ADMINISTRATION AGREEMENT
Exhibit
99.3
This
ADMINISTRATION AGREEMENT, dated as of November 6, 2009 (this “Administration
Agreement”), is entered into by and between ENTERGY TEXAS, INC. (“ETI”), as
administrator (in such capacity, the “Administrator”), and
ENTERGY TEXAS RESTORATION FUNDING, LLC, a Delaware limited liability company
(the “Issuer”).
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in Appendix A to the
Indenture (as defined below).
W I T N E
S S E T H:
WHEREAS,
the Issuer is issuing Transition Bonds pursuant to that certain Indenture
(including Appendix
A thereto), dated as of the date hereof (the “Indenture”), by and
between the Issuer and The Bank of New York Mellon, a New York banking
corporation, as the indenture trustee (the “Indenture Trustee”),
as the same may be amended, restated, supplemented or otherwise modified from
time to time, and the Series Supplement;
WHEREAS,
the Issuer has entered into certain agreements in connection with the issuance
of the Transition Bonds, including (i) the Indenture, (ii) the Transition
Property Servicing Agreement, dated as of November 6, 2009 (the “Servicing
Agreement”), by and between the Issuer and ETI, as Servicer, (iii) the
Transition Property Purchase and Sale Agreement, dated as of November 6, 2009
(the “Sale
Agreement”), by and between the Issuer and ETI, as Seller and (iv) the
other Basic Documents to which the Issuer is a party, relating to the Transition
Bonds (the Indenture, the Servicing Agreement, the Sale Agreement and the other
Basic Documents to which the Issuer is a party, as such agreements may be
amended and supplemented from time to time, 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
Transition Bond Collateral pledged to the Indenture Trustee pursuant to the
Indenture;
WHEREAS,
the Issuer has no employees, other than its officers and managers, and does
not intend to hire any employees, and consequently desires to have
the Administrator perform certain of the duties of the Issuer referred to in the
preceding clauses and to provide such additional services consistent with the
terms of this Administration Agreement and the Related Agreements as the Issuer
may from time to time request; and
WHEREAS,
the Administrator has the capacity to provide the services and the facilities
required thereby and is willing to perform such services and provide such
facilities for the Issuer on the terms set forth herein.
NOW,
THEREFORE, in consideration of the mutual covenants contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Duties of the Administrator
– Management Services. The Administrator hereby agrees to
provide the following corporate management services to the Issuer and to cause
third parties to provide professional services required for or contemplated by
such services in accordance with the provisions of this Administration
Agreement:
(a) furnish
the Issuer with ordinary clerical, bookkeeping and other corporate
administrative services necessary and appropriate for the Issuer, including,
without limitation, the following services:
(i) maintain
at the Premises (as defined below) general accounting records of the Issuer (the
“Account
Records”), subject to year-end audit, in accordance with generally
accepted accounting principles, separate and apart from its own accounting
records, prepare or cause to be prepared such quarterly and annual financial
statements as may be necessary or appropriate and arrange for year-end audits of
the Issuer’s financial statements by the Issuer’s independent
accountants;
(ii) prepare
and, after execution by the Issuer, file with the Securities and Exchange
Commission (the “Commission”) and any
applicable state agencies documents required to be filed by the Issuer with the
Commission and any applicable state agencies, including, without limitation,
periodic reports required to be filed under the Securities Exchange Act of 1934,
as amended;
(iii) 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;
(iv) 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, the LLC Agreement, and the
Certificate of Formation, the “Issuer Documents”);
and any other documents deliverable by the Issuer thereunder or in connection
therewith; and
(v) 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;
(b) 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;
(c) take
such actions on the behalf of the Issuer as are necessary for the issuance and
delivery of the Transition Bonds;
(d) provide
for the performance by the Issuer of its obligations under each of the Related
Agreements, and prepare, or cause to be prepared, all documents, reports,
filings, instruments, notices, certificates and opinions that it shall be the
duty of the Issuer to prepare, file or deliver pursuant to the Related
Agreements;
(e) to
the full extent allowable under applicable law, enforce each of the rights of
the Issuer under the Related Agreements, at the direction of the Indenture
Trustee;
(f) provide
for the defense, 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;
(g) 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;
(h) undertake
such other administrative services as may be appropriate, necessary or requested
by the Issuer; and
(i) provide
such other services as are incidental to the foregoing or as the Issuer and the
Administrator may agree.
In
providing the services under this Section 1 and as otherwise provided under this
Administration Agreement, the Administrator will not knowingly take any actions
on behalf of the Issuer 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 the LLC Agreement.
2. Compensation. As
compensation for the performance of the Administrator’s obligations under this
Administration Agreement (including the compensation of Persons serving as
Managers, other than the independent managers, and officers of the Issuer, but,
for the avoidance of doubt, excluding the performance by ETI of its obligations
in its capacity as Servicer), the Administrator shall be entitled to $100,000
annually (the “Administration Fee”),
payable by the Issuer in arrears proportionately on each Payment
Date. In addition, the Administrator shall be entitled to be
reimbursed by the Issuer for all costs and expenses of services performed by
unaffiliated third parties and actually incurred by the Administrator in
connection with the performance of its obligations under this Administration
Agreement in accordance with Section 3 (but, for the avoidance of doubt,
excluding any such costs and expenses incurred by ETI in its capacity as
Servicer), to the extent that such costs and expenses are supported by invoices
or other customary documentation and are reasonably allocated to the Issuer
(“Reimbursable
Expenses”).
3. Third Party
Services. Any services required for or contemplated by the
performance of the above-referenced services by the Administrator to be provided
by unaffiliated third parties (including independent auditors’ fees and counsel
fees) may, if provided for or otherwise contemplated by any related financing
order issued by the PUCT and if the Issuer deems it necessary or desirable, be
arranged by the Issuer or by the Administrator at the direction (which may be
general or specific) of the Issuer. Costs and expenses associated
with the contracting for such third-party professional services may be paid
directly by the Issuer or paid by the Administrator and reimbursed by the Issuer
in accordance with Section 2, or otherwise as the Administrator and the Issuer
may mutually arrange.
4. Additional Information to be
Furnished to the Issuer. The Administrator shall furnish to
the Issuer from time to time such additional information regarding the
Transition Bond 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 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 members, managers, officers, employees, subsidiaries or affiliates
from engaging in other businesses or, in its sole discretion, from acting in a
similar capacity as an Administrator for any other person or entity even though
such person or entity may engage in business activities similar to those of the
Issuer.
8. Term of Agreement;
Resignation and Removal of Administrator.
(a) This
Administration Agreement shall continue in force until the payment in full of
the Transition Bonds 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:
(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 practicable 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 8 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 annual fee described in Section 2
hereof through the date of termination and all Reimbursable Expenses incurred by
it through the date of such termination, resignation or removal. The
Administrator shall forthwith upon such termination pursuant to Section 8(a)
deliver to the Issuer all property and documents of or relating to the
Transition Bond 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 steps requested to assist the Issuer in making an orderly transfer of
the duties of the Administrator.
10. Administrator’s
Liability. Except as otherwise provided herein, the
Administrator assumes no liability other than to render or stand ready to render
the services called for herein, and neither the Administrator nor any of its
members, managers, officers, employees, subsidiaries or affiliates shall be
responsible for any action of the Issuer or any of the members, managers,
officers, employees, subsidiaries or affiliates of the Issuer (other than the
Administrator itself). The Administrator shall not be liable for nor
shall it have any obligation with regard to any of the liabilities, whether
direct or indirect, absolute or contingent of the Issuer or any of the members,
managers, officers, employees, subsidiaries or affiliates of the Issuer (other
than the Administrator itself).
11. INDEMNITY.
(a) SUBJECT
TO THE PRIORITY OF PAYMENTS SET FORTH IN THE INDENTURE, THE ISSUER SHALL
INDEMNIFY THE ADMINISTRATOR, ITS MEMBERS, MANAGERS, OFFICERS, EMPLOYEES AND
AFFILIATES AGAINST ALL LOSSES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
LIABILITIES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF
LITIGATION OR PREPARATION THEREFOR WHETHER OR NOT THE ADMINISTRATOR IS A PARTY
THERETO) WHICH ANY OF THEM MAY PAY OR INCUR ARISING OUT OF OR RELATING TO THIS
ADMINISTRATION AGREEMENT AND THE SERVICES CALLED FOR HEREIN; PROVIDED, HOWEVER,
THAT SUCH INDEMNITY SHALL NOT APPLY TO ANY SUCH LOSS, CLAIM, DAMAGE, PENALTY,
JUDGMENT, LIABILITY OR EXPENSE RESULTING FROM THE ADMINISTRATOR’S NEGLIGENCE OR
WILLFUL MISCONDUCT IN THE PERFORMANCE OF ITS OBLIGATIONS HEREUNDER.
(b) THE
ADMINISTRATOR SHALL INDEMNIFY THE ISSUER, ITS MEMBERS, MANAGERS, OFFICERS AND
EMPLOYEES AGAINST ALL LOSSES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, LIABILITIES
AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION OR
PREPARATION THEREFOR WHETHER OR NOT THE ISSUER IS A PARTY THERETO) WHICH ANY OF
THEM MAY INCUR AS A RESULT OF THE ADMINISTRATOR’S GROSS 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:
(a) if
to the Issuer, to:
Capital
Center, 000 Xxxxxxxx Xxxxxx, Xxxxx 000-X, Xxxxxx, Xxxxx 00000
(b) if
to the Administrator, to:
000 Xxxx
Xxxxxx, Xxxxxxxx, Xxxxx 00000
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(c)
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if
to the Indenture Trustee, to the Corporate Trust
Office;
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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. 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, with
the prior written consent of the Indenture Trustee, the satisfaction of the
Rating Agency Condition and, if the contemplated amendment may in the judgment
of the PUCT increase ongoing Qualified Costs, the consent of the PUCT pursuant
to Section 14. Promptly after the execution of any such amendment or
consent, the Issuer shall furnish written notification of the substance of such
amendment or consent to each of the Rating Agencies.
14. PUCT
Condition. Notwithstanding anything to the contrary in Section
13, no amendment or modification of this Agreement shall be effective unless the
process set forth in this Section 14 has been followed.
(a) At
least thirty-one (31) days prior to the effectiveness of any such amendment or
modification and after obtaining the other necessary approvals set forth in
Section 13 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), the Administrator shall
have delivered to the PUCT’s executive director and general counsel written
notification of any proposed amendment or modification, which notification shall
contain:
(i) a
reference to Docket No. 37247;
(ii)
an Officer’s Certificate stating that the proposed amendment or modification has
been approved by all parties to this Administration 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 modification or to request additional
time.
(b) The
PUCT or its staff shall, within thirty (30) days of receiving the notification
complying with Section 14(a) above, either:
(i) provide
notice of its determination that the proposed amendment or modification will not
under any circumstances have the effect of increasing the ongoing qualified
costs related to the Transition Bonds,
(ii) provide
notice of its consent or lack of consent to the person specified in Section
14(a)(iii) above, or
(iii) be
conclusively deemed to have consented to the proposed amendment or
modification,
unless,
within thirty (30) days of receiving the notification complying with Section
14(a) above, the PUCT or its staff delivers to the office of the person
specified in Section 14(a)(iii) above a written statement requesting an
additional amount of time not to exceed thirty (30) days in which to consider
whether to consent to the proposed amendment or modification. If the
PUCT or its staff requests an extension of time in the manner set forth in the
preceding sentence, then the PUCT shall either provide notice of its consent or
lack of consent or notice of its determination that the proposed amendment or
modification will not under any circumstances increase ongoing Qualified Costs
to the person specified in Section 14(a)(iii) above no later than the last day
of such extension of time or be conclusively deemed to have consented to the
proposed amendment or modification on the last day of such extension of
time. Any amendment or modification requiring the consent of the PUCT
shall become effective on the later of (i) the date proposed by the parties to
such amendment or modification and (ii) the first day after the expiration of
the thirty (30)-day period provided for in this Section 14(b), or, if such
period has been extended pursuant hereto, the first day after the expiration of
such period as so extended.
(c) Following
the delivery of a notice to the PUCT by the Administrator under
Section 14(a) above, the Administrator shall have the right at any time to
withdraw from the PUCT further consideration of any notification of a proposed
amendment. Such withdrawal shall be evidenced by the prompt written
notice thereof by the Administrator to the PUCT, the Indenture Trustee, the
Issuer and the Servicer.
15. 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 and
without satisfaction of the Rating Agency Condition to a corporation or other
organization that is a successor (by merger, reorganization, consolidation or
purchase of assets) to the Administrator, including, without limitation, any
Permitted Successor; provided that such
successor or organization executes and delivers to the Issuer an Agreement in
which such corporation or other organization agrees to be bound hereunder by the
terms of said assignment in the same manner as the Administrator is bound
hereunder. Subject to the foregoing, this Administration Agreement
shall bind any successors or assigns of the parties hereto. Upon
satisfaction of all of the conditions of this Section 15, the preceding
Administrator shall automatically and without further notice be released from
all of its obligations hereunder.
16. 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.
17. Headings. The
Section headings hereof have been inserted for convenience of reference only and
shall not be construed to affect the meaning, construction or effect of this
Administration Agreement.
18. 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.
19. 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.
20. 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, acquiesce, petition or otherwise invoke or cause the Issuer to
invoke the process of any court or government authority for the purpose of
commencing or sustaining an involuntary case against the Issuer under any
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.
21. Assignment to Indenture
Trustee. The Administrator hereby acknowledges and consents to any
mortgage, pledge, assignment and grant of a security interest by the Issuer to
the Indenture Trustee for the benefit of the Secured Parties pursuant to the
Indenture of any or all of the Issuer’s rights hereunder and the assignment of
any or all of the Issuer’s rights hereunder to the Indenture Trustee for the
benefit of the Secured Parties.
22. Removal of
Managers. ETI, in its capacity as the Member of the Issuer, agrees
that, notwithstanding Section 7.04(b) of the LLC Agreement, any removal of a
Manager pursuant to the LLC Agreement shall not become effective on a date
earlier than the date a notice of such removal has been delivered to the
remaining Managers and the Manager designated to replace the removed
Manager.
[REMAINDER
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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.
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By:
/s/ Xxxxxx X. XxXxxx
Name: Xxxxxx
X. XxXxxx
Title: Vice
President and Treasurer
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ENTERGY
TEXAS, INC., as Administrator
By:
/s/ Xxxxx Xxxxxxxxx
Name: Xxxxx
Xxxxxxxxx
Title: Assistant
Treasurer
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