Exhibit 10(b)
[EXECUTION VERSION]
TXU CORP.
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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of December 22, 2004
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LOC 2003 TRUST
as Lender
TABLE OF CONTENTS
PAGE
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Article I DEFINITIONS; CONSTRUCTION
SECTION 1.01. Defined Terms....................................................1
SECTION 1.02. Terms Generally.................................................11
Article II THE CREDITS
SECTION 2.01. The Commitment..................................................12
SECTION 2.02. Loans...........................................................12
SECTION 2.03. Loan Procedure..................................................12
SECTION 2.04. Letters of Credit...............................................13
SECTION 2.05. Fees............................................................14
SECTION 2.06. Repayment of Outstanding Credits; Evidence of Indebtedness......14
SECTION 2.07. Interest on Loans...............................................14
SECTION 2.08. Default Interest................................................15
SECTION 2.09. Alternate Rate of Interest......................................15
SECTION 2.10. Termination and Reduction of the Commitment.....................15
SECTION 2.11. Prepayment......................................................16
SECTION 2.12. Reserve Requirements; Change in Circumstances...................16
SECTION 2.13. Change in Legality..............................................18
SECTION 2.14. Payments........................................................18
SECTION 2.15. Taxes...........................................................19
Article III REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization; Powers............................................20
SECTION 3.02. Authorization...................................................21
SECTION 3.03. Enforceability..................................................21
SECTION 3.04. Governmental Approvals..........................................21
SECTION 3.05. Financial Statements............................................21
SECTION 3.06. Litigation......................................................22
SECTION 3.07. Federal Reserve Regulations.....................................22
SECTION 3.08. Investment Company Act; Public Utility Holding Company Act......22
SECTION 3.09. No Material Misstatements.......................................22
SECTION 3.10. Taxes...........................................................23
SECTION 3.11. Employee Benefit Plans..........................................23
SECTION 3.12. Significant Subsidiaries........................................23
SECTION 3.13. Environmental Matters...........................................23
SECTION 3.14. Solvency........................................................24
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TABLE OF CONTENTS
(CONTINUED)
Article IV CONDITIONS
SECTION 4.01. Conditions to Initial Extension of Credit.......................24
SECTION 4.02. Conditions for All Extensions of Credit.........................25
Article V COVENANTS
SECTION 5.01. Existence. .....................................................26
SECTION 5.02. Compliance With Laws; Business and Properties...................26
SECTION 5.03. Financial Statements, Reports, Etc..............................26
SECTION 5.04. Insurance.......................................................28
SECTION 5.05. Taxes, Etc......................................................28
SECTION 5.06. Maintaining Records; Access to Properties and Inspections.......28
SECTION 5.07. ERISA...........................................................28
SECTION 5.08. Use of Proceeds.................................................29
SECTION 5.09. Consolidations, Mergers, Sales and Acquisitions of
Assets and Investments in Subsidiaries..........................29
SECTION 5.10. Limitations on Liens............................................29
SECTION 5.11. Interest Coverage...............................................31
SECTION 5.12. Equity Capitalization Ratio.....................................32
SECTION 5.13. Restrictive Agreements..........................................32
Article VI EVENTS OF DEFAULT
Article VII MISCELLANEOUS
SECTION 7.01. Notices.........................................................34
SECTION 7.02. Survival of Agreement...........................................35
SECTION 7.03. Binding Effect..................................................35
SECTION 7.04. Successors and Assigns..........................................35
SECTION 7.05. Expenses; Indemnity.............................................36
SECTION 7.06. Right of Setoff.................................................37
SECTION 7.07. Applicable Law..................................................38
SECTION 7.08. Waivers; Amendment..............................................38
SECTION 7.09. Entire Agreement................................................38
SECTION 7.10. Severability....................................................39
SECTION 7.11. Counterparts....................................................39
SECTION 7.12. Headings........................................................39
SECTION 7.13. Interest Rate Limitation........................................39
SECTION 7.14. Jurisdiction; Venue.............................................40
SECTION 7.15. Confidentiality.................................................40
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TABLE OF CONTENTS
(CONTINUED)
EXHIBITS AND SCHEDULES
Exhibit A - Form of Lending Request
Schedule 1.01 - Letters of Credit
Schedule 5.13 - Restrictive Agreements
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AMENDED AND RESTATED CREDIT AGREEMENT (this "AGREEMENT"),
dated as of December 22, 2004, between TXU Corp., a Texas
corporation (the "BORROWER"), and LOC 2003 Trust, a Delaware
statutory trust (the "LENDER").
The Lender has previously provided a credit facility for the making of
loans to the Borrower and the issuance of letters of credit for the benefit of
the Borrower. The Lender has agreed to amend and restate such credit facility on
the terms and conditions set forth herein.
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 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 2.09 or
2.13(a)(ii)) to a loan bearing interest at a rate determined by reference
to the Alternate Base Rate.
"ACQUISITION DATE" shall mean the date as of which a person or group
of related persons first acquires more than 30% of any outstanding class of
Voting Shares of the Borrower (within the meaning of Section 13(d) or 14(d)
of the Exchange Act and the applicable rules and regulations thereunder).
"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.
"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 1/100 of 1%) equal to the
greater of (i) the Federal Funds Effective Rate in effect on such day plus
.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 the Reference Bank as its base 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 announced publicly 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 that is a
Business Day, the arithmetic average, as determined by the Reference Bank,
of the quotations for the day of such transactions received by the
Reference Bank from three Federal funds brokers of recognized standing
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selected by it. If for any reason the Lender shall have determined (which
determination shall be conclusive absent manifest error; provided that the
Lender shall, upon request, provide to the Borrower a certificate setting
forth in reasonable detail the basis for such determination) that it is
unable to ascertain the Federal Funds Effective Rate for any reason,
including the inability of the Reference Bank 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, during any Collateral Period (as
defined in the New Trust Facility), 0.20% per annum and, at all other
times, 1.05% per annum.
"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 of the Borrower
or any duly authorized committee thereof.
"BORROWER" shall have the meaning given such term in the preamble
hereto.
"BUSINESS DAY" shall mean any day (other than a day that is a
Saturday, Sunday or legal holiday in the State of New York or the State of
Delaware) on which banks are open for business in New York City and
Wilmington, Delaware; provided, however, that, when used in connection with
a Eurodollar Loan, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in dollar deposits in the London
interbank market.
A "CHANGE IN CONTROL" shall be deemed to have occurred if (i) any
person or "group" (within the meaning of Section 13(d) or 14(d) of the
Exchange Act) shall acquire beneficial ownership of more than 30% of any
outstanding class of Voting Shares of the Borrower unless such acquisition
shall have been approved prior to such acquisition date by a majority of
Disinterested Directors of the Borrower or (ii) during any period of 12
consecutive months, a majority of the members of the Board of Directors
cease to be composed of individuals (A) who were members of the Board of
Directors on the first day of such period, (B) whose election or nomination
to the Board of Directors 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 or (C) whose election or nomination to
the Board of Directors 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.
"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.
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"COMMITMENT" shall mean the commitment of the Lender to make Loans and
to arrange the issuance of Letters of Credit in an aggregate amount not in
excess of $425,000,000, as such Commitment may be permanently terminated or
reduced from time to time pursuant to Section 2.10 or modified from time to
time pursuant to Section 7.04. The Commitment shall automatically and
permanently terminate on the Maturity Date if not terminated earlier
pursuant to the terms hereof.
"CONSOLIDATED SENIOR DEBT" shall mean, for the Borrower, the Senior
Debt of the Borrower and its Consolidated Subsidiaries determined on a
consolidated basis, excluding, however, up to $400,000,000 in the
aggregate, at any time of determination, of Senior Debt of Energy described
in clause (iii) of the definition of "Senior Debt".
"CONSOLIDATED SHAREHOLDERS' EQUITY" shall mean, for the Borrower, the
sum (without duplication) of (i) total common equity plus (ii) preferred
and preference stock not subject to mandatory redemption, each (in the case
of clauses (i) and (ii)) determined with respect to the Borrower and its
Consolidated Subsidiaries on a consolidated basis, plus (iii) Equity-Credit
Preferred Securities in an aggregate liquidation preference amount not in
excess of $3,000,000,000, plus (iv) Preferred Membership Interests;
provided, however, that in computing Consolidated Shareholders' Equity at
any time, the following should be added to the extent that the following
decreased total common equity (1) any cash and non-cash charges, in an
amount of up to $750,000,000 (calculated on an aggregate basis throughout
the term of this Agreement), as a result of (x) rulings by federal or state
regulatory bodies having jurisdiction over the Borrower or its Consolidated
Subsidiaries, (y) the early retirement, repurchase or termination of debt
or other securities or financing arrangements, including premiums, relating
to liability management activities and (z) initiatives implemented pursuant
to the Borrower's 4+4 performance improvement program, including, but not
limited to, severance costs, plant or mine closings, asset dispositions,
restructuring charges and transaction costs and (2) any losses incurred in
connection with Preferred Membership Interest Repurchases.
"CONSOLIDATED SUBSIDIARY" of any person shall mean at any date any
Subsidiary or other entity the accounts of which would be consolidated with
those of such person in such person's consolidated financial statements as
of such date.
"CONTROLLED GROUP" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Borrower, are treated as a
single employer under Section 414(b) or 414(c) of the Code.
"COVERED SUBSIDIARY" shall mean at any time a Subsidiary of the
Borrower other than an Excluded Subsidiary.
"CSFB" shall mean Credit Suisse First Boston, acting through its
Cayman Islands branch, and any successor thereto.
"DEFAULT" shall mean any event or condition, which upon notice, lapse
of time or both would constitute an Event of Default.
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"DELIVERY" shall mean TXU Electric Delivery Company, a Texas
corporation.
"DISINTERESTED DIRECTOR" shall mean any member of the Board of
Directors who is not affiliated, directly or indirectly, with, or appointed
by, a person or group of related persons (other than the Borrower, any
Subsidiary of the Borrower, the Qualified Transition Bond Issuer, TXU
Europe, any Subsidiary of TXU Europe or any pension, savings or other
employee benefit plan for the benefit of employees of the Borrower, any
Subsidiary of the Borrower, the Qualified Transition Bond Issuer, TXU
Europe and/or any Subsidiary of TXU Europe) acquiring the beneficial
ownership of more than 30% of the outstanding Voting Shares of the Borrower
(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 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.
"EBITDA" for any twelve-month period shall mean, without duplication,
(i) consolidated net income available for common stock plus (ii) preference
stock dividends plus (iii) extraordinary losses plus (or minus) (iv) loss
or income from discontinued operations minus (v) allowances for equity
funds used during construction to the extent that such allowances, taken as
a whole, increased such consolidated net income plus (vi) provisions for
Federal income taxes, to the extent that such provisions, taken as a whole,
decreased such consolidated net income minus (vii) amounts classified on
the income statements of the Borrower as "other income" plus (viii) amounts
classified on the income statements of the Borrower as "other deductions"
plus (ix) depreciation and amortization plus (x) Interest Expense plus (xi)
preferred dividends of Subsidiaries, distributions on trust preferred
securities and distributions on preferred member interests plus (xii)
charges for changes in accounting principles recorded in accordance with
GAAP plus (xiii) non-cash writedowns, one-time book losses or other charges
plus (xiv) any other writedowns, one-time book losses or other charges
related to the restructuring of the Borrower and its Subsidiaries during
the period April 1, 2004 to June 30, 2004, plus (xv) any charges or
write-offs, including severance charges, relating to restructuring
activities; provided, however, that in computing EBITDA for any
twelve-month period, the following shall be added to the extent that the
following decreased EBITDA: (A) any non-cash book losses or charges, (B)
any cash charges, in an amount of up to $500,000,000 (calculated on an
aggregate basis throughout the term of this Agreement), as a result of (1)
rulings by federal or state regulatory bodies having jurisdiction over the
Borrower or its Consolidated Subsidiaries, (2) the early retirement,
repurchase or termination of debt or other securities or financing
arrangements, including premiums, relating to liability management
activities and (3) initiatives implemented pursuant to the Borrower's 4+4
performance improvement program, including, but not limited to, severance
costs, plant or mine closings, asset dispositions, restructuring charges
and transaction costs, and (C) losses or distributions incurred in
connection with the Preferred Membership Interest Repurchases; all
determined for such twelve-month period with respect to the Borrower and
its Consolidated Subsidiaries on a consolidated basis.
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"ENERGY" shall mean TXU Energy Company LLC, a Delaware limited
liability company, or any successor thereof.
"EQUITY-CREDIT PREFERRED SECURITIES" shall mean securities, however
denominated, (i) issued by the Borrower or a Consolidated Subsidiary of the
Borrower, (ii) that are not subject to mandatory redemption or the
underlying securities, if any, of which are not subject to mandatory
redemption, (iii) that are perpetual or mature no less than 30 years from
the date of issuance, (iv) the indebtedness issued in connection with
which, including any guaranty, is subordinate in right of payment to the
unsecured and unsubordinated indebtedness of the issuer of such
indebtedness or guaranty, and (v) the terms of which permit the deferral of
the payment of interest or distributions thereon to a date occurring after
the Maturity Date.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended from time to time.
"ERISA AFFILIATE" shall mean any trade or business (whether or not
incorporated) that is a member of a group of (i) organizations described in
Section 414(b) or (c) of the Code and (ii) solely for purposes of the Lien
created under Section 412(n) of the Code, organizations described in
Section 414(m) or (o) of the Code of which the Borrower is a member.
"ERISA EVENT" shall mean (i) any Reportable Event; (ii) the adoption
of any amendment to a Plan that would require the provision of security
pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (iii)
the incurrence of any liability under Title IV of ERISA with respect to the
termination of any Plan or the withdrawal or partial withdrawal of the
Borrower or any of its ERISA Affiliates from any Plan or Multiemployer
Plan; (iv) the receipt by the Borrower or any ERISA Affiliate from the PBGC
of any notice relating to the intention to terminate any Plan or Plans or
to appoint a trustee to administer any Plan; (v) the receipt by the
Borrower or any ERISA Affiliate of any notice concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title
IV of ERISA; (vi) the occurrence of a "prohibited transaction" with respect
to which the Borrower or any of its Subsidiaries is liable; and (vii) any
other similar event or condition with respect to a Plan or Multiemployer
Plan that could result in liability of the Borrower other than a liability
to pay premiums or benefits when due.
"EURODOLLAR 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.
"EXCLUDED ITEMS" shall mean (i) the effect of any regulatory
disallowances in any proceeding before the Commission or the Railroad
Commission of Texas in an aggregate amount not to exceed $100,000,000, (ii)
any non-cash book losses relating to the sale or write-down of assets,
(iii) one-time costs of up to $100,000,000 incurred in connection with the
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restructuring of certain Subsidiaries of the Borrower in connection with
the 1999 Texas electric industry restructuring legislation (as described in
the Borrower's filings with the SEC) and (iv) any write-down of the
regulated assets related to Qualified Transition Bonds.
"EXCLUDED SUBSIDIARY" shall mean TXU International Holdings Limited
and each of its Subsidiaries.
"FEDERAL FUNDS EFFECTIVE RATE" shall have the meaning set forth in the
definition of "Alternate Base Rate".
"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.
"GAAP" shall mean generally accepted accounting principles, applied on
a consistent basis.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"HOLDINGS" shall mean TXU US Holdings Company (formerly "TXU Electric
Company"), a Texas corporation, or any successor thereof.
"INDEBTEDNESS" of any person shall mean (without duplication) all
liabilities, obligations and indebtedness (whether contingent or otherwise)
of such person (i) for borrowed money or evidenced by bonds, indentures,
notes, or other similar instruments, (ii) to pay the deferred purchase
price of property or services, (iii) as lessee under leases that are
recorded as capital leases, (iv) under reimbursement agreements or similar
agreements with respect to the issuance of letters of credit (other than
obligations in respect of letters of credit opened to provide for the
payment of goods or services purchased in the ordinary course of business),
(v) in respect of Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) a mortgage, lien, pledge, charge or other encumbrance on
any asset of such person (with the Indebtedness of such person described in
this clause (v) to be valued at the book value, net of accumulated
depreciation, of such asset of such person securing such Indebtedness of
others), (vi) all net payment obligations of such person in respect of
interest rate swap agreements, currency swap agreements and other similar
agreements designed to hedge against fluctuations in interest rates or
foreign exchange rates and (vii) under direct or indirect guaranties in
respect of, and to purchase or otherwise acquire, or otherwise to assure a
creditor against loss in respect of, liabilities, obligations or
indebtedness of others of the kinds referred to in clauses (i) through (vi)
above; provided, however, that for all purposes, the following shall be
excluded from the definition of "Indebtedness": (A) Qualified Transition
Bonds (including interest rate swaps entered into by any Qualified
Transition Bond Issuer in connection with Qualified Transition Bonds issued
by such Qualified Transition Bond Issuer) and (B) any Indebtedness defeased
by the Borrower or by any of its Subsidiaries.
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"INTEREST EXPENSE" for any twelve-month period shall mean the sum
(without duplication) of (i) interest on mortgage bonds plus (ii) interest
on other long-term debt plus (iii) other interest expense, including
interest on short-term debt and the current portion of long-term debt minus
(iv) non-cash amortization expense recorded as interest expense minus (v)
preferred dividends of Subsidiaries, distributions on trust preferred
securities, distributions on preferred member interests, including
dividends, interest, losses, charges, expenses or distributions in
connection with Preferred Membership Interest Repurchases minus (vi)
interest income generated by restricted cash investments, including any
cash and investments pledged as collateral accounts, minus (vii) any
charges, payments or write-offs resulting from the early retirement of debt
relating to liability management activities, in each case to the extent
included in the calculation of interest expense, all determined for such
twelve-month period with respect to the Borrower and its Consolidated
Subsidiaries on a consolidated basis. "Interest Expense" shall not include
interest or other payments in respect of Qualified Transition Bonds
(including interest rate swaps entered into by any Qualified Transition
Bond Issuer in connection with Qualified Transition Bonds issued by such
Qualified Transition Bond Issuer), all determined for such twelve-month
period with respect to the Borrower and its Consolidated Subsidiaries on a
consolidated basis.
"INTEREST PAYMENT DATE" shall mean, with respect to any Loan, the last
day of the Interest Period applicable thereto and, in the case of a
Eurodollar Loan with an Interest Period of more than three months'
duration, each day that would have been an Interest Payment Date for such
Loan had successive Interest Periods of three months' duration been
applicable to such Loan and, in addition, the date of any prepayment of
each Loan or conversion of such Loan to a Loan of a different Type.
"INTEREST PERIOD" shall mean (i) as to any Eurodollar Loan, the period
commencing on the date of such Loan 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 Loan 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
Loan, the period commencing on the date of such Loan 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 Loan is repaid or
prepaid in accordance with Section 2.06 or Section 2.11; 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.
"LC FEE" shall have the meaning given such term in Section 2.05(b).
"LENDER" shall have the meaning given such term in the preamble
hereto.
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"LENDING REQUEST" shall mean a request made pursuant to Section 2.03
in the form of Exhibit A.
"LETTER OF CREDIT" shall mean a letter of credit arranged by the
Lender outstanding on the date hereof and listed on Schedule 1.01, as such
Letter of Credit from time to time may be amended or modified, or may have
been extended on or prior to the date hereof, each in accordance with the
terms hereof.
"LIBO RATE" shall mean, with respect to any Eurodollar Loan 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 the
Lender 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 Loan 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 the
Reference Bank 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 2.02,
whether made as a Eurodollar Loan or 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 a materially adverse change in
the business, assets, operations or financial condition of the Borrower and
its Subsidiaries taken as a whole that makes the Borrower unable to perform
any of its obligations under this Agreement or that impairs the rights of,
or benefits available to, the Lender under this Agreement.
"MATURITY DATE" shall mean the earlier to occur of (i) December 31,
2005 and (ii) the date of termination or reduction in whole of the
Commitment pursuant to Section 2.10 or Article VI.
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"MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making, or accruing an obligation to make, contributions, or has within any
of the preceding five plan years made, or accrued an obligation to make,
contributions.
"NEW TRUST FACILITY" shall mean the Amended and Restated Credit
Agreement, dated as of the date hereof, among LOC 2003 Trust, as borrower,
the lenders party thereto, Credit Suisse First Boston, acting through its
Cayman Islands branch, as administrative agent and as collateral agent, as
amended, modified and supplemented from time to time.
"OUTSTANDING CREDITS" shall mean, on any date of determination, an
amount equal to (i) the aggregate principal amount of all Loans outstanding
on such date plus (ii) the undrawn stated amounts of all Letters of Credit
that are outstanding on such date plus (ii) the aggregate principal amount
of all unpaid reimbursement obligations of the Borrower on such date with
respect to payments made by the applicable issuing bank under any Letter of
Credit (excluding reimbursement obligations that have been made with the
proceeds of any Loan) on such date.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"PERSON" shall mean any natural person, corporation, statutory trust,
joint venture, association, company, limited liability company, partnership
or government, or any agency or political subdivision thereof.
"PLAN" shall mean any employee pension benefit plan described under
Section 3(2) of ERISA (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA that is maintained by the Borrower or any
ERISA Affiliate.
"PREFERRED MEMBERSHIP INTEREST REPURCHASE" shall mean the repurchase
by the Borrower, directly or indirectly, of all or a portion of the
Preferred Membership Interests.
"PREFERRED MEMBERSHIP INTERESTS" shall mean the $750,000,000 aggregate
liquidation preference amount of exchangeable preferred membership
interests in Energy.
"QUALIFIED TRANSITION BOND ISSUER" shall mean each of (i) TXU Electric
Delivery Transition Bond Company LLC, a Delaware limited liability company,
or any successor thereto, (ii) Delivery and (iii) a subsidiary of the
Borrower formed and operating solely for the purpose of (A) purchasing and
owning transition property created under a "financing order" (as such term
10
is defined in the Texas Utilities Code) issued by the Commission, (B)
issuing such securities pursuant to such order, (C) pledging its interests
in such transition property to secure such securities and (D) engaging in
activities ancillary to those described in clauses (A), (B) and (C) above.
"QUALIFIED TRANSITION BONDS" shall mean securities, however
denominated, that are (i) issued by a Qualified Transition Bond Issuer,
(ii) secured by or otherwise payable from transition charges authorized
pursuant to a "financing order" (as such term is defined in the Texas
Utilities Code) issued by the Commission, and (iii) non-recourse to the
Borrower or any of its Consolidated Subsidiaries (other than the issuer of
such securities).
"REFERENCE BANK" shall mean CSFB or any other bank acceptable to the
Borrower and the Lender that agrees to provide the information to be
provided by, or with respect to, the "Reference Bank" hereunder.
"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).
"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.
"RESTATEMENT DATE" shall have the meaning given such term in Section
4.01(a).
"SEC" shall mean the United States Securities and Exchange Commission.
"SENIOR DEBT" of any person shall mean (without duplication) (i) all
Indebtedness of such person described in clauses (i) through (iii) of the
definition of "Indebtedness", (ii) all Indebtedness of such person
described in clause (iv) of the definition of "Indebtedness" in respect of
unreimbursed drawings under letters of credit described in such clause
(iv), and (iii) all direct or indirect guaranties of such person in respect
of, and to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, liabilities, obligations or indebtedness of
others of the kinds referred to in clauses (i) and (ii) above; provided,
however, that in calculating "Senior Debt" of the Borrower, (A) the
aggregate amount of Preferred Membership Interests outstanding shall be
excluded and (B) any amount of Equity-Credit Preferred Securities not
included in the definition of "Consolidated Shareholders' Equity" shall be
included.
"SIGNIFICANT DISPOSITION" shall mean a sale, lease, disposition or
other transfer by the Borrower or any Significant Subsidiary, 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 Significant Subsidiary during such period,
10% or more of the assets of the Borrower and its Subsidiaries taken as a
whole, excluding any such sale, lease, disposition or other transfer to a
Wholly Owned Subsidiary of the Borrower.
"SIGNIFICANT SUBSIDIARY" shall mean at any time a Subsidiary of the
Borrower that as of such time satisfies the definition of a "significant
subsidiary" contained as of the date of this Agreement in Regulation S-X of
the SEC; provided, that no Excluded Subsidiary shall in any event be deemed
to be a Significant Subsidiary of the Borrower.
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"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 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.
"SUBSIDIARY" shall mean, with respect to any person (the "PARENT"),
any corporation or other entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time
directly or indirectly owned by such parent; provided, however, that the
Qualified Transition Bond Issuer and TXU Europe, together with its
Subsidiaries, shall not be deemed Subsidiaries of the Borrower.
"SUBSTANTIAL" shall mean an amount in excess of 10% of the
consolidated assets of the Borrower and its Consolidated Subsidiaries taken
as a whole.
"TXU EUROPE" shall mean TXU Europe Limited, a private limited company
incorporated under the laws of England and Wales.
"TYPE", when used in respect of any Loan, shall refer to the Rate by
reference to which interest on such Loan is determined. For purposes
hereof, "Rate" shall include the LIBO Rate and the Alternate Base Rate.
"VOTING SHARES" shall mean, as to shares or other equity interests of
a particular corporation or other type of person, outstanding shares of
stock or other equity interests of any class of such corporation or other
person entitled to vote in the election of directors or other comparable
managers of such person, excluding shares or other interests entitled so to
vote only upon the happening of some contingency.
"WHOLLY OWNED SUBSIDIARY" of any person shall mean any Consolidated
Subsidiary of such person all the shares of common stock and other voting
capital stock or other voting ownership interests having ordinary voting
power to vote in the election of the board of directors or other governing
body performing similar functions (except directors' qualifying shares) of
which are at the time directly or indirectly owned by such person.
"WITHDRAWAL LIABILITY" shall mean liability of the Borrower
established under Section 4201 of ERISA as a result of a complete or
partial withdrawal from a Multiemployer Plan, as such terms are defined in
Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. TERMS GENERALLY.
The definitions in Section 1.01 shall apply equally to both the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include", "includes" and "including" shall be deemed to be followed
12
by the phrase "without limitation". All references herein to Articles, Sections,
Exhibits and Schedules shall be deemed references to Articles and Sections of,
and Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided, however, that for purposes of determining
compliance with any covenant set forth in Article V, such terms shall be
construed in accordance with GAAP as in effect on the date hereof applied on a
basis consistent with the application used in preparing the Borrower's audited
financial statements referred to in Section 3.05.
ARTICLE II
THE CREDITS
SECTION 2.01. THE COMMITMENT.
The Lender has, prior to the date hereof, arranged the issuance of Letters
of Credit for the account of the Borrower in the amounts and with the expiration
dates specified on Schedule 1.01. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, the Lender
agrees, at any time and from time to time prior to the Maturity Date to finance
and re-finance the Borrower's reimbursement obligations in respect of drawings
under Letters of Credit, as required pursuant to Section 2.04(b) or as permitted
pursuant to Section 2.02(c), in an aggregate principal amount at any time
outstanding not to exceed the Commitment, subject, however, to the conditions
that at no time shall the Outstanding Credits exceed the Commitment. Once repaid
hereunder, Loans may not be reborrowed, other than pursuant to Section 2.02(c),
and no Letter of Credit may be extended or may be modified to increase the
stated amount thereof.
SECTION 2.02. LOANS.
(a) Each Loan 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 (x) the remaining balance of the available Commitment or (y) the
amount of the Borrower's reimbursement obligation being financed or refinanced
thereby).
(b) Each Loan shall be a Eurodollar Loan or an ABR Loan, as the Borrower
may request pursuant to Section 2.03. Loans of more than one Type may be
outstanding at the same time.
(c) The Borrower may refinance all or any part of any Loan with a Loan of
the same or a different Type, subject to the conditions and limitations set
forth in this Agreement. Any Loan or part thereof so refinanced shall be deemed
to be repaid or prepaid in accordance with Section 2.06 or 2.11, as applicable,
with the proceeds of a new Loan.
SECTION 2.03. LOAN PROCEDURE.
In order to request a Loan to refinance Loans made under Section 2.04(b) or
to refinance any such Loan, the Borrower shall hand deliver or telecopy to the
Lender a duly completed Lending Request in the form of Exhibit A (i) in the case
of a Eurodollar Loan, not later than 11:00 a.m., New York City time, three
13
Business Days before such Loan, and (ii) in the case of an ABR Loan, not later
than 11:00 a.m., New York City time, one Business Day before such Loan. Such
notice shall be irrevocable and shall in each case specify (A) whether the Loan
then being requested is to be a Eurodollar Loan or an ABR Loan; (B) the date of
such Loan (which shall be a Business Day) and the amount thereof; and (C) if
such Loan is to be a Eurodollar Loan, the Interest Period with respect thereto,
which shall not end after the Maturity Date. If no election as to the Type of
Loan is specified in any such notice, then the requested Loan shall be an ABR
Loan. If no Interest Period with respect to any Eurodollar Loan is specified in
any such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration (subject to the limitations set forth in the
definition of "Interest Period"). If the Borrower shall not have given notice in
accordance with this Section 2.03 of its election to refinance a Loan prior to
the end of the Interest Period in effect for such Loan, then the Borrower shall
(unless such Loan is repaid at the end of such Interest Period) be deemed to
have given notice of an election to refinance such Loan with an ABR Loan.
Notwithstanding any other provision of this Agreement to the contrary, no Loan
shall be requested if the Interest Period with respect thereto would end after
the scheduled Maturity Date.
SECTION 2.04. LETTERS OF CREDIT.
(a) The Borrower hereby agrees to pay to the Lender on each date on which
any amount is paid under any Letter of Credit a sum equal to the amount so paid.
(b) If the Lender shall not have been reimbursed in full by the Borrower
for any payment made by the Lender on or prior to the Maturity Date under a
Letter of Credit on the date of such payment, the Borrower shall be deemed to
have requested and received from the Lender an ABR Loan in the amount, and on
the date, of such payment by the Lender.
(c) The payment obligations of the Borrower under this Agreement in respect
of any payment under any Letter of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including 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 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) 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;
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(v) payment in good faith under the Letter of Credit against
presentation of a draft or certificate that 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.
SECTION 2.05. LC FEE.
(a) The Borrower agrees to pay to the Lender, on the last Business Day of
each March, June, September and December, a letter of credit fee (the "LC FEE")
equal to, during any Collateral Period, 0.20% and, at all other times, 1.05% of
the daily average face amounts of all Letters of Credit issued and outstanding
during the period from and including, in the case of such payment to be made on
December 31, 2004, the Restatement Date, and, in the case of each other payment,
the preceding payment date, to and excluding the date of such other payment.
(b) The LC Fee shall be computed on the basis of the actual number of days
elapsed in a year of 360 days and shall be paid on the dates due, in immediately
available funds, to the Lender. Once paid, the LC Fee shall not be refundable
under any circumstances.
SECTION 2.06. REPAYMENT OF OUTSTANDING CREDITS; EVIDENCE OF INDEBTEDNESS.
(a) The outstanding principal balance of each (i) Eurodollar Loan shall be
due and payable on the last day of the Interest Period applicable thereto and on
the Maturity Date and (ii) ABR Loan shall be due and payable on the Maturity
Date.
(b) The Lender shall maintain accounts in which it will record (i) the
amount of each Letter of Credit issued and each Loan made hereunder, the Type of
each Loan made and the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrower to the Lender hereunder, (iii) the amount and stated expiry date of
each Letter of Credit and (iv) the amount of any sum received by the Lender
hereunder from the Borrower.
(c) The entries made in the accounts maintained pursuant to subsection (b)
of this Section 2.06 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 the Lender to maintain such accounts or
any error therein shall not in any manner affect the obligations of the Borrower
to repay the Outstanding Credits in accordance with their terms.
SECTION 2.07. INTEREST ON LOANS.
(a) Subject to the provisions of Section 2.08, each Eurodollar Loan 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 Loan plus the Applicable Margin.
(b) Subject to the provisions of Section 2.08, each ABR Loan 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
15
days for other periods) at a rate per annum equal to the Alternate Base Rate.
(c) Interest on each Loan shall be payable on each Interest Payment Date
applicable to such Loan except as otherwise provided in this Agreement. The
applicable LIBO Rate or Alternate Base Rate for each Interest Period or day
within an Interest Period, as the case may be, shall be determined by the
Lender, and such determination shall be conclusive absent manifest error;
provided that the Lender shall, upon request, provide to the Borrower a
certificate setting forth in reasonable detail the basis for such determination.
SECTION 2.08. DEFAULT INTEREST.
If the Borrower shall default in the payment of the principal of or
interest on any Loan, any reimbursement obligation under Section 2.04(a), or any
other amount becoming due hereunder, whether by scheduled maturity, notice of
prepayment, acceleration or otherwise, the Borrower shall on demand from time to
time from the Lender 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
2.07(b)) equal to the Alternate Base Rate plus 2%.
SECTION 2.09. 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 Loan the Lender
shall have determined (i) that dollar deposits in the principal amounts of such
Eurodollar Loan are not generally available in the London interbank market or
(ii) that reasonable means do not exist for ascertaining the LIBO Rate, the
Lender shall, as soon as practicable thereafter, give telecopy notice of such
determination to the Borrower. In the event of any such determination under
clause (i) or (ii) above, until the Lender shall have advised the Borrower that
the circumstances giving rise to such notice no longer exist any request by the
Borrower for a Eurodollar Loan pursuant to Section 2.03 shall be deemed to be a
request for an ABR Loan. In the event the Lender determine that the rates at
which dollar deposits are being offered will not adequately and fairly reflect
the cost to the Lender of making or maintaining Eurodollar Loans during such
Interest Period, the Lender shall notify the Borrower and until the Lender shall
determine that the circumstances giving rise to such notice no longer exist, any
request by the Borrower for a Eurodollar Loan shall be deemed a request for an
ABR Loan. Each determination by the Lender hereunder shall be made in good faith
and shall be conclusive absent manifest error; provided that the Lender, shall,
upon request, provide to the Borrower a certificate setting forth in reasonable
detail the basis for such determination.
SECTION 2.10. TERMINATION AND REDUCTION OF THE COMMITMENT.
(a) The Commitment shall automatically terminate on the Maturity Date.
(b) Upon at least two Business Days' prior irrevocable written notice to
the Lender, the Borrower may at any time in whole permanently terminate, or from
time to time in part permanently reduce, the Commitment; provided, however, that
(i) each partial reduction of the Commitment shall be in an integral multiple of
$10,000,000, (ii) no such termination or reduction shall be made that would
16
reduce the Commitment to an amount less than (A) the Outstanding Credits on the
date of such termination or reduction (after giving effect to any prepayment
made pursuant to Section 2.11) or (B) $50,000,000, unless the result of such
termination or reduction referred to in this clause (B) is to reduce the
Commitment to $0 and (iii) the Borrower may not in any event reduce the
Commitment to an amount less than the "Total Commitment" under the New Trust
Facility.
(c) The Borrower agrees that, upon any reduction in the "Total Commitment"
under the New Trust Facility, the Commitment shall automatically be reduced by
an amount equal to the amount of such reduction.
(d) If, on any date, the Commitment shall exceed the Outstanding Credits,
the Commitment shall automatically and permanently be reduced by an amount equal
to such excess.
SECTION 2.11. PREPAYMENT.
(a) The Borrower shall have the right at any time and from time to time to
prepay any Loan, in whole or in part, upon giving telecopy notice (or telephone
notice promptly confirmed by telecopy) to the Lender: (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.
(b) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Loan (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Loan (or portion
thereof) by the amount stated therein on the date stated therein. All
prepayments under this Section 2.11 shall be subject to Section 7.05(b) but
otherwise without premium or penalty. All prepayments under this Section 2.11
shall be accompanied by accrued interest on the principal amount being prepaid
to the date of payment.
SECTION 2.12. 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 the Lender hereunder
(except for changes in respect of taxes on the overall net income of the Lender
imposed by the jurisdiction in which the Lender's principal executive 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 the Lender, or shall result in
the imposition on the Lender or the London interbank market of any other
condition affecting this Agreement, the Commitment, any Letter of Credit or any
Loan (other than an ABR Loan), and the result of any of the foregoing shall be
to increase the cost to the Lender of maintaining any Letter of Credit or making
or maintaining any Loan (other than an ABR Loan) or to reduce the amount of any
sum received or receivable by the Lender hereunder (whether of principal,
interest or otherwise) by an amount deemed by the Lender to be material, then
17
the Borrower shall, upon receipt of the notice and certificate provided for in
Section 2.12(c), promptly pay to the Lender such additional amount or amounts as
will compensate the Lender for such additional costs incurred or reduction
suffered.
(b) If the Lender shall have determined that the adoption of any law, rule,
regulation or guideline arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards," or the
adoption after the date hereof of any other law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Lender or the Lender's holding
company with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
Lender's capital or on the capital of the Lender's holding company, if any, as a
consequence of this Agreement, the Commitment, any Letter of Credit or any Loan
made by the Lender pursuant hereto to a level below that which the Lender or the
Lender's holding company could have achieved but for such adoption, change or
compliance (taking into consideration the Lender's policies and the policies of
the Lender's holding company with respect to capital adequacy) by an amount
deemed by the Lender to be material, then from time to time such additional
amount or amounts as will compensate the Lender for any such reduction suffered
will be paid by the Borrower to the Lender.
(c) A certificate of the Lender setting forth such amount or amounts as
shall be necessary to compensate the Lender or its holding company as specified
in subsection (a) or (b) above, and containing an explanation, in reasonable
detail, of the manner in which such amount or amounts shall have been
determined, shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay the Lender the amount shown as due on any
such certificate delivered by it within 10 days after its receipt of the same.
The Lender shall give prompt notice to the Borrower of any event of which it has
knowledge, occurring after the date hereof, that it has determined will require
compensation by the Borrower pursuant to this Section; provided, however, that
failure by the Lender to give such notice shall not constitute a waiver of the
Lender's right to demand compensation hereunder.
(d) Failure on the part of the Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
the Lender's right to demand compensation with respect to such period or any
other period; provided, however, that the Lender shall not be entitled to
compensation under this Section 2.12 for any costs incurred or reductions
suffered with respect to any date unless it shall have notified the Borrower
that it will demand compensation for such costs or reductions under subsection
(c) above not more than 90 days after the later of (i) such date and (ii) the
date on which it shall have become aware of such costs or reductions. The
protection of this Section shall be available to the Lender regardless of any
possible contention of the invalidity or inapplicability of the law, rule,
regulation, guideline or other change or condition that shall have occurred or
been imposed.
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SECTION 2.13. 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 the Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower, the Lender may:
(i) declare that Eurodollar Loans will not thereafter be made by the
Lender hereunder, whereupon any request for a Eurodollar Loan shall, as to
the Lender only, be deemed a request for an ABR Loan unless such
declaration shall be subsequently withdrawn (the Lender delivering such a
declaration hereby agreeing to withdraw such declaration promptly upon
determining that such event of illegality no longer exists); and
(ii) require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such
notice as provided in subsection (b) below.
In the event the Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by the Lender or the
converted Eurodollar Loans of the Lender shall instead be applied to repay the
ABR Loans made by the Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.13, a notice by the 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 2.14. PAYMENTS.
(a) The Borrower shall make each payment (including principal of or
interest on or any reimbursement obligation in respect of any Outstanding Credit
or any LC Fee 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 Lender at such account as the Lender may specify from time to time in
writing to the Borrower, in immediately available funds. Each such payment shall
be made without off-set, deduction or counterclaim, provided, that the foregoing
shall not constitute a relinquishment or waiver of the Borrower's rights to any
independent claim that the Borrower may have against the Lender.
(b) Whenever any payment (including principal of or interest on or any
reimbursement obligation in respect of any Outstanding Credit or the LC Fee 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 the LC Fee, if applicable.
19
SECTION 2.15. TAXES.
(a) Any and all payments of principal and interest on any Outstanding
Credit, or of the LC Fee or indemnity or expense reimbursements by the Borrower
hereunder ("BORROWER PAYMENTS") shall be made, in accordance with Section 2.14,
free and clear of and without deduction for any and all current or future United
States Federal, state and local taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect to 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 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 Lender
(or Transferee), in each case by the jurisdiction under the laws of which the
Lender (or Transferee) is organized or doing business through offices or
branches located therein, or any political subdivision thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities, collectively or individually, "TAXES"). If the Borrower shall be
required to deduct any Taxes from or in respect of any sum payable hereunder to
the Lender (or any Transferee), (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 2.15) the Lender (or Transferee) shall receive an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay to the relevant United States
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement
("OTHER Taxes").
(c) The Borrower shall indemnify the Lender (or Transferee thereof) for the
full amount of Taxes and Other Taxes with respect to Borrower Payments paid by
the Lender (or Transferee) 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 the Lender, 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) makes written
demand therefor.
(d) If the Lender (or Transferee) shall become aware that it is entitled to
claim a refund from a United States Governmental Authority in respect of Taxes
or Other Taxes as to which it has been indemnified by the Borrower, or with
respect to which the Borrower has paid additional amounts, pursuant to this
Section 2.15, it shall promptly notify the Borrower of the availability of such
refund claim and shall, within 30 days after receipt of a request by the
Borrower, make a claim to such United States Governmental Authority for such
refund at the Borrower's expense. If the Lender (or Transferee) receives a
refund (including pursuant to a claim for refund made pursuant to the preceding
sentence) in respect of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower had paid
additional amounts pursuant to this Section 2.15, it shall within 30 days from
the date of such receipt pay over such refund to the Borrower (but only to the
extent of indemnity payments made, or additional amounts paid, by the Borrower
under this Section 2.15 with respect to the Taxes or Other Taxes giving rise to
such refund), net of all out-of-pocket expenses of the Lender (or Transferee)
and without interest (other than interest paid by the relevant United States
Governmental Authority with respect to such refund); provided, however, that the
Borrower, upon the request of the Lender (or Transferee), agrees to repay the
amount paid over to the Borrower (plus penalties, interest or other charges) to
the Lender (or Transferee) in the event the Lender (or Transferee) is required
to repay such refund to such United States Governmental Authority.
(e) As soon as practicable, but in any event within 30 days, after the date
of any payment of Taxes or Other Taxes by the Borrower to the relevant United
States Governmental Authority, the Borrower will deliver to the Lender, at its
address referred to in Section 7.01, the original or a certified copy of a
receipt issued by such United States Governmental Authority evidencing payment
thereof.
(f) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.15 shall
survive the payment in full of the principal of and interest on all Loans and
reimbursement obligations made hereunder and the termination or expiry of all
Letters of Credit.
(g) If the Lender (or Transferee) shall claim any indemnity payment or
additional amounts payable pursuant to this Section 2.15, it shall use
reasonable efforts (consistent with legal and regulatory restrictions) to file
any certificate or document reasonably requested in writing by the Borrower if
the making of such a filing would avoid the need for or reduce the amount of any
such indemnity payment or additional amounts that may thereafter accrue and
would not, in the good faith determination of the Lender (or Transferee), be
otherwise disadvantageous to the Lender (or Transferee).
(h) Nothing contained in this Section 2.15 shall require the Lender (or
Transferee) to make available to the Borrower any of its tax returns (or any
other information) that it deems to be confidential or proprietary.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender as follows:
SECTION 3.01. ORGANIZATION; POWERS.
The Borrower (i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (ii) has
all requisite power and authority to own its property and assets and to carry on
its business as now conducted and as proposed to be conducted, (iii) is
qualified to do business in every jurisdiction where such qualification is
required, except where the failure so to qualify would not result in a Material
Adverse Change, and (iv) has the corporate power and authority to execute,
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deliver and perform its obligations under this Agreement and to request and
receive Loans and Letters of Credit hereunder.
SECTION 3.02. AUTHORIZATION.
The execution, delivery and performance by the Borrower of this Agreement
and the Loans and reimbursement obligations of the Borrower hereunder (i) have
been duly authorized by all requisite corporate action and (ii) will not (A)
violate (x) any provision of any law, statute, rule or regulation (including,
the Margin Regulations) to which the Borrower is subject or of the certificate
of incorporation or other constitutive documents or by-laws of the Borrower or
any of its Subsidiaries, (y) any order of any Governmental Authority or (z) any
provision of any indenture, agreement or other instrument to which the Borrower
or any of its Subsidiaries is a party or by which it or any of its property is
or may be bound, (B) be in conflict with, result in a breach of or constitute
(alone or with notice or lapse of time or both) a default under any such
indenture, agreement or other instrument or (C) result in the creation or
imposition of any Lien upon any property or assets of the Borrower.
SECTION 3.03. ENFORCEABILITY.
This Agreement constitutes a legal, valid and binding obligation of the
Borrower enforceable in accordance with its terms except to the extent that
enforcement may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally.
SECTION 3.04. GOVERNMENTAL APPROVALS.
No action, consent or approval of, registration or filing with or other
action by any Governmental Authority is or will be required in connection with
the execution, delivery and performance by the Borrower of this Agreement,
except those as have been duly obtained and as are (i) in full force and effect,
(ii) sufficient for their purpose and (iii) not subject to any pending or, to
the knowledge of the Borrower, threatened appeal or other proceeding seeking
reconsideration or review thereof.
SECTION 3.05. FINANCIAL STATEMENTS.
(a) Each of (i) the consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 2003 and the related consolidated
statements of income, shareholders' equity and cash flows for the fiscal year
then ended, reported on by Deloitte & Touche LLP or another nationally
recognized accounting firm and set forth in the Borrower's Annual Report on Form
10-K for such fiscal year, and (ii) the unaudited consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of September 30, 2004 and the
related consolidated statements of income and cash flows for the three and nine
month periods then ended, set forth in the Borrower's report on Form 10-Q for
the fiscal quarter then ended, copies of which have been made available to each
of the Lenders, present fairly (subject, in the case of such balance sheet and
statements of income and cash flows set forth in such Quarterly Report on Form
10-Q, to year-end adjustments), in all material respects, the consolidated
financial position of the Borrower and its Consolidated Subsidiaries as of such
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date and their consolidated results of operations and cash flows for the periods
ending on such dates in conformity with GAAP.
(b) Except (i) as set forth in the audited financial statements or other
reports of the type referred to in Section 5.03 hereof and that have been
delivered to the Lender on or prior to the date hereof and (ii) with respect to
the Excluded Items, since December 31, 2003, there has been no Material Adverse
Change.
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, which have been delivered to the Lender
on or prior to the date hereof, there is no action, suit or proceeding pending
against, or to the knowledge of the Borrower threatened against or affecting,
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable possibility
of an adverse decision that could materially adversely affect the ability of the
Borrower to pay its obligations hereunder or that in any manner draws into
question the validity of this Agreement.
SECTION 3.07. FEDERAL RESERVE REGULATIONS.
(a) Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Letter of Credit or Loan will be used by
the Borrower, whether directly or indirectly, and whether immediately,
incidentally or ultimately, to purchase or carry Margin Stock or to refund
indebtedness originally incurred for such purpose, or for any other purpose
which entails a violation of, or which is inconsistent with, the provisions of
the Margin Regulations.
(c) Not more than 25% of the value of the assets of the Borrower subject to
the restrictions of Sections 5.09 and 5.10 are represented by Margin Stock.
SECTION 3.08. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT.
(a) Neither the Borrower nor any of its Subsidiaries is an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940.
(b) The Borrower and each of its Subsidiaries is exempt from all provisions
of the Public Utility Holding Company Act of 1935 and rules and regulations
thereunder, except for Sections 9(a)(2) and 33 of such Act and the rules and
regulations thereunder, and the execution and delivery by the Borrower of this
Agreement and the performance of its obligations hereunder do not violate any
provision of such Act or any rule or regulation thereunder.
SECTION 3.09. NO MATERIAL MISSTATEMENTS.
No report, financial statement or other written information furnished by or
on behalf of the Borrower to the Lender pursuant to or in connection with this
Agreement contains or will contain any material misstatement of fact or omits or
23
will omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were or will be made, not
misleading.
SECTION 3.10. TAXES.
The Borrower and its Subsidiaries have filed or caused to be filed within 3
days of the date on which due, all material Federal, state and local tax returns
that to their knowledge are required to be filed by them, and have paid or
caused to be paid all material taxes shown to be due and payable on such returns
or on any assessments received by them, other than any taxes or assessments the
validity of which is being contested in good faith by appropriate proceedings
and with respect to which appropriate accounting reserves have to the extent
required by GAAP been set aside.
SECTION 3.11. EMPLOYEE BENEFIT PLANS.
With respect to each Plan the Borrower and its ERISA Affiliates are in
compliance in all material respects with the applicable provisions of ERISA and
the Code and the final regulations and published interpretations thereunder. No
ERISA Event has occurred that alone or together with any other ERISA Event has
resulted or could reasonably be expected to result in a Material Adverse Change.
Neither the Borrower nor any ERISA Affiliate has incurred any Withdrawal
Liability that could result in a Material Adverse Change. Neither the Borrower
nor any ERISA Affiliate has received any notification that any Multiemployer
Plan is in reorganization or has been terminated within the meaning of Title IV
of ERISA, which such reorganization or termination could result in a Material
Adverse Change, and no Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated where such reorganization or termination has
resulted or can reasonably be expected to result, through an increase in the
contributions required to be made to such Plan or otherwise, in a Material
Adverse Change.
SECTION 3.12. SIGNIFICANT SUBSIDIARIES.
Each of the Borrower's Significant Subsidiaries is a corporation, limited
liability company or other type of person duly incorporated or formed (as the
case may be), validly existing and in good standing under the laws of 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. The
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 that have been
delivered to the Lender on or prior to the date hereof, the Borrower and each of
its Subsidiaries has complied in all material respects with all Federal, state,
local and other statutes, ordinances, orders, judgments, rulings and regulations
relating to environmental pollution or to environmental or nuclear regulation or
control, except to the extent that failure to so comply could not reasonably be
expected to result in a Material Adverse Change. Except as set forth in or
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contemplated by such financial statements or other reports, neither the Borrower
nor any of its Subsidiaries has received notice of any material failure so to
comply, except where such failure could not reasonably be expected to result in
a Material Adverse Change. Except as set forth in or contemplated by such
financial statements or other reports, the facilities of the Borrower or any of
its Subsidiaries, as the case may be, are not used to manage any hazardous
wastes, hazardous substances, hazardous materials, toxic substances, toxic
pollutants or substances similarly denominated, as those terms or similar terms
are used in the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the Clean Air Act, the
Clean Water Act or any other applicable law relating to environmental pollution,
or any nuclear fuel or other radioactive materials, in violation in any material
respect of any law or any regulations promulgated pursuant thereto, except to
the extent that such violations could not reasonably be expected to result in a
Material Adverse Change. Except as set forth in or contemplated by such
financial statements or other reports, the Borrower is aware of no events,
conditions or circumstances involving environmental pollution or contamination
that could reasonably be expected to result in a Material Adverse Change.
SECTION 3.14. SOLVENCY.
The Borrower is Solvent.
ARTICLE IV
CONDITIONS
SECTION 4.01. CONDITIONS TO AMENDMENT AND RESTATEMENT.
The effectiveness of the amendment and restatement evidenced by this
Agreement is subject to the following conditions:
(a) The Lender shall have received the following documents, each dated
(except as specified below) the date hereof (the "RESTATEMENT DATE"), in form
and substance reasonably satisfactory to the Lender:
(i) A counterpart of this Agreement executed by the Borrower and the
Lender.
(ii) Evidence satisfactory to it of the occurrence of the "RESTATEMENT
DATE" under and as defined in the New Trust Facility.
(iii) Favorable written legal opinions of David A. Poole, Senior Vice
President and Associate General Counsel of TXU Business Services Company,
and Thelen Reid & Priest LLP, special New York counsel to the Borrower, in
each case dated the date hereof, addressed to the Lender and in form and
substance satisfactory to the Lender.
(iv) (i) a copy of the certificate of incorporation, including all
amendments thereto, of the Borrower, certified as of a recent date by the
Secretary of State of the State of Texas, and a certificate as to the good
standing of the Borrower as of a recent date from such Secretary of State;
25
(ii) a certificate of the Secretary or an Assistant Secretary of the
Borrower certifying (A) that attached thereto is a true and complete copy
of the bylaws of the Borrower as in effect on the date hereof 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 authorizing the
execution and delivery by the Borrower of this Agreement, the Loans to be
requested by the Borrower hereunder and the performance by the Borrower of
all of its obligations hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C) that
the certificate of incorporation referred to in clause (i) above has not
been amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to such clause (i) and (D)
as to the incumbency and specimen signature of each officer executing this
Agreement and any other document delivered in connection herewith on behalf
of the Borrower; (iii) a certificate of another officer of the Borrower as
to the incumbency and specimen signature of the Secretary or Assistant
Secretary executing the certificate pursuant to (ii) above; and (iv) a
certificate of a Responsible Officer of the Borrower stating that (A) no
action, consent or approval of, registration or filing with or other action
by any Governmental Authority is or will be required in connection with the
execution, delivery and performance by the Borrower of this Agreement,
except those as have been duly obtained and as are (1) in full force and
effect, (2) sufficient for their purpose and (3) not subject to any pending
or, to the knowledge of such person, threatened appeal or other proceeding
seeking reconsideration or review thereof, (B) the representations and
warranties set forth in Article III hereof are true and correct in all
material respects on and as of the date hereof, and (C) no Event of Default
or Default has occurred and is continuing on the date hereof.
(v) Such other approvals, opinions, certificates, instruments and
documents as the Lender may have reasonably requested, in form satisfactory
to the Lender (if applicable).
(b) The Lender shall have received payment of all fees and reimbursement of
all expenses for which invoices have been presented as and when due on or prior
to the Restatement Date pursuant to the terms of this Agreement.
SECTION 4.02. CONDITIONS FOR ALL LOANS.
The Commitment of the Lender to make each Loan (including the initial Loan)
on or after the Restatement Date (other than pursuant to Section 2.04(b)) shall
be subject to the satisfaction of the following conditions precedent on the date
of such Loan:
(a) The Lender shall have received a notice of such Loan as required by
Section 2.03.
(b) In the case of any Eurodollar Loan, the representations and warranties
set forth in Article III hereof, other than the representations and warranties
set forth in Sections 3.05(b), 3.06, 3.11 and 3.13, shall be true and correct in
all material respects on and as of the date of such Loan with the same effect as
though made on and as of such date, except to the extent such representations
and warranties expressly relate to an earlier date.
26
(c) At the time of and immediately after such Loan, no Event of Default or
Default shall have occurred and be continuing.
(d) The Lender shall have received a certificate of a Responsible Officer
of the Borrower certifying that the matters set forth in subsections (b) and (c)
of this Section 4.02 are true and correct as of such date.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as the Commitment hereunder exists 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.
It will furnish to the Lender:
(a) as soon as available, and in any event within 120 days after the end of
each fiscal year of the Borrower, a consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income, retained earnings and cash flows for
such fiscal year, setting forth in each case in comparative form the figures for
the previous fiscal year, all reported on in a manner reasonably acceptable to
the SEC by Deloitte & Touche LLP or other independent public accountants of
nationally recognized standing;
(b) as soon as available, and in any event within 60 days after the end of
each of the first three quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such quarter and the related consolidated statements of income for
such quarter, for the portion of the Borrower's fiscal year ended at the end of
27
such quarter, and for the twelve months ended at the end of such quarter, and
the related consolidated statement of cash flows for the portion of the
Borrower's fiscal year ended at the end of such quarter, setting forth
comparative figures for previous dates and periods to the extent required in
Form 10-Q, all certified (subject to normal year-end adjustments) as to fairness
of presentation, GAAP and consistency by a Financial Officer of the Borrower;
(c) simultaneously with any delivery of each set of financial statements
referred to in subsections (a) and (b) above, (i) an unconsolidated balance
sheet of the Borrower and the related unconsolidated statements of income,
retained earnings and cash flows as of the same date and for the same periods
applicable to the statements delivered pursuant to subsection (a) or (b) above,
as applicable, all certified (subject to normal year-end adjustments in the case
of quarterly statements) as to fairness of presentation, GAAP and consistency by
a Financial Officer of the Borrower and (ii) a certificate of a Financial
Officer of the Borrower (A) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of Sections 5.11 and 5.12 on the date of such financial statements,
and (B) stating whether any Default or Event of Default exists on the date of
such certificate and, if any Default or Event of Default then exists, setting
forth the details thereof and the action that the Borrower is taking or proposes
to take with respect thereto;
(d) simultaneously with the delivery of each set of financial statements
referred to in subsection (a) above, a statement of the firm of independent
public accountants that reported on such statements (i) stating whether anything
has come to their attention to cause them to believe that any Default or Event
of Default existed on the date of such statements and (ii) confirming the
calculations set forth in the Financial Officer's certificate delivered
simultaneously therewith pursuant to subsection (c) above;
(e) forthwith upon becoming aware of the occurrence of any Default or Event
of Default, a certificate of a Financial Officer of the Borrower setting forth
the details thereof and the action which the Borrower is taking or proposes to
take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the Borrower
generally, copies of all financial statements, reports and proxy statements so
mailed;
(g) promptly upon the filing thereof, copies of each final prospectus
(other than a prospectus included in any registration statement on Form S-8 or
its equivalent or with respect to a dividend reinvestment plan) and all reports
on Forms 10-K, 10-Q and 8-K and similar reports that the Borrower shall have
filed with the SEC, or any Governmental Authority succeeding to any of or all
the functions of the SEC;
(h) if and when any member of the Controlled Group (i) gives or is required
to give notice to the PBGC of any Reportable Event with respect to any Plan that
might constitute grounds for a termination of such Plan under Title IV of ERISA,
or knows that the plan administrator of any Plan has given or is required to
give notice of any such Reportable Event, a copy of the notice of such
Reportable Event given or required to be given to the PBGC; (ii) receives notice
from a proper representative of a Multiemployer Plan of complete or partial
Withdrawal Liability being imposed upon such member of the Controlled Group
under Title IV of ERISA, a copy of such notice; or (iii) receives notice from
28
the PBGC under Title IV of ERISA of an intent to terminate, or appoint a trustee
to administer, any Plan, a copy of such notice; and
(i) promptly, from time to time, such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Lender may reasonably request.
As promptly as practicable after delivering each set of financial
statements as required in subsection (a) of this Section, the Borrower shall
make available a copy of the consolidating workpapers used by the Borrower in
preparing such consolidated statements to the Lender that shall have requested
such consolidating workpapers. The Lender that receives such consolidating
workpapers shall hold them in confidence as required by Section 7.16; provided
that the Lender may not disclose such consolidating workpapers to any other
person pursuant to clause (iv) of Section 7.16.
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 the Lender 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.
29
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 or Letters of Credit for purposes other than for the
repayment of other Indebtedness of the Borrower and its Subsidiaries or to
arrange Letters of Credit.
SECTION 5.09. CONSOLIDATIONS, MERGERS, SALES AND ACQUISITIONS OF ASSETS AND
INVESTMENTS IN SUBSIDIARIES.
It (i) will not, and will not permit any Significant Subsidiary to,
consolidate or merge with or into any person unless, (A) in the case of any such
transaction involving the Borrower, the surviving person is the Borrower or
another person formed under the laws of a state of the United States of America
and assumes or is responsible, by operation of law, for all the obligations of
the Borrower hereunder and (B) in the case of any such transaction involving any
such Significant Subsidiary, the survivor is the Borrower, such Significant
Subsidiary or a Wholly Owned Subsidiary of the Borrower (or a person which as a
result of such transaction becomes a Wholly Owned Subsidiary of the Borrower),
and (ii) will not, and will not permit any Significant Subsidiary to, make a
Significant Disposition to any person other than the Borrower or a Wholly Owned
Subsidiary of the Borrower (or a person which as a result of such transaction
becomes a Wholly Owned Subsidiary of the Borrower), provided that the Borrower
will not in any event permit any such consolidation, merger, sale, lease or
transfer if any Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such transaction.
Notwithstanding the foregoing, (x) neither the Borrower nor any of its
Subsidiaries will engage to a Substantial extent in businesses other than those
currently conducted by them and other businesses reasonably related thereto and
(y) neither the Borrower nor any of its Subsidiaries will acquire any Subsidiary
or make any investment in any Subsidiary if, upon giving effect to such
acquisition or investment, as the case may be, the Borrower would not be in
compliance with the covenants set forth in Sections 5.11.
SECTION 5.10. LIMITATIONS ON LIENS.
(a) The Borrower will not pledge, mortgage, hypothecate or grant a security
interest in, or permit any mortgage, pledge, security interest or other lien
upon, any capital stock of any Subsidiary now or hereafter owned by the
Borrower, to secure any Indebtedness (hereinafter defined) without concurrently
making effective provision whereby the Commitments and the Outstanding Credits
shall (so long as such other Indebtedness shall be so secured) be equally and
ratably secured with any and all such other Indebtedness and any other
indebtedness similarly entitled to be equally and ratably secured; provided,
however, that this restriction shall not apply to nor prevent the creation or
existence of:
(i) any mortgage, pledge, security interest, lien or encumbrance upon
any such capital stock created at the time of the acquisition of such
capital stock by the Borrower or within 270 days after such time to secure
all or a portion of the purchase price for such capital stock;
30
(ii) any mortgage, pledge, security interest, lien or encumbrance upon
any such capital stock existing thereon at the time of the acquisition
thereof by the Borrower (whether or not the obligations secured thereby are
assumed by the Borrower);
(iii) any extension, renewal or refunding of any mortgage, pledge,
security interest, lien or encumbrance permitted by paragraph (i) or (ii)
above on capital stock of any Subsidiary theretofore subject thereto (or
substantially the same capital stock) or any portion thereof; or
(iv) any judgment, levy, execution, attachment or other similar lien
upon such capital stock arising in connection with court proceedings,
provided that either
(A) the execution or enforcement of each such lien is effectively
stayed within 30 days after entry of the corresponding judgment (or
the corresponding judgment has been discharged within such 30 day
period) and the claims secured thereby are being contested in good
faith by appropriate proceedings timely commenced and diligently
prosecuted;
(B) the payment of each such lien is covered in full by insurance
and the insurance company has not denied or contested coverage
thereof; or
(C) so long as each such lien is adequately bonded, any
appropriate legal proceedings that may have been duly initiated for
the review of the corresponding judgment, decree or order shall not
have been fully terminated or the period within which such proceedings
may be initiated shall not have expired.
For purposes of this Section 5.10, "Indebtedness" means all indebtedness,
whether or not represented by bonds, debentures, notes or other securities,
created or assumed by the Borrower for the repayment of money borrowed. All
indebtedness for money borrowed secured by a lien upon property owned by the
Borrower and upon which indebtedness for money borrowed the Borrower customarily
pays interest, although the Borrower has not assumed or become liable for the
payment of such indebtedness for money borrowed, shall for purposes of this
Section 5.10 be deemed to be Indebtedness of the Borrower. All indebtedness of
others for money borrowed that is guaranteed as to payment of principal by the
Borrower or in effect guaranteed by the Borrower through a contingent agreement
to purchase such indebtedness for money borrowed shall for purposes of this
Section 5.10 be deemed to be Indebtedness of the Borrower, but no other
contingent obligation of the Borrower in respect of indebtedness for money
borrowed or other obligations incurred by others shall for purposes of this
Section 5.10 be deemed to be Indebtedness of the Borrower.
In case the Borrower shall propose to pledge, mortgage, hypothecate or
grant a security interest in any capital stock of any Subsidiary owned by the
Borrower to secure any Indebtedness, other than as permitted by subsections
(a)(i) through (a)(ii), inclusive, of this Section 5.10, the Borrower will prior
thereto give written notice thereof to the Lender, and the Borrower will prior
to or simultaneously with such pledge, mortgage, hypothecation or grant of
security interest, effectively secure (for so long as such other Indebtedness
shall be so secured), in form satisfactory to the Lender, all the Commitments
and the Outstanding Credits equally and ratably with such Indebtedness and with
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any other indebtedness for money borrowed similarly entitled to be equally and
ratably secured.
(b) The provisions of subsection (a) of this Section 5.10 shall not apply
in the event that the Borrower shall pledge, mortgage, hypothecate or grant a
security interest in or other lien upon any capital stock of any Subsidiary now
or hereafter owned by the Borrower to secure any Indebtedness that would
otherwise be subject to the foregoing restriction up to an aggregate amount
that, together with all other Indebtedness (other than mortgages, pledges,
security interests, liens or encumbrances permitted by subsection (a) of this
Section 5.10) which would otherwise be subject to the foregoing restriction,
does not at the time exceed 5% of Consolidated Capitalization.
(c) For purposes of this Section 5.10:
(i) The term "Consolidated Capitalization" means the sum obtained by
adding (i) Total Consolidated Shareholders' Equity, (ii) Consolidated
Indebtedness for money borrowed (exclusive of any thereof which is due and
payable within one year of the date such sum is determined) and, without
duplication, (iii) any preference or preferred stock of the Borrower or any
Consolidated Subsidiary that is subject to mandatory redemption or sinking
fund provisions.
(ii) The term "Total Consolidated Shareholders' Equity" means the
total Assets of the Borrower and its Consolidated Subsidiaries less all
liabilities of the Borrower and its Consolidated Subsidiaries. As used in
this definition, "liabilities" means all obligations that would, in
accordance with generally accepted accounting principles, be classified on
a balance sheet as liabilities, including without limitation, (i)
indebtedness secured by property of the Borrower or any of its Consolidated
Subsidiaries whether or not the Borrower or such Consolidated Subsidiary is
liable for the payment thereof unless, in the case that the Borrower or
such Consolidated Subsidiary is not so liable, such property has not been
included among the Assets of the Borrower or such Consolidated Subsidiary
on such balance sheet, (ii) deferred liabilities, (iii) indebtedness of the
Borrower or any of its Consolidated Subsidiaries that is expressly
subordinated in right and priority of payment to other liabilities of the
Borrower or such Consolidated Subsidiary. As used in this definition,
"liabilities" includes preference or preferred stock of the Borrower or any
Consolidated Subsidiary only to the extent of any such preference or
preferred stock that is subject to mandatory redemption or sinking fund
provisions.
(iii) The "Assets" of any person means the whole or any part of its
business, property, assets, cash and receivables.
(iv) The term "Consolidated Indebtedness" means total indebtedness as
shown on the consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries.
SECTION 5.11. EBITDA TO INTEREST EXPENSE RATIO.
The Borrower will not, as of the end of each quarter of each fiscal year of
the Borrower, permit the ratio of EBITDA to Interest Expense for the twelve
months then ended to be less than 2.00 to 1.00.
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SECTION 5.12. CONSOLIDATED SENIOR DEBT TO EBITDA RATIO.
The Borrower will not, as of the end of each quarter of each fiscal year of
the Borrower, permit the ratio of Consolidated Senior Debt to EBITDA for the
twelve months then ended to be greater than 6.25 to 1.00.
SECTION 5.13. RESTRICTIVE AGREEMENTS.
The Borrower will not permit Energy or Delivery to enter into any agreement
restricting the ability of Energy or Delivery to make payments, directly or
indirectly, to its shareholders 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 Energy or Delivery to make any
payment, directly or indirectly, to its shareholders, other than pursuant to the
terms of preferred stock or Equity-Credit Preferred Securities issued by Energy
or Delivery or any of their respective Subsidiaries, if the effect of such
agreement is to subject Energy or Delivery or any of their respective
Subsidiaries to restrictions on such payments greater than those to which such
Subsidiary was subject on July 31, 2002. All such agreements to which Energy or
Delivery is a party as of the date hereof are listed in Schedule 5.13 hereto.
SECTION 5.14. CASH COLLATERAL.
If at any time and for so long as the Lender shall be required to provide
any collateral in the form of cash or a letter of credit (the "NEW TRUST CASH
COLLATERAL") to the "Administrative Agent" under and as defined in the New Trust
Facility to secure obligations of the Lender with respect to the Letters of
Credit and Loans arranged for the Borrower thereunder, the Borrower shall
immediately provide to the Lender, upon request by the Lender, such New Trust
Collateral.
ARTICLE VI
EVENTS OF DEFAULT
In case of the happening of any of the following events (each an "EVENT OF
DEFAULT"):
(a) any representation or warranty made or deemed made by the Borrower in
or in connection with the execution and delivery of this Agreement or the Loans
or Letters 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 the Borrower in the payment of any principal of any Loan or any
reimbursement obligation in respect of any Letter of 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;
(c) default shall be made by the Borrower in the payment of any interest on
any Outstanding Credit or the LC Fee or any other amount (other than an amount
referred to in subsection (b) above) due hereunder, when and as the same shall
become due and payable, and such default shall continue unremedied for a period
of five days;
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(d) default shall be made by the Borrower in the due observance or
performance of any covenant, condition or agreement contained in Section 5.01,
5.11, 5.12 or 5.14;
(e) default shall be made by the Borrower (i) in the due observance or
performance of any covenant, condition or agreement contained in Section 5.09
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) and such
default shall continue unremedied for a period of 30 days after notice thereof
from the Lender to the Borrower;
(f) the Borrower 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 due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in
respect of the Borrower or any Significant Subsidiary, or of a substantial part
of the property or assets of the Borrower or any Significant Subsidiary, under
Title 11 of the United States Bankruptcy Code, as now constituted or hereafter
amended, or any other Federal or state bankruptcy, insolvency, receivership or
similar law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Significant Subsidiary or for a substantial part of the property or assets of
the Borrower or any Significant Subsidiary or (iii) the winding up or
liquidation of the Borrower or any Significant Subsidiary; and such proceeding
or petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
(h) the Borrower or any Significant Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Bankruptcy Code, as now constituted or hereafter amended, or
any other Federal or state bankruptcy, insolvency, receivership or similar law,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
(g) above, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower or any
Significant Subsidiary or for a substantial part of the property or assets of it
or such Significant Subsidiary, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors, (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they become due or
(vii) take any action for the purpose of effecting any of the foregoing;
(i) a Change in Control shall occur;
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(j) one or more judgments or orders for the payment of money in an
aggregate amount in excess of $50,000,000 shall be rendered against the Borrower
and such judgment or order shall remain undischarged or unstayed for a period of
30 days, or any action shall be legally taken by a judgment creditor to levy
upon assets or properties of the Borrower to enforce any such judgment or order;
(k) an ERISA Event or ERISA Events shall have occurred that reasonably
could be expected to result in a Material Adverse Change; or
(l) the Borrower shall no longer own, directly or indirectly, any of the
following: (i) 80% of the common shares in Holdings, (ii) 80% of the common
membership interests in Energy or (iii) 100% of the beneficial interests in LOC
2003 Trust;
then, and in every such event, and at any time thereafter during the continuance
of such event, the Lender, shall, by notice to the Borrower, take either or both
of the following actions, at the same or different times: (i) terminate
forthwith the right of the Borrower to request and receive Loans and (ii)
declare the Loans of the Borrower then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and any unpaid
accrued LC Fee and all other liabilities of the Borrower accrued hereunder,
shall become forthwith due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived, anything
contained herein to the contrary notwithstanding; provided that in the case of
any event described in subsection (g) or (h) above with respect to the Borrower,
the right of the Borrower to request and receive Loans shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued LC Fee and all other liabilities of the
Borrower accrued hereunder shall automatically become due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein to the
contrary notwithstanding.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. 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:
If to the Borrower, to TXU Business Services Company, Energy Plaza, 1601
Bryan Street, 33rd Floor, Dallas, TX 75201, Attention: Treasurer (Telecopy No.
214-812-2488);
If to the Lender, c/o Wilmington Trust Company, Rodney Square North, 1100
North Market Street, Wilmington, DE 19890-0001, Attention: Corporate Capital
Markets (facsimile: (302) 636-4145), with a copy to the Administrator, at TXU
Business Services Company, Energy Plaza, 1601 Bryan Street, 33rd Floor, Dallas,
TX 75201, Attention: Treasurer (Telecopy No. 214-812-2488).
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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 7.02. SURVIVAL OF AGREEMENT.
All covenants, agreements, representations and warranties made by the
Borrower herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement shall be considered
to have been relied upon by the Lender and shall survive the making of Loans or
arrangement for Letters of Credit by the Lender regardless of any investigation
made by the Lender or on their behalf, and shall continue in full force and
effect as long as there are any Outstanding Credits or the LC Fee or any other
amount payable under this Agreement is outstanding and unpaid or the Commitment
have not been terminated or any Letter of Credit is available to be drawn.
SECTION 7.03. BINDING EFFECT.
Subject to Section 4.01, this Agreement shall become effective when it
shall have been executed by the Borrower and the Lender, and thereafter shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrower shall not have the right to
assign any rights hereunder or any interest herein without the prior consent of
the Lender.
SECTION 7.04. 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) The Borrower shall not assign or delegate any rights and duties
hereunder without the prior written consent of the Lender, and any attempted
assignment or delegation (except as a consequence of a transaction expressly
permitted under Section 5.09) by the Borrower without such consent shall be
void.
(c) The Lender may not assign or grant participations in Loans or Letters
of Credit or the Commitment other than as collateral to secure its obligations
under the New Trust Facility (unless and until the party secured by such
collateral has exercised its remedies as a secured creditor in respect of such
collateral). If and for so long as no Event of Default shall have occurred and
be continuing, the Lender will not agree to any assignment by any lender under
the New Trust Facility without the consent of the Borrower, which consent will
not be unreasonably withheld.
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SECTION 7.05. EXPENSES; INDEMNITY.
(a) The Borrower agrees to pay all reasonable out-of-pocket expenses
(including reasonable fees, charges and disbursements of counsel) incurred by
the Lender in connection with entering into this Agreement or in connection with
any amendments, modifications or waivers of the provisions hereof (but only if
such amendments, modifications or waivers are requested by the Borrower)
(whether or not the transactions hereby contemplated are consummated), or
incurred by the Lender in connection with the enforcement of its rights in
connection with this Agreement, or the Loans made and Letters of Credit arranged
hereunder, including the reasonable fees and disbursements of counsel for the
Lender in the case of enforcement following an Event of Default.
(b) The Borrower agrees to indemnify the Lender against any loss,
calculated in accordance with the next sentence, or reasonable expense which the
Lender may sustain or incur as a consequence of (i) any failure by the Borrower
to borrow or to refinance, convert or continue any Loan hereunder (including as
a result of the Borrower's failure to fulfill any of the applicable conditions
set forth in Article IV) after irrevocable notice of such Loan, refinancing,
conversion or continuation has been given pursuant to Section 2.03, (ii) any
payment, prepayment or conversion, or assignment of a Eurodollar Loan required
by any 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, including, in each such case, any loss or
reasonable expense sustained or incurred or to be sustained or incurred by the
Lender in liquidating or employing deposits from third parties, or with respect
to Commitment 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
the 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 the Lender) that would be realized by the
Lender in reemploying the funds so paid, prepaid or not borrowed or refinanced
for such period or Interest Period, as the case may be.
(c) The Borrower agrees to indemnify the Lender, each of its 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 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
proceeds of the Loans and Letters 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
37
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (A) 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
(B) result from any litigation brought by such Indemnitee against the Borrower
or by the Borrower against such Indemnitee, in which a final, nonappealable
judgment has been rendered against such Indemnitee; provided, further, that the
Borrower agrees that it will not, nor will it permit any of its Subsidiaries 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 7.05(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 Borrower hereby agrees to reimburse and indemnify the Lender upon
demand for all costs and expenses incurred by the Lender in connection with
providing the Commitment, the funding of the Loans and the procurement of the
Letters of Credit, including, without limitation, all such costs and expenses
relating to any obligation of the Lender to secure its repayment obligations
with respect to money borrowed to fund the Loans and its reimbursement
obligations with respect to the Letters of Credit.
(e) 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
Lender. All amounts due under this Section shall be payable on written demand
therefor.
(f) A certificate of the Lender setting forth any amount or amounts which
the Lender is entitled to receive pursuant to subsection (b) or (d) of this
Section and containing an explanation in reasonable detail of the manner in
which such amount or amounts shall have been determined shall be delivered to
the Borrower and shall be conclusive absent manifest error.
SECTION 7.06. LIMITATION ON LIABILITY OF THE TRUSTEE.
It is expressly understood and agreed by the parties that (i) this document
is executed and delivered by Wilmington Trust Company, not individually or
personally, but solely as Trustee, in the exercise of the powers and authority
conferred and vested in it pursuant to the Trust Agreement (LOC 2003 TRUST),
dated July 28, 2003, between Wilmington Trust Company, as trustee, and the
Borrower, as beneficial owner, (ii) each of the representations, undertakings
and agreements herein made on the part of the Lender is made and intended not as
a personal representation, undertaking and agreement by Wilmington Trust Company
but is made and intended for the purpose for binding only the Lender, (iii)
nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant,
either expressed or implied, contained herein, all such liability, if any, being
38
expressly waived by the parties hereto and by any person claiming by, through or
under the parties hereto, and (iv) under no circumstances shall Wilmington Trust
Company be personally liable for the payment of any indebtedness or expenses of
the Lender or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Lender under this
Agreement or any other related documents.
SECTION 7.07. RIGHT OF SETOFF.
If an Event of Default shall have occurred and be continuing, the Lender is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by the Lender to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or hereafter existing
under this Agreement held by the Lender, irrespective of whether or not the
Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of the Lender under this Section are in
addition to other rights and remedies (including other rights of setoff) which
the Lender may have.
SECTION 7.08. APPLICABLE LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
SECTION 7.09. WAIVERS; AMENDMENT.
(a) No failure or delay of the 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 Lender hereunder are cumulative and are not exclusive of any rights or
remedies which they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure therefrom shall in any event be effective
unless the same shall be permitted by subsection (b) below, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. No notice or demand on the Borrower or any of its Subsidiaries
in any case shall entitle such party to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Lender.
SECTION 7.10. ENTIRE AGREEMENT.
This Agreement (including the schedules and exhibits hereto) represents the
entire contract among the parties relative to the subject matter hereof and
thereof. Any previous agreement, whether written or oral, among the parties with
respect to the subject matter hereof, is superseded by this Agreement. There are
no unwritten oral agreements between the parties. Nothing in this Agreement,
expressed or implied, is intended to confer upon any party other than the
39
parties hereto any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
SECTION 7.11. SEVERABILITY.
In the event any one or more of the provisions contained in this Agreement
should be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby. The 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 7.12. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which
shall constitute an original but all of which when taken together shall
constitute but one contract, and shall become effective as provided in Section
7.03.
SECTION 7.13. HEADINGS.
Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 7.14. INTEREST RATE LIMITATION.
(a) Notwithstanding anything herein to the contrary, if at any time the
applicable interest rate, together with all fees and charges that 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 the Lender, shall exceed
the maximum lawful rate (the "MAXIMUM RATE") that may be contracted for,
charged, taken, received or reserved by the Lender in accordance with applicable
law, the rate of interest payable on the Outstanding Credits, together with all
Charges payable to the Lender, shall be limited to the Maximum Rate.
(b) If the amount of interest, together with all Charges, payable for the
account of the Lender in respect of any interest computation period is reduced
pursuant to subsection (a) of this Section and the amount of interest, together
with all Charges, payable for the Lender's 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 the Lender's account in respect of such subsequent interest
computation period shall, to the extent permitted by applicable law, be
automatically increased to such Maximum Rate; provided that at no time shall the
aggregate amount by which interest paid for the account of the Lender has been
increased pursuant to this subsection (b) exceed the aggregate amount by which
interest, together with all Charges, paid for its account has theretofore been
reduced pursuant to subsection (a) of this Section.
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SECTION 7.15. JURISDICTION; VENUE.
(a) The Borrower hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State court
or Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out of
or relating to this Agreement, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Subject to the foregoing and to subsection (b) below, nothing in this Agreement
shall affect any right that any party hereto may otherwise have to bring any
action or proceeding relating to this Agreement against any other party hereto
in the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or thereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any New York State court or
Federal court of the United States of America sitting in New York City. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
SECTION 7.16. CONFIDENTIALITY.
The Lender shall use its best efforts to hold in confidence all
information, memoranda, or extracts furnished to the Lender by the Borrower
hereunder or in connection with the negotiation hereof; provided that the Lender
may disclose any such information, memoranda or extracts (i) to its Affiliates,
accountants or counsel, (ii) to any regulatory agency having authority to
examine the Lender, (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 the Lender sells or proposes to sell an assignment or a
participation in its Outstanding Credits hereunder, if such other person agrees
for the benefit of the Borrower to comply with the provisions of this Section
and (v) to the extent that such information, memoranda or extracts shall be
publicly available or shall have become known to the Lender independently of any
disclosure by the Borrower hereunder or in connection with the negotiation
hereof. Notwithstanding the foregoing, the Lender may disclose the provisions of
this Agreement and the amounts, maturities and interest rates of its Loans to
any purchaser or potential purchaser of the Lender's interest in any Loan.
Notwithstanding the foregoing, the Borrower and the Lender (and each officer,
director, employee, representative, agent and advisor of each party hereto) may
disclose to any and all persons, without limitation of any kind, the "tax
treatment" and "tax structure" (in each case within the meaning of Treasury
Regulation Section 1.6011-4) of the transactions contemplated by this letter and
all materials of any kind (including opinions or other tax analyses) that are
provided to such person relating to such "tax treatment" and "tax structure".
The foregoing is intended to comply with the presumption set forth in Treasury
Regulation Section 1.6011-4(b)(3)(iii) and should be interpreted in a manner
consistent with such regulation.
41
[Signature pages follow]
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
TXU CORP.
By: /s/ Anthony R. Horton
---------------------
Anthony R. Horton
Senior Vice President and Treasurer
[SIGNATURE PAGE TO TXU CORP. AMENDED AND RESTATED CREDIT AGREEMENT]
S-2
LOC 2003 TRUST
By WILMINGTON TRUST COMPANY,
not in its individual capacity, but
solely in its capacity as Trustee
By /s/ Joseph B. Feil
------------------
Name: Joseph B. Feil
Title: Assistant Vice President
[SIGNATURE PAGE TO TXU CORP. AMENDED AND RESTATED CREDIT AGREEMENT]
EXHIBIT A
FORM OF LENDING REQUEST
LENDING REQUEST
[Date]
LOC 2003 Trust
c/o Wilmington Trust Company
Rodney Square North
1110 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Ladies and Gentlemen:
The undersigned, TXU Corp. (the "BORROWER"), refers to the Amended and
Restated Credit Agreement, dated as of December 22, 2004 (as amended, modified,
extended or restated from time to time, the "AGREEMENT"), between the Borrower
and LOC 2003 Trust (the "LENDER"). 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 Loan under the Agreement, and in that connection
sets forth below the terms on which such Loan is requested to be made:
(A) Date of Loan (which is a Business Day __________
(B) Principal amount of Loan/1/ __________
(C) Interest rate basis/2/ __________
(D) Interest Period and the last day thereof/3/ __________
Upon acceptance of any or all of the Loans made by the Lender 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,
- --------
1 Not less than $25,000,000 (or an aggregate principal amount equal to
(x) the remaining balance of the available Commitment or (y) the amount
of the Borrower's reimbursement obligation being financed or refinanced
thereby) and in an integral multiple of $5,000,000.
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.
TXU CORP.
By _________________________________
Name:
Title: [Financial Officer]
A-2
SCHEDULE 1.01
LETTERS OF CREDIT
SCHEDULE 5.13
RESTRICTIVE AGREEMENTS
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 Delivery.