Exhibit 10.5
REDEMPTION AGREEMENT
This redemption agreement (this "Agreement") is executed as of January 29, 2015
by and between InfraREIT, Inc. ("InfraREIT Inc.") and InfraREIT Partners, LP
(the "Operating Partnership").
RECITALS
WHEREAS, this Agreement is being entered into in connection with the Merger and
Transaction Agreement, dated as of January 29, 2015, by and among InfraREIT,
L.L.C. ("InfraREIT LLC"), InfraREIT Inc. and the Operating Partnership (as the
same may be amended, modified or supplemented from time to time, the "Merger
Agreement"), pursuant to which, among other things, InfraREIT LLC will be merged
with and into InfraREIT Inc., with InfraREIT Inc. as the surviving entity in the
merger (the "Merger");
WHEREAS, InfraREIT Inc. has filed with the United States Securities and Exchange
Commission a registration statement on Form S-11 with respect to an initial
public offering (the "IPO") of its common stock, par value $0.01 per share;
WHEREAS, 6,242,999 limited liability company interests in InfraREIT LLC
designated as common shares were transferred to a trust (the "Trust Shares") for
the benefit of the Charitable Beneficiary (as defined in the Merger Agreement)
as a result of the operation of certain provisions of Article 6 of the Amended
and Restated Limited Liability Company Agreement of InfraREIT LLC, dated as of
November 23, 2010 (the "LLC Agreement");
WHEREAS, pursuant to Section 6.18 of the LLC Agreement, InfraREIT LLC has
accepted the offer to purchase the Trust Shares from the Trust and InfraREIT
Inc., as successor to InfraREIT LLC, has agreed to acquire the Trust Shares
contemporaneously with the Merger in consideration for a promissory note with a
principal balance equal to $66,517,480 (the "ES Note");
WHEREAS, it is contemplated that the Operating Partnership will acquire the ES
Note;
WHEREAS, pursuant to Section 4.6.G of the Second Amended and Restated Agreement
of Limited Partnership of the Partnership (the "Second Amended and Restated OP
Agreement"), which will become effective upon the consummation of the IPO,
InfraREIT Inc. shall cause the Operating Partnership to purchase from InfraREIT
Inc. a number of Class A Units equal to the number of Trust Shares being
repurchased on the same terms and for the same aggregate price that InfraREIT
Inc. purchases the Trust Shares; and
WHEREAS, in consideration of the transfer and cancellation of the ES Note, the
Operating Partnership desires to redeem 6,242,999 Class A Units (the "Redeemed
Units") held by InfraREIT Inc.
1
NOW, THEREFORE, in consideration of the premises and of the mutual promises,
covenants, conditions and agreements contained herein, and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Redemption of Redeemed Units. Pursuant to Section 4.6.G of the Second Amended
and Restated OP Agreement, immediately upon acquisition of the ES Note, the
Operating Partnership hereby transfers to InfraREIT Inc. the ES Note and
InfraREIT Inc. hereby surrenders the Redeemed Units and all right, title and
interest therein.
2. Cancellation of the ES Note. InfraREIT Inc. and the Operating Partnership
agree that upon transfer of the