Exhibit 10.9

Execution Version

 

SERVICES AGREEMENT

BETWEEN

SHARYLAND DISTRIBUTION & TRANSMISSION SERVICES, L.L.C.

AND

HUNT UTILITY SERVICES, LLC

This SERVICES AGREEMENT (this “Agreement”) is entered into effective as of the
1st day of January, 2019 (the “Effective Date”), between Sharyland Distribution
& Transmission Services, L.L.C., a Texas limited liability company (“SDTS”), and
Hunt Utility Services, LLC, a Delaware limited liability company (the “Hunt
Manager”). SDTS and Hunt Manager may be referred to herein individually as a
“Party” and collectively as the “Parties.”

RECITALS

WHEREAS, Substantive Rule 25.84(e) of the Public Utility Commission of Texas
(the “Commission”) requires an electric utility to reduce to writing and file
with the Commission copies of contracts or agreements it has with its
affiliates; and

WHEREAS, in keeping with the requirement of applicable laws, SDTS and Hunt
Manager will enter into this Agreement to memorialize the terms and conditions
by which Hunt Manager will perform certain services for SDTS as set forth in
this Agreement;

NOW THEREFORE, in consideration of the premises and the covenants made herein
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, SDTS and Hunt Manager hereby agree as follows:

l. SCOPE OF WORK.  Hunt Manager shall perform for SDTS the services described in
Exhibit A hereto (the “Services”), as such Exhibit may be modified from time to
time.

 

2. COMPENSATION.  As consideration for performing the Services hereunder, Hunt
Manager shall be paid a fee equal to the sum of all of Hunt Manager’s direct and
indirect compensation expenses for providing the Services (the “Allocable
Compensation Expenses”) in accordance with the terms set forth in Section 3.a.
below. Notwithstanding anything to the contrary herein, the amounts charged by
Hunt Manager to SDTS shall be no higher than the amounts charged by Hunt Manager
to its other affiliates or to a nonaffiliated person (within the same market
areas or having the same market conditions) for the same service or class of
services.

 

3.PAYMENT TERMS.

 

 

a.

SDTS will pay Hunt Manager for the Services performed hereunder in cash on a
quarterly basis (each, a “Quarterly Payment”) in arrears on the last day of each

 

 

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calendar quarter (each, a “Completed Quarter”) (or the first business day that
follows such day, if the last day of the Completed Quarter is not a business
day). Subject to Section 3.b. below, each Quarterly Payment will be an amount
equal to the sum of (i) Hunt Manager’s actual Allocable Compensation Expenses
for the first two months of the Completed Quarter and (ii) Hunt Manager’s
reasonable estimate of its Allocable Compensation Expenses for the third month
of the Completed Quarter (the “Estimated Expenses”); provided that in no event
shall the Quarterly Payment with respect to a Completed Quarter exceed the
amount of the quarterly installment of the Base Fee (as defined in the
Management Agreement) payable by InfraREIT Partners, LP (the “Operating
Partnership”) with respect to such Completed Quarter (but, for purposes of this
proviso, without giving effect to any reduction of such payment for amounts
payable under this Agreement).

 

 

 

b.

Following the conclusion of a Completed Quarter, Hunt Manager will review and
determine whether there is a difference in the actual amount of Hunt’s Allocable
Compensation Expenses for the third month of the Completed Quarter (the “Actual
Expenses”) as compared to the Estimated Expenses that were utilized in
calculating the Quarterly Payment. If there has been such a difference, then (i)
if the Actual Expenses exceed the Estimated Expenses, the amount of such
difference will be added to the Quarterly Payment payable with respect to the
subsequent calendar quarter and (ii) if the Estimated Expenses exceed the Actual
Expenses, the amount of such difference will be deducted from the Quarterly
Payment payable with respect to the subsequent calendar quarter.

 

 

 

c.

No less than fifteen (15) days prior to the end of each Completed Quarter, Hunt
Manager will submit to SDTS an accounting of (i) the Services rendered pursuant
to this Agreement for such Completed Quarter (including any Estimated Expenses)
and (ii) any amounts that will be added or subtracted to the Quarterly Payment
pursuant to Section 3.b.

 

 

 

d.

For the avoidance of doubt, notwithstanding anything to the contrary contained
herein, following any expiration or termination of this Agreement pursuant to
Section 4, Hunt Manager will, as soon as reasonably practicable following the
final Quarterly Payment hereunder, determine whether there was a difference
between the Actual Expenses and the Estimated Expenses that were utilized in
calculating the final Quarterly Payment, and shall promptly thereafter determine
whether one Party should make a lump sum payment to the other Party as a result
of excess or deficient compensation paid by SDTS. If any amount is determined to
be due pursuant to this Section 3.d., the payment of such amount must be made
promptly upon the determination of such amount.

 

 

4. TERM.  This Agreement shall be effective as of the Effective Date and shall
continue in effect until the earlier of (a) termination by either Party, with or
without cause, upon at least thirty (30) days’ prior written notice to the other
Party; (b) the expiration or termination of the Management Agreement, dated as
of January 29, 2015 (“Management Agreement”), among InfraREIT, Inc.
(“InfraREIT”), the Operating Partnership and Hunt Manager, as amended; and (c)
the Closing Date, as defined in Section 1.2 of that certain Agreement and Plan
of Merger, dated as of October 18, 2018, among Oncor Electric Delivery Company
LLC, 1912 Merger Sub LLC, Oncor T&D Partners LP, InfraREIT and the Operating
Partnership; provided, however, that

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SDTS’s obligation to pay for Services actually performed in accordance with
Section 2 and Section 3 shall survive indefinitely.

 

 

 

 

5. CODE OF CONDUCT.  Hunt Manager shall (a) adhere to Sharyland Utilities,
L.P.’s Code of Conduct (a copy of which has been delivered to Hunt Manager) (the
“Code of Conduct”), as applicable, (b) work with SDTS to comply with all
additional Code of Conduct requirements imposed upon SDTS by the Commission or
by applicable law, and (c) ensure that its employees receive training in the
Code of Conduct requirements, including training with respect to handling of
confidential information and avoidance of inappropriate cross subsidization by
either Party or their respective affiliates.

 

6. ETHICS.  The Services shall be provided in compliance with the Code of
Conduct. In the event of any inconsistency between the provisions of this
Agreement and any requirement of the Code of Conduct, the terms and provisions
of the Code of Conduct shall govern and control.

 

7.GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICTS OF
LAW PRINCIPLES TO THE CONTRARY.

 

8. TAXES.  Hunt Manager shall be solely responsible for the payment wherever
payable of any state or federal income taxes or other taxes or contributions
based on the compensation paid to Hunt Manager hereunder, or paid by Hunt
Manager to its personnel, and shall complete and deliver to SDTS any applicable
tax forms requested by SDTS such as U.S. IRS Form W-9 showing taxpayer
identification number. SDTS may withhold from such compensation any amounts as
may be required or allowed by applicable law.

 

9. NO WAIVER OF BREACH.  No failure by either Party to enforce any obligation
under this Agreement shall prejudice that Party’s right thereafter to enforce
that or any other obligation unless specifically otherwise stated in writing.

 

10. NON-ASSIGNABILITY.  This Agreement shall inure to the benefit of, and be
binding upon, the respective successors and permitted assigns of the Parties.
Notwithstanding the foregoing, neither Party shall have the right to assign its
rights and obligations under this Agreement without the written consent of the
other Party.

 

11. No Joint Venture.  Nothing in this Agreement shall be construed to make SDTS
and Hunt Manager partners or joint venturers or impose any liability as such on
either of them.

 

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12. NOTICES.  Notices shall be in writing, in the English language, given in
person or by prepaid mail or express delivery and effective when received in
person or at the address of the receiving Party shown below. Notice given by
mail shall be deemed received twenty-four (24) hours after being mailed (postage
prepaid) to the address of the receiving Party shown below.

 

To SDTS:

 

Sharyland Distribution & Transmission Services, L.L.C.

 

 

1900 North Akard Street

 

 

Dallas, Texas 75201

 

 

Attn: General Counsel

 

 

Legal@huntutility.com

 

 

To Hunt Manager:

 

Sharyland Utilities, L.P.

 

 

1900 North Akard Street

 

 

Dallas, Texas 75201

 

 

Attn: Associate General Counsel

 

 

kelly.frazier@sharyland.com

 

13. ENTIRE AGREEMENT.  This Agreement (including Exhibit A attached hereto)
represents the complete understanding between SDTS and Hunt Manager and
supersedes all prior negotiations, representations, or agreements between the
Parties, either written or oral, and any amendment hereto must be in writing and
signed by both Parties. The invalidity of any particular provision of this
Agreement shall not affect the validity of any other provision, and no ambiguity
shall be construed against either Party on the grounds that such Party caused or
should have prevented it.

 

14. HEADINGS.  The underlined headings used throughout this Agreement are for
administrative convenience only and shall be completely disregarded for the
purposes of construing and enforcing this Agreement.

 

15. COUNTERPARTS.  This Agreement may be executed in identical counterparts,
which shall be deemed to constitute one and the same agreement.

 

[Signature page follows]

 

 

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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of February
26, 2019.

 

SDTS

 

Hunt Manager

Sharyland Distribution & Transmission

Services, L.L.C.

 

Hunt Utility Services, LLC

 

 

 

By:

/s/ Brant Meleski

 

By:

/s/ Michael Carter

Name:

Brant Meleski

 

Name:

Michael Carter

Title:

Senior Vice President and

Chief Financial Officer

 

Title:

Vice President

 

 

 

 

 

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EXHIBIT A

 

 

SERVICES TO BE PERFORMED

 

Hunt Manager shall provide specific services as requested from time to time by
SDTS, for the purpose of assisting SDTS in carrying out SDTS’s management and
administrative responsibilities. SDTS’s management and administrative
responsibilities that require Hunt Manager’s services include, but are not
limited to, the following:

 

 

1.

Implementation and operation of accounting systems, including requirements
necessary with respect to regulatory bodies, studies of accounting procedures
and practices to improve efficiency, preparation and analyses of financial and
operating reports and other statistical matters, development of capital and
operating budgets, development of cash and cost forecasts, implementation of
budgetary controls, evaluation of vendor creditworthiness and obtaining short-
and long-term debt and equity financing;

 

 

2.

Tax services and the management of all tax matters applicable to SDTS (and any
subsidiaries), including, but not limited to (a) the preparation, review and
filing of all federal, state and local tax returns (or similar reports) and the
remittance by SDTS of any associated tax payments and assessments; (b) tax
planning, appeals and protests; and (c) engaging and assisting any SDTS
third-party tax service providers;

 

 

3.

Provision of audit services;

 

 

4.

Consultation, analysis, advice and performance of SDTS’s legal, regulatory,
public affairs, corporate communications and administrative services;

 

 

5.

Administrative or project management duties; and

 

 

6.

Other corporate support services, as that term is defined in Commission
Substantive Rule 25.272, as required from time to time in the course of SDTS’s
business and in accordance with the Code of Conduct.