Exhibit 10.3

Thirteenth Amended and Restated Rent Supplement

(McAllen Lease)

November 9, 2017

This Thirteenth Amended and Restated Rent Supplement (this “Thirteenth Amended
Supplement”) between Sharyland Distribution & Transmission Services, L.L.C.
(“Lessor”) and Sharyland Utilities, L.P. (“Lessee”) is executed and delivered on
November 9, 2017 (the “Effective Date”) to give effect to the Exchange
Transaction (as defined below) under the McAllen Lease (as defined below).
Capitalized terms used herein that are not otherwise defined will have the
meanings assigned to them in the McAllen Lease.

WHEREAS, Lessor and Lessee are Parties to a Third Amended and Restated Master
System Lease Agreement (McAllen System) dated December 1, 2014 (as amended from
time to time in accordance with its terms, the “McAllen Lease”);

WHEREAS, on February 22, 2017 the Parties executed a Twelfth Amended and
Restated Rent Supplement (McAllen Lease) effective as of January 1, 2017 (the
“Twelfth Amended Supplement”);

WHEREAS, as of the Effective Date, pursuant to an Agreement and Plan of Merger
among Lessor, Lessee, Oncor Electric Delivery Company LLC (“Oncor”) and certain
other parties thereto, Lessor is disposing of certain transmission and
distribution assets that are subject to the McAllen Lease (the “Disposed McAllen
Assets”) and the Stanton/Brady/Celeste Lease and, in exchange therefor, is
acquiring certain transmission assets and cash from Oncor (the “Exchange
Transaction”); and

WHEREAS, in connection therewith, the Parties now desire to amend and restate
the Twelfth Amended Supplement as set forth herein.

NOW THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Parties hereto
agree to the following:

1. The Twelfth Amended Supplement is hereby amended and restated in its entirety
as set forth below.

2. The McAllen Lease, except as supplemented by this Thirteenth Amended
Supplement, shall remain in full force and effect.

 

Incremental CapEx:

  

2010

   $ 2,195,000  

2011

   $ 504,000  

2012

   $ 1,262,963  

2013

   $ 16,391,255  

2014

   $ 46,042,142  

2015

   $ 2,431,198  

2016

   $ 914,401  

2017

   $ 1,519,331 *     $ 20,859 ** 

(Total 2017)

   $ 1,540,190 *** 

 

* Represents the aggregate amount of distribution Incremental CapEx that the
Parties expected to be placed in service during 2017 (as adjusted for the
disposition of the Disposed McAllen Assets on the Effective Date). Rent
supplements with respect to this distribution Incremental CapEx were agreed to
and memorialized part of the Eleventh Amended and Restated Rent Supplement
(McAllen Lease) dated

 

   1    MCALLEN LEASE

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  December 31, 2016 (“Eleventh Amended Supplement”). Of the 2017 distribution
Incremental CapEx, an aggregate of $1,590,165 was expected to be in service as
of the Effective Date (“First 2017 Distribution CapEx”), with an expected
weighted average in-service date of June 1, 2017, and an aggregate of $(70,833)
was expected to be placed in service throughout the remainder of 2017 (“2017
Stub-Year Distribution CapEx”), with an expected weighted average in-service
date of December 1, 2017.

** Represents the aggregate amount of transmission Incremental CapEx the Parties
expected to be placed in service in 2017 (as adjusted for the disposition of the
Disposed McAllen Assets on the Effective Date). Rent supplements with respect to
this transmission Incremental CapEx were agreed to and memorialized as part of
the Eleventh Amended Supplement. Of the 2017 transmission Incremental CapEx, an
aggregate of $0 was expected to be in service as of the balance sheet date
reflected in Lessee’s first 2017 Regulatory Order (“First 2017 Transmission
CapEx”), an aggregate of $20,859 was expected to be in service as of the
Effective Date and reflected in Lessee’s second 2017 Regulatory Order
(“Pre-Closing Second 2017 Transmission CapEx”), an aggregate of $0 was expected
to be in service after the Effective Date but as of the balance sheet date
reflected in Lessee’s second 2017 Regulatory Order (“Post-Closing Second 2017
Transmission CapEx” and, together with the Pre-Closing Second 2017 Transmission
CapEx, “Second 2017 Transmission CapEx”) and an aggregate of $0 was expected to
be placed in service throughout the remainder of 2017 (“2017 Stub-Year
Transmission CapEx”) and included in the first 2018 Regulatory Order. The
Parties expected the First 2017 Transmission CapEx and Pre-Closing Second 2017
Transmission CapEx, collectively, to have a weighted average in-service date of
April 1, 2017. A “Regulatory Order” is defined as either (i) the PUCT’s approval
of Lessee’s application for updated wholesale transmission rates or (ii) final
resolution or settlement of a rate case applicable to Lessee’s transmission
rates (but, for the avoidance of doubt, does not include the order approving the
Exchange Transaction, the dismissal of the Parties’ pending rate case filed in
2016 or associated orders in connection therewith). The Parties expected the
first 2017 Regulatory Order to be effective on May 1, 2017, the second 2017
Regulatory Order to be effective on March 1, 2018, and the first 2018 Regulatory
Order to be effective on June 1, 2018. The Parties have agreed that any Rent
Validation (within the meaning of the McAllen Lease) with respect to First 2017
Transmission CapEx, Second 2017 Transmission CapEx and 2017 Stub-Year
Transmission CapEx will use the actual effective dates of the applicable
Regulatory Order (to the extent known), but will otherwise be determined in
accordance with Section 3.2(c) of the McAllen Lease.

*** Represents the total amount of transmission and distribution Incremental
CapEx that the Parties expected to be placed in service during 2017 (as adjusted
for the disposition of the Disposed McAllen Assets on the Effective Date).

 

Lessee CapEx:

  

2010

   $ 666,488  

2011

   $ 121,897  

2012

   $ 263,733  

2013

   $ 68,303  

2014

   $ 89,405  

2015

   $ 168,289  

2016

   $ 0  

2017

   $ 0  

Base Rent:

  

2010

   $ 5,260,447  

2011

   $ 5,453,529  

2012

   $ 5,521,881  

2013

   $ 6,566,290  

2014

   $ 8,445,964  

2015

   $ 11,818,692  

 

   2    MCALLEN LEASE

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2016

   $ 11,860,813  

2017

   $ 11,158,909 * 

2018

   $ 9,339,638 ** 

2019

   $ 9,156,772  

 

* Pursuant to the Twelfth Amended Supplement, Lessee has made or will make, as
applicable, a monthly 2017 Base Rent payment of $951,288 on the 15th day of each
month beginning on March 15, 2017 through December 15, 2017 (with respect to
January 2017 through October 2017). Lessee will then make a 2017 Base Rent
payment of $845,650 on January 15, 2018 and $800,377 on February 15, 2018 (with
respect to November 2017 and December 2017, respectively), with the decrease in
monthly Base Rent reflecting the disposition on the Effective Date of the
Disposed McAllen Assets. The Parties agree that any Rent Validation (within the
meaning of the McAllen Lease) with respect to Disposed McAllen Assets will use
the actual Rate Base of the Disposed McAllen Assets, but will otherwise be
determined in accordance with Section 3.2(c) of the McAllen Lease.

** Lessee will make a monthly 2018 Base Rent payment of $778,145 on each of
March 15, 2018 and April 15, 2018 (with respect to January 2018 and February
2018). Lessee will make a monthly 2018 Base Rent payment of $778,335 on the 15th
day of each month beginning on May 15, 2018 through July 15, 2018 (with respect
to March 2018 through May 2018), with the increase in monthly Base Rent
reflecting Second 2017 Transmission CapEx and commencing March 1, 2018, which is
30 days after the expected approval of Lessee’s second 2017 Regulatory Order.
Lessee will then make a 2018 Base Rent payment of $778,335 on the 15th day of
each month beginning on August 15, 2018 through February 15, 2019 (with respect
to June 2018 through December 2018), with the increase in monthly Base Rent
reflecting 2017 Stub-Year CapEx and commencing June 1, 2018, which is the
expected date of the approval of Lessee’s first 2018 Regulatory Order.

 

Percentage Rent Percentages:

  

2010

     36.993 % 

2011

     36.972 % 

2012

     36.923 % 

2013

     37.0 % 

2014

     36.9 % 

2015

     37.2 % 

2016

     32.1 % 

2017

     31.2 %* 

2018

     30.3 % 

2019

     29.9 % 

 

* The 2017 Percentage Rent Percentage reflects the assumptions set forth above
regarding the timing of the first 2017 Regulatory Order and the second 2017
Regulatory Order, as well as the amount of First 2017 Distribution CapEx, 2017
Stub-Year Distribution CapEx, First 2017 Transmission CapEx and Second 2017
Transmission CapEx.

 

Annual Percentage Rent Breakpoints:

  

2010

   $ 5,260,447  

2011

   $ 5,453,529  

2012

   $ 5,521,881  

2013

   $ 6,566,290  

2014

   $ 8,445,964  

2015

   $ 11,818,692  

 

   3    MCALLEN LEASE

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2016

   $ 12,616,219  

2017

   $ 11,938,001 * 

2018

   $ 10,150,638 ** 

2019

   $ 10,000,772  

 

* Of the 2017 Annual Percentage Rent Breakpoint, $10,451,938 will be applied to
Gross Revenues through the Effective Date, and $1,486,063 will be applied to
Gross Revenues throughout the remainder of 2017. The 2017 Annual Percentage Rent
Breakpoint reflects the assumptions set forth above regarding the timing of the
first 2017 Regulatory Order and the second 2017 Regulatory Order, as well as the
amount of First 2017 Distribution CapEx, 2017 Stub-Year Distribution CapEx,
First 2017 Transmission CapEx and Second 2017 Transmission CapEx.

** The 2018 Annual Percentage Rent Breakpoint reflects the assumptions set forth
above regarding the timing of the first 2018 Regulatory Order, as well as the
amount of 2017 Stub-Year Transmission CapEx.

 

Revenues Attributable to Lessee CapEx:

  

2010

   $ 60,546  

2011

   $ 249,481  

2012

   $ 289,945  

2013

   $ 345,693  

2014

   $ 355,744  

2015

   $ 360,527  

2016

   $ 206,130  

2017

   $ 97,925  

2018

   $ 73,431  

2019

   $ 45,266  

 

TCOS    Allocation:    before June 20, 2013: 100%    between June 20, 2013 and
October 17, 2013: 27.8%    between October 17, 2013 and February 25, 2014: 11.8%
   between February 25, 2014 and May 1, 2014: 8.2%    between May 1, 2014 and
October 3, 2014: 8.6%    between October 3, 2014 and March 31, 2015: 12.0%   

between April 1, 2015 and October 31, 2015: 11.9%

between November 1, 2015 and June 13, 2016: 10.6%

between June 14, 2016 and September 22, 2016: 9.8%

between September 23, 2016 and April 30, 2017: 8.5%

between May 1, 2017 and November 9, 2017: 7.9%

between November 10, 2017 and February 28, 2018: 6.1%

starting March 1, 2018: 5.7%

Term of Rent Supplement: Expires 12/31/19

 

   4    MCALLEN LEASE

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The Parties have executed this Thirteenth Amended Supplement to the McAllen
Lease as of the date set forth above.

 

SHARYLAND UTILITIES, L.P. By:  

/s/ Greg Wilks

Name:   Greg Wilks Title:   Chief Financial Officer SHARYLAND DISTRIBUTION &
TRANSMISSION SERVICES, L.L.C. By:  

/s/ Brant Meleski

Name:   Brant Meleski Title:   Chief Financial Officer

 

      MCALLEN LEASE