EXHIBIT 10B
CONFORMED COPY
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TXU ENERGY COMPANY LLC
ONCOR ELECTRIC DELIVERY COMPANY
TXU US HOLDINGS COMPANY,
as Borrowers
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$1,000,000,000
364-DAY REVOLVING CREDIT AGREEMENT
Dated as of April 24, 2002
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JPMORGAN CHASE BANK,
as Administrative Agent
BANK OF AMERICA, N.A. and JPMORGAN CHASE BANK,
as Fronting Banks
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BANC OF AMERICA SECURITIES LLC
▇. ▇. ▇▇▇▇▇▇ SECURITIES, INC.
Joint Lead Arrangers and Co-Book Managers
BANK OF AMERICA, N.A.
Syndication Agent
THE BANK OF NEW YORK
CITIBANK, N.A.
COMMERZBANK AG, NEW YORK AND CAYMAN ISLANDS BRANCHES
Co-Documentation Agents
TABLE OF CONTENTS
Section Page
------- ----
Article I
DEFINITIONS; CONSTRUCTION
SECTION 1.01. Defined Terms..................................................1
SECTION 1.02. Terms Generally...............................................16
Article II
THE CREDITS
SECTION 2.01. Commitments...................................................16
SECTION 2.02. Loans.........................................................17
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. Default Interest..............................................20
SECTION 2.08. Alternate Rate of Interest....................................20
SECTION 2.09. Termination and Reduction of Commitments......................21
SECTION 2.10. Prepayment....................................................21
SECTION 2.11. Reserve Requirements; Change in Circumstances.................22
SECTION 2.12. Change in Legality............................................24
SECTION 2.13. Pro Rata Treatment............................................24
SECTION 2.14. Sharing of Setoffs............................................25
SECTION 2.15. Payments......................................................25
SECTION 2.16. Taxes.........................................................26
SECTION 2.17. Assignment of Commitments Under Certain Circumstances.........28
SECTION 2.18. Term Loans....................................................29
SECTION 2.19. Letters of Credit.............................................29
Article III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization; Powers..........................................33
SECTION 3.02. Authorization.................................................33
SECTION 3.03. Enforceability................................................33
SECTION 3.04. Governmental Approvals........................................33
SECTION 3.05. Financial Statements..........................................33
SECTION 3.06. Litigation....................................................34
SECTION 3.07. Federal Reserve Regulations...................................34
SECTION 3.08. Investment Company Act; Public Utility Holding Company
Act......................................................................35
SECTION 3.09. No Material Misstatements.....................................35
SECTION 3.10. Taxes.........................................................35
SECTION 3.11. Employee Benefit Plans........................................35
i
SECTION 3.12. Significant Subsidiaries......................................36
SECTION 3.13. Environmental Matters.........................................36
SECTION 3.14. Solvency......................................................36
Article IV
CONDITIONS
SECTION 4.01. Initial Extensions of Credit..................................37
SECTION 4.02. Conditions for All Extensions of Credit.......................38
Article V
COVENANTS
SECTION 5.01. Existence.....................................................39
SECTION 5.02. Compliance With Laws; Business and Properties.................39
SECTION 5.03. Financial Statements, Reports, Etc............................39
SECTION 5.04. Insurance.....................................................41
SECTION 5.05. Taxes, Etc....................................................41
SECTION 5.06. Maintaining Records; Access to Properties and Inspections.....41
SECTION 5.07. ERISA.........................................................41
SECTION 5.08. Use of Proceeds...............................................42
SECTION 5.09. Consolidations, Mergers, Sales and Acquisitions of Assets
and Investments in Subsidiaries..........................................42
SECTION 5.10. Limitations on Liens..........................................42
SECTION 5.11. Fixed Charge Coverage.........................................44
SECTION 5.12. Equity Capitalization Ratio...................................44
SECTION 5.13. Restrictive Agreements........................................45
Article VI
EVENTS OF DEFAULT
Article VII
THE AGENT
Article VIII
MISCELLANEOUS
SECTION 8.01. Notices.......................................................50
SECTION 8.02. Survival of Agreement.........................................51
SECTION 8.03. Binding Effect................................................51
SECTION 8.04. Successors and Assigns........................................51
SECTION 8.05. Expenses; Indemnity...........................................54
SECTION 8.06. Right of Setoff...............................................56
SECTION 8.07. Applicable Law................................................56
SECTION 8.08. Waivers; Amendment............................................56
SECTION 8.09. Entire Agreement..............................................57
SECTION 8.10. Severability..................................................57
SECTION 8.11. Counterparts..................................................57
SECTION 8.12. Headings......................................................57
ii
SECTION 8.13. Interest Rate Limitation......................................57
SECTION 8.14. Jurisdiction; Venue...........................................58
SECTION 8.15. Confidentiality...............................................59
EXHIBITS AND SCHEDULES
Exhibit A - Form of Borrowing Request
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Request for Issuance
Schedule 2.01 - Commitments
Schedule 5.13 - Restrictive Agreements
iii
364-DAY REVOLVING CREDIT AGREEMENT (the
"Agreement"), dated as of April 24,
2002, among TXU Energy Company LLC, a
Delaware limited liability company
("Energy"), Oncor Electric Delivery
Company, a Texas corporation ("Oncor"),
TXU US Holdings Company, a Texas
corporation ("Holdings" and, together
with Energy and Oncor, the "Borrowers",
and each individually, a "Borrower");
the lenders listed in Schedule 2.01
(together with their successors and
assigns, the "Lenders"); JPMorgan Chase
Bank ("JPMorgan Chase"), as administrative
agent for the Lenders (in such capacity,
the "Agent"); and Bank of America, N.A.
("Bank of America") and JPMorgan Chase,
as Fronting Banks for the letters of
credit issued hereunder.
The Borrowers have requested the Lenders and the Fronting Banks to
provide the credit facility hereinafter described in the amounts and on the
terms and conditions set forth herein, the Lenders and the Fronting Banks have
so agreed on the terms and conditions set forth herein, and the Agent has agreed
to act as 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 2.08 or 2.12(a)(ii)) to a loan bearing interest at a rate
determined by reference to the Alternate Base Rate.
"Acquisition Date" shall mean the date as of which a person or
group of related persons first acquires more than 30% of the
outstanding Voting Shares of TXU (within the meaning of Section 13(d)
or 14(d) of the Exchange Act, and the applicable rules and regulations
thereunder).
"Administrative Fees" shall have the meaning assigned to such
term in Section 2.04(b).
"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.
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"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 0.50% and (ii) the Prime Rate in effect on such day. For
purposes hereof, "Prime Rate" shall mean the rate of interest per annum
publicly announced from time to time by JPMorgan Chase as its prime
rate in effect at its principal office in New York City; each change in
the Prime Rate shall be effective on the date such change is publicly
announced as effective; and "Federal Funds Effective Rate" shall mean,
for any day, the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as released on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
released for any day which is a Business Day, the arithmetic average
(rounded upwards to the next 1/100th of 1%), as determined by JPMorgan
Chase, of the quotations for the day of such transactions received by
JPMorgan Chase from three Federal funds brokers of recognized standing
selected by it. If for any reason JPMorgan Chase shall have determined
(which determination shall be conclusive absent manifest error;
provided that JPMorgan Chase shall, upon request, provide to the
applicable 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
JPMorgan Chase to obtain sufficient quotations in accordance with the
terms thereof, the Alternate Base Rate shall be determined without
regard to clause (i) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist. Any change
in the Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective on the effective date
of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"Applicable Margin" shall mean, with respect to any Borrower
for any Type of Loan at any time, the percentage per annum set forth
below corresponding to such Type of Loan in the column under the
Applicable Rating Level of such Borrower at such time, provided that
(i) during any Utilization Period, the Applicable Margin for each
Borrower for each Type of Loan shall be increased by the Utilization
Percentage and (ii) after the Revolving Period, the Applicable Margin
shall be increased by the percentage per annum set forth below
corresponding to "Term Loan Margin" in the column under the Applicable
Rating Level for such Borrower. Any change in the Applicable Margin for
a Borrower shall be effective on the date on which the applicable
rating agency announces any change in the Debt Rating of such Borrower.
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Applicable
Rating ▇▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇
------------ ------- ------- ------- -------
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Percentage Per Annum
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Eurodollar .500% .725% .925% 1.125%
Margin
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ABR 0 0 0 .125%
Margin
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Term Loan 1.000% 1.250% 1.500% 2.000%
Margin
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"Applicable Rating Level" shall mean, for any Borrower at any
time, the level set forth below in the row next to the then applicable
Debt Ratings of such Borrower. If there is a difference of one level in
the Debt Ratings of such Borrower assigned by S&P and ▇▇▇▇▇'▇, then the
higher Debt Rating shall be used for purposes of determining the
Applicable Rating Level for such Borrower and if there is a difference
of more than one level in the Debt Ratings assigned by S&P and ▇▇▇▇▇'▇
for such Borrower, then the Debt Rating one level higher than the lower
Debt Rating will be used for purposes of determining the Applicable
Rating Level of such Borrower. Any change in the Applicable Rating
Level of any Borrower shall be effective on the date on which the
applicable rating agency announces any change in the applicable Debt
Rating of such Borrower.
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S&P Debt Rating
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▇▇▇▇▇'▇ Debt Rating Applicable Rating Level
------------------- -----------------------
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BBB+ or better 1
Baa1 or better
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BBB 2
Baa2
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BBB- 3
Baa3
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BB+ or below* 4
Ba1 or below*
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* or unrated
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee in the form of
Exhibit B.
"Available Commitment" means, for each Lender, the excess of
such Lender's Commitment over such Lender's Percentage of the
Outstanding Credits. "Available Commitments" shall refer to the
aggregate of the Lenders' Available Commitments hereunder.
4
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Board of Directors" shall mean the Board of Directors or
analogous managing body of a Borrower or any duly authorized committee
thereof.
"Borrower" shall have the meaning given such term in the
preamble hereto.
"Borrowing" shall mean a group of Loans of a single Type made
by the Lenders on a single date and as to which a single Interest
Period is in effect.
"Borrowing Request" shall mean a request made pursuant to
Section 2.03 in the form of Exhibit A.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which
banks are open for business in New York City; provided, however, that,
when used in connection with a Eurodollar Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in
dollar deposits in the London interbank market.
"Cash Collateral Account" shall have the meaning assigned to
such term in Article VI.
"A Change in Control" shall be deemed to have occurred if (i)
any person or "group" (within the meaning of Section 13(d) or 14(d) of
the Exchange Act, as amended) shall acquire beneficial ownership of
more than 30% of any outstanding class of Voting Shares of TXU unless
such acquisition shall have been approved prior to such acquisition
date by a majority of Disinterested Directors of TXU or (ii) during any
period of 12 consecutive months, a majority of the members of the board
of directors of TXU cease to be composed of individuals (A) who were
members of board of directors of TXU on the first day of such period,
(B) whose election or nomination to the board of directors of TXU was
approved by individuals referred to in clause (i) above constituting at
the time of such election or nomination at least a majority of the
board of directors of TXU or (C) whose election or nomination to the
board of directors of TXU was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election or
nomination at least a majority of the board of directors of TXU.
"Code" shall mean the Internal Revenue Code of 1986, as the
same may be amended from time to time.
"Commission" shall mean the Public Utility Commission of the
State of Texas.
"Commitment" shall mean, with respect to each Lender, the
commitment of such Lender set forth in Schedule 2.01 hereto to make
Loans and to purchase participations in Letters of Credit, 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 8.04. The Commitment of each Lender shall automatically and
permanently terminate on the Maturity Date if not terminated earlier
pursuant to the terms hereof.
5
"Consolidated Earnings Available for Fixed Charges" for any
twelve-month period shall mean (i) consolidated net income, calculated
after deducting preferred stock dividends and preferred securities
distributions of Subsidiaries, but before any extraordinary items and
before the effect in such twelve-month period of any change in
accounting principles promulgated by the Financial Accounting Standards
Board becoming effective after December 31, 2001, less (ii) allowances
for equity funds used during construction to the extent that such
allowances, taken as a whole, increased such consolidated net income,
plus (iii) provisions for Federal income taxes, to the extent that such
provisions, taken as a whole, decreased such consolidated net income,
plus (iv) Consolidated Fixed Charges, all determined for such
twelve-month period with respect to Holdings and its Consolidated
Subsidiaries on a consolidated basis; provided, however, that in
computing Consolidated Earnings Available for Fixed Charges for any
twelve-month period the following amounts shall be excluded to the
extent otherwise included pursuant to the foregoing: (A) the effect of
any regulatory disallowances resolving fuel or other issues in any
proceeding before the Commission or the Railroad Commission of Texas in
an aggregate amount not to exceed $100,000,000, (B) any non-cash book
losses relating to the sale or write-down of assets, (C) one-time costs
of up to $100,000,000 incurred in connection with the restructuring of
certain subsidiaries of TXU in connection with the 1999 Texas electric
industry restructuring legislation (as described in TXU's filings with
the SEC) and (D) up to $100,000,000 of costs incurred in connection
with write-offs relating to the regulatory settlement plan, initially
filed with the Commission on December 31, 2001, of Holdings and certain
of its Subsidiaries (as described in TXU's filings with the SEC).
"Consolidated Fixed Charges" for any twelve-month period shall
mean the sum (without duplication) of (i) interest on mortgage bonds,
(ii) interest on other long-term debt, (iii) other interest expense,
including interest on short-term debt and the current portion of
long-term debt, and (iv) preferred stock dividends and preferred
securities distributions of Subsidiaries, all determined for such
twelve-month period with respect to Holdings and its Consolidated
Subsidiaries on a consolidated basis. For purposes of such calculation,
long-term debt shall not include the principal amount of, or interest
on, Qualified Transition Bonds.
"Consolidated Shareholders' Equity" of any Borrower shall mean
the sum (without duplication) of (i) total common stock equity plus
(ii) preferred stock not subject to mandatory redemption, each (in the
case of clauses (i) and (ii)) determined with respect to such Borrower
and its Consolidated Subsidiaries on a consolidated basis, plus (iii)
Equity-Credit Preferred Securities in an aggregate liquidation
preference amount not in excess of (A) $1,000,000,000, if Energy is the
Borrower; (B) $750,000,000, if Oncor is the Borrower and (C)
$1,750,000,000, if Holdings is the Borrower.
"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.
"Consolidated Total Capitalization" of any Borrower shall mean
the sum of (i) total common stock equity, (ii) preferred stock and
preferred securities, (iii) long-
6
term debt (less amounts due currently) and (iv) short-term debt
consisting of commercial paper, notes payable to unaffiliated entities
and long-term debt due currently to the extent such short-term debt
exceeds $2,000,000,000, in the case of Holdings and $1,000,000,000,
in the case of each of Energy and Oncor, determined with respect to
each such Borrower and its Consolidated Subsidiaries on a consolidated
basis. For purposes of such calculation, long-term debt shall not
include the principal amount of, or interest on, Qualified Transition
Bonds.
"Controlled Group" shall mean all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with Holdings, are
treated as a single employer under Section 414(b) or 414(c) of the
Code.
"Debt Ratings" shall mean, with respect to any Borrower, the
ratings (whether explicit or implied) assigned by S&P and ▇▇▇▇▇'▇ to
the senior unsecured non-credit enhanced long term debt of such
Borrower; provided, however, that if and for so long as Oncor shall not
have any such rated securities, the Debt Ratings for Oncor shall mean
the ratings one level below the ratings assigned by S&P and ▇▇▇▇▇'▇ to
the senior secured long term debt of Oncor.
"Default" shall mean any event or condition, which upon
notice, lapse of time or both would constitute an Event of Default.
"Disinterested Director" shall mean any member of the Board of
Directors of TXU who is not affiliated, directly or indirectly, with,
or appointed by, a person or group of related persons (other than TXU,
any Subsidiary of TXU, or any pension, savings or other employee
benefit plan for the benefit of employees of TXU and/or any Subsidiary
of TXU) acquiring the beneficial ownership of more than 30% of the
outstanding Voting Shares of TXU (within the meaning of Section 13(d)
or 14(d) of the Exchange Act, and the applicable rules and regulations
thereunder) and who either was a member of the Board of Directors of
TXU prior to the Acquisition Date or was recommended for election by a
majority of the Disinterested Directors in office prior to the
Acquisition Date.
"dollars" or "$" shall mean lawful money of the United States
of America.
"Energy" shall have the meaning set forth in the preamble
hereto.
"Equity-Credit Preferred Securities" shall mean securities,
however denominated, (i) issued by a Borrower or a Consolidated
Subsidiary of a Borrower, (ii) that are not subject to mandatory
redemption or the underlying securities, if any, of which are not
subject to mandatory redemption, (iii) that are perpetual or mature no
less than 30 years from the date of issuance, (iv) the indebtedness
issued in connection with which, including any guaranty, is subordinate
in right of payment to the unsecured and unsubordinated indebtedness of
the issuer of such indebtedness or guaranty, and (v) the terms of which
permit the deferral of the payment of interest or distributions thereon
to one year after the last day of the Revolving Period or later.
7
"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 applicable Borrower is a member.
"ERISA Event" shall mean (i) any "Reportable Event"; (ii) the
adoption of any amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code or Section 307 of
ERISA; (iii) the incurrence of any liability under Title IV of ERISA
with respect to the termination of any Plan or the withdrawal or
partial withdrawal of any Borrower or any of its ERISA Affiliates from
any Plan or Multiemployer Plan; (iv) the receipt by any 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 any 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 "prohibited transaction" with respect
to which any 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 any Borrower other
than a liability to pay premiums or benefits when due.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a
rate determined by reference to the LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such
term in Article VI.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Extension of Credit" means (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 Fee" shall have the meaning assigned to such term in
Section 2.04(a).
"Facility Fee Percentage" shall mean, at any time, the
percentage per annum set forth below in the column under the Applicable
Rating Level corresponding to the Debt Ratings of the Borrower that
would produce the lowest Applicable Rating Level (i.e., the highest
Facility Fee Percentage). Any change in the Facility Fee Percentage
shall be effective on the date on which any applicable rating agency
announces any change in a Debt Rating of any Borrower that would result
in a different Facility Fee Percentage pursuant to the terms of this
definition.
8
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Applicable ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇
------- ------- ------- -------
Rating
Level
-----
--------------------------------------------------------------------------------
Percentage Per Annum
--------------------------------------------------------------------------------
Facility Fee 0.125% 0.15% 0.20% 0.25%
================================================================================
"Federal Funds Effective Rate" shall have the meaning set
forth in the definition of "Alternate Base Rate".
"Fees" shall mean the Facility Fee, the Administrative Fees,
the Fronting Fee, the LC Fee and any other fees provided for in the
Letter Agreements.
"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.
"First Mortgage" shall mean (i)
the Oncor Mortgage, (ii) any mortgage and deed of trust
entered into by Oncor in order to refund or replace, or in substitution
for, the Oncor Mortgage, and (iii) if and for so long as any first
mortgage bonds are issued and outstanding under the Oncor Mortgage, any
other indenture or instrument of Oncor pursuant to which Oncor issues
debt securities secured directly or indirectly by (A) the Lien created
by the Oncor Mortgage and/or (B) any property of Oncor.
"Fronting Banks" means Bank of America, JPMorgan Chase and any
other Lender having a long-term credit rating acceptable to the
Borrowers that delivers an instrument in form and substance
satisfactory to the Borrowers and the Agent whereby such other Lender
agrees to act as "Fronting Bank" hereunder and states the amount of its
LC Fronting Bank Commitment.
"Fronting Fee" shall have the meaning assigned to such term in
Section 2.04(c).
"GAAP" shall mean generally accepted accounting principles,
applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Holdings" shall have the meaning set forth in the preamble
hereto.
"Indebtedness" of any person shall mean all indebtedness
representing money borrowed which is created, assumed, incurred or
guaranteed in any manner by such person or for which such person is
responsible or liable (whether by agreement to purchase indebtedness
of, or to supply funds to or invest in, others or otherwise).
"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
9
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
Maturity Date, such period may end on the seventh or fourteenth day
thereafter, as the Borrower may elect, and (ii) as to any ABR
Borrowing, the period commencing on the date of such Borrowing and
ending on the earliest of (A) the next succeeding March 31, June 30,
September 30 or December 31, (B) the Maturity Date, and (C) the date
such Borrowing is repaid or prepaid in accordance with Section 2.05 or
Section 2.10; 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.
"JPMorgan Chase" shall have the meaning given such term in the
preamble hereto.
"LC Fee" shall have the meaning assigned to such term in
Section 2.04(c).
"LC Fronting Bank Commitment" shall mean, with respect to any
Fronting Bank, the aggregate stated amount of all Letters of Credit
that such Fronting Bank agrees to issue hereunder, as modified from
time to time pursuant to agreement among such Fronting Bank, the
Borrowers and the Agent. As of the date of this Agreement, the LC
Fronting Bank Commitment of Bank of America is $750,000,000, and the LC
Fronting Bank Commitment of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ is $250,000,000.
"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 Borrowers on such date with
respect to payments made by the Fronting Banks under Letters of Credit
(excluding reimbursement obligations that have been repaid with the
proceeds of any 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 2.19(d).
10
"Lenders" shall have the meaning given such term in the
preamble hereto.
"Letter Agreements" shall mean (i) the Commitment Letter,
dated April 19, 2002, among the Borrowers, the Agent and the Joint Lead
Arrangers named therein, (ii) the Fee Letter, dated April 19, 2002,
among the Borrowers, Bank of America and Banc of America Securities LLC
and (iii) the Fee Letter dated April 19, 2002, among the Borrowers,
JPMorgan Chase and ▇.▇. ▇▇▇▇▇▇ Securities, Inc., each as amended,
modified or supplemented from time to time.
"Letter of Credit" means a letter of credit that is issued by
a Fronting Bank pursuant to Section 2.19, as such letter of credit may
from time to time be amended, modified or extended in accordance with
the terms of this Agreement.
"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 JPMorgan Chase 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 JPMorgan Chase in immediately available funds in the London
interbank market at approximately 11:00 a.m. London time, two Business
Days prior to the commencement of such Interest Period.
"Lien" shall mean, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in
respect of such asset. For the purposes of this Agreement, any person
shall be deemed to own subject to a Lien any asset which it has
acquired or holds subject to the interest of a vendor or lessor under
any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"Loan" shall mean a revolving loan made pursuant to Section
2.03, whether made as a Eurodollar Loan or as an ABR Loan.
"Margin Regulations" shall mean Regulations T, U and X of the
Board as from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Margin Stock" shall have the meaning given such term under
Regulation U of the Board.
"Material Adverse Change" shall mean, with respect to any
Borrower, a materially adverse change in the business, assets,
operations or financial condition of such Borrower and its Subsidiaries
taken as a whole that makes such Borrower unable to
11
perform any of its obligations under this Agreement or that impairs the
rights of, or benefits available to, the Lenders or any Fronting Bank
under this Agreement.
"Maturity Date" shall mean the earlier to occur of (i) the
last day of the Revolving Period, or, if the conditions set forth in
Section 2.18 shall have been met, the first anniversary of the last day
of the Revolving Period and (ii) the date of termination or reduction
in whole of the Commitments pursuant to Section 2.09 or Article VI.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which any 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.
"Oncor" shall have the meaning set forth in the preamble
hereto.
"Oncor Mortgage" shall mean the Mortgage and Deed of Trust,
dated as of December 1, 1983, from TXU Electric Company to Irving Trust
Company (now The Bank of New York), Trustee, as amended and
supplemented from time to time and as assumed by Oncor.
"Operating Agreements" shall mean (i) 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 Energy, TXU Energy Retail Company LP and TXU
Generation Company LP (pursuant to the Assumption Agreement, dated
December 31, 2001, by and among Holdings, Energy, TXU Energy Retail
Company LP and TXU Generation Company LP) (TXU Mining Operating
Agreement), and as it may be amended from time to time, or (ii) the
Operating Agreement, dated December 15, 1976, between TXU Fuel and
Dallas Power & Light Company, Texas Electric Service Company and Texas
Power & Light Company (TXU Fuel Operating Agreement), as it may be
amended from time to time; provided that no amendment of the TXU Mining
Operating Agreement or the TXU Fuel Operating Agreement shall increase
the scope of any Lien permitted under Section 5.10(j).
"Outstanding Credits" means, on any date of determination, an
amount equal to (i) the aggregate principal amount of all Loans
outstanding on such date plus (ii) the LC Outstandings on such date.
The "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.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
12
"Percentage" means, for any Lender on any date of
determination, the percentage obtained by dividing such Lender's
Commitment on such date by the Total Commitment on such date.
"Permitted Encumbrances" shall mean, as to any person at any
date, any of the following:
(a) (i) Liens for taxes, assessments or governmental
charges not then delinquent and Liens for workers' compensation awards
and similar obligations not then delinquent and undetermined Liens or
charges incidental to construction, Liens for taxes, assessments or
governmental charges then delinquent but the validity of which is
being contested at the time by such person in good faith against which
an adequate reserve has been established, with respect to which levy
and execution thereon have been stayed and continue to be stayed and
which do not impair the use of the property or the operation of such
person's business, (ii) Liens incurred or created in connection with
or to secure the performance of bids, tenders, contracts (other than
for the payment of money), leases, statutory obligations, surety bonds
or appeal bonds, and mechanics' or materialmen's Liens, assessments or
similar encumbrances, the existence of which does not impair the use
of the property subject thereto for the purposes for which it was
acquired, and other Liens of like nature incurred or created in the
ordinary course of business;
(b) Liens securing indebtedness, neither assumed nor
guaranteed by such person nor on which it customarily pays interest,
existing upon real estate or rights in or relating to real estate
acquired by such person for any substation, transmission line,
transportation line, distribution line, right of way or similar
purpose;
(c) rights reserved to or vested in any municipality or
public authority by the terms of any right, power, franchise, grant,
license or permit, or by any provision of law, to terminate such
right, power, franchise, grant, license or permit or to purchase or
recapture or to designate a purchaser of any of the property of such
person;
(d) rights reserved to or vested in others to take or
receive any part of the power, gas, oil, coal, lignite or other
minerals or timber generated, developed, manufactured or produced by,
or grown on, or acquired with, any property of such person and Liens
upon the production from property of power, gas, oil, coal, lignite or
other minerals or timber, and the by-products and proceeds thereof, to
secure the obligations to pay all or a part of the expenses of
exploration, drilling, mining or development of such property only out
of such production or proceeds;
(e) easements, restrictions, exceptions or reservations in
any property and/or rights of way of such person for the purpose of
roads, pipe lines, substations, transmission lines, transportation
lines, distribution lines, removal of oil, gas, lignite, coal or other
minerals or timber, and other like purposes, or for the joint or
common use of real property, rights of way, facilities and/or
equipment, and defects, irregularities and deficiencies in titles of
any property and/or rights of way, which do not materially impair the
use of such property and/or rights of way for the purposes for which
such property and/or rights of way are held by such person;
13
(f) rights reserved to or vested in any municipality or
public authority to use, control or regulate any property of such
person;
(g) any obligations or duties, affecting the property of
such person, to any municipality or public authority with respect to
any franchise, grant, license or permit;
(h) as of any particular time any controls, Liens,
restrictions, regulations, easements, exceptions or reservations of
any municipality or public authority applying particularly to space
satellites or nuclear fuel;
(i) any judgment Lien against such person securing a
judgment for an amount not exceeding 25% of Consolidated Shareholders'
Equity of such Person, so long as the finality of such judgment is
being contested by appropriate proceedings conducted in good faith and
execution thereon is stayed;
(j) any Lien arising by reason of deposits with or giving
of any form of security to any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, for any purpose at any time as
required by law or governmental regulation as a condition to the
transaction of any business or the exercise of any privilege or
license, or to enable such person to maintain self-insurance or to
participate in any fund for liability on any insurance risks or in
connection with workers' compensation, unemployment insurance, old age
pensions or other social security or to share in the privileges or
benefits required for companies participating in such arrangements; or
(k) any landlords' Lien on fixtures or movable property
located on premises leased by such person in the ordinary course of
business so long as the rent secured thereby is not in default.
"person" shall mean any natural person, corporation, business
trust, joint venture, association, company, limited liability company,
partnership or government, or any agency or political subdivision
thereof.
"Plan" shall mean any employee pension benefit plan described
under Section 3(2) of ERISA (other than a Multiemployer Plan) subject
to the provisions of Title IV of ERISA that is maintained by any
Borrower or any ERISA Affiliate.
"Qualified Transition Bonds" of any Borrower shall mean
securities, however denominated, that are (i) issued by such Borrower
or a Consolidated Subsidiary of such Borrower formed and operating
solely for the purpose of (A) purchasing and owning transition property
created under a "financing 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, (ii)
secured by or otherwise payable from transition charges authorized
pursuant to such order, and (iii) non-recourse to such Borrower or any
of its Consolidated Subsidiaries (other than the issuer of such
securities).
14
"Register" shall have the meaning given such term in Section
8.04(d).
"Reportable Event" shall mean any reportable event as defined
in Sections 4043(c)(1)-(8) of ERISA or the regulations issued
thereunder (other than a reportable event for which the 30 day notice
requirement has been waived) with respect to a Plan (other than a Plan
maintained by an ERISA Affiliate that is considered an ERISA Affiliate
only pursuant to subsection (m) or (o) of Code Section 414).
"Request for Issuance" shall mean a request made pursuant to
Section 2.19 in the form of Exhibit C.
"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 Article VI,
or (ii) if the Total Commitment has been terminated, Lenders 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.
"Revolving Period" shall mean the period beginning on the date
hereof and ending on April 22, 2003.
"S&P" shall mean Standard & Poor's Ratings Services (a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.).
"SEC" shall mean the Securities and Exchange Commission.
"Significant Disposition" shall mean a sale, lease,
disposition or other transfer by a Borrower, or any Subsidiary of a
Borrower, during any 12-month period, of assets constituting, either
individually or in the aggregate with all other assets sold, leased,
disposed or otherwise transferred by such Borrower or any Subsidiary
thereof during such period, 25% (in the case of each Subsidiary
Borrower) or 10% (in the case of Holdings) or more of the assets of
such Borrower and its Subsidiaries taken as a whole, excluding any such
sale, lease, disposition or other transfer to a Wholly Owned Subsidiary
of such Subsidiary Borrower.
"Significant Subsidiary" shall mean, with respect to any
Borrower at any time, any Subsidiary of such Borrower that as of such
time has total assets in excess of 10% of the total assets of such
Borrower and its Consolidated Subsidiaries; provided, that each of
Energy and Oncor shall at all times be considered a Significant
Subsidiary of Holdings.
"Solvent" means, 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
15
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" means the maximum amount available to be drawn
by a beneficiary under a Letter of Credit.
"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.
"Subsidiary Borrower" shall mean each of Energy and Oncor.
"Substantial" shall mean, for any Borrower, an amount in
excess of 10% of the consolidated assets of such Borrower and its
Consolidated Subsidiaries taken as a whole.
"Total Commitment" shall mean, at any time, the aggregate
amount of Commitments of all the Lenders, as in effect at such time.
The initial amount of the Total Commitment is $1,000,000,000.
"2001 Agreement" shall mean the 364-Day Competitive Advance
and Revolving Credit Facility Agreement, dated as of February 23, 2001,
as amended, among TXU and Holdings, as borrowers, the financial
institutions parties thereto, as lenders, and JPMorgan Chase, as
administrative agent and competitive advance facility agent thereunder.
"TXU" shall mean TXU Corp., a Texas corporation.
"TXU Fuel" shall mean TXU Fuel Company, a Texas corporation.
"TXU Mining" shall mean TXU Mining Company LP, a Texas limited
partnership, 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.
"Utilization Percentage" shall mean 0.125% per annum.
"Utilization Period" shall mean any day or days during the
Revolving Period in which the aggregate amount of Outstanding Credits
is greater than 33-1/3% of the Total Commitment for such day or days.
"Voting Shares" shall mean, as to shares or other equity
interests of a particular corporation or other type of person,
outstanding shares of stock or other equity interests
16
of any class of such corporation or other person entitled to vote in
the election of directors or other comparable managers of such person,
excluding shares or other interests entitled so to vote only upon the
happening of some contingency.
"Wholly Owned Subsidiary" of any person shall mean any
Consolidated Subsidiary of such person all the shares of common stock
and other voting capital stock or other voting ownership interests
having ordinary voting power to vote in the election of the board of
directors or other governing body performing similar functions (except
directors' qualifying shares) of which are at the time directly or
indirectly owned by such person.
"Withdrawal Liability" shall mean liability of a Borrower
established under Section 4201 of ERISA as a result of a complete or
partial withdrawal from a Multiemployer Plan, as such terms are defined
in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally.
The definitions in Section 1.01 shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include," "includes" and "including" shall be deemed to
be followed by the phrase "without limitation." All references herein to
Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided, however, that
for purposes of determining compliance with any covenant set forth in Article V,
such terms shall be construed in accordance with GAAP as in effect on the date
hereof applied on a basis consistent with the application used in preparing the
Borrowers' audited financial statements referred to in Section 3.05.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments.
Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender agrees, severally
and not jointly, to make Loans to any Borrower at any time and from time to time
until the last day of the Revolving Period or the prior termination of the
Commitment of such Lender up to the amount of such Lender's Available
Commitment, each Fronting Bank agrees to issue Letters of Credit for the account
of any Borrower at any time and from time to time until the fifth Business Day
preceding the last day of the Revolving Period in an aggregate stated amount at
any time outstanding not to exceed such Fronting Bank's LC Fronting Bank
Commitment, and each Lender agrees to purchase participations in such Letters of
Credit as more fully set forth in Section 2.19, subject, however, to the
conditions that (i) at no time shall Outstanding Credits exceed the Total
Commitment, (ii) at no time shall any Lender's Outstanding Credits exceed the
amount of such Lender's Commitment, (iii) at no time shall the
17
Outstanding Credits available to any Borrower exceed the Total Commitment, and
(iv) at no time shall any Fronting Bank make any Extension of Credit relating to
a Letter of Credit if such Extension of Credit would cause the aggregate amount
of Outstanding Credits to exceed the Total Commitment or the aggregate LC
Outstandings relating to such Fronting Bank to exceed such Fronting Bank's LC
Fronting Bank Commitment.
Within the foregoing limits, the Borrowers may borrow, pay or prepay
Loans and request new Extensions of Credit hereunder, on and after the date
hereof and prior to the 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
Loans made by the Lenders ratably in accordance with their respective
Commitments; provided, however, that the failure of any Lender to make any Loan
shall not in itself relieve any other Lender of its obligation to lend hereunder
(it being understood, however, that no Lender shall be responsible for the
failure of any other Lender to make any Loan required to be made by such other
Lender). The Loans comprising any Borrowing shall be in an aggregate principal
amount that is an integral multiple of $5,000,000 and not less than $25,000,000
(or an aggregate principal amount equal to the remaining balance of the
Available Commitments).
(b) Each Borrowing shall be comprised entirely of Eurodollar Loans
or ABR Loans, as the applicable 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 any Borrower to
repay such Loan in accordance with the terms of this Agreement. Borrowings of
more than one Type may be outstanding at the same time.
(c) Subject to paragraph (d) below, each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds to the Agent in New York, New York, not later than
noon, New York City time, and the Agent shall by 2:00 p.m., New York City time,
credit the amounts so received to the account or accounts specified from time to
time in one or more notices delivered by the applicable 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 paragraph (c) and the Agent may, in reliance
upon such assumption, make available to the applicable 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 applicable 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 such Borrower until the date such
amount is repaid to the Agent, at (i) in the case of such Borrower, the interest
rate applicable at the time to the Loans
18
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) A Borrower may refinance all or any part of any Borrowing with
a Borrowing of the same or a different Type, subject to the conditions and
limitations set forth in this Agreement. Any Borrowing or part thereof so
refinanced shall be deemed to be repaid or prepaid in accordance with Section
2.05 or 2.10, 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 such Borrower pursuant to paragraph (c) above.
SECTION 2.03. Borrowing Procedure.
In order to request a Borrowing, a Borrower shall hand deliver or
telecopy to the Agent a duly completed Borrowing Request in the form of Exhibit
A (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before such Borrowing, and (b) in the case of an
ABR Borrowing, not later than 11:00 a.m., New York City time, one Business Day
before such Borrowing. Such notice shall be irrevocable and shall in each case
specify (i) whether the Borrowing then being requested is to be a Eurodollar
Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which shall be a
Business Day) and the amount thereof; and (iii) if such Borrowing is to be a
Eurodollar Borrowing, the Interest Period with respect thereto, which shall not
end after the Maturity Date. 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 a 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 such Borrower shall (unless such Borrowing is repaid at the end of such
Interest Period) be deemed to have given notice of an election to refinance such
Borrowing with an ABR Borrowing. Notwithstanding any other provision of this
Agreement to the contrary, no Borrowing shall be requested if the Interest
Period with respect thereto would end after the Maturity Date. The Agent shall
promptly advise the Lenders of any notice given pursuant to this Section 2.03
and of each Lender's portion of the requested Borrowing.
SECTION 2.04. Fees.
(a) Holdings agrees to pay to each Lender, through the Agent, on
each March 31, June 30, September 30 and December 31 (with the first payment
being due on June 30, 2002) and on each date on which the Commitment of such
Lender shall be terminated or reduced as provided herein, a facility fee (a
"Facility Fee"), at a rate per annum equal to the Facility Fee Percentage from
time to time in effect on the amount of the Commitment of such Lender (whether
used or unused), during the preceding quarter (or other period commencing on the
date of this Agreement or ending on the Maturity Date or any date on which the
Commitment of such Lender shall be terminated). All Facility Fees shall be
computed on the basis of the actual number of days elapsed in a year of 360
days. The Facility Fee due to each Lender shall
19
commence to accrue on the date of this Agreement, and shall cease to accrue on
the date of termination of the Commitment of such Lender as provided herein.
(b) Holdings agrees to pay the Agent the fees from time to time
payable to it in its capacity as Agent pursuant to the Letter Agreements (the
"Administrative Fee").
(c) Each Borrower for the account of which a Letter of Credit is
issued agrees to pay the Agent for the account of the Fronting Bank that issued
such Letter of Credit a fronting fee (a "Fronting Fee") and such other charges
with respect to such Letter of Credit as are set forth in the Letter Agreements
or otherwise agreed upon with such Fronting Bank, and agrees to pay to the Agent
for the account of the Lenders a fee (the "LC Fee") on the face amount of each
Letter of Credit issued by any Fronting Bank for the account of such Borrower
calculated at a rate per annum equal to the Applicable Margin for Eurodollar
Loans (whether any such Loans are then outstanding), computed on the basis of
the actual number of days that each such Letter of Credit is outstanding,
assuming a year of 360 days, payable in arrears on each March 31, June 30,
September 30 and December 31, and on the date that such Letter of Credit expires
or is drawn in full.
(d) All Fees shall be paid on the dates due, in immediately
available funds, to the Agent for distribution, if and as appropriate, among the
Lenders. Once paid, none of the Fees shall be refundable under any
circumstances.
SECTION 2.05. Repayment of Loans; Evidence of Indebtedness.
(a) The outstanding principal balance of each Loan shall be due and
payable on the last day of the Interest Period applicable thereto and on the
Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness to such Lender
resulting from each 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.
(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 each
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Agent hereunder from each Borrower and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) of this Section 2.05 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Lender
or the Agent to maintain such accounts or any error therein shall not in any
manner affect the obligations of the Borrowers to repay the Outstanding Credits
in accordance with their terms.
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SECTION 2.06. Interest on Loans.
(a) Subject to the provisions of Section 2.07, the Loans comprising
each Eurodollar Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to the LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Margin from time to time in effect.
(b) Subject to the provisions of Section 2.07, the Loans comprising
each ABR Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of (i) 365 or 366 days, as the case may be,
for periods during which the Alternate Base Rate is determined by reference to
the Prime Rate and (ii) 360 days for other periods) at a rate per annum equal to
the Alternate Base Rate plus the Applicable Margin from time to time in effect.
(c) Interest on each Loan shall be payable on each Interest Payment
Date applicable to such Loan except as otherwise provided in this Agreement. The
applicable LIBO Rate or Alternate Base Rate for each Interest Period or day
within an Interest Period, as the case may be, shall be determined by JPMorgan
Chase, and such determination shall be conclusive absent manifest error;
provided that JPMorgan Chase shall, upon request, provide to the applicable
Borrower a certificate setting forth in reasonable detail the basis for such
determination.
SECTION 2.07. Default Interest.
If a Borrower shall default in the payment of the principal of or
interest on any Loan or any other amount becoming due hereunder, whether by
scheduled maturity, notice of prepayment, acceleration or otherwise, such
Borrower shall on demand from time to time from the Agent pay interest, to the
extent permitted by law, on such defaulted amount up to (but not including) the
date of actual payment (after as well as before judgment) at a rate per annum
(computed as provided in Section 2.06(b)) equal to the Alternate Base Rate plus
the Applicable Margin for ABR Loans plus 2%.
SECTION 2.08. 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 Borrowers and the Lenders. In
the event of any such determination under clause (i) or (ii) above, until the
Agent shall have advised the Borrowers and the Lenders that the circumstances
giving rise to such notice no longer exist, any request by a 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 applicable
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 such Borrower for a Eurodollar Borrowing shall be deemed a request
for an ABR
21
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 applicable Borrower a certificate setting forth in
reasonable detail the basis for such determination.
SECTION 2.09. Termination and Reduction of Commitments.
(a) The Commitments shall be automatically terminated on the Maturity
Date.
(b) On the last day of the Revolving Period, the Total Commitment shall
be permanently reduced to an amount equal to the Outstanding Credits. In
addition, if on any date following the last day of the Revolving Period the
Outstanding Credits shall be less than the Total Commitment, then on such date
the Total Commitment shall be permanently reduced to an amount equal to the then
Outstanding Credits.
(c) Upon at least two Business Days' prior irrevocable written notice
to the Agent, the Borrowers, acting jointly, may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Total Commitment; provided, however, that (i) each partial reduction of the
Total Commitment shall be in an integral multiple of $10,000,000 and in a
minimum principal amount of $10,000,000 and (ii) no such termination or
reduction shall be made that would reduce the Total Commitment to an amount less
than (1) the aggregate amount of Outstanding Credits on the date of such
termination or reduction (after giving effect to any prepayment made pursuant to
Section 2.10) or (2) $50,000,000, unless the result of such termination or
reduction referred to in this clause (2) is to reduce the Total Commitment to
$0. The Agent shall advise the Lenders of any notice given pursuant to this
Section 2.09(c) and of each Lender's portion of any such termination or
reduction of the Total Commitment.
(d) Each reduction in the Total Commitment hereunder shall be made
ratably among the Lenders in accordance with their respective Commitments. The
Borrowers shall pay to the Agent for the account of the Lenders, on the date of
each termination or reduction of the Total Commitment, the Facility Fees on the
amount of the Commitments so terminated or reduced accrued through the date of
such termination or reduction.
SECTION 2.10. Prepayment.
(a) Each Borrower shall have the right at any time and from time to
time to prepay any Borrowing, in whole or in part, upon giving telecopy notice
(or telephone notice promptly confirmed by telecopy) to the Agent: (i) before
11:00 a.m., New York City time, three Business Days prior to prepayment, in the
case of Eurodollar Loans, and (ii) before 11:00 a.m., New York City time, one
Business Day prior to prepayment, in the case of ABR Loans; provided, however,
that each partial prepayment shall be in an amount which is an integral multiple
of $10,000,000 and not less than $10,000,000. Any principal amount of any Loan
repaid or prepaid on or after the last day of the Revolving Period and not
refinanced with the proceeds of another Loan on the date of such repayment or
prepayment (as the case may be) may not be reborrowed.
(b) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Borrowing (or portion
thereof) by the amount stated therein
22
on the date stated therein. All prepayments under this Section 2.10 shall be
subject to Section 8.05 but otherwise without premium or penalty. All
prepayments under this Section 2.10 shall be accompanied by accrued interest on
the principal amount being prepaid to the date of payment.
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
any Fronting Bank hereunder (except for changes in respect of taxes on the
overall net income of such Lender or such Fronting Bank (as the case may be) or
its lending office imposed by the jurisdiction in which such Lender's or such
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 such Fronting Bank (as the case may be) or shall result in the imposition on
any Lender, any 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 such Fronting Bank, and
the result of any of the foregoing shall be to increase the cost to such Lender
or such 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 such Fronting Bank (as the case may be)
hereunder (whether of principal, interest or otherwise) by an amount deemed by
such Lender or such Fronting Bank (as the case may be) to be material, then the
applicable Borrower or, if the foregoing circumstances do not relate to a
particular Borrowing, Holdings shall, upon receipt of the notice and certificate
provided for in Section 2.11(c), promptly pay to such Lender or such Fronting
Bank (as the case may be) such additional amount or amounts as will compensate
such Lender or such Fronting Bank (as the case may be) for such additional costs
incurred or reduction suffered.
(b) If any Lender or 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
Fronting Bank (or any lending office of such Lender or such Fronting Bank) or
any Lender's or any 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 such
23
Fronting Bank's (as the case may be) capital or on the capital of such Lender's
or such 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 such Fronting Bank (as the case may be) pursuant
hereto to a level below that which such Lender or such Fronting Bank (as the
case may be) or such Lender's or such 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 such Fronting Bank's (as the case
may be) policies and the policies of such Lender's or such Fronting Bank's (as
the case may be) holding company with respect to capital adequacy) by an amount
deemed by such Lender or such 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 such Fronting Bank (as the case may be) for any such reduction
suffered will be paid to such Lender or such Fronting Bank (as the case may be)
by the applicable Borrower or, if the foregoing circumstances do not relate to a
particular Borrower, by Holdings. It is acknowledged that this Agreement is
being entered into by the Lenders and the Fronting Banks on the understanding
that neither the Lenders nor the Fronting Banks will be required to maintain
capital against their 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 any Fronting Bank shall otherwise
determine that such understanding is incorrect, it is agreed that the Lenders or
the Fronting Banks, as the case may be, will be entitled to make claims under
this paragraph (b) based upon market requirements prevailing on the date hereof
for commitments under comparable credit facilities against which capital is
required to be maintained.
(c) A certificate of each Lender or the applicable Fronting Bank
setting forth such amount or amounts as shall be necessary to compensate such
Lender or such Fronting Bank (as the case may be) or its holding company as
specified in paragraph (a) or (b) above, as the case may be, and containing an
explanation in reasonable detail of the manner in which such amount or amounts
shall have been determined, shall be delivered to the applicable Borrower or the
Borrowers, as the case may be, and shall be conclusive absent manifest error.
The applicable Borrower shall pay each Lender or 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 the same. Each Lender and each Fronting Bank shall
give prompt notice to the applicable Borrower of any event of which it has
knowledge, occurring after the date hereof, that it has determined will require
compensation by such Borrower pursuant to this Section; provided, however, that
failure by such Lender or such Fronting Bank to give such notice shall not
constitute a waiver of such Lender's or such Fronting Bank's (as the case may
be) right to demand compensation hereunder.
(d) Failure on the part of any Lender or 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 such 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 or 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 applicable
Borrower that it will demand compensation for such costs or reductions under
paragraph (c) above not more than 90 days after the later of (i) such date and
(ii) the date on which it shall have become aware of such costs or reductions.
The protection of this Section shall be available to each Lender and each
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 each 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
24
and will not, in the reasonable judgment of such Lender or such Fronting Bank
(as the case may be), be disadvantageous to such Lender or such 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 Borrowers and to the Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be
made by such Lender hereunder, whereupon any request for a Eurodollar
Borrowing shall, as to such Lender only, be deemed a request for an ABR
Loan unless such declaration shall be subsequently withdrawn (any
Lender delivering such a declaration hereby agreeing to withdraw such
declaration promptly upon determining that such event of illegality no
longer exists); and
(ii) require that all outstanding Eurodollar Loans made by it
be converted to ABR Loans, in which event all such Eurodollar Loans
shall be automatically converted to ABR Loans as of the effective date
of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(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 2.12 and 2.17, 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 Facility Fees, each reduction
of the Commitments and each refinancing or conversion of any Borrowing with a
Borrowing of any Type, shall be allocated pro rata among the Lenders in
accordance with their respective Commitments (or, if such Commitments shall have
expired or been terminated, in accordance with the respective principal amounts
of their Outstanding 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 in accordance with their
respective Commitments. 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.
25
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. Each 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 such Borrower to such Lender by reason
thereof as fully as if such Lender had made an Extension of Credit in the amount
of such participation.
Section 2.15. Payments.
(a) Each 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 One Chase
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ (Telecopy No. 212-552-5777), 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
such Borrower's rights to any independent claim that such Borrower may have
against the Agent, any 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.
26
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 a
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 such
Borrower Payments, but only to the extent reasonably attributable to such
Borrower Payments, excluding (i) income taxes imposed on the net income of the
Agent, any 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, any Fronting Bank or
any Lender (or Transferee), in each case by the jurisdiction under the laws of
which the Agent, such 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 any 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 any
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 sums payable under this Section
2.16) such Lender (or Transferee) or the Agent or such 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) such Borrower shall make such deductions
and (iii) such Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, each Borrower shall pay to the relevant United States
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or the
Letter Agreements ("Other Taxes").
(c) Each Borrower shall indemnify each Lender (or Transferee thereof),
the Agent and each 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, a 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 a 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 a Borrower, or with respect to which a Borrower has paid
additional amounts, pursuant to this Section 2.16, it shall promptly notify
27
such Borrower of the availability of such refund claim and shall, within 30
days after receipt of a request by such Borrower, make a claim to such United
States Governmental Authority for such refund at such Borrower's expense. If a
Lender (or Transferee) or the Agent or a 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 a Borrower or with respect to which a 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 such Borrower (but only to the
extent of indemnity payments made, or additional amounts paid, by such 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 such Fronting Bank and without interest (other than interest
paid by the relevant United States Governmental Authority with respect to such
refund); provided, however, that such Borrower, upon the request of such Lender
(or Transferee) or the Agent or such Fronting Bank, agrees to repay the amount
paid over to such Borrower (plus penalties, interest or other charges) to such
Lender (or Transferee) or the Agent or such Fronting Bank in the event such
Lender (or Transferee) or the Agent or such 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 a Borrower to the relevant
United States Governmental Authority, such Borrower will deliver to the Agent,
at its address referred to in Section 8.01, the original or a certified copy of
a receipt issued by such United States Governmental Authority evidencing
payment thereof.
(f) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.16 shall
survive the payment in full of the principal of and interest on all Outstanding
Credits hereunder.
(g) Each of the Agent, each 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 Borrowers 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 any 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
Section 2.16(g), a Non-U.S. Lender shall not be required to deliver any form
pursuant to this Section 2.16(g) that such Non-U.S. Lender is not legally able
to deliver.
(h) A 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
28
withholding tax pursuant to paragraph (a) or (c) above to the extent that (i)
the obligation to withhold amounts with respect to United States Federal, state
or local withholding tax existed on the date such Non-U.S. Lender became a
party to this Agreement (or, in the case of a Transferee that is a
participation holder, on the date such participation holder became a Transferee
hereunder) or, with respect to payments to a New Lending Office, the date such
Non-U.S. Lender designated such New Lending Office with respect to 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 such Borrower; and provided further, however, that this
clause (i) shall not apply to the extent the indemnity payment or additional
amounts any Transferee, or any 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 such 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 paragraph (g) above and (i) below.
(i) Any 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 a Borrower or to change the jurisdiction of its applicable lending
office if the making of such a filing or change would avoid the need for or
reduce the amount of any such indemnity payment or additional amounts that may
thereafter accrue and would not, in the good faith determination of such
Fronting Bank or such Lender (or Transferee) (as the case may be), be otherwise
disadvantageous to such Fronting Bank or such Lender (or Transferee) (as the
case may be).
(j) Nothing contained in this Section 2.16 shall require any Lender (or
Transferee) or the Agent or any Fronting Bank to make available to such Borrower
any of its tax returns (or any other information) that it deems to be
confidential or proprietary.
(k) Notwithstanding anything herein to the contrary, the
indemnification obligations under this Section shall, to the extent
practicable, be allocated between the Borrowers based upon their relative
liability for the interest, fee or other payments in respect of which such
indemnification obligations arise.
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 any Borrower shall be required
to make additional payments to any Lender under Section 2.16, the Borrowers
shall have the right, at their own expense, upon notice to such Lender and the
Agent, to require such Lender to transfer and assign without recourse (in
accordance with and subject to the restrictions contained in Section 8.04) all
such Lender's interests, rights and obligations contained hereunder to another
financial institution approved by
29
the Agent and the Borrowers (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 Borrowers shall
pay the processing and recordation fee due pursuant to Section 8.04.
SECTION 2.18. Term Loans.
On the last day of the Revolving Period, if and only if on such date
(i) Loans are outstanding and (ii) no Default or Event of Default shall have
occurred and be continuing, the Maturity Date shall be extended for a period of
one year from the last day of the Revolving Period.
1) Letters of Credit
(a) Subject to the terms and conditions hereof, each Letter of Credit
shall be issued (or the stated maturity thereof extended or terms thereof
modified or amended) on not less than three Business Days' prior notice thereof
by the delivery by a Borrower of a Request for Issuance to the Agent (which
shall promptly distribute copies thereof to the Lenders) and the Fronting Bank
designated by such Borrower. Each Request for Issuance shall identify the
Borrower for the account of which the Letter of Credit is proposed to be issued
and the relevant Fronting Bank and shall specify (i) 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
expiry date thereof (which shall be no later than the fifth Business Day
preceding the last day of the Revolving Period), (ii) 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 applicable Fronting
Bank), (iii) the name and address of the beneficiary of such Letter of Credit
and (iv) 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
the Letter of Credit thereto. Each Request for Issuance shall be irrevocable
unless modified or rescinded by the Borrower that delivered such request 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 applicable Fronting Bank shall issue
(or extend, amend or modify) such Letter of Credit and provide 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 applicable 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. No Fronting Bank shall
at any time be obligated to issue any Letter of Credit if such issuance would
conflict with any applicable requirement of law.
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(b) No Letter of Credit shall be requested or issued hereunder if,
after the issuance thereof, the Outstanding Credits would exceed the Total
Commitment.
(c) Each of the Borrowers hereby agrees to pay to the Agent for the
account of each Fronting Bank and, if they shall have funded participations in
the reimbursement obligations of such Borrower pursuant to subsection (d)
below, the Lenders, on demand made by such Fronting Bank to such Borrower, on
and after each date on which such Fronting Bank shall pay any amount under any
Letter of Credit issued by such Fronting Bank for the account of such Borrower,
a sum equal to the amount so paid plus interest on such amount from the date so
paid by such Fronting Bank until repayment to such Fronting Bank in full at a
fluctuating interest rate per annum equal to the Alternate Base Rate plus the
Applicable Margin for ABR Loans plus, if any amount paid by such Fronting Bank
under a Letter of Credit is not reimbursed by such Borrower within three
Business Days, 2%.
(d) If any Fronting Bank shall not have been reimbursed in full by a
Borrower for any payment made by such Fronting Bank under a Letter of Credit
issued by such Fronting Bank for the account of such Borrower on the date of
such payment, such 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
such Fronting Bank. Notwithstanding any provision of this Agreement to the
contrary, each Lender severally agrees to fund its participation in the
reimbursement obligation of the Borrower to each Fronting Bank by paying to the
Agent for the account of such Fronting Bank an amount equal to such Lender's
Percentage of such unreimbursed amount paid by such 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 such Fronting Bank to the date
of payment to such 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
such Fronting Bank and (ii) the Business Day on which the Lender shall have
received an LC Payment Notice from such Fronting Bank. Each Lender's obligation
to make each such payment to the Agent for the account of each Fronting Bank
shall be several and shall not be affected by the occurrence or continuance of
a Default or Event of Default or the failure of any other Lender to make any
payment under this Section 2.19(d). Each Lender further agrees that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) The failure of any Lender to make any payment to the Agent for the
account of any Fronting Bank in accordance with subsection (d) 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 any Fronting
Bank in accordance with subsection (d) above within five Business Days after
the LC Payment Notice relating thereto, then, for so long as such failure shall
continue, (i) such Fronting Bank shall be deemed to be a Lender hereunder owed
a Loan, and for purposes of voting rights hereunder, having a Commitment, in an
amount equal to the outstanding principal
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amount due and payable by such non-performing Lender to the Agent for the
account of such Fronting Bank pursuant to subsection (d) 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 principal amount
due and payable by such non-performing Lender. Any non-performing Lender and
the Borrower for the account of which the relevant Letter of Credit was issued
(without waiving any claim against such Lender for such Lender's failure to
fund a participation in the reimbursement obligations of such Borrower under
subsection (d) above) severally agree to pay to the Agent for the account of
the applicable Fronting Bank forthwith on demand 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 (d) above
until the date such amount is paid to the Agent at (A) in the case of such
Borrower, the interest rate applicable at the time to ABR Loans (or the
interest rate that would be applicable if ABR Loans were outstanding) and (B)
in the case of such Lender, the Federal Funds Effective Rate.
(f) The payment obligations of each Lender under Section 2.19(d) and of
each 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), any 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;
(v) payment in good faith by any Fronting Bank under the
Letter of Credit issued by such 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.
(g) Each Borrower assumes all risks of the acts and omissions of any
beneficiary or transferee of any Letter of Credit issued for the account of
such Borrower. Neither any 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 any
Fronting Bank against presentation of documents that do not comply with the
terms of
32
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
applicable Fronting Bank, and such Fronting Bank shall be liable to such
Borrower and any Lender, to the extent of any direct, as opposed to
consequential, damages suffered by such Borrower or such Lender which such
Borrower or such Lender proves were caused by such Fronting Bank's willful
misconduct or gross negligence, including, in the case of such Borrower, such
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, each Fronting Bank may accept sight drafts and accompanying
certificates presented under any Letter of Credit issued by such 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 such Fronting Bank. Without limiting the foregoing, no Lender
shall be obligated to indemnify any Borrower for damages caused by any Fronting
Bank's willful misconduct or gross negligence.
(h) If there shall be more than one Fronting Bank that has issued a
Letter of Credit at any time hereunder, each such Fronting Bank shall, with
respect to the Letters of Credit issued by it and the reimbursement obligations
owing to it, be regarded hereunder as the "Fronting Bank" and shall have all of
the rights, interests, protections and obligations of the "Fronting Bank"
hereunder with respect to such Letters of Credit and reimbursement obligations
and all matters relating thereto. Whenever any action may be, or is required to
be, taken by the Fronting Bank hereunder, each Fronting Bank may, or shall,
take such action only in respect of the Letters of Credit issued by it and the
reimbursement obligations owing to it. Whenever the consent of the Fronting
Bank is required hereunder with respect to any proposed action, the consent of
each Fronting Bank of a Letter of Credit that is then outstanding, or in
respect of which reimbursement obligations remain outstanding, shall be
required for such proposed action to be taken. Any notice to be provided to the
Fronting Bank shall be provided to each Fronting Bank of a Letter of Credit
that is then outstanding, or in respect of which reimbursement obligations
remain outstanding, and each such Fronting Bank shall have the right to request
any information, and take any other action, as the Fronting Bank is permitted
to do hereunder. The protections accorded the Fronting Bank hereunder shall
inure to the benefit of each Fronting Bank, regardless of whether any Letter of
Credit issued by any such Fronting Bank or any reimbursement obligations in
respect thereof are outstanding at the time the benefits of such protections
are asserted.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Borrower (or, if a representation and warranty relates to only a
specific Borrower, such Borrower) represents and warrants to each Lender and
each Fronting Bank as follows:
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SECTION 3.01. Organization; Powers.
Such Borrower (i) is a corporation or, in the case of Energy, a limited
liability company, duly organized or (in the case of Energy) formed, validly
existing and in good standing under the laws of the jurisdiction of its
organization or formation (as the case may be), (ii) has all requisite power and
authority to own its property and assets and to carry on its business as now
conducted and as proposed to be conducted, (iii) is qualified to do business in
every jurisdiction where such qualification is required, except where the
failure so to qualify would not result in a Material Adverse Change, and (iv)
has the corporate or (in the case of Energy) 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 such Borrower of this
Agreement and the Extensions of Credit hereunder (i) have been duly authorized
by all requisite corporate or (in the case of Energy) limited liability company
action and (ii) will not (A) violate (x) any provision of any law, statute, rule
or regulation (including, without limitation, the Margin Regulations) or of the
certificate of incorporation or other constitutive documents (including, in the
case of Energy, its limited liability company or operating agreement) or by-laws
of such Borrower or any of its Subsidiaries to which such Borrower is subject,
(y) any order of any Governmental Authority or (z) any provision of any
indenture, agreement or other instrument to which such Borrower or any of its
Subsidiaries is a party or by which it or any of its property is or may be
bound, (B) be in conflict with, result in a breach of or constitute (alone or
with notice or lapse of time or both) a default under any such indenture,
agreement or other instrument or (C) result in the creation or imposition of any
Lien upon any property or assets of such Borrower.
SECTION 3.03. Enforceability.
This Agreement constitutes a legal, valid and binding obligation of
such 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 such 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 such Borrower, threatened appeal or other proceeding seeking
reconsideration or review thereof.
SECTION 3.05. Financial Statements.
(a) The consolidated balance sheet of Holdings and its Consolidated
Subsidiaries as of December 31, 2001 and the related consolidated statements of
income, retained earnings and cash flows for the fiscal year then ended,
reported on by Deloitte & Touche LLP and set forth in Holdings' 2001 Annual
Report on Form 10-K, copies of which have been delivered to each of
34
the Lenders and the Fronting Banks, present fairly, in all material respects,
the consolidated financial position of Holdings and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for the period ending on such date in conformity with GAAP.
(b) The combined balance sheet of Energy and the businesses that Energy
comprises as of December 31, 2001 and the related statements of combined income
and cash flow for the fiscal year then ended, reported on by Deloitte & Touche
LLP and set forth in Holdings' Form 8-K filed with the SEC on April 17, 2002,
copies of which have been delivered to each of the Lenders and the Fronting
Banks, present fairly, in all material respects, the combined financial position
of Energy and the businesses that Energy comprises as of such date and their
combined results of operations and cash flows for the period ending on such
date, in conformity with GAAP.
(c) The combined balance sheet of Oncor and the businesses that Oncor
comprises as of December 31, 2001 and the related statements of combined income
and cash flow for the fiscal year then ended, reported on by Deloitte & Touche
LLP and set forth in Holdings' Form 8-K filed with the SEC on April 17, 2002,
copies of which have been delivered to each of the Lenders and the Fronting
Banks, present fairly, in all material respects, the combined financial
position of Oncor and the businesses that Oncor comprises as of such date and
their combined results of operations and cash flows for the period ending on
such date, in conformity with GAAP.
(d) Except as set forth in the financial statements or other reports of
the type referred to in Section 5.03 hereof and which have been delivered to
the Lenders and the Fronting Banks on or prior to the date hereof, since
December 31, 2001, there has been no Material Adverse Change with respect to
such Borrower, other than as a result of the matters excluded from the
computation of Consolidated Earnings Available for Fixed Charges as set forth
in the definition thereof.
SECTION 3.06. Litigation.
Except as set forth in the financial statements or other reports of the
type referred to in Section 5.03 hereof and which have been delivered to the
Lenders and the Fronting Banks on or prior to the date hereof, there is no
action, suit or proceeding pending against, or to the knowledge of such Borrower
threatened against or affecting, such 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 materially
adversely affect the ability of such Borrower to pay its obligations hereunder
or which in any manner draws into question the validity of this Agreement.
SECTION 3.07. Federal Reserve Regulations.
(a) Neither such 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
such Borrower, whether directly or indirectly, and whether immediately,
incidentally or ultimately, to purchase
35
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 any Borrower
subject to the restrictions of Sections 5.09 and 5.10 are represented by Margin
Stock.
SECTION 3.08. Investment Company Act; Public Utility Holding Company
Act.
(a) Neither such 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) Such Borrower and each of its Subsidiaries is exempt from all
provisions of the Public Utility Holding Company Act of 1935 and rules and
regulations thereunder, except for Sections 9(a)(2) and 33 of such Act and the
rules and regulations thereunder, and the execution, delivery and performance
by the Borrowers of this Agreement and their respective 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 such Borrower to the Agent, any 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.
SECTION 3.10. Taxes.
Such 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 which 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, such 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 such Borrower nor any ERISA Affiliate has incurred any
Withdrawal Liability that could result in a Material Adverse Change. Neither
such 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
36
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 such 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 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. Such
Borrower's Significant Subsidiaries have all material governmental licenses,
authorizations, consents and approvals required to carry on the business of the
Significant Subsidiaries substantially as now conducted.
SECTION 3.13. Environmental Matters.
Except as set forth in or contemplated by the financial statements or
other reports of the type referred to in Section 5.03 hereof and which have been
delivered to the Lenders and the Fronting Banks on or prior to the date hereof,
such Borrower and each of its Subsidiaries has complied in all material respects
with all Federal, state, local and other statutes, ordinances, orders,
judgments, rulings and regulations relating to environmental pollution or to
environmental or nuclear regulation or control, except to the extent that
failure to so comply could not reasonably be expected to result in a Material
Adverse Change. Except as set forth in or contemplated by such financial
statements or other reports, neither such Borrower nor any of its Subsidiaries
has received notice of any failure so to comply, except where such failure could
not reasonably be expected to result in a Material Adverse Change. Except as set
forth in or contemplated by such financial statements or other reports, the
facilities of such Borrower or any of its Subsidiaries, as the case may be, are
not used to manage any hazardous wastes, hazardous substances, hazardous
materials, toxic substances, toxic pollutants or substances similarly
denominated, as those terms or similar terms are used in the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response
Compensation and Liability Act, the Hazardous Materials Transportation Act, the
Toxic Substance Control Act, the Clean Air Act, the Clean Water Act or any other
applicable law relating to environmental pollution, or any nuclear fuel or other
radioactive materials, in violation in any material respect of any law or any
regulations promulgated pursuant thereto, except to the extent that such
violations could not reasonably be expected to result in a Material Adverse
Change. Except as set forth in or contemplated by such financial statements or
other reports, such 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.
Such Borrower is Solvent.
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ARTICLE IV
CONDITIONS
The obligations of the Lenders and the Fronting Banks 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 each
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) ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, special New York counsel to the Borrowers,
and (B) Hunton & ▇▇▇▇▇▇▇▇, general counsel to the Borrowers, and (ii) King &
Spalding, special New York counsel to the Agent, in each case dated the date
hereof, addressed to the Agent, the Fronting Banks and the Lenders and in form
and substance satisfactory to the Agent.
(b) The Agent shall have received (i) a copy of the certificate of
incorporation or formation (as the case may be), including all amendments
thereto, of each Borrower, certified as of a recent date by the Secretary of
State of the state of incorporation or formation (as the case may be) of such
Borrower, and a certificate as to the good standing of each 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 each Borrower, dated the date
of this Agreement and certifying (A) that attached thereto is a true and
complete copy of the bylaws or limited liability company agreement (in the case
of Energy) of such Borrower as in effect on such date and at all times since a
date prior to the date of the resolutions described in clause (B) below, (B)
that attached thereto are true and complete copies of resolutions duly adopted
by the Board of Directors of such Borrower authorizing the execution and
delivery by such Borrower of this Agreement, the Extensions of Credit to be
made hereunder and the performance by such Borrower of all of its obligations
hereunder, and that such resolutions have not been modified, rescinded or
amended and are in full force and effect, (C) that the certificate of
incorporation or formation (as the case may be) referred to in clause (i) above
has not been amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to such clause (i) and (D) as
to the incumbency and specimen signature of each officer executing this
Agreement and any other document delivered in connection herewith on behalf of
such Borrower; (iii) a certificate of another officer of such 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 each 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 such
Borrower of this Agreement, except those as have been duly obtained and as are
(1) in full force and effect, (2) sufficient for their purpose and (3) not
subject to any pending or, to the knowledge of such person, threatened appeal
or other proceeding seeking reconsideration or review thereof, and (B) the
representations and warranties set forth in Article III hereof are true and
correct in all material respects on and as of
38
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 evidence satisfactory to the Agent
that the commitments of the lenders under the 2001 Agreement have been
terminated and that all fees, accrued interest and other amounts outstanding
under the 2001 Agreement have been paid, repaid or prepaid (as appropriate), or
will be paid, repaid or prepaid (as appropriate), on the date of the first
Borrowing hereunder with the proceeds of Loans.
(d) The Agent shall have received such other approvals, opinions,
certificates, instruments and documents as the Agent, any 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).
(e) The Lenders, the Fronting Banks, the Agent and the Joint Lead
Arrangers named in the Letter Agreements shall have received payment of all
fees and reimbursements of all expenses for which invoices have been presented
as and when due on or prior to the date of the initial Extension of Credit
pursuant to the terms of this Agreement or the Letter Agreements.
SECTION 4.02. Conditions for All Extensions of Credit.
The Commitment of each Lender to make each Loan and of each 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 shall have received from the relevant Borrower a notice
requesting such Extension of Credit as required by Section 2.03 or Section
2.19, as applicable.
(b) The representations and warranties of the applicable 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
such Borrower, the representations set forth in Sections 3.05(d), 3.06, 3.11
and 3.13) shall be true and correct in all material respects on and as of 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 affecting the relevant Borrower (and, with respect
to any Extension of Credit to Holdings, no Default or Event of Default
affecting Energy or Oncor of the types described in clauses (b), (c), (g), (h),
(i), (j), (k) and (l) of Article VI "Events 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) In the case of any Extension of Credit to Energy, no Default or
Event of Default shall have occurred and be continuing with respect to the
failure of Holdings to comply with Section 5.11.
39
(e) The Agent shall have received a certificate of a Responsible
Officer of the relevant Borrower certifying that the matters set forth in
paragraphs (b), (c) and (d) of this Section 4.02 are true and correct as of
such date.
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), (c)
and (d) of this Section 4.02.
ARTICLE V
COVENANTS
Each Borrower agrees that, so long as any Lender has any Commitment
hereunder, any 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 5.01. Existence.
It will, and will cause each of its Significant Subsidiaries to, do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and all rights, licenses, permits, franchises and
authorizations necessary or desirable in the normal conduct of its business
except as otherwise permitted pursuant to Section 5.09.
SECTION 5.02. Compliance With Laws; Business and Properties.
It will, and will cause each of its Subsidiaries to, comply with all
applicable material laws, rules, regulations and orders of any Governmental
Authority, whether now in effect or hereafter enacted, except where the validity
or applicability of such laws, rules, regulations or orders is being contested
by appropriate proceedings in good faith; and at all times maintain and preserve
all property material to the conduct of its business and keep such property in
good repair, working order and condition and from time to time make, or cause to
be made, all needful and proper repairs, renewals, additions, improvements and
replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times.
SECTION 5.03. Financial Statements, Reports, Etc.
Each Borrower will furnish to the Agent, each Lender and each Fronting
Bank:
(a) as soon as available and in any event within 120 days after the end
of each fiscal year of such Borrower, a consolidated balance sheet of such
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 60 days (in the case
of Holdings) or 75 days (in the case of each Subsidiary Borrower) after the end
of each of the first three quarters of
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each fiscal year of such Borrower, a consolidated balance sheet of such
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 such 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 such Borrower's fiscal year ended at
the end of such quarter, setting forth comparative figures for previous dates
and periods to the extent required in Form 10-Q, all certified (subject to
normal year-end adjustments) as to fairness of presentation, GAAP and
consistency by a Financial Officer of such Borrower provided, that, neither
Subsidiary Borrower is required to provide such statements of income for the
twelve months ended March 31, 2002, June 30, 2002 or September 30, 2002 or any
such comparative figures for any fiscal period ending prior to March 31, 2002;
(c) simultaneously with any delivery of each set of financial
statements referred to in paragraphs (a) and (b) above a certificate of a
Financial Officer of such Borrower (i) setting forth in reasonable detail the
calculations required to establish whether such Borrower was in compliance with
the requirements of Sections 5.11 (in the case of Holdings only) and 5.12 on
the date of such financial statements, and (ii) stating whether any Default or
Event of Default exists on the date of such certificate and, if any Default or
Event of Default then exists, setting forth the details thereof and the action
that such Borrower is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in paragraph (a) above, a statement of the firm of
independent public accountants which reported on such statements (i) stating
whether anything has come to their attention to cause them to believe that any
Default or Event of Default existed on the date of such statements and (ii)
confirming the calculations set forth in the Financial Officer's certificate
delivered simultaneously therewith pursuant to paragraph (c) above;
(e) forthwith upon becoming aware of the occurrence of any Default or
Event of Default, a certificate of a Financial Officer of the affected Borrower
setting forth the details thereof and the action that such Borrower is taking
or proposes to take with respect thereto;
(f) promptly upon the filing thereof, copies of each final prospectus
(other than a prospectus included in any registration statement on Form S-8 or
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 which such Borrower shall have
filed with the SEC, or any Governmental Authority succeeding to any of or all
the functions of the SEC;
(g) if and when any member of the Controlled Group (i) gives or is
required to give notice to the PBGC of any Reportable Event with respect to any
Plan which 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
41
ERISA of an intent to terminate, or appoint a trustee to administer, any Plan,
a copy of such notice; and
(h) promptly, from time to time, such additional information regarding
the financial position or business of such Borrower and its Subsidiaries as the
Agent, at the request of any Lender or any Fronting Bank, may reasonably
request.
As promptly as practicable after delivering each set of financial statements as
required in paragraph (a) of this Section, each Borrower shall make available a
copy of the consolidating workpapers used by such Borrower in preparing such
consolidated statements to each Fronting Bank and each Lender that shall have
requested such consolidating workpapers. Each Lender and Fronting Bank that
receives such consolidating workpapers shall hold them in confidence as required
by Section 8.15; provided that neither any Lender nor any Fronting Bank may
disclose such consolidating workpapers to any other person pursuant to clause
(iv) of Section 8.15.
SECTION 5.04. Insurance.
It will, and will cause each of its Subsidiaries to, maintain such
insurance or self insurance, to such extent and against such risks, including
fire and other risks insured against by extended coverage, as is customary with
companies similarly situated and in the same or similar businesses.
SECTION 5.05. Taxes, Etc.
It will, and will cause each of its Subsidiaries to, pay and discharge
promptly when due all material taxes, assessments and governmental charges
imposed upon it or upon its income or profits or in respect of its property, as
well as all other material liabilities, in each case before the same shall
become delinquent or in default and before penalties accrue thereon, unless and
to the extent that the same are being contested in good faith by appropriate
proceedings and adequate reserves with respect thereto shall, to the extent
required by GAAP, have been set aside.
SECTION 5.06. Maintaining Records; Access to Properties and
Inspections.
It will, and will cause each of its Subsidiaries to, maintain financial
records in accordance with GAAP and, upon reasonable notice and at reasonable
times, permit authorized representatives designated by any Lender or any
Fronting Bank to visit and inspect its properties and to discuss its affairs,
finances and condition with its officers.
SECTION 5.07. ERISA.
It will, and will cause each of its Subsidiaries that are members of
the Controlled Group to, comply in all material respects with the applicable
provisions of ERISA and the Code except where any noncompliance, individually or
in the aggregate, would not result in a Material Adverse Change.
42
SECTION 5.08. Use of Proceeds.
It will not, and will not cause or permit any of its Subsidiaries to,
use the proceeds of the Loans for purposes other than to refinance the amounts
outstanding under the 2001 Agreement and for working capital and other general
corporate purposes, including the refinancing of short-term borrowings used for
working capital and other general corporate purposes.
SECTION 5.09. Consolidations, Mergers, Sales and Acquisitions of
Assets and Investments in Subsidiaries.
It (i) will not, and will not permit any of its Significant
Subsidiaries to, consolidate or merge with or into any person unless (A) in the
case of any such transaction involving such Borrower, the surviving person is
such Borrower or another person formed under the laws of a State of the United
States of America and assumes or is responsible, by operation of law, for all
the obligations of such Borrower hereunder and (B) in the case of any such
transaction involving any such Significant Subsidiary, the survivor is such
Borrower, such Significant Subsidiary or a Wholly Owned Subsidiary of such
Borrower (or a person which as a result of such transaction becomes a Wholly
Owned Subsidiary of such Borrower), and (ii) will not, and will not permit any
of its Significant Subsidiaries (other than, in the case of Holdings, Energy or
Oncor) to, make a Significant Disposition to any person other than such Borrower
or a Wholly Owned Subsidiary of such Borrower (or a person which as a result of
such transaction becomes a Wholly Owned Subsidiary of such Borrower), provided
that such Borrower will not in any event permit any such consolidation, merger,
sale, lease or transfer if any Default or Event of Default relating to such
Borrower shall have occurred and be continuing at the time of or after giving
effect to such transaction. Notwithstanding the foregoing, (x) neither any
Borrower nor any of its Subsidiaries will engage to a Substantial extent in
businesses other than those currently conducted by them and other businesses
reasonably related thereto, (y) neither any Borrower nor any of its Subsidiaries
will acquire any Subsidiary or make any investment in any Subsidiary if, upon
giving effect to such acquisition or investment, as the case may be, such
Borrower would not be in compliance with the covenants set forth in Sections
5.11 (in the case of Holdings only) and 5.12 and (z) nothing in this Section
shall prohibit any sales of assets permitted by Section 5.10(d).
SECTION 5.10. Limitations on Liens.
Neither such Borrower nor any Significant Subsidiary thereof will
create or assume or permit to exist any Lien in respect of any property or
assets of any kind (real or personal, tangible or intangible) of such Borrower
or any such Significant Subsidiary, or sell any such property or assets subject
to an understanding or agreement, contingent or otherwise, to repurchase such
property or assets, or sell, or permit any Significant Subsidiary thereof to
sell, any accounts receivable; provided that the provisions of this Section
shall not prevent or restrict the creation, assumption or existence of:
(a) any Lien in respect of any such property or assets of any
Significant Subsidiary of such Borrower to secure indebtedness owing by it to
such Borrower or any Wholly Owned Subsidiary of such Borrower; or
43
(b) Liens (including capital leases) in respect of property acquired by
such Borrower or any Significant Subsidiary thereof, to secure the purchase
price, or the cost of construction and development, of such property (or to
secure indebtedness incurred prior to, at the time of, or within 120 days after
the later of the acquisition of such property and the commencement of operation
of such property for the purpose of financing the acquisition, or the cost of
construction and development, of such property), or Liens existing on any such
property at the time of acquisition of such property by such Borrower or such
Significant Subsidiary, whether or not assumed, or any Lien in respect of
property of any person existing at the time such person becomes a Subsidiary of
such Borrower; or agreements to acquire any property or assets under
conditional sale agreements or other title retention agreements, or capital
leases in respect of any other property; provided that
(A)the aggregate principal amount of Indebtedness
secured by all Liens in respect of any such property shall
not exceed the cost (as determined by the board of
directors or analogous governing body of such Borrower or
such Significant Subsidiary, as the case may be) of such
property at the time of acquisition thereof (or (x) in the
case of property covered by a capital lease, the fair
market value, as so determined, of such property at the
time of such transaction, or (y) in the case of a Lien in
respect of property existing at the time such person
becomes a Subsidiary of such Borrower the fair market
value, as so determined of such property at such time), and
(B)at the time of the acquisition of the property by
such Borrower or such Significant Subsidiary, or at the
time such person becomes a Subsidiary of such Borrower, as
the case may be, every such Lien shall apply and attach
only to the property originally subject thereto and fixed
improvements constructed thereon; or
(c) refundings or extensions of any Lien permitted in the foregoing
paragraph (b) for amounts not exceeding the principal amount of the
Indebtedness so refunded or extended or the fair market value (as determined by
the board of directors (or analogous governing body) of Holdings or such
Significant Subsidiary, as the case may be) of the property theretofore subject
to such Lien, whichever shall be lower, in each case at the time of such
refunding or extension; provided that such Lien shall apply only to the same
property theretofore subject to the same and fixed improvements constructed
thereon; or
(d) sales subject to understandings or agreements to repurchase;
provided that the aggregate sales price for all such sales (other than sales to
any governmental instrumentality in connection with such instrumentality's
issuance of indebtedness, including without limitation industrial development
bonds and pollution control bonds, on behalf of such Borrower or any
Significant Subsidiary thereof) made in any one calendar year shall not exceed
$50,000,000 in the aggregate for the Borrowers and their respective Significant
Subsidiaries; or
(e) any production payment or similar interest which is dischargeable
solely out of natural gas, coal, lignite, oil or other mineral to be produced
from the property subject thereto and to be sold or delivered by such Borrower
or any Significant Subsidiary thereof; or
44
(f) any Lien, including in connection with sale-leaseback transactions,
created or assumed by such Borrower or any Significant Subsidiary thereof on
natural gas, coal, lignite, oil or other mineral properties or nuclear fuel
owned or leased by such Borrower or such Subsidiary, to secure loans to such
Borrower or such Subsidiary in an aggregate amount not to exceed $400,000,000
in the aggregate for the Borrowers and their respective Significant
Subsidiaries; provided that neither such Borrower nor any Subsidiary of such
Borrower shall assume or guarantee such financings; or
(g) any Lien (whenever incurred) on assets owned by such Borrower or
any Subsidiary thereof as of the date hereof and any fuel, operating and
maintenance or similar contract related thereto securing Indebtedness of such
Borrower or Subsidiary in an aggregate amount not to exceed 10% of consolidated
assets of such Borrower; or
(h) leases (other than capital leases) now or hereafter existing and
any renewals and extensions thereof under which such Borrower or any
Significant Subsidiary thereof may acquire or dispose of any of its property,
subject, however, to the terms of Section 5.09; or
(i) any Lien created or to be created by the First Mortgage; or
(j) any Lien on the rights of the TXU Mining or TXU Fuel existing under
their respective Operating Agreements; or
(k) pledges or sales by any such Borrower (other than Holdings) or any
Subsidiary of any Borrower of its accounts receivable including customers'
installment paper; or
(l) the pledge of current assets, in the ordinary course of business,
to secure current liabilities; or
(m) Permitted Encumbrances; or
(n) the Liens in favor of the Administrative Agent on funds in the Cash
Collateral Account and on the Cash Collateral Account to secure the
reimbursement obligations of the Borrowers in respect of Letters of Credit and
comparable Liens created to secure reimbursement obligations for other letters
of credit issued for the account of any Borrower or any of its Subsidiaries; or
(o) any Lien incurred in connection with the issuance of Qualified
Transition Bonds.
SECTION 5.11. Fixed Charge Coverage.
Holdings will not, as of the end of each quarter of each fiscal year of
Holdings, permit Consolidated Earnings Available for Fixed Charges for the
twelve months then ended to be less than or equal to 200% of Consolidated Fixed
Charges for the twelve months then ended.
SECTION 5.12. Equity Capitalization Ratio.
Such Borrower will not, as of the end of each quarter of each fiscal
year of such Borrower, permit the ratio of its Consolidated Shareholders' Equity
to its Consolidated Total
45
Capitalization to be less than 35%, in the case of each of Holdings and Oncor,
and 40%, in the case of Energy.
SECTION 5.13. Restrictive Agreements.
Neither Energy nor Oncor will enter into any agreement restricting the
ability of Energy or Oncor to make payments, directly or indirectly, to Holdings
by way of dividends, advances, repayments of loans or advances, reimbursements
of management and other intercompany charges, expenses and accruals or other
returns on investments or any other agreement or arrangement that restricts the
ability of such Subsidiary Borrower to make any payment, directly or indirectly,
to Holdings other than pursuant to the terms of preferred stock or Equity-Credit
Preferred Securities issued by Energy or Oncor or their respective Subsidiaries,
if the effect of such agreement is to subject Energy or Oncor or any of their
respective Subsidiaries to restrictions on such payments greater than those to
which such Subsidiary is subject on the date of this Agreement. All such
existing restrictive agreements are listed on Schedule 5.13 hereto.
ARTICLE VI
EVENTS OF DEFAULT
In case of the happening of any of the following events (each an "Event
of Default") with respect to a Borrower:
(a) any representation or warranty made or deemed made by such Borrower
in or in connection with the execution and delivery of this Agreement or the
Extensions of Credit hereunder shall prove to have been false or misleading in
any material respect when so made, deemed made or furnished;
(b) default shall be made by such Borrower in the payment of any
principal of any Outstanding Credit when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment
thereof or by acceleration thereof or otherwise;
(c) default shall be made by such Borrower in the payment of any
interest on any Outstanding Credit or any Fee or any other amount (other than
an amount referred to in paragraph (b) above) due hereunder, when and as the
same shall become due and payable, and such default shall continue unremedied
for a period of five days;
(d) default shall be made by such Borrower in the due observance or
performance of any covenant, condition or agreement contained in Section 5.01,
5.11 or 5.12;
(e) default shall be made by such Borrower (i) in the due observance or
performance of any covenant, condition or agreement contained in Section 5.09
and such default shall continue unremedied for a period of 5 days or (ii) in the
due observance or performance of any covenant, condition or agreement contained
herein (other than those specified in (b), (c), (d) or (e)(i) above) or in the
Letter Agreements and such default shall continue unremedied for a period of 30
days after notice thereof from the Agent at the request of any Lender or any
Fronting Bank to such Borrower;
46
(f) TXU shall no longer own, directly or indirectly, all the
outstanding equity interests in such Borrower or any permitted successor to
such Borrower (which shall constitute an Event of Default for Holdings and any
other Borrower in which TXU has ceased to own 100% of such equity interests),
or Holdings shall no longer own, directly or indirectly, 100% of the equity
interests in Energy or Oncor (which shall constitute an Event of Default for
Holdings), or Energy shall no longer own, directly or indirectly, 100% of the
equity interests in TXU Generation Holdings Company LLC, TXU Energy Trading
Company LP, or TXU Energy Retail Company LP (which shall constitute an Event of
Default for Energy); provided, however, that Holdings and Energy may sell in an
initial public offering up to 20% of the equity interests in any Subsidiary
comprising generating assets of Energy;
(g) such Borrower or any Subsidiary thereof shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any Indebtedness
in a principal amount in excess of $50,000,000, when and as the same shall
become due and payable, subject to any applicable grace periods, or (ii) fail
to observe or perform any other term, covenant, condition or agreement
contained in any agreement or instrument evidencing or governing any such
Indebtedness if the effect of any failure referred to in this clause (ii) is to
cause, or to permit the holder or holders of such Indebtedness or a trustee on
its or their behalf to cause, such Indebtedness to become accelerated or due
prior to its stated maturity;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of such Borrower or any Significant Subsidiary thereof, or of a
substantial part of the property or assets of such Borrower or any Significant
Subsidiary thereof, under Title 11 of the United States Bankruptcy Code, as now
constituted or hereafter amended, or any other Federal or state bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for such
Borrower or any Significant Subsidiary thereof or for a substantial part of the
property or assets of such Borrower or any Significant Subsidiary thereof or
(iii) the winding up or liquidation of such Borrower or any Significant
Subsidiary thereof; and such proceeding or petition shall continue undismissed
for 60 days or an order or decree approving or ordering any of the foregoing
shall be entered;
(i) such Borrower or any Significant Subsidiary thereof shall (i)
voluntarily commence any proceeding or file any petition seeking relief under
Title 11 of the United States Bankruptcy Code, as now constituted or hereafter
amended, or any other Federal or state bankruptcy, insolvency, receivership or
similar law, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or the filing of any petition described
in (h) above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for such
Borrower or any Significant Subsidiary thereof or for a substantial part of the
property or assets of it or such Significant Subsidiary, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors, (vi)
become unable, admit in writing its inability or fail generally to pay its
debts as they become due or (vii) take any action for the purpose of effecting
any of the foregoing;
(j) A Change in Control shall occur (which shall constitute an
Event of Default for each Borrower);
47
(k) one or more judgments or orders for the payment of money in an
aggregate amount in excess of $50,000,000 shall be rendered against such
Borrower or any Subsidiary thereof or any combination thereof and such judgment
or order shall remain undischarged or unstayed for a period of 30 days, or any
action shall be legally taken by a judgment creditor to levy upon assets or
properties of such Borrower or any Subsidiary thereof to enforce any such
judgment or order;
(l) an ERISA Event or ERISA Events shall have occurred that reasonably
could be expected to result in a Material Adverse Change with respect to such
Borrower;
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 affected Borrower(s), take one or all of the following
actions, at the same or different times: (i) terminate forthwith the right of
such affected Borrower(s) to request and receive Extensions of Credit; (ii) to
the extent such event would permit the Lenders and the Fronting Banks to
withhold Extensions of Credit to any other Borrower pursuant to Section 4.02(c)
or (d), terminate forthwith the right of such other Borrower to request and
receive Extensions of Credit; and (iii) declare the Loans of the affected
Borrower(s) 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 such Borrower(s) accrued hereunder, shall become forthwith
due and payable, without presentment, demand, protest or any other notice of
any kind, all of which are hereby expressly waived, anything contained herein
to the contrary notwithstanding; provided that in the case of any event
described in paragraph (h) or (i) above affecting any Borrower, the right of
such Borrower to request and receive Extensions of Credit shall automatically
terminate and the principal of the Loans then outstanding of such Borrower,
together with accrued interest thereon and any unpaid accrued Fees and all
other liabilities of such 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 such Borrower, anything
contained herein to the contrary notwithstanding.
Notwithstanding anything to the contrary contained herein, no notice
given or declaration made by the Agent pursuant to this Article VI shall affect
(i) the obligation of any Fronting Bank to make any payment under any Letter of
Credit issued by such 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 affecting any Borrower, the Agent shall at
the request, or may with the consent, of the Required Lenders, upon notice to
such Borrower, require such Borrower to deposit 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
issued for the account of such Borrower and outstanding at such time. 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 JPMorgan Chase for deposits equal to the
amount deposited by such Borrower in the Cash Collateral Account, for a term to
be determined by the Agent in its sole discretion. Each Borrower hereby grants
to the Agent for the benefit of the Fronting Banks and the Lenders a Lien on,
and hereby assigns to the Agent for the benefit of the Fronting Banks and the
Lenders all of its right, title and interest in, the Cash
48
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 Administrative
Agent shall elect, toward the payment in full of any or all of any 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
relevant Borrowers 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.
ARTICLE VII
THE AGENT
In order to expedite the transactions contemplated by this Agreement,
JPMorgan Chase is hereby appointed to act as Agent on behalf of the Lenders and
the Fronting Banks. Each Lender and each Fronting Bank hereby irrevocably
authorizes the Agent to take such actions on behalf of such Lender and such
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 Banks, without hereby limiting any implied
authority, (a) to receive on behalf of the Lenders and the Fronting Banks all
payments of principal of and interest on the Outstanding Credits and all other
amounts due to the Lenders and the Fronting Banks hereunder, and promptly to
distribute to each Lender and each Fronting Bank, its proper share of each
payment so received; (b) to give notice on behalf of each Lender and each
Fronting Bank to the Borrowers of any Event of Default of which the Agent has
actual knowledge acquired in connection with its agency hereunder; and (c) to
distribute to each Lender and each Fronting Bank copies of all notices,
financial statements and other materials delivered by the Borrowers pursuant to
this Agreement as received by the Agent.
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 Borrowers 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
Banks 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 such 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
49
thereto shall be binding on all the Lenders and the Fronting Banks. 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 Borrowers on account of the failure of or delay in
performance or breach by any Lender or any Fronting Bank of any of its
obligations hereunder or to any Lender or any Fronting Bank on account of the
failure of or delay in performance or breach by any other Lender, any Fronting
Bank or any Borrower of any of their respective obligations hereunder or in
connection herewith. The Agent may execute any and all duties hereunder by or
through agents or employees and shall be entitled to rely upon the advice of
legal counsel selected by it with respect to all matters arising hereunder and
shall not be liable for any action taken or suffered in good faith by it in
accordance with the advice of such counsel.
The Lenders and the Fronting Banks 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.
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 Banks and the Borrowers. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Agent acceptable to the
Borrowers. 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 Banks, 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 and Section 8.05 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Agent.
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 Borrowers or any
Subsidiary or other Affiliate thereof as if it were not Agent.
Each Lender agrees (i) to reimburse the Agent, on demand, in the amount
of its pro rata share (based on its Commitment hereunder or, if the Commitments
shall have been terminated, the amount of its percentage of Outstanding Credits)
of any expenses incurred for the benefit of the Lenders or the Fronting Banks,
in its role as Agent, including counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders or the Fronting
Banks, which shall not have been reimbursed by the Borrowers and (ii) to
indemnify and hold harmless the Agent and any of its directors, officers,
employees or agents, on demand, in the amount of such pro rata share, from and
against any and all liabilities, taxes, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
50
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 Borrowers; provided that neither any Lender nor any 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 each Fronting Bank agrees that any allocation made in good
faith by the Agent of expenses or other amounts referred to in this paragraph
shall be conclusive and binding for all purposes.
Each Lender and each Fronting Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Lender or
Fronting Bank, 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 each Fronting Bank also acknowledges that it will,
independently and without reliance upon the Agent or any other Lender or
Fronting Bank, 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.
Bank of America, N.A. shall not, by virtue of its designation as
"Syndication Agent" and neither ▇.▇. ▇▇▇▇▇▇ Securities, Inc. nor Banc of America
Securities LLC shall, by virtue of their designation as "Joint Lead Arrangers"
and "Co-Book Managers", have any duties, liabilities, obligations or
responsibilities under this Agreement other than, if applicable, as a Lender or
as a Fronting Bank hereunder.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. 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 any Borrower, to such Borrower c/o TXU Business Services
Company, Energy Plaza, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Treasurer (Telecopy No. 214-812-2488);
(b) if to Bank of America, as Fronting Bank, to Bank of America, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (TX1-492-14-05), ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
Sholarsh--Credit Services (Telephone: ▇▇▇-▇▇▇-▇▇▇▇; Telecopier: 214-290-9422).
(c) if to the Agent, to JPMorgan Chase Bank, Loan and Agency Services
Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇,
Attention of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (Telecopy No. 212-552-5777), with a copy to
JPMorgan Chase Bank at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Telecopy No. 713-216-4117); and
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(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.
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 or in accordance with the
latest unrevoked direction from such party given in accordance with this
Section.
SECTION 8.02. Survival of Agreement.
All covenants, agreements, representations and warranties made by the
Borrowers 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 Banks and shall survive
the making by the Lenders and the Fronting Banks of the Extensions of Credit
regardless of any investigation made by the Lenders or the Fronting Banks 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 Commitments have not been terminated
or any Letter of Credit is available to be drawn.
SECTION 8.03. Binding Effect.
This Agreement shall become effective when it shall have been executed
by the Borrowers, the Fronting Banks 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 Borrowers 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 Banks.
SECTION 8.04. Successors and Assigns.
(a) Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the successors and assigns of
such party; and all covenants, promises and agreements by or on behalf of any
party that are contained in this Agreement shall bind and inure to the benefit
of its successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the its Outstanding Credits); provided, however,
that (i) except in the case of an assignment to a Lender or an Affiliate of
such Lender, an assignment to a Federal Reserve Bank or an assignment made at
any time an Event of Default shall have occurred and be continuing, the
Borrowers, the Agent and the Fronting Banks 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
$5,000,000 or, if the amount of the Commitment of the assigning Lender is less
than $5,000,000, the aggregate amount of such Lender's Commitment, (iii) each
such assignment
52
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 8.04(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 Borrowers 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 8.05 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 Borrowers or the performance or
observance by the Borrowers 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 5.03 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (v) such
assignee will independently and without reliance upon the Agent, such assigning
Lender or any other Lender or 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 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 which by the terms of this
Agreement are required to be performed by it as a Lender.
(d) The Agent shall maintain at one of its offices in the City of New
York 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 Borrowers, the Fronting Banks, the Agent and the Lenders may treat each
person whose name is recorded in the
53
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 paragraph (b) above and, if required, the written consent of
the Borrowers, the Fronting Banks 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.
(f) Each Lender may without the consent of the Borrowers 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 8.05 to the same
extent as if it were the selling Lender (and limited to the amount that could
have been claimed by the selling Lender had it continued to hold the interest
of such participating bank or other entity), except that all claims made
pursuant to such Sections shall be made through such selling Lender, and (iv)
the Borrowers, the Agent, the Fronting Banks 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 Borrowers 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 scheduled 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,
disclose to the assignee or participant or proposed assignee or participant any
information relating to the Borrowers furnished to such Lender by or on behalf
of the Borrowers; provided that, prior to any such disclosure, each such
assignee or participant or proposed assignee or participant shall execute an
agreement whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of any such information.
(h) The Borrowers shall not assign or delegate any rights and duties
hereunder without the prior written consent of all Lenders, and any attempted
assignment or delegation (except as a consequence of a transaction expressly
permitted under Section 5.09) by a 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, each Borrower shall, at the
54
request of the assigning Lender, duly execute and deliver to the assigning
Lender a promissory note or notes evidencing the Loans made to such Borrower by
the assigning Lender hereunder.
(j) Subject to the appointment and acceptance of a successor Fronting
Bank as provided below, any Fronting Bank may resign at any time by notifying
the Lenders and the Borrowers. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Fronting Bank acceptable to the
Borrowers. 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 a Fronting Bank's
resignation hereunder, the provisions of Sections 2.11, 2.16 and 8.05 shall
continue in effect for its benefit in respect of any actions taken or omitted
to be taken by it while it was acting as Fronting Bank.
SECTION 8.05. Expenses; Indemnity.
(a) Holdings agrees to pay all reasonable out-of-pocket expenses
(including reasonable fees, charges and disbursements of 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 a Borrower) (whether or not the transactions hereby contemplated
are consummated), or incurred by the Agent, any 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 counsel for the Agent or, in the case of
enforcement following an Event of Default, the Lenders and the Fronting Banks.
In addition to the foregoing, each Borrower for the account of which a Letter
of Credit is issued shall pay or reimburse the Fronting Bank that issued such
Letter of Credit for such reasonable, normal and customary costs and expenses
as are incurred or charged by such Fronting Bank in issuing, negotiating,
effecting payment under, amending or otherwise administering such Letter of
Credit.
(b) Each Borrower agrees to indemnify each Lender and each Fronting
Bank against any loss, calculated in accordance with the next sentence, or
reasonable expense that such Lender or such Fronting Bank may sustain or incur
as a consequence of (i) any failure by such Borrower to borrow or to refinance,
convert or continue any Loan hereunder (including as a result of such
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 such Borrower, or assignment
of a Eurodollar Loan of such 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
55
relating to such 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) Holdings agrees to indemnify the Agent, the Fronting Banks, each
Lender, each of their Affiliates and the directors, officers, employees and
agents of the foregoing (each such person being called an "Indemnitee")
against, and to hold each Indemnitee harmless from, any and all costs, losses,
claims, damages, liabilities and related expenses, including reasonable counsel
fees and expenses, incurred by or asserted against any Indemnitee arising out
of (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; provided that 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 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 Borrowers or by any
Borrower against such Indemnitee, in which a final, nonappealable judgment has
been rendered against such Indemnitee; provided, further, that each Borrower
agrees that it will not, nor will it permit any Subsidiary to, without the
prior written consent of each Indemnitee, settle, compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification could be sought under the
indemnification provisions of this Section 8.05(c) (whether or not any
Indemnitee is an actual or potential party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent does not include any
statement as to an admission of fault, culpability or failure to act by or on
behalf of any Indemnitee and does not involve any payment of money or other
value by any Indemnitee or any injunctive relief or factual findings or
stipulations binding on any Indemnitee.
(d) The provisions of this Section shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement,
the consummation of the transactions contemplated hereby, the repayment of any
of the 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 any Fronting Bank. All amounts due under this Section
shall be payable on written demand therefor.
56
(e) A certificate of any Lender, any Fronting Bank or the Agent setting
forth any amount or amounts that such Lender, such Fronting Bank or such Agent
is entitled to receive pursuant to paragraph (b) of this Section and containing
an explanation in reasonable detail of the manner in which such amount or
amounts shall have been determined shall be delivered to the appropriate
Borrower and shall be conclusive absent manifest error.
SECTION 8.06. Right of Setoff.
If an Event of Default shall have occurred and be continuing, each
Lender and each 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 such Fronting
Bank to or for the credit or the account of the applicable Borrower against any
of and all the obligations of such Borrower now or hereafter existing under this
Agreement held by such Lender or such Fronting Bank (as the case may be),
irrespective of whether or not such Lender or such 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 each Fronting Bank
under this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender or such Fronting Bank may have.
SECTION 8.07. Applicable Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.
SECTION 8.08. Waivers; Amendment.
(a) No failure or delay of the Agent, any 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 Banks and
the Lenders hereunder are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) below, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. No notice or demand on any 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 Borrowers 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 date for the payment of any Facility Fee or LC Fee, 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
57
each Lender affected thereby, (ii) increase the Commitment of any Lender,
decrease the Facility Fee or decrease the LC Fee payable to 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 8.04(h), the provisions of this
Section or the definition of the "Required Lenders", without the prior written
consent of each Lender; provided further, however, that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Agent or any
Fronting Bank hereunder without the prior written consent of the Agent or the
applicable Fronting Bank, as the case may be. Each Lender and each Fronting
Bank shall be bound by any waiver, amendment or modification authorized by this
Section and any consent by any Lender, the Agent or any Fronting Bank pursuant
to this Section shall bind any assignee of its rights and interests hereunder.
SECTION 8.09. Entire Agreement.
This Agreement (including the schedules and exhibits hereto) and the
Letter Agreements represent the entire contract among the parties relative to
the subject matter hereof and thereof. Any previous agreement, whether written
or oral, among the parties with respect to the subject matter hereof, is
superseded by this Agreement and the Letter Agreements. There are no unwritten
oral agreements between the parties. Nothing in this Agreement, expressed or
implied, is intended to confer upon any party other than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
SECTION 8.10. Severability.
In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8.11. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute but one contract, and shall become effective as provided in Section
8.03.
SECTION 8.12. Headings.
Article and Section headings and the Table of Contents used herein are
for convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 8.13. Interest Rate Limitation.
(a) Notwithstanding anything herein to the contrary, if at any time the
applicable interest rate, together with all fees and charges which are treated
as interest under applicable law (collectively the "Charges"), as provided for
herein or in any other document executed in connection herewith, or otherwise
contracted for, charged, received, taken or reserved by any
58
Lender or any 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 such 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 such Fronting Bank (as the case may be), together with all Charges
payable to such Lender or such 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 any Fronting Bank in respect of any interest
computation period is reduced pursuant to paragraph (a) of this Section and the
amount of interest, together with all Charges, payable for such Lender's or
such Fronting Bank's (as the case may be) account in respect of any subsequent
interest computation period, computed pursuant to Section 2.07, would be less
than the Maximum Rate, then the amount of interest, together with all Charges,
payable for such Lender's or such 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 any Fronting Bank has been increased pursuant to
this paragraph (b) exceed the aggregate amount by which interest, together with
all Charges, paid for its account has theretofore been reduced pursuant to
paragraph (a) of this Section.
SECTION 8.14. Jurisdiction; Venue.
(a) Each Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York
City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Subject to the foregoing and to paragraph (b) below,
nothing in this Agreement shall affect any right that any party hereto may
otherwise have to bring any action or proceeding relating to this Agreement
against any other party hereto in the courts of any jurisdiction.
(b) Each Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or thereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any New York State court or
Federal court of the United States of America sitting in New York City. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
59
SECTION 8.15. Confidentiality.
Each Lender and each Fronting Bank shall use its best efforts to hold
in confidence all information, memoranda, or extracts furnished to such Lender
or such Fronting Bank (as the case may be) (directly or through the Agent) by
the Borrowers hereunder or in connection with the negotiation hereof; provided
that such Lender and such 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 such 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 5.03,
to any person to which such Lender or such 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 Borrowers
to comply with the provisions of this Section and (v) to the extent that such
information, memoranda or extracts shall be publicly available or shall have
become known to such Lender or such Fronting Bank (as the case may be)
independently of any disclosure by any Borrower hereunder or in connection with
the negotiation hereof. Notwithstanding the foregoing, any Lender and any
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.
[Signature pages follow]
TXU US HOLDINGS COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer and Assistant Secretary
TXU ENERGY COMPANY LLC
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer and Assistant Secretary
ONCOR ELECTRIC DELIVERY COMPANY
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
BANK OF AMERICA, N.A.
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Principal
JPMORGAN CHASE BANK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
ABN AMRO BANK N.V.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇▇ ▇. ▇. ▇▇▇ ▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇. ▇. ▇▇▇ ▇▇▇▇
Title: Assistant Vice President
THE BANK OF NEW YORK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD.
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-----------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: VP & Manager
BANK ONE, NA (Main office Chicago)
By /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
BARCLAYS BANK PLC
By /s/ Sydney ▇. ▇▇▇▇▇▇
--------------------
Name: Sydney ▇. ▇▇▇▇▇▇
Title: Director
BNP PARIBAS
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
CITIBANK, N.A.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
COMMERZBANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
By /s/ ▇. ▇. ▇▇▇▇, ▇▇.
-------------------
Name: ▇.▇. ▇▇▇▇, ▇▇.
Title: Asst. Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
CREDIT SUISSE FIRST BOSTON
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Associate
FLEET NATIONAL BANK
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
GUARANTY BANK
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
KBC BANK N.V.
By /s/ ▇▇▇▇-▇▇▇▇▇▇ Diels
---------------------
Name: ▇▇▇▇-▇▇▇▇▇▇ Diels
Title: First Vice President
▇▇▇▇▇▇ COMMERCIAL PAPER INC.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signatory
MELLON BANK, N.A.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ BANK USA
By /s/ D. ▇▇▇▇▇ ▇▇▇▇▇
------------------
Name: D. ▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Credit Officer
NATIONAL AUSTRALIA BANK LIMITED
A.C.N. 004044937
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Head of Project and Energy
Finance, US
SOCIETE GENERALE
By /s/ ▇▇▇▇▇ ▇▇▇▇
--------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
TORONTO DOMINION (TEXAS), INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
UBS AG, STAMFORD BRANCH
By /s/ ▇▇▇▇▇▇▇ ▇. Saint
--------------------
Name: ▇▇▇▇▇▇▇ ▇. Saint
Title: Associate Director Banking
Products Services, US
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director Banking Products
Services, US
WACHOVIA BANK, NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
WESTDEUTSCHE LANDESBANK
GIROZENTRALE,
NEW YORK BRANCH
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Associate Director
By /s/ ▇▇▇▇ ▇▇▇▇▇
--------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Associate Director
EXHIBIT A
Form of Borrowing Request
BORROWING REQUEST
[Date]
JPMorgan Chase Bank,
as Agent for the lenders referred to below,
Loan and Agency Services Group
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Ladies and Gentlemen:
The undersigned, [TXU Energy Company LLC] [Oncor Electric Delivery
Company] [TXU US Holdings Company] (the "Borrower"), refers to the 364-Day
Revolving Credit Agreement dated as of April 24, 2002 (as it may hereafter be
amended, modified, extended or restated from time to time, the "Agreement"),
among the Borrower, [TXU Energy Company LLC], [Oncor Electric Delivery Company],
[TXU US Holdings Company], the lenders listed in Schedule 2.01 thereto (the
"Lenders"), JPMorgan Chase Bank, as Agent, and Bank of America, N.A. and
JPMorgan Chase Bank, as Fronting Banks 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 Borrowing/1/ ____________
(C) Interest rate basis/2/ ____________
(D) Interest Period and the last day thereof/3/ ____________
-----------------------------
/1/ Not less than $25,000,000 (and in integral multiples of $5,000,000) or
greater than the Total Commitment then available.
/2/ Eurodollar Loan or ABR Loan.
/3/ Which shall be subject to the definition of "Interest Period" and end
not later than the Maturity Date.
Upon acceptance of any or all of the Loans made by the Lenders in
response to this request, the Borrower shall be deemed to have represented and
warranted that the applicable conditions to lending specified in Article IV of
the Agreement have been satisfied.
Very truly yours,
[TXU ENERGY COMPANY LLC]
[ONCOR ELECTRIC DELIVERY COMPANY]
[TXU US HOLDINGS COMPANY]
By ______________________________
Name:
Title:
A-2
EXHIBIT B
Form of Assignment and Acceptance
ASSIGNMENT AND ACCEPTANCE
[Date]
Reference is made to the 364-Day Revolving Credit Agreement, dated as
of April 24, 2002 (as amended, modified, extended or restated from time to time,
the "Agreement"), among TXU Energy Company LLC, Oncor Electric Delivery Company,
TXU US Holdings Company (collectively, the "Borrowers"), the lenders listed in
Schedule 2.01 thereto (the "Lenders"), JPMorgan Chase Bank, as Agent for the
lenders, and Bank of America, N.A. and JPMorgan Chase Bank, as Fronting Banks
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 the [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 which 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 8.04 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 2.16(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
Facility Principal Amount Assigned 8 decimals, as a percentage of the Facility
and the aggregate Commitments of all
Lenders thereunder
Commitment Assigned: $____________ __________%
Loans: $____________ __________%
Fees Assigned (if any): $____________ __________%
B-2
The terms set forth and on the reverse side Accepted:
hereof are hereby agreed to:
[ASSIGNOR], as TXU ENERGY COMPANY LLC
Assignor
By______________________, as By________________________________
Name: Name:
Title: Title:
[ASSIGNEE], as ONCOR ELECTRIC DELIVERY COMPANY
Assignee,
By______________________, as By________________________________
Name: Name:
Title: Title:
TXU US HOLDINGS COMPANY
By________________________________
Name:
Title:
JPMORGAN CHASE BANK, as
Agent
By________________________________
Name:
Title:
B-3
EXHIBIT C
Form of Request for Issuance
REQUEST FOR ISSUANCE
[Date]
JPMorgan Chase Bank,
as Agent for the lenders referred to below,
Loan and Agency Services Group
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
JPMorgan Chase Bank
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Ladies and Gentlemen:
The undersigned, [TXU Energy Company LLC] [Oncor Electric Delivery
Company] [TXU US Holdings Company] (the "Borrower"), refers to the 364-Day
Revolving Credit Agreement dated as of April 24, 2002 (as it may hereafter be
amended, modified, extended or restated from time to time, the "Agreement"),
among the Borrower, [TXU Energy Company LLC], [Oncor Electric Delivery Company],
[TXU US Holdings Company], the lenders listed in Schedule 2.01 thereto (the
"Lenders"), JPMorgan Chase Bank, as Agent, and Bank of America, N.A. and
JPMorgan Chase Bank, as Fronting Banks for the letters of credit issued
thereunder, and hereby gives you notice, irrevocably, pursuant to Section
2.19(a) of the Agreement, that the undersigned hereby requests the issuance of a
Letter of Credit, and in connection therewith sets forth below the terms on
which such Letter of Credit is to be issued:
(i) the requested date of issuance (which is a Business Day) is
_______________;/1/ and
(ii) the expiration date (which shall be no later than the fifth
Business Day preceding the last day of the Revolving Period) of
the Letter of Credit requested hereby is ______________;/2/ and
----------------------------
/1/ If the Request for Issuance is a request for extension of the stated
maturity of a Letter of Credit or a modification or amendment of the terms
thereof, set forth the date of effectiveness of such extension,
modification or amendment.
(iii) the proposed stated amount of the Letter of Credit requested
hereby is $_________________;/3/ and
(iv) the beneficiary of the Letter of Credit requested hereby is
_____________________, with an address at ____________________;
and
(v) the conditions under which a drawing may be made under such
Letter of Credit are as follows:_______________________;
(vi) attached hereto is a consent of the beneficiary of the Letter
of Credit to the modification of the Letter of Credit hereby
requested./4/
Upon the issuance of the Letter of Credit by the Fronting Bank in
response to this request, the Borrower shall be deemed to have represented and
warranted that the applicable conditions to an issuance of a Letter of Credit
that are specified in Article IV of the Agreement have been satisfied.
Very truly yours,
[TXU ENERGY COMPANY LLC]
[ONCOR ELECTRIC DELIVERY COMPANY]
[TXU US HOLDINGS COMPANY]
By________________________________
Name:
Title: [Financial Officer]
--------------------------------------------------------------------------------
/2/ Modify request as appropriate if used in connection with the extension,
modification or amendment of a Letter of Credit.
/3/ The proposed stated amount shall be not less than $1,000,000, unless
otherwise agreed to by the Fronting Bank.
/4/ Include only if the Request for Issuance relates to an amendment or
modification of a Letter of Credit.
B-2
SCHEDULE 2.01
COMMITMENTS
-------------------------------------------------------------------------------
NAME OF LENDER COMMITMENT
-------------------------------------------------------------------------------
Bank of America, N.A. $60,000,000
-------------------------------------------------------------------------------
JPMorgan Chase Bank 60,000,000
-------------------------------------------------------------------------------
Citibank, N.A. 60,000,000
-------------------------------------------------------------------------------
Commerzbank AG, New York and Grand
Cayman Branches 60,000,000
-------------------------------------------------------------------------------
The Bank of New York 60,000,000
-------------------------------------------------------------------------------
Barclays Bank PLC 60,000,000
-------------------------------------------------------------------------------
Wachovia Bank, National Association 60,000,000
-------------------------------------------------------------------------------
BNP Paribas 60,000,000
-------------------------------------------------------------------------------
Credit Lyonnais New York Branch 45,000,000
-------------------------------------------------------------------------------
▇▇▇▇▇▇ Commercial Paper Inc. 45,000,000
-------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank USA 35,200,000
-------------------------------------------------------------------------------
Credit Suisse First Boston 35,200,000
-------------------------------------------------------------------------------
UBS AG, Stamford Branch 35,200,000
-------------------------------------------------------------------------------
The Bank of Tokyo-Mitsubishi, Ltd. 35,200,000
-------------------------------------------------------------------------------
Bank One, NA (Main Office Chicago) 35,200,000
-------------------------------------------------------------------------------
Westdeutsche Landesbank Girozentrale,
New York Branch 35,200,000
-------------------------------------------------------------------------------
Fleet National Bank 35,200,000
-------------------------------------------------------------------------------
Toronto Dominion (Texas), Inc. 35,200,000
-------------------------------------------------------------------------------
ABN AMRO Bank N.V. 35,200,000
-------------------------------------------------------------------------------
KBC Bank N.V. 25,000,000
-------------------------------------------------------------------------------
National Australia Bank Limited
A.C.N. 004044937 25,000,000
-------------------------------------------------------------------------------
Mellon Bank, N.A. 25,000,000
-------------------------------------------------------------------------------
Societe Generale 25,000,000
-------------------------------------------------------------------------------
Guaranty Bank 13,200,000
-------------------------------------------------------------------------------
Total $1,000,000,000
==============
-------------------------------------------------------------------------------
SCHEDULE 5.13
RESTRICTIVE AGREEMENTS
Oncor Mortgage
