Document:

Exhibit 10.2

 

US INVESTOR SUBSCRIPTION AGREEMENT &
PURCHASER QUESTIONNAIRE

 

THIS NOTE SUBSCRIPTION
AGREEMENT (this “Agreement”), dated as of the date as indicated at the signature page, is made by and between Wins
Finance Holdings Inc., a Cayman Island corporation with principal executive office located at No. 58 Jianguo Road, Chaoyang District
Beijing 100024, People’s Republic of China (the "Company") and the subscriber(s) identified on the signature page
hereto (each a “Subscriber,” collectively, the “Subscribers”) relating to the Company’s offering
of up to $12,000,000 of its 4% Convertible Promissory Notes (the “Offering”).

 

WHEREAS, the
Company and the Subscribers are executing and delivering this Agreement in reliance upon the exemption from securities registration
for offers and sales to accredited investors afforded under Regulation D (“Regulation D”) as promulgated by the United
States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities
Act”), and Section 4(a)(2) of the Securities Act;

 

WHEREAS, the
Subscribers wish to purchase and acquire from the Company, and the Company desires to issue and sell to the Subscribers, 4.0% Convertible
Promissory Notes (each a “Note” and together the "Notes") in substantially the form of Exhibit A,
attached hereto, in the principal amounts indicated on the signature page to this Agreement (the “Purchase Price”).
The Notes are collectively referred to as the "Securities."

 

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

 

		1.	Purchase and Sale.

 

		(a)	Upon the terms and subject to the conditions
set forth in this Agreement, the Company hereby agrees to sell, assign, transfer and deliver to Subscriber, and Subscriber hereby
irrevocably agrees to purchase and accept delivery from the Company, the Note in substantially the form of Exhibit A. In
consideration thereof, the Subscriber shall deliver the Purchase Price in immediately available funds by personal or business check
or money order made payable to the Company.

 

		(b)	The closing of the purchase and sale of the Notes (the “Closing”) shall take place
as soon as practicable following receipt of the Purchase Price (or such later date as is mutually agreed to by the Company and
the Subscriber(s)). There may be multiple Closings (the date of any such Closing is hereinafter referred to as a “Closing
Date”). Each Closing shall occur on a Closing Date at the Company’s office (or such other place as is mutually agreed
to by the Company and the Subscriber(s)).

 

		2.	Acceptance of Subscription. The Subscriber acknowledges
that the Company has the right to accept or reject this subscription, in whole or in part, for any reason, and that this subscription
shall be deemed to be accepted by the Company only when it is signed by an authorized signatory on its behalf. The Agreement either
will be accepted or rejected, in whole or in part, as promptly as practical after receipt. The Subscriber agrees that subscriptions
need not be accepted in the order they are received by the Company. Upon rejection of this Agreement for any reason, all items
received with this Agreement will be returned to the Subscriber without deduction for any fee, commission or expense and without
interest with respect to any money received, and this Agreement shall be deemed to be null and void and of no further force or
effect. If the Company rejects any Subscriber’s subscription, such Subscriber will return to the Company any documents the
Company has provided to any such Subscriber for the purpose of evaluating the Offering. 

     

     

    

 

		3.	Representations, Warranties and Covenants of Subscriber.
Each Subscriber hereby represents, warrants and agrees with the Company (either in their individual capacity or as an authorized
representative of an entity, as applicable), that:

 

		(a)	if an individual, Subscriber is a bona fide resident of the state set forth on the signature page
of this Agreement, over 21 years of age, and legally competent to execute this Agreement; if an entity, the person executing this
Agreement on the Subscriber’s behalf represents that the Subscriber is duly organized under the laws of the state set forth
on the signature page of this agreement, is validly existing, and has the full power and authority to execute this Agreement, which
will then be legal, valid and binding;

 

		(b)	the Subscriber is an "accredited investor" as such term is defined in Rule 501 of Regulation
D ("Regulation D") promulgated under the Securities Act of 1933, as amended (the "Securities Act"), as indicated
by Subscriber’s responses to the questions contained in the Prospective Purchaser Questionnaire attached hereto and that
the Subscriber is able to bear the economic risk of an investment in the Securities;

 

		(c)	the Subscriber has been
furnished and has read all written materials provided by the Company relating to the Company, the Company’s public filings
at www.SEC.gov, the Company’s operations,
and any other matters relating to the Offering, including but not limited to the Confidential Private Placement Memorandum attached
hereto (all such materials, hereinafter collectively called the "Offering Materials") which have been requested; the
Company has answered all inquiries that the Subscriber has put to the Company relating thereto; and the Subscriber has been afforded
the opportunity to obtain any additional information, to the extent the Company possessed such information or were able to acquire
it without unreasonable effort or expense, necessary (A) to verify the accuracy of the information set forth in the Offering Materials;
and (B) to evaluate the merits and risks of purchasing the Securities;

 

		(d)	the Subscriber has carefully reviewed and understands the various risks of an investment in the
Securities and has made such independent investigation and evaluation of the statements made in the Offering Materials and all
other written materials provided to the Subscriber by the Company with respect to the Company’s financial condition, properties,
business and prospects as the Subscriber deems necessary to make an informed decision to purchase the Securities; the Subscriber’s
decision to purchase the Securities has been made on the basis of such investigation and evaluation; in making such decision the
Subscriber has relied exclusively on the written statements with respect to any such matters or otherwise with respect to the Company
which are contained in the Offering Materials, and which have been independently investigated and evaluated by the Subscriber;

 

		(e)	the Subscriber has completed the Confidential Purchaser Questionnaire attached hereto; the Subscriber
confirms the statements made therein are true on the date hereof, and Subscriber acknowledges that the statements and representations
made by Subscriber therein and in this Agreement have been relied upon by the Company in offering to sell the Securities to the
Subscriber; Subscriber further agrees to indemnify and hold harmless the Company and its respective officers, directors and shareholders,
from any and all damages, losses, costs and expenses (including reasonable attorneys' fees) that they may incur, by reason of any
breach of any of the statements or representations made by Subscriber contained herein or therein;

 

     

     

    

		(f)	the Subscriber understands that there is no public market for the Securities, and that no market
may develop for the Securities. Subscriber understands that even if a public market develops for such Securities, Rule 144 ("Rule
144") promulgated under the Securities Act requires for non-affiliates, among other conditions, a six-month or one-year holding
period prior to the resale of securities acquired in a non-public offering without having to satisfy the registration requirements
under the Securities Act. Subscriber understands and hereby acknowledges that, except as set forth in the Offering Materials, the
Company is under no obligation to register any of the Securities under the Securities Act or any state securities or "blue
sky" laws;

 

		(g)	the Subscriber realizes that that the Securities are "restricted securities" and Subscriber
will not be able to readily resell any of the Securities because none of the Securities have been registered under the Securities
Act, or any state securities laws, and, therefore, the Securities can be sold only if they are subsequently registered under the
Securities Act or an exemption from registration is available;

 

		(h)	the Subscriber consents to the placement of a legend on any certificate or other document evidencing
the Securities that such Securities have not been registered under the Securities Act or any state securities or "blue sky"
laws and setting forth or referring to the restrictions on transferability and sale thereof contained in this Agreement. Subscriber
is aware that the Company will make a notation in its appropriate records with respect to the restrictions on the transferability
of such Securities. The legend to be placed on each certificate shall be in form substantially similar to the following:

 

"THE SECURITIES REPRESENTED
HEREBY OR ISSUABLE UPON THE CONVERSION OR EXERCISE THEREOF, HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES OR "BLUE SKY LAWS," AND MAY NOT BE OFFERED,
SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER THE SECURITIES ACT OR COMPLIANCE
WITH RULE 144 PROMULGATED UNDER THE SECURITIES ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY
TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."

 

		(i)	the Subscriber understands that the Company has the absolute right to refuse to consent to transfer
or assignment of any Securities if that transfer or assignment does not comply with applicable state and federal securities laws;

 

		(j)	the Subscriber understands that the Offering is intended to be a non-public offering in accordance
with section 4(a)(2) of the Securities Act, and Regulation D ("Regulation D") and Regulation S ("Regulation S")
promulgated under the Securities Act, that no aspect of the Offering as been reviewed by the United States Securities and Exchange
Commission or the securities regulatory authorities of any state and that none of the Offering Materials nor any other written
materials furnished by the Company and used in connection with the Offering has been reviewed by any federal or state securities
regulatory bodies or authorities;

 

		(k)	the Subscriber is not purchasing the Securities as a result of any advertisement, article, notice
or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television
or radio or presented at any seminar or any other general solicitation or general advertisement;

 

     

     

    

		(l)	the Securities are being purchased for the Subscriber’s own account, for investment, and
not with a view to distribution; Subscriber is not participating, directly or indirectly, in an underwriting of any such distribution
or other transfer; Subscriber does not now have reason to anticipate any change in its circumstances or any other particular occasion
or event which would cause Subscriber to sell the Securities (or the components thereof); Subscriber has substantial experience
in making decisions of this type or is relying on its own qualified advisor in making the investment decision; and Subscriber understands
that the Company is relying upon the truth and accuracy of this representation and warranty;

 

		(m)	neither the Company nor any person acting on the Company’s behalf has made any representations
to Subscriber except as contained in the Offering Materials; and in making its decision to purchase the Securities Subscriber has
subscribed for, Subscriber has not relied on any representations or information other than those which Subscriber has independently
investigated and verified to its satisfaction;

 

		(n)	the Subscriber understands that this subscription may be accepted or rejected, in whole or in part,
by the Company in its sole and absolute discretion;

 

		(o)	all the information that Subscriber heretofore furnished to the Company, or that is set forth in
this Agreement or the related Confidential Purchaser Questionnaire, with respect to Subscriber’s financial position and business
experience is correct and complete as of the date of this Agreement, and if there should be any material change in that information
prior to receipt of the Securities, Subscriber will immediately furnish the Company with revised or corrected information;

 

		(p)	the Subscriber is able to bear the substantial economic risk of an investment in the Securities
and currently can afford a complete loss of that investment; Subscriber’s overall commitment in investments that are not
readily marketable is reasonable in relation to its net worth; and

 

		(q)	if an entity, the Subscriber has not been organized for the specific purpose of acquiring the Securities
being offered.

 

		(r)	the Subscriber agrees that it will not sell, assign, transfer, pledge or otherwise dispose of any
of the Securities, or any components thereof, except in compliance with all conditions on transfer imposed by the Securities Act
and by "Blue Sky" or securities laws of any state, and Subscriber will be fully responsible for complying with all such
conditions; and

 

		(s)	the Subscriber will execute such other documents as may be necessary to complete the transactions
contemplated hereby, including, without limitation, the Confidential Purchaser Questionnaire, and the Subscriber will be bound
by all of the terms of any such documents and will perform all of Subscriber’s obligations thereunder with respect to the
Securities being purchased; and

 

		(t)	the Subscriber is entering into this Agreement by signing the attached "individual subscription"
or "entity subscription," signature page, as applicable, on the date indicated thereon. By so doing the Subscriber is
agreeing to purchase the principal amount of Notes stated thereon and is agreeing to all the terms of this Agreement. Subscriber
is enclosing with this Agreement a bank wire or check payable to the order of the Company’s Escrow Agent in full payment
of Subscriber’s subscription, or has sent to the Company’s Escrow Agent that payment by wire transfer of immediately
available funds.

 

     

     

    

		(u)	the Subscriber is aware, and hereby acknowledges and understands that Martel Capital, LLC is the
placement agent for the Offering and as compensation for its services in such capacity shall receive a gross commission equal to
1% of the gross proceeds of the Offering.

 

		4.	Representations, Warranties and Covenants of the Company.
The Company represents and warrants to each Subscriber as of the Closing that:

 

		(a)	Organization and Qualification. The Company is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the jurisdiction of its formation, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. The Company is not
in violation of or in default under of any of the provisions of its Memorandum and Articles of Association (the “Memorandum
and Articles”). The Company is duly qualified to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to
result in: (i) a material adverse effect on the legality, validity or enforceability of the Notes or this Agreement (together,
the “Transaction Documents”), (ii) a material adverse effect on the results of operations, assets, business, prospects
or condition (financial or otherwise) of the Company, or (iii) a material adverse effect on the Company’s ability to perform
in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), each constitute
a “Material Adverse Effect”) and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing
or seeking to revoke, limit or curtail such power and authority or qualification.

 

		(b)	Authorization; Enforcement. The Company has the requisite company power and authority to
enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder, including the issuance of and the Company’s performance under, the
Notes. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation
by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the
Company and no further action is required by the Company, or its officers, directors or shareholders in connection herewith or
therewith. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been)
duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and
binding obligation of the Company enforceable against the Company in accordance with its terms, except: (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by
applicable law.

 

		(c)	Capitalization. The authorized, issued and outstanding
equity capital of the Company is as set forth in the Memorandum and all issued and outstanding ordinary shares of the Company are
validly issued, fully paid and nonassessable. Except as set forth in the Memorandum, there are no outstanding options, warrants,
agreements, convertible securities, preemptive rights or other rights to subscribe for or to purchase any equity capital of the
Company. Except as set forth in the Memorandum and as otherwise required by law, there are no restrictions upon the voting or transfer
of any of the equity capital of the Company pursuant to the Company’s Memorandum and Articles or other governing documents
or any agreement or other instruments to which the Company is a party or by which the Company is bound.

 

     

     

    

		(d)	No Conflicts. The execution, delivery and performance by the Company of this Agreement and
the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the
transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company’s
Memorandum and Articles or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, result in the creation of any lien upon any of the properties
or assets of the Company, or give to others any rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company debt or otherwise)
or other understanding to which the Company is a party or by which any property or asset of the Company is bound or affected, or
(iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company is bound or affected; except in the case of each of clauses (ii) and (iii), such
as could not have or reasonably be expected to result in a Material Adverse Effect.

 

		(e)	Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local
or other governmental authority or other person or entity in connection with the execution, delivery and performance by the Company
of the Transaction Documents, except any notices of sale required to be filed with the SEC under Regulation D of the Securities
Act and such post-Closing filings as may be required under applicable state securities laws, all of which will be timely filed
within the applicable periods therefor.

 

		(f)	Registration Rights.
Immediately after the Termination, as defined in the Memorandum, the Company will provide
to each Investor in the Offering a Selling Security Holder Questionnaire in the form of Appendix C to the Memorandum. Upon the
Company's receipt of executed and completed Selling Security Holder Questionnaires from each Investor in the Offering, the Company
will use commercially reasonable efforts to file, within 30 days after receipt of all of the completed and executed Questionnaires,
a shelf registration statement on Form F-1 or a comparable available form (the “Shelf
Registration Statement”) for the registration for resale under Rule 415 of the Securities Act, in accordance with the terms
of a Registration Rights Agreement (the “Registration Rights Agreement”) substantially in the form of Exhibit B to
Appendix A to the Memorandum, of the ordinary shares, $0.0001 par value (“Ordinary Shares), into which the Notes are convertible
and to cause the Shelf Registration Statement to be declared effective by the Securities and Exchange Commission within 120 days
after the receipt of the completed and executed Questionnaires. In the event of a full review of the Registration Statement by
the staff of Securities and Exchange Commission, the target effective date will be extended by an additional 30 days. 

 

		(g)	Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its respective properties before
or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or (ii)
could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.

 

     

     

    

 

		(h)	Compliance. The Company is not: (i) is in default under or in violation of (and no event
has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company), nor
has the Company received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether
or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator
or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection,
occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have
or reasonably be expected to result in a Material Adverse Effect.

 

		(i)	Regulatory Permits. The Company possesses all certificates, authorizations and permits issued
by appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses, except
where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and the Company has not received any notice of proceedings relating to the revocation or modification of any Material
Permit.

 

		(j)	Title to Assets. The Company has good and marketable title in all personal property owned
by it that is material to the business of the Company, in each case free and clear of all liens, except for (i) liens as do not
materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such
property by the Company and (ii) liens for the payment of federal, state or other taxes, for which appropriate reserves have been
made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property
and facilities held under lease by the Company are held by them under valid, subsisting and enforceable leases with which the Company
is in compliance.

 

		(k)	Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties,
no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers
as contemplated hereby.

 

		(l)	Solvency. Based on the consolidated financial condition of the Company as of the Closing,
after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder: (i) the fair saleable
value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s
existing debts and other liabilities (including known contingent liabilities) as they mature. The Company does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on
or in respect of its debt). The Company has no actual knowledge of any facts or circumstances which lead it to believe that it
will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year.

 

		(m)	Acknowledgment Regarding Subscribers’ Purchase of Securities. The Company acknowledges
and agrees that each of the Subscribers is acting solely in the capacity of an arm’s length purchaser with respect to the
Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Subscriber is acting
as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by any Subscriber or any of their respective representatives or agents in
connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Subscribers’
purchase of the Securities. The Company further represents to each Subscriber that the Company’s decision to enter into this
Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated
hereby by the Company and its representatives.

     

     

    

 

		(n)	Intellectual Property. The Company has rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rights as necessary or required for use in connection with their respective businesses and which the
failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). The Company
has not received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been
abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. The Company
has not received, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe
upon the rights of any person or entity, except as could not have or reasonably be expected to not have a Material Adverse Effect.
To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by
another person or entity of any of the Intellectual Property Rights. The Company has taken reasonable security measures to protect
the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

		(o)	No “Bad Actor” Disqualification. The Company has exercised reasonable care,
in accordance with rules and guidance of the Commission, to determine whether any Covered Person (as defined below) is subject
to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i) through (viii) under the Securities Act
(“Disqualification Events”). To the Company’s knowledge, no Covered Person is subject to a Disqualification Event,
except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. The Company has complied, to
the extent applicable, with any disclosure obligations under Rule 506(e) under the Securities Act. “Covered Persons”
are those persons specified in Rule 506(d)(1) under the Securities Act, including the Company; any predecessor or affiliate of
the Company; any director, executive officer, other officer participating in the offering, general partner or managing member of
the Company; any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the
basis of voting power; any promoter (as defined in Rule 405 under the Securities Act) connected with the Company in any capacity
at the time of the sale of the Securities; and any Person that has been or will be paid (directly or indirectly) remuneration for
solicitation of Subscribers in connection with the sale of the Securities (a “Solicitor”), any general partner or managing
member of any Solicitor, and any director, executive officer or other officer participating in the offering of any Solicitor or
general partner or managing member of any Solicitor.

 

		(p)	The Securities and Ordinary Shares. The Securities are duly authorized and, when issued
and paid for in accordance with the applicable Transaction Documents, will be fully paid and free and clear of any liens imposed
by the Company other than restrictions on transfer provided for in the Transaction Documents. The Ordinary Shares issuable upon
conversion of the Securities are duly authorized and, when issued upon conversion of the Securities in accordance with their terms,
will be fully paid and nonassessable, free and clear of any liens imposed by the Company other than restrictions on transfer provided
for in the Transaction Documents

 

     

     

    

5.     
Conditions to the Company’s Obligation to Sell. The obligation of the Company
hereunder to issue and sell the Notes to the Subscriber(s) at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived
by the Company at any time in its sole discretion:

 

		(a)	The Subscribers shall have executed this Agreement.

 

		(b)	The Subscribers shall have delivered to the escrow agent the Purchase Prices for the Notes by wire
transfer of immediately available U.S. funds pursuant to the wire instructions provided by the Company.

 

		(c)	The representations and warranties of the Subscribers contained in this Agreement shall be true
and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date), and the Subscriber shall have performed, satisfied and complied
in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or
complied with by the Subscriber at or prior to the Closing Date.

 

6.     
Conditions to the Subscriber’s Obligation to Purchase. The obligation of
the Subscriber(s) hereunder to purchase the Notes at the Closing is subject to the satisfaction, at or before the Closing Date,
of each of the following conditions: 

 

		(a)	The representations and warranties of the Company contained in this Agreement shall be true and
correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for representations
and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company
at or prior to the Closing Date.

 

		(b)	The Company shall have obtained any and all consents, permits, approvals, registrations and waivers
necessary or appropriate for consummation of the purchase and sale of the Notes, all of which shall be in full force and effect.

 

		(c)	The Company shall have executed and delivered to the Subscribers the Notes in the respective amounts
set forth on the signature pages of the Subscribers affixed hereto.

 

		7.	Miscellaneous.

 

		(a)	All notices or other communications given or made under this Agreement must be in writing and be
delivered by hand or by express courier to the Company or the Subscriber(s) at the respective addresses set forth herein, and will
be deemed to have been given or delivered on the date of delivery. The address for such notices and communications shall be as
set forth on the signature pages attached hereto.

 

		(b)	All matters arising under this Agreement, including without limitations tort claims, are governed
by the laws of the State of New York, without giving effect to principles of conflicts of law.

 

     

     

    

		(c)	This Agreement, the Notes, and any other document or agreement executed in connection with the
transactions contemplated hereunder constitutes the entire understanding between the parties with respect to the subject matter
of this Agreement and may be amended only by a writing executed by the Company and the Subscriber(s). Neither this Agreement nor
any of Subscriber’s rights under this Agreement may be transferred or otherwise assigned hereunder.

 

		(d)	Unless this Agreement is rejected, the Subscriber’s obligations hereunder will not be terminated
upon the occurrence of any event (whether by operation of law or otherwise), including, if the Subscriber is an individual, without
limitation, the death, occurrence of disability, or declaration of incompetency of such individual Subscriber, and this Agreement
(including the representations and warranties contained herein) will bind the Subscriber’s successors, legal representatives,
heirs, and distributees.

 

		(e)	If requested at any time by the Company, the Subscriber will promptly supply such information regarding
the Subscriber as may be necessary for inclusion in any registration, qualification, application or other filing to be made at
any time hereafter on the Company’s behalf. The Subscriber shall furnish such information to the Company, as the Company
deems necessary to satisfy itself that the Subscriber may legally purchase the Securities.

 

		(f)	If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity
and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby
and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon
so agreeing, shall incorporate such substitute provision in this Agreement.

 

		(g)	This Agreement may be executed in two or more counterparts, all of which when taken together shall
be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered
to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

 

		(h)	The captions of the various sections and paragraphs of this Agreement have been inserted only for
the purposes of convenience; such captions are not a part of this Agreement and shall not be deemed in any manner to modify, explain,
enlarge or restrict any of the provisions of this Agreement.

 

 

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION
AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH STATE
AND OTHER LAWS. THE SECURITIES OFFERED HEREUNDER ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND SUCH STATE AND OTHER LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF
TIME. THE SECURITIES OFFERED HEREUNDER NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES
COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS
OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

 

[Signature page
to follow]

 

     

     

    

 

 

ENTITY SUBSCRIBER SIGNATURE PAGE TO
SUBSCRIPTION AGREEMENT

 

Principal Amount and Purchase Price (Check Enclosed or Wire
to Be Sent)

 

$8,500,000                                                         

 

	
        Printed Name & Address of

        Principal Place of Business
	State of Organization (if different from State of Principal Place of Business)
	
        Bluesky LLC   

         

        _______________________________________
	
        Delaware

         

 

FORM OF OWNERSHIP- Check type of Subscriber.

 

	___X__	
        TRUST (Please include name of trust, name of trustee, date trust
        was formed and copy of the trust agreement).

         

	______	
        PARTNERSHIP (Please include copy of the Partnership agreement
        authorizing signature).

         

	______	
        CORPORATION (Please include certified corporate resolution(s)
        authorizing signature and purchase of Securities).

         

	______	OTHER (Please specify and include copy of document authorizing signature).

 

The undersigned trustee,
partner or officer represents that he has full power and authority from all beneficiaries, partners or shareholders of the entity
named above to execute this agreement Signature Page on behalf of the entity and that investment in the Securities is not prohibited
by the governing documents of that entity.

 

	Dated: December 28, 2015                                                   	 	 Bluesky LLC 
	 	 	(Name of Entity)
	 	 	 	 
	N/A	 	By:	/s/ Jianming Hao
	Taxpayer Identification Number	 	(Trustee, partner or authorized Corporate officer)
	 	 	 	 
	 	 	Name & Title:	Jianming Hao, Manager

 

 

[INDIVIDUAL SUBSCRIBER SIGNATURE PAGE
TO FOLLOW]

 

     

     

    

 

 

INDIVIDUAL SUBSCRIBER SIGNATURE PAGE
TO SUBSCRIPTION AGREEMENT

 

 

 

	SUBSCRIBER – N/A
	
        Name of Subscriber: ____________________________N/A__________________________________

         

        Address: _____________________________________ N/A___________________________________

         

        _____________________________________________N/A___________________________________

         

        _____________________________________________N/A___________________________________

         

        (Signature)

         

        By: N/A____________________________________________________________________________

         

        Dated: _N/A____________, _________

         

        Aggregate Purchase Price: $___N/A                  

         

 

 

[COMPANY SIGNATURE
PAGE TO FOLLOW]

 

 

     

     

    

 

 

COMPANY SIGNATURE PAGE TO SUBSCRIPTION
AGREEMENT

 

Subscription accepted as of

Dec. 28, 2015

 

 

Wins Finance Holdings Inc.

 

 

By: /s/ Richard Xu                              

Name: Richard Xu

Title: President

 

 

 

     

     

    

 

 

APPENDIX
A

 

FORM OF REGISTRATION RIGHTS AGREEMENT

 

Immediately
after the Termination, as defined in the Memorandum, the Company will provide to each Investor in the Offering a Selling Security
Holder Questionnaire in the form of Appendix B to the Memorandum. Upon the Company's receipt of executed and completed Selling
Security Holder Questionnaires from each Investor in the Offering, the Company will use commercially reasonable efforts to file
within 30 days after receipt of all of the completed and executed Questionnaires a shelf registration statement on Form F-1 or
a comparable available form (the “Shelf Registration Statement”) for the registration for resale under Rule 415 of
the Securities Act of the ordinary shares, $0.0001 par value (“Ordinary Shares) into which the Notes are convertible (the
“Note Shares”) and to cause the Shelf Registration Statement to be declared effective by the Securities and Exchange
Commission within 120 days after the receipt of the completed and executed Questionnaires. In the event of a full review of the
Registration Statement by the staff of Securities and Exchange Commission, the target effective date will be extended by an additional
30 days.

 

The Company will promptly
give to each registered holder of the Note or Notes Shares (each, a “Holder’), written notice thereof (a “Registration
Notice”), which shall include a list of the jurisdictions in which the Company intends to attempt to qualify such securities
under the applicable blue sky or other state securities laws; and

 

All expenses incurred
in connection with any registration or qualification of Note Shares, including without limitation, all registration, filing and
qualification fees, printing expenses, fees and disbursements of counsel for the Company, expenses of special audits incidental
to or required by such registration shall be borne by the Company, provided, however that the Company shall not be required to
pay underwriters' discounts or commissions, or stock transfer taxes relating to the Note included in such Registration Statement.

 

In connection with the
request of any Holder to have its Note included in any Registration Statement, the Company shall be entitled to require each selling
Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned by such Holder
and, if required by the SEC, the natural persons thereof that have voting and dispositive control over such shares.

 

In connection with the Company’s
registration obligations hereunder, the Company shall notify the Holders of Note Shares included in any Registration Statement
of the following: (i) that the Registration Statement has been declared effective, and provide such Holders with copies of the
prospectus included in the Registration Statement , as the same may be amended or supplemented from time to time (the “Prospectus”);
(ii) of any request by the SEC or any other federal or state governmental authority for amendments or supplements to a Registration
Statement or Prospectus or for additional information; (iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for
that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose; (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration
Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration
Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be,
such document will not contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
and (vi) the occurrence or existence of any pending corporate development with respect to the Company that the Company believes
may be material and that, in the sole judgment of the Company, renders the continued availability of a Registration Statement or
Prospectus, as the case may be, contrary to the best interests of the Company. Upon the occurrence of any event contemplated by
this paragraph, as promptly as reasonably practicable under the circumstances, prepare a an amendment, or a post-effective amendment,
as the case may be, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, and file any other required documents necessary to ensure that neither such a Registration
Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
provided, however, that, in complying with the aforementioned obligation, the Company shall be entitled to take into account its
own good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event.
In the event that the Company shall notify the Holders in accordance with clauses (iii) through (vi) above to suspend the use of
any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall promptly suspend use of such
Prospectus upon receipt of such notification; provided, however, that the Company will use its best efforts to ensure that the
use of the Prospectus may be resumed as promptly as reasonably practicable.EX-10.1

 Exhibit 10.1 

EXECUTION VERSION 

THIRD AMENDED AND RESTATED 

LEASE AGREEMENT 

(STANTON/BRADY/CELESTE ASSETS) 

between 
 SHARYLAND
DISTRIBUTION & TRANSMISSION SERVICES, L.L.C. 
 and 

SHARYLAND UTILITIES, L.P. 

December 31, 2015 

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
	 ARTICLE I LEASE
	  	 	1	  
			
	 1.1.
	 	 Lease of Stanton/Brady/Celeste Assets
	  	 	1	  
	 1.2.
	 	 Exclusive Rights
	  	 	3	  
	 1.3.
	 	 Absolute Net Lease
	  	 	3	  
	 1.4.
	 	 Waiver by Lessee
	  	 	4	  
	 1.5.
	 	 Quiet Enjoyment
	  	 	4	  
		
	 ARTICLE II TERM OF LEASE
	  	 	4	  
			
	 2.1.
	 	 Term
	  	 	4	  
	 2.2.
	 	 Approvals upon Expiration or Termination
	  	 	4	  
	 2.3.
	 	 Purchase Option upon Expiration or Termination
	  	 	5	  
		
	 ARTICLE III RENT
	  	 	5	  
			
	 3.1.
	 	 Rent
	  	 	5	  
	 3.2.
	 	 Rent Supplements
	  	 	9	  
	 3.3.
	 	 Confirmation of Percentage Rent
	  	 	12	  
	 3.4.
	 	 Additional Rent
	  	 	13	  
	 3.5.
	 	 No Set Off
	  	 	13	  
	 3.6.
	 	 Late Payment Penalty
	  	 	13	  
	 3.7.
	 	 Credit Support
	  	 	13	  
	 3.8.
	 	 Other Revenue
	  	 	14	  
	 3.9.
	 	 Survival
	  	 	14	  
		
	 ARTICLE IV LESSEE’S REPRESENTATIONS, WARRANTIES AND COVENANTS
	  	 	14	  
			
	 4.1.
	 	 Maintenance, Operation and Repair of the Stanton/Brady/Celeste Assets
	  	 	14	  
	 4.2.
	 	 Licenses and Permits
	  	 	15	  
	 4.3.
	 	 Property Taxes and Other Assessments and Fees
	  	 	15	  
	 4.4.
	 	 Requirements of Governmental Agencies and Regulatory Authorities
	  	 	15	  
	 4.5.
	 	 Liens
	  	 	16	  
	 4.6.
	 	 Hazardous Materials
	  	 	16	  
	 4.7.
	 	 Indebtedness
	  	 	17	  
	 4.8.
	 	 Records
	  	 	17	  
	 4.9.
	 	 Surrender
	  	 	17	  
	 4.10.
	 	 Cooperation; Transition Services
	  	 	18	  
	 4.11.
	 	 Lessee’s Authority
	  	 	18	  
	 4.12.
	 	 Litigation
	  	 	18	  
	 4.13.
	 	 Financing
	  	 	18	  
		
	 ARTICLE V LESSOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS
	  	 	20	  
			
	 5.1.
	 	 Lessor’s Authority
	  	 	20	  
	 5.2.
	 	 Liens and Tenants
	  	 	21	  
	 5.3.
	 	 Condition of Assets
	  	 	21	  

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
	 5.4.
	 	 Requirements of Governmental Agencies
	  	 	21	  
	 5.5.
	 	 Hazardous Materials
	  	 	21	  
	 5.6.
	 	 Litigation
	  	 	21	  
	 5.7.
	 	 Records
	  	 	22	  
	 5.8.
	 	 Limitation
	  	 	22	  
		
	 ARTICLE VI LOSS AND DAMAGE; INSURANCE
	  	 	22	  
			
	 6.1.
	 	 Loss and Damage to the Stanton/Brady/Celeste Assets
	  	 	22	  
	 6.2.
	 	 Insurance
	  	 	23	  
		
	 ARTICLE VII REPORTING
	  	 	24	  
			
	 7.1.
	 	 Financing Arrangements
	  	 	24	  
	 7.2.
	 	 Regulatory Information and Cooperation.
	  	 	25	  
	 7.3.
	 	 Mutual Obligations
	  	 	26	  
		
	 ARTICLE VIII ASSIGNMENT
	  	 	26	  
		
	 ARTICLE IX DEFAULT
	  	 	27	  
			
	 9.1.
	 	 Lessee Default
	  	 	27	  
	 9.2.
	 	 Lessor Default
	  	 	28	  
	 9.3.
	 	 Right to Cure
	  	 	28	  
	 9.4.
	 	 Remedies
	  	 	29	  
		
	 ARTICLE X CAPITAL EXPENDITURES
	  	 	29	  
			
	 10.1.
	 	 Capital Expenditures Generally
	  	 	29	  
	 10.2.
	 	 Capital Expenditures Funded by Lessor
	  	 	30	  
	 10.3.
	 	 Capital Expenditures Funded by Lessee
	  	 	30	  
	 10.4.
	 	 Footprint Project Construction Activities
	  	 	30	  
	 10.5.
	 	 Ownership of Footprint Projects
	  	 	31	  
	 10.6.
	 	 Asset Acquisitions
	  	 	31	  
	 10.7.
	 	 Reimbursements
	  	 	32	  
		
	 ARTICLE XI REGULATORY COOPERATION
	  	 	32	  
			
	 11.1.
	 	 Jurisdiction
	  	 	32	  
	 11.2.
	 	 Cooperation
	  	 	32	  
		
	 ARTICLE XII INDEMNITY
	  	 	33	  
			
	 12.1.
	 	 General Indemnity
	  	 	33	  
	 12.2.
	 	 Environmental Indemnity
	  	 	33	  
	 12.3.
	 	 Survival
	  	 	34	  
		
	 ARTICLE XIII MISCELLANEOUS
	  	 	34	  
			
	 13.1.
	 	 Limitation of Damages
	  	 	34	  

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
	 13.2.
	 	 Condemnation
	  	 	34	  
	 13.3.
	 	 Confidentiality
	  	 	35	  
	 13.4.
	 	 Successors and Assigns
	  	 	35	  
	 13.5.
	 	 Rent Obligations Not Excused by Force Majeure, Etc.
	  	 	35	  
	 13.6.
	 	 Further Assurances; Policies and Procedures
	  	 	35	  
	 13.7.
	 	 Arbitration
	  	 	36	  
	 13.8.
	 	 Notices
	  	 	37	  
	 13.9.
	 	 Entire Agreement; Amendments
	  	 	38	  
	 13.10.
	 	 Legal Matters
	  	 	38	  
	 13.11.
	 	 Partial Invalidity
	  	 	38	  
	 13.12.
	 	 Recording
	  	 	38	  
	 13.13.
	 	 Intention of Parties; True Lease
	  	 	38	  
	 13.14.
	 	 Rules of Construction
	  	 	39	  

  

					
	APPENDICES:	 	
			
	Appendix A	 	—	 	Definitions
	  
 EXHIBITS:

 

	Exhibit A	 	—	 	Assets
	Exhibit B	 	—	 	Subordinated Debt Terms
	Exhibit C	 	—	 	Insurance
	  
 SCHEDULES:

 
	 	
	Schedule 3.2(b)	 	Form – Rent Supplement

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 THIRD AMENDED AND RESTATED 

LEASE AGREEMENT 

(STANTON/BRADY/CELESTE ASSETS) 

This THIRD AMENDED AND RESTATED LEASE AGREEMENT (STANTON/BRADY/CELESTE ASSETS) (this “Agreement”) is entered into effective
as of December 31, 2015 (the “Effective Date”), between Sharyland Distribution & Transmission Services, L.L.C. (together with its permitted transferees, successors and assigns, “Lessor”), and Sharyland
Utilities, L.P. (together with its permitted transferees, successors and assigns, “Lessee”), and in connection herewith, Lessor and Lessee agree, covenant and contract as set forth in this Agreement. Lessor and Lessee are sometimes
referred to in this Agreement as a “Party” or collectively as the “Parties”. 
 Certain capitalized terms
used in this Agreement have the meaning assigned to them in Appendix A attached hereto. 
 WITNESSETH: 

WHEREAS, Lessor and Lessee entered into that certain Second Amended and Restated Lease Agreement effective as of December 1, 2014 (as
amended, restated, supplemented or otherwise modified from time to time, the “Amended and Restated Lease”), pursuant to which Lessee leases the Stanton/Brady/Celeste Lease Assets from Lessor; and 

WHEREAS, the Amended and Restated Lease will expire on December 31, 2015, and the Parties wish to extend the term of the Amended and
Restated Lease and make certain other changes as set forth herein. 
 NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the Parties hereto hereby amend and restate the terms of the Amended and Restated Lease as follows: 

ARTICLE I 
 LEASE

 1.1. Lease of Stanton/Brady/Celeste Assets. 

(a) Upon the terms and conditions set forth in this Agreement, Lessor hereby grants to Lessee the exclusive right to use and operate the
Stanton/Brady/Celeste Lease Assets. Subject to necessary regulatory approvals and the final paragraph of Section 1.1(b), this Agreement is intended by Lessor and Lessee to be a master lease of the Stanton/Brady/Celeste Lease Assets, as they
existed as of July 13, 2010 (the “Original Lease Date”), and as they have been or may continue to be altered or expanded thereafter by Footprint Projects in which Lessor has an interest. 

(b) The Stanton/Brady/Celeste Assets shall consist of (x) the original assets leased by Lessor to Lessee as of the Original Lease Date,
(y) assets that constitute Footprint Projects, other 

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
than any such Footprint Projects funded by Lessee pursuant to Section 10.3 (except as otherwise provided in Section 10.3), and (z) any components of the Stanton/Brady/Celeste
Assets that are repaired or replaced pursuant to Section 6.1. The Stanton/Brady/Celeste Assets shall consist of each of the following components which are owned by Lessor as of the Original Lease Date (or that are described within clause
(y) or clause (z) above) and that are located within the area depicted on Exhibit A: 
 (i) towers and poles
affixed to the land, and all necessary and proper foundations, footings, crossarms and other appliances and fixtures for use in connection with said towers, poles and lines; 

(ii) overhead, underground and underwater electrical distribution, transmission and communications lines, together with related
ductwork and insulators; 
 (iii) distribution transformers mounted on towers or poles and/or anchored to concrete pads; 

(iv) electric substation and switching facilities, including all associated transformers, circuit breakers, resistors,
capacitors, buses, interconnection and switching facilities, control and protection equipment which monitors the Stanton/Brady/Celeste Assets, and the building housing the foregoing items; 

(v) all facilities associated with any high-voltage direct current interconnections (“HVDC Ties”), including
alternating current (“AC”) / direct current (“DC”) converter stations; 
 (vi) electric
meters affixed to buildings or residences or otherwise required to operate the Stanton/Brady/Celeste Assets; 
 (vii) real
estate assets, including real property, interests in real property or real property rights (as defined in Section 856(c)(5)(B) of the Code and the regulations promulgated thereunder, and not otherwise included in Sections
1.1(b)(i) – 1.1(b)(vi) above) owned or leased by Lessor and underlying the Stanton/Brady/Celeste Assets, including, without limitation, easements, licenses, rights of way and other real property interests located within the area
depicted on Exhibit A or such other area as may be depicted in a Rent Supplement; and 
 (viii) all other systems or
property owned or leased by Lessor, as identified in the uniform system of accounts for major electric utilities, 18 C.F.R. Part 101, as adopted and amended from time to time by FERC (the “FERC Uniform System of Accounts”) (not
otherwise included in Sections 1.1(b)(i) – 1.1(b)(vii) above). 
 Notwithstanding anything to the contrary in this Agreement, the
Parties do not intend or agree to enter into a lease with respect to any Footprint Project or other alteration, expansion or addition to the Stanton/Brady/Celeste Assets (and the Lessee shall not be authorized to use or operate such Footprint
Project, alteration, expansion or addition to the Stanton/Brady/Celeste Assets) unless and until such time as the Parties first execute a Rent Supplement for the 

  
 2 

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
underlying Footprint Project and such Footprint Project is placed in service, and such Rent Supplement together with this Agreement shall be treated as a new lease with respect to such Footprint
Project. The Parties further agree and acknowledge that a Rent Supplement will be executed with respect to each Footprint Project before such Footprint Project is placed in service, and references in this Agreement to “Stanton/Brady/Celeste
Assets” rely on the assumption that this is the case. 
 (c) Notwithstanding anything to the contrary in this Section 1.1, for so
long as Lessor is in compliance with its obligation to fund Capital Expenditures pursuant to Article X, Lessor may notify Lessee of its intention to transfer certain assets that would otherwise constitute Stanton/Brady/Celeste Assets under this
Agreement (the “Transferred Assets”) to a TRS. Upon any such notification, the TRS and Lessee shall negotiate in good faith a lease agreement with respect to such Transferred Assets, on terms and conditions that are comparable to
those contained herein, and, upon the execution of such lease, the Transferred Assets shall no longer constitute Stanton/Brady/Celeste Assets hereunder. 

1.2. Exclusive Rights. Throughout the Term of this Agreement, Lessee shall have the exclusive right (a) to operate
and use the Stanton/Brady/Celeste Lease Assets for the transmission and distribution of electricity in accordance with applicable rules and regulations of all regulatory agencies having regulatory jurisdiction over the Stanton/Brady/Celeste Assets,
including without limitation, the PUCT, as well as applicable rules and regulations of ERCOT, TRE, NERC and other Regulatory Authorities, and (b) to utilize the Stanton/Brady/Celeste Lease Assets for other opportunities and uses
(provided that such other uses do not interfere with the current or future transmission and delivery of electricity, Good Utility Practice or Applicable Laws and do not adversely affect the reliability and safety of the Stanton/Brady/Celeste
Assets or the ERCOT electric grid). Throughout the Term of this Agreement, Lessor shall have access to the Stanton/Brady/Celeste Assets at all reasonable times for purposes of inspection and for the purposes of improving, expanding or modernizing
the Stanton/Brady/Celeste Assets in accordance with Article X. Except in the case of emergency, prior to Lessor’s access of the Stanton/Brady/Celeste Assets, Lessor will provide written notification to Lessee’s operations personnel. 

1.3. Absolute Net Lease. This Agreement is intended by the Parties to be an absolute net lease (and, except as
otherwise specified herein, the expenses and costs associated with the lease, license, servicing, insuring, maintenance, repair and operation of the Stanton/Brady/Celeste Assets and the performance of Lessee’s obligations under this Agreement
shall be for the account of the Lessee, unless expressly stated that such expenses or costs are for the account of Lessor or some other Person). Other than as expressly provided herein, (a) Lessee’s obligation to make all payments of Rent
as and when the same shall become due and payable in accordance with the terms of this Agreement shall be absolute, irrevocable and unconditional and shall not be affected by any circumstance or subject to any abatement or diminution by set-off,
deduction, counterclaim, recoupment, agreement, defense, suspension, deferment, interruption or otherwise, and (b) until such time as all Rent required to be paid has been paid, Lessee shall have no right to terminate this Agreement or to be
released, relieved or discharged from its obligation to make, and shall not suspend or discontinue, any payment of Rent for any reason whatsoever. 

  
 3 

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 1.4. Waiver by Lessee. Lessee hereby waives, to the extent permitted
by Applicable Law, any and all rights which it may now have or which at any time hereafter may be conferred upon it, by statute or otherwise, to modify, terminate, cancel, quit or surrender this Agreement except in accordance with the express terms
hereof. 
 1.5. Quiet Enjoyment. Lessee shall be entitled to the peaceful and
quiet enjoyment of the Stanton/Brady/Celeste Lease Assets, subject to the terms of this Agreement, so long as Lessee is not in default of this Agreement beyond applicable notice and cure periods. 

ARTICLE II 
 TERM OF
LEASE 
 2.1. Term. Subject to the provisions of Section 2.2 of this Agreement, or as otherwise stated herein,
this Agreement became effective on the Original Lease Date and, effective as the Effective Date, is hereby extended and shall continue through December 31, 2017 unless otherwise terminated in a manner consistent herewith (collectively, as
extended pursuant to this Agreement, the “Existing Term”). Thereafter, this Agreement may be renewed for subsequent terms (each, a “Renewal Term” and, collectively with the Existing Term, the
“Term”) by mutual agreement of the Parties; provided, however, that the Rent for any Renewal Term shall be targeted to provide the Lessor with a Comparable Rate of Return on the then-current Rate Base of the
Stanton/Brady/Celeste Assets. 
 2.2. Approvals upon Expiration or Termination. 

(a) Notwithstanding any provisions to the contrary herein, Lessee shall not surrender, resign, transfer, assign or otherwise cease to be the
operator of the Stanton/Brady/Celeste Assets at any time, including upon the termination of this Agreement or at the expiration of the Term, without first acquiring any necessary regulatory approvals from the PUCT or other Regulatory Authorities
regarding such surrender, resignation, transfer, assignment or cessation of such operatorship; provided that, in the event of expiration or termination, the Parties shall use commercially reasonable efforts to obtain all necessary regulatory
approvals of the transfer of such operatorship as soon as reasonably practicable. 
 (b) During any period of time after the expiration of
the Term or termination of this Agreement but prior to Lessee’s acquisition or receipt of any necessary regulatory approvals with respect to Lessee’s surrender, resignation, transfer, assignment or other cessation of its operation of the
Stanton/Brady/Celeste Assets (such period of time being herein referred to as the “Extended Period of Operatorship”), Lessee shall continue to operate the Stanton/Brady/Celeste Assets and shall continue to pay all Extended Period
Rent and perform all of Lessee’s other obligations under this Agreement; provided, however, that if regulatory approval is not obtained within twelve (12) months of initiation of the approval process and such delay is
(a) due to Lessor’s failure to reasonably pursue such approval, then the amounts payable as Rent will be eighty percent (80%) of such amount, or (b) due to Lessee’s failure to reasonably pursue such approval, then the
amounts payable as Rent will be one hundred five percent (105%) of such amount. 

  
 4 

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 (c) Upon the expiration of the Term or termination of this Agreement, Lessee shall use
commercially reasonable efforts to obtain all necessary regulatory approvals as soon as reasonably practicable from the PUCT or other Regulatory Authorities to transfer or assign the CCNs for the Stanton/Brady/Celeste Assets to Lessor or a third
party designated by Lessor and acceptable to the PUCT or other Regulatory Authorities. 
 (d) The obligations of Lessee and Lessor contained
in this Section 2.2 shall survive the expiration of the Term or termination of this Agreement. 
 2.3. Purchase Option
upon Expiration or Termination. Upon the later of (a) the expiration of the Term or termination of this Agreement or (b) the expiration of the Extended Period of Operatorship (if any), Lessor shall have the option to purchase from
Lessee any equipment or other property, tangible or intangible (including regulatory assets), owned by Lessee and principally used in connection with and necessary for the operation of the Stanton/Brady/Celeste Assets (including any Nonseverable
Footprint Projects owned by Lessee, if any), subject to any required regulatory approvals. The purchase price for such property or equipment shall be the greater of (i) the net book value thereof plus 10% and (ii) the fair market value
thereof as determined by mutual agreement of Lessor and Lessee. If the Parties fail to agree on the amount of the purchase price, the purchase price shall be submitted to arbitration in accordance with Section 13.7, pursuant to which the
Arbitration Panel shall be empowered to determine the amount of the purchase price, based on submissions by each of Lessee and Lessor. 

ARTICLE III 
 RENT

 3.1. Rent. Lessee will pay to Lessor in lawful money of the United States of America which shall be legal tender
for the payment of public and private debts, at Lessor’s address set forth in Section 13.8 hereof or at such other place or to such other Person, as Lessor from time to time may designate in a written notice to Lessee, all Rent
contemplated hereby during the Term on the basis hereinafter set forth. If there is a dispute as to the amount of Rent to be paid by Lessee, either Party may submit the dispute to arbitration pursuant to Section 13.7. However, Lessee shall be
required to pay, as and when Rent is due and payable hereunder, the Undisputed Rent until such time as the dispute is resolved by agreement between the Parties or by arbitration pursuant to Section 13.7. 

(a) Base Rent: Lessee will pay Lessor an amount of base rent equal to the amount set forth on the then-effective Rent Supplement, which shall
be payable monthly in arrears 45 days after the conclusion of the month. The amount of base rent owed pursuant to this Section 3.1(a) may be supplemented by the Parties from time to time in accordance with Section 3.2. The amount of base
rent payable pursuant to this Section 3.1(a), as supplemented from time to time pursuant to Section 3.2, is referred to as “Base Rent.” 

(b) Percentage Rent: In addition to the Base Rent set forth above, Lessee covenants and agrees to pay to Lessor, as percentage rent, an annual
amount equal to the percent of Gross Revenues during the applicable Lease Year in excess of the Annual Percentage Rent Breakpoint for such Lease Year, all as set forth on the then-effective Rent Supplement. The percentage amounts used for the
calculation of percentage rent owed pursuant to this Section 3.1(b) (the 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
“Percentage Rent Percentages”) may be supplemented by the Parties from time to time in accordance with Section 3.2 to account for additions to the Stanton/Brady/Celeste
Assets. The percentage rent payable pursuant to this Section 3.1(b), as supplemented from time to time pursuant to Section 3.2, is referred to as “Percentage Rent.” 

(c) Percentage Rent Breakpoints: With respect to the Annual Percentage Rent Breakpoint for each Lease Year: (1) the “First Lease
Quarter Percentage Rent Breakpoint” shall be 25% of the Annual Percentage Rent Breakpoint for such Lease Year; (2) the “Second Lease Quarter Percentage Rent Breakpoint” shall be 50% of the Annual Percentage Rent
Breakpoint for such Lease Year; and (3) the “Third Lease Quarter Percentage Rent Breakpoint” shall be 75% of the Annual Percentage Rent Breakpoint for such Lease Year. 

(d) Gross Revenues: 
 (i) As used
in this Agreement, subject to Section 3.1(d)(ii), the “Gross Revenues” of the Stanton/Brady/Celeste Assets shall mean and include all fees, charges and other revenues, computed without duplication, generated by or otherwise
(x) received by or payable to Lessee in connection with or which are the result of the operation of the Stanton/Brady/Celeste Assets (and any assets related to the Stanton/Brady/Celeste Assets owned by Lessee), as set forth in the FERC Uniform
System of Accounts or such other accounts as may be applicable from time to time in which Lessee records its revenues from operation of the Stanton/Brady/Celeste Assets; (y) received by or payable to Lessee from other opportunities and uses of
the Stanton/Brady/Celeste Assets pursuant to Section 1.2(b) hereof; or (z) arising from insurance proceeds for business income lost from an insured event related to the Stanton/Brady/Celeste Assets; provided that, “Gross
Revenues” shall not include (1) any payment received by Lessee as CIAC; (2) any items which are of a pure pass-through nature where such items are charged to and collected from customers of Lessee but which carry regulatory
responsibility to remit such collections without offset or deduction to a third party, including, but not limited to, items such as: (A) sales taxes or other charges collected by Lessee on behalf of a taxing authority; (B) fees, charges
and other revenues collected by Lessee that can be specifically traced to any regulatory approved costs incurred by Lessee that have been ordered or permitted by the PUCT to be recovered through Lessee’s rates such as system benefit fund and
transmission cost recovery factor; (C) fees, charges and other revenues collected by Lessee that can be specifically traced to any deferred costs funded by Lessee that have been ordered or permitted by the PUCT to be recovered through a tariff
rider; and (D) such other items that Lessor and Lessee agree to in good faith are consistent with the foregoing and should be included prospectively in the list set forth in this clause (2) and in the event the Lessor and Lessee cannot
agree on what items should be included on such list, then either Lessor or Lessee may submit such matter to arbitration pursuant to Section 13.7, pursuant to which the Arbitration Panel shall be empowered to determine which such items shall be
included on such list, based on submissions by each of the Lessee and the Lessor; and (3) Revenues Attributable to Lessee CapEx. The term “Unadjusted Gross Revenues” means the amount of Gross Revenue, calculated in accordance
with this Section 3.1(d)(i), without giving effect to the offset set forth in clause (3), above, related to Revenues Attributable to Lessee CapEx. 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 (ii) Except as set forth below, all ERCOT Transmission Revenues will be allocated to the
Stanton/Brady/Celeste Assets covered by this Agreement based upon the following formula: Multiply (x) total ERCOT Transmission Revenues received by Lessee by (y) a fraction, the numerator of which is the Transmission Net Plant in Service
for the Stanton/Brady/Celeste Assets covered by this Agreement and the denominator of which is the total Transmission Net Plant in Service for all regulated electric transmission systems owned by Lessor or an affiliate thereof and operated by Lessee
or a subsidiary thereof within ERCOT (the “TCOS Allocation”). As of the Effective Date, all regulated electric transmission systems operated by Lessee or a subsidiary thereof within ERCOT are owned by Lessor or a subsidiary or
parent entity thereof. As long as that is the case, Transmission Net Plant in Service and Transmission Gross Plant in service shall be derived exclusively from the financial statements of Lessor and agreed to by Lessee. If Lessee or any subsidiary
thereof operates any electric transmission systems within ERCOT that are not leased from Lessor or an affiliate thereof, then the Parties will negotiate in good faith an equitable and appropriate mechanism for allocating ERCOT Transmission Revenues
based on the Transmission Net Plant in Service of the respective electric transmission systems and in the event the Parties cannot agree on an equitable and appropriate mechanism, then either Party may submit such matter to arbitration pursuant to
Section 13.7, pursuant to which the Arbitration Panel shall be empowered to determine such equitable and appropriate TCOS Allocation mechanism, based on submissions by each of the Lessee and the Lessor. The most recent TCOS Allocation agreed to
by Lessor and Lessee will govern the allocation described in this Section 3.1(d)(ii), which TCOS Allocation may be set forth in a Rent Supplement but will not be required to be included in a Rent Supplement to be effective. Either Party may
request a revision to such TCOS Allocation, based on the most recent available monthly balance sheet, no more frequently than once every sixty (60) days or in connection with any Rent Supplement or Rent Validation executed and delivered by the
Parties. If the Parties are unable to agree to an allocation, such matter will be submitted to arbitration pursuant to Section 13.7. “Gross Revenues,” for purposes hereof, will include the amount of such ERCOT Transmission Revenues
allocated to the Stanton/Brady/Celeste Assets pursuant to this Section 3.1(d)(ii), if any, plus any other amounts, such as distribution revenue, that constitute Gross Revenues pursuant hereto, minus (without duplication) Revenues Attributable
to Lessee CapEx. 
 (iii) The Parties contemplate that there may be Capital Expenditures for assets that are placed in service and that are
related and fairly allocable to the Stanton/Brady/Celeste Assets or the Stanton Transmission Loop Assets and are classified as Lessee CapEx. Unless the Parties agree otherwise based on appropriate factors at the time of the negotiation, Capital
Expenditures that qualify as Lessee CapEx will qualify as Lessee CapEx on the date that the assets developed with such Capital Expenditures are placed in service. In such a case, Revenues Attributable to Lessee CapEx shall be determined and such
portion shall be subtracted from Unadjusted Gross Revenues in order to calculate Gross Revenues. For these purposes, Revenues Attributable to Lessee CapEx shall be targeted to equal that portion of the Unadjusted Gross Revenues collected by Lessee
which equals the amount needed to provide Lessee with the equivalent of a Comparable Rate of Return on any such Lessee CapEx (except that, in determining such Comparable 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
Rate of Return, the Parties will not consider Lessee’s creditworthiness and there will be no Agreed-to-Discount). It is understood and agreed that such determinations of the Revenues
Attributable to Lessee CapEx are intended to provide an accurate and reasonably administrable means of ensuring that the Lessee (and not the Lessor) will receive a Comparable Rate of Return attributable to the capital invested by Lessee in the
Lessee CapEx. The Revenues Attributable to Lessee CapEx shall be determined solely to provide a Comparable Rate of Return on such Lessee CapEx and shall not be determined with reference to, or with any intention to true up, the effect of any
difference between the initially anticipated and the actual return of or on prior Lessee CapEx. The Parties understand that there may be Capital Expenditures that relate to both (1) the Stanton/Brady/Celeste Assets and/or the Stanton
Transmission Loop Assets and (2) to other transmission and/or distribution systems owned or operated by Lessee or an affiliate thereof, and, in such circumstance, the Parties will negotiate in good faith to determine the portion of such Capital
Expenditures that constitute Lessee CapEx hereunder. In the event the Parties cannot determine such portion, then either Party may submit such matter to arbitration pursuant to Section 13.7, pursuant to which the Arbitration Panel shall be
empowered to determine such portion of Capital Expenditures that constitute Lessee CapEx hereunder, based on submissions by each of the Lessee and the Lessor. Lessee agrees to provide Lessor with sufficient information regarding Lessee CapEx so that
Lessor can monitor amounts actually spent on Lessee CapEx. If Lessee expects there will be any Lessee CapEx, Lessee may request, no more frequently than annually, that the Parties determine the Revenues Attributable to Lessee CapEx which relate to
such Lessee CapEx for each subsequent Lease Year. Lessee will use reasonable efforts to make such request coincide with a Rent Supplement pursuant to Section 3.2(a). Each supplement and related determination of Revenues Attributable to Lessee
CapEx for any Lease Year which is specified in this Section 3.1(d)(iii) shall be memorialized in the manner specified in Section 3.2(b). 

(e) Payment of Percentage Rent: Percentage Rent shall be paid by Lessee to Lessor not later than the date forty-five (45) days after the
end of each Lease Quarter as herein provided. Lessee shall record Gross Revenues in order to provide an audit trail for the Gross Revenues. Lessee shall deliver a written statement to Lessor, accompanied by a CFO Certificate, within forty-five
(45) days after the end of each Lease Quarter, stating (1) the Gross Revenues for that Lease Quarter, (2) the cumulative total through the end of that Lease Quarter of Gross Revenues for such Lease Year, (3) the Percentage Rent
Breakpoint (the First Lease Quarter Percentage Rent Breakpoint, the Second Lease Quarter Percentage Rent Breakpoint, the Third Lease Quarter Percentage Rent Breakpoint or the Annual Percentage Rent Breakpoint for such Lease Year, as applicable),
utilized by Lessee and applicable to Lessee’s calculation of Percentage Rent through the end of that Lease Quarter, and (4) the cumulative total of any Percentage Rent then due and the cumulative total of any Percentage Rent previously
paid with respect to any prior Lease Quarter(s) within such Lease Year. If such CFO Certificate indicates that any Percentage Rent is due for such Lease Quarter (or such Lease Year, as applicable), based upon the cumulative total of Gross Revenues
through the end of such Lease Quarter and the applicable Percentage Rent Breakpoint reflected in such statement, then Lessee shall pay and deliver any Percentage Rent then due with the statement and CFO Certificate for such Lease Quarter (or such
Lease Year, as applicable). With respect to the final Percentage Rent calculation for any Lease Year, Lessee 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
shall receive a credit for any Percentage Rent previously paid with respect to such Lease Year. If the Percentage Rent payments previously made by Lessee to Lessor for the first three Lease
Quarters of a Lease Year, on a cumulative basis, exceed the annual amount of Percentage Rent payable by Lessee to Lessor for such Lease Year, then Lessee shall receive a credit for such excess amount against the next Percentage Rent payment(s)
becoming due and payable by Lessee to Lessor under this Agreement. The applicable Percentage Rent Breakpoint shall also be adjusted pro rata for any partial Lease Quarters or partial Lease Years at the beginning and/or end of the Term. All
statements deliverable by Lessee to Lessor under this Agreement shall be delivered to the place where rent is then payable, or to such other place or places as Lessor may from time to time direct by written notice to Lessee. 

3.2. Rent Supplements. 

(a) The Parties have executed a Rent Supplement with respect to the Rent in effect as of the Effective Date (the “Renewal Rent
Supplement”). This Section 3.2(a) will not require any amendment to Rent unless the Parties expect Incremental CapEx and the Parties have not previously entered into a Rent Supplement with respect to such Incremental CapEx. If the
Parties expect Incremental CapEx (“Expected Incremental CapEx”), then the Parties will negotiate in good faith to supplement Rent and other matters in accordance with this Section 3.2. In connection therewith, the Parties will
negotiate the pre-tax rate of return that Lessor should earn on such Incremental CapEx, which will be based generally on an agreed-to discount from the rate of return that public utility companies generally earn in the State of Texas at the time of
such Rent Supplement negotiation, adjusted in the manner agreed to by the Parties (if justified) to take into account the creditworthiness of Lessee at the time of such Rent Supplement negotiation (the “Agreed-to-Discount”). Such
discount will be based on the comparable discount agreed to in connection with the negotiation of rent pursuant to the McAllen Lease and other leases between Lessee and Lessor (or an affiliate thereof), as modified to take into account appropriate
factors at the time of such Rent Supplement negotiation. Such pre-tax rate of return, as determined in accordance with this paragraph, is referred to as a “Comparable Rate of Return.” The following will apply to the determination of
the matters set forth on the Rent Supplement: 
 (i) The Parties will supplement Base Rent and Percentage Rent in a manner
intended to provide a Comparable Rate of Return for Lessor on the Expected Incremental CapEx. Such Comparable Rate of Return will be achieved by a split between Base Rent and Percentage Rent in the proportions requested by Lessor and agreed to by
Lessee. 
 (ii) Unless the Parties agree otherwise based on appropriate factors at the time of the negotiation, Capital
Expenditures will qualify as Incremental CapEx on the date the assets subject to such Capital Expenditures are placed in service (notwithstanding that Capital Expenditures that are included in CapEx Budgets pursuant to Article X are for such
purposes measured based on the date the related Capital Expenditures are incurred). 
 (iii) Notwithstanding anything herein
to the contrary, such supplement shall be determined solely to provide a Comparable Rate of Return on such Expected Incremental CapEx and shall not be determined with reference to, or with any intention to true up, the effect of any difference
between the initially anticipated and the actual return of or on, or the Base Rent or Percentage Rent payable with respect to, the Stanton/Brady/Celeste Assets as in place prior to the additions resulting from such Expected Incremental CapEx. 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 (b) The Parties will memorialize the results of all Incremental CapEx supplements and Lessee
CapEx supplement negotiations by executing and delivering a Rent Supplement, which will set forth the amount of contemplated Incremental CapEx, new Base Rent, a new Percentage Rent Schedule, new Revenues Attributable to Lessee CapEx, Lessee CapEx,
new TCOS Allocation (if applicable), the effective date on which such changes will occur and the term of such Rent Supplement (if applicable). In no event will any new Base Rent or new Percentage Rent be payable, or any Revenues Attributable to
Lessee CapEx be taken into account as a reduction to Unadjusted Gross Revenues, before the assets funded by the related Incremental CapEx or Lessee CapEx are placed in service. The Rent Supplement may also include the projected in-service date of
the Incremental CapEx or Lessee CapEx to which the Rent Supplement applies. Upon execution and delivery of any such Rent Supplement, this Agreement will be deemed amended thereby. If necessary, Exhibit A will be supplemented to reflect new
assets funded by Incremental CapEx. The Rent Supplement shall have the term set forth therein, not to extend past the then-current Term of this Agreement. At the end of the term of each Rent Supplement, the Parties shall negotiate a new Rent
Supplement for the Lessee CapEx and Incremental CapEx covered by such prior Rent Supplement using the Comparable Rate of Return methodology set forth in Sections 3.1(d)(iii) and 3.2(a). Notwithstanding the foregoing, the Percentage Rent Percentages
and Annual Percentage Rent Breakpoints reflected on such new Rent Supplement with respect to the Rate Base covered by such prior Rent Supplement shall be as set forth on the Percentage Rent Schedule of such prior Rent Supplement. 

(c) This Section 3.2(c) sets forth the process by which the Parties may request and effect Rent Validations. 

(i) If following the execution and delivery of a Rent Supplement there is a difference in (A) the amount of actual
Incremental CapEx compared to the amount contemplated by the then-effective Rent Supplement, (B) the amount of actual Lessee CapEx compared to the amount contemplated by the then-effective Rent Supplement, or (C) the placed-in-service date
of such Incremental CapEx or Lessee CapEx compared to what was contemplated at the time of the then-effective Rent Supplement, then, at any time within two years of the date the Parties agree to a Rent Supplement, either Party may request a Rent
Validation. If there has been such a difference, the Parties will supplement Incremental CapEx, Base Rent, Percentage Rent Percentages, Annual Percentage Rent Breakpoints, Revenues Attributable to Lessee CapEx and/or Lessee CapEx, as applicable, to
what they would have been, at the time of the Rent Supplement, to reflect (1) the amount of actual Incremental CapEx and Lessee CapEx and/or (2) the actual dates such Incremental CapEx and/or Lessee CapEx was placed in service, but keeping
fixed all other relevant assumptions and inputs, including the Comparable Rate of Return. For the avoidance of doubt, in no circumstance will a Rent Validation occur to account for any difference between the initially anticipated and the actual
return of or on the Incremental CapEx and/or Lessee CapEx, and no such difference will be taken into account as part of such Rent Validation. The Parties also will negotiate in good faith to determine (x) whether one Party should make a lump
sum payment to the other Party as a result of excess or deficient Rent that Lessee paid, prior to the date of the effective date of 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
the Rent Validation, in connection with the Rent Supplement, and, (y) if applicable, the amount of any such lump sum payment. The Parties will memorialize the result of any Rent Validation
negotiation by executing and delivering a revised Rent Supplement, which will set forth revised expected Incremental CapEx, Lessee CapEx, Base Rent, Percentage Rent Percentages, Annual Percentage Rent Breakpoints and/or Revenues Attributable to
Lessee CapEx, as applicable, the effective date on which such changes will occur and, if applicable, the amount of the lump sum payment that one Party must make to the other Party (which payment must be made within 30 days of the execution and
delivery of such revised Rent Supplement). Any lump sum payments received by Lessor under this Section 3.2(c)(i) shall be treated as Rent by the Parties. Upon execution and delivery of any such Rent Validation, this Agreement will be deemed
amended thereby. For the avoidance of doubt, notwithstanding expiration of the Existing Term on December 31, 2017, upon request of either Party made at any time before March 1, 2018, the Parties will conduct a Rent Validation pursuant to
this Section 3.2(c)(i) in order to determine (I) whether one Party should make a lump sum payment to the other Party as a result of excess or deficient Rent Lessee paid, prior to the date of the effective date of such Rent Validation, in
connection with the Rent Supplement, given any negotiated supplement, and, (II) if applicable, the amount of any such lump sum payment. The provisions of this Section 3.2(c)(i) will apply to any such lump sum payment. 

(ii) The Renewal Rent Supplement was negotiated and agreed to in the fourth quarter of 2015 based on, among other things,
estimates of the Rate Base amount related to the Stanton/Brady/Celeste Lease Assets and any Lessee CapEx as of December 31, 2015. If either Party determines there is a difference in the amount of actual Rate Base of the Stanton/Brady/Celeste
Lease Assets and any related Lessee CapEx as of December 31, 2015, compared to the amount contemplated in connection with the negotiation of the Renewal Rent Supplement, then, on or before March 1, 2016, either Party may request a Rent
Validation. If there has been such a difference, the Parties will supplement Base Rent, Percentage Rent Percentages, Annual Percentage Rent Breakpoints, Revenues Attributable to Lessee CapEx and/or Lessee CapEx, as applicable, to what they would
have been, at the time of the Rent Supplement, to reflect the amount of actual Rate Base, but keeping fixed all other relevant assumptions and inputs, including the Comparable Rate of Return. For the avoidance of doubt, in no circumstance will a
Rent Validation occur to account for any difference between the initially anticipated and the actual return of or on Rate Base and/or Lessee CapEx, and no such difference will be taken into account as part of such Rent Validation. The Parties also
will negotiate in good faith to determine (A) whether one Party should make a lump sum payment to the other Party as a result of excess or deficient Rent Lessee paid, prior to the date of the effective date of the Rent Validation, in connection
with the Rent Supplement, and, (B) if applicable, the amount of any such lump sum payment. The Parties will memorialize the result of any Rent Validation negotiation by executing and delivering a revised Rent Supplement, which will set forth
revised expected Lessee CapEx, Base Rent, Percentage Rent Percentages, Annual Percentage Rent Breakpoints and/or Revenues Attributable to Lessee CapEx, as applicable, the effective date on which such changes will occur and, if applicable, the amount
of the lump sum payment that one Party must make to the other 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
Party (which payment must be made within 30 days of the execution and delivery of such revised Rent Supplement). Any lump sum payments received by Lessor under this Section 3.2(c)(ii) shall
be treated as Rent by the Parties. Upon execution and delivery of any such revised Rent Supplement, this Agreement will be deemed amended thereby. 

(iii) The Parties will reasonably cooperate to minimize the number of Rent Validations, and prospective Rent Supplements and
Rent Validations (including Rent Validations pursuant to clause (i) and clause (ii) above) may be combined into one revised, amended and restated Rent Supplement. 

(d) In connection with the foregoing provisions of this Section 3.2, Lessor and Lessee shall use good faith efforts to agree to a Rent
Supplement, renewal of a Rent Supplement or Rent Validation, as applicable, within 60 days of a request therefor by either Party. If, by the end of such 60 day period, Lessee and Lessor cannot in good faith agree to the terms of a Rent Supplement,
renewal of a Rent Supplement or Rent Validation, such dispute shall be submitted to arbitration in accordance with Section 13.7, pursuant to which the Arbitration Panel shall be empowered to determine the terms of such Rent Supplement, renewal
of a Rent Supplement or Rent Validation (including any lump sum payment amount), based on submissions by each of the Lessee and the Lessor. 

3.3. Confirmation of Percentage Rent. 

(a) In the event that Lessee determines that the Percentage Rent paid with respect to any Lease Year exceeded the amount of Percentage Rent
actually due for such Lease Year (such overage being the “Excess Percentage Rent”), Lessee shall promptly notify Lessor of such fact and shall deliver a new CFO Certificate (the “Revised Certificate”) setting forth
the corrected calculations of the Percentage Rent due for such Lease Year and identifying the amount of the Excess Percentage Rent. Upon Lessor’s reasonable verification of the information set forth in the Revised Certificate, Lessor shall
refund to Lessee the Excess Percentage Rent. Notwithstanding anything to the contrary contained herein, in no event shall Lessor have any obligation under this Section 3.3(a) to refund any Excess Percentage Rent if Lessor has not received the
Revised Certificate by March 31 of the year following the Lease Year for which the Excess Percentage Rent was paid. 
 (b) Lessee shall
utilize, or cause to be utilized, an accounting system for the Stanton/Brady/Celeste Assets in accordance with the FERC Uniform System of Accounts, that will accurately record all data necessary to compute Percentage Rent, and Lessee shall retain
and shall allow Lessor and its representatives to have reasonable access to, for at least five (5) years after the expiration of each Lease Year, reasonably adequate records conforming to such accounting system showing all data necessary to
conduct Lessor’s Audit and to compute Percentage Rent for the applicable Lease Years and to otherwise file or defend tax returns and reports to any Regulatory Authority. 

(c) Lessor shall have the right from time to time to cause its accountants or representatives to conduct an inspection, examination and/or
audit (a “Lessor’s Audit”) of all of Lessee’s records, including supporting data, sales and excise tax returns and the records described in Section 3.3(b), reasonably required to complete such Lessor’s Audit and
to verify Percentage 

  
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Rent, subject to any prohibitions or limitations on disclosure of any such data under applicable laws, regulations and governmental requirements. If any Lessor’s Audit discloses a deficiency
in the payment of Percentage Rent, and either Lessee agrees with the result of Lessor’s Audit or the matter is otherwise determined or compromised, Lessee shall forthwith pay to Lessor the amount of the deficiency, as finally agreed or
determined, together with interest at the Overdue Rate from the date when said payment should have been made to the date of payment thereof. In addition to the amounts described above in this Section 3.3(c), if any Lessor’s Audit discloses
a deficiency in the payment of Percentage Rent which, as finally agreed or determined, exceeds 3% of the amount paid, Lessee shall pay the costs of Lessor’s Audit. In no event shall Lessor undertake a Lessor’s Audit after March 31 of
the second year following the Lease Year for which such audit is requested. 
 (d) Any proprietary information obtained by Lessor pursuant
to the provisions of this Section 3.3 shall be treated as confidential, except that such information may be used, subject to appropriate confidentiality safeguards, in any litigation or arbitration between the Parties and except further that
Lessor may disclose such information to lenders and investors, including prospective lenders or investors and to any other persons to whom disclosure is necessary or appropriate to comply with Applicable Laws, regulations and governmental
requirements and to comply with any reporting requirements applicable to Lessor or Lessee under any applicable securities laws or regulations or any listing requirements of any applicable securities exchange. 

(e) Any dispute as to the existence or amount of any deficiency in the payment of Percentage Rent as disclosed by Lessor’s Audit shall,
if not otherwise settled by the Parties, be submitted to arbitration pursuant to the provisions of Section 13.7. 
 3.4.
Additional Rent. In addition to Base Rent and Percentage Rent, Lessee also will pay and discharge as and when due and payable all other amounts, liabilities, obligations and impositions that Lessee assumes or agrees to pay
under this Agreement, including without limitation, the expenses and costs described in Section 1.3 and any reimbursement for such amounts and other damages to Lessor in the event that Lessor pays such expenses or costs or performs such
obligations on behalf of Lessee (collectively, “Additional Rent”). 
 3.5. No Set
Off. Rent shall be paid to Lessor without set off, deduction or counterclaim; provided, however, that Lessee shall have the right to assert any claim or counterclaim in a separate action brought by Lessee under
this Agreement or to assert any mandatory counterclaim in any action brought by Lessor under this Agreement. 
 3.6. Late
Payment Penalty. Except as otherwise provided in Section 9.1(b), if Lessee fails to make any payment of Rent to Lessor within five (5) days after it is due, interest shall accrue on the overdue amount, from the date overdue
until the date paid, at the Overdue Rate. 
 3.7. Credit Support. If Lessor has reasonable grounds for
insecurity regarding the performance of Lessee’s obligations hereunder, Lessor may require Lessee to provide credit support in the amount, form and for the term reasonably acceptable to Lessor, including but not limited to, a letter of credit,
a prepayment, or a guaranty. 

  
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 3.8. Other Revenue. If Lessee receives or expects to receive any
fees, charges or Other Revenue and other than de minimis amounts not to exceed $100,000 in any calendar year, then, unless Lessee reasonably believes that such Other Revenue will not operate to reduce Lessee’s tariff within the State of Texas,
Lessee and Lessor will negotiate in good faith to amend this Agreement or a similar lease to characterize the portion of such Other Revenue which Lessor reasonably expects will operate to reduce Lessee’s tariff within the State of Texas as
Unadjusted Gross Revenue hereunder or under such other similar lease. In the event the Lessee and Lessor cannot agree on the terms of such amendment of this Agreement or of a similar lease, then either the Lessee or the Lessor may submit such
matters to arbitration pursuant to Section 13.7, pursuant to which the Arbitration Panel shall be empowered to characterize the portion of such Other Revenue which Lessor reasonably expects will operate to reduce Lessee’s tariff within the
State of Texas as Unadjusted Gross Revenue hereunder or under such other similar lease, based on submissions by each of the Lessee and the Lessor. 

3.9. Survival. The obligations of Lessee and Lessor contained in this Article III with respect to the
calculation, validation and payment, including late payment, of Rent applicable to periods prior to the end of the Term shall survive the expiration or earlier termination of this Agreement. 

ARTICLE IV 

LESSEE’S REPRESENTATIONS, WARRANTIES AND COVENANTS 

Lessee hereby represents, warrants and covenants to Lessor that: 

4.1. Maintenance, Operation and Repair of the Stanton/Brady/Celeste Assets. 

(a) Lessee, at its own cost and expense, shall maintain (including both scheduled and unscheduled maintenance), operate, repair and make all
modifications (other than the construction of Footprint Projects, which shall be subject to Article X) to the Stanton/Brady/Celeste Assets and any components thereof (whether owned by Lessor or Lessee), including directing all operations of and
supplying all personnel necessary for the operation of the Stanton/Brady/Celeste Assets, in each case, as reasonable and prudent and consistent with Good Utility Practice and as required by Applicable Law. Lessee shall carry out all obligations
under this Agreement as reasonable and prudent and consistent with Good Utility Practice and in accordance with manufacturers’ warranty requirements (during any applicable warranty period) and the Lessee’s established operating procedures
and maintenance, rebuild and repair programs so as to keep the Stanton/Brady/Celeste Assets in good working order, ordinary wear and tear excepted, and in such condition as shall comply in all material respects with all Applicable Laws. Lessee will
operate the Stanton/Brady/Celeste Assets in a reliable and safe manner in compliance with all applicable requirements and regulations of Regulatory Authorities. Lessee will not operate the Stanton/Brady/Celeste Assets or any component thereof in any
manner excluded from coverage by any insurance in effect as required by the terms hereof. 
 (b) If inspections of the Stanton/Brady/Celeste
Assets by Lessor show that the Stanton/Brady/Celeste Assets do not meet industry standards or Good Utility Practice for maintenance and repair and/or fail to meet the requirements of any Applicable Law, Lessee shall promptly, but in any event within
thirty (30) days after such initial notification, (i) develop a plan 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
for Lessor’s review by which the Stanton/Brady/Celeste Assets can be modified or replaced to comply with the standards, and (ii) complete any and all such modifications and/or
replacements consistent with all applicable reliability and safety standards established by regulations, orders or requirements of Regulatory Authorities. 

4.2. Licenses and Permits. Lessee shall obtain and maintain any and all licenses, permits and other governmental
and third-party consents and approvals required by Applicable Law in order to carry out its obligations under this Agreement. 

4.3. Property Taxes and Other Assessments and Fees. Lessee shall bear (or collect from customers, as applicable)
and timely pay all ad valorem or property taxes, sales and use taxes, or other assessments, governmental charges or fees that shall or may during the Term be imposed on, or arise in connection with, the ownership, lease, repair, maintenance and/or
operation of, the Stanton/Brady/Celeste Assets (including all Footprint Projects as described and provided for in Section 10.1 of this Agreement) (excluding any Lessor Taxes, “Lessee Taxes”); provided that Lessee shall
not be obligated to pay any income, franchise or similar taxes imposed upon Lessor, any consolidated, combined unitary or similar group that includes Lessor or any direct or indirect owner of an equity interest in Lessor, or any transfer,
recordation, sales, use or similar taxes which arise in connection with Lessor’s acquisition of Footprint Projects or the construction of Footprint Projects funded by Lessor (“Lessor Taxes”). The Parties understand that Lessee
collects certain Lessee Taxes from end customers and remits such payments to the appropriate Regulatory Authority, and that nothing in this Section 4.3 is intended to impose liability on Lessee (instead of such customer) for the related tax
liability beyond that imposed by Applicable Law with respect to such collection obligations. Upon the written request by Lessor, Lessee shall provide Lessor with evidence of the payment of any such Lessee Taxes, the failure of which to be paid would
cause the imposition of a Lien upon the Stanton/Brady/Celeste Assets or any component thereof or interest therein. Lessee shall assume full responsibility for preparing and furnishing to Lessor for execution all filings with any Regulatory Authority
of or in the state and/or locality in which the Stanton/Brady/Celeste Assets are located in respect of any and all Lessee Taxes; except that, where required or permitted by Applicable Law, Lessee shall make such filings on behalf of Lessor in the
name of Lessor or in Lessee’s own name. In each case in which Lessee furnishes a tax return or any other form to be executed by Lessor for filing with or delivery to any taxing authority, Lessee shall certify to Lessor that such document is in
the proper form, is required to be filed under Applicable Law and does not impose any tax or other liability on Lessor or any of its affiliates which is not indemnified by Lessee. Lessee shall be permitted to contest, in its own name when permitted
by law but otherwise on behalf of Lessor, in good faith and upon consultation with Lessor, any taxes it is obligated to pay hereunder. 

4.4. Requirements of Governmental Agencies and Regulatory Authorities. Lessee, at its expense, shall comply with
all Applicable Laws, including without limitation all requirements of the Regulatory Authorities. Lessee shall have the right, in its reasonable discretion and at its cost and expense, to contest by appropriate legal proceedings, the validity or
applicability to the Stanton/Brady/Celeste Assets of any Applicable Law made or issued by any federal, state, county, local or other Regulatory Authority. Any such contest or proceeding shall be controlled and directed by Lessee. Lessee shall
provide Lessor with written notice of the commencement of any such legal proceedings that relate to or are a Lessor Material Matter. Thereafter, if requested by Lessor, Lessee will update Lessor, at reasonable intervals, of the progress of any such
proceedings that relate to or are a Lessor Material Matter. 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 4.5. Liens. Lessee shall keep the Stanton/Brady/Celeste Assets free
and clear of all Liens other than Permitted Liens; provided, however, that if Lessee wishes to contest any such Lien (other than a Permitted Lien), Lessee shall, promptly, and in any event within thirty (30) days after it receives
notice of the filing of such Lien, remove or bond over such Lien from the Stanton/Brady/Celeste Assets pursuant to Applicable Law. If Lessee fails to promptly remove or bond over any such Lien, Lessor may, after providing notice to Lessee, take
reasonable action to satisfy, defend, settle or otherwise remove the Lien at Lessee’s expense. 
 4.6. Hazardous
Materials. 
 (a) Lessee shall operate and maintain the Stanton/Brady/Celeste Assets and conduct all of its other activities
in respect thereof in compliance in all material respects with any Environmental Laws and other Applicable Laws relating to air, water, land and the generation, storage, use, handling, transportation, treatment or disposal of Hazardous Materials.
Lessee shall promptly notify Lessor of any such violation that is a Lessor Material Matter. To the extent Lessee becomes aware of any environmental, health, safety or security matter that requires a corrective action, Lessee shall (in consultation
with Lessor in the case of any Lessor Material Matter) undertake and complete such corrective action. Lessee shall have the obligation to report any such violations to the appropriate Regulatory Authorities in accordance with Applicable Law and, if
practicable, shall give notice thereof to Lessor prior to making such report with respect to any Lessor Material Matter. 
 (b) Without
limiting the generality of the foregoing, Lessee shall not (i) place or locate any underground tanks on the property underlying the Stanton/Brady/Celeste Assets, (ii) generate, manufacture, transport, produce, use, treat, store, release,
dispose of or otherwise deposit Hazardous Materials in or on the Stanton/Brady/Celeste Assets, the property underlying the Stanton/Brady/Celeste Assets or any portion thereof other than as permitted by Environmental Laws that govern the same or are
applicable thereto, (iii) permit any other substances, materials or conditions in, on or emanating from the Stanton/Brady/Celeste Assets, the property underlying the Stanton/Brady/Celeste Assets or any portion thereof which may support a claim
or cause of action under any Applicable Law or (iv) undertake any action that would reasonably be expected to cause an unauthorized release of Hazardous Materials at the property underlying the Stanton/Brady/Celeste Assets. 

(c) Lessee shall periodically, at intervals determined in its reasonable discretion in accordance with Good Utility Practice or as required by
Applicable Law, at Lessee’s sole expense, conduct inspections of all components of the Stanton/Brady/Celeste Assets to ensure compliance with Applicable Laws and with this Section 4.6, and shall promptly notify Lessor of the results of any
such inspections. Lessor may, at Lessor’s expense, conduct its own testing at times determined in its reasonable discretion, and after reasonable consultation with Lessee, to ensure Lessee’s compliance with Applicable Laws and with this
Section 4.6, provided, however, that Lessor agrees to indemnify Lessee from and against any and all Claims suffered or incurred by Lessee and arising from Lessor’s testing in accordance with Section 12.2. 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 4.7. Indebtedness. Lessee shall not incur Indebtedness other than:
(i) Indebtedness in an aggregate principal amount of up to the greater of (A) $5,000,000 and (B) an amount equal to one percent (1%) of the sum of, without duplication, (x) the total amount of the Consolidated Net Plant of
Lessee, plus (y) the total amount of the Consolidated Net Plant of any guarantor(s) of Lessee’s obligations under any Lease to which Lessee is a party as a lessee, plus (z) the total amount of Leased Consolidated Net Plant of Lessee,
in each case on a senior secured basis, (ii) Indebtedness in an aggregate principal amount of up to the greater of (A) $10,000,000 and (B) an amount equal to one-and-a-half percent (1.5%) of the sum of, without duplication,
(x) the total amount of the Consolidated Net Plant of Lessee, plus (y) the total amount of the Consolidated Net Plant of any guarantor(s) of Lessee’s obligations under any Lease to which Lessee is a party as a lessee, plus
(z) the total amount of Leased Consolidated Net Plant of Lessee, in each case on an unsecured subordinated basis on terms substantially similar to the terms set forth on Exhibit B and (iii) loans, in an aggregate principal amount
not to exceed $10,000,000 at any time outstanding, made by InfraREIT Partners, LP or a subsidiary thereof to Lessee from time to time for the purpose of financing capital expenditures. For purposes of clauses (i) and (ii) of the preceding
sentence, any Consolidated Qualified Lessees of Lessee will be treated as Lessee. In addition to the foregoing, any of Lessee’s subsidiaries may incur Indebtedness in an aggregate principal amount of up to the product of (x) Lessee’s
aggregate Consolidated Net Plant multiplied by (y) the lesser of (A) the sum of Lessee’s then-current PUCT-regulated debt-to-equity ratio (expressed as a percentage) and five percent (5%) or (B) sixty-five percent (65%);
provided, however, that such Indebtedness must be Non-Recourse Debt to Lessee. For purposes of this Section 4.7, Lessee’s Consolidated Net Plant will be derived from its most recently prepared consolidated balance sheet,
prepared in accordance with GAAP but adjusted to reverse the effects of failed sale-leaseback accounting in a manner reasonably determined by Lessee in good faith. Without limiting the amount of Indebtedness permitted by the foregoing, Lessee may
also incur Indebtedness (x) in the form of a pledge of equity interests in a subsidiary of Lessee as security for Non-Recourse Debt of such subsidiary and (y) in amounts otherwise permitted under the Debt Agreements. 

4.8. Records. In addition to the records referred to in Section 3.3, Lessee shall maintain proper books of
record and account in conformity with GAAP and all applicable Regulatory Authorities having legal or regulatory jurisdiction over Lessee. Additionally, Lessee shall maintain or cause to be maintained all logs, drawings, manuals, specifications and
data and inspection, modification and maintenance records and other materials required to be maintained in respect of the Stanton/Brady/Celeste Assets by Applicable Laws or by Good Utility Practice. Lessee shall allow Lessor and its representatives
to have reasonable access to, for at least five (5) years after the expiration of each Lease Year, the records referred to in this Section 4.8. 

4.9. Surrender. Upon expiration or earlier termination of this Agreement in accordance with its terms (but subject to
Section 2.2 and the requirements of all Applicable Laws), and in a manner calculated to avoid any disruption of electrical service, Lessee shall vacate and surrender possession of all components of the Stanton/Brady/Celeste Assets (other than
in respect of Footprint Projects funded by Lessee as described in Section 10.5(a)) to Lessor, or to such other Person as Lessor may direct. At the time of such surrender, the Stanton/Brady/Celeste Assets shall be free and clear of Liens and
other rights of third parties (other than Permitted Liens), and shall be in the same condition as on the Original Lease Date, 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
ordinary wear and tear and subsequent Footprint Projects excepted. Lessee shall deliver or cause to be delivered to Lessor, or to such other Person as Lessor may direct, copies of all title
documents, logs, drawings, manuals, specifications and data and inspection, modification and maintenance records, billing records, reports and other documents in respect of the Stanton/Brady/Celeste Assets which are necessary to determine the
condition of the Stanton/Brady/Celeste Assets or for the continued maintenance, repair or general operation of the Stanton/Brady/Celeste Assets and are in Lessee’s possession or control at such time. In connection with the surrender of the
Stanton/Brady/Celeste Assets, Lessor shall pay to Lessee the aggregate purchase price for any Footprint Projects, equipment or other property purchased by Lessor in accordance with Section 2.3 or Section 10.5(b). 

4.10. Cooperation; Transition Services. 

(a) During the period after notice of termination and prior to the termination of the Agreement, with reasonable notice, Lessee will cooperate
in all reasonable respects with the efforts of Lessor to sell or lease the Stanton/Brady/Celeste Assets (or any component thereof) or any interest therein, including, without limitation, permitting prospective purchasers or lessees to fully inspect
the Stanton/Brady/Celeste Assets and any logs, drawings, manuals, specifications, data and maintenance records relating thereto; provided that such cooperation shall not unreasonably interfere with the normal operation of the
Stanton/Brady/Celeste Assets or cause Lessee to incur any additional expenses other than as specifically provided herein. All information obtained in connection with such inspection shall be subject to confidentiality requirements at least as
restrictive as those contained in Section 13.3. 
 (b) Upon expiration or termination of this Agreement, Lessee shall continue to lease
and operate the Stanton/Brady/Celeste Assets pursuant to the terms of Section 2.2, if required thereunder. During such period Lessee shall perform all duties and retain all obligations under this Agreement in all respects, as if the Agreement
had not expired or been terminated, and will pay Extended Period Rent as and when due. 
 4.11. Lessee’s
Authority. Lessee has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder. Lessee has taken all action necessary to execute and deliver this Agreement and to
perform its obligations hereunder, and no other action or proceeding on the part of Lessee is necessary to authorize this Agreement. This Agreement constitutes the legally valid and binding obligation of Lessee, enforceable against Lessee in
accordance with its terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Applicable Laws affecting the enforcement of creditors’ rights generally and equitable
principles. 
 4.12. Litigation. If Lessee becomes aware of any actions, claims or other legal or administrative
proceedings that are pending, threatened or anticipated with respect to, or which could materially and adversely affect, the Stanton/Brady/Celeste Assets, Lessee shall promptly deliver notice thereof to Lessor. 

4.13. Financing. Lessee acknowledges that Lessor has advised Lessee that Lessor has obtained financing secured by, among
other things, the Stanton/Brady/Celeste Assets and this Agreement. In connection with such financing, Lessor made certain representations, warranties 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
and covenants set forth in that certain (i) Amended and Restated Note Purchase Agreement entered into by Lessor and dated as of September 14, 2010 (as amended, restated, supplemented or
otherwise modified from time to time, the “2009 Note Purchase Agreement”), a copy of which has been provided to and reviewed by Lessee, (ii) Amended and Restated Note Purchase Agreement entered into by Lessor and dated as of
July 13, 2010 (as amended, restated, supplemented or otherwise modified from time to time, the “2010 Note Purchase Agreement”), a copy of which has been provided to and reviewed by Lessee and (iii) Note Purchase Agreement
entered into by Lessor dated as of December 3, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “2015 Note Purchase Agreement” and, together with the 2009 Note Purchase Agreement and the
2010 Note Purchase Agreement, the “Note Purchase Agreements”), a copy of which has been provided to and reviewed by Lessee, (iv) Third Amended and Restated Credit Agreement entered into by Lessor and dated as of
December 10, 2014 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “2014 Credit Agreement”), a copy of which has been provided to and reviewed by Lessee and (v) Amended
and Restated Credit Agreement entered into by Lessor and dated as of December 3, 2015 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “2015 Credit Agreement” and, together
with the 2014 Credit Agreement, the “Credit Agreements”), a copy of which has been provided to and reviewed by Lessee. The Credit Agreements and the Note Purchase Agreements are referred to herein as the “Debt
Agreements”. 
 Lessee hereby covenants and agrees with Lessor that, during the term of the 2009 Note Purchase Agreement, Lessee
will comply with the covenants set forth in Sections 9.08 (Material Project Documents) (to the extent that Lessee is a party to any Material Project Documents, as defined in the 2009 Note Purchase Agreement), 10.04 (Terrorism Sanctions
Regulations), 10.10 (Sale of Assets, Etc.), 10.11 (Sale or Discount of Receivables), 10.12 (Amendments to Organizational Documents), 10.16 (Project Documents) and 10.17 (Regulation) of the 2009 Note Purchase
Agreement. 
 Lessee hereby covenants and agrees with Lessor that, during the term of the 2010 Note Purchase Agreement, Lessee will comply
with the covenants set forth in Sections 9.8 (Material Project Documents) (to the extent that Lessee is a party to any Material Project Documents, as defined in the 2010 Note Purchase Agreement), 10.4 (Terrorism Sanctions Regulations),
10.10 (Sale of Assets, Etc.), 10.11 (Sale or Discount of Receivables), 10.12 (Amendments to Organizational Documents), 10.16 (Project Documents) and 10.17 (Regulation) of the 2010 Note Purchase Agreement. 

Lessee hereby covenants and agrees with Lessor that, during the term of the 2015 Note Purchase Agreement, Lessee will comply with the
covenants set forth in Sections 9.8 (Material Project Documents) (to the extent that Lessee is a party to any Material Project Documents, as defined in the 2015 Note Purchase Agreement), 10.4 (Terrorism Sanctions Regulations), 10.6
(Sale of Assets, Etc.), 10.9 (Regulation), 10.10 (Amendments to Organizational Documents) and 10.11 (Project Documents) of the 2015 Note Purchase Agreement. 

Lessee hereby agrees with Lessor that, to the extent not otherwise covered by the terms of this Agreement, (i) Lessee hereby makes the
same representations and warranties to Lessor as Lessor makes to the Lender (as defined in the 2014 Credit Agreement) in Sections 6.3 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
(Disclosure), 6.5 (Financial Condition; Financial Instruments), 6.6 (Compliance with Laws, Other Instruments, Etc.), 6.7 (Governmental Authorizations, Etc.), 6.8
(Litigation; Observance of Agreements, Statutes and Orders), 6.9 (Taxes), 6.10 (Title to Property; Leases), 6.11 (Insurance), 6.12 (Licenses, Permits, Etc.; Material Project Documentation), 6.16 (Foreign Assets
and Control Regulations, Etc.), 6.17 (Status under Certain Statutes), 6.18 (Environmental Matters), 6.19 (Force Majeure Events; Employees) and 6.20 (Collateral) of the 2014 Credit Agreement (or equivalent provisions),
to the extent that such representations and warranties relate to (x) Lessee, whether in its capacity as Lessee or otherwise, including, without limitation, Lessee’s status or operations as a public utility, or (y) Lessee’s
ownership of the Stanton/Brady/Celeste Assets on or before the date hereof, and (ii) Lessee hereby covenants and agrees with Lessor that, during the term of the 2014 Credit Agreement, Lessee will comply with the covenants set forth in Sections
7.10 (Material Project Documents) (to the extent that Lessee is a party to any Material Project Documents, as defined in the 2014 Credit Agreement), 8.4 (Terrorism Sanctions Regulations), 8.10 (Sale of Assets, Etc.), 8.11
(Sale or Discount of Receivables), 8.12 (Amendments to Organizational Documents), 8.16 (Material Projects Documents) and 8.17 (Regulation) of the 2014 Credit Agreement (or equivalent provisions). 

Lessee hereby covenants and agrees with Lessor that, during the term of the 2015 Credit Agreement, Lessee will comply with the covenants set
forth in Sections 6.10 (Material Project Documents) (to the extent that Lessee is a party to any Material Project Documents, as defined in the 2015 Credit Agreement), 7.4 (Terrorism Sanctions Regulations), 7.10 (Sale of Assets,
Etc.), 7.11 (Sale or Discount of Receivables), 7.12 (Amendments to Organizational Documents), 7.16 (Project Documents) and 7.17 (Regulation) of the 2015 Credit Agreement. 

Lessee may not lease, or agree or otherwise commit to lease, any transmission or distribution facilities other than pursuant to a Lease.
Further, Lessee shall not permit Persons other than Hunt Family Members to acquire any interest in the Lessee, directly or indirectly, in a manner that would result in a Change of Control of Lessee. 

The Parties agree to amend, alter or supplement this Section 4.13 from time to time to give effect to the obligations under Lessor’s
then-current credit arrangements, including the credit arrangements of any successor to Lessor’s interest in this Agreement. Provided that the obligations or restrictions on Lessee are not materially increased from those provided for by
Lessor’s then-current credit arrangements, such an amendment to this Agreement shall become automatically effective upon the delivery by Lessor to Lessee of a revised version of Section 4.13 and copies of the pertinent portions of the
applicable credit arrangements referenced therein. 
 ARTICLE V 

LESSOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS 

Lessor hereby represents, warrants and covenants as follows: 

5.1. Lessor’s Authority. Lessor has all requisite power and authority to execute and deliver
this Agreement and to perform its obligations hereunder. Lessor has taken all action necessary to execute and deliver this Agreement and to perform its obligations hereunder, and no other action or proceeding on the part of Lessor is necessary to
authorize this Agreement. This Agreement constitutes the legally valid and binding obligation of Lessor, enforceable against 

  
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Lessor in accordance with its terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Applicable Laws affecting the
enforcement of creditors’ rights generally and equitable principles. 
 5.2. Liens and Tenants. Lessor
represents that Lessor has good and valid title to the Stanton/Brady/Celeste Assets, there are no unrecorded liens, encumbrances, leases, mortgages, deeds of trust (except as disclosed to Lessee in writing or as arise by operation of law), or other
exceptions (collectively, “Liens”) arising as a result of any acts, or omissions to act, of Lessor by, through or under Lessor to Lessor’s right, title or interest in the Stanton/Brady/Celeste Assets other than any such of the
foregoing that does not materially impair the Lessee’s use of the Stanton/Brady/Celeste Assets, and, to Lessor’s knowledge, there exist no rights or interests of any third party relating to the Stanton/Brady/Celeste Assets that are not
contemplated herein. Except for Permitted Liens or as may be disclosed in the applicable real property records in the State of Texas, or as disclosed by Lessor in writing to Lessee, Lessor represents that there are no Liens encumbering all or any
portion of the Stanton/Brady/Celeste Assets. Lessor shall fully cooperate and assist Lessee, at no out-of-pocket expense to Lessor, in efforts to obtain a subordination and non-disturbance agreement from each party that holds a Lien that might
reasonably be expected to interfere in any material respect with Lessee’s rights under this Agreement. Notwithstanding the foregoing, Lessor and its affiliates shall have the right to incur Permitted Liens encumbering the Stanton/Brady/Celeste
Assets or any component thereof solely for the benefit of Lessor in connection with any existing or future financing or refinancing pursuant to which the Stanton/Brady/Celeste Assets (or any component thereof) is pledged as collateral and Lessee
agrees to enter into such acknowledgments and agreements in respect thereof with the lenders, or a trustee or agent for the lenders as the Lessor may reasonably request. 

5.3. Condition of Assets. Lessor has not taken any action or failed to take any action that would
cause the Stanton/Brady/Celeste Assets not to be in good operating condition and repair, ordinary wear and tear excepted, or adequate for the uses to which it is being put. 

5.4. Requirements of Governmental Agencies. Lessor shall assist and fully cooperate with Lessee, in
complying with or obtaining any material land use permits and approvals, building permits, environmental impact reviews or any other approvals reasonably required for the maintenance or operation of the Stanton/Brady/Celeste Assets, including
execution of applications for such approvals, and including participating in any appeals or regulatory proceedings respecting the Stanton/Brady/Celeste Assets at Lessee’s cost and expense, if requested by Lessee. 

5.5. Hazardous Materials. Lessor shall conduct its activities in respect of the
Stanton/Brady/Celeste Assets in compliance in all material respects with applicable Environmental Laws. 
 5.6.
Litigation. If Lessor becomes aware of any actions, claims or other legal or administrative proceedings that are pending, threatened or anticipated with respect to, or which could materially and adversely affect,
the Stanton/Brady/Celeste Assets, Lessor shall promptly deliver notice thereof to Lessee. 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 5.7. Records. Lessor shall maintain proper books of record and accounts in
conformity with GAAP and all applicable Regulatory Authorities and each other governmental agency or authority having legal or regulatory jurisdiction over Lessor. 

5.8. Limitation. EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN THIS ARTICLE V, LESSOR
(A) MAKES NO AND EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO (I) TITLE TO THE STANTON/BRADY/CELESTE ASSETS OR ANY PORTION THEREOF, (II) ANY ESTIMATES OF THE VALUE OF THE STANTON/BRADY/CELESTE ASSETS
OR FUTURE REVENUES THAT MIGHT BE GENERATED BY THE STANTON/BRADY/CELESTE ASSETS, (III) THE MAINTENANCE, REPAIR, CONDITION, QUALITY, SUITABILITY, DESIGN OR MARKETABILITY OF THE STANTON/BRADY/CELESTE ASSETS, (IV) INFRINGEMENT OF ANY
INTELLECTUAL PROPERTY RIGHT OR (V) ANY OTHER MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE OR COMMUNICATED TO LESSEE OR ITS AFFILIATES, OR ITS OR THEIR EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR PRESENTATION RELATING THERETO, AND (B) FURTHER DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR CONFORMITY
TO MODELS OR SAMPLES OF MATERIALS OF ANY PORTION OF THE STANTON/BRADY/CELESTE ASSETS, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT THE STANTON/BRADY/CELESTE ASSETS ARE BEING LEASED “AS IS, WHERE IS,” WITH ALL FAULTS
AND DEFECTS, AND THAT LESSEE HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS LESSEE DEEMS APPROPRIATE. 
 ARTICLE VI 

LOSS AND DAMAGE; INSURANCE 

6.1. Loss and Damage to the Stanton/Brady/Celeste Assets. 

(a) In the event of any damage or loss to any component of the Stanton/Brady/Celeste Assets, Lessee shall promptly repair or replace such
component to the standards required by Section 4.1 (regardless of whether such repair or replacement constitutes a Repair or a Footprint Project). Notwithstanding anything to the contrary contained in this Agreement, any such repaired or
replaced component will immediately become part of the Stanton/Brady/Celeste Assets owned by Lessor and the cost of any repair or replacement shall be borne as described in Sections 6.1(b)-(d) below. 

(b) If such repair or replacement constitutes a Repair, the cost of repairing or replacing such damage or loss, whether actually covered in
whole or in part by insurance, shall be the responsibility of Lessee. In such circumstance, unless otherwise agreed by the Parties, (i) if the damage or loss is covered by insurance, Lessee shall be responsible for payment of any deductible,
and (ii) any damage or loss not covered by insurance (exclusive of any deductible) shall be the responsibility of Lessee. If the sum of such deductible and insurance proceeds exceeds the cost of such Repair, then Lessee will retain such excess.

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 (c) If such repair or replacement constitutes a Footprint Project, then, as long as the related
costs have been included in a CapEx Budget, the cost of repairing or replacing such damage or loss, whether actually covered in whole or in part by insurance, shall be the responsibility of Lessor. In such circumstance, unless otherwise agreed by
the Parties, (i) if the damage or loss is covered by insurance, Lessor shall be responsible for payment of any deductible, and (ii) any damage or loss not covered by insurance (exclusive of any deductible) shall be the responsibility of
Lessor. If the sum of such deductible and insurance proceeds exceeds the cost of such Footprint Project, then such excess will first reduce Lessor’s obligation to fund the deductible hereunder, and any excess thereafter will be retained by
Lessor. If such repair or replacement constitutes a Footprint Project that is not included in a CapEx Budget, the provisions of Article X shall apply. 

(d) Lessee shall be solely responsible for all costs of repairing or replacing any damaged property and equipment that is not part of the
Stanton/Brady/Celeste Assets and owned by Lessee, whether covered by Lessee’s insurance under Section 6.2 or otherwise. Nothing in this provision shall preclude Lessee from seeking recovery of such costs in a rate proceeding at the PUCT.

 (e) If Lessor funds Lessee’s Personal Property pursuant to Section 10.1(b) of this Agreement, then all such funded Personal
Property will be treated as a Footprint Project, and not a Repair, for purposes of this Section 6.1. 
 6.2.
Insurance. Lessee will maintain, with financially sound and reputable insurers, insurance with respect to its business and properties and the Stanton/Brady/Celeste Assets against such casualties and contingencies,
of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the
same or a similar business and similarly situated, but in no event less than the insurance set forth in this Section 6.2 and Exhibit C. 

(a) Lessee shall procure at its own expense and maintain in full force and effect at all times throughout the term of this insurance policies
with insurance companies rated A-, 8 or higher by A.M. Best or acceptable to Lessor if not so rated, and authorized to do business in the State of Texas. 

(b) Lessor may at any time amend the requirements and approved insurance companies described in this Section 6.2 or
Exhibit C due to (i) new information not previously known by Lessor prior to the date of this Agreement or (ii) changed circumstances after the date of this Agreement, which in the reasonable judgment of Lessor either
renders a required coverage to be materially inadequate or materially reduces the financial ability of the approved insurance companies to pay claims. 

(c) On the first Business Day of each year, and promptly at such other times as Lessor may reasonably request, Lessee shall furnish Lessor
with approved certification of all required insurance. Such certification shall be executed by each insurer or by an authorized representative of each insurer where it is not practical for such insurer to execute the certificate itself. Such
certification shall identify underwriters, the type of insurance, the insurance limits, 

  
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and the policy term, and shall specifically list the special provisions enumerated for such insurance required by this Section 6.2 and Exhibit C. Upon request, Lessee will promptly
furnish Lessor with copies of all insurance certificates, binders, and cover notes or other evidence of such insurance relating to the Stanton/Brady/Celeste Assets. 

(d) Concurrently with the furnishing of the certification referred to in Section 6.2(c) and on an annual basis thereafter, Lessee shall
furnish Lessor with a certificate, signed by an officer of Lessee, stating that all premiums then due have been paid and that the insurance then carried or to be renewed is in accordance with the terms of this Section 6.2. and Exhibit C.

 (e) In the event Lessee fails to take out or maintain the full insurance coverage required by this Section 6.2 and Exhibit C,
Lessor, upon thirty (30) days’ prior notice (unless the aforementioned insurance would lapse within such period, in which event notice should be given as soon as reasonably possible) to Lessee of any such failure, may (but shall not be
obligated to) take out the required policies of insurance and pay the premiums on the same. All amounts so advanced thereof by Lessor shall become an additional obligation of Lessee to Lessor, and Lessee shall forthwith pay such amounts to Lessor.

 (f) No provision of this Section 6.2 or Exhibit C or any other provision of this Agreement shall impose on Lessor any duty or
obligation to verify the existence or adequacy of the insurance coverage maintained by Lessee (nor shall any action taken, or not taken, by Lessor to verify the existence or adequacy of the insurance coverage maintained by Lessee affect the
obligations of Lessee pursuant to this Section 6.2), nor shall Lessor be responsible for any representations or warranties made by or on behalf of Lessee to any insurance company or underwriter. 

ARTICLE VII 
 REPORTING

 7.1. Financing Arrangements. 

(a) Lessee understands that Lessor, or an affiliate thereof, has raised equity and/or debt that may be secured by the Stanton/Brady/Celeste
Assets and this Agreement and that Lessor or its affiliates have reporting obligations in connection with such arrangements, including obligations to provide financial statements prepared in accordance with GAAP, to prepare an annual strategic plan
and to update such annual strategic plan in the event of certain material deviations therefrom. Lessee understands that Lessor relies on Lessee in order to comply with such obligations. From time to time, Lessor or an affiliate thereof may enter
into additional arrangements that impose similar obligations. 
 (b) Accordingly, Lessee agrees to provide Lessor in a timely manner: 

(i) Audited year-end financial statements and quarterly unaudited financial statements for the first three quarters of each
year; and 
 (ii) Such acknowledgements, certificates, permits, licenses, instruments, documents and other information as
Lessor may reasonably request from time to time in connection with, or to enable Lessor and its affiliates to comply with any such debt or equity financing arrangements or with Applicable Law. 

  
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 The Parties will negotiate in good faith the time frames during which Lessee will provide such information, with
the intention that Lessee provide such information in a manner that is not unduly burdensome but that also allows Lessor sufficient time to comply with its reporting obligations. 

(c) Lessee agrees that the unaudited interim financial statements provided pursuant to this Section 7.1 will be SAS 100 reviewed, and
Lessee agrees to use commercially reasonable efforts to cause its auditors to consent to the inclusion of their opinion regarding Lessee’s financial statements in filings with the SEC made by Lessor or an affiliate of Lessor (collectively, the
“SEC Reporting Requirements”). Lessor may also request that Lessee provide evidence of a SAS 100 review from Lessee’s auditors with respect to any unaudited interim financial statements included in any such filing. In addition
to including Lessee’s financial statements in the SEC filings of Lessor or an affiliate thereof, Lessor shall have the right to share any such financial statements with any party entitled to review such financial statements pursuant to the
terms of any Debt Agreement. 
 (d) Lessee represents, warrants and covenants that (i) the financial statements provided pursuant to
this Section 7.1 will fairly present in all material respects the financial condition, results of operations and cash flows of Lessee as of, and for, the periods presented, and (ii) Lessee will endeavor to cause such financial statements
to comply with any Applicable Laws, rules or regulations that Lessee and Lessor conclude in good faith are applicable to such financial statements by virtue of their inclusion in the securities law filings of Lessor or an affiliate of Lessor. 

(e) Lessee agrees that, in connection with any underwritten offering of the securities of Lessor or any affiliate thereof, Lessee will use
commercially reasonable efforts to cause its auditors, at Lessor’s cost, to provide a comfort letter (or its equivalent) to such underwriters, if requested by Lessor. 

(f) Lessee will also cooperate with Lessor to enable Lessor to satisfy its obligations in respect of annual strategic plans, including
providing Lessor with requested information in advance of the due date of such annual strategic plan and keeping Lessor apprised of deviations in capital expenditures, construction activity or revenues of Lessee from amounts that were originally
provided by Lessee in preparing such annual strategic plan. 
 (g) Lessee shall, at the earliest practicable time, advise Lessor if Lessee
will be unable to meet the reporting requirements set forth herein in a timely manner and to reasonably cooperate with Lessor to remedy the effects of such non-compliance. 

7.2. Public Company and Regulatory Information and Cooperation. 

(a) Lessee agrees to cooperate with Lessor when Lessor or an affiliate provides estimates to analysts and or investors regarding Lessor’s
expectations of its future operating results (including capital expenditures) and to cooperate with Lessor with respect to analysts and investors to the extent such expectations change in any material respect. 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 (b) Lessee and Lessor agree to reasonably cooperate to ensure that, to the extent they require
information from the other Party in order (i) to prepare their financial statements, (ii) to obtain audits of those financial statements and, if required, of their internal control over financial reporting, (iii) to respond to
comments of the SEC on such financial statements or statements related to internal control over financial reporting or disclosure controls and procedures, or (iv) to ensure the efficacy of their internal controls or disclosure controls and
procedures, they will reasonably cooperate in order to ensure that each Party is able to meet its obligations in respect thereof. 
 (c)
Lessee agrees to promptly notify Lessor of or provide to Lessor, as applicable, (i) any material communication, written or otherwise, submitted to Lessee by its auditors, including, but not limited to an audit response letter, accountant’s
management letter or other written report submitted to Lessee by its accountants or any Regulatory Authority in connection with an annual or interim audit of Lessee’s books, (ii) any material correspondence with, reports of or reports to
any Regulatory Authority with respect to the Stanton/Brady/Celeste Assets and (iii) any notices of violations of Applicable Law with respect to the Stanton/Brady/Celeste Assets, in each case taking into account Lessor’s and any of its
affiliates’ reporting obligations with the SEC. 
 (d) Lessor agrees to inform Lessee of the time periods in which each of the items
identified in this Section 7.2 will be required by providing written notice thereof to Lessee. Lessee shall, at the earliest practicable time, advise Lessor if Lessee will be unable to meet the reporting requirements set forth herein in a
timely manner and reasonably cooperate with Lessor to remedy the effects of such non-compliance. 
 (e) If Lessor identifies additional
matters with respect to which Lessee input, assistance or information is required in order for Lessor and its affiliates to comply with any applicable securities laws, the rules or regulations of any exchange on which the securities of such
affiliate are traded or any similar laws, rules or regulations, the Parties agree to cooperate and negotiate in good faith in order to determine the manner in which Lessee can provide such input, assistance or information in a manner that positions
Lessor and its affiliates to comply in a timely manner with such laws, rules or regulations, as efficiently as is feasible so as to minimize the burden that the provision of such input, assistance or information imposes on Lessee. 

7.3. Mutual Obligations. Each Party shall as promptly as reasonably practicable furnish or cause to be furnished
to the other Party, upon request from such Party, such information as may be required to enable such Party to file any reports required to be filed with any governmental or Regulatory Authority due to such Party’s ownership interest in or
operation and control of the Stanton/Brady/Celeste Assets, as applicable. 
 ARTICLE VIII 

ASSIGNMENT 
 This Agreement
shall not be assignable by either Party, nor shall the Stanton/Brady/Celeste Assets or any part thereof be subleased by Lessee (except in a manner 

  
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consistent with Section 1.2(b)), except with the prior written consent of the other Party and the prior approval of any Regulatory Authority whose approval is required for the effectiveness
of such assignment or sublease. For purposes of this Article VIII, an “assignment” by Lessee shall mean and include, in addition to any direct transfer by Lessee to a third party of all or any part of Lessee’s rights, estate or
interests under this Agreement, any direct or indirect, voluntary or involuntary transfer of or encumbrance on all or any part of Lessee’s rights, estate or interests under this Agreement (i) by operation of law and/or (ii) by direct
or collateral transfer of all or any part of the legal or beneficial ownership interest in Lessee by merger, consolidation or otherwise, provided that, in the case of clause (ii), any such transaction or transactions will only constitute an
assignment hereunder to the extent they result (whether in one or a series of transactions) in a Change of Control. Notwithstanding the foregoing, Lessor shall have the right, without Lessee’s consent but subject to obtaining regulatory
approval as described in the foregoing sentence, (a) to assign, pledge or grant a security interest in any or all of its interest in the Agreement to a lender or lenders, or a trustee acting on behalf of such lenders, in connection with a
financing or refinancing in which such interest is pledged as collateral, and Lessee agrees to enter into such acknowledgments and agreements in respect thereof as the Lessor may reasonably request and (b) to assign its interest in this
Agreement to a successor owner of the Stanton/Brady/Celeste Assets. 
 ARTICLE IX 

DEFAULT 
 9.1.
Lessee Default.  
 (a) Subject to Section 9.3, Lessee shall be in default in the event of any of
the following: 
 (i) Except as provided in Section 9.1(b) , Lessee’s failure to make any payment of Rent when due;

 (ii) Lessee (A) is generally not paying, or admits in writing its inability to pay, its debts as they become due,
(B) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction, (C) makes an assignment for the benefit of its creditors, (D) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property, (E) is adjudicated as insolvent or to be liquidated, or (F) takes any action for the purpose of any of the foregoing; 

(iii) A court or a Regulatory Authority of competent jurisdiction enters an order appointing, without consent by Lessee, a
custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other
petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of Lessee or any such petition shall be filed against Lessee and such
petition shall not be dismissed within 90 days; 

  
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 (iv) Any representation or warranty made by Lessee herein shall prove to have
been inaccurate in any material respect at the time made (unless any representation or warranty is already qualified by materiality or a similar qualification, in which case such representation or warranty shall be accurate in all respects); 

(v) A final judgment or judgments for the payment of money aggregating in excess of $1,000,000 are rendered against Lessee and
which judgments are not, within 60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; or 

(vi) Lessee shall have breached or failed to comply in any material respect with any other covenant or agreement contained
herein (unless any covenant or agreement is already qualified by materiality or a similar qualification, in which case such covenant or agreement shall have been complied with in all respects). 

(b) Notwithstanding Section 9.1(a)(i), Lessee’s failure to pay Rent when due shall not constitute an Event of Default if
(i) such failure is due to unforeseeable circumstances arising from a physical event beyond the control of the Lessee, including the incurrence of costs and expenditures as a result of such an event that are materially in excess of budgeted
costs and expenditures or an unforeseen material decline in electricity usage as a result of such event and (ii) such failure is cured within ninety (90) days after the date such Rent was due through Lessee’s payment of the entire
amount of such unpaid Rent, plus interest thereon at a rate equal to six percent (6%) per annum or the maximum rate allowed by Applicable Law, whichever is lesser, from the date such Rent was originally due until the date of payment. 

9.2. Lessor Default. Subject to Section 9.3, Lessor shall be in default in the event any
representation or warranty made by Lessor herein shall prove to have been inaccurate in any material respect at the time made, or in the event Lessor breaches or fails to comply in any material respect with any covenant or agreement contained herein
(unless any representation, warranty, covenant or agreement is already qualified by materiality or a similar qualification, in which case (a) such representation or warranty shall be accurate in all respects and (b) such covenant or
agreement shall have been complied with in all respects). 
 9.3. Right to Cure. If a Party (the
“Defaulting Party”) defaults pursuant to an Event of Default, such Defaulting Party shall not be in default of the terms of this Agreement if (other than in the event of a default described in Sections 9.1(a)(i),
9.1(a)(ii) and/or 9.1(a)(iii) above, none of which will be subject to a notice and cure period as provided below), (a) in the case of a Monetary Default (other than a Rent payment default pursuant to Section 9.1(a)(i), which shall not
be subject to a notice and cure period except as set forth in Section 9.1(b)), the Defaulting Party pays the past due amount within thirty (30) days of receiving a Notice of Default from the other Party (the “Non-Defaulting
Party”), and (b) in the case of a Non-Monetary Default, the Event of Default is cured within forty-five (45) days of receiving the Notice of Default; provided that, if the nature of the Non-Monetary Default requires, in the
exercise of commercially reasonable diligence, more than forty-five (45) days to cure then the Defaulting Party shall not be 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
in default as long as it commences performance of the cure within forty-five (45) days and thereafter completes such cure with commercially reasonable diligence within ninety (90) days
of receiving such Notice of Default. 
 9.4. Remedies. 

(a) Should an Event of Default remain uncured by the Defaulting Party, the Non-Defaulting Party shall have and shall be entitled to exercise
the remedies provided in this Section 9.4 and any and all other remedies available to it at law or in equity, all of which remedies shall be cumulative; provided that the exercise of any remedies hereunder shall be subject to PUCT and
other required regulatory approvals to the extent applicable and the provisions of Section 2.2. 
 (b) In no way limiting the
provisions of Section 9.4(a), in the case of an Event of Default of Lessee, Lessor shall have the right to (i) terminate the Agreement upon notice to Lessee, and recover from Lessee all damages to which Lessor is entitled under Applicable
Laws, (ii) terminate Lessee’s right to use and operate the Stanton/Brady/Celeste Assets (other than leasehold improvements pursuant to Section 10.3) while keeping this Agreement in effect, and recover from Lessee all damages to which
Lessor is entitled under Applicable Laws, and (iii) take reasonable action to cure Lessee’s default at Lessee’s expense; provided that, in the event of a violation of Applicable Laws by Lessee, an emergency or government or
regulatory action in respect of which Lessor, in its reasonable discretion, determines immediate action is necessary, Lessor shall have the right to step in and take such action on behalf of Lessee at Lessee’s cost and expense immediately upon
giving notice to Lessee, notwithstanding any applicable cure period. 
 (c) Any amounts recovered by Lessor from Lessee in the event of a
default shall, to the maximum extent permissible under Applicable Laws, be deemed to be in respect of past or future Rent owing under this Agreement. 

ARTICLE X 
 CAPITAL
EXPENDITURES 
 10.1. Capital Expenditures Generally.  

(a) Lessee has provided to Lessor in the CapEx Budget the approximate amounts of Capital Expenditures that Lessee expects will be needed for
purposes of funding Footprint Projects in each Lease Year through 2018 (assuming the renewal of this Agreement pursuant to Section 2.1). On or before October 15 of each calendar year, Lessee shall review and revise the CapEx Budget on a
rolling three-year basis (which shall include, if applicable, any year in such three-year period following the end of the then-current Term and assume the renewal of this Agreement pursuant to Section 2.1), taking into account any changed
circumstances that (i) make it no longer feasible to incur one or more of the costs reflected on the prevailing CapEx Budget, (ii) make it necessary to amend the nature or amounts reflected for a particular Footprint Project or
(iii) dictate that additional Footprint Projects be added (such budget, as so updated and revised, is referred to herein as the “CapEx Budget”). Lessee agrees to revise the CapEx Budget to include any Footprint Projects
(x) required by Regulatory Authorities or (y) reasonably necessary to satisfy Lessee’s obligation as a regulated utility to serve its customers or to maintain the safety or reliability of the Stanton/Brady/Celeste Assets and the
Stanton Transmission Loop Assets. 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
Capital Expenditures included in a CapEx Budget will be included based on the date such Capital Expenditures are to be incurred (notwithstanding that Incremental CapEx and Lessee CapEx are
otherwise measured under this Agreement based on when the assets developed with such Capital Expenditures are placed in service, and not when they are incurred). 

(b) If requested by Lessor, Lessee will also provide an estimate of any Capital Expenditures that Lessee expects for purposes of funding
Personal Property related to the Stanton/Brady/Celeste Assets and the Stanton Transmission Loop Assets. If Lessor and Lessee agree, Lessor will fund such Capital Expenditures pursuant to this Agreement, through a loan or through a separate lease.
Amounts Lessor provides pursuant to this Agreement to fund any such Personal Property will be treated in a manner similar to any amounts Lessor provides to fund Footprint Projects for purposes of Section 3.2 and elsewhere herein. Lessee will
cause any such Personal Property to be titled in Lessor’s name and will reasonably cooperate with Lessor in order to enable any secured lender of Lessor or any secured lender of an affiliate of Lessor to perfect its security interest in any
such Personal Property. In the alternative, Lessor may elect to fund such Capital Expenditures through a TRS or to loan (or cause such TRS to loan) Lessee the cash to acquire any such Personal Property in a transaction in which Lessor or a TRS may
retain a security interest in such Personal Property. In such case the Parties shall negotiate in good faith the terms under which Lessor or such TRS shall fund any such Personal Property, including the terms of any lease between Lessee and the TRS
or other financing arrangements provided by the Lessor or the TRS. 
 10.2. Capital Expenditures Funded by
Lessor. Lessor agrees to fund any Footprint Projects contained in the CapEx Budget (as revised from time to time). Lessor’s obligation to fund Footprint Projects pursuant to this Section 10.2 shall include any costs
associated with such Footprint Projects that Lessee is not allowed to recover through its PUCT-approved rates. Any Footprint Projects funded by Lessor under this Section 10.2 shall be deemed to be part of the Stanton/Brady/Celeste Assets upon
completion. 
 10.3. Capital Expenditures Funded by Lessee. Except as set forth in this Section 10.3,
Lessee may not fund any Footprint Projects. In the event Lessor fails to fund any Footprint Projects, Lessee may at its sole discretion fund the needed capital expenditures (and Lessee shall be entitled to applicable damages, if any, as a result of
funding any such Footprint Projects); provided that, in such circumstance, Lessee may fund Severable Footprint Projects without restriction under this Section 10.3 but may only fund Nonseverable Footprint Projects which are required in
order to comply with Applicable Law or which are required by any Regulatory Authority. Subject to Section 10.5, any Footprint Projects funded by Lessee under this Section 10.3 shall not be considered part of the Stanton/Brady/Celeste
Assets or the Stanton Transmission Loop Assets for purposes of this Agreement; provided however, that any part of the Stanton/Brady/Celeste Assets and the Stanton Transmission Loop Assets that is built with CIAC funds shall be
considered a leasehold improvement that is part of the Stanton/Brady/Celeste Assets and reverts to the Lessor upon termination of this Agreement without further payment from Lessor to Lessee under Section 2.3. 

10.4. Footprint Project Construction Activities. Lessee will either use its personnel, or either Lessee or Lessor
will contract with third parties, to construct Footprint Projects. Lessee shall be responsible for the oversight of such construction activities, regardless of whether the 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
Footprint Project is funded by Lessor or Lessee. Lessee’s construction activities and oversight shall be intended to ensure that such construction is performed in a manner consistent with
Good Utility Practice and Applicable Law and does not adversely affect the reliability and safety of the Stanton/Brady/Celeste Assets and the Stanton Transmission Loop Assets or the ERCOT electric grid. In connection therewith, Lessor will reimburse
Lessee for all Project Management Costs that Lessee incurs in connection with constructing such Footprint Project, provided that any costs and expenses of Lessee under this Section 10.4 must be included in any CapEx Budget submitted by
Lessee under Section 10.1 or approved by Lessor to qualify for reimbursement by Lessor hereunder. 
 10.5. Ownership of
Footprint Projects. 
 (a) Each Footprint Project shall be owned by the Party that funded the Capital Expenditures used to
construct such Footprint Project; provided, however, that any part of the Stanton/Brady/Celeste Assets or the Stanton Transmission Loop Assets that is built with CIAC funds shall be considered a leasehold improvement that is part of
the Stanton/Brady/Celeste Assets and shall revert to the Lessor upon termination of this Agreement without further payment from Lessor to Lessee under Section 2.3. 

(b) Upon the expiration or termination of this Agreement, Lessor shall have the right (but not the obligation) to purchase, subject to
required regulatory approvals, any Nonseverable Footprint Projects or Severable Footprint Projects owned by Lessee at the greater of (i) net book value plus ten percent (10%) and (ii) the fair market value thereof as determined by
mutual agreement of Lessor and Lessee. If the Parties fail to agree on the amount of the purchase price, the purchase price shall be submitted to arbitration in accordance with Section 13.7, pursuant to which the Arbitration Panel shall be
empowered to determine the amount of the purchase price, based on submissions by each of the Lessee and the Lessor. Lessee shall be entitled to remove any Severable Footprint Projects owned by Lessee upon the expiration or termination of this
Agreement in the event such Severable Footprint Projects are not purchased by Lessor, subject to any required regulatory approvals. 

10.6. Asset Acquisitions. Lessee and Lessor will cooperate in good faith to ensure that all Stanton/Brady/Celeste
Assets (including Footprint Projects relating to the Stanton Transmission Loop Assets) are acquired in Lessor’s name or are acquired by Lessee and subsequently transferred to Lessor. In connection therewith, Lessee agrees (a) to transfer
to Lessor all previously acquired Stanton/Brady/Celeste Assets (including Footprint Projects relating to the Stanton Transmission Loop Assets), (b) that any future-acquired Stanton/Brady/Celeste Assets will be deemed automatically transferred
to Lessor, (c) to take reasonable actions as are necessary and appropriate to document the transfer of any such Stanton/Brady/Celeste Assets (including Footprint Projects relating to the Stanton Transmission Loop Assets) to Lessor and, if
applicable, to memorialize the security interest in such Stanton/Brady/Celeste Assets (including Footprint Projects relating to the Stanton Transmission Loop Assets) required to be granted pursuant to the terms of the Debt Agreements, including
through the delivery and recordation of mortgages, deeds of trust or UCC financing statements, and (d) to take reasonable steps to record the transfer and such security interest in the records of the applicable county or other applicable locale
in which the Stanton/Brady/Celeste Assets (including Footprint Projects relating to the Stanton Transmission Loop Assets) are located. 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 10.7. Reimbursements. From time to time, Lessee may enter into
interconnect or similar agreements that obligate the counterparty to such agreements to reimburse Lessee for Capital Expenditures in certain circumstances. Such reimbursement obligation may, in some circumstances, be accompanied by additional
security such as a parent guaranty or a letter of credit. If and to the extent that (a) Lessor funds Capital Expenditures that are used for the construction or development pursuant to any of these interconnect agreements, and (b) Lessee
becomes entitled to assert any reimbursement or other rights pursuant to any such interconnect agreements, then, unless Lessor agrees otherwise, Lessee will enforce such reimbursement or other rights and will in turn promptly reimburse Lessor for
the amount of related Capital Expenditures that Lessor has funded pursuant hereto. Lessee further agrees to reimburse Lessor for other Capital Expenditures that Lessor has funded pursuant to this Agreement to the extent required by the Policies and
Procedures. 
 ARTICLE XI 

REGULATORY COOPERATION 

11.1. Jurisdiction. The Parties recognize that (i) the Stanton/Brady/Celeste Assets and the operation thereof
are subject to the jurisdiction of the PUCT and to certain reliability and safety requirements of ERCOT, NERC and TRE, and (ii) Lessee holds the CCNs for operation of the Stanton/Brady/Celeste Assets. The Parties agree that, as the lessee
hereunder, as operator of the Stanton/Brady/Celeste Assets and as the holder of the CCNs, Lessee shall be responsible for compliance with all regulatory requirements related to the Stanton/Brady/Celeste Assets, including but not limited to, taking
all actions reasonably necessary or advisable to comply with such requirements; preparing and filing all necessary notices, reports, applications, and other materials with the PUCT, ERCOT, TRE and NERC; and initiating, prosecuting, defending or
participating in any administrative or judicial proceeding reasonably necessary or advisable to operate the Stanton/Brady/Celeste Assets in an economical and efficient manner. Lessee shall consult with Lessor prior to initiating any rate proceeding
with the PUCT to change the rates Lessee can lawfully charge, provided that, with or without Lessor consent, Lessee shall be authorized to initiate any such rate proceeding. Upon Lessor’s request, Lessee shall file a rate proceeding
before the PUCT; provided that, Lessor shall be responsible for reimbursing Lessee for all costs associated with prosecution of such proceeding requested by Lessor to the extent that such costs are not recoverable in Lessee’s
PUCT-approved rates. 
 11.2. Cooperation. The Parties agree that during the term of this Agreement they will
cooperate to assure compliance with all Applicable Laws or other lawful requests of any Regulatory Authorities that relate to the Stanton/Brady/Celeste Assets and Lessee’s obligations as the holder of the CCNs and will provide such information
to such Regulatory Authorities as the other Party or such Regulatory Authorities may reasonably request in connection therewith. Lessor further agrees to use its best efforts to cooperate and promptly respond to any lawful requests from Lessee
relating to Lessee’s efforts to comply with all regulatory requirements or to participate in any necessary or advisable legal proceedings, whether judicial or administrative. Each Party shall bear its own costs in complying with this paragraph.

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 ARTICLE XII 

INDEMNITY 
 12.1.
General Indemnity. EACH PARTY (THE “INDEMNIFYING PARTY”) SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS THE OTHER PARTY AND THE OTHER PARTY’S RELATED PERSONS (EACH, AN “INDEMNIFIED
PARTY”) FROM AND AGAINST ANY AND ALL CLAIMS, LITIGATION, ACTIONS, PROCEEDINGS, INVESTIGATIONS, JUDGMENTS, LOSSES, DAMAGES, LIABILITIES, OBLIGATIONS, COSTS AND EXPENSES, INCLUDING ATTORNEYS’, INVESTIGATORS’ AND CONSULTING FEES,
COURT COSTS AND LITIGATION EXPENSES (COLLECTIVELY, “CLAIMS”) SUFFERED OR INCURRED BY SUCH INDEMNIFIED PARTY, EVEN IF SUCH LIABILITIES ARE CAUSED SOLELY OR IN PART BY THE NEGLIGENCE OF ANY INDEMNIFIED PARTY,
(A) ARISING FROM THE ACTS OR OMISSIONS TO ACT OF THE INDEMNIFYING PARTY, (B) ARISING IN THE CASE OF THE LESSEE AS THE INDEMNIFYING PARTY, FROM THE OPERATION OF THE STANTON/BRADY/CELESTE ASSETS, (C) FOR PHYSICAL DAMAGE TO THE
STANTON/BRADY/CELESTE ASSETS, TO THE EXTENT CAUSED BY THE INDEMNIFYING PARTY OR ANY RELATED PERSON THEREOF, (D) FOR PHYSICAL INJURIES OR DEATH (INCLUDING BY REASON OF USE, REPAIR, OPERATING OR MAINTAINING THE STANTON/BRADY/CELESTE ASSETS) TO OR
OF THE INDEMNIFIED PARTY OR THE PUBLIC, TO THE EXTENT CAUSED BY THE INDEMNIFYING PARTY OR ANY RELATED PERSON THEREOF, (E) ANY BREACH OF ANY COVENANT OR ANY FAILURE TO BE TRUE OF ANY REPRESENTATION OR WARRANTY, MADE BY THE INDEMNIFYING PARTY
UNDER THIS AGREEMENT OR (F) ARISING FROM THE NEGLIGENCE, RECKLESSNESS OR INTENTIONAL MISCONDUCT OF THE INDEMNIFYING PARTY OR ANY RELATED PERSON THEREOF; PROVIDED, HOWEVER, THAT IN NO EVENT SHALL THE INDEMNIFYING PARTY BE
RESPONSIBLE FOR DEFENDING, INDEMNIFYING OR HOLDING HARMLESS ANY INDEMNIFIED PARTY TO THE EXTENT OF ANY CLAIM CAUSED BY, ARISING FROM OR CONTRIBUTED TO BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PARTY. AS USED HEREIN, THE TERM
“RELATED PERSON” SHALL MEAN ANY AFFILIATES, CONTRACTORS, LESSEES, AND SUBLESSEES, AND EACH OF THEIR RESPECTIVE, PRINCIPALS, OFFICERS, EMPLOYEES, SERVANTS, AGENTS, REPRESENTATIVES, SUBCONTRACTORS, LICENSEES, INVITEES, GUESTS,
SUCCESSORS AND/OR ASSIGNS OF A PARTY; PROVIDED THAT IN NO EVENT SHALL A PARTY BE DEEMED A RELATED PERSON WITH RESPECT TO THE OTHER PARTY. 

12.2. Environmental Indemnity. 

(a) To the fullest extent permitted by law, Lessee shall defend, indemnify and hold harmless Lessor and Lessor’s Related Persons from
Claims (including, without limitation, any costs and expenses of clean up or other investigation or corrective action) suffered or incurred by such Persons resulting from any of the following occurring from and after the Original Lease Date or the
date on which Lessee assumed operational control over the relevant property: (i) the presence or release of Hazardous Materials in, under or about the Stanton/Brady/Celeste Assets which are or were brought or permitted to be brought onto the
Stanton/Brady/Celeste Assets by the Lessee or Lessee’s Related Persons, (ii) creation of any hazardous or potentially hazardous 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
environmental conditions or exacerbation of a pre-existing environmental condition, (iii) the violation or alleged violation of any Environmental Law by Lessee or Lessee’s Related
Persons or (iv) any other failure to comply with Section 4.6 by Lessee or Lessee’s Related Persons. 
 (b) To the fullest
extent permitted by law, Lessor shall defend, indemnify and hold harmless Lessee and Lessee’s Related Persons from Claims (including, without limitation, any costs and expenses of clean up or other investigation or corrective action) suffered
or incurred by such Persons resulting from (i) the presence or release of any Hazardous Material or hazardous or potentially hazardous condition in, under or about the Stanton/Brady/Celeste Assets that was present in, under or about the
Stanton/Brady/Celeste Assets as of the date Lessee assumed operational control over the relevant property (except to the extent such existing Hazardous Material or condition is exacerbated by Lessee or Lessee’s Related Persons), (ii) the
presence or release of Hazardous Materials in, under or about the Stanton/Brady/Celeste Assets which are or were brought or permitted to be brought onto the Stanton/Brady/Celeste Assets by Lessor or Lessor’s Related Persons during construction
of any improvement or addition to the Stanton/Brady/Celeste Assets, (iii) the violation or alleged violation of any Applicable Law by Lessor or Lessor’s Related Persons, or (iv) testing conducted under Section 4.6 by Lessor or
Lessor’s Related Persons. 
 12.3. Survival. The indemnification obligations under this Article XII shall survive
the expiration or earlier termination of this Agreement. 
 ARTICLE XIII 

MISCELLANEOUS 

13.1. Limitation of Damages. EXCEPT FOR DAMAGES PAID TO THIRD PARTIES TO WHICH AN INDEMNITY OR CONTRIBUTION UNDER
SECTION(S) 12.1 AND/OR 12.2 APPLIES, NEITHER PARTY SHALL BE LIABLE FOR ANY LOST OR PROSPECTIVE PROFITS, AND IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY OTHER SPECIAL, PUNITIVE, EXEMPLARY, CONSEQUENTIAL, INCIDENTAL OR INDIRECT LOSSES OR DAMAGES
(IN TORT, CONTRACT OR OTHERWISE) UNDER OR IN RESPECT OF THIS AGREEMENT OR FOR ANY FAILURE OF PERFORMANCE RELATED HERETO, HOWSOEVER CAUSED. FOR THE AVOIDANCE OF DOUBT, NOTHING IN THIS SECTION 13.1 SHALL IN ANY MANNER LIMIT OR OTHERWISE RESTRICT
(I) THE OBLIGATION OF LESSEE TO PAY RENT IN ACCORDANCE WITH ARTICLE III OR (II) A PARTY FROM COLLECTING ANY AMOUNT VALIDLY OWING UNDER AND CALCULATED IN ACCORDANCE WITH SECTIONS 6.1, 6.2, 9.4, 10.7, 13.2 AND 13.7. 

13.2. Condemnation. In the case of a condemnation or taking, this Agreement shall continue in effect; provided
that this Agreement shall terminate if 75% or more of the Stanton/Brady/Celeste Assets is subject to the condemnation or taking. Lessor shall be entitled to all sums received by reason of any such taking or condemnation, except for that portion of
such award, if any, which is expressly awarded for the Lessee’s leasehold interest under this Agreement or which is awarded for any property owned by Lessee (including any Footprint Projects funded by Lessee). Lessor shall have the right, in
its sole discretion, to challenge any condemnation or taking of the Stanton/Brady/Celeste Assets by proper proceedings, and Lessee shall not institute any such challenge without the prior written consent of Lessor. 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 13.3. Confidentiality. To the full extent allowed by Applicable Law, each
Party (the “Receiving Party”) shall maintain, for the benefit of the other Party (the “Disclosing Party”), in the strictest confidence all information pertaining to the financial terms of or payments under this
Agreement, the Disclosing Party’s methods of operation, methods of the Stanton/Brady/Celeste Assets, and the like, whether disclosed by the Disclosing Party or discovered by the Receiving Party, unless such information either (i) is in the
public domain by reason of prior publication through no act or omission of the Receiving Party or its employees or agents, (ii) was already known to the Receiving Party at the time of disclosure and which the Receiving Party is free to use or
disclose without breach of any obligation to any Person or (iii) is required to be disclosed by the PUCT or other Regulatory Authorities, or must be disclosed in accordance with applicable securities laws or tax laws or the rules of any
applicable securities exchange on which the securities of the Receiving Party (or an affiliate thereof) are traded. To the full extent permitted by law, neither Party shall use such information for its own benefit, publish or otherwise disclose it
to others, or permit its use by others for their benefit or to the detriment of the other Party. Notwithstanding the foregoing, the Receiving Party may disclose such information to any auditor or to the Receiving Party’s equity investors,
lenders, attorneys, accountants and other personal advisors; any prospective purchaser of the Stanton/Brady/Celeste Assets or the direct or indirect owner thereof; or pursuant to lawful process, subpoena or court order; provided that the
Receiving Party, in making such disclosure, advises the Party receiving the information of the confidentiality of the information and obtains the agreement of said Party not to disclose the information. 

13.4. Successors and Assigns. The Agreement shall inure to the benefit of and be binding upon Lessor and Lessee and, to
the extent provided in any assignment or other transfer under Article VIII hereof, any permitted assignee, and their respective heirs, transferees, successors and assigns, and all persons claiming under them. References to Lessee in this Agreement
shall be deemed to include assignees that hold a direct ownership interest in this Agreement and actually are exercising rights under this Agreement to the extent consistent with such interest. 

13.5. Rent Obligations Not Excused by Force Majeure, Etc. Subject to Section 9.1(b), Lessee shall not be excused
from its obligation to pay Rent during any Force Majeure Event or a condemnation or casualty of all or any part of the Stanton/Brady/Celeste Assets. 

13.6. Further Assurances; Policies and Procedures.  

(a) Each Party will, from time to time, execute, cause to be acknowledged and deliver such documents or instruments, and provide such
certificates, as the other Party may reasonably request to carry out and fulfill the transactions, and permit the exercise and performance of the rights and obligations, as are contemplated hereunder. Each Party will cooperate with the other Party
to effectuate fully the purposes and intent of this Agreement. In no way limiting the foregoing, the Parties shall cooperate to obtain any necessary regulatory approvals, including, without limitation, providing timely responses to discovery
requests, participating in regulatory proceedings to the extent necessary and generally providing assistance as required. 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 (b) From time to time, the Parties shall agree to policies and procedures regarding matters
arising under this Agreement including, without limitation, the treatment of Capital Expenditures for canceled Footprint Projects, each Party’s reporting obligations and such additional matters as the Parties may identify (the
“Policies and Procedures”). The Parties agree to cooperate and negotiate in good faith the Policies and Procedures, and any amendment or revision thereto that may be reasonably requested by either Party, and to
memorialize the same in a writing executed by a representative of each Party. In the event the Parties cannot agree on the terms of such Policies and Procedures, then either the Lessee or the Lessor may submit such matters to arbitration pursuant to
Section 13.7, pursuant to which the Arbitration Panel shall be empowered to determine Policies and Procedures that take into account InfraREIT’s reporting obligations as a public company and Lessee’s obligations as a regulated
utility. 
 13.7. Arbitration. Except for a dispute regarding the payment of Undisputed Rent, any dispute under this
Agreement shall, if not resolved by the Parties within ninety (90) days after notice of such dispute is served by one Party to the other (or, if different, the period provided for resolution by the Parties in the provision of this Agreement
under which such dispute is brought), be submitted to an “Arbitration Panel” comprised of three (3) members. No more than one (1) panel member may be with the same firm, and no panel member may have an economic interest in
the outcome of the arbitration. In addition to the foregoing, the failure by the Lessee and the Lessor to reach an agreement or make a mutual determination or characterization required by Sections 2.2(b); 2.3; 3.1 (the first paragraph thereof);
3.1(d)(i); 3.1(d)(ii); 3.1(d)(iii); 3.2(a); 3.2(d); 3.3(e); 3.8; 10.5(b) or 13.6(b), in each case after 60 days of negotiating in good faith, shall be deemed to be a “dispute” for purposes of this Section 13.7, to be resolved in
accordance with this Section. 
 (a) The Arbitration Panel shall be selected as follows: Within five (5) Business Days after the
expiration of the period referenced above, Lessee shall select its panel member meeting the criteria of the above paragraph (the “Lessee Panel Member”) and Lessor shall select its panel member meeting the criteria of
the above paragraph (the “Lessor Panel Member”). If a Party fails to timely select its respective panel member, the other Party may notify such Party in writing of such failure, and if such Party fails to select its
respective panel member within three (3) Business Days from such notice, then the other Party may select such panel member on such Party’s behalf. Within five (5) Business Days after the selection of the Lessor Panel Member and the
Lessee Panel Member, the Lessee Panel Member and the Lessor Panel Member shall jointly select a third panel member meeting the criteria of the above paragraph (the “Third Panel Member”). If the Lessor Panel Member and
the Lessee Panel Member fail to timely select the Third Panel Member and such failure continues for more than three (3) Business Days after written notice of such failure is delivered to the Lessor Panel Member and Lessee Panel Member by either
Lessor or Lessee, either Lessor or Lessee may request the managing officer of the American Arbitration Association to appoint the Third Panel Member. 

(b) Within ten (10) Business Days after the selection of the Arbitration Panel, each Party shall submit to the Arbitration Panel a
written statement identifying its summary of the issues and claims, including, if applicable, its calculation of Rent. Any Party may also request an evidentiary hearing on the merits in addition to the submission of written statements. The
Arbitration Panel shall make its decision within twenty (20) days after the later of (i) the submission of such written statements of particulars, and (ii) the conclusion of any evidentiary

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
hearing on the merits, and shall take into consideration the relative risks and rewards undertaken and capital invested by each Party and shall use the Comparable Rate of Return concept described
in Section 3.2(a) in determining any Rent disputes. The Arbitration Panel shall reach its decision by majority vote and shall communicate its decision by written notice to the Parties. 

(c) The decision by the Arbitration Panel shall be final, binding and conclusive and shall be non-appealable and enforceable in any court
having jurisdiction. All hearings and proceedings held by the Arbitration Panel shall take place in Dallas, Texas. 
 (d) The resolution
procedure described herein shall be governed by the Commercial Rules of the American Arbitration Association and subject to the Texas General Arbitration Act to the extent such act is applicable hereto. 

(e) In the case of an arbitration proceeding involving a determination of Rent and Percentage Rent, until Rent and Percentage Rent have been
finally determined, Lessee shall pay Rent and Percentage Rent based upon prevailing rates therefor, and an appropriate refund shall be made to or additional Rent shall be paid by Lessee within ten (10) days after a final determination is made.

 (f) The Parties shall bear equally the fees, costs and expenses of the Arbitration Panel in conducting the arbitration. 

13.8. Notices. All notices or other communications required or permitted by this Agreement, including payments to Lessor,
shall be in writing and shall be served personally or by reputable express courier service or by facsimile transmission addressed to the relevant parties at the address stated below or at any other address notified by that Party to the other as its
address for service. Any notice so given personally shall be deemed to have been served on delivery, any notice so given by express courier service shall be deemed to have been served the next Business Day after the same shall have been delivered to
the relevant courier, and any notice so given by facsimile transmission shall be deemed to have been served on dispatch. As proof of such service it shall be sufficient to produce a receipt showing personal service, the receipt of a reputable
courier company showing the correct address of the addressee or an activity report of the sender’s facsimile machine showing the correct facsimile number of the Parties on whom notice is served and the correct number of pages transmitted. All
communications, other than routine correspondence in the ordinary course of business, between the Parties pursuant to this Agreement shall be sent by the same method of communication by the Party sending the communication. The Parties’
addresses for service are: 
 If to Lessor: 

Sharyland Distribution & Transmission Services, L.L.C. 

1807 Ross Avenue, 4th Floor 

Dallas, Texas 75201 
 Attention:
Chief Executive Officer and General Counsel 

  
 37 

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 If to Lessee: 

Sharyland Utilities, L.P. 

1807 Ross Avenue, 4th Floor 

Dallas, Texas 75201 
 Attention:
Hunter Hunt 
 With a copy to: 

General Counsel 
 Fax:
(214) 855-6965 
 Any Party may change its address for purposes of this paragraph by giving written notice of such change to the other parties in the
manner provided in this Section 13.8. 
 13.9. Entire Agreement; Amendments. This Agreement and the Policies and
Procedures constitute the entire agreement between Lessor and Lessee respecting the subject matter hereof, and supersede any and all oral or written agreements. Any agreement, understanding or representation respecting the Stanton/Brady/Celeste
Assets, or any other matter referenced herein not expressly set forth in this Agreement, in the Policies and Procedures or in a subsequent writing signed by both Parties is null and void. For avoidance of doubt, the Amended and Restated Lease is
hereby replaced in its entirety by this Agreement. This Agreement shall not be modified or amended except in a writing signed by both Parties. No purported modifications or amendments, including without limitation any oral agreement (even if
supported by new consideration), course of conduct or absence of a response to a unilateral communication, shall be binding on either Party. 

13.10. Legal Matters. This Agreement shall be governed by and interpreted in accordance with the laws of the State of
Texas, without regard to its conflicts of law principles. The Parties agree that any rule of construction to the effect that ambiguities are to be resolved in favor of either Party shall not be employed in the interpretation of this Agreement and is
hereby waived. 
 13.11. Partial Invalidity. Should any provision of this Agreement be held, in a final and
unappealable decision by a court of competent jurisdiction, to be either invalid, void or unenforceable, the remaining provisions hereof shall remain in full force and effect, unimpaired by the holding. 

13.12. Recording. Lessee shall not record this Agreement without the prior written consent of the Lessor.
Lessee may record at its expense a memorandum of this Agreement in form and substance reasonably approved by Lessor. 
 13.13.
Intention of Parties; True Lease.  
 (a) The Parties hereby declare that their relationship in and to the
Stanton/Brady/Celeste Lease Assets is and will be that of lessor and lessee, expressly subject to the terms, conditions, limitations and requirements set forth in this Agreement. Nothing 

  
 38 

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
contained in this Agreement will be deemed to constitute the Parties as partners or joint venturers or as principal and agent. The Parties intend for this Agreement to constitute a true lease
with respect to the Stanton/Brady/Celeste Lease Assets for US Federal, state and local income tax purposes, and each Party shall treat the Agreement as a true lease with respect to the Stanton/Brady/Celeste Lease Assets for federal income tax
reporting purposes. 
 (b) The Parties acknowledge that Lessor is indirectly owned, in part, by InfraREIT, which qualifies as a real estate
investment trust (“REIT”) under the Code, and the Parties agree to negotiate in good faith any modification or amendment to this Agreement requested by Lessor to facilitate such qualification; provided that
Lessee shall not be obligated to agree to any such modification or amendment if such modification or amendment would materially adversely affect Lessee or would be in conflict with Applicable Law or any regulations or orders of any Regulatory
Authority. Notwithstanding anything to the contrary in this Agreement (including Section 13.3), Lessor may disclose to InfraREIT, and InfraREIT may disclose to any taxing authority, any information that Lessor or InfraREIT believes is relevant
to supporting or maintaining InfraREIT’s qualification as a REIT. 
 13.14. Rules of Construction. As used herein,
the singular shall be deemed to include the plural, and the plural shall be deemed to include the singular, and all pronouns shall include the masculine, feminine and neuter, whenever the context and facts require such construction. The headings,
captions, titles and subtitles herein are inserted for convenience of reference only and shall not affect the interpretation of this Agreement. Except as otherwise indicated herein, all section, appendix, exhibit and schedule references in this
Agreement shall be deemed to refer to the sections, appendices, exhibits and schedules of and to this Agreement, and the terms “herein,” “hereof,” “hereto,” “hereunder” and words of similar import refer to
this Agreement as a whole rather than to the particular provision in which such term is used. Whenever the words “including,” “include” or “includes” are used in this Agreement, they shall be interpreted in a
non-exclusive manner as though the words “but [is] not limited to” immediately followed the same. The language in all parts of this Agreement shall in all cases be construed simply according to the fair meaning thereof and not strictly
against the party that drafted such language. Except as otherwise provided herein, references in this Agreement to any agreement, instrument or other document are to such agreement, instrument or other document as amended, modified or supplemented
from time to time. 
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

  
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STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 IN WITNESS WHEREOF, Lessor and Lessee, acting through their duly authorized representatives, have
executed this Agreement with the intent that it be effective as of the Effective Date, and certify that they have read, understand and agree to the terms and conditions of this Agreement. 

 

			
	LESSOR:
	
	SHARYLAND DISTRIBUTION &
	TRANSMISSION SERVICES, L.L.C.
		
	By:	 	 /s/ Brant Meleski

	Name:	 	Brant Meleski
	Title:	 	SVP and Chief Financial Officer
	
	LESSEE:
	
	SHARYLAND UTILITIES, L.P.
		
	By:	 	 /s/ Greg Wilks

	Name:	 	Greg Wilks
	Title:	 	Chief Financial Officer

  
 Signature Page to
Stanton/Brady/Celeste Assets Lease Agreement 

 APPENDIX A 

DEFINITIONS 
 “2009 Note
Purchase Agreement” has the meaning set forth in Section 4.13. 
 “2010 Note Purchase Agreement” has the
meaning set forth in Section 4.13. 
 “2014 Credit Agreement” has the meaning set forth in Section 4.13. 

“2015 Credit Agreement” has the meaning set forth in Section 4.13. 

“2015 Note Purchase Agreement” has the meaning set forth in Section 4.13. 

“AC” has the meaning set forth in Section 1.1(b)(v). 

“Additional Rent” has the meaning set forth in Section 3.4. 

“AFUDC” means allowance for funds used during construction. 

“Agreed-to-Discount” has the meaning set forth in Section 3.2(a). 

“Agreement” has the meaning set forth in the Preamble. 

“Amended and Restated Lease” has the meaning set forth in the Recitals. 

“Annual Percentage Rent Breakpoint” means the dollar value of annual Gross Revenues that must be exceeded in a particular
Lease Year before Percentage Rent is owed, as set forth on the then-effective Rent Supplement. 
 “Applicable Laws” means
all laws, ordinances, statutes, orders and regulations of any federal, state, or local government, regulatory or administrative authority, any agency or commission thereof, or any court or tribunal, including without limitation all requirements of
the Regulatory Authorities, including Environmental Laws. 
 “Arbitration Panel” has the meaning set forth in
Section 13.7. 
 “assignment” has the meaning set forth in Article VIII. 

“Base Rent” has the meaning set forth in Section 3.1(a). 

“Business Day” means a day other than a Saturday, Sunday or other day on which federal agencies are authorized or required by
law to close. 
 “CapEx Budget” has the meaning set forth in Section 10.1(a). 

“Capital Expenditures” means expenditures that are or are expected to be capitalized under GAAP. 

 “CCN” means a Certificate of Convenience and Necessity or amendment thereto
issued by the PUCT. 
 “CFO Certificate” means a document signed by the Chief Financial Officer of Lessee and certifying to
the accuracy and completeness of the statement of Gross Revenues. 
 “Change of Control” means Hunt Family Members cease to
possess, directly or indirectly, the power to direct or cause the direction of the management or policies of Lessee, whether through the ability to exercise voting power, by contract or otherwise. 

“CIAC” means any contributions in aid of construction from current or prospective customers, plus any additional payments as
a tax gross up for such contributions, with respect to which Lessee does not receive or anticipate receiving an increase in its regulatory rate base. 

“Claims” has the meaning set forth in Section 12.1. 

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

“Comparable Rate of Return” has the meaning set forth in Section 3.2(a). 

“Consolidated Net Plant” means, with respect to any Person, as of the date of determination, the net plant set forth on the
face of the consolidated balance sheet of such Person or absent such amount on the consolidated balance sheet, the total plant of such Person on a consolidated basis minus accumulated depreciation as set forth in the footnotes of the consolidated
financial statements, in each case, for the fiscal quarter ended on the date of the last financial statements delivered pursuant to Section 7.1 of the 2014 Credit Agreement. 

“Consolidated Qualified Lessee” means any Qualified Lessee that is consolidated into the financial statements of another
Qualified Lessee. 
 “Covered Revenue” means any fees, charges or other revenues (a) that are characterized as
Unadjusted Gross Revenues (or Gross Revenues) for purposes hereof or for purposes of any other similar lease (x) between Lessee and Lessor or an affiliate thereof or (y) between Lessee and any of its wholly-owned subsidiaries,
(b) that are specifically excluded from the definition of “Gross Revenue” hereunder or under any similar lease, or (c) that are generated from the Rate Base of regulated assets owned or operated by a party other than Lessor or a
subsidiary thereof. 
 “Credit Agreements” has the meaning set forth in Section 4.13. 

“CREZ Lease” means the Second Amended and Restated Lease Agreement (CREZ Assets) between Sharyland Projects, L.L.C. and
Lessee effective as of December 1, 2014, as the same may be amended from time to time. 
 “DC” has the meaning set
forth in Section 1.1(b)(v). 
 “Debt Agreements” has the meaning set forth in Section 4.13. 

“Defaulting Party” has the meaning set forth in Section 9.3. 

 “Disclosing Party” has the meaning set forth in Section 13.3. 

“Effective Date” has the meaning set forth in the Preamble. 

“Entity” means any Person, other than any natural person. 

“Environmental Law” means any and all Legal Requirements regulating, relating to or imposing liability or standards of
conduct concerning protection of natural resources or the environment, or environmental impacts on human health as now or may at any time hereafter be in effect. 

“ERCOT” means the Electric Reliability Council of Texas, or its successors. 

“ERCOT Transmission Lease” means the Lease Agreement (ERCOT Transmission Assets) between Lessor and Lessee effective as of
December 1, 2014, as the same may be amended from time to time. 
 “ERCOT Transmission Revenues” means Lessee’s
Unadjusted Gross Revenues from regulated electric transmission systems operated by Lessee within ERCOT pursuant to the PUCT’s transmission cost of service mechanism, including any such Unadjusted Gross Revenues that Lessee collects from retail
electric providers through its transmission cost recovery factor included in its distribution rates. 
 “Event of Default”
means an event described in Section 9.1(a) or Section 9.2. 
 “Excess Percentage Rent” has the meaning set forth
in Section 3.3(a). 
 “Expected Incremental CapEx” has the meaning set forth in Section 3.2(a). 

“Existing Term” has the meaning set forth in Section 2.1. 

“Extended Period of Operatorship” has the meaning set forth in Section 2.2(b). 

“Extended Period Rent” means Rent that applies during any Extended Period of Operatorship beyond the Term, which will be
negotiated using the Comparable Rate of Return methodology set forth in Article III. 
 “FERC” means the Federal Energy
Regulatory Commission, or its successors. 
 “FERC Uniform System of Accounts” has the meaning set forth in
Section 1.1(b)(viii). 
 “First Lease Quarter Percentage Rent Breakpoint” has the meaning set forth in Section 3.1(c).

 “Footprint Projects” means T&D Projects that are (i) (A) located in the distribution service territory of
the Stanton/Brady/Celeste Assets or the Stanton Transmission Loop Assets, (B) transmission assets that are added to an existing transmission substation that comprises a part of the Stanton/Brady/Celeste Assets or the Stanton Transmission Loop
Assets or hang from transmission towers within the Stanton/Brady/Celeste Assets or the Stanton Transmission Loop 

 
Assets or (C) Reclassified Projects and (ii) funded by expenditures that are or are expected to be capitalized under GAAP and that are within the items described in
Section 1.1(b)(i)-(vii) (specifically excluding Section 1.1(b)(viii)). 
 “Force Majeure Event” means,
except to the extent resulting from the action or inaction of Lessee or within the control of Lessee, fire, earthquake, hurricane, flood, or other casualty or accident; strikes or labor disputes; war, civil strife or other violence; any law, order,
proclamation, regulation, ordinance, action, demand or requirement of any government agency or utility; or any other act or condition beyond the reasonable control of Lessee. 

“GAAP” means generally accepted accounting principles in effect in the United States of America. 

“Good Utility Practice” shall be as defined from time to time by PUCT and, as of the date hereof, means any of the practices,
methods, and acts engaged in or approved by a significant portion of the electric utility industry during the relevant time period, or any of the practices, methods, and acts that, in the exercise of reasonable judgment in light of the facts known
at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety, and expedition. Good utility practice is not intended to be limited to
the optimum practice, method, or act, to the exclusion of all others, but rather is intended to include acceptable practices, methods, and acts generally accepted in the region. 

“Gross Revenues” has the meaning set forth in Section 3.1(d)(i). 

“Hazardous Materials” means (A) any substance which is listed, defined, designated or classified under any Applicable
Law as a (i) hazardous material, substance, constituent or waste, (ii) toxic material, substance, constituent or waste, (iii) radioactive material, substance, constituent or waste, (iv) dangerous material, substance, constituent
or waste, (v) pollutant, (vi) contaminant, or (vii) special waste; (B) any material, substance, constituent or waste regulated under any Applicable Laws; or (C) petroleum, petroleum products, radioactive matters,
polychlorinated biphenyl, pesticides, asbestos or asbestos-containing materials. 
 “Hunt Family Members” means
(i) Ray L. Hunt; (ii) the spouse of Ray L. Hunt and each of his children and siblings; (iii) the spouse and lineal descendants of any Person identified in the foregoing clause (ii); (iv) any trust or account primarily for the
benefit of any Person or Persons identified in the foregoing clauses (i), (ii) or (iii); (v) any corporation, partnership or other Entity in which any of the Persons identified in the foregoing clauses (i), (ii), (iii) or
(iv) are the beneficial owners of substantially all of the shares of capital stock, membership interests, partnership interests or other equity interests and options or warrants to acquire, or securities convertible into, capital stock,
membership interests, partnership interests or other equity securities of an Entity; and (vi) the personal representative or guardian of any of the Persons identified in the foregoing clauses (i), (ii) and (iii) upon such
Person’s death for purposes of the administration of such Person’s estate or upon such Person’s disability or incompetency for purposes of the protection and management of the assets of such Person. 

“HVDC Ties” has the meaning set forth in Section 1.1(b)(v). 

 “Incremental CapEx” means Lessor-funded Capital Expenditures related to
Stanton/Brady/Celeste Assets (including Footprint Projects relating to the Stanton Transmission Loop Assets) that are placed in service, as and when such Stanton/Brady/Celeste Assets (including Footprint Projects relating to the Stanton Transmission
Loop Assets) are placed in service, as adjusted (y) for any applicable AFUDC and/or depreciation, and (z) to reflect the effect of the deferred tax liability or deferred tax asset, as applicable. 

“Indebtedness” with respect to any Person means, at any time, without duplication (a) its liabilities for borrowed money
and its redemption obligations in respect of mandatorily redeemable preferred stock; (b) its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business
but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property); (c)(i) all liabilities appearing on its balance sheet prepared in accordance with GAAP in respect of
capital leases and (ii) all liabilities which would appear on its balance sheet prepared in accordance with GAAP in respect of Synthetic Leases assuming such Synthetic Leases were accounted for as capital leases; provided,
however, that for purposes of this definition (including with respect to clauses (i) and (ii) hereof), (x) this Agreement and any similar lease between Lessor (or any subsidiary) and Lessee and (y) any lease between Lessee
and any of its wholly-owned subsidiaries shall not be treated as a capital lease; (d) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become
liable for such liabilities); (e) all of its liabilities in respect of letters of credit or instruments serving a similar function issued or accepted for its account by banks and other financial institutions (whether or not representing
obligations for borrowed money), provided, however, that for purposes of this definition, any surety bonds or indemnification agreements entered into by Lessee (with respect to which Lessee or a subsidiary has a reimbursement or
backstop obligation) in connection with condemnation proceedings shall be excluded; (f) the aggregate Swap Termination Value of all Swap Contracts of such Person; and (g) any guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (f) of this definition. Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (a) through (g) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP. 
 “Indemnified
Party” has the meaning set forth in Section 12.1. 
 “Indemnifying Party” has the meaning set forth in
Section 12.1. 
 “InfraREIT” means InfraREIT, Inc., a Maryland corporation. 

“Lease” or “Leases” means (i) this Agreement, the McAllen Lease, the CREZ Lease, the ERCOT Transmission
Lease and the Stanton Transmission Loop Lease and any other leases of transmission and distribution and related assets to a Qualified Lessee under which Lessor or any subsidiary of Lessor is a party as a lessor, and (ii) any lease of
transmission and distribution and related assets pursuant to which Lessee is the lessee and a subsidiary of Lessee or another Person controlled by one or more Hunt Family Members is the lessor; provided that no such lease will qualify as a
“Lease” hereunder if each of the three following criteria apply: (x) Lessee is the lessee, (y) cash rental payments have become due and payable pursuant thereto and (z) none of Lessor, a subsidiary of Lessor or a subsidiary
of Lessee is the lessor. 

 “Lease Quarter” means each calendar quarter during each Lease Year. 

“Lease Year” means each calendar year during the Term of this Agreement. 

“Leased Consolidated Net Plant” means that portion of the Consolidated Net Plant of the lessor of a Lease between such lessor
and a Qualified Lessee that is the subject of such Lease. 
 “Legal Requirements” means, as to any Person, the certificate
of incorporation and by-laws, limited liability company agreement, partnership agreement or other organizational or governing documents of such Person, any law (including common law), statute, code, treaty, rule, regulation, ordinance including any
government rule or determination of an arbitrator a court or other government authority, or any requirement under a Permit, in each case applicable to or binding upon such Person or any of its properties or to which such Person or any of its
property is subject. 
 “Lessee” has the meaning set forth in the Preamble. 

“Lessee CapEx” means Capital Expenditures that are related and fairly allocable to the Stanton/Brady/Celeste Assets or
Stanton Transmission Loop Assets and are funded by Lessee. 
 “Lessee Panel Member” has the meaning set forth in
Section 13.7(a). 
 “Lessee Taxes” has the meaning set forth in Section 4.3. 

“Lessor” has the meaning set forth in the Preamble. 

“Lessor’s Audit” has the meaning set forth in Section 3.3(c). 

“Lessor Material Matter” means (i) a proceeding of any Regulatory Authority or (ii) an environmental, health,
safety or security matter that requires a corrective action and, in the case of both (i) and (ii), either could (a) give rise to a Claim with respect for which Lessor would be responsible pursuant to Article XII hereof, (b) reasonably
be expected to have a material adverse effect on the operation of the Stanton/Brady/Celeste Assets or (c) reasonably be expected to result in the imposition of a liability on Lessor (other than liabilities for which Lessor is indemnified
pursuant hereto, unless the amount of such liability could reasonably be expected to exceed $2,000,000). 
 “Lessor Panel
Member” has the meaning set forth in Section 13.7(a). 
 “Lessor Taxes” has the meaning set forth in
Section 4.3. 
 “Liens” has the meaning set forth in Section 5.2. 

 “McAllen Lease” means the Third Amended and Restated Master System Lease
Agreement (McAllen System) between Lessor and Lessee effective as of December 1, 2014, as the same may be amended from time to time. 

“Monetary Default” means an Event of Default arising from the failure to pay when due any amounts payable under this
Agreement. 
 “NERC” means North American Electric Reliability Corporation, or its successors. 

“Non-Defaulting Party” has the meaning set forth in Section 9.3. 

“Non-Monetary Default” means an Event of Default other than a Monetary Default. 

“Non-Recourse Debt” means Indebtedness of a subsidiary of Lessee that, if secured, is secured solely by a pledge of
collateral owned by such subsidiary and the equity interests in such subsidiary, and for which no Person other than such subsidiary is personally liable. 

“Nonseverable Footprint Projects” means those Footprint Projects that cannot be readily removed from the
Stanton/Brady/Celeste Assets or the Stanton Transmission Loop Assets without causing diminution in value to the Stanton/Brady/Celeste Assets or the Stanton Transmission Loop Assets, as applicable. 

“Note Purchase Agreements” has the meaning set forth in Section 4.13. 

“Notice of Default” means written notice of an Event of Default. 

“Original Lease Date” has the meaning set forth in Section 1.1(a). 

“Other Revenue” means revenue generated from activities as a regulated utility within the State of Texas other than Covered
Revenue. 
 “Overdue Rate” means a rate equal to ten percent (10%) per annum or the maximum rate allowed by Applicable
Law, whichever is lesser. 
 “Party” or “Parties” has the meaning set forth in the Preamble. 

“Percentage Rent” has the meaning set forth in Section 3.1(b). 

“Percentage Rent Breakpoint” means individually any of the Annual Percentage Rent Breakpoint, the First Lease Quarter
Percentage Rent Breakpoint, the Second Lease Quarter Percentage Rent Breakpoint or the Third Lease Quarter Percentage Rent Breakpoint (collectively referred to as the “Percentage Rent Breakpoints”). 

“Percentage Rent Percentages” has the meaning set forth in Section 3.1(b). 

“Percentage Rent Schedule” means the schedule attached to the then-current Rent Supplement setting forth the Percentage Rent
Percentages and Annual Percentage Rent Breakpoints for the Stanton/Brady/Celeste Assets through the end of the Term. 

 “Permitted Liens” means: 

(i) The Liens granted by the Lessor to any lender or trustee for any lender which finances the Lessor’s interest in the
Stanton/Brady/Celeste Assets; 
 (ii) Liens imposed by any governmental authority for any tax, assessment or other charge
relating to the Stanton/Brady/Celeste Assets to the extent not yet past due or being contested in good faith and by appropriate proceedings; 

(iii) mechanics’, warehousemen’s, carriers’, workers’, repairers’, landlords’, and other similar
liens arising or incurred in the ordinary course of business and (i) which do not in the aggregate materially detract from the value of property or assets subject to such Liens or materially impair the continued use thereof in the operation of
the Stanton/Brady/Celeste Assets or (ii) which are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or asset subject to such Liens and for which
cash reserves consistent with GAAP have been established on the books of Lessee or Lessor, or other Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other
types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, trade contracts, leases, government contracts, performance and return-of-money bonds and other similar obligations incurred in
the ordinary course of business (exclusive of obligations in respect of the payment for borrowed money); 
 (iv) Liens
arising out of judgments or awards so long as an appeal or proceeding for review is being prosecuted in good faith and for the payment of which adequate cash reserves consistent with GAAP have been established on the books of Lessee or Lessor, bonds
or other security acceptable to the Lessor in its reasonable discretion have been provided or are fully covered by insurance; 

(v) zoning, entitlement, restriction, and other land use and environmental regulations by governmental authorities and
encroachments, easements, rights of way, covenants, restrictions or agreements which do not materially interfere with the continued use of any asset as currently used in the conduct of the business of the Lessee; 

(vi) any encumbrances set forth in any franchise or governing ordinance under which any portion of the business of the Lessee
is conducted and which could not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the operation of the Stanton/Brady/Celeste Assets; and 

(vii) all rights of condemnation, eminent domain, or other similar right of any Person. 

“Person” means any natural person, general partnership, limited partnership, proprietorship, corporation, limited liability
company, limited liability partnership, business trust, estate, governmental entity, cooperative, association or other foreign or domestic enterprise, or other entity whether acting in an individual, fiduciary or other capacity. 

 “Personal Property” means all assets, or rights therein, related to or used in
connection with the Stanton/Brady/Celeste Assets and the Stanton Transmission Loop Assets, other than assets of the type and nature described in Section 1.1(b)(i)-(vii). Examples of Personal Property include rolling stock, computers and
software programs. 
 “Policies and Procedures” has the meaning set forth in Section 13.6(b). 

“Project Management Costs” means all actual out-of-pocket costs incurred by Lessee pursuant to this Agreement or a separate
construction management agreement in connection with the construction activities, including (i) all direct wages and salaries (including benefits, payroll burden and overtime) which the Lessee pays to personnel employed or retained to conduct
such construction activities and a fair allocation of the direct wages and salaries (including benefits, payroll burden and overtime) of Lessee’s other personnel conducting such construction activities; (ii) the fair market value of
materials or equipment provided directly by Lessee or its affiliates (including the standard corporate day rate for any vehicles and equipment that are so utilized); (iii) a fair allocation of the lease payments of any leased vehicles and
equipment that are so utilized; (iv) all other third-party costs incurred by Lessee in the performance of such construction activities; and (v) all sales, use, transfer or similar taxes (excluding those taxes based upon Lessee’s net
income, gross receipts, net worth or similar taxes) incurred or paid by Lessee in conducting such construction activities or providing materials, if any (provided that, in managing its affairs, Lessee will attempt to minimize, to the extent
practicable, all such taxes incurred on behalf of Lessor and, in this regard, Lessor agrees to cooperate and provide Lessee any assistance necessary including providing appropriate evidence of any exemptions from tax). 

“PUCT” means the Public Utility Commission of Texas or its successors. 

“Qualified Lessee” means Lessee and/or any other utility that is (x) approved or authorized by the applicable public
utility commission or similar regulatory authority to operate and/or lease the transmission and/or distribution assets of Lessor or any subsidiary and (y) a party to a then-effective lease agreement with Lessor or a subsidiary thereof pursuant
to which such utility leases and operates such entity’s transmission and/or distribution assets 
 “Rate Base” means,
with respect to any transmission and distribution assets, gross electric plant in service under GAAP, which is the aggregate amount of capital expenditures used to construct such assets plus AFUDC, less accumulated depreciation, and adjusted for
accumulated deferred income taxes. 
 “Receiving Party” has the meaning set forth in Section 13.3. 

“Reclassified Projects” means any T&D Project that does not otherwise meet the definition of Footprint Project but Lessee
and Lessor jointly agree, in their sole discretion, to classify such T&D Project as a Footprint Project based upon such factors that the Parties deem relevant, including (a) the expected Rate Base of the T&D Project, it being understood
that the Parties generally expect that only T&D Projects with an expected Rate Base of less than $25 million could constitute a Reclassified Project; (b) whether the T&D Project is physically connected to the Stanton/Brady/Celeste
Assets or the Stanton Transmission Loop Assets; and (c) whether the T&D Project is necessary to serve distribution customers situated in the service territories of the Stanton/Brady/Celeste Assets or the Stanton Transmission Loop Assets.

 “Regulatory Authority” means the government of any nation, or of any political
subdivision thereof or of any state, county or local jurisdiction therein or any regulatory body, commission, department, division, organ, instrumentality, court or agency of any thereof, including PUCT, ERCOT, TRE, NERC, or any other governmental
agency with jurisdiction over Lessee, Lessor or the Stanton/Brady/Celeste Assets and any other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. 

“REIT” has the meaning set forth in Section 13.13(b). 

“Related Person” has the meaning set forth in Section 12.1. 

“Renewal Rent Supplement” has the meaning set forth in Section 3.2(a). 

“Renewal Term” has the meaning set forth in Section 2.1. 

“Rent” means the sum of Base Rent, Percentage Rent, Additional Rent and Extended Period Rent. 

“Rent Supplement” means a supplement to this Agreement in the form of Schedule 3.2(b) agreed to in accordance with
Section 3.2. 
 “Rent Validation” means the process of validating any Rent Supplement pursuant to Section 3.2(c).

 “Repairs” means all replacements, repairs or remedial activity undertaken directly on a then-existing portion of the
Stanton/Brady/Celeste Assets or the Stanton Transmission Loop Assets that are not Footprint Projects and that are expensed and not capitalized under GAAP. 

“Revenues Attributable to Lessee CapEx” means the portion of Unadjusted Gross Revenues from the Stanton/Brady/Celeste Assets
or the Stanton Transmission Loop Assets which is attributable to Lessee CapEx as determined in accordance with Section 3.1(d)(iii). 

“Revised Certificate” has the meaning set forth in Section 3.3(a). 

“SEC” means the United States Securities and Exchange Commission. 

“SEC Reporting Requirements” has the meaning set forth in Section 7.1(c). 

“Second Lease Quarter Percentage Rent Breakpoint” has the meaning set forth in Section 3.1(c). 

“Severable Footprint Projects” means any Footprint Projects that can be readily removed from the Stanton/Brady/Celeste Assets
or the Stanton Transmission Loop Assets without causing diminution in value to the Stanton/Brady/Celeste Assets or the Stanton Transmission Loop Assets, as applicable. 

 “Stanton/Brady/Celeste Assets” means the integrated electrical transmission and
distribution facilities located within the area depicted on Exhibit A, and the systems and other property necessary to operate such transmission and distribution facilities, together with the exclusive right to occupy and use all of
Lessor’s interest (whether by fee ownership, easement, lease, sublease, franchise or license) (other than to the extent expressly reserved to Lessor herein) in the premises upon which such facilities are situated and Footprint Projects that
add, expand or alter the assets identified from time to time pursuant to Rent Supplements, as modified by Section 1.1(b). 

“Stanton/Brady/Celeste Lease Assets” means the Stanton/Brady/Celeste Assets, excluding any Footprint Project included in the
definition of “Stanton/Brady/Celeste Assets,” unless (i) such Footprint Project has been placed in service and (ii) a Rent Supplement has been executed with respect to such Footprint Project. 

“Stanton Transmission Loop Assets” means the leasehold assets related to the Stanton Transmission Loop Lease. 

“Stanton Transmission Loop Lease” means the Third Amended and Restated Lease Agreement (Stanton Transmission Loop Assets)
between Lessor (as the successor in interest to SDTS FERC, L.L.C.) and Lessee (as the successor in interest to SU FERC, L.L.C.) effective as of December 1, 2014, as the same may be amended from time to time. 

“Swap Contract” means (a) any and all interest rate swap transactions, basis swap transactions, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward foreign exchange transactions, cap
transactions, floor transactions, currency options, spot contracts or any other similar transactions of any of the foregoing (including, without limitation, any options to enter into any of the foregoing), and (b) any and all transactions of
any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc. or any International Foreign Exchange
Master Agreement. 
 “Swap Termination Value” means, in respect of one or more Swap Contracts, after taking into account
the effect of any legally enforceable netting agreement relating to such Swap Contracts, (x) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such
termination value(s), and (y) for any date prior to the date referenced in clause (x), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Swap Contracts. 
 “Synthetic Lease” means, at any time, any lease
(including a lease that may be terminated by the lessee at any time) of any property by a Person (i) that is accounted for as an operating lease under GAAP and (ii) in respect of which the lessee retains or obtains ownership of the
property so leased for U.S. federal income tax purposes, other than any lease under which such Person is the lessor. 

 “TCOS Allocation” has the meaning set forth in Section 3.1(d)(ii). 

“T&D Project” means a business, project or assets relating primarily to the transmission and/or distribution of
electricity. 
 “Term” has the meaning set forth in Section 2.1. 

“Third Lease Quarter Percentage Rent Breakpoint” has the meaning set forth in Section 3.1(c). 

“Third Panel Member” has the meaning set forth in Section 13.7(a). 

“Transferred Assets” has the meaning set forth in Section 1.1(c). 

“Transmission Gross Plant” means electric transmission plant as determined in accordance with the FERC Uniform System of
Accounts. 
 “Transmission Net Plant in Service” means Transmission Gross Plant in service less accumulated depreciation as
determined in accordance with the FERC Uniform System of Accounts. 
 “TRE” means the Texas Reliability Entity, or its
successor entity. 
 “TRS” means an Entity that (x) is wholly-owned by Lessor and/or Lessee and (y) is a taxable
REIT subsidiary within the meaning of Section 856(l) of the Code. 
 “Unadjusted Gross Revenues” has the meaning set
forth in Section 3.1(d)(i). 
 “Undisputed Rent” means the undisputed amount of Rent the Parties agree is due and
payable. 

 EXHIBIT A 

Assets 

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 

 

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 

 

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 EXHIBIT B 

SUBORDINATED DEBT TERMS 

Reference is made to that certain Second Amended and Restated Collateral Agency Agreement dated as of December 10, 2014 (as amended,
restated, supplemented or otherwise modified, the “Collateral Agency Agreement”), entered into by and among The Bank of New York Mellon Trust Company, N.A., as collateral agent (together with its successors and assigns, the
“Collateral Agent”), Sharyland Distribution & Transmission Services, L.L.C., a Texas limited liability company (the “Company”), and the holders of the Permitted Secured Indebtedness (as defined therein)
from time to time party thereto. 
 Section 1. Definitions and Rules of Interpretation. Capitalized terms used herein without definition shall
have the meanings assigned to such terms in the Collateral Agency Agreement. The rules of interpretation set forth in Schedule A of the Collateral Agency Agreement shall apply to this Exhibit B as if fully set forth herein. In addition, the
following terms shall have the following meanings: 
  

	1.1	“Entitled Party” shall mean the Company unless the Collateral Agent or the Company has given notice to the Subordinated Lender that the Collateral Agent has, on behalf of the Secured Parties and
pursuant to the Collateral Agency Agreement or related documents, properly exercised its remedies to foreclose on the Company’s interest in any System Lease and receive payments pursuant to any System Lease directly from Sharyland, in which
case the Entitled Party shall mean the Collateral Agent, acting for the benefit of the Secured Parties. 

  

	1.2	“Governmental Authority” shall mean 

  

	 	(a)	the government of: 

  

	 	(i)	The United States of America or any State or other political subdivision thereof, or 

  

	 	(ii)	any other jurisdictions in which the Company conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company, or 

 

	 	(b)	any entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of, or pertaining to, any such government, or 

 

	 	(c)	the Electric Reliability Council of Texas or any successor thereto (“ERCOT”), or 

  

	 	(d)	the Texas Regional Entity. 

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

	1.3	“Insolvency Event” means the occurrence of any of the following: 

  

	 	(a)	Sharyland (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief
or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the
benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent
or to be liquidated, or (vi) takes a corporate action for the purpose of any of the foregoing; or 

  

	 	(b)	a court or Governmental Authority of competent jurisdiction enters an order appointing, without consent by Sharyland, a custodian, receiver, trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law
of any jurisdiction, or ordering the dissolution, winding-up or liquidation of Sharyland or any such petition shall be filed against Sharyland and such petition shall not be dismissed within 60 days. 

 

	1.4	“Reorganization Securities” shall mean any debt or equity securities issued on account of all or any portion of the Subordinated Indebtedness in connection with an Insolvency Event that are in each case
subordinated in liquidation to the Obligations (or any debt or equity securities issued on account of any Obligations) to at least the same extent that the Subordinated Indebtedness are subordinated to the Obligations hereunder. 

 

	1.5	“Sharyland” shall mean Sharyland Utilities, L.P. 

  

	1.6	“Subordinated Indebtedness” shall mean, with respect to Sharyland, Indebtedness (as defined under the applicable Financing Agreement or such other similar term) that is incurred in accordance with the
terms of such Financing Agreement and is required to be subordinated to the applicable Obligations. 

  

	1.7	“Subordinated Lenders” shall mean each and every Person to whom any of the Subordinated Indebtedness are owed. 

  

	1.8	“Subordinated Loan Documents” shall mean all documentation evidencing the Subordinated Indebtedness. 

  

	1.9	“System Leases” shall mean any and all leases of transmission and distribution and related assets pursuant to which Sharyland is the lessee and the Company or any Subsidiary of the Company is a party as
a lessor, and supplements thereto, each as amended, restated, supplemented or otherwise modified from time to time, or any new lease entered into in replacement thereof. 

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

	1.10	“System Lease Obligations” shall mean any and all Rent or other similar term (as such term is defined in the System Leases) then due and payable under the System Leases. 

 

	1.11	“Texas Regional Entity” shall mean the division of ERCOT authorized to develop, monitor, assess and enforce compliance with NERC Reliability Standards within geographic boundaries of ERCOT and any
successor thereto. 

 Section 2. Subordination of Subordinated Indebtedness. Until the indefeasible payment in full in cash of all
the Obligations and the termination of any commitments to lend under any Permitted Secured Indebtedness, the Subordinated Lenders and Sharyland hereby agree that (i) all Subordinated Indebtedness is and shall be subordinated in right of
liquidation in relation to all System Lease Obligations to the extent and in the manner hereinafter set forth, (ii) upon the occurrence and during the continuance of any default or event of default under any System Lease (or if after giving
effect to a proposed distribution in respect of any part of the Subordinated Indebtedness, a default or event of default under any System Lease will exist), no payments or other distributions whatsoever in respect of any part of the Subordinated
Indebtedness shall be made, (iii) upon the occurrence and during the continuance of an Insolvency Event, no payments or other distributions whatsoever-in respect of any part of the Subordinated Indebtedness shall be made nor shall any property
or assets of Sharyland be applied to the purchase or other acquisition or retirement of any part of the Subordinated Indebtedness, and (iv) upon the occurrence and during the continuance of an Insolvency Event, the Subordinated Lenders shall
not accept any payment by or on behalf of Sharyland on account of the principal of, premium or interest on, or any other amount in respect of, the Subordinated Indebtedness other than the payment of indemnity obligations and reasonable out of pocket
costs and expenses (including reasonable attorney’s fees) in each case as and when due and payable in accordance with the terms of the Subordinated Loan Documents. 

Section 3. Liquidation, Dissolution, Bankruptcy. Until the indefeasible payment in full in cash of all the Obligations and the termination of any
commitments to lend under any Permitted Secured Indebtedness, and without limitation to the rights of the Secured Parties under the terms of the Financing Agreements or the rights of Company under the System Leases: 

 

	3.1	upon the occurrence and during the continuance of any Insolvency Event: 

  

	 	3.1.1	the System Lease Obligations then due and payable shall first be irrevocably and indefeasibly paid in full to the Entitled Party before any of the Subordinated Lenders shall be entitled to receive any payment (other
than Reorganization Securities) on account of the Subordinated Indebtedness whether in cash, securities or other assets (other than Reorganization Securities); 

  

	 	3.1.2	any payment or distribution of assets of Sharyland of any kind or character in respect of the Subordinated Indebtedness to which any of the Subordinated Lenders would be entitled if the Subordinated Indebtedness were
not subordinated pursuant to the terms hereof shall be made by the trustee, liquidator or agent or other Person making such payment or distribution, directly to the Entitled Party until the System Lease Obligations then due and payable are paid in
full and each of the Subordinated Lenders and, unless the Company is. the Entitled Party, Sharyland irrevocably authorizes and empowers the Entitled Party to receive. and collect on its behalf any and all such payments or distributions; and

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

	 	3.1.3	the Subordinated Lenders agree not to, directly or indirectly, initiate, prosecute or participate in any claim, action or other proceeding challenging the enforceability, validity or priority of the System Lease
Obligations then due and payable. 

 Section 4. Incorrect Payments. If, for any reason whatsoever and whether pursuant to an
Insolvency Event or otherwise, Sharyland shall make or any of the Subordinated Lenders shall receive any payment or distribution of any kind or character, whether in cash, securities or other property (other than Reorganization Securities), on
account or in respect of the Subordinated Indebtedness in contravention of any of the terms set forth herein, such Subordinated Lender shall hold any such payment or distribution in trust for the benefit of the Secured Parties, promptly notify the
Entitled Party of the receipt of such payment or distribution and promptly pay over or deliver such distribution or payment to the Entitled Party or to any other Person nominated by the Entitled Party, to hold for the account of the Secured Parties.

 Section 5. Non-Impairment. To the fullest extent permitted by applicable Law, no change of law or circumstances shall release or diminish any
of the Subordinated Lender’s obligations, liabilities, agreements or duties hereunder, or affect the provisions set forth herein in any way. 

Section 6. Benefit of Subordination Provisions. These subordination provisions are intended solely to define the relative rights of the Secured
Parties, the Collateral Agent, the Company, the Subordinated Lenders, and their respective successors and permitted assigns. 
 Section 7.
Termination and Reinstatement. Notwithstanding anything to the contrary contained herein, the Subordinated Indebtedness shall no longer be subordinated in right of liquidation pursuant to the terms contained herein otherwise at such time as
the Secured Parties no longer have a lien on or security interest in the System Lease Obligations. If any payment to any of the Entitled Party, the Company, the Collateral Agent or the Secured Parties by Sharyland or any other Person in respect of
any of the System Lease Obligations is held to constitute a preference or a voidable transfer under applicable Law, or if for any other reason any such party is required to refund such payment to Sharyland or to such Person or to pay the amount
thereof to any other Person, each Subordinated Lender agrees and acknowledges that the provisions set forth herein shall continue to be effective or shall be reinstated, as the case may be, to the extent of any such payment or payments. 

Section 8. Restrictions on Transfers. None of the Subordinated Lenders may transfer (by sale, novation or otherwise) any of its rights or
obligations under the Subordinated Indebtedness unless the transferee of such interest first agrees in writing to be bound by the terms of this Exhibit B applicable to the transferor of such interest and executes an instrument to that effect. 

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 Section 9. Exercise of Powers. 

 

	9.1	After the occurrence and during the continuance of an Insolvency Event, the Entitled Party shall be entitled to exercise its rights and powers under these subordination provisions in such a manner and at such times as
the Entitled Party in its absolute discretion may determine. 

  

	9.2	The Subordinated Lenders alone shall be responsible for their contracts, engagements, acts, omissions, defaults and losses and for liabilities incurred by them. 

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 EXHIBIT C 

INSURANCE 
 Subject to Section 6.2(b) of
this Agreement, during the term of the Note Purchase Agreements, the Credit Agreements or until otherwise agreed by Lessee and Lessor, Lessee shall comply with the insurance requirements set forth in this Exhibit C. Capitalized terms used
herein but not otherwise defined in this Agreement have the meanings assigned to such terms in the Note Purchase Agreements or the Credit Agreements, as applicable. 
  

	A.	Coverages. 

 Property Insurance (Operational): 

 

			
	Cover:	  	All assets comprising the Stanton/Brady/Celeste Assets against “all risks” of physical loss or damage (including but not limited to machinery breakdown, earthquake, flood, windstorm and terrorism)
		
	Principal Exclusions:	  	War and civil war
		
		  	Nuclear risks
		
		  	Theft and mysterious disappearance revealed in the course of inventory undertaking
		
		  	The cost of making good wear and tear, gradual deterioration, etc., but not the consequential damage
		
		  	Consequential loss not otherwise excluded
		
		  	Fraud and misrepresentation
		
	Sum Insured:	  	Full replacement cost subject to the following sublimits.
		
	Sublimits:	  	Earthquake – full replacement cost
		
		  	Flood – full replacement cost
		
		  	Windstorm – full replacement cost
		
	Deductible:	  	$250,000 per loss or occurrence, except $250,000 earthquake and flood and $250,000 windstorm
		
	Insured:	  	Lessee
		
		  	Lessor

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

			
	Additional Insured:	  	The Prudential Insurance Company of America, as Purchaser
		
		  	Prudential Retirement Insurance and Annuity Company, as Purchaser
		
		  	Royal Bank of Canada, as Lender
		
		  	The Bank of New York Mellon Trust Company, N. A., as Collateral Agent
		
		  	The Secured Parties to the Note Purchase Agreements
		
		  	The Secured Parties to the Credit Agreements
		
	Mortgagee:	  	Bank of New York Mellon Trust Company, N.A. as Collateral Agent for the benefit of the Secured Parties
		
	Loss Payee:	  	The Bank of New York Mellon Trust Company, N.A. as Collateral Agent, as first loss payee
		
	Conditions:	  	30 days’ notice of cancellation or non-renewal except 10 days for non-payment of premium
		
		  	Acceptable loss payable clause
		
		  	Non-vitiation wording in favor of the Collateral Agent and the Secured Parties
		
		  	Waiver of subrogation in favor of the additional insureds
	
	General Liability Insurance:
		
	Cover:	  	Lessee against any liability arising out of claims for personal injury and property damage.
		
	Sum Insured:	  	$1,000,000 per occurrence up to a minimum of $2,000,000 aggregate limit (except that the fire damage legal liability coverage may be limited to $100,000 per fire and the medical expense coverage may be limited to $5,000 for any
one injured person).
		
	Insured:	  	Lessee
		
		  	Lessor

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

			
		
	Additional Insured:	  	The Prudential Insurance Company of America, as Purchaser
		
		  	Prudential Retirement Insurance and Annuity Company, as Purchaser
		
		  	The Bank of New York Mellon Trust Company, N. A., as Collateral Agent
		
		  	Royal Bank of Canada, as Lender
		
		  	The Secured Parties
		
	Conditions:	  	Occurrence policy wording or Aegis claims-first-made policy form
		
		  	Worldwide territory
	
	Automobile Liability Insurance:
		
	Cover:	  	Lessee for liability arising out of claims for personal injury (including bodily injury and death) and property damage covering all owned (if any), leased, non-owned and hired vehicles of Lessee, including loading and
unloading.
		
	Sum Insured:	  	$1,000,000 each accident.
		
	Deductible:	  	$1,000 each accident.
		
	Insured:	  	Lessee
		
		  	Lessor
		
		  	Additional Insured: The Prudential Insurance Company of America, as Purchaser
		
		  	Prudential Retirement Insurance and Annuity Company, as Purchaser
		
		  	The Bank of New York Mellon Trust Company, N. A., as Collateral Agent
		
		  	Royal Bank of Canada, as Lender
		
		  	The Secured Parties
	
	Workers’ Compensation and Employer’s Liability Insurance:
		
	Cover:	  	Lessee will maintain workers’ compensation insurance as required by applicable state laws and employer’s liability insurance insuring Lessee for liability arising out of injury to or death of employees.
		
	Sum Insured:	  	$1,000,000 each accident.

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

			
	Insured:	  	Lessee
		
		  	Lessor
	
	Excess or Umbrella Insurance:
		
	Cover:	  	Insurance covering claims in excess of the underlying insurance described in the foregoing.
		
	Sum Insured:	  	$25,000,000 each occurrence and in the aggregate
		
	Deductible:	  	$1,000,000 any one occurrence or amount of underlying insurance.
		
	Insured:	  	Lessee
		
		  	Lessor
		
	Additional Insured:	  	The Prudential Insurance Company of America, as Purchaser
		
		  	Prudential Retirement Insurance and Annuity Company, as Purchaser
		
		  	The Bank of New York Mellon Trust Company, N. A., as Collateral Agent
		
		  	Royal Bank of Canada, as Lender
		
		  	The Secured Parties
		
	Conditions:	  	Following form

  

	 	B.	Company Conditions and Requirements. 

 1. Loss Notification. Lessee shall promptly
notify Lessor of any single loss or event likely to give rise to a claim against an insurer for an amount in excess of $1,000,000 covered by any insurance policies required by this Exhibit C. 

2. Payment of Loss Proceeds. The Collateral Agent, on behalf of the Secured Parties, shall be named as the first loss payee in
applicable insurance policies (pursuant to a standard lender’s loss payable endorsement equivalent to a CP 1218). 
 3. Compliance
With Policy Requirements. Lessee shall not violate or permit to be violated any of the conditions, provisions or requirements of any insurance policy required by this Exhibit C, and Lessee shall perform, satisfy and comply with, or cause
to be performed, satisfied and complied with, all conditions, provisions and requirements of all insurance policies. 
 4. Waiver of
Subrogation. Lessee hereby waives any and every claim for recovery from the Secured Parties for any and all loss or damage covered by any of the insurance policies to be maintained under this Agreement to the extent that such loss or damage is
recovered under any such policy. If the 

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 
foregoing waiver will preclude the assignment of any such claim to the extent of such recovery, by subrogation (or otherwise), to an insurance company (or other Person), Lessee shall give written
notice of the terms of such waiver to each insurance company which has issued, or which may issue in the future, any such policy of insurance (if such notice is required by the insurance policy) and shall cause each such insurance policy to be
properly endorsed by Lessee to, or to otherwise contain one or more provisions that prevent the invalidation of the insurance coverage provided thereby by reason of such waiver. 

5. Notices. Lessee will advise Lessor in writing promptly of (i) any material changes in the coverage or limits provided under any
policy required by Section 6.2 of this Agreement and this Exhibit C and (ii) any default in the payment of any premium and of any other act or omission on the part of Lessee which may invalidate or render unenforceable, in whole or
in part, any insurance being maintained by Lessee pursuant to this Exhibit C. 
  

	C.	Insurance Policy Conditions and Requirements. 

 1. Permitted Insurers.
Lessee shall obtain the insurance required by this Exhibit C from responsible insurance companies authorized to do business in Texas (if required by law or regulation) with an A.M. Best Insurance Reports rating of A-, 8 or better. 

2. Control of Loss. If commercially feasible all policies of insurance required to be maintained pursuant to this Exhibit C,
wherein more than one insurer provides the coverage on any single policy, shall have a clause (or a separate agreement among the insurers) wherein all insurers have agreed that the lead insurer shall have full settlement authority on behalf of the
other insurers. 
 3. Loss Survey. All policies of insurance required to be maintained pursuant to this Exhibit C, wherein
more than one insurer provides the coverage on any single policy, shall have a clause (or a separate agreement among the insurers) wherein all insurers have agreed upon the employment of a single firm to survey and investigate all losses on behalf
of the insurers. 
 4. Policy Cancellation and Change. All policies of insurance required to be maintained pursuant to this
Exhibit C shall be endorsed so that if at any time they are canceled, or their coverage is reduced (by any party including the insured) so as to affect the interests of the Collateral Agent, the Holders and any other Secured Party, such
cancellation or reduction shall not be effective as to the Secured Parties for thirty (30) days, except for non-payment of premium which shall be for ten (10) days, after receipt by the Collateral Agent and the Secured Parties of written
notice from such insurer of such cancellation or reduction. 
 5. Miscellaneous Policy Provisions. All insurance policies providing
operational property damage, (i) shall name the Collateral Agent, on behalf of the Secured Parties, as the first loss payee, (ii) shall include a Lender’s loss payable clause in favor of the Collateral Agent, on behalf of the Secured
Parties. 
 6. Separation of Interests. All policies (other than in respect to workers compensation insurance) shall insure the
interests of the Secured Parties regardless of any breach or violation by Lessee or any other party of warranties, declarations or conditions contained in such policies, any action or inaction of Lessee or others, or any foreclosure relating to the
Stanton/Brady/Celeste Assets. 

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 7. Waiver of Subrogation. All policies of insurance required by this Exhibit C
shall provide for waivers of subrogation in favor of the Secured Parties and their respective officers and employees. 
 8. Liability
Insurance Endorsements. All policies of liability insurance required to be maintained by Lessee shall be endorsed as follows: 
 (i) To
name the Secured Parties as additional insureds; 
 (ii) To provide a severability of interests and cross liability clause; and 

(iii) That the insurance shall be primary and not excess to or contributing with any insurance or self-insurance maintained by Lessee. 

 

	D.	Acceptable Policy Terms and Conditions. 

 All policies of insurance required to be maintained
pursuant to this Exhibit C shall contain terms and conditions reasonably acceptable to Lessor. 

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

 SCHEDULE 3.2(b) 

FORM OF RENT SUPPLEMENT 
 Rent
Supplement 
 Pursuant to Section 3.2(b) of Lease 

[Date of Supplement] 
 Incremental CapEx: 

Lessee CapEx: 
 Base Rent: 

Percentage Rent Percentages: 
 Annual Percentage Rent
Breakpoints: 
 Revenues Attributable to Lessee CapEx: 
 ERCOT
Transmission Rate Allocation: 
 Term of Rent Supplement: 
  

			
	Executed this      day of             , 20    .
	
	SHARYLAND UTILITIES, L.P.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

	
	SHARYLAND DISTRIBUTION &
	TRANSMISSION SERVICES, L.L.C.
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  

STANTON/BRADY/CELESTE ASSETS LEASE AGREEMENT

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