ADMINISTRATION AGREEMENT
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This ADMINISTRATION AGREEMENT (this "Administration Agreement"), dated as
of July __, 2003, is by and between ONCOR ELECTRIC DELIVERY TRANSITION BOND
COMPANY LLC, a Delaware limited liability company, as Issuer (the "Issuer"), and
ONCOR ELECTRIC DELIVERY COMPANY, a Texas corporation, as Administrator (in such
capacity, the "Administrator"). Capitalized terms used and not otherwise defined
herein shall have the meanings assigned to them in Appendix A to that certain
Indenture, dated as of July __, 2003 (as amended or supplemented, the
"Indenture"), by and between the Issuer and The Bank of New York, as Indenture
Trustee and Securities Intermediary (the "Indenture Trustee").
W I T N E S S E T H:
WHEREAS, the Issuer is issuing contemporaneously herewith $500,000,000
aggregate principal amount of its series 2003 transition bonds and may issue one
or more additional series of transition bonds in 2004 or later, each pursuant to
the Indenture;
WHEREAS, the Issuer has entered and will enter into certain agreements in
connection with the issuance from time to time of the transition bonds,
including (i) the Indenture, (ii) one or more Transition Property Servicing
Agreements, including the Series 2003 Transition Property Servicing Agreement,
dated as of June __, 2003, between the Issuer and the Administrator, in its
capacity as Servicer (collectively, the "Servicing Agreements"), (iii) one or
more Transition Property Purchase and Sale Agreements, including the Series 2003
Transition Property Purchase and Sale Agreement, dated as of June __, 2003,
between the Issuer and the Administrator, in its capacity as Seller
(collectively, the "Sale Agreements"), (iv) one or more Letters of
Representation relating to the transition bonds, including the Letter of
Representation relating to the series 2003 transition bonds, dated as of June
__, 2003, by and among the Issuer, the Indenture Trustee and The Depository
Trust Company (collectively, the "Depository Agreements") and (v) the
Intercreditor Agreement, dated as of June ___, 2003, by and among the
Administrator in its capacity as Servicer, Originator and in its individual
capacity, the Issuer, the Indenture Trustee and the other parties named therein
(the "Intercreditor Agreement") (the Indenture, the Servicing Agreements, the
Sale Agreements, the Depository Agreements and the Intercreditor Agreement being
referred to hereinafter collectively as the "Related Agreements");
WHEREAS pursuant to the Related Agreements, the Issuer is required to
perform certain duties in connection with the Related Agreements, the transition
bonds, and the related Collateral pledged to the Indenture Trustee pursuant to
the Indenture;
WHEREAS the Issuer has no employees and does not intend to hire any
employees, and consequently desires to have the Administrator perform certain of
the duties of the Issuer referred to in the preceding clause and to provide such
additional services consistent with the terms of this Administration Agreement
and the Related Agreements as the Issuer may from time to time request; and
WHEREAS, the Administrator has the capacity to perform the duties and
provide the services and the facilities required thereby and is willing to
perform such duties and services and provide such facilities for the Issuer on
the terms set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Duties of the Administrator: Management Services. The Administrator
hereby agrees to provide the following corporate management services to the
Issuer:
(i) furnish the Issuer with ordinary clerical and bookkeeping services
necessary and appropriate for the Issuer, including, without limitation, the
following services:
(A) maintain at the Premises (as defined below) general accounting
records of the Issuer (the "Account Records"), subject to year-end audit,
in accordance with generally accepted accounting principles in the United
States, separate and apart from its own accounting records, prepare or
cause to be prepared such quarterly and annual financial statements as may
be necessary or appropriate and arrange for year-end audits of the Issuer's
financial statements by the Issuer's independent accountants;
(B) prepare in consultation with the Servicer and, after execution by
the Issuer, file with the SEC and any applicable state agencies documents
required to be filed with the SEC and any applicable state agencies,
including, without limitation, periodic reports required to be filed under
the Securities Exchange Act of 1934, as amended;
(C) prepare for execution by the Issuer and cause to be filed such
income, franchise or other tax returns of the Issuer as shall be required
to be filed by applicable law (the "Tax Returns") and cause to be paid on
behalf of the Issuer from the Issuer's funds any taxes required to be paid
by the Issuer under applicable law;
(D) prepare or cause to be prepared for execution by the Issuer's
Managers minutes of the meetings of the Issuer's Managers and such other
documents deemed appropriate by the Issuer to maintain the separate limited
liability company existence and good standing of the Issuer (the "Company
Minutes") or otherwise required under the Related Agreements (together with
the Account Records, the Tax Returns, the Company Minutes and the
organizational documents of the Issuer, the "Issuer Documents"), and any
other documents deliverable by the Issuer thereunder or in connection
therewith; and
(E) hold, maintain and preserve at the Premises (or such other place
as shall be required by any of the Related Agreements) executed copies (to
the extent applicable) of the Issuer Documents and other documents executed
by the Issuer thereunder or in connection therewith;
(ii) take such actions on behalf of the Issuer as are necessary or
desirable for the Issuer to keep in full effect its existence, rights and
franchises as a limited liability company under the laws of the state of
Delaware and obtain and preserve its qualification to do business in each
jurisdiction in which it becomes necessary to be so qualified;
(iii) prepare, or cause to be prepared, all documents, reports, filings,
instruments, notices, certificates and opinions that it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the Related Agreements;
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(iv) enforce each of the rights of the Issuer under the Related Agreements:
(A) on the occurrence of an Event of Default under the Indenture, at
the direction of the Indenture Trustee, acting at the direction of the
requisite Holders pursuant to the terms of the Indenture; and
(B) except as provided in (A), at the direction of the Issuer's
Managers;
(v) provide for the defense at the Issuer's expense (but subject to Section
11 below), at the direction of the Issuer's Managers, of any action, suit or
proceeding brought against the Issuer or affecting the Issuer or any of its
assets, other than defense of transition property of the Issuer, which shall be
provided pursuant to the applicable Servicing Agreement;
(vi) provide office space (the "Premises") for the Issuer and such
reasonable ancillary services as are necessary to carry out the obligations of
the Administrator hereunder, including telecopying, duplicating and word
processing services (each of the foregoing, on an arms-length basis);
(vii) provide instructions or directions to _____ with respect to the
investment of any monies in the segregated trust account held by the [Deposit
Bank] for the benefit of the Indenture Trustee, in accordance with the Account
Agreement, dated as of July ___, 2003 ("Account Agreement"), by and between the
Issuer, the Deposit Bank, the Administrator and the Indenture Trustee;
(viii) undertake all necessary or desirable actions on behalf of the Issuer
under the Account Agreement, including reimbursing the Indenture Trustee for its
reasonable fees and expenses (including indemnity amounts) to the extent
provided for in the Account Agreement;
(ix) undertake such other administrative services as may be appropriate,
necessary or requested by the Issuer; and
(x) provide such other services as are incidental to the foregoing or as
the Issuer and the Administrator may agree, but excluding services covered by
the Servicing Agreements.
In providing the services under this Section 1 and as otherwise provided
under this Administration Agreement, the Administrator will not knowingly take
any actions on behalf of the Issuer which (i) the Issuer is prohibited from
taking under the Related Agreements or (ii) would cause the Issuer to be in
violation of any federal, state or local law or its organizational documents,
including the separateness criteria specified in Section 1.07 of the Issuer's
LLC Agreement.
2. Compensation. As compensation for the performance of the Administrator's
obligations under this Administration Agreement, and, as reimbursement for its
expenses related thereto, the Administrator shall be entitled to $25,000
semiannually, payable in arrears on each Payment Date. The Administrator's
compensation paid under this Section 2, plus any costs and expenses described in
Section 3 of this Agreement, together with all other operating expenses of the
Issuer, (x) shall not exceed $185,000 annually (for all series of outstanding
transition bonds) and (y) shall be allocated pro-rata among all series of
outstanding transition bonds.
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3. Third Party Services. Any third-party professional services required for
the performance of the above-referenced services by the Administrator (including
independent auditors' fees and counsel fees) shall be arranged by the
Administrator, with the approval of the Board of Managers of the Issuer. Costs
and expenses associated with the contracting for such third-party professional
services shall be paid directly by the Issuer, unless otherwise agreed by the
Administrator and the Issuer.
4. Additional Information to be Furnished to the Issuer. The Administrator
shall furnish to the Issuer from time to time such additional information
regarding the Collateral as the Issuer shall reasonably request.
5. Independence of the Administrator. For all purposes of this
Administration Agreement, the Administrator shall be an independent contractor
and shall not, except as explicitly provided herein, be subject to the
supervision of the Issuer with respect to the manner in which it accomplishes
the performance of its obligations hereunder. Unless expressly authorized by the
Issuer, the Administrator shall have no authority, and shall not hold itself out
as having the authority, to act for or represent the Issuer in any way and shall
not otherwise be deemed an agent of the Issuer.
6. No Joint Venture. Nothing contained in this Administration Agreement (a)
shall constitute the Administrator and the Issuer as partners or co-members of
any partnership, joint venture, association, syndicate, unincorporated business
or other separate entity, (b) shall be construed to impose any liability as such
on either of them or (c) shall be deemed to confer on either of them any
express, implied or apparent authority to incur any obligation or liability on
behalf of the other.
7. Other Activities of Administrator. Nothing herein shall prevent the
Administrator or any of its shareholders, members, directors, managers,
officers, employees, subsidiaries or Affiliates from engaging in other
businesses or, in its sole discretion, from acting in a similar capacity as an
administrator for any other person or entity even though such person or entity
may engage in business activities similar to those of the Issuer.
8. Term of Administration Agreement; Resignation and Removal of
Administrator. (a) This Administration Agreement shall continue in force until
the payment in full of the transition bonds of the Issuer of all series and any
other amount which may become due and payable under the Indenture, upon which
event this Administration Agreement shall automatically terminate.
(b) Subject to Sections 8(e) and 8(f), the Administrator may resign its
duties hereunder by providing the Issuer with at least sixty (60) days' prior
written notice.
(c) Subject to Sections 8(e) and 8(f), the Issuer may remove the
Administrator without cause by providing the Administrator with at least sixty
(60) days' prior written notice.
(d) Subject to Sections 8(e) and 8(f), at the sole option of the Issuer,
the Administrator may be removed immediately upon written notice of termination
from the Issuer to the Administrator if any of the following events shall occur:
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(i) the Administrator shall default in the performance of any of its
duties under this Administration Agreement and, after notice of such
default, shall fail to cure such default within ten (10) days (or, if such
default cannot be cured in such time, shall (A) fail to give within ten
(10) days such assurance of cure as shall be reasonably satisfactory to the
Issuer and (B) fail to cure such default within thirty (30) days
thereafter);
(ii) a court of competent jurisdiction shall enter a decree or order
for relief, and such decree or order shall not have been vacated within
sixty (60) days, in respect of the Administrator in any involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or such court shall appoint a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official for the
Administrator or any substantial part of its property or order the
winding-up or liquidation of its affairs; or
(iii) the Administrator shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary
case under any such law, shall consent to the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator or similar official
for the Administrator or any substantial part of its property, shall
consent to the taking of possession by any such official of any substantial
part of its property, shall make any general assignment for the benefit of
creditors or shall fail generally to pay its debts as they become due.
The Administrator agrees that if any of the events specified in clauses (ii) or
(iii) of this Section 8(d) shall occur, it shall give written notice thereof to
the Issuer and the Indenture Trustee as soon as possible but in any event within
seven (7) days after the happening of such event.
(e) No resignation or removal of the Administrator pursuant to this Section
shall be effective until a successor Administrator has been appointed by the
Issuer, and such successor Administrator has agreed in writing to be bound by
the terms of this Administration Agreement in the same manner as the
Administrator is bound hereunder.
(f) The appointment of any successor Administrator shall be effective only
after satisfaction of the Rating Agency Condition with respect to the proposed
appointment.
9. Action upon Termination, Resignation or Removal. Promptly upon the
effective date of termination of this Administration Agreement pursuant to
Section 8(a), the resignation of the Administrator pursuant to Section 8(b) or
the removal of the Administrator pursuant to Section 8(c) or 8(d), the
Administrator shall be entitled to be paid a pro-rated portion of the
semi-annual fee described in Section 2 hereof through the date of termination
and all reimbursable expenses accruing to it through the date of such
termination, resignation or removal. The Administrator shall forthwith upon such
termination pursuant to Section 8(a) deliver to the Issuer all property and
documents of or relating to the Collateral then in the custody of the
Administrator. In the event of the resignation of the Administrator pursuant to
Section 8(b) or the removal of the Administrator pursuant to Section 8(c) or
8(d), the Administrator shall cooperate with the Issuer and take all reasonable
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steps requested to assist the Issuer in making an orderly transfer of the duties
of the Administrator.
10. Administrator's Liability. Except as otherwise provided herein, the
Administrator assumes no liability other than to render or stand ready to render
the services called for herein, and neither the Administrator nor any of its
shareholders, members, directors, managers, officers, employees, subsidiaries or
Affiliates shall be responsible for any action of the Issuer or any of the
members, managers, officers, employees, subsidiaries or Affiliates of the Issuer
(other than the Administrator itself). The Administrator shall not be liable for
nor shall it have any obligation with regard to any of the liabilities, whether
direct or indirect, absolute or contingent or otherwise, of the Issuer or any of
the members, managers, officers, employees, subsidiaries or affiliates of the
Issuer (other than the Administrator itself).
11. Indemnity. (a) Subject to the priority of payments set forth in the
Indenture, the Issuer shall indemnify the Administrator, its shareholders,
members, directors, managers, officers, employees and Affiliates against all
losses, claims, damages, penalties, judgments, liabilities and expenses
(including, without limitation, all expenses of litigation or preparation
therefor, including reasonable attorneys' fees, whether or not the Administrator
is a party thereto) which any of them may pay or incur arising out of or
relating to this Administration Agreement and the duties and services called for
herein; provided, however, that such indemnity shall not apply to any such loss,
claim, damage, penalty, judgment, liability or expense resulting from the
Administrator's negligence or willful misconduct in the performance of its
obligations hereunder.
(b) The Administrator shall indemnify the Issuer, its members, Managers,
officers and employees against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all expenses
of litigation or preparation therefor, including reasonable attorneys' fees,
whether or not the Issuer is a party thereto) which any of them may incur as a
result of the Administrator's negligence or willful misconduct in the
performance of its obligations hereunder.
12. Notices. Any notice, report or other communication given hereunder
shall be in writing and addressed as follows:
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(a) if to the Issuer, to:
Oncor Electric Delivery Transition Bond Company LLC
Energy Plaza
0000 Xxxxx Xxxxxx, Xxxxx 0-000
Xxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxx, Manager
Phone: 000-000-0000
Fax: 000-000-0000
(b) if to the Administrator, to:
Oncor Electric Delivery Company
Energy Plaza
0000 Xxxxx Xxxxxx, Xxxxx 00-000
Xxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxx, Assistant Treasurer
Phone: 000-000-0000
Fax: 000-000-0000
or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, or hand-delivered
to the address of such party as provided above.
13. Amendments. (a) This Administration Agreement may be amended from time
to time by a written amendment duly executed and delivered by each of the Issuer
and the Administrator, provided that (i) the Rating Agency Condition has been
satisfied in connection therewith and (ii) the Indenture Trustee and the PUCT
shall have consented thereto or shall be conclusively deemed to have consented
thereto, as the case may be.
(b) At least fifteen days prior to the effectiveness of any such amendment
or modification and after obtaining the other necessary approvals set forth in
Section 13(a) above (except that the consent of the Indenture Trustee may be
subject to the consent of Holders if such consent is required or sought by the
Indenture Trustee in connection with such amendment or modification), the
Administrator shall have delivered to the PUCT's executive director and general
counsel written notification of any proposed amendment, which notification shall
contain:
(i) a reference to Docket No. 25230;
(ii) an Officer's Certificate stating that the proposed amendment or
modification has been approved by all parties to this Agreement; and
(iii) a statement identifying the person to whom the PUCT or its staff
is to address any response to the proposed amendment or to request
additional time;
(c) If the PUCT or its staff shall have, within fifteen days (subject to
extension as provided in Section 13(d) below) of receiving a notification
complying with Section 13(b) above, delivered to the office of the person
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specified in Section 13(b)(iii) above a written statement that the PUCT might
object to the proposed amendment or modification, then such proposed amendment
or modification shall not be effective unless and until the PUCT subsequently
delivers a written statement that it does not object to such proposed amendment
or modification.
(d) If the PUCT or its staff shall have, within fifteen days of receiving a
notification complying with Section 13(b) above, delivered to the office of the
person specified in Section 13(b)(iii) above a written statement requesting an
additional amount of time not to exceed thirty days in which to consider such
proposed amendment or modification, then such proposed amendment or modification
shall not be effective if, within such extended period, the PUCT shall have
delivered to the office of the person specified in Section 13(b)(iii) above, a
written statement as described in Section 13(c) above, unless and until the PUCT
subsequently delivers a written statement that it does not object to such
proposed amendment or modification.
(e) If the PUCT or its staff shall have not delivered written notice that
the PUCT might object to such proposed amendment or modification within the time
periods described in Section 13(c) or Section 13(d) above, whichever is
applicable, then the PUCT shall be conclusively deemed not to have any objection
to the proposed amendment or modification and such amendment or modification may
subsequently become effective upon satisfaction of the other conditions
specified in Section 13.
(f) Following the delivery of a notice to the PUCT by the Administrator
under Section 13(b) above, the Administrator and the Issuer shall have the right
at any time to withdraw from the PUCT further consideration of any notification
of a proposed amendment.
14. Successors and Assigns. This Administration Agreement may not be
assigned by the Administrator unless such assignment is previously consented to
in writing by the Issuer and the Indenture Trustee and subject to the
satisfaction of the Rating Agency Condition in connection therewith. Any
assignment with such consent and satisfaction, if accepted by the assignee,
shall bind the assignee hereunder in the same manner as the Administrator is
bound hereunder. Notwithstanding the foregoing, this Administration Agreement
may be assigned by the Administrator without the consent of the Issuer or the
Indenture Trustee to a corporation or other organization that is a successor (by
merger, consolidation or purchase of assets) to the Administrator; provided that
such successor organization executes and delivers to the Issuer an
administration agreement in which such corporation or other organization agrees
to be bound hereunder by the terms of said assignment in the same manner as the
Administrator is bound hereunder. Subject to the foregoing, this Administration
Agreement shall bind any successors or assigns of the parties hereto.
15. Governing Law. This Administration Agreement shall be construed in
accordance with the laws of the State of Texas, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
16. Headings. The Section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or affect of this Administration Agreement.
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17. Counterparts. This Administration Agreement may be executed in
counterparts, each of which when so executed shall be an original, but all of
which together shall constitute but one and the same Administration Agreement.
18. Severability. Any provision of this Administration Agreement that is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
19. Nonpetition Covenant. Notwithstanding any prior termination of this
Administration Agreement, the Administrator covenants that it shall not, prior
to the date which is one year and one day after payment in full of the
transition bonds of all series, acquiesce, petition or otherwise invoke or cause
the Issuer to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Issuer under any federal
or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer.
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IN WITNESS WHEREOF, the parties have caused this Administration Agreement
to be duly executed and delivered as of the day and year first above written.
ONCOR ELECTRIC DELIVERY
TRANSITION BOND COMPANY LLC,
as Issuer
By: __________________________
Name:
Title:
ONCOR ELECTRIC DELIVERY COMPANY,
as Administrator
By: __________________________
Name:
Title:
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