Document:

System Restoration Property Sale Agreement dated as of November 25, 2009

 Exhibit 10.1 
 Execution Version 
 SYSTEM RESTORATION PROPERTY
SALE AGREEMENT 
 between 
 CENTERPOINT ENERGY RESTORATION BOND COMPANY, LLC 
 Issuer 
 and 
 CENTERPOINT
ENERGY HOUSTON ELECTRIC, LLC 
 Seller 
 Dated as of November 25, 2009 

 TABLE OF CONTENTS 
  

					
	 ARTICLE I DEFINITIONS
	  	1
	 Section 1.01
	  	 Definitions
	  	1
	 Section 1.02
	  	 Other Definitional Provisions
	  	1
		
	 ARTICLE II CONVEYANCE OF THE SYSTEM RESTORATION PROPERTY
	  	2
	 Section 2.01
	  	 Conveyance of the System Restoration Property
	  	2
	 Section 2.02
	  	 Conditions to Conveyance of the System Restoration Property
	  	3
		
	 ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER
	  	4
	 Section 3.01
	  	 Organization and Good Standing
	  	4
	 Section 3.02
	  	 Due Qualification
	  	4
	 Section 3.03
	  	 Power and Authority
	  	4
	 Section 3.04
	  	 Binding Obligation
	  	4
	 Section 3.05
	  	 No Violation
	  	4
	 Section 3.06
	  	 No Proceedings
	  	5
	 Section 3.07
	  	 Approvals
	  	5
	 Section 3.08
	  	 The System Restoration Property
	  	5
	 Section 3.09
	  	 Solvency
	  	6
	 Section 3.10
	  	 The Financing Order
	  	7
	 Section 3.11
	  	 State Action
	  	7
	 Section 3.12
	  	 No Court Order
	  	8
	 Section 3.13
	  	 Approvals Concerning the System Restoration Property
	  	8
	 Section 3.14
	  	 Assumptions
	  	8
	 Section 3.15
	  	 Creation of the System Restoration Property
	  	8
	 Section 3.16
	  	 Prospectus
	  	9
	 Section 3.17
	  	 Nature of Representations and Warranties
	  	9
		
	 ARTICLE IV COVENANTS OF THE SELLER
	  	9
	 Section 4.01
	  	 Seller’s Existence
	  	9
	 Section 4.02
	  	 No Liens or Conveyances
	  	10
	 Section 4.03
	  	 Delivery of Collections
	  	10
	 Section 4.04
	  	 Notice of Liens
	  	10
	 Section 4.05
	  	 Compliance With Law
	  	10
	 Section 4.06
	  	 Covenants Related to the System Restoration Property
	  	10
	 Section 4.07
	  	 Protection of Title
	  	11
	 Section 4.08
	  	 Taxes
	  	12
	 Section 4.09
	  	 Filings Pursuant to Financing Order
	  	12
		
	 ARTICLE V ADDITIONAL UNDERTAKINGS OF SELLER
	  	12
	 Section 5.01
	  	 Liability Of The Seller; Indemnities
	  	12
	 Section 5.02
	  	 Merger or Consolidation of, or Assumption of the Obligations of, the Seller
	  	14
	 Section 5.03
	  	 Limitation on Liability of the Seller and Others
	  	15
		
	 ARTICLE VI MISCELLANEOUS PROVISIONS
	  	16
	 Section 6.01
	  	 Amendment
	  	16

  

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	 Section 6.02
	  	 Notices
	  	17
	 Section 6.03
	  	 Assignment by the Seller
	  	18
	 Section 6.04
	  	 Assignment to the Indenture Trustee
	  	18
	 Section 6.05
	  	 Limitations on Rights of Others
	  	18
	 Section 6.06
	  	 Severability
	  	18
	 Section 6.07
	  	 Separate Counterparts
	  	18
	 Section 6.08
	  	 Headings
	  	18
	 Section 6.09
	  	 Governing Law
	  	18
	 Section 6.10
	  	 Nonpetition Covenants
	  	18
			
	 APPENDIX A
	  	 DEFINITIONS
	  	
		
	 SCHEDULE 1
	  	

  

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 SYSTEM RESTORATION PROPERTY SALE AGREEMENT (this “Agreement”) dated as of
November 25, 2009, between CENTERPOINT ENERGY RESTORATION BOND COMPANY, LLC, a Delaware limited liability company (the “Issuer”), and CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a Texas limited liability company, as seller (the
“Seller”). 
 WHEREAS, the Issuer desires to purchase the System Restoration Property created pursuant to the
securitization provisions of the Public Utility Regulatory 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. 
 (a) “Agreement” means this System Restoration Property Sale Agreement, as the same may be amended and supplemented
from time to time. 
 (b) Non-capitalized terms used herein which are defined in the Public Utility Regulatory
Act or the System Restoration Amendments, as the context requires, have the meanings assigned to such terms in the Public Utility Regulatory Act or the System Restoration Amendments, but without giving effect to amendments to the Public Utility
Regulatory Act or System Restoration Amendments after the date hereof which have a material adverse effect on the Issuer or the Bondholders. 
 (c) 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. 
 (d) 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

  

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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.” 
 (e) 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. 
 (a) In consideration of the Issuer’s payment to or upon the order of the Seller of $658,675,628 (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 to the
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 or prior to
the Transfer 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 Public Utility Regulatory 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. 
 (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). 
 (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. 
 (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

  

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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 (the
“UCC”), 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 Transfer Date shall be subject to and conditioned upon the
satisfaction or waiver of each of the following conditions: 
 (i) on or prior to the Transfer 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; 
 (ii) as of the Transfer 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; 
 (iii) as of the Transfer Date: 
 (A) the Issuer shall have sufficient funds available to pay the Purchase Price, and 
 (B) all conditions set forth in the Indenture to the issuance of the Bonds intended to provide such funds shall have been
satisfied or waived; 
 (iv) on or prior to the Transfer Date, the Seller shall have taken all actions required
under the Public Utility Regulatory Act, the Financing Order and other applicable law for the Issuer to have ownership of the System Restoration Property, free and clear of all Liens other than Liens created by the Issuer pursuant to the Indenture;
and the Issuer, or the Servicer on behalf of the Issuer, shall have taken any action required for the Issuer to grant the Indenture Trustee a first priority perfected security interest in the Trust Estate and maintain such security interest as of
such date (including all actions required under the Public Utility Regulatory Act, the Financing Order and the UCC); 
 (v) the Seller shall have delivered to each Rating Agency and to the Issuer any Opinions of Counsel requested by the Rating Agencies; 
 (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 
  

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 (vii) the Seller shall have received the Purchase Price in funds immediately
available on the Transfer Date. 
 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES OF SELLER 
 As of the
Transfer 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 Transfer 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 Transfer 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 Transfer 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 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 3.05 No Violation. The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms
hereof do not: (i) conflict with or result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a

  

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default under, the articles of organization or limited liability company regulations of the Seller, or any indenture, mortgage, credit agreement or other agreement or instrument to which the
Seller is a party or by which it or its properties is bound; (ii) result in the creation or imposition of any Lien upon any of the Seller’s properties pursuant to the terms of any such indenture, agreement or other instrument (except for
any Lien created in favor of the Bondholders pursuant to Section 39.309 of the Public Utility Regulatory Act or any Lien created by the Issuer under the Basic Documents); or (iii) violate any existing law or any existing order, rule or
regulation applicable to the Seller of any Governmental Authority having jurisdiction over the Seller or its properties. 
 Section 3.06 No Proceedings. Except as disclosed in the Issuer’s prospectus dated November 13, 2009 and the related prospectus supplement dated November 18, 2009 relating to the Bonds (together, 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: 
 (i) asserting the invalidity of this Agreement, any of the other Basic Documents, the Bonds, the System Restoration Amendments, the securitization provisions of the Public Utility Regulatory Act or the
Financing Order; 
 (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; 
 (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 
 (iv) challenging the Seller’s treatment of the Bonds as debt of CenterPoint Energy, Inc. for federal
or state income, gross receipts or franchise tax purposes. 
 Section 3.07 Approvals. Except for filings under the
UCC and the Public Utility Regulatory 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. 
 (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. 
  

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 (b) Effect of Transfer. It is the intention of the parties hereto that
(other than for United States 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. 
 (c) Transfer Filings. 
 (i) The Seller is the sole owner of the rights and interests under the Financing Order to be sold to the Issuer on the Transfer Date. 
 (ii) On the Transfer Date, immediately upon the sale hereunder, the System Restoration Property will have been validly sold,
assigned, transferred, set over and conveyed to the Issuer free and clear of all Liens (except for any Lien created in favor of the Bondholders pursuant to Section 39.309 of the Public Utility Regulatory Act or any Lien created by the Issuer
under the Basic Documents). 
 (iii) All actions or filings (including filings with the Texas Secretary of State
in accordance with the rules prescribed under the Public Utility Regulatory Act and the UCC) necessary in any jurisdiction to give the Issuer a perfected ownership interest (subject to any Lien created in favor of the Bondholders pursuant to
Section 39.309 of the Public Utility Regulatory Act or any Lien created by the Issuer under the Basic Documents) in the System Restoration Property and to grant to the Indenture Trustee a first priority perfected security interest in the System
Restoration Property, free and clear of all Liens of the Seller or anyone else (except for any Lien created in favor of the Bondholders pursuant to Section 39.309 of the Public Utility Regulatory Act or any Lien created by the Issuer under the
Basic Documents), have been taken or made. 
 Section 3.09 Solvency. After giving effect to the sale of the System
Restoration Property hereunder, the Seller: 
 (i) is solvent and expects to remain solvent, 
 (ii) is adequately capitalized to conduct its business and affairs considering its size and the nature of its business and
intended purposes, 
 (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, 
  

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 (iv) reasonably believes that it will be able to pay its debts as they come
due, and 
 (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.

 (a) The Financing Order was issued by the Texas Commission on August 26, 2009 in accordance with the
Public Utility Regulatory Act and the System Restoration Amendments; 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. 
 (b) As of the date of issuance
of the Bonds, the Bonds will be entitled to the protections provided by the Public Utility Regulatory 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 Six 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. 
 Section 3.11 State Action. 
 (a) Under the Public Utility Regulatory 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. 
 (b) Under the laws of the State of Texas and the federal laws of the United States, the State of Texas could not
constitutionally take any action of a legislative character, including the repeal or amendment of the securitization provisions of the Public Utility Regulatory Act or the System Restoration Amendments, 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, under the takings clauses of the State of Texas and United States
Constitutions, the State of Texas could not repeal or amend the securitization provisions of the Public Utility Regulatory

  

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Act or the System Restoration Amendments, 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 provisions of the Public Utility Regulatory Act, the System Restoration Amendments, 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, 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 Creation of the System Restoration Property.

 (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.

 (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: 
  

	 	(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, 

  

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	 	(2)	all rights and interest of the Seller under the Financing Order, 

  

	 	(3)	the rights to file for periodic adjustments of the System Restoration Charges as provided in the Financing Order, and 

  

	 	(4)	all revenues and collections resulting from the System Restoration Charges. 

 (c) 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 on such Transfer Date pursuant to this Agreement, the System Restoration Property will not be subject to any Lien created by a previous indenture.

 Section 3.16 Prospectus. As of the date hereof, the information describing the Seller under the caption “The
Seller, Initial Servicer and Sponsor of the System Restoration Property” in the Prospectus is true and correct in all material respects. 
 Section 3.17 Nature of Representations and Warranties. The representations and warranties set forth in Section 3.08 and Section 3.10 through Section 3.16, 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. 
 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. 
  

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 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 any payment under the terms and
provisions of the Intercreditor Agreement in respect of the System Restoration Charges or the proceeds thereof other than in its capacity as the Servicer, the Seller shall pay the Servicer all payments received by the Seller in respect thereof, in
accordance with the Intercreditor Agreement, as soon as practicable after receipt thereof by the Seller. 
 Section 4.04
Notice of Liens. The Seller shall notify the Issuer and the Indenture Trustee promptly after becoming aware of any Lien on the System Restoration Property, other than the conveyance hereunder, any Lien created in favor of the Bondholders
pursuant to Section 39.309 of the Public Utility Regulatory Act or any Lien created by the Issuer under the Indenture. 
 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 or the Seller’s performance
of its obligations hereunder. 
 Section 4.06 Covenants Related to the System Restoration Property. 
 (a) So long as any of the Bonds are outstanding, the Seller shall: 
 (i) treat the Bonds as debt of the Issuer and not of the Seller, except for financial reporting or tax purposes, 

(ii) disclose in its financial statements that it 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), 
 (iii) disclose the effects of all transactions between the Seller and the Issuer in accordance with generally accepted accounting principles, and 
 (iv) not own or purchase any Bonds. 
 (b) So long as any of the
Bonds are outstanding, 
  

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 (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); and 
 (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, including the Intercreditor Agreement. 
 (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 Public Utility Regulatory 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 Public Utility Regulatory 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 Public Utility Regulatory 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 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: 
 (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 set forth in Article III; or 
 (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 provisions of the Public Utility Regulatory Act,
the System Restoration Amendments, 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. 
  

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 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. 
 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 

  

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AGAINST ANY SUCH PERSON UNDER EXISTING LAW AS OF
THE TRANSFER 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 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 AMOUNT OF ANY DEPOSITS TO
THE ISSUER REQUIRED TO HAVE BEEN MADE IN ACCORDANCE WITH THE TERMS
OF THE BASIC DOCUMENTS WHICH ARE NOT MADE WHEN SO REQUIRED, 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 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 (OTHER THAN ANY LIABILITIES, OBLIGATIONS OR CLAIMS
FOR OR PAYMENTS OF PRINCIPAL OF OR INTEREST ON THE BONDS) 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. 
 (e) THE INDEMNIFICATION OBLIGATIONS OF THE
SELLER UNDER THIS SECTION 5.01 SHALL RANK PARI PASSU WITH ALL
OTHER GENERAL UNSECURED OBLIGATIONS OF THE SELLER. 
 (f) 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). THE SELLER SHALL NOT INDEMNIFY ANY PARTY UNDER THIS SECTION 5.01
FOR ANY CHANGES IN LAW AFTER THE TRANSFER DATE, INCLUDING BY MEANS
OF 

  

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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. 
 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 PUBLIC UTILITY REGULATORY
ACT OR AN APPLICABLE TARIFF, OR THE CREDITWORTHINESS OF ANY SUCH
PERSON. 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 or Consolidation of, or Assumption of the Obligations of, the Seller. 
 Any Person: 
 (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, 
 (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, 
 (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, 
 (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 
 (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 
 (i) immediately after giving effect to
such transaction, no representation or warranty made pursuant to Article III 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, 
  

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 (ii) the Rating Agencies shall have received prior written notice of such
transaction, 
 (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, 
 (iv) the Seller shall have delivered to
the Issuer and the Indenture Trustee an Opinion of Counsel either 
 (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 provisions of the Public Utility Regulatory 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 
 (B) stating that, in the opinion of such counsel, no such action is necessary to preserve and protect such interests, and

 (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 federal income tax purposes, such transaction will not
result in a material adverse 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. 
  

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 ARTICLE VI 
 MISCELLANEOUS PROVISIONS 
 Section 6.01
Amendment. 
 (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. 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, 
 (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: 
 (A) a reference to Docket No. 37200 and a statement as to the possible effect of the amendment
on ongoing qualified costs; 
 (B) an Officer’s Certificate stating that the proposed amendment has been
approved by all relevant parties; and 
 (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; 
 (ii) The Texas
Commission shall, within 30 days of receiving the request for consent complying with Section 6.01(a)(i) above, either 
 (A) provide notice of its consent or lack of consent to the person specified in Section 6.01(a)(i)(C) above, or 
 (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) above, the Texas Commission or its staff
delivers to the office of the person specified in Section 6.01(a)(i)(C) above 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) 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. 
  

 -16- 

 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. 
 (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. 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) above, 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 
 (a) in the case of the Seller, to CenterPoint Energy
Houston Electric, LLC, 1111 Louisiana Street, Houston, Texas 77002, Attention: Treasurer, 
 (b) in the case of
the Issuer, to CenterPoint Energy Restoration Bond Company, LLC, 1111 Louisiana Street, Suite 4664B, Houston, Texas 77002, Attention: Manager, 
 (c) in the case of Moody’s, to Moody’s Investors Service, Inc., ABS Monitoring Department, 7 World Trade Center at 250 Greenwich Street, New York, New York 10007, 
 (d) in the case of Standard & Poor’s, to Standard & Poor’s Ratings Services, a
Standard & Poor’s Financial Services LLC business, 55 Water Street, New York, New York 10041, Attention: Asset Backed Surveillance Department, 
 (e) in the case of Fitch, to Fitch, Inc., 1 State Street Plaza, New York, New York 10004, Attention: ABS Surveillance,

 (f) in the case the Indenture Trustee, at the address provided for notices or communications to the Indenture
Trustee in the Indenture, and 
 (g) in the case of the Texas Commission, to 1701 N. Congress Avenue, Austin,
Texas 78711-3326, Attention: Executive Director and General Counsel; 
  

 -17- 

 or, as to each of the foregoing, at such other address as shall be designated by written notice to the other
parties. 
 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 Assignment to the
Indenture Trustee. The Seller hereby acknowledges and consents to any pledge, assignment and grant of a security interest by the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the Bondholders of all right, title and
interest of the Issuer in, to and under the System Restoration Property and the proceeds thereof and the assignment of any or all of the Issuer’s rights hereunder to the Indenture Trustee. Notwithstanding such assignment, in no event shall the
Indenture 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 recourse
shall be had solely to the assets of the Issuer. 
 Section 6.05 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 6.06 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 6.07 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 6.08 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 6.09 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 6.10 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 a case against the Issuer under any federal or state bankruptcy, insolvency or similar

  

 -18- 

 
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. 
 (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 or cause the Seller to invoke the process of any Governmental Authority for the purpose of
commencing or sustaining a 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] 
  

 -19- 

 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, LLC,
 as Issuer

		
	By:	 	 /s/ Marc Kilbride

		 	Marc Kilbride
		 	Manager
	
	 CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC,
 as Seller

		
	By:	 	 /s/ Marc Kilbride

		 	Marc Kilbride
		 	Vice President and Treasurer

  

 -20- 

 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 November 25, 2009, 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 August 6, 2009, the Amended and Restated Limited Liability Company Agreement of the Issuer dated as of November 25, 2009, this Sale Agreement, the Bill of Sale, the Servicing Agreement, the Intercreditor Agreement, the
Administration Agreement, the Indenture and the Series Supplement. 
 “Bill of Sale” means the Bill of Sale, dated as
of November 25, 2009, 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 or Sunday or a day on which banking institutions in the City of Houston, Texas,
or in the City of New York, New York, are required or authorized by law or executive order to remain closed. 
 “CenterPoint Houston” means CenterPoint Energy Houston Electric, LLC, a Texas limited liability company, or its successor. 
 “Financing Order” means the Financing Order issued by the Texas Commission on August 26, 2009 in Docket No. 37200 pursuant to the System Restoration Amendments to the Public Utility
Regulatory Act. 
 “Fitch” means Fitch, Inc., or its successor. 
  

 A-1 

 “Governmental Authority” means any court or any federal or state regulatory body,
administrative agency or governmental instrumentality. 
 “Indenture” means the Indenture, dated as of
November 25, 2009, among the Issuer and the Indenture Trustee, 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 Deutsche Bank Trust Company Americas, or its successor or any successor Indenture Trustee under the
Indenture. 
 “Intercreditor Agreement” means the Intercreditor Agreement dated as of November 25, 2009, among
the Indenture Trustee, the Issuer, the Seller, CenterPoint Energy Transition Bond Company, LLC, CenterPoint Energy Transition Bond Company II, LLC, CenterPoint Energy Transition Bond Company III, LLC and the other parties thereto, each in the
capacities stated therein, as the same may be amended and supplemented from time to time. 
 “Issuance Advice Letter”
means the issuance advice letter submitted to the Texas Commission on November 25, 2009 by the Seller pursuant to the Financing Order in connection with the issuance of the Bonds. 
 “Issuer” means CenterPoint Energy Restoration Bond Company, 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 chairman of the board, the
chief executive officer, the president, any vice chairman, any executive vice president, senior vice president or vice president, the treasurer, 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. 
  

 A-2 

 “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 System Restoration
Amendments to the Public Utility Regulatory 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, Fitch 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, the notification in writing to each Rating Agency of such action, and
confirmation from S&P to the Indenture Trustee and the Issuer that such action will not result in a reduction or withdrawal of the then current rating by such Rating Agency of any outstanding class or tranche of Bonds. 
 “Restructuring Amendments” means the 1999 utility restructuring amendments to the Public Utility Regulatory Act, as subsequently
amended. 
 “Seller” means CenterPoint Houston, or its successor, in its capacity as seller of the System Restoration
Property to the Issuer pursuant to this Agreement. 
 “Series Supplement” means the First Supplemental Indenture,
dated as of November 25, 2009, among the Issuer and the Indenture Trustee, which specifies the terms of the Bonds. 
 “Servicer” means CenterPoint Houston, in its capacity as the servicer under the Servicing Agreement, and each successor to or assignee of CenterPoint Houston (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 November 25, 2009, between the Issuer and the Servicer and acknowledged by the Indenture Trustee, as the same may be amended and supplemented from time to time. 
 “Standard & Poor’s” or “S&P,” means Standard & Poor’s Ratings Services, a
Standard & Poor’s Financial Services LLC business, or its successor. 
 “System Restoration Amendments”
means Act of April 16, 2009, 81st Leg., R.S., S.B. 769, § 1 (to be codified at TEX UTIL. CODE ANN. §§ 36.401-.406). The provisions of the Public Utility Regulatory Act
as amended by the provisions of the Restructuring Amendments relating to the securitization in Chapter 39 Subchapter G of the Public Utility Regulatory Act are further amended and supplemented by the System Restoration Amendments. 
  

 A-3 

 “System Restoration Charges” means the nonbypassable amounts to be charged for the
use 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 August 26, 2009, 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. System Restoration Property is
known as “transition property” in the Public Utility Regulatory Act. 
 “Texas Commission” means the Public
Utility Commission of Texas or any successor thereto. 
 “Transfer Date” means the date on which the Bonds are to be
originally issued in accordance with Section 2.10 of the Indenture. 
 “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. 
  

 A-4 

 EXHIBIT A 
 BILL OF SALE 
 1. This Bill of Sale is being delivered pursuant to the System
Restoration Property Sale Agreement, dated as of November 25, 2009 (the “Sale Agreement”), between CenterPoint Energy Houston Electric, LLC (the “Seller”) and CenterPoint Energy Restoration Bond Company, LLC (the
“Issuer”). All capitalized terms used but not defined herein have the respective meanings ascribed thereto in the Sale Agreement. 
 2. In consideration of the Issuer’s payment to the Seller of $658,675,628, 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 Schedule 1 hereto (such sale, transfer,
assignment, setting over and conveyance of the System Restoration Property includes, to the fullest extent permitted by the Public Utility Regulatory 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. 
 3. The Issuer does hereby purchase the System Restoration Property identified on Schedule 1 hereto from the Seller for the
consideration set forth in paragraph 2 above. 
 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. 
 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 respects on the date hereof as if made on the
date hereof. 
 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. 
 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-1 

 IN WITNESS WHEREOF, the Seller and the Issuer have duly executed this
Bill of Sale as of the 25th day of November 2009.

  

			
	 CENTERPOINT ENERGY RESTORATION BOND COMPANY, LLC,
 as Issuer

		
	By:	 	  

		 	Marc Kilbride
		 	Manager
	
	 CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC,
 as Seller

		
	By:	 	  

		 	Marc Kilbride
		 	Vice President and Treasurer

  

 Exhibit A-2 

 SCHEDULE 1 
 to 
 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 August 26, 2009 (PUC Docket No. 37200), pursuant to the System Restoration Amendments to the Public Utility Regulatory Act, including rights to impose, collect
and receive the “transition charges” approved in such Financing Order.System Restoration Property Servicing Agreement dated as of November 25, 2009

 Exhibit 10.2 
 Execution Version 
 SYSTEM RESTORATION PROPERTY
SERVICING AGREEMENT 
 between 
 CENTERPOINT ENERGY RESTORATION BOND COMPANY, LLC 
 Issuer 
 and 
 CENTERPOINT
ENERGY HOUSTON ELECTRIC, LLC 
 Servicer 
 Dated as of November 25, 2009 

 Table of Contents 
  

					
	ARTICLE I DEFINITIONS	  	2
	 SECTION 1.01.
	 	DEFINITIONS	  	2
	 SECTION 1.02.
	 	OTHER DEFINITIONAL PROVISIONS	  	2
		
	ARTICLE II APPOINTMENT AND AUTHORIZATION OF SERVICER	  	2
	 SECTION 2.01.
	 	APPOINTMENT OF THE SERVICER; ACCEPTANCE OF APPOINTMENT	  	2
	 SECTION 2.02.
	 	AUTHORIZATION	  	2
	 SECTION 2.03.
	 	DOMINION AND CONTROL OVER SYSTEM RESTORATION PROPERTY	  	3
		
	ARTICLE III BILLING AND OTHER SERVICES	  	3
	 SECTION 3.01.
	 	DUTIES OF THE SERVICER	  	3
	 SECTION 3.02.
	 	SERVICING AND MAINTENANCE STANDARDS	  	6
	 SECTION 3.03.
	 	ANNUAL REPORTS ON COMPLIANCE WITH REGULATION AB	  	7
	 SECTION 3.04.
	 	ANNUAL REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM REPORT	  	8
	 SECTION 3.05.
	 	MONITORING OF THIRD-PARTY COLLECTORS	  	9
		
	ARTICLE IV SERVICES RELATED TO SYSTEM RESTORATION CHARGE ADJUSTMENTS AND PBRAF ADJUSTMENTS	  	13
	 SECTION 4.01.
	 	SYSTEM RESTORATION CHARGE ADJUSTMENTS	  	13
	 SECTION 4.02.
	 	LIMITATION OF LIABILITY	  	16
		
	ARTICLE V THE SYSTEM RESTORATION PROPERTY	  	17
	 SECTION 5.01.
	 	CUSTODY OF SYSTEM RESTORATION PROPERTY RECORDS	  	17
	 SECTION 5.02.
	 	DUTIES OF SERVICER AS CUSTODIAN	  	17
	 SECTION 5.03.
	 	CUSTODIAN’S INDEMNIFICATION	  	19
	 SECTION 5.04.
	 	EFFECTIVE PERIOD AND TERMINATION	  	19
		
	ARTICLE VI THE SERVICER	  	20
	 SECTION 6.01.
	 	REPRESENTATIONS AND WARRANTIES OF THE SERVICER	  	20
	 SECTION 6.02.
	 	INDEMNITIES OF THE SERVICER; RELEASE OF CLAIMS	  	22
	 SECTION 6.03.
	 	MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF, THE SERVICER	  	25
	 SECTION 6.04.
	 	ASSIGNMENT OF THE SERVICER’S OBLIGATIONS	  	26
	 SECTION 6.05.
	 	LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS	  	26
	 SECTION 6.06.
	 	CENTERPOINT HOUSTON NOT TO RESIGN AS SERVICER	  	27
	 SECTION 6.07.
	 	SERVICING FEE	  	27
	 SECTION 6.08.
	 	SERVICER EXPENSES	  	28
	 SECTION 6.09.
	 	COMPLIANCE WITH APPLICABLE LAW	  	28
	 SECTION 6.10.
	 	APPOINTMENTS	  	28
	 SECTION 6.11.
	 	NO SERVICER ADVANCES	  	28
	 SECTION 6.12.
	 	REMITTANCES	  	29
	 SECTION 6.13.
	 	SERVICER’S CERTIFICATE	  	29
	 SECTION 6.14.
	 	PROTECTION OF TITLE	  	29

  

 i 

					
	 SECTION 6.15.
	  	MAINTENANCE OF OPERATIONS	  	30
		
	ARTICLE VII SERVICER DEFAULT	  	30
	 SECTION 7.01.
	  	SERVICER DEFAULT	  	30
	 SECTION 7.02.
	  	NOTICE OF SERVICER DEFAULT	  	32
	 SECTION 7.03.
	  	WAIVER OF PAST DEFAULTS	  	32
	 SECTION 7.04.
	  	APPOINTMENT OF SUCCESSOR	  	32
	 SECTION 7.05.
	  	COOPERATION WITH SUCCESSOR	  	33
		
	ARTICLE VIII MISCELLANEOUS PROVISIONS	  	33
	 SECTION 8.01.
	  	AMENDMENT	  	33
	 SECTION 8.02.
	  	NOTICES	  	33
	 SECTION 8.03.
	  	ASSIGNMENT	  	34
	 SECTION 8.04.
	  	LIMITATIONS ON RIGHTS OF OTHERS	  	34
	 SECTION 8.05.
	  	SEVERABILITY	  	34
	 SECTION 8.06.
	  	SEPARATE COUNTERPARTS	  	35
	 SECTION 8.07.
	  	HEADINGS	  	35
	 SECTION 8.08.
	  	GOVERNING LAW	  	35
	 SECTION 8.09.
	  	ASSIGNMENT TO THE TRUSTEE	  	35
	 SECTION 8.10.
	  	NONPETITION COVENANTS	  	35
	 SECTION 8.11.
	  	TERMINATION	  	35
	 SECTION 8.12.
	  	PUCT CONSENT	  	35
	 SECTION 8.13.
	  	EFFECT OF SUBSEQUENT PUCT REGULATIONS	  	36
	 SECTION 8.14.
	  	LIMITATION OF LIABILITY	  	36

 SCHEDULE A TO SYSTEM RESTORATION PROPERTY SERVICING AGREEMENT 
 EXHIBIT A - FORM OF SEMI-ANNUAL SERVICER’S CERTIFICATE 
 EXHIBIT B-1 - FORM OF SERVICER’S REGULATION AB COMPLIANCE CERTIFICATE 
 EXHIBIT B-2 - FORM OF
CERTIFICATE OF COMPLIANCE 
 ANNEX 1 TO SERVICING AGREEMENT 
 APPENDIX A- MASTER DEFINITIONS 
  

 ii 

 SYSTEM RESTORATION PROPERTY SERVICING AGREEMENT dated as of November 25, 2009 (this
“Agreement”) between CENTERPOINT ENERGY RESTORATION BOND COMPANY, LLC, a Delaware limited liability company (the “Issuer”), and CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, a Texas limited liability company (“CenterPoint
Houston”), as the servicer of the System Restoration Property hereunder (together with each successor to CenterPoint Houston in such capacity pursuant to Section 6.03 or 7.04, the “Servicer”). 
 WHEREAS, pursuant to the Public Utility Regulatory Act and the Financing Order, the Seller and the Issuer are concurrently entering into the
Sale Agreement dated as of the date hereof pursuant to which the Seller is selling and the Issuer is purchasing the System Restoration Property created pursuant to the Public Utility Regulatory Act and the Financing Order; 
 WHEREAS, the Servicer is willing to service the System Restoration Property purchased from the Seller by the Issuer; 
 WHEREAS, the Issuer, in connection with ownership of the System Restoration Property, desires to engage the Servicer to carry out the
functions described herein; 
 WHEREAS, the System Restoration Charges may not be itemized on Customers’ bills and the SRC
Collections initially will be commingled with other funds Servicer collects from Customers and REPs; 
 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 required or allowed by the Financing Order, and to account for and remit the System Restoration Charges to or for the account of the Issuer in accordance with the remittance procedures contained in
this Agreement without any charge, deduction or surcharge of any kind (other than the Servicing Fee specified in this Agreement); 
 WHEREAS, a number of parties may have an interest in such commingled collections, and such parties have entered into an Intercreditor Agreement as of the date hereof that allows the party acting as the Utility (as defined therein) to
allocate the collected, commingled funds according to each interested party’s interest; and 
 WHEREAS, the Financing Order
provides that the PUCT, or its attorney, will enforce the Servicer’s obligations imposed under this Agreement for the benefit of Texas ratepayers to the extent permitted by law. 
 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: 
  

 1 

 ARTICLE I 
 DEFINITIONS 
 SECTION 1.01. DEFINITIONS. Capitalized
terms used but not otherwise defined in this Agreement have the respective meanings set forth in Appendix A hereto. 
 SECTION
1.02. OTHER DEFINITIONAL PROVISIONS. 
 (a) 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, Appendix, Annex, Exhibit and Schedule references contained in this Agreement are references to
Sections, Appendices, Annexes, Exhibits and Schedules in or to this Agreement unless otherwise specified; and the term “including” shall mean “including without limitation.” 
 (b) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. 
 (c) All terms defined in this Agreement have the same defined meanings when used in any certificate or other document made or delivered
pursuant to this Agreement unless otherwise defined therein. 
 ARTICLE II 
 APPOINTMENT AND AUTHORIZATION OF SERVICER 
 SECTION 2.01. APPOINTMENT OF THE SERVICER; ACCEPTANCE OF APPOINTMENT. The Issuer hereby appoints the Servicer, 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 and applicable law. 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. With respect to all or any
portion of the System Restoration Property, the Servicer shall be, and hereby is, authorized and empowered by the Issuer to: 
 (a) execute and deliver, on behalf of itself or the Issuer, as the case may be, any and all instruments, documents or notices, and 
 (b) on behalf of itself or the Issuer, as the case may be, make any filing and participate in Proceedings related to the duties of the Servicer hereunder with any governmental authorities, including with
the PUCT. 
 The Issuer shall furnish the Servicer with all executed documents as have been prepared by the Servicer for
execution by the Issuer, and with such other documents as may be in the Issuer’s possession, as necessary or appropriate to enable the Servicer to carry out its servicing

  

 2 

 
and administrative duties hereunder. Upon the written request of the Servicer, 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 System Restoration Property Documentation. The Servicer hereby agrees that it shall not take any action that is not authorized by this Agreement,
the Public Utility Regulatory Act, PUCT Regulations or the Financing Order, that is not consistent with its customary procedures and practices, or that shall impair the rights of the Issuer with respect to the System Restoration Property, in each
case unless such action is required by law or court or regulatory order. 
 ARTICLE III 
 BILLING AND OTHER SERVICES 
 SECTION 3.01. DUTIES OF THE SERVICER. The Servicer, as agent for the Issuer (to the extent provided herein), shall have the following duties: 
 (a) Duties of Servicer Generally. The Servicer shall manage, service, administer and make collections in respect of the System
Restoration Property. The Servicer’s duties will include: 
 (i) calculating and billing the System
Restoration Charges; 
 (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, applicable tariffs or the Public Utility Regulatory Act); 
 (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 Public Utility Regulatory Act, PUCT Regulations or applicable
tariffs; provided, however, the Issuer and the Servicer acknowledge and agree that pursuant to the Intercreditor Agreement, payments in respect of System Restoration Charges and System Restoration Property may be deposited initially
into an account held and processed by CenterPoint Houston in its capacity as the Utility for the benefit of the Servicer, and that CenterPoint Houston in its individual capacity may be replaced as the holder of such account by a Successor Servicer
or Designated Account Holder as those terms are defined and as set forth more fully in the Intercreditor Agreement; 
 (iv) posting all SRC Collections remitted to the Servicer and posting all late-payment penalties assessed against REPs (as described in Section 3.05(c)(ii)); 
  

 3 

 (v) responding to inquiries by Customers, REPs, the PUCT or any other State,
local or federal governmental authority with respect to the System Restoration Property and the System Restoration Charges; 
 (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 reports to the Issuer, the PUCT, the Trustee and
each Rating Agency; 
 (vii) 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 the Intercreditor Agreement and monitoring the collections of the agents for compliance with the Intercreditor Agreement;

 (viii) providing information reasonably requested by CenterPoint Houston 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; 
 (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;

 (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;

 (xi) making all filings with the PUCT and taking all other actions necessary to perfect the Issuer’s
ownership interests in and the Trustee’s Lien on the Trust Estate; 
 (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; 
 (xiii) taking action in connection with System Restoration Charge Adjustments and PBRAF Adjustments as is set forth herein; 
 (xiv) any other duties specified for a servicer under the Financing Order, Schedule SRC, the Public Utility Regulatory Act or
other applicable law; and 
 (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. 
  

 4 

 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 Public Utility Regulatory Act and any PUCT Regulations, orders or directions and the federal securities laws and the rules
and regulations promulgated thereunder, including Regulation AB, as in effect at the time such duties are to be performed. Without limiting the generality of this Section 3.01(a), 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 the Issuer Annex
hereto, 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. 
 (b) Reporting Functions. 
 (i) Notification of Laws and Regulations. The Servicer shall immediately notify the Issuer, the PUCT, the Trustee and each Rating Agency in writing of any laws 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. 
 (ii) Other Information. Upon the reasonable request of the Issuer, the Trustee, the PUCT or any Rating Agency, the Servicer shall provide to the Issuer, the Trustee, the PUCT 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, that may be reasonably necessary and
permitted by law for the Issuer, the Trustee, the PUCT or such Rating Agency to monitor the performance by the Servicer hereunder. In addition, so long as any of the Bonds are Outstanding, the Servicer shall provide to the Issuer, to the PUCT 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.

 (iii) 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 Section 6.13, the annual Servicer’s Regulation AB Compliance Certificate and Certificate of Compliance described in
Section 3.03, and the Annual Accountant’s Report described in Section 3.04. 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 under the 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, a copy or copies of (i) the Semi-Annual Servicer’s Certificates described in Section 6.13 (under Form 10-D or any other
applicable form), (iii) the annual statements of compliance, attestation reports and other certificates described in Section 3.03, and (iv) the Annual Accountant’s Report (and any attestation required under Regulation AB)
described in Section 3.04. In addition, the appropriate officer or officers of the Servicer shall (in its separate capacity as Servicer) sign the Sponsor’s

  

 5 

 
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 federal securities law and/or any other applicable law. 
 (c) Opinions of Counsel. 

The Servicer shall deliver to the Issuer and the Trustee: 
 (i) promptly after the execution and delivery of this Agreement and of each amendment hereto, and promptly after the execution of the Sale Agreement and of each amendment thereto, an Opinion of Counsel
from Independent counsel of the Issuer either 
 (A) to the effect that, in the opinion of such counsel, all
filings, including filings with the PUCT 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 Public Utility Regulatory Act to fully preserve, protect and perfect 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 preserve and protect such Liens;
and 
 (ii) within ninety (90) days after the beginning of each calendar year beginning with the first
calendar year beginning more than three (3) months after the date hereof, an Opinion of Counsel from Independent counsel of the Issuer, dated as of a date during such ninety (90)-day period, either 
 (A) to the effect that, in the opinion of such counsel, all filings, including filings with the PUCT and the Secretary of
State of the State of Texas and all filings pursuant to the UCC, have been executed and filed that are necessary under the UCC and the Public Utility Regulatory Act to fully preserve, protect and perfect the Liens of the Trustee in 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 preserve, protect and perfect such Liens. 
 Each Opinion of Counsel referred to in clause (i) or (ii) above shall specify any action necessary (as of the date of such opinion) to be taken in the following year to preserve
and protect such interest or Lien. 
 SECTION 3.02. SERVICING AND MAINTENANCE STANDARDS. The Servicer shall, on behalf of the
Issuer: 
 (a) manage, service, administer and make collections in respect of the System Restoration Property with reasonable
care and in material compliance with applicable law,

  

 6 

 
including all applicable PUCT Regulations and guidelines, using the same degree of care and diligence that the Servicer exercises with respect to billing and collection activities that the
Servicer conducts for itself and others; 
 (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 PUCT has mandated and that are consistent with the terms and provisions of the Financing Order, Schedule SRC and existing law; 
 (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; 
 (d) calculate System Restoration Charges and PBRAFs in
compliance with the Public Utility Regulatory Act, the Financing Order, any PUCT order related to System Restoration Charge allocation and any applicable tariffs; 
 (e) provide all reports to such parties to the Intercreditor Agreement 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 the Intercreditor Agreement; and 
 (f) make all filings required under the Public Utility Regulatory 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 pursuant to Section 5.02(d) and 5.02(e) hereof or otherwise. 
 The Servicer shall petition the PUCT for
adjustments to the System Restoration Charges and PBRAF that the servicer determines to be necessary in accordance with the Financing Order. 
 SECTION 3.03. ANNUAL REPORTS ON COMPLIANCE WITH REGULATION AB. 
 (a) The Servicer
shall deliver to the Issuer, the PUCT, the Trustee and the Rating Agencies, on or before the earlier of (i) March 31 of each year beginning March 31, 2010, or (ii) with respect to each calendar year during which CenterPoint
Houston’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 annual report on Form 10-K is required to be filed in accordance with the
Exchange Act and the rules and regulations thereunder, 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,

  

 7 

 
as then in effect (the “Regulation AB Compliance Certificate”), 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”). These certificates may be in the form of, or shall include the forms attached hereto as, Exhibit B-1 and Exhibit
B-2 hereto, with, in the case of Exhibit B-1, such changes as may be required to conform to applicable securities law. 
 (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
Item 1123 of Regulation AB to the extent required in connection with the filing of the annual report on Form 10-K referred to above; provided, however, 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 Exhibit A of the Indenture. 
 SECTION 3.04. ANNUAL REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM REPORT. 
 (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 PUCT, the Trustee and each Rating Agency, on or before the earlier of (a) March 31 of each year, beginning March 31, 2010, to and including the
March 31 succeeding the retirement of all Bonds or (b) with respect to each calendar year during which the Sponsor’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 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 customary auditing activities, to the effect that such firm has performed certain procedures, agreed between the Servicer and such accountants, in connection with the Servicer’s compliance
with its obligations under this Agreement during the preceding calendar year ended December 31 (or, in the case of the first Annual Accountant’s Report, the period of time from the Sale Date through December 31, 2009), identifying the
results of such procedures and including any exceptions noted. In the event 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. 
 (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 the attestation report
required under Item 1122(b) of Regulation AB (or any successor or similar items or rule), as then in effect. The Annual Accountant’s Report shall also indicate that the accounting firm providing such report is independent of the Servicer
within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants. 
  

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 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: 
 (a) Maintenance of Records and Information. In addition to any actions required by the Tariff, PUCT
Regulations or other applicable law, the Servicer shall: 
 (i) maintain adequate records for promptly
identifying and contacting each Third-Party Collector; 
 (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; 
 (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; 
 (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

 (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. 
 (b) Credit and Collection Policies. The Servicer shall, to the fullest extent permitted under the Financing Order, Utilities Code 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 PUCT. 
  

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 (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: 
 (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 Section 3.05(c)(ii) below) 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 law or court or PUCT 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 the Issuer Annex. 
 (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; provided, however, that the prior REP shall not be relieved of the previously
assessed Penalties. 
 (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. 
 (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

  

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Restoration Charges which 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 Section 3.05(c)(ii) of this Agreement, direct the Trustee by written instruction to deliver to 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, 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. 
 (i) If an REP is in default pursuant to Section 9 of Schedule SRC and Finding of Fact 53 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: 
 (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 53 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 Bondholders
and (iii) the Rating Agency Condition has been satisfied; and 
 (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 53 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. 
 (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 PUCT or the Customer requests the services of another REP, in accordance with Schedule SRC and PUCT Regulations. In any case, the

  

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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. 
 (iii) In addition to the obligations set forth in 3.05(g) below, 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. 
 (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, 
 (i) the Servicer shall agree with the REP as to the size of the initial REP Deposit, 
 (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 or the Servicer shall instruct the Trustee to remit or release to the REP any portion of
the REP Deposit no longer required to be on deposit, and 
 (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. 
 (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 Section 3.05(c)(ii) of this Agreement. 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 PUCT as set forth in the Financing Order and Schedule SRC. If the REP prevails in the informal dispute process or before the PUCT, 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 PUCT. As provided in the Financing Order, Schedule SRC and Section 4.01(b)(i)(C) of this Agreement, 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. 
  

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 (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. 
 (h) Affiliated Third-Party Collectors. In performing its obligations under this Section 3.05, 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:

 (a) Expected Amortization Schedule. The Expected Amortization Schedule for the Bonds is provided in the Supplement.

 (b) System Restoration Charge Adjustments. 
 (i) Annual System Restoration Charge Adjustments and Filings. Prior to each Calculation Date, the Servicer shall
calculate 
 (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 PUCT, 
 (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 PUCT within five business days following such Calculation Date), and 
 (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: 
  

	 	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, 

  

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	 	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, 

  

	 	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, 

  

	 	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 the Issuer Annex, 

  

	 	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
Section 3.05(f) of this Agreement for which the Servicer’s claim to the funds in dispute was not clearly unfounded, and 

  

	 	6.	the fees and expenses of the Servicer, the Trustee, the independent manager of the Issuer and the Administrator and other fees, expenses, charges and costs authorized
in the Financing Order will be paid. 

 (ii) Prior to each Calculation Date, the Servicer shall
make annual reconciliation filings with the PUCT 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:

 (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 PUCT Docket No. 37200 and shall participate in a contested case proceeding at the PUCT, the purpose of which will be to determine whether any proposed adjustment complies with the Financing Order,
as set forth therein), and 
 (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. 
 (c) Interim System Restoration Charge Adjustments and Filings. The Servicer shall calculate any interim System Restoration Charge Adjustments to be requested between Calculation Dates to correct
under-collection or over-collection of System Restoration Charges, as set forth in the Financing Order and Schedule SRC, in order to provide for the timely payment of the Bonds. As provided for in the Financing Order, the Servicer shall file for
interim System Restoration Charge Adjustments: 
 (i) to correct any undercollection or overcollection in order
to assure timely payment of the Bonds based on Rating Agency and Bondholder considerations; 
  

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 (ii) the Servicer determines that expected collection of System Restoration
Charges for the upcoming payment date would result in a difference that is greater than 5% in absolute value, between (i) the actual outstanding principal balances of the Bonds plus amounts on deposit in the Excess Funds Subaccount and
(ii) the outstanding principal balances anticipated in the target amortization schedule; or 
 (iii) to meet
a Rating Agency requirement that any tranche of the Bonds be paid in full by its Expected Final Payment Date. 
 In the event an interim System
Restoration Charge Adjustment is necessary, the interim System Restoration Charge Adjustment should be filed on the fifteenth day of the current month for implementation in the first billing cycle of the following month. In no event would such
interim System Restoration Charge Adjustments occur more frequently than every three months if quarterly Bond payments are required or every six months if Semi-Annual Bond payments are required; provided, however, that interim System Restoration
Charge Adjustments for any Bonds remaining outstanding during the fourteenth and fifteenth year after the Bonds are issued may occur quarterly. 
 (d) On each Adjustment Date and Interim Adjustment Date, the Servicer shall 
 (i) take all reasonable actions and make all reasonable efforts in order to effectuate all adjustments approved by the PUCT to the System Restoration Charges and/or PBRAFs, and 
 (ii) promptly send to the Trustee copies of all material notices and documents relating to such adjustments. 
 (e) Reports. 
 (i) For each Calculation Date, the Servicer shall provide to the Issuer, the PUCT, the Trustee and the Rating Agencies a statement indicating: 
 (A) the Bond Balance and the Projected Bond Balance as of the immediately preceding Payment Date, 
 (B) the amount on deposit in the Capital Subaccount and the Required Capital Amount as of the immediately preceding Payment
Date; 
 (C) the amount on deposit in the Excess Funds Subaccount as of the immediately preceding Payment Date;

 (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; 
  

 15 

 (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 
 (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. 
 (ii) Reports to Customers. 
 (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. 
 (B) The Servicer shall comply with the requirements of the Financing Order and 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. 
 (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 clauses (A) and (B) above, including printing and postage costs. 
 (iii) REP Reports. The Servicer shall provide to the Rating Agencies, upon request, any publicly available reports filed by the Servicer with the PUCT (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 
 (a) The Issuer and the Servicer expressly agree and acknowledge that: 
 (i) In connection with any System Restoration Charge Adjustment, the Servicer is acting solely in its capacity as the servicing agent hereunder. 
  

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 (ii) Neither the Servicer nor the Issuer nor 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 Section 4.01 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 PUCT in any way related
to the System Restoration Property or in connection with any System Restoration Charge Adjustment, the subject of any filings under Section 4.01, any proposed System Restoration Charge Adjustment, or the approval of any revised System
Restoration Charges and the scheduled adjustments thereto. 
 (iii) Except to the extent that the Servicer is
liable under Section 6.02, 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 volume 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
negligent manner in connection therewith, nor shall the Servicer have any liability whatsoever as a result of any Person, including the Bondholders, not receiving any payment, amount or return anticipated or expected or in respect of any Bond
generally. 
 (b) Notwithstanding the foregoing, this Section 4.02 shall not relieve the Servicer of liability for any
misrepresentation by the Servicer under Section 6.01 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 Servicer shall keep on file, in accordance with its customary procedures, all System Restoration Property Documentation, it being understood that the Servicer is acting only as the servicing agent and custodian for
the Issuer with respect to the System Restoration Property Documentation. 
 SECTION 5.02. DUTIES OF SERVICER AS CUSTODIAN.

 (a) Safekeeping. The Servicer shall maintain accurate and complete accounts, records and computer systems pertaining to
the System Restoration Property and the System Restoration Property Documentation in accordance with its standard accounting procedures and in sufficient detail to permit reconciliation between payments or recoveries on (or with respect

  

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to) System Restoration Charges and the SRC Collections from time to time remitted to the Trustee pursuant to Section 6.12 and to enable the Issuer to comply with this Agreement and the
Indenture. The Servicer shall conduct, or cause to be conducted, periodic audits of the System Restoration Property Documentation held by it under this Agreement and of the related accounts, records and computer systems, in such a manner as shall
enable the Issuer and the Trustee, as pledgee of the Issuer, to verify the accuracy of the Servicer’s record keeping. The Servicer shall promptly report to the Issuer, to the PUCT, and to the Trustee any failure on the Servicer’s part to
hold the System Restoration Property Documentation 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 Documentation. The Servicer’s duties to hold the System Restoration Property Documentation on behalf of the Issuer set forth in this
Section 5.02, to the extent such System Restoration Property Documentation has not been previously transferred to a Successor Servicer, shall terminate one year and one day after the earlier of the date on which (i) the Servicer is
succeeded by a Successor Servicer pursuant to the provisions of this Agreement or (ii) no Bonds are Outstanding. 
 (b)
Maintenance of and Access to Records. The Servicer shall maintain the System Restoration Property Documentation at 1111 Louisiana Street, Houston, Texas or at such other office as shall be specified to the Issuer, to the PUCT and to the
Trustee by written notice not later than 30 days prior to any change in location. The Servicer shall permit the Issuer and the Trustee or their respective duly authorized representatives, attorneys, agents or auditors at any time during normal
business hours to inspect, audit and make copies of and abstracts from the Servicer’s records regarding the System Restoration Property, the System Restoration Charges and the System Restoration Property Documentation. The failure of the
Servicer to provide access to such information as a result of an obligation or applicable law (including PUCT Regulations) prohibiting disclosure of information regarding customers shall not constitute a breach of this Section 5.02(b).

 (c) Release of Documents. Upon written instruction from the Trustee in accordance with the Indenture, the Servicer
shall release any System Restoration Property Documentation to the Trustee, the Trustee’s agent or the Trustee’s designee, as the case may be, and to the PUCT at such place or places as the Trustee may designate, as soon as practicable.

 (d) Defending System Restoration Property Against Claims. The Servicer shall, subject to applicable law, institute any
action or Proceeding necessary to compel performance by each REP and each party to the Intercreditor Agreement (and in the case of each REP at the earliest possible time) of any of their respective obligations or duties under the Public Utility
Regulatory Act, the Financing Order or the Intercreditor Agreement with respect to the System Restoration Property, and the Servicer agrees, subject to applicable law, 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 as may be reasonably necessary to block or overturn any attempts to cause a repeal of, modification of, or supplement to, the Public Utility
Regulatory Act or 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 Trustee or the Bondholders. The costs of any such
action shall be payable from SRC Collections as an Operating Expense (and shall not be deemed to

  

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constitute a portion of the Servicing Fee) in accordance with the Indenture. The Servicer’s obligations pursuant to this Section 5.02 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). 
 (e) Additional Litigation to Defend System Restoration Property. In addition to the above, the Servicer shall, at its own expense,
institute any action or proceeding necessary to compel performance by the PUCT or the State of Texas of any of their respective obligations or duties under the Public Utility Regulatory 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 CenterPoint Houston’s electric distribution facilities, the Servicer shall assert that the court ordering such condemnation must treat such municipality as a successor to
CenterPoint Houston under the Public Utility Regulatory Act and the Financing Order. 
 SECTION 5.03. CUSTODIAN’S
INDEMNIFICATION. The Servicer as custodian shall indemnify the Issuer, the Independent Managers and the Trustee (for itself and for the benefit of the Bondholders) 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 (collectively, “Losses”) that may be
imposed on, incurred by or asserted against each such Person as the result of any negligent act or omission in any way relating to the maintenance and custody by the Servicer, as custodian, of the System Restoration Property Documentation;
provided, however, 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 Independent Managers or the Trustee, as the case may be.

 Indemnification under this Section 5.03 shall survive resignation or removal of the Trustee or any Independent Manager and shall include
reasonable out-of-pocket fees and expenses of investigation and litigation (including reasonable attorney’s fees and expenses). 
 SECTION 5.04. EFFECTIVE PERIOD AND TERMINATION. The Servicer’s appointment as custodian shall become effective as of the Issuance Date and shall continue in full force and effect until terminated pursuant to this Section 5.04. 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 Section 7.01, 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 year and one day
after the date on which no Bonds are Outstanding. 
  

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 ARTICLE VI 
 THE SERVICER 
 SECTION 6.01. REPRESENTATIONS AND
WARRANTIES OF THE SERVICER. The Servicer makes the following representations and warranties as of the Sale Date, 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 any of the System Restoration Property to the Issuer and the pledge thereof to the Trustee pursuant to the Indenture. 
 (a) Organization and Good Standing. The Servicer is a limited liability company duly organized, validly existing and in good standing
under the laws of the State of Texas, with the limited liability company power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted and to execute, deliver
and carry out the terms of this Agreement and the Intercreditor Agreement and has the power, authority and legal right to service the System Restoration Property and to hold the System Restoration Property Documentation as custodian. 
 (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 the ownership or lease of property or the conduct of its business (including the servicing of the System Restoration Property as required by this Agreement and the Intercreditor Agreement) requires such
qualifications, licenses or approvals (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). 
 (c) Power and Authority. The Servicer has the limited liability company
power and authority to execute and deliver this Agreement and the Intercreditor Agreement and to carry out the terms of each; and the execution, delivery and performance of this Agreement and the Intercreditor Agreement have been duly authorized by
the Servicer by all necessary limited liability company action. 
 (d) Binding Obligation. This Agreement and the
Intercreditor Agreement both constitute legal, valid and binding obligations of the Servicer enforceable against the Servicer in accordance with their terms subject to applicable bankruptcy, receivership, insolvency, reorganization, moratorium 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. 
 (e) No Violation. The consummation of the
transactions contemplated by this Agreement and the Intercreditor Agreement (to the extent applicable to the Servicer’s responsibilities thereunder) and the fulfillment of the terms of each 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 default under, the articles of organization or limited liability company regulations of

  

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the Servicer, or any material agreement to which the Servicer is a party or by which it 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 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. 
 (f) Approvals. 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
Servicer of this Agreement or the Intercreditor Agreement, the performance by the Servicer of the transactions contemplated hereby or thereby or the fulfillment by the Servicer of the terms of each, except those that have been obtained or made or
that are required by this Agreement to be made in the future by the Servicer, including the Issuance Advice Letter, filings with the PUCT for adjusting System Restoration Charges and PBRAFs pursuant to Section 4.01 and the Issuer Annex and
filings with the Secretary of State of the State of Texas under the Public Utility Regulatory Act and Article 9 of the UCC. 
 (g) No Proceedings. Except as disclosed by the Servicer on Schedule A hereto, there are no Proceedings pending or, to the Servicer’s knowledge, threatened before any Governmental Authority having jurisdiction over the Servicer
or its properties: 
 (i) asserting the invalidity of this Agreement or any of the other Basic Documents;

 (ii) seeking any determination or ruling that might materially and adversely affect the System Restoration
Property or the performance by the Servicer of its obligations under, or the validity or enforceability against the Servicer of, this Agreement; 
 (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 System Restoration Property or the
Bonds; or 
 (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. 
 (h) Reports and Certificates. Each report and
certificate delivered in connection with any filing made to the PUCT by the Servicer on behalf of the Issuer with respect to System Restoration Charges, System Restoration Charge Adjustments or PBRAF Adjustments will be true and correct in all
material respects; provided, however, that to the extent any such report or certificate is based in part 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. 
  

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 SECTION 6.02. INDEMNITIES OF THE SERVICER; RELEASE OF CLAIMS. 
 (a) THE SERVICER SHALL BE LIABLE IN ACCORDANCE HEREWITH ONLY TO THE EXTENT OF THE OBLIGATIONS SPECIFICALLY UNDERTAKEN BY THE SERVICER
UNDER THIS AGREEMENT AND THE INTERCREDITOR AGREEMENT. 
 (b) THE SERVICER SHALL INDEMNIFY THE ISSUER AND THE TRUSTEE (FOR
ITSELF AND ON BEHALF OF THE BONDHOLDERS) 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 LOSSES THAT MAY BE IMPOSED
UPON, INCURRED BY OR ASSERTED AGAINST ANY SUCH PERSON AS A RESULT OF: 
 (i) THE SERVICER’S WILLFUL
MISCONDUCT, BAD FAITH OR 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 OR THE INTERCREDITOR AGREEMENT;

 (ii) THE SERVICER’S BREACH OF ANY OF ITS REPRESENTATIONS OR WARRANTIES IN THIS AGREEMENT OR THE
INTERCREDITOR AGREEMENT; OR 
 (iii) LITIGATION AND RELATED EXPENSES RELATING TO ITS STATUS AND
OBLIGATIONS AS SERVICER (OTHER THAN ANY PROCEEDINGS THE SERVICER IS REQUIRED TO INSTITUTE UNDER THIS AGREEMENT); 
 PROVIDED,
HOWEVER, THAT THE SERVICER SHALL NOT BE LIABLE FOR ANY LOSSES RESULTING FROM THE BAD FAITH, WILLFUL MISCONDUCT OR NEGLIGENCE OF ANY PERSON INDEMNIFIED PURSUANT TO THIS SECTION 6.02 (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. 
 (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 SECTION 6.02, 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 SECTION 6.02 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

  

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OR INVESTIGATION BROUGHT BY A THIRD PARTY FOR WHICH INDEMNIFICATION MAY BE SOUGHT BY AN INDEMNIFIED PERSON UNDER THIS SECTION 6.02, 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 SECTION 6.02 (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. 
 (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 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; PROVIDED, HOWEVER, THAT THE FOREGOING INDEMNITY IS EXTENDED TO THE TRUSTEE SOLELY
IN ITS INDIVIDUAL CAPACITY AND NOT FOR THE BENEFIT OF THE BONDHOLDERS OR ANY OTHER PERSON. SUCH AMOUNTS WITH RESPECT TO THE TRUSTEE SHALL BE DEPOSITED AND DISTRIBUTED IN ACCORDANCE WITH THE INDENTURE. 
 (e) THE SERVICER’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 6.02(b) AND (d) FOR EVENTS OCCURRING PRIOR TO THE REMOVAL OR
RESIGNATION OF THE TRUSTEE OR THE TERMINATION OF THIS AGREEMENT SHALL SURVIVE THE RESIGNATION OR REMOVAL OF THE TRUSTEE OR THE TERMINATION OF THIS AGREEMENT AND SHALL INCLUDE

  

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REASONABLE COSTS, FEES AND EXPENSES OF INVESTIGATION AND LITIGATION (INCLUDING THE ISSUER’S AND THE TRUSTEE’S REASONABLE ATTORNEYS’ FEES AND EXPENSES). 
 (f) EXCEPT TO THE EXTENT EXPRESSLY PROVIDED FOR IN THIS AGREEMENT, THE SALE AGREEMENT OR THE FORMATION DOCUMENTS (INCLUDING THE
SERVICER’S CLAIMS WITH RESPECT TO THE SERVICING FEES AND THE SELLER’S CLAIM FOR PAYMENT OF THE PURCHASE PRICE OF SYSTEM RESTORATION PROPERTY), THE SERVICER HEREBY RELEASES AND DISCHARGES THE ISSUER (INCLUDING ITS MEMBERS, MANAGERS,
EMPLOYEES AND AGENTS, IF ANY), AND THE TRUSTEE (INCLUDING ITS RESPECTIVE OFFICERS, DIRECTORS AND AGENTS) (COLLECTIVELY, THE “RELEASED PARTIES”) FROM ANY AND ALL ACTIONS, CLAIMS AND DEMANDS WHATSOEVER, WHICH THE SERVICER, IN ITS CAPACITY AS
SERVICER, 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. 
 (g) THE SERVICER AND THE ISSUER HEREBY ACKNOWLEDGE THAT, NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, THE TRUSTEE IS A THIRD-PARTY BENEFICIARY OF THIS SECTION 6.02 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. 
 (h) THE SERVICER SHALL INDEMNIFY THE PUCT (FOR THE BENEFIT OF CUSTOMERS), THE ISSUER, THE TRUSTEE (FOR
ITSELF AND ON BEHALF OF THE BONDHOLDERS), 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 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 SECTION 6.07(b) 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. THE INDEMNIFICATION OBLIGATION SET FORTH IN THIS PARAGRAPH MAY BE ENFORCED BY THE PUCT BUT IS NOT ENFORCEABLE BY ANY REP OR ANY CUSTOMER. ANY
INDEMNITY PAYMENTS MADE TO THE PUCT UNDER THIS PARAGRAPH FOR THE BENEFIT OF CUSTOMERS SHALL BE REMITTED TO THE TRUSTEE PROMPTLY FOR DEPOSIT INTO THE COLLECTION ACCOUNT. 
  

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 SECTION 6.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF, THE SERVICER.
Any Person: 
 (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 August 26, 2009), 
 (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 August 26, 2009), 
 (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 August 26, 2009), 
 (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 August 26, 2009), or 
 (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 August 26, 2009), 
 which Person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the Servicer under this Agreement, 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; provided, however, that: 
 (i) immediately after giving effect to such
transaction, the representations and warranties made pursuant to Section 6.01 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; 
 (ii) the Servicer shall have delivered to the Issuer, the PUCT and the Trustee an
Officers’ Certificate and an Opinion of Counsel each stating that such consolidation, merger, conversion, division or succession and such agreement of assumption comply with this Section 6.03 and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been complied with; 
  

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 (iii) the Servicer shall have delivered to the Issuer, the PUCT, the Trustee
and the Rating Agencies an Opinion of Counsel either 
 (A) stating that, in the opinion of such counsel, all
filings to be made by the Servicer, including filings with the PUCT pursuant to the Public Utility Regulatory 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 
 (B) stating that, in the opinion of such counsel, no such action is necessary to preserve and protect such interests; 
 (iv) the Rating Agencies shall have received prior written notice of such transaction and, if such Person is not an Affiliate
of CenterPoint Houston, the Rating Agency Condition shall be satisfied; and 
 (v) the Servicer shall have
delivered to the Issuer, the PUCT, 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 Bondholders. 
 The Servicer 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 Servicer substantially as a whole or otherwise becomes the successor to the Servicer in accordance with the terms of this
Section 6.03, then upon the satisfaction of all of the other conditions of this Section 6.03, the Servicer shall automatically and without further notice be released from its obligations hereunder. 
 SECTION 6.04. ASSIGNMENT OF THE SERVICER’S OBLIGATIONS. Upon written notice to the Trustee, the PUCT and the Rating Agencies, the
Servicer may assign a portion of its obligations hereunder to an assignee (A) in accordance with the Intercreditor Agreement 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 Section 6.03. 
 SECTION 6.05. LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS. The Servicer shall not be liable to the Issuer, its managers, the Bondholders, the Trustee or any other person, except as provided under this Agreement, for any action taken
or for refraining from the taking of any action pursuant to this Agreement or for errors in judgment; provided, however, that this provision shall not protect the Servicer against any liability that would otherwise be imposed by reason
of willful misconduct, bad faith or negligence in the performance of its duties or by reason of reckless disregard of its obligations and duties under this Agreement or the Intercreditor Agreement. The Servicer and any director or officer or

  

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employee or agent of the Servicer may rely in good faith on the advice of counsel reasonably acceptable to the Trustee or on any document of any kind, reasonably believed to be genuine and to
have been signed by the proper party respecting any matters arising under this Agreement. 
 Except as provided in this
Agreement (including but not limited to Section 5.02(d) of this Agreement), 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; provided, however, 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 Bondholders under this Agreement. The Servicer’s costs and expenses incurred in connection with any such Proceeding shall be payable from SRC Collections as an Operating Expense (and shall not be deemed to
constitute a portion of the Servicing Fee) in accordance with the Indenture. The Servicer’s obligations pursuant to this Section 6.05 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. CENTERPOINT HOUSTON NOT TO RESIGN AS SERVICER. Subject to the provisions of Sections 6.03 and 6.04, CenterPoint Houston 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 PUCT 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 Section 7.04. 
 SECTION 6.07. SERVICING FEE.
(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: 
 (i) CenterPoint Houston or one of its Affiliates is the Servicer, 
 (ii) a successor to CenterPoint Houston or one of its Affiliates is the Servicer due to the operation of the provisions of
Section 6.03, or 
 (iii) any Person is the Successor Servicer hereunder pursuant to the provisions of
Section 6.03 if the predecessor Servicer was CenterPoint Houston or one of its Affiliates, 
 the amount of the Servicing Fee paid to the
Servicer annually shall equal 0.05% of the Bond Balance on the Issuance Date 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. 
  

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 (b) In the event that a Successor Servicer not an Affiliate of CenterPoint Houston is
appointed in accordance with Section 7.04, the amount of Servicing Fee paid to the Servicer annually shall be agreed upon by the Successor Servicer and the Trustee but shall in no event exceed 0.60% of the Bond Balance on the Issuance Date
without the consent of the PUCT 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. The foregoing fees set forth in Section 6.07(a) and
this Section 6.07(b) constitute a fair and reasonable price for the obligations to be performed by the Servicer. The Servicer and any Successor Servicer agrees to pay from amounts received as the Servicing Fee all fees due and owing pursuant to
the Intercreditor Agreement, and neither the Servicer nor any Successor Servicer shall seek or be entitled to any other or additional reimbursement therefor. The Trustee shall not be responsible or liable for the Servicing Fee or any fees arising
from the Intercreditor Agreement or for any increase or differential in such fees. 
 SECTION 6.08. SERVICER EXPENSES. Except as
otherwise expressly provided in Sections 5.02(d) and 6.05, the Servicer shall be required to pay all expenses incurred by it in connection with its activities hereunder and under the Intercreditor Agreement, including fees and disbursements of
independent accountants and counsel, taxes imposed on the Servicer and expenses incurred in connection with reports to Bondholders. 
 SECTION 6.09. 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
such System Restoration Property the noncompliance with which would have a material adverse effect on the value of the System Restoration Property; provided, however, 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 6.10. APPOINTMENTS. The Servicer, with written notice to the Trustee and the PUCT, may at any time appoint a subservicer or agent to
perform all or any portion of its obligations as Servicer hereunder; provided, however, that the Rating Agency Condition shall have been satisfied in connection therewith; provided further that the Servicer shall remain
obligated and be liable to the Issuer 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
subservicer or agent 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 the subservicer or agent shall be as agreed
between the Servicer and its subservicer or agent from time to time, and none of the Issuer, the Trustee or the Bondholders shall have any responsibility therefor. Any such appointment shall not constitute a Servicer resignation under
Section 6.06. The Designated Account Holder shall constitute a subservicer for purposes of this Section 6.10. 
 SECTION 6.11. NO SERVICER ADVANCES. The Servicer shall not make any advances of interest on or principal of the Bonds. 
  

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 SECTION 6.12. REMITTANCES. 
 (a) The Servicer shall collect and remit to the Trustee on a daily basis, for deposit in the Collection Account in accordance with
Section 6.12(c) below, the System Restoration Charges plus any Accrued Interest thereon from the date or dates such System Restoration Charges were actually received (the “Daily Remittance”). The Daily Remittance shall be made as soon
as reasonably practicable but in no event later than the second Business Day after the Servicer receives those SRC Collections 
 (b) The Servicer agrees and acknowledges that it will hold all SRC Collections and other System Restoration Property collected by it for the benefit of the Issuer and the Trustee and that all amounts will be remitted by the Servicer in
accordance with this Agreement without any surcharge, fee, offset, charge or other deduction other than as expressly permitted in the Financing Order and without making any claim to reduce its obligation to remit all SRC Collections and any other
proceeds of the System Restoration Property collected by it. 
 (c) On or before each remittance by the Servicer to the Trustee,
the Servicer shall prepare and furnish to the Issuer, the PUCT and the Trustee a statement setting forth the aggregate amount remitted or to be remitted by the Servicer to the Trustee for deposit on such date pursuant to the Indenture. 

(d) On or before each Payment Date, the Servicer shall prepare and furnish to the Issuer and the Trustee a statement setting forth the
transfers and payments to be made on that Payment Date and the amounts thereof. 
 (e) On or before each Payment Date for the
Bonds, the Servicer shall prepare and furnish to the Issuer, the PUCT and the Trustee a statement setting forth the amounts to be paid to the Holders of Bonds. 
 SECTION 6.13. SERVICER’S CERTIFICATE. Not later than two (2) Business Days prior to each Payment Date, the Servicer shall deliver a written report, for the Bonds, substantially in the form of
Exhibit A hereto (the “Semi-Annual Servicer’s Certificate”) to the Issuer, the PUCT, the Trustee and the Rating Agencies setting forth the transfers and payments to be made in respect of such Payment Date pursuant to the
Indenture and the amounts thereof and the amounts to be paid to Holders of Bonds pursuant to the Indenture. 
 SECTION 6.14.
PROTECTION OF TITLE. The Servicer shall execute and file all filings, including filings with the Secretary of State of the State of Texas pursuant to the Public Utility Regulatory Act and Article 9 of the UCC, and cause to be executed and filed all
filings, all 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 Trustee in the System Restoration Property, including all filings required under the Public Utility
Regulatory Act and Article 9 of the UCC relating to the transfer of the ownership or security interest in the System Restoration Property by the Seller to the Issuer or any security interest granted by the Issuer in the System Restoration Property.
The Servicer shall deliver (or cause to be delivered) to the Issuer, the PUCT and the Trustee file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing. 
  

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 SECTION 6.15. MAINTENANCE OF OPERATIONS. To the extent that any interest in the System
Restoration Property is assigned, sold, or transferred to an assignee, CenterPoint Houston shall enter into a contract with that assignee that requires CenterPoint Houston to continue to operate its transmission and distribution system in order to
provide electric services to CenterPoint Houston’s customers; provided, however, that this provision shall not prohibit CenterPoint Houston from selling, assigning, or otherwise divesting its transmission and distribution systems or any part
thereof so long as the entity or entities acquiring such system agree to continue operating the facilities to provide electric service to CenterPoint Houston’s customers. 
 ARTICLE VII 
 SERVICER DEFAULT 
 SECTION 7.01. SERVICER DEFAULT. If any one of the following events (a “Servicer Default”) occurs and is continuing: 
 (a) any failure by the Servicer to remit to the Trustee, on behalf of the Issuer, any required remittance by the date that such remittance
must be made that continues unremedied for a period of five Business Days; 
 (b) any failure by the Servicer duly to observe or
perform in any material respect any other covenant or agreement of the Servicer set forth in this Agreement (other than as provided in Section 7.01(a) or (c)) or any other Basic Document to which it is a party in such capacity, which failure

 (i) materially and adversely affects the System Restoration Property or the timely collection of the System
Restoration Charges or the rights of the Trustee or the Bondholders, and 
 (ii) continues unremedied for a
period of 60 days after the earlier to occur of (A) the Trustee, the PUCT or the Issuer delivers written notice of such failure to the Servicer or (B) an officer of the Servicer discovers such failure; 
 (c) any failure by the Servicer duly to perform its obligations under Section 4.01 of this Agreement in the time and manner set forth
therein, which failure continues unremedied for a period of five business days; 
 (d) any representation or warranty made by
the Servicer in this Agreement or any Basic Document proves to have been incorrect when made, which has a material adverse effect on the System Restoration Property or the Issuer’s ownership interest therein, the security interest of the
Trustee in the System Restoration Property, the PUCT, the Issuer, the Bondholders or the investment of the Bondholders in the Bonds, and which material adverse effect continues unremedied for a period of 60 days after the date on which written
notice thereof shall have been given to the Servicer (with a copy to the Trustee) by the Issuer, the PUCT or the Trustee or after discovery of such failure by an officer of the Servicer, as the case may be; or 
 (e) an Insolvency Event occurs with respect to the Servicer; 
  

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 then, so long as the Servicer Default shall not have been remedied, and in no other circumstances, the
Trustee may, or shall upon the written instruction of the Majority Holders, terminate all the rights and obligations (other than the indemnification obligations set forth in Section 6.02 hereof and the obligation under Section 7.04 to
continue performing its functions as Servicer until a Successor Servicer is appointed) of the Servicer under this Agreement by notice then given in writing to the Servicer (a “Termination Notice”) and the Trustee shall comply with the
provisions of the Intercreditor Agreement. The Servicer shall notify each Rating Agency promptly upon the Servicer’s receipt of a Termination Notice. 
 In addition, upon a Servicer Default, 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 PUCT for an order that amounts arising
from the System Restoration Charges be transferred to a separate account for the benefit of the Bondholders, in accordance with the Public Utility Regulatory 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 System Restoration Property, the related System
Restoration Charges or otherwise, shall, upon appointment of a Successor Servicer pursuant to Section 7.04 and pursuant to the provisions of the Intercreditor Agreement, without further action, pass to and be vested in such Successor Servicer
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 Documentation and related documents, or otherwise. The predecessor Servicer shall
cooperate with the Successor Servicer, the Trustee and the Issuer in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Agreement and the Intercreditor Agreement, including the transfer to the
Successor Servicer for administration by it of 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 or the related System
Restoration Charges. As soon as practicable after receipt by the Servicer of such Termination Notice, the Servicer shall deliver the System Restoration Property Documentation to the Successor Servicer. All reasonable costs and expenses (including
attorneys’ fees and expenses) incurred in connection with transferring the System Restoration Property Documentation to the Successor Servicer and amending this Agreement or the Intercreditor Agreement to reflect such succession as Servicer
pursuant to this Section shall be paid by the predecessor Servicer upon presentation of documentation of such costs and expenses. All costs and expenses (including attorneys’ fees and expenses) incurred in connection with transferring the
System Restoration Property Documentation to the Successor Servicer and amending this Agreement or the Intercreditor Agreement to reflect the succession as Servicer other than pursuant to this Section shall be paid by the party incurring such costs
and expenses. Termination of CenterPoint Houston’s rights as a Servicer shall not terminate CenterPoint Houston’s rights or obligations in its individual capacity under the Sale Agreement or the Intercreditor Agreement (except rights
thereunder deriving from its rights as the Servicer hereunder). 
  

 31 

 SECTION 7.02. NOTICE OF SERVICER DEFAULT. The Servicer shall deliver to the Issuer, to the
Trustee, to the PUCT, and to each Rating Agency promptly after having obtained actual knowledge thereof, but in no event later than two Business Days thereafter, written notice in an Officers’ Certificate of any event or circumstance which,
with the giving of notice or the passage of time, would become a Servicer Default under Section 7.01. 
 SECTION 7.03.
WAIVER OF PAST DEFAULTS. The Trustee, with the written consent of the Majority Holders, 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 remittances to the Trustee of SRC Collections from System Restoration Property in accordance with Section 6.12 of 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. 
 SECTION 7.04. APPOINTMENT OF SUCCESSOR. 
 (a) Upon the Servicer’s receipt of a Termination Notice pursuant to Section 7.01 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 Majority Holders, shall, appoint a Successor Servicer, 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 PUCT or a court of competent
jurisdiction to appoint a Successor Servicer under this Agreement. A Person shall qualify as a Successor Servicer only if: 
 (i) such Person is permitted under PUCT Regulations to perform the duties of the Servicer pursuant to the Public Utility Regulatory Act, the Financing Order and this Agreement, 
 (ii) either (A) the PUCT has approved the appointment of the Successor Servicer or (B) 45 days have lapsed 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 shall have been satisfied, and 
 (iv) such Person enters into a servicing agreement with the Issuer having substantially the same provisions as this Agreement and into the Intercreditor Agreement (as Additional SRC Servicer). 
  

 32 

 (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 all the rights
granted to the predecessor Servicer by the terms and provisions of this Agreement. 
 (c) The Successor Servicer may not resign
unless it is prohibited from serving as such by law. 
 SECTION 7.05. COOPERATION WITH SUCCESSOR. The predecessor 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. (a) This Agreement
may be amended by the Servicer and the Issuer, with the prior written consent of the Trustee, the consent of the PUCT pursuant to Section 8.12 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. 

Prior to the execution of any amendment to this Agreement, the Issuer and the Trustee shall be entitled to receive and conclusively rely
upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and the Opinion of Counsel referred to in Section 3.01(c). The Issuer and the Trustee may, but shall not be obligated to, enter
into any such amendment which affects their own rights, duties or immunities under this Agreement or otherwise. 
 (b)
Notwithstanding Section 8.01(a) or anything to the contrary in this Agreement, the Servicer and the Issuer may amend the Issuer Annex 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; provided that
any such amendment shall not have a material adverse effect on the Holders of then Outstanding Bonds. 
 SECTION 8.02. NOTICES.
All demands, notices and communications upon or to the Servicer, the Issuer, the PUCT, the Trustee or the Rating Agencies under this Agreement shall be in writing, delivered personally, via facsimile, by reputable overnight courier or by first class
mail, and shall be deemed to have been duly given upon receipt 
 (a) in the case of the Servicer, to CenterPoint Energy Houston
Electric, LLC, 1111 Louisiana Street, Houston, Texas 77002, Attention: Treasurer; 
  

 33 

 (b) in the case of the Issuer, to CenterPoint Energy Restoration Bond Company, LLC, 1111
Louisiana Street, Suite 4664B, Houston, Texas 77002, Attention: Manager; 
 (c) in the case of the Trustee, at its Corporate
Trust Office; 
 (d) in the case of Moody’s, to Moody’s Investors Service, Inc., ABS Monitoring Department, 7 World
Trade Center at 250 Greenwich Street, New York, New York 10007; 
 (e) in the case of Standard & Poor’s, to
Standard & Poor’s Ratings Services, a Standard and Poor’s Financial Services LLC business, 55 Water Street, New York, New York 10041, Attention: Asset Backed Surveillance Department; and 
 (f) in the case of Fitch, to Fitch, Inc., 1 State Street Plaza, New York, New York 10004, Attention: ABS Surveillance; 
 (g) in the case of the PUCT, to 1701 N. Congress Avenue, Austin, Texas 78711-3326, Attention: Executive Director and General Counsel;

 or, as to each of the foregoing, at such other address as shall be designated by written notice to the other parties. 
 SECTION 8.03. ASSIGNMENT. Notwithstanding anything to the contrary contained herein, except as provided in Sections 6.03 and 6.04 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 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. 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 PUCT (or by the Attorney General of the State
of Texas in the name of the PUCT) for the benefit of such Customer. 
 SECTION 8.05. 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. 
  

 34 

 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. ASSIGNMENT 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 Bondholders 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
assignment of any or all of the Issuer’s rights hereunder and under the Intercreditor Agreement 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 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 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 a 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. 
 SECTION 8.11. TERMINATION. This Agreement shall terminate when all Bonds have been
retired or redeemed in full. 
 SECTION 8.12. PUCT CONSENT. Except as specifically set forth in Section 7.04, to the extent
the consent of the PUCT is required to effect any amendment to or modification of this Agreement or any provision of this Agreement, 
 (a) the Servicer may request the consent of the PUCT by delivering to the PUCT’s executive director and general counsel a written request for such consent, which request shall contain: 
 (i) a reference to Docket No. 37200 and a statement as to the possible effect of the amendment on ongoing qualified
costs; 
  

 35 

 (ii) an Officer’s Certificate stating that the proposed amendment or
modification has been approved by all parties to this Agreement; and 
 (iii) a statement identifying the person
to whom the PUCT or its staff is to address its consent to the proposed amendment or modification or request additional time; 
 (b) The PUCT shall, within 30 days of receiving the request for consent complying with Section 8.12(a) above, either 
 (i) provide notice of its consent or lack of consent to the person specified in Section 8.12(a)(iii) above, or 
 (ii) be conclusively deemed, on the 31st day after receiving the request for consent, to have consented to the proposed
amendment or modification, 
 unless, within 30 days of receiving the request for consent complying with Section 8.12(a) above, the PUCT or
its staff delivers to the office of the person specified in Section 8.12(a)(iii) above a written statement requesting an additional amount of time not to exceed thirty days in which to consider whether to consent to the proposed amendment or
modification. If the PUCT or its staff requests an extension of time in the manner set forth in the preceding sentence, then the PUCT shall either provide notice of its consent or lack of consent to the person specified in Section 8.12(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 or modification on the last day of such extension of time. 
 Any amendment or modification requiring the consent of the PUCT as provided in this Section 8.12 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 30-day period provided for in this Section 8.12(b)(ii), or, if such period has been extended pursuant thereto, the first day
after the expiration of such period as so extended. 
 SECTION 8.13. EFFECT OF SUBSEQUENT PUCT REGULATIONS. Notwithstanding
anything to the contrary contained in this Agreement (including the Issuer Annex hereto), to the extent the PUCT 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 8.14. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that this Agreement is executed and delivered by the Trustee, not

  

 36 

 
individually or personally but solely as Trustee in the exercise of the powers and authority conferred and vested in it, and that the Trustee, in acting hereunder, is entitled to all rights,
benefits, protections, immunities and indemnities accorded to it under the Indenture. 
  

 37 

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

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

		 	 Marc Kilbride

		 	 Manager

	
	CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as Servicer
		
	 By:
	 	 /s/ Marc Kilbride

		 	 Marc Kilbride

		 	 Vice President and Treasurer

  

			
	Acknowledged and Accepted:
	 Deutsche Bank Trust Company Americas,
 not in its individual capacity but solely as
 Trustee on behalf of the Holders
 of the Bonds

		
	By:	 	 /s/ Jenna Kaufman

		 	Jenna Kaufman
		 	Director
		
	By:	 	 /s/ Maria Inoa

		 	Maria Inoa
		 	Associate

  

 38 

 SCHEDULE A 
 TO 
 SYSTEM RESTORATION PROPERTY SERVICING AGREEMENT 
 Proceedings pending or, to the Servicer’s best knowledge, threatened before any court, federal or State regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or its properties seeking any determination or ruling that might materially and adversely affect the System Restoration Property or the performance by the Servicer of its obligations
under, or the validity or enforceability against the Servicer of, this Agreement: 
 None. 
  

 39 

 EXHIBIT A 
 FORM OF SEMI-ANNUAL SERVICER’S CERTIFICATE 
 CenterPoint Energy Restoration Bond Company, LLC 
 $664,859,000 2009 Senior Secured System Restoration Bonds

 Semiannual Servicer’s Certificate 
 CenterPoint Energy Restoration Bond Company, LLC 
 $664,859,000 2009
Senior Secured System Restoration Bonds 
 Pursuant to Section 6.13 of the System Restoration Property Servicing
Agreement (the “Agreement”), dated as of 
 November 25, 2009, between CenterPoint Energy Houston Electric,
LLC, as Servicer, and CenterPoint Energy Restoration Bond Company, LLC, as Issuer, the Servicer does hereby certify as follows: 
 Capitalized terms used in this Semiannual Servicer’s Certificate have their respective meanings as set forth in the Agreement. 
 References herein to certain sections and subsections are references to the respective sections and subsections of the Agreement. 
 Collection Periods: [            ] through [            ]

 Payment Date: [            ] 
 Today’s Date: [            ] 
  

									
	1. Collections Allocable and Aggregate Amounts Available for Current Payment Date:
					
		 	 i.
	  	Remittances for the [            ] through [            ]
Collection Period	  	0.00	  	
		 	 ii.
	  	Remittances for the [            ] through [            ]
Collection Period	  	0.00	  	
		 	 iii.
	  	Remittances for the [            ] through [            ]
Collection Period	  	0.00	  	
		 	 iv.
	  	Remittances for the [            ] through [            ]
Collection Period	  	0.00	  	
		 	 v.
	  	Remittances for the [            ] through [            ]
Collection Period	  	0.00	  	
		 	 vi.
	  	Remittances for the [            ] through [            ]
Collection Period	  	0.00	  	
		 	 vii.
	  	Net Earnings on General Subaccount	  	0.00	  	
		 		  		  	 	  	
		 	 viii.
	  	General Subaccount Balance (sum of i through vii above)	  	0.00	  	
		 		  		  	 	  	
					
		 	 ix.
	  	Excess Funds Subaccount Balance as of Current Payment Date	  	0.00	  	
		 	 x.
	  	Capital Subaccount Balance as of Current Payment Date	  	0.00	  	
		 		  		  	 	  	
		 	 xi.
	  	Collection Account Balance (sum of viii through x above)	  	0.00	  	
		 		  		  	 	  	
	
	2. Outstanding Amounts as of Prior Payment Date:
					
		 	 i.
	  	Tranche A-1 Principal Balance	  	0.00	  	
		 	 ii.
	  	Tranche A-2 Principal Balance	  	0.00	  	
		 	 iii.
	  	Tranche A-3 Principal Balance	  	0.00	  	
		 	 iv.
	  	Aggregate Principal Balance of all Bonds	  	0.00	  	
		 		  		  	 	  	
	
	3. Required Funding/Payments as of Current Payment Date:
					
	 	 	  	  	 Principal
	  	Projected
Principal
Balance	  	Semiannual
Principal Due
		 	i.	  	Tranche A-1	  	0.00	  	0.00
		 	ii.	  	Tranche A-2	  	0.00	  	0.00
		 	iii.	  	Tranche A-3	  	0.00	  	0.00
		 	iv.	  	For all Bonds	  	0.00	  	0.00
		 		  		  	 	  	 

  

 Exhibit A 
 1 

											
	 	  	 	  	 	  	 System
Restoration
Bond
 Interest Rate
	  	Days in
Interest
Period (1)	  	Interest
Due
		  	v.	  	Required Tranche A-1 Interest	  	%	  	0	  	0.00
		  	vi.	  	Required Tranche A-2 Interest	  	%	  	0	  	0.00
		  	vii.	  	Required Tranche A-3 Interest	  	%	  	0	  	0.00
	
	 (1) On 30/360 Day basis.

						
	 	  	 	  	 	  	 Required Level
 (Including
Replenishment
 of Amounts
Previously
 Withdrawn for
4.i.-4.viii.)
	  	Funding
Required	  	 
		  	viii.	  	Capital Subaccount	  		  	0.00	  	
	
	4. Allocation of Remittances as of Current Payment Date Pursuant to Section 8.02(d) of Indenture:
						
		  	i.	  	Trustee Fees and Expenses	  	0.00	  		  	
		  	ii.	  	Servicing Fee	  	0.00	  		  	
		  	iii.	  	Administration Fee and Independent Manager Fee	  	0.00	  		  	
		  	iv.	  	Operating Expenses	  	0.00	  		  	
		  	v.	  	Semiannual Interest (including any past-due Semiannual Interest for prior periods)	  		  		  	
						
	 	  	 	  	 	  	 Aggregate
	  	Per $1,000
of Original
Principal
Amount	  	 
		  		  	1. Tranche A-1 Interest Payment	  	 0.00
	  	0.00	  	
		  		  	2. Tranche A-2 Interest Payment	  	 0.00
	  	0.00	  	
		  		  	3. Tranche A-3 Interest Payment	  	 0.00
	  	0.00	  	
						
		  	vi.	  	Principal Due and Payable as a result of (A) Event of Default or (B) on Final Maturity Date	  		  		  	
						
	 	  	 	  	 	  	 Aggregate
	  	Per $1,000
of Original
Principal
Amount	  	 
		  		  	1. Tranche A-1 Principal Payment	  	 0.00
	  	0.00	  	
		  		  	2. Tranche A-2 Principal Payment	  	 0.00
	  	0.00	  	
		  		  	3. Tranche A-3 Principal Payment	  	 0.00
	  	0.00	  	
						
		  	vii.	  	Principal Scheduled to be Paid on Current Payment Date	  		  		  	

  

 Exhibit A 
 2 

									
					
	 	  	 	  	 	  	 Aggregate
	  	Per $1,000
of Original
Principal
Amount
		  		  	1. Tranche A-1 Principal Payment	  	 0.00
	  	0.00
		  		  	2. Tranche A-2 Principal Payment	  	 0.00
	  	0.00
		  		  	3. Tranche A-3 Principal Payment	  	 0.00
	  	0.00
					
		  	viii.	  	Operating Expenses not Paid under Clause (iv) above	  	 0.00
	  	
		  	ix.	  	Replenishment of Any Amounts Drawn from Capital Subaccount	  	 0.00
	  	
		  	x.	  	Amount calculated at 11.075% per annum on the amount contributed to the Capital Subaccount in excess of 0.5% of the initial outstanding principal balance of the Bonds released to
Issuer	  	0.00	  	
		  	xi.	  	Net Earnings in Capital Subaccount relating to the initial contribution of 0.5% of the initial outstanding principal balance of the Bonds released to Issuer	  	0.00	  	
		  	xii.	  	Deposit to Excess Funds Subaccount	  	0.00	  	
		  	xiii.	  	Released to Issuer upon Series Retirement: Collection Account	  	0.00	  	
		  		  		  	 	  	
		  	xiv.	  	Aggregate Remittances as of Current Payment Date	  	0.00	  	
		  		  		  	 	  	
	
	5. Subaccount Release or Withdrawals as of Current Payment Date Pursuant to Section 8.02(d) of Indenture:
					
		  	i.	  	Capital Subaccount Release (available for 4.xi.)	  	0.00	  	
		  	ii.	  	Excess Funds Subaccount Withdrawal (available for 4.i. through 4.x.)	  	0.00	  	
		  	iii.	  	Capital Subaccount Withdrawal (available for 4.i. through 4.viii.)	  	0.00	  	
		  		  		  	 	  	
		  	iv.	  	Total Release or Withdrawals	  	0.00	  	
		  		  		  	 	  	
	
	 6. Outstanding Amounts and Collection Account Balance as of Current Payment Date
 (after giving effect to payments to be made on such Payment Date):

					
		  	i.	  	Tranche A-1 Principal Balance	  	0.00	  	
		  	ii.	  	Tranche A-2 Principal Balance	  	0.00	  	
		  	iii.	  	Tranche A-3 Principal Balance	  	0.00	  	
		  	iv.	  	Aggregate Principal Balance for all Bonds	  	0.00	  	
		  		  		  	 	  	
		  	v.	  	Excess Funds Subaccount Balance	  	0.00	  	
		  	vi.	  	Capital Subaccount Balance	  	0.00	  	
		  	vii.	  	Aggregate Collection Account Balance	  	0.00	  	
		  		  		  	 	  	
	
	 7. Shortfalls In Interest and Principal Payments as of Current Payment Date
 (after giving effect to payments to be made on such Payment Date):

					
		  	i.	  	Semiannual Interest	  		  	
					
		  		  	1. Tranche A-1 Bond Interest Payment	  	0.00	  	
		  		  	2. Tranche A-2 Bond Interest Payment	  	0.00	  	
		  		  	3. Tranche A-3 Bond Interest Payment	  	0.00	  	
					
		  	ii.	  	Semiannual Principal	  		  	
					
		  		  	1. Tranche A-1 Principal Payment	  	0.00	  	
		  		  	2. Tranche A-2 Principal Payment	  	0.00	  	
		  		  	3. Tranche A-3 Principal Payment	  	0.00	  	
	
	 8. Shortfall in Required Subaccount Level as of Current Payment Date
 (after giving effect to payments to be made on such Payment Date):

					
		  	i.	  	Capital Subaccount	  	0.00	  	
	
	 IN WITNESS HEREOF, the undersigned has duly executed and delivered this Semiannual Servicer’s Certificate this
             day of             , 20    .

	
	 CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC, as Servicer

  

									
		 	by:	 	  
	 		 	
		 		 	[Name]	 		 	
		 		 	[Title]	 		 	

  

 Exhibit A 
 3 

 EXHIBIT B-1 
 FORM OF SERVICER’S REGULATION AB COMPLIANCE CERTIFICATE 
 The undersigned hereby certifies that he/she 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 November 25, 2009 (the “Servicing Agreement”) between the Servicer and CENTERPOINT ENERGY RESTORATION BOND
COMPANY, LLC (the “Issuer”) and further that: 
 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”). 
 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                     ,
         and covered by CenterPoint Houston’s annual report on Form 10-K (such fiscal year, the “Assessment Period”): 
  

					
	 Regulation AB
 Reference
	  	 Servicing Criteria
	  	 Applicable
 Servicing Criteria

			
	 	  	General Servicing Considerations	  	 
			
	1122(d)(1)(i)	  	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.	  	Applicable; assessment below.
			
	1122(d)(1)(ii)	  	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such
servicing activities.	  	Not applicable; no servicing activities were outsourced.
			
	1122(d)(1)(iii)	  	Any requirements in the transaction agreements to maintain a back-up servicer for pool assets are maintained.	  	Not applicable; documents do not provide for a back-up servicer.
			
	1122(d)(1)(iv)	  	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required
by and otherwise in accordance with the terms of the transaction agreements.	  	Not applicable; PUCT rules impose credit standards on retail electric providers who handle customer collections and govern performance requirements of utilities.

  

 Exhibit B-1 
 1 

					
	 Regulation AB
 Reference
	  	 Servicing Criteria
	  	 Applicable
 Servicing Criteria

			
	 	  	Cash Collection and Administration	  	 
			
	1122(d)(2)(i)	  	Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days of receipt, or such other number
of days specified in the transaction agreements.	  	Applicable
			
	1122(d)(2)(ii)	  	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	  	Not applicable; no disbursements on behalf of obligors or to investors are made by Servicer by means of wire transfer
			
	1122(d)(2)(iii)	  	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as
specified in the transaction agreements.	  	Applicable, but no current assessment required; no advances by the Servicer are permitted under the transaction agreements.
			
	1122(d)(2)(iv)	  	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to
commingling of cash) as set forth in the transaction agreements.	  	Applicable, but no current assessment is required since transaction accounts are maintained by and in the name of the Trustee.
			
	1122(d)(2)(v)	  	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally
insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Exchange Act.	  	Applicable, but no current assessment required; all “custodial accounts” are maintained by the Trustee.
			
	1122(d)(2)(vi)	  	Unissued checks are safeguarded so as to prevent unauthorized access.	  	Not applicable; all transfers made by wire transfer.

  

 Exhibit B-1 
 2 

					
	 Regulation AB
 Reference
	  	 Servicing Criteria
	  	 Applicable
 Servicing Criteria

	1122(d)(2)(vii)	  	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared within 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.	  	Applicable; assessment below. Reconciliations as to REP accounts are limited to confirming that the funds in any REP’s account known to Servicer are at least in the amount
required by Servicer.
			
	 	  	Investor Remittances and Reporting	  	 
			
	1122(d)(3)(i)	  	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission 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 Commission 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.	  	Applicable; assessment below.
			
	1122(d)(3)(ii)	  	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	  	Not applicable; trustee allocates among, and remits to, investors.

  

 Exhibit B-1 
 3 

					
	 Regulation AB
 Reference
	  	 Servicing Criteria
	  	 Applicable
 Servicing Criteria

	1122(d)(3)(iii)	  	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.
	  	Not applicable; disbursements are made by Trustee and Trustee maintains investor records; for the purposes of this criteria, servicer’s investor records are the trustee’s
records of the investors.
			
	1122(d)(3)(iv)	  	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	  	Applicable; assessment below, based on Semi-Annual Servicer’s Certificate.
			
		  	Pool Asset Administration	  	
			
	1122(d)(4)(i)	  	Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents.	  	Applicable; assessment below.
			
	1122(d)(4)(ii)	  	Pool assets and related documents are safeguarded as required by the transaction agreements.	  	Applicable; assessment below.
			
	1122(d)(4)(iii)	  	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction
agreements.	  	Not applicable; no removals or substitutions of system restoration property are contemplated or allowed under the transaction documents.
			
	1122(d)(4)(iv)	  	Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the Servicer’s obligor records maintained no more than
two 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.	  	Applicable; assessment below. Payments received from REPs are posted to Servicer’s records and funds transferred to Trustee.
			
	1122(d)(4)(v)	  	The Servicer’s records regarding the pool assets agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.	  	Not applicable; because underlying obligation (system restoration charge) is not an interest bearing instrument

  

 Exhibit B-1 
 4 

					
	 Regulation AB
 Reference
	  	 Servicing Criteria
	  	 Applicable
 Servicing Criteria

	1122(d)(4)(vi)	  	Changes with respect to the terms or status of an obligor’s pool asset (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.	  	Applicable; assessment below. The only changes relate to true-up under the financing order.
			
	1122(d)(4)(vii)	  	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted
and concluded in accordance with the timeframes or other requirements established by the transaction agreements.	  	Applicable, to the extent required by the transaction agreements; assessment below.
			
	1122(d)(4)(viii)	  	Records documenting collection efforts are maintained during the period 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).	  	Applicable, but does not require assessment since no explicit documentation requirements with respect to delinquent accounts are imposed under the transactional documents due to
availability of “true-up” mechanism.
			
	1122(d)(4)(ix)	  	Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents.	  	Not applicable; system restoration charges are not interest bearing instruments.

  

 Exhibit B-1 
 5 

					
	 Regulation AB
 Reference
	  	 Servicing Criteria
	  	 Applicable
 Servicing Criteria

	1122(d)(4)(x)	  	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s pool asset documents, on at least an
annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and (C) such funds are returned to the
obligor within 30 calendar days of full repayment of the related pool assets, or such other number of days specified in the transaction agreements.	  	Applicable; assessment below.
			
	1122(d)(4)(xi)	  	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or
notices for such payments, provided that such support has been received by the Servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.	  	Not applicable; Servicer does not make payments on behalf of obligors.
			
	1122(d)(4)(xii)	  	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the Servicer’s funds and not charged to the obligor, unless the late
payment was due to the obligor’s error or omission.	  	Not applicable; Servicer cannot make advances of its own funds on behalf of customers under the transaction documents.
			
	1122(d)(4)(xiii)	  	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.	  	Not applicable; Servicer cannot make advances of its own funds on behalf of customers to pay principal or interest on the bonds.
			
	1122(d)(4)(xiv)	  	Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.	  	Applicable; assessment below.
			
	1122(d)(4)(xv)	  	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction
agreements.	  	Not applicable; no external enhancement is required under the transaction documents.

  

 Exhibit B-1 
 6 

 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 ending the end of the fiscal year ended             ,
             and covered by CenterPoint Houston’s annual report on Form 10-K. [If not true, include description of any material instance of noncompliance.] 
 4. A registered independent public accounting firm has issued to us 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 ending the end of the fiscal year ended             ,
             and covered by CenterPoint Houston’s annual report on Form 10-K. 
 Executed as of this              day of
            ,            . 
  

			
	CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC
		
	By:	 	  

	Name:	 	
	Title:	 	

  

 Exhibit B-1 
 7 

 EXHIBIT B-2 
 FORM OF CERTIFICATE OF COMPLIANCE 
 The undersigned hereby
certifies that he/she 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 November 25, 2009 (the “Servicing Agreement”) between the Servicer and CenterPoint Energy Restoration Bond Company, LLC (the
“Issuer”) and further that: 
 1. A review of the activities of the Servicer and of its performance under the
Servicing Agreement during the twelve months ended [            ], [            ] has been made under the supervision of the
undersigned pursuant to Section 3.03 of the Servicing Agreement; and 
 2. To the best of 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 [            ],
[            ], except as set forth on Annex A hereto. 
 Executed as of this              day of             ,
             
  

			
	CenterPoint Energy Houston Electric, LLC
		
	By:	 	  

	Name:	 	
	Title:	 	

  

 Exhibit B-2 
 1 

 ANNEX A 
 to Certificate of Compliance 
 LIST OF SERVICER DEFAULTS 

The following Servicer Defaults, or events which with the giving of notice, the lapse of time, or both, would become Servicer Defaults
known to the undersigned occurred during the year ended [                    ]: 
  

			
	 Nature of Default
	  	 Status

  

 Exhibit B-2 
 2 

 ANNEX 1 
 TO 
 SERVICING AGREEMENT 
 The Servicer agrees to comply with the following servicing procedures: 
 SECTION 1. DEFINITIONS. 
 (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 “Agreement”). 
 SECTION 2. DATA ACQUISITION. 
 (a) Installation, Maintenance of Meters and Data
Acquisition. 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) Cost of Data Acquisition. The Issuer shall not be
obligated to pay any costs associated with the data acquisition set forth in this Section 2, 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) ERCOT. 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. USAGE AND BILL CALCULATION. 
 The Servicer, from the usage measurements obtained pursuant to Section 2, 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. BILLING. 
 The Servicer shall implement the System Restoration Charges as of the Issuance Date 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) Frequency of Bills; Billing Practices. 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. 
  

 1 

 (b) Format. 
 (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 Servicing 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, Tariff and PUCT Regulations. To the extent that Bill format, structure and text are not prescribed by the Utilities Code or by applicable PUCT Regulations, the Servicer shall, subject to clauses
(i) and (ii) 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) Delivery. 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. CUSTOMER SERVICE FUNCTIONS.  
 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. COLLECTIONS; PAYMENT PROCESSING; REMITTANCE. 
 (a) Collection Efforts, Policies, Procedures. 
  

 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 Utilities Code, 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 Section 6(b)(ii) and (iii) 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 Bondholders; 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) Payment Processing; Allocation; Priority of Payments. 
 (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 clause (iii) 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. 
  

 3 

 (iii) If a Customer or REP does not pay the full amount of any bill by the Servicer, the amount paid by the
Customer or REP will first be apportioned between the System Restoration Charges and other fees and charges (including amounts billed and due in respect of system restoration or transition charges associated with system restoration or transition
bonds issued under other financing orders), other than late fees, and second, any remaining portion of the payment will be allocated to late fees. 
 (c) Accounts; Records. 
 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) Charge-Offs. 
 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 to the Servicer System Restoration Charges based on the charge-off percentage in effect for the then most recently established transition charges related to the transition bonds
issued by CenterPoint Energy Transition Bond Company, LLC on October 24, 2001, by CenterPoint Energy Transition Bond Company II, LLC on December 16, 2005 and CenterPoint Energy Transition Bond Company III, LLC on February 12, 2008.
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.

  

 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 Section 4 to receive a credit against future payments of Billed SRCs to the Servicer shall not take effect until after the next Adjustment Date. 
 (e) Investment of SRC Collections Received. 
 Prior to each Daily Remittance, the Servicer
may invest SRC Collections received at its own risk and for its own benefit, provided however, that the Servicer shall pay Accrued Interest as provided in Section 6.12 of the Agreement. So long as the Servicer complies with its obligations
under Section 6(c), neither such investments nor such funds shall be required to be segregated from the other investments and funds of the Servicer. 
 (f) Remittances.  
 (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. 
  

 5 

 APPENDIX A 
 DEFINITIONS 
 The definitions contained in this Appendix A are applicable to the
singular as well as the plural forms of such terms. 
 “Accrued Interest” 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 this Agreement. 
 “Act” has the meaning specified in Section 11.03 of the Indenture. 
 “Additional SRC Servicer” has the meaning specified in the Intercreditor Agreement. 
 “Adjustment Date” 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 October 15, 2010, and all subsequent Adjustment Dates shall be on or about the same day of the year in subsequent years. 
 “Administration Agreement” means the Administration Agreement dated as of November 25, 2009, between CenterPoint
Houston, as Administrator, and the Issuer, as the same may be amended and supplemented from time to time. 
 “Administrator” means CenterPoint Houston as administrator under the Administration Agreement and each successor to or assignee of CenterPoint Houston in the same capacity. 
 “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. 
 “Annual Accountant’s Report” has the meaning assigned to that term in Section 3.04 of the Servicing Agreement. 
 “Applicable MDMA” means with respect to each Customer, the meter data management agent providing meters or meter reading
services for that Customer’s account. 
 “Basic Documents” means the Issuer LLC Agreement, the Issuer
Certificate of Formation, the Sale Agreement, the Servicing Agreement, the Intercreditor Agreement, the Administration Agreement, the Indenture, the Supplement and any other Supplemental Indentures, the DTC Agreement, the Underwriting Agreement and
the Bill of Sale. 
  

 1 

 “Bill” means each of the regular monthly bills, summary bills, opening
bills and closing bills issued to Customers by CenterPoint Houston or REPs or to REPs by CenterPoint Houston on its own behalf and in its capacity as Servicer. 
 “Billed SRCs” means the amounts of System Restoration Charges billed by the Servicer, whether billed directly to Customers by the Servicer or indirectly through REPs. 
 “Billing Period” means the period of approximately thirty (30) days for which the Servicer renders Bills. 

“Bill of Sale” has the meaning assigned to that term in the Sale Agreement. 
 “Bond” means any of the Senior Secured System Restoration Bonds, issued by the Issuer pursuant to the Indenture.

 “Bond Balance” means, as of any date, the aggregate Outstanding Amount of Bonds, on such date. 

“Bond Owner” means, with respect to a Book-Entry Bond, the Person who is the beneficial owner of such Book-Entry Bond,
as reflected on the books of the Clearing Agency, or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of
such Clearing Agency). 
 “Bond Register” has the meaning specified in Section 2.05 of the Indenture.

 “Bond Registrar” means the Trustee, in its capacity as keeper of the Bond Register, or any successor to the
Trustee in such capacity. 
 “Book-Entry Bonds” 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. 
 “Business Day” means any day other than a Saturday or Sunday or a day on which banking institutions in the City of Houston, Texas, or in the City of New York, New York, are required or authorized by law or executive order
to remain closed. 
 “Calculation Date” means, with respect to the Bonds, the date on which the calculations
and filings set forth in Section 4 and the Issuer Annex will be made each year. The first Calculation Date will be no later than September 30, 2010, if the Servicer requests only System Restoration Charge Adjustments, and no later than
July 17, 2010, 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. 
 “Capital Subaccount” has the meaning specified in Section 8.02(a) of the Indenture. 

 

 2 

 “CenterPoint Houston” means CenterPoint Energy Houston Electric, LLC, a
Texas limited liability company, or its successor. 
 “Clearing Agency” means an organization registered as a
“clearing agency” pursuant to Section 17A of the Exchange Act. 
 “Clearing Agency Participant”
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. 
 “Collection Account” has the meaning specified in Section 8.02(a) of the Indenture. 
 “Collection Period” means the period from and including the first day of a calendar month to but excluding the first day of
the next calendar month. 
 “Corporate Trust Office” has the meaning specified in Appendix A to the Indenture.

 “Customer Class” means each of the System Restoration Charge classes specified in the Financing Order.

 “Customer” means each Person from whom CenterPoint Houston 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. 
 “Daily Remittance” has the meaning specified in Section 6.12(a). 
 “Default”
means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default. 
 “Designated Account Holder” has the meaning specified in the Intercreditor Agreement. 
 “DTC” means The Depository Trust Company. 
 “DTC Agreement” means the Letter of
Representations among the Issuer, the Bond Registrar and DTC or other applicable Clearing Agency, relating to the Clearing Agency’s rights and obligations (in its capacity as Clearing Agency) with respect to any Book-Entry Bonds, as the same
may be amended and supplemented from time to time. 
 “ERCOT” means the Electric Reliability Council of Texas
or any successor thereto. 
 “Event of Default” has the meaning specified in Section 5.01 of the
Indenture. 
 “Excess Funds Subaccount” has the meaning specified in Section 8.02(a) of the Indenture.

 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
 “Expected Amortization Schedule” means, with respect to the Bonds, or any Tranche thereof, the expected amortization
schedule for principal thereof, as specified in the Supplement. 
  

 3 

 “Expected Final Payment Date” 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, as specified in the Supplement. 
 “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such
period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Servicer from three federal
funds brokers of recognized standing selected by it. 
 “Final Maturity Date” means, for the Bonds, or,
if applicable, each Tranche thereof, the date by which all principal and interest on the Bonds is required to be paid, as specified in the Supplement. 
 “Financing Order” means the Financing Order issued by the PUCT on August 26, 2009 in Docket No. 37200. 
 “Fitch” means Fitch, Inc. or any successor thereto. 
 “Formation Documents” means, collectively, the Issuer Certificate of Formation, the Issuer LLC Agreement and any other
document pursuant to which the Issuer is formed or governed, as the same may be amended and supplemented from time to time. 
 “Governmental Authority” means any court or any federal or state regulatory body, administrative agency or governmental instrumentality. 
 “Holder” or “Bondholder” means the Person in whose name a Bond of any Tranche is registered on the Bond Register. 
 “Indenture” means the Indenture, dated as of November 25, 2009, between the Issuer and the Trustee, and the Supplement
(including the forms and terms of the Bonds, established thereunder), as the same may be amended and supplemented with respect to the Bonds, from time to time. 
 “Independent” means, when used with respect to any specified Person, that the Person 
 (a) is in fact independent of the Issuer, any other obligor upon the Bonds, the Servicer and any Affiliate of any of the foregoing Persons, 
 (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other
obligor, the Servicer or any Affiliate of any of the foregoing Persons, and 
 (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. 
  

 4 

 “Insolvency Event” means, with respect to a specified Person, 

(a) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or
any substantial part of its property in an involuntary case under any applicable federal or State bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person’s affairs, and such decree or order shall remain unstayed and in effect for a period of 90
consecutive days, or 
 (b) the commencement by such Person of a voluntary case under any applicable federal or
State bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or
the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing. 
 “Intercreditor Agreement” means the Intercreditor Agreement dated as of November 25, 2009, among the Issuer, CenterPoint Houston, CenterPoint Energy Transition Bond Company, LLC,
CenterPoint Energy Transition Bond Company II, LLC, CenterPoint Energy Transition Bond Company III, LLC, the Trustee and the other parties thereto, each in the capacities stated therein, as the same may be amended from time to time. 
 “Interim Adjustment Date” means the effective date of any interim (non-annual) System Restoration Charge Adjustment.

 “Issuance Advice Letter” means the issuance advice letter submitted to the PUCT by CenterPoint Houston
pursuant to the Financing Order in connection with the issuance of the Bonds. 
 “Issuance Date” means the date
on which the Bonds are to be originally issued in accordance with the Indenture and the Supplement. 
 “Issuer”
means CenterPoint Energy Restoration Bond Company, LLC, a Delaware limited liability company, or any successor thereto pursuant to the Indenture. 
 “Issuer Annex” means Annex 1 of the Servicing Agreement. 
 “Issuer Certificate of Formation” means the Certificate of Formation of the Issuer that was filed with the Delaware Secretary of State on August 6, 2009, as the same may be amended and restated from time to time.

 “Issuer LLC Agreement” means the Limited Liability Company Agreement between the Issuer and CenterPoint
Houston, as sole Member, effective as of September 28, 2009, as amended and restated on November 25, 2009, as the same may be amended or supplemented from time to time. 
  

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 “Lien” means a security interest, lien, charge, pledge, equity or
encumbrance of any kind. 
 “Losses” means collectively, any and all liabilities, obligations, losses, damages,
payments, costs or expenses of any kind whatsoever. 
 “Majority Holders” means the Holders of a majority of
the Outstanding Amount of the Bonds. 
 “Moody’s” means Moody’s Investors Service Inc., or any
successor thereto. 
 “Officers’ Certificate” means a certificate signed, in the case of CenterPoint
Houston, by: 
 (a) any manager, the chairman of the board, the chief executive officer, the president, the vice
chairman or any executive vice president, senior vice president or vice president; and 
 (b) the treasurer, any
assistant treasurer, the secretary or any assistant secretary. 
 “Operating Expenses” 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, the Servicing Fee, the fees and expenses relating to the Bonds, payable by the Issuer to the
Administrator under the Administration Agreement, the fees and expenses relating to the Bonds, payable by the Issuer to the Independent manager of the Issuer, legal fees and expenses of the Servicer pursuant to this Servicing Agreement, and legal
and accounting fees, costs and expenses of the Issuer relating to the Bonds. 
 “Opinion of Counsel” means one
or more written opinions of counsel who may be an employee of or counsel to the Servicer or the Issuer, which counsel shall be reasonably acceptable to the Trustee, the Issuer or the Rating Agencies, as applicable, and which shall be in form
reasonably satisfactory to the Trustee, if applicable. 
 “Outstanding” with respect to Bonds means, as of the
date of determination, all Bonds theretofore authenticated and delivered under the Indenture except: 
 (a) Bonds
theretofore canceled by the Bond Registrar or delivered to the Bond Registrar for cancellation; 
 (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; provided, however, that if such Bonds are to be redeemed,
notice of such redemption has been duly given pursuant to the Indenture or provision therefor, satisfactory to the Trustee; and 
  

 6 

 (c) Bonds in exchange for or in lieu of other Bonds which have been
authenticated and delivered pursuant to the Indenture unless proof satisfactory to the Trustee is presented that any such Bonds are held by a bona fide purchaser; 
 provided 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 Issuer, any other obligor upon the Bonds, CenterPoint Houston or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be fully protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Bonds that a Responsible Officer of the Trustee 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, the Servicer or any Affiliate of any of the foregoing Persons. 
 “Outstanding Amount” means the aggregate principal amount of all Outstanding Bonds, or, if the context requires, all Outstanding Bonds of a Tranche of Bonds, Outstanding at the date of determination. 
 “Paying Agent” means the Trustee or any other Person that meets the eligibility standards for the Trustee specified in
Section 6.11 of the Indenture and is authorized by the Issuer to make the payments of principal of or premium, if any, or interest on the Bonds on behalf of the Issuer. 
 “Payment Date” means, with respect to the Bonds, or, if applicable, each Tranche thereof, the date or dates specified as
Payment Dates for each Tranche in the Supplement, provided that if any such date is not a Business Day, the Payment Date shall be the Business Day immediately succeeding such date. 
 “PBRAF” 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. 
 “PBRAF
Adjustment” 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 PUCT pursuant to Section 39.253 of the Public
Utility Regulatory Act, and the Issuer Annex. 
 “Penalty” 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 Section 3.05(c) of this Servicing Agreement. 
 “Periodic Billing Requirement” 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 System Restoration Charge Adjustment
Date. 
  

 7 

 “Periodic Payment Requirement” 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 Level and (4) all other fees and
expenses due and owing and required or allowed to be paid under Section 8.02 of the Indenture as of such date shall have been paid in full; provided that, with respect to any annual 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 System Restoration Charge Adjustment Date and (y) the Final Maturity Date for such Bonds. 
 “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. 
 “Projected Bond Balance” 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. 
 “Provider of Last Resort” has the
meaning specified in Section 39.106 of the Public Utility Regulatory Act. 
 “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 or any successor entity thereto. 
 “PUCT
Regulation” means any regulation, rule, order or directive promulgated, issued or adopted by the PUCT. 
 “Qualified Costs” has the meaning assigned to that term in Section 36.403(d) of the Public Utility Regulatory Act and the Financing Order. 
 “Rating Agency” means any rating agency rating the Bonds, at the time of issuance at the request of the Issuer, which initially shall be Moody’s, Fitch and Standard &
Poor’s. 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 PUCT and the Servicer. 
  

 8 

 “Rating Agency Condition” means, with respect to any action, the
notification in writing to each Rating Agency of such action, and confirmation from S&P to the Trustee and the Issuer that such action will not result in a reduction or withdrawal of the then current rating by such Rating Agency of the Bonds.

 “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. 
 “Released
Parties” has the meaning specified in Section 6.02(f) of the Servicing Agreement. 
 “Remittance
Requirement” 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. 
 “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 Customers. 
 “REP Billing Day” has the meaning specified in Section 3.05(c) of the Servicing Agreement. 
 “REP Credit Requirement” means the credit and collection policies applicable to REPs under the Financing Order, the Tariff
and other PUCT Regulations. 
 “REP Default” has the meaning specified in Section 3.05(d) of the Servicing
Agreement. 
 “REP Deposit” has the meaning specified in Section 3.05(e) of the Servicing Agreement.

 “Required Capital Amount” means a capital contribution in an amount equal to the amount specified in the
Supplement, representing a capital contribution from CenterPoint Houston. 
 “Requirement of Law” means any
foreign, federal, state or local laws, statutes, regulations, rules, codes or ordinances enacted, adopted, issued or promulgated by any Governmental Authority or common law. 
 “Responsible Officer” means, with respect to the Trustee, any officer within the Corporate Trust Office of the Trustee,
including any Vice President, Director, Managing Officer, associate, Assistant Vice President, Secretary, Assistant Secretary, or any other officer of the Trustee customarily performing functions similar to those performed by any of the above
designated officers 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. 
  

 9 

 “Retirement” means any day on which the final distribution is made to the
Trustee in respect of the last Outstanding Amount. 
 “Retiring Trustee” means a Trustee that resigns or
vacates the office of Trustee for any reason. 
 “Sale Agreement” means the System Restoration Property Sale
Agreement dated as of November 25, 2009 relating to the System Restoration Property, between the Seller and the Issuer, as the same may be amended and supplemented from time to time. 
 “Sale Date” means the date on which the Seller sells, transfers, assigns and conveys to the issuer the System Restoration
Property to which this Agreement relates. 
 “Schedule SRC” means the tariff on the form entitled
“Schedule SRC” approved by the PUCT in the Financing Order and filed by CenterPoint Houston prior to the issuance of any Bonds. 
 “SEC” means the U.S. Securities and Exchange Commission. 
 “Seller” means CenterPoint Houston, or its successor, in its capacity as seller of the System Restoration Property to the Issuer pursuant to the Sale Agreement. 
 “Semiannual Servicer’s Certificate” means the statement prepared by the Servicer and delivered to the Trustee with
respect to the Bonds, on or prior to each Payment Date therefor, the form of which is attached to the Servicing Agreement as Exhibit A. 
 “Servicer” means CenterPoint Houston, as the servicer of the System Restoration Property, and each successor to or assignee of CenterPoint Houston (in the same capacity) pursuant to
Section 6.03, 6.04, or 7.04 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” or “this Agreement” means the System Restoration Property Servicing Agreement dated as of November 25, 2009, between the Issuer and the Servicer, and acknowledged by the Trustee, relating to the System
Restoration Property as the same may be amended and supplemented from time to time. 
 “Servicing Fee” means
the fee payable by the Issuer to the Servicer on each Payment Date with respect to the Bonds, in an amount specified in Section 6.07 of the Servicing Agreement. 
 “Servicing Standard” 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. 
  

 10 

 “Standard & Poor’s” or “S&P” means
Standard & Poor’s Ratings Services, a Standard and Poor’s Financial Services LLC business, or any successor thereto. 
 “State” means any one of the 50 states of the United States of America or the District of Columbia. 
 “SRC Collections” means amounts constituting good funds collected by the Servicer in respect of System Restoration Charges and System Restoration Property. 
 “Successor Servicer” means (i) a successor to CenterPoint Houston pursuant to Section 6.03 of the Servicing
Agreement or (ii) a successor Servicer appointed by the 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. 
 “Supplement” means the First Supplemental Indenture dated of even date herewith to the Indenture that authorizes the Bonds.

 “Supplemental Indenture” means a supplemental indenture entered into by the Issuer and the Trustee pursuant
to Article IX of the Indenture. 
 “System Restoration Charge Adjustment” 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 the Issuer Annex. 
 “System Restoration Charges” means the nonbypassable amounts to be charged for the use of electric services, approved by the PUCT in the Financing Order to recover Qualified Costs that
may be collected by CenterPoint Houston, 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 within the Seller’s certificated service area as it existed on August 26, 2009, 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. System Restoration Property is known as “Transition Property” in the Public Utility Regulatory Act. 
 “System Restoration Property Documentation” means all documents relating to the System Restoration Property, including
copies of the Financing Order and all documents filed with the PUCT in connection with any System Restoration Charge Adjustment. 
 “Tariff” means any rate tariff filed with the PUCT pursuant to the Public Utility Regulatory Act to evidence any System Restoration Charges. 
  

 11 

 “Termination Notice” has the meaning specified in Section 7.01 of the
Servicing Agreement. 
 “Third-Party Collector” means each third party, including each REP, which, pursuant to
any Tariff filed with the PUCT, or any agreement with CenterPoint Houston, is obligated to bill, pay or collect System Restoration Charges. 
 “Tranche” means any one of the tranches of Bonds, as specified in the Supplement. 
 “Trust Estate” has the meaning specified in the Supplement. 
 “Trustee” means Deutsche Bank Trust Company Americas, as trustee, or its successor or any successor Trustee under the Indenture. 
 “UCC” means, unless the context otherwise requires, the Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended from time to time. 
 “Underwriting Agreement” has the meaning specified in the Indenture. 
 “Utilities Code” means the Texas Utilities Code, as amended from time to time. 
 “Utility” has the meaning specified in the Intercreditor Agreement. 
  

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