CREDIT AGREEMENT

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EXHIBIT 4.2

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$200,000,000

CREDIT AGREEMENT

Dated as of March 7, 2005

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Among

CENTERPOINT ENERGY HOUSTON ELECTRIC, LLC,

as Borrower,

THE BANKS PARTIES HERETO,

BARCLAYS BANK PLC,

as Syndication Agent,

BANK OF AMERICA, N.A.,

CITIBANK, N.A.

and

UBS SECURITIES LLC,

as Co-Documentation Agents

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

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BANK OF AMERICA SECURITIES LLC and

BARCLAYS CAPITAL,

as Joint Lead Arrangers and Bookrunners

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TABLE OF CONTENTS

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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS............................... 1

SECTION 1.1. Certain Defined Terms.................................... 1

SECTION 1.2. Other Definitional Provisions............................ 21

ARTICLE II AMOUNTS AND TERMS OF THE LOANS AND LETTERS OF CREDIT.......... 22

SECTION 2.1. The Commitments.......................................... 22

SECTION 2.2. Procedure for Revolving Loan Borrowing................... 23

SECTION 2.3. Minimum Tranches......................................... 24

SECTION 2.4. Letters of Credit........................................ 24

ARTICLE III PROVISIONS RELATING TO ALL LOANS............................. 28

SECTION 3.1. Evidence of Loans........................................ 28

SECTION 3.2. Fees..................................................... 29

SECTION 3.3. Interest................................................. 29

SECTION 3.4. Reserve Requirements..................................... 30

SECTION 3.5. Interest Rate Determination and Protection............... 31

SECTION 3.6. Voluntary Interest Conversion or Continuation of Loans... 31

SECTION 3.7. Funding Losses Relating to LIBOR Rate Loans.............. 32

SECTION 3.8. Change in Legality....................................... 33

ARTICLE IV INCREASED COSTS, TAXES, PAYMENTS AND PREPAYMENTS.............. 33

SECTION 4.1. Increased Costs; Capital Adequacy........................ 33

SECTION 4.2. Pro Rata Treatment and Payments and Computations......... 35

SECTION 4.3. Taxes.................................................... 35

SECTION 4.4. Sharing of Payments, Etc................................. 37

SECTION 4.5. Optional Termination or Reduction of the Commitments..... 38

SECTION 4.6. Voluntary Prepayments.................................... 38

SECTION 4.7. Mitigation of Losses and Costs........................... 39

SECTION 4.8. Determination and Notice of Additional Costs and

Other Amounts......................................... 39

ARTICLE V CONDITIONS OF LENDING.......................................... 40

SECTION 5.1. Conditions Precedent to Loans and Letters of Credit...... 40

SECTION 5.2. Conditions Precedent to Each Borrowing................... 41

ARTICLE VI REPRESENTATIONS AND WARRANTIES................................ 42

SECTION 6.1. Representations and Warranties of the Borrower........... 42

ARTICLE VII AFFIRMATIVE AND NEGATIVE COVENANTS........................... 46

SECTION 7.1. Affirmative Covenants.................................... 46

SECTION 7.2. Negative Covenants....................................... 49

SECTION 7.3. Borrower's Accounting Reorganization..................... 52

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ARTICLE VIII EVENTS OF DEFAULT........................................... 53

SECTION 8.1. Events of Default........................................ 53

SECTION 8.2. Cancellation/Acceleration................................ 55

ARTICLE IX THE ADMINISTRATIVE AGENT...................................... 57

SECTION 9.1. Appointment.............................................. 57

SECTION 9.2. Delegation of Duties..................................... 57

SECTION 9.3. Exculpatory Provisions................................... 57

SECTION 9.4. Reliance by Administrative Agent......................... 57

SECTION 9.5. Notice of Default........................................ 58

SECTION 9.6. Non-Reliance on Administrative Agent and Other Banks..... 58

SECTION 9.7. Indemnification.......................................... 59

SECTION 9.8. Agent in Its Individual Capacity......................... 59

SECTION 9.9. Successor Administrative Agent........................... 59

ARTICLE X MISCELLANEOUS.................................................. 60

SECTION 10.1. Amendments and Waivers.................................. 60

SECTION 10.2. Notices................................................. 61

SECTION 10.3. No Waiver; Cumulative Remedies.......................... 62

SECTION 10.4. Survival of Representations and Warranties.............. 62

SECTION 10.5. Payment of Expenses and Taxes; Indemnity................ 62

SECTION 10.6. Effectiveness, Successors and Assigns,

Participations; Assignments.......................... 63

SECTION 10.7. Setoff.................................................. 66

SECTION 10.8. Counterparts............................................ 66

SECTION 10.9. Severability............................................ 66

SECTION 10.10. Integration............................................ 67

SECTION 10.11. GOVERNING LAW.......................................... 67

SECTION 10.12. Submission to Jurisdiction; Waivers.................... 67

SECTION 10.13. Acknowledgments........................................ 68

SECTION 10.14. Limitation on Agreements............................... 68

SECTION 10.15. Removal of Bank........................................ 69

SECTION 10.16. Officer's Certificates................................. 69

SECTION 10.17. USA Patriot Act........................................ 70

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Schedules

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Schedule 1.1(A) - Schedule of Commitments and Addresses

Schedule 6.1(p) - Ownership of Capital Stock of Subsidiaries; Significant

Subsidiaries

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Exhibits

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Exhibit A - Notice of Borrowing

Exhibit B - Notice of Interest Conversion/Continuation

Exhibit C - Assignment and Acceptance

Exhibit D - Note

</TABLE>

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This Credit Agreement (this "Agreement"), dated as of March 7, 2005,

among CenterPoint Energy Houston Electric, LLC, a Texas limited liability

company (the "Borrower"), the banks and other financial institutions from time

to time parties hereto (individually, a "Bank" and, collectively, the "Banks"),

Barclays Bank PLC, as syndication agent (in such capacity, the "Syndication

Agent"), Bank of America, N.A., Citibank, N.A. and UBS Securities LLC, as

co-documentation agents (in such capacities, the "Documentation Agents") and

JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, together

with any successors thereto in such capacity, the "Administrative Agent").

The parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.1. Certain Defined Terms. As used in this Agreement, the

following terms shall have the following meanings:

"ABR" means for any day, a rate per annum (rounded upwards, if

necessary, to the next 1/64 of 1%) equal to the greater of (a) the Prime

Rate in effect on such day and (b) the Federal Funds Effective Rate in

effect on such day plus 1/2 of 1%. For purposes hereof, "Prime Rate" means

the rate of per annum publicly announced from time to time by JPMorgan

Chase Bank, N.A. as its prime rate in effect at its principal office in New

York City (the Prime Rate not being intended to be the lowest rate of

interest charged by JPMorgan Chase Bank, N.A. in connection with extensions

of credit to debtors). Any change in the ABR due to a change in the Prime

Rate or the Federal Funds Effective Rate shall be effective as of the

opening of business on the effective day of such change in the Prime Rate

or the Federal Funds Effective Rate, respectively.

"ABR Loan" means a Loan that bears interest at the ABR as provided in

Section 3.3(a).

"Adjusted Interest Expense" means, for any period, (a) total interest

expense (including that attributable to Capital Lease obligations and

capitalized interest) determined in accordance with GAAP of the Borrower

and its Consolidated Subsidiaries for such period with respect to all

outstanding Indebtedness of the Borrower and its Consolidated Subsidiaries

(including all commissions, discounts and other fees and charges owed with

respect to letters of credit and bankers' acceptance financings and net

costs under Swap Agreements in respect of interest rates to the extent such

net costs are allocable to such period in accordance with GAAP) less (b)

the sum of the following for such period (i) total interest income

determined in accordance with GAAP and (ii) but only to the extent included

in the amount calculated pursuant to clause (a) above, (x) interest expense

on Hybrid Preferred Securities, (y) interest expense in respect of the

securitization programs of the Borrower and its Consolidated Subsidiaries

and in respect of any other Securitization Securities and (z) amortization

of settlement payments previously made on forward-starting Swap Agreements

and of any upfront fees and other costs associated with financings for the

Borrower and its Consolidated Subsidiaries.

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"Administrative Agent" has the meaning specified in the introduction

to this Agreement.

"Affiliate" means any Person that, directly or indirectly, Controls or

is Controlled by or is under common Control with another Person.

"Agents" means the collective reference to the Syndication Agent, the

Documentation Agents and the Administrative Agent.

"Agreement" has the meaning specified in the introduction to this

Agreement.

"Applicable Margin" means the rate per annum set forth below opposite

the Designated Rating from time to time in effect during the period for

which payment is due:

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<CAPTION>

DESIGNATED RATING LIBOR RATE MARGIN ABR MARGIN

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<S> <C> <C>

BBB+ or Baa1 or higher 0.625% 0.000%

BBB or Baa2 0.750% 0.000%

BBB- or Baa3 0.875% 0.000%

BB+ or Ba1 1.000% 0.000%

BB or Ba2 or lower 1.250% 0.250%

</TABLE>

In each row in the table set forth above, the first indicated rating corresponds

to that assigned by S&P and the second indicated rating corresponds to that

assigned by Moody's; the determination of which row of such table is applicable

at any time is set forth in the definition of "Designated Rating".

"Application" means an application, in such form as an Issuing Bank

may specify from time to time, requesting such Issuing Bank to issue a

Letter of Credit.

"Assignment and Acceptance" has the meaning specified in Section

10.6(c).

"Available Commitment" means, as to any Bank at any time, an amount

equal to the excess, if any, of (a) such Bank's Commitment then in effect

over (b) such Bank's Outstanding Extensions of Credit then outstanding.

"Bank" and "Banks" have the meanings specified in the introduction to

this Agreement.

"Bank Affiliate" means, (a) with respect to any Bank, (i) an Affiliate

of such Bank that is a bank or (ii) any entity (whether a corporation,

partnership, trust or otherwise) that is engaged in making, purchasing,

holding or otherwise investing in bank loans and similar extensions of

credit in the ordinary course of its business and is administered or

managed by a Bank or an Affiliate of such Bank and (b) with respect to any

Bank that is a fund which invests in bank loans and similar extensions of

credit, any

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other fund that invests in bank loans and similar extensions of credit and

is managed by such Bank, an Affiliate of such Bank or the same investment

advisor as such Bank or by an Affiliate of such investment advisor.

"Board" means the Board of Governors of the Federal Reserve System of

the United States (or any successor thereto).

"Borrowed Money" of any Person means any Indebtedness of such Person

for or in respect of money borrowed or raised by whatever means (including

acceptances, deposits, lease obligations under Capital Leases, Mandatory

Payment Preferred Stock and synthetic leases); provided, however, that

Borrowed Money shall not include (a) any guarantees that may be incurred by

endorsement of negotiable instruments for deposit or collection in the

ordinary course of business or similar transactions, (b) any obligations or

guarantees of performance of obligations under a franchise, performance

bonds, franchise bonds, obligations to reimburse drawings under letters of

credit issued in accordance with the terms of any safe harbor lease or

franchise or in lieu of performance or franchise bonds or other obligations

incurred in the ordinary course of business that do not represent money

borrowed or raised, in each case to the extent that such reimbursement

obligations are payable in full within ten (10) Business Days after the

date upon which such obligation arises, (c) trade payables, (d) any

obligations of such Person under Swap Agreements, (e) customer advance

payments and deposits arising in the ordinary course of business or (f)

operating leases.

"Borrower" has the meaning specified in the introduction to this

Agreement.

"Borrowing" means a borrowing consisting of Loans under Section 2.1 of

the same Type, and having, in the case of LIBOR Rate Loans, the same

Interest Period, made on the same day by the Banks.

"Borrowing Date" means any Business Day specified by the Borrower as a

date on which the Borrower requests the Banks to make Loans hereunder.

"Business Day" means a day other than a Saturday, Sunday or other day

on which commercial banks in New York City are authorized or required by

law to close; provided that when used in connection with a LIBOR Rate Loan,

the term "Business Day" shall also exclude any day on which commercial

banks are not open for dealings in Dollar deposits in the London interbank

market.

"Capital Lease" means a lease that, in accordance with GAAP, would be

recorded as a capital lease on the balance sheet of the lessee.

"Capital Stock" means any and all shares, interests, participations or

other equivalents (however designated) of capital stock of a corporation,

and any and all equivalent ownership interests in a Person (other than a

corporation), including without limitation, partnership interests in

partnerships and member interests in limited liability companies, and any

and all warrants or options to purchase any of the foregoing or securities

convertible into any of the foregoing.

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"Cash Equivalents" means (a) marketable direct obligations issued by,

or unconditionally guaranteed by, the United States government or issued by

any agency thereof and backed by the full faith and credit of the United

States, in each case maturing within one year from the date of acquisition;

(b) certificates of deposit, time deposits, eurodollar time deposits or

overnight bank deposits having maturities of 270 days or less from the date

of acquisition issued by any Bank or by any commercial bank organized under

the laws of the United States or any state thereof having combined capital

and surplus of not less than $500,000,000; (c) commercial paper of an

issuer rated at least A-1 by S&P or P-1 by Moody's, or carrying an

equivalent rating by a nationally recognized rating agency, if both of the

two named rating agencies cease publishing ratings of commercial paper

issuers generally, and maturing within 270 days from the date of

acquisition; (d) repurchase obligations of any Bank or of any commercial

bank satisfying the requirements of clause (b) of this definition, having a

term of not more than 30 days, with respect to securities issued or fully

guaranteed or insured by the United States government; (e) securities with

maturities of one year or less from the date of acquisition issued or fully

guaranteed by any state, commonwealth or territory of the United States, by

any political subdivision or taxing authority of any such state,

commonwealth or territory or by any foreign government, the securities of

which state, commonwealth, territory, political subdivision, taxing

authority or foreign government (as the case may be) are rated at least A

by S&P or A by Moody's; (f) securities with maturities of 270 days or less

from the date of acquisition backed by standby letters of credit issued by

any Bank or any commercial bank satisfying the requirements of clause (b)

of this definition; (g) money market mutual or similar funds that invest

exclusively in assets satisfying the requirements of clauses (a) through

(f) of this definition; or (h) money market funds that (i) comply with the

criteria set forth in SEC Rule 2a-7 under the Investment Company Act of

1940, as amended, (ii) are rated AAA by S&P and Aaa by Moody's and (iii)

have portfolio assets of at least $5,000,000,000.

"CEHE Backstop Agreement" means the $1,310,000,000 Credit Agreement,

dated as of the date hereof, among the Borrower, Citibank, N.A., as

administrative agent, and the other financial institutions parties thereto,

as amended, modified or supplemented from time to time.

"CEHE Facility" means the credit facilities provided under the

Existing CEHE Credit Agreement and under the CEHE Backstop Agreement.

"CenterPoint" means CenterPoint Energy, Inc., a Texas corporation and

utility holding company, and the indirect parent of the Borrower.

"Change in Control" means (i) with respect to CenterPoint, the

acquisition by any Person or "group" (within the meaning of Rule 13d-5 of

the Exchange Act) of beneficial ownership (determined in accordance with

Rule 13d-3 of the Exchange Act) of Capital Stock of CenterPoint, the result

of which is that such Person or group beneficially owns 50% or more of the

aggregate voting power of all then issued and outstanding Capital Stock of

CenterPoint or (ii) CenterPoint shall cease to own and control

beneficially, directly or indirectly, 100% of the outstanding common

Capital Stock of the Borrower free and clear of all Liens. For purposes of

the foregoing, the phrase "voting power"

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means, with respect to an issuer, the power under ordinary circumstances to

vote for the election of members of the board of directors or other

governing body of such issuer.

"Closing Date" means the date, on or before March 31, 2005, all the

conditions set forth in Section 6.1 are satisfied (or waived) in accordance

with the terms hereof.

"Code" means the Internal Revenue Code of 1986, as amended from time

to time, and any successor statute.

"Commitment" means, as to any Bank, the obligation of such Bank, if

any, to make Loans and participate in L/C Obligations in an aggregate

principal and/or face amount not to exceed the amount set forth under the

heading "Commitment" opposite such Bank's name on Schedule 1.1(A) and/or in

the Assignment and Acceptance pursuant to which such Bank became a party

hereto, as the same may be changed from time to time pursuant to the terms

hereof; and "Commitments" shall be the collective reference to the

Commitments of all of the Banks. The original amount of the Total

Commitments is $200,000,000.

"Commitment Fee" means, as to any Bank, the fee equal to the rate per

annum set forth below opposite the Designated Rating from time to time in

effect during the period for which payment is due on the Available

Commitment of such Bank:

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DESIGNATED RATING COMMITMENT FEE

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BBB+ or Baa1 or higher 0.125%

BBB or Baa2 0.150%

BBB- or Baa3 0.175%

BB+ or Ba1 0.200%

BB or Ba2 or lower 0.250%

</TABLE>

In each row in the table set forth above, the first indicated rating

corresponds to that assigned by S&P and the second indicated rating

corresponds to that assigned by Moody's; the determination of which row of

such table is applicable at any time is set forth in the definition of

"Designated Rating".

"Commonly Controlled Entity" means an entity, whether or not

incorporated, that is under common control with the Borrower within the

meaning of Section 4001 of ERISA or is part of a group that includes the

Borrower and that is treated as a single employer under Section 414 of the

Code.

"Confidential Information Memorandum" means the Confidential

Information Memorandum, dated January, 2005.

"Consolidated Capitalization" means, as of any date of determination,

the sum of (a) Consolidated Shareholders' Equity, (b) Consolidated

Indebtedness for Borrowed

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Money and, without duplication, (c) Mandatory Payment Preferred Stock;

provided that for the purpose of calculating compliance with Section

7.2(a), Consolidated Capitalization shall be determined excluding any

adjustment, non-cash charge to net income or other non-cash charges or

writeoffs resulting thereto from application of SFAS No. 142.

"Consolidated EBITDA" means, for any twelve-month period ending on the

date of determination, Consolidated Net Income for such period plus,

without duplication and to the extent reflected as a charge in the

statement of such Consolidated Net Income for such period, the sum of (a)

income tax expense, (b) interest expense, distributions on Hybrid Preferred

Securities (to the extent not included in interest expense and to the

extent deducted to arrive at Consolidated Net Income), amortization or

writeoff of debt discount and debt issuance costs and commissions,

discounts and other fees and charges associated with Indebtedness

(including the Loans) of the Borrower and its Consolidated Subsidiaries and

amortization of settlement payments previously made on forward-starting

Swap Agreements, (c) depreciation and amortization expense, (d)

amortization of intangibles (including, but not limited to, goodwill) and

organization costs, (e) any extraordinary, unusual or non-recurring

expenses or losses (including, whether or not otherwise includable as a

separate item in the statement of such Consolidated Net Income for such

period, losses on sales of assets outside of the ordinary course of

business) and (f) any other non-cash charges, and minus, to the extent

included as income in the statement of such Consolidated Net Income for

such period, the sum of (a) interest income, (b) any extraordinary, unusual

or non-recurring income or gains (including, whether or not otherwise

includable as a separate item in the statement of such Consolidated Net

Income for such period, gains on the sales of assets outside of the

ordinary course of business), (c) any other non-cash income, (d) Transition

Charges Principal and Interest, (e) Pre-Tax Excess Mitigation Credit and

(f) the aggregate pre-tax principal amount of CTC Recoveries, all as

determined on a consolidated basis. For purposes of this definition, any

results of operations classified as "discontinued operations" in accordance

with GAAP will be included in the manner set forth above.

"Consolidated Indebtedness" means, as of any date of determination,

the sum of

(i) the total Indebtedness for Borrowed Money of the Borrower and

its Consolidated Subsidiaries as shown on the consolidated balance

sheet of the Borrower and its Consolidated Subsidiaries, determined

without duplication of any Guarantee of Indebtedness of the Borrower

by any of its Consolidated Subsidiaries or of any Guarantee of

Indebtedness of any such Consolidated Subsidiary by the Borrower or

any other Consolidated Subsidiary of the Borrower, plus

(ii) any Mandatory Payment Preferred Stock, less

(iii) the amount of Indebtedness described in clause (i)

attributable to amounts then outstanding under receivables facilities

or arrangements to the extent that such amounts would not have been

shown as Indebtedness on a balance sheet prepared in accordance with

GAAP prior to January 1, 1997, less

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(iv) the greater of (x) until the date that is six months after

the receipt thereof, cash and Cash Equivalents of the Borrower and its

Consolidated Subsidiaries on such date of determination constituting

Net Cash Proceeds of the True-Up Securitization and (y) until the date

of the final scheduled maturity of the CEHE Facility, the lesser of

(A) the aggregate amount of cash and Cash Equivalents of the Borrower

and its Consolidated Subsidiaries on such date of determination

constituting Net Cash Proceeds of the True-Up Securitization and (B)

the aggregate principal amount outstanding on such date under the CEHE

Facility.

"Consolidated Net Income" means, for any period, the consolidated net

income (or loss) of the Borrower and its Consolidated Subsidiaries,

determined on a consolidated basis in accordance with GAAP; provided that

there shall be excluded (a) the income (or deficit) of any Person accrued

prior to the date it becomes a Consolidated Subsidiary of the Borrower or

is merged into or consolidated with the Borrower or any of its Consolidated

Subsidiaries and (b) the income (or deficit) of any Person (other than a

Consolidated Subsidiary of the Borrower) in which the Borrower or any of

its Consolidated Subsidiaries has an ownership interest, except to the

extent that any such income is actually received by the Borrower or such

Consolidated Subsidiary in the form of dividends or similar distributions.

"Consolidated Shareholders' Equity" means, as of any date of

determination, the total assets of the Borrower and its Significant

Subsidiaries, less all liabilities of the Borrower and its Significant

Subsidiaries. As used in this definition, "liabilities" means all

obligations that, in accordance with GAAP consistently applied, would be

classified on a balance sheet as liabilities (including without limitation

(to the extent so classified), (a) Indebtedness; (b) deferred liabilities;

and (c) Indebtedness of the Borrower or any of its Significant Subsidiaries

that is expressly subordinated in right and priority of payment to other

liabilities of the Borrower or such Significant Subsidiary, but in any case

excluding as at such date of determination any Junior Subordinated Debt

owned by any Hybrid Preferred Securities Subsidiary).

"Consolidated Subsidiary" means, with respect to a specified Person at

any date, any Subsidiary or any other Person (other than with respect to

the Borrower, any Securitization Subsidiary or any Unrestricted

Subsidiary), the accounts of which under GAAP would be consolidated with

those of such specified Person in its consolidated financial statements as

of such date.

"Contractual Obligation" means, as to any Person, any provision of any

security issued by such Person or of any written agreement, instrument or

other written undertaking to which such Person is a party or by which it or

any of its property is bound.

"Controlled" means, with respect to any Person, the ability of another

Person (whether directly or indirectly and whether by the ownership of

voting securities, contract or otherwise) to appoint and/or remove the

majority of the members of the board of directors or other governing body

of that Person (and "Control" shall be similarly construed).

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"CTC Recoveries" means the competition transition charges to be paid

to the Borrower by retail electric providers in respect of stranded costs

and certain power market price and fuel cost recovery true-ups.

"Default" means any event that, with the lapse of time or giving of

notice, or both, or any other condition, would constitute an Event of

Default.

"Default Rate" means with respect to any overdue amount owed

hereunder, a rate per annum equal to (a) in the case of overdue principal

with respect to any Loan, the sum of the interest rate in effect at such

time with respect to such Loan under Section 3.3, plus 2%; provided that in

the case of overdue principal with respect to any LIBOR Rate Loan, after

the end of the Interest Period with respect to such Loan, the Default Rate

shall equal the rate set forth in clause (c) below, (b) in the case of

overdue principal with respect to any Reimbursement Obligations, the sum of

the interest rate per annum in effect at such time with respect to ABR

Loans under Section 3.3, plus 2%, and (c) in the case of overdue interest

with respect to any Loan, Commitment Fees, Utilization Fees or other

amounts payable hereunder, the sum of the interest rate per annum in effect

at such time with respect to ABR Loans, plus 2%.

"Designated Rating" means (a) the higher of the Ratings and (b) if the

difference in the Rating issued by S&P and Moody's is greater than one

level, the Rating that is one level higher than the lower of such Ratings

shall apply. Any change in the calculation of the Applicable Margin with

respect to the Borrower that is caused by a change in the Designated Rating

will become effective on the date of the change in the Designated Rating.

If the rating system of any Rating Agency shall change, or if either S&P or

Moody's shall cease to be in the business of rating corporate debt

obligations, the Borrower and the Administrative Agent shall negotiate in

good faith if necessary to amend this definition and the definitions of

"Rating" and "Rating Agencies" to reflect such changed rating system or the

unavailability of Ratings from such Rating Agencies and, pending the

effectiveness of any such amendment, the Designated Rating shall be

determined by reference to the Rating most recently in effect prior to such

change or cessation.

"Disposition" means with respect to any Property (excluding cash and

Cash Equivalents), any sale, lease, sale and leaseback, assignment,

conveyance, transfer or other disposition thereof outside the ordinary

course of business. The terms "Dispose" and "Disposed of" shall have

correlative meanings.

"Documentation Agents" has the meaning specified in the introduction

to this Agreement.

"Dollars" and the symbol "$" mean the lawful currency of the United

States.

"Early Funding ABR Loan" has the meaning specified in Section 2.2(a).

"ERISA" means the Employee Retirement Income Security Act of 1974, as

amended from time to time.

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"Event of Default" has the meaning specified in Section 8.1.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Existing CEHE Credit Agreement" means the $1,310,000,000 Credit

Agreement, dated as of November 12, 2002, among CenterPoint Electric, as

borrower, Credit Suisse First Boston, as administrative agent, and the

other financial institutions parties thereto, as amended, modified or

supplemented from time to time.

"Existing CenterPoint Credit Agreement" means the $2,350,000,000

Credit Agreement, dated as of October 7, 2003, among CenterPoint, the

Administrative Agent and other financial institutions parties thereto, as

heretofore amended, modified or supplemented.

"Existing CenterPoint Credit Facility" means the credit facility

provided under the Existing CenterPoint Credit Agreement.

"Facility" means the Commitments and the extensions of credit made

thereunder.

"Federal Funds Effective Rate" means, for any day, a fluctuating rate

per annum equal to the weighted average of the rates on overnight federal

funds transactions with members of the Federal Reserve System arranged by

federal funds brokers, as published on the next succeeding Business Day by

the Federal Reserve Bank of New York, or, if such rate is not so published

for any day that is a Business Day, the average of the quotations for such

day for such transactions received by the Administrative Agent from three

federal funds brokers of recognized standing selected by the Borrower.

"Funding Office" means the office of the Administrative Agent

specified in Section 10.2 or such other office as may be specified from

time to time by the Administrative Agent as its funding office by written

notice to the Borrower and the Banks.

"GAAP" means generally accepted accounting principles in effect from

time to time in the United States of America.

"General Mortgage Indenture" means the General Mortgage Indenture,

dated as of October 10, 2002, between the Borrower and JPMorgan Chase Bank,

N.A. (as successor to JPMorgan Chase Bank), as trustee, as amended,

modified or supplemented from time to time.

"Global Coordinators" means J.P. Morgan Securities Inc. and Citigroup

Global Markets Inc., in their capacities as global coordinators.

"Governmental Authority" means any nation or government, any state or

other political subdivision thereof and any entity exercising executive,

legislative, judicial, regulatory or administrative functions of or

pertaining to government.

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"Guarantee" means, as to any Person (the "guaranteeing person"), any

obligation of (a) the guaranteeing Person or (b) another Person (including,

without limitation, any bank under any letter of credit) to induce the

creation of which the guaranteeing person has issued a reimbursement,

counterindemnity or similar obligation, in either case guaranteeing or in

effect guaranteeing any principal of any Indebtedness for Borrowed Money

(the "primary obligation") of any other third Person in any manner, whether

directly or indirectly, including, without limitation, any obligation of

the guaranteeing Person, whether or not contingent, (i) to purchase any

such primary obligation or any property constituting direct or indirect

security therefor, (ii) to advance or supply funds for the purchase or

payment of any such primary obligation or (iii) otherwise to assure or hold

harmless the owner of any such primary obligation against loss in respect

thereof. The amount of any Guarantee of any guaranteeing person shall be

deemed to be the lower of (a) an amount equal to the stated or determinable

amount of the primary obligation in respect of which such Guarantee is made

and (b) the maximum amount for which such guaranteeing person may be liable

pursuant to the terms of the instrument embodying such Guarantee, unless

such primary obligation and the maximum amount for which such guaranteeing

person may be liable are not stated or determinable, in which case the

amount of such Guarantee shall be such guaranteeing person's maximum

reasonably anticipated liability in respect thereof as determined by the

Borrower in good faith (and "guaranteed" and "guarantor" shall be construed

accordingly).

"Highest Lawful Rate" means, with respect to each Bank, the maximum

nonusurious interest rate, if any, that at any time or from time to time

may be contracted for, taken, reserved, charged or received with respect to

any Loan or on other amounts, if any, due to such Bank pursuant to this

Agreement or any other Loan Document under applicable law. "Applicable law"

as used in this definition means, with respect to each Bank, that law in

effect from time to time that permits the charging and collection by such

Bank of the highest permissible lawful, nonusurious rate of interest on the

transactions herein contemplated including, without limitation, the laws of

each State that may be held to be applicable, and of the United States, if

applicable.

"Hybrid Preferred Securities" means preferred securities issued by any

Hybrid Preferred Securities Subsidiary.

"Hybrid Preferred Securities Subsidiary" means any Delaware business

trust (or similar entity) (i) all of the common equity interest of which is

owned (either directly or indirectly through one or more Wholly-Owned

Subsidiaries) at all times by the Borrower, (ii) that has been formed for

the purpose of issuing Hybrid Preferred Securities and (iii) substantially

all of the assets of which consist at all times solely of the Junior

Subordinated Debt and payments made from time to time on the Junior

Subordinated Debt.

"Indebtedness" of any Person means the sum of (a) all items (other

than Capital Stock, capital surplus, retained earnings, other comprehensive

income, treasury stock and any other items that would properly be included

in shareholder equity) that, in accordance with GAAP consistently applied,

would be included in determining total liabilities as shown on the

liability side of a balance sheet of such Person as at the date on which

the

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<PAGE>

Indebtedness is to be determined, (b) all obligations of such Person,

contingent or otherwise, as account party or applicant (or equivalent

status) in respect of any standby letters of credit or equivalent

instruments, and (c) without duplication, the amount of Guarantees by such

Person of items described in clauses (a) and (b); provided, however, that

Indebtedness of a Person shall not include (i) any Junior Subordinated Debt

owned by any Hybrid Preferred Securities Subsidiary, (ii) any Guarantee by

the Borrower or its Subsidiaries of payments with respect to any Hybrid

Preferred Securities, (iii) any Securitization Securities or (iv) any

Hybrid Preferred Securities.

"Insolvency" means, with respect to any Multiemployer Plan, the

condition that such Plan is insolvent within the meaning of Section 4245 of

ERISA (and "Insolvent" shall be construed accordingly for such purposes).

"Interest Period" means, for each LIBOR Rate Loan comprising part of

the same Borrowing, the period commencing on the date of such LIBOR Rate

Loan or the date of the conversion of any Loan into such LIBOR Rate Loan,

as the case may be, and ending on the last day of the period selected by

the Borrower pursuant to Section 2.2 or 3.6, as the case may be, and,

thereafter, each subsequent period commencing on the last day of the

immediately preceding Interest Period and ending on the last day of the

period selected by the Borrower pursuant to Section 3.6. The duration of

each such Interest Period shall be one, two, three, six or, if available to

all Banks under the Facility, nine or twelve months or periods shorter than

one month, as Borrower may select by notice pursuant to Section 2.2 or 3.6

hereof, provided, however, that:

(i) any Interest Period in respect of a Loan that would otherwise

extend beyond the Termination Date shall end on the Termination Date;

(ii) whenever the last day of any Interest Period would otherwise

occur on a day other than a Business Day, the last day of such

Interest Period shall be extended to occur on the next succeeding

Business Day; provided that if such extension would cause the last day

of such Interest Period to occur in the next following calendar month,

the last day of such Interest Period shall occur on the next preceding

Business Day, and

(iii) any Interest Period that begins on the last Business Day of

a calendar month (or on a day for which there is no numerically

corresponding day in the calendar month at the end of such Interest

Period) shall end on the last Business Day of a calendar month.

"Investment" has the meaning specified in Section 7.2(f).

"Issuing Bank" means (i) JPMorgan Chase Bank, N.A., and Citibank,

N.A., each in its capacity as issuer of any Letter of Credit; provided,

however, that neither JPMorgan Chase Bank, N.A. nor Citibank, N.A. shall be

required to issue Letters of Credit in excess of $25,000,000 at any time

outstanding for each such Issuing Bank, and (ii) any other Bank, in such

capacity, selected to be an Issuing Bank by the Borrower with the consent

of the Administrative Agent, which shall not be unreasonably withheld, and

such Bank.

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Any reference to an Issuing Bank herein means the applicable institution

issuing the applicable Letter of Credit.

"Junior Subordinated Debt" means subordinated debt of the Borrower or

any Subsidiary of the Borrower (i) that is issued at par to a Hybrid

Preferred Securities Subsidiary in connection with the issuance of Hybrid

Preferred Securities, (ii) the payment of the principal of which and

interest on which is subordinated (with certain exceptions) to the prior

payment in full in cash or its equivalent of all senior indebtedness of the

obligor thereunder and (iii) that has an original tenor no earlier than 30

years from the issuance thereof.

"L/C Commitment" means the amount of $50,000,000.

"L/C Fee Payment Date" means the last day of each March, June,

September and December while the L/C Commitment remains in effect and the

Termination Date.

"L/C Obligations" means, at any time, an amount equal to the sum of

(a) the aggregate then undrawn and unexpired face amount of the then

outstanding Letters of Credit and (b) the aggregate amount of drawings

under Letters of Credit that have not then been reimbursed pursuant to

Section 2.4.

"L/C Participants" means the collective reference to all the Banks

other than the Issuing Bank in their respective capacities as participants

in L/C Obligations.

"Lead Arrangers" means Barclays Capital and Bank of America Securities

LLC, in their capacities as joint lead arrangers and bookrunners.

"Letters of Credit" has the meaning assigned to such term in Section

2.4(a)(ii).

"LIBOR Rate" means, with respect to each day during each Interest

Period pertaining to a LIBOR Rate Loan, the rate per annum determined on

the basis of the rate for deposits in Dollars for a period equal to such

Interest Period commencing on the first days of such Interest Period

appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London

time, two Business Days prior to the beginning of such Interest Period. In

the event that such rate does not appear on Page 3750 of the Telerate

screen (or otherwise on such screen), the "LIBOR Rate" shall be determined

by reference to such other comparable publicly available service for

displaying eurodollar rates as may be selected by the Administrative Agent

or, in the absence of such availability, by reference to the rate at which

the Administrative Agent is offered Dollar deposits at or about 11:00 A.M.,

New York City time, two Business Days prior to the beginning of such

Interest Period in the interbank eurodollar market where its eurodollar and

foreign currency and exchange operations are then being conducted for

delivery on the first day of such Interest Period for the number of days

comprised therein.

"LIBOR Rate Loan" means a Loan that bears interest at the LIBOR Rate

as provided in Section 3.3(b).

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"Lien" means any mortgage, deed of trust, pledge, hypothecation,

assignment, deposit arrangement, charge, security interest, encumbrance or

lien of any kind whatsoever (including any Capital Lease).

"Loans" means the loans made by the Banks to the Borrower pursuant to

this Agreement.

"Loan Documents" means this Agreement, any Notes and any document or

instrument executed in connection with the foregoing.

"Majority Banks" means, at any time, Banks having in excess of 50% of

the Total Commitments then in effect or, if the Commitments shall have

terminated, the Total Outstanding Extensions of Credit then outstanding.

"Mandatory Payment Preferred Stock" means any preference or preferred

stock of the Borrower or of any Consolidated Subsidiary (other than (x) any

preference or preferred stock issued to the Borrower or its Subsidiaries,

(y) Hybrid Preferred Securities and (z) Junior Subordinated Debt) that is

subject to mandatory redemption, sinking fund or retirement provisions

(regardless of whether any portion thereof is due and payable within one

year).

"Margin Stock" has the meaning assigned to such term in Regulation U.

"Material Adverse Effect" means any material adverse effect on the

ability of the Borrower to perform its obligations under the Loan Documents

on a timely basis (it being understood that Material Adverse Effect shall

not include the effect of any True-Up Litigation).

"Maturity Date" means March 7, 2010.

"Moody's" means Moody's Investors Service, Inc. and any successor

rating agency.

"Multiemployer Plan" means a Plan that is a multiemployer plan as

defined in Section 4001(a)(3) of ERISA.

"Net Cash Proceeds" means, in connection with any True-Up

Securitization or any incurrence of Indebtedness for Borrowed Money, the

cash proceeds received from such securitization or incurrence,

respectively, net of attorneys' fees, investment banking fees, accountants'

fees, underwriting discounts, escrow fees, reserves, related swap costs and

commissions and other customary fees and expenses actually incurred in

connection therewith and other similar payment obligations resulting

therefrom that are required to be paid concurrently or otherwise as a

result of such securitization or incurrence.

"Net Tangible Assets" means the total assets of the Borrower, its

Consolidated Subsidiaries and the Unrestricted Subsidiaries, minus goodwill

and other intangible assets as shown on the balance sheet of the Borrower,

its Consolidated Subsidiaries and the

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<PAGE>

Unrestricted Subsidiaries delivered pursuant to Section 7.1(a) in respect

of the most recently ended fiscal quarter of the Borrower.

"Notes" means the collective reference to any promissory note

evidencing Loans.

"Notice of Borrowing" has the meaning specified in Section 2.2.

"Notice of Interest Conversion/Continuation" has the meaning specified

in Section 3.6(a).

"Original Mortgage" means the Mortgage and Deed of Trust, dated as of

November 1, 1944, by the Borrower to South Texas Commercial National Bank

of Houston, as Trustee (JPMorgan Chase Bank, N.A., as successor Trustee),

as amended, modified or supplemented from time to time.

"Other Taxes" has the meaning specified in Section 4.3(b).

"Outstanding Extensions of Credit" means, as to any Bank at any time,

an amount equal to the sum of (a) the aggregate principal amount of all

Loans made by such Bank then outstanding and (b) such Bank's Revolving

Percentage of the L/C Obligations then outstanding.

"Participant" has the meaning specified in Section 10.6(b).

"PBGC" means the Pension Benefit Guaranty Corporation established

pursuant to Subtitle A of Title IV of ERISA or any successor.

"Permitted Liens" means with respect to any Person:

(a) Liens for current taxes, assessments or other governmental

charges that are not delinquent or remain payable without any penalty,

or the validity or amount of which is contested in good faith by

appropriate proceedings, provided, however, that adequate reserves

with respect thereto are maintained on the books of such Person in

accordance with GAAP, and provided, further, that any right to

seizure, levy, attachment, sequestration, foreclosure or garnishment

with respect to Property of such Person or any Subsidiary of such

Person by reason of such Lien has not matured, or has been, and

continues to be, effectively enjoined or stayed;

(b) landlord Liens for rent not yet due and payable and Liens for

materialmen, mechanics, warehousemen, carriers, employees, workmen,

repairmen and other similar nonconsensual Liens imposed by operation

of law, for current wages or accounts payable or other sums not yet

delinquent, in each case arising in the ordinary course of business or

if overdue, that are being contested in good faith by appropriate

proceedings, provided, however, that any right to seizure, levy,

attachment, sequestration, foreclosure or garnishment with respect to

Property of such Person or any Subsidiary of such Person by reason of

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<PAGE>

such Lien has not matured, or has been, and continues to be,

effectively enjoined or stayed;

(c) Liens (other than any Lien imposed pursuant to Section

401(a)(29) or 412(n) of the Code, ERISA or any environmental law,

order, rule or regulation) incurred or deposits made, in each case, in

the ordinary course of business, (i) in connection with workers'

compensation, unemployment insurance and other types of social

security or (ii) to secure (or to obtain letters of credit that

secure) the performance of tenders, statutory obligations, surety and

appeal bonds, bids, leases, performance or payment bonds, purchase,

construction, sales contracts and other similar obligations, in each

case not incurred or made in connection with the borrowing of money,

the obtaining of advances or the payment of the deferred purchase

price of property;

(d) Liens arising out of or in connection with any litigation or

other legal proceeding that is being contested in good faith by

appropriate proceedings; provided, however, that adequate reserves

with respect thereto are maintained on the books of such Person in

accordance with GAAP; and provided, further, that, subject to Section

8.1(i) (so long as such Lien is discharged or released within 60 days

of attachment thereof), any right to seizure, levy, attachment,

sequestration, foreclosure or garnishment with respect to Property of

such Person or any Subsidiary of such Person by reason of such Lien

has not matured, or has been, and continues to be, effectively

enjoined or stayed;

(e) precautionary filings under the applicable Uniform Commercial

Code made by a lessor with respect to personal property leased to such

Person or any Subsidiary of such Person;

(f) other non-material Liens or encumbrances none of which

secures Indebtedness for Borrowed Money of the Borrower or any of its

Subsidiaries or interferes materially with the use of the Property

affected in the ordinary conduct of Borrower's or its Subsidiaries'

business and which individually or in the aggregate do not have a

Material Adverse Effect;

(g) easements, rights-of-way, restrictions and other similar

encumbrances and exceptions to title existing or incurred in the

ordinary course of business that, in the aggregate, do not in any case

materially detract from the value of the property subject thereto or

materially interfere with the ordinary conduct of the business of the

Borrower and its Subsidiaries, taken as a whole;

(h) (i) Liens created by Capital Leases, provided that the Liens

created by any such Capital Lease attach only to the Property leased

to the Borrower or one of its Subsidiaries pursuant thereto, (ii)

purchase money Liens securing Indebtedness of the Borrower or any of

its Subsidiaries (including such Liens securing such Indebtedness

incurred within twelve months of the date on which such Property was

acquired), provided that all such Liens attach only to the Property

purchased with the proceeds of the Indebtedness secured thereby and

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<PAGE>

only secure the Indebtedness incurred to finance such purchase, (iii)

Liens on receivables, customer charges, notes, ownership interests,

contracts or contract rights created in connection with a sale,

securitization or monetization of such receivables, customer charges,

notes, ownership interests, contracts or contract rights, and Liens on

rights of the Borrower or any Subsidiary related to such receivables,

customer charges, notes, ownership interests, contracts or contract

rights which are transferred to the purchaser of such receivables,

customer charges, notes, ownership interests, contracts or contract

rights in connection with such sale, securitization or monetization,

provided that such Liens secure only the obligations of the Borrower

or any of its Subsidiaries in connection with such sale,

securitization or monetization and (iv) Liens created by leases that

do not constitute Capital Leases at the time such leases are entered

into, provided that the Liens created thereby attach only to the

Property leased to the Borrower or one of its Subsidiaries pursuant

thereto;

(i) Liens on cash and short-term investments (i) deposited by the

Borrower or any of its Subsidiaries in accounts with or on behalf of

futures contract brokers or other counterparties or (ii) pledged by

the Borrower or any of its Subsidiaries, in the case of clause (i) or

(ii) to secure its obligations with respect to contracts (including

without limitation, physical delivery, option (whether cash or

financial), exchange, swap and futures contracts) for the purchase or

sale of any energy-related commodity or interest rate or currency rate

management contracts;

(j) Liens on (i) Property owned by a Project Financing Subsidiary

or (ii) equity interests in a Project Financing Subsidiary (including

in each case a pledge of a partnership interest, common stock or a

membership interest in a limited liability company) securing

Indebtedness of the Borrower or any of its Subsidiaries incurred in

connection with a Project Financing; and

(k) Liens on equity interests in an Unrestricted Subsidiary

(including in each case a pledge of a partnership interest, common

stock or a membership interest in a limited liability company)

securing, subject to Section 7.2(f), Indebtedness of such Unrestricted

Subsidiary.

"Person" means an individual, partnership, corporation (including a

business trust), joint stock company, trust, unincorporated association,

joint venture, government (or any political subdivision or agency thereof)

or any other entity of whatever nature.

"Plan" means, at a particular time with respect to the Borrower, any

employee benefit plan that is covered by ERISA and in respect of which

Borrower or a Commonly Controlled Entity is (or, if such plan were

terminated at such time, would under Section 4069 of ERISA be deemed to be)

an "employer" as defined in Section 3(5) of ERISA.

"Pre-Tax Excess Mitigation Credit" means the amount of the credit, if

any, (including the interest component) provided to retail electric

customers under order of the PUC to reflect the refund of an amount equal

to estimated cumulative excess earnings

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<PAGE>

applicable to the years 1998 through 2001 which were used to accelerate

depreciation on electric generation assets in order to reduce or mitigate

exposure to stranded costs associated with electric generation assets or

any other credit provided to customers that will be recovered through

securitization or CTC Recoveries.

"Project Financing" means any Indebtedness or lease obligations that

do not constitute Capital Leases at the time such leases are entered into,

in each case that are incurred to finance a project or group of projects

(including any construction financing) to the extent that such Indebtedness

(or other obligations) expressly are not recourse to the Borrower or any of

its Restricted Subsidiaries (other than a Project Financing Subsidiary) or

any of their respective Property other than the Property of a Project

Financing Subsidiary and equity interests in a Project Financing Subsidiary

(including in each case a pledge of a partnership interest, common stock or

a membership interest in a limited liability company).

"Project Financing Subsidiary" means any Restricted Subsidiary of the

Borrower (or any other Person in which Borrower directly or indirectly owns

a 50% or less interest) whose principal purpose is to incur Project

Financing or to become an owner of interests in a Person so created to

conduct the business activities for which such Project Financing was

incurred, and substantially all the fixed assets of which Subsidiary or

Person are those fixed assets being financed (or to be financed) in whole

or in part by one or more Project Financings.

"Property" means any interest or right in any kind of property or

asset, whether real, personal or mixed, owned or leased, tangible or

intangible and whether now held or hereafter acquired.

"Purchasing Banks" has the meaning specified in Section 10.6(c).

"PUC" means the Public Utility Commission of Texas.

"Rating" means the Borrower's corporate credit rating issued by S&P

and the Borrower's issuer rating issued by Moody's (it being understood

that a change in outlook status (e.g., watch status, negative outlook

status) is not a change in Rating as contemplated hereby).

"Rating Agencies" means (a) S&P and (b) Moody's.

"Register" has the meaning specified in Section 10.6(d) hereof.

"Regulation U" means Regulation U of the Board or any other regulation

hereafter promulgated by the Board to replace the prior Regulation U and

having substantially the same function.

"Reimbursement Obligation" means the obligation of the Borrower to

reimburse the Issuing Bank pursuant to Section 2.4(e) for amounts drawn

under Letters of Credit.

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"Reorganization" means, with respect to any Multiemployer Plan, the

condition that such Plan is in reorganization within the meaning of Section

4241 of ERISA.

"Reportable Event" means any of the events set forth in Section

4043(c) of ERISA and PBGC Reg. Section 4043, other than those events as to

which the thirty-day notice period is waived under PBGC Reg. Section 4043

or other regulations, notices or rulings issued by the PBGC.

"Requirement of Law" means, as to any Person, any law, statute,

ordinance, decree, requirement, order, judgment, rule or regulation of any

Governmental Authority.

"Responsible Officer" means, with respect to any Person, its chief

financial officer, chief accounting officer, assistant treasurer, treasurer

or controller of such Person or any other officer of such Person whose

primary duties are similar to the duties of any of the previously listed

officers of such Person.

"Restricted Subsidiaries" means all Subsidiaries of the Borrower other

than Securitization Subsidiaries and Unrestricted Subsidiaries.

"Revolving Percentage" means, as to any Bank at any time, a fraction

(expressed as a percentage) the numerator of which is the amount of such

Bank's Commitment or, if the Commitments shall have terminated, the

Outstanding Extensions of Credit of such Bank then outstanding, and the

denominator of which is the Total Commitments then in effect or, if the

Commitments shall have terminated, the Total Outstanding Extensions of

Credit then outstanding.

"S&P" means Standard & Poor's Ratings Group and any successor rating

agency.

"SEC" means the Securities and Exchange Commission and any successor

thereto.

"Secured Indebtedness" means, with respect to any Person, all

Indebtedness secured (or for which the holder of such Indebtedness has an

existing right, contingent or otherwise, to be secured) by any Lien on any

Property (including, without limitation, accounts and contract rights)

owned by such Person or any of its Subsidiaries, even though such Person

has not assumed or become liable for the payment of such Indebtedness.

"Securitization Securities" means transition bonds issued pursuant to

the Texas Electric Choice Plan if (and only if) no recourse may be had to

the Borrower or any of its Subsidiaries (or to their respective assets) for

the payment of such obligations, other than the issuer of the bonds and its

assets, provided that payment of transition charges by any retail electric

provider ("REP") in accordance with such legislation, whether or not such

REP has collected such charges from the retail electric customers, shall

not be deemed "recourse" hereunder, including any REP that is a Subsidiary

of the Borrower or a division of an Affiliate of the Borrower or any

Affiliate of the Borrower.

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"Securitization Subsidiary" means a special purpose subsidiary created

to issue Securitization Securities.

"Significant Subsidiary" means (i) for the purposes of determining

what constitutes an "Event of Default" under Sections 8.1(f), (g), (h), (i)

and (j), a Subsidiary of the Borrower (other than a Project Financing

Subsidiary) whose total assets, as determined in accordance with GAAP,

represent at least 10% of the total assets of the Borrower, on a

consolidated basis, as determined in accordance with GAAP and (ii) for all

other purposes the "Significant Subsidiaries" shall be those Subsidiaries

of the Borrower whose total assets, as determined in accordance with GAAP,

represent at least 10% of the total assets of the Borrower on a

consolidated basis, as determined in accordance with GAAP for the

Borrower's most recently completed fiscal year and identified in the

certificate most recently delivered pursuant to Section 7.1(a)(iv)(C);

provided that no Securitization Subsidiary or Unrestricted Subsidiary shall

be deemed to be a Significant Subsidiary or subject to the restrictions,

covenants or Events of Default under this Agreement.

"Single Employer Plan" means any Plan that is covered by Title IV of

ERISA, but that is not a Multiemployer Plan.

"Subsidiary" means, as to any Person, a corporation, partnership,

limited liability company or other entity of which more than 50% of the

outstanding shares of Capital Stock or other ownership interests having

ordinary voting power (other than Capital Stock or such other ownership

interests having such power only by reason of the happening of a

contingency) to elect directors or other managers of such corporation,

partnership or other entity are at the time owned, directly or indirectly,

through one or more Subsidiaries of such Person, by such Person; provided,

however, that no Securitization Subsidiary shall be deemed to be a

Subsidiary for purposes of this Agreement.

"Swap Agreement" means any agreement with respect to any swap,

forward, future or derivative transaction or option or similar agreement

involving, or settled by reference to, one or more rates, currencies,

commodities, equity or debt instruments or securities, or economic,

financial or pricing indices or measures of economic, financial or pricing

risk or value or any similar transaction or any combination of these

transactions; provided that no phantom stock or similar plan providing for

payments only on account of services provided by current or former

directors, officers, employees or consultants of the Borrower or any of its

Subsidiaries shall be a "Swap Agreement".

"Syndication Agent" has the meaning specified in the introduction to

this Agreement.

"Taxes" has the meaning specified in Section 4.3(a).

"Termination Date" means the Maturity Date or any earlier date on

which (a) the Commitments have been terminated in accordance with this

Agreement or (b) all unpaid

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principal amounts of the Loans hereunder have been declared due and payable

in accordance with this Agreement.

"Texas Genco" means Texas Genco Holdings, Inc.

"Texas Genco Stock" means the Capital Stock of Texas Genco now owned

or hereafter acquired by Utility Holding, LLC, which, as of the date

hereof, constitutes 100% of the issued and outstanding Capital Stock of

Texas Genco.

"Total Commitments" means, at any time, the aggregate amount of the

Commitments of all Banks then in effect.

"Total Outstanding Extensions of Credit" means, at any time, the

aggregate amount of the Outstanding Extensions of Credit of all Banks

outstanding at such time.

"Tranche" means the collective reference to LIBOR Rate Loans, the

Interest Periods with respect to all of which begin on the same date and

end on the same later date (whether or not such Loans shall originally have

been made on the same day).

"Transferee" has the meaning specified in Section 10.6(f).

"Transfer Effective Date" has the meaning specified in Section

10.6(c).

"Transition Charges Principal and Interest" means the non-bypassable

transition charges billed to customers for payment of debt service on

Securitization Securities.

"Triggering Event" has the meaning specified in Section 4.8(b).

"True-Up Litigation" means any litigation or other proceeding in

connection with the determination by the PUC of the recovery by CenterPoint

and its Subsidiaries of stranded costs and other amounts to be recovered in

the true-up process.

"True-Up Securitization" means a sale or contribution of assets to a

Securitization Subsidiary or series of such transactions, together with the

issuance of Securitization Securities.

"Type" refers to the determination of whether a Loan is an ABR Loan or

a LIBOR Rate Loan (or a Borrowing comprised of such Loans).

"Uniform Customs" means the Uniform Customs and Practice for

Documentary Credits (1993 Revision), International Chamber of Commerce

Publication No. 500, as the same may be amended from time to time.

"United States" means the United States of America.

"Unrestricted Subsidiary" means any Subsidiary of the Borrower and its

direct or indirect Subsidiaries that is designated by a Responsible Officer

of the Borrower as an Unrestricted Subsidiary, but only if (x) the

aggregate amount of net tangible assets of all

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Unrestricted Subsidiaries at the time of designation does not exceed, or

would not exceed as a result of such designation, 10% of the Net Tangible

Assets, (y) such designation and the Investment of the Borrower in such

Subsidiary complies with the limitations in Section 7.2(f) and (z) such

Subsidiary: (i) has no Indebtedness with recourse to the Borrower and the

Restricted Subsidiaries except that permitted under Section 7.2(f); (ii) is

not party to any agreement, contract, arrangement or understanding with the

Borrower or any Significant Subsidiary of the Borrower unless the terms of

any such agreement, contract, arrangement or understanding and related

transactions are substantially no less favorable to the Borrower or such

Significant Subsidiary than those that might be obtained at the time from

Persons who are not Affiliates of the Borrower; (iii) is a Person with

respect to which neither the Borrower nor any of its Significant

Subsidiaries has any direct or indirect obligation that violates Section

7.2(f) (a) to subscribe for additional Capital Stock of such Person or (b)

to maintain or preserve such Person's financial condition or to cause such

Person to achieve any specified levels of operating results; and (iv) does

not, either alone or in the aggregate, operate, directly or indirectly, all

or substantially all of the business of the Borrower and its Subsidiaries.

Any designation of a Subsidiary of the Borrower as an Unrestricted

Subsidiary shall be evidenced by a certificate of a Responsible Officer of

the Borrower giving effect to such designation and a certificate executed

by a Responsible Officer certifying that such designation complied with the

preceding conditions and was permitted by Section 7.2(f) delivered to the

Administrative Agent. If, at any time, any Unrestricted Subsidiary would

fail to meet the preceding requirements as an Unrestricted Subsidiary, it

shall thereafter cease to be an Unrestricted Subsidiary for purposes of

this Agreement and any Indebtedness of such Subsidiary shall be deemed to

be incurred by a Significant Subsidiary of the Borrower as of such date

and, if such Indebtedness is not permitted to be incurred as of such date

under Section 7.2(f), the Borrower shall be in default of such covenant. A

Responsible Officer of the Borrower may at any time designate any

Unrestricted Subsidiary to be a Subsidiary of the Borrower that is not an

Unrestricted Subsidiary; provided that such designation shall be deemed to

be an incurrence of Indebtedness by such Subsidiary of any outstanding

Indebtedness of such Unrestricted Subsidiary and such designation shall

only be permitted if (1) such Indebtedness is permitted under this

Agreement calculated on a pro forma basis as if such designation had

occurred at the beginning of the four-quarter reference period; and (2) no

Default or Event of Default would be in existence following such

designation.

"Utilization Fee" has the meaning specified in Section 3.2(b).

"Wholly-Owned" means, with respect to any Subsidiary of any Person,

all the outstanding Capital Stock (other than directors' qualifying shares

required by law) or other ownership interest of such Subsidiary which are

at the time owned by such Person or by one or more Wholly-Owned

Subsidiaries of such Person, or both.

SECTION 1.2. Other Definitional Provisions. (a) Unless otherwise specified

therein, all terms defined in this Agreement shall have such defined meanings

when used in the other Loan Documents or any certificate or other document made

or delivered pursuant hereto or thereto.

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(b) As used herein and in the other Loan Documents, and any certificate or

other document made or delivered pursuant hereto or thereto, (i) accounting

terms relating to the Borrower or any of its Subsidiaries not defined in Section

1.1 and accounting terms partly defined in Section 1.1, to the extent not

defined, shall have the respective meanings given to them under GAAP, (ii) the

words "include", "includes" and "including" shall be deemed to be followed by

the phrase "without limitation", (iii) the word "incur" shall be construed to

mean incur, create, issue, assume, become liable in respect of or suffer to

exist (and the words "incurred" and "incurrence" shall have correlative

meanings), (iv) the words "asset" and "property" shall be construed to have the

same meaning and effect and to refer to any and all tangible and intangible

assets and properties, including cash, Capital Stock, securities, revenues,

accounts, leasehold interests and contract rights, and (v) references to

agreements or other Contractual Obligations shall, unless otherwise specified,

be deemed to refer to such agreements or Contractual Obligations as amended,

supplemented, restated or otherwise modified from time to time.

(c) The words "hereof", "herein" and "hereunder" and words of similar

import, when used in this Agreement, shall refer to this Agreement as a whole

and not to any particular provision of this Agreement, and Section, Schedule and

Exhibit references are to this Agreement unless otherwise specified.

(d) The meanings given to terms defined herein shall be equally applicable

to both the singular and plural forms of such terms.

ARTICLE II

AMOUNTS AND TERMS OF THE LOANS AND LETTERS OF CREDIT

SECTION 2.1. The Commitments. (a) Each Bank severally agrees, on the terms

and subject to the conditions hereinafter set forth, to make revolving credit

Loans to the Borrower from time to time on any Business Day during the period

from the Closing Date until the Termination Date in an aggregate principal

amount outstanding, which, when added to such Bank's Revolving Percentage of the

then outstanding L/C Obligations, does not exceed at any time such Bank's

Commitment; provided that no Loan shall be made as a LIBOR Rate Loan with an

Interest Period ending after the Termination Date; and provided, further, that

in no event shall the Total Outstanding Extensions of Credit at any time exceed

the Total Commitments at such time.

(b) Each Borrowing by the Borrower shall be in an aggregate principal

amount not less than $10,000,000 (in the case of LIBOR Rate Loans) or $5,000,000

(in the case of ABR Loans), or an integral multiple of $1,000,000 in excess

thereof and shall consist of Loans of the same Type made on the same day by the

Banks ratably according to their respective Revolving Percentages. Within the

limits of the applicable Commitments, the Borrower may borrow, prepay pursuant

to Section 4.6 and reborrow under this Section 2.1. The principal amount

outstanding on the Loans shall be due and payable on the Termination Date,

together with accrued and unpaid interest thereon.

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SECTION 2.2. Procedure for Revolving Loan Borrowing. (a) The Borrower may

borrow under the Commitments on any Business Day during the period from and

including the Closing Date to and excluding the Termination Date, provided that

the Borrower shall give the Administrative Agent irrevocable oral notice or

written notice pursuant to a notice of borrowing, in substantially the form of

Exhibit A hereto ("Notice of Borrowing") which shall be signed by the Borrower

and shall specify therein the requested (i) date of such Borrowing, (ii) Type of

Loans comprising such Borrowing, (iii) aggregate amount of such Borrowing and

(iv) the Interest Period for each such Loan in the case of any LIBOR Rate Loan:

(i) not later than 11:00 A.M. (New York City time) on the third

Business Day prior to the date of the proposed Borrowing in the case of a

LIBOR Rate Loan;

(ii) not later than 11:00 A.M. (New York City time) on the Business

Day immediately preceding the date of the proposed Borrowing in the case of

an Early Funding ABR Loan; and

(iii) not later than 11:00 A.M. (New York City time) on the same

Business Day of the proposed Borrowing in the case of any other ABR Loan.

With respect to any oral notice of borrowing given by the Borrower, the Borrower

shall promptly thereafter confirm such notice in writing pursuant to a Notice of

Borrowing. Upon receipt of any such notice, the Administrative Agent shall

promptly notify each Bank thereof. Each Bank shall, before 1:00 P.M. (New York

City time) on the date of such Borrowing, make available to the Administrative

Agent at the Funding Office, in immediately available funds, such Bank's

applicable Revolving Percentage of such Borrowing; provided, however, that, in

the event of a requested ABR Loan with respect to which the Borrower has

delivered its Notice of Borrowing on the Business Day immediately preceding the

requested Borrowing Date (an "Early Funding ABR Loan"), each Bank shall make its

applicable Revolving Percentage of such Borrowing available before 10:00 A.M.

(New York City time) on the requested Borrowing Date. The Administrative Agent

shall, no later than 2:00 P.M. (New York City time) on such date (or no later

than 11:00 A.M. (New York City time), in the case of an Early Funding ABR Loan),

make available to the Borrower the proceeds of the Loans received by the

Administrative Agent hereunder by crediting such account of the Borrower which

the Administrative Agent and the Borrower shall from time to time designate.

Each Notice of Borrowing shall be irrevocable and binding on the Borrower.

(b) Unless the Administrative Agent shall have received notice from a Bank

at least two hours prior to the applicable time described in clause (a) above by

which such Bank is required to deliver its funds to the Administrative Agent

with respect to any Borrowing that such Bank will not make available to the

Administrative Agent such Bank's applicable Revolving Percentage of such

Borrowing, the Administrative Agent may assume that such Bank has made such

portion available to the Administrative Agent on the date of such Borrowing in

accordance with Section 2.2(a) and the Administrative Agent may, in reliance

upon such assumption, make available to the Borrower on such date a

corresponding amount. If such amount is made available to the Administrative

Agent on a date after such date of Borrowing, such Bank shall pay to the

Administrative Agent on demand an amount equal to the product of (i) the daily

average Federal Funds Effective Rate during such period, times (ii) the amount

of such Bank's

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applicable Revolving Percentage of such Borrowing, times (iii) a fraction, the

numerator of which is the number of days that elapse from and including such

date of Borrowing to the date on which such Bank's applicable Revolving

Percentage of such Borrowing shall have become immediately available to the

Administrative Agent and the denominator of which is 360. A certificate of the

Administrative Agent submitted to any Bank with respect to any amounts owing

under this Section 2.2(b) shall be conclusive in the absence of manifest error.

If such Bank shall repay to the Administrative Agent such corresponding amount,

such amount so repaid shall constitute such Bank's Loan as part of such

Borrowing for purposes of this Agreement. If such Bank's applicable Revolving

Percentage of such Borrowing is not in fact made available to the Administrative

Agent by such Bank within one (1) Business Day of such date of Borrowing, the

Administrative Agent shall be entitled to recover such amount with interest

thereon at the rate per annum, equal to (i) the ABR (in the case of ABR Loans)

or (ii) the Federal Funds Effective Rate (in the case of LIBOR Rate Loans), on

demand, from the Borrower.

(c) The failure of any Bank to make the Loan to be made by it as part of

any Borrowing shall not relieve any other Bank of its obligation, if any,

hereunder to make its Loan on the date of such Borrowing, but no Bank shall be

responsible for the failure of any other Bank to make the Loan to be made by

such other Bank on the date of any Borrowing.

SECTION 2.3. Minimum Tranches. All Borrowings, prepayments, conversions and

continuations of Loans hereunder and all selections of Interest Periods

hereunder shall be in such amounts and be made pursuant to such elections so

that, after giving effect thereto, the aggregate principal amount of the Loans

comprising each Tranche of LIBOR Rate Loans shall be equal to $10,000,000 or an

integral multiple of $1,000,000 in excess thereof.

SECTION 2.4. Letters of Credit. (a) L/C Commitment.

(i) Subject to the terms and conditions hereof, each Issuing Bank, in

reliance on the agreements of the other Banks set forth in Section 2.4(d),

agrees to issue standby letters of credit (the "Letters of Credit") for the

account of the Borrower in support of obligations (including, without

limitation, performance, bid and similar bonding obligations and credit

enhancement) of the Borrower and its Affiliates on any Business Day on or

after the Closing Date and prior to the Termination Date in such form as

may be approved from time to time by such Issuing Bank; provided that no

Issuing Bank shall have any obligation to issue any Letter of Credit if,

after giving effect to such issuance, (A) the L/C Obligations would exceed

the L/C Commitment or (B) the Total Outstanding Extensions of Credit then

outstanding would exceed the Total Commitments then in effect and provided,

further, that neither JPMorgan Chase Bank, N.A. nor Citibank, N.A. shall be

required to issue Letters of Credit in excess of $25,000,000 at any time

outstanding for each such Issuing Bank.

(ii) Each Letter of Credit shall be denominated in Dollars and shall

be a standby letter of credit issued to support obligations of the Borrower

or any of its Affiliates, contingent or otherwise, and expire no later than

the Maturity Date.

(iii) Each Letter of Credit shall be subject to the Uniform Customs

and, to the extent not inconsistent therewith, the laws of the State of New

York.

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(iv) No Issuing Bank shall at any time be obligated to issue any

Letter of Credit hereunder if such issuance would conflict with, or cause

such Issuing Bank or any L/C Participant to exceed any limits imposed on

such Issuing Bank by, any applicable Requirement of Law.

(b) Procedure for Issuance of Letters of Credit. The Borrower may from time

to time request that an Issuing Bank issue a Letter of Credit by delivering to

such Issuing Bank at its address for notices specified herein an Application

therefor, completed to the satisfaction of such Issuing Bank, and such other

certificates, documents and other papers and information as such Issuing Bank

may reasonably request. Upon receipt of any Application, the Issuing Bank will

process such Application and the certificates, documents and other papers and

information delivered to it in connection therewith in accordance with its

customary procedures and shall promptly issue the Letter of Credit requested

thereby (but in no event shall any Issuing Bank be required to issue any Letter

of Credit earlier than two Business Days after its receipt of the Application

therefor and all such other certificates, documents and other papers and

information relating thereto) by issuing the original of such Letter of Credit

in a form satisfactory to the Borrower to the beneficiary thereof or as

otherwise may be agreed by such Issuing Bank and Borrower. The relevant Issuing

Bank shall furnish a copy of such Letter of Credit to the Borrower promptly

following the issuance thereof and notify the Banks of the amount thereof.

(c) Fees, Commissions and Other Charges.

(i) The Borrower shall pay to the Administrative Agent, for the

account of the relevant Issuing Bank and the L/C Participants, a letter of

credit commission fee with respect to each Letter of Credit, computed for

the period from the last L/C Fee Payment Date (or, if later, the date of

issuance thereof) to the date upon which such payment is due hereunder at

the rate per annum equal to the Applicable Margin for LIBOR Rate Loans then

in effect, calculated on the basis of a 365- (or 366-, as the case may be)

day year, of the aggregate amount available to be drawn under such Letter

of Credit on the date on which such fee is calculated. The Borrower shall

pay to the Administrative Agent, for the account of the relevant Issuing

Bank, a fronting fee with respect to each Letter of Credit, computed for

the period from the last L/C Fee Payment Date to the date upon which such

payment is due hereunder at the rate per annum equal to 0.125%, calculated

on the basis of a 365- (or 366-, as the case may be) day year, of the

aggregate amount available to be drawn under such Letter of Credit on the

date on which such fee is calculated. Such commissions and fronting fees

shall be payable in arrears on each L/C Fee Payment Date and shall be

nonrefundable.

(ii) In addition to the foregoing fees and commissions, the Borrower

shall pay or reimburse each Issuing Bank for such normal and customary

costs and reasonable expenses as are incurred or charged by such Issuing

Bank in issuing, effecting payment under, amending or otherwise

administering any Letter of Credit.

(iii) The Administrative Agent shall, promptly following its receipt

thereof, distribute to the relevant Issuing Bank and the L/C Participants

all fees and commissions received by the Administrative Agent for their

respective accounts pursuant to this Section 2.4(c).

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(d) L/C Participations.

(i) Each Issuing Bank irrevocably agrees to grant and hereby grants to

each L/C Participant, and, to induce each Issuing Bank to issue Letters of

Credit hereunder, each L/C Participant irrevocably agrees to accept and

purchase and hereby accepts and purchases from such Issuing Bank, on the

terms and conditions hereinafter stated, for such L/C Participant's own

account and risk an undivided interest equal to such L/C Participant's

Revolving Percentage in each Issuing Bank's obligations and rights under

each Letter of Credit issued hereunder and the aggregate amount of drawings

under Letters of Credit that have not then been reimbursed pursuant to

Section 2.4(e). Each L/C Participant unconditionally and irrevocably agrees

with each Issuing Bank that, if a draft is paid under any Letter of Credit

for which such Issuing Bank is not reimbursed in full by the Borrower in

accordance with the terms of this Agreement, such L/C Participant shall pay

to such Issuing Bank upon demand at such Issuing Bank's address for notices

specified herein an amount equal to such L/C Participant's Revolving

Percentage of the amount of such draft, or any part thereof, which is not

so reimbursed. Each Bank acknowledges and agrees that its obligation to

acquire participations pursuant to this Section 2.4(d)(i) in respect of

Letters of Credit is absolute and unconditional and shall not be affected

by any circumstance whatsoever, including any amendment, renewal or

extension of any Letter of Credit or the occurrence and continuance of a

Default or reduction or termination of the Commitments, and that each such

payment shall be made without any offset, abatement, withholding or

reduction whatsoever.

(ii) If any amount required to be paid by any L/C Participant to an

Issuing Bank pursuant to Section 2.4(d)(i) in respect of any unreimbursed

portion of any payment made by such Issuing Bank under any Letter of Credit

is not paid to such Issuing Bank within one Business Day after the date

such payment is due, such L/C Participant shall pay to such Issuing Bank on

demand an amount equal to the product of (A) such amount, times (B) the

daily average Federal Funds Effective Rate as quoted by the relevant

Issuing Bank, during the period from and including the date such payment is

required to the date on which such payment is immediately available to such

Issuing Bank, times (C) a fraction the numerator of which is the number of

days that elapse during such period and the denominator of which is 360. If

any such amount required to be paid by any L/C Participant pursuant to

Section 2.4(d)(i) is not in fact made available to the relevant Issuing

Bank by such L/C Participant within three (3) Business Days after the date

such payment is due, such Issuing Bank shall be entitled to recover from

such L/C Participant, on demand, such amount with interest thereon

calculated from such due date at the ABR. A certificate of the relevant

Issuing Bank submitted to any L/C Participant with respect to any amounts

owing under this subsection shall be conclusive in the absence of manifest

error.

(iii) Whenever, at any time after any Issuing Bank has made payment

under any Letter of Credit and has received from any L/C Participant its

pro rata share of such payment in accordance with Section 2.4(d)(i), such

Issuing Bank receives any payment related to such Letter of Credit (whether

directly from the Borrower or otherwise, including proceeds of collateral

applied thereto by the Issuing Bank), or any payment of interest on account

thereof, such Issuing Bank will distribute to such L/C Participant its

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pro rata share thereof; provided, however, that in the event that any such

payment received by such Issuing Bank shall be required to be returned by

such Issuing Bank, such L/C Participant shall return to such Issuing Bank

the portion thereof previously distributed by such Issuing Bank to it.

(e) Reimbursement Obligation of the Borrower. (i) The Borrower shall

reimburse each Issuing Bank for any payment that such Issuing Bank makes under a

Letter of Credit on or before the date of such payment if the Borrower receives

notice of such payment on or before 10:00 a.m. (New York City time) on the date

such payment is made by such Issuing Bank; provided, however, that, if the

Borrower does not receive timely notice or reimburse such Issuing Bank under

this Section 2.4(e)(i), then Section 2.4(e)(ii) shall apply. Each such payment

shall be made to the relevant Issuing Bank at its address for notices specified

herein in Dollars and in immediately available funds.

(ii) Notwithstanding Section 5.2, each drawing under any Letter of

Credit shall be deemed to constitute a Borrowing of ABR Loans in the amount

of such drawing unless the Borrower has reimbursed the relevant Issuing

Bank under Section 2.4(e)(i). The Borrowing Date with respect to each such

borrowing shall be deemed to be the date of such drawing.

(f) Obligations Absolute.

(i) The Borrower's payment obligations under Section 2.4(e) shall be

absolute and unconditional under any and all circumstances and irrespective

of any set-off, counterclaim or defense to payment that the Borrower may

have or have had against the relevant Issuing Bank or any beneficiary of a

Letter of Credit other than a defense based upon the gross negligence or

willful misconduct of such Issuing Bank or violation of the standards of

care specified in the Uniform Commercial Code of the State of New York.

(ii) The Borrower also agrees with each Issuing Bank that no Issuing

Bank shall be responsible for, and the Borrower's Reimbursement Obligations

under Section 2.4(e) shall not be affected by, among other things, (i) the

validity or genuineness of documents or of any endorsements thereon, even

though such documents shall in fact prove to be invalid, fraudulent or

forged, (ii) any dispute between or among the Borrower and any beneficiary

of any Letter of Credit or any other party to which such Letter of Credit

may be transferred or (iii) any claims whatsoever of the Borrower against

any beneficiary of such Letter of Credit or any such transferee.

(iii) No Issuing Bank shall be liable for any error, omission,

interruption or delay in transmission, dispatch or delivery of any message

or advice, however transmitted, in connection with any Letter of Credit,

except for errors or omissions caused by such Issuing Bank's gross

negligence or willful misconduct or in violation of the standards of care

specified in the Uniform Commercial Code of the State of New York.

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(iv) The Borrower agrees that any action taken or omitted by any

Issuing Bank under or in connection with any Letter of Credit or the

related drafts or documents, if done in the absence of gross negligence or

willful misconduct and in accordance with the standards of care specified

in the Uniform Commercial Code of the State of New York, shall be binding

on the Borrower and shall not result in any liability of such Issuing Bank

to the Borrower.

(g) Letter of Credit Payments. If any draft shall be presented for payment

under any Letter of Credit, the relevant Issuing Bank shall promptly notify the

Borrower by telephone (confirmed in writing) of the date and amount thereof and

whether such Issuing Bank has made or will make a payment thereunder. The

responsibility of such Issuing Bank to the Borrower in connection with any draft

presented for payment under any Letter of Credit shall, in addition to any

payment obligation expressly provided for in such Letter of Credit, be limited

to determining that the documents (including each draft) delivered under such

Letter of Credit in connection with such presentment are in conformity with such

Letter of Credit.

(h) Application. To the extent that any provision of any Application

related to any Letter of Credit is inconsistent with the provisions of this

Section 2.4, the provisions of this Section 2.4 shall control.

(i) Replacement of the Issuing Bank. Any Issuing Bank may be replaced at

any time by written agreement among the Borrower, the Administrative Agent, the

replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent

shall notify the Banks of any such replacement of such Issuing Bank. At the time

any such replacement shall become effective, the Borrower shall pay all unpaid

fees accrued for the account of such replaced Issuing Bank pursuant to Section

2.4(c). From and after the effective date of any such replacement, (i) the

applicable successor Issuing Bank shall have all the rights and obligations of

such Issuing Bank under this Agreement with respect to Letters of Credit to be

issued thereafter and (ii) references herein to the term "Issuing Bank" shall be

deemed to refer to such successor or to any previous Issuing Bank, or to such

successor and all previous Issuing Banks, as the context shall require. After

the replacement of an Issuing Bank hereunder, the applicable replaced Issuing

Bank shall remain a party hereto and shall continue to have all the rights and

obligations of an Issuing Bank under this Agreement with respect to Letters of

Credit issued by it prior to such replacement, but shall not be required to

issue additional Letters of Credit.

ARTICLE III

PROVISIONS RELATING TO ALL LOANS

SECTION 3.1. Evidence of Loans. (a) Each Bank shall maintain in accordance

with its usual practice an account or accounts evidencing indebtedness of the

Borrower to such Bank resulting from each Loan made by such Bank from time to

time, including, without limitation, the amounts of principal and interest

payable and paid to such Bank from time to time under this Agreement.

(b) The Administrative Agent shall maintain the Register pursuant to

Section 10.6(d) and a subaccount therein for each Bank, in which shall be

recorded (i) the amount of each Loan

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made by each Bank through the Administrative Agent hereunder, the type thereof

and each Interest Period applicable thereto, (ii) the amount of any principal or

interest due and payable or to become due and payable from the Borrower to each

Bank hereunder and (iii) both the amount of any sum received by the

Administrative Agent hereunder from the Borrower and each Bank's share thereof.

(c) The entries made in the Register and the accounts of each Bank

maintained pursuant to Section 3.1(a) shall, to the extent permitted by

applicable law, be prima facie evidence of the existence and amount of the

obligations of the Borrower therein recorded; provided, however, that the

failure of any Bank or the Administrative Agent to maintain the Register or any

such account, or any error therein, shall not in any manner affect the

obligation of the Borrower to repay (with applicable interest) the Loans

actually made to the Borrower by such Bank in accordance with the terms of this

Agreement.

SECTION 3.2. Fees. (a) The Borrower agrees to pay to the Administrative

Agent for the account of each Bank the Commitment Fee, from the date hereof

until such date that the Loans and other obligations under this Agreement have

been paid in full, payable quarterly in arrears on the last day of each March,

June, September and December until such date that the Loans and other

obligations under this Agreement have been paid in full and on such date of

payment in full, commencing on the first such date to occur after the date

hereof.

(b) The Borrower agrees to pay to the Administrative Agent for the account

of each Bank a utilization fee (the "Utilization Fee") at a rate per annum equal

to 0.125% on the Outstanding Extensions of Credit of such Bank at any time that

the Total Outstanding Extensions of Credit outstanding shall exceed 50% of the

Total Commitments then in effect, payable quarterly in arrears on the last day

of each March, June, September and December, commencing on the first such date

to occur after the date hereof.

(c) The fees payable under Sections 3.2(a) and 3.2(b) shall be calculated

by the Administrative Agent on the basis of a 365- or 366-day year, as the case

may be, for the actual days (including the first day but excluding the last day)

occurring in the period for which such fee is payable.

(d) The Borrower shall pay to the Administrative Agent, for its own

account, the fees in the amounts and on the dates previously agreed to in

writing by the Borrower and the Administrative Agent.

SECTION 3.3. Interest. The Borrower shall pay interest on the unpaid

principal amount of each Loan made by each Bank from the date of such Loan until

such principal amount shall be paid in full, at the times and at the rates per

annum set forth below:

(a) ABR Loans. Each ABR Loan shall bear interest at a rate per annum equal

at all times to the lesser of (i) the ABR plus the Applicable Margin and (ii)

the Highest Lawful Rate, payable quarterly in arrears on the last day of each

March, June, September and December and on the Termination Date.

(b) LIBOR Rate Loans. Each LIBOR Rate Loan shall bear interest at a rate

per annum equal at all times to, in the case of each LIBOR Rate Loan, the lesser

of (A) the sum of

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the LIBOR Rate for the applicable Interest Period for such Loan plus the

Applicable Margin and (B) the Highest Lawful Rate, payable on the last day of

such Interest Period and, with respect to Interest Periods of six, nine or

twelve months, on the ninetieth (90th) day after the commencement of the

Interest Period and on each succeeding ninetieth (90th) day during such Interest

Period, and on the Termination Date.

(c) Calculations. Interest that is determined by reference to the ABR shall

be calculated by the Administrative Agent on the basis of a 365- or 366-day

year, as the case may be, for the actual days (including the first day but

excluding the last day) occurring in the period in which such interest is

payable and otherwise shall be calculated by the Administrative Agent on the

basis of a 360-day year for the actual days (including the first day and

excluding the last day) occurring in the period for which such interest is

payable.

(d) Default Rate. Notwithstanding the foregoing, if all or a portion of (i)

the principal amount of any Loan or Reimbursement Obligation, (ii) any interest

payable thereon, or (iii) any Commitment Fee, Utilization Fee or other amount

payable hereunder shall not be paid when due (whether at the stated maturity, by

acceleration or otherwise), such overdue amount shall bear interest, payable

from time to time on demand, at a rate per annum equal to the lesser of (A) the

Highest Lawful Rate and (B) the Default Rate, in each case from the date of such

non-payment until such amount is paid in full (as well after as before

judgment).

(e) Determination Conclusive. Each determination of an interest rate by the

Administrative Agent pursuant to any provisions of this Agreement shall be

conclusive and binding on the Borrower and the Banks in the absence of manifest

error. The Administrative Agent shall, at the request of the Borrower, deliver

to the Borrower a statement showing in reasonable detail the quotations used by

the Administrative Agent in determining the LIBOR Rate.

SECTION 3.4. Reserve Requirements. (a) The Borrower agrees to pay to each

Bank that requests compensation under this Section 3.4 in accordance with the

provisions set forth in Section 4.8(b), so long as such Bank shall be required

to maintain reserves against "Eurocurrency liabilities" under Regulation D of

the Board (or, so long as such Bank shall be required by the Board or by any

other Governmental Autho