# EDGAR Filing Document

**Accession Number:** 0002072436
**File Stem:** 0001104659-25-061199
**Filing Date:** 2025-6
**Character Count:** 2030004
**Document Hash:** b7c6460d12134aebbbf89b7b2278e9bb
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-25-061199.hdr.sgml**: 20250620

**ACCESSION NUMBER**: 0001104659-25-061199

**CONFORMED SUBMISSION TYPE**: SF-1

**PUBLIC DOCUMENT COUNT**: 51

**FILED AS OF DATE**: 20250620

**ABS ASSET CLASS**: Other

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CenterPoint Energy Restoration Bond Co II, LLC
- **CENTRAL INDEX KEY:** 0002072436

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** SF-1
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-288206
- **FILM NUMBER:** 251061987

**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
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-288206-01
- **FILM NUMBER:** 251061988

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

**MAIL ADDRESS:**
- **STREET 1:** 611 WALKER
- **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 June 20, 2025

Registration Nos. 333-

and 333-

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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.

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[**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 June 20, 2025

#### PRELIMINARY PROSPECTUS

### $ 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**  |
|  |  |  | $nan% |  |  |  | &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 [20](#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 $ aggregate principal amount of Series 2025-A Senior Secured System Restoration Bonds (the "**system restoration bonds**") in 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)  | [17](#tSORF) |
| [RISK FACTORS](#tRIFA)  | [20](#tRIFA) |
| &nbsp;&nbsp;&nbsp; [RISKS ASSOCIATED WITH POTENTIAL JUDICIAL, LEGISLATIVE OR REGULATORY <br> ACTIONS](#tRAWP)  | [20](#tRAWP) |
| &nbsp;&nbsp;&nbsp; [SERVICING RISKS](#tSERI)  | [23](#tSERI) |
| &nbsp;&nbsp;&nbsp; [WEATHER-RELATED DAMAGE AND OTHER NATURAL DISASTER RISKS](#tWDAO)  | [26](#tWDAO) |
| &nbsp;&nbsp;&nbsp; [RISKS TO THE ELECTRIC TRANSMISSION AND DISTRIBUTION INDUSTRY](#tRTTE)  | [26](#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)  | [27](#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)  | [32](#tORAW) |
| [REVIEW OF THE SYSTEM RESTORATION PROPERTY](#tROTS1)  | [38](#tROTS1) |
| [DESCRIPTION OF THE SYSTEM RESTORATION PROPERTY](#tDOTS1)  | [42](#tDOTS1) |
| &nbsp;&nbsp;&nbsp; [Creation of the System Restoration Property; Financing Order](#tCOTS)  | [42](#tCOTS) |
| &nbsp;&nbsp;&nbsp; [Tariff; System Restoration Charges](#tTSRC)  | [42](#tTSRC) |
| &nbsp;&nbsp;&nbsp; [Billing and Collection Terms and Conditions](#tBACT)  | [43](#tBACT) |
| [THE SECURITIZATION ACT](#tTSA2)  | [45](#tTSA2) |
| &nbsp;&nbsp;&nbsp; [Overview of the Securitization Act](#tOOTS)  | [45](#tOOTS) |
| &nbsp;&nbsp;&nbsp; [CenterPoint Houston and Other Utilities May Securitize Qualified Costs](#tCHAO)  | [45](#tCHAO) |
| [CENTERPOINT HOUSTON'S FINANCING ORDER](#tCHFO)  | [49](#tCHFO) |
| [RETAIL ELECTRIC PROVIDERS](#tREP)  | [53](#tREP) |
| [THE DEPOSITOR, SELLER, INITIAL SERVICER AND SPONSOR](#tTDSI)  | [58](#tTDSI) |
| &nbsp;&nbsp;&nbsp; [About CenterPoint Houston](#tACH)  | [58](#tACH) |
| &nbsp;&nbsp;&nbsp; [Municipalization](#tMUN)  | [61](#tMUN) |
| &nbsp;&nbsp;&nbsp; [Servicing Experience](#tSEEX)  | [62](#tSEEX) |
| &nbsp;&nbsp;&nbsp; [Customer Classes and Electric Energy Consumption](#tCCAE)  | [62](#tCCAE) |
| &nbsp;&nbsp;&nbsp; [Forecasting Electricity Consumption](#tFEC)  | [63](#tFEC) |
| &nbsp;&nbsp;&nbsp; [Relationships with Retail Electric Providers](#tRWRE)  | [64](#tRWRE) |
| &nbsp;&nbsp;&nbsp; [Credit Policy; Billing Process; Collections Process](#tCPBP)  | [65](#tCPBP) |
| &nbsp;&nbsp;&nbsp; [Write-off and Delinquency Experience](#tWADE)  | [67](#tWADE) |
| &nbsp;&nbsp;&nbsp; [Average Days Sales Outstanding](#tADSO)  | [68](#tADSO) |
|  [CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC, THE ISSUING ENTITY](#tCERB)  | [69](#tCERB) |
| &nbsp;&nbsp;&nbsp; [General](#tS001)  | [69](#tS001) |
| &nbsp;&nbsp;&nbsp; [Restricted Purposes](#tS002)  | [70](#tS002) |
| &nbsp;&nbsp;&nbsp; [Our Relationship with CenterPoint Houston](#tS003)  | [70](#tS003) |
| &nbsp;&nbsp;&nbsp; [Our Relationship with the PUCT](#tS004)  | [70](#tS004) |

---

i

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

---

| | |
|:---|:---|
| | **Page**  |
| &nbsp;&nbsp;&nbsp; [Managers and Officers](#tS005)  | [71](#tS005) |
| &nbsp;&nbsp;&nbsp; [Manager Fees and Limitation on Liabilities](#tS006)  | [72](#tS006) |
| &nbsp;&nbsp;&nbsp; [We are a Separate and Distinct Legal Entity from CenterPoint Houston](#tS007)  | [73](#tS007) |
| &nbsp;&nbsp;&nbsp; [Administration Agreement](#tS008)  | [73](#tS008) |
| [THE SYSTEM RESTORATION CHARGES](#tTSRC1)  | [74](#tTSRC1) |
| [DESCRIPTION OF THE SYSTEM RESTORATION BONDS](#tDOTS)  | [75](#tDOTS) |
| &nbsp;&nbsp;&nbsp; [General](#tGEN)  | [75](#tGEN) |
| &nbsp;&nbsp;&nbsp; [Payments of Interest and Principal on the System Restoration Bonds](#tPOIA)  | [75](#tPOIA) |
| &nbsp;&nbsp;&nbsp; [Redemption of the System Restoration Bonds](#tROTS)  | [79](#tROTS) |
| &nbsp;&nbsp;&nbsp; [System Restoration Bonds Will Be Issued in Book-Entry Form](#tSRBW)  | [79](#tSRBW) |
| &nbsp;&nbsp;&nbsp; [Definitive Certificated System Restoration Bonds](#tDCSR)  | [82](#tDCSR) |
| &nbsp;&nbsp;&nbsp; [Registration and Transfer of the System Restoration Bonds](#tRATO)  | [83](#tRATO) |
| &nbsp;&nbsp;&nbsp; [The Security for the System Restoration Bonds](#tTSFT)  | [83](#tTSFT) |
| &nbsp;&nbsp;&nbsp; [The Collection Account for the System Restoration Bonds](#tTCAF)  | [84](#tTCAF) |
| &nbsp;&nbsp;&nbsp; [How Funds in the Collection Account Will Be Allocated](#tHFIT)  | [87](#tHFIT) |
| &nbsp;&nbsp;&nbsp; [How Funds in the Subaccounts Will Be Used upon Repayment of the System Restoration <br> Bonds](#tHFIT1)  | [89](#tHFIT1) |
| &nbsp;&nbsp;&nbsp; [Reports to the Holders of the System Restoration Bonds](#tRTTH)  | [89](#tRTTH) |
| &nbsp;&nbsp;&nbsp; [Website](#tWEB)  | [89](#tWEB) |
| &nbsp;&nbsp;&nbsp; [We and the Trustee May Modify the Indenture](#tWATT)  | [90](#tWATT) |
| &nbsp;&nbsp;&nbsp; [What Constitutes an Event of Default on the System Restoration Bonds](#tWCAE)  | [93](#tWCAE) |
| &nbsp;&nbsp;&nbsp; [Our Covenants](#tOUCO)  | [96](#tOUCO) |
| &nbsp;&nbsp;&nbsp; [Access to the List of Holders of the System Restoration Bonds](#tATTL)  | [98](#tATTL) |
| &nbsp;&nbsp;&nbsp; [We Must File an Annual Compliance Statement](#tWMFA)  | [98](#tWMFA) |
| &nbsp;&nbsp;&nbsp; [The Trustee Must Provide an Annual Report to All Holders of the System Restoration Bonds](#tTTMP)  | [98](#tTTMP) |
| &nbsp;&nbsp;&nbsp; [What Will Trigger Satisfaction and Discharge of the Indenture](#tWWTS)  | [99](#tWWTS) |
| &nbsp;&nbsp;&nbsp; [Our Legal Defeasance and Covenant Defeasance Options](#tOLDA)  | [99](#tOLDA) |
| &nbsp;&nbsp;&nbsp; [No Recourse to Others](#tNRTO)  | [100](#tNRTO) |
| &nbsp;&nbsp;&nbsp; [Governing Law](#tGOLA)  | [101](#tGOLA) |
| [THE TRUSTEE](#tTHTR)  | [102](#tTHTR) |
|  [WEIGHTED AVERAGE LIFE AND YIELD CONSIDERATIONS FOR THE SYSTEM RESTORATION BONDS](#tWALA)  | [105](#tWALA) |
| [ESTIMATED ANNUAL FEES AND EXPENSES](#tEAFA)  | [107](#tEAFA) |
| [THE SALE AGREEMENT](#tTSA)  | [108](#tTSA) |
| &nbsp;&nbsp;&nbsp; [CenterPoint Houston's Sale and Assignment of the System Restoration Property](#tCHSA)  | [108](#tCHSA) |
| &nbsp;&nbsp;&nbsp; [Conditions to the Sale of the System Restoration Property](#tCTTS)  | [109](#tCTTS) |
| &nbsp;&nbsp;&nbsp; [CenterPoint Houston's Representations and Warranties](#tCHRA)  | [109](#tCHRA) |
| &nbsp;&nbsp;&nbsp; [CenterPoint Houston's Covenants](#tCHC)  | [113](#tCHC) |
| &nbsp;&nbsp;&nbsp; [CenterPoint Houston's Obligation to Indemnify Us and the Trustee and to Take Legal Action](#tCHOT)  | [116](#tCHOT) |
| &nbsp;&nbsp;&nbsp; [Successors to CenterPoint Houston](#tSTCH)  | [117](#tSTCH) |
| &nbsp;&nbsp;&nbsp; [Amendment](#tAME)  | [118](#tAME) |
| [THE SERVICING AGREEMENT](#tTSA1)  | [119](#tTSA1) |
| &nbsp;&nbsp;&nbsp; [Servicing Procedures](#tSEPR)  | [119](#tSEPR) |
| &nbsp;&nbsp;&nbsp; [Adjustment Process for the System Restoration Charges](#tAPFT)  | [121](#tAPFT) |

---

ii

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

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| | |
|:---|:---|
| | **Page**  |
| &nbsp;&nbsp;&nbsp; [Remittances to Collection Account](#tRTCA)  | [122](#tRTCA) |
| &nbsp;&nbsp;&nbsp; [Servicer Compensation](#tS009)  | [123](#tS009) |
| &nbsp;&nbsp;&nbsp; [CenterPoint Houston's Representations and Warranties as Servicer](#tCHRA1)  | [124](#tCHRA1) |
| &nbsp;&nbsp;&nbsp; [The Servicer Will Indemnify Us, Other Entities and the PUCT in Limited Circumstances](#tTSWI)  | [125](#tTSWI) |
| &nbsp;&nbsp;&nbsp; [Limitation on Liability of Servicer and Others](#tLOLO)  | [126](#tLOLO) |
| &nbsp;&nbsp;&nbsp; [The Servicer Will Provide Statements to Us and the Trustee](#tTSWP)  | [126](#tTSWP) |
| &nbsp;&nbsp;&nbsp; [The Servicer Will Provide Assessments Concerning Compliance with the Servicing Agreement](#tTSWP1)  | [127](#tTSWP1) |
| &nbsp;&nbsp;&nbsp; [Matters Regarding CenterPoint Houston as the Servicer](#tMRCH)  | [127](#tMRCH) |
| &nbsp;&nbsp;&nbsp; [Events Constituting a Default by the Servicer](#tECAD)  | [129](#tECAD) |
| &nbsp;&nbsp;&nbsp; [The Trustee's Rights if the Servicer Defaults](#tTTRI)  | [129](#tTTRI) |
| &nbsp;&nbsp;&nbsp; [Waiver of Past Defaults](#tWOPD)  | [130](#tWOPD) |
| &nbsp;&nbsp;&nbsp; [The Replacement of CenterPoint Houston as Servicer with a Successor Servicer](#tTROC)  | [130](#tTROC) |
| &nbsp;&nbsp;&nbsp; [The Obligations of a Successor Servicer](#tTOOA)  | [130](#tTOOA) |
| &nbsp;&nbsp;&nbsp; [Amendment](#tAME1)  | [130](#tAME1) |
| [HOW A BANKRUPTCY MAY AFFECT YOUR INVESTMENT](#tHABM)  | [131](#tHABM) |
| [USE OF PROCEEDS](#tUOP)  | [135](#tUOP) |
| [PLAN OF DISTRIBUTION](#tPOD)  | [136](#tPOD) |
| &nbsp;&nbsp;&nbsp; [The Underwriters' Sales Price for the System Restoration Bonds](#tTUSP)  | [136](#tTUSP) |
| &nbsp;&nbsp;&nbsp; [No Assurance as to Resale Price or Resale Liquidity for the System Restoration Bonds](#tNAAT)  | [136](#tNAAT) |
| &nbsp;&nbsp;&nbsp; [Various Types of Underwriter Transactions that May Affect the Price of the System Restoration Bonds](#tVTOU)  | [136](#tVTOU) |
| [AFFILIATIONS AND CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS](#tAACR)  | [138](#tAACR) |
| [MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES](#tMUFI)  | [139](#tMUFI) |
| &nbsp;&nbsp;&nbsp; [General](#tGEN1)  | [139](#tGEN1) |
| &nbsp;&nbsp;&nbsp; [Income Tax Status of the System Restoration Bonds and Us as Issuing Entity](#tITSO)  | [139](#tITSO) |
| &nbsp;&nbsp;&nbsp; [Tax Consequences to U.S. Holders](#tTCTU)  | [140](#tTCTU) |
| &nbsp;&nbsp;&nbsp; [Tax Consequences to Non-U.S. Holders](#tTCTN)  | [141](#tTCTN) |
| [ERISA CONSIDERATIONS](#tERCO)  | [144](#tERCO) |
| &nbsp;&nbsp;&nbsp; [General](#tGEN2)  | [144](#tGEN2) |
| &nbsp;&nbsp;&nbsp; [Regulation of Assets Included in a Plan](#tROAI)  | [144](#tROAI) |
| &nbsp;&nbsp;&nbsp; [Prohibited Transaction Exemptions](#tPTE)  | [145](#tPTE) |
| &nbsp;&nbsp;&nbsp; [Consultation with Counsel](#tCWC)  | [146](#tCWC) |
| [LEGAL PROCEEDINGS](#tLEPR)  | [147](#tLEPR) |
| [RATINGS FOR THE SYSTEM RESTORATION BONDS](#tRFTS)  | [148](#tRFTS) |
| [WHERE YOU CAN FIND MORE INFORMATION](#tWYCF)  | [149](#tWYCF) |
| [INCORPORATION BY REFERENCE](#tIBR)  | [150](#tIBR) |
| [INVESTMENT COMPANY ACT OF 1940 AND VOLCKER RULE MATTERS](#tICAO)  | [151](#tICAO) |
| [RISK RETENTION](#tRIRE)  | [152](#tRIRE) |
| [LEGAL MATTERS](#tLEMA)  | [153](#tLEMA) |
| [OFFERING RESTRICTIONS IN CERTAIN JURISDICTIONS](#tORIC)  | [154](#tORIC) |
| &nbsp;&nbsp;&nbsp; [NOTICE TO RESIDENTS OF UNITED KINGDOM](#tNTRO)  | [154](#tNTRO) |
| &nbsp;&nbsp;&nbsp; [NOTICE TO RESIDENTS OF CANADA](#tNTRO1)  | [154](#tNTRO1) |
| [GLOSSARY OF DEFINED TERMS](#tGODT)  | [155](#tGODT) |

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iii

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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 [155](#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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; • CenterPoint Houston's ability to successfully construct, operate, repair and maintain electric generating facilities, temporary emergency electric energy facilities ("**TEEEF**") and electric transmission facilities, including complying with applicable environmental 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 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

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events, ice storms and other severe weather events, terrorism, 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, particularly 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 of the particular statement, and other than as required under securities laws, we undertake no obligation to update or revise any forward-looking statements.

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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 [20](#tRIFA) of this prospectus before you invest in the system restoration bonds.** 

Securities offered:

$ 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\***  |

---

\*

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, intercreditor 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**  |
|  | &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 holders of record of the system restoration bonds on each record date,

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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**  |

---

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 of the collection account in the following order of priority in accordance with the related written statement from 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 subaccount and the excess funds subaccount, released to us free of the lien of the indenture, which funds, less an amount equal to

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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 financing costs, and investment earnings on amounts in the excess funds subaccount of the system restoration bonds will be held in the excess funds subaccount.

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

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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 its out-of-pocket costs for external accounting and legal services. 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 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

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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.

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 20 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; • Changes to billing and collection practices might reduce the value of your investment in the system restoration bonds.

&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.

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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; • 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.

&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

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property or similar property (including transition property under the Securitization Act) that, in each case, includes a nonbypassable charge on customers.

&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 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, which may 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 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

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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 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.

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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.

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

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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 March 31, 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.

#### Changes to billing and collection practices might reduce the value of your investment in the system restoration bonds.
The financing order specifies the methodology for determining the amount of the system restoration charges we may impose. The servicer may not change this methodology without approval from the PUCT. However, the servicer may set its own billing and collection arrangements with REPs and retail customers, if any, from whom it collects system restoration charges directly, provided that these arrangements comply with the PUCT's customer safeguards and the provisions of the servicing agreement. For example, to recover part of an outstanding bill, the servicer may agree to extend a REP's payment schedule or to write-off the remaining portion of the bill, including system restoration charges. Also, the servicer may change billing and collection practices, which might adversely impact the timing and amount of retail customer payments and might reduce system restoration charge collections, thereby limiting our ability to make scheduled payments on the system restoration bonds. Separately, the PUCT might require changes to these practices. Any changes in billing and collection practices regulations might make it more difficult for the servicer to collect the system restoration charges and adversely affect the value of your investment in the system restoration bonds. Please read "The Depositor, Seller, Initial Servicer and Sponsor — Forecasting Electricity Consumption," and "— Credit Policy; Billing Process; Collections Process" in this prospectus.

#### 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

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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.

#### 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.

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#### 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.

 ***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,

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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.

#### 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

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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;

&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

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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 intercreditor 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,

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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 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.

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 ***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 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

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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.

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.

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#### 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 and transition bonds, 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 or transition bonds by another subsidiary or affiliated entity of CenterPoint Houston may include terms and provisions that would be unique to that particular issuance. 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 or an amendment to the existing 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.

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 transition or system restoration charges on other similar bonds, the amount remitted will first be apportioned between the system restoration charges and other fees and charges (including amounts billed and due in respect of transition charges or 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 transition bonds or 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, 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

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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 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.

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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.

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

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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. 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 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

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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 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

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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 March 31, 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 March 31, 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

&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

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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 March 31, 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 March 31, 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 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

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Medical Center. Together, Houston's energy and nonenergy sectors provide the city with a strong technical and engineering employment base.

*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 March 31, 2025, CenterPoint Energy had a market capitalization of approximately $23.6 billion with total assets of approximately $44.5 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 |

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**\***

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)\*†

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **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 March 31, 2025, there were 64 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 March 31, 2025, CenterPoint Houston billed (through the REPs) approximately 72,023 million kilowatt-hours (kWh) of electric energy to retail customers at distribution voltage in CenterPoint Houston's service territory. Of that amount, approximately 25,557 million kWh, or 35.5%, were delivered to retail customers served by NRG, approximately 13,925 million kWh, or 19.3%, to retail customers served by Vistra, and the remaining approximately 32,541 million kWh, or 45.2%, to retail customers served by the 62 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.

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.

 *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 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

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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 and Delinquency 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).

#### 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% |

---

\*

Numbers not exact due to rounding.

 *Delinquencies* 

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)</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% |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **As of December 31,**  | **2020**  | **2021**  | **2022**  | **2023**  | **2024**  |
| 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.

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 |

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\*

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, intercreditor 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 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**  |
| Darin M. Carroll (President and Manager) | 48 | Manager and President of CenterPoint Energy Restoration Bond Company II, LLC since June 5, 2025. Senior Vice President, Electric Business of CenterPoint Energy since July 2024; Senior Vice President, Natural Gas Business of CenterPoint Energy from January 2023 to July 2024; Senior Vice President, Operations Support of CenterPoint Energy from January 2022 to January 2023; Vice President, Operations Support of CenterPoint Energy from February 2019 to January 2022. Prior to Vectren's acquisition by CenterPoint Energy, Mr. Carroll served as Director, Operations from February 2014 to February 2019 of Vectren.  |
| 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 financing 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**  |
|  |  |  | $nan% |  |  |

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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 tranche, and % with regard to the tranche. Beginning , 2026, we will make payments on the system restoration bonds semi-annually on and 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

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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 collection account) are not sufficient to make up the shortfall, principal of a tranche of the system

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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 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 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 <br> Amount**  | **Tranche <br> Amount**  |
| Initial Principal Amount  |  |  |

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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 in the table above and to the extent of funds available in the collection account after payment of certain of

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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**  |
| **Total Payments**  | $— |

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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 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

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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 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

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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 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.

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*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 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.

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*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, intercreditor 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 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,

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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 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

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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:

&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

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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; (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.

*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

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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 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

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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; 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.

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.

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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,

&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,

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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 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 financing 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 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* 

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restoration bonds but, with respect to amendments that would increase ongoing financing 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 financing costs may be provided by us to the PUCT, along with a statement as to the possible effect of the amendment on the ongoing financing 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 financing 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 financing costs shall be provided by us to the PUCT, along with a statement as to the possible effect of the amendment on the ongoing financing 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 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

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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 financing 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 effect of increasing ongoing financing costs shall be provided by us to the PUCT, along with a statement as to the possible effect of the amendment on the ongoing financing 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.

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 *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 financing 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 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

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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; 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:

&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

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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 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

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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,

&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

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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.

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,

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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,

&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.

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#### 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 financing 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 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 financing 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

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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 financing 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 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

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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 $676 billion as of March 31, 2025, is the parent company of U.S. Bank N.A., the fifth largest commercial bank in the United States. As of March 31, 2025, U.S. Bancorp operated over 2,100 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 46 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 March 31, 2025, U.S. Bank was acting as trustee with respect to over 154,000 issuances of securities with an aggregate outstanding principal balance of over $6.3 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.

While the legal proceedings discussed above involve certain affiliates of the trustee, none of such legal proceedings are material to the holders of the system restoration bonds.

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

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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 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 for Tranche and later than the related scheduled final payment dates for Tranche . 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)**  | **-15% <br> (Standard Deviations from Mean)**  |
| **Tranche**  | **Expected Weighted <br> Average Life <br> (Years)**  | **Weighted <br> Average Life <br> (Years)** <br> **Change (Days)**  | **Weighted <br> Average Life <br> (Years)** <br> **Change (Days)**  |

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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 | $ per annum (so long as CenterPoint Houston is servicer), payable in installments of $ 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, collections, claims, rights to payments, payments, money or proceeds 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.

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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 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

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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 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

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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 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 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 between 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 filing fees and fees and expenses for attorneys, accountants, printing and other professional services incurred to meet our obligations under the basic documents. 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 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

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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, 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

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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 financing 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,

&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,

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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; • 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 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

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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 or transition charges associated with other issuances of system restoration bonds or transition bonds, as applicable. If so, the collected system restoration charges or transition 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**  |
| Citigroup Global Markets Inc.  | $— |
| Barclays Capital Inc.  | $— |
| Academy Securities, Inc.  | $— |
| Total  | $— |

---

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  | &nbsp;&nbsp;&nbsp;% | &nbsp;&nbsp;&nbsp;&nbsp;% |
| Tranche  | &nbsp;&nbsp;&nbsp;% | &nbsp;&nbsp;&nbsp;&nbsp;% |

---

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

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Houston, the trustee, our managers nor any of the underwriters represent that the underwriters will engage in any of these transactions or that these transactions, if commenced, will not be discontinued without notice at any time.

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 $ 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, trustee, 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, none of which are material to the holders of the system restoration bonds.

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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- .

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 servicer, 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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### $ 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 |
| &nbsp;&nbsp; 3.1 | [Certificate of Formation of CenterPoint Energy Restoration Bond Company II, LLC](tm2517786d2_ex3-1.htm)  |
| &nbsp;&nbsp; 3.2 | [Limited Liability Company Agreement of CenterPoint Energy Restoration Bond Company II, LLC](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](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)](tm2517786d2_ex4-1.htm) |
| &nbsp;&nbsp; 5.1\* | Opinion of Baker Botts L.L.P. with respect to legality of the securities being offered |
| &nbsp;&nbsp; 8.1\* | Opinion of Baker Botts L.L.P. with respect to federal income tax matters |
| 10.1 | [Form of System Restoration Property Servicing Agreement between CenterPoint Energy Restoration Bond Company II, LLC and CenterPoint Houston, as Servicer](tm2517786d2_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](tm2517786d2_ex10-2.htm)  |
| 10.3 | [Form of Administration Agreement between CenterPoint Energy Restoration Bond Company II, LLC and CenterPoint Houston, as Administrator](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 |
| 23.1\* | Consent of Baker Botts L.L.P. (included as part of its opinions filed as Exhibits 5.1 and 8.1) |
| 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](tm2517786d2_ex25-1.htm)  |
| 99.1 | [Financing Order of the PUCT](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 |
| 99.3 | [Consent of Manager Nominee](tm2517786d2_ex99-3.htm)  |
| 107 | [Filing Fee Table](tm2517786d2_ex-filingfees.htm)  |

---

\*

To be filed by amendment.

#### 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 registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on the 20th day of June, 2025.

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC

/s/ Darin M. Carroll

Darin M. Carroll

President, Chief Executive Officer and Manager

Each of the persons whose signatures appear below constitute and appoint Monica Karuturi, Kristie L. Colvin and Darin M. Carroll, 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 registration statement has been signed by the following persons in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature**  | **Title**  | **Date**  |
| /s/ Darin M. Carroll <br>Darin M. Carroll  | President, Chief Executive Officer and <br> Manager <br> (Principal Executive Officer)  | June 20, 2025  |
| /s/ Christopher A. Foster <br>Christopher A. Foster  | Executive Vice President and Chief Financial <br> Officer <br> (Principal Financial Officer)  | June 20, 2025  |
| /s/ Kristie L. Colvin <br>Kristie L. Colvin  | Senior Vice President and Chief Accounting <br> Officer <br> (Principal Accounting Officer)  | June 20, 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 registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on the 20th day of June, 2025.

CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC

By:

/s/ Darin M. Carroll

Darin M. Carroll

President and Manager

Each of the persons whose signatures appear below constitute and appoint Monica Karuturi, Kristie L. Colvin and Darin M. Carroll, 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 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  | June 20, 2025  |
| /s/ Kristie L. Colvin <br>Kristie L. Colvin  | Vice President, Chief Accounting Officer <br> and Manager  | June 20, 2025  |
| /s/ Darin M. Carroll <br>Darin M. Carroll  | President and Manager  | June 20, 2025  |

---

------

## Exhibit 3.1

**Exhibit 3.1**

**STATE OF DELAWARE**

**CERTIFICATE OF FORMATION**

**OF**

**CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC**

The undersigned authorized person, desiring to form a limited liability company pursuant to the Delaware Limited Liability Company Act (6 Del. C. §18-101, et seq.), hereby certifies as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The name of the limited liability company is CenterPoint Energy Restoration Bond Company II, LLC (the "***Company***").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The Registered Office of the Company in the State of Delaware is located at **1209 Orange Street, Corporation Trust Center, in the City of Wilmington, Zip Code 19801**. The name of the Registered Agent at such address upon whom process against the Company may be served is **The Corporation Trust Company**.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation as of June 5, 2025.

---

| | |
|:---|:---|
| By: | /s/ Vincent A. Mercaldi |
|  | Authorized Person |
| Name: | Vincent A. Mercaldi |
|  | Print or Type |

---

## Exhibit 3.2

**Exhibit 3.2**

LIMITED LIABILITY COMPANY AGREEMENT

OF

CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC

Effective as of June 5, 2025

**TABLE OF CONTENTS**

<u>Page</u>

---

| | | |
|:---|:---|:---|
| ARTICLE I DEFINITIONS | ARTICLE I DEFINITIONS | 1 |
| ARTICLE II FORMATION OF THE COMPANY | ARTICLE II FORMATION OF THE COMPANY | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 | Formation | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 | Name | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 | Place of Business | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 | Registered Office and Registered Agent | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 | Term | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 | Business Purpose | 3 |
| ARTICLE III INITIAL MEMBER | ARTICLE III INITIAL MEMBER | 4 |
| ARTICLE IV CAPITAL OF THE COMPANY | ARTICLE IV CAPITAL OF THE COMPANY | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 | Common Shares and Initial Contributions | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 | Additional Contributions | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 | Interest | 5 |
| ARTICLE V RIGHTS AND OBLIGATIONS OF THE MEMBER | ARTICLE V RIGHTS AND OBLIGATIONS OF THE MEMBER | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 | Limitation of Member's Responsibility, Liability | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 | Return of Distributions | 5 |
| ARTICLE VI ACTS OF THE MEMBER | ARTICLE VI ACTS OF THE MEMBER | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 | Action by the Member at a Meeting | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 | Action by the Member Without a Meeting | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 | Waiver of Notice | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 | Special Prohibitions and Limitations | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 | Amendments to Be Adopted Solely by the Managers | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6 | Amendments | 7 |
| ARTICLE VII RIGHTS AND DUTIES OF MANAGERS | ARTICLE VII RIGHTS AND DUTIES OF MANAGERS | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 | Management | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 | Number and Qualifications | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 | Powers of the Managers | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 | Initial Managers | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 | Place of Meetings | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 | Meetings of Managers | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 | Quorum | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8 | Attendance and Waiver of Notice | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9 | Action by Managers Without a Meeting | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10 | Compensation of Managers | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.11 | Committees | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.12 | Liability of Managers | 9 |

---

-i-

---

| | | |
|:---|:---|:---|
| ARTICLE VIII INDEMNIFICATION | ARTICLE VIII INDEMNIFICATION | 9.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 | Indemnification | 9.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 | Advancement or Reimbursement of Expenses | 9.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 | Nonexclusivity and Survival of Indemnification | 10.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 | Insurance | 10.0 |
| ARTICLE IX ALLOCATIONS AND DISTRIBUTIONS | ARTICLE IX ALLOCATIONS AND DISTRIBUTIONS | 10.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 | Allocations | 10.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 | Distributions | 10.0 |
| ARTICLE X ACCOUNTING PERIOD, RECORDS AND REPORTS | ARTICLE X ACCOUNTING PERIOD, RECORDS AND REPORTS | 10.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 | Accounting Period | 10.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 | Records, Audits and Reports | 10.0 |
| ARTICLE XI TAX MATTERS | ARTICLE XI TAX MATTERS | 11.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 | Tax Returns and Elections | 11.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 | State, Local or Foreign Income Taxes | 11.0 |
| ARTICLE XII RESTRICTIONS ON TRANSFERABILITY | ARTICLE XII RESTRICTIONS ON TRANSFERABILITY | 11.0 |
| ARTICLE XIII DISSOLUTION AND TERMINATION | ARTICLE XIII DISSOLUTION AND TERMINATION | 11.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1 | Dissolution | 11.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2 | Effect of Dissolution | 12.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.3 | Winding Up, Liquidating and Distribution of Assets | 12.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.4 | Certificate of Cancellation | 12.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.5 | Return of Contribution | 12.0 |
| ARTICLE XIV MISCELLANEOUS PROVISIONS | ARTICLE XIV MISCELLANEOUS PROVISIONS | 13.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1 | Notices | 13.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2 | Books of Account and Records | 13.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.3 | Application of Delaware Law | 13.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.4 | Waiver of Action for Partition | 13.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.5 | Execution of Additional Instruments | 13.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.6 | Headings | 13.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.7 | Waivers | 13.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.8 | Rights and Remedies Cumulative | 13.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.9 | Severability | 14.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.10 | Heirs, Successors and Assigns | 14.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.11 | Creditors | 14.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.12 | Counterparts | 14.0 |

---

-ii-

LIMITED LIABILITY COMPANY AGREEMENT

This Limited Liability Company Agreement (this "Agreement") is made and executed to be effective as of _______ __, 2025, by CenterPoint Energy Houston Electric, LLC, a Texas limited liability company ("CEHE"), as the sole member.

WHEREAS, a certificate of formation of CenterPoint Energy Restoration Bond Company II, LLC (the "Company"), has been filed with the Secretary of State of the State of Delaware; and

WHEREAS, it is desired that the orderly management of the affairs of the Company be provided for.

ARTICLE I

DEFINITIONS

The following terms used in this Agreement shall have the following meanings (unless otherwise expressly provided herein):

"Agreement" shall mean this Limited Liability Company Agreement as originally executed and as it may be amended from time to time hereafter.

"Bonds" shall have the meaning given such term in Section 2.6.

"Capital Contribution" shall mean any contribution to the capital of the Company in cash or property by the Member whenever made.

"Certificate of Formation" shall mean the Certificate of Formation of the Company filed with and endorsed by the Secretary of State of the State of Delaware, as such certificate may be amended from time to time hereafter.

"Code" shall mean the Internal Revenue Code of 1986, as amended, or corresponding provisions of subsequent superseding federal revenue laws.

"Common Interest" shall have the meaning given such term in Section 4.1(b).

"Common Share" shall mean an undivided portion of all of the rights, duties, obligations and ownership interests in the Company.

"Delaware Act" shall mean the Delaware Limited Liability Company Act (6 Del. C. §§18-101, et seq.), as the same may be amended from time to time hereafter.

"Entity" shall mean any foreign or domestic general partnership, limited partnership, limited liability company, corporation, joint enterprise, trust, business trust, employee benefit plan, cooperative or association.

"Financing Order" shall mean the financing order to be issued by the Texas Commission in Docket No. 57559.

"Fiscal Year" shall mean the Company's fiscal year, which shall be determined by the Managers in accordance with Section 706(b) of the Code.

"Governmental Authority" shall mean any court or any federal or state regulatory body, administrative agency or governmental instrumentality.

"Indemnitee" has the meaning given such term in Section 8.1.

"Manager" shall mean any of the managers of the Company duly appointed or elected to serve in such capacity under Delaware law and this Agreement.

"Member" shall mean each Person who executes a counterpart of this Agreement as a Member and each Person who may hereafter become a Member pursuant to Article XII; but shall not include any Member that ceases to be a Member.

"Person" shall mean any individual or Entity, and any heir, executor, administrator, legal representative, successor or assign of such "Person" where the context so admits.

"PURA" shall mean the Texas Public Utility Regulatory Act, as codified in Title II of the Texas Utilities Code.

"Securitization Act" means Subchapter I of Chapter 36 of PURA, adopted and effective in August 2009, that allows for the securitization of system restoration costs, together with Subchapter G of Chapter 39 of PURA.

"System Restoration Property" shall mean all of CEHE's rights and interests under the Financing Order (including rights to impose, collect and receive the "system restoration charges" (as defined in the Securitization Act) approved in the Financing Order), once those rights are first transferred to the Company or pledged in connection with the issuance of the Bonds, except the rights of CEHE to earn and receive a rate of return on its invested capital in the Company, to receive administration and servicer fees, or to use CEHE's remaining portion of the Purchase Price (as defined in the System Restoration Property Sale Agreement, to be entered into by the Company and CEHE in connection with the issuance of the Bonds), and all revenue, collections, payments, money and proceeds arising out of those rights and interests.

"Texas Commission" shall mean the Public Utility Commission of Texas or any successor entity thereto.

"Treasury Regulations" shall mean regulations, including proposed or temporary regulations, promulgated under the Code. References herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations.

ARTICLE II

FORMATION OF THE COMPANY

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Formation</u>. On June 5, 2025, the Certificate of Formation of the Company was filed with the Secretary of State of the State of Delaware pursuant to the Delaware Act. Vincent A. Mercaldi, as an authorized person within the meaning of the Delaware Act, has caused a certificate of formation of the Company to be executed and filed in the office of the Secretary of State of the State of Delaware on June 5, 2025 (such execution and filing being hereby ratified and approved in all respects). Upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware, his powers as an "authorized person" ceased, and the Member thereupon became the designated "authorized person" and shall continue as the designated "authorized person" within the meaning of the Delaware Act. The existence of the Company as a separate legal entity shall continue until the cancellation of the Certificate of Formation of the Company as provided in the Delaware 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;2.2 <u>Name</u>. The name of the Company is CenterPoint Energy Restoration Bond Company II, LLC. If the Company shall conduct business in any jurisdiction other than the State of Delaware, it shall register the Company or its trade name with the appropriate authorities in such state in order to have the legal existence of the Company recognized.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Place of Business</u>. The Company may locate its places of business and registered office at any place or places as the Managers may from time to time deem advisable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 <u>Registered Office and Registered Agent</u>. The Company's registered office shall be at the office of its registered agent at 1209 Orange Street, Wilmington, Delaware 19801, and the name of its initial registered agent at such address shall be The Corporation Trust Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 <u>Term</u>. The term of the Company and this Agreement shall continue until the earliest of (a) such time as all of the Company's assets have been sold or otherwise disposed of or (b) such time as the Company's existence has been terminated as otherwise provided herein or in the Delaware 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;2.6 <u>Business Purpose</u>. The nature of the business or purpose to be conducted or promoted by the Company is to engage exclusively in the following business and financial activities:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 authorize, issue, sell and deliver a series of system restoration bonds (as defined in the Securitization Act) and authorized in the Financing Order (the "Bonds") and, in connection therewith, to enter into any agreement or document providing for the authorization, issuance, sale and delivery 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;(b) to purchase, acquire, own, hold, administer, service, and enter into agreements for the servicing of, finance, manage, sell, assign, pledge, collect amounts due on and otherwise deal with the System Restoration Property and other assets to be acquired in connection therewith and any proceeds or rights associated therewith;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 negotiate, authorize, execute, deliver, assume the obligations under, and perform its duties under, any agreement, instrument or document relating to the activities set forth in clauses (a) and (b) above; provided, that each party to any such agreement under which material obligations are imposed upon the Company shall covenant that it shall not, prior to the date which is one year and one day after the termination of the indenture governing the Bonds and the payment in full of the Bonds and any other amounts owed under such indenture, acquiesce, petition or otherwise invoke or cause the Company to invoke the process of any court or Governmental Authority for the purpose of commencing or sustaining a case against the Company 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 Company or any substantial part of the property of the Company; or ordering the winding up or liquidation of the affairs of the Company; and provided, further, that the Company shall be permitted to incur additional indebtedness or other liabilities payable to service providers and trade creditors in the ordinary course of business in connection with the foregoing activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 invest proceeds from the System Restoration Property and its other assets and any capital and income of the Company in accordance with the applicable agreements or instruments entered into in connection with the issuance of the Bonds or as otherwise determined by the Managers and not inconsistent with this Section or such applicable agreements or instruments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) to do such other things and carry on any other activities which the Managers determine to be necessary, convenient or incidental to any of the foregoing purposes, and have and exercise all of the powers and rights conferred upon limited liability companies formed pursuant to the Delaware Act that are related or incidental to any of the foregoing; 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;(f) to enter into and perform all agreements or instruments entered into in connection with the issuance of the Bonds and all documents, certificates or financing statements contemplated thereby or related thereto, all without any further act, vote or approval of the Member, any Manager or other Person notwithstanding any other provision of this Agreement, the Delaware Act or applicable law, rule or regulation. The foregoing authorization shall not be deemed a restriction on the powers of the Member or any Manager to enter into other agreements on behalf of the Company.

ARTICLE III

INITIAL MEMBER

The name and place of business of the initial Member are as follows:

CenterPoint Energy Houston Electric, LLC

1111 Louisiana Street<br> Houston, Texas 77002

The initial Member was admitted as the sole member of the Company upon its execution of a counterpart signature page to this Agreement.

ARTICLE IV

CAPITAL OF THE COMPANY

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Common Shares and Initial Contributions</u>. (a) A class of equity interests denominated the "Common Shares" is hereby designated as the sole class of equity interests of the Company. Each issued and outstanding Common Share shall at any time represent that undivided portion of all of the rights, duties, obligations and ownership interests in the Company in proportion to the total number of Common Shares outstanding at such 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;(b) The Company will issue to the initial Member 1,000 Common Shares (together, the "Common Interest") upon payment of $1,000 to the Company from the initial Member, which shall be deemed to be the initial Capital Contribution of the initial Member. Upon receipt of such initial Capital Contribution and execution of this Agreement by the Member, such Common Shares shall be validly issued and outstanding, fully paid and nonassessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Additional Contributions</u>. The Member shall not be required to make additional Capital Contributions unless, and except on such terms as, the Managers and the Member unanimously agree.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Interest</u>. No interest shall be paid by the Company on Capital Contributions.

ARTICLE V

RIGHTS AND OBLIGATIONS OF THE MEMBER

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Limitation of Member's Responsibility, Liability</u>. The Member shall not perform any act on behalf of the Company, incur any expense, obligation or indebtedness of any nature on behalf of the Company, or in any manner participate in the management of the Company or receive or be credited with any amounts, except as specifically contemplated hereunder. Except as otherwise provided by the Delaware Act, the Member shall not be personally liable for any amount in excess of its Capital Contribution and shall not be liable for any of the debts or losses of the Company, except to the extent that a liability of the Company is founded upon or results from an unauthorized act or activity of the Member. In addition, the Member's liability shall be limited as set forth in the Delaware Act and other applicable law hereafter in 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;5.2 <u>Return of Distributions</u>. In accordance with Section 18-607 of the Delaware Act, the Member will be obligated to return any distribution from the Company only as provided by applicable law.

ARTICLE VI

ACTS OF THE MEMBER

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Action by the Member at a Meeting</u>. The Member may act by voting the Common Interest at a meeting, which may be called by the Member or any Manager, and which may be held at any place designated by the Member. If a Manager calls such a meeting, written notice shall be given to the Member not less than 10 and not more than 60 days before the date of the meeting. At all meetings of the Member, the Member may vote in person or by proxy executed in writing by the Member or by a duly authorized attorney in fact. Such proxy shall be filed with the Managers of the Company before or at the time of the meeting. No proxy shall be valid after 11 months from the date of its execution, unless otherwise provided in the proxy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Action by the Member Without a Meeting</u>. Action required or permitted to be taken at a meeting of the Member may be taken without a meeting if the action is evidenced by one or more written consents describing the action taken, signed by the Member and delivered to the Managers of the Company for inclusion in the minutes or for filing with the Company records.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Waiver of Notice</u>. When any notice is required to be given to the Member, a waiver thereof in writing signed by the Person entitled to such notice, whether before, at or after the time stated therein, shall be equivalent to the giving of such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 <u>Special Prohibitions and Limitations</u>. Without the prior approval of the Member, the Company shall not (a) sell, exchange or otherwise dispose of all or substantially all of the assets of the Company outside the ordinary course of business of the Company, (b) merge, consolidate or combine with any other Person, or (c) issue additional Common Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 <u>Amendments to Be Adopted Solely by the Managers</u>. The Managers, without the consent at the time of the Member, may amend any provision of this Agreement and execute, swear to, acknowledge, deliver, file and record whatever documents may be required in connection therewith, to reflect:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 change in the name of the Company or the location of the principal place of business of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 change that is necessary or advisable in the opinion of the Managers to qualify the Company as a company in which members have limited liability under the laws of any state or other jurisdiction or to ensure that the Company will not be treated as an association taxable as a corporation for 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;(c) a change that (i) in the sole discretion of the Managers does not adversely affect the Member in any material respect, (ii) is necessary or desirable to satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any Governmental Authority or contained in any federal or state statute or (iii) is required or contemplated by 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;(d) a change in any provision of this Agreement that requires any action to be taken by or on behalf of the Company or the Member pursuant to the requirements of the Delaware Act if the provisions of the Delaware Act are amended, modified or revoked so that the taking of such action is no longer required; provided that this Section 6.5(d) shall be applicable only if such changes are not materially adverse to the Member; 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;(e) any other amendments similar to the foregoing.

The Member hereby appoints each Manager as its attorney in fact to execute any amendment permitted by this Section 6.5.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6 <u>Amendments</u>. Any amendment to this Agreement (other than one permitted by Section 6.5) shall be effective upon its adoption by the Member.

ARTICLE VII

RIGHTS AND DUTIES OF MANAGERS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Management</u>. The powers of the Company shall be exercised by or under the authority of, and the business and affairs of the Company shall be managed under, its Managers. In addition to the powers and authorities expressly conferred by this Agreement upon the Managers, the Managers may exercise all such powers of the Company and do all such lawful acts and things as are not directed or required to be exercised or done by the Member by the Delaware Act, the Certificate of Formation or this Agreement. In accordance with and pursuant to the provisions of Section 18-407 of the Delaware Act, the Managers may delegate to one or more other persons their rights and powers to manage and control the business and affairs of the Company, provided that any such delegation may not authorize any action that would violate or reasonably be expected to violate the limited business purpose of the Company specified in Section 2.6.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Number and Qualifications</u>. The number of Managers of the Company shall initially be three; but the number of Managers may be changed by the Member. Managers need not be residents of the State of Delaware or Members of the Company. The Managers, in their discretion, may elect a chair of the Managers who shall preside at any meetings of the Managers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Powers of the Managers</u>. Without limiting the generality of Section 7.1, the Managers shall have power and authority, acting in concert in accordance with this Agreement, to cause the Company to do and perform all acts as may be necessary or appropriate to the conduct of the Company's business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Initial Managers</u>. The initial Managers shall be Darin M. Carroll, Patricia L. Martin and Kristie L. Colvin. The Member shall have the right to take action pursuant to Section 6.1 or Section 6.2 to designate one or more Managers and to remove, replace or fill any vacancy occurring for any reason of any 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;7.5 <u>Place of Meetings</u>. All meetings of the Managers or committees thereof may be held either inside or outside the State of Delaware. Any Manager may participate in a meeting by means of conference telephone or similar equipment, and participation by such means shall constitute presence in person at the meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 <u>Meetings of Managers</u>. Meetings of the Managers may be called by any Manager on two days' notice to each Manager, either personally or by mail, telephone or electronic mail.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 <u>Quorum</u>. At all meetings of the Managers, the presence of a majority of the Managers shall be necessary and sufficient to constitute a quorum for the transaction of business unless a greater number is required by applicable law. The act of a majority of the Managers present at a meeting at which a quorum is present shall be the act of the Managers, except as otherwise provided by applicable law, the Certificate of Formation or this Agreement. If a quorum shall not be present at any meeting of the Managers, the Managers present at the meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8 <u>Attendance and Waiver of Notice</u>. Attendance of a Manager at any meeting shall constitute a waiver of notice of such meeting, except where a Manager attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Managers need be specified in the notice or waiver of notice of such meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9 <u>Action by Managers Without a Meeting</u>. Action required or permitted to be taken at a meeting of Managers may be taken without a meeting if the action is evidenced by one or more written consents describing the action taken, signed by a majority of the Managers and included in the Company minutes or records. Action taken under this Section 7.9 is effective when a majority of the Managers have signed the consent, unless the consent specifies a different effective date. The record date for determining Managers entitled to take action without a meeting shall be the date the first Manager signs a written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10 <u>Compensation of Managers</u>. Managers, as such, shall not receive any stated salary for their services, but shall receive such compensation for their services as may be from time to time approved by the Member, provided that nothing contained in this Agreement shall preclude any Manager from serving the Company in any other capacity and receiving compensation for service. In addition, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each meeting of the Managers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.11 <u>Committees</u>. The Managers may, by resolution, designate from among the Managers one or more committees, each of which shall be comprised of one or more Managers, and may designate one or more of the Managers as alternate members of any committee, who may, subject to any limitations imposed by the Managers, replace absent or disqualified Managers at any meeting of that committee. Such committee shall have and may exercise all of the authority of the Managers, subject to the limitations set forth in this Agreement and under the Delaware 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;7.12 <u>Liability of Managers</u>. A Manager shall not be liable under any judgment, decree or order of a court, or in any other manner, for any debt, obligation or liability of the Company by reason of his acting as a Manager. A Manager shall not be personally liable to the Company or the Member for monetary damages for breach of fiduciary duty as a Manager, except for liability for any acts or omissions that involve intentional misconduct, fraud or a knowing violation of applicable law or for a distribution in violation of Delaware law as a result of the willful or grossly negligent act or omission of the Manager. If the laws of the State of Delaware are amended after the date of this Agreement to authorize action further eliminating or limiting the personal liability of Managers, then the liability of a Manager, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by the amended laws of the State of Delaware. Any repeal or modification of this Section 7.12 by the Member shall be prospective only and shall not adversely affect any limitation on the personal liability of a Manager existing at the time of such repeal or modification or thereafter arising as a result of acts or omissions prior to the time of such repeal or modification.

ARTICLE VIII

INDEMNIFICATION

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 <u>Indemnification</u>. Each Person who at any time shall be, or shall have been, a Member or Manager, or any Person who, while a Member, Manager or agent of the Company, is or was serving at the request of the Company as a director, member, manager, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of an Entity, shall be entitled to indemnification by the Company as and to the fullest extent permitted by the provisions of Delaware law or any successor statutory provisions, as from time to time amended. The foregoing right of indemnification shall not be deemed exclusive of any other rights to which one to be indemnified may be entitled as a matter of law or under this Agreement, any other agreement, by vote of the Member or disinterested Managers or otherwise, both as to any action in an official capacity and as to action in another capacity while holding such office. Any repeal of this Section 8.1 shall be prospective only and shall not adversely affect any right of indemnification existing at the time of such repeal or modification or thereafter arising as a result of acts or omissions prior to the time of such repeal or modification. Any Person entitled to indemnification in accordance with this Section 8.1 shall hereinafter be referred to as an "Indemnitee." If any provision or provisions of this Agreement relating to indemnification shall be held to be invalid, illegal or unenforceable for any reason whatsoever, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby; and, to the fullest extent possible, the provisions of this Agreement shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable, including, without limitation, by allowing indemnification by vote of the Member or Managers or the disinterested minority 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;8.2 <u>Advancement or Reimbursement of Expenses</u>. The Company may pay in advance or reimburse expenses actually or reasonably incurred or anticipated by an Indemnitee in connection with an appearance as a witness or other participation in a proceeding whether or not such Indemnitee is a named defendant or a respondent in the 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;8.3 <u>Nonexclusivity and Survival of Indemnification</u>. The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this Article VIII shall not be deemed exclusive of any other rights to which one seeking indemnification and advancement of expenses may be entitled under this Agreement, any other agreement, by vote of the disinterested Member or Managers or otherwise, both as to action in an official capacity and as to action in any other capacity while holding such office, it being the policy of the Company that, if the Managers and the Member unanimously approve, indemnification specified in this Article VIII shall be made to the fullest extent permitted by applicable law. The provisions of this Article VIII shall not be deemed to preclude the indemnification of any Person who is not specified in this Article VIII but whom the Company has the power or obligation to indemnify under the provisions of the Delaware Act 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;8.4 <u>Insurance</u>. The Company may purchase and maintain insurance on behalf of any Person who is or was a Member, Manager or agent of the Company, or is or was serving at the request of the Company as a director, member, manager, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of an Entity against any liability asserted against and incurred by such Person in any such capacity or arising out of such Person's status as such, whether or not the Company would have the power or the obligation to indemnify such Person against such liability under the provisions of this Article VIII.

ARTICLE IX

ALLOCATIONS AND DISTRIBUTIONS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 <u>Allocations</u>. Except as may otherwise be unanimously agreed by the Managers with the consent of the Member, all items of income, gain, loss, deduction, and credit of the Company shall be allocated to the Member in respect of its Common 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;9.2 <u>Distributions</u>. The Member shall be entitled to receive, out of the assets of the Company legally available therefor, when, as and if declared by unanimous vote of the Managers, distributions payable in cash in such amounts, if any, as the Managers shall declare. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not be required to make a distribution to the Member on account of its interest in the Company if such distribution would violate Sections 18-607 or 18-804 of the Delaware Act or any other applicable law or any agreement or instrument entered into by the Company in connection with the issuance of the Bonds.

ARTICLE X

ACCOUNTING PERIOD, RECORDS AND 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;10.1 <u>Accounting Period</u>. The Company's accounting period shall be the 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;10.2 <u>Records, Audits and Reports</u>. At the expense of the Company, the Managers shall maintain records and accounts of all operations and expenditures of the Company.

ARTICLE XI

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;11.1 <u>Tax Returns and Elections</u>. The Managers or their designees shall cause the preparation and timely filing of all tax returns required to be filed by the Company pursuant to the Code and all other tax returns that the Managers or their designees deem necessary and are required to be filed by the Company. Copies of such returns, or pertinent information therefrom, shall be furnished to the Member as promptly as practicable after 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;11.2 <u>State, Local or Foreign Income Taxes</u>. In the event state or foreign income taxes are applicable, any references to federal income taxes or to "income taxes" contained herein shall refer to federal, state, local and foreign income taxes. References to the Code or Treasury Regulations shall be deemed to refer to corresponding provisions that may become applicable under state, local or foreign income tax statutes and regulations.

ARTICLE XII

RESTRICTIONS ON TRANSFERABILITY

The Common Interest constitutes personal property and shall be freely transferable and assignable in whole but not in part upon registration of such transfer and assignment on the books of the Company in accordance with the procedures established for such purpose by the Managers. Upon registration of the transfer and assignment of the Common Interest on the books of the Company, and without any further action of any Person, the transferee/assignee shall be admitted as a member and become the sole Member of the Company and shall have the rights and powers, and be subject to the restrictions and liabilities, of the Member under this Agreement and the Delaware Act, and following such admission, the transferor/assignor shall cease to be the Member, each as of the date of such registration. Notwithstanding the foregoing, the Common Interest may not be transferred unless any conditions thereto specified in agreements or instruments entered into by the Company in connection with the issuance of the Bonds are satisfied.

ARTICLE XIII

DISSOLUTION AND TERMINATION

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1 <u>Dissolution</u>. The Company shall dissolve upon the occurrence of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) when all of the Company's assets have been sold or otherwise disposed 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;(ii) if the Member so elects by vote or in writing; 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) as otherwise provided under Delaware 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;13.2 <u>Effect of Dissolution</u>. Upon the occurrence of any of the events specified in this Article XIII effecting the dissolution of the Company, the Company shall cease to carry on its business, except insofar as may be necessary for the winding up of its business, but its separate existence shall continue until a Certificate of Cancellation has been issued by the Secretary of State of the State of Delaware.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.3 <u>Winding Up, Liquidating and Distribution of Assets</u>. (a) Upon dissolution, an accounting shall be made of the accounts of the Company and of the Company's assets, liabilities and operations, from the date of the last previous accounting until the date of dissolution. The Managers shall immediately proceed to wind up the affairs of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Company is dissolved and its affairs are to be wound up, the Managers shall (i) sell or otherwise liquidate all of the Company's assets as promptly as practicable (except to the extent the Managers may determine to distribute any assets in kind to the Member), (ii) allocate any income or loss resulting from such sales to the Member in accordance with this Agreement, (iii) satisfy (whether by payment or making reasonable provision for payment thereof) all liabilities to creditors in the order of priority as provided by applicable law, (iv) discharge all liabilities of the Member (other than liabilities to the Member or for Capital Contributions to the extent unpaid in breach of an obligation to do so), including all costs relating to the dissolution, winding up and liquidation and distribution of assets, (v) discharge any liabilities of the Company to the Member other than on account of their interests in Company capital or profits and (vi) distribute the remaining assets to the Member, either in cash or in kind, as determined by the Managers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 anything to the contrary in this Agreement, upon a liquidation of the Company no Member shall have any obligation to make any contribution to the capital of the Company other than any Capital Contributions such Member agreed to make in accordance with 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;(d) Upon (i) completion of the winding up, liquidation and distribution of the assets, and (ii) the filing of a Certificate of Cancellation as provided in Section 13.4, the Company shall terminate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Managers shall comply with any applicable requirements of applicable law pertaining to the winding up of the affairs of the Company and the final distribution of its assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.4 <u>Certificate of Cancellation</u>. When all debts, liabilities and obligations have been paid and discharged or adequate provisions have been made therefor and all of the remaining property and assets have been distributed to the Member, a Certificate of Cancellation shall be executed and filed with the Secretary of State of the State of Delaware, which Certificate shall set forth the information required by the Delaware 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;13.5 <u>Return of Contribution</u>. Except as provided by applicable law, upon dissolution, the Member shall look solely to the assets of the Company for the return of its Capital Contribution.

ARTICLE XIV

MISCELLANEOUS 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;14.1 <u>Notices</u>. Any notice, demand or communication required or permitted to be given by any provision of this Agreement shall be deemed to have been sufficiently given or served for all purposes if delivered personally to the party or to an executive officer of the party to whom the same is directed or if sent by registered or certified mail, postage and charges prepaid, addressed to the Member's and/or Company's address, as appropriate, which is set forth in this Agreement. If mailed, any such notice shall be deemed to be delivered two calendar days after being deposited in the United States mail with postage thereon prepaid, addressed and sent as aforesaid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2 <u>Books of Account and Records</u>. Proper and complete records and books of account in which shall be entered fully and accurately all transactions and other matters relating to the Company's business in such detail and completeness as is customary and usual for businesses of the type engaged in by the Company shall be kept or shall be caused to be kept by the Company. The books and records of the Company shall at all times be maintained at the principal place of business of the Company and shall be open to the reasonable inspection and examination of the Member or its duly authorized representatives during reasonable business hours.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.3 <u>Application of Delaware Law</u>. This Agreement, and the application of interpretation hereof, shall be governed exclusively by its terms and by the laws of the State of Delaware, and specifically the Delaware 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;14.4 <u>Waiver of Action for Partition</u>. The Member irrevocably waives, during the term of the Company, any right that the Member may have to maintain any action for partition with respect to the property of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.5 <u>Execution of Additional Instruments</u>. The Member hereby agrees to execute such other and further statements of interest and holdings, designations, powers of attorney and other instruments necessary to comply with any laws, rules or 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;14.6 <u>Headings</u>. The headings in this Agreement are inserted for convenience only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision 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;14.7 <u>Waivers</u>. No waiver of any right under this Agreement shall be effective unless evidenced in writing and executed by the Person entitled to the benefits thereof. The failure of any party to seek redress for violation of or to insist upon the strict performance of any covenant or condition of this Agreement shall not prevent another act or omission, which would have originally constituted a violation, from having the effect of an original violation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.8 <u>Rights and Remedies Cumulative</u>. The rights and remedies provided by this Agreement are cumulative and the use of any one right or remedy by any party shall not preclude or waive the right to use any or all other rights or remedies. Said rights and remedies are given in addition to any other rights the parties may have by applicable law, statute, ordinance 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;14.9 <u>Severability</u>. If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid, illegal or unenforceable to any extent, the remainder of this Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by 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;14.10 <u>Heirs, Successors and Assigns</u>. Each and all of the covenants, terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the parties hereto and, to the extent permitted by this Agreement, their respective heirs, legal representatives, successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.11 <u>Creditors</u>. None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.12 <u>Counterparts</u>. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

EXECUTED to be effective as of the date first above written.

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| | |
|:---|:---|
| CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC | CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC |
| By: | /s/ Darin M. Carroll |
|  | Name: Darin M. Carroll |
|  | Title: President and Chief Executive Officer |

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## Exhibit 3.3

**Exhibit 3.3**

**AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT**

**OF**

**CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC**

**Dated as of**

**__________ __, 2025**

<u>**TABLE OF CONTENTS**</u>

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| | | |
|:---|:---|:---|
|  |  | <u>Page</u> |
| ARTICLE I | ARTICLE I |  |
| GENERAL PROVISIONS | GENERAL PROVISIONS |  |
| SECTION 1.01 | Definitions | 1 |
| SECTION 1.02 | Sole Member; Registered Office and Agent | 2 |
| SECTION 1.03 | Other Offices | 3 |
| SECTION 1.04 | Name | 3 |
| SECTION 1.05 | Purpose; Nature of Business Permitted; Powers | 3 |
| SECTION 1.06 | Limited Liability Company Agreement; Certificate of Formation | 4 |
| SECTION 1.07 | Separate Existence | 5 |
| SECTION 1.08 | Limitation on Certain Activities | 8 |
| SECTION 1.09 | No State Law Partnership | 9 |
| ARTICLE II | ARTICLE II |  |
| CAPITAL | CAPITAL |  |
| SECTION 2.01 | Initial Capital | 9 |
| SECTION 2.02 | Additional Capital Contributions | 9 |
| SECTION 2.03 | Capital Account | 10 |
| SECTION 2.04 | Interest | 10 |
| ARTICLE III | ARTICLE III |  |
| ALLOCATIONS; BOOKS | ALLOCATIONS; BOOKS |  |
| SECTION 3.01 | Allocations of Income and Loss | 10 |
| SECTION 3.02 | Company to be Disregarded for Tax Purposes | 10 |
| SECTION 3.03 | Books of Account | 11 |
| SECTION 3.04 | Access to Accounting Records | 11 |
| SECTION 3.05 | Annual Tax Information | 11 |
| SECTION 3.06 | Internal Revenue Service Communications | 11 |

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- i -

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| | | |
|:---|:---|:---|
| ARTICLE IV | ARTICLE IV |  |
| MEMBER | MEMBER |  |
| SECTION 4.01 | Powers | 11.0 |
| SECTION 4.02 | Compensation of Member | 13.0 |
| SECTION 4.03 | Other Ventures | 13.0 |
| SECTION 4.04 | Actions by the Member | 13.0 |
| ARTICLE V | ARTICLE V |  |
| OFFICERS | OFFICERS |  |
| SECTION 5.01 | Designation; Term; Qualifications | 13.0 |
| SECTION 5.02 | Removal and Resignation | 15.0 |
| SECTION 5.03 | Vacancies | 15.0 |
| SECTION 5.04 | Compensation | 15.0 |
| ARTICLE VI | ARTICLE VI |  |
| MEMBERSHIP INTEREST | MEMBERSHIP INTEREST |  |
| SECTION 6.01 | General | 15.0 |
| SECTION 6.02 | Distributions | 15.0 |
| SECTION 6.03 | Rights on Liquidation, Dissolution or Winding Up | 15.0 |
| SECTION 6.04 | Redemption | 15.0 |
| SECTION 6.05 | Voting Rights | 16.0 |
| SECTION 6.06 | Transfer of Membership Interests | 16.0 |
| SECTION 6.07 | Admission of Transferee as Member | 16.0 |
| ARTICLE VII | ARTICLE VII |  |
| MANAGERS | MANAGERS |  |
| SECTION 7.01 | Managers. | 17.0 |
| SECTION 7.02 | Powers of the Managers | 18.0 |
| SECTION 7.03 | Reimbursement | 19.0 |
| SECTION 7.04 | Removal of Managers | 19.0 |
| SECTION 7.05 | Resignation of Manager | 19.0 |
| SECTION 7.06 | Vacancies | 19.0 |
| SECTION 7.07 | Meetings of the Managers | 20.0 |
| SECTION 7.08 | Electronic Communications | 20.0 |
| SECTION 7.09 | Committees of Managers | 20.0 |
| SECTION 7.10 | Limitations on Independent Manager(s) | 20.0 |

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- ii -

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| | | |
|:---|:---|:---|
| ARTICLE VIII | ARTICLE VIII |  |
| EXPENSES | EXPENSES |  |
| SECTION 8.01 | Expenses | 21.0 |
| ARTICLE IX | ARTICLE IX |  |
| PERPETUAL EXISTENCE; DISSOLUTION, LIQUIDATION AND WINDING-UP | PERPETUAL EXISTENCE; DISSOLUTION, LIQUIDATION AND WINDING-UP |  |
| SECTION 9.01 | Existence | 21.0 |
| SECTION 9.02 | Dissolution | 22.0 |
| SECTION 9.03 | Accounting | 23.0 |
| SECTION 9.04 | Certificate of Cancellation | 23.0 |
| SECTION 9.05 | Winding Up | 23.0 |
| SECTION 9.06 | Order of Payment of Liabilities Upon Dissolution | 23.0 |
| SECTION 9.07 | Limitations on Payments Made in Dissolution | 23.0 |
| SECTION 9.08 | Limitation on Liability | 23.0 |
| ARTICLE X | ARTICLE X |  |
| INDEMNIFICATION | INDEMNIFICATION |  |
| SECTION 10.01 | Indemnity | 24.0 |
| SECTION 10.02 | Indemnity for Actions By or In the Right of the Company | 24.0 |
| SECTION 10.03 | Indemnity If Successful | 24.0 |
| SECTION 10.04 | Expenses | 25.0 |
| SECTION 10.05 | Advance Payment of Expenses | 25.0 |
| SECTION 10.06 | Other Arrangements Not Excluded | 25.0 |
| ARTICLE XI | ARTICLE XI |  |
| MISCELLANEOUS PROVISIONS | MISCELLANEOUS PROVISIONS |  |
| SECTION 11.01 | No Bankruptcy Petition; Dissolution | 26.0 |
| SECTION 11.02 | Amendments | 27.0 |
| SECTION 11.03 | Counterparts | 28.0 |
| SECTION 11.04 | Governing Law | 28.0 |
| SECTION 11.05 | Headings | 29.0 |
| SECTION 11.06 | Severability | 29.0 |
| SECTION 11.07 | Assigns | 29.0 |

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- iii -

SECTION 11.08 Enforcement by each Independent Manager 29 <br> SECTION 11.09 Waiver of Partition; Nature of Interest 29 <br> SECTION 11.10 Benefits of Agreement; No Third-Party Rights 29

<u>EXHIBITS, SCHEDULES AND APPENDIX</u>

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| | |
|:---|:---|
| Schedule A | Schedule of Capital Contribution of Member |
| Schedule B | Initial Managers |
| Schedule C | Initial Officers |
| Exhibit A | Management Agreement |
| Appendix A | Definitions |

---

- iv -

AMENDED AND RESTATED<br> LIMITED LIABILITY COMPANY AGREEMENT<br> OF centerpoint energy restoration bond company iI, LLC

This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (as amended, restated or amended and restated from time to time, this "<u>LLC Agreement</u>") of CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC, a Delaware limited liability company (the "<u>Company</u>"), dated as of _______ __, 2025, is entered into by CenterPoint Energy Houston Electric, LLC, a Texas limited liability company, as sole equity member of the Company (together with any additional or successor members of the Company, each in their capacity as a member of the Company, other than Special Members, the "<u>Member</u>"), and by Bernard J. Angelo, as the Independent Manager.

RECITALS

WHEREAS, the Member has caused to be filed a Certificate of Formation of the Company with the Secretary of State of the State of Delaware to form the Company under and pursuant to the LLC Act and has entered into a Limited Liability Company Agreement of the Company, effective as of June 5, 2025 (the "<u>Original LLC Agreement</u>"); and

WHEREAS, in accordance with the LLC Act, the Member desires to continue the Company without dissolution and to enter into this LLC Agreement to amend and restate in its entirety the Original LLC Agreement and to set forth the rights, powers and interests of the Member with respect to the Company and its Membership Interest therein and to provide for the management of the business and operations of the Company.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby amend and restate in its entirety the Original LLC Agreement as follows:

ARTICLE I

GENERAL PROVISIONS

SECTION 1.01 <u>Definitions</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) Unless otherwise defined herein, capitalized terms used herein shall have the meanings assigned to them in <u>Appendix A</u> attached 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) All terms defined in this LLC Agreement shall have the 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 LLC Agreement, shall refer to this LLC Agreement as a whole and not to any particular provision of this LLC Agreement; Article, Section, Schedule, Exhibit, Appendix, Annex and Attachment references contained in this LLC Agreement are references to Articles, Sections, Schedules, Exhibits, Appendices, Annexes and Attachments in or to this LLC 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 LLC Agreement are applicable to the singular as well as the plural forms of such 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;(e) Non-capitalized terms used herein which are defined in the LLC Act, shall, as the context requires, have the meanings assigned to such terms in the LLC Act.

SECTION 1.02 <u>Sole Member; Registered Office and Agent</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 sole Member of the Company shall be CenterPoint Energy Houston Electric, LLC, a Texas limited liability company, or any successor as sole member pursuant to <u>Sections 1.02(c)</u>, <u>6.06</u> and <u>6.07</u>. The registered office and registered agent of the Company in the State of Delaware as of the date hereof are The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801. The Member may change said registered office and agent from one location to another in the State of Delaware. The Member shall provide notice of any such change 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;(b) Upon the occurrence of any event that causes the Member to cease to be a member of the Company (other than upon continuation of the Company without dissolution upon the transfer or assignment by the Member of all of its limited liability company interest in the Company and the admission of the transferee or an additional Member of the Company pursuant to <u>Sections 1.02(c), 6.06</u> and <u>6.07</u>), each Person acting as an Independent Manager pursuant to the terms of this LLC Agreement shall, without any action of any Person and simultaneously with the Member ceasing to be a member of the Company, automatically be admitted to the Company as a Special Member and shall continue the Company without dissolution. No Special Member may resign from the Company or transfer its rights as Special Member unless (i) a successor Special Member has been admitted to the Company as Special Member by executing a counterpart to this LLC Agreement, and (ii) such successor has also accepted its appointment as an Independent Manager pursuant to this LLC Agreement; <u>provided</u>, <u>however</u>, a Special Member shall automatically cease to be a member of the Company upon the admission to the Company of a substitute Member. Each Special Member shall be a member of the Company that has no interest in the profits, losses and capital of the Company and has no right to receive any distributions of Company assets (and no Special Member shall be treated as a member of the Company for federal income tax purposes). Pursuant to Section 18-301 of the LLC Act, a Special Member shall not be required to make any capital contributions to the Company and shall not receive a limited liability company interest in the Company. A Special Member, in its capacity as Special Member, may not bind the Company. Except as required by any mandatory provision of the LLC Act, each Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, the Company, including the merger, consolidation, division or conversion of the Company. In order to implement the admission to the Company of each Special Member, each Person acting as an Independent Manager pursuant to this LLC Agreement shall execute a counterpart to this LLC Agreement. Prior to its admission to the Company as Special Member, each Person acting as an Independent Manager pursuant to this LLC Agreement shall not be a member of the Company. A "<u>Special Member</u>" means, upon such Person's admission to the Company as a member of the Company pursuant to this <u>Section 1.02(b)</u>, a Person acting as an Independent Manager, in such Person's capacity as a member of the Company. A Special Member shall only have the rights and duties expressly set forth in this LLC Agreement. For purposes of this LLC Agreement, a Special Member is not included within the defined term "Member."

&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 Company may admit additional Members with the affirmative vote or written consent of a majority of the Managers, which vote or written consent must include the affirmative vote or written consent of each Independent Manager. Notwithstanding the preceding sentence, it shall be a condition to the admission of any additional Member that the sole Member shall have received an opinion of outside tax counsel (as selected by the Member in form and substance reasonably satisfactory to the Member) that the admission of such additional Member shall not cause the Company to be treated, for federal income tax purposes, as having more than a "sole owner" and that the Company shall not be treated, for federal income tax purposes, as an entity separate from such "sole owner". If such additional Member is being admitted when there are no members of the Company, its admission shall be effective as of the last remaining Member ceasing to be a member of the Company.

SECTION 1.03 <u>Other Offices</u>. The Company may have an office at 1111 Louisiana Street, Suite 4664B, Houston, Texas 77002, or at any other offices that may at any time be established by the Member at any place or places within or outside the State of Delaware. The Member shall provide notice to the Indenture Trustee of any change in the location of the Company's office.

SECTION 1.04 <u>Name</u>. The name of the Company shall be "CenterPoint Energy Restoration Bond Company II, LLC". The name of the Company may be changed from time to time by the Member with ten (10) days' prior written notice to the Managers and the Indenture Trustee, and the filing of an appropriate amendment to the Certificate of Formation with the Secretary of State as required by the LLC Act.

SECTION 1.05 <u>Purpose; Nature of Business Permitted; Powers</u>. The purposes for which the Company is formed are limited 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) financing, purchasing, owning, administering, managing and servicing the System Restoration Property and the other Bond Collateral;

&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) authorizing, executing, issuing, delivering and registering 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;(c) making payment 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;(d) distributing amounts released to the Company;

&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) managing, assigning, pledging, collecting amounts due on or otherwise dealing in the System Restoration Property and the other Bond Collateral;

&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) negotiating, executing, assuming and performing its 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;(g) pledging its interest in the System Restoration Property and the other Bond Collateral to the Indenture Trustee under the Indenture and the Series Supplement in order to secure 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;(h) filing with the U.S. Securities and Exchange Commission the registration statement, 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 Bonds under the securities or "Blue Sky" laws of various jurisdictions; 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) performing activities or exercising any powers permitted to limited liability companies formed under the laws of the State of Delaware that are necessary, suitable or convenient to accomplish the above purposes.

The Company shall engage only in any activities related to the foregoing purposes or required or authorized by the terms of the Basic Documents or other agreements referenced above. The Company shall have all powers reasonably incidental, necessary, suitable or convenient to effect the foregoing purposes, including all powers granted under the LLC Act. The Company shall issue the Bonds pursuant to the Financing Order. The Company is hereby authorized to execute, deliver and perform, and the Member, any Manager (other than an Independent Manager), or any officer of the Company, acting singly or collectively, on behalf of the Company, are hereby authorized to execute and deliver, the Bonds, the Basic Documents and all registration statements, documents, agreements, certificates or financing statements contemplated thereby or related thereto, all without any further act, vote, consent or approval of any Member, Manager or other Person, notwithstanding any other provision of this LLC Agreement, the LLC Act, or other applicable law, rule or regulation. Notwithstanding any other provision of this LLC Agreement, the LLC Act or other applicable law, any Basic Document executed prior to the date hereof by any Member, Manager or officer on behalf of the Company is hereby ratified and approved in all respects. The authorization set forth in the preceding two sentences shall not be deemed a restriction on the power and authority of the Member or any Manager, including any Independent Manager, to enter into other agreements or documents on behalf of the Company as authorized pursuant to this LLC Agreement or the LLC Act. The Company shall possess and may exercise all the powers and privileges granted by the LLC Act or by any other law or by this LLC Agreement, together with any powers incidental thereto, insofar as such powers and privileges are incidental, necessary, suitable or convenient to the conduct, promotion or attainment of the business purposes or activities of the Company.

SECTION 1.06 <u>Limited Liability Company Agreement; Certificate of Formation</u>. This LLC Agreement shall constitute a "limited liability company agreement" within the meaning of the LLC Act. Vincent A. Mercaldi, as an authorized person within the meaning of the LLC Act, has caused a certificate of formation of the Company to be executed and filed in the office of the Secretary of State of the State of Delaware on June 5, 2025 (such execution and filing being hereby ratified and approved in all respects). Upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware, his powers as an "authorized person" ceased, and the Member thereupon became the designated "authorized person" and shall continue as the designated "authorized person" within the meaning of the LLC Act. The existence of the Company as a separate legal entity shall continue until the cancellation of the Certificate of Formation of the Company as provided in the LLC Act.

SECTION 1.07 <u>Separate Existence</u>. Except for financial reporting purposes (to the extent required by generally accepted accounting principles) and for federal income tax purposes and, to the extent consistent with applicable state tax law, state income and franchise tax purposes, the Member and the Managers shall take all steps necessary to continue the identity of the Company as a separate legal entity and to make it apparent to third Persons that the Company is an entity with assets and liabilities distinct from those of the Member, Affiliates of the Member or any other Person, and that the Company is not a division of any of the Affiliates of the Company or any other Person. In that regard, and without limiting the foregoing in any manner, the Company 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) maintain the assets of the Company in such a manner that it is not costly or difficult to segregate, identify or ascertain its individual assets from those of any other Person, including any Affiliate;

&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) conduct all transactions with Affiliates on an arm's length basis;

&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) not guarantee, become obligated for or pay the debts of any Affiliate or hold the credit of the Company out as being available to satisfy the obligations of any Affiliate or other Person (nor, except as contemplated in the Basic Documents, indemnify any Person for losses resulting therefrom), nor, except as contemplated in the Basic Documents, have any of its obligations guaranteed by any Affiliate or hold the Company out as responsible for the debts of any Affiliate or other Person or for the decisions or actions with respect to the business and affairs of any Affiliate, nor seek or obtain credit or incur any obligation to any third party based upon the creditworthiness or assets of any Affiliate or any other Person (*i.e.*, other than based on the assets of the Company) nor allow any Affiliate to do such things based on the credit of the Company;

&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 expressly otherwise permitted hereunder or under any of the Basic Documents, not permit the commingling or pooling of the Company's funds or other assets with the funds or other assets of any Affiliate;

&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) maintain separate deposit and other bank accounts and funds (separately identifiable from those of the Member or any other Person) to which no Affiliate (except CEHE, in its capacity as Servicer and Administrator) has any access, which accounts shall be maintained in the name and, to the extent not inconsistent with applicable federal tax law, with the tax identification number of the Company;

&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) maintain full books of accounts and records (financial or other) and financial statements separate from those of its Affiliates or any other Person, prepared and maintained in accordance with generally accepted accounting principles (including, all resolutions, records, agreements or instruments underlying or regarding the transactions contemplated by the Basic Documents or otherwise) and audited annually by an independent accounting firm which, upon written request, shall provide such audit 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;(g) pay its own liabilities out of its own funds, including fees and expenses of the Administrator pursuant to the Administration Agreement and the Servicer 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;(h) not hire or maintain any employees, but shall compensate (either directly or through reimbursement of the Company's allocable share of any shared expenses) all consultants, agents and Affiliates, to the extent applicable, for services provided to the Company by such consultants, agents or Affiliates, in each case, from the Company'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;(i) allocate fairly and reasonably the salaries of and the expenses related to providing the benefits of officers or managers shared with the Member, any Special Member or any 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;(j) allocate fairly and reasonably any overhead shared with the Member, any Special Member or any 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;(k) pay from its own bank accounts for accounting and payroll services, rent, lease and other expenses (or the Company's allocable share of any such amounts provided by one or more other Affiliates) and not have such operating expenses (or the Company's allocable share thereof) paid by any Affiliates, <u>provided</u>, that the Member shall be permitted to pay the initial organization expenses of the Company and certain of the expenses related to the transactions contemplated by the Basic Documents as provided 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;(l) maintain adequate capitalization to conduct its business and affairs considering the Company's size and the nature of its business and intended purposes and, after giving effect to the transactions contemplated by the Basic Documents, refrain from engaging in a business for which its remaining property represents an unreasonably small 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;(m) conduct all of the Company's business (whether in writing or orally) solely in the name of the Company through the Member and the Company's Managers, officers and agents and hold the Company out as an entity separate from any Affiliate;

&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) not make or declare any distributions of cash or property to the Member except in accordance with appropriate limited liability company formalities and only consistent with sound business judgment to the extent that it is permitted pursuant to the Basic Documents and not violative of any 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;(o) otherwise practice and adhere to all limited liability company procedures and formalities to the extent required by this LLC Agreement or all other appropriate constituent documents and the laws of its state of formation and all other appropriate jurisdictions;

&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) not appoint an Affiliate or any employee of an Affiliate as an agent of the Company, except as otherwise permitted in the Basic Documents (although such Persons can qualify as a Manager or as an officer of the Company);

&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) not acquire obligations or securities of or make loans or advances to or pledge its assets for the benefit of any Affiliate, the Member or any Affiliate of the Member;

&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) not permit the Member or any Affiliate to acquire obligations of or make loans or advances to the Company;

&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) except as expressly provided in the Basic Documents, not permit the Member or any Affiliate to guarantee, pay or become liable for the debts of the Company nor permit any such Person to hold out its creditworthiness as being available to pay the liabilities and expenses of the Company nor, except for the indemnities in this LLC Agreement and the Basic Documents, indemnify any Person for losses resulting therefrom;

&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) maintain separate minutes of the actions of the Member and the Managers, including the transactions 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;(u) cause (i) all written and oral communications, including letters, invoices, purchase orders, and contracts, of the Company to be made solely in the name of the Company, (ii) the Company to have its own tax identification number (to the extent not inconsistent with applicable federal tax law), stationery, checks and business forms separate from those of any Affiliate, (iii) all Affiliates not to use the stationery or business forms of the Company, and cause the Company not to use the stationery or business forms of any Affiliate, and (iv) all Affiliates not to conduct business in the name of the Company, and cause the Company not to conduct business in the name of any Affiliate;

&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) direct creditors of the Company to send invoices and other statements of account of the Company directly to the Company and not to any Affiliate and cause the Affiliates to direct their creditors not to send invoices and other statements of accounts of such Affiliates to the Company;

&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) cause the Member to maintain as official records all resolutions, agreements, and other instruments underlying or regarding the transactions 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;(x) disclose, and cause the Member to disclose, in its financial statements the effects of all transactions between the Member and the Company in accordance with generally accepted accounting principles, and in a manner which makes it clear that (i) the Company is a separate legal entity, (ii) the assets of the Company (including the System Restoration Property transferred to the Company pursuant to the Sale Agreement) are not assets of any Affiliate and are not available to pay creditors of any Affiliate and (iii) neither the Member nor any other Affiliate is liable or responsible for the debts of the Company;

&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) treat and cause the Member to treat the transfer of the System Restoration Property from the Member to the Company as a sale under the Securitization 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;(z) except as described herein with respect to tax purposes and financial reporting, describe and cause each Affiliate to describe the Company, and hold the Company out as a separate legal entity and not as a division or department of any Affiliate, and promptly correct any known misunderstanding regarding the Company's identity separate from any Affiliate or 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;(aa) so long as any of the Bonds are Outstanding, treat the Bonds as debt for all purposes and specifically as debt of the Company, other than for financial reporting, state or federal 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;(bb) solely for purposes of federal income taxes and, to the extent consistent with applicable state, local and other tax law, state, local and other taxes, so long as any of the Bonds are Outstanding, treat the Bonds as indebtedness of Utility Holding secured by the Bond Collateral unless otherwise required by appropriate taxing authorities;

&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) file its own tax returns, if any, as may be required under applicable law, to the extent (i) not part of a consolidated group filing a consolidated return or returns or (ii) not treated as a division or disregarded entity for tax purposes of another taxpayer, and pay any taxes so required to be paid under 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;(dd) maintain its valid existence in good standing under the laws of the State of Delaware and maintain its qualification to do business under the laws of such other jurisdictions as its operations require;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee) not form, or cause to be formed, any subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff) comply with all laws applicable to the transactions contemplated by this LLC Agreement and the Basic Documents; 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;(gg) cause the Member to observe in all material respects all limited liability company procedures and formalities, if any, required by its constituent documents and the laws of its state of formation and all other appropriate jurisdictions.

Failure of the Company, or the Member or any Manager on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this LLC Agreement shall not affect the status of the Company as a separate legal entity or the limited liability of the Member or the Managers.

SECTION 1.08 <u>Limitation on Certain Activities</u>. Notwithstanding any other provisions of this LLC Agreement and any provision of law that otherwise so empowers the Company, the Member or any Manager or any other Person, the Company, and the Member or Managers or any other Person on behalf of the Company, 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) engage in any business or activity other than as set forth in <u>Article 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;(b) without the prior unanimous affirmative vote or written consent of the Member and all of the Managers, including each Independent Manager, file a voluntary bankruptcy petition for relief with respect to the Company under the Bankruptcy Code or any other state, local, federal, foreign or other law relating to bankruptcy, consent to the institution of insolvency or bankruptcy proceedings against the Company or otherwise institute insolvency or bankruptcy proceedings with respect to the Company or take any limited liability company action in furtherance of any such filing or institution of a proceeding; <u>provided however</u>, that neither the Member nor any Manager may authorize the taking of any of the foregoing actions unless there is at least one Independent Manager then serving in such capacity;

&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) without the prior unanimous affirmative vote or written consent of all Managers, including each Independent Manager, and then only to the extent permitted by the Basic Documents, convert, merge or consolidate with any other Person or sell all or substantially all of its assets or acquire all or substantially all of the assets or capital stock or other ownership interest of 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;(d) take any action, file any tax return, or make any election inconsistent with the treatment of the Company, for purposes of federal income taxes and, to the extent consistent with applicable state tax law, state income and franchise tax purposes, as a disregarded entity that is not separate from its owner for 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;(e) incur any indebtedness or assume or guarantee any indebtedness of any Person (other than the indebtedness incurred 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;(f) issue any bonds other than 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;(g) to the fullest extent permitted by applicable law, without the prior unanimous affirmative vote or written consent of its Member and all Managers, including each Independent Manager, execute any dissolution, division, liquidation, or winding up of the Company.

So long as any of the Bonds are Outstanding, the Company and the Member shall give written notice to each applicable Rating Agency of any action described in <u>clauses (b)</u>, <u>(c)</u> or <u>(g)</u> of this <u>Section 1.08</u> which is taken by or on behalf of the Company with the required affirmative vote or written consent of the Member and all Managers as therein described.

SECTION 1.09 <u>No State Law Partnership</u>. No provisions of this LLC Agreement shall be deemed or construed to constitute a partnership (including a limited partnership) or joint venture, or the Member a partner or joint venturer of or with any Manager or the Company, for any purposes.

ARTICLE II

CAPITAL

SECTION 2.01 <u>Initial Capital</u>. The initial capital of the Company shall be the sum of cash contributed to the Company by the Member (the "<u>Capital Contribution</u>") in the amount set out opposite the name of the Member on <u>Schedule A</u> hereto, as amended from time to time and incorporated herein by this reference.

SECTION 2.02 <u>Additional Capital Contributions</u>. It is expected that no capital contributions to the Company will be necessary after the purchase of the System Restoration Property. On or prior to the date of issuance of the Bonds, the Member shall make an additional contribution to the Company in an amount equal to 0.50% of the initial principal amount of the Bonds less the initial Capital Contribution, which amount the Company shall deposit into a capital account or capital subaccount of the Collection Account established by the Indenture Trustee as provided under the Indenture. No capital contribution by the Member to the Company will be made for the purpose of mitigating losses on System Restoration Property that has previously been transferred to the Company, and all capital contributions shall be made in accordance with all applicable limited liability company procedures and requirements, including proper record keeping by the Member and the Company. Each capital contribution will be acknowledged by a written receipt signed by any one of the Managers. The Managers acknowledge and agree that, notwithstanding anything in this LLC Agreement to the contrary, such additional contribution will be invested only in Eligible Investments, and all income earned thereon shall be allocated or paid by the Indenture Trustee in accordance with the provisions of the Indenture.

SECTION 2.03 <u>Capital Account</u>. A Capital Account shall be established and maintained for the Member on the Company's books (the "<u>Capital Account</u>").

SECTION 2.04 <u>Interest</u>. On any Payment Date, with respect to any collection period, the sum of investment earnings on the Capital Account for such collection period shall, subject to the LLC Act, be paid in accordance with the Indenture.

ARTICLE III

ALLOCATIONS; BOOKS

SECTION 3.01 <u>Allocations of Income and Loss</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>Book Allocations</u>. The net income and net loss of the Company shall be allocated entirely to the Member.

&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>Tax Allocations</u>. Because the Company is not making (and will not make) an election to be treated as an association taxable as a corporation under Section 301.7701-3(a) of the Treasury Regulations, and because the Company is a business entity that has a single owner and is not a corporation, it is expected to be disregarded as an entity separate from its owner for federal income tax purposes under Section 301.7701-3(b)(1) of the Treasury Regulations. Accordingly, all items of income, gain, loss, deduction and credit of the Company for all taxable periods will be treated for federal income tax purposes, and for state and local income and other tax purposes to the extent permitted by applicable law, as realized or incurred directly by the Member. To the extent not so permitted, all items of income, gain, loss, deduction and credit of the Company shall be allocated entirely to the Member as permitted by applicable tax law, and the Member shall pay (or indemnify the Company, the Indenture Trustee and each of their officers, managers, employees or agents for, and defend and hold harmless each such Person from and against its payment of) any taxes levied or assessed upon all or any part of the Company's property or assets based on existing law as of the date hereof, including any sales, gross receipts, general corporation, 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). The Indenture Trustee (on behalf of its related Secured Parties) shall be a third-party beneficiary of the Member's obligations set forth in this <u>Section 3.01</u>, it being understood that Bondholders shall be entitled to enforce their rights against the Member under this <u>Section 3.01</u> solely through a cause of action brought for their benefit by the Indenture Trustee.

SECTION 3.02 <u>Company to be Disregarded for Tax Purposes</u>. The Company shall comply with the applicable provisions of the Code and the applicable Treasury Regulations thereunder in the manner necessary to effect the intention of the parties that the Company be treated, for federal income tax purposes, as a disregarded entity that is not separate from its owner for federal income tax purposes pursuant to Treasury Regulations Section 301.7701-1 *et seq.* and that the Company be accorded such treatment until its dissolution pursuant to <u>Article IX</u> hereof and shall take all actions, and shall refrain from taking any action, required by the Code or Treasury Regulations thereunder in order to maintain such status of the Company. In addition, for federal income tax purposes, the Company may not claim any credit on, or make any deduction from the principal or premium, if any, or interest payable in respect of, the Bonds (other than amounts properly withheld from such payments under the Code or other tax laws) or assert any claim against any present or former Bondholder by reason of the payment of the taxes levied or assessed upon any part of the Bond Collateral.

SECTION 3.03 <u>Books of Account</u>. At all times during the continuance of the Company, the Company shall maintain or cause to be maintained full, true, complete and correct books of account in accordance with generally accepted accounting principles, using the fiscal year and taxable year of the Member. In addition, the Company shall keep all records required to be kept pursuant to the LLC Act.

SECTION 3.04 <u>Access to Accounting Records</u>. All books and records of the Company shall be maintained at any office of the Company or at the Company's principal place of business, and the Member, and its duly authorized representative, shall have access to them at such office of the Company and the right to inspect and copy them at reasonable times.

SECTION 3.05 <u>Annual Tax Information</u>. The Managers shall cause the Company to deliver to the Member all information necessary for the preparation of the Member's federal income tax return.

SECTION 3.06 <u>Internal Revenue Service Communications</u>. The Member shall communicate and negotiate with the Internal Revenue Service on any federal tax matter on behalf of the Member and the Company.

ARTICLE IV

MEMBER

SECTION 4.01 <u>Powers</u>. Subject to the provisions of this LLC Agreement (including <u>Sections 1.07</u> and <u>1.08</u>), it is hereby expressly declared that the Member shall have the following powers:

&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 select and remove the Managers, prescribe such powers and duties for them as may be consistent with the LLC Act and other applicable law and this LLC Agreement, fix their compensation, and require from them security for faithful service; <u>provided</u>, that, except as provided in <u>Section 7.06</u>, at all times during which any of the Bonds are Outstanding and the Indenture remains in full force and effect (and otherwise in accordance with the Indenture) the Company shall have at least one Independent Manager. Prior to the issuance of the Bonds, the Member shall appoint at least one Independent Manager. An "<u>Independent Manager</u>" means 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 of the Company and (4) is not and has not been for at least five years from the date of his or her or its appointment, and while serving as an Independent Manager of the Company will not be, any 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a member, partner, or equity holder, manager, director, officer, agent, consultant, attorney, accountant, advisor or employee of the Company, the Member or any of their respective equityholders or Affiliates (other than as an Independent Manager or Special Member of the Company or similar roles for any other special purpose bankruptcy-remote entity); <u>provided</u>, that the indirect or beneficial ownership of stock of the Member 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;&nbsp;&nbsp;&nbsp;&nbsp;&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 creditor, supplier or service provider (including provider of professional services) to the Company, the Member or any of their respective equityholders or Affiliates (other than a nationally-recognized company that routinely provides professional independent managers and other corporate services to the Company, the Member or any of their Affiliates in the ordinary course of its business);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 family member of any such Person described in <u>clauses (i)</u> or <u>(ii)</u> above; 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) a Person that controls (whether directly, indirectly or otherwise) any of <u>clauses (i)</u>, <u>(ii)</u> or <u>(iii)</u> above.

A natural person who otherwise satisfies the foregoing definition and satisfies <u>clause (i)</u> by reason of being the independent manager or independent director of a "special purpose entity" affiliated with the Company shall be qualified to serve as an Independent Manager of the Company, <u>provided</u> that the fees that such individual earns from serving as an independent manager or independent director of Affiliates of the Company in any given year constitute in the aggregate less than five percent (5%) of such individual's annual income for that year. For purposes of this paragraph, a "special purpose entity" is an entity, whose organizational documents contain restrictions on its activities and impose requirements intended to preserve such entity's separateness that are substantially similar to the Special Purpose Provisions of this LLC Agreement.

The fees charged by an Independent Manager shall be determined without regard to the income of the Company, shall not be deemed to constitute distributions to the recipient of any profit, loss or capital of the Company and shall be considered an Operating Expense of the Company subject to the limitations on such expenses set forth in the Financing Order. Each Manager, including each Independent Manager, is hereby deemed to be a "manager" within the meaning of Section 18-101(12) of the LLC Act.

Promptly following any resignation or replacement of any Independent Manager, the Member shall give written notice to each applicable Rating Agency and to the Indenture Trustee of any such resignation or replacement.

&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 change the registered agent and office of the Company in Delaware from one location to another and to fix and locate from time to time one or more other offices of the Company.

SECTION 4.02 <u>Compensation of Member</u>. To the extent permitted by applicable law, the Company shall have authority to reimburse the Member for out-of-pocket expenses incurred by the Member in connection with its service to the Company. It is understood that the compensation paid to the Member under the provisions of this <u>Section 4.02</u> shall be determined without regard to the income of the Company, shall not, to the fullest extent permitted by applicable law, be deemed to constitute distributions to the recipient of any profit, loss or capital of the Company and shall be considered as an Operating Expense.

SECTION 4.03 <u>Other Ventures</u>. Notwithstanding any duties (including fiduciary duties) otherwise existing at law or in equity, it is expressly agreed that the Member, the Managers and any Affiliates, officers, directors, members, stockholders, partners or employees of the Member, may engage in other business ventures of any nature and description, whether or not in competition with the Company, independently or with others, and the Company shall not have any rights in and to any independent venture or activity or the income or profits derived therefrom.

SECTION 4.04 <u>Actions by the Member</u>. All actions of the Member may be taken by written resolution of the Member which shall be signed on behalf of the Member by an authorized officer of the Member and filed with the records of the Company.

ARTICLE V

OFFICERS

SECTION 5.01 <u>Designation; Term; Qualifications</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>Officers</u>. The officers of the Company as of the date hereof are identified on <u>Schedule C</u> (such individuals, to the extent not previously appointed, being hereby appointed to such offices). The Managers may, from time to time, designate one or more Persons to be officers of the Company. Any officer so designated shall have such title and authority and perform such duties as the Managers may, from time to time, delegate to them. Each officer shall hold office for the term for which such officer is designated and until its successor shall be duly designated and shall qualify or until its death, resignation or removal as provided in this LLC Agreement. Any Person may hold any number of offices. No officer need be a Manager, the Member, a Delaware resident, or a United States citizen.

&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>President</u>. The President shall be the chief executive officer of the Company, shall preside at all meetings of the Managers, shall be responsible for the general and active management of the business of the Company and shall see that all orders and resolutions of the Managers are carried into effect. The President or any other officer authorized by the President or the Managers may execute all contracts, except: (i) where required or permitted by applicable law or this LLC Agreement to be otherwise signed and executed, including <u>Section 1.08</u>; and (ii) where signing and execution thereof shall be expressly delegated by the Managers to some other officer or agent of the Company.

&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>Vice President</u>. In the absence of the President or in the event of the President's inability to act, the Vice President, if any (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Managers, or in the absence of any designation, then in the order of their election), shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice Presidents, if any, shall perform such other duties and have such other powers as the Managers may from time to time prescribe.

&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>Secretary and Assistant Secretary</u>. The Secretary shall be responsible for filing legal documents and maintaining records for the Company. The Secretary shall attend all meetings of the Managers and record all the proceedings of the meetings of the Company and of the Managers in a book to be kept for that purpose and shall perform like duties for the standing committees when required. The Secretary shall give, or shall cause to be given, notice of all meetings of the Member, if any, and special meetings of the Managers, and shall perform such other duties as may be prescribed by the Managers or the President, under whose supervision the Secretary shall serve. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Managers (or if there be no such determination, then in order of their designation), shall, in the absence of the Secretary or in the event of the Secretary's inability to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Managers may from time to time prescribe.

&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>Treasurer and Assistant Treasurer</u>. The Treasurer shall have the custody of the Company funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company and shall deposit all moneys and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Manager. The Treasurer shall disburse the funds of the Company as may be ordered by the Manager, taking proper vouchers for such disbursements, and shall render to the President and to the Managers, at its regular meetings or when the Managers so require, an account of all of the Treasurer's transactions and of the financial condition of the Company. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Managers (or if there be no such determination, then in the order of their designation), shall, in the absence of the Treasurer or in the event of the Treasurer's inability to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Managers may from time to time prescribe.

&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>Officers as Agents</u>. The officers of the Company, to the extent their powers as set forth in this LLC Agreement or otherwise vested in them by action of the Managers are not inconsistent with this LLC Agreement, are agents of the Company for the purpose of the Company's business and, subject to <u>Section 1.08</u>, the actions of the officers taken in accordance with such powers shall bind the Company.

&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>Duties of Managers and Officers</u>. Except to the extent otherwise provided herein, each Manager (other than the Independent Managers) and officer of the Company shall have a fiduciary duty of loyalty and care similar to that of directors and officers of business corporations organized under the General Corporation Law of the State of Delaware.

SECTION 5.02 <u>Removal and Resignation</u>. Any officer of the Company may be removed as such, with or without cause, by the Managers at any time. Any officer of the Company may resign as such at any time upon written notice to the Company. Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time is specified therein, at the time of its receipt by the Managers.

SECTION 5.03 <u>Vacancies</u>. Any vacancy occurring in any office of the Company may be filled by the Managers.

SECTION 5.04 <u>Compensation</u>. The compensation, if any, of the officers of the Company shall be fixed from time to time by the Managers. Such compensation shall be determined without regard to the income of the Company, shall not be deemed to constitute distributions to the recipient of any profit, loss or capital of the Company and shall be considered an Operating Expense.

ARTICLE VI

MEMBERSHIP INTEREST

SECTION 6.01 <u>General</u>. "<u>Membership Interest</u>" means the limited liability company interest of the Member in the Company. The Membership Interest constitutes personal property and, subject to <u>Section 6.06</u>, shall be freely transferable and assignable in whole but not in part upon registration of such transfer and assignment on the books of the Company in accordance with the procedures established for such purpose by the Managers of the Company.

SECTION 6.02 <u>Distributions</u>. The Member shall be entitled to receive, out of the assets of the Company legally available therefor, distributions payable in cash in such amounts, if any, as the Managers shall declare. Notwithstanding any provision to the contrary contained in this LLC Agreement, the Company shall not make a distribution to the Member on account of its interest in the Company if such distribution would violate the LLC Act or any other applicable law or any Basic Document.

SECTION 6.03 <u>Rights on Liquidation, Dissolution or Winding Up</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 of any liquidation, dissolution or winding up of the Company, the Member shall be entitled to all remaining assets of the Company available for distribution to the Member after satisfaction (whether by payment or reasonable provision for payment) of all liabilities, debts and obligations of the Company.

&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) Neither the sale of all or substantially all of the property or business of the Company, nor the merger or consolidation of the Company into or with another Person or other entity, shall be deemed to be a dissolution, liquidation or winding up, voluntary or involuntary, for the purpose of this <u>Section 6.03</u>.

SECTION 6.04 <u>Redemption</u>. The Membership Interest shall not be redeemable.

SECTION 6.05 <u>Voting Rights</u>. Subject to the terms of this LLC Agreement, the Member shall have the sole right to vote (or consent) on all matters as to which members of a limited liability company shall be entitled to vote (or consent) pursuant to the LLC Act and other applicable law.

SECTION 6.06 <u>Transfer of Membership Interests</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 Member may transfer its Membership Interest, in whole but not in part, but the transferee shall not be admitted as a Member except in accordance with <u>Section 6.07</u>. Until the transferee is admitted as a Member, the Member shall continue to be the sole member of the Company (subject to <u>Section 1.02</u>) and to be entitled to exercise any rights or powers of a Member of the Company with respect to the Membership Interest transferred.

&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 fullest extent permitted by applicable law, any purported transfer of any Membership Interest in violation of the provisions of this LLC Agreement shall be wholly cancelled and shall not effectuate the transfer contemplated thereby. Notwithstanding anything contained herein to the contrary and to the fullest extent permitted by applicable law, the Member may not transfer any Membership Interest in violation of any provision of this LLC Agreement or in violation of any applicable federal or state securities laws.

SECTION 6.07 <u>Admission of Transferee as Member</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) A transferee of a Membership Interest desiring to be admitted as a Member must execute a counterpart of, or an agreement adopting, this LLC Agreement and, except as permitted by <u>Section 6.07(b)</u>, shall not be admitted without unanimous affirmative vote or written consent of the Managers, which vote or written consent must include the affirmative vote or written consent of each Independent Manager. Upon admission of the transferee as a Member, the transferee shall have the rights, powers and duties and shall be subject to the restrictions and liabilities of the Member under this LLC Agreement and the LLC Act. The transferee shall also be liable, to the extent of the Membership Interest transferred, for the unfulfilled obligations, if any, of the transferor Member to make capital contributions to the Company, but shall not be obligated for liabilities unknown to the transferee at the time such transferee was admitted as a Member and that could not be ascertained from this LLC Agreement. Except as set forth in paragraph (b) below, whether or not the transferee of a Membership Interest is admitted to the Company as a Member, the Member transferring the Membership Interest is not released from any liability to the Company under this LLC Agreement or the LLC 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) The approval of the Managers, including the Independent Manager(s), shall not be required for the transfer of the Membership Interest from the Member to any successor pursuant to the Sale Agreement or the admission of such Person as a Member. Once the transferee of a Membership Interest pursuant to this <u>Section 6.07(b)</u> is admitted to the Company as a Member, the prior Member shall cease to be a member of the Company and shall be released from any liability to the Company under this LLC Agreement and the LLC Act to the fullest extent permitted by applicable law and the Company shall continue without dissolution.

ARTICLE VII

MANAGERS

SECTION 7.01 <u>Managers</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) Subject to <u>Sections 1.07</u> and <u>1.08</u>, the business and affairs of the Company shall be managed by or under the direction of three or more Managers designated by the Member. Subject to the terms of this LLC Agreement, the Member may determine at any time in its sole and absolute discretion the number of Managers. Subject in all cases to the terms of this LLC Agreement, the authorized number of Managers may be increased or decreased by the Member at any time in its sole and absolute discretion, upon notice to all Managers; <u>provided</u>, that, except as provided in <u>Section 7.06</u>, at all times the Company shall have at least one Independent Manager. The initial number of Managers shall be four, one of which shall be an Independent Manager; <u>provided</u>, <u>however</u>, that so long as one Independent Manager is required the number of total Managers shall not be less than two. Each Manager designated by the Member shall hold office until a successor is elected and qualified or until such Manager's earlier death, resignation, expulsion or removal. Each Manager shall execute and deliver the Management Agreement in the form attached hereto as <u>Exhibit A</u>. Managers need not be a Member. The Managers designated by the Member as of the date hereof are listed on <u>Schedule B</u> 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) Each Manager shall be designated by the Member and shall hold office for the term for which designated and until a successor has been designated.

&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 Managers shall be obliged to devote only as much of their time to the Company's business as shall be reasonably required in light of the Company's business and objectives. Except as otherwise provided in <u>Section 7.02</u> with respect to an Independent Manager, a Manager shall perform his or her duties as a Manager in good faith, in a manner he or she reasonably believes to be in or not opposed to the best interests of the Company, and with such care as an ordinarily prudent Person in a like position would use under similar 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;(d) Except as otherwise provided in this LLC Agreement, the Managers shall act by the affirmative vote or written consent of a majority of the Managers. Each Manager shall have the authority to sign duly authorized agreements and other instruments on behalf of the Company without the joinder of any other 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;(e) Subject to the terms of this LLC Agreement, any action may be taken by the Managers without a meeting and without prior notice if authorized by the written consent of a majority of the Managers (or such greater number as is required by this LLC Agreement), which written consent shall be filed with the records of the Company.

&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) Every Manager is an agent of the Company for the purpose of its business, and the act of every Manager, including the execution in the Company name of any instrument for carrying on the business of the Company, binds the Company, unless such act is in contravention of this LLC Agreement or unless the Manager so acting otherwise lacks the authority to act for the Company and the Person with whom he or she is dealing has knowledge of the fact that he or she has no such authority.

&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) To the extent permitted by applicable law, the Managers shall not be personally liable for the Company's debts, obligations or liabilities.

SECTION 7.02 <u>Powers of the Managers</u>. Subject to the terms of this LLC Agreement, the Managers shall have the right and authority to take all actions which the Managers deem incidental, necessary, suitable or convenient for the management and conduct of the Company's business.

An Independent Manager may not delegate his or her duties, authorities or responsibilities hereunder. If an Independent Manager resigns, dies or becomes incapacitated, or such position is otherwise vacant, no action requiring the unanimous affirmative vote or written consent of the Managers shall be taken until a successor Independent Manager is appointed by the Member and qualifies and approves such action.

To the fullest extent permitted by applicable law, including Section 18-1101(c) of the LLC Act, and notwithstanding any duty otherwise existing at law or in equity, each Independent Manager shall consider only the interests of the Company, including its creditors, in acting or otherwise voting on the matters referred to in <u>Section 1.02(c)</u>, <u>1.08</u>, <u>6.07(a)</u>, <u>7.02</u>, <u>9.02(a)</u> or <u>11.02(a)</u>. Except for duties to the Company as set forth in the immediately preceding sentence (including duties to the Member and the Company's creditors solely to the extent of their respective economic interests in the Company but excluding (i) all other interests of the Member, (ii) the interests of other Affiliates of the Company, and (iii) the interests of any group of Affiliates of which the Company is a part), to the fullest extent permitted by applicable law, except as expressly set forth in this LLC Agreement (including <u>Section 1.02(b)</u> and this <u>Section 7.02</u>), the Independent Manager(s) shall not have any duties (including fiduciary duties) to the Company, the Member, any Manager or any other Person bound by this LLC Agreement; <u>provided</u>, <u>however</u>, the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing. To the fullest extent permitted by applicable law, including Section 18-1101(e) of the LLC Act, an Independent Manager shall not be liable to the Company, the Member or any other Person bound by this LLC Agreement for breach of contract or breach of duties (including fiduciary duties), unless such Independent Manager acted in bad faith or engaged in willful misconduct.

No Independent Manager shall at any time serve as trustee in bankruptcy for any Affiliate of the Company.

Subject to the terms of this LLC Agreement, the Managers may exercise all powers of the Company and do all such lawful acts and things as are not prohibited by the LLC Act, other applicable law or this LLC Agreement directed or required to be exercised or done by the Member. All duly authorized instruments, contracts, agreements and documents providing for the acquisition or disposition of property of the Company shall be valid and binding on the Company if executed by one or more of the Managers.

The compensation, if any, of the Independent Manager(s) shall be fixed from time to time by the Managers (other than the Independent Manager(s)). Such compensation shall be determined without regard to the income of the Company, shall not be deemed to constitute distributions to the recipient of any profit, loss or capital of the Company and shall be considered an Operating Expense. The Company shall not compensate the Managers (other than the Independent Manager) for their services to the Company.

Notwithstanding the terms of <u>Section 7.01</u>, <u>7.07</u> or <u>7.09</u> or any provision of this LLC Agreement to the contrary, (x) no meeting, vote or written consent with respect to any action described in <u>clauses (b)</u>, <u>(c)</u> or <u>(g)</u> of <u>Section 1.08</u> or any amendment to any of the Special Purpose Provisions shall be conducted unless each Independent Manager is present or has provided his or her written consent and (y) neither the Company nor the Member, any Manager or any officer on behalf of the Company shall (i) take any action described in <u>clauses (b)</u>, <u>(c)</u> or <u>(g)</u> of <u>Section 1.08</u> unless each Independent Manager has consented thereto or (ii) adopt any amendment to any of the Special Purpose Provisions unless each Independent Manager has consented thereto. The vote or written consent of an Independent Manager with respect to any such action or amendment shall not be dictated by the Member or any other Manager or officer of the Company.

SECTION 7.03 <u>Reimbursement</u>. To the extent permitted by applicable law, the Company may reimburse any Manager, directly or indirectly, for reasonable out-of-pocket expenses incurred by such Manager in connection with its services rendered to the Company. The reasonable out-of-pocket expenses of the Independent Manager 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 this LLC Agreement. Such reimbursement shall be determined by the Managers without regard to the income of the Company, shall not be deemed to constitute distributions to the recipient of any profit, loss or capital of the Company and shall be considered an Operating Expense.

SECTION 7.04 <u>Removal of Managers</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) Subject to <u>Section 4.01</u>, the Member may remove any (i) Manager (other than an Independent Manager) with or without cause at any time, and (ii) Independent Manager with Cause at any 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) Subject to <u>Sections 4.01</u> and <u>7.05</u>, any removal of a Manager shall become effective on such date as may be specified by the Member and in a notice delivered to any remaining Managers or the Manager designated to replace the removed Manager (except that it shall not be effective on a date earlier than the date such notice is delivered to the remaining Managers or the Manager designated to replace the removed Manager). Should a Manager be removed who is also the Member, the Member shall continue to participate in the Company as the Member and receive its share of the Company's income, gains, losses, deductions and credits pursuant to this LLC Agreement.

SECTION 7.05 <u>Resignation of Manager</u>. A Manager other than an Independent Manager may resign as a Manager at any time by thirty (30) days' prior notice to the Member. To the fullest extent permitted by applicable law, an Independent Manager may not withdraw or resign as a Manager without the consent of the Member. No resignation or removal of an Independent Manager, and no appointment of a successor Independent Manager, shall be effective until such successor (i) shall have accepted his or her appointment as an Independent Manager by a written instrument, which may be a counterpart signature page to the Management Agreement, and (ii) shall have executed a counterpart to this LLC Agreement.

SECTION 7.06 <u>Vacancies</u>. Subject to <u>Section 4.01</u>, any vacancies among the Managers may be filled by the Member. In the event of a vacancy in the position of an Independent Manager, the Member shall, as soon as practicable, appoint a successor Independent Manager. Notwithstanding anything to the contrary contained in this LLC Agreement, no Independent Manager shall be removed or replaced unless the Company provides the Indenture Trustee with no less than two (2) Business Days' prior written notice of (a) any proposed removal of such Independent Manager, and (b) the identity of the proposed replacement Independent Manager, together with a certification that such replacement satisfies the requirements for an Independent Manager set forth in this LLC Agreement.

SECTION 7.07 <u>Meetings of the Managers</u>. The Managers may hold meetings, both regular and special, within or outside the State of Delaware. Regular meetings of the Managers may be held without notice at such time and at such place as shall from time to time be determined by the Managers. Special meetings of the Managers may be called by the President on not less than one (1) day's notice to each Manager by telephone, facsimile, mail, email or any other means of communication, and special meetings shall be called by the President or Secretary in like manner and with like notice upon the written request of any one or more of the Managers.

SECTION 7.08 <u>Electronic Communications</u>. Managers, or any committee designated by the Managers, may participate in meetings of the Managers, or any committee, by means of telephone or video conference or similar communications equipment that allows all Persons participating in the meeting to hear each other, and such participation in a meeting shall constitute presence in Person at the meeting. If all the participants are participating by telephone conference or similar communications equipment, the meeting shall be deemed to be held at the principal place of business of the Company.

SECTION 7.09 <u>Committees of Managers</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 Managers may, by resolution passed by a majority of the Managers (excluding the Independent Manager(s)), designate one or more committees, each committee to consist of one or more of the Managers (excluding the Independent Manager(s)). The Managers may designate one or more Managers (excluding the Independent Manager(s)) as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.

&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 absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such members constitute a quorum, may unanimously appoint another Manager to act at the meeting in the place of any such absent or disqualified member.

&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 such committee, to the extent provided in the resolution of the Managers, shall have and may exercise all the powers and authority of the Managers in the management of the business and affairs of the Company. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Managers. Each committee shall keep regular minutes of its meetings and report the same to the Managers when required.

SECTION 7.10 <u>Limitations on Independent Manager(s)</u>. All right, power and authority of each Independent Manager shall be limited to the extent necessary to exercise those rights and perform those duties specifically set forth in this LLC Agreement and the Independent Manager(s) shall otherwise have no authority to bind the Company.

ARTICLE VIII

EXPENSES

SECTION 8.01 <u>Expenses</u>. Except as otherwise provided in this LLC Agreement or the Basic Documents, the Company shall be responsible for all expenses and the allocation thereof including:

&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 expenses incurred by the Member or its Affiliates in organizing the Company;

&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 expenses related to the business of the Company and all routine administrative expenses of the Company, including the maintenance of books and records of the Company, the preparation and dispatch to the Member of checks, financial reports, tax returns and notices required pursuant to this LLC 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) all expenses incurred in connection with any litigation or arbitration involving the Company (including the cost of any investigation and preparation) and the amount of any judgment or settlement paid in connection therewith;

&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) all expenses for indemnity or contribution payable by the Company to 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;(e) all expenses incurred in connection with the collection of amounts due to the Company from 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;(f) all expenses incurred in connection with the preparation of amendments to this LLC 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) all expenses incurred in connection with the liquidation, dissolution and winding up of the Company; 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;(h) all expenses otherwise allocated in good faith to the Company by the Managers.

ARTICLE IX

PERPETUAL EXISTENCE; DISSOLUTION, LIQUIDATION AND WINDING-UP

SECTION 9.01 <u>Existence</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 Company shall have a perpetual existence, unless dissolved in accordance with this LLC Agreement. So long as any of the Bonds are Outstanding, to the fullest extent permitted by applicable law, the Member shall not be entitled to consent to the dissolution of the Company.

&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 provision of this LLC Agreement, the Bankruptcy of the Member or Special Member will not cause such Member or Special Member, respectively, to cease to be a member of the Company, and upon the occurrence of such an event, the Company shall continue without dissolution. To the fullest extent permitted by applicable law, the dissolution of the Member will not cause the Member to cease to be a member of the Company, and upon the occurrence of such an event, the Company shall, to the fullest extent permitted by applicable law, continue without dissolution. For purposes of this <u>Section 9.01(b)</u>, "<u>Bankruptcy</u>" means, with respect to any Person (A) if such Person (i) makes an assignment for the benefit of creditors, (ii) files a voluntary petition in bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has entered against it an order for relief, in any bankruptcy or insolvency proceedings, (iv) files a petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or regulation, (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it in any proceeding of this nature, or (vi) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the Person or of all or any substantial part of its properties, or (B) if one hundred and twenty (120) days after the commencement of any proceeding against the Person seeking reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or regulation, the proceeding has not been dismissed or if within ninety (90) days after the appointment without such Person's consent or acquiescence of a trustee, receiver or liquidator of such Person or of all or any substantial part of its properties, the appointment is not vacated or stayed, or within ninety (90) days after the expiration of any such stay, the appointment is not vacated. The foregoing definition of "Bankruptcy" is intended to replace and shall supersede and replace the definition of "Bankruptcy" set forth in Sections 18-101(1) and 18-304 of the LLC Act. Upon the occurrence of any event that causes the last remaining member of the Company to cease to be a member of the Company or that causes the Member to cease to be a member of the Company (other than upon continuation of the Company without dissolution upon an assignment by the Member of all of its limited liability company interest in the Company and the admission of the transferee pursuant to <u>Sections 6.06</u> and <u>6.07</u>), to the fullest extent permitted by applicable law, the personal representative of such member is hereby authorized to, and shall, within ninety (90) days after the occurrence of the event that terminated the continued membership of such member in the Company, agree in writing (i) to continue the Company and (ii) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of the Company, effective as of the occurrence of the event that terminated the continued membership of the last remaining member of the Company or the Member in the Company.

SECTION 9.02 <u>Dissolution</u>. The Company shall be dissolved and its affairs shall be wound up upon the occurrence of the earliest of the following events:

&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) subject to <u>Section 1.08</u>, the election to dissolve the Company made in writing by the Member and each Manager, including each Independent Manager, as permitted under the Basic Documents and after the discharge in full 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;(b) the termination of the legal existence of the last remaining member of the Company or the occurrence of any event that causes the last remaining member of the Company to cease to be a member of the Company unless the Company is continued without dissolution in a manner permitted by the LLC Act or this LLC Agreement; 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;(c) the entry of a decree of judicial dissolution of the Company pursuant to Section 18-802 of the LLC Act.

SECTION 9.03 <u>Accounting</u>. In the event of the dissolution, liquidation and winding-up of the Company, a proper accounting shall be made of the Capital Account of the Member and of the net income or net loss of the Company from the date of the last previous accounting to the date of dissolution.

SECTION 9.04 <u>Certificate of Cancellation</u>. As soon as possible following the occurrence of any of the events specified in <u>Section 9.02</u> and the completion of the winding up of the Company, the Person winding up the business and affairs of the Company, as an authorized person, shall cause to be executed a Certificate of Cancellation of the Certificate of Formation and file the Certificate of Cancellation of the Certificate of Formation as required by the LLC Act.

SECTION 9.05 <u>Winding Up</u>. Upon the dissolution of the Company, the Company shall continue solely for the purpose of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors. The Member, or if there is no Member, the Managers, shall be responsible for overseeing the winding up and liquidation of the Company, shall take full account of the liabilities of the Company and its assets, shall either cause its assets to be sold or distributed, and if sold as promptly as is consistent with obtaining the fair market value thereof, shall cause the proceeds therefrom, to the extent sufficient therefor, to be applied and distributed as provided in <u>Section 9.06</u>.

SECTION 9.06 <u>Order of Payment of Liabilities Upon Dissolution</u>. After determining that all debts and liabilities of the Company, including all contingent, conditional or unmatured liabilities of the Company, in the process of winding-up, including debts and liabilities to the Member in the event it is a creditor of the Company to the extent otherwise permitted by applicable law, have been paid or adequately provided for in the manner, and in the order of priority, set forth in Section 18-804 of the LLC Act, the remaining assets shall be distributed in cash or in kind to the Member.

SECTION 9.07 <u>Limitations on Payments Made in Dissolution</u>. Except as otherwise specifically provided in this LLC Agreement, the Member shall only be entitled to look solely to the assets of Company for the return of its positive Capital Account balance and shall have no recourse for its Capital Contribution or share of net income (upon dissolution or otherwise) against any Manager.

SECTION 9.08 <u>Limitation on Liability</u>. Except as otherwise provided by the LLC Act and except as otherwise characterized for tax and financial reporting purposes, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Member, Special Member or Manager shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Member, Special Member or a Manager.

ARTICLE X

INDEMNIFICATION

SECTION 10.01 <u>Indemnity</u>. Subject to the provisions of <u>Section 10.04</u> hereof, to the fullest extent permitted by applicable law, the Company shall 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, except an action by or in the right of the Company, by reason of the fact that such Person is or was a Manager, Member, officer, controlling Person, legal representative or agent of the Company, 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, partnership, corporation, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by such Person in connection with the action, suit or proceeding if such Person acted in good faith and in a manner which such Person reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to a criminal action or proceeding, had no reasonable cause to believe such Person's conduct was unlawful; <u>provided</u> 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 or, in the case of an Independent Manager, bad faith or willful misconduct.

SECTION 10.02 <u>Indemnity for Actions By or In the Right of the Company</u>. Subject to the provisions of <u>Section 10.04</u>, to the fullest extent permitted by applicable law, the Company shall indemnify any Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the rights of the Company to procure a judgment in its favor by reason of the fact that such Person is or was a Member, Manager, officer, controlling Person, legal representative or agent of the Company, 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, against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by such Person in connection with the defense or settlement of the actions or suit if such Person acted in good faith and in a manner which such Person reasonably believed to be in or not opposed to the best interests of the Company; <u>provided</u> 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 or, in the case of an Independent Manager, bad faith or willful misconduct. Indemnification may not be made for any claim, issue or matter as to which such Person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the Company or for amounts paid in settlement to the Company, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the Person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

SECTION 10.03 <u>Indemnity If Successful</u>. To the fullest extent permitted by applicable law, the Company shall indemnify any Person who is or was a Manager, Member, officer, controlling Person, legal representative or agent of the Company, 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 against expenses, including reasonable attorneys' fees, actually and reasonably incurred by him or her in connection with the defense of any action, suit or proceeding referred to in <u>Sections 10.01</u> and <u>10.02</u> or in defense of any claim, issue or matter therein, to the extent that such Person has been successful on the merits.

SECTION 10.04 <u>Expenses</u>. Any indemnification under <u>Sections 10.01</u> and <u>10.02</u>, as well as the advance payment of expenses permitted under <u>Section 10.05</u> unless ordered by a court or advanced pursuant to <u>Section 10.05</u>, must be made by the Company only as authorized in the specific case upon a determination that indemnification of the Manager, Member, officer, controlling Person, legal representative or agent is proper in the circumstances. The determination must be made:

&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) by the Member if the Member was not a party to the act, suit or proceeding; 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) if the Member was a party to the act, suit or proceeding, by independent legal counsel in a written opinion of counsel.

SECTION 10.05 <u>Advance Payment of Expenses</u>. To the fullest extent permitted by applicable law, the expenses of each Person who is or was 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, incurred in defending a civil or criminal action, suit or proceeding may be paid by the Company as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of such Person to repay the amount if it is ultimately determined by a court of competent jurisdiction that such Person is not entitled to be indemnified by the Company. The provisions of this <u>Section 10.05</u> shall not affect any rights to advancement of expenses to which personnel other than the Member or the Managers (other than each Independent Manager) may be entitled under any contract or otherwise by applicable law.

SECTION 10.06 <u>Other Arrangements Not Excluded</u>. The indemnification and advancement of expenses authorized in or ordered by a court pursuant to this <u>Article X</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) does not exclude any other rights to which a Person seeking indemnification or advancement of expenses may be entitled under any agreement, decision of the Member or otherwise, for either an action of any Person who is or was 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, in the official capacity of such Person or an action in another capacity while holding such position, except that indemnification and advancement, unless ordered by a court pursuant to <u>Section 10.05</u> above, may not be made to or on behalf of such Person if a final adjudication established that its acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and were material to the cause of action; 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) continues for a Person who has ceased to be a Member, Manager, officer, legal representative or agent and inures to the benefit of the successors, heirs, executors and administrators of such a Person.

ARTICLE XI

MISCELLANEOUS PROVISIONS

SECTION 11.01 <u>No Bankruptcy Petition; Dissolution</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) To the fullest extent permitted by applicable law, the Member, each Special Member and each Manager hereby covenant and agree (or shall be deemed to have hereby covenanted and agreed) that, prior to the date which is one year and one day after the termination of the Indenture and the payment in full of all Bonds and any other amounts owed under the Indenture, it will not acquiesce, petition or otherwise invoke or cause the Company to invoke the process of any court or Governmental Authority for the purpose of commencing or sustaining an involuntary case against the Company 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 Company or any substantial part of the property of the Company, or ordering the winding up or liquidation of the affairs of the Company; <u>provided</u>, <u>however</u>, that nothing in this <u>Section 11.01</u> shall constitute a waiver of any right to indemnification, reimbursement or other payment from the Company pursuant to this LLC Agreement. This <u>Section 11.01</u> is not intended to, and shall not, apply to the filing of a voluntary bankruptcy petition on behalf of the Company which is governed by <u>Section 1.08</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;(b) To the fullest extent permitted by applicable law, the Member, each Special Member and each Manager hereby covenants and agrees (or shall be deemed to have hereby covenanted and agreed) that, until the termination of the Indenture and the payment in full of all Bonds and any other amounts owed under the Indenture, the Member, such Special Member and such Manager will not consent to, or make application for, or institute or maintain any action for, the dissolution of the Company under Section 18-801 or 18-802 of the LLC Act or otherwise or any division of the Company under Section 18-217 of the LLC Act 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;(c) In the event that the Member, any Special Member or any Manager takes action in violation of this <u>Section 11.01</u>, the Company agrees that it shall file an answer with the court or otherwise properly contest the taking of such action and raise the defense that the Member, the Special Member or Manager, as the case may be, has agreed in writing not to take such action and should be estopped and precluded therefrom and such other defenses, if any, as its counsel advises that it may assert.

&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 provisions of this <u>Section 11.01</u> shall survive the termination of this LLC Agreement and the resignation, withdrawal or removal of the Member, any Special Member or any Manager. Nothing herein contained shall preclude participation by the Member, any Special Member or a Manager in assertion or defense of its claims in any such proceeding involving the Company.

SECTION 11.02 <u>Amendments</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) Subject to the additional requirements of <u>Section 11.02(b)</u>, the power to alter, amend or repeal this LLC Agreement shall be only on the consent of the Member, <u>provided</u>, that: the Company shall not alter, amend or repeal any provision of <u>Sections 1.02(b)</u> and <u>(c)</u>, <u>1.05</u>, <u>1.07</u>, <u>1.08</u>, <u>3.01(b)</u>, <u>3.02</u>, <u>6.06</u>, <u>6.07</u>, <u>7.02</u>, <u>7.05</u>, <u>7.06</u>, <u>9.01</u>, <u>9.02</u>, <u>11.02</u> and <u>11.07</u> of this LLC Agreement or the definition of "Independent Manager" contained herein or the requirement that at all times the Company have at least one Independent Manager (collectively, the "<u>Special Purpose Provisions</u>") without, in each case, the affirmative vote or written consent of a majority of the Managers, which vote must include the affirmative vote or written consent of each 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;(b) So long as the Rating Agency Condition is satisfied, prior written notice has been provided to the Indenture Trustee and, in the case of any amendment that increases ongoing qualified costs as defined in the Financing Order, the Texas Commission shall have given its prior written approval or be deemed to have given its prior written approval, this LLC Agreement may be modified, altered, supplemented or amended in writing by the Member; <u>provided</u>, <u>however</u>, that the satisfaction of the Rating Agency Condition shall not be necessary if such modification, alteration, supplement or amendment is necessary: (i) to cure any ambiguity or (ii) to correct or supplement any provision in a manner consistent with the intent of this LLC 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) With respect to the Texas Commission's approval as required by <u>Section 11.02(b)</u> of any amendment of this LLC Agreement that increases ongoing qualified costs as defined in the Financing Order, any Manager may request the approval of the Texas Commission by delivering to the Texas Commission's executive director and general counsel a written request for such approval, 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;(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;(ii) an officer's certificate stating that the proposed amendment has been approved by all necessary 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;(iii) a statement identifying the person to whom the Texas Commission or its staff is to address its approval 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;(d) The Texas Commission shall, within thirty (30) days of receiving the request for approval complying with <u>Section 11.02(c)</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;(i) provide notice of its approval or lack of approval to the person specified in <u>Section 11.02(c)(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;(ii) be conclusively deemed to have approved the proposed amendment of this LLC Agreement,

unless, within thirty (30) days of receiving the request for approval complying with <u>Section 11.02(c)</u>, the Texas Commission or its staff delivers to the office of the person specified in <u>Section 11.02(c)(iii)</u> a written statement requesting an additional amount of time not to exceed thirty (30) days in which to consider whether to approve the proposed amendment of this LLC Agreement. 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 approval or lack of approval to the person specified in <u>Section 11.02(c)(iii)</u> no later than the last day of such extension of time or be conclusively deemed to have approved the proposed amendment of this LLC Agreement as of the last day of such extension of time. Following delivery of a notice to the Texas Commission under <u>Section 11.02(c)</u>, the Manager making the request (or other Person designated by the Managers) may at any time withdraw from the Texas Commission further consideration of any notification of a proposed amendment of this LLC Agreement. 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 Company or the Member.

&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) Any amendment requiring the consent of the Texas Commission as provided in this <u>Section 11.02</u> 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 thirty (30) day period provided for in <u>Section 11.02(d)</u>, 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;(f) The Company's power to alter, amend or restate the Certificate of Formation shall be vested in the Member. Upon obtaining the approval of any amendment, supplement or restatement as to the Certificate of Formation, the Member on behalf of the Company shall cause a Certificate of Amendment or Amended and Restated Certificate of Formation to be prepared, executed and filed in accordance with the LLC 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) Notwithstanding anything in this LLC Agreement to the contrary, including <u>Sections 11.02(a)-(f)</u>, unless and until any Bonds are Outstanding, the Member may, without the need for any consent or action of, or notice to, any other Person, including any Manager, any officer, the Indenture Trustee, any Rating Agency or the Texas Commission, alter, amend or repeal this LLC Agreement in any manner (other than any amendment that increases ongoing qualified costs as defined in the Financing Order, in which case, the Texas Commission shall have given its prior written approval or be deemed to have given its prior written approval as set forth in <u>Section 11.02(c)</u>).

SECTION 11.03 SECTION 11.03 <u>Counterparts</u>. This LLC Agreement may be executed in any number of counterparts, each of which shall be deemed an original of this LLC Agreement and all of which together shall constitute one and the same instrument.

SECTION 11.04 <u>Governing Law</u>. THIS LLC AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, 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 11.05 <u>Headings</u>. 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 11.06 <u>Severability</u>. Any provision of this LLC 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 of such provision (if any) or the remaining provisions hereof (unless such construction shall be unreasonable), and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 11.07 <u>Assigns</u>. Each and all of the covenants, terms, provisions and agreements contained in this LLC Agreement shall be binding upon and inure to the benefit of the Member, and its permitted successors and assigns.

SECTION 11.08 <u>Enforcement by each Independent Manager</u>. Notwithstanding any other provision of this LLC Agreement, the Member agrees that this LLC Agreement constitutes a legal, valid and binding agreement of the Member, and is enforceable against the Member by each Independent Manager in accordance with its terms.

SECTION 11.09 <u>Waiver of Partition; Nature of Interest</u>. Except as otherwise expressly provided in this LLC Agreement, to the fullest extent permitted by applicable law, each of the Member and the Special Members hereby irrevocably waives any right or power that such Person might have to cause the Company or any of its assets to be partitioned, to cause the appointment of a receiver for all or any portion of the assets of the Company, to compel any sale of all or any portion of the assets of the Company pursuant to any applicable law or to file a complaint or to institute any proceeding at law or in equity to cause the dissolution, division, liquidation, winding up or termination of the Company. The Member shall not have any interest in any specific assets of the Company, and the Member shall not have the status of a creditor with respect to any distribution pursuant to this LLC Agreement.

SECTION 11.10 <u>Benefits of Agreement; No Third-Party Rights</u>. Except for the Indenture Trustee with respect to the Special Purpose Provisions and Persons entitled to indemnification hereunder, none of the provisions of this LLC Agreement shall be for the benefit of or enforceable by any creditor of the Company or by any creditor of the Member or Special Member. Nothing in this LLC Agreement shall be deemed to create any right in any Person (other than the Indenture Trustee with respect to the Special Purpose Provisions and Persons entitled to indemnification hereunder) not a party hereto, and this LLC Agreement shall not be construed in any respect to be a contract in whole or in part for the benefit of any third Person.

**[SIGNATURE PAGE FOLLOWS]**

IN WITNESS WHEREOF, this LLC Agreement is hereby executed by the undersigned and is effective as of the date first above written.

---

| | |
|:---|:---|
| MEMBER: | MEMBER: |
| CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC | CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC |
| By: |  |
|  | Name: |
|  | Title: |
| INDEPENDENT MANAGER: | INDEPENDENT MANAGER: |
| Name: | Name: |

---

[*Signature Page to Amended and Restated Limited Liability Company Agreement<br> of CenterPoint Energy Restoration Bond Company II, LLC*]

SCHEDULE A

SCHEDULE OF CAPITAL CONTRIBUTIONS OF MEMBER

---

| | | | |
|:---|:---|:---|:---|
| MEMBER'S<br> NAME | CAPITAL<br> CONTRIBUTION | MEMBERSHIP INTEREST<br> PERCENTAGE | CAPITAL<br> ACCOUNT |
| CenterPoint Energy Houston Electric, LLC | $1000 | 100% | $1000 |

---

Schedule A

SCHEDULE B

INITIAL MANAGERS

&nbsp;&nbsp;&nbsp;&nbsp;1. Darin M. Carroll

&nbsp;&nbsp;&nbsp;&nbsp;2. Kristie L. Colvin

&nbsp;&nbsp;&nbsp;&nbsp;3. Patricia L. Martin

&nbsp;&nbsp;&nbsp;&nbsp;4. Bernard J. Angelo, as an Independent Manager

Schedule B

SCHEDULE C

INITIAL OFFICERS

---

| | |
|:---|:---|
| <u>Name</u> | <u>Office</u> |
| Darin M. Carroll | President |
| Kristie L. Colvin | Vice President and Chief Accounting Officer |
| Christopher A. Foster | Vice President and Chief Financial Officer |
| Patricia L. Martin | Vice President and Treasurer |
| Monica Karuturi | Vice President and General Counsel |
| Brett A. Jerasa | Assistant Treasurer |
| Vincent A. Mercaldi | Secretary |

---

Schedule C

EXHIBIT A

MANAGEMENT AGREEMENT

__________ __, 2025

CenterPoint Energy Restoration Bond Company II, LLC

1111 Louisiana Street

Suite 4664B

Houston, Texas 77002

<u>Re: Management Agreement — CenterPoint Energy Restoration Bond Company II, LLC</u>.

Ladies and Gentlemen:

For good and valuable consideration, each of the undersigned Persons, who have been designated as managers of CenterPoint Energy Restoration Bond Company II, LLC, a Delaware limited liability company (the "<u>Company</u>"), in accordance with the Amended and Restated Limited Liability Company Agreement of the Company, dated as of _______ __, 2025 (as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the "<u>A&R LLC Agreement</u>"), hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Each of the undersigned accepts such Person's rights and authority as a Manager under the A&R LLC Agreement and agrees to perform and discharge such Person's duties and obligations as a Manager under the A&R LLC Agreement, and further agrees that such rights, authorities, duties and obligations under the A&R LLC Agreement shall continue until such Person's successor as a Manager is designated or until such Person's resignation or removal as a Manager in accordance with the A&R LLC Agreement. Each of the undersigned agrees and acknowledges that it has been designated as a "manager" of the Company within the meaning of the Delaware Limited Liability Company Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Until a year and one day has passed since the date that the last obligation under the Basic Documents was paid, to the fullest extent permitted by applicable law, each of the undersigned agrees, solely in its capacity as a creditor of the Company on account of any indemnification or other payment owing to the undersigned by the Company, not to acquiesce, petition or otherwise invoke or cause the Company to invoke the process of any court or governmental authority for the purpose of commencing or sustaining an involuntary case against the Company 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 Company or any substantial part of the property of the Company, or ordering the winding up or liquidation of the affairs of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

Exhibit A-1

Capitalized terms used and not otherwise defined herein have the meanings set forth in the A&R LLC Agreement.

This Management Agreement may be executed in any number of counterparts, each of which shall be deemed an original of this Management Agreement and all of which together shall constitute one and the same instrument.

[Signature Pages Follow]

Exhibit A-2

IN WITNESS WHEREOF, the undersigned have executed this Management Agreement as of the day and year first above written.

---

| |
|:---|
| Darin M. Carroll, as a Manager |
| Kristie L. Colvin, as a Manager |
| Patricia L. Martin, as a Manager |
| Bernard J. Angelo, as an Independent Manager |

---

Exhibit A-3

APPENDIX A

DEFINITIONS

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Defined Terms</u>. As used in this LLC Agreement, the following terms have the following meanings:

"<u>Administration Agreement</u>" means the Administration Agreement, to be dated as of the date the Bonds are issued, by and between the Administrator and the Company, as the same may be amended, restated, supplemented or otherwise modified from time to time.

"<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>Bankruptcy</u>" has the meaning specified in <u>Section 9.01(b)</u> of this LLC Agreement.

"<u>Bankruptcy Code</u>" means Title 11 of the United States Code (11 U.S.C. §§ 101 *et seq.*), as amended from time to time.

"<u>Basic Documents</u>" means the Indenture, the Administration Agreement, the Sale Agreement, the Bill of Sale, the Certificate of Formation, the Servicing Agreement, the Series Supplement, the Letter of Representations, the Underwriting Agreement, any intercreditor agreement to which the Company is a party, and any amendments to the foregoing, and all other documents and certificates delivered in connection therewith.

"<u>Bill of Sale</u>" means the Bill of Sale, to be dated as of the date the Bonds are issued, by and between the Seller and the Company, as the same may be amended, restated, supplemented or otherwise modified from time to time.

"<u>Bond Collateral</u>" means with respect to the Bonds, (a) the System Restoration Property created under and pursuant to the Financing Order and the Securitization Act and transferred by CEHE to the Company pursuant to the Sale Agreement, (b) all System Restoration Charges related to the System Restoration Property, (c) the Sale Agreement and all property and interests in property transferred under the Sale Agreement, (d) the Servicing Agreement, the Administration Agreement, and any intercreditor agreement, subservicing, agency, administration, or collection agreements executed in connection therewith, if any, to the extent related to the System Restoration Property and the Bonds, (e) the Collection Account, all subaccounts thereof and all amounts of cash, instruments, investment property or other assets on deposit therein or credited thereto from time to time and all financial assets and securities entitlements carried therein or credited thereto, (f) all rights to compel the Servicer to file for and obtain adjustments to the System Restoration Charges in accordance with the Securitization Act and the Financing Order, (g) 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 property, accounts, general intangibles, instruments, contract rights, chattel paper or proceeds of such items or any other form of property with respect to the Bonds, (h) all accounts, chattel paper, deposit accounts, documents, general intangibles, goods, instruments, investment property, letters of credit, letters-of-credit rights, money, commercial tort claims and supporting obligations with respect to the Bonds related to the foregoing (other than any cash released to the Company by the Indenture Trustee on any Payment Date to be distributed to CEHE as a return of its Capital Contribution or as earnings on the capital subaccount of the Collection Account) and (i) all payments on or under, and all proceeds in respect of, any or all of the foregoing with respect to the Bonds.

Appendix A

"<u>Bond Register</u>" means the register maintained pursuant to the Indenture, providing for the registration of the Bonds and transfers and exchanges thereof.

"<u>Bond Registrar</u>" means the registrar at any time of the Bond Register, appointed pursuant to the Indenture.

"<u>Bonds</u>" means the system restoration bonds authorized by the Financing Order and issued under the Indenture and the Series Supplement.

"<u>Book-Entry Form</u>" means, with respect to any Bond, that ownership and transfers of such Bond shall be made through book entries by a Clearing Agency as described in the Indenture and the Series Supplement.

"<u>Book-Entry Bonds</u>" means the Bonds 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 Bonds are to be issued to the Holder of such Bonds, such Bonds shall no longer be "Book-Entry Bonds".

"<u>Business Day</u>" means any day other than a Saturday, a Sunday or a day on which banking institutions in Houston, Texas, or New York, New York are, or DTC or the Corporate Trust Office is, authorized or obligated by applicable law, regulation or executive order to be closed.

"<u>Capital Account</u>" has the meaning specified in <u>Section 2.03</u> of this LLC Agreement.

"<u>Capital Contribution</u>" has the meaning specified in <u>Section 2.01</u> of this LLC Agreement.

"<u>Cause</u>" means, with respect to an Independent Manager, (i) acts or omissions by such Independent Manager that constitute willful disregard of, or willful misconduct, bad faith or gross negligence with respect to, such Independent Manager's duties under or in connection with this LLC Agreement, (ii) that such Independent Manager has engaged in or has been charged with or has been indicted or convicted for any crime or crimes of fraud or other acts constituting a crime under any law applicable to such Independent Manager, (iii) that such Independent Manager has breached its fiduciary duties of loyalty or care as and to the extent of such duties in accordance with the terms of the Company's organizational documents, (iv) there is a material increase in the fees charged by such Independent Manager or a material change to such Independent Manager's terms of service, (v) such Independent Manager is unable to perform his or her duties as Independent Manager due to death, disability, incapacity or other cause, or (vi) such Independent Manager no longer meets the criteria specified in the definition of Independent Manager.

Appendix A-2

"<u>CEHE</u>" means CenterPoint Energy Houston Electric, LLC, a Texas limited liability company, and any of its successors or permitted assigns.

"<u>Certificate of Formation</u>" means the Certificate of Formation of the Company filed with the Secretary of State of the State of Delaware on June 5, 2025, as amended, restated or amended and restated from time to time.

"<u>Clearing Agency</u>" means an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act.

"<u>Code</u>" means the Internal Revenue Code of 1986, as amended.

"<u>Collection Account</u>" means, with respect to the Bonds, the account established and maintained by the Indenture Trustee in accordance with the Indenture and any subaccounts contained therein.

"<u>Company</u>" has the meaning specified in the preamble hereto.

"<u>Corporate Trust Office</u>" means the office of the Indenture Trustee at which, at any particular time, its corporate trust business shall be administered.

"<u>Definitive Bonds</u>" means certificated, fully registered Bonds issued in definitive form in accordance with the Indenture or the Series Supplement.

"<u>DTC</u>" means The Depository Trust Company or any successor thereto.

"<u>Eligible Investments</u>", with respect to the Bonds, has the meaning specified in the Indenture.

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended.

"<u>Financing Order</u>" means the Order issued by the Texas Commission on June 5, 2025, in Docket No. 57559 pursuant to the Securitization Act, authorizing the creation of the System Restoration Property and the issuance by the Company, as issuer, of the Bonds.

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

"<u>Holder</u>" or "<u>Bondholder</u>" means the Person in whose name a Bond is registered on the Bond Register.

"<u>Indenture</u>" means the Indenture, to be dated as of the date the Bonds are issued, by and between the Company and U.S. Bank Trust Company, National Association, as Indenture Trustee, and U.S. Bank National Association, as Securities Intermediary, as the same may be amended, restated, supplemented or otherwise modified from time to time.

Appendix A-3

"<u>Indenture Trustee</u>" means initially, U.S. Bank Trust Company, National Association, as indenture trustee under the Indenture, or any successor indenture trustee under the Indenture.

"<u>Independent Manager</u>" has the meaning specified in <u>Section 4.01(a)</u> of this LLC Agreement.

"<u>Internal Revenue Service</u>" means the Internal Revenue Service of the United States of America.

"<u>Letter of Representations</u>" means any applicable agreement between the Company, as 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, as the same may be amended, supplemented, restated or otherwise modified from time to time.

"<u>LLC Act</u>" means the Delaware Limited Liability Company Act, 6 <u>Del. C.</u> § 18-101 *et seq.*, as amended from time to time.

"<u>LLC Agreement</u>" has the meaning specified in the preamble hereto.

"<u>Manager</u>" means each person selected to be a manager of the Company from time to time by the Member, including each Independent Manager, each in such person's capacity as a "manager" of the Company. Each Manager is designated as a "manager" of the Company within the meaning of Section 18-101(12) of the LLC Act.

"<u>Member</u>" has the meaning specified in the preamble to this LLC Agreement.

"<u>Membership Interest</u>" has the meaning specified in <u>Section 6.01</u> of this LLC Agreement.

"<u>Moody's</u>" means Moody's Investors Service, Inc. or any successor thereto. References to Moody's are effective so long as Moody's is a Rating Agency.

"<u>Operating Expenses</u>" means all unreimbursed fees, costs and out-of-pocket expenses of the Company, including all amounts owed by the Company to the Indenture Trustee (including indemnities, legal fees and expenses and audit fees and expenses), or any Manager, the Servicing Fee and other amounts owed to the Servicer pursuant to the Servicing Agreement, administration fees owed to CEHE, or a successor administrator, pursuant to the Administration Agreement, legal and accounting fees, Rating Agency fees, costs and expenses of the Company and CEHE, the return equity on CEHE for its Capital Contribution and any franchise or other taxes owed by the Company.

"<u>Original LLC Agreement</u>" has the meaning specified in the recitals to this LLC Agreement.

Appendix A-4

"<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;(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;(b) 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 Bonds; and

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

<u>provided</u>, that, in determining whether the Holders of the requisite Outstanding Amount of the Bonds or any Tranche thereof have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any Basic Document, Bonds owned by the Company, 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 Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds that the Indenture 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 Indenture Trustee the pledgee's right so to act with respect to such Bonds and that the pledgee is not the Company, any other obligor upon the Bonds, the Member, the Seller, the Servicer or any Affiliate of any of the foregoing Persons.

"<u>Outstanding Amount</u>" means the aggregate principal amount of the Bonds or, if the context requires, all Bonds of a Tranche, Outstanding at the date of determination under the Indenture.

"<u>Paying Agent</u>" means, with respect to the Indenture, the Indenture Trustee and any other Person appointed as a paying agent for the Bonds pursuant to the Indenture.

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

"<u>Person</u>" means any individual, corporation, limited liability company, estate, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or Governmental Authority.

"<u>Protected Purchaser</u>" has the meaning specified in Section 8-303 of the UCC.

"<u>PURA</u>" means the Texas Public Utility Regulatory Act, as codified in Title II of the Texas Utilities Code.

"<u>Qualified Costs</u>" has the meaning assigned to that term in the Securitization Act and the Financing Order.

Appendix A-5

"<u>Rating Agency</u>" means, with respect to any Tranche of the Bonds, any of Moody's or Standard & Poor's which provides a rating with respect to such Tranche of the Bonds. If no such organization (or successor) is any longer in existence, "Rating Agency" shall be a nationally recognized statistical rating organization or other comparable Person designated by the Company, notice of which designation shall be given to the Indenture Trustee 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 Rating Agency to the Indenture Trustee and the Company 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 Company that such action has resulted or would result in the suspension, reduction or withdrawal of the then current rating of any Tranche of Bonds; <u>provided</u>, that if within such ten (10) Business Day period, any Rating Agency (other than Standard & Poor's) 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 Company 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).

"<u>Sale Agreement</u>" means the System Restoration Property Sale Agreement, to be dated as of the date the Bonds are issued, between the Company, as purchaser, and CEHE, as seller, and acknowledged and accepted by U.S. Bank Trust Company, National Association, as Indenture Trustee, as the same may be amended, restated, supplemented or otherwise modified from time to time.

"<u>Secretary of State</u>" means the Secretary of State of the State of Delaware or the Secretary of State of the State of Texas, as the case may be, or any Governmental Authority succeeding to the duties of such offices.

"<u>Secured Parties</u>" means the Indenture Trustee, the Bondholders and any credit enhancer described in the Series Supplement.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended.

"<u>Securitization Act</u>" means Subchapter I of Chapter 36 of PURA, adopted and effective in August 2009, that allows for the securitization of system restoration costs, together with Subchapter G of Chapter 39 of PURA.

"<u>Seller</u>" has the meaning specified in the preamble to the Sale Agreement.

Appendix A-6

"<u>Series Supplement</u>" means the Series Supplement, to be dated as of the date the Bonds are issued, between the Company and U.S. Bank Trust Company, National Association, as Indenture Trustee, relating to the Bonds, as the same may be amended, restated, supplemented or otherwise modified from time to time.

"<u>Servicer</u>" means CEHE, as Servicer under the Servicing Agreement, or any successor Servicer to the extent permitted under the Servicing Agreement.

"<u>Servicing Agreement</u>" means the System Restoration Property Servicing Agreement, to be dated as of the date the Bonds are issued, between the Company and CEHE, as Servicer, and acknowledged and accepted by U.S. Bank Trust Company, National Association, as Indenture Trustee, as the same may be amended, restated, supplemented or otherwise modified from time to time.

"<u>Servicing Fee</u>" means the fee payable to the Servicer on each Payment Date for services rendered during the period from, but not including, the preceding Payment Date (or from the closing date specified in the Indenture in the case of the first Payment Date) to and including the current Payment Date, determined pursuant to the Servicing Agreement.

"<u>Special Member</u>" has the meaning specified in <u>Section 1.02(b)</u> of this LLC Agreement.

"<u>Special Purpose Provisions</u>" has the meaning specified in <u>Section 11.02(a)</u> of this LLC Agreement.

"<u>Standard & Poor's</u>" or "<u>S&P</u>" means S&P Global Ratings, a division of S&P Global Inc., or any successor thereto. References to S&P are effective so long as S&P is a Rating Agency.

"<u>State</u>" means any one of the fifty states of the United States of America or the District of Columbia.

"<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.

"<u>System Restoration Property</u>" means all of CEHE's rights and interest under the Financing Order (including rights to impose, collect and receive the "system restoration charges" (as defined in the Securitization Act) approved in the Financing Order), once those rights are first transferred to the Company or pledged in connection with the issuance of the Bonds, except the rights of CEHE to earn and receive a rate of return on its invested capital in the Company, 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.

"<u>Texas Commission</u>" means the Public Utility Commission of Texas or any successor thereto.

"<u>Tranche</u>" means any one of the tranches of the Bonds.

Appendix A-7

"<u>Treasury Regulations</u>" means the regulations, including proposed or temporary regulations, promulgated under the Code. References herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations.

"<u>UCC</u>" means, unless the context otherwise requires, the Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended from time to time.

"<u>Underwriting Agreement</u>" means the Underwriting Agreement, dated _______ __, 2025, by and among the Company, CEHE and the representatives of the several underwriters named therein, relating to the issuance and sale of the Bonds, as the same may be amended, supplemented or modified 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;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 any Basic Document are inconsistent with the meanings of such terms under generally accepted accounting principles or regulatory accounting principles, the definitions contained in such Basic Document shall control. As used in the Basic Documents, the term "<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;C. <u>Computation of Time Periods</u>. Unless otherwise stated in any of the Basic Documents, as the case may be, in the computation of a period of time from a specified date to a later specified date, the word "<u>from</u>" means "<u>from and including</u>" and the words "<u>to</u>" and "<u>until</u>" each means "<u>to but excluding</u>".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Reference; Captions</u>. The words "hereof", "herein" and "hereunder" and words of similar import when used in any Basic Document shall refer to such Basic Document as a whole and not to any particular provision of such Basic Document; and references to "<u>Section</u>", "<u>subsection</u>", "<u>Schedule</u>" and "<u>Exhibit</u>" in any Basic Document are references to Sections, subsections, Schedules and Exhibits in or to such Basic Document unless otherwise specified in such Basic Document. The various captions (including the tables of contents) in each Basic Document are provided solely for convenience of reference and shall not affect the meaning or interpretation of any Basic Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. <u>Terms Generally</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-8

## 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 | 19 |
| &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 | 26.0 |
| &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 | 27.0 |
| &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 | 28.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.24. | Taxes | 30.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3.25. | Notices from Holders | 30.0 |
| &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 | 32.0 |
| &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 | 52.0 |
| &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 | 64.0 |
| &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 | 66.0 |
| &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>**

---

| | |
|:---|:---|
| &nbsp;&nbsp;**<u>Trust Indenture Act<br> Section</u>** | &nbsp;&nbsp;**<u>Indenture Section</u>** |
| &nbsp;&nbsp;310 &nbsp;&nbsp;(a)(1) | &nbsp;&nbsp;6.11 |
| &nbsp;&nbsp; &nbsp;&nbsp;(a)(2) | &nbsp;&nbsp;6.11 |
| &nbsp;&nbsp; &nbsp;&nbsp;(a)(3) | &nbsp;&nbsp;6.10(b)(i) |
| &nbsp;&nbsp; &nbsp;&nbsp;(a)(4) | &nbsp;&nbsp;Not applicable |
| &nbsp;&nbsp; &nbsp;&nbsp;(a)(5) | &nbsp;&nbsp;6.11 |
| &nbsp;&nbsp; &nbsp;&nbsp;(b) | &nbsp;&nbsp;6.11 |
| &nbsp;&nbsp;311 &nbsp;&nbsp;(a) | &nbsp;&nbsp;6.12 |
| &nbsp;&nbsp; &nbsp;&nbsp;(b) | &nbsp;&nbsp;6.12 |
| &nbsp;&nbsp;312 &nbsp;&nbsp;(a) | &nbsp;&nbsp;7.01 and 7.02 |
| &nbsp;&nbsp; &nbsp;&nbsp;(b) | &nbsp;&nbsp;7.02(b) |
| &nbsp;&nbsp; &nbsp;&nbsp;(c) | &nbsp;&nbsp;7.02(c) |
| &nbsp;&nbsp;313 &nbsp;&nbsp;(a) | &nbsp;&nbsp;7.04 |
| &nbsp;&nbsp; &nbsp;&nbsp;(b)(1) | &nbsp;&nbsp;7.04 |
| &nbsp;&nbsp; &nbsp;&nbsp;(b)(2) | &nbsp;&nbsp;7.04 |
| &nbsp;&nbsp; &nbsp;&nbsp;(c) | &nbsp;&nbsp;7.03(a) and 7.04 |
| &nbsp;&nbsp; &nbsp;&nbsp;(d) | &nbsp;&nbsp;Not applicable |
| &nbsp;&nbsp;314 &nbsp;&nbsp;(a) | &nbsp;&nbsp;3.09, 4.01 and 7.03(a) |
| &nbsp;&nbsp; &nbsp;&nbsp;(b) | &nbsp;&nbsp;3.06 and 4.01 |
| &nbsp;&nbsp; &nbsp;&nbsp;(c)(1) | &nbsp;&nbsp;2.10, 4.01, 8.04(b) and 10.01(a) |
| &nbsp;&nbsp; &nbsp;&nbsp;(c)(2) | &nbsp;&nbsp;2.10, 4.01, 8.04(b) and 10.01(a) |
| &nbsp;&nbsp; &nbsp;&nbsp;(c)(3) | &nbsp;&nbsp;2.10, 4.01, 4.02 and 10.01(a) |
| &nbsp;&nbsp; &nbsp;&nbsp;(d) | &nbsp;&nbsp;8.04(b) and 10.01 |
| &nbsp;&nbsp; &nbsp;&nbsp;(e) | &nbsp;&nbsp;10.01(a) |
| &nbsp;&nbsp; &nbsp;&nbsp;(f) | &nbsp;&nbsp;10.01(a) |
| &nbsp;&nbsp;315 &nbsp;&nbsp;(a) | &nbsp;&nbsp;6.01(b)(i) and 6.01(b)(ii) |

---

v

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**<u>Trust Indenture Act<br> Section</u>** | &nbsp;&nbsp;**<u>Trust Indenture Act<br> Section</u>** | &nbsp;&nbsp;**<u>Indenture Section</u>** |
|  | &nbsp;&nbsp;(b) | &nbsp;&nbsp;6.05 |
|  | &nbsp;&nbsp;(c) | &nbsp;&nbsp;6.01(a) |
|  | &nbsp;&nbsp;(d) | &nbsp;&nbsp;6.01(c)(i), 6.01(c)(ii) and 6.01(c)(iii) |
|  | &nbsp;&nbsp;(e) | &nbsp;&nbsp;5.13 |
| &nbsp;&nbsp;316 | &nbsp;&nbsp;(a) (last sentence) | &nbsp;&nbsp;Appendix A – definition of "Outstanding" |
|  | &nbsp;&nbsp;(a)(1)(A) | &nbsp;&nbsp;5.11 |
|  | &nbsp;&nbsp;(a)(1)(B) | &nbsp;&nbsp;5.12 |
|  | &nbsp;&nbsp;(a)(2) | &nbsp;&nbsp;Not applicable |
|  | &nbsp;&nbsp;(b) | &nbsp;&nbsp;5.07 |
|  | &nbsp;&nbsp;(c) | &nbsp;&nbsp;Appendix A – definition of "Record Date" |
| &nbsp;&nbsp;317 | &nbsp;&nbsp;(a)(1) | &nbsp;&nbsp;5.03(a) |
|  | &nbsp;&nbsp;(a)(2) | &nbsp;&nbsp;5.03(c)(iv) |
|  | &nbsp;&nbsp;(b) | &nbsp;&nbsp;3.03 |
| &nbsp;&nbsp;318 | &nbsp;&nbsp;(a) | &nbsp;&nbsp;10.06 |
|  | &nbsp;&nbsp;(b) | &nbsp;&nbsp;10.06 |
|  | &nbsp;&nbsp;(c) | &nbsp;&nbsp;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, 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. {_____} | ${__________} |
| Tranche {__} | CUSIP No.: {__________} |

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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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|:---|:---|:---|:---|:---|
| BOND<br> INTEREST<br> RATE | ORIGINAL<br> PRINCIPAL<br> AMOUNT |  | SCHEDULED<br> FINAL <br> PAYMENT<br> DATE | FINAL <br> MATURITY<br> DATE |
| {____}% | ${__________ | } | {__________}, 20{__} | {__________}, 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, | CENTERPOINT ENERGY RESTORATION BOND COMPANY II, LLC, |
|  | as Issuer | 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, | U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, |
| as Indenture Trustee | 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 |  | (<u> </u>) |
|  | | | (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

  <br> (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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| | | | | |
|:---|:---|:---|:---|:---|
| Weighted Average Life | 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;{_____}, 20{__} | &nbsp;&nbsp;{_____}, 20{__} |
| {__} | $&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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| | |
|:---|:---|
| CENTER POINT ENERGY RESTORATION BOND COMPANY II, LLC,<br> as Issuer | CENTER POINT 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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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;Date | Tranche A-1 | Tranche A-2 |
| &nbsp;&nbsp;Closing Date | $&nbsp;&nbsp;{__________} | $&nbsp;&nbsp;{__________} |
| &nbsp;&nbsp;{__________}, 202_ | $&nbsp;&nbsp;{__________} | $&nbsp;&nbsp;{__________} |
| &nbsp;&nbsp;{__________}, 202_ | $&nbsp;&nbsp;{__________} | $&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 Reference** | &nbsp;&nbsp;**Servicing Criteria** | &nbsp;&nbsp;**Applicable Indenture 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** |

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Regulation AB Reference** | &nbsp;&nbsp;**Servicing Criteria** | &nbsp;&nbsp;**Applicable Indenture 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.

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".

Appendix A-4

"<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).

"<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.

Appendix A-5

"<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.

"<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:

Appendix A-6

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

"<u>Lien</u>" means a security interest, lien, charge, pledge, equity or encumbrance of any kind.

Appendix A-7

"<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.

"<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

Appendix A-8

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

"<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.

Appendix A-9

"<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 Servicer, the Indenture Trustee and the Issuer that such action will not result in a suspension, reduction or withdrawal of the then current rating by such Rating Agency of any tranche of 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).

"<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.

Appendix A-10

"<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.

"<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.

Appendix A-11

"<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.

"<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.

Appendix A-12

"<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.

"<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.

Appendix A-13

"<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 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 1.01 | DEFINITIONS AND RULES OF CONSTRUCTION | 1 |
| ARTICLE II APPOINTMENT AND AUTHORIZATION OF SERVICER | ARTICLE II APPOINTMENT AND AUTHORIZATION OF SERVICER | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.01 | APPOINTMENT OF THE SERVICER; ACCEPTANCE OF APPOINTMENT | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.02 | AUTHORIZATION | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2.03 | DOMINION AND CONTROL OVER SYSTEM RESTORATION PROPERTY | 2 |
| ARTICLE III ROLE OF THE SERVICER | ARTICLE III ROLE OF THE SERVICER | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.01 | DUTIES OF THE SERVICER | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.02 | SERVICING AND MAINTENANCE STANDARDS | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.03 | ANNUAL REPORTS ON COMPLIANCE WITH REGULATION AB | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 3.04 | ANNUAL REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM REPORT | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.01 | SYSTEM RESTORATION CHARGE ADJUSTMENTS | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 4.02 | LIMITATION OF LIABILITY | 19 |
| ARTICLE V THE SYSTEM RESTORATION PROPERTY | ARTICLE V THE SYSTEM RESTORATION PROPERTY | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.01 | CUSTODY OF SYSTEM RESTORATION PROPERTY RECORDS | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.02 | DUTIES OF SERVICER AS CUSTODIAN | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.03 | CUSTODIAN'S INDEMNIFICATION | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5.04 | EFFECTIVE PERIOD AND TERMINATION | 22 |
| ARTICLE VI THE SERVICER | ARTICLE VI THE SERVICER | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.01 | REPRESENTATIONS AND WARRANTIES OF THE SERVICER | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.02 | INDEMNITIES OF THE SERVICER; RELEASE OF CLAIMS | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.03 | MERGER, CONVERSION OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF, THE SERVICER | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.04 | ASSIGNMENT OF THE SERVICER'S OBLIGATIONS | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.05 | LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.06 | CEHE NOT TO RESIGN AS SERVICER | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.07 | SERVICING COMPENSATION | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.08 | COMPLIANCE WITH APPLICABLE LAW | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.09 | ACCESS TO CERTAIN RECORDS AND INFORMATION REGARDING SYSTEM RESTORATION PROPERTY | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.10 | APPOINTMENTS | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.11 | NO SERVICER ADVANCES | 33 |

---

i

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.12 | REMITTANCES | 33.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 6.13 | MAINTENANCE OF OPERATIONS | 34.0 |
| ARTICLE VII SERVICER DEFAULT | ARTICLE VII SERVICER DEFAULT | 34.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.01 | SERVICER DEFAULT | 34.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.02 | NOTICE OF SERVICER DEFAULT | 36.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.03 | WAIVER OF PAST DEFAULTS | 36.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.04 | APPOINTMENT OF SUCCESSOR | 37.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 7.05 | COOPERATION WITH SUCCESSOR | 37.0 |
| ARTICLE VIII MISCELLANEOUS PROVISIONS | ARTICLE VIII MISCELLANEOUS PROVISIONS | 38.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.01 | AMENDMENT | 38.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.02 | NOTICES | 38.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.03 | ASSIGNMENT | 39.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.04 | LIMITATIONS ON RIGHTS OF OTHERS | 39.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.05 | SEVERABILITY | 39.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.06 | SEPARATE COUNTERPARTS | 40.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.07 | HEADINGS | 40.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.08 | GOVERNING LAW | 40.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.09 | PLEDGE TO THE TRUSTEE | 40.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.10 | NONPETITION COVENANTS | 40.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.11 | TERMINATION | 40.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.12 | TEXAS COMMISSION CONSENT | 41.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.13 | TERMINATION | 41.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.14 | EFFECT OF SUBSEQUENT PUCT REGULATIONS | 42.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 8.15 | RULE 17g-5 COMPLIANCE | 42.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Bond Balance and the Projected Bond Balance as of the immediately preceding 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;(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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 amount on deposit in the Excess Funds Subaccount as of the immediately preceding 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;(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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 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 any Holders 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.

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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 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:

(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.

Annex I-1

(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.

**SECTION 6. <u>COLLECTIONS; PAYMENT PROCESSING; REMITTANCE</u>.**

(a) Collection Efforts, Policies, Procedures.

Annex I-2

(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.

(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 between 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.

Annex I-3

(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.

Annex I-4

(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.

(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<br> 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** |  |  |  |  |  |  |

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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{__}.

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| | |
|:---|:---|
| **CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as Servicer** | **CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as Servicer** |
| By: |  |
|  | Name: |
|  | Title: |

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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 Financing 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

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| | | |
|:---|:---|:---|
|  |  | Aggregate |
| i. | Tranche A-1 |  |
| ii. | Tranche A-2 |  |
| iii. | Total: |  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Interest

---

| | | |
|:---|:---|:---|
|  |  | Aggregate |
| i. | Tranche A-1 |  |
| ii. | Tranche A-2 |  |
| 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):

i. Tranche A-1

ii. Tranche A-2

iii. Total:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Expected principal balance to be Outstanding (following payment on the Current Payment Date):

i. Tranche A-1

ii. Tranche A-2

iii. Total:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Difference between (b) above and Outstanding Amount specified in Expected Amortization Schedule:

i. Tranche A-1

ii. Tranche A-2

iii. Total:

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 Financing Costs

Exhibit B-2

i. Trustee Fees and Expenses (subject to $200,000 annual cap per Section 8.02(e)(i) of the Indenture):

ii. Servicing Fee:

iii. Issuer's Fees:

iv. Total:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Other Ongoing Financing Costs and Payments

i. Other Ongoing Financing Costs (payable pursuant to Section 8.02(e)(v) of the Indenture):

ii. Funding of Capital Subaccount to the Required Capital Amount

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:

iv. Deposits to Excess Funds Subaccount:

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;&nbsp;&nbsp;&nbsp;&nbsp;a) Capital Subaccount

i. Total:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Excess Funds Subaccount

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 ${__________}

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** Required Funding/Payments as of Current Payment Date:

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| | | |
|:---|:---|:---|
|  | ***Principal*** | ***Principal Due*** |
| i. | Bonds – Tranche A-1 | ${__________} |
| ii. | Bonds – Tranche A-2 | ${__________} |
|  | ***Interest*** |  |

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Exhibit B-3

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| | | | | |
|:---|:---|:---|:---|:---|
| **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 |  |  |  | ${________} |
|  |  |  | **<u>Required Level</u>** | **<u>Funding <br> Required</u>** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***Capital Subaccount*** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***Capital Subaccount*** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***Capital Subaccount*** | ${__________} | ${__________} |

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**4.** Allocation of Remittances as of Current Payment Date Pursuant to 8.02(e) of Indenture:

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| | |
|:---|:---|
| i. Trustee Fees and Expenses; Indemnity Amounts | ${__________} |
| ii. Servicing Fee | ${__________} |
| iii. Administration Fee | ${__________} |
| iv. Operating Expenses | ${__________} |

---

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| | | |
|:---|:---|:---|
| Bonds | Aggregate | 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) |  |
| 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.

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| | |
|:---|:---|
| 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 | ${__________} |

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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:

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| | | |
|:---|:---|:---|
| 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 ${__________}

Exhibit B-5

IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Semi-Annual Servicer's Certificate this day of .

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| | |
|:---|:---|
| **CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as Servicer** | **CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as Servicer** |
| By: |  |
|  | Name: |
|  | Title: |

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Exhibit B-6

**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*"):

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Regulation AB <br> Reference** | &nbsp;&nbsp;**Servicing Criteria** | &nbsp;&nbsp;**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. |

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Exhibit C-1-1

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| | | |
|:---|:---|:---|
| &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. |

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Exhibit C-1-2

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| | | |
|:---|:---|:---|
|  | &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;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. |
|  | &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;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. |

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Exhibit C-1-3

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| | | |
|:---|:---|:---|
| &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. |
| &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. |

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Exhibit C-1-4

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| | | |
|:---|:---|:---|
| &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. |

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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;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: |

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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: |

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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**

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| | | |
|:---|:---|:---|
| **Semi-Annual Payment <br> Date** | **Tranche A-1 <br> Amount** | **Tranche A-2<br> Amount** |
| Initial Principal Amount | $— | $— |
|  | $— | $— |
|  | $— | $— |
|  | $— | $— |
|  | $— | $— |
|  | $— | $— |
|  | $— | $— |
|  | $— | $— |
| **Total Payments** | $— | $— |

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#### 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 Servicer, 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-

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| | | |
|:---|:---|:---|
| 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.

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.

---

| | |
|:---|:---|
| 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 Servicer, the Indenture Trustee and the Issuer that such action will not result in a suspension, reduction or withdrawal of the then current rating by such Rating Agency of any tranche of 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.

---

| | |
|:---|:---|
| 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

## Exhibit 10.3

**Exhibit 10.3**

ADMINISTRATION AGREEMENT

ADMINISTRATION AGREEMENT, dated as of _______ __, 2025 (this "Administration Agreement"), is by and between CenterPoint Energy Restoration Bond Company II, LLC, a Delaware limited liability company, as Issuer (the "Issuer"), and CenterPoint Energy Houston Electric, LLC, a Texas limited liability company ("CEHE"), as Administrator (in such capacity, the "Administrator"). Capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in Appendix A to the Indenture (as defined below). Not all terms defined in Appendix A are used in this Administration Agreement. The rules of construction set forth in Appendix A shall apply to this Administration Agreement and are hereby incorporated by reference into this Administration Agreement as if set forth in this Administration Agreement.

W I T N E S S E T H:

WHEREAS, the Issuer is issuing Bonds pursuant to the Indenture, dated as of the date hereof and the Series Supplement thereto, also dated as of the date hereof (the "Series Supplement") (as amended, supplemented or otherwise modified and in effect from time to time, the "Indenture"), between the Issuer and U.S. Bank Trust Company, National Association, as the Trustee (the "Trustee"), and U.S. Bank, National Association, as the Securities Intermediary;

WHEREAS, the Issuer has entered into certain agreements in connection with the issuance of the Bonds, including (i) the Indenture and the Series Supplement, (ii) the System Restoration Property Servicing Agreement, dated as of the date hereof (the "Servicing Agreement"), between the Issuer and CEHE, as Servicer, (iii) the System Restoration Property Sale Agreement, dated as of the date hereof (the "Sale Agreement"), between the Issuer and CEHE, as Seller, and (iv) the Letter of Representations, dated as of _______ __, 2025 (the "Depository Agreement"), between the Issuer and The Depository Trust Company relating to the Bonds (the Indenture, the Series Supplement, the Servicing Agreement, the Sale Agreement and the Depository Agreement and other Basic Documents, as such agreements may be amended and supplemented from time to time, being referred to hereinafter collectively as the "Initial Related Agreements");

WHEREAS, pursuant to the Initial Related Agreements, the Issuer is required to perform certain duties in connection with the Initial Related Agreements, the Bonds and the Trust Estate pledged to the Trustee pursuant to the Indenture;

WHEREAS, the Issuer may from time to time enter into and be required to perform certain duties under additional agreements similar to the Initial Related Agreements (together with the Initial Related Agreements, the "Related Agreements");

WHEREAS, the Issuer has no employees, other than its officers and managers, and does not intend to hire any employees, and consequently desires to have the Administrator perform certain of the duties of the Issuer referred to in the preceding clauses and to provide such additional services consistent with the terms of this Administration Agreement and the Related Agreements as the Issuer may from time to time request; and

WHEREAS, the Administrator has the capacity to provide the services and the facilities required thereby and is willing to perform such services and provide such facilities for the Issuer on the terms set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. *Duties of the Administrator: Management Services*. The Administrator hereby agrees to provide the
following corporate management services to the Issuer and to cause third parties to provide professional services required for or contemplated
by such services in accordance with the provisions of this Administration Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) furnish the Issuer with ordinary clerical, bookkeeping and other corporate administrative services necessary
and appropriate for the Issuer, including, without limitation, the following services:

&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 at the Premises (as defined below) general accounting records of the Issuer (the "Account
Records"), subject to year-end audit, in accordance with generally accepted accounting principles, separate and apart from its own
accounting records, prepare or cause to be prepared such quarterly and annual financial statements as may be necessary or appropriate
and arrange for year-end audits of the Issuer's financial statements by the Issuer's independent 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;(B) prepare and, after execution by the Issuer, file with the U.S. Securities and Exchange Commission (the
 "SEC") and any applicable state agencies documents required to be filed by the Issuer with the SEC and any applicable state
agencies, including, without limitation, periodic reports required to be filed under the Securities Exchange Act of 1934, as amended;

&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) prepare for execution by the Issuer and cause to be filed such income, franchise or other tax returns
of the Issuer as shall be required to be filed by applicable law (the "Tax Returns") and cause to be paid on behalf of the
Issuer from the Issuer's funds any taxes required to be paid by the Issuer under 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;(D) prepare or cause to be prepared for execution by the Issuer's managers (the "Managers")
minutes of the meetings of the Managers and such other documents deemed appropriate by the Issuer to maintain the separate limited liability
company existence and good standing of the Issuer (the "Company Minutes") or otherwise required under the Related Agreements
(together with the Account Records, the Tax Returns, the Company Minutes, the Issuer LLC Agreement, and the Issuer Certificate of Formation,
the "Issuer Documents"); and any other documents deliverable by the Issuer thereunder or in connection therewith; 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) hold, maintain and preserve at the Premises (or such other place as shall be required by any of the Related
Agreements) executed copies (to the extent applicable) of the Issuer Documents and other documents executed by the Issuer thereunder or
in connection therewith;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) take such actions on behalf of the Issuer as are necessary or desirable for the Issuer to keep in full
effect its existence, rights and franchises as a limited liability company under the laws of the State of Delaware and obtain and preserve
its qualification to do business in each jurisdiction in which it becomes necessary to be so qualified;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) take such actions on behalf of the Issuer as are necessary for the issuance and delivery of the Bonds;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) provide for the performance by the Issuer of its obligations under each of the Related Agreements, and
prepare, or cause to be prepared, all documents, reports, filings, instruments, notices, certificates and opinions that it shall be the
duty of the Issuer to prepare, file or deliver pursuant to the Related Agreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) to the fullest extent allowable under applicable law, enforce each of the rights of the Issuer under the
Related Agreements, at the written direction of the Trustee (acting at the direction of the Holders representing at least a majority of
the Outstanding Amount of the Bonds);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) provide for the defense, at the direction of the Managers, of any action, suit or proceeding brought against
the Issuer or affecting the Issuer or any of its assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) provide office space (the "Premises") for the Issuer and such reasonable ancillary services
as are necessary to carry out the obligations of the Administrator hereunder, including telecopying, duplicating and word processing services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) undertake such other administrative services as may be appropriate, necessary or requested by the Issuer;
and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) provide such other services as are incidental to the foregoing or as the Issuer and the Administrator
may agree.

In providing the services under this Section 1 and as otherwise provided under this Administration Agreement, the Administrator will not knowingly take any actions on behalf of the Issuer that (i) the Issuer is prohibited from taking under the Related Agreements, or (ii) would cause the Issuer to be in violation of any federal, state or local law or the Issuer LLC Agreement.

In performing its duties hereunder, the Administrator shall use the same degree of care and diligence that the Administrator exercises with respect to performing such duties on its own account and, if applicable, for others.

2. *Compensation*. As compensation for the performance of the Administrator's obligations under
this Administration Agreement (including the compensation of Persons serving as Managers (other than the independent Manager(s)) and officers
of the Issuer, but, for the avoidance of doubt, excluding the performance by CEHE of its obligations in its capacity as Servicer), the
Administrator shall be entitled to $100,000 annually (the "Administration Fee"), with no escalation, payable by the Issuer
in arrears proportionately on each Payment Date, in semi-annual increments of $50,000, which amount shall be prorated for the period beginning
on the day that the Securitization Bonds are issued and ending on the first Payment Date. In addition, the Administrator shall be entitled
to be reimbursed by the Issuer for all costs and expenses of services performed by unaffiliated third parties and actually incurred by
the Administrator in connection with the performance of its obligations under this Administration Agreement in accordance with Section 3
(but, for the avoidance of doubt, excluding any such costs and expenses incurred by CEHE in its capacity as Servicer), to the extent that
such costs and expenses are supported by invoices or other customary documentation and are reasonably allocated to the Issuer ("Reimbursable
Expenses").

3. *Third Party Services*. Any services required for or contemplated by the performance of the above-referenced
services by the Administrator to be provided by unaffiliated third parties (including independent accountants' fees and legal counsel
fees) may, if provided for or otherwise contemplated by the Financing Order and if the Issuer deems it necessary or desirable, be arranged
by the Issuer or by the Administrator at the direction (which may be general or specific) of the Issuer. Costs and expenses associated
with the contracting for such third-party services may be paid directly by the Issuer or paid by the Administrator and reimbursed by the
Issuer in accordance with Section 2, or otherwise as the Administrator and the Issuer may mutually arrange.

4. *Additional Information to be Furnished to the Issuer*. The Administrator shall furnish to the Issuer
from time to time such additional information regarding the Trust Estate as the Issuer shall reasonably request.

5. *Independence of the Administrator*. For all purposes of this Administration Agreement, the Administrator
shall be an independent contractor and shall not be subject to the supervision of the Issuer with respect to the manner in which it accomplishes
the performance of its obligations hereunder. Unless expressly authorized by the Issuer or in this Administration Agreement, the Administrator
shall have no authority, and shall not hold itself out as having the authority, to act for or represent the Issuer in any way and shall
not otherwise be deemed an agent of the Issuer.

6. *No Joint Venture*. Nothing contained in this Administration Agreement (a) shall constitute
the Administrator and the Issuer as partners or co-members of any partnership, joint venture, association, syndicate, unincorporated business
or other separate entity, (b) shall be construed to impose any liability as such on either of them or (c) shall be deemed to
confer on either of them any express, implied or apparent authority to incur any obligation or liability on behalf of the other.

7. *Other Activities of Administrator*. Nothing herein shall prevent the Administrator or any of its
members, managers, officers, employees, subsidiaries or affiliates from engaging in other businesses or, in its sole discretion, from
acting in a similar capacity as an Administrator for any other person or entity even though such person or entity may engage in business
activities similar to those of the Issuer.

8. *Term of Agreement; Resignation and Removal of Administrator*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Administration Agreement shall continue in full force until the payment in full of the Bonds and
any other amount which may become due and payable under the Indenture, upon which event this Administration Agreement shall automatically
terminate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to Sections 8(e) and 8(f), the Administrator may resign its duties hereunder by providing
the Issuer, the Trustee and the Rating Agencies with at least sixty (60) days' prior written notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Subject to Sections 8(e) and 8(f), the Issuer may remove the Administrator without cause by providing
the Administrator, the Trustee and the Rating Agencies with at least sixty (60) days' prior written notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Subject to Sections 8(e) and 8(f), at the sole option of the Issuer, the Administrator may be removed
immediately upon written notice of termination from the Issuer to the Administrator and the Rating Agencies if any of the following events
shall occur:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Administrator shall default in the performance of any of its duties under this Administration Agreement
and, after notice of such default, shall fail to cure such default within ten (10) days (or, if such default cannot be cured in such
time, shall (A) fail to give within ten (10) days such assurance of cure as shall be reasonably satisfactory to the Issuer and
(B) fail to cure such default within thirty (30) days thereafter);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a court of competent jurisdiction shall enter a decree or order for relief, and such decree or order shall
not have been vacated within sixty (60) days, in respect of the Administrator in any involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or such court shall appoint a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for the Administrator or any substantial part of its property or order the winding-up or liquidation
of its affairs; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Administrator shall commence a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, shall
consent to the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator or similar official for the Administrator
or any substantial part of its property, shall consent to the taking of possession by any such official of any substantial part of its
property, shall make any general assignment for the benefit of creditors or shall fail generally to pay its debts as they become due.

The Administrator agrees that if any of the events specified in clauses (ii) or (iii) of this Section 8(d) shall occur, it shall give written notice thereof to the Issuer and the Trustee as soon as practicable but in any event within seven (7) days after the happening of such event.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) No resignation or removal of the Administrator pursuant to this Section 8(e) shall be effective
until (i) a successor Administrator has been appointed by the Issuer, (ii) the Rating Agency Condition with respect to the proposed
appointment has been satisfied and (iii) such successor Administrator has agreed in writing to be bound by the terms of this Administration
Agreement in the same manner as the Administrator is bound hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The appointment of any successor Administrator shall be effective only after satisfaction of the Rating
Agency Condition with respect to the proposed appointment.

9. *Action upon Termination, Resignation or Removal*. Promptly upon the effective date of termination
of this Administration Agreement pursuant to Section 8(a), the resignation of the Administrator pursuant to Section 8(b) or
the removal of the Administrator pursuant to Section 8(c) or 8(d), the Administrator shall be entitled to be paid a pro-rated
portion of the annual fee described in Section 2 hereof through the date of termination and all Reimbursable Expenses incurred by
it through the date of such termination, resignation or removal. The Administrator shall forthwith upon such termination pursuant to Section 8(a) deliver
to the Issuer all property and documents of or relating to the Trust Estate then in the custody of the Administrator. In the event of
the resignation of the Administrator pursuant to Section 8(b) or the removal of the Administrator pursuant to Section 8(c) or
8(d), the Administrator shall cooperate with the Issuer and take all reasonable steps requested to assist the Issuer in making an orderly
transfer of the duties of the Administrator.

10. *Administrator's Liability*. Except as otherwise provided herein, the Administrator assumes
no liability other than to render or stand ready to render the services called for herein, and neither the Administrator nor any of its
members, managers, officers, employees, subsidiaries or affiliates shall be responsible for any action of the Issuer or any of the members,
managers, officers, employees, subsidiaries or affiliates of the Issuer (other than the Administrator itself). The Administrator shall
not be liable for nor shall it have any obligation with regard to any of the liabilities, whether direct or indirect, absolute or contingent
of the Issuer or any of the members, managers, officers, employees, subsidiaries or affiliates of the Issuer (other than the Administrator
itself).

11. **INDEMNITY.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **SUBJECT TO THE PRIORITY OF PAYMENTS SET FORTH IN THE INDENTURE, THE ISSUER SHALL INDEMNIFY THE ADMINISTRATOR, ITS MEMBERS, MANAGERS, OFFICERS, EMPLOYEES AND AFFILIATES AGAINST ALL LOSSES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, LIABILITIES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION OR PREPARATION THEREFOR WHETHER OR NOT THE ADMINISTRATOR IS A PARTY THERETO) WHICH ANY OF THEM MAY PAY OR INCUR ARISING OUT OF OR RELATING TO THIS ADMINISTRATION AGREEMENT AND THE SERVICES CALLED FOR HEREIN; PROVIDED, HOWEVER, THAT SUCH INDEMNITY SHALL NOT APPLY TO ANY SUCH LOSS, CLAIM, DAMAGE, PENALTY, JUDGMENT, LIABILITY OR EXPENSE RESULTING FROM THE ADMINISTRATOR'S NEGLIGENCE OR WILLFUL MISCONDUCT IN THE PERFORMANCE OF ITS OBLIGATIONS HEREUNDER.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **THE ADMINISTRATOR SHALL INDEMNIFY THE ISSUER, ITS MEMBERS, MANAGERS, OFFICERS AND EMPLOYEES AGAINST ALL LOSSES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, LIABILITIES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION OR PREPARATION THEREFOR WHETHER OR NOT THE ISSUER IS A PARTY THERETO) WHICH ANY OF THEM MAY INCUR AS A RESULT OF THE ADMINISTRATOR'S NEGLIGENCE OR WILLFUL MISCONDUCT IN THE PERFORMANCE OF ITS OBLIGATIONS HEREUNDER.**

12. *Notices*. Any notice, report or other communication given hereunder shall be in writing and 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) if to the Issuer, to:

CenterPoint Energy Restoration Bond Company II

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) if to the Administrator, to:

CenterPoint Energy Houston Electric, LLC

1111 Louisiana Street

Houston, Texas 77002

Attention: Treasurer

or to such other address as either party shall have provided to the other party in writing. Any notice required to be in writing hereunder shall be deemed given if such notice is mailed by certified mail, postage prepaid, or hand-delivered to the address of such party as provided above.

13. *Amendments*. This Administration Agreement may be amended from time to time by a written amendment
duly executed and delivered by each of the Issuer and the Administrator, provided that (i) the Rating Agency Condition has been satisfied
in connection therewith, (ii) the Trustee shall have consented and (iii) in the case of any amendment that increases ongoing
qualified costs as defined in the applicable financing order of the Texas Commission, the Texas Commission shall have consented thereto
or shall be conclusively deemed to have consented thereto. With respect to the Texas Commission's consent to any amendment to this
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;(a) the Administrator 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 has been approved by all parties to this Administration 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 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 Section 13(a) above, 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 Section 13(a)(iii) above, 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 to have consented to the proposed amendment,

unless, within thirty (30) days of receiving the request for consent complying with Section 13(a) above, the Texas Commission or its staff delivers to the office of the person specified in Section 13(a)(iii) above a written statement requesting an additional amount of time not to exceed thirty (30) days in which to consider whether to consent to the proposed 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 Section 13(a)(iii) above 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. Following delivery of a notice to the Texas Commission by the Administrator under Section 13(a) above, the Administrator and Issuer may at any time withdraw from the Texas Commission further consideration of any notification of a proposed amendment. 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 Administrator.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 amendment requiring the consent of the Texas Commission as provided in this Section 13 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 thirty (30) day period provided for in Section 13(b), or, if such period has been extended pursuant thereto, the first day after the expiration of such period as so extended.

14. *Successors and Assigns*. This Administration Agreement may not be assigned by the Administrator
unless such assignment is previously consented to in writing by the Issuer and the Trustee and subject to the satisfaction of the Rating
Agency Condition in connection therewith. Any assignment with such consent and satisfaction, if accepted by the assignee, shall bind the
assignee hereunder in the same manner as the Administrator is bound hereunder. Notwithstanding the foregoing, this Administration Agreement
may be assigned by the Administrator without the consent of the Issuer or the Trustee and without satisfaction of the Rating Agency Condition
to a corporation or other organization that is a successor (by merger, reorganization, consolidation or purchase of assets) to the Administrator;
provided that such successor organization executes and delivers to the Issuer an agreement in which such corporation or other organization
agrees to be bound hereunder by the terms of said assignment in the same manner as the Administrator is bound hereunder. Subject to the
foregoing, this Administration Agreement shall bind any successors or assigns of the parties hereto. Upon satisfaction of all of the conditions
of this Section 14, the preceding Administrator shall automatically and without further notice be released from all of its obligations
hereunder.

15. *Governing Law*. This Administration 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.

16. *Headings*. The Section headings hereof have been inserted for convenience of reference only
and shall not be construed to affect the meaning, construction or effect of this Administration Agreement.

17. *Counterparts*. This Administration Agreement may be executed in counterparts, each of which when
so executed shall be an original, but all of which together shall constitute but one and the same Administration Agreement.

18. *Severability*. Any provision of this Administration Agreement that is prohibited or unenforceable
in any jurisdiction shall 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.

19. *Nonpetition Covenant*. Notwithstanding any prior termination of this Administration Agreement, the
Administrator covenants that it shall not, prior to the date which is one year and one day after payment in full of the Bonds, acquiesce,
petition or otherwise invoke or cause the Issuer 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 or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the Issuer.

20. *Pledge to Trustee*. The Administrator hereby acknowledges and consents to any pledge and grant of
a security interest by the Issuer to the Trustee for the benefit of the Secured Parties pursuant to the Indenture of any or all of the
Issuer's rights hereunder. For the avoidance of doubt, the Trustee is a third-party beneficiary of this Administration Agreement
and is entitled to the rights and benefits hereunder and may enforce the provisions hereof as if it were a party hereto.

[Rest of page intentionally left blank]

IN WITNESS WHEREOF, the parties have caused this Administration Agreement to be duly executed and delivered 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 Administrator | as Administrator |
| By: |  |
|  | Name: |
|  | Title: |

---

## Exhibit 25.1

**Exhibit 25.1**

------

**securities and exchange commission**

**Washington, D.C. 20549**

**FORM T-1**

**Statement of Eligibility Under**

**The Trust Indenture Act of 1939 of a** 

**Corporation Designated to Act as Trustee**

Check if an Application to Determine Eligibility of

a Trustee Pursuant to Section 305(b)(2) ◻

**U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION**

(Exact name of Trustee as specified in its charter)

**91-1821036**

I.R.S. Employer Identification No.

800 Nicollet Mall Minneapolis, Minnesota <u> 55402</u> <br> <u>(Address of principal executive offices)</u> <u>(Zip Code)</u>

Matthew M. Smith

U.S. Bank Trust Company, National Association

190 South LaSalle Street, 7<sup>th</sup> floor

Chicago, Il 60603

(312) 332-7462

(Name, address and telephone number of agent for service)

**Centerpoint Energy Restoration Bond Company II, LLC**

(Issuer with respect to the Securities)

Delaware <u>39-2616236</u> <br> <u>(State or other jurisdiction of incorporation or organization)</u> <u>(I.R.S. Employer Identification No.)</u>

1111 Lousiana Street, Suite 4654B Houston, TX <u> 77002</u> <br> <u>(Address of Principal Executive Offices)</u> <u>(Zip Code)</u>

**Series 2025-A Senior Secured System Restoration Bonds**

**(Title of the Indenture Securities)**

**<u>FORM T-1</u>**

**Item 1.** **GENERAL INFORMATION*.*** Furnish the following information as to the Trustee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; a) *Name and address of each examining or supervising authority to which it is subject.*

Comptroller of the Currency

Washington, D.C.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) *Whether it is authorized to exercise corporate trust powers.*

Yes

**Item 2. AFFILIATIONS WITH THE OBLIGOR.** *If the obligor is an affiliate of the Trustee, describe each such affiliation.*

None

**Items 3-15** *Items 3-15 are not applicable because to the best of the Trustee's knowledge, the obligor is not in default under any Indenture for which the Trustee acts as Trustee.*

**Item 16. LIST OF EXHIBITS:** *List below all exhibits filed as a part of this statement of eligibility and qualification.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. A copy of the Articles of Association of the Trustee, attached
as Exhibit 1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. A copy of the certificate of authority of the Trustee to commence
business, attached as Exhibit 2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. A copy of the authorization of the Trustee to exercise corporate
trust powers, included as Exhibit 2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. A copy of the existing bylaws of the Trustee, attached as Exhibit
4. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. A copy of each Indenture referred to in Item 4. Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. The consent of the Trustee required by Section 321(b) of the
Trust Indenture Act of 1939, attached as Exhibit 6.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Report of Condition of the Trustee as of March 31, 2025, published
pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7.

**SIGNATURE**

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Chicago, State of Illinois on the 20th of June, 2025.

---

| | |
|:---|:---|
| By: | /s/ Matthew M. Smith |
|  | Matthew M. Smith |
|  | Vice President |

---

**<u>Exhibit 1</u>**

**ARTICLES OF ASSOCIATION**

**OF**

**U. S. BANK TRUST COMPANY, NATIONAL ASSOCIATION**

For the purpose of organizing an association (the "Association") to perform any lawful activities of national banks, the undersigned enter into the following Articles of Association:

**FIRST.** The title of this Association shall be U. S. Bank Trust Company, National Association.

**SECOND.** The main office of the Association shall be in the city of Portland, county of Multnomah, state of Oregon. The business of the Association will be limited to fiduciary powers and the support of activities incidental to the exercise of those powers. The Association may not expand or alter its business beyond that stated in this article without the prior approval of the Comptroller of the Currency.

**THIRD.** The board of directors of the Association shall consist of not less than five nor more than twenty-five persons, the exact number to be fixed and determined from time to time by resolution of a majority of the full board of directors or by resolution of a majority of the shareholders at any annual or special meeting thereof. Each director shall own common or preferred stock of the Association or of a holding company owning the Association, with an aggregate par, fair market, or equity value of not less than $1,000, as of either (i) the date of purchase, (ii) the date the person became a director, or (iii) the date of that person's most recent election to the board of directors, whichever is more recent. Any combination of common or preferred stock of the Association or holding company may be used.

Any vacancy in the board of directors may be filled by action of a majority of the remaining directors between meetings of shareholders. The board of directors may increase the number of directors up to the maximum permitted by law. Terms of directors, including directors selected to fill vacancies, shall expire at the next regular meeting of shareholders at which directors are elected, unless the directors resign or are removed from office. Despite the expiration of a director's term, the director shall continue to serve until his or her successor is elected and qualified or until there is a decrease in the number of directors and his or her position is eliminated.

Honorary or advisory members of the board of directors, without voting power or power of final decision in matters concerning the business of the Association, may be appointed by resolution of a majority of the full board of directors, or by resolution of shareholders at any annual or special meeting. Honorary or advisory directors shall not be counted to determined the number of directors of the Association or the presence of a quorum in connection with any board action, and shall not be required to own qualifying shares.

**FOURTH.** There shall be an annual meeting of the shareholders to elect directors and transact whatever other business may be brought before the meeting. It shall be held at the main office or any other convenient place the board of directors may designate, on the day of each year specified therefor in the Bylaws, or if that day falls on a legal holiday in the state in which the Association is located, on the next following banking day. If no election is held on the day fixed or in the event of a legal holiday on the following banking day, an election may be held on any subsequent day within 60 days of the day fixed, to be designated by the board of directors, or, if the directors fail to fix the day, by shareholders representing two-thirds of the shares issued and outstanding. In all cases, at least 10 days' advance notice of the meeting shall be given to the shareholders by first-class mail.

In all elections of directors, the number of votes each common shareholder may cast will be determined by multiplying the number of shares he or she owns by the number of directors to be elected. Those votes may be cumulated and cast for a single candidate or may be distributed among two or more candidates in the manner selected by the shareholder. On all other questions, each common shareholder shall be entitled to one vote for each share of stock held by him or her.

A director may resign at any time by delivering written notice to the board of directors, its chairperson, or to the Association, which resignation shall be effective when the notice is delivered unless the notice specifies a later effective date.

A director may be removed by the shareholders at a meeting called to remove him or her, when notice of the meeting stating that the purpose or one of the purposes is to remove him or her is provided, if there is a failure to fulfill one of the affirmative requirements for qualification, or for cause; provided, however, that a director may not be removed if the number of votes sufficient to elect him or her under cumulative voting is voted against his or her removal.

**FIFTH.** The authorized amount of capital stock of the Association shall be 1,000,000 shares of common stock of the par value of ten dollars ($10) each; but said capital stock may be increased or decreased from time to time, according to the provisions of the laws of the United States. The Association shall have only one class of capital stock.

No holder of shares of the capital stock of any class of the Association shall have any preemptive or preferential right of subscription to any shares of any class of stock of the Association, whether now or hereafter authorized, or to any obligations convertible into stock of the Association, issued, or sold, nor any right of subscription to any thereof other than such, if any, as the board of directors, in its discretion, may from time to time determine and at such price as the board of directors may from time to time fix.

Transfers of the Association's stock are subject to the prior written approval of a federal depository institution regulatory agency. If no other agency approval is required, the approval of the Comptroller of the Currency must be obtained prior to any such transfers.

Unless otherwise specified in the Articles of Association or required by law, (1) all matters requiring shareholder action, including amendments to the Articles of Association must be approved by shareholders owning a majority voting interest in the outstanding voting stock, and

(2) each shareholder shall be entitled to one vote per share.

Unless otherwise specified in the Articles of Association or required by law, all shares of voting stock shall be voted together as a class, on any matters requiring shareholder approval.

Unless otherwise provided in the Bylaws, the record date for determining shareholders entitled to notice of and to vote at any meeting is the close of business on the day before the first notice is mailed or otherwise sent to the shareholders, provided that in no event may a record date be more than 70 days before the meeting.

The Association, at any time and from time to time, may authorize and issue debt obligations, whether subordinated, without the approval of the shareholders. Obligations classified as debt, whether subordinated, which may be issued by the Association without the approval of shareholders, do not carry voting rights on any issue, including an increase or decrease in the aggregate number of the securities, or the exchange or reclassification of all or part of securities into securities of another class or series.

**SIXTH.** The board of directors shall appoint one of its members president of this Association and one of its members chairperson of the board and shall have the power to appoint one or more vice presidents, a secretary who shall keep minutes of the directors' and shareholders' meetings and be responsible for authenticating the records of the Association, and such other officers and employees as may be required to transact the business of this Association. A duly appointed officer may appoint one or more officers or assistant officers if authorized by the board of directors in accordance with the Bylaws.

The board of directors shall have the power to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Define the duties of the officers, employees, and agents of the Association.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Delegate the performance of its duties, but not the responsibility for its duties,
to the officers, employees, and agents of the Association.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Fix the compensation and enter employment contracts with its officers and employees
upon reasonable terms and conditions consistent with applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Dismiss officers and employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Require bonds from officers and employees and to fix the penalty thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Ratify written policies authorized by the Association's management or committees
of the board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) Regulate the manner any increase or decrease of the capital of the Association
shall be made; provided that nothing herein shall restrict the power of shareholders to increase or decrease the capital of the Association
in accordance with law, and nothing shall raise or lower from two-thirds the percentage required for shareholder approval to increase
or reduce the capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) Manage and administer the business and affairs of the Association.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) Adopt initial Bylaws, not inconsistent with law or the Articles of Association, for managing the business
and regulating the affairs of the Association.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) Amend or repeal Bylaws, except to the extent that the Articles of Association reserve this power in
whole or in part to the shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) Make contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) Generally perform all acts that are legal for a board of directors to perform.

**SEVENTH.** The board of directors shall have the power to change the location of the main office to any authorized branch within the limits of the city of Portland, Oregon, without the approval of the shareholders, or with a vote of shareholders owning two-thirds of the stock of the Association for a location outside such limits and upon receipt of a certificate of approval from the Comptroller of the Currency, to any other location within or outside the limits of the city of Portland, Oregon, but not more than thirty miles beyond such limits. The board of directors shall have the power to establish or change the location of any office or offices of the Association to any other location permitted under applicable law, without approval of shareholders, subject to approval by the Comptroller of the Currency.

**EIGHTH.** The corporate existence of this Association shall continue until termination according to the laws of the United States.

**NINTH.** The board of directors of the Association, or any shareholder owning, in the aggregate, not less than 25 percent of the stock of the Association, may call a special meeting of shareholders at any time. Unless otherwise provided by the Bylaws or the laws of the United States, or waived by shareholders, a notice of the time, place, and purpose of every annual and special meeting of the shareholders shall be given by first-class mail, postage prepaid, mailed at least 10, and no more than 60, days prior to the date of the meeting to each shareholder of record at his/her address as shown upon the books of the Association. Unless otherwise provided by the Bylaws, any action requiring approval of shareholders must be effected at a duly called annual or special meeting.

**TENTH.** These Articles of Association may be amended at any regular or special meeting of the shareholders by the affirmative vote of the holders of a majority of the stock of the Association, unless the vote of the holders of a greater amount of stock is required by law, and in that case by the vote of the holders of such greater amount; provided, that the scope of the Association's activities and services may not be expanded without the prior written approval of the Comptroller of the Currency. The Association's board of directors may propose one or more amendments to the Articles of Association for submission to the shareholders.

In witness whereof, we have hereunto set our hands this <u>11<sup>th</sup></u> of June, 1997.

---

| |
|:---|
| /s/ Jeffrey T. Grubb |
| Jeffrey T. Grubb |

---

---

| |
|:---|
| /s/ Robert D. Sznewajs |
| Robert D. Sznewajs |
| /s/ Dwight V. Board |
| Dwight V. Board |

---

---

| |
|:---|
| /s/ P.K. Chatterjee |
| P.K. Chatterjee |

---

---

| |
|:---|
| /s/ Robert Lane |
| Robert Lane |

---

**<u>Exhibit 2</u>**

**<u>Exhibit 4</u>**

**U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION**

**<u>AMENDED AND RESTATED BYLAWS</u>**

<u>ARTICLE I</u>

<u>Meetings of Shareholders</u>

Section 1.1. <u>Annual Meeting</u>. The annual meeting of the shareholders, for the election of directors and the transaction of any other proper business, shall be held at a time and place as the Chairman or President may designate. Notice of such meeting shall be given not less than ten (10) days or more than sixty (60) days prior to the date thereof, to each shareholder of the Association, unless the Office of the Comptroller of the Currency (the "OCC") determines that an emergency circumstance exists. In accordance with applicable law, the sole shareholder of the Association is permitted to waive notice of the meeting. If, for any reason, an election of directors is not made on the designated day, the election shall be held on some subsequent day, as soon thereafter as practicable, with prior notice thereof. Failure to hold an annual meeting as required by these Bylaws shall not affect the validity of any corporate action or work a forfeiture or dissolution of the Association.

Section 1.2. <u>Special Meetings</u>. Except as otherwise specially provided by law, special meetings of the shareholders may be called for any purpose, at any time by a majority of the board of directors (the "Board"), or by any shareholder or group of shareholders owning at least ten percent of the outstanding stock.

Every such special meeting, unless otherwise provided by law, shall be called upon not less than ten (10) days nor more than sixty (60) days prior notice stating the purpose of the meeting.

Section 1.3. <u>Nominations for Directors</u>. Nominations for election to the Board may be made by the Board or by any shareholder.

Section 1.4. <u>Proxies</u>. Shareholders may vote at any meeting of the shareholders by proxies duly authorized in writing. Proxies shall be valid only for one meeting and any adjournments of such meeting and shall be filed with the records of the meeting.

Section 1.5. <u>Record Date</u>. The record date for determining shareholders entitled to notice and to vote at any meeting will be thirty days before the date of such meeting, unless otherwise determined by the Board.

Section 1.6. <u>Quorum and Voting</u>. A majority of the outstanding capital stock, represented in person or by proxy, shall constitute a quorum at any

meeting of shareholders, unless otherwise provided by law, but less than a quorum may adjourn any meeting, from time to time, and the meeting may be held as adjourned without further notice. A majority of the votes cast shall decide every question or matter submitted to the shareholders at any meeting, unless otherwise provided by law or by the Articles of Association.

Section 1.7. <u>Inspectors</u>. The Board may, and in the event of its failure so to do, the Chairman of the Board may appoint Inspectors of Election who shall determine the presence of quorum, the validity of proxies, and the results of all elections and all other matters voted upon by shareholders at all annual and special meetings of shareholders.

Section 1.8. <u>Waiver and Consent</u>. The shareholders may act without notice or a meeting by a unanimous written consent by all shareholders.

Section 1.9. <u>Remote Meetings</u>. The Board shall have the right to determine that a shareholder meeting not be held at a place, but instead be held solely by means of remote communication in the manner and to the extent permitted by the General Corporation Law of the State of Delaware.

<u>ARTICLE II</u>

<u>Directors</u>

Section 2.1. <u>Board of Directors</u>. The Board shall have the power to manage and administer the business and affairs of the Association. Except as expressly limited by law, all corporate powers of the Association shall be vested in and may be exercised by the Board.

Section 2.2. <u>Term of Office</u>. The directors of this Association shall hold office for one year and until their successors are duly elected and qualified, or until their earlier resignation or removal.

Section 2.3. <u>Powers</u>. In addition to the foregoing, the Board shall have and may exercise all of the powers granted to or conferred upon it by the Articles of Association, the Bylaws and by law.

Section 2.4. <u>Number</u>. As provided in the Articles of Association, the Board of this Association shall consist of no less than five nor more than twenty-five members, unless the OCC has exempted the Association from the twenty-five- member limit. The Board shall consist of a number of members to be fixed and determined from time to time by resolution of the Board or the shareholders at any meeting thereof, in accordance with the Articles of Association. Between meetings of the shareholders held for the purpose of electing directors, the Board by a majority vote of the full Board may increase the size of the Board but not to more than a total of twenty-five directors, and fill any vacancy so created in the Board; provided that the Board may increase the number of directors only by up to two directors, when the number of directors last elected by shareholders was fifteen or fewer, and by up to four directors, when the number of directors last elected by shareholders was sixteen or more. Each director shall own a qualifying equity interest in the Association or a company that has control of the Association in each case as required by applicable law. Each director shall own such qualifying equity interest in his or her own right and meet any minimum threshold ownership required by applicable law.

Section 2.5. <u>Organization Meeting</u>. The newly elected Board shall meet for the purpose of organizing the new Board and electing and appointing such officers of the Association as may be appropriate. Such meeting shall be held on the day of the election or as soon thereafter as practicable, and, in any event, within thirty days thereafter, at such time and place as the Chairman or President may designate. If, at the time fixed for such meeting, there shall not be a quorum present, the directors present may adjourn the meeting until a quorum is obtained.

Section 2.6. <u>Regular Meetings</u>. The regular meetings of the Board shall be held, without notice, as the Chairman or President may designate and deem suitable.

Section 2.7. <u>Special Meetings</u>. Special meetings of the Board may be called at any time, at any place and for any purpose by the Chairman of the Board or the President of the Association, or upon the request of a majority of the entire Board. Notice of every special meeting of the Board shall be given to the directors at their usual places of business, or at such other addresses as shall have been furnished by them for the purpose. Such notice shall be given at least twelve hours (three hours if meeting is to be conducted by conference telephone) before the meeting by telephone or by being personally delivered, mailed, or electronically delivered. Such notice need not include a statement of the business to be transacted at, or the purpose of, any such meeting.

Section 2.8. <u>Quorum and Necessary Vote</u>. A majority of the directors shall constitute a quorum at any meeting of the Board, except when otherwise provided by law; but less than a quorum may adjourn any meeting, from time to time, and the meeting may be held as adjourned without further notice. Unless otherwise provided by law or the Articles or Bylaws of this Association, once a quorum is established, any act by a majority of those directors present and voting shall be the act of the Board.

Section 2.9. <u>Written Consent</u>. Except as otherwise required by applicable laws and regulations, the Board may act without a meeting by a unanimous written consent by all directors, to be filed with the Secretary of the Association as part of the corporate records.

Section 2.10. <u>Remote Meetings</u>. Members of the Board, or of any committee thereof, may participate in a meeting of such Board or committee by means of conference telephone, video or similar communications equipment by means of which all persons participating in the meeting can hear each other and such participation shall constitute presence in person at such meeting.

Section 2.11. <u>Vacancies</u>. When any vacancy occurs among the directors, the remaining members of the Board may appoint a director to fill such vacancy at any regular meeting of the Board, or at a special meeting called for that purpose.

<u>ARTICLE III</u>

<u>Committees</u>

Section 3.1. <u>Advisory Board of Directors</u>. The Board may appoint persons, who need not be directors, to serve as advisory directors on an advisory board of directors established with respect to the business affairs of either this Association alone or the business affairs of a group of affiliated organizations of which this Association is one. Advisory directors shall have such powers and duties as may be determined by the Board, provided, that the Board's responsibility for the business and affairs of this Association shall in no respect be delegated or diminished.

Section 3.2. <u>Trust Audit Committee</u>. At least once during each calendar year, the Association shall arrange for a suitable audit (by internal or external auditors) of all significant fiduciary activities under the direction of its trust audit committee, a function that will be fulfilled by the Audit Committee of the financial holding company that is the ultimate parent of this Association. The Association shall note the results of the audit (including significant actions taken as a result of the audit) in the minutes of the Board. In lieu of annual audits, the Association may adopt a continuous audit system in accordance with 12 C.F.R. § 9.9(b).

The Audit Committee of the financial holding company that is the ultimate parent of this Association, fulfilling the function of the trust audit committee:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Must not include any officers of the Association or an affiliate who participate significantly in the administration of the Association's fiduciary activities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Must consist of a majority of members who are not also members of any committee to which the Board has delegated power to manage and control the fiduciary activities of the Association.

Section 3.3. <u>Executive Committee</u>. The Board may appoint an Executive Committee which shall consist of at least three directors and which shall have, and may exercise, to the extent permitted by applicable law, all the powers of the Board between meetings of the Board or otherwise when the Board is not meeting.

Section 3.4. <u>Trust Management Committee</u>. The Board of this Association shall appoint a Trust Management Committee to provide oversight of the fiduciary activities of the Association. The Trust Management Committee shall determine policies governing fiduciary activities. The Trust Management Committee or such sub-committees, officers or others as may be duly designated by the Trust Management Committee shall oversee the processes related to fiduciary activities to assure conformity with fiduciary policies it establishes, including ratifying the acceptance and the closing out or relinquishment of all trusts. The Trust Management Committee will provide regular reports of its activities to the Board.

Section 3.5. <u>Other Committees</u>. The Board may appoint, from time to time, committees of one or more persons who need not be directors, for such purposes and with such powers as the Board may determine; however, the Board will not delegate to any committee any powers or responsibilities that it is prohibited from delegating under any law or regulation. In addition, either the Chairman or the President may appoint, from time to time, committees of one or more officers, employees, agents or other persons, for such purposes and with such powers as either the Chairman or the President deems appropriate and proper. Whether appointed by the Board, the Chairman, or the President, any such committee shall at all times be subject to the direction and control of the Board.

Section 3.6. <u>Meetings, Minutes and Rules</u>. An advisory board of directors and/or committee shall meet as necessary in consideration of the purpose of the advisory board of directors or committee, and shall maintain minutes in sufficient detail to indicate actions taken or recommendations made; unless required by the members, discussions, votes or other specific details need not be reported. An advisory board of directors or a committee may, in consideration of its purpose, adopt its own rules for the exercise of any of its functions or authority.

<u>ARTICLE IV</u>

<u>Officers</u>

Section 4.1. <u>Chairman of the Board</u>. The Board may appoint one of its members to be Chairman of the Board to serve at the pleasure of the Board. The Chairman shall supervise the carrying out of the policies adopted or approved by the Board; shall have general executive powers, as well as the specific powers conferred by these Bylaws; and shall also have and may exercise such powers and duties as from time to time may be conferred upon or assigned by the Board.

Section 4.2. <u>President</u>. The Board may appoint one of its members to be President of the Association. In the absence of the Chairman, the President shall preside at any meeting of the Board. The President shall have general executive powers, and shall have and may exercise any and all other powers and duties pertaining by law, regulation or practice, to the office of President, or imposed by these Bylaws. The President shall also have and may exercise such powers and duties as from time to time may be conferred or assigned by the Board.

Section 4.3. <u>Vice President</u>. The Board may appoint one or more Vice Presidents who shall have such powers and duties as may be assigned by the Board and to perform the duties of the President on those occasions when the President is absent, including presiding at any meeting of the Board in the absence of both the Chairman and President.

Section 4.4. <u>Secretary</u>. The Board shall appoint a Secretary, or other designated officer who shall be Secretary of the Board and of the Association, and shall keep accurate minutes of all meetings. The Secretary shall attend to the giving of all notices required by these Bylaws to be given; shall be custodian of the corporate seal, records, documents and papers of the Association; shall provide for the keeping of proper records of all transactions of the Association; shall, upon request, authenticate any records of the Association; shall have and may exercise any and all other powers and duties pertaining by law, regulation or practice, to the Secretary, or imposed by these Bylaws; and shall also perform such other duties as may be assigned from time to time by the Board. The Board may appoint one or more Assistant Secretaries with such powers and duties as the Board, the President or the Secretary shall from time to time determine.

Section 4.5. <u>Other Officers</u>. The Board may appoint, and may authorize the Chairman, the President or any other officer to appoint, any officer as from time to time may appear to the Board, the Chairman, the President or such other officer to be required or desirable to transact the business of the Association. Such officers shall exercise such powers and perform such duties as pertain to their several offices, or as may be conferred upon or assigned to them by these Bylaws, the Board, the Chairman, the President or such other authorized officer. Any person may hold two offices.

Section 4.6. <u>Tenure of Office</u>. The Chairman or the President and all other officers shall hold office until their respective successors are elected and qualified or until their earlier death, resignation, retirement, disqualification or removal from office, subject to the right of the Board or authorized officer to discharge any officer at any time.

<u>ARTICLE V</u>

<u>Stock</u>

Section 5.1. The Board may authorize the issuance of stock either in certificated or in uncertificated form. Certificates for shares of stock shall be in such form as the Board may from time to time prescribe. If the Board issues certificated stock, the certificate shall be signed by the President, Secretary or any other such officer as the Board so determines. Shares of stock shall be transferable on the books of the Association, and a transfer book shall be kept in which all transfers of stock shall be recorded. Every person becoming a shareholder by such transfer shall, in proportion to such person's shares, succeed to all rights of the prior holder of such shares. Each certificate of stock shall recite on its face that the stock represented thereby is transferable only upon the books of the Association properly endorsed. The Board may impose conditions upon the transfer of the stock reasonably calculated to simplify the work of the Association for stock transfers, voting at shareholder meetings, and related matters, and to protect it against fraudulent transfers.

<u>ARTICLE VI</u>

<u>Corporate Seal</u>

Section 6.1. The Association shall have no corporate seal; provided, however, that if the use of a seal is required by, or is otherwise convenient or advisable pursuant to, the laws or regulations of any jurisdiction, the following seal may be used, and the Chairman, the President, the Secretary and any Assistant Secretary shall have the authority to affix such seal:

<u>ARTICLE VII</u>

<u>Miscellaneous Provisions</u>

Section 7.1. <u>Execution of Instruments</u>. All agreements, checks, drafts, orders, indentures, notes, mortgages, deeds, conveyances, transfers, endorsements, assignments, certificates, declarations, receipts, discharges, releases, satisfactions, settlements, petitions, schedules, accounts, affidavits, bonds, undertakings, guarantees, proxies and other instruments or documents may be signed, countersigned, executed, acknowledged, endorsed, verified, delivered or accepted on behalf of the Association, whether in a fiduciary capacity or otherwise, by any officer of the Association, or such employee or agent as may be designated from time to time by the Board by resolution, or by the Chairman or the President by written instrument, which resolution or instrument shall be certified as in effect by the Secretary or an Assistant Secretary of the Association. The provisions of this section are supplementary to any other provision of the Articles of Association or Bylaws.

Section 7.2. <u>Records</u>. The Articles of Association, the Bylaws as revised or amended from time to time and the proceedings of all meetings of the shareholders, the Board, and standing committees of the Board, shall be recorded in appropriate minute books provided for the purpose. The minutes of each meeting shall be signed by the Secretary, or other officer appointed to act as Secretary of the meeting.

Section 7.3. <u>Trust Files</u>. There shall be maintained in the Association files all fiduciary records necessary to assure that its fiduciary responsibilities have been properly undertaken and discharged.

Section 7.4. <u>Trust Investments</u>. Funds held in a fiduciary capacity shall be invested according to the instrument establishing the fiduciary relationship and according to law. Where such instrument does not specify the character and class of investments to be made and does not vest in the Association a discretion in the matter, funds held pursuant to such instrument shall be invested in investments in which corporate fiduciaries may invest under law.

Section 7.5. <u>Notice</u>. Whenever notice is required by the Articles of Association, the Bylaws or law, such notice shall be by mail, postage prepaid, e- mail, in person, or by any other means by which such notice can reasonably be expected to be received, using the address of the person to receive such notice, or such other personal data, as may appear on the records of the Association. Except where specified otherwise in these Bylaws, prior notice shall be proper if given not more than 30 days nor less than 10 days prior to the event for which notice is given.

<u>ARTICLE VIII</u>

<u>Indemnification</u>

Section 8.1. The Association shall indemnify such persons for such liabilities in such manner under such circumstances and to such extent as permitted by Section 145 of the Delaware General Corporation Law, as now enacted or hereafter amended. The Board may authorize the purchase and maintenance of insurance and/or the execution of individual agreements for the purpose of such indemnification, and the Association shall advance all reasonable costs and expenses (including attorneys' fees) incurred in defending any action, suit or proceeding to all persons entitled to indemnification under this Section 8.1. Such insurance shall be consistent with the requirements of 12 C.F.R. § 7.2014 and shall exclude coverage of liability for a formal order assessing civil money penalties against an institution-affiliated party, as defined at 12 U.S.C. § 1813(u).

Section 8.2. Notwithstanding Section 8.1, however, (a) any indemnification payments to an institution-affiliated party, as defined at 12 U.S.C. § 1813(u), for an administrative proceeding or civil action initiated by a federal banking agency, shall be reasonable and consistent with the requirements of 12 U.S.C. § 1828(k) and the implementing regulations thereunder; and (b) any indemnification payments and advancement of costs and expenses to an institution-affiliated party, as defined at 12 U.S.C. § 1813(u), in cases involving an administrative proceeding or civil action not initiated by a federal banking agency, shall be in accordance with Delaware General Corporation Law and consistent with safe and sound banking practices.

<u>ARTICLE IX</u>

<u>Bylaws: Interpretation and Amendment</u>

Section 9.1. These Bylaws shall be interpreted in accordance with and subject to appropriate provisions of law, and may be added to, altered, amended, or repealed, at any regular or special meeting of the Board.

Section 9.2. A copy of the Bylaws and all amendments shall at all times be kept in a convenient place at the principal office of the Association, and shall be open for inspection to all shareholders during Association hours.

<u>ARTICLE X</u>

<u>Miscellaneous Provisions</u>

Section 10.1. <u>Fiscal Year</u>. The fiscal year of the Association shall begin on the first day of January in each year and shall end on the thirty-first day of December following.

Section 10.2. <u>Governing Law</u>. This Association designates the Delaware General Corporation Law, as amended from time to time, as the governing law for its corporate governance procedures, to the extent not inconsistent with Federal banking statutes and regulations or bank safety and soundness.

\*\*\*

(February 8, 2021)

**<u>Exhibit 6</u>**

**CONSENT**

In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor.

Dated: June 20, 2025

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| | |
|:---|:---|
| By: | /s/ Matthew M. Smith |
|  | Matthew M. Smith |
|  | Vice President |

---

**<u>Exhibit 7</u>**

**U.S. Bank Trust Company, National Association**

**Statement of Financial Condition**

**as of 3/31/2025**

**($000's)** 

---

| | |
|:---|:---|
|  | **3/31/2025** |
| **Assets** |  |
| &nbsp;&nbsp;&nbsp;Cash and Balances Due From Depository Institutions | $1748785 |
| &nbsp;&nbsp;&nbsp; Securities | 4557 |
| &nbsp;&nbsp;&nbsp;Federal Funds | 0 |
| &nbsp;&nbsp;&nbsp;Loans & Lease Financing Receivables | 0 |
| &nbsp;&nbsp;&nbsp;Fixed Assets | 896 |
| &nbsp;&nbsp;&nbsp;Intangible Assets | 575665 |
| &nbsp;&nbsp;&nbsp;Other Assets | 156612 |
| &nbsp;&nbsp;&nbsp;**Total Assets** | $**2486515** |
| **Liabilities** |  |
| &nbsp;&nbsp;&nbsp;Deposits | $0 |
| &nbsp;&nbsp;&nbsp;Fed Funds | 0 |
| &nbsp;&nbsp;&nbsp;Treasury Demand Notes | 0 |
| &nbsp;&nbsp;&nbsp;Trading Liabilities | 0 |
| &nbsp;&nbsp;&nbsp;Other Borrowed Money | 0 |
| &nbsp;&nbsp;&nbsp;Acceptances | 0 |
| &nbsp;&nbsp;&nbsp;Subordinated Notes and Debentures | 0 |
| &nbsp;&nbsp;&nbsp;Other Liabilities | 222718 |
| &nbsp;&nbsp;&nbsp;**Total Liabilities** | $**222718** |
| **Equity** |  |
| &nbsp;&nbsp;&nbsp;Common and Preferred Stock | 200 |
| &nbsp;&nbsp;&nbsp;Surplus | 1171635 |
| &nbsp;&nbsp;&nbsp;Undivided Profits | 1091962 |
| &nbsp;&nbsp;&nbsp;Minority Interest in Subsidiaries | 0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Equity Capital** | $**2263797** |
| **Total Liabilities and Equity Capital** | $**2486515** |

---

****<br>

## Exhibit 99.1

**Exhibit 99.1**

**DOCKET NO. 57559**

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| | | |
|:---|:---|:---|
| **APPLICATION OF CENTERPOINT** | **§** | **PUBLIC UTILITY COMMISSION** |
| **ENERGY HOUSTON ELECTRIC, LLC** | **§** |  |
| **FOR A FINANCING ORDER FOR** | **§** | **OF TEXAS** |
| **SYSTEM RESTORATION COSTS** | **§** |  |
| **ASSOCIATED WITH MAY 2024** | **§** |  |
| **EMERGENCY OPERATIONS PLAN** | **§** |  |
| **STORMS** | **§** |  |

---

**FINANCING ORDER**

This Financing Order addresses the application of CenterPoint Energy Houston Electric, LLC (CenterPoint Houston) under PURA<sup>1</sup> chapter 36, subchapter I<sup>2</sup> and chapter 39 subchapter G.<sup>3</sup> In its application, CenterPoint Houston seeks the following: (1) authorization of the issuance of system restoration bonds<sup>4</sup> to securitize the system restoration costs and carrying costs approved by the Commission in Docket No. 57271,<sup>5</sup> net of any insurance proceeds, government grants, and other sources of funding that have been received by CenterPoint Houston that compensate CenterPoint Houston for system restoration costs at the time of the application for this Financing Order (the securitizable balance); (2) to securitize certain other qualified costs incurred in connection with such securitization as further defined and described below; (3) approval of the proposed securitization financing structure; (4) approval of system restoration charges sufficient to recover the principal and interest on the system restoration bonds and to recover the ongoing qualified costs of supporting and servicing the system restoration bonds; (5) approval of the tariff to implement the system restoration charges; and (6) approval of the tariff to implement the accumulated deferred federal income tax credit (ADFIT Credit).

<sup>1</sup> Public Utility Regulatory Act, Tex. Util. Code §§ 11.001–66.016.

<sup>2</sup> PURA §§ 36.401–.406.

<sup>3</sup> PURA §§ 39.301–.313.

<sup>4</sup> Under PURA § 36.403(e), "transition bonds" issued to securitize system restoration costs may be called "system restoration bonds."

<sup>5</sup> *Application of CenterPoint Energy Houston Electric, LLC For Determination of System Restoration Costs*, Docket No. 57271, Order (Apr. 24, 2025).

---

| | | |
|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 1 of 82** |

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On November 8, 2024, CenterPoint Houston filed an application in Docket No. 57271 under PURA § 36.405 to quantify the reasonable and necessary system restoration costs incurred in connection with two storm events taking place in May 2024: a 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 in the Houston area on May 28, 2024 (collectively, the Storms). As discussed in this Financing Order, the Commission finds that CenterPoint Houston should be authorized to securitize and to cause the issuance of system restoration bonds in accordance with this Financing Order. The Commission also finds that the securitization approved in this Financing Order meets all applicable requirements of PURA.

In this Financing Order, the Commission approves the securitization of the sum of the Securitizable Balance plus up-front qualified costs as described in Ordering Paragraphs 1 and 16. The Commission also approves the structure of the proposed securitization financing and issuance of system restoration bonds in one or more series and approves system restoration charges in an amount to be calculated as provided in this Financing Order. The Commission further approves the form tariff to implement the system restoration charges and the form tariff to implement the ADFIT Credit. Finally, the Commission finds that the potential benefits of: (1) floating-rate system restoration bonds and interest-rate swaps within the securitization financing structure, (2) the issuance of system restoration bonds denominated in foreign currencies, and (3) the use of interest-rate hedges will not outweigh the incremental risk to customers. Therefore, the Commission concludes that floating-rate system restoration bonds and interest-rate swaps should not be utilized within the securitization financing structure and that CenterPoint Houston should not be authorized to issue system restoration bonds denominated in a foreign currency or use interest-rate hedges.

To approve the securitization of the system restoration costs, the Commission must consider whether the proposed securitization meets the financial tests set forth in PURA chapter 36, subchapter I and chapter 39, subchapter G. The three financial tests require that: (1) the total revenues collected under this Financing Order are less than the revenues collected using conventional financing methods (the total-revenues test),<sup>6</sup> (2) the securitization of the system restoration costs provides greater tangible and quantifiable benefits to ratepayers<sup>7</sup> than would have been achieved without the issuance of the system restoration bonds (the tangible-and-quantifiable-benefits test),<sup>8</sup> and (3) the amount securitized does not exceed the present value of the revenue requirement over the life of the proposed system restoration bonds associated with the system restoration costs sought to be securitized (the present-value test).<sup>9</sup>

<sup>6</sup> PURA § 39.303(a).

<sup>7</sup> The term "customer" used throughout this financing order will encompass the term "ratepayer" as it is used throughout PURA §§ 36.401–.406 and §§ 39.301–.313.

<sup>8</sup> PURA §§ 39.301 and 36.401(b)(2).

<sup>9</sup> PURA § 39.301.

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| **Docket No. 57559** | **Financing Order** | **Page 2 of 82** |

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CenterPoint Houston submitted evidence demonstrating that the proposed securitization will meet each of the financial tests set forth in PURA chapter 36, subchapter I and PURA chapter 39, subchapter G. All of the calculations performed by CenterPoint Houston demonstrated that the transaction would pass these tests. Considering the margin by which the proposed securitization passes the various tests, the Commission declines to determine a particular number for each benefit conferred by the proposed securitization. Accordingly, in quantifying the benefit to customers as a result of this securitization, the Commission refers to the ranges of benefits calculated under CenterPoint Houston's expected-case scenario, in which the system restoration bonds bear a 4.90% weighted-average interest rate, and a sensitivity case-scenario, in which the system restoration bonds are subject to a 7.24% weighted-average interest rate.

CenterPoint Houston's evidence showed that, as a result of the securitization approved by this Financing Order, retail customers served at distribution voltage in CenterPoint Houston's service area (customers) will realize benefits. Based on the amount that CenterPoint Houston seeks to securitize, CenterPoint Houston's financial analysis indicated that, for the tangible-and-quantifiable-benefits test, such customers will realize benefits estimated to be $85,000 on a present-value basis in the sensitivity-case scenario. At the expected weighted-average interest rate of 4.90%, securitization confers benefits of $63 million on a present-value basis. In addition, under the sensitivity-case scenario, the securitization will result in a reduction in the amount of revenues collected by CenterPoint Houston of $76,000, on a nominal basis, when compared to the amount that would have been collected under the conventional financing methods that would otherwise be used to recover the system restoration costs. In the expected case, the securitization will result in a reduction in the amount of revenues collected by CenterPoint Houston of $88 million, on a nominal basis. Finally, under the present-value test, the present value of the amount CenterPoint Houston initially sought to securitize—$408.5 million in the expected case and $407.5 million in the 7.24% sensitivity case—does not exceed the present value of the revenue requirements using conventional financing. Accordingly, the Commission concludes that the benefits for customers set forth in CenterPoint Houston's evidence are fully indicative of the benefits that customers will realize from the securitization approved here. In the issuance advice letter, CenterPoint Houston will be required to update the benefit analyses to verify that the final structure of the securitization satisfies the statutory financial tests.

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| **Docket No. 57559** | **Financing Order** | **Page 3 of 82** |

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CenterPoint Houston provided a general description of the proposed securitization transaction structure in its application and in the testimony and exhibits submitted in support of its application. The proposed securitization transaction structure does not contain every relevant detail and, in certain places, uses only approximations of certain costs and requirements. The final securitization transaction structure will depend, in part, upon the requirements of the nationally-recognized credit rating agencies that will rate the system restoration bonds and, in part, upon the market conditions that exist at the time the system restoration bonds are taken to the market.

While the Commission recognizes the need for some degree of flexibility with regard to the final details of the securitization transaction approved in this Financing Order, its primary focus is upon the statutory requirements—the most important of which is to ensure that securitization results in tangible and quantifiable benefits to customers—that must be met before issuing a financing order.

In view of these obligations, the Commission has established certain criteria in this Financing Order that must be met in order for the approvals and authorizations granted in this Financing Order to become effective. This Financing Order grants authority to issue system restoration bonds and to impose, collect, and receive system restoration charges only if the final structure of the securitization transaction complies in all material respects with these criteria. The authority and approval granted in this Financing Order is effective only upon CenterPoint Houston filing with the Commission an issuance advice letter demonstrating compliance of that issuance with the provisions of this Financing Order. If market conditions make it desirable to issue the system restoration bonds in more than one series, then the authority and approval in this Financing Order is effective as to each issuance, but only upon CenterPoint Houston filing with the Commission a separate issuance advice letter for that issuance demonstrating compliance with the provisions of this Financing Order.

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| **Docket No. 57559** | **Financing Order** | **Page 4 of 82** |

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**I. Discussion and Statutory Overview**

The Texas Legislature amended PURA in 2009 to permit electric utilities to use securitization financing to recover costs of restoring service and infrastructure associated with electric power outages as a result of hurricanes and other weather-related events or natural disasters that occurred in 2008 or later.<sup>10</sup> The Legislature provided this option for recovering qualified costs based on the conclusion that securitization financing will lower the carrying costs associated with recovery of these costs relative to the costs that would be incurred using conventional utility financing methods.<sup>11</sup> As a precondition to the use of securitization, the Legislature required that the Commission must ensure that the securitization will provide greater tangible and quantifiable benefits to customers than would have been achieved without the issuance of the system restoration bonds.<sup>12</sup> Consequently, a basic purpose of securitization financing—the recovery of an electric utility's qualified costs—is conditioned upon the other basic purpose—providing economic benefits to consumers of electricity in this state. The provisions for securitization of system restoration costs were based on and incorporate relevant terms of the provisions in chapter 39, subchapter G of PURA for securitization of transition costs adopted by the Texas Legislature in 1999, which have been used by CenterPoint Houston and other electric utilities to reduce the costs of recovering costs associated with the transition to competition.<sup>13</sup>

Under chapter 36, subchapter I of PURA, the qualified costs eligible for securitization by CenterPoint Houston include: (1) the system restoration costs determined by the Commission in 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 this Financing Order, with carrying costs on the unrecovered balance at CenterPoint Houston's weighted average cost of capital as approved in its last rate case; (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 Commission 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 transition bonds.<sup>14</sup> Chapter 36, subchapter I of PURA also expressly provides: (1) that the term *transition bonds*, as defined and used in chapter 39, subchapter G of PURA, includes bonds issued under chapter 36 (i.e. system restoration bonds),<sup>15</sup> (2) that the term transition charges, as defined and used in subchapter G, includes all non-bypassable amounts approved by the Commission under a financing order to recover system restoration costs (i.e. system restoration charges),<sup>16</sup> (3) the term financing order as defined and used in chapter 39, subchapter G of PURA, includes a financing order authorizing the securitization of system restoration costs, and (4) that the provisions of chapter 39, subchapter G of PURA (i.e., the provisions with respect to the issuances of system restoration bonds, the imposition of system restoration charges, and the creation of transition property (system restoration property))<sup>17</sup> must govern financing orders allowing for securitization of system restoration costs and all rights and interests established in such order, except to the extent that such provisions conflict with the provisions of PURA chapter 36, subchapter I, in which case the latter provisions must control.<sup>18</sup>

<sup>10</sup> PURA § 36.401(a).

<sup>11</sup> *Id*.

<sup>12</sup> PURA § 36.401(b)(2).

<sup>13</sup> *See, e.g., Application of CenterPoint Energy Houston Electric, LLC for Financing Order,* Docket No. 30485, Financing Order (Mar. 16, 2005); *Application of AEP Texas Central Company for a Financing Order,* Docket No. 32475, Financing Order (June 21, 2006); *Application of CenterPoint Energy Houston Electric, LLC for Financing Order,* Docket No. 34448, Financing Order (Sept. 18, 2007); *Application of AEP Texas Inc. for a Financing Order,* Docket No. 49308, Financing Order (June 17, 2019); *Application of Entergy Texas, Inc for a Financing Order;* Docket No. 52302, Order (Jan. 14, 2022).

<sup>14</sup> PURA § 36.403(d).

<sup>15</sup> PURA § 36.403(c).

<sup>16</sup> PURA § 36.403(f).

<sup>17</sup> The term "system restoration property" used throughout this financing order will have the full effect as "transition property" as defined under PURA § 39.302(8) and used throughout PURA §§ 36.401–.406.

<sup>18</sup> PURA § 36.403(b).

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| **Docket No. 57559** | **Financing Order** | **Page 5 of 82** |

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To allow for securitization of an electric utility's qualified costs associated with system restoration costs, the Commission may authorize the issuance of system restoration bonds. System restoration bonds are generally defined as evidences of indebtedness or ownership that are issued under a financing order, are limited to a term of not longer than 15 years, and are secured by or payable from system restoration property, which includes all rights and interests of an electric utility under a financing order at the time such rights are transferred to an assignee or pledged in connection with the issuance of system restoration bonds.<sup>19</sup> The net proceeds from the sale of system restoration bonds must be used to reduce the amount of a utility's recoverable system restoration costs.<sup>20</sup> If system restoration bonds are approved and issued, retail electric customers must pay the principal, interest, and related charges of the system restoration bonds through system restoration charges.<sup>21</sup> System restoration charges are non-bypassable charges that will be paid as a component of the monthly charge for electric service.<sup>22</sup> System restoration charges must be approved by the Commission under a financing order.<sup>23</sup>

The Commission may adopt a financing order only if it finds that the total amount of revenues to be collected under the financing order is less than the revenue requirement that would be recovered using conventional financing methods and that the financing order is in accordance with the standards of PURA §§ 36.401 and 39.301.<sup>24</sup> The Commission must ensure that the net proceeds of system restoration bonds may be used only for the purpose of reducing the amount of recoverable system restoration costs.<sup>25</sup> In addition, the Commission must ensure that: (1) securitization provides tangible and quantifiable benefits to customers greater than would have been achieved absent the issuance of the system restoration bonds,<sup>26</sup> and (2) the structuring and pricing of the system restoration bonds result in the lowest system-restoration-bond charges in compliance with market conditions and the terms of a financing order.<sup>27</sup> Finally, the amount securitized may not exceed the present value of the revenue requirement over the life of the proposed system restoration bonds associated with the amounts sought to be securitized, and the present value calculation must use a discount rate equal to the proposed interest rate on the system restoration bonds.<sup>28</sup> All of these statutory requirements are designed to ensure that securitization will provide real benefits to retail customers.

<sup>19</sup> *See* PURA § 39.302(6) and 39.304.

<sup>20</sup> *See* PURA § 36.401(a).

<sup>21</sup> *See* PURA § 36.403(f).

<sup>22</sup> *Id*.

<sup>23</sup> *See* PURA § 39.302(7).

<sup>24</sup> *See* PURA §§ 36.402(a) through (c) and 36.403(d).

<sup>25</sup> *See* PURA § 36.401(a).

<sup>26</sup> *See* PURA § 36.401(b)(2).

<sup>27</sup> *See* PURA § 39.301.

<sup>28</sup> *Id*.

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| **Docket No. 57559** | **Financing Order** | **Page 6 of 82** |

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The essential finding by the Commission that is needed to issue a financing order is that customers will receive tangible and quantifiable benefits as a result of securitization. This finding can only be made upon a showing of economic benefits to customers through an economic analysis. An economic analysis is necessary to recognize the time value of money in evaluating whether and the extent to which benefits accrue from securitization. Moreover, an economic analysis recognizes the concept that the timing of a payment can be as important as the magnitude of a payment in determining the value of the payment. Thus, an analysis showing an economic benefit is necessary to quantify a tangible benefit to customers.

Economic benefits also depend upon a favorable financial market—one in which system restoration bonds may be sold at an interest rate lower than the carrying costs of the assets being securitized. The precise interest rate at which system restoration bonds can be sold in a future market, however, is not known today. Nevertheless, benefits can be calculated based upon certain known facts (e.g., the amount of system restoration costs to be securitized and the cost of the alternative to securitization) and assumptions (e.g., the interest rate of the system restoration bonds, the term of the system restoration bonds, and the amount of other qualified costs). By analyzing the proposed securitization based upon those facts and assumptions, a determination can be made as to whether tangible and quantifiable benefits result. To ensure that benefits are realized, the securitization transaction must conform to the structure ordered by the Commission and an issuance advice letter must be presented to the Commission immediately before issuance of the system restoration bonds demonstrating that the actual structure and costs of the system restoration bonds will provide tangible and quantifiable benefits. The cost-benefit analysis contained in the issuance advice letter must reflect the actual structure of the system restoration bonds.

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| **Docket No. 57559** | **Financing Order** | **Page 7 of 82** |

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CenterPoint Houston's financial analysis shows that securitizing the Securitizable Balance along with CenterPoint Houston's other qualified costs in the manner provided by this Financing Order will produce an economic benefit to customers of $63 million on a present value basis using the expected weighted-average interest rate of 4.90%. A benefit of $85,000 will result even if the bond market is less favorable than current market conditions and system restoration bonds have to be issued at the sensitivity-case weighted-average interest rate of 7.24%.<sup>29</sup> The economic benefit to customers will be larger if a more favorable market allows the system restoration bonds to be issued at a lower interest rate. In the issuance advice letter, CenterPoint Houston will be required to update the benefit analyses to verify that the final system restoration bond structure and pricing satisfies the statutory financial tests.

To issue a financing order, PURA also requires that the Commission find that the total amount of revenues collected under the financing order will be less than would otherwise have been collected under conventional financing methods.<sup>30</sup> In this proceeding, CenterPoint Houston's financial analysis of the amount sought to be securitized under sensitivity-case market conditions, in which the system restoration bonds bear a 7.24% weighted average interest rate, demonstrates that revenues will be reduced by $76,000 on a nominal basis under this Financing Order compared to the amount that would be recovered under conventional financing methods. Under the base-case scenario in which the system restoration bonds are issued at a 4.90% weighted average annual interest rate, securitization saves customers $88 million in nominal revenue.<sup>31</sup> If system restoration bonds are issued in a more favorable market, this reduction in revenues will be larger.

Before the system restoration bonds may be issued, CenterPoint Houston must submit to the Commission an issuance advice letter in which it demonstrates, based upon the actual market conditions at the time of pricing, that the proposed structure and pricing of the system restoration bonds will provide real economic benefits to customers and comply with the statutory financial tests and terms of this Financing Order. As part of this submission, CenterPoint Houston must also certify to the Commission that the structure and pricing of the system restoration bonds result in the lowest system-restoration-bond charges in compliance with market conditions at the time of pricing and the terms of this Financing Order. The form of certification that must be submitted by CenterPoint Houston is set out in appendix A to this Financing Order. The Commission, by order, may stop the issuance of the system restoration bonds authorized by this Financing Order if CenterPoint Houston fails to make this demonstration or certification.

<sup>29</sup> *Id*.

<sup>30</sup> *See* PURA § 39.303(a).

<sup>31</sup> *Id*.

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| **Docket No. 57559** | **Financing Order** | **Page 8 of 82** |

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PURA requires that system restoration charges be charged for the use or availability of electric services to recover all qualified costs.<sup>32</sup> System restoration charges, like transition charges, can be recovered over a period that does not exceed 15 years.<sup>33</sup> The Commission concludes that this prevents the collection of system restoration charges from customers for services rendered after the 15-year period but does not prohibit recovery of system restoration charges for service rendered during the 15-year period but not actually collected until after the 15-year period.

System restoration charges constitute transition charges as defined in PURA § §39.302 and used in chapter 39, subchapter G of PURA<sup>34</sup> and will be collected by an electric utility, its successors, an assignee, or other collection agents as provided for in this Financing Order.<sup>35</sup> System restoration charges must be functionalized and allocated to customers in the same manner as the corresponding facilities relating to the system restoration costs and related expenses are functionalized and allocated in a utility's current base rates.<sup>36</sup> The Commission further determines that, to ensure that the allocation of system restoration charges are functionalized in such manner, the ADFIT benefits associated with the securitization transaction should be calculated and allocated in the manner described in this Financing Order.

<sup>32</sup> PURA § 36.403(f).

<sup>33</sup> *See* PURA § 39.303(b).

<sup>34</sup> PURA § 36.403(f).

<sup>35</sup> *See* PURA § 39.302(7).

<sup>36</sup> PURA § 36.403(g).

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| **Docket No. 57559** | **Financing Order** | **Page 9 of 82** |

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The rights to impose, collect, and receive system restoration charges (including all other rights of an electric utility under the financing order) are only contract rights until such rights are first transferred to an assignee or pledged in connection with the issuance of system restoration bonds.<sup>37</sup> Upon the transfer or pledge of those rights, they become system restoration property and, as such, are afforded certain statutory protections to ensure that the system restoration charges are available for system restoration bond retirement.<sup>38</sup>

This Financing Order contains terms, as it must, ensuring that the imposition and collection of system restoration charges authorized herein must be non-bypassable.<sup>39</sup> It also includes a mechanism requiring that system restoration charges be reviewed and adjusted at least annually, within 45 days of the anniversary date of the issuance of the system restoration bonds, to correct any overcollections or undercollections during 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.<sup>40</sup> In addition to the required annual reviews, interim reviews are allowed to ensure that the amount of the system restoration charges matches the funding requirements approved in this Financing Order. These provisions will help to ensure that the amount of system restoration charges paid by customers does not exceed the amount necessary to cover the costs of this securitization. To encourage utilities to undertake securitization financing, other benefits and assurances are provided.

The State of Texas has pledged, for the benefit and protection of financing parties and electric utilities, that it will not take or permit any action that would impair the value of system restoration property, or, except for the true-up expressly allowed by law, reduce, alter, or impair the system restoration charges to be imposed, collected, and remitted to financing parties, until the principal, interest, 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.<sup>41</sup>

<sup>37</sup> PURA § 39.304(a).

<sup>38</sup> *See* PURA § 39.304(b).

<sup>39</sup> *See* PURA §§ 36.404 and 39.306.

<sup>40</sup> *See* PURA § 39.307.

<sup>41</sup> *See* PURA § 39.310.

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| **Docket No. 57559** | **Financing Order** | **Page 10 of 82** |

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System restoration property (whether associated with a single system restoration bond issuance covering the entire amount of system restoration costs authorized to be financed with securitization or with one of multiple system restoration bond issuances, with each issuance covering only a portion of the total amount authorized to be securitized) constitutes a present system restoration property right for purposes of contracts concerning the sale or pledge of property, and the property will continue to exist for the duration of the pledge of the State of Texas as described in the preceding paragraph.<sup>42</sup> In addition, the interests of an assignee or pledgee in system restoration property (as well as the revenues and collections arising from the system restoration property) are not subject to setoff, counterclaim, surcharge, or defense by the electric utility or any other person or in connection with the bankruptcy of the electric utility or any other entity.<sup>43</sup> Further, 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.<sup>44</sup> The creation, granting, perfection, and enforcement of liens and security interests in system restoration property are governed by PURA § 39.309 and not by the Texas Business and Commerce Code.<sup>45</sup>

The Commission may, at the request of an electric utility, adopt a financing order providing for the retiring and refunding of system restoration bonds only upon making a finding that the future system restoration charges required to service the new system restoration bonds, including transaction costs, will be less than the future system restoration charges required to service the system restoration bonds being retired or refunded.<sup>46</sup> CenterPoint Houston has not requested, and this Financing Order does not grant, any authority to refinance the system restoration bonds authorized by this Financing Order. This Financing Order does not preclude CenterPoint Houston from filing a request for a financing order to retire or refund the system restoration bonds approved in this Financing Order upon a showing that the statutory criteria in PURA § 39.303(g) are met.<sup>47</sup>

To facilitate compliance and consistency with applicable statutory provisions, this Financing Order adopts the definitions in PURA §§ 36.403 and 39.302.

<sup>42</sup> *See* PURA § 39.304(b).

<sup>43</sup> *See* PURA § 39.305.

<sup>44</sup> *See* PURA § 39.311.

<sup>45</sup> *See* PURA § 39.309(a).

<sup>46</sup> *See* PURA § 39.303(g).

<sup>47</sup> *Id*.

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| **Docket No. 57559** | **Financing Order** | **Page 11 of 82** |

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**II. Description of Proposed Securitization Transaction**

A description of the securitization transaction proposed by CenterPoint Houston is contained in its application and the filing package submitted in support of the application. A brief summary of the proposed securitization transaction is provided in this section. A more detailed description is included in the section III.C, titled *Structure of the Proposed Securitization* and in the application and filing package submitted in support of the application.

To facilitate the proposed securitization, CenterPoint Houston has proposed that (depending on whether more than one series of system restoration bonds are issued) one or more special purpose securitization funding entities (each referred to as BondCo) be created to which CenterPoint Houston will transfer the rights to impose, collect, and receive system restoration charges along with the other rights arising under this Financing Order, in each case allocable to the series of system restoration bonds the BondCo is issuing. Upon transfer to a BondCo (in connection with the issuance of the particular series of system restoration bonds), these rights will become system restoration property as provided by PURA § 39.304.<sup>48</sup> If system restoration bonds are issued in more than one series, then the system restoration property transferred as a result of each issuance must be only those rights associated with that portion of the total amount authorized to be securitized by this Financing Order which is securitized by a particular system restoration bond issuance. The rights to impose, collect and receive system restoration charges, along with the other rights arising under this Financing Order as they relate to any portion of the total amount authorized to be securitized that remains unsecuritized, must remain with CenterPoint Houston and must not become system restoration property until transferred to a BondCo in connection with a subsequent issuance of system restoration bonds.

<sup>48</sup> PURA § 39.304.

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| **Docket No. 57559** | **Financing Order** | **Page 12 of 82** |

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CenterPoint Houston will create a separate BondCo for the issuance of a particular series of the system restoration bonds, and the rights, obligations, structure, and restrictions described in this Financing Order with respect to BondCo are applicable to each such purchaser of system restoration property to the extent of the system restoration property transferred and sold to it and the system restoration bonds issued by it. BondCo will issue system restoration bonds and will transfer the net proceeds from the sale of the system restoration bonds to CenterPoint Houston in consideration for the transfer of the corresponding system restoration property. BondCo will be organized and managed in a manner designed to achieve the objective of maintaining BondCo as a bankruptcy-remote entity that would not be affected by the bankruptcy of CenterPoint Houston or any other affiliates of CenterPoint Houston or any of their respective successors. In addition, BondCo will have at least one independent manager whose approval will be required for certain major actions or organizational changes by BondCo.

The system restoration bonds will be issued under an indenture and administered by an indenture trustee.<sup>49</sup> The system restoration bonds will be secured by and payable solely out of the system restoration property created under this Financing Order and other collateral described in CenterPoint Houston's application. That collateral will be pledged to the indenture trustee for the benefit of the holders of the system restoration bonds and to secure payment of certain qualified costs.

The servicer of the system restoration bonds will collect the system restoration charges and remit those amounts to the indenture trustee on behalf of BondCo. The servicer will be responsible for filing any required or allowed true-ups of the system restoration charges. If the servicer defaults on its obligations under the servicing agreement, the indenture trustee may, on behalf of the holders of system restoration bonds, appoint a successor servicer. CenterPoint Houston will act as the initial servicer for the system restoration bonds.

<sup>49</sup> If more than one series of system restoration bonds is issued, each series will be issued under a separate indenture and be subject to its own set of basic agreements (e.g., system restoration property purchase and sale agreement, system restoration property servicing agreement, administration agreement). For purposes of this Financing Order, the description of the system restoration bonds applies to each series of system restoration bonds.

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| **Docket No. 57559** | **Financing Order** | **Page 13 of 82** |

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Retail electric providers (REPs) will be required to meet certain financial standards to collect system restoration charges under this Financing Order. If a REP qualifies to collect system restoration charges, the servicer will bill to and collect from the REP the system restoration charges attributable to the REP's customers. The REP in turn will bill to and collect from its customers the system restoration charges attributable to them. If any REP fails to qualify to collect system restoration charges or defaults in the remittance of those charges to the servicer of the system restoration bonds, another entity can assume responsibility for collection of the system restoration charges from the REP's customers.

System restoration charges will be calculated to ensure the collection of an amount sufficient to service the principal, interest, and related charges for the system restoration bonds. The costs will be functionalized and allocated in the same manner as corresponding facilities and related expenses are functionalized and allocated in CenterPoint Houston's current base-rates.<sup>50</sup> The system restoration charges will be calculated by the method described in Schedule SRC – System Restoration Charges (Schedule SRC), a pro forma copy of which is contained in appendix B. In addition to the annual true-up required by PURA § 39.307, interim true-ups may be performed as necessary to ensure that the amount collected from system restoration charges is sufficient to service the system restoration bonds. In addition, an adjustment to the system restoration charge class allocations will be allowed under certain circumstances. The methodology for making true-ups and class allocation adjustments and the circumstances under which each must be made are described in Schedule SRC.

The Commission determines that CenterPoint Houston's proposed system restoration charge structure should be utilized. This structure, which was used in each of CenterPoint Houston's prior securitizations, is designed to produce essentially level residential rates over the recovery period if: (1) the actual year-to-year changes in customers' loads match the changes forecasted at the time the system restoration bonds are structured and (2) annual loads and costs match those used to develop each system restoration charge true-up. If the system restoration bonds are issued in more than one series, the system restoration charges for each series must provide a substantially level system restoration charge structure.

<sup>50</sup> *See* PURA § 36.403(g).

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| **Docket No. 57559** | **Financing Order** | **Page 14 of 82** |

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All of the transition bonds and system restoration bonds issued in prior Texas securitizations have been issued with a fixed interest rate.<sup>51</sup> A fixed interest rate is necessary to assure that customers benefit from the securitization. Although the benefits of fixed rates can be achieved through a combination of floating-rate bonds and interest-rate swaps, the Commission in prior securitizations in Texas concluded that the possible benefit of floating-rate bonds did not outweigh the cost of preparing for and executing interest-rate swaps and the potential risks swaps would impose on retail customers. As a result, the financing orders in those proceedings prohibited the use of interest-rate swaps and thus, effectively, the issuance of floating-rate bonds. The Commission reaches the same conclusion in this proceeding and prohibits CenterPoint Houston from issuing floating-rate system restoration bonds.

The Commission reaches a similar conclusion that issuance of system restoration bonds denominated in foreign currency should likewise be prohibited. Denominating system restoration bonds in foreign currency would create foreign currency risks for customers. While these risks can be reduced through use of derivatives, the derivatives themselves create risks for customers.

Interest-rate hedges can also be used to lock in interest rates or limit the variability of interest rates before issuance of the system restoration bonds. However, the hedge is a bet on the direction of future market changes, which is neither necessary nor appropriate. Hedges also create additional costs and risks if, for any reason, the system restoration bonds are not issued or the amount issued is different from the principal amount hedged. As a result, this Financing Order prohibits CenterPoint Houston from issuing system restoration bonds denominated in foreign currencies and from entering into interest-rate hedges.

CenterPoint Houston requested approval of system restoration charges sufficient to recover the principal and interest on the system restoration bonds plus ongoing qualified costs of supporting and servicing the system restoration bonds as described in this Financing Order and appendix C. CenterPoint Houston requested that the system restoration charges be recovered from REPs, and through them from consumers, and that the amount of the system restoration charges be calculated based upon the allocation methodology and billing determinants specified in Schedule SRC. CenterPoint Houston also requested that certain standards related to the billing and collection of system restoration charges be applied to REPs, as specified in Schedule SRC. To implement the system restoration charges and billing and collection requirements, CenterPoint Houston requested approval of Schedule SRC.

<sup>51</sup> *E.g., Application of AEP Texas Central Company for a Financing Order,* Docket No. 32475, Financing Order at 14 and 15 (June 21, 2006); *Application of Entergy Gulf States, Inc. for a Financing Order,* Docket No. 33586, Financing Order at 2 (Apr. 2, 2007); *Application of CenterPoint Houston Electric, LLC for a Financing Order,* Docket No. 34448, Financing Order at 2 (Sep. 18, 2007); *Application of CenterPoint for a Financing Order,* Docket No. 37200, Financing Order at 2 (Aug. 27, 2009); *Application of Entergy Texas, Inc. for a Financing Order,* Docket No. 37247, Financing Order at 2 (Sept. 11, 2009); *Application of AEP Texas Central Company for a Financing Order,* Docket No. 39931, Financing Order at 16 (June 17, 2019); *Application of Entergy Texas, Inc. for a Financing Order,* Docket No. 52302, Order at 15 (Jan. 14, 2022).

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CenterPoint Houston requested authority to securitize and to cause the issuance of system restoration bonds in an aggregate principal amount not to exceed the sum of: (1) the Securitizable Balance at the date of issuance of the system restoration bonds plus (2) its actual up-front qualified costs of issuing, supporting, and servicing the system restoration bonds. CenterPoint Houston provided an illustrative analysis of the costs and benefits of securitization using its estimate of the September 2, 2025 Securitizable Balance. CenterPoint Houston proposed that these amounts be updated in the issuance advice letter to reflect the actual issuance date of the system restoration bonds and other relevant current information as permitted by this Financing Order, and that CenterPoint Houston be authorized to securitize the updated Securitizable Balance and up-front qualified costs as reflected in the issuance advice letter.

CenterPoint Houston requested in the application that its up-front and ongoing costs of issuing and maintaining the system restoration bonds be recovered respectively through the system restoration bonds and system restoration charges approved in this Financing Order. CenterPoint Houston estimated that its up-front costs would total $5.2 million, while its ongoing costs of servicing the system restoration bonds would total $700,000 per year for each year of the term of the system restoration bonds. The estimates were based on assumptions regarding a number of variables that will directly affect the level of up-front and ongoing qualified costs including the following: (1) the total Securitizable Balance will be $396 million; (2) only one series of system restoration bonds will be issued; (3) the financing order proceeding will not be contested; (4) the financing order will not permit use of interest-rate or foreign-currency hedges, floating-rate system restoration bonds, or system restoration bonds denominated in foreign currencies; and (5) CenterPoint Houston will act as the servicer.

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| **Docket No. 57559** | **Financing Order** | **Page 16 of 82** |

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The Commission finds that CenterPoint Houston should be permitted to securitize its up-front costs of issuance in accordance with the terms of this Financing Order. In the issuance advice letter, CenterPoint Houston must report the actual qualified costs securitized.

CenterPoint Houston is authorized to recover directly through the system restoration charges its actual ongoing costs of servicing the system restoration bonds and providing administration services to BondCo, subject to a cap on annual servicing fees equal to 0.075% of the initial principal amount of system restoration bonds issued under this Financing Order and a cap on annual administrative fees of $100,000 for each BondCo plus reimbursable third-party costs, which will apply as long as CenterPoint Houston continues to serve as the servicer or administrator, respectively. Ongoing qualified costs, other than the servicer and administrative fees charged by CenterPoint Houston when it is the servicer and administrator, are not capped. They are, however, estimated in appendix C. The estimated ongoing qualified costs should be updated in the issuance advice letter to reflect more current information then available to CenterPoint Houston. In accordance with the terms of this Financing Order and subject to the approval of the indenture trustee, the Commission will permit a successor servicer to CenterPoint Houston to recover a higher servicer fee if CenterPoint Houston ceases to service the system restoration bonds.

CenterPoint Houston does not anticipate incurring costs of refinancing or retiring debt or equity in connection with the use of the proceeds from the issuance of the system restoration bonds.<sup>52</sup> However, if costs of refinancing or retiring debt or equity are incurred, the Commission notes that the cost of refinancing or retiring CenterPoint Houston's existing debt or equity using the proceeds from the system restoration bonds must remain uncapped. Commission experience with these expenses indicates that they vary widely and are not entirely within CenterPoint Houston's control. CenterPoint Houston should be authorized to record such costs as a regulatory asset included on its balance sheet and to accrue carrying costs on such regulatory asset using the average weighted interest rate on the system restoration bonds, until the costs are included in CenterPoint Houston's next base-rate case, and that the costs, together with carrying costs, be evaluated for recovery in CenterPoint Houston's next base-rate case, subject to a showing that such costs were prudently incurred and are reasonable and necessary.

<sup>52</sup> Direct Testimony of Patrica L. Martin at 19.

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| **Docket No. 57559** | **Financing Order** | **Page 17 of 82** |

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**III.** **Findings of Fact**

The Commission makes the following findings of fact.

**A.** **Identification and Procedure** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Applicant** 

1. CenterPoint Houston is a Texas limited liability company registered with the Texas secretary of state
under filing number 800119842. CenterPoint Houston is an indirect wholly-owned subsidiary of CenterPoint Energy, Inc. (CenterPoint
Energy), which is a public utility holding company under the Public Utility Holding Company Act of 2005.

2. CenterPoint Houston owns and operates for compensation in Texas facilities and equipment to transmit and
distribute electricity in the Electric Reliability Council of Texas (ERCOT) region.

3. CenterPoint Houston holds certificate of convenience and necessity number 30086 to provide service to
the public.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Background and Application** 

4. A storm that the National Weather Services has officially named "the Houston Derecho" and
a wave of strong thunderstorms struck CenterPoint Houston's service territory on May 16, 2024, and May 28, 2024, respectively *,* causing extensive damage to CenterPoint Houston's system and widespread electric outages. These storms are collectively referred
to in this Financing Order as the Storms.

5. On November 8, 2024, CenterPoint Houston filed an application in Docket No. 57271 under PURA
 § 36.405 for determination of the amount of system restoration costs related to the Storms eligible for securitization or other recovery.

6. On January 24, 2025, CenterPoint Houston filed an application in this proceeding for a financing
order under PURA chapter 36, subchapter I and chapter 39, subchapter G to permit securitization of an amount equal to the following: (a) the
sum of the Securitizable Balance as of the date of issuance of the system restoration bonds, plus (b) up-front qualified costs. The
application includes exhibits, schedules, attachments, and testimony.

7. In Order No. 2 filed on February 7, 2025, the administrative law judge (ALJ) found CenterPoint
Houston's application administratively complete.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Notice of Application** 

8. On March 3, 2025, CenterPoint Houston filed the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. the affidavit of Alice S. Hart, supervisor for regulatory and litigation support for CenterPoint Houston,
attesting that CenterPoint Houston sent: (a) a copy of its application to all parties in its most recent comprehensive base rate
case, Docket No. 56211,<sup>53</sup> and to all parties in Docket No. 57271, on January 24, 2025; and (b) notice
of the application to each municipality in CenterPoint Houston's service area and all certified retail electric providers listed on the
Commission's website by first-class mail or electronic mail; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. a publisher's affidavit attesting to the publication of notice in the *Houston Chronicle*,
a newspaper of general circulation throughout CenterPoint Houston's service area, on February 7 and 14, 2025.

9. In Order No. 6 filed on March 24, 2025, the ALJ found CenterPoint Houston's notice sufficient.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** **Intervenors** 

10. In Order No. 3 filed on February 18, 2025, the ALJ granted the motions to intervene filed by
Houston Coalition of Cities (HCOC), Office of Public Utility Counsel (OPUC), and Texas Energy Association for Marketers (TEAM).

11. In Order No. 4 filed on March 6, 2025, the ALJ granted the motion to intervene filed by Texas
Coast Utilities Coalition (TCUC).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **Testimony and Agreement** 

12. CenterPoint Houston's application included the direct testimonies and exhibits of the following
five witnesses: Patricia L. Martin, Russel K. Wright, Charles C. Wang, John R. Durland, and Steffen Lunde.

13. On April 23, 2025, CenterPoint Houston filed an agreement resolving the issues among CenterPoint
Houston, Commission Staff, OPUC, HCOC, and TCUC (the signatories). The only party this is not a signatory to the agreement, TEAM, does
not oppose the agreement.

<sup>53</sup> *Application of CenterPoint Energy Houston Electric, LLC, for Authority to Change Rates,* Docket No. 56211, Order (Mar. 13, 2025).

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14. On April 23, 2025, CenterPoint Houston filed the testimony of Patricia L. Martin in support of the
agreement.

15. On April 30, 2025, Commission Staff filed the testimony of Darryl Tietjen in support of the agreement.

16. On April 30, 2025, CenterPoint filed an unopposed errata to the agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **Evidentiary Record** 

17. In Order No. 11 filed on May 15, 2025, the ALJ admitted the following evidence into the record
of this proceeding:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. CenterPoint Houston's application, including all attachments, schedules and supporting testimony
filed on January 24, 2025;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. CenterPoint Houston's affidavit of notice filed on March 3, 2025;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. the agreement, including all attachments, filed on April 23, 2025;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. the testimony of Patricia L. Martin in support of the agreement, including all attachments, filed on April 23,
2025;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. the testimony of Darryl Tietjen in support of the agreement, including all attachments, filed on April 30,
2025; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. the errata to the proposed financing order filed on April 30, 2025.

**B.** **Qualified Costs and Amount to be Securitized** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Identification and Amounts** 

18. Qualified costs are defined in PURA § 36.403(d) to include 100% of an electric utility's
system restoration costs, including carrying costs at the electric utility's weighted-average cost of capital as last approved in
the utility's general rate case (calculated using a pre-tax basis), net of any insurance proceeds, government grants, or other sources
of funding that compensate the utility for system restoration costs received by the utility at the time it files an application for a
financing order, together with the costs of issuing, supporting, and servicing system restoration bonds and any costs of retiring and
refunding the electric utility's existing debt and equity securities in connection with the issuance of system restoration bonds.<sup>54</sup>
Qualified costs also include the costs to the Commission of acquiring professional services for the purpose of evaluating proposed securitization
transactions and costs associated with ancillary agreements such as any bond insurance policy, letter of credit, reserve account, surety
bond, swap arrangement, hedging arrangement, liquidity or credit support arrangement or other financial arrangement entered into in connection
with the issuance or payment of the system restoration bonds.

<sup>54</sup> PURA § 36.403(d).

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| **Docket No. 57559** | **Financing Order** | **Page 20 of 82** |

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19. The actual costs of issuing and supporting the system restoration bonds will not be known until the system
restoration bonds are issued, and certain ongoing costs relating to the system restoration bonds may not be known until such costs are
incurred. However, to satisfy the statutory obligation to ensure tangible and quantifiable benefits to customers, it is appropriate to
limit the amount of certain up-front qualified costs that may be included in the principal amount of the system restoration bonds so that
the sum of those up-front qualified costs does not exceed $5.2 million plus: (a) the cost of original-issue discount, credit enhancements
and other arrangements to enhance marketability as discussed in Ordering Paragraphs 5 and 22, (b) rating agency fees, (c) United
States Securities and Exchange Commission registration fees, (d) the cost of the Commission's financial advisor and its legal
counsel, if any, and any additional costs incurred by CenterPoint Houston to comply with the requests and recommendations of the Commission's
financial advisor, and (e) any costs incurred by CenterPoint Houston if this Financing Order is appealed. The amount of the up-front
qualified costs must be shown in the issuance advice letter to ensure compliance with all statutory requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Accumulated Deferred Federal Income Taxes** 

20. Accumulated deferred federal income taxes (ADFIT) associated with system restoration costs occurs because
of the timing difference between the regulatory and tax treatment of the system restoration costs.

21. CenterPoint Houston's proposed Schedule ADFITC provides customers the benefits of a deferred tax
liability recorded by CenterPoint Houston. CenterPoint Houston's proposed Schedule ADFITC is subject to adjustment on each
date that the system restoration charges are adjusted to: (a) correct any over-credit or under-credit of the amounts previously scheduled
to be provided to customers, (b) reflect the amounts scheduled to be provided to customers during the period the adjusted ADFITC
is to be effective, and (c) account for the effects, if any, on ADFIT of any insurance proceeds, government grants or other source
of funding that compensate CenterPoint Houston for system restoration costs incurred. The adjustment must be made through a separate filing
submitted by CenterPoint Houston at the same time as it submits the system restoration charge adjustment filing and using the same allocation
factors and billing determinants as the system restoration charge adjustment filing.

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| **Docket No. 57559** | **Financing Order** | **Page 21 of 82** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Balance to be Securitized** 

22. It is appropriate that CenterPoint Houston be authorized to cause system restoration bonds to be issued
in an aggregate principal amount equal to the Securitizable Balance at the time of issuance plus up-front qualified costs as described
in Ordering Paragraphs 1 and 16. The Securitizable Balance to be securitized must be equal to the balance of distribution-related
system restoration costs as determined in Docket No. 57271 plus Storms-related carrying costs using the rate approved in Docket No. 57271
through the date the system restoration bonds are issued, net of any insurance proceeds, government grants, and other sources of funding
received by CenterPoint Houston at the time that the financing application was filed that compensate CenterPoint Houston for the distribution-related
system restoration costs. In the issuance advice letter, CenterPoint Houston must update the amounts to reflect the Securitizable Balance
on the date of issuance and the amount of up-front qualified costs.

23. It is appropriate for CenterPoint Houston to recover the annual ongoing servicing fees and administration
fees and the other annual fixed operating costs directly through system restoration charges. It is also appropriate to impose additional
limits to ensure that the annual servicing fees incurred when CenterPoint Houston serves as servicer do not exceed 0.075% of the
initial principal balance of the system restoration bonds and that the annual administration fees incurred under the administration agreement
do not exceed $100,000 for each BondCo plus reimbursable third-party costs as shown in appendix C. In compliance with CenterPoint
Houston's prior securitizations, the annual servicing fee payable to any other servicer not affiliated with CenterPoint Houston
will not exceed 0.60% of the initial principal amount of the system restoration bonds unless such higher rate is approved by the Commission.
Ongoing qualified costs other than the servicer and administration fees charged by CenterPoint Houston when it serves as servicer and
administrator will not be capped but are estimated in appendix C to this Financing Order. The servicing and administration fees collected
by CenterPoint Houston, or any affiliate of CenterPoint Houston, acting as servicer or administrator under the servicing agreement or
administration agreement, must be included as a revenue credit and reduce revenue requirements in each subsequent CenterPoint Houston
base-rate case. The expenses incurred by CenterPoint Houston or such affiliate to perform obligations under the servicing agreement and
should be included in each CenterPoint Houston base-rate case.

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| **Docket No. 57559** | **Financing Order** | **Page 22 of 82** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** **Issuance Advice Letter** 

24. Because the actual structure and pricing of the system restoration bonds will not be known at the time
this Financing Order is issued, following determination of the final terms of the system restoration bonds and before issuance of the
system restoration bonds, CenterPoint Houston will file with the Commission for each series of system restoration bonds issued, and
no later than the end of the first business day after the pricing date for that series of system restoration bonds, an issuance advice
letter. The issuance advice letter will include CenterPoint Houston's best estimate of total up-front qualified costs for such issuance.
The estimated total up-front qualified costs in the issuance advice letter may be included in the principal amount securitized. Within
60 days of issuance of the system restoration bonds, CenterPoint Houston must submit to the Commission a final accounting of the total
up-front qualified costs, as described in Finding of Fact 25. The issuance advice letter will report the actual dollar amount of the initial
system restoration charges and other information specific to the system restoration bonds to be issued. CenterPoint Houston's
issuance advice letter must update the benefits analysis to verify that the final amount securitized satisfies the statutory financial
tests. All amounts that require computation will be computed using the mathematical formulas contained in the form of the issuance advice
letter in appendix A to this Financing Order and Schedule SRC. The initial system restoration charges and the final terms of the
system restoration bonds set forth in the issuance advice letter must become effective on the date of issuance of the system restoration
bonds unless before noon on the fourth business day after pricing the Commission issues an order finding that the proposed issuance does
not comply with the requirements of PURA and this Financing Order.

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25. If the actual up-front qualified costs are less than the up-front qualified costs included in the principal
amount securitized, the Periodic Billing Requirement, defined below, for the first annual true-up adjustment must be reduced by the amount
of such unused funds (together with interest, if any, earned on the investment of such funds) and such unused funds (together with such
interest) must be available for payment of debt service on the bond payment date next succeeding such true-up adjustment. If the actual
up-front qualified costs are more than the up-front qualified costs included in the principal amount securitized, CenterPoint Houston
may request recovery of the remaining up-front qualified costs through a surcharge to CenterPoint Houston's rates for distribution
service.

26. CenterPoint Houston will submit a draft issuance advice letter to the Commission Staff for review not
later than two weeks before the expected date of commencement of marketing the system restoration bonds. Within one week after receipt
of the draft issuance advice letter, Commission Staff will provide CenterPoint Houston comments and recommendations regarding the adequacy
of the information provided.

27. The issuance advice letter must be submitted to the Commission not later than the end of the first business
day after the pricing of the system restoration bonds. Commission Staff may request such revisions of the issuance advice letter as may
be necessary to assure the accuracy of the calculations and that the requirements of PURA and of this Financing Order have been met. The
initial system restoration charges and the final terms of the system restoration bonds set forth in the issuance advice letter must become
effective on the date of issuance of the system restoration bonds (which must not occur before the fifth business day after pricing) unless
before noon on the fourth business day after pricing the Commission issues an order finding that the proposed issuance does not comply
with the requirements of PURA and the Financing Order. CenterPoint Houston 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 Commission.

28. The completion and filing of an issuance advice letter in the form of the issuance advice letter attached
as appendix A, including the certification from CenterPoint Houston discussed in Findings of Fact 29 and 98, is necessary to ensure that
any securitization actually undertaken by CenterPoint Houston complies with the terms of this Financing Order.

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29. The certification statement contained in CenterPoint Houston's certification letter must be worded
precisely as the statement in the form of the issuance advice letter approved by the Commission. Other aspects of the certification letter
may be modified to describe the particulars of the system restoration bonds and the actions that were taken during the transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **Tangible and Quantifiable Benefit** 

30. The statutory requirements in PURA §§ 36.401 and 39.301 that direct the Commission to ensure
that securitization provides tangible and quantifiable benefits to customers greater than would be achieved absent the issuance of system
restoration bonds can only be determined using an economic analysis to account for the time value of money. An analysis that compares:
(a) in the aggregate, over the expected life of the system restoration bonds, the present value of the revenue requirement associated
with recovery of the Securitizable Balance through rates reflective of conventional utility financing, with (b) the present value
of the revenue required under securitization, is an appropriate economic analysis to demonstrate whether securitization provides economic
benefits to customers.

31. The financial analysis presented by CenterPoint Houston indicates that securitization of the Securitizable
Balance and other qualified costs as requested by CenterPoint Houston would result in $85,000 of tangible and quantifiable economic benefits
to customers on a present value basis if the system restoration bonds are issued at an average weighted-average interest rate of 7.24%
allowed by this Financing Order and with a 14-year expected life. Using the projected weighted-average interest rate of 4.90% and a 14-year
expected life, the benefits of securitization would be $63 million on a present-value basis. These estimates use CenterPoint Houston's
Securitizable Balance as of September 2, 2025 (i.e. $396 million), as approved in Docket No. 57271, and assume that actual
up-front and ongoing qualified costs will be as shown on appendix C to this Financing Order. The benefits for customers set forth in CenterPoint
Houston's evidence are fully indicative of the benefits customers will realize from the securitization approved in this Financing
Order; however, the actual benefit to customers will depend upon market conditions on the date of issuance of the system restoration bonds,
the actual scheduled maturity of the system restoration bonds, and the amount actually securitized. CenterPoint Houston will be required
to provide an updated tangible and quantifiable benefits analysis in its issuance advice letter to verify that this statutory test is
met.

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| **Docket No. 57559** | **Financing Order** | **Page 25 of 82** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **Present Value Cap** 

32. The amount securitized may not exceed the present value of the revenue requirement over the life of the
proposed system restoration bonds associated with conventional (i.e., nonsecuritized) recovery of the authorized amounts where the present
value analysis uses a discount rate equal to the proposed interest rate on the system restoration bonds.<sup>55</sup> The analysis presented
by CenterPoint Houston demonstrates that the proposed securitization meets this requirement whether the system restoration bonds are assumed
to bear interest at a weighted-average interest rate of 7.24%, at the projected weighted-average interest rate of 4.90%, or at other interest
rates less than 7.24%. Using a 4.90% weighted-average interest rate, the present value of the revenue requirements would be $408.5 million.
At the higher interest rate of 7.24%, the present value of the revenue requirements would be $407.5 million. These estimates use CenterPoint
Houston's Securitizable Balance as of September 2, 2025, as approved in Docket No. 57271, an expected life of 14 years,
and assume that actual up-front and ongoing qualified costs will be as estimated on appendix C to this Financing Order. The benefits
for customers set forth in CenterPoint Houston's evidence are fully indicative of the benefits customers will realize from the securitization
approved in this Financing Order; however, CenterPoint Houston will be required to provide an updated present value analysis in its issuance
advice letter to verify that this statutory test is met.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.** **Total Amount of Revenue to be Recovered** 

33. The Commission is required to find that the total amount of revenues to be collected under this Financing
Order will be less than the revenue requirement that would be recovered over the life of the amounts that are securitized under this Financing
Order, using conventional financing methods.<sup>56</sup> CenterPoint Houston's analysis assumed that under conventional financing
methods, the costs would be recovered over the life of the system restoration bonds (for purposes of its analysis, 14 years) with carrying
costs equal to CenterPoint Houston's pre-tax weighted-average cost of capital of 7.716%. The resulting total conventional revenues
would be $471 million. If 14-year system restoration bonds are issued at a 4.90% weighted-average interest rate, CenterPoint Houston's
financial analysis indicates that the total amount of revenues to be collected under this Financing Order is expected to be $63 million
less than the revenue requirement that would be recovered using conventional utility financing methods. Using the projected weighted-average
interest rate of 4.90%, the benefits of securitization would be $88 million on a nominal basis. These estimates use CenterPoint Houston's
Securitizable Balance as of September 2, 2025, as approved in Docket No. 57271, an expected life of 14 years, and assume that
actual up-front and ongoing qualified costs will be as estimated on appendix C to this Financing Order. The benefits for retail customers
set forth in CenterPoint Houston's evidence are fully indicative of the benefits customers will realize from the securitization
approved in this Financing Order; however, CenterPoint Houston will be required to provide an updated total revenue analysis in its issuance
advice letter to verify that this statutory test is met.

<sup>55</sup> *See* PURA § 39.301.

<sup>56</sup> *See* PURA § 39.303(a).

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| **Docket No. 57559** | **Financing Order** | **Page 26 of 82** |

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**C.** **Structure of the Proposed Securitization** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **BondCo** 

34. For purposes of this securitization, CenterPoint Houston will create one or more BondCos, special purpose
securitization funding entities (each of which will be referred to as BondCo), each of which will be a Delaware limited liability company
with CenterPoint Houston as its sole member. If more than one series of system restoration bonds are issued, CenterPoint Houston will
create a separate BondCo for the issuance of a particular series of system restoration bonds and the rights, structure, and restrictions
described in this Financing Order with respect to BondCo will be applicable to each such purchaser of system restoration property to the
extent of the system restoration property sold to it and the system restoration bonds issued by it. BondCo will be formed for the limited
purpose of acquiring system restoration property, issuing system restoration bonds in one or more tranches, and performing other activities
relating thereto or otherwise authorized by this Financing Order. BondCo will not be permitted to engage in any other activities and will
have no assets other than system restoration property and related assets to support its obligations under the system restoration bonds.
Obligations relating to the system restoration bonds will be BondCo's only significant liabilities. These restrictions on the activities
of BondCo and restrictions on the ability of CenterPoint Houston to take action on BondCo's behalf are imposed to achieve the objective
that BondCo will be bankruptcy remote and not affected by a bankruptcy of CenterPoint Houston. BondCo will be managed by a board of managers
with rights and duties similar to those of a board of directors of a corporation. As long as the system restoration bonds remain outstanding,
BondCo will have at least one independent manager with no organizational affiliation with CenterPoint Houston other than acting as
independent manager for one or more other bankruptcy-remote subsidiaries of CenterPoint Houston or its affiliates. BondCo will not be
permitted to amend the provisions of the organizational documents that relate to the bankruptcy remoteness of BondCo without the consent
of the independent manager. Similarly, BondCo will not be permitted to institute bankruptcy or insolvency proceedings or to consent to
the institution of bankruptcy or insolvency proceedings against it, or to dissolve, liquidate, consolidate, convert, or merge without
the consent of the independent manager. Other restrictions to facilitate bankruptcy remoteness may also be included in the organizational
documents of BondCo as required by the rating agencies.

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| **Docket No. 57559** | **Financing Order** | **Page 27 of 82** |

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35. The initial capital of BondCo is expected to be not less than 0.5% of the initial principal amount of
the system restoration bonds issued by BondCo. Funding of BondCo at this level is intended to protect the bankruptcy remoteness of BondCo.
A sufficient level of capital is necessary to minimize this risk and, therefore, assist in achieving the lowest system restoration bond
charges possible.

36. BondCo will issue one series of system restoration bonds consisting of one or more tranches. The aggregate
amount of all tranches of all series of system restoration bonds issued under this Financing Order must not exceed the principal amount
approved by this Financing Order. BondCo will pledge to the indenture trustee, as collateral for payment of the system restoration bonds,
the system restoration property, including BondCo's right to receive the system restoration charges as and when collected, and certain
other collateral described in CenterPoint Houston's application.

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| **Docket No. 57559** | **Financing Order** | **Page 28 of 82** |

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37. Concurrent with the issuance of any of the system restoration bonds, CenterPoint Houston will transfer
to BondCo all of CenterPoint Houston's rights under this Financing Order related to the amount of system restoration bonds BondCo
is issuing, including rights to impose, collect, and receive system restoration charges approved in this Financing Order. This transfer
will be structured so that it will qualify as a true sale within the meaning of PURA § 39.308 and that such rights will become system
restoration property concurrently with the sale to BondCo as provided in PURA § 39.304. By virtue of the transfer, BondCo will acquire
all of the right, title, and interest of CenterPoint Houston in the portion of the system restoration property arising under this Financing
Order that is related to the amount of system restoration bonds BondCo is issuing.

38. The use and proposed structure of BondCo and the limitations related to its organization and management
are necessary to minimize risks related to the proposed securitization transactions and to minimize the system restoration charges. Therefore,
the use and proposed structure of BondCo should be approved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Credit Enhancement and Arrangements to Reduce Interest Rate Risk or Enhance Marketability** 

39. CenterPoint Houston requested approval to use additional forms of credit enhancement (including letters
of credit, reserve accounts, surety bonds, or guarantees) and other mechanisms designed to promote the credit quality and marketability
of the system restoration bonds if the benefits of such arrangements exceed their cost. CenterPoint Houston also asked that the costs
of any credit enhancements as well as the costs of arrangements to enhance marketability be included in the amount of qualified costs
to be securitized. CenterPoint Houston should be permitted to recover the up-front and ongoing costs of credit enhancements and arrangements
to enhance marketability, provided that the Commission's designated representative and CenterPoint Houston agree in advance that
such enhancements and arrangements provide benefits greater than their tangible and intangible costs. If the use of original issue discount,
credit enhancements, or other arrangements is proposed by CenterPoint Houston, CenterPoint Houston must provide the Commission's
designated representative copies of all cost-benefit analyses performed by or for CenterPoint Houston that support the request to use
such arrangements. This finding does not apply to the collection account or its subaccounts approved in this Financing Order.

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|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 29 of 82** |

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40. CenterPoint Houston's proposed use of credit enhancements and arrangements to enhance marketability
is reasonable and should be approved, provided that CenterPoint Houston certifies that the enhancements or arrangements provide benefits
greater than their cost and that such certifications are agreed to by the Commission's designated representative, as further described
in Findings of Fact 91 through 94.

41. In prior financing orders, the Commission determined that the costs and risks of interest-rate swap transactions
outweighed the expected benefits and prohibited the use of interest-rate swaps.<sup>57</sup>

42. Also in prior financing orders, the Commission determined that the use of floating-rate notes, notes denominated
in foreign currencies, interest-rate hedges, and interest-rate swaps would not be expected to result in the lowest system restoration
bond charges and would expose customers to higher risks and greater uncertainty about future costs. Accordingly, the Commission has determined
that CenterPoint Houston should not be permitted to use floating-rate system restoration bonds, system restoration bonds denominated in
foreign currencies, hedges, or interest-rate swaps in this securitization transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **System Restoration Property** 

43. Under PURA § 39.304(a), the rights and interests of an electric utility or successor under a financing
order, including the right to impose, collect, and receive the system restoration charges authorized in the financing order, are only
contract rights until they are first transferred to an assignee or pledged in connection with the issuance of system restoration bonds,
at which time they will become system restoration property.

<sup>57</sup> *E.g., Application of AEP Texas Central Company for a Financing Order,* Docket No. 32475, Financing Order at 14–15 (June 21, 2006); *Application of Entergy Gulf States, Inc. for a Financing Order,* Docket No. 33586, Financing Order at 2 (Apr. 2, 2007); *Application of CenterPoint Houston Electric, LLC for a Financing Order,* Docket No. 34448, Financing Order at 2 (Sept. 18, 2007); *Application of CenterPoint for a Financing Order,* Docket No. 37200, Financing Order at 2 (Aug. 27, 2009); *Application of Entergy Texas, Inc. for a Financing Order,* Docket No. 37247, Financing Order at 2 (Sept. 11, 2009); *Application of AEP Texas Central Company for a Financing Order,* Docket No. 39931, Financing Order at 4 (Jan. 12, 2012); *Application of Entergy Texas Inc, for a Financing Order,* Docket No. 52302, Order at 15 (Jan. 14, 2022).

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|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 30 of 82** |

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44. The rights to impose, collect, and receive the system restoration charges approved in this Financing Order
along with the other rights arising under this Financing Order will become system restoration property upon the transfer of such rights
by CenterPoint Houston to BondCo under PURA § 39.304. If system restoration bonds are issued in more than one series, then the system
restoration property transferred as a result of each issuance must be only those rights associated with that portion of the total amount
of system restoration property authorized to be securitized by this Financing Order which is securitized by such issuance. The rights
to impose, collect and receive system restoration charges along with the other rights arising under this Financing Order as they relate
to any portion of the total amount of system restoration property authorized to be securitized that remains unsecuritized must remain
with CenterPoint Houston and must not become system restoration property unless and until transferred to a BondCo in connection with a
subsequent issuance of system restoration bonds.

45. System restoration property and all other collateral will be held and administered by the indenture trustee
under the indenture, as described in CenterPoint Houston's application. This proposal will help ensure the lowest system restoration
bond charges and should be approved.

46. Under PURA § 39.304(b), system restoration property constitutes a present property right for purposes
of contracts concerning the sale or pledge of property, even though the imposition and collection of system restoration charges depends
on further acts of the utility or others that have not yet occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** **Servicer and the Servicing Agreement** 

47. CenterPoint Houston will execute a servicing agreement with BondCo. The servicing agreement may be amended,
renewed or replaced by another servicing agreement. The entity responsible for carrying out the servicing obligations under any servicing
agreement is the servicer. CenterPoint Houston will be the initial servicer but may be succeeded as servicer by another entity under certain
circumstances detailed in the servicing agreement and as authorized by the Commission. Under the servicing agreement, the servicer is
required, among other things, to impose and collect the applicable system restoration charges for the benefit and account of BondCo, to
make the interim true-up adjustments of system restoration charges required or allowed by this Financing Order, and to account for and
remit the applicable system restoration charges to or for the account of BondCo in accordance with the remittance procedures contained
in the servicing agreement without any charge, deduction or surcharge of any kind (other than the servicing fee specified in the servicing
agreement). Under the terms of the servicing agreement, if any servicer fails to perform its servicing obligations in any material respect,
the indenture trustee acting under the indenture to be entered into in connection with the issuance of the system restoration bonds may,
or, upon the instruction of the requisite percentage of holders of the outstanding amount of system restoration bonds, must, appoint an
alternate party to replace the defaulting servicer, in which case the replacement servicer will perform the obligations of the servicer
under the servicing agreement. The obligations of the servicer under the servicing agreement and the circumstances under which an alternate
servicer may be appointed are more fully described in the servicing agreement. The rights of BondCo under the servicing agreement will
be included in the collateral pledged to the indenture trustee under the indenture for the benefit of holders of the system restoration
bonds.

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|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 31 of 82** |

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48. The servicing agreement for this securitization must include a provision that CenterPoint Houston
must indemnify the Commission (for the benefit of customers) in connection with any increase in servicing fees that become payable as
a result of a default resulting from CenterPoint Houston's willful misconduct, bad faith, or negligence in performance of its duties
or observance of its covenants under the servicing agreement. The indemnity will be enforced by the Commission but will not be enforceable
by any REP or retail customer.

49. The obligations to continue to provide service and to collect and account for system restoration charges
will be binding upon CenterPoint Houston and any other entity that provides transmission and distribution services or direct wire services
to a person that was a retail customer taking service at distribution voltage within CenterPoint Houston's service area as it existed
on the date of this Financing Order, or that became a retail customer for electric services within such area after the date of this Financing
Order, and is still located within such area, except as provided in Findings of Fact 72 and 73. Further, and to the extent REPs are responsible
for imposing and billing system restoration charges on behalf of BondCo, billing and credit standards approved in this Financing Order
will be binding on all REPs that bill and collect system restoration charges from such retail customers, together with their successors
and assigns. The Commission will enforce the obligations imposed by this Financing Order, its applicable substantive rules, and statutory
provisions.

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|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 32 of 82** |

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Financing Order to an assignee,<sup>58</sup> CenterPoint Houston will enter into a contract with that assignee that will require CenterPoint
Houston to continue to operate its transmission and distribution system to provide electric services to CenterPoint Houston's customers
who receive service at distribution voltage. This provision does not prohibit CenterPoint Houston from selling, assigning, or otherwise
divesting its transmission and distribution system or any part thereof so long as the entity acquiring such facilities agrees to continue
operating the facilities to provide electric services to CenterPoint Houston's customers who receive service at distribution voltage.

51. The provisions described in Findings of Fact 47 through 50 are reasonable, will reduce risk associated
with the proposed securitization and will result in lower system restoration bond charges and greater benefits to customers and should
be approved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **Retail Electric Providers** 

52. The servicer will bill the system restoration charges to the REP for each customer as it existed on the
date of this Financing Order and the REP will collect the system restoration charges from its retail customers that are subject to the
system restoration charges.

53. Schedule SRC sets forth minimum billing and collection standards to apply to REPs that collect system
restoration charges approved by this Financing Order from customers. The Commission finds that the REP standards set forth in Schedule
SRC are appropriate and should be adopted.

<sup>58</sup> The term assignee means any individual, corporation, or other legally recognized entity to which an interest in system restoration property is transferred, other than as security, including any assignee of that party. *See* PURA § 39.302(1).

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| **Docket No. 57559** | **Financing Order** | **Page 33 of 82** |

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54. The REP standards set forth in Schedule SRC relate only to the billing and collection of system restoration
charges authorized under this Financing Order, and do not apply to collection of any other non-bypassable charges or other charges. The
standards apply to all REPs other than REPs that have contracted with CenterPoint Houston to have CenterPoint Houston bill and collect
system restoration charges from the REP's retail customers. REPs may contract with parties other than CenterPoint Houston to bill
and collect system restoration charges from retail customers, but such parties must remain subject to these REP standards set forth in
Schedule SRC. Upon adoption of any amendment to 16 Texas Administrative Code (TAC) § 25.108, the Commission Staff will open a proceeding
to investigate the need to modify the REP standards in Schedule SRC to conform to that rule, provided that such modifications may not
be implemented absent prior written confirmation (or deemed inapplicability of such confirmation requirement) 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.

55. The REP standards 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;**a.** **Rating, Deposit, and Related Requirements.**

Each REP must (1) have a long-term, unsecured credit rating of not less than "BBB-" and "Baa3" (or the equivalent) from Standard & Poor's and Moody's Investors Service, respectively, or (2) provide to the indenture trustee (i) a deposit of two months' maximum expected system-restoration-charge collections in the form of cash, (ii) an affiliate guarantee, surety bond, or letter of credit providing for payment of such amount of system restoration charge collections in the event that the REP defaults in its payment obligations, or (iii) a combination of any of the foregoing. A REP that does not have or maintain the requisite long-term, unsecured credit rating may select which alternate form of deposit, credit support, or combination thereof it will utilize, in its sole discretion. The indenture trustee must be a beneficiary of any affiliate guarantee, surety bond, or letter of credit. The provider of any affiliate guarantee, surety bond, or letter of credit must have and maintain a long-term, unsecured credit rating of not less than "BBB-" and "Baa3" (or the equivalent) from Standard & Poor's and Moody's Investors Service, respectively.

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| **Docket No. 57559** | **Financing Order** | **Page 34 of 82** |

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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;**b. Loss of Rating.**

If the long-term, unsecured credit rating from either Standard & Poor's or Moody's Investors Service 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 the alternate form of deposit, credit support, or combination thereof, or new forms thereof, in each case from providers with the requisite ratings, within ten business days following such suspension, withdrawal, or downgrade. A REP failing to make such provision must comply with the provisions set forth in paragraph (e).

&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. Computation of Deposit**

The computation of the size of a deposit required under paragraph (a) 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 expected system restoration charge collections. Within ten business days following such review, (1) the REP must remit to the indenture trustee the amount of any shortfall in such required deposit or (2) the servicer must instruct the indenture trustee 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 in paragraph (e). REP cash deposits must be held by the indenture trustee, maintained in a segregated account, and invested in short-term high-quality investments, as permitted by the rating agencies rating the system restoration bonds. Investment earnings on REP cash deposits must be considered part of such cash deposits so long as they remain on deposit with the indenture 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 calendar days) instruct the indenture trustee to remit the amounts in the segregated accounts to the REP.

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| **Docket No. 57559** | **Financing Order** | **Page 35 of 82** |

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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;**d. Payment of System Restoration Charges.**

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 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 ten-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 in paragraph (e). 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 billing by the servicer. Any and all such penalty payments will be made to the servicer to be applied against system restoration charge obligations. A REP must not be obligated to pay the overdue system restoration 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 must not be assessed the 5% penalty upon such system restoration charges; however, the prior REP must 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;**e. Remedies Upon Default.**

After the ten calendar-day grace period (the 45th calendar day after the billing date) referred to in paragraph (d), the servicer must have the option to seek recourse against any cash deposit, affiliate guarantee, surety bond, letter of credit, or combination thereof provided by the REP, and 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 in paragraphs (b), (c), or (d) above 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Allow the provider of last resort (POLR) or a qualified REP of the consumer's choosing to immediately
assume the responsibility for the billing and collection of system restoration charges;

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| **Docket No. 57559** | **Financing Order** | **Page 36 of 82** |

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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;(ii) Immediately implement other mutually suitable and agreeable arrangements with the servicer. It is expressly
understood that the servicer's ability to agree to any other arrangements will be limited by the terms of the servicing agreement
and requirements of each of the rating agencies that have rated the system restoration bonds necessary to avoid a suspension, withdrawal,
or downgrade of the ratings on the system restoration 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;(iii) 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
the remaining amounts are released to the REP. All costs associated with this mechanism will be borne solely by the REP.

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 must immediately implement option (i), 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 in paragraphs (b), (c), and (d) above and the payment of all past-due amounts and associated penalties, the REP will no longer be required to comply with this paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**f.** **Interest of REPs (including the POLR) in Funds Held by Servicer.** 

Any interest that a REP (including the POLR) may have in any funds in the hands of the servicer must be junior and subordinate to any and all rights of the indenture trustee or BondCo to such funds.

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| **Docket No. 57559** | **Financing Order** | **Page 37 of 82** |

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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;**g. Billing by Providers of Last Resort**

The POLR appointed by the Commission must meet the minimum credit rating or deposit and credit support requirements described in paragraph (a) in addition to any other standards that may be adopted by the Commission. If the POLR defaults or is not eligible to provide such services, responsibility for billing and collection of system restoration charges will immediately be transferred to and assumed by the servicer until a new POLR can be named by the Commission or the customer requests the services of a certified REP. Customers may never be re-billed by the successor REP, the POLR, or the servicer for any amount of system restoration charges they have paid their REP (although future system restoration charges must reflect REP and other system-wide charge-offs). Additionally, if the amount of the penalty detailed in paragraph (d) is the sole remaining past-due amount after the 45th calendar day, the REP must not be required to comply with clauses (i), (ii), or (iii) of paragraph (e) above, unless the penalty is not paid within an additional 30 calendar 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;**h. 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 in paragraph (d). The REP and 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 Commission. If the REP is successful in the dispute process (informal or formal), the REP must be entitled to interest on the disputed amount paid to the servicer at the Commission-approved interest rate. Disputes about the date of receipt of system restoration charge payments (and penalties arising thereof) or the size of a required REP deposit will be handled in a like manner. It is expressly intended that any interest paid by the servicer on disputed amounts must not be recovered through system restoration charges if it is determined that the servicer's claim to the funds is clearly unfounded. No interest must be paid by the servicer if it is determined that the servicer has received inaccurate metering data from another entity providing competitive metering services under PURA § 39.107.

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| **Docket No. 57559** | **Financing Order** | **Page 38 of 82** |

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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;**i. Metering Data.**

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

&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. 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. In the initial year, REPs will be allowed to remit payments 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. 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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
system restoration charges) have been written off.

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| **Docket No. 57559** | **Financing Order** | **Page 39 of 82** |

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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;(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 no event will the REP have recourse to the indenture trustee,
BondCo, or BondCo's funds for such 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;(iii) The REP must 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 and the REP's rights to credits will not take effect until after such adjusted system-restoration-charge
rates have been implemented.

&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. Service Termination.**

In the event that the servicer is billing retail customers for system restoration charges, the servicer must have the right to terminate transmission and distribution service to the end-use customer for non-payment by the end-use customer under applicable Commission rules. In the event that a REP or the POLR is billing customers for system restoration charges, the REP or POLR must have the right to transfer the customer to the POLR (or to another certified REP) or to direct the servicer to terminate transmission and distribution service to the end-use customer for non-payment in accordance with the applicable Commission rules.

56. The proposed billing and collection standards for REPs and the applicability of those standards are appropriate
for the collection of system restoration charges resulting from this Financing Order, are reasonable, will lower risks associated with
the collection of system restoration charges, and will result in lower system restoration bond charges and greater benefits to customers.
In addition, adoption of these standards will provide uniformity of standards for the billing and collection of system restoration charges
for which CenterPoint Houston acts as servicer. Therefore, the proposed billing and collection standards for REPs and the applicability
of those standards described in Findings of Fact 54 and 55 should be approved.

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|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 40 of 82** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **System Restoration Bonds** 

57. BondCo will issue and sell system restoration bonds, which may be issued in one or more tranches. The
legal final maturity date of the system restoration bonds will not exceed 15 years from the date of issuance. The legal final maturity
date of the system restoration bonds and tranche thereof and amounts in each tranche will be finally determined by CenterPoint Houston
and the Commission's designated representative, consistent with market conditions and indications of the rating agencies, at the
time the system restoration bonds are priced, but subject to ultimate Commission review through the issuance advice letter process. CenterPoint
Houston will retain sole discretion regarding whether or when to assign, sell, or otherwise transfer any rights concerning system restoration
property arising under this Financing Order, or to cause the issuance of any system restoration bonds authorized in this Financing Order,
subject to the right of the Commission to find that the proposed issuance does not comply with the requirements of PURA and this Financing
Order. BondCo will issue the system restoration bonds on or after the fifth business day after pricing of the system restoration bonds
unless, before noon on the fourth business day following pricing of the system restoration bonds, the Commission issues an order finding
that the proposed issuance does not comply with the requirements of PURA and this Financing Order.

58. The Commission finds that the proposed structure—providing for substantially levelized annual revenue
requirements over the scheduled term of the system restoration bonds—is in the public interest and should be used. The approved
structure is reasonable and should be approved, provided that the issuance advice letter demonstrates that all of the statutory financial
requirements are met. This restriction is necessary to ensure that the stated economic benefits to customers materialize.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.** **Security for System Restoration Bonds** 

59. The payment of the system restoration bonds and related system restoration charges authorized by this

described in the application. The system restoration bonds will be issued under an indenture administered by the indenture trustee. The
indenture will include provisions for a collection account, subaccounts for the collection and administration of the system restoration
charges, and payment or funding of the principal and interest on the system restoration bonds and other costs, including fees and expenses,
in connection with the system restoration bonds, as described in CenterPoint Houston's application. In accordance with the indenture,
BondCo will establish a collection account as a trust account to be held by the indenture trustee as collateral to ensure the payment
of the principal, interest, and other costs approved in this Financing Order related to the system restoration bonds in full and on a
timely basis. The collection account will include the general subaccount, the capital subaccount, and the excess funds subaccount, and
may include other subaccounts.

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| **Docket No. 57559** | **Financing Order** | **Page 41 of 82** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** **The General Subaccount** 

60. The indenture trustee will deposit the system-restoration-charge remittances that the servicer remits
to the indenture trustee for the account of BondCo into the general subaccount. The indenture trustee will allocate or use all amounts
in this subaccount on a periodic basis to pay expenses of BondCo, to pay principal and interest on the system restoration bonds, and to
meet the funding requirements of the other subaccounts. The funds in the general subaccount will be invested by the indenture trustee
in short-term high-quality investments, and such funds (including, to the extent necessary, investment earnings) will be applied by the
indenture trustee to pay principal and interest on the system restoration bonds and all other components of the periodic payment requirement
(PPR) (as defined in Finding of Fact 81), and otherwise in accordance with the terms of the indenture.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** **The Capital Subaccount** 

61. When system restoration bonds are issued, CenterPoint Houston will make a capital contribution to BondCo,
which BondCo will deposit into the capital subaccount. The amount of the capital contribution is expected to be not less than 0.5% of
the initial principal amount of the system restoration bonds, although the actual amount will depend on tax and rating agency requirements.
The capital subaccount will serve as collateral to ensure timely payment of principal and interest on the system restoration bonds and
all other components of the PPR. Any funds drawn from the capital subaccount to pay these amounts due to a shortfall in the system-restoration-charge
remittances will be replenished through future system-restoration-charge remittances. The funds in this subaccount will be invested by
the indenture trustee in short-term high-quality investments, and such funds (including investment earnings) will be used by the indenture
trustee to pay principal and interest on the system restoration bonds and all other components of the PPR. If CenterPoint Houston is required
to make a capital contribution in excess of 0.5% of the original principal amount of each series of bonds, CenterPoint Houston will be
authorized to receive an aggregate amount equal to the sum of the (i) actual amounts earned from investments of the capital contribution
(up to 0.5% of the original principal amount of the system restoration bonds) and (ii) an annual return at the authorized pre-tax
return on equity established in CenterPoint Houston's most recent base-rate case on the remainder of the capital contribution. The
required revenue, if any, to provide the annual return at the pre-tax equity return established in CenterPoint Houston's most recent
base-rate case is an ongoing qualified cost. Upon payment of the principal amount of all system restoration bonds and the discharge of
all obligations that may be paid by use of system restoration charges, all amounts in the capital subaccount, including any investment
earnings, will be released to BondCo for payment to CenterPoint Houston. Investment earnings in this subaccount may be released earlier
in accordance with the indenture.

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| **Docket No. 57559** | **Financing Order** | **Page 42 of 82** |

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62. The capital contribution to BondCo should be funded by CenterPoint Houston. To ensure that customers receive
the appropriate benefit from the securitization approved in this Financing Order, the proceeds from the sale of the system restoration
bonds should not be applied towards this capital contribution. Because CenterPoint Houston funds the capital subaccount, CenterPoint Houston
should receive the investment earnings on that capital from time to time and should receive return of that capital after all system restoration
bonds have been paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** **The Excess Funds Subaccount** 

63. The excess funds subaccount will hold any system-restoration-charge remittances and investment earnings
on the collection account (other than earnings attributable to the capital subaccount and released under the terms of the indenture) in
excess of the amounts needed to pay current principal and interest on the system restoration bonds and to pay ongoing costs related to
the system restoration bonds (including, but not limited to, replenishing the capital subaccount). Any balance in or allocated to the
excess funds subaccount on a true-up adjustment date will be subtracted from the periodic billing requirement (PBR) (as defined in Finding
of Fact 81) for purposes of the true-up adjustment. The money in this subaccount will be invested by the indenture trustee in short-term
high-quality investments, and such money (including investment earnings thereon) will be used by the indenture trustee to pay principal
and interest on the system restoration bonds and other ongoing costs relating to the system restoration bonds.

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| **Docket No. 57559** | **Financing Order** | **Page 43 of 82** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.** **Other Subaccounts** 

64. Other credit enhancements in the form of subaccounts may be utilized for the securitization transaction
provided that the Commission's designated representative and CenterPoint Houston agree in advance that such enhancements provide
benefits greater than their tangible and intangible costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** **General Provisions** 

65. The collection account and the subaccounts described above are intended to provide for full and timely
payment of scheduled principal and interest on the system restoration bonds and all other components of the PPR. If the amount of system
restoration charges remitted to the general subaccount is insufficient to make all scheduled payments of principal and interest on the
system restoration bonds and to make payment on all of the other components of the PPR, the excess funds subaccount and the capital subaccount
will be drawn down, in that order, to make those payments. Any deficiency in the capital subaccount due to such withdrawals must be replenished
to the capital subaccount on a periodic basis through the true-up process. In addition to the foregoing, there may be such additional
accounts and subaccounts as are necessary to segregate amounts received from various sources (i.e., amounts received from REPs), or to
be used for specified purposes. Such accounts will be administered and utilized as set forth in the servicing agreement and the indenture.
Upon the maturity of the system restoration bonds and the discharge of all obligations in respect thereof, remaining amounts in the collection
account, other than amounts that were in the capital subaccount, will be released to BondCo and equivalent amounts will be credited by
CenterPoint Houston to its customers in accordance with PURA § 39.262(g).

66. The use of a collection account and its subaccounts in the manner proposed by CenterPoint Houston
is reasonable, will lower risks associated with the securitization and thus lower the costs to customers, and should, therefore, be approved.

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| **Docket No. 57559** | **Financing Order** | **Page 44 of 82** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** **System Restoration Charges—Imposition and Collection, Non-bypassability, and Self-Generation** 

67. CenterPoint Houston seeks authorization to impose on and collect from REPs, and from other entities which
are required to bill, pay or collect system restoration charges under this Financing Order or the tariffs approved in this Financing Order,
system restoration charges in an amount sufficient to provide for the timely recovery of its qualified costs approved in this Financing
Order (including payment of principal and interest on the system restoration bonds and ongoing costs related to the system restoration
bonds).

68. System restoration charges may be separately identified on bills presented to REPs and other entities
obligated to pay or collect system restoration charges.

69. If a REP or other entity does not pay the full amount it has been billed, the amount paid by the REP or
such other entity will first be apportioned between 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 future financing orders), other
than late fees, and second, any remaining portion of the payment will be allocated to late fees. This allocation will facilitate a proper
balance between the competing claims to this source of revenue in an equitable manner.

70. The system restoration bonds may have a scheduled final payment date not to exceed 14 years from the date
of issuance. However, amounts may still need to be recovered after the expiration of the scheduled final maturity date. CenterPoint Houston
proposed that the system restoration charges related to a series of system restoration bonds will be recovered over a period of not more
than 15 years from the date of issuance of that series of the system restoration bonds but that amounts due at or before the end of that
period for system restoration charges allocable to the 15-year period may be collected after the conclusion of the 15-year period.

71. PURA § 39.303(b) prohibits the recovery of system restoration charges for a period of time that
exceeds 15 years. System restoration charges related to a series of system restoration bonds may not be collected for periods after 15
years from the date of issuance of that series of bonds. This restriction does not, however, prevent the collection of amounts due at
the end of such 15-year period for system restoration charges allocable to such 15-year period.

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| **Docket No. 57559** | **Financing Order** | **Page 45 of 82** |

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72. CenterPoint Houston, acting as servicer, and any subsequent servicer, will collect system restoration
charges from REPs serving retail customers located within CenterPoint Houston's certificated service area as it existed on the date
this Financing Order is issued and from other entities which are required to bill, pay, or collect system restoration charges under
this Financing Order or the tariffs approved hereby. A customer within such area may not avoid system restoration charges by switching
to another electric utility, electric cooperative, or municipally-owned utility after the date this Financing Order is issued. PURA requires
that 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 this Financing Order is issued.<sup>59</sup>

73. A customer may not avoid the payment of system restoration charges by switching to new on-site generation.
New on-site generation means electric generation capacity greater than ten 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 this Financing Order is 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.<sup>60</sup> 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 an amount each month computed by multiplying the output of the on-site generation utilized to meet the
internal electrical requirements of the customer by the applicable system restoration charges in effect for that month.<sup>61</sup>
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. Payments of the system restoration charges owed by such customers will be made
to the servicer and will be collected in addition to any other charges applicable to services provided to the customer through CenterPoint
Houston's facilities and any other charges applicable to self-generation.<sup>62</sup>

<sup>59</sup> *See* PURA §§ 39.252(c), 39.306, and 36.404.

<sup>60</sup> *See* PURA §§ 36.404, 39.252(b)(1), and 39.262(k).

<sup>61</sup> *See* PURA §§ 36.404 and 39.252(b)(2).

<sup>62</sup> *Id*.

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| **Docket No. 57559** | **Financing Order** | **Page 46 of 82** |

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74. CenterPoint Houston's proposal related to imposition and collection of system restoration charges
is reasonable and is necessary to ensure collection of system restoration charges sufficient to support recovery of the qualified costs
approved in this Financing Order and should be approved. It is reasonable to approve the form of CenterPoint Houston's Schedule
SRC found in appendix B to this Financing Order and require that these tariff provisions be filed before any system restoration bonds
are issued under this Financing Order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.** **Allocation of Qualified Costs Between Retail Customers** 

75. In Docket No. 57271, CenterPoint Houston's system restoration costs were functionalized and
allocated in the same manner the corresponding facilities and related expenses are functionalized and allocated in the company's
current base-rates. Accordingly, CenterPoint Houston's proposal to allocate the PBR, defined below, to the five classes of customers
receiving distribution service using the allocation factors approved in Docket No. 49421<sup>63</sup> results in functionalization
and allocation of costs in the same manner as corresponding facilities and related expenses are allocated in CenterPoint Houston's
current base-rates. These allocation percentages are referred to as the PBR Allocation Factor (PBRAF).

76. Section 6 of Schedule SRC contains a series of formulas to adjust the class allocation factors if
load losses within a given class or group of classes exceed specified thresholds. The formulas are substantively identical to those in
transition charge Schedules TC, TC2, and TC3 approved in CenterPoint Houston's prior securitizations.

<sup>63</sup> *Application of Centerpoint Energy Houston Electric, LLC For Authority to Change Rates,* Docket No. 49421, Final Order (March 9, 2020).

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| **Docket No. 57559** | **Financing Order** | **Page 47 of 82** |

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77. The initial PBRAF for each system restoration charge class must be set out in the Schedule SRC filed
with CenterPoint Houston's issuance advice letter.

78. New retail consumers will be assigned to the system restoration charge classes listed in Schedule SRC
based on the definitions and procedures described in the applicable schedules of CenterPoint Houston's tariff.

79. The initial PBRAFs will remain in effect throughout the life of the system restoration bonds unless a
modification is made in accordance with Section 6 of Schedule SRC.

80. The method of calculating and adjusting PBRAFs as set forth in CenterPoint Houston's application
and Schedule SRC comply with the requirements of PURA § 36.403(g) and should be approved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.** **True-Up of System Restoration Charges** 

81. Under PURA § 39.307, the servicer of the system restoration bonds will make annual adjustments to
the system restoration charges to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. correct any undercollections or overcollections of system restoration charges, including without limitation
any caused by REP defaults, during the preceding 12 months; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. 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 (including but not limited to ongoing fees and expenses, amounts required to be deposited in or allocated to any collection account
or subaccount, indenture trustee indemnities, payments due in connection with any expenses incurred by the indenture trustee or the servicer
to enforce bondholder rights and all other payments that may be required under the waterfall of payments described in the indenture) during
the period for which such adjusted system restoration charges are to be in effect.

Such amounts are referred to as the Periodic Payment Requirement (PPR) and the amounts necessary to be billed to collect such PPR are referred to as the Periodic Billing Requirement (PBR). With respect to any series of system restoration bonds, the servicer will make true-up adjustment filings with the Commission at least annually, within 45 days of the anniversary of the date of the original issuance of the system restoration bonds of that series.

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| **Docket No. 57559** | **Financing Order** | **Page 48 of 82** |

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82. True-up filings will be based upon the cumulative differences, regardless of the reason, between the PPR
and the amount of system restoration charge remittances to the indenture trustee. True-up procedures are necessary to ensure full recovery
of amounts sufficient to meet the PPR over the expected life of the system restoration bonds. To assure adequate system restoration charge
revenues to fund the PPR and to avoid large overcollections and undercollections over time, the servicer will reconcile the system restoration
charges using CenterPoint Houston's 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 also reflect both a projection of uncollectible
system restoration charges and a projection of payment lags between the billing and collection of system restoration charges based upon
CenterPoint Houston's and the REPs' most recent experience regarding collection of system restoration charges.

83. The servicer will make true-up adjustments in the following manner described in Section 8 of
Schedule SRC. For the residential customer class it will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. allocate the upcoming period's PBR based on the PBRAFs approved in this Financing Order, including
any undercollection or overcollection of system restoration charges, including, without limitation, any caused by REP defaults, from the
preceding period, based on the PBRAFs determined in accordance with Schedule SRC approved in this Financing Order; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. divide the amount assigned to the residential customer class in step (a) above by the appropriate
forecasted billing units to determine the system restoration charge rate for the residential customer class for the upcoming period.

For each Non-residential SRC Group as defined in Schedule SRC, an adjustment factor will be computed by dividing (1) the amount assigned to the group in step (a) above by (2) the sum of the existing rates times the forecasted billing determinants for each class in the group. For each class in the group, the system restoration charge for the upcoming period will be the product of the existing system restoration charge times the adjustment factor for the group in which that class resides.

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| **Docket No. 57559** | **Financing Order** | **Page 49 of 82** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.** **Interim True-Up** 

84. In addition to annual true-up adjustments, true-up adjustments may be made by the servicer more frequently
at any time during the term of the system restoration bonds to correct any forecasted undercollection of system restoration charges to
assure timely payment of the system restoration bonds, including the replenishment of any funds drawn from the capital subaccount.

85. In the event an interim true-up is necessary, the interim true-up adjustment should be filed on the fifteenth
day of the current month for implementation in the first billing cycle of the following month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.** **Adjustment to PBRAFs** 

86. Schedule SRC contains detailed procedures for adjustment of PBRAFs to reflect load losses a system restoration
charge class or group of system restoration charge classes may suffer.

87. A proceeding for the purpose of approving an allocation factor adjustment should be conducted in the following
manner:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Any allocation factor adjustment will be made in conjunction with a standard, annual true-up. Any such
adjustment will be filed with the Commission at least 90 days before the date of the proposed true-up adjustment will become effective.
The filing will contain the proposed changes to the system restoration charge rates, justification for such changes as necessary to specifically
address the causes of the adjustment and a statement of the proposed adjustment date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Concurrently with the filing with the Commission, the servicer will notify all parties to this docket
of the filing of the proposed adjustment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. The servicer will issue appropriate notice and the Commission will conduct a contested case proceeding
on the allocation adjustment under PURA § 39.003.

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| **Docket No. 57559** | **Financing Order** | **Page 50 of 82** |

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The scope of the proceeding will be limited to determining whether the proposed adjustment complies with this Financing Order. In any true-up proceeding that involves the adjustment of the PBRAFs, all parties in the proceeding must have the right to challenge the reasonableness of the forecasts of billing determinants proposed as a basis for adjusting the PBRAFs. The Commission will issue a final order by the proposed adjustment date stated in the filing. In the event that the Commission cannot issue an order by that date, the servicer will be permitted to implement its proposed changes. Any modifications subsequently ordered by the Commission will be made by the servicer in the next true-up filing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.** **Additional True-Up Provisions** 

88. The true-up adjustment filing will set forth the servicer's calculation of the true-up adjustment
to the system restoration charges. Except for the allocation adjustment described in Findings of Fact 86 and 87, the Commission will have
15 days after the date of a true-up adjustment filing in which to confirm the mathematical accuracy of the servicer's adjustment.
Except for the allocation adjustment described above, any true-up adjustment filed with the Commission should be effective on its proposed
effective date, which must be not less than 15 days after filing. 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.

89. The true-up procedures contained in Schedule SRC are reasonable and will reduce risks related to the system
restoration bonds, resulting in lower system restoration bond charges and greater benefits to customers and should be approved.

90. The broad-based nature of the true-up mechanism and the pledge of the State of Texas embodied in PURA
 § 39.310, along with the bankruptcy remoteness of BondCo and the collection account, will serve to minimize credit risk associated
with the system restoration bonds (i.e., that sufficient funds will be available and paid to discharge all principal and interest obligations
when due).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.** **Designated Representative** 

91. To ensure, as required by PURA § 39.301, that the structuring and pricing of the system restoration
bonds result in the lowest system-restoration-bond charges in compliance with market conditions and the terms of this Financing Order,
the Commission finds that it is necessary for the Commission or its designated representative, Mr. Darryl Tietjen, to have a decision-making
role co-equal with CenterPoint Houston with respect to the structuring and pricing of the system restoration bonds and that all matters
related to the structuring and pricing of the system restoration bonds must be determined through a joint decision of CenterPoint Houston
and the Commission or its designated representative. The Commission's primary goal is to ensure that the structuring and pricing
of the system restoration bonds result in the lowest system restoration bond charges in compliance with market conditions and the terms
of this Financing Order.

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| **Docket No. 57559** | **Financing Order** | **Page 51 of 82** |

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92. The Commission or its designated representative must have an opportunity to participate fully and in advance
in all plans and decisions relating to the structuring, marketing, and pricing of the system restoration bonds and must be provided timely
information as necessary to allow it to participate in a timely manner (including, but not limited to, information prepared for the benefit
of rating agencies and information prepared for use in marketing the system restoration bonds to investors).

93. The Commission or its designated representative may require a certificate from the bookrunning underwriters
confirming that the structuring, marketing, and pricing of the system restoration bonds resulted in the lowest system restoration bond
charges in compliance with market conditions at the time of pricing, the marketing plan, and the terms of this Financing Order.

94. CenterPoint Houston stated that it expected the following transaction documents to be executed in connection
with each series of system restoration bonds issued under this Financing Order and that it expected the form of each document to be in
compliance with those used in its last securitization: Servicing Agreement, Administration Agreement, Base Indenture and Series Supplement,
Amended and Restated Limited Liability Company Agreement, Sale Agreement, and Bill of Sale (in the form of exhibit A to the sale agreement).
The Commission's designated representative must be afforded an opportunity to review and comment on these documents before they
are finalized. In compliance with the last securitization, CenterPoint Houston requested the right to amend the terms of these transaction
documents; provided, however, that no amendment to any such agreement must increase ongoing qualified costs without the approval of the
Commission.

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| **Docket No. 57559** | **Financing Order** | **Page 52 of 82** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16.** **Lowest System Restoration Bond Charges** 

95. CenterPoint Houston has proposed a securitization transaction structure that is expected to include (but
is not limited to):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. the use of BondCo as issuer of the system restoration bonds, limiting the risks to system restoration
bondholders of any adverse impact resulting from a bankruptcy proceeding of its parent or any affiliate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. the right to impose and collect system restoration charges that are non-bypassable and which must be trued-up
at least annually, but may be trued-up more frequently under certain circumstances, to assure the timely payment of the debt service and
other ongoing qualified costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. additional collateral in the form of a collection account that includes a capital subaccount funded in
cash in an amount not less than 0.5% of the initial principal amount of the system restoration bonds and other subaccounts resulting in
greater certainty of timely payment of principal and interest to investors and that are in compliance with the Internal Revenue Service
(IRS) requirements that must be met to receive the desired federal income tax treatment for the system restoration bond transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. protection of system restoration bondholders against potential defaults by a servicer or REPs that are
responsible for billing and collecting the system restoration charges from existing or future retail customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. benefits for federal income tax purposes including: (i) the transfer of the rights under this Financing
Order to BondCo not resulting in gross income to CenterPoint Energy and the future revenues under the system restoration charges
being included in CenterPoint Energy's gross income under its usual method of accounting, (ii) the issuance of the system restoration
bonds and the transfer of the proceeds of the system restoration bonds to CenterPoint Houston not resulting in gross income to CenterPoint
Energy, and (iii) the system restoration bonds constituting obligations of CenterPoint Energy;

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| **Docket No. 57559** | **Financing Order** | **Page 53 of 82** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. the system restoration bonds will be marketed using proven underwriting and marketing processes, through
which market conditions and investors' preferences, with regard to the timing of the issuance, the terms and conditions, expected
and legal final maturities, and other aspects of the structuring and pricing will be determined, evaluated and factored into the structuring
and pricing of the system restoration bonds; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. furnishing timely information to the Commission's designated representative to allow the Commission
through the issuance advice letter process to ensure that the structuring and pricing of the system restoration bonds result in the lowest
system restoration bond charges in compliance with market conditions at the time of pricing and the terms of this Financing Order.

96. CenterPoint Houston's proposed securitization transaction structure is necessary to enable the system
restoration bonds to obtain the highest possible bond credit rating, ensures that the structuring and pricing of the system restoration
bonds will result in the lowest system restoration bond charges in compliance with market conditions at the time of pricing and the terms
of this Financing Order, and ensures the greatest benefit to customers in compliance with market conditions and the terms of this Financing
Order.

97. To ensure that customers receive the tangible and quantifiable economic benefits due from the proposed
securitization and so that the proposed system restoration bond transaction will be in accordance with the standards set forth in PURA
 §§ 36.401, 36.403, 39.301 and 39.303, it is necessary that: (a) the issuance advice letter demonstrates that the transaction
is expected to provide benefits to customers on both the total revenue (i.e., nominal) and present value bases when compared to collection
of the Securitizable Balance through conventional financing; (b) the scheduled final payment date of the last tranche of system restoration
bonds will not exceed 14 years from the date of issuance (although the legal final maturity of the system restoration bonds may extend
to 15 years), (c) the amortization of the system restoration bonds is structured to be in accordance with Findings of Fact 57 and
58, and (d) CenterPoint Houston otherwise satisfies the requirements of this Financing Order.

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| **Docket No. 57559** | **Financing Order** | **Page 54 of 82** |

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98. To allow the Commission to fulfill its obligations under PURA related to the securitization approved in
this Financing Order, it is necessary for CenterPoint Houston, for each series of system restoration bonds issued, to certify to the Commission
that the structure and pricing of that series results in the lowest system restoration bond charges in compliance with market conditions
at the time that the system restoration bonds are priced and the terms (including the specified amortization pattern) of this Financing
Order and, if additional credit enhancements or arrangements to enhance marketability were used, to certify that they are expected to
provide benefits in excess of their cost as required by Findings of Fact 30 through 33 of this Financing Order.

**D.** **Use of Proceeds** 

99. Upon the issuance of system restoration bonds, BondCo will use the net proceeds from the sale of the system
restoration bonds (after payment of transaction costs) to pay to CenterPoint Houston the purchase price of the system restoration property.

100. The net proceeds from the sale of the system restoration bonds (after payment of transaction costs) will
be applied by CenterPoint Houston to reduce its recoverable system restoration costs. The proposed 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 specific application of the proceeds will be determined by market conditions and CenterPoint Houston's expected future
expenditures at the time the proceeds are received. Although PURA § 36.401(a) authorizes the use of proceeds to refinance or
retire utility debt or equity, specific application of the proceeds will depend on (a) the need to maintain a strong investment grade
rating at CenterPoint Houston, (b) the need to remain in compliance with any financial covenants contained in CenterPoint Houston's
financing agreements, and (c) the need to maintain a debt to total capitalization ratio that is no greater than what the Commission
has found to be prudent for a Texas electric transmission and distribution utility to maintain. Because several factors will not be known
until after the proceeds are received, it is not prudent for CenterPoint Houston to decide the particular usage for the proceeds at this
time.

**E.** **Informal Disposition** 

101. More than 15 days have passed since the completion of notice provided in this docket.

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| **Docket No. 57559** | **Financing Order** | **Page 55 of 82** |

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102. CenterPoint Houston, Commission Staff, OPUC, HCOC, TCUC, and TEAM are the only parties to this proceeding.

103. No party requested a hearing and no hearing is needed.

104. Commission Staff recommended approval of the application.

105. This decision is not adverse to any party.

**IV. Conclusions of Law**

The Commission makes the following conclusions of law.

1. CenterPoint Houston is a public utility as defined in PURA § 11.004, and an electric utility as defined
in PURA § 31.002(6).

2. CenterPoint Houston is entitled to file an application for a Financing Order under PURA § 36.401.

3. The Commission has authority over CenterPoint Houston's application under PURA §§ 14.001,
32.001, 36.401–.406 and 39.303.

4. The Commission has authority to approve this Financing Order under PURA chapter 36, subchapter I and chapter
39, subchapter G.

5. Notice of CenterPoint Houston's application was provided in compliance with the Administrative Procedure
Act<sup>64</sup> and 16 TAC §§ 22.54 and 22.55.

6. This proceeding does not constitute a major rate proceeding as defined by 16 TAC § 22.2.

7. PURA chapter 36, subchapter I allows an electric utility to securitize its system restoration costs as
determined in separate proceedings under that subchapter.

8. BondCo will be an assignee as defined in PURA § 39.302(1) when an interest in the system restoration
property created under this Financing Order is transferred, other than as security, to BondCo.

9. The holders of the system restoration bonds and the indenture trustee will each be a financing party as
defined in PURA § 39.302(3).

<sup>64</sup> Tex. Gov't Code §§ 2001.001–.903.

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| **Docket No. 57559** | **Financing Order** | **Page 56 of 82** |

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10. BondCo may issue system restoration bonds in accordance with this Financing Order.

11. The securitization approved in this Financing Order results in the removal of the regulatory asset representing
the distribution-related portion of system restoration costs from CenterPoint Houston's books and satisfies the requirement of PURA
 § 36.401(a) dictating that the proceeds of the system restoration bonds must be used solely for the purposes of reducing the
amount of recoverable system restoration costs, including the refinancing or retirement of utility debt or equity.

12. The securitization approved in this Financing Order satisfies the requirement of PURA § 36.401(b)(2),
mandating that the securitization provides tangible and quantifiable benefits to customers greater than would have been achieved absent
the issuance of system restoration bonds. In compliance with fundamental financial principles, this requirement in PURA § 36.401
can only be determined using an economic analysis to account for the time value of money. An analysis that compares in the aggregate over
the expected life of the system restoration bonds, the present value of the revenue requirement associated with use of conventional financing
with the present value of the revenue required under securitization is an appropriate economic analysis to demonstrate whether securitization
provides economic benefits to customers.

13. PURA § 36.402(b) specifies that system restoration costs include carrying costs at the utility's
weighted average cost of capital as last approved by the Commission in a general rate proceeding from the date the system restoration
costs were incurred until they are recovered. As a result, for purposes of the present value, nominal revenue, and other financial tests,
it is necessary to compute the revenue requirements associated with non-securitized rates reflecting conventional utility financing using
a pre-tax weighted average cost of capital of 7.716%, which is the weighted average cost of capital last approved in a CenterPoint Houston
general rate proceeding.

14. BondCo's issuance of the system restoration bonds approved in this Financing Order in compliance
with the criteria established by this Financing Order satisfies the requirement of PURA § 39.301 prescribing that 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 this Financing Order.

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| **Docket No. 57559** | **Financing Order** | **Page 57 of 82** |

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15. The amount approved in this Financing Order for securitization does not exceed the present value of the
revenue requirement over the life of the proposed system restoration bonds approved in this Financing Order that are associated with the
costs sought to be securitized, as required by PURA § 39.301.

16. The securitization approved in this Financing Order satisfies the requirements of PURA § 39.303(a) directing
that the total amount of revenues to be collected under this Financing Order be less than the revenue requirement that would be recovered
using conventional financing methods and that this Financing Order be in accordance with the standards of PURA § 39.301.

17. Under PURA §§ 36.401, 36.403, 39.301, and 39.303, the Commission has the ability to prohibit
different financial options relating to the system restoration bonds if the evidence supports the finding that the financial option will
not or is unlikely to result in the lowest system restoration bonds charges in compliance with market conditions.

18. This Financing Order adequately details the amount to be recovered and the period over which CenterPoint
Houston will be permitted to recover non-bypassable system restoration charges in accordance with the requirements of PURA §§
36.403 and 36.404. System restoration charges related to a series of system restoration bonds may not be collected after 15 years
from the date of issuance of that series of bonds. This provision does not preclude the servicer from recovering system restoration charges
attributable to service rendered during the 15-year period but remaining unpaid at the end of the 15-year period.

19. The method approved in this Financing Order for collecting and allocating the system restoration charges
satisfies the requirements of PURA § 36.403(g).

20. As provided in PURA § 39.303(d), this Financing Order, together with the system restoration charges
authorized by this Financing Order, is irrevocable and not subject to reduction, impairment, or adjustment by further act of the Commission,
except for the true-up procedures approved in this Financing Order, as required by PURA § 39.307, provided, however, that such irrevocability
must not preclude the Commission from extending the deadline for issuance of system restoration bonds if requested to do so by CenterPoint
Houston.

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| **Docket No. 57559** | **Financing Order** | **Page 58 of 82** |

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21. As provided in PURA § 39.304(a), the rights and interests of CenterPoint Houston or its successor
under this Financing Order, including the right to impose, collect and receive the system restoration charges authorized in this Financing
Order, are assignable and must become system restoration property when they are first transferred to BondCo.

22. The rights, interests and property conveyed to BondCo in the system restoration property sale agreement
and the related bill of sale, including the irrevocable right to impose, collect, and receive system restoration charges and the revenues
and collections from system restoration charges are system restoration property within the meaning of PURA §§ 39.302(8) and
39.304. 23. System restoration property will constitute a present property right for purposes of contracts concerning
the sale or pledge of property, even though the imposition and collection of the system restoration charges depend on further acts by
CenterPoint Houston or others that have not yet occurred, as provided by PURA § 39.304(b).

24. All revenues and collections resulting from the system restoration charges will constitute proceeds only
of the system restoration property arising from this Financing Order, as provided by PURA § 39.304(c).

25. The bond proceeds may be used only for the purposes of reducing the amount of recoverable system restoration
costs. PURA § 36.401(a) further authorizes, but does not require, the use of bond proceeds to refinance or retire utility debt
or equity.

26. Upon the transfer by CenterPoint Houston of system restoration property to a BondCo, the BondCo will have
all of the rights, title and interest of CenterPoint Houston with respect to such system restoration property including the right to impose,
collect, and receive the system restoration charges authorized by the Financing Order.

27. The system restoration bonds issued under this Financing Order will be transition bonds within the meaning
of PURA §§ 36.403(e) and 39.302(6), and the system restoration bonds and holders thereof are entitled to all of the protections
provided under chapter 36, subchapter I and chapter 39, subchapter G of PURA.

28. Amounts that are required to be paid to the servicer as system restoration charges under this Financing
Order or the tariffs approved hereby are transition charges as defined in PURA §§ 36.403(f) and 39.302(7), and
the amounts collected from retail customers with respect to such system restoration charges, are transition charges as defined in PURA §§ 36.403(f) and
39.302(7), to the extent that such amounts are attributable to system restoration charges billed to the REPs by the servicer, whether
or not such charges are set out as a separate line item on the retail customer's bill.

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| **Docket No. 57559** | **Financing Order** | **Page 59 of 82** |

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29. Any payment of system restoration charges by a customer to its REP, directly to the servicer, or to another
entity responsible for collecting system restoration charges from customers under this Financing Order or the tariffs approved hereunder,
will discharge the customer's obligations in respect of that payment, but will not discharge the obligations of any REP or other
entity responsible for collecting system restoration charges from retail customers under this Financing Order to remit such payments to
the servicer of the system restoration bonds on behalf of the BondCo or an assignee or its obligations to pay amounts determined through
subsequent true-up adjustments.

30. As provided in PURA § 39.305, the interests of an assignee, the holders of system restoration bonds,
and the indenture trustee in system restoration property and in the revenues and collections arising from that property are not subject
to setoff, counterclaim, surcharge, or defense by CenterPoint Houston or any other person or in connection with the bankruptcy of CenterPoint
Houston or any other entity.

31. The methodology approved in this Financing Order to true-up the system restoration charges satisfies the
requirements of PURA §§ 36.401 and 39.307.

32. If and when CenterPoint Houston transfers to the BondCo the right to impose, collect, and receive the
system restoration charges and to issue the system restoration bonds, the servicer will be able to recover the system restoration charges
associated with such system restoration property only for the benefit of the BondCo and the holders of the system restoration bonds in
accordance with the servicing agreement.

33. If and when CenterPoint Houston transfers its rights under this Financing Order to the BondCo under an
agreement that expressly states that the transfer is a sale or other absolute transfer in accordance with the true-sale provisions of
PURA § 39.308, then, in accordance with that statutory provision, that transfer will be a true sale of an interest in system restoration
property and not a secured transaction or other financing arrangement and title, legal and equitable, to the system restoration property
will pass to the BondCo. As provided by PURA § 39.308, this true sale must apply regardless of whether the purchaser has any recourse
against the seller, or any other term of the parties' agreement, including the seller's retention of an equity interest in
the system restoration property, CenterPoint Houston's role as the collector of system restoration charges relating to the system
restoration property, or the treatment of the transfer as a financing for tax, financial reporting, or other purposes.

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| **Docket No. 57559** | **Financing Order** | **Page 60 of 82** |

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34. As provided in PURA § 39.309(b), a valid and enforceable lien and security interest in the system

Order and the execution and delivery of a security agreement with the holders of the system restoration bonds or a trustee on their behalf
in connection with the issuance of the system restoration bonds. The lien and security interest will attach automatically from the time
value is received for the system restoration bonds and, on perfection through the filing of notice with the secretary of state in
accordance with the rules prescribed by the secretary of state under PURA § 39.309(d), will be a continuously perfected
lien and security interest in the system restoration property and all proceeds of the system restoration property, whether accrued or
not, will have priority in the order of filing and will take precedence over any subsequent judicial or other lien creditor.

35. As provided in PURA § 39.309(c), the transfer of an interest in system restoration property to an
assignee will be perfected against all third parties, including subsequent judicial or other lien creditors, when this Financing Order
becomes effective, transfer documents have been delivered to that assignee, and a notice of that transfer has been filed in accordance
with the rules prescribed by the secretary of state under PURA § 39.309(d); provided, however, that if notice of the transfer
has not been filed in accordance with this process within ten days after the delivery of transfer documentation, the transfer of the interest
will not be perfected against third parties until the notice is filed. The transfer to BondCo of CenterPoint Houston's rights under
this Financing Order will be a transfer of an interest in system restoration property for purposes of PURA § 39.309(c).

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| **Docket No. 57559** | **Financing Order** | **Page 61 of 82** |

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36. As provided in PURA § 39.309(e), the priority of a lien and security interest perfected in accordance
with PURA § 39.309 will not be impaired by any later change in the system restoration charges under PURA § 39.307 or by the
commingling of funds arising from system restoration charges with other funds, and any other security interest that may apply to those
funds will be terminated when they are transferred to a segregated account for an assignee or a financing party. To the extent that system
restoration charges are not collected separately from other funds owed by REPs, the amounts to be remitted to such segregated account
for an assignee or a financing party may be determined according to system-wide charge off percentages, collection curves or such other
reasonable methods of estimation, as are set forth in the servicing agreement.

37. As provided in PURA § 39.309(e), if system restoration property is transferred to an assignee, any
proceeds of the system restoration property will be treated as held in trust for the assignee.

38. As provided in PURA § 39.309(f), if a default or termination occurs under the system restoration
bonds, the financing parties or their representatives may foreclose on or otherwise enforce their lien and security interest in the relevant
system restoration property as if they were secured parties under chapter 9 of the Texas Business and Commerce Code, and, upon application
by or on behalf of the financing parties, the Commission may order that amounts arising from the related system restoration charges be
transferred to a separate account for the financing parties' benefit, to which their lien and security interest may apply.

39. As provided in PURA § 39.309(f), if a default or termination occurs under the system restoration
bonds, on application by or on behalf of the financing parties, a district court of Travis County, Texas, must order the sequestration
and payment to those parties of revenues arising from the system restoration charges.

40. As provided by PURA § 39.310, the system restoration bonds authorized by this Financing Order are
not a debt or obligation of the State of Texas and are not a charge on its full faith and credit or taxing power.

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| **Docket No. 57559** | **Financing Order** | **Page 62 of 82** |

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41. Under PURA § 39.310, the State of Texas has pledged for the benefit and protection of all financing
parties and CenterPoint Houston, that it will not take or permit any action that would impair the value of system restoration property,
or, except as permitted by PURA § 39.307, reduce, alter or impair the system restoration charges to be imposed, collected,
and remitted to any financing parties, until the principal, interest and premium, and any other charges incurred and contracts to be performed
in connection with the system restoration bonds have been paid and performed in full. BondCo, in issuing system restoration bonds, is
authorized under PURA § 39.310 and this Financing Order to include this pledge in any documentation relating to the system restoration
bonds.

42. As provided in PURA § 39.311, transactions involving the transfer and ownership of the 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.

43. This Financing Order will remain in full force and effect and unabated notwithstanding the bankruptcy
of CenterPoint Houston, its successors, or assignees.

44. CenterPoint Houston retains sole discretion regarding whether or when to assign, sell, or otherwise transfer

authorized by this Financing Order, subject to the right of the Commission, acting through its designated representative to participate
in the structuring, pricing, and marketing of the system restoration bonds, and the Commission's authority through the issuance
advice letter process to find that the proposed issuance does not comply with the requirements of PURA and this Financing Order.

45. This Financing Order is final, is not subject to rehearing by this Commission, and is not subject to review
or appeal except as expressly provided in PURA §§ 36.405(g) and 39.303(f). The finality of this Financing Order is
not impaired in any manner by the participation of the Commission through its designated representative in any decisions related to issuance
of the system restoration bonds or by the Commission's review of or issuance of an order related to the issuance advice letter required
to be filed with the Commission by this Financing Order.

46. This Financing Order meets the requirements for a financing order under chapter 36, subchapter I
and chapter 39, subchapter G of PURA.

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| **Docket No. 57559** | **Financing Order** | **Page 63 of 82** |

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47. The true-up mechanism, and all other obligations of the State of Texas and the Commission set forth in
this 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 Commission in accordance with Texas law.

48. The requirements for informal disposition under 16 TAC § 22.35 have been met in this proceeding.

**V. Ordering Paragraphs**

In accordance with these findings of fact and conclusions of law, the Commission issues the following orders.

**A.** **Approval** 

1. **Authority to Securitize**. CenterPoint Houston is authorized in accordance with this Financing Order
to securitize and to cause the issuance of system restoration bonds with a principal amount equal to the sum of: (a) the Securitizable
Balance at the time the system restoration bonds are issued, plus (b) up-front qualified costs, plus (i) the cost of original
issue discount, credit enhancements and other arrangements to enhance marketability as discussed in Ordering Paragraphs 5 and 22, (ii) rating
agency fees, (iii) United States Securities and Exchange Commission registration fees, (iv) the cost of the Commission's
financial advisor and its legal counsel, if any, and any additional costs incurred by CenterPoint Houston to comply with the requests
and recommendations of the Commission's financial advisor, and (v) any costs incurred by CenterPoint Houston if this Financing
Order is appealed; however, no component of the capped up-front qualified costs will be subject to an individual cap. The Securitizable
Balance as of any given date is equal to the balance of distribution-related system restoration costs as determined in Docket No. 57271
plus Storms-related carrying costs through the date the system restoration bonds are issued and minus all 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 determined in Docket No. 57271. If the actual up-front qualified costs are less than the up-front qualified
costs included in the principal amount securitized, the Periodic Billing Requirement for the first annual true-up adjustment must be reduced
by the amount of such unused funds (together with interest, if any, earned from the investment of such funds). If the final up-front qualified
costs are more than the up-front qualified costs included in the principal amount securitized, CenterPoint Houston may request recovery
of the remaining up-front qualified costs through a surcharge to CenterPoint Houston's rates for service at distribution voltage.

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| **Docket No. 57559** | **Financing Order** | **Page 64 of 82** |

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2. **Accumulated Deferred Federal Income Taxes.** CenterPoint Houston must calculate and place into effect,
contemporaneous with the implementation of system restoration charges, Schedule ADFITC as described in Findings of Fact 20 and 21. Schedule
ADFITC must be subject to adjustment, as necessary, to accurately reflect the amount of ADFIT benefit available over the period of the
rider's existence, through a filing submitted by CenterPoint Houston at the same time it submits its
periodic system restoration charge true-up adjustment filings. Implementation and adjustment of Schedule ADFITC must use the same allocation
factors and billing determinants as the system restoration charge implementation and true-up adjustment filings. The ADFIT benefits associated
with such system restoration costs must not be applied to reduce the Securitizable Balance, nor may the ADFIT balance associated with
such system restoration costs be used to reduce rate base in future proceedings. Schedule ADFITC and the obligation to provide the ADFIT
must not be transferred to BondCo, must not be or become system restoration property as defined in PURA § 39.302(8) but must
be and remain a separate unsecuritized rate credit of CenterPoint Houston.

3. **Recovery of System Restoration Charges.** CenterPoint Houston must impose on, and the servicer must
collect from, REPs serving all existing and future retail customers located within CenterPoint Houston's certificated service area
as it exists on the date of this Financing Order and take service at distribution voltage and other entities which, under the terms of
this Financing Order or the tariffs approved hereby, are required to bill, pay or collect system restoration charges, as provided in this
Financing Order, system restoration charges in an amount sufficient to provide for the timely recovery of its aggregate qualified costs
detailed in this Financing Order (including payment of principal and interest on the system restoration bonds). REPs and other entities
responsible for collecting system restoration charges from retail customers under this Financing Order must pay the system restoration
charges billed to them whether or not they collect the system restoration charges from their retail customers.

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| **Docket No. 57559** | **Financing Order** | **Page 65 of 82** |

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4. **Provision of Information.** CenterPoint Houston must take all necessary steps to ensure that the
Commission or its designated representative is provided sufficient and timely information to allow the Commission or its designated representative
to fully participate in and exercise its decision-making authority over the proposed securitization as provided in this Financing Order.

5. **Issuance Advice Letter.** For each series of system restoration bonds issued, CenterPoint Houston
must submit a draft issuance advice letter to Commission Staff for review not later than two weeks before the expected date of commencement
of marketing the system restoration bonds. With the approval of the Commission's designated representative, the actual date of the
commencement of marketing may be a date other than the expected date. Within one week after receipt of the draft issuance advice letter,
Commission Staff must provide CenterPoint Houston comments and recommendations regarding the adequacy of the information provided. Not
later than the end of the first business day after the pricing of the system restoration bonds and before issuance of the system restoration
bonds, CenterPoint Houston, in consultation with the Commission acting through its designated representative, must file with the Commission
an issuance advice letter in substantially the form of the issuance advice letter attached as appendix A to this Financing Order. As part
of the issuance advice letter, CenterPoint Houston, through an officer of CenterPoint Houston, must provide a certification worded precisely
as the statement in the Form of Issuance Advice Letter approved by the Commission. The issuance advice letter must be completed,
must evidence the actual dollar amount of the initial system restoration charges and other information specific to the system restoration
bonds to be issued, and must certify to the Commission that the structure and pricing of that series of system restoration bonds result
in the lowest system restoration bond charges in compliance with market conditions at the time that the system restoration bonds are priced
and with the terms set out in this Financing Order. In addition, if original issue discount, additional credit enhancements, or arrangements
to enhance marketability are used, the issuance advice letter must include certification that the original issue discount, additional
credit enhancements, or other arrangements are reasonably expected to provide benefits as required by this Financing Order. All amounts
which require computation must be computed using the mathematical formulas contained in the form of the issuance advice letter in appendix
A to this Financing Order and Schedule SRC approved in this Financing Order. Electronic spreadsheets with the formulas supporting the
schedules contained in the issuance advice letter must be included with such letter. The Commission's review of the issuance advice
letter must be limited to the arithmetic accuracy of the calculations and to compliance with PURA, this Financing Order, and the specific
requirements that are contained in the issuance advice letter. The initial system restoration charges and the final terms of the system
restoration bonds set forth in the issuance advice letter must become effective on the date of issuance of the system restoration bonds
(which must not occur before the fifth business day after pricing) unless before noon on the fourth business day after pricing the Commission
issues an order finding that the proposed issuance does not comply with the requirements set forth above in this Financing Order. CenterPoint
Houston 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 Commission.

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| **Docket No. 57559** | **Financing Order** | **Page 66 of 82** |

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6. **Approval of Tariffs.** The form of Schedule SRC attached as appendix B to this order, and the form
of Schedule ADFITC, attached as appendix D to this order, are approved. Before the issuance of any system restoration bonds under this
Financing Order, CenterPoint Houston must file tariffs that conform to the form of the Schedule SRC tariff and the Schedule ADFITC tariff
provisions attached to this Financing Order.

**B.** **System Restoration Charges** 

7. **Imposition and Collection.** CenterPoint Houston is authorized to impose on, and the servicer is
authorized to collect from, REPs serving all existing and future retail customers that are served at distribution voltage and are located
within CenterPoint Houston's certificated service area as it existed on the date this Financing Order is issued, and other entities
which, under the terms of this Financing Order or the tariffs approved hereby are required to bill, pay or collect system restoration
charges, system restoration charges in an amount sufficient to provide for the timely recovery of the aggregate Periodic Payment Requirement
(including payment of principal and interest on the system restoration bonds), as approved in this Financing Order. If there is a shortfall
in payment of an amount billed, the amount paid must first be apportioned between the system restoration charges and other fees and charges
(including future system restoration charges associated with system restoration bonds issued under future financing orders) other than
late fees, and second, any remaining portion of the payment must be allocated to late fees.

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| **Docket No. 57559** | **Financing Order** | **Page 67 of 82** |

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8. **BondCo's Rights and Remedies.** Upon the transfer by CenterPoint Houston of the system restoration
property to BondCo, BondCo must have all of the rights, title, and interest of CenterPoint Houston with respect to such system restoration
property, including, without limitation, the right to exercise any and all rights and remedies with respect thereto, including the right
to authorize disconnection of electric service and to assess and collect any amounts payable by any retail customer in respect of the
system restoration property. If system restoration bonds are issued in more than one series, then the system restoration property transferred
as a result of each issuance must be only those rights associated with that portion of the total amount authorized to be securitized under
this Financing Order which is securitized by such issuance. The rights to impose, collect and receive system restoration charges along
with the other rights arising under this Financing Order as they relate to any portion of the total amount authorized to be securitized
that remains unsecuritized must remain with CenterPoint Houston and must not become system restoration property until transferred to the
BondCo in connection with a subsequent issuance of system restoration bonds.

9. **Collector of System Restoration Charges.** CenterPoint Houston or any subsequent servicer of the
system restoration bonds must bill a consumer's REP or other entity which, under the terms of this Financing Order or the tariffs
approved hereby, is required to bill, or collect system restoration charges, for the system restoration charges attributable to that customer.
REPs and other entities responsible for collecting system restoration charges from retail customers under this Financing Order must pay
the system restoration charges billed to them less the charge off allowance as provided in Finding of Fact 55(j) whether or not they
collect the system restoration charges from their retail customers.

10. **Collection Period.** The system restoration charges related to a series of system restoration bonds
must be designed to be collected over the scheduled life of the system restoration bonds, which may not exceed 14 years. However, to the
extent that any amounts are not recovered at the end of this period, CenterPoint Houston may continue to recover them over a period ending
not more than 15 years from the date of issuance of that series of system restoration bonds. Amounts remaining unpaid after this 15-year
period may be recovered but only to the extent that the charges are attributable to system restoration charges allocable to the 15-year
period.

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| **Docket No. 57559** | **Financing Order** | **Page 68 of 82** |

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11. **Allocation.** CenterPoint Houston must allocate the system restoration charges between retail customer
classes in the manner described in this Financing Order and Schedule SRC.

12. **Non-bypassability.** CenterPoint Houston and any other entity providing electric transmission or
distribution services and any REP providing services to any retail customer within CenterPoint Houston's certificated service area
as it existed on the date this Financing Order is issued are entitled to collect and must remit, in accordance with this Financing Order,
the system restoration charges from such retail customers, including certain customers in a multiply-certificated service area that switch
service providers as described in finding of fact 72 and certain retail consumers that switch to certain new on-site generation as described
in finding of fact number 73, and such retail consumers are required to pay such system restoration charges. The Commission 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 certificated service area as it exists on the date this Financing Order is issued and any
REP providing services to any retail customer within such certificated service area.

13. **True-Ups.** True-ups of the system restoration charges, including any required adjustments to PBRAFs,
must be undertaken and conducted as described in Schedule SRC. The servicer must file the true-up adjustments in a compliance docket and
must give notice of the filing to all parties in this docket. If system restoration bonds are issued in more than one series, then each
series will be subject to separate true-up adjustments under PURA and this Financing Order, provided, however, that more than one series
may be trued-up in a single proceeding.

14. **Ownership Notification.** Any entity that bills system restoration charges to retail customers must,
at least annually, provide written notification to each retail customer for which the entity bills system restoration charges that the
system restoration charges are the property of BondCo and not of the entity issuing such bill.

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| **Docket No. 57559** | **Financing Order** | **Page 69 of 82** |

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**C.** **System Restoration Bonds** 

15. **Issuance.** BondCo is authorized to issue system restoration bonds as specified in this Financing
Order. The ongoing qualified costs described in appendix C may be recovered directly through the system restoration charges. The system
restoration bonds must be denominated in United States dollars.

16. **Up-Front Qualified Costs.** CenterPoint Houston may securitize up-front qualified costs in accordance
with the terms of this Financing Order, which provide that the total amount for up-front qualified cost must not exceed $5.2 million plus
(i) the cost of original issue discount, credit enhancements and other arrangements to enhance marketability as discussed in Ordering
Paragraphs 5 and 22, (ii) rating agency fees, (iii) United States Securities and Exchange Commission registration fees, (iv) the
cost of the Commission's financial advisor and its legal counsel, if any, and any additional costs incurred by CenterPoint Houston
to comply with the requests and recommendations of the Commission's financial advisor, and (v) any costs incurred by CenterPoint
Houston if this Financing Order is appealed.

17. **Ongoing Qualified Costs.** CenterPoint Houston may recover its actual ongoing qualified costs through
its system restoration charges, subject to the caps on the servicing fees and administration fees (which are applicable as long as CenterPoint
Houston serves as servicer or administrator, as applicable) set forth in Finding of Fact 23 and appendix C to this Financing Order. Ongoing
qualified costs other than the servicing and administration fees of CenterPoint Houston as servicer and administrator are not capped by
this Financing Order. Ongoing qualified costs also include an annual return at the authorized pre-tax return on equity determined in CenterPoint
Houston's most recent base-rate case on the amount, if any, of invested capital in excess of 0.5% of the principal amount of each
series of bonds as discussed in Finding of Fact 61. The amount of ongoing qualified costs is subject to updating in the issuance advice
letter to reflect a change in the size of the system restoration bond issuance, any decision to issue the system restoration bonds in
more than one series, and other information available at the time of submission of the issuance advice letter. As provided in Ordering
Paragraph 28, a servicer, other than CenterPoint Houston, may collect a servicing fee higher than that set forth in appendix C to
this Financing Order, if such higher fee is approved by the Commission and the indenture trustee.

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| **Docket No. 57559** | **Financing Order** | **Page 70 of 82** |

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18. **Refinancing.** CenterPoint Houston or any assignee may apply for one or more new financing orders
under PURA § 39.303(g).

19. **Collateral.** All system restoration property and other collateral must be held and administered
by the indenture trustee under the indenture as described in CenterPoint Houston's application. BondCo must establish a collection
account with the indenture trustee as described in the application and Findings of Fact 60 through 65. Upon payment of the principal amount
of all system restoration bonds authorized in this Financing Order and the discharge of all obligations in respect thereof, all amounts
in the collection account, including investment earnings, other than amounts in the capital subaccount, must be released by the indenture
trustee to the servicer on behalf of BondCo. CenterPoint Houston must notify the Commission within 30 days after the date that these funds
are eligible to be released of the amount of such funds available for crediting to the benefit of customers.

20. **Distribution Following Repayment.** Following repayment of the system restoration bonds authorized
in this Financing Order and release of the funds held by the indenture trustee, the servicer, on behalf of BondCo, must distribute to
REPs (and other entities responsible for collection of system restoration charges from retail customers), the final balance of the general,
excess funds, and all other subaccounts (except the capital subaccount), whether such balance is attributable to principal amounts deposited
in such subaccounts or to interest thereon, remaining after all other qualified costs have been paid. The amounts must be distributed
to each REP and other entity that paid Schedule SRC system restoration charges during the last 12 months that the Schedule SRC system
restoration charges were in effect. BondCo or its successor in interest to the system restoration property must, to the extent the capital
subaccount is not depleted below its original amount, also distribute to REPs (and other entities responsible for collection of system
restoration charges from retail customers) any subsequently collected system restoration charges. The amount paid to each REP or other
entity must be determined by multiplying the total amount available for distribution by a fraction, the numerator of which is the total
Schedule SRC system restoration charges paid by the REP or other entity during the last 12 months Schedule SRC charges were in effect
and the denominator of which is the total Schedule SRC system restoration charges paid by all REPs and other entities responsible for
collection of system restoration charges from customers during the last 12 months the Schedule SRC system restoration charges were in
effect.

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|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 71 of 82** |

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21. **Funding of Capital Subaccount.** The capital contribution by CenterPoint Houston to BondCo to be
deposited into the capital subaccount must, with respect to each series of system restoration bonds, be funded by CenterPoint Houston
and not from the proceeds of the sale of system restoration bonds. Upon payment of the principal amount of all system restoration bonds
and the discharge of all obligations in respect thereof, all amounts in the capital subaccount, including investment earnings, must be
released to BondCo for payment to CenterPoint Houston. Investment earnings in this subaccount may be released earlier in accordance with
the indenture.

22. **Original Issue Discount and Credit Enhancement.** CenterPoint Houston may provide original issue
discount or provide for various forms of credit enhancement including letters of credit, overcollateralization subaccount or other reserve
accounts, surety bonds, and other mechanisms designed to promote the credit quality or marketability of the system restoration bonds to
the extent not prohibited by this Financing Order. The decision to use such arrangements to enhance credit or promote marketability must
be made in conjunction with the Commission acting through its designated representative. CenterPoint Houston may not enter into an interest
rate swap, currency hedge, or other hedging arrangement. CenterPoint Houston may include the costs of original issue discount, credit
enhancements, or other arrangements to promote credit quality or marketability as qualified costs only if CenterPoint Houston certifies
that such arrangements are reasonably expected to provide benefits greater than their cost and such certifications are agreed to by the
Commission's designated representative. CenterPoint Houston must not be required to enter into any arrangements to promote credit
quality or marketability unless all related costs and liabilities can be included in qualified costs. CenterPoint Houston and the Commission's
designated representative must evaluate the relative benefits of the arrangements in the same way that benefits are quantified under the
tangible and quantifiable benefits test. This Ordering Paragraph does not apply to the collection account or its subaccounts approved
in this Financing Order.

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|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 72 of 82** |

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23. **Annual Weighted Average Interest Rate of Bonds.** The effective annual weighted-average interest
rate of the system restoration bonds, excluding up-front and ongoing costs, must not exceed 7.24%.

24. **Life of Bonds.** The legal final maturity date of the system restoration bonds authorized by this
Financing Order must not exceed 15 years.

25. **Amortization Schedule.** The Commission approves the amortization schedule, and the system restoration
bonds must be structured to provide a system restoration charge that is designed to produce a substantially level annual revenue requirement
over the expected life of the system restoration bonds.

26. **Commission Participation in Bond Issuance.** The Commission, acting through its designated representative,
must participate directly with CenterPoint Houston in negotiations regarding the structuring, pricing, and marketing of the system restoration
bonds must have equal rights with CenterPoint Houston to approve or disapprove the proposed structuring, pricing, and marketing of the
system restoration bonds. The Commission's designated representative must have the right to participate fully and in advance regarding
all aspects of the structuring, pricing, and marketing of the system restoration bonds (and all parties must be notified of the designated
representative's role), and must be provided timely information that is necessary to fulfill its obligation to the Commission. The
Commission directs its designated representative to advise the Commission of any proposal that does not comply in any material respect
with the criteria established in this Financing Order and to promptly inform CenterPoint Houston and the Commission of any items that,
in the designated representative's opinion, are not reasonable. Although this Financing Order is written in the context of an underwritten
registered public offering, nothing herein must be construed to preclude issuance of the system restoration bonds through a competitive
bid offering or private placement if CenterPoint Houston and the Commission's designated representative agree that CenterPoint Houston
should do so. The Commission's designated representative must notify CenterPoint Houston and the Commission no later than 12:00
p.m. central standard time on the business day after the Commission's receipt of the issuance advice letter for each series
of system restoration bonds whether the structuring, marketing, and pricing of that series of system restoration bonds comply with the
criteria established in this Financing Order.

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|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 73 of 82** |

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27. **Use of BondCo.** CenterPoint Houston must use BondCo, a special purpose securitization funding entity,
as proposed in its application, in conjunction with the issuance of any system restoration bonds authorized under this Financing Order.
BondCo must be funded by CenterPoint Houston with an amount of capital that is sufficient for BondCo to carry out its intended functions
and to avoid the possibility that CenterPoint Houston would have to extend funds to BondCo in a manner that could jeopardize the bankruptcy
remoteness of BondCo. CenterPoint Houston may create more than one BondCo in which event, the rights, structure, and restrictions described
in this Financing Order with respect to BondCo would be applicable to each purchaser of system restoration property to the extent of the
system restoration property sold to it and the system restoration bonds issued by it.

**D.** **Servicing** 

28. **Servicing Agreement.** The Commission authorizes CenterPoint Houston to enter into a servicing agreement
with BondCo and to perform the servicing duties approved in this Financing Order. Without limiting the foregoing, in its capacity as initial
servicer of the system restoration property, CenterPoint Houston is authorized to calculate, bill and collect for the account of BondCo,
the system restoration charges initially authorized in this Financing Order, as adjusted from time to time to meet the Periodic Payment
Requirements as provided in this Financing Order; and to make such filings and take such other actions as are required or permitted by
this Financing Order in connection with the interim true-ups described in this Financing Order. The servicer must be entitled to collect
servicing fees in accordance with the provisions of the servicing agreement, provided that, as set forth in appendix C, the annual servicing
fee payable to CenterPoint Houston while it is serving as servicer (or to any other servicer affiliated with CenterPoint Houston) must
not at any time exceed 0.075% of the initial principal amount of the system restoration bonds. The annual servicing fee payable to any
other servicer not affiliated with CenterPoint Houston is required to not at any time exceed 0.6% of the initial principal amount of the
system restoration bonds unless such higher rate is approved by the Commission under Ordering Paragraph 31. The servicing agreement
for this securitization is required to also include a provision that CenterPoint Houston is required to indemnify the Commission (for
the benefit of retail customers) in connection with any increase in servicing fees that become payable as a result of a default resulting
from CenterPoint Houston's willful misconduct, bad faith, or negligence in performance of its duties or observance of its covenants
under the servicing agreement. The indemnity will be enforced by the Commission but will not be enforceable by any REP or retail customer.

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|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 74 of 82** |

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29. **Administration Agreement.** The Commission authorizes CenterPoint Houston to enter into an administration
agreement with each BondCo to provide the services covered by the administration agreements in CenterPoint Houston's prior securitization
transactions. The fee charged by CenterPoint Houston as administrator under that agreement must not exceed $100,000 per annum per
BondCo plus reimbursable third-party costs.

30. **Servicing and Administration Agreement Revenues.** The servicing and administration fees collected
by CenterPoint Houston, or any affiliate of CenterPoint Houston, acting as either the servicer or the administrator under the servicing
agreement or administration agreement, must be included as a revenue credit and reduce revenue requirements in each CenterPoint Houston
base-rate case. The expenses incurred by CenterPoint Houston or such affiliate to perform obligations under the servicing agreement and
the administration agreement must likewise be included as a cost of service in each CenterPoint Houston base-rate case.

31. **Replacement of CenterPoint Houston as Servicer.** Upon the occurrence of an event of default under
the servicing agreement relating to CenterPoint Houston's performance of its servicing functions with respect to the system restoration
charges, the financing parties may replace CenterPoint Houston as the servicer in accordance with the terms of the servicing agreement.
If the servicing fee of the replacement servicer will exceed the applicable maximum servicing fee specified in Ordering Paragraph 28,
the replacement servicer must not begin providing service until (i) the date the Commission approves the appointment of such replacement
servicer or (ii) if the Commission does not act to either approve or disapprove the appointment, the date which is 45 days after
notice of appointment of the replacement servicer is provided to the Commission. No entity may replace CenterPoint Houston as the servicer
in any of its servicing functions with respect to the system restoration charges and the system restoration property authorized by this
Financing Order, if the replacement would cause any of the then current credit ratings of the system restoration bonds to be suspended,
withdrawn, or downgraded.

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| | | |
|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 75 of 82** |

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32. **Amendment of Agreements.** The parties to the Servicing Agreement, Administration Agreement, Base
Indenture, and System Restoration Property Sale Agreement may amend the terms of such agreements; provided, however, that no amendment
to any such agreement may increase the ongoing qualified costs without the approval of the Commission. Any amendment that does not increase
the ongoing qualified costs must be effective without prior Commission authorization. Any amendment to any such agreement that may have
the effect of increasing ongoing qualified costs must be provided by BondCo to the Commission along with a statement as to the possible
effect of the amendment on the ongoing qualified costs. The amendment must become effective on the later of (i) the date proposed
by the parties to the amendment or (ii) 31 days after such submission to the Commission unless the Commission issues an order disapproving
the amendment within a 30-day period.

33. **Collection Terms.** The servicer must remit collections of the system restoration charges to BondCo
or the indenture trustee for BondCo's account in accordance with the terms of the servicing agreement.

34. **Contract to Provide Service.** In connection with the assignment, sale or transfer of the system

that requires CenterPoint Houston to continue to operate its transmission and distribution system to provide electric services to
CenterPoint Houston's customers; provided, however, that this provision must not prohibit CenterPoint Houston from selling, assigning,
or otherwise divesting its transmission and distribution systems or any part thereof so long as the entities acquiring such systems agree
to continue operating the facilities to provide electric service to CenterPoint Houston's customers.

35. **SEC Requirements.** Each REP or other entity responsible for collecting system restoration charges
from retail customers must furnish to BondCo or CenterPoint Houston or to any successor servicer information and documents necessary to
enable BondCo or CenterPoint Houston or any successor to comply with their respective disclosure and reporting requirements, if any, with
respect to the system restoration bonds under federal securities laws.

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| | | |
|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 76 of 82** |

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**E.** **Retail Electric Providers** 

36. **REP Billing and Credit Standards.** The Commission approves the REP standards detailed in Finding
of Fact 55. These proposed REP standards relate only to the billing and collection of system restoration charges authorized under this
Financing Order, and do not apply to collection of any other non-bypassable charges or other charges. The standards apply to all REPs
other than REPs that have contracted 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 must remain subject to these standards. Upon adoption of any amendment to the rules governing REP
standards as set out in 16 TAC § 25.108, Commission Staff must initiate a proceeding to investigate the need to modify the standards
adopted in this Financing Order to conform to that rule and to address whether each of the rating agencies that have rated the system
restoration bonds will determine that such modifications will not cause a suspension, withdrawal, or downgrade of the ratings on the system
restoration bonds. Modifications to the REP standards adopted in this Financing Order may not be implemented absent prior written confirmation
(or deemed inapplicability of such confirmation requirement) 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. The servicer
of the system restoration bonds must also comply with the provisions of the REP standards adopted by this Financing Order that are applicable
to the servicer.

37. **System Restoration Charge Remittance Procedures.** System restoration charges must be billed and
collected in accordance with the REP standards adopted by this Financing Order. REPs must be subject to penalties as provided in these
standards. A REP must not be obligated to pay the overdue system restoration charges of another REP whose customers it agrees to serve.

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|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 77 of 82** |

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38. **Remedies upon REP Default.** A servicer of system restoration bonds must have the remedies provided
in the REP standards adopted by this Financing Order. If a REP that is in default fails to immediately select and implement one of the
options provided in the REP standards or, after making its selection, fails to adequately meet its responsibilities under the selected
option, then, subject to the limitations and requirements of the bankruptcy code if the REP is a debtor in bankruptcy, the REP is required
to allow the POLR or a qualified REP of the consumer's choosing to immediately assume the responsibility for the billing and collection
of system restoration charges in the manner and for the time provided in the REP standards.

39. **Billing by POLRs.** Every POLR appointed by the Commission must comply with the minimum credit rating
or deposit or credit support requirements described in the REP standards in addition to any other standard that may be adopted by the
Commission. If the POLR defaults or is not eligible to provide billing and collection services, the servicer must immediately assume responsibility
for billing and collection of system restoration charges and continue to meet this obligation until a new POLR can be named by the Commission
or the customer requests the services of a REP in good standing. Retail customers may never be directly re-billed by the successor REP,
the POLR, or the servicer for any amount of system restoration charges the customers have previously paid to their REP.

40. **Disputes.** Disputes between a REP and a servicer regarding any amount of billed system restoration
charges must be resolved in the manner provided by the REP standards adopted by this Financing Order.

41. **Metering Data.** If the servicer is providing metering services to a REP's retail customers,
then metering data must be provided to the REP at the same time as the billing. If the servicer is not providing metering services, the
entity providing metering services must comply with Commission rules and ensure that the servicer and the REP receive timely and
accurate metering data for the servicer to meet its obligations under the servicing agreement and this Financing Order.

42. **Charge-Off Allowance.** The REP may retain an allowance for charge-offs from its payments to the
servicer as provided in the REP standards adopted by this Financing Order.

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|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 78 of 82** |

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43. **Service Termination.** In the event that the servicer is billing retail customers for system restoration
charges, the servicer must have the right to terminate transmission and distribution service to the end-use consumer for non-payment by
the end-use consumer under applicable Commission rules. In the event that a REP or the POLR is billing retail customers for system restoration
charges, the REP or POLR must have the right to transfer the consumer to the POLR or to another certified REP or to direct the servicer
to terminate transmission and distribution service to the end-use consumer for non-payment by the end-use consumer to the extent permitted
by and in accordance with terms and limitations of the applicable Commission rules.

**F.** **Structure of the Securitization** 

44. **Structure.** CenterPoint Houston must structure the securitization as proposed in CenterPoint Houston's
application. This structure must be in accordance with Findings of Fact 95through 98.

**G.** **Use of Proceeds** 

45. **Use of Proceeds.** Upon the issuance of system restoration bonds, BondCo must pay the net proceeds
from the sale of the system restoration bonds (after payment of transaction costs) to CenterPoint Houston for the purchase price of the
system restoration property. CenterPoint Houston will apply these net proceeds to reduce recoverable system restoration costs.

**H.** **Miscellaneous Provisions** 

46. **Continuing Issuance Right.** CenterPoint Houston has the continuing irrevocable right to cause the
issuance of system restoration bonds in one or more series in accordance with this Financing Order for a period commencing with the date
of this Financing Order and extending 24 months following the later of (i) the date on which this Financing Order becomes final and
no longer subject to any appeal; or (ii) the date on which any other regulatory approvals necessary to issue the system restoration
bonds are obtained and no longer subject to any appeal. If at any time during the effective period of this Financing Order there is a
severe disruption in the financial markets of the United States, the effective period must automatically be extended to a date which is
not less than 90 days after the date such disruption ends.

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|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 79 of 82** |

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47. **Internal Revenue Service Private Letter or Other Rulings.** CenterPoint Houston is not required by
this Financing Order to obtain a ruling from the IRS; however, if it elects to do so, then upon receipt, CenterPoint Houston must promptly
deliver to the Commission a copy of each private letter or other ruling issued by the IRS with respect to the proposed securitization
transaction, the system restoration bonds or any other matter related thereto. CenterPoint Houston must also include a copy of every such
ruling by the IRS it has received as an attachment to each issuance advice letter required to be filed by this Financing Order.

48. **Binding on Successors.** This Financing Order, together with the system restoration charges authorized
in it, must be binding on CenterPoint Houston and any successor to CenterPoint Houston that provides transmission and distribution service
directly to retail consumers in CenterPoint Houston's certificated service area as it existed on the date of this Financing Order,
and any other entity that provides transmission or distribution services to retail consumers within that service area, and any successor
to such other entity. This Financing Order is also binding on each REP, and any successor, that sells electric energy to retail consumers
located within CenterPoint Houston's certificated service area, any other entity responsible for billing and collecting system restoration
charges on behalf of BondCo, and any successor to the Commission. In this paragraph, a "successor" means any entity that succeeds
by any means whatsoever to any interest or obligation of its predecessor, including by way of bankruptcy, reorganization or other insolvency
proceeding, merger, consolidation, conversion, assignment, pledge or other security, by operation of law or otherwise.

49. **Flexibility.** Subject to compliance with the requirements of this Financing Order, CenterPoint Houston
and BondCo must be afforded flexibility in establishing the terms and conditions of the system restoration bonds, including the final
structure of BondCo, repayment schedules, term, payment dates, collateral, credit enhancement, required debt service, reserves, interest
rates, use of original issue discount, other financing costs, and the ability of CenterPoint Houston, at its option, to cause one or more
series of system restoration bonds to be issued or to create more than one BondCo for purposes of issuing such system restoration bonds.

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|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 80 of 82** |

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50. **Effectiveness of Order.** This Financing Order is effective upon issuance and is not subject to rehearing
by the Commission. Notwithstanding the foregoing, no system restoration property must be created hereunder, and CenterPoint Houston must
not be authorized to impose, collect, and receive system restoration charges, until concurrently with the transfer of CenterPoint Houston's
rights hereunder to BondCo in conjunction with the issuance of the system restoration bonds.

51. **Regulatory Approvals.** All regulatory approvals within the authority of the Commission that are
necessary for the securitization of the system restoration charges associated with the costs that are the subject of the application,
and all related transactions contemplated in the application, are granted.

52. **Payment of Commission's Costs for Professional Services.** In accordance with PURA §§ 36.403(d)(1) and
39.302(4), CenterPoint Houston must pay the costs to the Commission of acquiring professional services for the purpose of evaluating CenterPoint Houston's
proposed securitization transaction, including, but not limited to, the Commission's outside attorneys' fees in the amounts
specified in this Financing Order no later than 30 days after the issuance of any system restoration bonds. Such fees constitute upfront
qualified costs and CenterPoint Houston may be reimbursed for any payments made in accordance with this paragraph by BondCo.

53. **Compliance with PURA § 36.402(c).** If CenterPoint Houston receives insurance proceeds, governmental
grants, or any other source of funding not reflected in the Securitizable Balance to compensate it for system restoration costs or the
Commission determines that the actual costs incurred are less than estimated costs, if any, included in the Securitizable Balance, the
Commission will take such amounts into account as required by PURA § 36.402(c). Such amounts must accrue interest as provided in
PURA § 36.402(e). Any adjustment to reflect such amounts may not affect the stream of revenue available to service the system
restoration bonds. A REP is required to appropriately refund or credit to its customers any reduction in rates or any credits received
from the utility under this paragraph.

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|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 81 of 82** |

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54. **Effect of Appeal of Docket No. 57271.** If the amount of system restoration costs approved in
Docket No. 57271 is subject to judicial review at the time of issuance of the system restoration bonds, CenterPoint Houston must
adjust its rates, other than system restoration charges, or provide credits, other than credits to system restoration charges, in a manner
that will refund over the remaining life of the system restoration bonds any overpayments resulting from securitization of amounts in
excess of the amount resulting from a final determination of the system restoration costs. The adjustment mechanism may not affect the
stream of revenue available to service the system restoration bonds. An adjustment may not be made under this paragraph until all appellate
reviews, including, if applicable, appellate reviews following a Commission decision on remand of its original orders, have been completed.
A REP is required to appropriately refund or credit to its customers any reduction in rates or any credits received from the utility under
this paragraph.

55. **Effect.** This Financing Order constitutes a legal financing order for CenterPoint Houston under
chapter 36, subchapter I and chapter 39, subchapter G of PURA. The Commission finds this Financing Order complies with the provisions
of chapter 36, subchapter I and chapter 39, subchapter G of PURA. A financing order gives rise to rights, interests, obligations and duties
as expressed in chapter 36, subchapter I and chapter 39, subchapter G of PURA. It is the Commission's express intent to give
rise to those rights, interests, obligations and duties by issuing this Financing Order. CenterPoint Houston and the servicer are directed
to take all actions as are required to effectuate the transactions approved in this Financing Order, subject to compliance with the criteria
established in this Financing Order.

56. **Further Commission Action.** The Commission guarantees that it will act under this Financing Order
as expressly authorized by PURA 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 issued under this Financing Order and other costs, including fees and expenses,
in connection with the system restoration bonds.

57. **Not Binding Precedent.** Entry of this Financing Order does not indicate the Commission's endorsement
or approval of any principle or methodology that may underlie the Agreement. Entry of this Financing Order is required to not be regarded
as a binding holding or precedent as to the appropriateness of any principle underlying the Agreement.

58. **All Other Motions Denied.** The Commission denies all other motions and any other requests for general
or specific relief that have not been expressly granted.

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|:---|:---|:---|
| **Docket No. 57559** | **Financing Order** | **Page 82 of 82** |

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**Signed at Austin, Texas on the 5th day of June 2025.**

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|:---|
| **PUBLIC UTILITY COMMISSION OF TEXAS** |
| /s/ Thomas J. Gleeson |
| **THOMAS J. GLEESON, CHAIRMAN** |
| /s/ Kathleen Jackson |
| **KATHLEEN JACKSON, COMMISSIONER** |
| /s/ Courtney K. Hjaltman |
| **COURTNEY K. HJALTMAN, COMMISSIONER** |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg001.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix A Page 1 of 16 FORM OF ISSUANCE ADVICE LETTER day, , 2025 DOCKET NO. XXXX THE PUBLIC UTILITY COMMISSION OF TEXAS SUBJECT: ISSUANCE ADVICE LETTER FOR SYSTEM RESTORATION BONDS Pursuant to the Financing Order adopted in Application of CenterPoint Energy Houston Electric, LLC for a Financing Order, Docket No. XXXX (the "Financing Order"), CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC ("Applicant") hereby submits, no later than the end of the first business day after the pricing date of this series of System Restoration Bonds, the information referenced below. This Issuance Advice Letter is for the 2025 System Restoration Bonds, tranches A- 1 thru A-_. Any capitalized terms not defined in this letter have the meanings ascribed to them in the Financing Order. PURPOSE This filing establishes the following: (a) the total amount of Qualified Costs being securitized; (b) confirmation of compliance with issuance standards; (c) the actual terms and structure of the System Restoration Bonds being issued; (d) the initial System Restoration Charge for retail users; and (e) the identification ofthe BondCo. OUALIFFED COSTS BEING SECURITIZED The total amount of Qualified Costs being securitized (the "Securitized Qualified Costs") is presented in Attachment 1.  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg002.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix A Page 2 of 16 COMPLIANCE WITH ISSUANCE STANDARDS The Financing Order requires Applicant to confirm, using the methodology approved therein, that the actual terms ofthe System Restoration Bonds result in compliance with the standards set forth in the Financing Order. These standards are: 1. The securitization of Qualified Costs will provide tangible and quantifiable benefits to ratepayers, greater than would be achieved absent the issuance of the System Restoration Bonds (See Attachment 2, Schedule D); 2. The amount securitized will not exceed the present value of the conventional revenue requirement over the life of the System Restoration Bonds associated with the Securitized Qualified Costs when the present value calculation is made using a discount rate equal to the proposed interest rate on the System Restoration Bonds (See Attachment 2, Schedule D); 3. The total amount of revenues to be collected under the Financing Order is less than the revenue requirement that would be recovered using conventional financing methods (See Attachment 2, Schedules C and D); 4. The System Restoration Bonds will be issued in one or more series, comprised of one or more tranches, having scheduled final payment dates of no more than 14 years from the date of issuance of such series and legal final maturities not exceeding 15 years from the date of issuance of such series (See Attachment 2, Schedule A); 5. The System Restoration Bonds may be issued with an original issue discount, additional credit enhancement, or arrangements to enhance marketability provided that the Applicant certifies that the original issue discount is reasonably expected to provide benefits greater than its cost; and 6. The structuring and pricing of the System Restoration Bonds is certified by the Applicant to result in the lowest System Restoration Charges consistent with market conditions and the terms (including the amortization structure ordered by the Commission, if any) set out in the Financing Order (See Attachment 4).  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg003.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix A Page 3 of 16 ACTUAL TERMS OF ISSUANCE System Restoration Bond Series: System Restoration Bond Issuer: [BondCo] Trustee: Closing Date: ,2025 Bond Ratings: Moody's Aaa, S&P AAA Amount Issued $ System Restoration Bond Up-Front Qualified Costs: See Attachment 1, Schedule B. System Restoration Bond Ongoing Qualified Costs: See Attachment 2, Schedule B. Expected Tranche Coupon Tranche Weighted Rate Size Average Life Expected Legal Final Final Payrnent Maturity A - 1 % $ yrs i l l l A - 2 % $ yrs - 12 - I l Effective Annual Weighted Average Interest Rate of the System Restoration Bonds: Life of Series: Weighted Average Life of Series: Call provisions (including premium, if any): Target Amortization Schedule: Target Final Payment Dates: Legal Final Maturity Dates: Payments to Investors: % years years Attachment 2, Schedule A Attachment 2, Schedule A Attachment 2, Schedule A Semiannually Beginning ,20 Initial annual Servicing Fee as a percent of the original System Restoration Bond principal balance: 0.10%  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg004.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix A Page 4 of 16 INITIAL SYSTEM RESTORATION CHARGE Table I below shows the current assumptions for each ofthe variables used in the calculation of the initial System Restoration Charges. TABLE I Input Values for Initial System Restoration Charges Applicable period: from to Forecasted retail kWh/kVA sales for the applicable Residential; kWh period: Secondary<= 10; kWh Secondary > 10; kVA Primary; kVA Lighting; kWh System Restoration Bond debt service for the applicable period: $ Percent ofbilled amounts expected to be charged-off: Forecasted % of Billing Paid in the Applicable Period: Forecasted retail kWh/kW sales billed and collected for the applicable period: Forecasted annual ongoing transaction expenses (Excluding System Restoration Bond principal and interest): $ Initial System Restoration Bond outstanding balance: $1.9946% % Target System Restoration Bond outstanding balance asof / / : $ Total Periodic Billing Requirement for applicable period: $ Allocation of the PBR among customer classes: See Attachment 3.  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg005.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix A Page 5 of 16 Based on the foregoing, the initial System Restoration Charges calculated for retail users are as follows: TABLE I[ Rate Class Initial System Restoration Charge Residential $/kWh Secondary <= 10 kVA $/kWh Secondary > 10 kVA $/Per Billing kVA Primary Service $/Per Billing kVA Lighting Services $/kWh IDENTIFICATION OF SPE The owner of the System Restoration Property will be: EFFECTIVE DATE [BondCo]. In accordance with the Financing Order, the System Restoration Charge shall be automatically effective upon the Applicant's receipt of payment in the amount of $1 f~om [BondCo], following Applicant's execution and delivery to [BondCo] of the Bill of Sale transferring Applicant's rights and interests under the Financing Order and other rights and interests that will become System Restoration Property upon transfer to [BondCo] as described in the Financing Order. 1 The total securitized qualified costs less the sum of up-front qualified costs and original issue discount of $ |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg006.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix A Page 6 of 16 NOTICE Copies of this filing are being furnished to the parties on the attached service list. Notice to the public is hereby given by filing and keeping this filing open for public inspection at Applicant's corporate headquarters. AUTHORIZED OFFICER The undersigned is an officer of Applicant and authorized to deliver this Issuance Advice Letter on behalf of Applicant. Respectfully submitted, CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC By: Name: Title:  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg007.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix A Page 7 of 16 ATTACHMENT 1 SCHEDULE A CALCULATION OF SECURITIZED OUALIFIED COSTS Securitizable balance to be securitized $ Up-front Qualified Costs $ TOTAL SECURITIZED QUALIFIED COSTS $ |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg008.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix A Page 8 of 16 ATTACHMENT 1 SCHEDULE B ESTIMATED UP-FRONT QUALIFIED COSTS Legal Fees (Company, Issuer, and Underwriter) $ Accountant' s Fees $ Trustee's/Trustee Counsel's Fees and Expenses $ Servicer's Set-up Costs $ Printing/Edgarizing Expenses $ Company Financial Advisor Fees & Expenses $ BondCo Setup Costs $ Company's Non-Legal Securitization Proceeding Costs & Expenses $ Company's Miscellaneous Administrative Costs $ Underwriter's Fees $ SubtotaI Capped Up-Front Qualified Costs $$ Uncapped Up-Front Costs Commission's Financial Advisor's Fees & Expenses $ Legal Fees & Expenses for Counsel to the Commission's Advisor $ Original Issue Discount $ Cost of Other Credit Enhancements Rounding/Contingency $ Rating Agency Fees $ SEC Registration Fee TOTAL UP-FRONT QUALIFIED COSTS SECURITIZED $ Note: Certain costs are subject to an aggregate cap set forth in the Financing Order. Differences that result from the Estimated Up-front Qualified Costs securitized being more than the actual up-front costs incurred will be resolved through the true-up process described in the Financing Order. Differences that result from the Estimated Up-front Qualified Costs securitized being less than the actual up-front costs incurred may be resolved in a future proceeding as described in the Financing Order, provided that the total amount of capped costs may not be recovered in excess of the aggregate cap.  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg009.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix A Page 9 of 16 ATTACHMENT 2 SCHEDULE A SYSTEM RESTORATION BOND REVENUE REOUIREMENT INFORMATION SERIES ,TRANCHE Payment Date Principal Balance Interest Principal Total Payment $$ l l ll l l 11 SERIES ,TRANCHE Payment Date Principal Balance Interest Principal Total Payment $$ ll l l 11 11 1l l l ll 11 ll Legal Final Maturity: Tranche A-1 [DATE] Tranche A-2 [DATE]  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg010.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix A Page 10 of 16 ATTACHMENT 2 SCHEDULE B ONGOING QUALIFIED COSTS ANNUAL AMOUNT Ongoing Servicer Fees Fee (CenterPoint Houston as $ Servicer) (0.075% of initial System Restoration Bond principal amount) Administration Fees $ Accountants Fees $ Legal Fees/Expenses for Company's/Issuer's Counsel $ Trustee's/Trustee's Counsel Fees & Expenses $ Independent Manager's Fees $ Rating Agency Fees $ Printing/Edgarization Expenses $ Miscellaneous $ TOTAL PROJECTED ONGOING QUALIFIED $ COSTS (with CenterPoint Houston as Servicer) Ongoing Servicers Fee (Third Party as Servicer) (0.60% of $ principal amount) TOTAL PROJECTED ONGOING QUALIFIED $ COSTS (Third Party as Servicer) Note: Certain of the Ongoing Qualified Costs are subject to caps set forth in the Financing Order. The amounts shown for each category of operating expense on this attachment are the expected expenses for the first year of the System Restoration Bonds. System Restoration Charges will be adjusted at least annually to reflect any changes in Ongoing Qualified Costs through the true-up process described in the Financing Order.  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg011.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix A Page 11 of 16 ATTACHMENT 2 SCHEDULE C CALCULATION OF SYSTEM RESTORATION CHARGES Year Total Nominal Present Value System Restoration Ongoing System Restoration of System Bond Payments2 Qualified Costs3 Charge Restoration RequiremenP Charges5 1 $$$$2 $$$$3 $$$$4 $$$$5 $$$$6 $$$$7 $$$$8 $$$$9 $$$$10 $$$$11 $$$$12 $$$$ I3 $$$$14 $$$$ Total $$$$2 From Attachment 2, Schedule A. 3 From Attachment 2, Schedule B. 4 Sum of System Restoration Bond payments and ongoing qualified costs. 5 The discount rate used is the weighted average effective annual interest rate of the System Restoration Bonds.  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg012.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix A Page 12 of 16 ATTACHMENT 2 SCHEDULE D COMPLIANCE WITH SUBCHAPTER G OF THE UTILITIES CODE Tangible & Quantifiable Benefits and Revenue Requirements Tests: 6 Conventional Financing Securitization Financing7 Savings/(Cost) of Securitization Financing Nominal $ million $ million $ million Present Value $ million $ million $ million 6 Calculated in accordance with the methodology cited in the Financing Order. 7 From Attachment 2, Schedule C.  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg013.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix A Page 13 of 16 ATTACHMENT 3 INITIAL ALLOCATION OF COSTS TO SRC CLASSES (1) (2) (3) (4) (5) (6) SRC Class Allocation Periodic Billing Forecasted SRC Charge Factorss Billing Requirement Billing Requirement per SRC Determinants Class Residential % $$$/kWh Secondary <= % $$$/1< 10 kVA Secondary > % $$$/kWh 10 kVA Primary %$$$/kWh Service Lighting %$$$/kWh Services 100.00% $$$/kWh 8 Determined in accordance with the methodology set forth in the Financing Order and Schedule SRC-2.  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg014.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix A Page 14 of 16 ATTACHMENT 4 FORM OF APPLICANT'S CERTIFICATION [CEHE Letterhead] Date: ,2025 Public Utility Commission of Texas 1701 N. Congress Ave. P.O. Box 13362 Austin, TX 78711-3326 [Commission's Financial Advisor] RE . Application of CenterPoint Energy Houston Electric , LLC for a Financing Order , Docket No . CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC (the "Applicant") submits this Certification pursuant to Ordering Paragraph No. _ of the Financing Order in Application of CenterPoint Energy Houston Electric , LLC Inc . for a Financing Order , Docket No . (the "Financing Order"). All capitalized terms not defined in this letter have the meanings ascribed to them in the Financing Order. In its issuance advice letter dated , 2025, the Applicant has set forth the following particulars of the System Restoration Bonds: Name of System Restoration Bonds: SPE: [BondCo] Closing Date: Amount Issued: $ Expected Amortization Schedule: See Attachment 2, Schedule A to the Issuance Advice Letter Distributions to Investors [e.g., quarterly or semi-annually]: Weighted Average Coupon Rate: % Weighted Average Yield:9 % 9 The internal rate of return, calculated including all up-front and ongoing costs.  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg015.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix A Page 15 of 16 The following actions were taken in connection with the design, marketing, structuring and pricing of the bonds: • Included credit enhancement in the form of the true-up mechanism and an equity contribution of 0.50% ofthe original principal amount. • Registered the System Restoration Bonds with the U.S. Securities and Exchange Commission to facilitate greater liquidity. e Achieved preliminary Aaa/AAA ratings from two major rating agencies with final Aaa/AAA ratings as a condition of closing. • Worked with the Commission's designated representative(s) to select underwriters that have relevant experience and execution capability.® Provided the term sheet and preliminary prospectus by e-mail to prospective investors. • Allowed sufficient time for investors to review the term sheet and preliminary prospectus and to ask questions regarding the transaction. e Arranged for the issuance ofrating agency pre-sale reports during the marketing period.® During the period that the System Restoration Bonds were marketed, held daily market update discussions with the underwriting team to develop recommendations for pricing. e Had multiple conversations with all of the members of the underwriting team before and during the marketing phase in which we stressed the requirements of the Financing Order. • Developed and implemented a marketing plan designed to give each of the underwriters incentive to aggressively market the System Restoration Bonds to their customers and to reach out to a broad base of potential investors. • Provided potential investors with access to an internet roadshow for viewing on repeated occasions at investors' convenience. • Adapted the System Restoration Bond offering to market conditions and investor demand at the time of pricing. Variables impacting the final structure of the transaction were evaluated including the length of average lives and maturity of the System Restoration Bonds and interest rate requirements at the time of pricing so that the structure of the transaction would correspond to investor preferences and rating agency requirements for AAA ratings, while meeting the requirements of the Financing Order. [After evaluation, incorporated the use of original issue discount to investors consistent with the expectation that it would provide greater benefit than its cost]  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg016.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix A Page 16 of 16 • Worked with the Commission's designated representative to develop bond allocations, underwriter compensation and preliminary price guidance designed to achieve lowest interest rates. • Worked with Commission and underwriters (and each of our respective counsels) to finalize documentation in accordance with established standards for transaction ofthis sort and the terms of the financing order. [Note: foregoing bullet points are illustrative and will be modified to reflect actual activities in this transaction] Based upon information reasonably available to the officers, agent, and employees of the Applicant, the Applicant hereby certifies that the structuring and pricing of the System Restoration Bonds, as described in the issuance advice letter, will result in the lowest system restoration bond charges consistent with market conditions and the terms of the Financing Order (including the amortization structure, if any, ordered by the Commission), all within the meaning of Sections 39.302 and 36.401 ofPURA. CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC By: Name: Title:  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg017.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix B Chapter 6: Company Specific Items Sheet No. 6.7.4 Page 1 of 16 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area 6.1.1.2.4 SCHEDULE SRC - SYSTEM RESTORATION CHARGES SECTION 1: APPLICABILITY This schedule sets out the rates and terms and conditions under which System Restoration Charges (SRC or SR Charges) will be billed and collected by CenterPoint Energy Houston Electric, LLC (Company), any successor servicer(s) and any retail electric providers (REP) or collection agents billing or collecting SR Charges on behalf of CenterPoint Energy Restoration Bond Company II, LLC (SPE). The SR Charges were authorized by the Financing Order approved by the Public Utility Commission of Texas (Commission) in Docket No. 57559 on [XXXXX] (Financing Order). Pursuant to terms of the Financing Order and the requirements of Section 36.401 et seq. of the Texas Utilities Code, all of the Company's rights under the Financing Order, including the right to bill and collect SR Charges and to adjust SR Charges pursuant to this Schedule SRC, were transferred to the SPE in connection with the issuance of system restoration bonds. The rights transferred to the SPE are "transition property" of the SPE (as defined in Section 39.304 of the Utilities Code). On the effective date of this Schedule SRC the Company will act as servicer on behalf of the SPE to bill, collect, receive and adjust SR Charges imposed pursuant to this Schedule SRC. However, the SPE may select another party to serve as servicer or the Company may resign as servicer in accordance with the terms and subject to the conditions of the Servicing Agreement and the Financing Order. A successor servicer selected under these conditions will assume the obligations of the Company as servicer under this Schedule SRC. As used in this Schedule SRC, the term "Servicer" includes any successor servicer. All actions by the Company under this Schedule SRC, including collection of SR Charges, will be undertaken solely in its role as servicer under the Servicing Agreement between the Company and the SPE dated as of [XXXXX.] This schedule is applicable to: 1. Retail customers located within the certificated service area of Company as such service area existed on [date of Financing Order] who receive electric distribution service through a REP served by the Company and to the facilities, premises and loads of such retail customers; 2. Retail customers located within Company's certificated service area as it existed on [date ofFinancing Order] who are presently receiving distribution service either directly from another utility, electric cooperative or municipally owned utility (T or D Provider) or through a REP served by another T or D Provider, and whose request to change service to the other T or D Provider was made after [date of Financing Order]; 3. Retail customers located within Company's certificated service area as it existed on [date of Financing Order] and who are served by New On-Site Generation. New Revision Number: Effective: XXXXXX  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg018.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix B Chapter 6: Company Specific Items Sheet No. 6.7.4 Page 2 o f 16 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area On-Site Generation means "New On-Site Generation" as defined in the Financing Order. 4. REPs that serve retail customers located within Company's certificated service area as it existed on [date of Financing Order]. 5. Any other entity which, under the terms of the Financing Order or the Utilities Code, may be obligated to pay, bill, collect, or adjust the System Restoration Charges. SECTION 2: CHARACTER OF SYSTEM RESTORATION CHARGES SR Charges are non-bypassable charges. All SR Charges other than those applicable to New On-Site Generation are computed and paid on the basis of individual end-use retail customer consumption or demand. In accordance with the Financing Order, the SR Charges applicable to use ofNew On-Site Generation that results in a "material reduction" ofthe customer's use ofenergy delivered through the Company's distribution facilities (as defined in the Financing Order) are computed and paid based on the output of the onsite generation used to meet the internal electric requirements of the customer. Customers with New On-Site Generation will also be required to pay the SR Charges applicable to energy actually delivered to the Customer through the Company's facilities. Individual end use retail customers are responsible for paying SR Charges billed to them in accordance with the terms of this Schedule SRC whether the charges are billed directly by Servicer or are included in the bills submitted to the customer by a REP or another entity. Payment is to be made to the entity that bills the customer in accordance with the terms of the Servicing Agreement and the Financing Order. The billing entity may be the Company, a successor servicer, a REP or an entity designated to collect SR Charges in place of the REP. The SR Charges are separate charges to be paid in addition to any other applicable charges for services received. Although the SR Charges are separate charges, they may be included within other charges of the billing entity. The REP or entity designated to collect SR Charges in place of the REP will pay SR Charges (less an allowance for charge-offs calculated pursuant to this Schedule SRC) to Servicer in accordance with the requirements of the Financing Order and this Schedule SRC whether or not it has collected the SR Charges from its customers. To the extent that the REP's actual charge-offs differ from the charge-off allowance, adjustments will be made pursuant to this Schedule SRC. The REP will have no right to reimbursement other than as expressly set out in this Schedule SRC. Servicer will remit collections to the SPE in accordance with the terms ofthe Servicing Agreement. Revision Number: Effective: XXXXXX  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg019.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix B Chapter 6: Company Specific Items Sheet No. 6.7.4 Page 3 of 16 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area SECTION 3: TERM This Schedule SRC is effective beginning on the date the system restoration bonds are issued. Schedule SRC will remain in effect as provided in the Financing Order until the SR Charges collected and remitted to the SPE are sufficient to satisfy all obligations ofthe SPE to pay principal and interest on the system restoration bonds (as due over the 14-year term of the system restoration bonds) and to pay all other qualified costs as provided in the Financing Order. However, in no event will the SR Charges be billed for service provided after 15 years from issuance of the system restoration bonds, or sooner ifthe system restoration bonds are paid in full at an earlier date. This Schedule SRC is irrevocable. SECTION 4: SYSTEM RESTORATION CHARGE CLASSES SR Charges are calculated and applied by SRC Class. There are 5 SRC Classes. Each SRC Class is defined in terms of the base rate tariff classes existing on the Company's system on [date of Financing Order]. The SRC Classes are: Residential Service Secondary Service Less Than or Equal to 10 kVA Secondary Service Greater than 10 kVA Primary Service Lighting Services SECTION 5: PERIODIC BILLING REOUIREMENT ALLOCATION FACTORS The initial Periodic Billing Requirement Allocation Factors ("PBRAF") for each SRC Class are set out below. These initial PBRAFs will remain in effect throughout the life of the system restoration bonds unless a modification of the factors is made pursuant to the allocation factor adjustment provisions in Section 6 ofthis Schedule SRC: INITIAL PERIODIC BILLING REQUIREMENT ALLOCATION FACTORS SRC PBRAF CLASS Residential Service 55.4597% Secondary Service Less Than or Equal to 10 kVA 1.5261% Secondary Service Greater than 10 kVA 31.7972% Primary Service 2.4092% Lighting Services 8.8078% Revision Number: Effective: XXXXXX  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg020.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix B Chapter 6: Company Specific Items Sheet No. 6.7.4 Page 4 of 16 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area SECTION 6: ALLOCATION FACTOR ADJUSTMENTS The PBRAFs will be subject to adjustment using the procedures in this Section 6. Any adjustment required under this Section 6 will be made effective on the date of an annual Standard True-up Adjustment. Required adjustments will be made in the following order: first, adjustments will be made under Part A; second, adjustments will be made under Part B. For purposes of determining whether an allocation adjustment is required under Parts A and B of this Section 6 and adjusting PBRAFs pursuant to those Parts, the SRC Classes will be combined into two groups (SRC Groups) as follows: SRC GROUPS SRC GROUP SRC INITIAL GROUP CLASSES ALLOCATION PERCENTAGE Residential Residential 55.4597% Non-Residential All other SRC Classes 44.5403% Part A: Inter-Group Adjustments Due to Cumulative Load Loss In connection with each annual Standard True-up Adjustment, the Company will compare the projected billing determinants being used to set SR Charges for each SRC Class during the ensuing year to the billing determinants in effect on the original effective date of Schedule SRC (such billing determinants are hereafter referred to as the "Base Billing Determinants"). The PBRAFs ofall SRC Classes in all SRC Groups will be adjusted if one or more SRC Groups experience load loss aggregating 50% or more on a cumulative basis when measured against the Base Billing Determinants. The adjustments under this Part A will be made using the following procedures: Step 1: For each SRC Group, if CTCOLG/PBRGk Then, no PBRAF adjustment will occur 0.50 and any adjustment made in previous years under Part A shall be reversed For each SRC Group, if CTCOLG / PBRo < Then, a PBRAF adjustment will be 0.50 calculated pursuant to Steps 2 through 5. Revision Number: Effective: XXXXXX  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg021.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix B Chapter 6: Company Specific Items Sheet No. 6.7.4 Page 5 of 16 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area Where: CTCOLG - cumulative test collections for group G=Z CCc\* FBUc for all classes (c) in Group (G) FBUc = forecasted billing determinants for class c CCc= cumulative test charge for class c = {PBRAFc\*PB]4}/ BBDc PBRAFc= the PBRAFs then in effect PBRT= total periodic billing requirement for upcoming period BBDc= Base Billing Determinants for class c PBRe= periodic billing requirement for group = E PBRAFc\* PBRr for all classes in G Step 2: For each SRC Group in Step 1 where CTCOLG / PBRG < 0.50, a reduction amount (REDG) Will be calculated for group G where REDG= 0.5 (PBRG - CTCOLG) Step 3: For all SRC Groups, a reallocation amount for that group (RAG) shall be calculated where: RAG = GAPo \* {E REDo} for all Groups Where: GAPG = Group Allocation Percentage = I PBRAFc for all classes in the group Step 4: For all SRC groups a Group Allocation Percentage Adjustment (GAPAG) shall be calculated where: GAPAG= (RAG-REDG) / PBRT Where: EGAPAG= 0 forall G Step 5: For all SRC classes, the PBRAF adjustment for class c (PBRAFAc) will be calculated for use in calculating adjustments to the SR Charges under Section 8 where PBRAFAc=-GAPAG \* (PBRAFJGAPe) Revision Number: Effective: XXXXXX  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg022.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix B Chapter 6: Company Specific Items Sheet No. 6.7.4 Page 6 of 16 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area Part B: Inter-Group Adjustments Due to Year-Over-Year Load Loss In connection with each annual Standard True-up Adjustment, the Company will compare the projected billing determinants being usedto set SR Charges for each SRC Class during the ensuing year to the forecasted billing determinants used to develop the then currently effective SR Charges for the class (such amount is hereinafter referred to as the "Prior Year Billing Determinants"). The PBRAFs ofall SRC Classes in all SRC Groups will be adjusted if (i) one or more SRC Groups experience load loss of 10% or greater on a year-over-year basis when compared to the Prior Year Billing Determinants or (ii) any SRC Group for which an adjustment was made under this Part B in one or more prior years experiences load growth resulting in projected billing determinants for the current year at a level which, if they had existed in one or more o f such prior year(s) would have resulted in no adjustment to PBRAFs in such prior year(s). No reduction in PBRAFs will be made under this Part B for any SRC Group for which a reduction amount was computed under Step 5 of Part A. The adjustments under this Part B will be made using the following procedures: Step 1: For each SRC Group not adjusted under Part A, If YTCOLG / PBRok 0.90 Then, no PBRAF adjustment will occur. If YTCOLG/PBRG> 1.00 If YTCOLG / PBRG< 0.90 Then, no PBRAF adjustment will occur and any prior year adjustments made under B will be reversed pursuant to step 6. Then, a PBRAF adjustment will be calculated pursuant to Steps 2 through 5. Where: YTCOLo = year-to-year test collections for group G=E YCc\* FBUc for all classes (c) in Group (G) FBUc = forecasted billing determinants for class c YCc= year-to-year test charge for class c = {PBRAFc\*PBRr}/ FBUc-1 PBRAFc= the PBRAFs then in effect PBRr= total periodic billing requirement for upcoming period FBUc-1=prior year's forecasted billing determinants for class c PBRG= periodic billing requirement for group = E PBRAFc\* PBRT for all classes in the group Revision Number: Effective: XXXXXX  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg023.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix B Chapter 6: Company Specific Items Sheet No. 6.7.4 Page 7 of 16 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area Step 2: For each SRC Group in Step 1 where YTCOL0/ PBRG< 0.90, a year to year reduction amount (YREDG) shall be calculated where YREDG= 0.9 (PBRc; - YTCOLG) Step 3: For all SRC Groups, a year to year reallocation amount (YRAG) shall be calculated where: YRAG= GAPG \* {Y YREDG} for all groups Where: GAPG = Group Allocation Percentage = E PBRAFc for all classes in the group Step 4: For all SRC groups a year to year group allocation percentage adjustment (YGAPAG) shall be calculated where: YGAPAG== (YRAG-YREDG) / PBRr Where E GAPA~ = 0 for all G Step 5: For all SRC classes, a year to year PBRAF adjustment (YPBRAFAc) shall be calculated for use in calculating adjustments to the SR Charges under Section 8 where: YPBRAFAc= YGAPAo\*(PBRAFJGAPe) Step 6: if{E (YCc\*FBUc)}/{E (YCc\*FBU~-1)}k .90 (for all classes in group G) then the adjustment made in year t shall be discontinued. if{I (YCc\*FBUc)}/{E (YCc\*FBUJ-1)} < .90 (for all classes in group G) then the adjustment made in year t canies forward. Where FBUJ-1 is the forecasted billing determinants from the year prior to the year an adjustment was made. Revision Number: Effective: XXXXXX  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg024.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix B Chapter 6: Company Specific Items Sheet No. 6.7.4 Page 8 of 16 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area SECTION 7: SYSTEM RESTORATION CHARGES The SR Charges to be applied beginning on the effective date of this Schedule SRC are set out below. SR Charges to be applied in subsequent periods (Adjusted SR Charges) will be determined in the manner described in Section 8. SYSTEM RESTORATION CHARGES SRC PER UNIT BILLING CLASS CHARGE UNIT Residential Service $0.000910 Per kWh Secondary Service Less Than $0.000902 or Equal to 10 kVA Per kWh Secondary Service Greater than 10 kVA $0.159426 Per Billing kVA Primary Service $0.0922I3 Per Billing kVA Lighting Services $0.021448 Per kWh The billing units are defined as in the base rate tariff. Any change in determination ofthese billing units will be effective for this Schedule SRC at the next annual true-up adjustment. In addition, each customer which has New On-Site Generation shall pay an amount each month computed by multiplying the output of the on-site generation used to serve the internal electric requirements of the customer (Billing kVA) by the SR Charge in effect for services provided to customers in that class during the month. This amount shall be in addition to any SR Charges applicable to demand actually delivered to the customer through the Company's or another T&D Provider's facilities. SECTION 8: STANDARD TRUE-UP FOR ADJUSTMENT OF SR CHARGES SR Charges will be adjusted annually effective on [October 15th] to ensure that the expected collection of SR Charges is adequate to pay principal and interest on the system restoration bonds when due pursuant to the expected amortization schedule, and pay as due all other qualified costs. In addition to annual true-up adjustments, true-up adjustments may be made by the servicer more frequently at any time during the term of the system restoration bonds to correct any forecasted undercollection of system restoration charges in order to assure timely payment of the system restoration bonds, including the replenishment of any funds drawn from the capital subaccount. All annual and interim adjustments will be designed to cause (i) the outstanding principal balance of the system restoration bonds to be equal to the scheduled balance on the expected amortization schedule; (ii) the amount in the capital subaccount to be equal to the required capital plus any Revision Number: Effective: XXXXXX  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg025.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix B Chapter 6: Company Specific Items Sheet No. 6.7.4 Page 9 of 16 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area investment earnings on amounts in the capital subaccount to the extent that the investment earnings have not been released to the SPE. TRUE-UP ADJUSTMENT PROCEDURE FOR STANDARD AND INTERIM TRUE-UPS Servicer will calculate the Adjusted SR Charges using the methodology described below and will file the Adjusted SR Charges with the Commission. Annual adjustments will be filed 15 days prior to the effective date of the Adjusted SR Charges unless an adjustment to the PBRAFs is required under Section 6 in which case the annual adjustment will be filed not later than 90 days prior to the effective date. Interim Adjustments will be filed not less than 15 days prior to the effective date of the Adjusted SR Charges. The Adjusted SR Charge for the upcoming period for each class (SRCc) shall be computed as follows: Revision Number: Effective: XXXXXX  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg026.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix B Chapter 6: Company Specific Items Sheet No. 6.7.4 Page 10 of 16 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area For the residential class, SRCc= PBRT\*(PBRAFc+PBRAFAc+YPBRAFAct)/FBUc For classes in the Non-Residential SRC Group: SR.Cc= SRCc-1 {F [PBR.r \* (PBRAFc+PBRAFAc-I-YPBRAFAO] / E(SRCc-1\*FBUc)} For all classes in the non-residential group, Where SRCc-1 = the SR charge for that class from the previous period PBRT = Periodic Billing Requirement for the ensuing period (the 12 months beginning on the effective date of the adjusted SR Charges in the case of annual true-ups and the period until the next scheduled annual true-up in the case of interim adjustments). The Periodic Billing Requirement will be the amounts required to pay principal and interest on the system restoration bonds when due pursuant to the expected amortization schedule, pay as due all other qualified costs, and recover any net system under-collections or credit any net system over-collections so that (i) the outstanding principal balance of the system restoration bonds will be equal to the scheduled balance on the expected amortization schedule; (ii) the amount in the capital subaccount will be equal to the required capital plus any investment earnings on amounts in the capital subaccount to the extent that the investment earnings have not been released to the SPE. PBRAFc = the PBRAFs then in effect. PBRAFAc= the adjustment (if any) from Section 6, Part A, Step 5 YPBRAFAct= the adjustment from Section 6, Part B, Step 5 for every year t in which an adjustment was made unless that adjustment was discontinued under Section 6, Part B, Step 6. FBUc= the forecasted billing determinants for the upcoming period Revision Number: Effective: XXXXXX  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg027.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix B Chapter 6: Company Specific Items Sheet No. 6.7.4 Page 11 of 16 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area SECTION 9: BILLING AND COLLECTION TERMS AND CONDITIONS SR Charges will be billed and collected as set forth in this Schedule SRC. The terms and conditions for each party are set forth below. A. Billings by Servicer to other T or D Providers: 1. SR Charges applicable to former retail customers of the Company in multiply certificated service areas who are now taking service directly from other T or D Providers or through REPs served by other T or D Providers will be billed to and collected from the other T or D Provider, which, in turn will be responsible for collecting the SR Charges from the retail customers and REPs. 2. The T or D Provider shall pay all SR Charges not later than 35 days after bill is mailed by Servicer. The T or D Provider shall make such payment regardless of whether it collects such charges from the end-use retail customer or REP. B. Billings by Servicer to New On-Site Generation: 1. Customers subject to SR Charges for New On-Site Generation shall pay such charges in full not later than sixteen days after the date the bill is mailed to the customer. 2. SR Charges applicable to New On-Site Generation are in addition to applicable SR Charges under A above or C below. 3. If the entity with New On-Site Generation receives transmission or distribution service from the Company or another T or D Provider, Servicer shall have the same right to terminate service or require the other provider to terminate service for non-payment of SR Charges as the Company has to terminate service for non-payment of charges under the Company's rate schedules. Any termination shall comply with applicable Commission rules. C. Billings by the REP or its replacement to end-use customers: 1. REPs will bill and collect, or cause to be billed and collected, all SR Charges applicable to consumption by retail customers served by the REP. 2. If Servicer is providing the metering, metering data will be provided to the REP at the same time as the billing. If Servicer is not providing the metering, the entity providing metering services will be responsible for complying with Commission rules and ensuring that Servicer and the REP will receive timely and accurate Revision Number: Effective: XXXXXX  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg028.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix B Chapter 6: Company Specific Items Sheet No. 6.7.4 Page 12 of 16 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area metering data in order for Servicer to meet its obligations under the Servicing Agreement and the Financing Order with respect to billing and true-ups. 3. Each REP must (1) have a long-term, unsecured credit rating ofnot less than "BBB- " and "Baa3" (or the equivalent) from Standard & Poor's and Moody's Investors Service, respectively, or (2) provide to the indenture trustee (a) a deposit of two months' maximum expected system restoration charge collections in the form of cash, (b) an affiliate guarantee, surety bond, or letter of credit providing for payment of such amount o f system restoration charge collections in the event that the REP defaults in its payment obligations, or (c) a combination of any of the foregoing. A REP that does not have or maintain the requisite long-term, unsecured credit rating may select which alternate form of deposit, credit support, or combination thereof it will utilize, in its sole discretion. The indenture trustee must be a beneficiary of any affiliate guarantee, surety bond or letter of credit. The provider of any affiliate guarantee, surety bond, or letter of credit must have and maintain a long-term, unsecured credit rating of not less than "BBB-" and "Baa3" (or the equivalent) from Standard & Poor's and Moody's Investors Service, respectively. 4. If the long-term, unsecured credit rating from either Standard & Poor's or Moody's Investors Service 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 the 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 in paragraph 3 of Section D, Billings by Servicer to the REP or its replacement (when applicable). 5. The computation of the size of a required deposit shall be agreed upon by Servicer and the REP, and reviewed no more frequently than quarterly to ensure that the deposit accurately reflects two months' maximum collections. Within 10 business days following such review, (1) the REP shall remit to the indenture trustee the amount of any shortfall in such required deposit or (2) Servicer shall instruct the indenture trustee 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 in Paragraph 3 of the Section D, Billings by Servicer to the REP or its replacement (when applicable). REP cash deposits shall be held by the indenture trustee, maintained in a segregated account, and invested in short-term high quality investments, as permitted by the rating agencies rating the system restoration bonds. Investment earnings on REP cash deposits shall be considered part of such cash deposits so long as they remain on deposit with the indenture trustee. At the Revision Number: Effective: XXXXXX  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg029.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix B Chapter 6: Company Specific Items Sheet No. 6.7.4 Page 13 of 16 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area instruction of 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 Bond payments. Once the deposit is no longer required, Servicer shall promptly (but not later than 30 calendar days) instruct the indenture trustee to remit the amounts in the segregated accounts to the REP. 6. In the event that a REP or the Provider of Last Resort (POLR) is billing customers for SR Charges, the REP shall have the right to transfer the customers to the POLR (or to another certified REP) or to direct Servicer to terminate transmission and distribution service to the end-use customer for non-payment by the end-use customer pursuant to applicable Commission rules. D. Billings by Servicer to the REP or its replacement (when applicable): 1. Servicer will bill and collect from REPs all SR Charges applicable to consumption by retail customers served by the REP, including applicable customers served by New On-Site Generation. 2. Payments of SR Charges are due 35 calendar days following each billing by Servicer to the REP, without regard to whether or when the REP receives payment from the end-use retail customers. 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 Servicer, or the date the check clears. A 5% penalty is to be charged on amounts received after 35 calendar daysi 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 in paragraph 3 of this Section D. The 5% penalty will be a one-time assessment measured against the current amount overdue from the REP to Servicer. The "current amount" consists of the total unpaid SR Charges existing on the 36th calendar day after billing by Servicer. Any and all such penalty payments will be made to the indenture trustee to be applied against SR Charge obligations. A REP shall not be obligated to pay the overdue SR Charges of another REP. If a REP agrees to assume the responsibility for the payment of overdue SR 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 5% penalty upon such SR Charges; however, the prior REP shall not be relieved of the previously-assessed penalties. 3. After the 10 calendar-day grace period (the 45th calendar day after the billing date), Servicer shall have the option to seek recourse against any cash deposit, affiliate guarantee, surety bond, letter of credit, or combination thereof provided by the REP, and avail itself of such legal remedies as may be appropriate to collect any Revision Number: Effective: XXXXXX  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg030.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix B Chapter 6: Company Specific Items Sheet No. 6.7.4 Page 14 of 16 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area remaining unpaid SR Charges and associated penalties due Servicer after the application ofthe REP's deposit or alternate form of credit support. In addition, a REP that is in default with respect to the requirements set forth in paragraphs 4 and 5 of Section C and paragraph 2 of this Section D shall select and implement one of the following options: (a) Allow the POLR or a qualified REP of the customer's choosing to immediately assume the responsibility for the billing and collection of SR Charges. (b) Immediately implement other mutually suitable and agreeable arrangements with Servicer. It is expressly understood that Servicer's ability to agree to any other arrangements will be limited by the terms ofthe Servicing Agreement and requirements of rating agencies that have rated the system restoration bonds necessary to avoid suspension, withdrawal or downgrade of the ratings on the system restoration bonds. (c) Arrange that all amounts owed by retail customers for services rendered be timely billed and immediately paid directly into a lock-box controlled by Servicer with such amounts to be applied first to pay SR Charges before the remaining amounts are released to the REP. All costs associated with this mechanism will be borne solely by the REP. If a REP that is in default does not immediately select and implement one of the options specified in (a), (b) or (c) or, after so selecting one ofthe foregoing options, fails to adequately meet its responsibilities thereunder, then Servicer shall immediately implement option (a), subject to the limitations and requirements of the bankruptcy code if the REP is a debtor in bankruptcy. Upon re-establishment of compliance with the requirements set forth in paragraphs 4 and 5 of Section C and paragraph 2 of this Section D and the payment of all past-due amounts and associated penalties, the REP will no longer be required to comply with this paragraph 3. 4. The POLR appointed by the Commission must meet the minimum credit rating or deposit/credit support requirements described in paragraph 3 of Section C ("Billings by the REP or its Replacement to end-use customers") in addition to any other standards that may be adopted by the Commission. If the POLR defaults or is not eligible to provide such services, responsibility for billing and collection of SR Charges will immediately be transferred to and assumed by Servicer until a new POLR can be named by the Commission or the customer requests the services of a certified REP. Retail customers may never be re-billed by the successor REP, the POLR, or Servicer for any amount of SR Charges they have paid their REP (although future SR Charges shall reflect REP and other system-Revision Number: Effective: XXXXXX  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg031.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix B Chapter 6: Company Specific Items Sheet No. 6.7.4 Page 15 of 16 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area wide charge-offs). Additionally, if the amount ofthe penalty detailed in paragraph 2 of this Section D is the sole remaining past-due amount after the 45th calendar day, the REP shall not be requiredto comply with clauses (a), (b) or (c) ofparagraph 3 of this Section D, unless the penalty is not paid within an additional 30 calendar days. 5. In the event that Servicer is billing customers for SR Charges, Servicer shall have the right to terminate transmission and distribution service to the end-use customer for non-payment by the end use customer pursuant to applicable Commission rules. 6. The REP will be allowed to hold back an allowance for charge-offs in its payments to Servicer. Such charge-off rate will be recalculated each year in connection with the annual true-up procedure. In the initial year, REPs will be allowed to remit payments based on a charge-offpercentage of 1.9946%. The charge offpercentage experienced in the last full year of the SRC established in Docket No. 37200. On an annual basis in connection with the true-up adjustment process, the REP and 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 Servicer, provided that: (a) The REP's right to reconciliation for write-offs will be limited to customers whose service has been permanently terminated and whose entire accounts (Le., all amounts due the REP for its own account as well as the portion representing SR Charges) have been written off. (b) The REP's recourse will be limited to a credit against future SR Charge payments unless the REP and Servicer agree to alternative arrangements, but in no event will the REP have recourse to the indenture trustee, the SPE or the SPE's funds for such payments. (c) The REP shall provide information on a timely basis to Servicer so that Servicer can include the REP' s default experience and any subsequent credits into its calculation of the adjusted SR Charge rates for the next SR charge billing period and the REP's rights to credits will not take effect until such adjusted SR Charge rates have been implemented. 7. In the event that a REP disputes any amount of billed SR Charges, the REP shall pay the disputed amount under protest according to the timelines detailed in paragraph 2 of this Section D. The REP and Servicer shall 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 Commission. If the REP is successful in the dispute process (informal or formal), the REP shall be entitled to interest on the disputed amount paid to Servicer at the Commission-approved interest rate. Revision Number: Effective: XXXXXX  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg032.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix B Chapter 6: Company Specific Items Sheet No. 6.7.4 Page 16 of 16 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area Disputes about the date of receipt of SR Charge payments (and penalties arising thereof) or the size of a required REP deposit will be handled in a like manner. It is expressly intended that any interest paid by Servicer on disputed amounts shall not be recovered through SR Charges if it is determined that Servicer's claim to the funds is clearly unfounded. No interest shall be paid by Servicer if it is determined that Servicer has received inaccurate metering data from another entity providing competitive metering services pursuant to Utilities Code Section 39.107. 8. If Servicer is providing the metering, metering data will be provided to the REP at the same time as the billing. If Servicer is not providing the metering, the entity providing metering services will be responsible for complying with Commission rules and ensuring that Servicer and the REP will receive timely and accurate metering data in order for Servicer to meet its obligations under the Servicing Agreement and the Financing Order with respect to billing and true-ups. OTHER TERMS AND CONDITIONS If the customer or REP pays only a portion of its bill, a pro-rata portion of SR Charge revenues shall be deemed to be collected. The Company will allocate any shortfall first, ratably based on the amount owed for SR Charges and the amount owed for other fees and charges, other than late charges, owed to the Company or any successor, and second, all late charges shall be allocated to the Company or any successor. If the Company does not regularly include the notice described below in the bills sent by it to REPs or directly to retail customers, then at least once each year the Company shall cause to be prepared and delivered to REPs and such customers a notice stating, in effect, that the amount billed includes SR Charges which were authorized by the Financing Order dated [XXXXX] and have been transferred to and are being collected on behalfofCenterPoint Energy Restoration Bond Company II, LLC [BondCo] and are not owned by the Company. In the customer's initial bill from the REP and at least once each year thereafter, each REP that bills SR Charges shall cause to be prepared and delivered to its customers a notice stating, in effect, that the amount billed includes SR Charges which were authorized by the Financing Order dated [XXXXX]and have been transferred to and are being collected on behalf of CenterPoint Energy Restoration Bond Company II, LLC [BondCo] and are not owned by the REP or the Company, and that under certain circumstances described in Schedule SRC Servicer may be permitted to collect the SR Charges directly from the retail customer. Such notice shall be included either as an insert to or in the text of the bills delivered to such REPs or customers, as applicable, or shall be delivered to REPs or customers by electronic means or such other means as Servicer or the REP may from time to time use to communicate with their respective customers. Revision Number: Effective: XXXXXX  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg033.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix C Schedule 5_Qualified Costs Page 1 of 1 CenterPoint Energy Houston Electric, LLC Projected Qualified Costs [A] [8] [C] [D] [E] [F] [G] On-Going Costs On-Going Costs ContorPoint Houston as Sorvicer Expected Case Sensitivity Case NPV PV @ PV @ Description of Cost items Upfront Costs Year Annual Amount Period 4.90% 7.24% Legal Fees/Exp for Company's/Undorwritofs Counsel 1 $2,375,000 [1] 2025 $350,821 0.6 $340,894 $336,412 Fee for Commission's Financial Advisor $50,000 [1] 2026 $701,641 1.6 $649,941 $627,399 Fee for Company's Financial Advisor $300,000 [1] 2027 $701,641 2.6 $619,582 $585,042 Printing/Edgarizjng Expenses $#0,®0 [1] 2028 $701,641 3.6 $' 590,640 $545,545 Securitization Proceeding Expenses $2029 $701,641 4.6 $563,051 $508,714 Miscellaneous Administrative Costs $11,294 [1] 2030 $701,641 5.6 $536,750 $474,370 Accountant's Fees $185,000 [1] 2031 $701,641 6.6 $511,678 $442,344 Servicer Set-up Costs $- [1] 2032 $701,641 7.6 $487,777 $412,480 Trustee's/Trustee's Counsel Foos and Expenses $25,000 [1] 2033 $701,641 8.6 $464,992 $3&4,633 2034 $701,641 9.6 $443,272 $358,666 2035 $701,641 10.6 $422,566 $334,451 2036 $701,641 11.6 $402,828 $311,872 Total Fixed Qualified Costs\* $2.9?6,294 2037 $701,641 12.6 $384,011 $290,817 \*Subject to proposed cap on upfront costs 2038 $701,641 13.6 $366,074 $271,183 2039 $350,821 14.6 $174,487 $126,437 Total $9,822,974 Total $6,958,544 $6,010,364 OC Acct $- $- $6,958,544 $6,010,364 Item A Net Socuritized Amount Before Qualified Costs $396,325,134 Item B Fixed qualified Costs $2,996,294 Net Securitized Amount Including Fixed Costs (Items A+B) $399,321,428 Other Qualified Costs &]mlnL B@!2 Item C Undonwritofs Spread (%) $1,606,084 [2] 0.400% Item D SEC Fees (%) $61,473 0.015% Rating Agoncy Fees: Item E Moody's (Min of $255,000) $301,141 [3] 0.075% Item F S&P (Min of $200,000 / Max of $650,000) $230,875 [3] 0.058% Total Other Qualified Costs $2,199,572 Total AJI Qualified Costs (Fixed & Other) $5,195,866 Net Securitzed Amount Including All Qualified Costs $401,521,000 Itemized Ongoing Costs Description Annual Semi-Annual Ongoing Sorvic:or Foo (Third Party as Servicer) (0.60% of principal amount) $2,409,126 $1,204,563 [Ongoing Sorvicer Foo. (CEHEE gj Se~xic~).(0·076©# p®\*#kmo®i) _ $, 301,141 $150,571 Administration Fee $100,000 [1] $50,000 Accountants' Fees $170,000 [1] $85,000 Logal Fees/Expenses for Company's/lssuefs Counsel $25,000 [1] $12.500 Trustee's/Trustee's Counsel Fees and Expenses $5,000 [1] $2,500 Independent Managers' Foo $3,500 [1] $1,750 Rating Agency Fees $77,000 (1] $38,500 Pfinting/EDGARization Expenses $10,000 [1] $5,000 Miscellaneous $10.000 [1] $5,000 TOTAL (CEHE as Sonicer) $701,641 $350,821 TOTAL (Third Party as Sorvicer) $2,809,626 $1,404,813 Notes: [1] Estimates based on precedent transactions, updated to current conditions [21 $4.00 per bond (for the 2008 System Restoration Bonds, the underwriting spread was $4.25 per bond) r31 Estimates based on latest information obtainod from rating agencies  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg034.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix D Chapter 6: Company Specific Items Sheet No. 6.14.7 Page 1 of 2 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area 6.1.1.6.10 RIDER AI\*ITC - ADFIT CREDIT APPLICABILITY Pursuant to the Financing Order in Public Utility Commission of Texas Docket No. 57559, the ADFIT Credit ("ADFITC") is a negative charge to customers subject to Schedule SRC to provide customers the accumulated deferred federal income tax (ADFIT) benefits associated with the May 2024 EOP Storm restoration costs. This schedule is applicable to distribution voltage level Retail customers and any other entity obligated to pay charges as defined under Schedule SRC. TERM This Rider ADFITC is effective beginning on the date Schedule SRC is effective and will remain in effect over the 14-year term of Schedule SRC. ADFITC ALLOCATFON FACTORS The ADFITC Allocation Factors are the same as the PBRAFs in Schedule SRC and shall be adjusted to coincide with any PBRAF adjustments for Schedule SRC. The ADFITC Charges to be applied beginning on the effective date of this Rider ADFITC are set out below. ADFITC Charges to be applied in subsequent periods will be determined in the annual true-up process described below. ADFIT CREDIT CHARGES ADFITC PER UNIT BILLING CLASS CHARGE UNIT Residential Service ($0.000187) Per kWh Secondary Service Less Than or Equal to 10 kVA ($0.000185) Per kWh Secondary Service Greater than 10 kVA ($0.032687) Per Billing kVA Primary Service ($0.018907) Per Billing kVA Lighting Services ($0.004397) Per kWh Revision Number: 14th Effective: XXXXXX  |

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| &nbsp;&nbsp;![GRAPHIC](tm2517786d2_ex99-1iiimg035.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appendix D Chapter 6: Company Specific Items Sheet No. 6.14.7 Page 2 of 2 CenterPoint Energy Houston Electric, LLC Applicable: Entire Service Area The ADFITC classes and billing units are defined the same as the classes and billing units in Schedule SRC. In addition, ADFITC Charges are applicable to each customer which has New On-Site Generation as defined in Schedule SRC as and to the extent Schedule SRC charges are applicable to such customers. ANNUAL TRUE-UP FOR ADJUSTMENT OF ADFITC CHARGES ADFITC Charges shall be adjusted at least annually effective on each date that charges in Schedule SRC become effective. The adjustment shall be made through a separate filing submitted at the same time as the Schedule SRC system restoration charge adjustment filing and using the same allocation factors and billing determinants as the system restoration charge adjustment filing. The ADFITC Charges shall be adjusted to (1) correct any over-credit or under-credit of the amounts previously scheduled to be provided to customers, (2) reflect the amounts scheduled to be provided to customers during the period the adjusted ADFITC Charges are to be effective, and (3) account for the effects, if any, on ADFIT of any insurance proceeds, government grants or other source of funding that compensate CenterPoint Houston for system restoration costs incurred. TRUE-UP ADJUSTMENT PROCEDURE FOR ANNUAL TRUE-UPS Adjusted ADFITC Charges shall be calculated using the same methodology as described in Schedule SRC for the system restoration charges. The ADFITC Groups are defined the same as Schedule SRC Groups. Annual adjustments will be filed 15 days prior to the effective date ofthe Adjusted ADFITC Charges unless an adjustment to the ADFITC Allocation Factors is required in which case the annual adjustment will be filed not later than 90 days prior to the effective date. OTHER TERMS AND CONDITIONS Ifthe customer or REP pays only a portion of its bill, a pro-rata portion ofADFITC Charge credits shall be deemed to be credited equal to the pro-ram portion of Schedule SRC deemed collected according to Schedule SRC. NOTICE This Rate Schedule is subject to the Company's Tariff and Applicable Legal Authorities. Revision Number: 14th Effective: XXXXXX  |

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## Exhibit 99.3

**Exhibit 99.3**

**Consent of Manager Nominee**

CenterPoint Energy Houston Electric, LLC and CenterPoint Energy Restoration Bond Company II, LLC (the "Issuer") are filing a Registration Statement on Form SF-1 (the "Registration Statement") with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act"), in connection with the public offering of the Issuer's Series 2025-A Senior Secured System Restoration Bonds. In connection therewith, I hereby consent, pursuant to Rule 438 of the Securities Act, to being named as a person about to become a manager of the Issuer as identified in the Registration Statement, as may be amended from time to time. I also consent to the filing of this consent as an exhibit to the Registration Statement and any amendments thereto.

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| /s/ Bernard J. Angelo |
| Bernard J. Angelo |

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## Ex-Filing

**Exhibit 107**

Calculation of Filing Fee Tables

**Form SF-1** 

(Form Type)

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| | |
|:---|:---|
| **CenterPoint Energy Houston Electric, LLC** | **CenterPoint Energy Restoration Bond Company II, LLC** |
| (Exact Name of Registrant, Sponsor and Depositor as Specified in its Charter) | (Exact Name of Registrant and Issuing Entity as Specified in its Charter) |

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<u>Table 1: Newly Registered Securities</u>

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;Security <br> Type | &nbsp;&nbsp;Security Class<br> Title | &nbsp;&nbsp;Fee<br> Calculation<br> Rule | &nbsp;&nbsp;Amount<br> Registered | &nbsp;&nbsp;Proposed<br> Maximum<br> Offering<br> Price Per Unit | &nbsp;&nbsp;Maximum<br> Aggregate<br> Offering Price <sup>(1)</sup> | &nbsp;&nbsp;Fee Rate | &nbsp;&nbsp;Amount of<br> Registration<br> Fee<sup>(1)</sup> |
| &nbsp;&nbsp;Fees to Be Paid | &nbsp;&nbsp;Asset-Backed Securities | &nbsp;&nbsp;Series 2025-A Senior Secured System Restoration Bonds | &nbsp;&nbsp;457(o) | &nbsp;&nbsp;$401521000 | &nbsp;&nbsp;100% | &nbsp;&nbsp;$401521000 | &nbsp;&nbsp;0.00015310 | &nbsp;&nbsp;$61472.87 |
|  | &nbsp;&nbsp;Total Offering Amounts | &nbsp;&nbsp;Total Offering Amounts | &nbsp;&nbsp;Total Offering Amounts | &nbsp;&nbsp;Total Offering Amounts |  | &nbsp;&nbsp;$401521000 |  | &nbsp;&nbsp;$61472.87 |
|  | &nbsp;&nbsp;Total Fees Previously Paid | &nbsp;&nbsp;Total Fees Previously Paid | &nbsp;&nbsp;Total Fees Previously Paid | &nbsp;&nbsp;Total Fees Previously Paid |  |  |  | &nbsp;&nbsp;— |
|  | &nbsp;&nbsp;Total Fee Offsets | &nbsp;&nbsp;Total Fee Offsets | &nbsp;&nbsp;Total Fee Offsets | &nbsp;&nbsp;Total Fee Offsets |  |  |  | &nbsp;&nbsp;— |
|  | &nbsp;&nbsp;Net Fee Due | &nbsp;&nbsp;Net Fee Due | &nbsp;&nbsp;Net Fee Due | &nbsp;&nbsp;Net Fee Due |  |  |  | &nbsp;&nbsp;$61472.87 |

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(1) Estimated solely for the purpose of calculating the registration fee.