Exhibit 10(c)
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TXU GAS COMPANY
as Borrower
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$300,000,000
CREDIT AGREEMENT
Dated as of April 26, 2004
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CREDIT SUISSE FIRST BOSTON,
as Administrative Agent
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CREDIT SUISSE FIRST BOSTON
Sole Lead Arranger and Bookrunner
TABLE OF CONTENTS
Page
Article I
DEFINITIONS; CONSTRUCTION
Section 1.01. Defined Terms..............................................................................1
Section 1.02. Terms Generally...........................................................................14
Article II
THE CREDITS
Section 2.01. Commitments...............................................................................15
Section 2.02. Loans.....................................................................................15
Section 2.03. Borrowing Procedure.......................................................................16
Section 2.04. Fees......................................................................................17
Section 2.05. Repayment of Loans; Evidence of Indebtedness..............................................17
Section 2.06. Interest on Loans.........................................................................18
Section 2.07. Alternate Rate of Interest................................................................18
Section 2.08. Termination and Reduction of Commitments..................................................18
Section 2.09. Prepayment................................................................................19
Section 2.10. Reserve Requirements; Change in Circumstances.............................................19
Section 2.11. Change in Legality........................................................................21
Section 2.12. Pro Rata Treatment........................................................................22
Section 2.13. Sharing of Setoffs........................................................................22
Section 2.14. Payments..................................................................................22
Section 2.15. Taxes.....................................................................................23
Section 2.16. Assignment of Commitments Under Certain Circumstances.....................................25
Article III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Organization; Powers......................................................................26
Section 3.02. Authorization.............................................................................26
Section 3.03. Enforceability............................................................................26
Section 3.04. Governmental Approvals....................................................................26
Section 3.05. Financial Statements......................................................................27
Section 3.06. Litigation................................................................................27
Section 3.07. Federal Reserve Regulations...............................................................27
Section 3.08. Investment Company Act; Public Utility Holding Company Act................................28
Section 3.09. No Material Misstatements.................................................................28
Section 3.10. Taxes.....................................................................................28
Section 3.11. Employee Benefit Plans....................................................................28
Section 3.12. Significant Subsidiaries..................................................................28
Section 3.13. Environmental Matters.....................................................................29
Section 3.14. Solvency..................................................................................29
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Article IV
CONDITIONS
Section 4.01. Initial Loans.............................................................................29
Section 4.02. Conditions for All Loans..................................................................31
Article V
COVENANTS
Section 5.01. Existence.................................................................................31
Section 5.02. Compliance With Laws; Business and Properties.............................................31
Section 5.03. Financial Statements, Reports, Etc........................................................32
Section 5.04. Insurance.................................................................................33
Section 5.05. Taxes, Etc................................................................................33
Section 5.06. Maintaining Records; Access to Properties and Inspections.................................33
Section 5.07. ERISA.....................................................................................34
Section 5.08. Maintain Ratings..........................................................................34
Section 5.09. Use of Proceeds...........................................................................34
Section 5.10. Consolidations, Mergers, Sales and Acquisitions of Assets and
Investments in Subsidiaries........................................................................34
Section 5.11. Limitations on Liens......................................................................35
Section 5.12. Fixed Charge Coverage Ratio...............................................................37
Section 5.13. Debt to Total Capitalization Ratio........................................................37
Section 5.14. Restrictive Agreements....................................................................37
Article VI
EVENTS OF DEFAULT
Article VII
THE AGENT
Article VIII
MISCELLANEOUS
Section 8.01. Notices...................................................................................42
Section 8.02. Survival of Agreement.....................................................................42
Section 8.03. Binding Effect............................................................................43
Section 8.04. Successors and Assigns....................................................................43
Section 8.05. Expenses; Indemnity.......................................................................45
Section 8.06. Right of Setoff...........................................................................47
Section 8.07. Applicable Law............................................................................47
Section 8.08. Waivers; Amendment........................................................................47
Section 8.09. Entire Agreement..........................................................................48
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Section 8.10. Severability..............................................................................48
Section 8.11. Counterparts..............................................................................49
Section 8.12. Headings..................................................................................49
Section 8.13. Interest Rate Limitation..................................................................49
Section 8.14. Jurisdiction; Venue.......................................................................49
Section 8.15. Confidentiality...........................................................................50
EXHIBITS AND SCHEDULES
Exhibit A - Form of Borrowing Request
Exhibit B - Form of Assignment and Assumption
Exhibit C - Form of Administrative Questionnaire
Schedule 2.01 - Commitments
Schedule 5.14 - Restrictive Agreements
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CREDIT AGREEMENT (this "Agreement"), dated as of April 26,
2004, among TXU Gas Company, a Texas corporation (the
"Borrower"), the lenders listed in Schedule 2.01 (together
with their successors and assigns, the "Lenders"), and Credit
Suisse First Boston (together with its successors, "CSFB"), as
administrative agent for the Lenders (in such capacity, the
"Agent").
The Borrower has requested the Lenders to provide the credit facility
hereinafter described in the amounts and on the terms and conditions set forth
herein, the Lenders have so agreed on the terms and conditions set forth herein,
and CSFB has agreed to act as administrative agent for the Lenders, on such
terms and conditions;
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
Section 1.01. Defined Terms.
As used in this Agreement, the following terms shall have the meanings
specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with
the provisions of Article II or any Eurodollar Loan converted (pursuant
to Section 2.07 or 2.11(a)(ii)) to a loan bearing interest at a rate
determined by reference to the Alternate Base Rate.
"Acquisition Date" shall mean the date as of which a person or
group of related persons first acquires more than 30% of any
outstanding class of Voting Shares of TXU (within the meaning of
Section 13(d) or 14(d) of the Exchange Act, and the applicable rules
and regulations thereunder).
"Administrative Fees" shall have the meaning assigned to such
term in Section 2.04(b).
"Administrative Questionnaire" means an Administrative
Questionnaire in the form of Exhibit C.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly or indirectly controls or is
controlled by or is under common control with the person specified.
"Agent" shall have the meaning given such term in the preamble
hereto.
"Agreement" shall have the meaning given such term in the
preamble hereto.
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"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to
the greater of (i) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1% and (ii) the Prime Rate in effect on such day. For
purposes hereof, "Prime Rate" shall mean the rate of interest per annum
announced from time to time by CSFB as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall
be effective on the date such change is publicly announced as
effective; and "Federal Funds Effective Rate" shall mean, for any day,
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as released on the next succeeding Business Day
by the Federal Reserve Bank of New York, or, if such rate is not so
released for any day which is a Business Day, the arithmetic average,
as determined by CSFB, of the quotations for the day of such
transactions received by CSFB from three Federal funds brokers of
recognized standing selected by it. If for any reason CSFB shall have
determined (which determination shall be conclusive absent manifest
error; provided that CSFB shall, upon request, provide to the Borrower
a certificate setting forth in reasonable detail the basis for such
determination) that it is unable to ascertain the Federal Funds
Effective Rate for any reason, including the inability of CSFB to
obtain sufficient quotations in accordance with the terms thereof, the
Alternate Base Rate shall be determined without regard to clause (i) of
the first sentence of this definition until the circumstances giving
rise to such inability no longer exist. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change
in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Margin" shall mean, for any ABR Loan 0% per annum
and for any Eurodollar Loan 0.875% per annum, provided, however, at any
time an Event of Default has occurred and is continuing, the Applicable
Margins set forth herein shall be increased by 2.00%.
"Assignment and Assumption" shall mean an assignment and
assumption entered into by a Lender and an assignee in the form of
Exhibit B.
"Availability Period" shall have the meaning given such term
in Section 2.01.
"Available Commitment" shall mean, for each Lender, the
excess of such Lender's Commitment over the Loans made by such Lender.
"Available Commitments" shall refer to the aggregate of the Lenders'
Available Commitments hereunder.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Borrower" shall have the meaning given such term in the
preamble hereto.
"Borrowing" shall mean a group of Loans of a single Type made
by the Lenders on a single date and as to which a single Interest
Period is in effect.
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"Borrowing Request" shall mean a request made pursuant to
Section 2.03 in the form of Exhibit A.
"Business Day" shall mean any day (other than a day that is a
Saturday, Sunday or legal holiday in the State of New York) on which
banks are open for business in New York City; provided, however, that,
when used in connection with a Eurodollar Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in
dollar deposits in the London interbank market.
"A Change in Control" shall be deemed to have occurred if (i)
any person or "group" (within the meaning of Section 13(d) or 14(d) of
the Exchange Act, as amended) shall acquire beneficial ownership of
more than 30% of any outstanding class of Voting Shares of TXU unless
such acquisition shall have been approved prior to such acquisition
date by a majority of Disinterested Directors of TXU or (ii) during any
period of 12 consecutive months, a majority of the members of the board
of directors of TXU cease to be composed of individuals (A) who were
members of board of directors of TXU on the first day of such period,
(B) whose election or nomination to the board of directors of TXU was
approved by individuals referred to in clause (i) above constituting at
the time of such election or nomination at least a majority of the
board of directors of TXU or (C) whose election or nomination to the
board of directors of TXU was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election or
nomination at least a majority of the board of directors of TXU.
"Code" shall mean the Internal Revenue Code of 1986, as the
same may be amended from time to time.
"Commission" shall mean the Public Utility Commission of the
State of Texas.
"Commitment" shall mean, with respect to each Lender, the
commitment of such Lender in the amount set forth in Schedule 2.01
hereto to make Loans, as such Commitment may be permanently terminated
or reduced from time to time pursuant to Section 2.08 or modified from
time to time pursuant to Section 8.04. The Commitment of each Lender
shall automatically and permanently terminate on the Maturity Date if
not terminated earlier pursuant to the terms hereof.
"Commitment Fee" shall have the meaning assigned to such term
in Section 2.04(a).
"Commitment Fee Percentage" shall mean, at any time, 0.15% per
annum.
"Consolidated Earnings Available for Fixed Charges" shall
mean, for the Borrower for any twelve-month period, (i) consolidated
net income, calculated after deducting preferred stock dividends and
preferred securities distributions of its Subsidiaries, but before any
extraordinary items and before the effect in such twelve-month period
of any change in GAAP becoming effective after December 31, 2003, less
(ii) allowances for equity funds used during construction to the extent
that such allowances, taken as a whole, increased such consolidated net
income, plus (iii) provisions for Federal income taxes, to the extent
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that such provisions, taken as a whole, decreased such consolidated net
income, plus (iv) Consolidated Fixed Charges, all determined for such
twelve-month period with respect to the Borrower and its Consolidated
Subsidiaries on a consolidated basis; provided, however, that in
computing Consolidated Earnings Available for Fixed Charges for any
twelve-month period, the following shall be added to the extent that
the following decreased consolidated net income: (A) any non-cash
one-time book losses relating to the sale or write-down of assets, (B)
any write-offs and charges required as a result of rulings by federal
or state regulatory bodies having jurisdiction over the Borrower and
its Consolidated Subsidiaries, (C) any charges or write-offs resulting
from the early retirement of debt, including premiums, relating to
liability management activities, and (D) any charges or write-offs,
including severance charges, relating to restructuring activities.
"Consolidated Fixed Charges" shall mean, for the Borrower for
any twelve-month period, the sum (without duplication) of (i) interest
expense (excluding any charges or write-offs resulting from the early
retirement of debt relating to liability management activities, in each
case to the extent included in the calculation of interest expense) and
(ii) preferred stock dividends and preferred securities distributions,
all determined for such twelve-month period with respect to the
Borrower and its Consolidated Subsidiaries on a consolidated basis.
"Consolidated Senior Debt" shall mean, for the Borrower, the
Senior Debt of the Borrower and its Consolidated Subsidiaries
determined on a consolidated basis, excluding, however, up to
$400,000,000 in the aggregate at any time of determination of such
Senior Debt described in clause (iii) of the definition of "Senior
Debt".
"Consolidated Shareholders' Equity" shall mean, for the
Borrower, the sum (without duplication) of (i) total common stock or
common members' interest plus (ii) preferred stock or preferred
members' interest not subject to mandatory redemption, each (in the
case of clauses (i) and (ii)) determined with respect to the Borrower
and its Consolidated Subsidiaries on a consolidated basis, plus (iii)
Equity-Credit Preferred Securities in an aggregate liquidation
preference amount not in excess of $300,000,000, provided, however,
that in computing Consolidated Shareholders' Equity at any time, there
shall be excluded any reduction in total common stock equity resulting
from (A) any write-offs and charges required as a result of rulings by
federal or state regulatory bodies having jurisdiction over the
Borrower and its Consolidated Subsidiaries, (B) charges for changes in
accounting principles recorded in accordance with GAAP, (C) non-cash
writedowns, one-time book losses or other charges, (D) charges or
write-offs resulting from the early retirement of debt, including
premiums, relating to liability management activities, and (E) charges
or write-offs, including severance charges, relating to restructuring
activities, all determined for such twelve month period with respect to
the Borrower and its Consolidated Subsidiaries on a consolidated basis.
"Consolidated Subsidiary" of any person shall mean at any date
any Subsidiary or other entity the accounts of which would be
consolidated with those of such person in such person's consolidated
financial statements as of such date.
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"Consolidated Total Capitalization" shall mean, for the
Borrower, the sum of (i) Consolidated Shareholders' Equity and (ii)
Consolidated Senior Debt.
"Controlled Group" shall mean all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower,
are treated as a single employer under Section 414(b) or 414(c) of the
Code.
"CSFB" shall have the meaning given such term in the preamble
hereto.
"Default" shall mean any event or condition, which upon
notice, lapse of time or both would constitute an Event of Default.
"Disinterested Director" shall mean any member of the board of
directors of TXU who is not affiliated, directly or indirectly, with,
or appointed by, a person or group of related persons (other than TXU,
any Subsidiary of TXU, or any pension, savings or other employee
benefit plan for the benefit of employees of TXU and/or any Subsidiary
of TXU) acquiring the beneficial ownership of more than 30% of the
outstanding Voting Shares of TXU (within the meaning of Section 13(d)
or 14(d) of the Exchange Act, and the applicable rules and regulations
thereunder) and who either was a member of the board of directors of
TXU prior to the Acquisition Date or was recommended for election by a
majority of the Disinterested Directors in office prior to the
Acquisition Date.
"dollars" or "$" shall mean lawful money of the United States
of America.
"Equity-Credit Preferred Securities" shall mean securities,
however denominated, (i) issued by the Borrower or a Consolidated
Subsidiary of the Borrower, (ii) that are not subject to mandatory
redemption or the underlying securities, if any, of which are not
subject to mandatory redemption, (iii) that are perpetual or mature no
less than 30 years from the date of issuance, (iv) the indebtedness
issued in connection with which, including any guaranty, is subordinate
in right of payment to the unsecured and unsubordinated indebtedness of
the issuer of such indebtedness or guaranty, and (v) the terms of which
permit the deferral of the payment of interest or distributions thereon
to a date occurring after the Maturity Date.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) that is a member of a group of (i) organizations
described in Section 414(b) or (c) of the Code and (ii) solely for
purposes of the Lien created under Section 412(n) of the Code,
organizations described in Section 414(m) or (o) of the Code of which
the Borrower is a member.
"ERISA Event" shall mean (i) any Reportable Event; (ii) the
adoption of any amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code or Section 307 of
ERISA; (iii) the incurrence of any liability under Title IV of ERISA
with respect to the termination of any Plan or the withdrawal or
6
partial withdrawal of the Borrower or any of its ERISA Affiliates from
any Plan or Multiemployer Plan; (iv) the receipt by the Borrower or any
ERISA Affiliate from the PBGC of any notice relating to the intention
to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (v) the receipt by the Borrower or any ERISA Affiliate of any
notice concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of
ERISA; (vi) the occurrence of a nonexempt "prohibited transaction" as
defined in Section 4975(c) of the Code or Section 406 of ERISA with
respect to which the Borrower or any of its Subsidiaries is liable; and
(vii) any other similar event or condition with respect to a Plan or
Multiemployer Plan that could result in liability of the Borrower other
than a liability to pay premiums or benefits when due.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a
rate determined by reference to the LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such
term in Article VI.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Federal Funds Effective Rate" shall have the meaning set
forth in the definition of "Alternate Base Rate".
"Fees" shall mean the Commitment Fee, the Administrative Fees,
and any other fees provided for in the Letter Agreements.
"Financial Officer" of any corporation or limited liability
company shall mean the chief financial officer, principal accounting
officer, treasurer, associate or assistant treasurer, or any
responsible officer designated by one of the foregoing persons, of such
corporation or limited liability company.
"GAAP" shall mean generally accepted accounting principles,
applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Holdings" shall mean TXU US Holdings Company, a Texas
corporation, and its successors.
"Indebtedness" of any person shall mean (without duplication)
all liabilities, obligations and indebtedness (whether contingent or
otherwise) of such person (i) for borrowed money or evidenced by bonds,
indentures, notes or other similar instruments, (ii) to pay the
deferred purchase price of property or services, (iii) as lessee under
leases that are recorded as capital leases, (iv) under reimbursement
agreements or similar agreements with respect to the issuance of
letters of credit (other than obligations in respect of letters of
credit opened to provide for the payment of goods or services purchased
7
in the ordinary course of business), (v) in respect of Indebtedness of
others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) a mortgage,
lien, pledge, charge or other encumbrance on any asset of such person
(with the Indebtedness of such person described in this clause (iii) to
be valued at the book value, net of accumulated depreciation, of such
asset of such person securing such Indebtedness of others), (vi) all
net payment obligations of such person in respect of interest rate swap
agreements, currency swap agreements and other similar agreements
designed to hedge against fluctuations in interest rates or foreign
exchange rates and (vii) under direct or indirect guaranties in respect
of, and to purchase or otherwise acquire, or otherwise to assure a
creditor against loss in respect of, liabilities, obligations or
indebtedness of others of the kinds referred to in clauses (i) through
(vi) above; provided, however, that for all purposes, the following
shall be excluded from the definition of "Indebtedness": amounts
payable from the Borrower to Oncor Electric Delivery Company in
connection with nuclear decommissioning costs, excess mitigation
credits, retail clawback or other regulatory transition issues.
"Interest Payment Date" shall mean, with respect to any Loan,
the last day of the Interest Period applicable thereto and, in the case
of a Eurodollar Loan with an Interest Period of more than three months'
duration, each day that would have been an Interest Payment Date for
such Loan, had successive Interest Periods of three months' duration
been applicable to such Loan, and, in addition, the date of any
prepayment of such Loan or conversion of such Loan to a Loan of a
different Type.
"Interest Period" shall mean (i) as to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and
ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month
that is 1, 2, 3 or 6 months thereafter; provided that, in the case of
any Eurodollar Borrowing made during the 30-day period ending on the
Maturity Date, such period may end on the seventh or fourteenth day
thereafter, as the Borrower may elect, and (ii) as to any ABR
Borrowing, the period commencing on the date of such Borrowing and
ending on the earliest of (A) the next succeeding March 31, June 30,
September 30 or December 31, (B) the Maturity Date, and (C) the date
such Borrowing is repaid or prepaid in accordance with Section 2.05 or
Section 2.09; provided, however, that if any Interest Period would end
on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of
Eurodollar Loans only, such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end
on the next preceding Business Day. Interest shall accrue from and
including the first day of an Interest Period to but excluding the last
day of such Interest Period.
"Lenders" shall have the meaning given such term in the
preamble hereto.
"Letter Agreements" shall mean (i) the Commitment Letter,
dated April 26, 2004, among CSFB, TXU, the Borrower and TXU Energy,
(ii) the Fee Letter, dated April 26, 2004, among CSFB, TXU, the
Borrower and TXU Energy, and (iii) the Engagement Letter, dated April
26, 2004, among Credit Suisse First Boston LLC, TXU, the Borrower and
TXU Energy, each as amended, modified or supplemented from time to
time.
8
"LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, the rate appearing on Page 3750 of
the Telerate Service (or on any successor or substitute page of such
service, or any successor to or substitute for such service, providing
rate quotations comparable to those currently provided on such page of
such service, as determined by CSFB from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in
the London interbank market) at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period as
the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such
time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at
which dollar deposits of $1,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of CSFB
in immediately available funds in the London interbank market at
approximately 11:00 a.m. London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" shall mean, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in
respect of such asset. For the purposes of this Agreement, any person
shall be deemed to own subject to a Lien any asset which it has
acquired or holds subject to the interest of a vendor or lessor under
any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"Loan" shall mean a loan made pursuant to Section 2.03,
whether made as a Eurodollar Loan or as an ABR Loan.
"Mandatory Prepayment Amount" shall mean an amount equal to
(i) 100% of the amount of Net Cash Proceeds received by any person
remaining, if any, after prepayment of the outstanding loans under the
TXU Corp. Agreement as required thereunder (unless such prepayment
would result in a violation of applicable law or other state or federal
regulation or order or would result in a default or breach of any
agreement or result in a breakage fee or cost or premium, then, in such
case, the outstanding Loans shall be prepaid first and the outstanding
loans under the TXU Corp Agreement shall be paid second), plus (ii)
100% of the TXU Australia Net Cash Proceeds remaining, if any, after
prepayment of the outstanding loans under, first, the TXU Corp.
Agreement as required thereunder and, second, the TXU Energy Agreement
as required thereunder, plus (iii) 100% of the TXU Energy Cash Proceeds
remaining, if any, after prepayment of the outstanding loans under,
first, the TXU Energy Agreement as required thereunder and, second, the
TXU Corp. Agreement as required thereunder.
"Margin Regulations" shall mean Regulations T, U and X of the
Board as from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Margin Stock" shall have the meaning given such term under
Regulation U of the Board.
"Material Adverse Change" shall mean, a materially adverse
change in the business, assets, operations or financial condition of
the Borrower and its Subsidiaries taken as a whole that makes the
Borrower unable to perform any of its obligations under this Agreement
or that impairs the rights of, or benefits available to, the Lenders
under this Agreement.
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"Maturity Date" shall mean the earlier to occur of April 25,
2005 and the date of termination or reduction in whole of the
Commitments pursuant to Section 2.08 or Article VI.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Borrower or any
ERISA Affiliate is making, or accruing an obligation to make,
contributions, or has within any of the preceding five plan years made,
or accrued an obligation to make, contributions.
"Net Cash Proceeds" shall mean, with respect to (i) any
Securities Offering of the Borrower or any of its Subsidiaries or (ii)
any sale, lease, transfer or other disposition of any equity interests
in or any assets or other property of the Borrower or its Subsidiaries,
other than any individual sale, lease, transfer or other disposition
made in the ordinary course of business in an amount of $5,000,000 or
less, the aggregate amount of cash proceeds received from time to time
by or on behalf of any person in connection with such transaction after
deducting therefrom only (A) reasonable and customary brokerage
commissions, underwriting fees and discounts, legal fees, finder's
fees, advisory and arrangement fees and other similar fees and
commissions and other transaction costs, (B) the amount of any
Indebtedness (other than under this Agreement) that is required to be
repaid upon such sale, lease, transfer or other disposition pursuant to
the terms of any bank or credit facilities or other debt obligations,
and (C) the amount of taxes payable in connection with or as a result
of such transaction (calculated, in the case of income taxes, on a
stand-alone basis), in each case to the extent, but only to the extent,
that the amounts so deducted are paid or to be paid are properly
attributable to such transaction or to the asset that is the subject
thereof, excluding, however, 25% of the proceeds from the sale, lease,
transfer or other disposition of all or a portion of the equity
interests in or any assets or other property of the Borrower and its
Subsidiaries.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
"Percentage" shall mean, for any Lender on any date of
determination, the percentage obtained by dividing such Lender's
Commitment on such date by the Total Commitment on such date.
"Permitted Encumbrances" shall mean, as to any person at any
date, any of the following:
(a) (i) Liens for taxes, assessments or governmental charges
not then delinquent and Liens for workers' compensation awards and
similar obligations not then delinquent and undetermined Liens or
charges incidental to construction, Liens for taxes, assessments or
governmental charges then delinquent but the validity of which is
being contested at the time by such person in good faith against which
an adequate reserve has been established, with respect to which levy
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and execution thereon have been stayed and continue to be stayed and
that do not impair the use of the property or the operation of such
person's business, (ii) Liens incurred or created in connection with
or to secure the performance of bids, tenders,
contracts (other than for the payment of money), leases, statutory
obligations, surety bonds or appeal bonds, and mechanics' or
materialmen's Liens, assessments or similar encumbrances, the existence
of which does not impair the use of the property subject thereto for
the purposes for which it was acquired, and other Liens of like nature
incurred or created in the ordinary course of business;
(b) Liens securing indebtedness, neither assumed nor
guaranteed by such person nor on which it customarily pays interest,
existing upon real estate or rights in or relating to real estate
acquired by such person for any substation, transmission line,
transportation line, distribution line, right of way or similar
purpose;
(c) rights reserved to or vested in any municipality or
public authority by the terms of any right, power, franchise, grant,
license or permit, or by any provision of law, to terminate such
right, power, franchise, grant, license or permit or to purchase or
recapture or to designate a purchaser of any of the property of
such person;
(d) rights reserved to or vested in others to take or receive
any part of the power, gas, oil, coal, lignite or other minerals or
timber generated, developed, manufactured or produced by, or grown
on, or acquired with, any property of such person and Liens upon the
production from property of power, gas, oil, coal, lignite or other
minerals or timber, and the by-products and proceeds thereof, to
secure the obligations to pay all or a part of the expenses of
exploration, drilling, mining or development of such property only out
of such production or proceeds;
(e) easements, restrictions, exceptions or reservations in
any property and/or rights of way of such person for the purpose of
roads, pipe lines, substations, transmission lines, transportation
lines, distribution lines, removal of oil, gas, lignite, coal or other
minerals or timber, and other like purposes, or for the joint or
common use of real property, rights of way, facilities and/or
equipment, and defects, irregularities and deficiencies in titles of
any property and/or rights of way, which do not materially impair the
use of such property and/or rights of way for the purposes for which
such property and/or rights of way are held by such person;
(f) rights reserved to or vested in any municipality or
public authority to use, control or regulate any property of such
person;
(g) any obligations or duties, affecting the property of
such person, to any municipality or public authority with respect to
any franchise, grant, license or permit;
(h) as of any particular time any controls, Liens,
restrictions, regulations, easements, exceptions or reservations of
any municipality or public authority applying particularly to space
satellites or nuclear fuel;
(i) any judgment Lien against such person securing a judgment
for an amount not exceeding 25% of Consolidated Shareholders' Equity
of such person, so long as the finality of such judgment is being
contested by appropriate proceedings conducted in good faith and
execution thereon is stayed;
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(j) any Lien arising by reason of deposits with or giving of
any form of security to any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, for any purpose at any time as
required by law or governmental regulation as a condition to the
transaction of any business or the exercise of any privilege or
license, or to enable such person to maintain self-insurance or to
participate in any fund for liability on any insurance risks or in
connection with workers' compensation, unemployment insurance, old age
pensions or other social security or to share in the privileges or
benefits required for companies participating in such arrangements; or
(k) any landlords' Lien on fixtures or movable property
located on premises leased by such person in the ordinary course of
business so long as the rent secured thereby is not in default.
"person" shall mean any natural person, corporation, business
trust, joint venture, association, company, limited liability company,
partnership or government, or any agency or political subdivision
thereof.
"Plan" shall mean any employee pension benefit plan described
under Section 3(2) of ERISA (other than a Multiemployer Plan) subject
to the provisions of Title IV of ERISA that is maintained by the
Borrower or any ERISA Affiliate.
"Register" shall have the meaning given such term in Section
8.04(d).
"Reportable Event" shall mean any reportable event as defined
in Sections 4043(c)(1)-(8) of ERISA or the regulations issued
thereunder (other than a reportable event for which the 30 day notice
requirement has been waived) with respect to a Plan (other than a Plan
maintained by an ERISA Affiliate that is considered an ERISA Affiliate
only pursuant to subsection (m) or (o) of Code Section 414).
"Required Lenders" shall mean, at any time, Lenders having
Commitments representing in excess of 50% of the Total Commitment or,
(i) for purposes of acceleration pursuant to clause (ii) of the first
paragraph of Article VI, or (ii) if the Total Commitment has been
terminated, Lenders holding in excess of 50% of the aggregate principal
amount of outstanding Loans.
"Responsible Officer" of any corporation shall mean any
executive officer or Financial Officer of such corporation and any
other officer or similar official thereof responsible for the
administration of the obligations of such corporation in respect of
this Agreement.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Offering" of any person shall mean the public or
private issuance or sale by such person or any Subsidiary of such
person on or after the date hereof of any debt or equity securities,
any securities convertible into or exchangeable for any debt or equity
12
securities or any warrants, rights or options to acquire or subscribe
for any debt or equity securities, excluding (i) any borrowings,
drawings, refinancings, remarketings or refundings of bank or credit
facilities or other debt instruments (including issuances of commercial
paper) in existence on the date hereof, (ii) any Indebtedness under the
TXU system money pool, (iii) any equity infusion (cash or non-cash)
from TXU or any Subsidiary of TXU to any such person or any Subsidiary
of such person, (iv) any debt obligations by such person to TXU or any
of its Subsidiaries that are subordinate in right of payment and
performance to the obligations of the Borrower under this Agreement,
(v) any debt obligations of the Subsidiaries of such person to such
person and other Wholly Owned Subsidiaries of such person, and (vi) any
issuances of equity securities of such person and its Subsidiaries to
TXU or any other Subsidiary of TXU.
"Securities Repurchase" shall mean the repurchase by TXU,
directly or indirectly, of the common stock, preference or preferred
stock, preferred securities, equity units or debt securities of TXU or
its Subsidiaries.
"Senior Debt" of any person shall mean (without duplication)
(i) all Indebtedness of such person described in clauses (i) through
(iii) of the definition of "Indebtedness", (ii) all Indebtedness of
such person described in clause (iv) of the definition of
"Indebtedness" in respect of unreimbursed drawings under letters of
credit described in such clause (iv), and (iii) all direct or indirect
guaranties of such person in respect of, and to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
liabilities, obligations or indebtedness of others of the kinds
referred to in clauses (i) and (ii) above; provided, however, that in
calculating "Senior Debt" of the Borrower, any amount of
Equity-Credit-Preferred Securities not included in the definition of
"Consolidated Shareholders Equity" shall be included.
"Significant Disposition" shall mean a sale, lease,
disposition or other transfer by the Borrower, or any Subsidiary of the
Borrower, during any 12-month period, of assets constituting, either
individually or in the aggregate with all other assets sold, leased,
disposed or otherwise transferred by the Borrower or any Subsidiary
thereof during such period, 10% or more of the assets of the Borrower
and its Subsidiaries taken as a whole, excluding any such sale, lease,
disposition or other transfer to a Wholly Owned Subsidiary of the
Borrower.
"Significant Subsidiary" shall mean, at any time, any
Subsidiary of the Borrower that as of such time has total assets in
excess of 10% of the total assets of the Borrower and its Consolidated
Subsidiaries.
"Solvent" shall mean, with respect to any person as of a
particular date, that on such date such person is able to pay its debts
and other liabilities, contingent obligations and other commitments as
they mature in the normal course of business. In computing the amount
of contingent liabilities at any time, it is intended that such
liabilities will be computed as the amount which, in light of all the
facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured
liability.
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"Subsidiary" shall mean, with respect to any person (the
"parent"), any corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such parent.
"Substantial" shall mean an amount in excess of 10% of the
consolidated assets of the Borrower and its Consolidated Subsidiaries
taken as a whole.
"Transaction Costs" shall mean fees and expenses incurred by
the Borrower in connection with the execution and delivery of this
Agreement.
"Total Commitment" shall mean, at any time, the aggregate
amount of Commitments of all the Lenders, as in effect at such time.
The initial amount of the Total Commitment is $300,000,000.
"TXU" shall mean TXU Corp., a Texas corporation, and its
successors.
"TXU Australia" shall mean TXU Australia (No. 1) Holdings
Company, a Delaware corporation and a direct Wholly Owned Subsidiary of
TXU, and its successors.
"TXU Australia Net Cash Proceeds" shall mean, with respect to
(i) any Securities Offering by TXU Australia or its Subsidiaries or
(ii) any sale, lease, transfer or other disposition of equity interests
in or any assets or other property of TXU Australia or its Subsidiaries
(whether characterized as purchase price, an assumption of debt and
equity contribution or otherwise), other than any individual sale,
lease, transfer or other disposition made in the ordinary course of
business in an amount of $5,000,000 or less, the aggregate amount of
cash proceeds received from time to time by or on behalf of any person
in connection with such transaction after deducting therefrom only (A)
reasonable and customary brokerage commissions, underwriting fees and
discounts, legal fees, finder's fees, advisory and arrangement fees and
other similar fees and commissions and other transaction costs, (B) the
amount of any Indebtedness (other than under this Agreement) that is
required to be repaid upon such sale, lease, transfer or other
disposition pursuant to the terms of any bank or credit facilities or
other debt obligations, and (C) the amount of taxes payable in
connection with or as a result of such transaction (calculated, in the
case of income taxes, on a stand-alone basis), in each case to the
extent, but only to the extent, that the amounts so deducted are paid
or to be paid are properly attributable to such transaction or to the
asset that is the subject thereof.
"TXU Corp. Agreement" shall mean the $700,000,000 Credit
Agreement, dated as of April 26, 2004, among TXU, as borrower, the
financial institutions parties thereto, as lenders, and CSFB, as
administrative agent, as amended, modified or supplemented from time to
time.
"TXU Corp. Net Cash Proceeds" shall mean "Net Cash Proceeds",
as defined in the TXU Corp. Agreement.
"TXU Energy" shall mean TXU Energy Company LLC, a Delaware
limited liability company and its successors.
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"TXU Energy Agreement" shall mean the $1,000,000,000 Credit
Agreement, dated as of April 26, 2004, among TXU Energy, as borrower,
the financial institutions parties thereto, as lenders, and CSFB, as
administrative agent, as amended, modified or supplemented from time to
time.
"TXU Energy Net Cash Proceeds" shall mean "Net Cash Proceeds",
as defined in the TXU Energy Agreement.
"TXU Fuel" shall mean TXU Fuel Company, a Texas corporation,
and its successors.
"Type", when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or on the
Loans comprising such Borrowing is determined. For purposes hereof,
"Rate" shall include the LIBO Rate and the Alternate Base Rate.
"Voting Shares" shall mean, as to shares or other equity
interests of a particular corporation or other type of person,
outstanding shares of stock or other equity interests of any class of
such corporation or other person entitled to vote in the election of
directors or other comparable managers of such person, excluding shares
or other interests entitled so to vote only upon the happening of some
contingency.
"Wholly Owned Subsidiary" of any person shall mean any
Consolidated Subsidiary of such person all the shares of common stock
and other voting capital stock or other voting ownership interests
having ordinary voting power to vote in the election of the board of
directors or other governing body performing similar functions (except
directors' qualifying shares) of which are at the time directly or
indirectly owned by such person.
"Withdrawal Liability" shall mean liability of the Borrower
established under Section 4201 of ERISA as a result of a complete or
partial withdrawal from a Multiemployer Plan, as such terms are defined
in Part I of Subtitle E of Title IV of ERISA.
Section 1.02. Terms Generally.
The definitions in Section 1.01 shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include," "includes" and "including" shall be deemed to
be followed by the phrase "without limitation." All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided, however, that
for purposes of determining compliance with any covenant set forth in Article V,
such terms shall be construed in accordance with GAAP as in effect on the date
hereof applied on a basis consistent with the application used in preparing the
Borrower's audited financial statements referred to in Section 3.05.
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Article II
THE CREDITS
Section 2.01. Commitments.
Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender agrees, severally
and not jointly, to make Loans to the Borrower at any time and from time to time
until 60 days after the date hereof (the "Availability Period") up to the amount
of such Lender's Available Commitment, subject, however, to the conditions that
(i) at no time shall Loans outstanding exceed the Total Commitment, (ii) at no
time shall any Lender's outstanding Loans exceed the amount of such Lender's
Commitment, and (iii) at no time shall the outstanding Loans available to the
Borrower exceed the Total Commitment. Within the foregoing limits, the Borrower
may borrow, pay or prepay Loans pursuant to Section 2.09 on and after the date
hereof and prior to the Maturity Date subject to the terms, conditions and
limitations set forth herein, provided, however, that once any amount is repaid
or prepaid in accordance with Section 2.09 (and excluding deemed repayments and
prepayments under Section 2.02(d)), such amount may not be reborrowed by the
Borrower.
Section 2.02. Loans.
(a) Each Loan shall be made as part of a Borrowing consisting of Loans
made by the Lenders ratably in accordance with their respective Commitments;
provided, however, that the failure of any Lender to make any Loan shall not in
itself relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of any
other Lender to make any Loan required to be made by such other Lender). The
Loans comprising any Borrowing shall be in an aggregate principal amount that is
an integral multiple of $5,000,000 and not less than $25,000,000 (or an
aggregate principal amount equal to the remaining balance of the Available
Commitments).
(b) Each Borrowing shall be comprised entirely of Eurodollar Loans or
ABR Loans, as the Borrower may request pursuant to Section 2.03. Each Lender
may at its option make any Eurodollar Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that any
exercise of such option shall not affect the obligation of the Borrower to
repay such Loan in accordance with the terms of this Agreement. Borrowings of
more than one Type may be outstanding at the same time.
(c) Subject to paragraph (d) below, each Lender shall make each Loan
to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds to the Agent in New York, New York, not later than
noon, New York City time, and the Agent shall by 2:00 p.m., New York City time,
credit the amounts so received to the account or accounts specified from time to
time in one or more notices delivered by the Borrower to the Agent or, if a
Borrowing shall not occur on such date because any condition precedent herein
specified shall not have been met, return the amounts so received to the
respective Lenders. Loans shall be made by the Lenders pro rata in accordance
with Section 2.12. Unless the Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make available to
the Agent such Lender's portion of such Borrowing, the Agent may assume that
such Lender has made such portion available to the Agent on the date of such
16
Borrowing in accordance with this paragraph (c) and the Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have made
such portion available to the Agent, such Lender and the Borrower (without
waiving any claim against such Lender for such Lender's failure to make such
portion available) severally agree to repay to the Agent forthwith on demand
such corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Lender, the Federal Funds Effective Rate. If such Lender shall
repay to the Agent such corresponding amount, such amount shall constitute such
Lender's Loan as part of such Borrowing for purposes of this Agreement.
(d) The Borrower may refinance all or any part of any Borrowing with
a Borrowing of the same or a different Type, subject to the conditions and
limitations set forth in this Agreement. Any Borrowing or part thereof so
refinanced shall be deemed to be repaid or prepaid in accordance with Section
2.05 or 2.09, as applicable, with the proceeds of a new Borrowing, and the
proceeds of the new Borrowing, to the extent they do not exceed the principal
amount of the Borrowing being refinanced, shall not be paid by the Lenders to
the Agent or by the Agent to the Borrower pursuant to paragraph (c) above.
Section 2.03. Borrowing Procedure.
In order to request a Borrowing, the Borrower shall hand deliver or
telecopy to the Agent a duly completed Borrowing Request in the form of Exhibit
A (i) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before such Borrowing, (ii) in the case of an ABR
Borrowing, not later than 11:00 a.m., New York City time, one Business Day
before such Borrowing, and (iii) in the case of the initial Borrowing, not later
than 3:00 p.m., New York City time, on the day of such Borrowing. Such notice
shall be irrevocable and shall in each case specify (A) whether the Borrowing
then being requested is to be a Eurodollar Borrowing or an ABR Borrowing, (B)
the date of such Borrowing (which shall be a Business Day) and the amount
thereof, (C) if such Borrowing is to be a Eurodollar Borrowing, the Interest
Period with respect thereto, which shall not end after the Maturity Date, and
(D) the location and number of the Borrower's account to which funds are to be
disbursed, which shall comply with the requirements of this Agreement. If no
election as to the Type of Borrowing is specified in any such notice, then the
requested Borrowing shall be deemed an ABR Borrowing. If no Interest Period with
respect to any Eurodollar Borrowing is specified in any such notice, then the
Borrower shall be deemed to have selected an Interest Period of one month's
duration (subject to the limitations set forth in the definition of "Interest
Period"). If the Borrower shall not have given notice in accordance with this
Section 2.03 of its election to refinance a Borrowing prior to the end of the
Interest Period in effect for such Borrowing, then the Borrower shall (unless
such Borrowing is repaid at the end of such Interest Period) be deemed to have
given notice of an election to refinance such Borrowing with an ABR Borrowing.
Notwithstanding any other provision of this Agreement to the contrary, no
Borrowing shall be requested if the Interest Period with respect thereto would
end after the Maturity Date. The Agent shall promptly advise the Lenders of any
notice given pursuant to this Section 2.03 and of each Lender's portion of the
requested Borrowing.
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SECTION 2.04. Fees.
(a) The Borrower agrees to pay to each Lender, through the Agent, on
each last day of the month following March 31, June 30, September 30 and
December 31 (with the first payment being due on April 30, 2004) and on each
date on which the Commitment of such Lender shall be terminated or reduced as
provided herein, a commitment fee (a "Commitment Fee"), at a rate per annum
equal to the Commitment Fee Percentage from time to time in effect on the unused
portion of the Commitment of such Lender during the preceding quarter (or other
period commencing on the date of this Agreement or ending on the Maturity Date
or any date on which the Commitment of such Lender shall be terminated). All
Commitment Fees shall be computed on the basis of the actual number of days
elapsed in a year of 360 days. The Commitment Fee due to each Lender shall
commence to accrue on the date of this Agreement, and shall cease to accrue on
the date of termination of the Commitment of such Lender as provided herein.
(b) The Borrower agrees to pay the Agent the fees from time to time
payable to it in its capacity as Agent pursuant to the Letter Agreements (the
"Administrative Fees").
(c) All Fees shall be paid on the dates due, in immediately available
funds, to the Agent for distribution, if and as appropriate, among the Lenders.
Once paid, none of the Fees shall be refundable under any circumstances.
Section 2.05. Repayment of Loans; Evidence of Indebtedness.
(a) The outstanding principal balance of each Loan shall be due and
payable on the last day of the Interest Period applicable thereto and on the
Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness to such Lender resulting from
each Loan made by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Agreement.
(c) The Agent shall maintain accounts in which it will record (i) the
amount of each Loan made hereunder, the Type of each Loan made and the Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Agent hereunder from the
Borrower and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs
(b) and (c) of this Section 2.05 shall, to the extent permitted by applicable
law, be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any
Lender or the Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of the Borrower to repay the
outstanding Loans in accordance with their terms.
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SECTION 2.06. Interest on Loans.
(a) The Loans comprising each Eurodollar Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of
360 days) at a rate per annum equal to the LIBO Rate for the Interest
Period in effect for such Borrowing plus the Applicable Margin from time to
time in effect.
(b) The Loans comprising each ABR Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of (i)
365 or 366 days, as the case may be, for periods during which the Alternate
Base Rate is determined by reference to the Prime Rate and (ii) 360 days for
other periods) at a rate per annum equal to the Alternate Base Rate plus the
Applicable Margin from time to time in effect.
(c) Interest on each Loan shall be payable on each Interest Payment Date
applicable to such Loan except as otherwise provided in this Agreement. The
applicable LIBO Rate or Alternate Base Rate for each Interest Period or day
within an Interest Period, as the case may be, shall be determined by CSFB, and
such determination shall be conclusive absent manifest error, provided that CSFB
shall, upon request, provide to the Borrower a certificate setting forth in
reasonable detail the basis for such determination.
SECTION 2.07. Alternate Rate of Interest.
In the event, and on each occasion, that on the day two Business Days
prior to the commencement of any Interest Period for a Eurodollar Borrowing the
Agent shall have determined (i) that dollar deposits in the principal amounts of
the Eurodollar Loans comprising such Borrowing are not generally available in
the London interbank market or (ii) that reasonable means do not exist for
ascertaining the LIBO Rate, the Agent shall, as soon as practicable thereafter,
give telecopy notice of such determination to the Borrower and the Lenders. In
the event of any such determination under clause (i) or (ii) above, until the
Agent shall have advised the Borrower and the Lenders that the circumstances
giving rise to such notice no longer exist, any request by the Borrower for a
Eurodollar Borrowing pursuant to Section 2.03 shall be deemed to be a request
for an ABR Borrowing. In the event the Required Lenders notify the Agent that
the rates at which dollar deposits are being offered will not adequately and
fairly reflect the cost to such Lenders of making or maintaining Eurodollar
Loans during such Interest Period, the Agent shall notify the Borrower of such
notice and until the Required Lenders shall have advised the Agent that the
circumstances giving rise to such notice no longer exist, any request by the
Borrower for a Eurodollar Borrowing shall be deemed a request for an ABR
Borrowing. Each determination by the Agent hereunder shall be made in good faith
and shall be conclusive absent manifest error; provided that the Agent, shall,
upon request, provide to the Borrower a certificate setting forth in reasonable
detail the basis for such determination.
Section 2.08. Termination and Reduction of Commitments.
(a) The Commitments shall automatically terminate on the Maturity Date.
(b) On each day following the last day of the Availability Period on
which the Total Commitment shall exceed the aggregate principal amount of Loans
outstanding, the Total Commitment shall automatically reduce by an amount equal
to such excess.
19
(c) Upon at least two Business Days' prior irrevocable written notice
to the Agent, the Borrower may at any time in whole permanently terminate,
or from time to time in part permanently reduce, the Total Commitment;
provided, however, that (i) each partial reduction of the Total Commitment
shall be in an integral multiple of $10,000,000 and in a minimum principal
amount of $10,000,000 and (ii) no such termination or reduction shall be
made that would reduce the Total Commitment to an amount less than (1) the
aggregate amount of outstanding Loans on the date of such termination or
reduction (after giving effect to any prepayment made pursuant to Section
2.09) or (2) $50,000,000, unless the result of such termination or
reduction referred to in this clause (2) is to reduce the Total Commitment
to $0. The Agent shall advise the Lenders of any notice given pursuant to
this Section 2.08(c) and of each Lender's portion of any such termination
or reduction of the Total Commitment.
(d) Each reduction in the Total Commitment hereunder shall be made
ratably among the Lenders in accordance with their respective Commitments. The
Borrower shall pay to the Agent for the account of the Lenders, on the date of
each termination or reduction of the Total Commitment, the Commitment Fees on
the amount of the Commitments so terminated or reduced accrued through the date
of such termination or reduction.
SECTION 2.09. Prepayment.
(a) Optional. The Borrower shall have the right at any time and from
time to time to prepay any Borrowing, in whole or in part, upon giving telecopy
notice (or telephone notice promptly confirmed by telecopy) to the Agent:
(i) before 11:00 a.m., New York City time, three Business Days prior to
prepayment, in the case of Eurodollar Loans, and (ii) before 11:00 a.m., New
York City time, one Business Day prior to prepayment, in the case of ABR Loans;
provided, however, that each partial prepayment shall be in an amount which is
an integral multiple of $10,000,000 and not less than $10,000,000. Each notice
of prepayment shall specify the prepayment date and the principal amount of
each Borrowing (or portion thereof) to be prepaid, shall be irrevocable and
shall commit the Borrower to prepay such Borrowing (or portion thereof) by the
amount stated therein on the date stated therein.
(b) Mandatory. On the date of receipt by (i) the Borrower or any other
person of any Net Cash Proceeds, (ii) TXU Australia or any other person of any
TXU Australia Net Cash Proceeds, or (iii) TXU Energy or any other person of any
TXU Energy Net Cash Proceeds, the Borrower shall prepay the Loans, in an amount
equal to the Mandatory Prepayment Amount, together with accrued interest on such
Loans to the date of such prepayment on the principal amount prepaid.
(c) All prepayments under this Section 2.09 shall be subject to
Section 8.05 but otherwise without premium or penalty. All prepayments under
this Section 2.09 shall be accompanied by accrued interest on the principal
amount being prepaid to the date of payment.
Section 2.10. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision herein, if after the date of
this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
20
force of law) shall change the basis of taxation of payments to any Lender
hereunder (except for changes in respect of taxes on the overall net income of
such Lender (as the case may be) or its lending office imposed by the
jurisdiction in which such Lender's principal executive office or lending
office is located), or shall result in the imposition, modification or
applicability of any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of or credit extended
by any Lender or shall result in the imposition on any Lender or the London
interbank market of any other condition affecting this Agreement, such
Lender's Commitment or any Loan (other than an ABR Loan) made by such
Lender, and the result of any of the foregoing shall be to increase the
cost to such Lender of making or maintaining any outstanding Loans (other
than an ABR Loan) or to reduce the amount of any sum received or receivable
by such Lender hereunder (whether of principal, interest or otherwise) by
an amount deemed by such Lender to be material, then the Borrower shall,
upon receipt of the notice and certificate provided for in Section 2.10(c),
promptly pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction
suffered.
(b) If any Lender shall have determined that the adoption of any law,
rule, regulation or guideline arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards," or the
adoption after the date hereof of any other law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any lending office of
such Lender) or any Lender's holding company with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender's capital or on the capital of such
Lender's holding company, if any, as a consequence of this Agreement, such
Lender's Commitment or the Loans made by such Lender pursuant hereto to a level
below that which such Lender or such Lender's holding company could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies and the policies of such Lender's holding company with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time such additional amount or amounts as will compensate such
Lender for any such reduction suffered will be paid to such Lender by the
Borrower. It is acknowledged that this Agreement is being entered into by the
Lenders on the understanding that the Lenders will not be required to maintain
capital against their Commitments under currently applicable laws, regulations
and regulatory guidelines. In the event the Lenders shall otherwise determine
that such understanding is incorrect, it is agreed that the Lenders, will be
entitled to make claims under this paragraph (b) based upon market requirements
prevailing on the date hereof for commitments under comparable credit facilities
against which capital is required to be maintained.
(c) A certificate of each Lender setting forth such amount or amounts
as shall be necessary to compensate such Lender or its holding company as
specified in paragraph (a) or (b) above, as the case may be, and containing an
explanation in reasonable detail of the manner in which such amount or amounts
shall have been determined, shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay each Lender the amount
21
shown as due on any such certificate delivered by it within 10 days after its
receipt of the same. Each Lender shall give prompt notice to the Borrower of
any event of which it has knowledge, occurring after the date hereof, that it
has determined will require compensation by the Borrower pursuant to this
Section; provided, however, that failure by such Lender to give such notice
shall not constitute a waiver of such Lender's right to demand compensation
hereunder.
(d) Failure on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
such Lender's right to demand compensation with respect to such period or any
other period; provided, however, that no Lender shall be entitled to
compensation under this Section 2.10 for any costs incurred or reductions
suffered with respect to any date unless it shall have notified the Borrower
that it will demand compensation for such costs or reductions under paragraph
(c) above not more than 90 days after the later of (i) such date and (ii) the
date on which it shall have become aware of such costs or reductions. The
protection of this Section shall be available to each Lender regardless of any
possible contention of the invalidity or inapplicability of the law, rule,
regulation, guideline or other change or condition which shall have occurred
or been imposed.
(e) Each Lender agrees that it will designate a different lending
office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the reasonable judgment of such Lender be
disadvantageous to such Lender.
SECTION 2.11. Change in Legality.
(a) Notwithstanding any other provision herein, if any change in any
law or regulation or in the interpretation thereof by any Governmental
Authority charged with the administration or interpretation thereof shall make
it unlawful for any Lender to make or maintain any Eurodollar Loan or to give
effect to its obligations as contemplated hereby with respect to any Eurodollar
Loan, then, by written notice to the Borrower and to the Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder, whereupon any request for a Eurodollar Borrowing
shall, as to such Lender only, be deemed a request for an ABR Loan
unless such declaration shall be subsequently withdrawn (any Lender
delivering such a declaration hereby agreeing to withdraw such
declaration promptly upon determining that such event of illegality no
longer exists); and
(ii) require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall
be automatically converted to ABR Loans as of the effective date of
such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
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(b) For purposes of this Section 2.11, a notice by any Lender shall be
effective as to each Eurodollar Loan, if lawful, on the last day of the Interest
Period currently applicable to such Eurodollar Loan; in all other cases such
notice shall be effective on the date of receipt.
SECTION 2.12. Pro Rata Treatment.
Except as required under Sections 2.11 and 2.16, each Borrowing, each
payment or prepayment of principal of any Borrowing, each payment of interest on
the Loans, each payment of the Commitment Fees, each reduction of the
Commitments and each refinancing or conversion of any Borrowing with a Borrowing
of any Type, shall be allocated pro rata among the Lenders in accordance with
their respective Commitments (or, if such Commitments shall have expired or been
terminated, in accordance with the respective principal amounts of their
outstanding Loans). Each Lender agrees that in computing such Lender's portion
of any Borrowing to be made hereunder, the Agent may, in its discretion, round
each Lender's percentage of such Borrowing to the next higher or lower whole
dollar amount.
SECTION 2.13. Sharing of Setoffs.
Each Lender agrees that if it shall, through the exercise of a right of
banker's lien, setoff or counterclaim, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Bankruptcy Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, obtain payment (voluntary or involuntary) in
respect of any Loans as a result of which the unpaid principal portion of its
Loans shall be proportionately less than the unpaid principal portion of the
Loans of any other Lender, it shall be deemed simultaneously to have purchased
from such other Lender at face value, and shall promptly pay to such other
Lender the purchase price for, a participation in the Loans of such other
Lender, so that the aggregate unpaid principal amount of the Loans and
participations in the Loans held by each Lender shall be in the same proportion
to the aggregate unpaid principal amount of all Loans then outstanding as the
principal amount of its Loans prior to such exercise of banker's lien, setoff or
counterclaim or other event was to the principal amount of all Loans outstanding
prior to such exercise of banker's lien, setoff or counterclaim or other event;
provided, however, that, if any such purchase or purchases or adjustments shall
be made pursuant to this Section 2.13 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. The Borrower expressly consents to the
foregoing arrangements and agrees that any Lender holding a participation in a
Loan deemed to have been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any and all moneys owing
by the Borrower to such Lender by reason thereof as fully as if such Lender had
made a Loan in the amount of such participation.
SECTION 2.14. Payments.
(a) The Borrower shall make each payment (including principal of or
interest on any outstanding Loans or any Fees or other amounts) hereunder from
an account in the United States not later than 12:00 noon, New York City time,
on the date when due in dollars to the Agent at its offices at Eleven ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, in immediately available funds as
23
instructed from time to time by the Agent. Each such payment shall be made
without off-set, deduction or counterclaim, provided, that the foregoing shall
not constitute a relinquishment or waiver of the Borrower's rights to any
independent claim that the Borrower may have against the Agent or any Lender.
(b) Whenever any payment (including principal of or interest on any
outstanding Loans or any Fees or other amounts) hereunder shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.
SECTION 2.15. Taxes.
(a) Any and all payments of principal and interest on any of the
outstanding Loans, or of any Fees or indemnity or expense reimbursements by
the Borrower hereunder ("Borrower Payments") shall be made, in accordance
with Section 2.14, free and clear of and without deduction for any and all
current or future United States Federal, state and local taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect to the Borrower Payments, but only to the extent reasonably
attributable to the Borrower Payments, excluding (i) income taxes imposed
on the net income of the Agent or any Lender (or any transferee or assignee
thereof, including a participation holder (any such entity a "Transferee"))
and (ii) franchise taxes imposed on the net income of the Agent or any
Lender (or Transferee), in each case by the jurisdiction under the laws of
which the Agent or such Lender (or Transferee) is organized or doing
business through offices or branches located therein, or any political
subdivision thereof (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities, collectively or
individually, "Taxes"). If the Borrower shall be required to deduct any
Taxes from or in respect of any sum payable hereunder to any Lender (or any
Transferee) or the Agent, (i) the sum payable shall be increased by the
amount (an "additional amount") necessary so that after making all required
deductions (including deductions applicable to additional amounts payable
under this Section 2.15) such Lender (or Transferee) or the Agent (as the
case may be) shall receive an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay to the relevant United States
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or the
Letter Agreements ("Other Taxes").
(c) The Borrower shall indemnify each Lender (or Transferee thereof)
and the Agent for the full amount of Taxes and Other Taxes with respect to
Borrower Payments paid by such person, and any liability (including penalties,
interest and expenses (including reasonable attorney's fees and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted by the relevant United States
Governmental Authority. A certificate setting forth and containing an
explanation in reasonable detail of the manner in which such amount shall have
24
been determined and the amount of such payment or liability prepared by a
Lender or the Agent on their behalf, absent manifest error, shall be final,
conclusive and binding for all purposes. Such indemnification shall be made
within 30 days after the date the Lender (or Transferee) or the Agent, as the
case may be, makes written demand therefor.
(d) If any Lender (or Transferee) or the Agent shall become aware that
it is entitled to claim a refund from a United States Governmental Authority in
respect of Taxes or Other Taxes as to which it has been indemnified by the
Borrower, or with respect to which the Borrower has paid additional amounts,
pursuant to this Section 2.15, it shall promptly notify the Borrower of the
availability of such refund claim and shall, within 30 days after receipt of a
request by the Borrower, make a claim to such United States Governmental
Authority for such refund at the Borrower's expense. If any Lender (or
Transferee) or the Agent receives a refund (including pursuant to a claim for
refund made pursuant to the preceding sentence) in respect of any Taxes or Other
Taxes as to which it has been indemnified by the Borrower or with respect to
which the Borrower had paid additional amounts pursuant to this Section 2.15, it
shall within 30 days from the date of such receipt, pay over such refund to the
Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section 2.15 with respect to the Taxes
or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
such Lender (or Transferee) or the Agent and without interest (other than
interest paid by the relevant United States Governmental Authority with respect
to such refund); provided, however, that the Borrower, upon the request of such
Lender (or Transferee) or the Agent, agrees to repay the amount paid over to the
Borrower (plus penalties, interest or other charges) to such Lender (or
Transferee) or the Agent in the event such Lender (or Transferee) or the Agent
is required to repay such refund to such United States Governmental Authority.
(e) As soon as practicable, but in any event within 30 days, after the
date of any payment of Taxes or Other Taxes by the Borrower to the relevant
United States Governmental Authority, the Borrower will deliver to the Agent,
at its address referred to in Section 8.01, the original or a certified copy of
a receipt issued by such United States Governmental Authority evidencing payment
thereof.
(f) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.15 shall
survive the payment in full of the principal of and interest on all outstanding
Loans hereunder.
(g) Each of the Agent and each Lender (or Transferee) that is organized
under the laws of a jurisdiction other than the United States, any State thereof
or the District of Columbia (a "Non-U.S. Lender" or "Non U.S. Agent", as
applicable) shall deliver to the Borrower and the Agent two copies of either
United States Internal Revenue Service Form W-8BEN or Form W-8ECI, properly
completed and duly executed by such Non-U.S. Lender claiming complete exemption
from, or reduced rate of, United States Federal withholding tax on payments by
the Borrower under this Agreement. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement (or,
in the case of a Transferee that is a participation holder, on or before the
date such participation holder becomes a Transferee hereunder) and on or before
the date, if any, such Non-U.S. Lender changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
25
each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender.
Notwithstanding any other provision of this Section 2.15(g), a Non-U.S. Lender
shall not be required to deliver any form pursuant to this Section 2.15(g) that
such Non-U.S. Lender is not legally able to deliver.
(h) The Borrower shall not be required to indemnify any Non-U.S. Lender
or Non-U.S. Agent (including any Transferee), or to pay any additional amounts
to any Non-U.S. Lender or Non-U.S. Agent (including any Transferee), in
respect of United States Federal, state or local withholding tax pursuant
to paragraph (a) or (c) above to the extent that (i) the obligation to
withhold amounts with respect to United States Federal, state or local
withholding tax existed on the date such Non-U.S. Lender became a party to
this Agreement (or, in the case of a Transferee that is a participation
holder, on the date such participation holder became a Transferee
hereunder) or, with respect to payments to a New Lending Office, the date
such Non-U.S. Lender designated such New Lending Office with respect to a
Loan; provided, however, that this clause (i) shall not apply to any
Transferee or New Lending Office that becomes a Transferee or New Lending
Office as a result of an assignment, participation, transfer or designation
made at the request of the Borrower; and provided further, however, that
this clause (i) shall not apply to the extent the indemnity payment or
additional amounts any Transferee or any Lender (or Transferee) through a
New Lending Office, would be entitled to receive (without regard to this
clause (i)) do not exceed the indemnity payment or additional amounts that
the person making the assignment, participation or transfer to such
Transferee or Lender (or Transferee) making the designation of such New
Lending Office, would have been entitled to receive in the absence of such
assignment, participation, transfer or designation or (ii) the obligation
to pay such additional amounts or such indemnity payments would not have
arisen but for a failure by such Non-U.S. Lender (including any Transferee)
to comply with the provisions of paragraph (g) above and (i) below.
(i) Any Lender (or Transferee) claiming any indemnity payment or
additional amounts payable pursuant to this Section 2.15 shall use reasonable
efforts (consistent with legal and regulatory restrictions) to file any
certificate or document reasonably requested in writing by the Borrower or to
change the jurisdiction of its applicable lending office if the making of such
a filing or change would avoid the need for or reduce the amount of any such
indemnity payment or additional amounts that may thereafter accrue and would
not, in the good faith determination of such Lender (or Transferee) be otherwise
disadvantageous to such Lender (or Transferee).
(j) Nothing contained in this Section 2.15 shall require any Lender (or
Transferee) or the Agent to make available to the Borrower any of its tax
returns (or any other information) that it deems to be confidential or
proprietary.
SECTION 2.16. Assignment of Commitments Under Certain Circumstances.
In the event that any Lender shall have delivered a notice or
certificate pursuant to Section 2.10 or 2.11, or the Borrower shall be required
to make additional payments to any Lender under Section 2.15, the Borrower shall
have the right, at its own expense, upon notice to such Lender and the Agent, to
require such Lender to transfer and assign without recourse (in accordance with
and subject to the restrictions contained in Section 8.04) all such Lender's
interests, rights and obligations contained hereunder to another financial
26
institution approved by the Agent and the Borrower (which approval shall not be
unreasonably withheld) which shall assume such obligations; provided that (i) no
such assignment shall conflict with any law, rule or regulation or order of any
Governmental Authority and (ii) the assignee shall pay to the affected Lender in
immediately available funds on the date of such assignment the principal of and
interest accrued to the date of payment on the Loans made by it hereunder and
all other amounts accrued for its account or owed to it hereunder and the
Borrower shall pay the processing and recordation fee due pursuant to Section
8.04.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each Lender as follows:
SECTION 3.01. Organization; Powers.
The Borrower (i) is a corporation, duly formed, validly existing and in
good standing under the laws of the jurisdiction of its formation, (ii) has all
requisite power and authority to own its property and assets and to carry on its
business as now conducted and as proposed to be conducted, (iii) is qualified to
do business in every jurisdiction where such qualification is required, except
where the failure so to qualify would not result in a Material Adverse Change,
and (iv) has the corporate power and authority to execute, deliver and perform
its obligations under this Agreement and to request and receive Borrowings
hereunder.
SECTION 3.02. Authorization.
The execution, delivery and performance by the Borrower of this
Agreement and the making of the Loans hereunder (i) have been duly authorized by
all requisite corporate action and (ii) will not (A) violate (x) any provision
of any law, statute, rule or regulation (including, without limitation, the
Margin Regulations) or of the certificate of incorporation or other constitutive
documents or by-laws of the Borrower or any of its Subsidiaries, (y) any order
of any Governmental Authority or (z) any provision of any indenture, agreement
or other instrument to which the Borrower or any of its Subsidiaries is a party
or by which it or any of its property is or may be bound, (B) be in conflict
with, result in a breach of or constitute (alone or with notice or lapse of time
or both) a default under any such indenture, agreement or other instrument or
(C) result in the creation or imposition of any Lien upon any property or assets
of the Borrower.
SECTION 3.03. Enforceability.
This Agreement constitutes a legal, valid and binding obligation of the
Borrower enforceable in accordance with its terms except to the extent that
enforcement may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally.
SECTION 3.04. Governmental Approvals.
No action, consent or approval of, registration or filing with or other
action by any Governmental Authority is or will be required in connection with
the execution, delivery and performance by the Borrower of this Agreement,
27
except those as have been duly obtained and as are (i) in full force and effect,
(ii) sufficient for their purpose and (iii) not subject to any pending or, to
the knowledge of the Borrower, threatened appeal or other proceeding seeking
reconsideration or review thereof.
SECTION 3.05. Financial Statements.
(a) The consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of December 31, 2003 and the related consolidated statements of
income, retained earnings and cash flows for the fiscal year then ended,
reported on by Deloitte & Touche LLP and set forth in Borrower's Annual Report
on Form 10-K, a copy of which has been delivered to each of the Lenders, present
fairly, in all material respects, the consolidated financial position of the
Borrower and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for the period ending on such
date in conformity with GAAP.
(b) Except as set forth in the financial statements or other reports of
the type referred to in Section 5.03 hereof and that have been delivered to the
Lenders on or prior to the date hereof, since December 31, 2003, other than as
a result of the matters excluded from the computation of Consolidated Earnings
Available for Fixed Charges as set forth in the definition thereof, there has
been no Material Adverse Change with respect to the Borrower.
SECTION 3.06. Litigation.
Except as set forth in the financial statements or other reports of the
type referred to in Section 5.03 hereof and that have been delivered to the
Lenders on or prior to the date hereof, there is no action, suit or arbitral or
governmental proceeding pending against, or to the knowledge of the Borrower
threatened against or affecting, the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision that could result in a
Material Adverse Change.
SECTION 3.07. Federal Reserve Regulations.
(a) Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used by the Borrower,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry Margin Stock or to refund indebtedness
originally incurred for such purpose, or for any other purpose which entails a
violation of, or which is inconsistent with, the provisions of the Margin
Regulations.
(c) Not more than 25% of the value of the assets of the Borrower
subject to the restrictions of Sections 5.10 and 5.11 is represented by Margin
Stock.
28
SECTION 3.08. Investment Company Act; Public Utility Holding
Company Act.
(a) Neither the Borrower nor any of its Subsidiaries is an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940.
(b) The Borrower and each of its Subsidiaries is exempt from all
provisions of the Public Utility Holding Company Act of 1935 and rules and
regulations thereunder, except for Sections 9(a)(2) and 33 of such Act and the
rules and regulations thereunder, and the execution, delivery and performance
by the Borrower of this Agreement and its obligations hereunder do not violate
any provision of such Act or any rule or regulation thereunder.
SECTION 3.09. No Material Misstatements.
No report, financial statement or other written information furnished
by or on behalf of the Borrower to the Agent or any Lender pursuant to or in
connection with this Agreement contains or will contain any material
misstatement of fact or omits or will omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were or will be made, not misleading.
SECTION 3.10. Taxes.
The Borrower and its Subsidiaries have filed or caused to be filed
within 3 days of the date on which due, all material Federal, state and local
tax returns that to their knowledge are required to be filed by them, and have
paid or caused to be paid all material taxes shown to be due and payable on such
returns or on any assessments received by them, other than any taxes or
assessments the validity of which is being contested in good faith by
appropriate proceedings and with respect to which appropriate accounting
reserves have to the extent required by GAAP been set aside.
SECTION 3.11. Employee Benefit Plans.
With respect to each Plan, the Borrower and its ERISA Affiliates are in
compliance in all material respects with the applicable provisions of ERISA and
the Code and the final regulations and published interpretations thereunder. No
ERISA Event has occurred that alone or together with any other ERISA Event has
resulted or could reasonably be expected to result in a Material Adverse Change.
Neither the Borrower nor any ERISA Affiliate has incurred any Withdrawal
Liability that could result in a Material Adverse Change. Neither the Borrower
nor any ERISA Affiliate has received any notification that any Multiemployer
Plan is in reorganization or has been terminated within the meaning of Title IV
of ERISA, which such reorganization or termination could result in a Material
Adverse Change, and no Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated where such reorganization or termination has
resulted or can reasonably be expected to result, through an increase in the
contributions required to be made to such Plan or otherwise, in a Material
Adverse Change.
SECTION 3.12. Significant Subsidiaries.
Each of the Borrower's Significant Subsidiaries is a corporation,
limited liability company or other type of person duly incorporated or formed
(as the case may be), validly existing and in good standing under the laws of
29
its jurisdiction of incorporation or formation (as the case may be) and has all
corporate, limited liability company, partnership or other (as the case may be)
powers necessary to carry on its business substantially as now conducted. Each
of the Borrower's Significant Subsidiaries has all material governmental
licenses, authorizations, consents and approvals required to carry on its
business substantially as now conducted.
SECTION 3.13. Environmental Matters.
Except as set forth in or contemplated by the financial statements or
other reports of the type referred to in Section 5.03 hereof and that have been
delivered to the Lenders on or prior to the date hereof, the Borrower and each
of its Subsidiaries has complied in all material respects with all Federal,
state, local and other statutes, ordinances, orders, judgments, rulings and
regulations relating to environmental pollution or to environmental or nuclear
regulation or control, except to the extent that failure to so comply could not
reasonably be expected to result in a Material Adverse Change. Except as set
forth in or contemplated by such financial statements or other reports, neither
the Borrower nor any of its Subsidiaries has received notice of any material
failure so to comply, except where such failure could not reasonably be expected
to result in a Material Adverse Change. Except as set forth in or contemplated
by such financial statements or other reports, the facilities of the Borrower or
any of its Subsidiaries, as the case may be, are not used to manage any
hazardous wastes, hazardous substances, hazardous materials, toxic substances,
toxic pollutants or substances similarly denominated, as those terms or similar
terms are used in the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the Clean Air Act, the
Clean Water Act or any other applicable law relating to environmental pollution,
or any nuclear fuel or other radioactive materials, in violation in any material
respect of any law or any regulations promulgated pursuant thereto, except to
the extent that such violations could not reasonably be expected to result in a
Material Adverse Change. Except as set forth in or contemplated by such
financial statements or other reports, the Borrower is aware of no events,
conditions or circumstances involving environmental pollution or contamination
that could reasonably be expected to result in a Material Adverse Change.
SECTION 3.14. Solvency.
The Borrower is Solvent.
ARTICLE IV
CONDITIONS
The obligations of the Lenders to make Loans hereunder are subject to
the satisfaction of the following conditions:
SECTION 4.01. Initial Loans.
The Commitment of each Lender to make its initial Loan on or after the
date hereof is subject to the conditions that on or prior to the date of such
Loan:
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(a) The Agent shall have received favorable written legal opinions of
(i) (A) ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, special New York counsel to the Borrower,
(B) Hunton & ▇▇▇▇▇▇▇▇ LLP, counsel to the Borrower, and (ii) King & Spalding
LLP, special New York counsel to the Agent, in each case dated the date hereof,
addressed to the Agent and the Lenders and in form and substance satisfactory
to the Agent.
(b) The Agent shall have received (i) a copy of the certificate of
incorporation, including all amendments thereto, of the Borrower, certified as
of a recent date by the Secretary of State of Texas, and a certificate as to the
good standing of the Borrower as of a recent date from such Secretary of State;
(ii) a certificate of the Secretary or an Assistant Secretary or analogous
officer of the Borrower, dated the date of this Agreement and certifying (A)
that attached thereto is a true and complete copy of the by-laws of the Borrower
as in effect on such date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached thereto are true
and complete copies of resolutions duly adopted by the board of directors (or
any duly authorized committee thereof) of the Borrower authorizing the execution
and delivery by the Borrower of this Agreement, the Loans to be made hereunder
and the performance by the Borrower of all of its obligations hereunder, and
that such resolutions have not been modified, rescinded or amended and are in
full force and effect, (C) that the certificate of incorporation referred to in
clause (i) above has not been amended since the date of the last amendment
thereto shown on the certificate of good standing furnished pursuant to such
clause (i) and (D) as to the incumbency and specimen signature of each officer
executing this Agreement and any other document delivered in connection herewith
on behalf of the Borrower; (iii) a certificate of another officer of the
Borrower as to the incumbency and specimen signature of the Secretary or
Assistant Secretary or analogous officer executing the certificate pursuant to
(ii) above; and (iv) a certificate of a Responsible Officer of the Borrower,
dated the date of this Agreement, stating that (A) no action, consent or
approval of, registration or filing with or other action by any Governmental
Authority is or will be required in connection with the execution, delivery and
performance by the Borrower of this Agreement, except those as have been duly
obtained and as are (1) in full force and effect, (2) sufficient for their
purpose and (3) not subject to any pending or, to the knowledge of such person,
threatened appeal or other proceeding seeking reconsideration or review thereof,
and (B) the representations and warranties set forth in Article III hereof are
true and correct in all material respects on and as of the date hereof, and (C)
no Event of Default or Default has occurred and is continuing on the date
hereof.
(c) The Agent shall have received documentation and information
required by regulatory authorities under applicable "know your customer" and
anti-money laundering rules and regulations, including without limitation the
USA Patriot Act.
(d) The Agent shall have received evidence satisfactory to it of the
execution and delivery of the TXU Corp. Agreement and the TXU Energy Agreement.
(e) The Agent shall have received such other approvals, opinions,
certificates, instruments and documents as the Agent, or any of the Lenders may
have reasonably requested, in form satisfactory to the Agent and the requesting
Lender.
(f) The Lenders, the Agent and the Sole Lead Arranger named in the
Letter Agreements shall have received payment of all fees and reimbursements of
all expenses for which invoices have been presented as and when due on or prior
to the date of the initial Loan pursuant to the terms of this Agreement or the
Letter Agreements.
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SECTION 4.02. Conditions for All Loans.
The Commitment of each Lender to make each Loan hereunder shall be
subject to the satisfaction of the following conditions precedent on the date of
such Loan:
(a) The Agent shall have received from the Borrower a notice
requesting such Loan as required by Section 2.03.
(b) The representations and warranties of the Borrower set forth in
Article III hereof (except, in the case of any Loan that does not increase the
aggregate principal amount of the Loans outstanding to the Borrower, the
representations set forth in Sections 3.05(b), 3.06, 3.11 and 3.13) shall be
true and correct in all material respects on and as of the date of such Loan
with the same effect as though made on and as of such date, except to the
extent such representations and warranties expressly relate to an earlier date.
(c) At the time of and immediately after such Loan, no Default or Event
of Default affecting the Borrower shall have occurred and be continuing at the
time of such Loan or would result from the making of such Loan.
(d) The Agent shall have received a certificate of a Responsible
Officer of the Borrower certifying that the matters set forth in paragraphs
(b) and (c) of this Section 4.02 are true and correct as of such date.
Each Loan shall be deemed to constitute a representation and warranty
by the Borrower on the date of such Loan as to the matters specified in
paragraphs (b) and (c) of this Section 4.02.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Lender has any Commitment
hereunder or any amount payable hereunder remains unpaid:
SECTION 5.01. Existence.
It will, and will cause each of its Significant Subsidiaries to, do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and all rights, licenses, permits, franchises and
authorizations necessary or desirable in the normal conduct of its business
except as otherwise permitted pursuant to Section 5.10.
SECTION 5.02. Compliance With Laws; Business and Properties.
It will, and will cause each of its Subsidiaries to, comply with all
applicable material laws, rules, regulations and orders of any Governmental
Authority, whether now in effect or hereafter enacted, except where the validity
or applicability of such laws, rules, regulations or orders is being contested
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by appropriate proceedings in good faith; and at all times maintain and preserve
all property material to the conduct of its business and keep such property in
good repair, working order and condition and from time to time make, or cause to
be made, all needful and proper repairs, renewals, additions, improvements and
replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times.
SECTION 5.03. Financial Statements, Reports, Etc.
It will furnish to the Agent for each Lender:
(a) as soon as available and in any event within 120 days after the end
of each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such fiscal year
and the related consolidated statements of income, retained earnings and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on in a manner reasonably
acceptable to the SEC by Deloitte & Touche LLP or other independent public
accountants of nationally recognized standing;
(b) as soon as available and in any event within 75 days after the end
of each of the first three quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such quarter and the related consolidated statements of income
for such quarter, for the portion of the Borrower's fiscal year ended at the
end of such quarter, and for the twelve months ended at the end of such quarter,
and the related consolidated statement of cash flows for the portion of the
Borrower's fiscal year ended at the end of such quarter, setting forth
comparative figures for previous dates and periods to the extent required in
Form 10-Q, all certified (subject to normal year-end adjustments) as to
fairness of presentation, GAAP and consistency by a Financial Officer of the
Borrower;
(c) simultaneously with any delivery of each set of financial statements
referred to in paragraphs (a) and (b) above, a certificate of a Financial
Officer of the Borrower (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of Sections 5.12 and 5.13 on the date of such financial statements,
and (ii) stating whether any Default or Event of Default exists on the date of
such certificate and, if any Default or Event of Default then exists, setting
forth the details thereof and the action that the Borrower is taking or proposes
to take with respect thereto;
(d) simultaneously with the delivery of each set of financial statements
referred to in paragraph (a) above, a statement of the firm of independent
public accountants that reported on such statements (i) stating whether anything
has come to their attention to cause them to believe that any Default or Event
of Default existed on the date of such statements and (ii) confirming the
calculations set forth in the Financial Officer's certificate delivered
simultaneously therewith pursuant to paragraph (c) above;
(e) forthwith upon becoming aware of the occurrence of any Default or
Event of Default, a certificate of a Financial Officer of the Borrower setting
forth the details thereof and the action that the Borrower is taking or
proposes to take with respect thereto;
(f) promptly upon the filing thereof, copies of each final prospectus
(other than a prospectus included in any registration statement on Form S-8 or
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its equivalent or with respect to a dividend reinvestment plan) and all reports
on Forms 10-K, 10-Q and 8-K and similar reports that the Borrower shall have
filed with the SEC, or any Governmental Authority succeeding to any of or all
the functions of the SEC;
(g) if and when any member of the Controlled Group (i) gives or is
required to give notice to the PBGC of any Reportable Event with respect to any
Plan that might constitute grounds for a termination of such Plan under Title
IV of ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such Reportable Event, a copy of the notice of
such Reportable Event given or required to be given to the PBGC; (ii) receives
notice from a proper representative of a Multiemployer Plan of complete or
partial Withdrawal Liability being imposed upon such member of the Controlled
Group under Title IV of ERISA, a copy of such notice; or (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate, or appoint
a trustee to administer, any Plan, a copy of such notice; and
(h) promptly, from time to time, such additional information regarding
the financial position or business of the Borrower and its Subsidiaries as the
Agent, at the request of any Lender, may reasonably request.
As promptly as practicable after delivering each set of financial statements as
required in paragraph (a) of this Section, the Borrower shall make available a
copy of the consolidating workpapers used by the Borrower in preparing such
consolidated statements to and each Lender that shall have requested such
consolidating workpapers. Each Lender that receives such consolidating
workpapers shall hold them in confidence as required by Section 8.15; provided
that no Lender may disclose such consolidating workpapers to any other person
pursuant to clause (iv) of Section 8.15.
SECTION 5.04. Insurance.
It will, and will cause each of its Subsidiaries to, maintain such
insurance or self insurance, to such extent and against such risks, including
fire and other risks insured against by extended coverage, as is customary with
companies similarly situated and in the same or similar businesses.
SECTION 5.05. Taxes, Etc.
It will, and will cause each of its Subsidiaries to, pay and discharge
promptly when due all material taxes, assessments and governmental charges
imposed upon it or upon its income or profits or in respect of its property, as
well as all other material liabilities, in each case before the same shall
become delinquent or in default and before penalties accrue thereon, unless and
to the extent that the same are being contested in good faith by appropriate
proceedings and adequate reserves with respect thereto shall, to the extent
required by GAAP, have been set aside.
SECTION 5.06. Maintaining Records; Access to Properties and
Inspections.
It will, and will cause each of its Subsidiaries to, maintain financial
records in accordance with GAAP and, upon reasonable notice and at reasonable
times, permit authorized representatives designated by any Lender to visit and
inspect its properties and to discuss its affairs, finances and condition with
its officers.
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SECTION 5.07. ERISA.
It will, and will cause each of its Subsidiaries that are members of
the Controlled Group to, comply in all material respects with the applicable
provisions of ERISA and the Code except where any noncompliance, individually or
in the aggregate, would not result in a Material Adverse Change.
SECTION 5.08. Maintain Ratings.
It will maintain ratings (whether explicit or implied) assigned by
Standard & Poor's Ratings Services (a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc.) and ▇▇▇▇▇'▇ Investors Service, Inc. for the senior unsecured non-credit
enhanced long term debt of the Borrower. For the avoidance of doubt, it being
understood that no minimum credit rating is required to be achieved or
maintained by the Borrower.
SECTION 5.09. Use of Proceeds.
It will not use the proceeds of the Loans for purposes other than to
(i) to fund directly or indirectly Securities Repurchases, (ii) to repay all or
a portion of the currently outstanding intercompany loans made by TXU to the
Borrower in the aggregate principal amount of $300,000,000, (iii) to pay all or
a portion of the Transaction Costs, and (iv) for other general corporate
purposes.
SECTION 5.10. Consolidations, Mergers, Sales and Acquisitions of Assets
and Investments in Subsidiaries.
It (i) will not, and will not permit any of its Significant
Subsidiaries to, consolidate or merge with or into any person unless, (A) in the
case of any such transaction involving the Borrower, the surviving person is the
Borrower or another person formed under the laws of a State of the United States
of America and assumes or is responsible, by operation of law, for all the
obligations of the Borrower hereunder and (B) in the case of any such
transaction involving any such Significant Subsidiary, the survivor is the
Borrower, such Significant Subsidiary or a Wholly Owned Subsidiary of the
Borrower (or a person which as a result of such transaction becomes a Wholly
Owned Subsidiary of the Borrower), and (ii) will not, and will not permit any of
its Significant Subsidiaries to, make a Significant Disposition to any person
other than the Borrower or a Wholly Owned Subsidiary of the Borrower (or a
person which as a result of such transaction becomes a Wholly Owned Subsidiary
of the Borrower), provided that the Borrower will not in any event permit any
such consolidation, merger, sale, lease or transfer if any Default or Event of
Default relating to the Borrower shall have occurred and be continuing at the
time of or after giving effect to such transaction. Notwithstanding the
foregoing, (x) neither the Borrower nor any of its Subsidiaries will engage to a
Substantial extent in businesses other than those currently conducted by them
and other businesses reasonably related thereto, (y) neither the Borrower nor
any of its Subsidiaries will acquire any Subsidiary or make any investment in
any Subsidiary if, upon giving effect to such acquisition or investment, as the
case may be, the Borrower would not be in compliance with the covenants set
forth in Sections 5.12 and 5.13 and (z) nothing in this Section shall prohibit
any sales of assets permitted by Section 5.11(d).
35
SECTION 5.11. Limitations on Liens.
Neither it nor any Significant Subsidiary thereof will create or assume
or permit to exist any Lien in respect of any property or assets of any kind
(real or personal, tangible or intangible) of the Borrower or any such
Significant Subsidiary, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets, or sell, or permit any Significant Subsidiary thereof to sell, any
accounts receivable; provided that the provisions of this Section shall not
prevent or restrict the creation, assumption or existence of:
(a) any Lien in respect of any such property or assets of any
Significant Subsidiary of the Borrower to secure indebtedness owing by it to
the Borrower or any Wholly Owned Subsidiary of the Borrower; or
(b) Liens (including capital leases) in respect of property
acquired by the Borrower or any Significant Subsidiary thereof, to secure the
purchase price, or the cost of construction and development, of such property
(or to secure indebtedness incurred prior to, at the time of, or within 120
days after the later of the acquisition of such property and the commencement
of operation of such property for the purpose of financing the acquisition, or
the cost of construction and development, of such property), or Liens existing
on any such property at the time of acquisition of such property by the
Borrower or such Significant Subsidiary, whether or not assumed, or any Lien in
respect of property of any person existing at the time such person becomes
a Subsidiary of the Borrower; or agreements to acquire any property or assets
under conditional sale agreements or other title retention agreements, or
capital leases in respect of any other property; provided that
(A) the aggregate principal amount of Indebtedness secured
by all Liens in respect of any such property shall not exceed the
cost (as determined by the board of directors or analogous
governing body of the Borrower or such Significant Subsidiary,
as the case may be) of such property at the time of
acquisition thereof (or (x) in the case of property covered by
a capital lease, the fair market value, as so determined, of
such property at the time of such transaction, or (y) in the
case of a Lien in respect of property existing at the time
such person becomes a Subsidiary of the Borrower the fair
market value, as so determined of such property at such time),
and
(B) at the time of the acquisition of the property by the
Borrower or such Significant Subsidiary, or at the time such
person becomes a Subsidiary of the Borrower, as the case may be,
every such Lien shall apply and attach only to the property
originally subject thereto and fixed improvements constructed
thereon; or
(c) refundings or extensions of any Lien permitted in the
foregoing paragraph (b) for amounts not exceeding the principal amount of the
Indebtedness so refunded or extended or the fair market value (as determined by
36
the board of directors (or analogous governing body) of the Borrower or
such Significant Subsidiary, as the case may be) of the property theretofore
subject to such Lien, whichever shall be lower, in each case at the time of
such refunding or extension; provided that such Lien shall apply only to the
same property theretofore subject to the same and fixed improvements
constructed thereon; or
(d) sales subject to understandings or agreements to repurchase;
provided that the aggregate sales price for all such sales (other than sales to
any governmental instrumentality in connection with such instrumentality's
issuance of indebtedness, including without limitation industrial development
bonds and pollution control bonds, on behalf of the Borrower or any Significant
Subsidiary thereof) made in any one calendar year shall not exceed $50,000,000
in the aggregate for the Borrower and their respective Significant Subsidiaries;
or
(e) any production payment or similar interest which is dischargeable
solely out of natural gas, coal, lignite, oil or other mineral to be produced
from the property subject thereto and to be sold or delivered by the Borrower
or any Significant Subsidiary thereof; or
(f) any Lien, including in connection with sale-leaseback
transactions, created or assumed by the Borrower or any Significant Subsidiary
thereof on natural gas, coal, lignite, oil or other mineral properties or
nuclear fuel owned or leased by the Borrower or such Subsidiary, to secure
loans to the Borrower or such Subsidiary in an aggregate amount not to
exceed $100,000,000 in the aggregate for the Borrower and their respective
Significant Subsidiaries; provided that neither the Borrower nor any Subsidiary
of the Borrower shall assume or guarantee such financings; or
(g) any Lien (whenever incurred) on assets owned by the Borrower
or any Subsidiary thereof as of the date hereof and any fuel, operating and
maintenance or similar contract related thereto securing Indebtedness of the
Borrower or Subsidiary in an aggregate amount not to exceed 10% of consolidated
assets of the Borrower; or
(h) leases (other than capital leases) now or hereafter existing
and any renewals and extensions thereof under which the Borrower or any
Significant Subsidiary thereof may acquire or dispose of any of its property,
subject, however, to the terms of Section 5.10; or
(i) pledges or sales by the Borrower or any Subsidiary of the
Borrower of its accounts receivable including customers' installment paper; or
(j) the pledge of current assets, in the ordinary course of
business, to secure current liabilities; or
(k) Permitted Encumbrances; or
(l) Liens on cash and cash equivalents created to secure
reimbursement obligations for letters of credit issued for the account of the
Borrower or any of its Subsidiaries.
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SECTION 5.12. Fixed Charge Coverage Ratio.
It will not, as of the end of each quarter of each fiscal year of the
Borrower, permit the ratio of (x) its Consolidated Earnings Available for Fixed
Charges for the twelve months then ended to (y) its Consolidated Fixed Charges
for the twelve months then ended to be less than 1.25 to 1.00.
SECTION 5.13. Debt to Total Capitalization Ratio.
It will not, as of the end of each quarter of each fiscal year of the
Borrower, permit the ratio of its Consolidated Senior Debt to its Consolidated
Total Capitalization to be greater than 0.60 to 1.00.
SECTION 5.14. Restrictive Agreements.
It will not cause or permit any of its Significant Subsidiaries (the
"Subject Subsidiaries") to enter into any agreement restricting the ability of
any Subject Subsidiary to make payments, directly or indirectly, to the Borrower
by way of dividends, advances, repayments of loans or advances, reimbursements
of management and other intercompany charges, expenses and accruals or other
returns on investments or any other agreement or arrangement that restricts the
ability of such Subject Subsidiary to make any payment, directly or indirectly,
to the Borrower other than pursuant to the terms of preferred stock or
Equity-Credit Preferred Securities issued by such Subject Subsidiary, if the
effect of such agreement is to subject such Subject Subsidiary to restrictions
on such payments greater than those to which such Subject Subsidiary is subject
on the date of this Agreement. All such existing restrictive agreements are
listed on Schedule 5.14 hereto.
ARTICLE VI
EVENTS OF DEFAULT
In case of the happening of any of the following events (each an "Event
of Default"):
(a) any representation or warranty made or deemed made by the Borrower
in or in connection with the execution and delivery of this Agreement or the
Loans made hereunder shall prove to have been false or misleading in any
material respect when so made, deemed made or furnished;
(b) default shall be made by the Borrower in the payment of any
principal of any outstanding Loans when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment
thereof or by acceleration thereof or otherwise;
(c) default shall be made by the Borrower in the payment of any
interest on any outstanding Loans or any Fee or any other amount (other than an
amount referred to in paragraph (b) above) due hereunder, when and as the same
shall become due and payable, and such default shall continue unremedied for a
period of five days;
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(d) default shall be made by the Borrower in the due observance or
performance of any covenant, condition or agreement contained in Section 5.01,
5.12 or 5.13;
(e) default shall be made by the Borrower (i) in the due observance or
performance of any covenant, condition or agreement contained in Section 5.10
and such default shall continue unremedied for a period of 5 days or (ii) in the
due observance or performance of any covenant, condition or agreement contained
herein (other than those specified in paragraphs (b), (c), (d) or (e)(i) above)
or in the Letter Agreements and such default shall continue unremedied for a
period of 30 days after notice thereof from the Agent at the request of any
Lender to the Borrower;
(f) TXU shall no longer own, directly or indirectly, all the
outstanding common stock or common members' interest in the Borrower or any
permitted successor to the Borrower;
(g) the Borrower or any Subsidiary thereof shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any Indebtedness
in a principal amount in excess of $50,000,000, when and as the same shall
become due and payable, subject to any applicable grace periods, or (ii) fail
to observe or perform any other term, covenant, condition or agreement contained
in any agreement or instrument evidencing or governing any such Indebtedness if
the effect of any failure referred to in this clause (ii) is to cause, or to
permit the holder or holders of such Indebtedness or a trustee on its or their
behalf to cause, such Indebtedness to become accelerated or due prior to its
stated maturity;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of the Borrower or any Significant Subsidiary, or of a substantial
part of the property or assets of the Borrower or any Significant Subsidiary,
under Title 11 of the United States Bankruptcy Code, as now constituted or
hereafter amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law, (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower or any
Significant Subsidiary or for a substantial part of the property or assets of
the Borrower or any Significant Subsidiary or (iii) the winding up or
liquidation of the Borrower or any Significant Subsidiary; and such proceeding
or petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
(i) the Borrower or any Significant Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Bankruptcy Code, as now constituted or hereafter amended, or
any other Federal or state bankruptcy, insolvency, receivership or similar law,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
(h) above, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower or any
Significant Subsidiary or for a substantial part of the property or assets of it
or such Significant Subsidiary, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors, (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they become due or
(vii) take any action for the purpose of effecting any of the foregoing;
39
(j) A Change in Control shall occur;
(k) one or more judgments or orders for the payment of money in an
aggregate amount in excess of $50,000,000 shall be rendered against the Borrower
or any Subsidiary thereof or any combination thereof and such judgment or order
shall remain undischarged or unstayed for a period of 30 days, or any action
shall be legally taken by a judgment creditor to levy upon assets or properties
of the Borrower or any Subsidiary thereof to enforce any such judgment or order;
(l) an ERISA Event or ERISA Events shall have occurred that reasonably
could be expected to result in a Material Adverse Change;
then, and in every such event, and at any time thereafter during the continuance
of such event, the Agent, at the request of the Required Lenders, shall, by
notice to the Borrower, take one or all of the following actions, at the same or
different times: (i) terminate forthwith the right of the Borrower to request
and receive Loans; and (ii) declare the Loans of the Borrower then outstanding
to be forthwith due and payable in whole or in part, whereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of the Borrower
accrued hereunder, shall become forthwith due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived, anything contained herein to the contrary notwithstanding;
provided that in the case of any event described in paragraph (h) or (i) above
affecting the Borrower, the right of the Borrower to request and receive Loans
shall automatically terminate and the principal of the Loans then outstanding of
the Borrower, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of the Borrower accrued hereunder shall automatically
become due and payable, without presentment, demand, protest or any other notice
of any kind, all of which are hereby expressly waived by the Borrower, anything
contained herein to the contrary notwithstanding.
ARTICLE VII
THE AGENT
(a) In order to expedite the transactions contemplated by this
Agreement, CSFB is hereby appointed to act as Agent on behalf of the Lenders.
Each Lender hereby irrevocably authorizes the Agent to take such actions on
behalf of such Lender and to exercise such powers as are specifically delegated
to the Agent by the terms and provisions hereof, together with such actions and
powers as are reasonably incidental thereto. The Agent is hereby expressly
authorized by the Lenders, without hereby limiting any implied authority, (i)
to receive on behalf of the Lenders and all payments of principal of and
interest on the outstanding Loans and all other amounts due to the Lenders
hereunder, and promptly to distribute to each Lender, its proper share of each
payment so received; (ii) to give notice on behalf of each Lender to the
Borrower of any Event of Default of which the Agent has actual knowledge
acquired in connection with its agency hereunder; and (iii) to distribute to
each Lender copies of all notices, financial statements and other materials
delivered by the Borrower pursuant to this Agreement as received by the Agent.
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(b) Neither the Agent nor any of its directors, officers, employees or
agents shall be liable as such for any action taken or omitted by any of them
except for its or his or her own gross negligence or willful misconduct, or be
responsible for any statement, warranty or representation herein or the contents
of any document delivered in connection herewith, or be required to ascertain or
to make any inquiry concerning the performance or observance by the Borrower of
any of the terms, conditions, covenants or agreements contained in this
Agreement. The Agent shall not be responsible to the Lenders for the due
execution, genuineness, validity, enforceability or effectiveness of this
Agreement or other instruments or agreements. The Agent may deem and treat the
Lender that makes any Loan as the holder of the indebtedness resulting therefrom
for all purposes hereof until it shall have received notice from such Lender,
given as provided herein, of the transfer thereof. The Agent shall in all cases
be fully protected in acting, or refraining from acting, in accordance with
written instructions signed by the Required Lenders and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Lenders. The Agent shall, in the
absence of knowledge to the contrary, be entitled to rely on any instrument or
document believed by it in good faith to be genuine and correct and to have been
signed or sent by the proper person or persons. Neither the Agent nor any of its
directors, officers, employees or agents shall have any responsibility to the
Borrower on account of the failure of or delay in performance or breach by any
Lender of any of its obligations hereunder or to any Lender on account of the
failure of or delay in performance or breach by any other Lender or the Borrower
of any of their respective obligations hereunder or in connection herewith. The
Agent may execute any and all duties hereunder by or through agents or employees
and shall be entitled to rely upon the advice of legal counsel selected by it
with respect to all matters arising hereunder and shall not be liable for any
action taken or suffered in good faith by it in accordance with the advice of
such counsel.
(c) The Lenders hereby acknowledge that the Agent shall not be under
any duty to take any discretionary action permitted to be taken by it pursuant
to the provisions of this Agreement unless it shall be requested in writing to
do so by the Required Lenders.
(d) Subject to the appointment and acceptance of a successor Agent as
provided below, the Agent may resign at any time by notifying the Lenders and
the Borrower. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor Agent acceptable to the Borrower. If no successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, having a combined capital and surplus of at least $500,000,000
or an Affiliate of any such bank. Upon the acceptance of any appointment as
Agent hereunder by a successor bank, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After the Agent's resignation hereunder, the provisions of this
Article and Section 8.05 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was acting as the Agent.
(e) The Lenders may remove the Agent upon 30 days' prior notice by so
notifying the Borrower and, in such event, the Lenders shall appoint a successor
Agent acceptable to the Borrower. Either the Required Lenders or the Borrower
may remove any Agent if (i) such Agent is adjudged bankrupt or insolvent or (ii)
a receiver or other public officer takes charge of such Agent or its property.
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If no successor Agent shall have been appointed by the Lenders and shall have
accepted such appointment within 30 days after delivery by the Lenders of the
notice required by the first sentence of this paragraph (b), the Required
Lenders or the Borrower may petition any court of competent jurisdiction for the
appointment of a successor Agent. After the Agent's removal hereunder, the
provisions of this Article and Section 8.05 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
(f) With respect to the Loans made by it hereunder, the Agent, in its
individual capacity and not as Agent, shall have the same rights and powers as
any other Lender and may exercise the same as though it were not the Agent, and
the Agent and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not Agent.
(g) Each Lender agrees (i) to reimburse the Agent, on demand, in the
amount of its pro rata share (based on its Commitment hereunder or, if the
Commitments shall have been terminated, the amount of its percentage of
outstanding Loans) of any expenses incurred for the benefit of the Lenders,
in its role as Agent, including counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, which shall
not have been reimbursed by the Borrower and (ii) to indemnify and hold
harmless the Agent and any of its directors, officers, employees or agents,
on demand, in the amount of such pro rata share, from and against any and
all liabilities, taxes, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against it in
any way relating to or arising out of this Agreement or any action taken or
omitted by it under this Agreement to the extent the same shall not have
been reimbursed by the Borrower; provided that no Lender shall be liable to
the Agent for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or willful misconduct of
the Agent or any of its directors, officers, employees or agents. Each
Lender agrees that any allocation made in good faith by the Agent of
expenses or other amounts referred to in this paragraph shall be conclusive
and binding for all purposes.
(h) Each Lender acknowledges that it has, independently and without
reliance upon the Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own credit analysis
and decision to enter into this Agreement. Each Lender also acknowledges
that it will, independently and without reliance upon the Agent or any
other Lender, and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking
or not taking action under or based upon this Agreement or any related
agreement or any document furnished hereunder or thereunder.
(i) CSFB, by virtue of its designation as "Sole Lead Arranger and
Bookrunner" on the cover page of this Agreement shall have no duties,
liabilities, obligations or responsibilities under this Agreement other
than as the Agent and a Lender hereunder.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Notices.
(a) Notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed or
sent by telecopy, as follows:
(i) if to the Borrower, c/o TXU Business Services Company,
Energy Plaza, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Treasurer (Telecopy No. 214-812-2488);
(ii) if to CSFB, as Agent, to Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Loan Services Manager (facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇);
(iii) if to a Lender, to it at its address (or telecopy number)
set forth in the Register or in the Assignment and Assumption pursuant
to which such Lender became a party hereto; and
(iv) as to each party hereto, at such other address as shall be
designated by such party in a written notice to each other party
hereto.
(b) Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by the Agent.
The Agent or the Borrower may, in its discretion, agree to accept notices and
other communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that the approval of such procedures may be
limited to particular notices or communications.
(c) All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by telecopy or electronic mail to such party as provided in this
Section or in accordance with the latest unrevoked direction from such party
given in accordance with this Section. Electronic forms of communication not
otherwise described herein require the consent of the Borrower and the Agent.
SECTION 8.02. Survival of Agreement.
All covenants, agreements, representations and warranties made by the
Borrower herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement shall be considered
to have been relied upon by the Lenders and shall survive the making by the
Lenders of the Loans regardless of any investigation made by the Lenders or on
their behalf, and shall continue in full force and effect as long as there are
any outstanding Loans or any Fee or any other amount payable under this
Agreement is outstanding and unpaid or the Commitments have not been terminated.
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SECTION 8.03. Binding Effect.
This Agreement shall become effective when it shall have been executed
by the Borrower and the Agent and when the Agent shall have received copies
hereof (telecopied or otherwise) which, when taken together, bear the signature
of each Lender, and thereafter shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that the
Borrower shall not have the right to assign any rights hereunder or any interest
herein without the prior consent of all the Lenders.
SECTION 8.04. Successors and Assigns.
(a) Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the successors and assigns of
such party; and all covenants, promises and agreements by or on behalf of any
party that are contained in this Agreement shall bind and inure to the benefit
of its successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and its outstanding Loans); provided, however, that
(i) except in the case of an assignment to a Lender or an Affiliate of such
Lender, an assignment to a Federal Reserve Bank or an assignment made at any
time an Event of Default shall have occurred and be continuing, the Borrower and
the Agent must give their prior written consent to such assignment (which
consent shall not be unreasonably withheld), (ii) the amount of the Commitment
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Agent) shall not be less than $1,000,000 (or, if less, the entire
remaining amount of such Lender's Commitment) and shall be in an amount that is
an integral multiple of $1,000,000 (or the entire remaining amount of such
Lender's Commitment ), (iii) the parties to each such assignment shall execute
and deliver to the Agent an Assignment and Assumption (such Assignment and
Assumption to be (A) electronically executed and delivered to the Agent via an
electronic settlement system then acceptable to the Agent, which shall initially
be the settlement system of ClearPar, LLC, or (B) manually executed and
delivered together with a processing and recordation fee of $3,500) and (iv) the
assignee, if it shall not be a Lender immediately prior to the assignment, shall
deliver to the agent an Administrative Questionnaire and applicable tax form(s).
Upon acceptance and recording pursuant to Section 8.04(e), from and after the
effective date specified in each Assignment and Assumption (A) the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement and (B) the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto (but shall continue to be entitled to the benefits of Sections 2.10, 2.15
and 8.05 as well as to any Fees accrued for its account hereunder and not yet
paid)).
(c) By executing and delivering an Assignment and Assumption, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim; (ii)
except as set forth in (i) above, such assigning Lender makes no representation
44
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement, or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto or the financial condition of the Borrower or the performance or
observance by the Borrower of any obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignor and such
assignee represents and warrants that it is legally authorized to enter into
such Assignment and Assumption; (iv) such assignee confirms that it has received
a copy of this Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 5.03 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Assumption; (v) such assignee will
independently and without reliance upon the Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (vi) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all the obligations that by the terms of this Agreement are required to be
performed by it as a Lender.
(d) The Agent, acting for this purpose as an agent of the Borrower,
shall maintain at one of its offices in the City of New York a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitment of, and the principal
amount of the outstanding Loans of, each Lender pursuant to the terms hereof
from time to time (the "Register"). The entries in the Register shall be
conclusive in the absence of manifest error and the Borrower, the Agent and the
Lenders may treat each person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by each party hereto, at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, an Administrative Questionnaire
and, if necessary, applicable tax form(s) completed in respect of the assignee
(unlessthe assignee shall already be a Lender hereunder), the written consent of
the Agent to such assignment, and the processing and recordation fee referred to
in paragraph (b) above and, if required, the written consent of the Borrower and
the Agent to such assignment, the Agent shall (i) accept such Assignment and
Assumption and (ii) record the information contained therein in the Register. No
assignment shall be effective unless it has been recorded in the Register as
provided in this paragraph (e).
(f) Each Lender may without the consent of the Borrower or the Agent
sell participations to one or more banks or other entities in all or a portion
of its rights and/or obligations under this Agreement (including all or a
portion of its Commitment and its Loans); provided, however, that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) each participating bank or other entity
45
shall be entitled to the benefit of the cost protection provisions contained in
Sections 2.10, 2.15 and 8.05 to the same extent as if it were the selling Lender
(and limited to the amount that could have been claimed by the selling Lender
had it continued to hold the interest of such participating bank or other
entity), except that all claims made pursuant to such Sections shall be made
through such selling Lender, and (iv) the Borrower, the Agent and the other
Lenders shall continue to deal solely and directly with such selling Lender in
connection with such Lender's rights and obligations under this Agreement, and
such Lender shall retain the sole right to enforce the obligations of the
Borrower under this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement (other than amendments, modifications
or waivers (x) decreasing any fees payable hereunder or the amount of principal
of, or the rate at which interest is payable on, the outstanding Loans,
(y) extending any scheduled principal payment date or date fixed for the payment
of interest on the outstanding Loans or (z) extending the Commitments).
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section,
disclose to the assignee or participant or proposed assignee or participant any
information relating to the Borrower furnished to such Lender by or on behalf of
the Borrower; provided that, prior to any such disclosure, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of any such information.
(h) The Borrower shall not assign or delegate any rights and duties
hereunder without the prior written consent of all Lenders, and any attempted
assignment or delegation (except as a consequence of a transaction expressly
permitted under Section 5.10) by the Borrower without such consent shall be
void.
(i) Any Lender may at any time pledge all or any portion of its rights
under this Agreement to a Federal Reserve Bank; provided that no such pledge
shall release any Lender from its obligations hereunder or substitute any such
Bank for such Lender as a party hereto. In order to facilitate such an
assignment to a Federal Reserve Bank, the Borrower shall, at the request of the
assigning Lender, duly execute and deliver to the assigning Lender a promissory
note or notes evidencing the Loans made to the Borrower by the assigning Lender
hereunder.
SECTION 8.05. Expenses; Indemnity.
(a) The Borrower agrees to pay all reasonable out-of-pocket expenses
(including reasonable fees, charges and disbursements of one counsel,
unless in the good faith opinion of the Agent or such counsel, it would be
inappropriate under applicable standards of legal professional conduct, due
to an actual or potential conflict of interest, to have only one counsel)
incurred by the Agent in connection with the preparation, execution and
delivery of this Agreement or in connection with any amendments,
modifications or waivers of the provisions hereof (but only if such
amendments, modifications or waivers are requested by the Borrower)
(whether or not the transactions hereby contemplated are consummated), or
incurred by the Agent or any Lender in connection with the enforcement of
their rights in connection with this Agreement (including in respect of
workouts and restructurings) or in connection with the Loans made
hereunder, including the reasonable fees and disbursements of one counsel
(unless in the good faith opinion of the Agent or such counsel, it would be
inappropriate under applicable standards of legal professional conduct, due
to an actual or potential conflict of interest, to have only one counsel)
for the Agent or, in the case of enforcement following an Event of Default,
the Lenders.
46
(b) The Borrower agrees to indemnify each Lender against any loss,
calculated in accordance with the next sentence, or reasonable expense that
such Lender may sustain or incur as a consequence of (i) any failure by the
Borrower to borrow or to refinance, convert or continue any Loan hereunder
(including as a result of the Borrower's failure to fulfill any of the
applicable conditions set forth in Article IV) after irrevocable notice of
such borrowing, refinancing, conversion or continuation has been given
pursuant to Section 2.03, (ii) any payment, prepayment or conversion of a
Eurodollar Loan of the Borrower, or assignment of a Eurodollar Loan of the
Borrower required by any other provision of this Agreement or otherwise
made or deemed made, on a date other than the last day of the Interest
Period, if any, applicable thereto, (iii) any default in payment or
prepayment of the principal amount of any outstanding Loan or any part
thereof or interest accrued thereon, as and when due and payable (at the
due date thereof, whether by scheduled maturity, acceleration, irrevocable
notice of prepayment or otherwise) or (iv) the occurrence of any Event of
Default relating to the Borrower, including, in each such case, any loss or
reasonable expense sustained or incurred or to be sustained or incurred by
such Lender in liquidating or employing deposits from third parties, or
with respect to commitments made or obligations undertaken with third
parties, to effect or maintain any Loan hereunder or any part thereof as a
Eurodollar Loan. Such loss shall include an amount equal to the excess, if
any, as reasonably determined by such Lender, of (x) its cost of obtaining
the funds for the Loan being paid, prepaid, refinanced, converted or not
borrowed (assumed to be the LIBO Rate for the period from the date of such
payment, prepayment, refinancing or failure to borrow or refinance to the
last day of the Interest Period for such Loan (or, in the case of a failure
to borrow or refinance, the Interest Period for such Loan that would have
commenced on the date of such failure) over (y) the amount of interest (as
reasonably determined by such Lender) that would be realized by such Lender
in reemploying the funds so paid, prepaid or not borrowed or refinanced for
such period or Interest Period, as the case may be.
(c) The Borrower agrees to indemnify the Agent, each Lender, each of
their respective Affiliates and the directors, officers, employees and
agents of the foregoing (each such person being called an "Indemnitee")
against, and to hold each Indemnitee harmless from, any and all costs,
losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees of one counsel for all Indemnitees (unless in the
good faith opinion of such Indemnitee, it would be inappropriate under
applicable standards of legal professional conduct, due to an actual or
potential conflict of interest, to have only one counsel) and expenses,
incurred by or asserted against any Indemnitee arising out of the
Borrower's acts or omissions in connection with (i) the preparation,
execution, delivery, enforcement, performance and administration of this
Agreement, (ii) the use of the proceeds of the Loans or (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, including any of the
foregoing arising from the negligence, whether sole or concurrent, on the
part of any Indemnitee. Notwithstanding the foregoing, such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses (i) are determined by a
final, non-appealable judgment of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such
47
Indemnitee, or (ii) result from any litigation brought by such Indemnitee
against the Borrower or by the Borrower against such Indemnitee, in which a
final, non-appealable judgment has been rendered against such Indemnitee;
provided, further, that the Borrower agrees that it will not, nor will it
permit any Subsidiary to, without the prior written consent of each
Indemnitee, settle, compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding in respect of
which indemnification could be sought under the indemnification provisions
of this Section 8.05(c) (whether or not any Indemnitee is an actual or
potential party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent does not include any statement as to an
admission of fault, culpability or failure to act by or on behalf of any
Indemnitee and does not involve any payment of money or other value by any
Indemnitee or any injunctive relief or factual findings or stipulations
binding on any Indemnitee.
(d) The provisions of this Section shall remain operative and in full
force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans outstanding, the invalidity or
unenforceability of any term or provision of this Agreement or any
investigation made by or on behalf of the Agent or any Lender. All amounts
due under this Section shall be payable on written demand therefor.
(e) A certificate of any Lender or the Agent setting forth any amount
or amounts that such Lender or such Agent is entitled to receive pursuant
to paragraph (b) of this Section and containing an explanation in
reasonable detail of the manner in which such amount or amounts shall have
been determined shall be delivered to the Borrower and shall be conclusive
absent manifest error.
SECTION 8.06. Right of Setoff.
If an Event of Default shall have occurred and be continuing, each
Lender is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any of and all the obligations of the Borrower
now or hereafter existing under this Agreement held by such Lender, irrespective
of whether or not such Lender, shall have made any demand under this Agreement
and although such obligations may be unmatured. The rights of each Lender under
this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
SECTION 8.07. Applicable Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.
SECTION 8.08. Waivers; Amendment.
(a) No failure or delay of the Agent or any Lender in exercising any
power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment
or discontinuance of steps to enforce such a right or power, preclude any
48
other or further exercise thereof or the exercise of any other right or
power. The rights and remedies of the Agent and the Lenders hereunder are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to
any departure therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for
which given. No notice or demand on the Borrower or any Subsidiary in any
case shall entitle such party to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders; provided,
however, that no such agreement shall (i) decrease the principal amount of,
or extend the maturity of or any scheduled principal payment date or date
for the payment of any interest on, any Loan or date for the payment of any
Commitment Fee, or waive or excuse any such payment or any part thereof, or
decrease the rate of interest on any Loan, without the prior written
consent of each Lender affected thereby, (ii) increase the Commitment of
any Lender, decrease the Commitment Fee payable to any Lender without the
prior written consent of such Lender, or (iii) amend or modify the
provisions of Section 2.12, 2.13 or Section 8.04(h), the provisions of this
Section or the definition of the "Required Lenders", without the prior
written consent of each Lender; provided further, however, that no such
agreement shall amend, modify or otherwise affect the rights or duties of
the Agent without the prior written consent of the Agent. Each Lender shall
be bound by any waiver, amendment or modification authorized by this
Section, and any consent by any Lender or the Agent pursuant to this
Section shall bind any assignee of its rights and interests hereunder.
SECTION 8.09. Entire Agreement.
This Agreement (including the schedules and exhibits hereto) and the
Letter Agreements represent the entire contract among the parties relative to
the subject matter hereof and thereof. Any previous agreement, whether written
or oral, among the parties with respect to the subject matter hereof, is
superseded by this Agreement and the Letter Agreements. There are no unwritten
oral agreements between the parties. Nothing in this Agreement, expressed or
implied, is intended to confer upon any party other than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
SECTION 8.10. Severability.
In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
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SECTION 8.11. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute but one contract, and shall become effective as provided in Section
8.03.
SECTION 8.12. Headings.
Article and Section headings and the Table of Contents used herein are
for convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 8.13. Interest Rate Limitation.
(a) Notwithstanding anything herein to the contrary, if at any time
the applicable interest rate, together with all fees and charges which are
treated as interest under applicable law (collectively the "Charges"), as
provided for herein or in any other document executed in connection
herewith, or otherwise contracted for, charged, received, taken or reserved
by any Lender, shall exceed the maximum lawful rate (the "Maximum Rate")
which may be contracted for, charged, taken, received or reserved by such
Lender in accordance with applicable law, the rate of interest payable on
the outstanding Loans of such Lender, together with all Charges payable to
such Lender, shall be limited to the Maximum Rate.
(b) If the amount of interest, together with all Charges, payable for
the account of any Lender in respect of any interest computation period is
reduced pursuant to paragraph (a) of this Section and the amount of
interest, together with all Charges, payable for such Lender's account in
respect of any subsequent interest computation period, would be less than
the Maximum Rate, then the amount of interest, together with all Charges,
payable for such Lender's account in respect of such subsequent interest
computation period shall, to the extent permitted by applicable law, be
automatically increased to such Maximum Rate; provided that at no time
shall the aggregate amount by which interest paid for the account of any
Lender has been increased pursuant to this paragraph (b) exceed the
aggregate amount by which interest, together with all Charges, paid for its
account has theretofore been reduced pursuant to paragraph (a) of this
Section.
SECTION 8.14. Jurisdiction; Venue.
(a) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York
State court or Federal court of the United States of America sitting in New
York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York
State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law. Subject to
the foregoing and to paragraph (b) below, nothing in this Agreement shall
affect any right that any party hereto may otherwise have to bring any
action or proceeding relating to this Agreement against any other party
hereto in the courts of any jurisdiction.
50
(b) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it
may now or thereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any New York
State court or Federal court of the United States of America sitting in New
York City. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
SECTION 8.15. Confidentiality.
Each Lender shall use its best efforts to hold in confidence all
information, memoranda, or extracts furnished to such Lender (directly or
through the Agent) by the Borrower hereunder or in connection with the
negotiation hereof; provided that such Lender may disclose any such information,
memoranda or extracts (i) to its Affiliates, accountants or counsel, (ii) to any
regulatory agency having authority to examine such Lender (as the case may be),
(iii) as required by any legal or governmental process or otherwise by law, (iv)
except as provided in the last sentence of Section 5.03, to any person to which
such Lender sells or proposes to sell an assignment or a participation in its
outstanding Loans hereunder, if such other person agrees for the benefit of the
Borrower to comply with the provisions of this Section and (v) to the extent
that such information, memoranda or extracts shall be publicly available or
shall have become known to such Lender independently of any disclosure by the
Borrower hereunder or in connection with the negotiation hereof. Notwithstanding
the foregoing, any Lender may disclose the provisions of this Agreement, the
amounts, maturities and interest rates of its outstanding Loans, and any Fees to
which it is entitled, to any purchaser or potential purchaser of such Lender's
interest in any Loans outstanding. Notwithstanding the foregoing, each party
hereto (and each officer, director, employee, representative, agent and advisor
of each party hereto) may disclose to any and all persons, without limitation of
any kind, the "tax treatment" and "tax structure" (in each case within the
meaning of Treasury Regulation Section 1.6011-4) of the transactions
contemplated by the Loan Documents and all materials of any kind (including
opinions or other tax analyses) that are provided to such person relating to
such "tax treatment" and "tax structure". The foregoing is intended to comply
with the presumption set forth in Treasury Regulation Section
1.6011-4(b)(3)(iii) and should be interpreted in a manner consistent with such
regulation.
[Signature pages follow]
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
TXU GAS COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer and Assistant Secretary
CREDIT SUISSE FIRST BOSTON,
as Agent and as Lender
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Director
Signature Page to TXU Gas Company Credit Agreement
EXHIBIT A
Form of Borrowing Request
BORROWING REQUEST
[Date]
Credit Suisse First Boston,
as Agent for the lenders referred to below,
[Address]
Attention:
Telecopy:
Ladies and Gentlemen:
The undersigned, TXU Gas Company (the "Borrower"), refers to the Credit
Agreement, dated as of April 26, 2004 (as it may hereafter be amended, modified,
extended or restated from time to time, the "Agreement"), among the Borrower,
the lenders party thereto (the "Lenders") and Credit Suisse First Boston, as
Agent. Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Agreement. The Borrower hereby gives
you notice pursuant to Section 2.03 of the Agreement that it requests a
Borrowing under the Agreement, and in that connection sets forth below the terms
on which such Borrowing is requested to be made:
(A) Date of Borrowing (which is a Business Day) ------------------
(B) Principal amount of Borrowing1 -----------------
(C) Interest rate basis2 -----------------
(D) Interest Period and the last day thereof3 -----------------
(E) Borrower Account No. and Location -----------------
------------------------
1 Not less than $25,000,000 (and in integral multiples of $5,000,000)
or greater than the Total Commitment then available.
2 Eurodollar Loan or ABR Loan.
3 Which shall be subject to the definition of "Interest Period" and end
not later than the Maturity Date.
Upon acceptance of any or all of the Loans made by the Lenders in
response to this request, the Borrower shall be deemed to have represented and
warranted that the applicable conditions to lending specified in Article IV of
the Agreement have been satisfied.
Very truly yours,
TXU GAS COMPANY
By -----------------------------------
Name:
Title:
A-2
EXHIBIT B
Form of Assignment and Assumption
ASSIGNMENT AND ASSUMPTION
[Date]
This Assignment and Assumption (the "Assignment and Assumption") is
dated as of the Effective Date set forth below and is entered into by and
between [insert name of Assignor] (the "Assignor") and [insert the name of
Assignee] (the "Assignee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Credit Agreement identified below (as
amended, modified, extended or restated from time to time, the "Credit
Agreement"). The Standard Terms and Condition set forth in Annex 1 attached
hereto are hereby agreed to and incorporated herein by reference and made a part
of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Agent as contemplated below (i) all of the Assignor's rights and obligations
in its capacity as a Lender under the Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to the amount
and percentage interest identified below of all of such outstanding rights and
obligation of the Assignor under the respective facilities identified below and
(ii) to the extent permitted to be assigned under applicable law, all claims,
suits, causes of action and any other right of the Assignor (in its capacity as
a Lender) against any person, whether known or unknown, arising under or in
connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby or in any
way based on or related to any of the foregoing, including, but not limited to,
contract claims, tort claims, malpractice claims, statutory claims and all other
claims at law or in equity related to the rights and obligations sold and
assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as, the "Assigned Interest"). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.
1. Assignor:--------------------------------------
2. Assignee:--------------------------------------
[and is an Affiliate/Approved Fund
of [identify Lender]1]
3. Borrower:-------------------------------------
------------------------------
1 Select as applicable.
4. Agent: -----------------, as the administrative agent
under the Credit Agreement
5. Credit Agreement The $300,000,000 Credit Agreement dated as of
April 26, 2004 among TXU Gas Company, as borrower,
the lenders party thereto, and Credit Suisse First
Boston, as administrative agent for the Lenders.
6. Assigned Interest:
------------------------- ----------------------------- ----------------------------- --------------------------------
Facility Assigned2 Aggregate Amount of Amount of Percentage Assigned of
Commitment/Loans for all Commitment/Loans Commitment/Loans3
Lenders Assigned*
------------------------- ----------------------------- ----------------------------- --------------------------------
$ $ %
------------------------- ----------------------------- ----------------------------- --------------------------------
$ $ %
------------------------- ----------------------------- ----------------------------- --------------------------------
$ $ %
------------------------- ----------------------------- ----------------------------- --------------------------------
$ $ %
------------------------- ----------------------------- ----------------------------- --------------------------------
Effective Date: ______, 20 _____ [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]
-----------------------------------
2. Fill in appropriate terminology for the types of facilities under the Credit
Agreement that are being assigned under this Assignment (e.g. "Revolving
Credit Commitment." "Term Loan Commitment," etc.)
* Amount to be adjusted by the counterparties to take into account any
payments or prepayments made between the Trade Date and the Effective
Date.
3 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
B-2
The terms set forth in this Assignment and Assumption are hereby agreed
to:
ASSIGNOR:
[NAME OF ASSIGNOR]
By:---------------------------------
Title:
ASSIGNEE:
[NAME OF ASSIGNEE]
By:----------------------------------
Title:
Consented to and Accepted:
[NAME OF ADMINISTRATIVE AGENT], as
Administrative Agent
By--------------------------------
Title:
By:-------------------------------
Title:
B-3
ANNEX 1
[ ]4
STANDARD TERM AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants that
(i) it is the legal and beneficial owner of the Assigned interest, (ii) the
Assigned interest is free and clear of any lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other document related
thereto, (ii) the execution, legality, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any collateral thereunder, (iii) the
financial condition of the Borrower, any of its Subsidiaries or Affiliates or
any other person obligated in respect of the Credit Agreement or (iv) the
performance or observance by the Borrower, any of its Subsidiaries or Affiliates
or any other person of any of their respective obligations under the Credit
Agreement.
1.2 Assignee. The Assignee (a) represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, (iv)
it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 5.03 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Agent or any other Lender, and (v) if it is a Non-U.S. Lender, attached
to the Assignment and Assumption is any documentation required to be delivered
by it pursuant to the terms of the Credit Agreement, duly completed and executed
by the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender.
2. Payments. From and after the Effective Date, the Agent
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and other amounts) to the Assignor for amounts
which have accrued to but excluding the Effective Date and to the Assignee for
amounts which have accrued from and after the Effective Date.
---------------------------
4 Describe Credit Agreement at option of Administrative Agent.
2
3. General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of New York.
SCHEDULE 2.01
COMMITMENTS
--------------------------------------------- --------------------------------
NAME OF LENDER COMMITMENT
--------------------------------------------- --------------------------------
Credit Suisse First Boston $300,000,000
--------------------------------------------- --------------------------------
Total $300,000,000
--------------------------------------------- --------------------------------
SCHEDULE 5.14
RESTRICTIVE AGREEMENTS
[None.]