EXHIBIT 10.1.C
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT, dated as of _______, 2002 (this
"Administration Agreement"), is by and between JCP&L TRANSITION FUNDING LLC, a
Delaware limited liability company, as Issuer (the "Issuer"), and GPU SERVICE,
INC., a Pennsylvania 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 the Indenture dated as of
________, 2002 between the Issuer and The Bank of New York, as Trustee (the
"Trustee").
WITNESSETH:
WHEREAS, the Issuer is issuing Transition Bonds pursuant to the
Indenture;
WHEREAS, the Issuer has entered into certain agreements in connection
with the issuance of the Transition Bonds, including (i) the 2002-A Series
Supplement to the Indenture, dated as of ________, 2002 (the "2002-A Series
Supplement"), (ii) the Servicing Agreement, (iii) the Sale Agreement, and (iv)
the DTC Agreement (the Indenture, the 2002-A Series Supplement, the Servicing
Agreement, the Sale Agreement and the DTC Agreement are hereinafter collectively
referred to as the "Related Agreements");
WHEREAS, pursuant to the Related Agreements, the Issuer is required to
perform certain duties in connection with the Issuer LLC Agreement, the
Transition Bonds, the Collateral and the Related Agreements pledged to the
Trustee pursuant to the Indenture;
WHEREAS, the Issuer 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 provide the services
required hereby and is willing to perform such services 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
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hereby agrees, subject to the directions of the Managers, to:
(i) furnish the Issuer with ordinary clerical and bookkeeping
services required by the Issuer, including, without limitation, the
following services:
(A) maintenance of general accounting records of the
Issuer (the "Accounting Records"), in accordance with
generally accepted accounting principles, separate and apart
from its own accounting records, preparation of such quarterly
and annual financial statements as may be necessary or
appropriate and arrangement for annual audits of the Issuer's
financial statements by the Issuer's Independent accountants;
(B) preparation and, after execution by the Issuer,
filing with the Commission and any applicable state agencies
documents required to be filed with such agencies (the
"Required Filings"), including, without limitation, periodic
reports required to be filed under the Exchange Act;
(C) preparation and, after execution by the Issuer,
filing with the applicable federal or state agency such
income, franchise or other tax returns of the Issuer as shall
be required to be filed by applicable law (the "Tax Returns")
and payment on behalf of the Issuer from the Issuer's funds
any taxes required to be paid by the Issuer under applicable
law;
(D) preparation for execution by the Managers of the
minutes of the Managers' meetings and such other documents
deemed necessary or appropriate by the Issuer to maintain its
corporate existence and good standing (the "Corporate
Minutes," and together with the Accounting Records, the
Required Filings, the Tax Returns and the Issuer LLC
Agreement, collectively the "Issuer Documents"); and
(E) maintenance and preservation of copies (executed
or otherwise) of the Issuer Documents at the Premises (as
defined below);
(ii) take such actions on behalf of the Issuer as are
necessary or appropriate for the Issuer to remain organized and in good
standing in the State of Delaware as a limited liability company and
qualified to do business in those foreign jurisdictions in which it
becomes necessary to be so qualified;
(iii) provide all corporate management services necessary or
appropriate for the issuance and delivery of the Transition Bonds;
(iv) provide all corporate management services necessary or
appropriate for the performance by the Issuer of its obligations under
each of the Related Agreements;
(v) prepare all documents, reports, filings, instruments,
certificates and opinions that the Issuer must prepare, file or deliver
pursuant to the Related Agreements;
(vi) enforce each of the rights of the Issuer under the
Related Agreements, at the direction of the Managers;
(vii) provide the defense, at the direction of the Managers,
of any action, suit or proceeding brought against the Issuer or
affecting the Issuer or any of its assets;
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(viii) provide office space (the "Premises") for the Issuer
as may be necessary for the Administrator to carry out its obligations
hereunder, including telecopying, duplicating, word processing services
and any other reasonable ancillary services;
(ix) undertake such other administrative services as may be
necessary, appropriate or requested by the Issuer; and
(x) provide such other services as may be incidental to the
foregoing or as the Issuer and the Administrator may agree.
In providing the services described in this Section 1 and as otherwise
provided in this Administration Agreement, the Administrator will not knowingly
take any actions on behalf of the Issuer which (i) the Issuer would be
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 Issuer LLC
Agreement.
2. Compensation. All of the services rendered under this
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Administration Agreement will be at the actual cost thereof, fairly and
equitably allocated in accordance with Rules 90 and 91 of the Public Utility
Holding Company Act of 1935, as amended. Cost of service will be determined and
paid for in accordance with the Act and the rules, regulations and orders
thereunder, and will include all costs of doing business incurred by the
Administrator.
3. Third Party Services. Any third-party professional services
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required for the performance of the above-referenced services by the
Administrator (including Independent auditor fees and counsel fees) may, if the
Issuer deems it necessary or desirable, be arranged by 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
Issuer and the Administrator.
4. Additional Information to be Furnished to the Issuer. The
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Administrator shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer may reasonably request.
5. Independence of the Administrator. For all purposes of this
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Administration Agreement, the Administrator shall be treated as an independent
contractor and shall not be subject to the supervision of the Issuer, its
Managers or the Trustee 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 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 Agreement (a) shall be
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deemed to make the Administrator and the Issuer 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
outside the terms of this Administration Agreement.
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7. Other Activities of Administrator. Nothing herein shall prevent the
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Administrator or any of its shareholders, directors, 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
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Administrator.
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(a) This Administration Agreement shall continue in force until
the termination of the Indenture and the payment in full of the Transition Bonds
and any other amounts owed 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 from its duties hereunder by providing the Issuer with at least sixty
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
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 not cure such default within ten days
(or, if such default cannot be cured in such time, shall not give
within ten days such assurance of cure as shall be reasonably
satisfactory to the Issuer);
(ii) a court having jurisdiction over the Administrator
shall enter a decree or order for relief, and such decree or order
shall not have been vacated within sixty 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 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
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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 Trustee within seven 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 not be
effective unless prior notice of such appointment has been given to each Rating
Agency.
9. Action upon Termination, Resignation or Removal. Promptly upon the
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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 (d), the
Administrator shall be entitled to be paid all of its properly allocated costs
accruing to it to 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 or the Issuer 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 (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
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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, directors, officers, employees, subsidiaries or Affiliates shall
be responsible for any action of the Issuer or any of the members, Managers,
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,
employees, subsidiaries or Affiliates of the Issuer (other than the
Administrator itself).
11. Indemnity.
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(a) Subject to the priority of payments set forth in the
Indenture, the Issuer shall indemnify the Administrator, its shareholders,
directors, 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 (or its shareholders', directors', officers', employees',
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agents' or Affiliates') gross negligence or willful misconduct in the
performance of its or their obligations hereunder.
(b) The Administrator shall indemnify the Issuer, its members,
Managers, employees, subsidiaries 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 Issuer is a party thereto) which any of them may incur as a result of the
Administrator's (or its shareholders', directors', officers', employees',
agents' or Affiliates') gross negligence or willful misconduct in the
performance of its or their obligations hereunder.
12. Notices. Any notice, report or other communication given hereunder
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shall be in writing and addressed as follows:
(a) if to the Issuer, to:
JCP&L Transition Funding LLC
c/o GPU Service, Inc.
00 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxx 00000
(b) if to the Rating Agencies, to:
Standard & Poor's Ratings Group
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx'x Investors Services, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fitch, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
(c) if to the Trustee, to:
The Bank of New York
0 Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
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(d) if to the Administrator, to:
GPU Service, Inc.
00 Xxxxx Xxxx Xxxxxx
Xxxxx, Xxxx 00000
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, telecopied, faxed,
hand-delivered, or sent by overnight courier to the address of such party as
provided above.
13. Amendments. This Administration Agreement may be amended from time
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to time by a written amendment duly executed and delivered by each of the Issuer
and the Administrator, provided that prior notice of such amendment has been
given to each Rating Agency.
14. Successors and Assigns. This Administration Agreement may not be
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assigned by the Administrator unless such assignment is previously consented to
in writing by the Issuer and the Trustee, which consent shall not be
unreasonably withheld, and prior notice of such assignment has been given to
each Rating Agency. Any assignment with such consent and notice, 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 Trustee to (a) any service company affiliated with
the Administrator and/or FirstEnergy Corp. or (b) a corporation or other
organization that is a successor (by merger, consolidation or purchase of
assets) to the Administrator, provided that such service company or successor
organization executes and delivers to the Issuer an agreement in which such
service company or successor 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 AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
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THE LAWS OF THE STATE OF NEW JERSEY 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
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convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Administration Agreement.
17. Counterparts. This Administration Agreement may be executed in
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counterparts, each of which when so executed shall be an original, but all of
which together shall constitute but one and the same agreement.
18. Severability. Any provision of this Administration Agreement that
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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.
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19. Nonpetition Covenant. Notwithstanding any prior termination of this
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Administration Agreement or the Indenture, the Administrator hereby covenants
and agrees that it shall not, prior to the date which is one year and one day
after the termination of the Indenture and payment in full of the Transition
Bonds and any other amounts owed under the Indenture, including, without
limitation, any amounts owed to third party credit enhancers, 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.
JCP&L TRANSITION FUNDING LLC,
as Issuer
By:_________________________
Name:
Title:
GPU SERVICE, INC.,
as Administrator
By:__________________________
Name:
Title:
