 5.02</u> shall be payable from the Collection Account as an Operating Expense (and shall not be deemed to constitute a portion of the Servicing Fee) in accordance with the priorities set forth in Section 8.02(e) of the Indenture. The Servicer's obligations pursuant to this <u>Section 5.02</u> shall survive and continue notwithstanding the fact that the payment of Operating Expenses pursuant to Section 8.02 of the Indenture and any supplemental indenture may be delayed; <u>provided</u>, that, the Servicer is obligated to institute and maintain such action or proceedings only if it is being reimbursed on a current basis for its costs and expenses in taking such actions in accordance with Section 8.02 of the Indenture, and is not required to advance its own funds to satisfy these obligations.

Section 5.03 CUSTODIAN'S INDEMNIFICATION.

**THE SERVICER AS CUSTODIAN SHALL INDEMNIFY THE ISSUER, THE MANAGERS AND THE TRUSTEE (FOR ITSELF AND FOR THE BENEFIT OF THE HOLDERS) AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FOR, AND DEFEND AND HOLD HARMLESS EACH SUCH PERSON FROM AND AGAINST, ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PAYMENTS AND CLAIMS, AND REASONABLE COSTS OR EXPENSES, OF ANY KIND WHATSOEVER, INCLUDING REASONABLE OUT-OF-POCKET FEES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES AND EXPENSES) OF INVESTIGATION AND LITIGATION AND ENFORCING THE SERVICER'S INDEMNIFICATION OBLIGATIONS HEREUNDER (COLLECTIVELY, "INDEMNIFIED LOSSES") THAT MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST EACH SUCH PERSON AS THE RESULT OF ANY GROSSLY NEGLIGENT ACT OR OMISSION IN ANY WAY RELATING TO THE MAINTENANCE AND CUSTODY BY THE SERVICER, AS CUSTODIAN, OF THE SYSTEM RESTORATION PROPERTY RECORDS; <u>PROVIDED</u>*,* <u>HOWEVER</u>, THAT THE SERVICER SHALL NOT BE LIABLE FOR ANY PORTION OF ANY SUCH AMOUNT RESULTING FROM THE WILLFUL MISCONDUCT, BAD FAITH OR NEGLIGENCE OF THE ISSUER, THE MANAGERS OR THE TRUSTEE, AS THE CASE MAY BE.**

**INDEMNIFICATION UNDER THIS <u>SECTION 5.03</u> SHALL SURVIVE RESIGNATION OR REMOVAL OF THE TRUSTEE OR ANY INDEPENDENT MANAGER AND THE TERMINATION OF THIS AGREEMENT.**

Section 5.04 EFFECTIVE PERIOD AND TERMINATION.

The Servicer's appointment as custodian shall become effective as of the date of this Agreement and shall continue in full force and effect until terminated pursuant to this <u>Section 5.04</u>. If the Servicer shall resign as Servicer in accordance with the provisions of this Agreement or if all of the rights and obligations of the Servicer shall have been terminated under <u>Section 7.01</u>, the appointment of the Servicer as custodian shall be terminated effective as of the date on which the termination or resignation of the Servicer is effective. Additionally, if not sooner terminated as provided above, the Servicer's obligations as custodian shall terminate one (1) year and one (1) day after the date on which no Bonds are Outstanding.

**ARTICLE VI**

**THE SERVICER**

Section 6.01 REPRESENTATIONS AND WARRANTIES OF THE SERVICER.

The Servicer makes the following representations and warranties as of the date of this Agreement, and as of such other dates as expressly provided in this <u>Section 6.01</u>, on which the Issuer has relied in acquiring the System Restoration Property. The representations and warranties shall survive the execution and delivery of this Agreement, the sale of the System Restoration Property to the Issuer and the pledge thereof to the Trustee pursuant to the Indenture.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Organization and Existence*. The Servicer is a limited liability company duly organized and validly existing under the laws of the State of Texas, with the requisite power and authority to own its properties, to conduct its business as such business is presently conducted and to execute, deliver and carry out the terms of this Agreement and has the requisite power, authority and legal right to service the System Restoration Property and to hold the System Restoration Property Records as custodian.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Due Qualification*. The Servicer is duly qualified to do business and is in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which it is required to do so (except where the failure to so qualify would not be reasonably likely to have a material adverse effect on the Servicer's business, operations, assets, revenues or properties or adversely affect the servicing of the System Restoration Property).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Power and Authority*. The execution, delivery and performance of the terms of this Agreement have been duly authorized by all necessary action on the part of the Servicer under its organizational or governing documents and laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *Binding Obligation*. This Agreement constitutes a legal, valid and binding obligation of the Servicer enforceable against the Servicer in accordance with its terms, subject to applicable bankruptcy, receivership, insolvency, reorganization, moratorium, fraudulent transfer or conveyance and other laws relating to or affecting creditors' rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a Proceeding in equity or at law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *No Violation*. The consummation of the transactions contemplated by this Agreement (to the extent applicable to the Servicer's responsibilities thereunder) and the fulfillment of the terms will not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a material default under, the Servicer's organizational documents or any material indenture or any material agreement to which the Servicer is a party or by which it or any of its property is bound or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such agreement (other than any Lien that may be granted in favor of the Trustee for the benefit of the Holders under the Basic Documents or any Lien created pursuant to Section 39.309 of the Public Utility Regulatory Act), or violate any existing law or any existing order, rule or regulation applicable to the Servicer of any Governmental Authority having jurisdiction over the Servicer or its properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *Approvals*. No governmental approvals, authorizations, consents, orders or other actions or filings with any Governmental Authority are required for the Servicer to execute, deliver and perform its obligations under this Agreement except those that have previously been obtained or made, those that are required to be made by the Servicer in the future pursuant to <u>Article IV</u> and those that the Servicer may need to file in the future to continue the effectiveness of any financing statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) *No Proceedings*. There are no Proceedings pending or, to the Servicer's knowledge, threatened before any Governmental Authority having jurisdiction over the Servicer or its properties involving or relating to the Servicer or the Issuer or, to the Servicer's knowledge, any other Person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) asserting the invalidity of this Agreement or any of the other Basic Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) seeking any determination or ruling that might materially and adversely affect the performance by the Servicer of its obligations under, or the validity or enforceability against the Servicer of, this Agreement, any of the other Basic Documents or the Bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) relating to the Servicer and which might materially and adversely affect the federal income tax or State income, gross receipts or franchise tax attributes of the Bonds; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) seeking to prevent the issuance of the Bonds or the consummation of any of the transactions contemplated by this Agreement or any of the other Basic Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) *Reports and Certificates*. Each report and certificate delivered in connection with any filing made with the Texas Commission by the Servicer on behalf of the Issuer with respect to the System Restoration Charges or System Restoration Charge Adjustments will constitute a representation and warranty by the Servicer that each such report or certificate, as the case may be, is true and correct in all material respects, and to the extent that such report or certificate is based upon or contains assumptions, forecasts or other predictions of future events, the representation and warranty of the Servicer with respect thereto will be limited to the representation and warranty that such assumptions, forecasts or other predictions of future events are reasonable based upon historical performance (and facts known to the Servicer on the date such report or certificate is delivered).

The Servicer, the Trustee and the Issuer are not responsible as a result of any action, decision, ruling or other determination made or not made, or any delay (other than any delay resulting from the Servicer's failure to make any filings with the Texas Commission required by this Agreement in a timely and correct manner or any breach by the Servicer of its duties under this Agreement that adversely affects the System Restoration Property or the System Restoration Charge Adjustments), by the Texas Commission in any way related to the System Restoration Property or in connection with any System Restoration Charge Adjustment, the subject of any such filings, any proposed System Restoration Charge Adjustment or the approval of any revised System Restoration Charges and the scheduled adjustments thereto. Except to the extent that the Servicer otherwise is liable under the provisions of this Agreement, the Servicer shall have no liability whatsoever relating to the calculation of any revised System Restoration Charges and the scheduled adjustments thereto, including as a result of any inaccuracy of any of the assumptions made in such calculations, so long as the Servicer has acted in good faith and has not acted in a grossly negligent manner in connection therewith, nor shall the Servicer have any liability whatsoever as a result of any person or entity, including the Holders, not receiving any payment, amount or return anticipated or expected or in respect of any Bond generally.

Section 6.02 INDEMNITIES OF THE SERVICER; RELEASE OF CLAIMS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **THE SERVICER SHALL BE LIABLE IN ACCORDANCE HEREWITH ONLY TO THE EXTENT OF THE OBLIGATIONS SPECIFICALLY UNDERTAKEN BY THE SERVICER UNDER THIS AGREEMENT.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **THE SERVICER SHALL INDEMNIFY THE ISSUER, THE TRUSTEE (FOR ITSELF AND ON BEHALF OF THE HOLDERS) AND ANY INDEPENDENT MANAGER AND EACH OF THEIR RESPECTIVE TRUSTEES, MEMBERS, MANAGERS, OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, FOR, AND DEFEND AND HOLD HARMLESS EACH SUCH PERSON FROM AND AGAINST, ANY AND ALL INDEMNIFIED LOSSES IMPOSED ON, INCURRED BY OR ASSERTED AGAINST ANY SUCH PERSON AS A RESULT OF:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) **THE SERVICER'S WILLFUL MISCONDUCT, BAD FAITH OR GROSS NEGLIGENCE IN THE PERFORMANCE OF ITS DUTIES OR OBSERVANCE OF ITS COVENANTS UNDER THIS AGREEMENT OR THE SERVICER'S RECKLESS DISREGARD OF ITS OBLIGATIONS AND DUTIES UNDER THIS AGREEMENT;**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) **THE SERVICER'S MATERIAL BREACH OF ANY OF ITS REPRESENTATIONS OR WARRANTIES IN THIS AGREEMENT THAT RESULTS IN A SERVICER DEFAULT; OR**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) **LITIGATION AND RELATED EXPENSES RELATING TO THE SERVICER'S STATUS AND OBLIGATIONS AS SERVICER (OTHER THAN ANY PROCEEDING THE SERVICER IS REQUIRED TO INSTITUTE UNDER THIS AGREEMENT);**

**<u>PROVIDED</u>*,* <u>HOWEVER</u>, THAT THE SERVICER SHALL NOT BE LIABLE FOR ANY INDEMNIFIED LOSSES RESULTING FROM THE BAD FAITH, WILLFUL MISCONDUCT OR NEGLIGENCE OF ANY PERSON INDEMNIFIED PURSUANT TO THIS <u>SECTION 6.02</u> (EACH, AN "INDEMNIFIED PERSON") OR RESULTING FROM A BREACH OF A REPRESENTATION OR WARRANTY MADE BY SUCH INDEMNIFIED PERSON TO THE SERVICER IN ANY BASIC DOCUMENT THAT GIVES RISE TO THE SERVICER'S BREACH.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **PROMPTLY AFTER RECEIPT BY AN INDEMNIFIED PERSON OF WRITTEN NOTICE OF ITS INVOLVEMENT IN ANY ACTION, PROCEEDING OR INVESTIGATION, SUCH INDEMNIFIED PERSON SHALL, IF A CLAIM FOR INDEMNIFICATION IN RESPECT THEREOF IS TO BE MADE AGAINST THE SERVICER UNDER THIS <u>SECTION 6.02</u>, NOTIFY THE SERVICER IN WRITING OF SUCH INVOLVEMENT. FAILURE BY AN INDEMNIFIED PERSON TO SO NOTIFY THE SERVICER SHALL RELIEVE THE SERVICER FROM THE OBLIGATION TO INDEMNIFY AND HOLD HARMLESS SUCH INDEMNIFIED PERSON UNDER THIS <u>SECTION 6.02</u> ONLY TO THE EXTENT THAT THE SERVICER SUFFERS ACTUAL PREJUDICE AS DETERMINED BY A COURT OF COMPETENT JURISDICTION AS A RESULT OF SUCH FAILURE. WITH RESPECT TO ANY ACTION, PROCEEDING OR INVESTIGATION BROUGHT BY A THIRD PARTY FOR WHICH INDEMNIFICATION MAY BE SOUGHT BY AN INDEMNIFIED PERSON UNDER THIS <u>SECTION 6.02</u>, THE SERVICER SHALL BE ENTITLED TO ASSUME THE DEFENSE OF ANY SUCH ACTION, PROCEEDING OR INVESTIGATION UNLESS (X) SUCH ACTION, PROCEEDING OR INVESTIGATION EXPOSES THE INDEMNIFIED PERSON TO A RISK OF CRIMINAL LIABILITY OR FORFEITURE, (Y) THE SERVICER AND SUCH INDEMNIFIED PERSON HAVE A CONFLICT OF INTEREST IN THEIR RESPECTIVE DEFENSES OF SUCH ACTION, PROCEEDING OR INVESTIGATION OR (Z) THERE EXISTS AT THE TIME THE SERVICER WOULD ASSUME SUCH DEFENSE AN ONGOING SERVICER DEFAULT. UPON ASSUMPTION BY THE SERVICER OF THE DEFENSE OF ANY SUCH ACTION, PROCEEDING OR INVESTIGATION, THE INDEMNIFIED PERSON SHALL HAVE THE RIGHT TO PARTICIPATE IN SUCH ACTION OR PROCEEDING AND TO RETAIN ITS OWN COUNSEL (INCLUDING LOCAL COUNSEL), AND THE SERVICER SHALL BEAR THE REASONABLE FEES, COSTS AND EXPENSES OF SUCH SEPARATE COUNSEL. THE INDEMNIFIED PERSON SHALL NOT SETTLE OR COMPROMISE OR CONSENT TO THE ENTRY OF ANY JUDGMENT WITH RESPECT TO ANY PENDING OR THREATENED CLAIM, ACTION, SUIT OR PROCEEDING IN RESPECT OF WHICH INDEMNIFICATION MAY BE SOUGHT UNDER THIS <u>SECTION 6.02</u> (WHETHER OR NOT THE SERVICER IS AN ACTUAL OR POTENTIAL PARTY TO SUCH CLAIM OR ACTION) UNLESS THE SERVICER AGREES IN WRITING TO SUCH SETTLEMENT, COMPROMISE OR CONSENT AND SUCH SETTLEMENT, COMPROMISE OR CONSENT INCLUDES AN UNCONDITIONAL RELEASE OF THE SERVICER FROM ALL LIABILITY ARISING OUT OF SUCH CLAIM, ACTION, SUIT OR PROCEEDING.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **THE SERVICER SHALL INDEMNIFY THE TRUSTEE AND ITS RESPECTIVE TRUSTEES, OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FOR, AND DEFEND AND HOLD HARMLESS EACH SUCH PERSON FROM AND AGAINST, ANY AND ALL INDEMNIFIED LOSSES THAT MAY BE IMPOSED UPON, INCURRED BY OR ASSERTED AGAINST ANY SUCH PERSON AS A RESULT OF THE ACCEPTANCE OR PERFORMANCE OF THE TRUSTS AND DUTIES CONTAINED HEREIN AND IN THE INDENTURE, EXCEPT TO THE EXTENT THAT ANY SUCH LOSS (I) SHALL BE DUE TO THE WILLFUL MISCONDUCT, BAD FAITH OR NEGLIGENCE OF THE TRUSTEE OR (II) SHALL ARISE FROM THE TRUSTEE'S BREACH OF ANY OF ITS REPRESENTATIONS OR WARRANTIES SET FORTH IN THE INDENTURE; <u>PROVIDED</u>*,* <u>HOWEVER</u>, THAT THE FOREGOING INDEMNITY IS EXTENDED TO THE TRUSTEE SOLELY IN ITS INDIVIDUAL CAPACITY AND NOT FOR THE BENEFIT OF THE HOLDERS OR ANY OTHER PERSON. SUCH AMOUNTS WITH RESPECT TO THE TRUSTEE SHALL BE DEPOSITED AND DISTRIBUTED IN ACCORDANCE WITH THE INDENTURE.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **THE SERVICER'S INDEMNIFICATION OBLIGATIONS UNDER <u>SECTION 6.02(b)</u> AND <u>SECTION 6.02(d)</u> FOR EVENTS OCCURRING PRIOR TO THE REMOVAL OR RESIGNATION OF THE TRUSTEE OR ANY INDEPENDENT MANAGER OR THE TERMINATION OF THIS AGREEMENT SHALL SURVIVE THE RESIGNATION OR REMOVAL OF THE TRUSTEE, ANY INDEPENDENT MANAGER OR THE TERMINATION OF THIS AGREEMENT. INDEMNIFICATION UNDER THIS <u>SECTION 6.02</u> SHALL SURVIVE ANY REPEAL OF, MODIFICATION OF, OR SUPPLEMENT TO, OR JUDICIAL INVALIDATION OF, THE SECURITIZATION ACT OR THE FINANCING ORDER.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) **EXCEPT TO THE EXTENT EXPRESSLY PROVIDED FOR IN THIS AGREEMENT OR THE OTHER BASIC DOCUMENTS (INCLUDING THE SERVICER'S CLAIMS WITH RESPECT TO THE SERVICING FEES AND EXPENSE REIMBURSEMENT AND THE SELLER'S CLAIM FOR PAYMENT OF THE PURCHASE PRICE OF THE SYSTEM RESTORATION PROPERTY), THE SERVICER HEREBY RELEASES AND DISCHARGES THE ISSUER (INCLUDING ITS MEMBERS, MANAGERS, EMPLOYEES AND AGENTS, IF ANY), ANY INDEPENDENT MANAGER, AND THE TRUSTEE (INCLUDING ITS RESPECTIVE OFFICERS, DIRECTORS AND AGENTS) (COLLECTIVELY, THE "RELEASED PARTIES") FROM ANY AND ALL CLAIMS WHATSOEVER, WHICH THE SERVICER, IN ITS CAPACITY AS SERVICER OR OTHERWISE, SHALL OR MAY HAVE AGAINST ANY SUCH PERSON RELATING TO THE SYSTEM RESTORATION PROPERTY OR THE SERVICER'S ACTIVITIES WITH RESPECT THERETO OTHER THAN ANY ACTIONS, CLAIMS AND DEMANDS ARISING OUT OF THE WILLFUL MISCONDUCT, BAD FAITH OR NEGLIGENCE OF THE RELEASED PARTIES.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) **THE SERVICER AND THE ISSUER HEREBY ACKNOWLEDGE THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE TRUSTEE IS A THIRD-PARTY BENEFICIARY OF THIS <u>SECTION 6.02</u> AND IS ENTITLED TO THE BENEFITS OF THE INDEMNITY FROM THE SERVICER CONTAINED HEREIN AND TO BRING ANY ACTION TO ENFORCE SUCH INDEMNIFICATION DIRECTLY AGAINST THE SERVICER.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) **THE SERVICER SHALL INDEMNIFY THE TEXAS COMMISSION (FOR THE BENEFIT OF CUSTOMERS), THE ISSUER, THE TRUSTEE (FOR ITSELF AND ON BEHALF OF THE HOLDERS), AND EACH OF THEIR RESPECTIVE TRUSTEES, MEMBERS, MANAGERS, OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FOR, AND DEFEND AND HOLD HARMLESS EACH SUCH PERSON FROM AND AGAINST, ANY AND ALL INDEMNIFIED LOSSES THAT MAY BE IMPOSED UPON, INCURRED BY OR ASSERTED AGAINST ANY SUCH PERSON AS A RESULT OF ANY INCREASE IN THE SERVICING FEE THAT BECOMES PAYABLE PURSUANT TO <u>SECTION 6.07(b)</u> OF THIS AGREEMENT AS A RESULT OF A DEFAULT RESULTING FROM THE SERVICER'S WILLFUL MISCONDUCT, BAD FAITH OR NEGLIGENCE IN PERFORMANCE OF ITS DUTIES OR OBSERVANCE OF ITS COVENANTS UNDER THIS AGREEMENT OR TERMINATION FOR CAUSE OF CEHE OR AN AFFILIATE SERVICER. THE INDEMNIFICATION OBLIGATION SET FORTH IN THIS <u>SECTION 6.02(h)</u> MAY BE ENFORCED BY THE TEXAS COMMISSION BUT IS NOT ENFORCEABLE BY ANY REP, THIRD-PARTY COLLECTOR OR CUSTOMER. ANY INDEMNITY PAYMENTS UNDER THIS <u>SECTION 6.02(h)</u> FOR THE BENEFIT OF CUSTOMERS SHALL BE REMITTED TO THE TRUSTEE PROMPTLY FOR DEPOSIT INTO THE COLLECTION ACCOUNT.**

Section 6.03 MERGER, CONVERSION OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF, THE SERVICER.

Any Person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) into which the Servicer may be merged, converted or consolidated and which succeeds to all or substantially all of the electric distribution business of the Servicer (or, if the Servicer's distribution business is split, which provides distribution service directly to a majority of the retail electric customers in the Seller's certificated service area as it existed on the date of the issuance of the Financing Order),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) which results from the division of the Servicer into two or more Persons and which succeeds to all or substantially all of the electric distribution business of the Servicer (or, if the Servicer's distribution business is split, which provides distribution service directly to a majority of the retail electric customers in the Seller's certificated service area as it existed on the date of the issuance of the Financing Order),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) which may result from any merger, conversion or consolidation to which the Servicer shall be a party and which succeeds to all or substantially all of the electric distribution business of the Servicer (or, if the Servicer's distribution business is split, which provides distribution service directly to a majority of the retail electric customers in the Seller's certificated service area as it existed on the date of the issuance of the Financing Order),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) which may purchase or otherwise succeed to the properties and assets of the Servicer substantially as a whole and which purchases or otherwise succeeds to all or substantially all of the electric distribution business of the Servicer (or, if the Servicer's distribution business is split, which provides distribution service directly to a majority of the retail electric customers in the Seller's certificated service area as it existed on the date of the issuance of the Financing Order), or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) which may otherwise purchase or succeed to all or substantially all of the electric distribution business of the Servicer (or, if the Servicer's distribution business is split, which provides distribution service directly to a majority of the retail electric customers in the Seller's certificated service area as it existed on the date of the issuance of the Financing Order),

which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Servicer under this Agreement and undertake to collect, account and remit amounts in respect of the System Restoration Charges from REPs and Customers for the benefit and account of the Issuer (or its financing party), shall be the successor to the Servicer under this Agreement without the execution or filing of any document or any further act by any of the parties to this Agreement; <u>provided</u>, <u>however</u>, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) immediately after giving effect to such transaction, the representations and warranties made pursuant to <u>Section 6.01</u> shall be true and correct and no Servicer Default, and no event that, after notice or lapse of time, or both, would become a Servicer Default, shall have occurred and be continuing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Servicer shall have delivered to the Issuer and the Trustee an Officer's Certificate and an Opinion of Counsel each stating that such consolidation, merger, conversion, division or succession and such agreement of assumption comply with this <u>Section 6.03</u> and that all conditions precedent, if any, provided for in this Agreement relating to such transaction have been complied with;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Servicer shall have delivered to the Issuer, the Trustee and the Rating Agencies an Opinion of Counsel either:

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| a | stating that, in the opinion of such counsel, all filings to be made by the Servicer, including filings with the Texas Commission pursuant to the Securitization Act and the UCC, that are necessary fully to preserve and protect the interests of each of the Issuer and the Trustee in the System Restoration Property have been executed and filed and are in full force and effect, and reciting the details of such filings or |

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b stating that, in the opinion of such counsel, no such action is necessary to preserve and protect such interests;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the Rating Agencies shall have received prior written notice of such transaction; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the Servicer shall have delivered to the Issuer, the Trustee and the Rating Agencies an opinion of independent tax counsel (as selected by, and in form and substance satisfactory to, the Servicer, and which may be based on a ruling from the Internal Revenue Service) to the effect that, for federal income tax purposes, such transaction will not result in a material adverse federal income tax consequence to the Issuer or the Holders.

The Servicer shall not consummate any transaction referred to in <u>clauses (a), (b), (c), (d) or (e)</u> above except upon execution of the above-described agreement of assumption and compliance with <u>clauses (i), (ii), (iii), (iv) and (v)</u> above. When any Person (or more than one Person) acquires the properties and assets of the Servicer substantially as a whole or otherwise becomes the successor to the Servicer in accordance with the terms of this <u>Section 6.03</u>, then upon the satisfaction of all of the other conditions of this <u>Section 6.03</u>, the preceding Servicer shall automatically and without further notice be released from all of its obligations hereunder.

Section 6.04 ASSIGNMENT OF THE SERVICER'S OBLIGATIONS.

Upon written notice to the Trustee and the Rating Agencies, the Servicer may assign a portion of its obligations hereunder to an assignee (A) in accordance with any future intercreditor agreement to which the Issuer is a party with respect to the obligations to maintain and process any account into which initial collections may be deposited and process payments in respect of System Restoration Charges or (B) subject to the satisfaction of <u>Section 6.03</u>.

Section 6.05 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.

Except as otherwise provided in this Agreement, neither the Servicer nor any of the directors, officers, employees or agents of the Servicer shall be liable to the Issuer, the Managers, the Holders, the Trustee or any other Person, for any action taken or for refraining from the taking of any action pursuant to this Agreement or for good faith errors in judgment; <u>provided</u>, <u>however</u>, that this provision shall not protect the Servicer or any such Person against any liability that would otherwise be imposed by reason of willful misconduct, bad faith or gross negligence in the performance of its duties under this Agreement. The Servicer and any director, officer, employee or agent of the Servicer may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising under this Agreement.

Except as provided in this Agreement (including <u>Section 5.02</u>), the Servicer shall not be under any obligation to appear in, prosecute or defend any Proceeding that is not directly related to one of the Servicer's enumerated duties in this Agreement or related to its obligation to pay indemnification, and that in its reasonable opinion may cause it to incur any expense or liability; <u>provided</u>*,* <u>however</u>, that the Servicer may, in respect of any Proceeding, undertake any reasonable action that is not specifically identified in this Agreement as a duty of the Servicer but that the Servicer may deem necessary or desirable in respect of this Agreement and the rights and duties of the parties to this Agreement and the interests of the Holders under this Agreement. The Servicer's costs and expenses incurred in connection with any such Proceeding shall be payable from the Collection Account as an Operating Expense (and shall not be deemed to constitute a portion of the Servicing Fee) in accordance with <u>Section 8.02(e)</u> of the Indenture. The Servicer's obligations pursuant to this <u>Section 6.05</u> shall survive and continue notwithstanding the fact that the payment of Operating Expenses pursuant to the Indenture may be delayed (it being understood that the Servicer may be required initially to advance its own funds to satisfy its obligations hereunder).

Section 6.06 CEHE NOT TO RESIGN AS SERVICER.

Subject to <u>Section 6.03</u> and <u>Section 6.04</u>, CEHE shall not resign from the obligations and duties imposed on it as Servicer under this Agreement unless the Servicer delivers to the Issuer, the Trustee, the Texas Commission and each Rating Agency written notice of such resignation at the earliest practicable time and, concurrently therewith or promptly thereafter, an opinion of Independent legal counsel that the Servicer's performance of its duties under this Agreement shall no longer be permissible under applicable law. No such resignation shall become effective until a successor Servicer shall have assumed the servicing obligations and duties hereunder of the Servicer in accordance with <u>Section 7.04</u>.

Section 6.07 SERVICING COMPENSATION.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Issuer agrees to pay the Servicer on each Payment Date, solely to the extent amounts are available therefor in accordance with the Indenture, the Servicing Fee with respect to the Bonds. For so long as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) CEHE or one of its Affiliates is the Servicer,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a successor to CEHE or one of its Affiliates is the Servicer due to the operation of the provisions of <u>Section 6.03</u>, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any Person is the successor Servicer hereunder pursuant to the provisions of <u>Section 6.03</u> if the predecessor Servicer was CEHE or one of its Affiliates,

the amount of the Servicing Fee paid to the Servicer annually shall equal 0.075% of the Bond Balance on the date of this Agreement and shall be prorated based on the fraction of a calendar year during which the Servicer provides any of the services set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the event that a successor Servicer not an Affiliate of CEHE is appointed in accordance with <u>Section 7.04</u>, the amount of Servicing Fee paid to the Servicer annually shall be agreed upon by the successor Servicer and the Trustee acting at the written direction of the Holders evidencing at least a majority of the Outstanding Amount of the Bonds but shall in no event exceed 0.60% of the Bond Balance on the date of this Agreement without the consent of the Texas Commission and shall be prorated based on the fraction of a calendar year during which the successor Servicer provides any of the services set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In addition, the Servicer shall be entitled to be reimbursed by the Issuer for filing fees and fees and expenses for attorneys, accountants, printing or other professional services retained by the Issuer and paid for by the Servicer (or procured by the Servicer on behalf of the Issuer and paid for by the Servicer) to meet the Issuer's obligations under the Basic Documents ("Reimbursable Expenses"). Except for such Reimbursable Expenses, the Servicer shall be required to pay all other costs and expenses incurred by the Servicer in performing its activities hereunder (but, for the avoidance of doubt, excluding any such costs and expenses incurred by CEHE in its capacity as Administrator). It is expressly acknowledged that the payment of fees to the Rating Agencies shall be at the expense of the Issuer and that, if the Servicer advances such payments to the Rating Agencies, the Issuer shall reimburse the Servicer for any such advances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Servicing Fee set forth in <u>Section 6.07(a)</u> shall be paid to the Servicer by the Trustee, on each Payment Date in accordance with the priorities set forth in Section 8.02(e) of the Indenture, by wire transfer of immediately available funds from the Collection Account to an account designated by the Servicer. Any portion of the Servicing Fee not paid on any such date shall be added to the Servicing Fee payable on the subsequent Payment Date. The Servicing Fee, together with any portion of the Servicing Fee that remains unpaid from prior Payment Dates, will be paid solely to the extent funds are available. The Servicing Fee will be paid prior to the payment of or provision for any amounts in respect of interest on and principal of the Bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Servicer and the Issuer acknowledge and agree that the Servicer's actual collections of SRC Collections on some days might exceed the Servicer's deemed collections, and that the Servicer's actual collections of SRC Collections on other days might be less than the Servicer's deemed collections. The Servicer and the Issuer further acknowledge and agree that the amount of these variances is likely to be small and are not likely to be biased in favor of over-remittances or under-remittances. Consequently, so long as the Servicer faithfully makes all daily remittances as provided for herein, the Servicer and the Issuer agree that no actual or deemed investment earnings shall be payable in respect of such over-remittances or under-remittances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The foregoing fees set forth in this <u>Section 6.07</u> constitute a fair and reasonable price for the obligations to be performed by the Servicer. The Servicer shall have indemnification obligations for an increased Servicing Fee under certain circumstances, in accordance with <u>Section 6.02(h).</u>

Section 6.08 COMPLIANCE WITH APPLICABLE LAW.

The Servicer covenants and agrees, in servicing the System Restoration Property, to comply in all material respects with all laws applicable to, and binding upon, the Servicer and relating to the System Restoration Property the noncompliance with which would have a material adverse effect on the value of the System Restoration Property; <u>provided</u>, <u>however</u>, that the foregoing is not intended to, and shall not, impose any liability on the Servicer for noncompliance with any Requirement of Law that the Servicer is contesting in good faith in accordance with its customary standards and procedures.

Section 6.09 ACCESS TO CERTAIN RECORDS AND INFORMATION REGARDING SYSTEM RESTORATION PROPERTY.

The Servicer shall provide to the Trustee access to the System Restoration Property Records for the Bonds as is reasonably required for the Trustee to perform its duties and obligations under the Indenture and the other Basic Documents and shall provide access to such records to the Holders as required by applicable law. Access shall be afforded without charge, but only upon reasonable request and during normal business hours at the offices of the Servicer. Nothing in this <u>Section 6.09</u> shall affect the obligation of the Servicer to observe any applicable law (including any PUCT Regulation) prohibiting disclosure of information regarding REPs or Customers, and the failure of the Servicer to provide access to such information as a result of such obligation shall not constitute a breach of this <u>Section 6.09</u>.

Section 6.10 APPOINTMENTS.

The Servicer may at any time appoint any Person to perform all or any portion of its obligations as Servicer hereunder; <u>provided</u>*,* <u>however</u>, that, unless such Person is an Affiliate of CEHE, the Rating Agency Condition shall have been satisfied in connection therewith; <u>provided</u>*,* <u>further</u>*,* that the Servicer shall remain obligated and be liable to the Issuer under this Agreement for the servicing and administering of the System Restoration Property in accordance with the provisions hereof without diminution of such obligation and liability by virtue of the appointment of such Person and to the same extent and under the same terms and conditions as if the Servicer alone were servicing and administering the System Restoration Property. The fees and expenses of any such Person shall be as agreed between the Servicer and such Person from time to time, and none of the Issuer, the Trustee or the Holders shall have any responsibility therefor. Any such appointment shall not constitute a Servicer resignation under <u>Section 6.06</u>.

Section 6.11 NO SERVICER ADVANCES.

The Servicer shall not make any advances of interest on or principal of the Bonds.

Section 6.12 REMITTANCES.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On each Servicer Business Day, commencing thirty-five (35) days after the Closing Date (or if such day is not a Servicer Business Day, the immediately succeeding Servicer Business Day), the Servicer shall remit to the General Subaccount of the Collection Account the total Estimated SRC Collections on such Servicer Business Day in respect of all previously billed System Restoration Charges (the "Daily Remittance"), which Daily Remittance shall be calculated according to the procedures set forth in <u>Annex I</u> and shall be remitted as soon as reasonably practicable but in no event later than the second Servicer Business Day after such payments are estimated to have been received. Prior to each remittance to the General Subaccount of the Collection Account pursuant to this <u>Section 6.12</u>, the Servicer shall provide written notice (which may be via electronic means, including electronic mail) to the Trustee of each such remittance (including the exact dollar amount to be remitted). The Servicer shall also, promptly upon receipt, remit to the Collection Account any other proceeds of the System Restoration Property which it may receive from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Servicer agrees and acknowledges that it holds all SRC Payments collected by it and any other proceeds for the System Restoration Property received by it for the benefit of the Trustee and the Holders and that all such amounts will be remitted by the Servicer in accordance with this <u>Section 6.12</u> without any surcharge, fee, offset, charge or other deduction except (i) as set forth in <u>Section 6.12(c)</u> and (ii) for late fees permitted by the Financing Order. The Servicer further agrees not to make any claim to reduce its obligation to remit all SRC Payments collected by it in accordance with this Agreement except (i) as set forth in <u>Section 6.12(c)</u> and (ii) for late fees permitted by the Financing Order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) On or before the twenty-fifth calendar day of each calendar month (or, if such day is not a Servicer Business Day, the immediately preceding Servicer Business Day) commencing with ___________ 25, 2025, the Servicer shall calculate the amount of any Remittance Shortfall or Excess Remittance for the Collection Period of the immediately preceding Reconciliation Period, and (A) if a Remittance Shortfall exists, the Servicer shall make a supplemental remittance, to the General Subaccount of the Collection Account within two (2) Servicer Business Days, or (B) if an Excess Remittance exists, the Servicer shall be entitled either (i) to reduce the amount of each Daily Remittance which the Servicer subsequently remits to the General Subaccount of the Collection Account for application to the amount of such Excess Remittance until the balance of such Excess Remittance has been reduced to zero, the amount of such reduction becoming the property of the Servicer or (ii) so long as such withdrawal would not cause the amounts on deposit in the General Subaccount or the Excess Funds Subaccount to be insufficient for the payment of the next installment of interest on the System Restoration Bonds or principal due at maturity on the next Payment Date or upon acceleration on or before the next Payment Date, to be paid immediately from the General Subaccount or the Excess Funds Subaccount the amount of such Excess Remittance, such payment becoming the property of the Servicer. If there is a Remittance Shortfall, the amount which the Servicer remits to the General Subaccount of the Collection Account on the relevant date set forth above shall be increased by the amount of such Remittance Shortfall, such increase coming from the Servicer's own funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Unless otherwise directed to do so by the Issuer, the Servicer shall be responsible for selecting Eligible Investments in which the funds in the Collection Account shall be invested pursuant to Sections 8.03 and 8.07 of the Indenture.

Section 6.13 MAINTENANCE OF OPERATIONS.

Subject to <u>Section 6.03</u>, CEHE agrees to continue, unless prevented by circumstances beyond its control, to operate its electric distribution system to provide service so long as it is acting as the Servicer under this Agreement.

**ARTICLE VII**

**SERVICER DEFAULT**

Section 7.01 SERVICER DEFAULT.

If any one or more of the following events (a "Servicer Default") shall occur and be continuing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any failure by the Servicer to remit to the Collection Account, on behalf of the Issuer, any required remittance that shall continue unremedied for a period of five (5) Business Days after written notice of such failure is received by the Servicer from the Issuer or the Trustee or after discovery of such failure by a Responsible Officer of the Servicer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any failure on the part of the Servicer or, so long as the Servicer is CEHE or an Affiliate thereof, any failure on the part of CEHE, as the case may be, to observe or to perform in any material respect any covenants or agreements of the Servicer or CEHE, as the case may be, set forth in this Agreement (other than as provided in <u>Section 7.01(a)</u> or <u>Section 7.01(c)</u>) or any other Basic Document to which it is a party, which failure shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) materially and adversely affect the rights of the Holders, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) continue unremedied for a period of 60 days after the date on which (A) written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer or CEHE, as the case may be, by the Issuer, or to the Servicer or CEHE, as the case may be, by the Trustee or (B) such failure is discovered by a Responsible Officer of the Servicer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any failure by the Servicer to perform its obligations under <u>Section 4.01(b)</u> in the time and manner set forth therein, which failure continues unremedied for a period of five (5) Servicer Business Days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any representation or warranty made by the Servicer in this Agreement or any other Basic Document proves to have been incorrect in a material respect when made, which has a material adverse effect on the Holders, and which material adverse effect continues unremedied for a period of 60 days after the date on which (i) written notice thereof, requiring the same to be remedied, shall have been delivered to the Servicer (with a copy to the Trustee) by the Issuer or the Trustee, or (ii) such failure is discovered by a Responsible Officer of the Servicer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) an Insolvency Event occurs with respect to the Servicer;

then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Trustee shall, upon the written instruction of (i) Holders evidencing at least a majority of the Outstanding Amount of the Bonds or (ii) the Texas Commission, by notice then given in writing to the Servicer (and to the Trustee if given by the Holders) (a "Termination Notice"), terminate all the rights and obligations (other than the obligations set forth in <u>Section 6.02</u> and the obligation under <u>Section 7.02</u> to continue performing its functions as Servicer until a successor Servicer is appointed) of the Servicer under this Agreement; <u>provided</u>, <u>however</u>, that the Trustee's obligation to give a Termination Notice upon instruction of the Texas Commission is subject to and dependent upon satisfaction of the Rating Agency Condition in connection therewith.

In addition, upon a Servicer Default described in <u>Section 7.01(a)</u>, the Issuer and the Trustee shall be entitled to (x) apply to a state district court located in Travis County, Texas, for sequestration and payment to the Trustee of revenues arising with respect to the System Restoration Property, (y) foreclose on or otherwise enforce the Lien on and security interests in the System Restoration Property and (z) apply to the Texas Commission for an order that amounts arising from the System Restoration Charges be transferred to a separate account for the benefit of the Holders, in accordance with the Securitization Act. On or after the receipt by the Servicer of a Termination Notice, all authority and power of the Servicer under this Agreement, whether with respect to the Bonds, the System Restoration Property, SRC Collections, the System Restoration Charges or otherwise, shall, without further action, pass to and be vested in such successor Servicer as may be appointed under <u>Section 7.04</u>; and, without limitation, the Trustee is hereby authorized and empowered to execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such Termination Notice, whether to complete the transfer of the System Restoration Property Records and related documents, or otherwise. The predecessor Servicer shall cooperate with the successor Servicer, the Issuer and the Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Agreement, including the transfer to the successor Servicer for administration by it of all System Restoration Property Records and all cash amounts that shall at the time be held by the predecessor Servicer for remittance, or shall thereafter be received by it with respect to the System Restoration Property, SRC Collections or the System Restoration Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the System Restoration Property Records to the successor Servicer. In case a successor Servicer is appointed as a result of a Servicer Default, all reasonable costs and expenses (including reasonable attorneys' fees and expenses) incurred in connection with transferring the System Restoration Property Records to the successor Servicer and amending this Agreement to reflect such succession as Servicer pursuant to this <u>Section 7.01</u> shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Termination of CEHE as Servicer shall not terminate CEHE's rights or obligations under the Sale Agreement (except rights thereunder deriving from its rights as the Servicer hereunder).

Section 7.02 NOTICE OF SERVICER DEFAULT.

The Servicer shall deliver to the Issuer, to the Trustee and to each Rating Agency promptly after having obtained actual knowledge thereof, but in no event later than five (5) Servicer Business Days thereafter, written notice of any Servicer Default under <u>Section 7.01</u>.

Section 7.03 WAIVER OF PAST DEFAULTS.

The Trustee, with the written consent of the Holders evidencing at least a majority of the Outstanding Amount of the Bonds, may waive in writing in whole or in part any default by the Servicer in the performance of its obligations hereunder and its consequences, except a default in making any required deposits to the Collection Account in accordance with this Agreement. Upon any such waiver of a past default, such default shall cease to exist, and any Servicer Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereto. Promptly after the execution of any such waiver, the Servicer shall furnish copies of such waiver to each of the Rating Agencies.

Section 7.04 APPOINTMENT OF SUCCESSOR.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Upon the Servicer's receipt of a Termination Notice pursuant to <u>Section 7.01</u> or the Servicer's resignation in accordance with the terms of this Agreement, the Servicer shall continue to perform its functions as Servicer under this Agreement and shall be entitled to receive the requisite portion of the Servicing Fee, until a successor Servicer shall have assumed in writing the obligations of the Servicer hereunder as described below. In the event of the Servicer's removal or resignation hereunder, the Trustee may, and at the written direction and with the consent of the Holders of at least a majority of the Outstanding Amount of the Bonds shall, appoint a successor Servicer (selected by the directing Holders), and the successor Servicer shall accept its appointment by a written assumption in form acceptable to the Issuer and the Trustee. In no event shall the Trustee be liable for its appointment of a successor Servicer appointed with due care or responsible in its individual capacity for payment of the fee paid to a successor Servicer. If, within 30 days after the delivery of the Termination Notice, a new Servicer shall not have been appointed and accepted such appointment, the Trustee may petition the Texas Commission or a court of competent jurisdiction to appoint a successor Servicer under this Agreement. A Person shall qualify as a successor Servicer only if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) such Person is permitted under PUCT Regulations to perform the duties of the Servicer pursuant to the Securitization Act, the Financing Order and this Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) either (A) the Texas Commission has approved the appointment of the successor Servicer or (B) forty-five (45) days have lapsed since the Texas Commission received notice of appointment of the successor Servicer and the Texas Commission has neither approved nor disapproved that appointment,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Rating Agency Condition shall have been satisfied, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) such Person enters into a servicing agreement with the Issuer having substantially the same provisions as this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Upon appointment, the successor Servicer shall be the successor in all respects to the predecessor Servicer under this Agreement and shall be subject to all the responsibilities, duties and liabilities arising thereafter relating thereto placed on the predecessor Servicer and shall be entitled to the Servicing Fee and reimbursement of expenses and all the rights granted to the predecessor Servicer by the terms and provisions of this Agreement.

Section 7.05 COOPERATION WITH SUCCESSOR.

The Servicer covenants and agrees with the Issuer that it will, on an ongoing basis, cooperate with the successor Servicer and provide whatever information is, and take whatever actions are, reasonably necessary to assist the successor Servicer in performing its obligations hereunder.

**ARTICLE VIII**

**MISCELLANEOUS PROVISIONS**

Section 8.01 AMENDMENT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement may be amended by the Servicer and the Issuer, with the prior written consent of the Trustee (acting at the written direction of the Holders evidencing at least a majority of the Outstanding Amount of the Bonds), the consent of the Texas Commission pursuant to <u>Section 8.12</u> if the contemplated amendment increases ongoing qualified costs as defined in the Financing Order and the satisfaction of the Rating Agency Condition. Promptly after the execution of any such amendment or consent, the Issuer shall furnish written notification of the substance of such amendment or consent to each of the Rating Agencies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Prior to the execution of any amendment to this Agreement, the Issuer and the Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and all conditions precedent have been satisfied. The Issuer and the Trustee may, but shall not be obligated to, enter into any such amendment that affects their own rights, duties or immunities under this Agreement or otherwise. Following delivery of a request for consent to the Texas Commission by the Servicer under <u>Section 8.01(a)</u>, the Servicer and the Issuer may at any time withdraw from the Texas Commission further consideration of any such request for consent.

Notwithstanding <u>Section 8.01(a)</u> or anything to the contrary in this Agreement, (x) the Servicer and the Issuer may amend <u>Annex I</u> in writing with prior written notice given to the Trustee and the Rating Agencies, but without the consent of the Trustee, any Rating Agency or any Holder, solely to address changes to the Servicer's method of calculating SRC Collections as a result of changes to the Servicer's current computerized customer information system; <u>provided</u> that any such amendment shall not have a material adverse effect on the Holders, and (y) this Agreement shall be amended automatically to comply with changes in applicable law. The Servicer shall give prompt written notice to the Trustee of the terms of any such automatic amendment.

Section 8.02 NOTICES.

Unless otherwise specifically provided herein, all demands, notices and communications upon or to the Servicer, the Issuer, the Texas Commission, the Trustee or the Rating Agencies under this Agreement shall be sufficiently given for all purposes hereunder if in writing and delivered personally, sent by documented delivery service or, to the extent receipt is confirmed, sent by telecopy or other form of electronic transmission:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) in the case of the Servicer, to CenterPoint Energy Houston Electric, LLC, 1111 Louisiana Street, Houston, Texas 77002, Attention: Treasurer,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in the case of the Issuer, to CenterPoint Energy Restoration Bond Company II, LLC, 1111 Louisiana Street, Suite 4664B, Houston, Texas 77002, Attention: Manager,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in the case of Moody's, to Moody's Investors Service, Inc., ABS/RMBS Monitoring Department, 25th Floor, 7 World Trade Center, 250 Greenwich Street, New York, New York 10007, Email: <u>ABSCORMonitoring@moodys.com</u> (for notices) and <u>servicereports@moodys.com</u> (for servicer reports and other reports) (all notices and reports to be delivered to Moody's in writing by email),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) in the case of S&P, to Standard & Poor's Ratings Group, Inc., Structured Credit Surveillance, 55 Water Street, New York, New York 10041, Telephone: (212) 438-8991, Email: servicer_reports@spglobal.com (all such notices to be delivered to S&P in writing by email), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) in the case of the Trustee, at the address provided for notices or communications to the Trustee in the Indenture;

or, as to each of the foregoing, at such other address as shall be designated by written notice to the other parties. Each party hereto may, by notice given in accordance herewith to the other party or parties hereto, designate any further or different address to which subsequent notices, reports and other communications shall be sent. Any notice to or other communication with the Texas Commission shall be sent by electronic delivery to <u>connie.corona@puc.texas.gov</u> and <u>shelah.cisneros@puc.texas.gov</u> or to such other email address or physical address as the Texas Commission shall have provided to the Servicer.

Section 8.03 ASSIGNMENT.

Notwithstanding anything to the contrary contained herein, except as provided in <u>Section 6.03</u> and <u>Section 6.04</u> and as provided in the provisions of this Agreement concerning the resignation or termination of the Servicer, this Agreement may not be assigned by the Servicer. Any purported assignment not in compliance with this Agreement shall be void.

Section 8.04 LIMITATIONS ON RIGHTS OF OTHERS.

The provisions of this Agreement are solely for the benefit of the Servicer, the Issuer and, to the extent provided herein or in the other Basic Documents, Customers and the other Persons expressly referred to herein and the Trustee, on behalf of itself and the Holders, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the System Restoration Property and other amounts in the Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein. Notwithstanding anything to the contrary contained herein, for the avoidance of doubt, any right, remedy or claim to which any Customer may be entitled pursuant to the Financing Order and this Agreement may be asserted or exercised only by the Texas Commission (or by the Attorney General of the State of Texas in the name of the Texas Commission) for the benefit of such Customer.

Section 8.05 SEVERABILITY.

Any provision, or portion thereof, of this Agreement 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 or such provision (if any) or the remaining provisions hereof (unless such a 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 8.06 SEPARATE COUNTERPARTS.

This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 8.07 HEADINGS.

The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

Section 8.08 GOVERNING LAW.

**THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.**

Section 8.09 PLEDGE TO THE TRUSTEE.

The Servicer hereby acknowledges and consents to any pledge, assignment and grant of a security interest by the Issuer to the Trustee pursuant to the Indenture for the benefit of the Secured Parties (as defined in the Indenture) of all right, title and interest of the Issuer in, to and under the System Restoration Property owned by the Issuer and the proceeds thereof and the pledge of any or all of the Issuer's rights hereunder to the Trustee. Notwithstanding such assignment, in no event shall the Trustee have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer, hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which any recourse shall be had solely to the assets of the Issuer.

Section 8.10 NONPETITION COVENANTS.

Notwithstanding any prior termination of this Agreement or the Indenture, but subject to a court's rights to order the sequestration and payment of revenues arising with respect to the System Restoration Property pursuant to Section 39.309(f) of the Public Utility Regulatory Act, the Servicer shall not, prior to the date that is one year and one day after the satisfaction and discharge of the Indenture, acquiesce, petition or otherwise invoke or cause the Issuer to invoke or join with any Person in provoking the process of any Governmental Authority for the purpose of commencing or sustaining an involuntary case against the Issuer under any U.S. federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer for any substantial part of the property of the Issuer or ordering the dissolution, winding up or liquidation of the affairs of the Issuer.

Section 8.11 TERMINATION.

This Agreement shall terminate when all Bonds have been retired or redeemed in full.

Section 8.12 TEXAS COMMISSION CONSENT.

Except as specifically set forth in <u>Section 7.04</u>, to the extent the consent of the Texas Commission is required to effect any amendment to or modification of this Agreement or any provision of this Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Servicer may request the consent of the Texas Commission by delivering to the Texas Commission's executive director and general counsel a written request for such consent, which request shall contain:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a reference to Docket No. 57559 and a statement as to the possible effect of the amendment on ongoing qualified costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) an Officer's Certificate stating that the proposed amendment or modification has been approved by all parties to this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) a statement identifying the person to whom the Texas Commission or its staff is to address its consent to the proposed amendment or modification or request additional time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Texas Commission shall, within thirty (30) days of receiving the request for consent complying with <u>Section 8.12(a)</u>, either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) provide notice of its consent or lack of consent to the person specified in <u>Section 8.12(a)(iii)</u>, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) be conclusively deemed, on the thirty-first (31<sup>st</sup>) day after receiving the request for consent, to have consented to the proposed amendment or modification,

unless, within thirty (30) days of receiving the request for consent complying with <u>Section 8.12(a)</u>, the Texas Commission or its staff delivers to the office of the person specified in <u>Section 8.12(a)(iii)</u> 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 amendment or modification. If the Texas Commission or its staff requests an extension of time in the manner set forth in the preceding sentence, then the Texas Commission shall either provide notice of its consent or lack of consent to the person specified in <u>Section 8.12(a)(iii)</u> no later than the last day of such extension of time or be conclusively deemed to have consented to the proposed amendment or modification on the last day of such extension of time.

Any amendment or modification requiring the consent of the Texas Commission as provided in this <u>Section 8.12</u> shall become effective on the later of (i) the date proposed by the parties to such amendment or modification and (ii) the first day after the expiration of the thirty(30)-day period provided for in this <u>Section 8.12(b)(ii)</u>, or, if such period has been extended pursuant thereto, the first day after the expiration of such period as so extended.

Section 8.13 TERMINATION.

This Agreement shall terminate when all Bonds have been retired or redeemed in full.

Section 8.14 EFFECT OF SUBSEQUENT PUCT REGULATIONS.

Notwithstanding anything to the contrary contained in this Agreement (including <u>Annex I</u>), to the extent the Texas Commission promulgates any PUCT Regulation permitted by the Financing Order or the Public Utility Regulatory Act whose effect is to modify or supplement any provision of this Agreement relating to REP standards, this Agreement shall be deemed to have been so modified or supplemented on the effective date of such regulation, and all other provisions contained herein shall be deemed modified accordingly without the necessity of any further action by any party hereto. The Servicer will notify the Issuer, the Rating Agencies and the Trustee of any such PUCT Regulation and the corresponding modification of or supplement to this Agreement promptly upon obtaining knowledge thereof.

Section 8.15 RULE 17g-5 COMPLIANCE.

The Servicer agrees that any notice, report, request for satisfaction of the Rating Agency Condition, document or other information provided by the Servicer to any Rating Agency under this Agreement or any other Basic Document to which it is a party for the purpose of determining the initial credit rating of the Bonds or undertaking credit rating surveillance of the Bonds with any Rating Agency, or satisfy the Rating Agency Condition, shall be substantially concurrently posted by the Servicer on the 17g-5 Website.

Section 8.16 TRUSTEE ACTIONS.

In acting hereunder, the Trustee shall have the rights, protections and immunities granted to it under the Indenture.

[Rest of page intentionally left blank]

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

---

| | |
|:---|:---|
| **CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC,** | **CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC,** |
| as Issuer, | as Issuer, |
| By: |  |
|  | Name: |
|  | Title: |
| **CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC,** | **CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC,** |
| as Servicer, | as Servicer, |
| By: |  |
|  | Name: |
|  | Title: |

---

Acknowledged and Accepted:

**U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION**,

not in its individual capacity but solely as

Trustee on behalf of the Holders

of the System Restoration Bonds

By:   <br> Name: <br> Title:

*Signature Page to System Restoration Property Servicing Agreement*

**ANNEX I**

**SERVICING PROCEDURES**

The Servicer agrees to comply with the following servicing procedures:

**SECTION 1. <u>DEFINITIONS</u>.**

(a) Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in Appendix A of the System Restoration Property Servicing Agreement (the "<u>Agreement</u>").

**SECTION 2. <u>DATA ACQUISITION</u>.**

(a) <u>Installation, Maintenance of Meters and Data Acquisition</u>. Except to the extent that another entity is responsible for such services, the Servicer shall cause to be installed, replaced and maintained meters in such places and in such condition as will enable the Servicer to obtain usage measurements for each Customer at least once every Billing Period. To the extent another entity is responsible for such services, such other entity may obtain usage measurements for each Customer less frequently than once every Billing Period in accordance with its current practices so long as the PUCT Regulations so permit. To the extent another entity is responsible for such services, but not performing such services, the Servicer shall take all reasonably necessary actions to obtain usage measurements for each Customer at least once every Billing Period.

(b) <u>Cost of Data Acquisition</u>. The Issuer shall not be obligated to pay any costs associated with the data acquisition set forth in this <u>Section 2</u>, nor shall the Issuer be entitled to any credit against the Servicing Fee for any cost savings realized by the Servicer or any REP as a result of new metering and/or billing technologies.

(c) <u>ERCOT</u>. The Servicer shall take all reasonable actions available under PUCT Regulations to obtain timely information from ERCOT (or, if such information is not available from ERCOT, directly from the Applicable MDMA) which is necessary for the Servicer to fulfill its obligations under the Servicing Agreement.

**SECTION 3. <u>USAGE AND BILL CALCULATION</u>.**

The Servicer, from the usage measurements obtained pursuant to <u>Section 2</u>, shall determine each Customer's individual System Restoration Charges to be included on Bills issued by it to such Customer or to the REP responsible for billing such Customer.

**SECTION 4. <u>BILLING</u>.**

The Servicer shall implement the System Restoration Charges as of the date of the Servicing Agreement and shall thereafter bill each Customer or, with respect to Customers billed by a REP, for the respective Customer's outstanding current and past due System Restoration Charges accruing through the date on which such System Restoration Charges may no longer be billed under the Tariff, all in accordance with the following:

Annex I-1

(a) <u>Frequency of Bills; Billing Practices</u>. In accordance with the Servicer's then-existing policies and practices for its own charges, as such policies and practices may be modified from time to time, the Servicer shall generate and issue a Bill to each Customer, or, where the REP is responsible for billing the Customers, to the REP, for such Customers' System Restoration Charges once every applicable Billing Period, at the same time, with the same frequency and on the same Bill as that containing the Servicer's own charges to such Customers or REPs, as the case may be.

(b) <u>Format</u>.

(i) Each Bill issued by the Servicer to a Customer shall contain the charge corresponding to the System Restoration Charges owed by such Customer for the applicable Billing Period. The System Restoration Charges shall be separately identified if required by and in accordance with the terms of the Financing Order and Tariff.

(ii) Where a REP is responsible for billing the Customers, the Servicer shall deliver to the REP itemized charges for each Customer setting forth such Customer's System Restoration Charges. If such charges are not separately identified, the Servicer shall provide the REP, (and unless prohibited by applicable PUCT Regulations, shall cause each REP to provide the REP's Customers) with the annual notice required by Section 4.01(e)(ii) of the Agreement.

(iii) The Servicer shall conform to such requirements in respect of the format, structure and text of Bills delivered to Customers and REPs in accordance with, if applicable, the Financing Order, the Tariff and PUCT Regulations. To the extent that Bill format, structure and text are not prescribed by the Public Utility Regulatory Act or by applicable PUCT Regulations, the Servicer shall, subject to <u>clauses (i)</u> and <u>(ii)</u> above, determine the format, structure and text of all Bills in accordance with its reasonable business judgment, its policies and practices with respect to its own charges and prevailing industry standards.

(c) <u>Delivery</u>. The Servicer shall deliver all Bills issued by it by any means, whether electronic or otherwise, that the Servicer may from time to time use to present its own charges to the REPs or to Servicer's other customers, as applicable. The Servicer or each REP, as applicable, shall pay from its own funds all costs of issuance and delivery of all Bills, including but not limited to printing and postage costs.

**SECTION 5. <u>CUSTOMER SERVICE FUNCTIONS</u>.**

The Servicer shall handle all Customer or REP inquiries and other customer service matters according to the same procedures it uses with respect to its own charges.

Annex I-2

**SECTION 6. <u>COLLECTIONS; PAYMENT PROCESSING; REMITTANCE</u>.**

(a) Collection Efforts, Policies, Procedures.

(i) The Servicer shall use reasonable efforts to collect all Billed SRCs from Customers and REPs as and when the same become due and shall follow such collection procedures as it follows with respect to comparable assets that it services for itself or others, including with respect to the following:

(A) The
 Servicer shall prepare and deliver overdue notices to its Customers and REPs in accordance with applicable PUCT Regulations.

(B) The Servicer shall
 apply late payment charges to its outstanding Customer and REP balances in accordance with applicable PUCT Regulations and as required
 by the Financing Order.

(C) In circumstances where
 the Servicer bills Customers directly, the Servicer shall deliver final notices of delinquency and possible disconnection in accordance
 with applicable PUCT Regulations.

(D) The Servicer shall
 adhere to and carry out disconnection policies and termination of REP billing in accordance with the Public Utility Regulatory Act,
 the Financing Order and applicable PUCT Regulations.

(E) The Servicer may employ
 the assistance of collection agents to collect any past-due System Restoration Charges from its Customers and REPs in accordance
 with applicable PUCT Regulations and the Tariff.

(F) The Servicer shall
 apply its Customer and REP deposits to the payment of delinquent accounts in accordance with the Tariff, the Financing Order and
 applicable PUCT Regulations and according to the priorities set forth in <u>Section 6(b)(ii)</u> and <u>(iii)</u> of
 this Annex I.

(ii) The Servicer shall not waive any late payment charge or any other fee or charge relating to delinquent payments, if any, or waive, vary or modify any terms of payment of any amounts payable by its Customer or an REP, in each case unless such waiver or action: (A) would be in accordance with the Servicer's customary practices or those of any successor Servicer with respect to comparable assets that it services for itself and for others; (B) would not materially adversely affect the rights of the Holders; and (C) would comply with applicable law.

(iii) The Servicer shall accept payment in respect of Billed SRCs in such forms and methods and at such times and places as the Servicer accepts payments of its own charges in accordance with, if applicable, the Financing Order, the Tariff and any other PUCT Regulations.

(b) <u>Payment Processing; Allocation; Priority of Payments</u>.

(i) The Servicer shall post all payments received to customer accounts as promptly as practicable, and, in any event, substantially all payments shall be posted no later than two (2) Business Days after receipt.

(ii) Subject to <u>clause (iii)</u> below, the Servicer shall apply payments received to each Customer's or each REP's account in proportion to the charges contained on the outstanding Bill to such Customer or REP.

Annex I-3

(iii) If a Customer or REP does not pay the full amount of any bill by the Servicer, the amount paid by the Customer or REP will first be apportioned ratably among the System Restoration Charges and other fees and charges (including amounts billed and due in respect of system restoration charges associated with system restoration bonds issued under other financing orders), other than late fees, and second, any remaining portion of the payment will be allocated to late fees.

(c) <u>Accounts; Records</u>.

The Servicer shall maintain accounts and records as to the System Restoration Property accurately and in accordance with its standard accounting procedures and in sufficient detail (i) to permit reconciliation between payments or recoveries with respect to the System Restoration Property and the amounts from time to time remitted to the Collection Account in respect of the System Restoration Property and (ii) to permit the SRC Collections held by the Servicer to be accounted for separately from the funds with which they may be commingled, so that the dollar amounts of SRC Collections commingled with the Servicer's funds may be properly identified and traced.

(d) <u>Charge-Offs</u>.

In accordance with the Financing Order and Schedule SRC, each REP will be permitted to hold back an allowance for charge-offs in its System Restoration Charge payments to the Servicer. Such charge-off rate will be recalculated each year in connection with the annual System Restoration Charge Adjustment. Until the first Calculation Date, each REP that has chosen to hold back an allowance for charge-offs in its payments of Billed SRCs to the Servicer will remit System Restoration Charge payments to the Servicer based on the same charge-off percentage used by the REP to remit payments to the Servicer in connection with the most recently established system restoration charges related to the senior secured system restoration bonds issued by CenterPoint Energy Restoration Bond Company, LLC on November 25, 2009. Thereafter, on or about each Calculation Date, the REP and the Servicer will be responsible for reconciling the amounts held back with amounts actually written off as uncollectible in accordance with the terms agreed to by the REP and the Servicer, provided that:

(i) The REP's right to reconciliation for write-offs will be limited to customers whose service has been permanently terminated and whose entire accounts (*i.e.*, all amounts due the REP for its own account as well as the portion representing all System Restoration Charges) have been written off.

(ii) The REP's recourse will be limited to a credit against future System Restoration Charge payments unless the REP and the Servicer agree to alternative arrangements, but, in accordance with the Financing Order and Schedule SRC, in no event will the REP have recourse to the Trustee, the Issuer or the Issuer's funds for such payments.

(iii) In accordance with the Financing Order and Schedule SRC, the REP shall provide information on a timely basis to the Servicer so that the Servicer can include the REP's default experience and any subsequent credits into its calculation of the adjusted System Restoration Charge rates for the next System Restoration Charge billing period. The REP's rights to credits will not take effect until after such adjusted System Restoration Charges have been implemented.

(iv) If the REP has held back less than the amount actually written off as uncollectible during the time period, the REP shall be entitled to a credit against future System Restoration Charge payments over the twelve-month period immediately following the next Adjustment Date in the amount of the hold-back shortfall and no other remedy. If the REP has held back more than the amount actually written off as uncollectible during the time period, the permitted charge-off percentage shall be adjusted so that it is projected that the REP will remit to the Servicer the amount of such underpayment of SRC Collections over the twelve-month period immediately following the next Adjustment Date.

Annex I-4

(v) The Servicer will incorporate the REPs' Customer default information and any subsequent credits to the REPs for System Restoration Charges already paid by the REPs to the Servicer in its calculation of the System Restoration Charge Adjustments on the Calculation Date. The REPs' right described in this <u>Section 6</u> to receive a credit against future payments of Billed SRCs to the Servicer shall not take effect until after the next Adjustment Date.

(e) <u>Investment of SRC Collections Received</u>.

Prior to each Daily Remittance, the Servicer may invest SRC Collections received at its own risk and for its own benefit. So long as the Servicer complies with its obligations under <u>Section 6(c)</u> of this Annex I, neither such investments nor such funds shall be required to be segregated from the other investments and funds of the Servicer.

(f) <u>Calculation of Daily Remittance.</u>

(i) For purposes of calculating the Daily Remittance, (i) all Billed SRCs shall be deemed to be collected the same number of days after billing as is equal to the Weighted Average Days Outstanding then in effect (or, if such day is not a Servicer Business Day, the immediately succeeding Servicer Business Day) and (ii) the Servicer will, on each Servicer Business Day, remit to the Trustee for deposit in the Collection Account the applicable Billed SRCs. Such remittance shall constitute the amount of Estimated SRC Collections for such Servicer Business Day. Pursuant to <u>Section 6.12(c)</u> of the Agreement, commencing no later than _________ 25, 2025, the Servicer shall calculate in each Monthly Servicer's Certificate the amount of Actual SRC Collections for the first Collection Period of the Reconciliation Period as compared to the Estimated SRC Collections forwarded to the Collection Account in respect of such calendar month. No Excess Remittance shall be withdrawn from the Collection Account if such withdrawal would cause the amounts on deposit in the General Subaccount or the Excess Funds Subaccount to be insufficient for the payment of the next installment of interest or principal due at maturity on the next Payment Date or upon acceleration on or before the next Payment Date on the System Restoration Bonds.

(ii) On or before __________ 15 of each year in accordance with <u>Section 4.01(b)(i)</u> of the Agreement, the Servicer shall, in a timely manner so as to perform all required calculations under such <u>Section 4.01(b)(i)</u>, update the Weighted Average Days Outstanding in order to be able to calculate the Periodic Billing Requirement for the next True-Up Adjustment and to calculate any change in the Daily Remittances for the next Calculation Period.

Annex I-5

(iii) The Servicer and the Issuer acknowledge that, as contemplated in the last paragraph of <u>Section 8.01</u> of the Agreement, the Servicer may make certain changes to its current computerized customer information system, which changes, when functional, would affect the Servicer's method of calculating the SRC Payments estimated to have been received by the Servicer during each Collection Period as set forth in this <u>Annex I</u>. Should these changes to the computerized customer information system become functional during the term of the Agreement, the Servicer and the Issuer agree that they shall review the procedures used to calculate the SRC Payments estimated to have been received in light of the capabilities of such new system and shall amend this <u>Annex I</u> in writing to make such modifications and/or substitutions to such procedures as may be appropriate in the interests of efficiency, accuracy, cost and/or system capabilities; <u>provided</u>, <u>however</u>, that the Servicer may not make any modification or substitution that will materially adversely affect the Holders as evidenced by an Officer's Certificate of the Issuer. As soon as practicable, and in no event later than sixty (60) Business Days after the date on which all Customer accounts are being billed under such new system, the Servicer shall notify the Issuer, the Trustee and the Rating Agencies of the same.

(iv) All calculations of collections, each update of the Weighted Average Days Outstanding and any changes in procedures used to calculate the Estimated SRC Payments pursuant to this <u>Section 6(f)</u> shall be made in good faith, and in the case of any update pursuant to <u>clause (ii)</u> above or any change in procedures pursuant to <u>clause (iii)</u> above, in a manner reasonably intended to provide estimates and calculations that are at least as accurate as those that would be provided on the Closing Date utilizing the initial procedures.

(g) <u>Remittances.</u>

(i) The Issuer shall cause to be established the Collection Account in the name of the Trustee in accordance with the Indenture.

(ii) The Servicer shall make remittances to the Collection Account in accordance with Section 6.12 of the Agreement.

(iii) In the event of any change of account or change of institution affecting the Collection Account, the Issuer shall provide written notice thereof to the Servicer not later than five (5) Business Days from the effective date of such change.

Annex I-6

**EXHIBIT A**

**FORM OF MONTHLY SERVICER'S CERTIFICATE**

**MONTHLY SERVICER'S CERTIFICATE**

**CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC**

**$____________ Series 2025-A Senior Secured System Restoration Bonds**

Pursuant to <u>Section 3.01(b)</u> of the System Restoration Property Servicing Agreement, dated as of ________ __, 2025, by and between CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as Servicer, and CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC, as Issuer (the "<u>Servicing Agreement</u>"), the Servicer does hereby certify as follows:

Capitalized terms used but not defined in this Monthly Servicer's Certificate have their respective meanings as set forth in the Servicing Agreement. References herein to certain sections and subsections are references to the respective sections or subsections of the Servicing Agreement.

Beginning of Billing Period: ____________________

End of Billing Period: ____________________

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;**Customer Class** | &nbsp;&nbsp;**a. SRCs in<br> Effect** | &nbsp;&nbsp;**b. SRCs <br> Billed** | &nbsp;&nbsp;**c. Estimated <br> SRC<br> Payments<br> Received** | &nbsp;&nbsp;**d. Actual SRC<br> Payments<br> Received** | &nbsp;&nbsp;**e. Remittance<br> Shortfall for<br> this Collection** | &nbsp;&nbsp;**f. Excess <br> Remittance for<br> this Collection** |
| &nbsp;&nbsp;**Total** |  |  |  |  |  |  |

---

g. Daily remittances previously made by the Servicer to the Collection Account in respect of this Collection Period (c):

h. The amount to be remitted by the Servicer to the Collection Account for this Collection Period is (c + e - f):

i. If (h>g), (h-g) equals net amount due from the Servicer to the Collection Amount:

j. If (g>h), (g-h) equals net amount due to the Servicer from the Collection Amount:

Exhibit A-1

Executed as of this {____} day of {__________}, 20{__}.

---

| | |
|:---|:---|
| **CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as Servicer** | **CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as Servicer** |
| By: |  |
|  | Name: |
|  | Title: |

---

cc: CenterPoint Energy Restoration Bond Company II, LLC

Exhibit A-2

**EXHIBIT B**

**FORM OF SEMI-ANNUAL SERVICER'S CERTIFICATE**

**SEMI-ANNUAL SERVICER'S CERTIFICATE**

**CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC**

**$____________ Series 2025-A Senior Secured System Restoration Bonds**

Pursuant to <u>Section 4.01(f)(ii)(A)</u> of the System Restoration Property Servicing Agreement, dated as of ________ __, 2025, by and between CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as Servicer, and CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC, as Issuer (the "<u>Servicing Agreement</u>"), the Servicer does hereby certify as follows, for the , 20 Payment Date (the "<u>Current Payment Date</u>"), as follows:

Capitalized terms used but not defined in this Semi-Annual Servicer's Certificate have their respective meanings as set forth in the Servicing Agreement. References herein to certain sections and subsections are references to the respective sections of the Servicing Agreement or the Indenture, as the context indicates.

**Collection Periods:** {__________} to {__________}

**Payment Date:** {__________}, 20{__}

**Cut-off Date:** {__________}, 20{__}

1. (a) Available amounts on deposit in Collection
 Account (including Excess Funds Subaccount) as of the Cut-Off Date: $_______________________

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Actual Remittances from the date in (a) above through the Servicer Business Day preceding the Current Payment Date: $______________________

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Total amounts available to the Trustee for payment of the Bonds and Ongoing Qualified Costs: $_______________________

Exhibit B-1

2. Allocation of available amounts as of the Current
 Payment Date allocable to payment of principal and interest on the Bonds on the Current Payment
 Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Principal

---

| | | |
|:---|:---|:---|
|  |  | Aggregate |
| &nbsp;&nbsp;&nbsp;&nbsp;i. | Tranche A-1 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;ii. | Tranche A-2 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;iii. | Total: |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Interest

---

| | | |
|:---|:---|:---|
|  |  | Aggregate |
| &nbsp;&nbsp;&nbsp;&nbsp;i. | Tranche A-1 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;ii. | Tranche A-2 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;iii. | Total: |  |

---

3. Outstanding amount of the Bonds prior to, and
 after giving effect to the payment on the Current Payment Date and the difference, if any,
 between the Outstanding Amount specified in the Expected Amortization Schedule (after giving
 effect to payments to be made on such Payment Date under 1a above) and the expected principal
 balance to be Outstanding (following payment on the Current Payment Date):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Expected principal balance Outstanding
 (as of the date of this certification):

&nbsp;&nbsp;&nbsp;&nbsp;i. Tranche

&nbsp;&nbsp;&nbsp;&nbsp;ii. Tranche

&nbsp;&nbsp;&nbsp;&nbsp;iii. Total:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Expected principal balance to be Outstanding
 (following payment on the Current Payment Date):

&nbsp;&nbsp;&nbsp;&nbsp;i. Tranche

&nbsp;&nbsp;&nbsp;&nbsp;ii. Tranche

&nbsp;&nbsp;&nbsp;&nbsp;iii. Total:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Difference between (b) above and
 Outstanding Amount specified in Expected Amortization Schedule:

&nbsp;&nbsp;&nbsp;&nbsp;i. Tranche

&nbsp;&nbsp;&nbsp;&nbsp;ii. Tranche

&nbsp;&nbsp;&nbsp;&nbsp;iii. Total:

Exhibit B-2

4. All other transfers to be made on the Current
 Payment Date, including amounts to be paid to the Trustee and to the Servicer pursuant to
 Section 8.02(e) of the Indenture:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Certain Ongoing Qualified Costs

&nbsp;&nbsp;&nbsp;&nbsp;i. Trustee Fees and Expenses (subject to $200,000 annual cap per Section 8.02(e)(i) of the Indenture):

&nbsp;&nbsp;&nbsp;&nbsp;ii. Servicing
 Fee:

&nbsp;&nbsp;&nbsp;&nbsp;iii. Issuer's
 Fees:

&nbsp;&nbsp;&nbsp;&nbsp;iv. Total:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Other Ongoing Qualified Costs and Payments

&nbsp;&nbsp;&nbsp;&nbsp;i. Other
 Ongoing Qualified Costs (payable pursuant to Section 8.02(e)(v) of the Indenture):

&nbsp;&nbsp;&nbsp;&nbsp;ii. Funding
 of Capital Subaccount to the Required Capital Amount

&nbsp;&nbsp;&nbsp;&nbsp;iii. Any
 other unpaid Issuance Costs of the Issuer, any remaining fees, expenses and indemnity amounts owed to the Trustee and any remaining
 indemnity amounts owed to the Issuer shall be paid to the parties to which such amounts, if any, are owed, pursuant to Section 8.02(e)(viii) of
 the Indenture:

&nbsp;&nbsp;&nbsp;&nbsp;iv. Deposits
 to Excess Funds Subaccount:

&nbsp;&nbsp;&nbsp;&nbsp;v. Total:

5. Estimated amounts on deposit in the Capital
 Subaccount and Excess Funds Subaccount after giving effect to the foregoing payments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Capital Subaccount

&nbsp;&nbsp;&nbsp;&nbsp;i. Total:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Excess Funds Subaccount

&nbsp;&nbsp;&nbsp;&nbsp;i. Total:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Collections Allocable and Aggregate Amounts
 Available for the Current Payment Date:

i. Remittances
 for the {__________} Collection Period ${__________}

ii. Remittances for the {__________}
 Collection Period ${__________}

iii. Remittances for the {__________}
 Collection Period ${__________}

iv. Remittances for the {__________}
 Collection Period ${__________}

v. Remittances for the {__________}
 Collection Period ${__________}

vi. Investment Earnings on
 Capital Subaccount ${__________}

vii. Investment Earnings on
 Excess Funds Subaccount ${__________}

viii. Investment Earnings on
 General Subaccount ${__________}

**ix.** **General Subaccount Balance (sum of i through viii above)** ${__________}

xi. Capital Subaccount Balance
 as of prior Payment Date ${__________}

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** Outstanding Amounts as of prior Payment
 Date:

i. Tranche A-1
 Outstanding Amount ${__________}

ii. Tranche A-2 Outstanding
 Amount ${__________}

Exhibit B-3

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** Required Funding/Payments as of Current
 Payment Date:

---

| | | |
|:---|:---|:---|
|  | ***Principal*** | ***Principal Due*** |
| i. | Bonds – Tranche A-1 | ${__________} |
| ii. | Bonds – Tranche A-2 | ${__________} |
|  | ***Interest*** |  |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Tranche** | **Interest<br> Rate** | **Days in Interest <br> Period<sup>2</sup>** | **Principal <br> Balance** | **Interest Due** |
| i. Tranche A-1 | {__}% | {_____} | ${__________} | ${________} |
| ii. Tranche A-2 | {__}% | {_____} | ${__________} | ${________} |
| iii. Total |  |  |  | ${________}<br>|
|  |  |  | **<u>Required Level</u>** | **<u>Funding <br> Required</u>** |
| ***Capital Subaccount*** | ***Capital Subaccount*** | ***Capital Subaccount*** | ${__________} | ${__________} |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** Allocation of Remittances as of Current
 Payment Date Pursuant to 8.02(e) of Indenture:

---

| | | | |
|:---|:---|:---|:---|
| i. Trustee Fees and Expenses; Indemnity Amounts | i. Trustee Fees and Expenses; Indemnity Amounts | i. Trustee Fees and Expenses; Indemnity Amounts | ${__________} |
| ii. Servicing Fee | ii. Servicing Fee | ii. Servicing Fee | ${__________} |
| iii. Administration Fee | iii. Administration Fee | iii. Administration Fee | ${__________} |
| iv. Operating Expenses | iv. Operating Expenses | iv. Operating Expenses | ${__________} |
| Bonds | Aggregate | <br> Per $1,000 of Original Principal<br> Amount | <br> Per $1,000 of Original Principal<br> Amount |
| v. Semi-Annual Interest (including any past-due for prior periods) | v. Semi-Annual Interest (including any past-due for prior periods) | v. Semi-Annual Interest (including any past-due for prior periods) |  |
| 1. Tranche A-1 Interest Payment | ${_______} | ${_________} | ${_________} |
| 2. Tranche A-2 Interest Payment | ${_______} | ${_________} | ${_________} |
| vi. Principal Due and Payable as a Result of an Event of Default or on Final Maturity Date |  |  |  |
| 1. Tranche A-1 Interest Payment | ${________} | ${________} | ${________} |
| 2. Tranche A-2 Interest Payment | ${_______} | ${_________} | ${_________} |
| vii. Semi-Annual Principal |  |  |  |
| 1. Tranche A-1 Principal Payment | ${_______} | ${________} | ${________} |
| 2. Tranche A-2 Principal Payment | ${_______} | ${_________} | ${_________} |

---

<sup>2</sup> On 30/360-day basis for initial payment date; otherwise use one-half of annual rate.

---

| | |
|:---|:---|
| viii. Other unpaid Operating Expenses | ${__________} |
| ix. Funding of Capital Subaccount (to required level) | ${__________} |
| x. Capital Subaccount Return to CEHE | ${__________} |
| xi. Deposit to Excess Funds Subaccount | ${__________} |
| xii. Released to Issuer upon Retirement of all Bonds | ${__________} |
| xiii. Aggregate Remittances as of the Current Payment Date | ${__________} |

---

Exhibit B-4

5. Outstanding Amount and Collection Account Balance as of the Current Payment Date (after giving effect to payments to be made on such Payment Date):

i. Bonds
 – Tranche A-1 ${__________}

ii. Bonds – Tranche
 A-2 ${__________}

iii. Excess Funds Subaccount
 Balance ${__________}

iv. Capital Subaccount
 Balance ${__________}

v. Aggregate Collection
 Account Balance ${__________}

6. Subaccount Withdrawals as of the Current Payment Date (if applicable, pursuant to Section 8.02(e) of Indenture):

i. Excess
 Funds Subaccount ${__________}

ii. Capital Subaccount ${__________}

iii. Total Withdrawals ${__________}

7. Shortfalls in Interest and Principal Payments as of Current Payment Date:

---

| | | |
|:---|:---|:---|
| i. | Semi-annual Interest |  |
|  | Bonds – Tranche A-1 Interest Payment | ${__________} |
|  | Bonds – Tranche A-2 Interest Payment | ${__________} |
|  | Total Bonds Interest Payments | ${__________} |
| ii. | Semi-annual Principal |  |
|  | Bonds – Tranche A-1 Principal Payment | ${__________} |
|  | Bonds – Tranche A-2 Principal Payment | ${__________} |
|  | Total Bonds Principal Payments | ${__________} |

---

8. Shortfalls in Payment of Return on Invested Capital as of the Current Payment Date:

i. Return
 on Invested Capital ${__________}

9. Shortfalls in Required Subaccount Levels as of the Current Payment Date:

i. Capital
 Subaccount ${__________}

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Semi-Annual Servicer's Certificate this day of .

---

| | |
|:---|:---|
| **CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as Servicer** | **CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as Servicer** |
| By: |  |
|  | Name: |
|  | Title: |

---

Exhibit B-5

**EXHIBIT C-1**

**FORM OF SERVICER ANNUAL CERTIFICATE**

**SERVICER ANNUAL CERTIFICATE**

**CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC**

**$____________ Series 2025-A Senior Secured System Restoration Bonds**

The undersigned hereby certifies that the undersigned is the duly elected and acting ________________ of CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as servicer (the "*Servicer*"), under the System Restoration Property Servicing Agreement dated as of ________ __, 2025 (the "*Servicing Agreement*") by and between the Servicer and CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC (the "*Issuer*") and further certifies that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The undersigned is responsible for assessing the Servicer's compliance with the servicing criteria set forth in Item 1122(d) of Regulation AB (the "*Servicing Criteria*").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. With respect to each of the Servicing Criteria, the undersigned has made the following assessment of the Servicing Criteria in accordance with Item 1122(d) of Regulation AB, with such discussion regarding the performance of such Servicing Criteria during the fiscal year ended December 31, 20__, and covered by the Issuer's annual report on Form 10-K (such fiscal year, the "*Assessment Period*"):

---

| | | |
|:---|:---|:---|
| **Regulation AB<br> Reference** | **Servicing Criteria** | **Assessment** |
|  | &nbsp;&nbsp;**General Servicing Considerations** |  |
| &nbsp;&nbsp;1122(d)(1)(i) | &nbsp;&nbsp;Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements. | &nbsp;&nbsp;Applicable; assessment below. |
| &nbsp;&nbsp;1122(d)(1)(ii) | &nbsp;&nbsp;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. | &nbsp;&nbsp;Not applicable; no servicing activities were outsourced. |
| &nbsp;&nbsp;1122(d)(1)(iii) | &nbsp;&nbsp;Any requirements in the transaction agreements to maintain a back-up servicer for pool assets are maintained. | &nbsp;&nbsp;Not applicable; transaction agreements do not provide for a back-up servicer. |
| &nbsp;&nbsp;1122(d)(1)(iv) | &nbsp;&nbsp;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. | &nbsp;&nbsp;Not applicable; Texas Commission rules impose credit standards on REPs who handle customer collections and govern performance requirements of utilities; transaction agreements do not require a fidelity bond or errors and omissions policy. |

---

Exhibit C-1-1

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;1122(d)(1)(v) | &nbsp;&nbsp;Aggregation of information, as applicable, is mathematically accurate and the information conveyed accurately reflects the information | &nbsp;&nbsp;Applicable. |
|  | &nbsp;&nbsp;**Cash Collection and Administration** |  |
| &nbsp;&nbsp;1122(d)(2)(i) | &nbsp;&nbsp;Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two Business Days following receipt, or such other number of days specified in the transaction agreements. | &nbsp;&nbsp;Applicable. |
| &nbsp;&nbsp;1122(d)(2)(ii) | &nbsp;&nbsp;Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel. | &nbsp;&nbsp;Not applicable; no disbursements on behalf of obligors or to investors are made by Servicer by means of wire transfer. |
| &nbsp;&nbsp;1122(d)(2)(iii) | &nbsp;&nbsp;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. | &nbsp;&nbsp;Applicable; no advances by the Servicer are permitted under the transaction agreements, except for payments of certain indemnities and Excess Remittances. |
| &nbsp;&nbsp;1122(d)(2)(iv) | &nbsp;&nbsp;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. | &nbsp;&nbsp;Applicable, but no current assessment is required since the related accounts are maintained by the Trustee. |
| &nbsp;&nbsp;1122(d)(2)(v) | &nbsp;&nbsp;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) under the Exchange Act. | &nbsp;&nbsp;Applicable, but no current assessment required; all "custodial accounts" are maintained by the Trustee. |
| &nbsp;&nbsp;1122(d)(2)(vi) | &nbsp;&nbsp;Unissued checks are safeguarded so as to prevent unauthorized access. | &nbsp;&nbsp;Not applicable; all payments made by wire transfer. |
| &nbsp;&nbsp;1122(d)(2)(vii) | &nbsp;&nbsp;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 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 90 calendar days of their original identification, or such other number of days specified in the transaction agreements. | &nbsp;&nbsp;Applicable; assessment below. Reconciliations as to REP accounts are limited to confirming that the funds in any REP's account known to the Servicer are at least in the amount required by the Servicer. |

---

Exhibit C-1-2

---

| | | |
|:---|:---|:---|
| | **Investor Remittances and Reporting** | |
| &nbsp;&nbsp;1122(d)(3)(i) | &nbsp;&nbsp;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. | &nbsp;&nbsp;Applicable; assessment below. |
| &nbsp;&nbsp;1122(d)(3)(ii) | &nbsp;&nbsp;Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements. | &nbsp;&nbsp;Not applicable; investor records maintained by the Trustee. |
| &nbsp;&nbsp;1122(d)(3)(iii) | &nbsp;&nbsp;Disbursements made to an investor are posted within two Business Days to the servicer's investor records, or such other number of days specified in the transaction agreements. | &nbsp;&nbsp;Applicable. |
| &nbsp;&nbsp;1122(d)(3)(iv) | &nbsp;&nbsp;Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements. | &nbsp;&nbsp;Applicable; assessment below. |
|  | **Pool Asset Administration** |  |
| &nbsp;&nbsp;1122(d)(4)(i) | &nbsp;&nbsp;Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents. | &nbsp;&nbsp;Applicable; assessment below. |
| &nbsp;&nbsp;1122(d)(4)(ii) | &nbsp;&nbsp;Pool assets and related documents are safeguarded as required by the transaction agreements. | &nbsp;&nbsp;Applicable; assessment below. |
| &nbsp;&nbsp;1122(d)(4)(iii) | &nbsp;&nbsp;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. | &nbsp;&nbsp;Not applicable; no removals or substitutions of System Restoration Property are contemplated or allowed under the transaction documents. |
| &nbsp;&nbsp;1122(d)(4)(iv) | &nbsp;&nbsp;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 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 agreements. | &nbsp;&nbsp;Applicable; assessment below. Payments received from REPs are posted to the Servicer's records and funds transferred to the Trustee. |

---

Exhibit C-1-3

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;1122(d)(4)(v) | &nbsp;&nbsp;The servicer's records regarding the pool assets agree with the servicer's records with respect to an obligor's unpaid principal balance. | &nbsp;&nbsp;Not applicable; because underlying obligation (System Restoration Charge) is not an interest-bearing instrument. |
| &nbsp;&nbsp;1122(d)(4)(vi) | &nbsp;&nbsp;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. | &nbsp;&nbsp;Applicable; assessment below. |
| &nbsp;&nbsp;1122(d)(4)(vii) | &nbsp;&nbsp;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. | &nbsp;&nbsp;Applicable; limited assessment below. Servicer actions governed by PUCT Regulations. |
| &nbsp;&nbsp;1122(d)(4)(viii) | &nbsp;&nbsp;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). | &nbsp;&nbsp;Applicable, but does not require assessment since no explicit documentation requirement with respect to delinquent accounts are imposed under the transaction agreements due to availability of "true-up" mechanism; and any such documentation is maintained in accordance with applicable Texas Commission rules and regulations. |
| &nbsp;&nbsp;1122(d)(4)(ix) | &nbsp;&nbsp;Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents. | &nbsp;&nbsp;Not applicable; System Restoration Charges are not interest-bearing instruments. |
| &nbsp;&nbsp;1122(d)(4)(x) | &nbsp;&nbsp;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 30 calendar days of full repayment of the related pool assets, or such other number of days specified in the transaction agreements. | &nbsp;&nbsp;Applicable; Servicer maintains REP deposit accounts in accordance with PUCT rules and regulations. |

---

Exhibit C-1-4

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;1122(d)(4)(xi) | &nbsp;&nbsp;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 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements. | &nbsp;&nbsp;Not applicable; Servicer does not make payments on behalf of obligors. |
| &nbsp;&nbsp;1122(d)(4)(xii) | &nbsp;&nbsp;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. | &nbsp;&nbsp;Not applicable; Servicer cannot make advances of its own funds on behalf of customers under the transaction agreements. |
| &nbsp;&nbsp;1122(d)(4)(xiii) | &nbsp;&nbsp;Disbursements made on behalf of an obligor are posted within two Business Days to the obligor's records maintained by the servicer, or such other number of days specified in the transaction agreements. | &nbsp;&nbsp;Not applicable; Servicer cannot make advances of its own funds on behalf of customers to pay principal or interest on the Bonds. |
| &nbsp;&nbsp;1122(d)(4)(xiv) | &nbsp;&nbsp;Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements. | &nbsp;&nbsp;Applicable; assessment below. |
| &nbsp;&nbsp;1122(d)(4)(xv) | &nbsp;&nbsp;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. | &nbsp;&nbsp;Not applicable; no external enhancement is required under the transaction agreements. |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. To the best of the undersigned's knowledge, based on such review, the Servicer is in compliance in all material respects with the applicable servicing criteria set forth above as of and for the period ended the end of the fiscal year covered by the Issuer's annual report on Form 10-K. {If not true, include description of any material instance of noncompliance.}

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. A registered independent public accounting firm has issued an attestation report in accordance with Section 1122(b) of Regulation AB on its assessment of compliance with the applicable servicing criteria as of and for the period ended the end of the fiscal year covered by the Issuer's annual report on Form 10-K.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Capitalized terms used but not defined herein have their respective meanings as set forth in the Servicing Agreement.

Exhibit C-1-5

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Servicer Annual Certificate this { } day of { }, 20__.

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| | |
|:---|:---|
| **CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as Servicer** | **CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as Servicer** |
| By: |  |
|  | Name: |
|  | Title: |

---

Exhibit C-1-6

**EXHIBIT C-2**

**FORM OF CERTIFICATE OF COMPLIANCE**

**CERTIFICATE OF COMPLIANCE**

**CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC**

**$____________ Series 2025-A Senior Secured System Restoration Bonds**

Pursuant to <u>Section 4.01(f)(ii)(A)</u> of the System Restoration Property Servicing Agreement, dated as of ________ __, 2025, by and between CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as Servicer, and CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC, as Issuer (the "<u>Servicing Agreement</u>"), the Servicer does hereby certify as follows, for the , 20 Payment Date (the "<u>Current Payment Date</u>"), as follows:

The undersigned hereby certifies that the undersigned is the duly elected and acting ________________ of CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as servicer (the "*Servicer*"), under the System Restoration Property Servicing Agreement dated as of _________ __, 2025 (the "*Servicing Agreement*") by and between the Servicer and CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC (the "*Issuer*"), and further certifies that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. A review of the activities of the Servicer and of its performance under the Servicing Agreement during the twelve months ended December 31, 20__ has been made under the supervision of the undersigned pursuant to Section 3.03 of the Servicing Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. To the undersigned's knowledge, based on such review, the Servicer has fulfilled all of its obligations in all material respects under the Servicing Agreement throughout the twelve months ended December 31, 20__, except as set forth on *Annex A* hereto.

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Servicer Certificate of Compliance this { } day of { }, 20__.

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| | |
|:---|:---|
| **CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as Servicer** | **CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as Servicer** |
| By: |  |
|  | Name: |
|  | Title: |

---

Exhibit C-2-1

**ANNEX A**

**to Certificate of Compliance**

**LIST OF SERVICER DEFAULTS**

The following Servicer Defaults, or events that with the giving of notice, the lapse of time, or both, would become Servicer Defaults known to the undersigned occurred during the twelve months ended December 31, 20__:

Nature of Default   <u>Status</u> <br>      

Exhibit C-2-2

**SCHEDULE 4.01(a)**

**EXPECTED AMORTIZATION SCHEDULE**

**OUTSTANDING PRINCIPAL BALANCE**

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;<br> **Semi-Annual Payment<br> Date** | **Tranche A-1<br> Amount** | **Tranche A-2**<br> **Amount** |
| Initial Principal Amount | $— | $— |
|  | $— | $— |
|  | $— | $— |
|  | $— | $— |
|  | $— | $— |
|  | $— | $— |
|  | $— | $— |
|  | $— | $— |
| **Total Payments** | $— | $— |

---

**Schedule 4.01(a)**

**APPENDIX A<br> DEFINITIONS AND RULES OF CONSTRUCTION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Defined Terms</u>. The following terms have the following meanings:

"<u>17g-5 Website</u>" is defined in the Indenture.

"<u>Accrued Interest</u>" means interest accrued at the Federal Funds Rate on amounts held by the Servicer prior to, on, or after the date such amounts are due and payable to the Trustee under the Servicing Agreement.

"<u>Actual SRC Collections</u>" means, with respect to Billed SRCs in any Reconciliation Period, the amount of such Billed SRCs less the amounts held back under the Tariff by an applicable REP to reflect potential write-offs calculated for such Reconciliation Period.

"<u>Adjustment Date</u>" means the date other than an Interim Adjustment Date on which any System Restoration Charge Adjustment (other than an interim (non-annual) System Restoration Charge Adjustment) and/or any PBRAF Adjustment, as applicable, becomes effective. The first Adjustment Date will be on or about ________ __, 2026, and all subsequent Adjustment Dates shall be on or about the same day of the year in subsequent years.

"<u>Administration Agreement</u>" means the Administration Agreement, dated as of the date hereof, by and between the Administrator and the Issuer, as the same may be amended and supplemented from time to time.

"<u>Administration Fee</u>" is defined in Section 2 of the Administration Agreement.

"<u>Administrator</u>" means CEHE, as Administrator under the Administration Agreement, or any successor Administrator to the extent permitted under the Administration Agreement.

"<u>Affiliate</u>" 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 specified 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.

"<u>Annual Accountant's Report</u>" is defined in <u>Section 3.04(a)</u> of the Servicing Agreement.

"<u>Annual Compliance Certificate</u>" is defined in <u>Section 3.03(a)</u> of the Servicing Agreement.

"<u>Applicable MDMA</u>" means with respect to each Customer, the meter data management agent providing meters or meter reading services for that Customer's account.

"<u>Bankruptcy Code</u>" means Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.).

**Appendix A-1**

"<u>Basic Documents</u>" means the Indenture, the Series Supplement, the Certificate of Formation, the LLC Agreement, the Administration Agreement, the Sale Agreement, the Bill of Sale, the Servicing Agreement, the Letter of Representations, the Underwriting Agreement and all other documents and certificates delivered in connection therewith.

"<u>Bill</u>" means each of the regular monthly bills, summary bills, opening bills and closing bills issued to Customers by CEHE or REPs or to REPs by CEHE on its own behalf and in its capacity as Servicer.

"<u>Bill of Sale</u>" means a bill of sale substantially in the form of <u>Exhibit A</u> to the Sale Agreement delivered pursuant to Section 2.02(i) of the Sale Agreement.

"<u>Billed SRCs</u>" means the amounts of System Restoration Charges billed by the Servicer, whether billed directly to Customers by the Servicer or indirectly through REPs.

"<u>Billing Period</u>" means the period of approximately thirty (30) days for which the Servicer renders Bills.

"<u>Bond Balance</u>" means, as of any date, the aggregate Outstanding Amount of Bonds, on such date.

"<u>Bond Register</u>" means the register provided by the Issuer pursuant to Section 2.05 of the Indenture.

"<u>Bond Registrar</u>" means U.S. Bank Trust Company, National Association for the purpose of registering the Bonds and transfers of Bonds pursuant to Section 2.05 of the Indenture.

"<u>Bonds</u>" means any of the Series 2025-A Senior Secured System Restoration Bonds issued by the Issuer pursuant to the Indenture on the Closing Date.

"<u>Book-Entry Bonds</u>" means beneficial interests in the Bonds, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 2.11 of the Indenture.

"<u>Business Day</u>" means any day other than a Saturday, a Sunday or a day on which banking institutions in New York, New York or Houston, Texas, are, or The Depository Trust Company is, required or authorized by law or executive order to remain closed.

"<u>Calculation Date</u>" means, with respect to the Bonds, the date on which the calculations and filings set forth in <u>Section 4.01(b)(i)</u> of the Servicing Agreement will be made each year. The first Calculation Date will be no later than ________ __, 2025, if the Servicer requests only System Restoration Charge Adjustments, and no later than _______ __, 2025, if the Servicer requests any PBRAF Adjustments (whether or not the Servicer also requests System Restoration Charge Adjustments). Subsequent Calculation Dates will be on or about the same applicable day of the year in subsequent years.

"<u>Calculation Period</u>" means the period of time covering the next two Payment Dates plus [three months] after the second such Payment Date.

"<u>Capital Subaccount</u>" is defined in Section 8.02(a) of the Indenture.

"<u>CEHE</u>" means CenterPoint Energy Houston Electric, LLC, a Texas limited liability company, or its successor.

**Appendix A-2**

"<u>Certificate of Compliance</u>" means the certificate referred to in <u>Section 3.03(a)</u> of the Servicing Agreement and substantially in the form of <u>Exhibit C-2</u> to the Servicing Agreement.

"<u>Certificate of Formation</u>" means the Certificate of Formation of the Issuer filed with the Secretary of State of the State of Delaware on June 5, 2025 pursuant to which the Issuer was formed.

"<u>Claim</u>" means a "claim" as defined in Section 101(5) of the Bankruptcy Code.

"<u>Clearing Agency</u>" means an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act.

"<u>Closing Date</u>" means the date on which the Bonds are originally issued in accordance with <u>Section 2.10</u> of the Indenture and the Series Supplement.

"<u>Collection Account</u>" is defined in <u>Section 8.02(a)</u> of the Indenture.

"<u>Collection Period</u>" means the period from and including the first day of a calendar month to but excluding the first day of the next calendar month.

"<u>Corporate Trust Office</u>" has the meaning specified in Appendix A to the Indenture.

"<u>Customer Class</u>" means each of the System Restoration Charge classes specified in the Financing Order.

"<u>Customer</u>" means each Person from whom CEHE is authorized to recover Qualified Costs as defined in and pursuant to the Public Utility Regulatory Act, any PUCT Regulation or the Financing Order, but shall not include REPs.

"<u>Daily Remittance</u>" is defined in <u>Section 6.12(a)</u> of the Servicing Agreement.

"<u>Eligible Investments</u>" has the meaning specified in the Indenture.

"<u>ERCOT</u>" means the Electric Reliability Council of Texas or any successor thereto.

"<u>Estimated SRC Collections</u>" means the sum of the payments in respect of System Restoration Charges which are deemed to have been received by the Servicer, directly or indirectly (including through a REP), from or on behalf of Customers, calculated in accordance with <u>Annex I</u> of the Servicing Agreement. Estimated SRC Collections include the amounts held back under the Tariff by an applicable REP to reflect potential write-offs.

"<u>Event of Default</u>" is defined in Section 5.01 of the Indenture.

"<u>Excess Funds Subaccount</u>" is defined in Section 8.02(a) of the Indenture.

"<u>Excess Remittance</u>" means the amount, if any, calculated for a particular Reconciliation Period, by which all Estimated SRC Collections remitted to the Collection Account during such Reconciliation Period exceed Actual SRC Collections received by the Servicer during such Reconciliation Period.

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended.

"<u>Expected Amortization Schedule</u>" means the expected amortization schedule set forth in <u>Schedule 4.01(a)</u> to the Servicing Agreement.

**Appendix A-3**

"<u>Expected Final Payment Date</u>" means, with respect to the Bonds, or, if applicable, each Tranche thereof, the date when all interest and principal is scheduled to be paid for that Tranche in accordance with the Expected Amortization Schedule.

"<u>Expected Sinking Fund Schedule</u>" means the expected sinking fund schedule in Schedule A to the Series Supplement.

"<u>Federal Book-Entry Regulations</u>" means 31 C.F.R. Part 357 <u>et seq</u>. (Department of Treasury).

"<u>Federal Funds Rate</u>" 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 federal funds brokers of recognized standing selected by it.

"<u>Final Maturity Date</u>" means, with respect to each Tranche of the Bonds, the final maturity date of such Tranche of the Bonds as specified in the Series Supplement.

"<u>Financing Order</u>" means the Financing Order issued by the Texas Commission on June 5, 2025 in Docket No. 57559 pursuant to the Securitization Act.

"<u>General Subaccount</u>" is defined in Section 8.02(a) of the Indenture.

"<u>Governmental Authority</u>" means any nation or government, any U.S. 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 functions of government.

"<u>Holders</u>" means the Person in whose name a Bond is registered on the Bond Register.

"<u>Indemnified Losses</u>" is defined in <u>Section 5.03</u> of the Servicing Agreement.

"<u>Indemnified Person</u>" is defined in <u>Section 6.02</u> of the Servicing Agreement.

"<u>Indenture</u>" means the Indenture, dated as of the date hereof, by and among the Issuer, U.S. Bank Trust Company, National Association, as Trustee, and U.S. Bank National Association, as Securities Intermediary.

"<u>Independent</u>" means, when used with respect to any specified Person, that such specified Person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) is in fact independent of the Issuer, any other obligor on the Bonds, the Seller, the Servicer and any Affiliate of any of the foregoing Persons,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

**Appendix A-4**

"<u>Independent Manager</u>" is defined in Section 4.01(a) of the LLC Agreement.

"<u>Insolvency Event</u>" 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 specified Person or any substantial part of its property in an involuntary case under any applicable U.S. federal or state bankruptcy, insolvency or other similar law in effect as of the date hereof or thereafter, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such specified Person or for any substantial part of its property, or ordering the winding-up or liquidation of such specified Person's affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (b) the commencement by such specified Person of a voluntary case under any applicable U.S. federal or state bankruptcy, insolvency or other similar law in effect as of the Closing Date or thereafter, or the consent by such specified Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such specified Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such specified Person or for any substantial part of its property, or the making by such specified Person of any general assignment for the benefit of creditors, or the failure by such specified Person generally to pay its debts as such debts become due, or the taking of action by such specified Person in furtherance of any of the foregoing.

"<u>Interim Adjustment Date</u>" means the effective date of any interim or semi-annual System Restoration Charge Adjustment in accordance with <u>Section 4.01(c)</u> of the Servicing Agreement.

"<u>Investment Earnings</u>" means investment earnings on funds deposited in the Collection Account net of losses and investment expenses.

"<u>Issuance Advice Letter</u>" means the issuance advice letter submitted to the Texas Commission by CEHE pursuant to the Financing Order in connection with the issuance of the Bonds.

"<u>Issuer</u>" means CenterPoint Energy Restoration Bond Company II, 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 Trust Indenture Act, each other obligor on the Bonds.

"<u>Letter of Representations</u>" 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 Bonds.

"<u>Lien</u>" means a security interest, lien, charge, pledge, equity or encumbrance of any kind.

"<u>LLC Agreement</u>" means the Amended and Restated Limited Liability Company Agreement of CenterPoint Energy Restoration Bond Company II, LLC, dated as of the date hereof.

"<u>Losses</u>" means (a) any and all amounts of principal of and interest on the Bonds not paid when due or when scheduled to be paid in accordance with their terms and the amounts of any deposits by or to the Issuer required to have been made in accordance with the terms of the Basic Documents or the Financing Order that are not made when so required and (b) any and all other liabilities, obligations, losses, claims, damages, payments, costs or expenses of any kind whatsoever.

**Appendix A-5**

"<u>Majority Holders</u>" means the Holders of at least a majority of the Outstanding Amount of the Bonds.

"<u>Manager</u>" means each manager of the Issuer under the LLC Agreement.

"<u>Member</u>" has the meaning specified in the first paragraph of the LLC Agreement.

"<u>Monthly Servicer's Certificate</u>" is defined in <u>Section 3.01(b)(i)</u> of the Servicing Agreement.

"<u>Moody's</u>" means Moody's Investors Service, Inc. or any successor in interest. References to Moody's are effective so long as Moody's is a rating agency.

"<u>NY UCC</u>" means the Uniform Commercial Code as in effect on the date hereof in the State of New York.

"<u>Officer's Certificate</u>" 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 Trustee.

"<u>Operating Expenses</u>" means, with respect to the Issuer, all fees, costs and expenses owed by the Issuer with respect to the Bonds, including all amounts owed by the Issuer to the Trustee (including any indemnity payments to the Trustee), the Servicing Fee, the Administration Fee, the costs and expenses incurred by the Seller in connection with the performance of the Seller's obligations under Section 4.07 of the Sale Agreement, the costs and expenses incurred by the Servicer in connection with the performance of the Servicer's obligations under <u>Section 5.02(d)</u> of the Servicing Agreement, the fees payable by the Issuer to the Independent Manager, administrative expenses, including external legal and external accounting fees, ratings maintenance fees, and all other costs and expenses recoverable by the Issuer under the terms of the Financing Order.

"<u>Opinion of Counsel</u>" 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.

"<u>Outstanding</u>" means, as of the date of determination, all Bonds theretofore authenticated and delivered under the Indenture except:

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

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

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

**Appendix A-6**

provided that in determining whether the Holders of the requisite Outstanding Amount of the Bonds have given any request, demand, authorization, direction, notice, consent or waiver under any Basic Document, Bonds owned by the Issuer, any other obligor upon the 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 (unless one or more such Persons owns 100% of such Bonds), except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds that the Trustee actually knows to be so owned shall be so disregarded. Bonds so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Bonds and that the pledgee is not the Issuer, any other obligor upon the Bonds, Member, the Seller, the Servicer or any Affiliate of any of the foregoing Persons.

"<u>Outstanding Amount</u>" means the aggregate principal amount of all Outstanding Bonds, Outstanding at the date of determination.

"<u>Paying Agent</u>" means U.S. Bank Trust Company, National Association, and any other Person appointed as a paying agent for the Bonds pursuant to the Indenture.

"<u>Payment Date</u>" has the meaning set forth in Section 3(b) of the Series Supplement.

"<u>PBRAF</u>" means the periodic billing requirement allocation factor used to allocate System Restoration Charges among different classes of Customers, as set forth in Schedule SRC and any other applicable tariff or order.

"<u>PBRAF Adjustment</u>" means each adjustment to any PBRAF made in accordance with Section 4.01 of the Servicing Agreement, Schedule SRC and any other applicable tariff, any order issued by the Texas Commission pursuant to Section 39.253 of the Public Utility Regulatory Act, and Annex I to the Servicing Agreement.

"<u>Penalty</u>" means a late-fee penalty assessed by the Servicer against an REP or other Person for such REP's or such other Person's failure to remit timely payments of System Restoration Charges as set forth in <u>Section 3.05(c)(ii)</u> of the Servicing Agreement.

"<u>Periodic Billing Requirement</u>" means, for any Calculation Period, the aggregate amount of System Restoration Charges calculated by the Servicer as necessary to be billed during such period in order to collect the Periodic Payment Requirements on or before the end of the Collection Period immediately preceding the next annual Adjustment Date.

"<u>Periodic Payment Requirement</u>" for any Calculation Period means the total dollar amount (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 Bonds at the end of such calculation period and including any shortfalls in Periodic Payment Requirements for any prior Calculation Period) sufficient to ensure that, as of the last Payment Date occurring in such Calculation Period, (1) all accrued and unpaid interest on the Bonds then due shall have been paid in full, (2) the Outstanding Amount of the Bonds is equal to the Projected Bond Balance, (3) the balance on deposit in the Capital Subaccount equals the aggregate Required Capital Amount and (4) all other fees and expenses due and owing and required or allowed to be paid under <u>Section 8.02</u> of the Indenture as of such date shall have been paid in full; <u>provided</u> that, with respect to any annual System Restoration Charge Adjustment or interim System Restoration Charge Adjustment occurring after the last Scheduled Final Payment Date for any Bonds, the Periodic Payment Requirements shall be calculated to ensure that sufficient System Restoration Charges will be collected to retire such Bonds in full as of the earlier of (x) the Payment Date preceding the next annual Adjustment Date and (y) the Final Maturity Date for such Bonds.

**Appendix A-7**

"<u>Person</u>" means any individual, corporation, estate, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), business trust, limited liability company, unincorporated organization or Governmental Authority.

"<u>Proceeding</u>" means any suit in equity, action at law or other judicial or administrative proceeding.

"<u>Projected Bond Balance</u>" means, as of any date, the anticipated Outstanding Amount of Bonds, after giving effect to payment of the sum of the payment amounts provided for in the Expected Amortization Schedules for the Bonds, to be paid on or before such date.

"<u>Protected Purchaser</u>" means has the meaning specified in Section 8-303 of the UCC.

"<u>Provider of Last Resort</u>" has the meaning specified in Section 39.106 of the Public Utility Regulatory Act.

"<u>Public Utility Regulatory Act</u>" means the Texas Public Utility Regulatory Act, as codified in Title II of the Utilities Code.

"<u>PUCT Regulation</u>" means any regulation, rule, order or directive promulgated, issued or adopted by the Texas Commission.

"<u>Purchase Price</u>" has the meaning specified in Section 2.01(a) of the Sale Agreement.

"<u>Qualified Costs</u>" has the meaning assigned to that term in Section 36.403(d) of the Public Utility Regulatory Act and the Financing Order.

"<u>Rating Agency</u>" means any rating agency rating the Bonds at the applicable time at the request of the Issuer, which initially shall be Moody's and S&P. 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, written notice of which designation shall be given to the Trustee, the Texas Commission and the Servicer.

"<u>Rating Agency Condition</u>" means, with respect to any action, at least ten Business Days' prior written notification to each Rating Agency of such action, and written confirmation from each of S&P and Moody's to the 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 the Bonds and that prior to the taking of the proposed action no other Rating Agency shall have provided written notice to us that such action has resulted or would result in the suspension, reduction or withdrawal of the then current rating of any such Tranche of the Bonds; <u>provided</u>, that, if within such ten Business Day period, any Rating Agency (other than S&P) has neither replied to such notification nor responded in a manner that indicates that such Rating Agency is reviewing and considering the notification, then (i) the requesting party shall be required to confirm that such Rating Agency has received the Rating Agency Condition request, and if it has, promptly request the related Rating Agency Condition confirmation and (ii) if the Rating Agency neither replies to such notification nor responds in a manner that indicates it is reviewing and considering the notification within five Business Days following such second request, the applicable Rating Agency Condition requirement shall not be deemed to apply to such Rating Agency. For the purposes of this definition, any confirmation, request, acknowledgment or approval that is required to be in writing may be in the form of electronic mail or a press release (which may contain a general waiver of a Rating Agency's right to review or consent).

**Appendix A-8**

"<u>Reconciliation Period</u>" means, with respect to any Collection Period, the twelve-month period ending the first day of such Collection Period; <u>provided</u>, that the initial Reconciliation Period shall commence on the Closing Date and that a shorter Reconciliation Period may be established pursuant to the last paragraph of <u>Section 8.01(b)</u> of the Servicing Agreement.

"<u>Regulation AB</u>" means the rules of the SEC promulgated under Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123.

"<u>Reimbursable Expenses</u>" is defined in Section 2 of the Administration Agreement and <u>Section 6.07(c)</u> of the Servicing Agreement.

"<u>Released Parties</u>" is defined in <u>Section 6.02(f)</u> of the Servicing Agreement.

"<u>Remittance Requirement</u>" means, with respect to any REP, the requirement that such REP remit System Restoration Charges to the Servicer within a prescribed number of days of billing by the Servicer in accordance with, if applicable, the Financing Order, the Tariff and any other PUCT Regulations.

"<u>Remittance Shortfall</u>" means the amount, if any, calculated for a particular Reconciliation Period, by which Actual SRC Collections received by the Servicer during such Reconciliation Period exceed all Estimated SRC Collections remitted to the Collection Account during such Reconciliation Period.

"<u>REP</u>" means a retail electric provider under the Financing Order or any other entity which, under the terms of the Financing Order or the Utilities Code, may be obligated to pay, bill or collect the System Restoration Charges, other than Customers.

"<u>REP Billing Day</u>" has the meaning specified in <u>Section 3.05(c)(ii)</u> of the Servicing Agreement.

"<u>REP Credit Requirement</u>" means the credit and collection policies applicable to REPs under the Financing Order, the Tariff and other PUCT Regulations.

"<u>REP Default</u>" has the meaning specified in <u>Section 3.05(d)(i)</u> of the Servicing Agreement.

"<u>REP Deposit</u>" has the meaning specified in <u>Section 3.05(e)</u> of the Servicing Agreement.

"<u>Required Capital Amount</u>" means the amount specified as such in the Series Supplement.

"<u>Requirement of Law</u>" means any foreign, U.S. federal, state or local laws, statutes, regulations, rules, codes or ordinances enacted, adopted, issued or promulgated by any Governmental Authority or common law.

**Appendix A-9**

"<u>Responsible Officer</u>" means, with respect to: (a) the Issuer, any officer, including President, Vice President, Secretary, Assistant Secretary, Treasurer or Assistant Treasurer, of the Issuer, or any Manager; (b) the Trustee, any officer within the Corporate Trust Office of such trustee (including the President, any Vice President, any Assistant Vice President, any Secretary, any Assistant Treasurer or any other officer of the 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 Trustee but including CEHE), the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Treasurer, any 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), 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.

"<u>Retirement</u>" means any day on which the final distribution is made to the Trustee in respect of the last Outstanding Amount.

"<u>Return on Invested Capital</u>" means, for any Payment Date, the sum of (i) the actual amounts earned from investments, payable to CEHE, on its capital contribution in the Issuer which amount has been deposited by the Issuer into the Capital Subaccount plus (ii) any Return on Invested Capital not paid on any prior Payment Date.

"<u>Sale Agreement</u>" means the System Restoration Property Sale Agreement, dated as of the date hereof, by and between the Issuer and CEHE, and acknowledged and accepted by the Trustee, as the same may be amended and supplemented from time to time.

"<u>S&P</u>" means S&P Global Ratings, a division of S&P Global Inc. or any successor in interest. References to S&P are effective so long as S&P is a rating agency.

"<u>Schedule SRC</u>" means the tariff on the form entitled "Schedule SRC" approved by the Texas Commission in the Financing Order and filed by CEHE prior to the issuance of the Bonds.

"<u>Scheduled Final Payment Date</u>" means, with respect to each Tranche of the Bonds, the date when all interest and principal for such Tranche is scheduled to be paid on the Bonds in accordance with the Expected Sinking Fund Schedule, as specified in the Series Supplement.

"<u>SEC</u>" means the Securities and Exchange Commission.

"<u>Securities Intermediary</u>" means U.S. Bank National Association, a national banking association, 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.

"<u>Securitization Act</u>" means Subchapter I of Chapter 36 of the Public Utility Regulatory Act, adopted and effective in August 2009, that allows for the securitization of system restoration costs, together with Subchapter G of Chapter 39 of the Public Utility Regulatory Act.

"<u>Seller</u>" means CEHE, or its successor, in its capacity as seller of the System Restoration Property to the Issuer pursuant to the Sale Agreement.

"<u>Semi-Annual Servicer's Certificate</u>" is defined in <u>Section 4.01(f)(ii)(A)</u> of the Servicing Agreement.

**Appendix A-10**

"<u>Series Supplement</u>" means an indenture supplemental to the Indenture in the form attached as <u>Exhibit B</u> to the Indenture that authorizes the issuance of the Bonds.

"<u>Servicer</u>" means CEHE, as initial Servicer under the Servicing Agreement, or any successor Servicer to the extent permitted under the Servicing Agreement.

"<u>Servicer Business Day</u>" means any day other than a Saturday, a Sunday or a day on which banking institutions in New York, New York, Chicago, Illinois or Houston, Texas are required or authorized by law or executive order to remain closed, on which the Servicer maintains normal office hours and conducts business.

"<u>Servicer Default</u>" is defined in <u>Section 7.01</u> of the Servicing Agreement.

"<u>Servicing Agreement</u>" or "<u>this Agreement</u>" means the System Restoration Property Servicing Agreement, dated as of the date hereof, by and between the Issuer and CEHE, and acknowledged and accepted by the Trustee, as the same may be amended and supplemented from time to time.

"<u>Servicing Fee</u>" means the fee payable by the Issuer to the Servicer on each Payment Date with respect to the Bonds, in an amount specified in <u>Section 6.07(a)</u> of the Servicing Agreement.

"<u>Servicing Standard</u>" means the obligation of the Servicer to calculate, apply, remit and reconcile proceeds of the System Restoration Property, including SRC Collections and REP Deposits 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 set forth in the Financing Order and Schedule SRC and (iii) in accordance with the other terms of the Servicing Agreement.

"<u>Special Payment Date</u>" means the date on which any payment of principal of or interest (including any interest accruing upon default) on, or any other amount in respect of, the Bonds that is not actually paid within five days of the Payment Date applicable thereto is to be made by the Trustee to the Holders.

"<u>State</u>" means any one of the 50 states of the United States of America or the District of Columbia.

"<u>SRC Collections</u>" means amounts constituting good funds collected by the Servicer in respect of the System Restoration Charges and the System Restoration Property.

"<u>Subaccount</u>" means, individually, the General Subaccount, the Excess Funds Subaccount, and the Capital Subaccount.

"<u>successor Servicer</u>" means (i) a successor to CEHE pursuant to <u>Section 6.03</u> of the Servicing Agreement or (ii) a successor Servicer appointed by the Trustee pursuant to <u>Section 7.04</u> of the Servicing Agreement which in each case will succeed to all the rights and duties of the Servicer under the Servicing Agreement.

"<u>System Restoration Charge Adjustment</u>" means each adjustment to System Restoration Charges related to the System Restoration Property made in accordance with <u>Section 4.01</u> of the Servicing Agreement and <u>Annex I</u> to the Servicing Agreement.

"<u>System Restoration Charges</u>" means the nonbypassable amounts to be charged for the use or availability of electric services, approved by the Texas Commission in the Financing Order to recover Qualified Costs that may be collected by CEHE, its successors, assignees or other collection agents as provided for in the Financing Order.

**Appendix A-11**

"<u>System Restoration Property</u>" means the rights and interests of the Seller or its successor under the Financing Order once those rights are first transferred to the Issuer or pledged in connection with the issuance of the Bonds, including the right to impose, collect and receive through System Restoration Charges payable by retail electric customers which take service at distribution voltage within Seller's certificated service area as it existed on the date of the Financing Order, an amount sufficient to cover the Qualified Costs of the Seller authorized in the Financing Order, the right to receive System Restoration Charges in amounts and at times sufficient to pay principal and interest and make other deposits in connection with the Bonds and all revenues and collections resulting from System Restoration Charges, except the rights of CEHE to earn and receive a rate of return on its invested capital in the Issuer, to receive administration and servicer fees, or to use CEHE's remaining portion of the Purchase Price, and all revenue, collections, payments, money and proceeds arising out of those rights and interests. System Restoration Property is known as "transition property" in the Securitization Act.

"<u>System Restoration Property Records</u>" is defined in <u>Section 5.01</u> of the Servicing Agreement.

"<u>Tariff</u>" means any rate tariff filed with the Texas Commission pursuant to the Public Utility Regulatory Act to evidence any System Restoration Charges.

"<u>Termination Notice</u>" is defined in <u>Section 7.01</u> of the Servicing Agreement.

"<u>Texas Commission</u>" means the Public Utility Commission of Texas or any successor entity thereto.

"<u>Third-Party Collector</u>" means each third party, including each REP, which, pursuant to any Tariff filed with the Texas Commission, or any agreement with CEHE, is obligated to bill, pay or collect System Restoration Charges.

"<u>Tranche</u>" means any one of the tranches of Bonds, as specified in the Series Supplement.

"<u>Trust Estate</u>" has the meaning set forth in the Series Supplement.

"<u>Trust Indenture Act</u>" means the Trust Indenture Act of 1939 as in force on the Closing Date, unless otherwise specifically provided.

"<u>Trustee</u>" means U.S. Bank Trust Company, National Association, a national banking association, as indenture trustee for the benefit of the Holders, or any other indenture trustee for the benefit of the Holders, under the Indenture.

"<u>UCC</u>" means the Uniform Commercial Code as in effect in the relevant jurisdiction.

"<u>Underwriting Agreement</u>" means the Underwriting Agreement, dated ________ __, 2025, by and among the Issuer, CEHE, and the representatives of the several Underwriters named therein, as the same may be amended, supplemented or modified from time to time, with respect to the issuance of the Bonds.

"<u>Utilities Code</u>" means the Texas Utilities Code, as amended from time to time.

**Appendix A-12**

"<u>Weighted Average Days Outstanding</u>" means the weighted average number of days CEHE's monthly bills to REPs remain outstanding during the calendar year immediately preceding the calculation thereof pursuant to <u>Section 4.01(b)(i)</u> of the Servicing Agreement. The initial Weighted Average Days Outstanding shall be thirty-five (35) days until updated pursuant to <u>Section 4.01(b)(i)</u> of the Servicing Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Rules of Construction</u>. Unless the context otherwise requires:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) 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 this Agreement are inconsistent with the meanings of such terms under U.S. generally accepted accounting principles or regulatory accounting principles, the definitions contained in this Agreement shall control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The term "<u>including</u>" means "including without limitation", and other forms of the verb "<u>include</u>" have correlative meanings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) All references to any Person shall include such Person's permitted successors and assigns, and any reference to a Person in a particular capacity excludes such Person in other capacities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Unless otherwise stated in this Agreement, 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 each of the words "to" and "until" means "to but excluding".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. References to Articles, Sections, Appendices and Exhibits in this Agreement are references to Articles, Sections, Appendices and Exhibits in or to this Agreement unless otherwise specified in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The various captions (including the tables of contents) in this Agreement are provided solely for convenience of reference and shall not affect the meaning or interpretation of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The definitions contained in this <u>Appendix A</u> apply equally to the singular and plural forms of such terms, and words of the masculine, feminine or neuter gender shall mean and include the correlative words of other genders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Unless otherwise specified, references to an agreement or other document include references to such agreement or document as from time to time amended, restated, reformed, supplemented or otherwise modified in accordance with the terms thereof (subject to any restrictions on such amendments, restatements, reformations, supplements or modifications set forth in such agreement or document) and include any attachments thereto.

**Appendix A-13**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) References to any law, rule, regulation or order of a Governmental Authority shall include such law, rule, regulation or order as from time to time in effect, including any amendment, modification, codification, replacement or reenactment thereof or any substitution therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) The word "will" shall be construed to have the same meaning and effect as the word "shall."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) The word "or" is not exclusive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant thereto unless otherwise defined therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) A term has the meaning assigned to it.

**Appendix A-14**

## Exhibit 10.2

**Exhibit 10.2**

SYSTEM RESTORATION PROPERTY SALE AGREEMENT

between

CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC

Issuer

and

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

Seller

Dated as of _________ __, 2025

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| ARTICLE I DEFINITIONS | ARTICLE I DEFINITIONS | 1 |
| &nbsp;&nbsp;&nbsp;Section 1.01 | Definitions | 1 |
| &nbsp;&nbsp;&nbsp;Section 1.02 | Other Definitional Provisions | 1 |
| ARTICLE II CONVEYANCE OF THE SYSTEM RESTORATION PROPERTY | ARTICLE II CONVEYANCE OF THE SYSTEM RESTORATION PROPERTY | 2 |
| &nbsp;&nbsp;&nbsp;Section 2.01 | Conveyance of the System Restoration Property | 2 |
| &nbsp;&nbsp;&nbsp;Section 2.02 | Conditions to Conveyance of the System Restoration Property | 3 |
| ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER | ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER | 4 |
| &nbsp;&nbsp;&nbsp;Section 3.01 | Organization and Good Standing | 4 |
| &nbsp;&nbsp;&nbsp;Section 3.02 | Due Qualification | 4 |
| &nbsp;&nbsp;&nbsp;Section 3.03 | Power and Authority | 4 |
| &nbsp;&nbsp;&nbsp;Section 3.04 | Binding Obligation | 4 |
| &nbsp;&nbsp;&nbsp;Section 3.05 | No Violation | 5 |
| &nbsp;&nbsp;&nbsp;Section 3.06 | No Proceedings | 5 |
| &nbsp;&nbsp;&nbsp;Section 3.07 | Approvals | 5 |
| &nbsp;&nbsp;&nbsp;Section 3.08 | The System Restoration Property | 5 |
| &nbsp;&nbsp;&nbsp;Section 3.09 | Solvency | 6 |
| &nbsp;&nbsp;&nbsp;Section 3.10 | The Financing Order | 7 |
| &nbsp;&nbsp;&nbsp;Section 3.11 | State Action | 7 |
| &nbsp;&nbsp;&nbsp;Section 3.12 | No Court Order | 8 |
| &nbsp;&nbsp;&nbsp;Section 3.13 | Approvals Concerning the System Restoration Property | 8 |
| &nbsp;&nbsp;&nbsp;Section 3.14 | Assumptions | 8 |
| &nbsp;&nbsp;&nbsp;Section 3.15 | Tax Liens | 8 |
| &nbsp;&nbsp;&nbsp;Section 3.16 | Creation of the System Restoration Property | 8 |
| &nbsp;&nbsp;&nbsp;Section 3.17 | Prospectus | 9 |
| &nbsp;&nbsp;&nbsp;Section 3.18 | Nature of Representations and Warranties | 9 |
| &nbsp;&nbsp;&nbsp;Section 3.19 | Waivers of Legal Warranties | 9 |
| ARTICLE IV COVENANTS OF THE SELLER | ARTICLE IV COVENANTS OF THE SELLER | 10 |
| &nbsp;&nbsp;&nbsp;Section 4.01 | Seller's Existence | 10 |
| &nbsp;&nbsp;&nbsp;Section 4.02 | No Liens or Conveyances | 10 |
| &nbsp;&nbsp;&nbsp;Section 4.03 | Delivery of Collections | 10 |
| &nbsp;&nbsp;&nbsp;Section 4.04 | Notice of Liens | 10 |
| &nbsp;&nbsp;&nbsp;Section 4.05 | Compliance with Law | 10 |
| &nbsp;&nbsp;&nbsp;Section 4.06 | Covenants Related to the System Restoration Property | 11 |
| &nbsp;&nbsp;&nbsp;Section 4.07 | Protection of Title | 12 |
| &nbsp;&nbsp;&nbsp;Section 4.08 | Taxes | 13 |
| &nbsp;&nbsp;&nbsp;Section 4.09 | Filings Pursuant to Financing Order | 13 |
| &nbsp;&nbsp;&nbsp;Section 4.10 | Issuance Advice Letter | 13 |
| &nbsp;&nbsp;&nbsp;Section 4.11 | Tariff | 13 |
| &nbsp;&nbsp;&nbsp;Section 4.12 | Notice of Breach to Rating Agencies, Etc. | 13 |
| &nbsp;&nbsp;&nbsp;Section 4.13 | Further Assurances | 13 |
| &nbsp;&nbsp;&nbsp;Section 4.14 | Use of Proceeds | 13 |

---

-i-

---

| | | |
|:---|:---|:---|
| ARTICLE V ADDITIONAL UNDERTAKINGS OF SELLER | ARTICLE V ADDITIONAL UNDERTAKINGS OF SELLER | 14.0 |
| &nbsp;&nbsp;&nbsp;Section 5.01 | **Liability of the Seller; Indemnities** | 14.0 |
| &nbsp;&nbsp;&nbsp;Section 5.02 | Merger, Conversion or Consolidation of, or Assumption of the Obligations of, the Seller | 15.0 |
| &nbsp;&nbsp;&nbsp;Section 5.03 | Limitation on Liability of the Seller and Others | 17.0 |
| ARTICLE VI MISCELLANEOUS PROVISIONS | ARTICLE VI MISCELLANEOUS PROVISIONS | 17.0 |
| &nbsp;&nbsp;&nbsp;Section 6.01 | Amendment | 17.0 |
| &nbsp;&nbsp;&nbsp;Section 6.02 | Notices | 18.0 |
| &nbsp;&nbsp;&nbsp;Section 6.03 | Assignment by the Seller | 19.0 |
| &nbsp;&nbsp;&nbsp;Section 6.04 | Limitations on Rights of Others | 19.0 |
| &nbsp;&nbsp;&nbsp;Section 6.05 | Severability | 19.0 |
| &nbsp;&nbsp;&nbsp;Section 6.06 | Separate Counterparts | 19.0 |
| &nbsp;&nbsp;&nbsp;Section 6.07 | Headings | 19.0 |
| &nbsp;&nbsp;&nbsp;Section 6.08 | Governing Law | 20.0 |
| &nbsp;&nbsp;&nbsp;Section 6.09 | Limitation of Liability | 20.0 |
| &nbsp;&nbsp;&nbsp;Section 6.10 | Waivers | 20.0 |
| &nbsp;&nbsp;&nbsp;Section 6.11 | Nonpetition Covenants | 20.0 |

---

APPENDIX A DEFINITIONS <br> <br> EXHIBIT A BILL OF SALE

-ii-

SYSTEM RESTORATION PROPERTY SALE AGREEMENT dated as of _________ __, 2025, between CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC, a Delaware limited liability company (the "Issuer"), and CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a Texas limited liability company, as seller, and acknowledged and accepted by U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as indenture trustee (the "Indenture Trustee").

WHEREAS, the Issuer desires to purchase the System Restoration Property created pursuant to the Securitization Act and the Financing Order;

WHEREAS, the Seller is willing to sell its rights and interests under the Financing Order to the Issuer whereupon such rights and interests will become the System Restoration Property;

WHEREAS, the Issuer, in order to finance the purchase of the System Restoration Property, will issue the Bonds under the Indenture; and

WHEREAS, the Issuer, to secure its obligations under the Bonds and the Indenture, will pledge its right, title and interest in the System Restoration Property and this Agreement to the Indenture Trustee for the benefit of the Bondholders.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained and intending to be legally bound hereby, the parties hereto agree as follows:

**ARTICLE I**

**DEFINITIONS**

Section 1.01 *Definitions*. Capitalized terms used herein and not otherwise defined herein have the meanings assigned to them in Appendix A to this Agreement.

Section 1.02 *Other Definitional Provisions*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Non-capitalized terms used herein which are defined in the Securitization Act, as the context requires, have the meanings assigned to such terms in the Securitization Act, but without giving effect to amendments to the Securitization Act after the date hereof which have a material adverse effect on the Issuer or the Bondholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All terms defined in this Agreement shall have such defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The words "hereof," "herein," "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section, Schedule and Exhibit references contained in this Agreement are references to Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; and the term "including" shall mean "including without limitation."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms.

**ARTICLE II**

**CONVEYANCE OF THE SYSTEM RESTORATION PROPERTY**

Section 2.01 *Conveyance of the System Restoration Property*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In consideration of the Issuer's payment to or upon the order of the Seller of $__________________ (the "Purchase Price"), subject to the satisfaction or waiver of the conditions specified in Section 2.02, the Seller does hereby irrevocably sell, transfer, assign, set over and otherwise convey to the Issuer, without recourse (subject, for the avoidance of doubt, to the express obligations of the Seller herein) or warranty, except as set forth herein, all right, title and interest of the Seller in, to and under the Financing Order as identified in the Bill of Sale delivered pursuant to Section 2.02(i) on the Closing Date whereupon such rights and interests under the Financing Order shall become the System Restoration Property (such sale, transfer, assignment, setting over and conveyance of the System Restoration Property to include, to the fullest extent permitted by the Securitization Act the right to impose, collect and receive the System Restoration Charges, as the same may be adjusted from time to time). Such sale, transfer, assignment, setting over and conveyance of the System Restoration Property is hereby expressly stated to be a sale or other absolute transfer and, pursuant to Section 39.308 of the Public Utility Regulatory Act and other applicable law, is a true sale and is not a secured transaction and title, legal and equitable, has passed to the Issuer. The preceding sentence is the statement referred to in Section 39.308 of the Public Utility Regulatory Act. The Seller agrees and confirms that upon payment of the Purchase Price and the execution and delivery of this Agreement and the Bill of Sale, the sale, transfer and assignment hereunder shall be effective and the Seller shall have no right, title or interest in, to or under the System Restoration Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to the satisfaction or waiver of conditions specified in Section 2.02, the Issuer does hereby purchase the System Restoration Property from the Seller for the consideration set forth in Section 2.01(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Seller and the Issuer each acknowledge and agree that the purchase price for the System Restoration Property sold pursuant to this Agreement is equal to its fair market value at the time of sale.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding the foregoing, in the event that the sale, transfer, assignment, setting over and conveyance of the System Restoration Property is determined by any court of competent jurisdiction not to be a true sale as contemplated by the parties and as provided in Section 39.308 of the Public Utility Regulatory Act, then such sale, transfer, assignment, setting over and conveyance shall be treated as a pledge of and grant of a security interest in the System Restoration Property under Section 39.309 of the Public Utility Regulatory Act and under the Uniform Commercial Code as enacted in the State of Texas and each other applicable jurisdiction, and the Seller shall be deemed to have granted, and does hereby grant, as of the date hereof, a security interest to the Issuer on behalf of itself and the Indenture Trustee in the System Restoration Property to secure a payment obligation incurred by the Seller in the amount paid by the Issuer for the System Restoration Property.

Section 2.02 *Conditions to Conveyance of the System Restoration Property*. The obligation of the Seller to sell, and the obligation of the Issuer to purchase the System Restoration Property on the Closing Date shall be subject to and conditioned upon the satisfaction or waiver of each of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) on or prior to the Closing Date, the Seller shall deliver to the Issuer a duly executed Bill of Sale identifying the System Restoration Property, substantially in the form of Exhibit A hereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) as of the Closing Date, the representations and warranties of the Seller in this Agreement shall be true and correct in all material respects and no material breach by the Seller of its covenants in this Agreement shall exist and the Seller shall have delivered to the Issuer and the Indenture Trustee an Officer's Certificate to such effect and no Servicer Default shall have occurred and be continuing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) as of the Closing Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the Issuer shall have sufficient funds available to pay the Purchase Price,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) all conditions set forth in the Indenture to the issuance of the Bonds shall have been satisfied or waived, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) the Seller is not insolvent and will not have been made insolvent by the sale of the System Restoration Property and the Seller is not aware of any pending insolvency with respect to itself;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the Seller shall have delivered to each Rating Agency and to the Issuer any Opinions of Counsel requested by the Rating Agencies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) the Seller shall have delivered to the Indenture Trustee and the Issuer an Officer's Certificate confirming the satisfaction of each relevant condition precedent specified in this Section 2.02; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) the Seller shall have received the Purchase Price in funds immediately available on the Closing Date.

**ARTICLE III**

**REPRESENTATIONS AND WARRANTIES OF SELLER**

As of the Closing Date, the Seller makes the following representations and warranties on which the Issuer has relied and will rely in acquiring the System Restoration Property. The following representations and warranties are made under existing law as in effect as of the Closing Date. The Seller shall not be in breach of any representation or warranty herein as a result of a change in law occurring after the Closing Date, including by means of legislative enactment, constitutional amendment or voter initiative. The representations and warranties shall survive the sale of the System Restoration Property to the Issuer and the pledge thereof on the Closing Date to the Indenture Trustee pursuant to the Indenture.

Section 3.01 *Organization and Good Standing*. The Seller is a limited liability company duly organized and in good standing under the laws of the State of Texas, with limited liability company power and authority to own its properties and to conduct its business as currently owned or conducted.

Section 3.02 *Due Qualification*. The Seller is duly qualified to do business as a foreign limited liability company in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business requires such qualifications, licenses or approvals (except where the failure to so qualify or obtain such licenses and approvals would not be reasonably likely to have a material adverse effect on the Seller's business, operations, assets, revenues or properties).

Section 3.03 *Power and Authority*. The Seller has the limited liability company power and authority to obtain the Financing Order and to execute and deliver this Agreement and to carry out its terms; the Seller has the limited liability company power and authority to own the rights and interests under the Financing Order, and to sell and assign the rights and interests under the Financing Order to the Issuer, whereupon (subject to the effectiveness of the Issuance Advice Letter) such rights and interests will become the System Restoration Property; and the execution, delivery and performance of this Agreement have been duly authorized by the Seller by all necessary limited liability company action.

Section 3.04 *Binding Obligation*. This Agreement constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, subject to bankruptcy, receivership, insolvency, reorganization, moratorium, fraudulent transfer and other laws relating to or affecting creditors' or secured parties' rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law.

Section 3.06 *No Proceedings*. Except as disclosed in the Issuer's prospectus dated ________ __, 2025 relating to the Bonds (the "Prospectus"), there are no proceedings pending and, to the Seller's knowledge, (x) there are no proceedings threatened and (y) there are no investigations pending or threatened before any Governmental Authority having jurisdiction over the Seller or its properties involving or relating to the Seller or the Issuer or, to the Seller's knowledge, any other Person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) asserting the invalidity of this Agreement, any of the other Basic Documents, the Bonds, the Securitization Act or the Financing Order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) seeking to prevent the issuance of the Bonds or the consummation of any of the transactions contemplated by this Agreement or any of the other Basic Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) seeking any determination or ruling that could reasonably be expected to materially and adversely affect the performance by the Seller of its obligations under, or the validity or enforceability of, this Agreement, any of the other Basic Documents or the Bonds; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) challenging the Seller's treatment of the Bonds as debt of Utility Holding, LLC for federal or state income, gross receipts or franchise tax purposes.

Section 3.07 *Approvals*. Except for filings under the UCC and the Securitization Act, no approval, authorization, consent, order or other action of, or filing with, any Governmental Authority is required under an applicable law, rule or regulation in connection with the execution and delivery by the Seller of this Agreement, the performance by the Seller of the transactions contemplated hereby or the fulfillment by the Seller of the terms hereof, except those that have been obtained or made and those that the Seller, in its capacity as Servicer under the Servicing Agreement, is required to make in the future pursuant to the Servicing Agreement.

Section 3.08 *The System Restoration Property*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Information. Subject to Section 3.14, all written information, as amended or supplemented from time to time prior to the date this representation is made, provided by the Seller to the Issuer with respect to the System Restoration Property (including the Financing Order and the Issuance Advice Letter) is correct in all material respects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Effect of Transfer. It is the intention of the parties hereto that (other than for U.S. federal income tax purposes and, to the extent consistent with applicable state tax laws, state income and franchise tax purposes) the sale, transfer, assignment, setting over and conveyance herein contemplated constitutes a sale or other absolute transfer of all right, title and interest of the Seller in, to and under the Financing Order from the Seller to the Issuer whereupon (subject to the effectiveness of the Issuance Advice Letter) such rights and interests shall become the System Restoration Property. Upon execution and delivery of this Agreement and the Bill of Sale and payment of the Purchase Price, the Seller will have no right, title or interest in, to or under the System Restoration Property; and that the System Restoration Property would not be a part of the estate of the Seller as debtor in the event of the filing of a bankruptcy petition by or against the Seller under any bankruptcy law. No portion of the System Restoration Property has been sold, transferred, assigned, pledged or otherwise conveyed by the Seller to any person other than the Issuer, and, to the Seller's knowledge, no security arrangement, financing statement or equivalent security or lien instrument listing the Seller, as debtor, and all or a portion of the System Restoration Property, as collateral, is on file or of record in Texas, except such as may have been filed or recorded in favor of the Issuer or the Indenture Trustee in connection with the Basic Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Transfer Filings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Seller is the sole owner of all of the rights and interests under the Financing Order to be sold to the Issuer on the Closing Date.

Section 3.09 *Solvency*. After giving effect to the sale of the System Restoration Property hereunder, the Seller:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) is solvent and expects to remain solvent,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) is adequately capitalized to conduct its business and affairs considering its size and the nature of its business and intended purposes,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) is not engaged and does not expect to engage in a business for which its remaining property represents an unreasonably small portion of its capital,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) reasonably believes that it will be able to pay its debts as they come due, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) is able to pay its debts as they come due and does not intend to incur, or believes that it will incur, indebtedness that it will not be able to repay at its maturity.

Section 3.10 *The Financing Order*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Financing Order was issued by the Texas Commission on June 5, 2025 in accordance with the Securitization Act; the Financing Order and the process by which it was issued comply with all applicable laws, rules and regulations of the State of Texas and the federal laws of the United States, and the Financing Order is final, non-appealable and in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) As of the date of issuance of the Bonds, the Bonds will be entitled to the protections provided by the Securitization Act and the Financing Order, and the Financing Order and the System Restoration Charges authorized therein will have become irrevocable and not subject to reduction, impairment or adjustment by further action of the Texas Commission, except as permitted by Section 39.307 of the Public Utility Regulatory Act, and the Issuance Advice Letter has been filed in accordance with the Financing Order. The Texas Commission has not issued any order prior to noon on the fourth business day after submission of the Issuance Advice Letter that the Bonds do not comply with Ordering Paragraph 5 of the Financing Order and the initial System Restoration Charges and the final terms of the Bonds set forth in the Issuance Advice Letter have become effective. No other approval, authorization, consent, order or other action of, or filing with any Governmental Authority is required in connection with the creation of the System Restoration Property transferred on such date, except those that have been obtained or made.

Section 3.11 *State Action*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Under the Securitization Act, the State of Texas has pledged that it will not take or permit any action that would impair the value of the System Restoration Property or, except as permitted in Section 39.307 of the Public Utility Regulatory Act, reduce, alter or impair the System Restoration Charges until the principal, interest and premium, if any, and any other charges incurred and contracts to be performed in connection with the Bonds, have been paid and performed in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Under the laws of the State of Texas and the federal laws of the United States, a reviewing court of competent jurisdiction would hold that (x) the State of Texas could not constitutionally take any action of a legislative character, including the repeal or amendment of the Securitization Act, which would substantially limit, alter or impair the System Restoration Property or other rights vested in the Bondholders pursuant to the Financing Order, or substantially limit, alter, impair or reduce the value or amount of the System Restoration Property, unless such action is a reasonable exercise of the State of Texas' sovereign powers and of a character reasonable and appropriate to the important public purpose justifying such action, and, (y) under the takings clauses of the State of Texas and United States Constitutions, if the court concludes that the System Restoration Property is protected by the takings clause, the State of Texas could not repeal or amend the Securitization Act, or take any other action in contravention of its pledge quoted above without paying just compensation to the Bondholders, as determined by a court of competent jurisdiction, if doing so would constitute a permanent appropriation of a substantial property interest of the Bondholders in the System Restoration Property and deprive the Bondholders of their reasonable expectations arising from their investments in the Bonds; however, there is no assurance that, even if a court were to award just compensation, it would be sufficient to pay the full amount of principal of and interest on the Bonds.

Section 3.12 *No Court Order*. There is no order by any court providing for the revocation, alteration, limitation or other impairment of the Securitization Act, the Financing Order, the Issuance Advice Letter, the System Restoration Property or the System Restoration Charges or any rights arising under any of them or that seeks to enjoin the performance of any obligations under the Financing Order.

Section 3.13 *Approvals Concerning the System Restoration Property*. Under the laws of the State of Texas and the federal laws of the United States in effect on the date hereof, no other approval, authorization, consent, order or other action of, or filing with any Governmental Authority is required in connection with the creation or transfer of the Seller's rights and interests under the Financing Order and the Issuer's purchase of the System Restoration Property from the Seller, except those that have been obtained or made.

Section 3.14 *Assumptions*. Based on information available to the Seller on the date hereof, the assumptions used in calculating the System Restoration Charges in the Issuance Advice Letter are reasonable and made in good faith; however, notwithstanding the foregoing, **the Seller makes no representation or warranty, express or implied, that amounts actually collected arising from the System Restoration Charges will in fact be sufficient to meet the payment obligations on the Bonds or that the assumptions used in calculating such System Restoration Charges will in fact be realized**.

Section 3.15 *Tax Liens*. The Seller is not aware of any judgment or tax Lien filings against the Issuer or the Seller that would result in a Lien on the System Restoration Property.

Section 3.16 *Creation of the System Restoration Property*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Upon the effectiveness of the Issuance Advice Letter, the transfer of the Seller's rights and interests under the Financing Order related to the Bonds and the Issuer's purchase of the System Restoration Property from the Seller pursuant to this Agreement, the System Restoration Property will constitute a present property right.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Upon the effectiveness of the Issuance Advice Letter, the transfer of the Seller's rights and interests under the Financing Order and the Issuer's purchase of the System Restoration Property from the Seller pursuant to this Agreement, the System Restoration Property includes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the right to impose, collect and receive the System Restoration Charges, including the right to receive
System Restoration Charges in amounts and at times sufficient to pay principal and interest on the Bonds,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) all rights and interest of the Seller under the Financing Order, except the rights of Seller to earn and
receive a rate of return on its invested capital in the Issuer, to receive administration and servicer fees, or to use the Seller's
remaining portion of the Purchase Price,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) the rights to file for periodic adjustments of the System Restoration Charges as provided in the Financing
Order, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) all revenues and collections resulting from the System Restoration Charges.

Section 3.17 *Prospectus*. As of the date hereof, the information describing the Seller under the captions "Review of the System Restoration Property", "The Depositor, Seller, Initial Servicer and Sponsor" and "The Sale Agreement" in the Prospectus is true and correct in all material respects.

Section 3.18 *Nature of Representations and Warranties*. The representations and warranties set forth in Section 3.08 and Section 3.10 through Section 3.17, insofar as they involve conclusions of law, are made not on the basis that the Seller purports to be a legal expert or to be rendering legal advice, but rather to reflect the parties' good faith understanding of the legal basis on which the parties are entering into this Agreement and the other Basic Documents and the basis on which the Bondholders are purchasing the Bonds, and to reflect the parties' agreement that, if such understanding turns out to be incorrect or inaccurate, the Seller will be obligated to indemnify the Issuer and its permitted assigns (to the extent required by and in accordance with Section 5.01), and that the Issuer and its permitted assigns will be entitled to enforce any rights and remedies under the Basic Documents on account of such inaccuracy to the same extent as if the Seller had breached any other representations or warranties hereunder.

Section 3.19 *Waivers of Legal Warranties*. The Seller makes no representation or warranty, express or implied, as to the solvency of any REP or Customer on the Closing Date or as to the future solvency of any REP or Customer.

**ARTICLE IV**

**COVENANTS OF THE SELLER**

Section 4.01 *Seller's Existence*. Subject to Section 5.02, so long as any of the Bonds are outstanding, the Seller (i) shall keep in full force and effect its existence and remain in good standing under the laws of the state of its organization, and shall obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or will be necessary to protect the validity and enforceability of this Agreement and each other instrument or agreement to which the Seller is a party necessary to the proper administration of this Agreement and the transactions contemplated hereby and (ii) hereby agrees to continue to operate its distribution system in order to provide electric services to retail electric customers served at distribution voltage in the Seller's certificated service area, provided that this clause (ii) shall not prohibit Seller from selling, assigning or otherwise divesting its distribution system or any part thereof in accordance with this Agreement and the Financing Order.

Section 4.02 *No Liens or Conveyances*. Except for the conveyances hereunder or any Lien under Section 39.309 of the Public Utility Regulatory Act for the benefit of the Issuer, the Indenture Trustee and the Bondholders, the Seller shall not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien on, any of the System Restoration Property, whether now existing or hereafter created, or any interest therein. The Seller shall not at any time assert any Lien against or with respect to the System Restoration Property, and shall defend the right, title and interest of the Issuer and the Indenture Trustee, as assignee of the Issuer, in, to and under the System Restoration Property against all claims of third parties claiming through or under the Seller.

Section 4.03 *Delivery of Collections*. In the event that the Seller receives collections in respect of the System Restoration Charges or the proceeds thereof other than in its capacity as the Servicer, the Seller agrees to pay to the Servicer, on behalf of the Issuer, all payments received by it in respect thereof, as soon as practicable after receipt thereof. Prior to such remittance to the Servicer by the Seller, the Seller agrees that such amounts are held by it in trust for the Issuer and the Indenture Trustee. If the Seller becomes a party to any future trade receivables purchase and sale arrangement or similar arrangement under which it sells all or any portion of its accounts receivables, the Seller and the other parties to such arrangement shall enter into an intercreditor agreement in connection therewith and the terms of the documentation evidencing such trade receivables purchase and sale arrangement or similar arrangement shall expressly exclude System Restoration Charges from any receivables or other assets pledged or sold under such arrangement.

Section 4.05 *Compliance with Law*. The Seller shall comply with its organizational or governing documents and all laws, treaties, rules, regulations and determinations of any Governmental Authority applicable to the Seller, except to the extent that failure to so comply would not materially adversely affect the Issuer's or the Indenture Trustee's interests in the System Restoration Property or under any of the Basic Documents to which the Seller is a party or the Seller's performance of its obligations hereunder or under any of the other Basic Documents to which the Seller is a party.

Section 4.06 *Covenants Related to the System Restoration Property*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) So long as any of the Bonds are outstanding, the Seller shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) treat the Bonds as debt of the Issuer and not of the Seller, except for financial reporting, federal or state regulatory or tax purposes,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) disclose in its financial statements that the Issuer is, and the Seller is not, the owner of the System Restoration Property and that the assets of the Issuer are not available to pay creditors of the Seller or any of its Affiliates (other than the Issuer),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) unless, and to the extent, required by applicable law or directed or required by a Governmental Authority, disclose the effects of all transactions between the Seller and the Issuer in accordance with generally accepted accounting principles, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) not own or purchase any Bonds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) So long as any of the Bonds are outstanding,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) in all proceedings relating directly or indirectly to the System Restoration Property, the Seller shall: (A) affirmatively certify and confirm that it has sold all of its rights and interests under the Financing Order to the Issuer (other than for financial reporting or tax purposes), and (B) not make any statement or reference in respect of the System Restoration Property that is inconsistent with the ownership thereof by the Issuer (other than for financial reporting or tax purposes);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Seller shall not take any action in respect of the System Restoration Property except solely in its capacity as the Servicer thereof pursuant to the Servicing Agreement or as contemplated by the Basic Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) neither the Seller nor the Issuer shall take any action, file any tax return, or make any election inconsistent with the treatment of the Issuer, for purposes of U.S. federal income tax and, to the extent consistent with applicable state, local and other tax law, for purposes of state, local and other taxes, as a disregarded entity that is not separate from the sole owner of the Issuer for U.S. federal income tax purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) if the Seller enters into a sale agreement selling to any other affiliate property consisting of nonbypassable charges payable by REPs comparable to those sold by the Seller pursuant to this Agreement, the Rating Agency Condition shall be satisfied with respect to the Bonds prior to or coincident with such sale and the Seller shall enter into an intercreditor agreement with the Issuer, the Indenture Trustee, the issuing entity of such additional bonds and the indenture trustee for such additional bonds; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) neither the Seller nor a subsidiary of the Seller shall issue or cause to be issued any bonds similar to the Bonds or other bonds supported by nonbypassable charges payable by REPs comparable to those sold by the Seller pursuant to this Agreement without the Rating Agency Condition being satisfied with respect to the Bonds prior to or coincident with such issuance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Seller agrees that upon the sale by the Seller of all of its rights and interests under the Financing Order to the Issuer pursuant to this Agreement, any payment to the Servicer by any Person responsible for remitting System Restoration Charges to the Servicer under the terms of the Financing Order or the Securitization Act or applicable tariff shall discharge such Person's obligations in respect of the System Restoration Property to the extent of such payment, notwithstanding any objection or direction to the contrary by the Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) So long as any of the Bonds are outstanding, the Issuer shall promptly provide the Seller with any confirmation received from a Rating Agency in connection with the satisfaction of the Rating Agency Condition in Section 4.06(b)(iv) or (v).

Section 4.07 *Protection of Title*. The Seller shall execute and file such filings, and cause to be executed and filed such filings, in such manner and in such places as may be required by law fully to preserve, maintain and protect the interests of the Issuer and the Indenture Trustee in the System Restoration Property, including all filings required under the Securitization Act and the UCC relating to the transfer of the ownership of the rights and interests under the Financing Order by the Seller to the Issuer and the pledge of the System Restoration Property by the Issuer to the Indenture Trustee. The Seller shall deliver (or cause to be delivered) to the Issuer and the Indenture Trustee file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing. The Seller shall institute any action or proceeding reasonably necessary to compel performance by the Texas Commission or the State of Texas of any of their obligations or duties under the Securitization Act, the Financing Order or the Issuance Advice Letter relating to the transfer of the rights and interests under the Financing Order by the Seller to the Issuer, and shall notify the Indenture Trustee of the institution of any such action. The Seller agrees to take such legal or administrative actions, including defending against or instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, in each case as may be reasonably necessary:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) to protect the Issuer and the Bondholders from claims, state actions or other actions or proceedings of third parties which, if successfully pursued, would result in a breach of any representation or warranty of the Seller set forth in Article III; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) so long as the Seller is also the Servicer, to block or overturn any attempts to cause a repeal of, modification of or supplement to the Securitization Act, the Financing Order, the Issuance Advice Letter or the rights of Bondholders by legislative enactment or constitutional amendment that would be materially adverse to the Issuer, the Indenture Trustee or the Bondholders.

The costs of any such actions or proceedings shall be reimbursed by the Issuer to the Seller from amounts on deposit in the Collection Account as an Operating Expense (as such terms are defined in the Indenture) in accordance with the terms of the Indenture. The Seller's obligations pursuant to this Section 4.07 shall survive and continue notwithstanding that the payment of Operating Expenses pursuant to the Indenture may be delayed (it being understood that the Seller may be required to advance its own funds to satisfy its obligation hereunder). The Seller designates the Issuer as its agent and attorney-in-fact to execute any filings of financing statements, continuation statements or other instruments required of the Seller pursuant to this Section 4.07, it being understood that the Issuer shall have no obligation to execute any such instruments.

Section 4.08 *Taxes*. So long as any of the Bonds are outstanding, the Seller shall pay all material taxes, assessments and governmental charges imposed upon it or any of its properties or assets or with respect to any of its franchises, businesses, 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 System Restoration Property; provided that no such tax need be paid if the Seller or any of its Affiliates is contesting the same in good faith by appropriate proceedings promptly instituted and diligently conducted and if the Seller or such Affiliate has established appropriate reserves as shall be required in conformity with generally accepted accounting principles.

Section 4.09 *Filings Pursuant to Financing Order*. The Seller shall comply with all filing requirements imposed upon the Seller in its capacity as such by the Financing Order, including making any such post-closing filings.

Section 4.10 *Issuance Advice Letter*. The Seller hereby agrees not to withdraw the filing of the Issuance Advice Letter with the Texas Commission.

Section 4.11 *Tariff*. The Seller hereby agrees to make all reasonable efforts to keep the applicable tariff in full force and effect at all times.

Section 4.12 *Notice of Breach to Rating Agencies, Etc*. Promptly after obtaining knowledge thereof, in the event of a breach in any material respect (without regard to any materiality qualifier contained in such representation, warranty or covenant) of any of the Seller's representations, warranties or covenants contained herein, the Seller shall promptly notify the Issuer, the Indenture Trustee and the Rating Agencies of such breach. For the avoidance of doubt, any breach which would adversely affect scheduled payments on the Bonds will be deemed to be a material breach for purposes of this Section 4.12.

Section 4.13 *Further Assurances*. Upon the reasonable request of the Issuer, the Seller shall execute and deliver such further instruments and do such further acts as may be reasonably necessary to carry out more effectually the provisions and purposes of this Agreement.

Section 4.14 *Use of Proceeds*. The Seller will use the proceeds from the sale of the System Restoration Property to the Issuer in accordance with the applicable provisions of the Financing Order.

**ARTICLE V**

**ADDITIONAL UNDERTAKINGS OF SELLER**

The Seller hereby undertakes the obligations contained in this Article V and acknowledges that the Issuer shall have the right to assign its rights with respect to such obligations to the Indenture Trustee for the benefit of the Bondholders.

Section 5.01 **Liability of the Seller; Indemnities** **.**

(a) **The Seller shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Seller under this Agreement.**

(b) **The Seller shall indemnify the Issuer and the Indenture Trustee, for itself and on behalf of the Bondholders, and each of their respective officers, directors, managers, employees and agents for, and defend and hold harmless each such Person from and against, any and all taxes (other than any taxes imposed on Bondholders solely as a result of their ownership of Bonds) that may at any time be imposed on or asserted against any such Person under existing law as of the Closing Date as a result of the sale and assignment of the Seller's rights and interests under the Financing Order by the Seller to the Issuer, the acquisition or holding of the System Restoration Property by the Issuer or the issuance and sale by the Issuer of the Bonds, including any sales, gross receipts, tangible personal property, privilege, franchise or license taxes, but excluding any taxes imposed as a result of a failure of such Person to properly withhold or remit taxes imposed with respect to payments on any Bond, in the event and to the extent such taxes are not recoverable as Qualified Costs, it being understood that the Bondholders shall be entitled to enforce their rights against the Seller under this Section 5.01(b) solely through a cause of action brought for their benefit by the Indenture Trustee in accordance with the terms of the Indenture.**

(c) **The Seller shall indemnify the Issuer and the Indenture Trustee, for itself and on behalf of the Bondholders, and each of their respective officers, directors, managers, employees and agents for, and defend and hold harmless each such Person from and against, any and all liabilities, obligations, claims, actions, suits or payments of any kind whatsoever that may be imposed on or asserted against any such Person (which may include, without limitation, an amount equal to principal and interest on the Bonds as a measure of Seller's indemnification obligations under this Section 5.01) together with any reasonable costs and expenses incurred by such Person, in each case as a result of the Seller's breach of any of its representations, warranties or covenants contained in this Agreement.**

(d) **The indemnification obligations of the Seller under this Section 5.01 shall rank *pari passu* with all other general unsecured obligations of the Seller.**

(e) **Indemnification under this Section 5.01 shall survive the resignation or removal of the Indenture Trustee and the termination of this Agreement and shall include reasonable fees and expenses of investigation and litigation (including reasonable attorneys' fees and expenses) and the costs and expenses (including reasonable attorney's fees and expenses) of enforcing the Seller's indemnification obligations hereunder. The Seller shall not indemnify any party under this Section 5.01 for any changes in law after the Closing Date, including by means of legislative enactment, constitutional amendment or voter initiative, or for any liability resulting solely from a downgrade in any rating of the Bonds by any Rating Agency. The Seller shall not indemnify the Indenture Trustee or its officers, directors, managers, employees or agents under this Section 5.01 against any liability, obligation, claim, action, suit or payment of any kind arising out of the willful misconduct, negligence or bad faith of any such Person.**

**(**f**)** **The Seller shall not be required to indemnify a party under this Section 5.01 for any amount paid or payable by such party in the settlement of any action, proceeding or investigation without the prior written consent of the seller, which consent shall not be unreasonably withheld.**

**Notwithstanding the foregoing, in no event shall any such foregoing indemnity extend to the collectibility of the System Restoration Charges from any Person responsible for remitting System Restoration Charges to the Servicer under the terms of the Financing Order, the** **Securitization Act or an applicable tariff, or the creditworthiness of any such Person or the inability or failure of such Person to timely pay all or a portion of the System Restoration Charges. The remedies provided in this Agreement are the sole and exclusive remedies against the Seller for breach of its representations, warranties or covenants in this Agreement.**

Section 5.02 *Merger, Conversion or Consolidation of, or Assumption of the Obligations of, the Seller*.

Any Person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) into which the Seller may be merged, converted or consolidated and which succeeds to all or substantially all of the electric distribution business of the Seller,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) which results from the division of the Seller into two or more Persons and which succeeds to all or substantially all of the electric distribution business of the Seller,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) which may result from any merger, conversion or consolidation to which the Seller shall be a party and which succeeds to all or substantially all of the electric distribution business of the Seller,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) which may purchase or otherwise succeed to the properties and assets of the Seller substantially as a whole and which purchases or otherwise succeeds to all or substantially all of the electric distribution business of the Seller, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) which may otherwise purchase or succeed to all or substantially all of the electric distribution business of the Seller,

which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Seller under this Agreement, shall be the successor to the Seller hereunder without the execution or filing of any document or any further act by any of the parties to this Agreement; provided, however, that

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) immediately after giving effect to such transaction, no representation, warranty or covenant made pursuant to Article III or Article IV shall have been breached in any material respect and no Servicer Default, and no event that, after notice or lapse of time, or both, would become a Servicer Default, shall have occurred and be continuing,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Rating Agencies shall have received prior written notice of such transaction,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Seller shall have delivered to the Issuer and the Indenture Trustee an Officer's Certificate and an Opinion of Counsel each stating that such consolidation, conversion, merger, division or succession and such agreement of assumption comply with this Section 5.02 and that all conditions precedent, if any, provided for in this Agreement relating to such transaction have been complied with,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the Seller shall have delivered to the Issuer and the Indenture Trustee an Opinion of Counsel either

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) stating that, in the opinion of such counsel, all filings to be made by the Seller, including filings with the Texas Commission pursuant to the Securitization Act and the UCC, that are necessary fully to preserve and protect the respective interests of the Issuer and the Indenture Trustee in the System Restoration Property have been executed and filed, and reciting the details of such filings, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) stating that, in the opinion of such counsel, no such action is necessary to preserve and protect such interests, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the Seller shall have delivered to the Issuer, the Indenture Trustee and the Rating Agencies an opinion of independent tax counsel (as selected by, and in form and substance satisfactory to the Seller, and which may be based on a ruling from the Internal Revenue Service) to the effect that, for U.S. federal income tax purposes, such transaction will not result in a material adverse U.S. federal income tax consequence to the Issuer, the Indenture Trustee or the Bondholders.

The Seller shall not consummate any transaction referred to in clauses (a), (b), (c), (d) or (e) above except upon execution of the above described agreement of assumption and compliance with clauses (i), (ii), (iii), (iv) and (v) above. When any Person acquires the properties and assets of the Seller substantially as a whole and succeeds to all or substantially all of the electric distribution business of the Seller, or otherwise becomes the successor to the Seller in accordance with the terms of this Section 5.02, then upon the satisfaction of all of the other conditions of this Section 5.02, the Seller shall automatically and without further notice be released from its obligations hereunder.

Section 5.03 *Limitation on Liability of the Seller and Others*. The Seller and any manager, officer, employee or agent of the Seller may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person, respecting any matters arising hereunder. Subject to Section 4.07, the Seller shall not be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its obligations under this Agreement, and that in its opinion may involve it in any expense or liability.

**ARTICLE VI**

**MISCELLANEOUS PROVISIONS**

Section 6.01 *Amendment*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement may be amended in writing by the Seller and the Issuer, provided that (i) the Rating Agency Condition has been satisfied in connection therewith, (ii) the Indenture Trustee has consented thereto and (iii) in the case of any amendment that increases ongoing qualified costs as defined in the Financing Order, the Texas Commission has consented thereto or shall be conclusively deemed to have consented thereto; provided, that the Indenture Trustee shall not be required to consent to any amendment prior to its receipt of the Opinion of Counsel pursuant to Section 6.01(b). Promptly after the execution of any such amendment or consent, the Issuer shall furnish written notification of the substance of such amendment or consent to each of the Rating Agencies. With respect to the Texas Commission's consent to any amendment to this Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Seller may request the consent of the Texas Commission by delivering to the Texas Commission's executive director and general counsel a written request for such consent, which request shall contain:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) a reference to Docket No. 57559 and a statement as to the possible effect of the amendment on ongoing qualified costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) an Officer's Certificate stating that the proposed amendment has been approved by all relevant parties; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) a statement identifying the person to whom the Texas Commission or its staff is to address its consent to the proposed amendment or request additional time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Texas Commission shall, within 30 days of receiving the request for consent complying with Section 6.01(a)(i), either

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) provide notice of its consent or lack of consent to the person specified in Section 6.01(a)(i)(C), or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) be conclusively deemed to have consented to the proposed amendment,

unless, within 30 days of receiving the request for consent complying with Section 6.01(a)(i), the Texas Commission or its staff delivers to the office of the person specified in Section 6.01(a)(i)(C) a written statement requesting an additional amount of time not to exceed 30 days in which to consider whether to consent to the proposed amendment. If the Texas Commission or its staff requests an extension of time in the manner set forth in the preceding sentence, then the Texas Commission shall either provide notice of its consent or lack of consent to the person specified in 6.01(a)(i)(C) no later than the last day of such extension of time or be conclusively deemed to have consented to the proposed amendment as of the last day of such extension of time.

Any amendment requiring the consent of the Texas Commission as provided in this Section 6.01(a) shall become effective on the later of (i) the date proposed by the parties to such amendment and (ii) the first day after the expiration of the 30 day period provided for in Section 6.01(a)(ii), or, if such period has been extended pursuant thereto, the first day after the expiration of such period as so extended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Prior to the execution of any amendment to this Agreement, the Issuer and the Indenture Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and that all conditions precedent to such amendment have been satisfied. The Issuer and the Indenture Trustee may, but shall not be obligated to, enter into any such amendment that affects their own rights, duties or immunities under this Agreement or otherwise. Following delivery of a notice to the Texas Commission by the Seller under Section 6.01(a), the Seller and Issuer may at any time withdraw from the Texas Commission further consideration of any notification of a proposed amendment.

Section 6.02 *Notices*. Unless otherwise specifically provided herein, all demands, notices and communications upon or to the Seller, the Issuer, the Indenture Trustee, the Texas Commission or the Rating Agencies under this Agreement shall be in writing, delivered personally, via facsimile, reputable overnight courier or by certified mail, return-receipt requested, and shall be deemed to have been duly given upon receipt

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) in the case of the Seller, to CenterPoint Energy Houston Electric, LLC, 1111 Louisiana Street, Houston, Texas 77002, Attention: Treasurer,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in the case of the Issuer, to CenterPoint Energy Restoration Bond Company II, LLC, 1111 Louisiana Street, Suite 4664B, Houston, Texas 77002, Attention: Manager,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in the case of Moody's, to Moody's Investors Service, Inc., ABS/RMBS Monitoring Department, 25<sup>th</sup> Floor, 7 World Trade Center, 250 Greenwich Street, New York, New York 10007, Email: <u>ABSCORMonitoring@moodys.com</u> (for notices) and <u>servicereports@moodys.com</u> (for servicer reports and other reports) (all notices and reports to be delivered to Moody's in writing by email),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) in the case of S&P, to Standard & Poor's Ratings Group, Inc., Structured Credit Surveillance, 55 Water Street, New York, New York 10041, Telephone: (212) 438-8991, Email: <u>servicer_reports@spglobal.com</u> (all such notices to be delivered to S&P in writing by email), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) in the case the Indenture Trustee, at the address provided for notices or communications to the Indenture Trustee in the Indenture;

or, as to each of the foregoing, at such other address as shall be designated by written notice to the other parties. Any notice to or other communication with the Texas Commission shall be sent by electronic delivery to <u>connie.corona@puc.texas.gov</u> and <u>shelah.cisneros@puc.texas.gov</u> or to such other email address or physical address as the Texas Commission shall have provided to the Seller.

Section 6.03 *Assignment by the Seller*. Notwithstanding anything to the contrary contained herein, except as provided in Section 5.02, this Agreement may not be assigned by the Seller.

Section 6.04 *Limitations on Rights of Others*. The provisions of this Agreement are solely for the benefit of the Seller, the Issuer and the Indenture Trustee, on behalf of itself and the Bondholders, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein.

Section 6.05 *Severability*. Any provision of this Agreement 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 remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 6.06 *Separate Counterparts*. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 6.07 *Headings*. The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

Section 6.08 *Governing Law*. **This Agreement shall be construed in accordance with the laws of the State of Texas, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.**

Section 6.09 *Limitation of Liability*. It is expressly understood and agreed by the parties hereto that this Agreement is executed and delivered by the Indenture Trustee, not individually or personally but solely as Indenture Trustee on behalf of the Secured Parties, in the exercise of the powers and authority conferred and vested in it. The Indenture Trustee in acting hereunder is entitled to all rights, benefits, protections, immunities and indemnities accorded to it under the Indenture.

Section 6.10 *Waivers*. Any term or provision of this Agreement may be waived, or the time for its performance may be extended, by the party or parties entitled to the benefit thereof; provided, however, that no such waiver delivered by the Issuer shall be effective unless the Indenture Trustee (acting at the written direction of the Holders of not less than a majority of the Bonds) has given its prior written consent thereto. Any such waiver shall be validly and sufficiently authorized for the purposes of this Agreement if, as to any party, it is authorized in writing by an authorized representative of such party, with prompt written notice of any such waiver to be provided to the Rating Agencies. The failure of any party hereto to enforce at any time any provisions of this Agreement shall not be construed to be a waiver of such provision, nor in any way to affect the validity of this Agreement or any part hereof or the right of any party thereafter to enforce each and every such provision. No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach.

Section 6.11 *Nonpetition Covenants*. (a) Notwithstanding any prior termination of this Agreement or the Indenture, the Seller shall not, prior to the date which is one year and one day after the termination of the Indenture, petition or otherwise invoke or cause the Issuer to invoke the process of any Governmental Authority for the purpose of commencing or sustaining an involuntary case against the Issuer under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of the property of the Issuer, or ordering the winding-up or liquidation of the affairs of the Issuer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding any prior termination of this Agreement or the Indenture, the Issuer shall not, prior to the date which is one year and one day after the termination of the Indenture, petition or otherwise invoke the process of any Governmental Authority for the purpose of commencing or sustaining an involuntary case against the Seller under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Seller or any substantial part of the property of the Seller, or ordering the winding-up or liquidation of the affairs of the Seller.

[Rest of page intentionally left blank]

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

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| | |
|:---|:---|
| CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC,<br> as Issuer | CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC,<br> as Issuer |
| By: |  |
|  | Name: |
|  | Title: |
| CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, | CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, |
| as Seller | as Seller |
| By: |  |
|  | Name: |
|  | Title: |

---

---

| | |
|:---|:---|
| <u>ACKNOWLEDGED AND ACCEPTED</u> | <u>ACKNOWLEDGED AND ACCEPTED</u> |
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, | U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, |
| not in its individual capacity, but solely as Indenture Trustee under the Indenture | not in its individual capacity, but solely as Indenture Trustee under the Indenture |
| By: |  |
|  | Name: |
|  | Title: |

---

*System Restoration Property Sale Agreement*

APPENDIX A - DEFINITIONS

The definitions contained in this Appendix A are applicable to the singular as well as the plural forms of such terms.

"Administration Agreement" means the Administration Agreement, dated as of the date hereof, between the Issuer and the Seller, as the same may be amended and supplemented from time to time.

"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.

"Agreement" or this "Sale Agreement" means this System Restoration Property Sale Agreement, as the same may be amended and supplemented from time to time.

"Basic Documents" means the Certificate of Formation of the Issuer which was filed with the Secretary of State of the State of Delaware on June 5, 2025, the Amended and Restated Limited Liability Company Agreement of the Issuer dated as of the date hereof, this Sale Agreement, the Bill of Sale, the Servicing Agreement, the Administration Agreement, the Indenture and the Series Supplement.

"Bill of Sale" means the Bill of Sale, dated as of the date hereof, issued by the Seller to the Issuer pursuant to the Sale Agreement evidencing the sale of the System Restoration Property by the Seller to the Issuer.

"Bond" means any of the system restoration bonds issued by the Issuer pursuant to the Indenture and the Series Supplement.

"Bondholder" means a Person in whose name a Bond is registered on the Bond Register.

"Bond Register" has the meaning specified in Section 2.05 of the Indenture.

"Business Day" means any day other than a Saturday, a Sunday or a day on which banking institutions in the City of Houston, Texas, or in the City of New York, New York, are, or The Depository Trust Company is, required or authorized by law or executive order to remain closed.

"CEHE" means CenterPoint Energy Houston Electric, LLC, a Texas limited liability company, or its successor.

"Closing Date" means the date on which the Bonds are to be originally issued in accordance with Section 2.10 of the Indenture.

"Customer" means a consumer of electricity and related services within CEHE's service territory.

"Financing Order" means the Financing Order issued by the Texas Commission on June 5, 2025 in Docket No. 57559 pursuant to the Securitization Act.

"Governmental Authority" means any court or any federal or state regulatory body, administrative agency or governmental instrumentality.

"Holders" means the Person in whose name a Bond is registered on the Bond Register.

"Indenture" means the Indenture, dated as of the date hereof, among the Issuer and the Indenture Trustee, and U.S. Bank National Association, as Securities Intermediary, and the Series Supplement (including the forms and terms of the Bonds), as the same may be amended and supplemented with respect to the Bonds from time to time.

"Indenture Trustee" means U.S. Bank Trust Company, National Association, or its successor or any successor Indenture Trustee under the Indenture.

"Issuance Advice Letter" means the issuance advice letter submitted to the Texas Commission on __________ __, 2025 by the Seller pursuant to the Financing Order in connection with the issuance of the Bonds.

"Issuer" means CenterPoint Energy Restoration Bond Company II, LLC, a Delaware limited liability company, or its successor under the Indenture.

"Lien" means a security interest, lien, charge, pledge, equity or encumbrance of any kind.

"Moody's" means Moody's Investors Service, Inc., or any successor thereto.

"Officer's Certificate" means a certificate signed, in the case of the Seller, by any manager, the chair of the board, the chief executive officer, the president, any vice chair, any executive vice president, senior vice president or vice president, the general counsel, the treasurer, any assistant treasurer, the secretary or any assistant secretary of the Seller.

"Opinion of Counsel" means one or more written opinions of counsel who may be an employee of or counsel to the Issuer or the Seller, which counsel shall be reasonably acceptable to the Indenture Trustee, the Issuer or the Rating Agencies, as applicable, and which shall be in form reasonably satisfactory to the Indenture Trustee, if applicable.

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

"proceeding" means any suit in equity, action at law or other judicial or administrative proceeding.

"Prospectus" has the meaning specified in Section 3.06 hereof.

"Public Utility Regulatory Act" means the Texas Public Utility Regulatory Act, as codified in Title II of the Texas Utilities Code.

"Purchase Price" has the meaning specified in Section 2.01(a) hereof.

"Qualified Costs" has the meaning assigned to that term in the Securitization Act and the Financing Order.

"Rating Agency" means any rating agency rating the Bonds at the time of issuance thereof at the request of the Issuer, which initially shall be Moody's and S&P. 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, written notice of which designation shall be given to the Indenture Trustee, the Texas Commission and the Servicer.

"Rating Agency Condition" means, with respect to any action, at least ten Business Days' prior written notification to each Rating Agency of such action, and written confirmation from each of S&P and Moody's to 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 the Bonds and that prior to the taking of the proposed action no other Rating Agency shall have provided written notice to the Issuer that such action has resulted or would result in the suspension, reduction or withdrawal of the then current rating of any such tranche of the Bonds; provided, that, if within such ten Business Day period, any Rating Agency (other than S&P) has neither replied to such notification nor responded in a manner that indicates that such Rating Agency is reviewing and considering the notification, then (i) the requesting party shall be required to confirm that such Rating Agency has received the Rating Agency Condition request, and if it has, promptly request the related Rating Agency Condition confirmation and (ii) if the Rating Agency neither replies to such notification nor responds in a manner that indicates it is reviewing and considering the notification within five Business Days following such second request, the applicable Rating Agency Condition requirement shall not be deemed to apply to such Rating Agency. For the purposes of this definition, any confirmation, request, acknowledgment or approval that is required to be in writing may be in the form of electronic mail or a press release (which may contain a general waiver of a Rating Agency's right to review or consent).

"REP" means an entity certified under state law that provides electricity and related services to Customers.

"S&P" means S&P Global Ratings, a division of S&P Global Inc., or its successor.

"Secured Parties" means the Indenture Trustee, the Bondholders and any credit enhancer described in the Series Supplement.

"Securitization Act" means Subchapter I of Chapter 36 of the Public Utility Regulatory Act, adopted and effective in August 2009, that allows for the securitization of system restoration costs, together with Subchapter G of Chapter 39 of the Public Utility Regulatory Act.

"Seller" means CEHE, or its successor, in its capacity as seller of the System Restoration Property to the Issuer pursuant to this Agreement.

"Series Supplement" means the Series Supplement, dated as of the date hereof, among the Issuer and the Indenture Trustee, which specifies the terms of the Bonds.

"Servicer" means CEHE, in its capacity as the servicer under the Servicing Agreement, and each successor to or assignee of CEHE (in the same capacity) pursuant to the relevant sections of the Servicing Agreement.

"Servicer Default" means the occurrence and continuation of one of the events specified in Section 7.01 of the Servicing Agreement.

"Servicing Agreement" means the System Restoration Property Servicing Agreement, dated as of the date hereof, between the Issuer and the Servicer and acknowledged by the Indenture Trustee, as the same may be amended and supplemented from time to time.

"System Restoration Charges" means the nonbypassable amounts to be charged for the use or availability of electric services, approved by the Texas Commission in the Financing Order to recover Qualified Costs that may be collected by the Seller, its successors, assignees or other collection agents as provided for in the Financing Order.

"System Restoration Property" means the rights and interests of the Seller or its successor under the Financing Order once those rights are first transferred to the Issuer or pledged in connection with the issuance of the Bonds, including the right to impose, collect and receive through System Restoration Charges payable by retail electric customers which take service at distribution voltage within Seller's certificated service area as it existed on the date of the Financing Order, an amount sufficient to cover the Qualified Costs of the Seller authorized in the Financing Order, the right to receive System Restoration Charges in amounts and at times sufficient to pay principal and interest and make other deposits in connection with the Bonds and all revenues and collections resulting from System Restoration Charges, except the rights of CEHE to earn and receive a rate of return on its invested capital in the Issuer, to receive administration and servicer fees, or to use CEHE's remaining portion of the Purchase Price, and all revenue, collections, payments, money and proceeds arising out of those rights and interests. System Restoration Property is known as "transition property" in the Securitization Act.

"Texas Commission" means the Public Utility Commission of Texas or any successor thereto.

"Trust Estate" has the meaning specified in the Series Supplement.

"UCC" means, unless the context otherwise requires, the Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended from time to time.

EXHIBIT A

BILL OF SALE

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. This Bill of Sale is being delivered pursuant to the System Restoration Property Sale Agreement, dated as of __________ __, 2025 (the "Sale Agreement"), between CenterPoint Energy Houston Electric, LLC (the "Seller") and CenterPoint Energy Restoration Bond Company II, LLC (the "Issuer"). All capitalized terms used but not defined herein have the respective meanings ascribed thereto in the Sale Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. In consideration of the Issuer's payment to the Seller of $________, receipt of which is hereby acknowledged, the Seller does hereby irrevocably sell, transfer, assign, set over and otherwise convey to the Issuer, without recourse or warranty, except as set forth in the Sale Agreement, all right, title and interest of the Seller in, to and under the System Restoration Property identified on <u>Schedule 1</u> hereto (such sale, transfer, assignment, setting over and conveyance of the System Restoration Property includes, to the fullest extent permitted by the Securitization Act, the right to impose, collect and receive the System Restoration Charges related to the System Restoration Property, as the same may be adjusted from time to time). Such sale, transfer, assignment, setting over and conveyance is hereby expressly stated to be a sale or other absolute transfer and, pursuant to Section 39.308 of the Public Utility Regulatory Act and other applicable law, is a true sale and is not a secured transaction and title, legal and equitable, has passed to the Issuer. The preceding sentence is the statement referred to in Section 39.308 of the Public Utility Regulatory Act. The Seller agrees and confirms that, after giving effect to the sale evidenced by this Bill of Sale, the Seller has no right, title or interest in, to or under the System Restoration Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The Issuer does hereby purchase the System Restoration Property identified on <u>Schedule 1</u> hereto from the Seller for the consideration set forth in paragraph 2 above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The Seller and the Issuer each acknowledge and agree that the purchase price for the System Restoration Property sold pursuant to this Bill of Sale and the Sale Agreement is equal to its fair market value on the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The Seller confirms that each of the representations and warranties on the part of the Seller contained in the Sale Agreement are true and correct in all material respects on the date hereof as if made on the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. This Bill of Sale may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **This Bill of Sale shall be construed in accordance with the laws of the State of Texas, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.**

Exhibit A-3

IN WITNESS WHEREOF, the Seller and the Issuer have duly executed this Bill of Sale as of the ____ day of __________ 2025.

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| | |
|:---|:---|
| CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC, | CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC, |
| as Issuer | as Issuer |
| By: |  |
|  | Name: |
|  | Title: |
| CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, | CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, |
| as Seller | as Seller |
| By: |  |
|  | Name: |
|  | Title: |

---

Exhibit A-3

SCHEDULE 1<br> to<br> BILL OF SALE

System Restoration Property

All of the Seller's rights, title and interest in, to and under the Financing Order issued by the Texas Commission on June 5, 2025 (Docket No. 57559), pursuant to the Securitization Act, including rights to impose, collect and receive the "system restoration charges" approved in such Financing Order, except the rights of CEHE to earn and receive a rate of return on its invested capital in the Issuer, to receive administration and servicer fees, or to use CEHE's remaining portion of the Purchase Price (as defined in the Sale Agreement), and all revenue, collections, payments, money and proceeds arising out of those rights and interests.

Exhibit A-3