Exhibit 10(m)
SALE PARTICIPATION
AGREEMENT
(Director Form)
Oncor Electric Delivery Company
LLC
, 200
To: The Person whose name
is
set
forth on the signature page hereof
Dear Sir or Madam:
Concurrently with entering into this
letter agreement (this “ Agreement ”), you are
entering into a Director Stockholder’s Agreement (the “
Stockholder’s Agreement ”) with Oncor Management
Investment LLC (the “ Company ”), a Delaware
limited liability company, and Oncor Electric Delivery Company LLC
(“ Onco r”), a Delaware limited liability
company, relating to (i) your acquisition and continued
ownership of Class B membership interests of the Company (“
Management Units ”), (ii) any membership
interests in Oncor (including any successor common equity of an IPO
Vehicle, “ Oncor Units ”) you may subsequently
receive or acquire in respect of Stock Appreciation Rights, as
defined below, pursuant to a distribution made by the Company or
otherwise, and/or (iii) the grant by Oncor to you of certain
stock appreciation rights each representing the approximate
economic equivalent of one Oncor Unit subject to a Base Price equal
to the current fair market value of an Oncor Unit on the date of
grant as determined by the Board of Directors of Oncor (the “
Stock Appreciation Rights ”).
Oncor Electric Delivery Holdings
Company LLC, a Delaware limited liability company (together with
any of its current or future Affiliates that hold a direct interest
in Oncor or an IPO Vehicle, other than Oncor Management Investment
LLC, “ Oncor Holdings ”), hereby agrees with you
as follows:
1. (a) In the event that at any time
on or after a Public Offering of Oncor or an IPO Vehicle (the
“ Public Entity ”), Oncor Holdings proposes to
sell directly for cash or any other consideration units or shares
of common equity of the Public Entity (“ Oncor Units
”) owned by Oncor Holdings, in any transaction other than a
Public Offering or a sale, directly or indirectly, to an Affiliate
of Oncor Holdings, then, unless Oncor Holdings is entitled to and
does exercise the drag-along rights pursuant to Paragraph 7 below
and a Drag Transaction (as defined below) is consummated, Oncor
Holdings will notify you or your Management Stockholder’s
Estate, Stockholder’s Estate, Management Stockholder’s
Trust or Stockholder’s Trust, as applicable (as such terms
are defined in the Stockholder’s Agreement, and collectively
with you, the “ Stockholder Entities ”), as the
case may be, in writing (a “ Notice ”) of such
proposed sale (a “ Proposed Sale ”) specifying
the principal terms and conditions of the Proposed Sale (the
“ Material Terms ”) including (A) the
number of Oncor Units proposed to be included in the
Proposed Sale, (B) the percentage of the
outstanding Oncor Units at the time the Notice is given that is
represented by the number of Oncor Units proposed to be included in
the Proposed Sale, (C) the price per Oncor Unit subject to the
Proposed Sale, including a description of any pricing formulae and
of any non-cash consideration, (D) the Sale Percentage (as
defined below) of Oncor Holdings and (E) the name and address
of the Person to whom Oncor Units are proposed to be
sold.
(b) If, within ten
(10) Business Days after the delivery of a Notice under
Paragraph 1(a), Oncor Holdings and Oncor receive from a Stockholder
Entity a written request (a “ Request ”) to
include Oncor Units held by such Stockholder Entity in the Proposed
Sale (which Request shall be irrevocable except (A) as set
forth in clauses (c) and (d) of this Paragraph 1 below or
(B) if otherwise mutually agreed to in writing by the
Stockholder Entity and Oncor Holdings), Oncor Units held by such
Stockholder Entity (not in any event to exceed the Sale Percentage
of Oncor Holdings multiplied by the total number of Oncor
Units held by the Stockholder Entity in the aggregate) will be so
included as provided herein. Promptly after the execution of the
definitive sale agreement, if any, for such Proposed Sale (the
“ Sale Agreement ”), Oncor Holdings will furnish
each Stockholder Entity with a copy of the Sale Agreement, if any.
For purposes of this Agreement, the “ Sale Percentage
” shall mean the fraction, expressed as a percentage,
determined by dividing the number of Oncor Units to be purchased
from Oncor Holdings by the total number of Oncor Units owned
directly by Oncor Holdings.
(c) Notwithstanding anything to the
contrary contained in this Agreement, if any of the economic terms
of the Proposed Sale change, including without limitation if the
per unit price will be less than the per unit price disclosed in
the Notice, or any of the other principal terms or conditions will
be materially less favorable to the selling Stockholder Entities
than those described in the Notice, Oncor Holdings will provide
written notice thereof to each Stockholder Entity who has made a
Request and each such Stockholder Entity will then be given an
opportunity to withdraw the offer contained in such holder’s
Request (by providing prompt (and in any event within five
(5) Business Days; provided that, notwithstanding the
foregoing, if the proposed closing with respect to the Proposed
Sale is to occur within five (5) Business Days or less, no
later than three (3) Business Days prior to such closing)
written notice of such withdrawal to Oncor Holdings and Oncor),
whereupon such withdrawing Stockholder Entity will be released from
all obligations thereunder.
(d) If Oncor Holdings does not
complete the Proposed Sale by the end of the 180th day following
the date of the effectiveness of the Notice, each selling
Stockholder Entity shall be released on and after such date from
all obligations under the applicable Request and the Notice of the
relevant Stockholder Entity shall be null and void, and it will
then be necessary for a separate Notice to be furnished, and the
terms and provisions of clauses (a) and (b) of this
Paragraph 1 separately complied with, in order to consummate such
Proposed Sale pursuant to this Paragraph 1, unless the failure to
complete such Proposed Sale resulted from any failure by any
selling Stockholder Entity to comply with the terms of this
Paragraph 1.
(e) Notwithstanding anything to the
contrary in the foregoing provisions of this Paragraph 1, Oncor
Holdings may, in its sole discretion, decide whether or not to
pursue, consummate, postpone or abandon the Proposed Sale and the
terms and conditions thereof.
2
None of the Company, the Public Entity, Oncor
Holdings or any of their respective Affiliates shall have any
liability to any Stockholder Entity arising from, relating to or in
connection with the pursuit, consummation, postponement,
abandonment or terms and conditions of any such Proposed
Sale.
2. (a) If the aggregate number of
Oncor Units to be sold by Oncor Holdings together with Oncor Units
to be sold by you and all other Persons participating in such sale
as tag-along sellers (all such other participants, the “
Tag Along Sellers ”), exceeds the total number of
Oncor Units specified in the Notice to be included in the Proposed
Sale, then you and each exercising Tag Along Seller shall each
reduce, on a pro rata basis (such pro rata share of
ownership calculated by a fraction the numerator of which is the
number of Oncor Units owned by you or the Tag Along Seller, as
applicable, and the denominator of which is the total number of
Oncor Units owned by you, Oncor Holdings and the Tag Along Sellers)
the Oncor Units that each otherwise would have sold so as to permit
Oncor Holdings, you and the Tag Along Sellers to sell the amount of
Oncor Units specified in the Notice.
(b) If one or more Tag Along Sellers
elect not to include the maximum number of Oncor Units which such
Tag Along Seller would have been permitted to include in a Proposed
Sale pursuant to Paragraph 2(a) (such non-included units, the
“ Eligible Units ”), then after Oncor Holdings
has sold any additional Oncor Units pursuant to this paragraph, you
and each of the remaining Tag Along Sellers will have the right to
sell in the Proposed Sale a number of additional Oncor Units equal
to your pro rata portion of the number of Eligible Units remaining
after such sale of additional units, based on the relative number
of Oncor Units then held by you and each such Tag Along Seller.
Such additional Oncor Units which you and such Tag Along Seller
propose to sell shall not be included in any calculation made
pursuant to Paragraph 2(a) for the purpose of determining the
number of Oncor Units which you will be permitted to include in a
Proposed Sale; provided that, notwithstanding any of the foregoing,
Oncor Holdings will have the right to sell in the Proposed Sale
additional Oncor Units owned by it equal to the number, if any, of
the total remaining Eligible Units, which will not be included in
any calculation made pursuant to Paragraph 2(a) for the purpose of
determining the number of Oncor Units which you will be permitted
to include in a Proposed Sale.
3. Except as may otherwise be
provided herein, Oncor Units subject to a Request will be included
in a Proposed Sale pursuant hereto and in any agreements with
purchasers relating thereto on the same terms and subject to the
same conditions applicable to the Oncor Units which Oncor Holdings
proposes to sell in the Propo
