Exhibit 10(c)
[EXECUTION VERSION]
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TXU ENERGY COMPANY LLC
AS BORROWER
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$500,000,000
CREDIT AGREEMENT
Dated as of November 4, 2004
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WACHOVIA BANK, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT AND FRONTING BANK
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TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS; CONSTRUCTION...............................1
SECTION 1.01. Defined Terms.................................1
SECTION 1.02. Terms Generally..............................15
ARTICLE II THE CREDITS...........................................16
SECTION 2.01. Commitments..................................16
SECTION 2.02. Loans........................................16
SECTION 2.03. Borrowing Procedure..........................18
SECTION 2.04. Fees.........................................18
SECTION 2.05. Repayment of Loans; Evidence of
Indebtedness.............................................19
SECTION 2.06. Interest on Loans............................20
SECTION 2.07. Alternate Rate of Interest...................21
SECTION 2.08. Termination and Reduction of Total
COMMITMENT................................................ 21
SECTION 2.09. Optional Prepayment..........................21
SECTION 2.10. Mandatory Prepayment.........................22
SECTION 2.11. Reserve Requirements; Change in
Circumstances............................................22
SECTION 2.12. Change in Legality...........................24
SECTION 2.13. Pro Rata Treatment...........................25
SECTION 2.14. Sharing of Setoffs...........................25
SECTION 2.15. Payments.....................................26
SECTION 2.16. Taxes........................................26
SECTION 2.17. Assignment of Commitments Under Certain
Circumstances.............................................29
SECTION 2.18. Letters of Credit............................29
SECTION 2.19. Reinstatement of Letter of Credit Amounts
with respect to Bond Letters of Credit...................33
ARTICLE III REPRESENTATIONS AND WARRANTIES.......................33
SECTION 3.01. Organization; Powers.........................33
SECTION 3.02. Authorization................................33
SECTION 3.03. Enforceability...............................34
SECTION 3.04. Governmental Approvals.......................34
SECTION 3.05. Financial Statements.........................34
SECTION 3.06. Litigation...................................35
SECTION 3.07. Federal Reserve Regulations..................35
SECTION 3.08. Investment Company Act; Public Utility
Holding Company Act......................................35
SECTION 3.09. No Material Misstatements....................35
SECTION 3.10. Taxes........................................36
SECTION 3.11. Employee Benefit Plans.......................36
SECTION 3.12. Significant Subsidiaries.....................36
SECTION 3.13. Environmental Matters........................36
SECTION 3.14. Solvency.....................................37
ARTICLE IV CONDITIONS............................................37
SECTION 4.01. Initial Extensions of Credit.................37
SECTION 4.02. Conditions for All Extensions of Credit......38
SECTION 4.03. Conditions to Issuance of a Bond Letter
of Credit................................................39
ARTICLE V THE PROVIDER BONDS.....................................40
ARTICLE VI COVENANTS.............................................42
SECTION 6.01. Corporate Existence..........................42
SECTION 6.02. Compliance with Laws; Maintenance of
Properties...............................................42
SECTION 6.03. Financial Statements, Reports, Etc...........42
SECTION 6.04. Annual Officer's Certificate as to
Compliance...............................................43
SECTION 6.05. Consolidation, Merger, Conveyance or
Other Transfer...........................................44
SECTION 6.06. Limitations on Liens.........................45
SECTION 6.07. Limitations on Debt..........................46
SECTION 6.08. Limitations on Asset Sales...................46
SECTION 6.09. Bond Documents...............................46
SECTION 6.10. Use of Proceeds..............................47
ARTICLE VII EVENTS OF DEFAULT....................................47
SECTION 7.01. Events of Default............................47
SECTION 7.02. Letter of Credit Remedies...................49
ARTICLE VIII THE AGENT...........................................50
ARTICLE IX MISCELLANEOUS.........................................52
SECTION 9.01. Notices......................................52
SECTION 9.02. Survival of Agreement........................53
SECTION 9.03. Binding Effect...............................53
SECTION 9.04. Successors and Assigns.......................53
SECTION 9.05. Expenses; Indemnity..........................56
SECTION 9.06. Right of Setoff..............................58
SECTION 9.07. Pari Passu...................................58
SECTION 9.08. Applicable Law...............................58
SECTION 9.09. Waivers; Amendment...........................59
SECTION 9.10. Entire Agreement.............................59
SECTION 9.11. Severability.................................59
SECTION 9.12. Counterparts.................................60
SECTION 9.13. Headings.....................................60
SECTION 9.14. Interest Rate Limitation.....................60
SECTION 9.15. Jurisdiction; Venue..........................60
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SECTION 9.16. Confidentiality...............................61
EXHIBITS AND SCHEDULES
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Borrowing Request
Exhibit C - Form of Prepayment Notice
Exhibit D - Form of Notice of Interest Period
Schedule 2.01 - Commitments
Schedule 2.18(i) - Fronting Bank LC Limits
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CREDIT AGREEMENT (this "AGREEMENT"), dated as of November 4, 2004, among
TXU Energy Company LLC, a Delaware limited liability company (the "BORROWER"),
the lenders listed in Schedule 2.01 (together with their successors and assigns,
the "LENDERS") and Wachovia Bank, National Association as administrative agent
for the Lenders (in such capacity, the "AGENT") and as the fronting bank for
letters of credit issued hereunder (in such capacity, the "FRONTING BANK").
The Borrower has requested that the Lenders and the Fronting Bank provide
the credit facility hereinafter described in the amounts and on the terms and
conditions set forth herein, the Lenders and the Fronting Bank have so agreed on
the terms and conditions set forth herein, and Wachovia Bank, National
Association 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 2.03,
2.08 or 2.12(a)(ii)) to a loan bearing interest at a rate determined by
reference to the Alternate Base Rate.
"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.
"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 Base Rate in effect on such day. For purposes
hereof, "BASE RATE" shall mean the rate of interest per annum publicly
announced from time to time by Wachovia as its base rate in effect at its
principal office in Charlotte, North Carolina; each change in the Base 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
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Business Day, the arithmetic average (rounded upwards to the next 1/100th
of 1%), as determined by Wachovia, of the quotations for the day of such
transactions received by Wachovia from three Federal funds brokers of
recognized standing selected by it. If for any reason Wachovia shall have
determined (which determination shall be conclusive absent manifest error;
provided that Wachovia 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 Wachovia 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 Base Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Base Rate or the
Federal Funds Effective Rate, respectively.
"APPLICABLE MATURITY DATE" shall mean, with respect to any Bridge
Loan, the Bridge Maturity Date and with respect to any other Loan, the
Facility Maturity Date.
"APPLICABLE PERIOD" shall have the meaning set forth in Section
2.04(a).
"ASSET SALE" means any sale of any properties or assets of the
Borrower or any of its Subsidiaries including by way of the sale by the
Borrower or any such Subsidiary of equity interests in any such Subsidiary
or by way of a sale-leaseback or similar transaction; provided, however,
that "Asset Sale" shall not include (i) any sales of accounts receivable,
energy, fuel or other commodities or the right or obligation to purchase,
or other contracts or derivatives associated with, energy, fuel or other
commodities, (ii) any energy and commodity trading, marketing or risk
management activities, (iii) any sale-leaseback or similar transaction that
results in Debt, or (iv) any sale-leaseback or similar transaction
completed within twelve months from the later of the time the property that
is the subject of such transaction is acquired and the time it is placed
into commercial operation by the Borrower or any of its Subsidiaries.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance
entered into by a Lender and an assignee in the form of Exhibit A.
"AVAILABLE COMMITMENT" shall mean, for each Lender, the excess of such
Lender's Commitment over such Lender's Outstanding Credits. "AVAILABLE
COMMITMENTS" shall refer to the aggregate of the Lenders' Available
Commitment hereunder.
"AVAILABLE REVOLVER SUB-COMMITMENT" shall mean, for each Lender, the
lesser of (A) such Lender's Revolver Sub-Commitment or (B) the excess of
such Lender's Commitment over such Lender's Outstanding Credits. "AVAILABLE
REVOLVER SUB-COMMITMENTS" shall refer to the aggregate of the Lenders'
Available Revolver Sub-Commitment hereunder.
"BOARD" shall mean the Board of Governors of the Federal Reserve
System of the United States.
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"BOND COUNSEL" means ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., Dallas, Texas,
or an attorney or firm of attorneys of nationally recognized standing in
the field of law relating to municipal, state and public agency financing,
selected by the Borrower and reasonably acceptable to the Trustee, the
Issuer and the Agent.
"BOND LETTER OF CREDIT" means any Letter of Credit issued under the
terms of this Agreement whereby such Letter of Credit has been issued by
the Fronting Bank to support the payment of the principal of and interest
on, the purchase price of, and, if applicable, the premium of a certain
Series of Bonds.
"BONDS" means any pollution control revenue bonds issued, or to be
issued, by a Governmental Authority (or similar entity) whereby the
proceeds of such bonds are to be or have been loaned, advanced or otherwise
applied or distributed to the Borrower, at the direction of the Borrower,
for the purposes of purchasing or otherwise financing or refinancing any
pollution control facility as identified in the particular Indenture under
which such bonds were or are to be issued.
"BORROWER" has the meaning given such term in the preamble hereto.
"BORROWER INFORMATION" shall have the meaning given such term in
Section 3.05(b) hereof.
"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.
"BORROWING REQUEST" shall mean a request made pursuant to Section 2.03
in the form of Exhibit B.
"BRIDGE AVAILABILITY PERIOD" shall mean the period commencing on the
Closing Date and ending on the earlier to occur of (i) December 3, 2004 or
(ii) the date on which the Bridge Loans have been fully drawn.
"BRIDGE MATURITY DATE" shall mean the earlier of November 3, 2005 and
the date that all amounts due under the Bridge Loans are fully paid in
accordance with Section 2.10.
"BRIDGE LOAN" shall mean any bridge loan made pursuant to Section
2.02(a), whether made as a Eurodollar Loan or as an ABR Loan.
"BUSINESS DAY" shall mean any day (other than a day that is a
Saturday, Sunday or legal holiday in the State of New York or North
Carolina) on which banks are open for business in ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇; 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.
"CAPITALIZED LEASE LIABILITIES" of any person means the amount, if
any, shown as liabilities on such person's unconsolidated balance sheet for
capitalized leases of property not owned by such person, which amount shall
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be determined in accordance with GAAP and practices applicable to the type
of business in which such person is engaged.
"CASH COLLATERAL ACCOUNT" shall have the meaning assigned to such term
in Section 7.02.
"CLOSING DATE" means November 4, 2004.
"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 any Lender, the commitment of
such Lender, as set forth in Schedule 2.01 hereto, to make Bridge Loans
during the Bridge Availability Period, to make Revolving Loans during the
Revolver Availability Period not to exceed the Revolver Sub-Commitment and
to purchase Term Loan participations in the Letters of Credit, 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
9.04.
"COMMITMENT REDUCTION AMOUNT" means, as of any Reduction Date, the
amount by which the Total Commitment is being reduced on such Reduction
Date.
"COMPARABLE TREASURY ISSUE" means the United States Treasury security
having a maturity comparable to the period remaining from the Reduction
Date to the Facility Maturity Date at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity.
"COMPARABLE TREASURY PRICE" means, with respect to any Reduction Date,
(i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on
the third Business Day preceding such Reduction Date, as set forth in the
daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
Business Day, (a) the average of the Reference Treasury Dealer Quotations
for such Reduction Date or (b) if only one Reference Treasury Dealer
Quotation is available, such quotation.
"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.
"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.
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"CORPORATION" shall mean a corporation, association, company, limited
liability company, partnership, joint stock company, business or statutory
trust or other business entity, and references to "corporate" and other
derivations of "corporation" herein shall be deemed to include appropriate
derivations of such entities.
"DEBT," with respect to any person, means:
(a) indebtedness of such person for borrowed money evidenced by a
bond, debenture, note or other similar written instrument or agreement by
which such person is obligated to repay such borrowed money,
(b) Capitalized Lease Liabilities of such person, and
(c) any guaranty by such person of any such indebtedness or
Capitalized Lease Liabilities of another person.
However, "Debt" does not include, among other things,
(x) indebtedness of such person under any installment sale or
conditional sale agreement or any other agreement relating to indebtedness
for the deferred purchase price of property or services,
(y) any trade obligations (including obligations under agreements
relating to the purchase and sale of any commodity, including fuel or power
purchase or sale agreements, tolling agreements, and any commodity,
currency, interest rate, weather or other ▇▇▇▇▇▇ or derivatives regardless
of whether such transaction is a "financial" or physical transaction) or
other obligations of such person in the ordinary course of business, or
(z) obligations of such person under any lease agreement (including
any lease intended as security), other than Capitalized Lease Liabilities.
"DEFAULT" shall mean any event or condition, which upon notice, lapse
of time or both would constitute an Event of Default.
"DOLLARS" or "$" shall mean lawful money of the United States of
America.
"DTC" shall mean The Depository Trust Company.
"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.
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"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 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
Section 7.01.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXCLUDED ITEMS" shall mean (i) any non-cash book losses relating to
the sale or write-down of assets and (ii) any write-down of the regulated
assets related to Qualified Transition Bonds.
"EXTENSION OF CREDIT" shall mean (i) the making of a Loan or (ii) the
issuance of a Letter of Credit or the amendment of any Letter of Credit
having the effect of extending the stated termination date thereof or
increasing the maximum amount available to be drawn thereunder.
"FACILITY MATURITY DATE" shall mean December 15, 2009.
"FEDERAL FUNDS EFFECTIVE RATE" shall have the meaning set forth in the
definition of "Alternate Base Rate".
"FEES" shall mean, collectively, the Termination Fee, the Unused
Commitment Fee and the Letter of Credit Fee and other fees, administrative
costs or expenses set forth in Section 2.04.
"FINANCIAL OFFICER" of any corporation 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.
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"FRONTING BANK" shall mean Wachovia or any Affiliate of Wachovia
acceptable to the Borrower that delivers an instrument in form and
substance satisfactory to the Borrower and the Agent whereby such Affiliate
agrees to act as the "Fronting Bank" hereunder and states the amount of its
LC Fronting Bank Commitment.
"GAAP" shall mean generally accepted accounting principles, applied on
a consistent basis.
"GOVERNMENTAL AUTHORITY" means the government of the United States or
of any state or territory thereof or of the District of Columbia or of any
county, municipality or other political subdivision of any of the
foregoing, or any department, agency, authority or other instrumentality of
any of the foregoing.
"INDENTURE" means, with respect to a Series of Bonds, the indenture or
trust agreement, as amended or supplemented, under which such Series of
Bonds are issued.
"INSTALLMENT PAYMENT AND BOND AMORTIZATION AGREEMENT" means, with
respect to a Series of Bonds, the agreement between the Borrower and the
Issuer, as amended or supplemented, related to the issuance of such Series
of Bonds.
"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 or 90 days'
duration, as the case may be, 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 Applicable Maturity Date, such
period may end on the seventh or fourteenth day thereafter, as the Borrower
may elect (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 Applicable 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.
"ISSUER" means, with respect to a Series of Bonds, the applicable
Governmental Authority (or similar entity) that issues or issued such
Series of Bonds.
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"LC FRONTING BANK COMMITMENT" shall mean $500,000,000.
"LC OUTSTANDINGS" shall mean, on any date of determination, the sum of
(i) the undrawn Stated Amounts of all Letters of Credit that are
outstanding on such date and (ii) the aggregate principal amount of all
unpaid reimbursement obligations of the Borrower on such date with respect
to payments made by the Fronting Bank under Letters of Credit (excluding
reimbursement obligations that have been repaid with the proceeds of any
Term Loan). A Lender's "LC Outstandings" shall mean such Lender's
participation interest in undrawn Letters of Credit and its Percentage of
all unpaid reimbursement obligations in respect of the Letters of Credit.
"LC PAYMENT NOTICE" shall have the meaning assigned to such term in
Section 2.18(e).
"LENDERS" shall have the meaning given such term in the preamble
hereto.
"LETTER OF CREDIT" shall mean a letter of credit that is issued by a
Fronting Bank pursuant to a Request for Issuance, as such letter of credit
may from time to time be amended, modified or extended in accordance with
the terms of this Agreement.
"LETTER OF CREDIT FEE" shall have the meaning set forth in Section
2.04(b).
"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 Wachovia 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 $5,000,000 and for a
maturity comparable to such Interest Period are offered by the principal
London office of Wachovia 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 any lien, mortgage, deed of trust, pledge or
security interest, in each case, intended to secure the repayment of Debt.
"LOAN" shall mean any Bridge Loan, Revolving Loan or Term Loan made
pursuant to Section 2.02 or 2.18(c).
"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.
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"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 Agent, the Lenders or the Fronting
Bank under this Agreement.
"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.
"OFFERING CIRCULAR" means, with respect to a Series of Bonds, the
offering circular, together with the documents incorporated therein by
reference, including any amendments, supplements or reoffering circulars
related thereto, relating to such Series of Bonds.
"OUTSTANDING CREDITS" of any Lender shall mean, on any date of
determination, an amount equal to (i) the aggregate principal amount of all
outstanding Loans made by such Lender plus (ii) such Lender's LC
Outstandings on such date.
"PARENT CREDIT AGREEMENT" shall mean the $2,300,000,000 Credit
Agreement, dated as of November 4, 2004, among TXU Corp. as borrower,
Citicorp North America, Inc., as administrative agent and the lenders party
thereto.
"PAYMENT DATE" shall have the meaning set forth in Section 2.04(a).
"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 BUSINESS" means a business that is the same or similar to
the business of the Borrower or any Subsidiary as of November 4, 2004, or
any business reasonably related thereto.
"PERMITTED LIENS" means
(a) any Liens existing at November 4, 2004;
(b) any vendors' Liens, purchase money Liens and other Liens placed on
property at, or within twelve months following the later of the date of
acquisition of such property and the date such property is placed into
commercial operation by the Borrower or any of its Subsidiaries and Liens
to secure or provide for the acquisition, construction, improvement,
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expansion or development of any property by the Borrower or any such
Subsidiary, provided that no such Lien in this clause (b) shall extend to
or cover any other property of the Borrower or any such Subsidiary;
(c) any Liens on cash or securities (other than equity interests
issued by any Subsidiary) on hand or in banks or other financial
institutions, deposit accounts and interests in general or limited
partnerships (other than equity interests issued by any Subsidiary of the
Borrower);
(d) any Liens on property or equity interests, or arising out of any
Debt, of any person existing at the time the person is merged into or
consolidated with the Borrower or any of its Subsidiaries;
(e) any Liens in connection with the issuance of tax-exempt pollution
control bonds or other similar bonds issued pursuant to Section 103(b) of
the Internal Revenue Code of 1986, as amended (or any successor provision),
and any taxable bonds that the Borrower intends to refinance with such
tax-exempt bonds, to finance all or any part of the purchase price of or
the cost of constructing, equipping or improving property, provided that
such Liens are limited to the property acquired or constructed or improved
and to substantially unimproved real property on which such construction or
improvement is located; provided further, that the Borrower or any of its
Subsidiaries may further secure all or any part of such purchase price or
the cost of construction or improvement by an interest on additional
property of the Borrower or any of its Subsidiaries only to the extent
necessary for the construction, maintenance and operation of, and access
to, such property so acquired or constructed or such improvement;
(f) any Liens on contracts, leases and other agreements of whatsoever
kind and nature; any Liens on contract rights, bills, notes and other
instruments; any Liens on revenues, accounts, accounts receivable and
unbilled revenues, claims, credits, demands and judgments; any Liens on
governmental and other licenses, permits, franchises, consents and
allowances; and any Liens on patents, patent licenses and other patent
rights, patent applications, trade names, trademarks, copyrights, claims,
credits, choses in action and other intangible property and general
intangibles including, but not limited to, computer software;
(g) any Liens, including in connection with sale-leaseback
transactions, on natural gas, coal, lignite, oil or other mineral
properties or nuclear fuel owned or leased by the Borrower or any of its
Subsidiaries;
(h) any Liens on automobiles, buses, trucks and other similar vehicles
and movable equipment; vessels, boats, barges and other marine equipment;
airplanes, helicopters, aircraft engines and other flight equipment; and
parts, accessories and supplies used in connection with any of the
foregoing;
(i) any Liens on furniture and furnishings, and computers, data
processing, data storage, data transmission, telecommunications and other
equipment, facilities and apparatus, which, in any case, are used primarily
for administrative or clerical purposes;
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(j) any Liens on property that is the subject of a lease agreement
(other than any lease agreement for which the Borrower or any of its
Subsidiaries has incurred Capitalized Lease Liabilities) designating the
Borrower or any of its Subsidiaries as lessee and all right, title and
interest of the Borrower or any of its Subsidiaries in and to such property
and in, to and under such lease agreement, whether or not such lease
agreement is intended as security;
(k) any Liens on the rights of TXU Mining Company LP, or its
successors, existing under the Operating Agreement, dated April 28, 1978,
as amended by the Modification of Operating Agreement, dated April 20,
1979, among TXU Mining Company LP and TXU US Holdings Company (formerly TXU
Electric Company, successor to Dallas Power & Light Company, Texas Electric
Service Company and Texas Power & Light Company) and the Borrower, TXU
Energy Retail Company LP and TXU Generation Company LP (pursuant to the
Assumption Agreement, dated December 31, 2001, by and among TXU US Holdings
Company, the Borrower, TXU Energy Retail Company LP and TXU Generation
Company LP), and as it may be amended from time to time; provided that any
amendment thereof shall not increase the scope of any Liens permitted under
this clause (k);
(l) any other Liens securing Debt, provided that the sum of (i) the
aggregate principal amount of the Debt of the Borrower and any of its
Subsidiaries secured by such Liens, plus (ii) the aggregate principal
amount of Debt of any such Subsidiary issued under clause (e) of the
definition of Permitted Subsidiary Debt, does not exceed 10% of the total
assets of the Borrower and its Consolidated Subsidiaries as shown on the
Borrower's most recent quarterly audited or unaudited consolidated balance
sheet; and provided further that in so calculating the total amount of Debt
for purposes of this clause (l), no Debt (whether or not secured) shall be
counted more than once; and
(m) any Liens granted in connection with extending, renewing,
replacing or refinancing, in whole or in part, the Debt secured by Liens
described in the foregoing clauses (a) through (l), to the extent of the
principal amount of the Debt so extended, renewed, replaced or refinanced.
In determining whether any Lien is a Permitted Lien, the Borrower may rely
on one or more of clauses (a) through (m) of this definition of Permitted
Lien with respect to such Lien.
"PERMITTED SUBSIDIARY DEBT" means:
(a) any Debt of any Subsidiary of the Borrower existing at November 4,
2004;
(b) any Debt of any such Subsidiary incurred at the time of, or within
twelve months following the later of the acquisition of property and the
placement of such property into commercial operation by such Subsidiary, or
incurred to provide for the construction, improvement, expansion or
development of property, provided that no such Debt shall be incurred in an
amount greater than the fair value of the property so acquired,
constructed, improved, expanded or developed;
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(c) any Debt of any corporation existing at the time the corporation
was merged into or consolidated with any Subsidiary of the Borrower;
(d) any Debt incurred in connection with borrowings from the Borrower
or any wholly-owned Subsidiary of the Borrower;
(e) any other Debt of a Subsidiary of the Borrower (whether or not
secured), provided that the sum of (i) the aggregate principal amount of
the Debt of the Borrower and any such Subsidiary issued pursuant to clause
(l) of the definition of Permitted Liens, plus (ii) the aggregate principal
amount of Debt of the Borrower's Subsidiaries issued pursuant to this
clause (e), does not exceed 10% of the total assets of the Borrower and its
Consolidated Subsidiaries as shown on the Borrower's most recent quarterly
audited or unaudited consolidated balance sheet; and provided further that
in so calculating the total amount of Debt for purposes of this clause (e),
no Debt (whether or not secured) shall be counted more than once; and
(f) any Debt incurred in connection with extending, renewing,
replacing or refinancing, in whole or in part, the Debt described in the
foregoing clauses (a) through (e), to the extent of the principal amount of
the Debt so extended, renewed, replaced or refinanced.
In determining whether any Debt is Permitted Subsidiary Debt, the Borrower
may rely on one or more of clauses (a) through (f) of this definition of
Permitted Subsidiary Debt with respect to such Debt.
"PERSON" shall mean any individual, corporation, joint venture trust
or unincorporated organization or any Governmental Authority.
"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.
"PREPAYMENT NOTICE" shall mean a notice of prepayment made pursuant to
Section 2.09(a) or 2.10(c), substantially in the form of Exhibit C.
"PRIOR REIMBURSEMENT AGREEMENT" means, with respect to a Series of
Bonds, any reimbursement agreement between the Borrower and a prior letter
of credit provider, whereby the prior letter of credit provider issued a
letter of credit for such Series of Bonds, which letter of credit is to be
terminated and replaced by a Bond Letter of Credit and all obligations
under the reimbursement agreement related to such prior letter of credit
are to be satisfied.
"PROVIDER BONDS" shall have the meaning assigned to such term in
Section 5.01(a) of this Agreement (which bonds may be referred to as "Bank
Bonds" or another defined term in the applicable Indenture).
"QUALIFIED TRANSITION BOND ISSUER" shall mean (i) the Borrower or (ii)
a subsidiary of such Borrower formed and operating solely for the purpose
of (A) purchasing and owning transition property created under a "financing
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order" (as such term is defined in the Texas Utilities Code) issued by the
Commission, (B) issuing such securities pursuant to such order, (C)
pledging its interests in such transition property to secure such
securities and (D) engaging in activities ancillary to those described in
clauses (A), (B) and (C) above.
"QUALIFIED TRANSITION BONDS" shall mean securities, however
denominated, that are (i) issued by a Qualified Transition Bond Issuer,
(ii) secured by or otherwise payable from transition charges authorized
pursuant to the financing order referred to in clause (iii)(A) of the
definition of "Qualified Transition Bond Issuer", and (iii) non-recourse to
the Borrower or any of its Consolidated Subsidiaries (other than the issuer
of such securities).
"REDUCTION DATE" shall have the meaning set forth in Section 2.04(c).
"REFERENCE TREASURY DEALER" means a primary U.S. Government securities
dealer in New York City selected by the Agent and reasonably acceptable to
the Borrower.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Reference Treasury Dealer and any Reduction Date, the average of the bid
and asked prices for the Comparable Treasury Issue (expressed in each case
as a percentage of its principal amount) quoted by three Reference Treasury
Dealers at 5:00 p.m. on the third Business Day preceding such Reduction
Date.
"REGISTER" shall have the meaning given such term in Section 9.04(d).
"RELATED DOCUMENTS" means, with respect to a Series of Bonds supported
or to be supported by a Bond Letter of Credit, the relevant Series of
Bonds, the Indenture or Installment Payment and Bond Amortization Agreement
related thereto, the Offering Circular, the Remarketing Agreement or any
other agreement or instrument relative thereto
"REMARKETING AGENT" means, with respect to a Series of Bonds, any
remarketing agent appointed under the Indenture for such Series of Bonds,
and its successors and assigns.
"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).
"REQUEST FOR ISSUANCE" shall have the meaning given such term in
Section 2.18(a).
"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 Section
7.01 hereof, or (ii) if the Total Commitment has been terminated, Lenders
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with Outstanding Credits in excess of 50% of the aggregate amount of
Outstanding Credits.
"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.
"REVOLVER AVAILABILITY PERIOD" shall mean the period commencing on the
first date after the Bridge Availability Period when there are no Bridge
Loans outstanding and terminating on the Facility Maturity Date.
"REVOLVER SUB-COMMITMENT" shall mean, with respect to any Lender, the
commitment of such Lender, as set forth in Schedule 2.01 hereto, to make
Revolving Loans during the Revolver Availability Period, as such Commitment
may be permanently terminated or reduced from time to time pursuant to
Section 2.09 or modified from time to time pursuant to Section 9.04.
"REVOLVING LOAN" shall mean a revolving loan made pursuant to Section
2.02(a), whether made as a Eurodollar Loan or as an ABR Loan.
"SEC" shall mean the United States Securities and Exchange Commission.
"SERIES" means any series of Bonds.
"SIGNIFICANT SUBSIDIARY" shall mean, with respect to the Borrower 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.
"STATED AMOUNT" shall mean, with respect to a Letter of Credit, the
maximum amount available to be drawn by a beneficiary under such Letter of
Credit.
"STATED EXPIRATION DATE" shall mean the stated expiration date of a
Letter of Credit or shall have the meaning assigned to such term in the
applicable Bond Letter of Credit and shall not be a date later than the
Facility Maturity Date..
"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; provided, however, that any
15
Qualified Transition Bond Issuer that is a subsidiary of the Borrower or
any subsidiary of any such Qualified Transition Bond Issuer shall not be
deemed a Subsidiary of the Borrower.
"TERM LOAN" shall mean a term loan made pursuant to Section 2.18(c).
"TENDER DRAFT" has the meaning assigned to that term in the applicable
Bond Letter of Credit.
"TENDERED BONDS" means, with respect to a Series of Bonds, the Bonds
of such Series tendered or deemed tendered for purchase, the purchase price
of which was paid by a draw under a Bond Letter of Credit.
"TERMINATION FEE" shall have the meaning set forth in Section 2.04(c).
"TOTAL COMMITMENT" shall mean, at any time, the aggregate amount of
Commitments of all the Lenders, as in effect at such time. The amount of
the Total Commitment on the date hereof is $500,000,000.
"TREASURY RATE" means, with respect to any Reduction Date, the rate
per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Reduction Date.
"TRUSTEE" means, with respect to a Series of Bonds, any trustee
appointed under the Indenture for a particular Series of Bonds, its
successors and assigns.
"TXU" shall mean TXU Corp., 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.
"UNUSED COMMITMENT FEE" shall have the meaning set forth in Section
2.04(a).
"WACHOVIA " shall mean Wachovia Bank, National Association.
"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
16
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.
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS.
(a) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender and the
Fronting Bank (as applicable) agrees, severally and not jointly, as
follows: (i) each Lender agrees to make Bridge Loans to the Borrower at any
time and from time to time during the Bridge Availability Period up to the
amount of such Lender's Available Commitment, (ii) each Lender agrees to
make Revolving Loans to the Borrower at any time and from time to time
during the Revolving Availability Period up to the amount of such Lender's
Available Revolver Sub-Commitment, (iii) the Fronting Bank agrees to issue
Letters of Credit for the account of the Borrower at any time and from time
to time until the fifth Business Day preceding the Facility Maturity Date
in an aggregate Stated Amount at any time outstanding not to exceed the LC
Fronting Bank Commitment, and (iv) each Lender agrees to purchase its pro
rata share of Term Loans made by the Fronting Bank as more fully set forth
in Section 2.18. Notwithstanding the foregoing, at no time shall (A) the
Outstanding Credits exceed the aggregate amount of the Lenders'
Commitments, (B) any Lender's Outstanding Credits exceed the amount of such
Lender's Commitment, (C) the Fronting Bank make any Extension of Credit
relating to a Letter of Credit if such Extension of Credit would cause (x)
the aggregate amount of Outstanding Credits to exceed the aggregate amount
of the Lenders' Commitments, or (y) the aggregate LC Outstandings of the
Fronting Bank to exceed the LC Fronting Bank Commitment.
(b) The Borrower may not reborrow Bridge Loans (other than
refinancings under Section 2.02(d)).
(c) Within the foregoing limits, the Borrower may borrow, pay or
prepay Loans and request new Extensions of Credit on and after the date
hereof and prior to the Facility Maturity Date subject to the terms,
conditions and limitations set forth herein.
SECTION 2.02. LOANS.
(a) Each Loan shall be made as part of a Borrowing consisting of (i)
Bridge Loans during the Bridge Availability Period, made by the Lenders
ratably in accordance with their respective Commitments, (ii) Revolving
Loans during the Revolver Availability Period, made by the Lenders ratably
in accordance with their respective Revolver Sub-Commitments, and (iii)
Term Loans made in accordance with Section 2.18(d) upon payment by the
Fronting Bank of any Letter of Credit. 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
17
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); provided,
that Term Loans shall be made in the principal amount of the Letter of
Credit payment constituting the Term Loan in accordance with Section
2.18(c).
(b) Except as provided in Section 2.18(e), 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 subsection (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 Charlotte, North Carolina, 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 2.13. 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 Borrowing
in accordance with this subsection (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, 2.09 or 2.10, 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 subsection (c) above.
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SECTION 2.03. BORROWING PROCEDURE.
In order to request a Borrowing, the Borrower shall hand deliver or
send via facsimile to the Agent a duly completed Borrowing Request (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 9:00 a.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 Applicable 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 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 Applicable 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.
SECTION 2.04. FEES.
(a) The Borrower hereby agrees to pay to the Agent, for the benefit of
the Lenders, an unused commitment fee (the "UNUSED COMMITMENT FEE") equal
to (i) the average daily amount during the Applicable Period of the Total
Commitment minus (ii) the sum of the average daily amount during the
Applicable Period of (x) the aggregate available amount of each Letter of
Credit (with no reduction for interest draws) issued plus (y) the aggregate
principal amount of the Bridge Loans or Revolving Loans outstanding plus
(z) the aggregate principal amount of the Term Loans outstanding,
multiplied by 125 basis points per annum. The Unused Commitment Fee, if
any, shall be payable in arrears on (1) March 31, June 30, September 30 and
December 31 of each year, commencing December 31, 2004, (2) each date of
reduction or termination of the Total Commitment pursuant to Section 2.08
hereof, and (3) the Facility Maturity Date (each such date described in
clauses (1) through (3) above, a "PAYMENT DATE"); provided, however, that
the Borrower's obligation to pay the Unused Commitment Fee shall cease
immediately after its payment made in respect of any Payment Date that is
the date of termination of the Total Commitment. "APPLICABLE PERIOD" shall
mean (A) with respect to the payment due on the first Payment Date, the
period from the Closing Date to and including such Payment Date and (B)
with respect to each other Payment Date, the period from the first day
following the Payment Date immediately prior thereto to and including such
Payment Date.
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(b) The Borrower hereby agrees to pay to the Agent, for the benefit of
the Lenders, a letter of credit fee (the "LETTER OF CREDIT FEE") equal to
the aggregate available amount of each Letter of Credit (with no reduction
for interest draws) issued and outstanding multiplied by 125 basis points
per annum. The Letter of Credit Fee shall be payable in arrears on each
Payment Date and on the date of the cancellation of any Letter of Credit;
provided, however, that Borrower's obligation to pay Letter of Credit Fees
shall cease immediately after its payment in respect of any Payment Date
that is the date of termination of the Total Commitment.
(c) In the event the Total Commitment, other than with respect to the
Bridge Loans, is reduced or terminated on a date prior to the Facility
Maturity Date (each such date a "REDUCTION DATE"), the Borrower agrees to
pay to Wachovia a termination fee (the "TERMINATION FEE") for its own
account, in an amount equal to the present value of all Letter of Credit
Fees (excluding the portion of any Letter of Credit Fees accrued to the
Reduction Date) that would have been payable on the Commitment Reduction
Amount as if the Letters of Credit were issued and outstanding in such
amount through the Facility Maturity Date discounted from each scheduled
payment date to the Reduction Date at the Treasury Rate plus 50 basis
points (assuming semiannual compounding and an actual / 360 day count
convention). The Termination Fee shall be due and payable in immediately
available funds on each Reduction Date.
(d) The Borrower hereby agrees to pay to the Agent, for the account of
the Fronting Bank, a letter of credit transfer fee in the amount of $1,000
per transfer of a Letter of Credit in accordance with the terms thereof,
which fee shall be payable simultaneously with any such transfer.
(e) The Borrower hereby agrees to pay to the Agent, for the account of
the Fronting Bank, a drawing fee in the amount of $100 in connection with,
and at the time of, each drawing under a Letter of Credit.
(f) The amount of Fees under this Section 2.04 allocated or paid by
the Agent to any Lender may be subject to a separate written agreement
between the Agent and such Lender.
SECTION 2.05. REPAYMENT OF LOANS; EVIDENCE OF INDEBTEDNESS.
(a) The outstanding principal balance of each Eurodollar Loan shall be
due and payable on the last day of the Interest Period applicable thereto
and on the Applicable Maturity Date; and the outstanding principal balance
of each ABR Loan shall be due and payable on the Applicable 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 Extension of Credit 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. Upon the request of any
Lender that becomes a party hereto after the date hereof pursuant to a
syndication by any Lender that is a party hereto on the date hereof, the
Borrower shall provide to such Lender a promissory note, payable to the
order of such Lender, evidencing the Commitment and the Revolver Sub-
20
Commitment of such Lender. The date and amount of each Loan made by
such Lender and of each repayment of principal thereof received by such
Lender shall be recorded by such Lender on its records, or, at its option,
on the schedule attached to such promissory note. The failure to record any
such amount on such schedule shall not limit or otherwise affect the
obligations of the Borrower hereunder or under such promissory note to
repay the principal amount of the Loans together with all interest accruing
thereon.
(c) The Agent shall maintain accounts in which it will record (i) the
amount of each Extension of Credit 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
subsections (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 Credits in accordance with their terms.
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 from time to time in effect plus 1.25%.
(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 Base Rate and (ii)
360 days for other periods) at a rate per annum equal to the Alternate Base
Rate 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 the Agent, and such determination 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.
(d) Upon the occurrence and during the continuance of an Event of
Default (i) all Loans shall bear interest at a rate per annum of two
percent (2%) in excess of the interest rate then applicable thereto and
(ii) without duplication of the penalty rate described in clause (i)
immediately above, any overdue interest, fee or other amount owing to the
Agent, the Fronting Bank or any Lender shall bear interest at a rate per
annum that is the rate described in Section 2.06(b) applicable to an ABR
Borrowing plus two percent (2%).
21
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 TOTAL COMMITMENT.
(a) The Total Commitments shall terminate automatically on the
Facility Maturity Date; provided, that the Commitments of the Lenders to
make Bridge Loans shall terminate on the last day of the Bridge
Availability Period.
(b) 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 (in each case subject to
the Borrower's obligation to pay the applicable Fees), 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, (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 Credits 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, and (iii) the Borrower, on the date of such
reduction or termination, shall pay to the Agent any amounts owed under
Section 2.04 of this Agreement. The Agent shall advise the Lenders of any
notice given pursuant to this subsection (b) and of each Lender's portion
of any such termination or reduction of the Total Commitment.
SECTION 2.09. OPTIONAL PREPAYMENT.
(a) 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 a Prepayment
Notice via telecopy (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
22
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.
(b) Each Prepayment Notice 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. All prepayments under this Section 2.09 shall be subject to
Section 9.05 but otherwise without premium or penalty. All prepayments
under this Section 2.09 and Section 2.10 shall be accompanied by accrued
interest on the principal amount being prepaid to the date of payment.
SECTION 2.10. MANDATORY PREPAYMENT.
(a) Prior to or at the closing of any remarketing or reissuance of any
Bonds supported by a letter of credit or other credit enhancement, the
Borrower shall make a mandatory prepayment of the Bridge Loans in the
amount of the lesser of (i) the outstanding Bridge Loans or (ii) the face
value of such Bonds, whether the letter of credit (or other credit
enhancement) is issued pursuant to this Agreement or otherwise.
(b) The Borrower shall make a mandatory prepayment of Loans in the
event the Outstanding Credits of all Lenders at any time exceeds the Total
Commitment in the amount of such excess. Any prepayments made pursuant to
this subsection (b) shall be applied first to the Bridge Loans until paid
in full and then to the Term Loans until paid in full and then to the
Revolving Loans.
(c) Any prepayment under this Section 2.10 shall be pursuant to a
Prepayment Notice and subject to 2.09(b).
SECTION 2.11. 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 force of law) shall change the basis of taxation of payments to
any Lender or the Fronting Bank hereunder (except for changes in respect of
taxes on the overall net income of such Lender or the Fronting Bank (as the
case may be) or its lending office imposed by the jurisdiction in which
such Lender's or the Fronting Bank's (as the case may be) 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 the Fronting Bank (as the case may
be) or shall result in the imposition on any Lender, the Fronting Bank or
the London interbank market of any other condition affecting this
Agreement, such Lender's Commitment or any Extension of Credit (other than
an ABR Loan) made by such Lender or the Fronting Bank, and the result of
any of the foregoing shall be to increase the cost to such Lender or the
Fronting Bank (as the case may be) of making or maintaining any Outstanding
Credit (other than an ABR Loan) or to reduce the amount of any sum received
or receivable by such Lender or the Fronting Bank (as the case may be)
hereunder (whether of principal, interest or otherwise) by an amount deemed
23
by such Lender or the Fronting Bank (as the case may be) to be material,
then the Borrower shall, upon receipt of the notice and certificate
provided for in Section 2.11(c), promptly pay to such Lender or the
Fronting Bank (as the case may be) such additional amount or amounts as
will compensate such Lender or the Fronting Bank (as the case may be) for
such additional costs incurred or reduction suffered.
(b) If any Lender or the Fronting Bank 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 the Fronting Bank (or any lending office of
such Lender or the Fronting Bank) or any Lender's or the Fronting Bank'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 or the Fronting Bank's (as the case may be)
capital or on the capital of such Lender's or the Fronting Bank's (as the
case may be) holding company, if any, as a consequence of this Agreement,
such Lender's Commitment or the Extensions of Credit made by such Lender or
the Fronting Bank (as the case may be) pursuant hereto to a level below
that which such Lender or the Fronting Bank (as the case may be) or such
Lender's or the Fronting Bank's (as the case may be) holding company could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or the Fronting Bank's (as the case may be)
policies and the policies of such Lender's or the Fronting Bank's (as the
case may be) holding company with respect to capital adequacy) by an amount
deemed by such Lender or the Fronting Bank (as the case may be) to be
material, then from time to time such additional amount or amounts as will
compensate such Lender or the Fronting Bank (as the case may be) for any
such reduction suffered will be paid to such Lender or the Fronting Bank
(as the case may be) by the Borrower. It is acknowledged that this
Agreement is being entered into by the Lenders and the Fronting Bank on the
understanding that neither the Lenders nor the Fronting Bank will be
required to maintain capital against their respective Commitments or
agreements to issue Letters of Credit, as the case may be, under currently
applicable laws, regulations and regulatory guidelines. In the event the
Lenders or the Fronting Bank shall otherwise determine that such
understanding is incorrect, it is agreed that the Lenders or the Fronting
Bank, as the case may be, will be entitled to make claims under this
subsection (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 or the Fronting Bank setting forth
such amount or amounts as shall be necessary to compensate such Lender or
the Fronting Bank (as the case may be) or its holding company as specified
in subsection (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 or the Fronting Bank (as the case may be) the amount shown as due on
any such certificate delivered by it within 10 days after its receipt of
24
the same. Each Lender and the Fronting Bank 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 2.11; provided, however, that failure by such
Lender or the Fronting Bank to give such notice shall not constitute a
waiver of such Lender's or the Fronting Bank's (as the case may be) right
to demand compensation hereunder.
(d) Failure on the part of any Lender or the Fronting Bank 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 or the Fronting Bank's (as
the case may be) right to demand compensation with respect to such period
or any other period; provided, however, that no Lender nor the Fronting
Bank shall be entitled to compensation under this Section 2.11 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 subsection (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 2.11
shall be available to each Lender and the Fronting Bank 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 and the Fronting Bank 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 or the Fronting Bank (as the case may be), be
disadvantageous to such Lender or the Fronting Bank (as the case may be).
SECTION 2.12. 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 subsection (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
25
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.
(b) For purposes of this Section 2.12, 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 2.13. PRO RATA TREATMENT.
Except as required under Sections 2.11 and 2.16, each Extension of
Credit, each payment or prepayment of principal of any Borrowing, each
payment of interest on the Loans, each payment of a reimbursement
obligation in respect of a drawn Letter of Credit, each payment of the
Fees, each reduction of the Total Commitment 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
Credits). For purposes of determining the Available Commitments of the
Lenders at any time, the LC Outstandings shall be deemed to have utilized
the Commitments of the Lenders pro rata at such time. Each Lender agrees
that in computing such Lender's portion of any Extension of Credit to be
made hereunder, the Agent may, in its discretion, round each Lender's
percentage of such Extension of Credit to the next higher or lower whole
dollar amount.
SECTION 2.14. 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 or LC Outstandings as a
result of which the unpaid principal portion of its Loans and LC
Outstandings shall be proportionately less than the unpaid principal
portion of the Loans and LC Outstandings 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 or LC Outstandings of such other Lender, so
that the aggregate unpaid principal amount of the Loans and LC Outstandings
and participations in the Loans and LC Outstandings held by each Lender
shall be in the same proportion to the aggregate unpaid principal amount of
all Loans and LC Outstandings then outstanding as the principal amount of
its Loans and LC Outstandings prior to such exercise of banker's lien,
setoff or counterclaim or other event was to the principal amount of all
Loans and LC Outstandings 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 2.14 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
or any LC Outstandings 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
26
fully as if such Lender had made an Extension of Credit in the amount of
such participation.
SECTION 2.15. PAYMENTS.
(a) The Borrower shall make each payment (including principal of or
interest on any Outstanding Credit 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
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, in immediately
available funds. 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, the Fronting Bank or any
Lender.
(b) Whenever any payment (including principal of or interest on any
Outstanding Credit 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 2.16. TAXES.
(a) Any and all payments of principal and interest on any of the
Outstanding Credits or of any Fees or indemnity or expense reimbursements
by the Borrower hereunder ("BORROWER PAYMENTS") shall be made, in
accordance with Section 2.15, 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, the Fronting Bank 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, the Fronting Bank or any Lender (or Transferee), in each case
by the jurisdiction under the laws of which the Agent, the Fronting Bank 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 or the Fronting
Bank, (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
2.16) such Lender (or Transferee) or the Agent or the Fronting Bank (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,
27
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 ("OTHER TAXES").
(c) The Borrower shall indemnify each Lender (or Transferee thereof),
the Agent and the Fronting Bank 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 been determined and the amount of such payment
or liability prepared by a Lender, the Fronting Bank 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 or the Fronting Bank, as the
case may be, makes written demand therefor.
(d) If a Lender (or Transferee) or the Agent or the Fronting Bank
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 2.16, 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 a Lender (or Transferee) or the Agent or the
Fronting Bank 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
2.16, 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 2.16 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 or the
Fronting Bank 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 or the Fronting Bank, agrees to repay the amount
paid over to the Borrower (plus penalties, interest or other charges) to
such Lender (or Transferee) or the Agent or the Fronting Bank in the event
such Lender (or Transferee) or the Agent or the Fronting Bank 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 9.01, 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 2.16 shall
survive the payment in full of the principal of and interest on all
Outstanding Credits hereunder.
28
(g) Each of the Agent, the Fronting Bank 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, 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 subsection
(g), a Non-U.S. Lender shall not be required to deliver any form pursuant
to this subsection (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 subsection (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 an Extension of Credit; 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 the
Fronting Bank 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 the
Fronting Bank 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 subsection (g) above and (i) below.
(i) The Fronting Bank or any Lender (or Transferee) claiming any
indemnity payment or additional amounts payable pursuant to this Section
2.16 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 the Fronting Bank or such Lender (or Transferee) (as the
case may be), be otherwise disadvantageous to the Fronting Bank or such
Lender (or Transferee) (as the case may be).
29
(j) Nothing contained in this Section 2.16 shall require any Lender
(or Transferee) or the Agent or the Fronting Bank to make available to the
Borrower any of its tax returns (or any other information) that it deems to
be confidential or proprietary.
SECTION 2.17. ASSIGNMENT OF COMMITMENTS UNDER CERTAIN CIRCUMSTANCES.
In the event that any Lender shall have delivered a notice or
certificate pursuant to Section 2.11 or 2.12, or the Borrower shall be
required to make additional payments to any Lender under Section 2.16, 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 9.04) all such Lender's interests, rights and obligations contained
hereunder to another financial 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 9.04.
SECTION 2.18. LETTERS OF CREDIT.
(a) Subject to the terms and conditions hereof, each Letter of Credit
shall be issued (or the Stated Expiration Date thereof extended or terms
thereof modified or amended) on not less than three Business Days' prior
notice thereof (or longer, in the case of a Bond Letter of Credit, as
required under the terms of the applicable Indenture relating to such
Series of Bonds) by the delivery by the Borrower of a request for issuance
to the Agent (which shall promptly distribute copies thereof to the
Lenders) and the Fronting Bank. Each request for issuance (a "REQUEST FOR
ISSUANCE") shall specify (i) if such Letter of Credit is to be a Bond
Letter of Credit, the Series of Bonds which such Letter of Credit shall
support, the payment of the principal of and interest on, the purchase
price of, and, if applicable, the premium thereon, (ii) the date (which
shall be a Business Day) of issuance of such Letter of Credit (or the date
of effectiveness of such extension, modification or amendment) and the
Stated Expiration Date thereof (which shall be no later than the fifth
Business Day preceding the Facility Maturity Date), (iii) the proposed
Stated Amount (denominated in dollars) of such Letter of Credit (which
shall not be less than $1,000,000, unless otherwise agreed to by the
Fronting Bank), (iv) the name and address of the beneficiary of such Letter
of Credit and (v) a statement of drawing conditions applicable to such
Letter of Credit, and if such Request for Issuance relates to an amendment
or modification of a Letter of Credit, it shall be accompanied by the
consent of the beneficiary of such Letter of Credit. In addition, if such
Letter of Credit is to be a Bond Letter of Credit, the Borrower shall
comply with the terms of the applicable Indenture under which the Series of
Bonds was or is to be issued and provide those items listed in Section 4.03
of this Agreement. Each Request for Issuance shall be irrevocable unless
modified or rescinded by the Borrower that delivered such Request for
Issuance not less than two days prior to the proposed date of issuance (or
effectiveness) specified therein. Not later than 12:00 noon (New York City
time) on the proposed date of issuance (or effectiveness) specified in such
Request for Issuance, and upon fulfillment of the applicable conditions
precedent and the other requirements set forth herein, the Fronting Bank
shall issue (or extend, amend or modify) such Letter of Credit and provide
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notice and a copy thereof to the Agent, which shall promptly furnish copies
thereof to the Lenders. Each Lender shall, upon the issuance of any Letter
of Credit, acquire a participation interest in such Letter of Credit,
automatically and without any action on its part or the part of the
Fronting Bank, whereby such Lender shall become obligated to perform such
obligations in respect of such Letter of Credit as are expressly set forth
herein. The Fronting Bank shall not at any time be obligated to issue any
Letter of Credit if such issuance would conflict with any applicable
requirement of law.
(b) No Letter of Credit shall be issued hereunder if, after the
issuance thereof, the aggregate Stated Amounts of all outstanding Letters
of Credit, plus the principal amount of all Term Loans outstanding plus the
principal amount of all outstanding Bridge Loans or Revolving Loans would
exceed the Commitment.
(c) If the Fronting Bank shall make any payment under the Letter of
Credit the amount of such payment shall be deemed to constitute a Term Loan
made by the Lenders, ratably in accordance with their respective
Commitments, to the Borrower on the date of such payment in the amount of
such payment.
(d) On and after each date on which the Fronting Bank shall make a
Term Loan as a result of the payment of any amount under any Letter of
Credit issued by the Fronting Bank for the account of the Borrower, such
Term Loan shall initially be an ABR Loan (which the Borrower may, at its
option, convert to a Eurodollar Loan); provided, however, if the Borrower
pays or cause to be paid to the Agent, for the account of the Lenders (or
the Fronting Bank if the Lenders have not reimbursed the Fronting Bank
pursuant to subsection (e) below), such Term Loan no later than 3:00 p.m.
(New York City time) on the date of such payment no interest shall bear or
be due and payable on such Term Loan.
(e) If the Fronting Bank shall not have been reimbursed in full by a
Borrower for any payment made by the Fronting Bank under a Letter of Credit
issued by the Fronting Bank for the account of the Borrower on the date of
such payment, the Fronting Bank shall give the Agent and each Lender prompt
notice thereof (an "LC PAYMENT NOTICE") no later than 12:00 noon (New York
City time) on the Business Day immediately succeeding the date of such
payment by the Fronting Bank. Notwithstanding any provision of this
Agreement to the contrary, each Lender having a Commitment for the
applicable Letter of Credit severally agrees to fund its participation in
the reimbursement obligation of the Borrower to the Fronting Bank by paying
to the Agent for the account of the Fronting Bank an amount equal to such
Lender's Percentage of such unreimbursed amount paid by the Fronting Bank,
plus interest on such amount at a rate per annum equal to the Federal Funds
Effective Rate from the date of the payment by the Fronting Bank to the
date of payment to the Fronting Bank by such Lender. Each such payment by a
Lender shall be made not later than 3:00 p.m. (New York City time) on the
later to occur of (i) the Business Day immediately following the date of
such payment by the Fronting Bank and (ii) the Business Day on which the
Lender shall have received an LC Payment Notice from the Fronting Bank.
Each Lender's obligation to make each such payment to the Agent for the
account of the Fronting Bank shall be several and shall not be affected by
the occurrence or continuance of a Default or Event of Default or the
31
failure of any other Lender to make any payment under this subsection. Each
Lender further agrees that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever.
(f) The failure of any Lender to make any payment to the Agent for the
account of the Fronting Bank in accordance with subsection (e) above shall
not relieve any other Lender of its own obligation to make any similar
payment to the Agent, but no Lender shall be responsible for the failure of
any other Lender to make any such payment. If any Lender (a "NON-PERFORMING
Lender") shall fail to make any payment to the Agent for the account of the
Fronting Bank in accordance with subsection (e) above within five Business
Days after delivery by the Fronting Bank of the LC Payment Notice relating
thereto, then, for so long as such failure shall continue, (i) the Fronting
Bank shall be deemed to be a Lender hereunder owed a Loan, and for purposes
of voting rights hereunder, having a Commitment for the applicable Letter
of Credit, in an amount equal to the outstanding amount due and payable by
such non-performing Lender to the Agent for the account of the Fronting
Bank pursuant to subsection (e) above and (ii) for purposes of voting
rights hereunder, the Commitment of such non-performing Lender shall be
reduced in an amount equal to such outstanding amount due and payable by
such non-performing Lender. Any non-performing Lender and the Borrower
(without waiving any claim against such Lender for such Lender's failure to
fund a participation in the reimbursement obligations of the Borrower under
subsection (e) above) severally agree to pay to the Agent for the account
of the Fronting Bank such amount, together with interest thereon for each
day from the date such Lender would have funded its participation had it
complied with the requirements of subsection (e) above until the date such
amount is paid to the Agent at (A) in the case of the Borrower, the
interest rate applicable at the time to Base Rate Loans (or the interest
rate that would be applicable if Base Rate Loans were outstanding) and (B)
in the case of such Lender, the Federal Funds Effective Rate.
(g) The payment obligations of each Lender under subsection (d) and of
the Borrower under this Agreement in respect of any payment under any
Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any other agreement or instrument relating hereto or to such Letter of
Credit;
(ii) any amendment or waiver of, or any consent to departure from,
the terms of this Agreement or such Letter of Credit;
(iii)the existence of any claim, set-off, defense or other right
that the Borrower for the account of which such Letter of Credit was
issued may have at any time against any beneficiary, or any transferee,
of such Letter of Credit (or any persons for whom any such beneficiary
or any such transferee may be acting), the Fronting Bank, or any other
person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit, or any unrelated
transaction;
(iv) any statement or any other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
32
(v) payment in good faith by the Fronting Bank under such Letter
of Credit issued by the Fronting Bank against presentation of a draft
or certificate which does not comply with the terms of such Letter of
Credit; or
(vi) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing.
(h) The Borrower assumes all risks of the acts and omissions of any
beneficiary or transferee of any Letter of Credit issued for the account of
the Borrower. Neither the Fronting Bank, any Lender nor any of their
respective officers, directors, employees, agents or Affiliates shall be
liable or responsible for (i) the use that may be made of such Letter of
Credit or any acts or omissions of any beneficiary or transferee thereof in
connection therewith; (ii) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents should
prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (iii) payment by the Fronting Bank against presentation of
documents that do not comply with the terms of such Letter of Credit,
including failure of any documents to bear any reference or adequate
reference to such Letter of Credit; or (iv) any other circumstances
whatsoever in making or failing to make payment under such Letter of
Credit, except that the Borrower for the account of which such Letter of
Credit was issued and each Lender shall have the right to bring suit
against the Fronting Bank, and the Fronting Bank shall be liable to the
Borrower and any Lender, to the extent of any direct, as opposed to
consequential, damages suffered by the Borrower or such Lender which the
Borrower or such Lender proves were caused by the Fronting Bank's willful
misconduct or gross negligence, including, in the case of the Borrower, the
Fronting Bank's willful failure to make timely payment under such Letter of
Credit following the presentation to it by the beneficiary thereof of a
draft and accompanying certificate(s) which strictly comply with the terms
and conditions of such Letter of Credit. In furtherance and not in
limitation of the foregoing, the Fronting Bank may accept sight drafts and
accompanying certificates presented under any Letter of Credit issued by
the Fronting Bank that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and payment against such documents shall not
constitute willful misconduct or gross negligence by the Fronting Bank.
Without limiting the foregoing, no Lender shall be obligated to indemnify
the Borrower for damages caused by the Fronting Bank's willful misconduct
or gross negligence.
(i) The Bond Letter of Credit shall provide that upon receipt of
written notice of an Event of Default under this Agreement from the Agent
or Fronting Bank such Bond Letter of Credit shall be promptly drawn upon by
the Trustee under the Indenture relating to the Bonds being supported by
such Bond Letter of Credit and if such Bond Letter of Credit is not drawn,
such Bond Letter of Credit may be cancelled by the Fronting Bank in
accordance with its terms subsequent to the Trustee's receipt of written
notice from the Agent or Fronting Bank of an Event of Default under this
Agreement that directs the Trustee to accelerate the maturity of all of the
relevant Bonds.
(j) The Letters of Credit shall be governed by, and construed in
accordance with, International Standby Practices (1998) International
Chamber of Commerce Publication No. 590 ("ISP98"). As to matters not
covered by the ISP98, the Letters of Credit shall be governed by the
33
laws of the state of New York, including, to the extent not inconsistent
with the ISP98, the Uniform Commercial Code as in effect in the state of
New York.
SECTION 2.19. REINSTATEMENT OF LETTER OF CREDIT AMOUNTS WITH RESPECT
TO BOND LETTERS OF CREDIT.
Prior to or simultaneously with the resale of any Series of Bonds
which were acquired by the Trustee with the proceeds of one or more draws
under a Bond Letter of Credit by one or more Tender Drafts, the Borrower
shall, or shall cause the Remarketing Agent or Trustee for such Series of
Bonds on behalf of the Borrower to, prepay the then outstanding Term Loans
(in the order in which they were made) by paying to the Agent for the
account of the Lenders (or, if the Fronting Bank has not been reimbursed
pursuant to Section 2.18(e), for the account of the Fronting Bank) an
amount equal to the sum of (i) the aggregate principal amount of the Bonds
of such Series being resold or to be resold plus (ii) the aggregate amount
of accrued and unpaid interest on such Bonds which was paid by a drawing or
drawings under such Tender Draft or Drafts plus (iii) in the case of
prepayments of Eurodollar Loans, any amount payable to the Lenders in
respect thereof pursuant to Section 9.05(b) plus (iv) amounts, if any, due
and owing under Section 2.04(c), resulting from the termination or
reduction of the Commitment. Such payments shall be applied in
reimbursement of such drawings and as prepayment of Term Loans resulting
from such drawings in the manner described above, as applicable. The
Borrower irrevocably authorizes the Fronting Bank, upon receipt of such
payments, to reinstate such Bond Letter of Credit to the extent thereof and
in connection therewith to provide notice thereof to the Remarketing Agent
and the Trustee for such Series of Bonds.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each Lender and the Fronting
Bank as follows:
SECTION 3.01. ORGANIZATION; POWERS.
The Borrower is a limited liability company, duly formed, validly
existing and in good standing under the laws of the State of Delaware, (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 limited liability
company power and authority to execute, deliver and perform its obligations
under this Agreement and to request and receive Extensions of Credit
hereunder.
SECTION 3.02. AUTHORIZATION.
The execution, delivery and performance by the Borrower of this
Agreement and the Extensions of Credit hereunder (i) have been duly
authorized by all requisite limited liability company action of the
Borrower and (ii) will not (A) violate (x) any provision of any law,
statute, rule or regulation (including, without limitation, the Margin
Regulations) to which the Borrower is subject or of the certificate of
incorporation or other constitutive documents (including the limited
liability company agreement) 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
34
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, 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, cash flows and membership interests for
the fiscal year then ended, reported on by Deloitte & Touche LLP and set
forth in the Borrower's Annual Report on Form 10-K for such fiscal year,
and the unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of June 30, 2004 and the related consolidated
statements of income and cash flows for the fiscal quarter then ended, set
forth in the Borrower's Quarterly Report on Form 10-Q for such fiscal
quarter, copies of each of which have been made available to each of the
Lenders and the Fronting Bank, present fairly (subject, in the case of such
balance sheet and statements of income and cash flows set forth in such
Quarterly Report on Form 10-Q, to year-end adjustments), in all material
respects, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such dates and their consolidated results
of operations and cash flows for the periods ending on such dates in
conformity with GAAP.
(b) Except (i) as set forth in the financial statements or other
reports of the type referred to in Section 6.03 hereof that have been made
available to the Lenders and the Fronting Bank on or prior to the date
hereof (collectively, the "Borrower Information") and (ii) with respect to
the Excluded Items, since June 30, 2004, there has been no Material Adverse
Change, other than as a result of (A) any non-cash book losses or charges,
(B) any cash charges, in an amount of up to $500,000,000 (calculated on an
aggregate basis throughout the term of this Agreement), as a result of (1)
rulings by federal or state regulatory bodies having jurisdiction over the
Borrower or its Consolidated Subsidiaries, (2) the early retirement,
repurchase or termination of debt or other securities or financing
arrangements, including premiums, relating to liability management
activities and (3) initiatives implemented pursuant to TXU's 4+4
35
performance improvement program, including, but not limited to, severance
costs, plant or mine closings, asset dispositions, restructuring charges
and transaction costs and (C) any losses incurred in connection with the
repurchase by TXU of the $750,000,000 aggregate liquidation preference
amount of exchangeable preferred membership interests in the Borrower and
any subsequent purchase or purchases of such interests in the Borrower by
any affiliate of TXU
SECTION 3.06. LITIGATION.
Except as set forth in the Borrower Information, since June 30, 2004,
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 Extension of Credit 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 6.05 and 6.06 is represented by
Margin Stock.
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 and delivery by the
Borrower of this Agreement and the performance of 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, the Fronting Bank 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.
36
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 its jurisdiction of incorporation, organization 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 the Borrower Information, 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 the Borrower Information,
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 the Borrower Information, the facilities of
37
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 the
Borrower Information, 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 and the Fronting Bank to make
Extensions of Credit hereunder are subject to the satisfaction of the
following conditions:
SECTION 4.01. INITIAL EXTENSIONS OF CREDIT.
The Commitment of each Lender to make its initial Loan and of the
Fronting Bank to issue its initial Letter of Credit on or after the date
hereof is subject to the conditions that on or prior to the date of such
Extension of Credit:
(a) The Agent shall have received favorable written legal opinions of
(i) (A) ▇▇▇▇▇ ▇. ▇▇▇▇▇, Senior Vice President and Associate General Counsel
of TXU Business Services Company, and (B) ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, counsel
to the Borrower, and (ii) King & Spalding LLP, special New York counsel to
the Agent and Fronting Bank in each case dated the date hereof, addressed
to the Agent, the Fronting Bank 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
formation, including all amendments thereto, of the Borrower, certified as
of a recent date by the Secretary of State of the State of Delaware, 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 limited liability company agreement 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
Managers (or any duly authorized committee thereof) of the Borrower
authorizing the execution and delivery by the Borrower of this Agreement,
the Extensions of Credit 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 formation referred to in clause (i)
38
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, (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 such other approvals, opinions,
certificates, instruments and documents as the Agent, the Fronting Bank or
any of the Lenders may have reasonably requested, in form satisfactory to
the Agent and the requesting Fronting Bank or Lender (if applicable).
(d) The Lenders, the Fronting Bank, and the Agent 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
Extension of Credit pursuant to the terms of this Agreement.
(e) The Agent shall have received all 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 (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)).
SECTION 4.02. CONDITIONS FOR ALL EXTENSIONS OF CREDIT.
The Commitment of each Lender to make each Loan and of the Fronting
Bank to make each Extension of Credit relating to a Letter of Credit
hereunder shall be subject to the satisfaction of the following conditions
precedent on the date of such Extension of Credit:
(a) The Agent and the Fronting Bank, if applicable, shall have
received from the Borrower a notice requesting such Extension of Credit as
required by Section 2.03 or Section 2.17, as applicable.
(b) The representations and warranties of the Borrower set forth in
Article III hereof (except, in the case of any Extension of Credit that
does not increase the aggregate principal amount of the Outstanding Credits
to the Borrower, the representations set forth in Sections 3.05(b), 3.06,
3.11 and 3.13 and except, in the case of any Extension of Credit that is to
be used to repay commercial paper, the representation set forth in Section
3.05(b)) shall be true and correct in all material respects on and as of
39
the date of such Extension of Credit 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 Extension of Credit, no
Default or Event of Default shall have occurred and be continuing at the
time of such Extension of Credit or would result from the making of such
Extension of Credit.
(d) The Agent shall have received a certificate of a Responsible
Officer of the Borrower certifying that the matters set forth in
subsections (b) and (c) of this Section 4.02 are true and correct as of
such date.
(e) With respect to the making of any Bridge Loan, (i) TXU shall have
obtained funding of not less than $2,300,000,000 in the aggregate on or
after November 4, 2004 by entering into the Parent Credit Agreement and/or
one or more other financing arrangements on terms and conditions
satisfactory to the Agent, it being understood and agreed that a sale of
senior notes by TXU shall be deemed to be a financing arrangement on terms
and conditions satisfactory to the Agent, and (ii) the Agent shall have
received a certificate of a Responsible Officer certifying as to the
availability of, and absence of any event of default under, the Parent
Credit Agreement and/or any other financing arrangement or arrangements
referred to in clause (i) above.
(f) With respect to the making of any Revolving Loan, the Revolver
Availability Period shall have commenced.
Each Extension of Credit shall be deemed to constitute a
representation and warranty by the Borrower for which such Extension of
Credit was made on the date of such Extension of Credit as to the matters
specified in subsections (b) and (c) of this Section 4.02.
SECTION 4.03. CONDITIONS TO ISSUANCE OF A BOND LETTER OF CREDIT.
In addition to the satisfaction of the conditions precedent set forth
in Section 4.02 above, the Commitment of the Fronting Bank to make each
Extension of Credit relating to a Bond Letter of Credit hereunder shall be
subject to the receipt by the Agent and the Fronting Bank of the following
(each in form and substance reasonably satisfactory to the Agent and
Fronting Bank):
(a) Copies of the Related Documents with respect to the Series of
Bonds for which the Bond Letter of Credit is issued, duly executed by the
parties thereto or duplicate copies certified as of the issuance date of
the Bond Letter of Credit by the Borrower to be true and complete copies
thereof.
(b) If applicable, evidence satisfactory to the Agent that the Prior
Reimbursement Agreement has been or will be terminated and all amounts
owing thereunder have been or will be paid in full.
(c) A true and correct copy of the Offering Circular to be used in
connection with the offering or reoffering of such Series of Bonds.
40
(d) An opinion of Bond Counsel, as required under the terms of the
applicable Indenture.
(e) A Certificate of a Responsible Officer of the Borrower to the
effect that:
(i) the representations and warranties contained in Article III of
this Agreement and in each other Related Document to which the
Borrower is a party are true and correct on and as of the closing date
or the issuance date of such Bond Letter of Credit, as though made on
and as of such date;
(ii) no Default or Event of Default has occurred and is
continuing, or would result from the entering into of this Agreement
or the issuance of such Bond Letter of Credit hereunder; and
(iii)the information provided by the Borrower set forth in the
Offering Circular, including any supplements or amendments thereof and
the appendices thereto to be used in connection with the offering or
reoffering of such Series of Bonds, is accurate in all material
respects (subject to customary and usual qualifications and
exclusions, including qualifications and exclusions contained in
letters of representation provided by the Borrower to underwriters in
connection with such Offering Circular).
(f) Such other customary and usual approvals, opinions or other
documents as the Required Lenders (through the Agent) may reasonably
request that are commonly required in connection with the closing of such
Series of Bonds and such Bond Letter of Credit.
ARTICLE V
THE PROVIDER BONDS
(a) In the event that the applicable Indenture provides that Bonds
purchased with proceeds of a Tender Draft or Drafts on a Bond Letter of
Credit become "Bank Bonds" (or other designation reflecting ownership
rights or security in such Bonds) and are registered to or held for the
benefit of the Fronting Bank or the Agent, as appropriate, whether by
direct registration upon purchase of the Bonds, by assignment by the
Trustee or otherwise, such Indenture provisions shall establish the rights
and security of the Fronting Bank, Agent or the Lenders, as applicable,
with respect to such Bonds. In the event that the applicable Indenture does
not so provide for the ownership or security of the Fronting Bank or Agent,
as applicable, with respect to Bonds purchased with proceeds of a Tender
Draft or Drafts on a Bond Letter of Credit and the Borrower purchases Bonds
(i) with proceeds from a Tender Draft or Drafts on a Bond Letter of Credit,
and (ii) such Bonds were not remarketed on the date such Bonds were
purchased, and (iii) the Fronting Bank was not reimbursed under Section
2.18(e) of this Agreement ("PROVIDER BONDS") for the proceeds drawn under
the Bond Letter of Credit, then such Bonds shall be deemed Provider Bonds,
and the Borrower hereby pledges, assigns, hypothecates, transfers and
grants to the Agent, subject to the provisions of the applicable Indenture
and this Section 5.01(a), for the benefit of the Lenders, a first lien on,
and security interest in, its right, title and interest in and to each of
the Provider Bonds, the interest thereon and all proceeds thereof, as
collateral security for the prompt and complete payment when due from time
to time by the Borrower (by acceleration, at stated maturity or otherwise)
of all obligations to the Agent, the Fronting Bank and the Lenders
hereunder. The Borrower hereby authorizes and directs the Trustee for such
41
Provider Bonds to either register such Provider Bonds in the name of the
Agent or to hold such Provider Bonds in accordance with the applicable
sections of the Indenture as pledgee. The Provider Bonds shall, upon
payment of the related Term Loan in accordance with this Agreement, be
released and delivered to the Trustee as provided in the Indenture and the
Agent shall take all actions necessary to effectuate such release and
delivery. The Borrower shall deliver, or cause to be delivered, the
Provider Bonds to the Trustee or to another pledge agent designated by the
Agent immediately upon receipt thereof or, in the case of Provider Bonds
held under a book-entry system administered by DTC (or any other clearing
corporation), the Borrower shall cause the Provider Bonds to be reflected
on the records of DTC (or such other clearing corporation) as a position
held by the Agent (or a pledge agent acceptable to the Agent) as a DTC
participant (or a participant in such other clearing corporation) and the
Agent (or its pledge agent) shall reflect on its records that the Provider
Bonds are owned beneficially by the Borrower subject to the pledge in favor
of the Agent. Any payments in respect of Bank Bonds or Provider Bonds made
by the Issuer to the Trustee shall be paid over to the Agent for the
benefit of the Lenders and shall be applied to the payment of amounts due
in respect of Term Loans.
(b) The Agent shall not be liable for failure to realize upon the
Provider Bonds or any collateral security or guarantee therefor, or any
part thereof, or for any delay in so doing, nor shall it be under any
obligation to take any action whatsoever with regard thereto. If an "EVENT
OF DEFAULT" has occurred and is continuing under the Indenture under which
the Provider Bonds were issued, the Agent may (or shall at the request of
the Required Lenders) thereafter without notice, exercise all rights,
privileges or options pertaining to any Provider Bonds as if it were the
absolute owner thereof, upon such terms and conditions as it may determine,
all without liability except to account to the Borrower for property
actually received by it.
(c) Except as contemplated herein, without the prior written consent
of the Agent, the Borrower agrees that it will not sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the
Provider Bonds (other than a sale thereof by the Remarketing Agent in
accordance with the terms of the applicable Indenture), nor will it create,
incur or permit to exist any pledge, lien, mortgage, hypothecation,
security interest, charge, option or any other encumbrance with respect to
any of the Provider Bonds, or any interest therein, or any proceeds
thereof, except for the lien and security interest provided for by this
Agreement and the Indenture under which the Provider Bonds were issued. The
Borrower further agrees to do or cause to be done all such other reasonable
acts and things as may be necessary to make any disposition or sale of any
portion or all of the Provider Bonds by the Agent permitted by this
Agreement valid and binding and in compliance with applicable law, all at
the Borrower's expense.
(d) Provider Bonds, or such portion thereof, shall be released from
the pledge and security interest created under this Agreement to the extent
of, and upon satisfaction of the Borrower's reimbursement obligations
under, this Agreement with respect to such Provider Bonds.
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ARTICLE VI
COVENANTS
The Borrower agrees that, so long as any Lender has any Commitment
hereunder, the Fronting Bank has any obligation to issue Letters of Credit
hereunder, any Letter of Credit remains available to be drawn or any amount
payable hereunder remains unpaid:
SECTION 6.01. CORPORATE EXISTENCE.
Subject to the rights of the Borrower under Section 6.05, the Borrower
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.
SECTION 6.02. COMPLIANCE WITH LAWS; MAINTENANCE OF PROPERTIES.
The Borrower shall, and shall 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 by appropriate proceedings in good faith; and
the Borrower shall cause (or, with respect to property owned in common with
others, make reasonable effort to cause) all its properties used or useful
in the conduct of its business to be maintained and kept in good condition,
repair and working order and shall cause (or, with respect to property
owned in common with others, make reasonable effort to cause) to be made
all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as, in the judgment of the Borrower, may be necessary so that
the business carried on in connection therewith may be properly conducted;
provided, however, that nothing in this Section 6.02 shall prevent the
Borrower from discontinuing, or causing the discontinuance of, the
operation and maintenance of any of its properties if such discontinuance
is, in the judgment of the Borrower, desirable in the conduct of its
business.
SECTION 6.03. FINANCIAL STATEMENTS, REPORTS, ETC.
The Borrower will furnish to the Agent, for each Lender and the
Fronting Bank:
(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
43
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 the delivery of each set of financial
statements referred to in subsection (a) above, a statement of the firm of
independent public accountants that reported on such statements 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;
(d) 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;
(e) promptly upon the filing thereof, copies of each final prospectus
(other than a prospectus included in any registration statement on Form S-8
or 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;
(f) 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
(g) 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 or the Fronting Bank, may
reasonably request.
As promptly as practicable after delivering each set of financial
statements as required in sub-subsection (a) of this Section 6.03, the
Borrower shall make available a copy of the consolidating workpapers used
by the Borrower in preparing such consolidated statements to the Fronting
Bank and each Lender that shall have requested such consolidating
workpapers. Each Lender and the Fronting Bank that receives such
consolidating workpapers shall hold them in confidence as required by
Section 9.16; provided that neither any Lender nor the Fronting Bank may
disclose such consolidating workpapers to any other person pursuant to
clause (iv) of Section 9.16.
SECTION 6.04. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
Not later than June 1 in each year, commencing June 1, 2005, the
Borrower shall deliver to the Agent, with sufficient copies for the Lenders
and the Fronting Bank, a certificate, executed by a Responsible Officer, as
to such officer's knowledge of the Borrower's compliance with all
conditions and
44
covenants under this Agreement, such compliance to be determined
without regard to any period of grace or requirement of notice under this
Agreement.
SECTION 6.05. CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER.
The Borrower shall not consolidate with or merge into any other
corporation, in each case in a transaction in which it is not the successor
corporation or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any person, unless:
(a) the corporation formed by such consolidation or into which the
Borrower is merged, or the corporation that acquires by conveyance or
transfer, or that leases, the properties and assets of the Borrower as an
entirety or substantially as an entirety, shall be a corporation organized
and validly existing under the laws of the United States, any state thereof
or the District of Columbia, and shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the Agent, in form
satisfactory to the Agent, the due and punctual payment of the principal of
and interest, if any, on any Loan, all reimbursement obligations, fees and
other amounts payable by the Borrower hereunder and the performance of
every covenant of this Agreement on the part of the Borrower to be
performed or observed;
(b) immediately after giving effect to such transaction, no Event of
Default and no Default shall have occurred and be continuing; and
(c) the Borrower shall have delivered to the Agent a certificate of a
Responsible Officer and an opinion of counsel, each stating that such
consolidation, merger, conveyance or other transfer or lease and such
agreement supplemental hereto comply with this Section 6.05 and that all
conditions precedent herein provided for relating to such transactions have
been complied with.
Upon any consolidation by the Borrower with or merger by the Borrower
into any other corporation, or any conveyance or other transfer or lease of
the properties and assets of the Borrower as an entirety or substantially
as an entirety in accordance with this Section 6.05, the successor formed
by such consolidation or into which the Borrower is merged or the person to
which such conveyance, or other transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the
Borrower under this Agreement with the same effect as if such successor
person had been named as the Borrower herein, and thereafter, except in the
case of a lease, the predecessor person shall be relieved of and released
from all obligations and covenants under this Agreement (unless the
Borrower shall have delivered to the Agent an instrument waiving such
relief and release), and the Agent shall acknowledge in writing that the
Borrower has been so relieved and released.
For purposes of clarification and not in limitation of the provisions
of this Section 6.05, nothing in this Agreement shall be deemed to prevent
or restrict:
(i) any consolidation or merger after the consummation of which
the Borrower would be the surviving or resulting corporation, or
45
(ii) any conveyance or other transfer, or lease of any part of the
properties of the Borrower which does not constitute the entirety, or
substantially the entirety, thereof, or
(iii) the approval by the Borrower of, or the consent by the
Borrower to, any consolidation or merger of any direct or indirect
subsidiary or affiliate of the Borrower, or any conveyance, transfer
or lease by any such subsidiary or affiliate of any of its assets.
SECTION 6.06. ..LIMITATIONS ON LIENS.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, create incur or assume any Lien upon any of their respective properties
or assets in order to secure any Debt (other than Permitted Liens). The
provisions of the preceding sentence shall not prohibit the creation,
incurrence or assumption of any Lien if, contemporaneously therewith,
either
(a) the Borrower shall make effective provision whereby all
Outstanding Credits shall be secured equally and ratably with such other
Debt with a Lien on the same properties or assets (unless such other Debt
is subordinated to the Outstanding Credits, in which case all of the
Outstanding Credits will be secured prior to such other Debt with a Lien on
the same properties or assets); or
(b) the Borrower shall deliver to the Agent bonds, notes or other
evidences of indebtedness secured equally and ratably with such other Debt
with a Lien on the same properties or assets (unless such other Debt is
subordinated to the Outstanding Credits, in which case all of the
Outstanding Credits will be secured prior to such other Debt with a Lien on
the same properties or assets) (hereinafter called "SECURED OBLIGATIONS"):
(i) in an aggregate principal amount equal to the aggregate
principal amount of the Outstanding Credits,
(ii) maturing (or being subject to mandatory redemption) on such
dates and in such principal amounts that, upon repayment of any
Outstanding Credits, there shall mature (or be redeemed) Secured
Obligations equal in principal amount to such Outstanding Credits then
to mature and
(iii) containing, in addition to any mandatory redemption
provisions applicable to all Secured Obligations outstanding under
such Lien and any mandatory redemption provisions contained therein
pursuant to clause (ii) above, mandatory redemption provisions
correlative to the provisions, if any, for the mandatory redemption
(pursuant to a sinking fund or otherwise) of the Outstanding Credits
or for the redemption thereof at the option of the Lenders, as well as
a provision for mandatory redemption upon an acceleration of the
maturity of all Outstanding Credits following an Event of Default
(such mandatory redemption to be rescinded upon the rescission of such
acceleration);
it being expressly understood that such Secured Obligations
(x) may, but need not, bear interest,
46
(y) may, but need not, contain provisions for the redemption thereof
at the option of the issuer, any such redemption to be made at a redemption
price or prices not less than the principal amount thereof, and
(z) shall be held by the Agent for the benefit of the Lenders subject
to such terms and conditions relating to surrender to the Borrower,
transfer restrictions, voting, application of payments of principal,
premiums, if any, and interest and other matters as shall be set forth in
an amendment hereto specifically providing for the delivery to the Agent of
such Secured Obligations.
SECTION 6.07. LIMITATIONS ON DEBT.
The Borrower shall not permit any of its Subsidiaries to create, incur
or assume any Debt other than Permitted Subsidiary Debt.
SECTION 6.08. LIMITATIONS ON ASSET SALES.
Except for the sale of the properties and assets of the Borrower as an
entirety or substantially as an entirety pursuant to Section 6.05, and
other than properties or assets required to be sold to conform with
governmental requirements, the Borrower shall not, and shall not permit any
of its Subsidiaries to, consummate any Asset Sale, if the aggregate net
book value of all such Asset Sales consummated during the four calendar
quarters immediately preceding any date of determination would exceed 10%
of the total assets of the Borrower and its Consolidated Subsidiaries as
shown on the Borrower's most recent quarterly audited or unaudited
consolidated balance sheet; provided, however, that any such Asset Sale
will be disregarded for purposes of the 10% limitation specified above
(a) to the extent that such properties or assets are, in the
Borrower's opinion, worn out or are not useful or necessary in connection
with the operation of the business of the Borrower or its Subsidiaries;
(b) to the extent such properties or assets are being transferred to a
wholly-owned Subsidiary of the Borrower;
(c) to the extent that the cash or other proceeds thereof
(i) are, within 12 months of the consummation of such Asset Sale,
invested or reinvested by the Borrower or any Subsidiary in a
Permitted Business,
(ii) are used by the Borrower or a Subsidiary to repay Debt of the
Borrower or such Subsidiary, or
(iii) are retained by the Borrower or any Subsidiary.
SECTION 6.09. BOND DOCUMENTS.
The Borrower shall not modify any Related Document in respect of a
Series of Bonds at any time subsequent to the issuance of a Bond Letter of
Credit in respect thereto in a manner that is or could be adverse to the
47
Agent, the Fronting Bank or any Lender, without the Agent's prior written
consent.
SECTION 6.10. USE OF PROCEEDS.
The Borrower shall use proceeds of Bridge Loans to lend, advance or
distribute funds to TXU to be used by TXU to purchase its common stock and
for general corporate purposes of the Borrower. The Borrower shall use
proceeds of Revolving Loans for general corporate purposes of the Borrower.
Letters of Credit shall be issued to support Bonds and for general
corporate purposes of the Borrower.
ARTICLE VII.
EVENTS OF DEFAULT
SECTION 7.01. EVENTS OF DEFAULT.
In case of the happening of any of the following events (each an
"EVENT OF DEFAULT"):
(a) failure to pay interest, if any, on any Loan, or any portion of
the Fees, or any other amount payable hereunder (other than the principal
amount of any Loan) within 30 days after the same becomes due and payable;
or
(b) failure to pay the principal amount of any Loan when the same
becomes due and payable; or
(c) failure to perform or breach of any covenant or warranty of the
Borrower in this Agreement (other than a covenant or warranty a default in
the performance of which or breach of which is elsewhere in this Section
7.01 specifically dealt with) for a period of 90 days after there has been
given, by registered or certified mail, to the Borrower by the Agent, or to
the Borrower and the Agent by the Required Lenders, a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder, unless the
Agent, or the Agent and the Required Lenders, as the case may be, shall
agree in writing to an extension of such period prior to its expiration;
provided, however, that the Agent, or the Agent and the Required Lenders,
as the case may be, shall be deemed to have agreed to an extension of such
period if corrective action is initiated by the Borrower within such period
and is being diligently pursued; or
(d) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Borrower in an involuntary
case or proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or (ii) a decree or order
adjudging the Borrower a bankrupt or insolvent, or approving as properly
filed a petition by one or more persons other than the Borrower seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Borrower under any applicable Federal or state bankruptcy, insolvency
or similar law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official for the Borrower or for any
substantial part of its property, or ordering the winding up or liquidation
of its affairs, and any such decree or order for relief or any such other
decree or order shall have remained unstayed and in effect for a period of
90 consecutive days;
48
(e) the commencement by the Borrower of a voluntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by the Borrower to
the entry of a decree or order for relief in respect of the Borrower in a
case or proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against the Borrower, or
the filing by the Borrower of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or state bankruptcy,
insolvency, reorganization or similar law, or the consent by the Borrower
to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Borrower or of any substantial part
of its property, or the making by the Borrower of a general assignment for
the benefit of creditors, or the admission by the Borrower in writing of
its inability to pay its debts generally as they become due, or the
authorization of such action by the Board of Managers of the Borrower;
(f) the occurrence of any default or similar event under the terms of
the Borrower's 9% Exchangeable Subordinated Notes due 2012 (the
"SUBORDINATED NOTES") (or any security of the Borrower or any Subsidiary
issued directly or indirectly upon the conversion, exchange or extension
(in whole or in part) of such Subordinated Notes) that results in the
acceleration (or other mandatory repayment prior to the maturity date) of
such Subordinated Notes or such other security or the failure to pay such
Subordinated Notes or such other security at maturity shall constitute an
Event of Default; or
(g) during the Bridge Availability Period or while any amount of
Bridge Loans remains outstanding, an event of default shall occur under the
$2,500,000,000 Revolving Credit Agreement, dated as of June 24, 2004
between the Borrower, the lenders party thereto, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, as
administrative agent, and Citibank, N.A. as fronting bank or under any
credit facility that replaces or refinances such agreement;
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 Extensions of Credit; 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
subsection (d) or (e) above, the right of the Borrower to request and
receive Extensions of Credit shall automatically terminate and the
principal of the Loans then outstanding, 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.
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SECTION 7.02. LETTER OF CREDIT REMEDIES.
Notwithstanding anything to the contrary contained herein, but subject
to the paragraph concerning Bond Letters of Credit below, no notice given
or declaration made by the Agent pursuant to this Article VII shall affect
(i) the obligation of the Fronting Bank to make any payment under any
Letter of Credit issued by the Fronting Bank in accordance with the terms
of such Letter of Credit or (ii) the obligations of each Lender in respect
of each such Letter of Credit; provided, however, that upon the occurrence
and during the continuance of any Event of Default, the Agent shall at the
request, or may with the consent, of the Required Lenders, upon notice to
the Borrower, require the Borrower to deposit and maintain with the Agent
an amount in the cash collateral account (the "CASH COLLATERAL ACCOUNT")
described below equal to the aggregate maximum amount available to be drawn
under all Letters of Credit outstanding at such time and at any time during
the continuance of such Event of Default. Such Cash Collateral Account
shall at all times be free and clear of all rights or claims of third
parties. The Cash Collateral Account shall be maintained with the Agent in
the name of, and under the sole dominion and control of, the Agent, and
amounts deposited in the Cash Collateral Account shall bear interest at a
rate equal to the rate generally offered by Wachovia for deposits equal to
the amount deposited by the Borrower in the Cash Collateral Account, for a
term to be determined by the Agent in its sole discretion. The Borrower
hereby grants to the Agent for the benefit of the Fronting Bank and the
Lenders a Lien on, and hereby assigns to the Agent for the benefit of the
Fronting Bank and the Lenders all of its right, title and interest in, the
Cash Collateral Account and all funds from time to time on deposit therein
to secure its reimbursement obligations in respect of Letters of Credit
issued for its account. If any drawings then outstanding or thereafter made
are not reimbursed in full immediately upon demand or, in the case of
subsequent drawings, upon being made, then, in any such event, the Agent
may apply the amounts then on deposit in the Cash Collateral Account, in
such priority as the Agent shall elect, toward the payment in full of any
or all of the Borrower's obligations hereunder as and when such obligations
shall become due and payable, regardless of whether the amounts to be so
applied were deposited by the Borrower for the account of which the
Letter(s) of Credit then being drawn were issued. Upon payment in full,
after the termination of the Letters of Credit, of all such obligations,
the Agent will repay and reassign to the Borrower any cash then on deposit
in the Cash Collateral Account and the Lien of the Agent on the Cash
Collateral Account and the funds therein shall automatically terminate.
With respect to the obligations of the Fronting Bank, Agent and the
Lenders under a Bond Letter of Credit and upon the occurrence of an Event
of Default, and at any time thereafter during the continuance of such Event
of Default, the Agent, at the request of the Required Lenders, may provide
for the establishment of a Cash Collateral Account (as provided for and as
described in the previous paragraph), and, by notice to the Borrower, take
one or more of the following actions, as applicable, at the same or
different times: (a) give notice to the Trustee pursuant to the applicable
default provisions of the Indenture of the occurrence of an Event of
Default hereunder that requires acceleration of the related Series of
Bonds, (b) give notice to the Trustee pursuant to the applicable default
provisions of the Indenture that the Fronting Bank has not been reimbursed
for a drawing that requires acceleration of such Series of Bonds, (c)
declare the Term Loans, with respect to such Bond Letter of Credit, all
interest thereon and any other amounts outstanding hereunder, to be
forthwith due and payable, whereupon the Term Loans, with respect to such
Bond Letter of Credit, all such interest and all such amounts shall become
50
and be forthwith due and payable, without presentment, demand, protest, or
further notice of any kind, all of which are hereby expressly waived by the
Company, (d) cancel the Bond Letter of Credit on the cancellation date of
the Bond Letter of Credit as provided therein, and (e) exercise all the
rights and remedies provided for herein or by law.
ARTICLE VIII
THE AGENT
(a) In order to expedite the transactions contemplated by this
Agreement, Wachovia is hereby appointed to act as Agent on behalf of the
Lenders and the Fronting Bank. Each Lender and the Fronting Bank hereby
irrevocably authorizes the Agent to take such actions on behalf of such
Lender and the Fronting Bank 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 and the Fronting
Bank, without hereby limiting any implied authority, (i) to receive on
behalf of the Lenders and the Fronting Bank all payments of principal of
and interest on the Outstanding Credits and all other amounts due to the
Lenders and the Fronting Bank hereunder, and promptly to distribute to each
Lender and the Fronting Bank, its proper share of each payment so received;
(ii) to give notice on behalf of each Lender and the Fronting Bank 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 and the Fronting Bank copies of all notices, financial
statements and other materials delivered by the Borrower pursuant to this
Agreement as received by the Agent.
(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 or the Fronting Bank 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 or the
Fronting Bank that makes any Extension of Credit as the holder of the
indebtedness resulting therefrom for all purposes hereof until it shall
have received notice from such Lender or the Fronting Bank, 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 and the
Fronting Bank. 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 or the Fronting Bank of any of its obligations hereunder or to any
Lender or the Fronting Bank on account of the failure of or delay in
performance or breach by any other Lender, the Fronting Bank 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
51
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 and the Fronting Bank 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,
the Fronting Bank 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
Agent gives notice of its resignation, then the Agent may, on behalf of the
Lenders and the Fronting Bank, 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
Agent shall be discharged from its duties and obligations hereunder. After
the Agent's resignation hereunder, the provisions of this Article VIII and
Section 9.05 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. 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 subsection (e), 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 VIII
and Section 9.05 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 Extensions of Credit 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
Total Commitment shall have been terminated, the amount of its percentage
of Outstanding Credits) of any expenses incurred for the benefit of the
Lenders or the Fronting Bank, in its role as Agent, including fees and
expenses of counsel and compensation of agents and employees paid for
services rendered on behalf of the Lenders or the Fronting Bank, 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
52
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 neither any Lender
nor the Fronting Bank 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 and the Fronting Bank agrees that any
allocation made in good faith by the Agent of expenses or other amounts
referred to in this subsection shall be conclusive and binding for all
purposes.
(h) Each Lender and the Fronting Bank acknowledges that it has,
independently and without reliance upon the Agent, the Fronting Bank 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 and the Fronting Bank also acknowledges that it
will, independently and without reliance upon the Agent, the Fronting Bank
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.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES.
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:
(a) if to the Borrower, c/o TXU Business Services Company, TXU Energy
Plaza, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: General Counsel
(facsimile No. 214-812-6032);
(b) if to the Agent, to Wachovia Bank, National Association, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Debt Capital Markets (Telecopy No. 704-383-0661),
with a copy to Wachovia Bank, National Association, ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Agency Services
(Telecopy No. ▇▇▇-▇▇▇-▇▇▇▇), with a copy to Wachovia Bank, National
Association, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Telecopy No. 404-332-4136), with a copy to ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P., ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. (Telecopy No.
704-334-4706); to
(c) if to the Fronting Bank, to Wachovia Bank, National Association,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Debt Capital Markets (Telecopy No.
53
704-383-0661), with a copy to Wachovia Bank, National Association, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(Telecopy No. 404-332-4136), with a copy to Wachovia Bank, National
Association, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: International Operations, Standby Letters of Credit, NC-6034
(Telecopy No. ▇▇▇-▇▇▇-▇▇▇▇/0953);
(d) if to a Lender, to it at its address (or telecopy number) set
forth in the Register or in the Assignment and Acceptance pursuant to which
such Lender became a party hereto; and
(e) 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.
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 to such party as provided in this Section 9.01
or in accordance with the latest unrevoked direction from such party given
in accordance with this Section 9.01.
SECTION 9.02. 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 the Fronting Bank
and shall survive the making by the Lenders and the Fronting Bank of the
Extensions of Credit regardless of any investigation made by the Lenders or
the Fronting Bank or on their behalf, and shall continue in full force and
effect as long as there are any Outstanding Credits or any Fee or any other
amount payable under this Agreement is outstanding and unpaid or the Total
Commitment has not been terminated or any Letter of Credit is available to
be drawn.
SECTION 9.03. BINDING EFFECT.
This Agreement shall become effective when it shall have been executed
by the Borrower, the Fronting Bank 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 and the Fronting Bank.
SECTION 9.04. 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 the its Outstanding Credits);
54
provided, however, that (i) except in the case of an assignment to (A) a
Lender or an Affiliate of such Lender, (B) a Federal Reserve Bank, or (C)
any direct or indirect contractual counterparties in swap agreements to the
extent required in connection with the physical settlement of any Lender's
obligations pursuant thereto, the Borrower (so long as no Default or Event
of Default shall have occurred and be continuing), the Agent and the
Fronting Bank 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 Acceptance with respect to
such assignment is delivered to the Agent) shall not be less than
$1,000,000 or, if the amount of the Commitment of the assigning Lender is
less than $1,000,000, the aggregate amount of such Lender's Commitment,
(iii) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Lender's rights and obligations under this
Agreement and (iv) the parties to each such assignment shall execute and
deliver to the Agent an Assignment and Acceptance, and a processing and
recordation fee of $3,500. Upon acceptance and recording pursuant to
Section 9.04(e), from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five
Business Days after the execution thereof unless otherwise agreed by the
Agent (the Borrower to be given reasonable notice of any shorter period),
(A) the assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Acceptance, 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 Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance 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 2.11, 2.16 and 9.05
afforded to such Lender prior to its assignment as well as to any Fees
accrued for its account hereunder and not yet paid)).
(c) By executing and delivering an Assignment and Acceptance, 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 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 Acceptance; (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 6.03 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 Acceptance; (v) such
assignee will independently and without reliance upon the Agent, such
assigning Lender or any other Lender or the Fronting Bank 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
55
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 Charlotte, North Carolina a
copy of each Assignment and Acceptance 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 Credits 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 Fronting Bank, 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 Acceptance
executed by an assigning Lender and an assignee, the processing and
recordation fee referred to in subsection (b) above and, if required, the
written consent of the Borrower, the Fronting Bank and the Agent to such
assignment, the Agent shall (i) accept such Assignment and Acceptance 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 subsection (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, its Loans and its LC Outstandings);
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 shall be entitled to the benefit of
the cost protection provisions contained in Sections 2.11, 2.16 and 9.05 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, the Fronting Bank 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 Credits, (y) extending any principal payment
date or date fixed for the payment of interest on the Outstanding Credits
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 9.04, 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
56
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 6.05 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.
(j) Subject to the appointment and acceptance of a successor Fronting
Bank as provided below, the Fronting Bank 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 Fronting Bank
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 Fronting Bank gives notice of its resignation, then
the retiring Fronting Bank may appoint a successor Fronting Bank, 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 Fronting Bank
hereunder by a successor bank, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Fronting Bank, and the retiring Fronting Bank shall be discharged from its
duties and obligations hereunder. After the Fronting Bank's resignation
hereunder, the provisions of Sections 2.11, 2.16 and 9.05 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 Fronting Bank.
SECTION 9.05. 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, the Fronting Bank 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 Extensions of Credit 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
57
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 and the Fronting
Bank.
(b) The Borrower agrees to indemnify each Lender and the Fronting Bank
against any loss, calculated in accordance with the next sentence, or
reasonable expense that such Lender or the Fronting Bank 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 Credit 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, the Fronting Bank,
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 fees and expenses 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), 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 Extensions of Credit 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 Indemnitee, or (ii) result from any litigation brought
by such Indemnitee against the Borrower or by the Borrower against such
58
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 subsection (c) of this Section 9.05
(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 9.05 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 Outstanding Credits, the invalidity or
unenforceability of any term or provision of this Agreement or any
investigation made by or on behalf of the Agent, any Lender or the Fronting
Bank. All amounts due under this Section 9.05 shall be payable on written
demand therefor.
(e) A certificate of any Lender, the Fronting Bank or the Agent
setting forth any amount or amounts that such Lender, the Fronting Bank or
such Agent is entitled to receive pursuant to subsection (b) of this
Section 9.05 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 9.06. RIGHT OF SETOFF.
If an Event of Default shall have occurred and be continuing, each
Lender and the Fronting Bank 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 or
the Fronting Bank 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 or the Fronting Bank (as
the case may be), irrespective of whether or not such Lender or the
Fronting Bank (as the case may be), shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of
each Lender and the Fronting Bank under this Section 9.06 are in addition
to other rights and remedies (including other rights of setoff) which such
Lender or the Fronting Bank may have.
SECTION 9.07. PARI PASSU
Except as otherwise provided herein, this Agreement shall rank pari
passu with other unsecured and unsubordinated indebtedness of the Borrower.
SECTION 9.08. APPLICABLE LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.
59
SECTION 9.09. WAIVERS; AMENDMENT.
(a) No failure or delay of the Agent, the Fronting Bank 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 other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the Agent,
the Fronting Bank 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 subsection (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 reimbursement obligation in
respect of a Letter of Credit, or waive or excuse any such payment or any
part thereof, or decrease the rate of interest on any Loan or any
reimbursement obligation in respect of a Letter of Credit, without the
prior written consent of each Lender affected thereby, (ii) increase the
Commitment of any Lender without the prior written consent of such Lender,
or (iii) amend or modify the provisions of Section 2.13, 2.14 or Section
9.04(h), the provisions of this Section 9.09 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 or the Fronting Bank
hereunder without the prior written consent of the Agent or the Fronting
Bank, as the case may be. Each Lender and the Fronting Bank shall be bound
by any waiver, amendment or modification authorized by this Section 9.09,
and any consent by any Lender, the Agent or the Fronting Bank pursuant to
this Section 9.09 shall bind any assignee of its rights and interests
hereunder.
SECTION 9.10. ENTIRE AGREEMENT.
This Agreement (including the schedules and exhibits hereto)
represents 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. 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 9.11. 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
60
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.
SECTION 9.12. 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 9.03.
SECTION 9.13. 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 9.14. 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 or the Fronting Bank, shall exceed the maximum lawful rate
(the "MAXIMUM RATE") which may be contracted for, charged, taken, received
or reserved by such Lender or the Fronting Bank (as the case may be) in
accordance with applicable law, the rate of interest payable on the
Outstanding Credits of such Lender or the Fronting Bank (as the case may
be), together with all Charges payable to such Lender or the Fronting Bank
(as the case may be), shall be limited to the Maximum Rate.
(b) If the amount of interest, together with all Charges, payable for
the account of any Lender or the Fronting Bank in respect of any interest
computation period is reduced pursuant to subsection (a) of this Section
9.14 and the amount of interest, together with all Charges, payable for
such Lender's or the Fronting Bank's (as the case may be) account in
respect of any subsequent interest computation period, computed pursuant to
Section 2.06, would be less than the Maximum Rate, then the amount of
interest, together with all Charges, payable for such Lender's or the
Fronting Bank's (as the case may be) 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 or the Fronting Bank has been increased pursuant to this
subsection (b) exceed the aggregate amount by which interest, together with
all Charges, paid for its account has theretofore been reduced pursuant to
subsection (a) of this Section 9.14.
SECTION 9.15. 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
61
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 subsection (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.
(b) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that 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 9.16. CONFIDENTIALITY.
Each Lender and the Fronting Bank shall use its best efforts to hold
in confidence all information, memoranda, or extracts furnished to such
Lender or the Fronting Bank (as the case may be) (directly or through the
Agent) by the Borrower hereunder or in connection with the negotiation
hereof; provided that such Lender and the Fronting Bank 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 or the Fronting Bank (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 6.03, to any person to which such Lender or
the Fronting Bank (as the case may be) sells or proposes to sell an
assignment or a participation in its Outstanding Credits hereunder, if such
other person agrees for the benefit of the Borrower to comply with the
provisions of this Section 9.16 and (v) to the extent that such
information, memoranda or extracts shall be publicly available or shall
have become known to such Lender or the Fronting Bank (as the case may be)
independently of any disclosure by the Borrower hereunder or in connection
with the negotiation hereof. Notwithstanding the foregoing, any Lender and
the Fronting Bank may disclose the provisions of this Agreement, the
amounts, maturities and interest rates of its Outstanding Credits, and any
Fees to which it is entitled, to any purchaser or potential purchaser of
such Lender's interest in any Outstanding Credits. Notwithstanding any
other provision in this Agreement, the Agent hereby confirms that the
Borrower and the Borrower's representatives shall not be limited from
disclosing the U.S. tax treatment or the U.S. tax structure of the
transactions contemplated by this Agreement.
[Signature pages follow]
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 ENERGY COMPANY LLC
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer and
Assistant Secretary
WACHOVIA BANK, NATIONAL ASSOCIATION
as Agent, as Fronting Bank and as
a Lender
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Director
EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE
ASSIGNMENT AND ACCEPTANCE
[Date]
Reference is made to the Credit Agreement, dated as of November 4, 2004
(as amended, modified, extended or restated from time to time, the "AGREEMENT"),
among TXU Energy Company LLC (the "BORROWER"), the lenders party thereto (the
"LENDERS"), and Wachovia Bank, National Association, as Agent for the Lenders
and as Fronting Bank for the letters of credit issued thereunder. Terms defined
in the Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of [Effective Date of Assignment set forth below],
the interests set forth on the reverse hereof (the "ASSIGNED INTEREST") in the
Assignor's rights and obligations under the Agreement, including, without
limitation, the interests set forth on the reverse hereof in the Commitment of
the Assignor on the [Effective Date of Assignment] and the Loans owing to the
Assignor that are outstanding on the [Effective Date of Assignment], together
with unpaid interest accrued on the assigned Loans to the [Effective Date of
Assignment] and the amount, if any, set forth on the reverse hereof of the Fees
accrued to the [Effective Date of Assignment] for the account of the Assignor.
Each of the Assignor and the Assignee hereby makes and agrees to be bound by all
the representations, warranties and agreements set forth in Section 9.04 of the
Agreement, a copy of which has been received by each such party. From and after
the [Effective Date of Assignment], (i) the Assignee shall be a party to and be
bound by the provisions of the Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent of the interests
assigned by this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement.
2. This Assignment and Acceptance is being delivered to the Agent together
with (i) if the Assignee is organized under the laws of a jurisdiction outside
the United States, the forms specified in Section 2.15(g) of the Agreement, duly
completed and executed by such Assignee and (ii) a processing and recordation
fee of $3,500.
3. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment
unless otherwise agreed by the Agent):
------------------ --------------- ---------------------------
Percentage Assigned of
Facility/Commitment
(set forth, to at least
8 decimals, as a
Facility percentage of the
Principal Amount Facility and the
Assigned aggregate Commitments
of all Lenders
thereunder
Commitment $ %
Assigned:
Loans: $ %
Fees Assigned (if
any): $ %
A-2
The terms set forth and on Accepted:
the reverse side hereof are
hereby agreed to:
TXU ENERGY COMPANY LLC
[ASSIGNOR], as
Assignor
By ______________________
By _________________, as Name:
Name: Title:
Title:
[ASSIGNEE], as WACHOVIA BANK,
Assignee, NATIONAL ASSOCIATION , as
Agent
By _______________________
By _________________, as Name:
Name: Title:
Title:
A-3
EXHIBIT B
FORM OF BORROWING REQUEST
BORROWING REQUEST
[Date]
Wachovia Bank, National Association
as Agent for the lenders and Fronting Bank
to the Credit Agreement referred to below
Ladies and Gentlemen:
The undersigned, TXU Energy Company LLC (the "BORROWER"), refers to the
Credit Agreement, dated as of November 4, 2004 (as it may hereafter be amended,
modified, extended or restated from time to time, the "AGREEMENT"), among the
Borrower, TXU Energy Company LLC, the lenders party thereto (the "LENDERS"),
Wachovia Bank, National Association, as Agent and as Fronting Bank for the
letters of credit issued thereunder. 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 number 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 Applicable 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 ENERGY COMPANY LLC
By _________________________________
Name:
Title:
B-2
EXHIBIT C
FORM OF PREPAYMENT NOTICE
PREPAYMENT NOTICE
[Date]
Wachovia Bank, National Association
as Agent for the lenders and Fronting Bank
to the Credit Agreement referred to below
Ladies and Gentlemen:
The undersigned, TXU Energy Company LLC (the "BORROWER"), refers to the
Credit Agreement dated as of November 4, 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 Wachovia Bank, National
Association, as Agent and as Fronting Bank for the letters of credit issued
thereunder. 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 irrevocable notice of prepayment pursuant to Section 2.10 of the
Agreement and, in that connection, acknowledges that it is committed hereby to
prepay the Borrowing (or portion thereof) identified below by the amount and on
the date stated below, and that such prepayment will be accompanied by accrued
interest on the principal amount being prepaid to the date of prepayment.
(A)Interest rate basis1 of Borrowing
to be prepaid (in whole or in part)
(B)Principal amount to be prepaid2
(C)Date of prepayment (which is a Business Day)
____________________
1 Eurodollar Loan or ABR Loan.
2 If a partial prepayment, not less than $10,000,000 and in
integral multiples of $10,000,000.
Very truly yours,
TXU Energy Company LLC
By _________________________________
Name:
Treasurer
C-2
EXHIBIT D
FORM OF NOTICE OF INTEREST PERIOD
[Date]
Wachovia Bank, National Association
as Agent for the lenders and Fronting Bank
to the Credit Agreement referred to below
Ladies and Gentlemen:
The undersigned, TXU Energy Company LLC (the "BORROWER"), refers to the
Credit Agreement, dated as of November 4, 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"), Wachovia Bank, National
Association, as Agent and as Fronting Bank for the letters of credit issued
thereunder. 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 2.06(a) of the Agreement that it requests
that the Interest Period be converted as follows:
(A) Principal amount of Eurodollar Borrowings1 __________
(B) Interest Period and the last day thereof2 __________
_____________________
1 Shall equal the aggregate principal amount of all Borrowings consisting of
Eurodollar Borrowings on the Applicable Maturity Date.
2 Which shall be subject to the definition of "INTEREST
Period".
Very truly yours,
TXU ENERGY COMPANY LLC
By _________________________________
Name:
Title:
SCHEDULE 2.01
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| NAME OF LENDER | COMMITMENT | REVOLVING |
| | | SUB-COMMITMENT |
---------------------------------------------------------------------------
| Wachovia Bank, National | $500,000,000 | $250,000,000 |
| Association | | |
---------------------------------------------------------------------------
| Total | $500,000,000 | $250,000,000 |
---------------------------------------------------------------------------
SCHEDULE 2.18(I)
LC FRONTING BANK COMMITMENTS
--------------------------------------------------------------------------
| FRONTING BANK | LC FRONTING BANK COMMITMENT |
--------------------------------------------------------------------------
| Wachovia Bank, National Association | $500,000,000 |
--------------------------------------------------------------------------
