Exhibit 10(b)
[EXECUTION VERSION]
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TXU CORP.
AS BORROWER
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$2,300,000,000
CREDIT AGREEMENT
Dated as of November 4, 2004
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CITICORP NORTH AMERICA, INC.,
AS ADMINISTRATIVE AGENT
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CITIGROUP GLOBAL MARKETS INC.,
Sole Lead Arranger and Bookrunner
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
WACHOVIA CAPITAL MARKETS, LLC,
Co-Syndication Agents
TABLE OF CONTENTS
PAGE
Article I
DEFINITIONS; CONSTRUCTION
SECTION 1.01. Defined Terms................................................. 1
SECTION 1.02. Terms Generally...............................................16
Article II
THE CREDITS
SECTION 2.01. Commitments...................................................17
SECTION 2.02. Loans.........................................................17
SECTION 2.03. Borrowing Procedure...........................................18
SECTION 2.04. Fees..........................................................19
SECTION 2.05. Repayment of Loans; Evidence of Indebtedness..................19
SECTION 2.06. Interest on Loans.............................................20
SECTION 2.07. Alternate Rate of Interest....................................20
SECTION 2.08. Termination and Reduction of Commitments......................21
SECTION 2.09. Prepayment....................................................21
SECTION 2.10. Reserve Requirements; Change in Circumstances.................22
SECTION 2.11. Change in Legality............................................24
SECTION 2.12. Pro Rata Treatment............................................24
SECTION 2.13. Sharing of Setoffs............................................25
SECTION 2.14. Payments......................................................25
SECTION 2.15. Taxes.........................................................26
SECTION 2.16. Assignment of Commitments Under Certain Circumstances.........28
Article III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization; Powers..........................................29
SECTION 3.02. Authorization.................................................29
SECTION 3.03. Enforceability................................................29
SECTION 3.04. Governmental Approvals........................................29
SECTION 3.05. Financial Statements..........................................29
SECTION 3.06. Litigation....................................................30
SECTION 3.07. Federal Reserve Regulations...................................30
SECTION 3.08. Investment Company Act; Public Utility Holding Company Act....30
SECTION 3.09. No Material Misstatements.....................................31
SECTION 3.10. Taxes.........................................................31
SECTION 3.11. Employee Benefit Plans........................................31
SECTION 3.12. Significant Subsidiaries......................................31
SECTION 3.13. Environmental Matters.........................................32
SECTION 3.14. Solvency......................................................32
Article IV
CONDITIONS
SECTION 4.01. Initial Loans.................................................32
SECTION 4.02. Conditions for All Loans......................................33
Article V
COVENANTS
SECTION 5.01. Existence.....................................................34
SECTION 5.02. Compliance With Laws; Business and Properties.................34
SECTION 5.03. Financial Statements, Reports, Etc............................35
SECTION 5.04. Insurance.....................................................36
SECTION 5.05. Taxes, Etc....................................................36
SECTION 5.06. Maintaining Records; Access to Properties and Inspections.....37
SECTION 5.07. ERISA.........................................................37
SECTION 5.08. Use of Proceeds...............................................37
SECTION 5.09. Consolidations, Mergers, Sales and Acquisitions of Assets
and Investments in Subsidiaries ..............................37
SECTION 5.10. Limitations on Liens..........................................38
SECTION 5.11. Interest Coverage Ratio.......................................40
SECTION 5.12. Debt to Earnings Ratio........................................40
SECTION 5.13. Restrictive Agreements........................................40
Article VI
EVENTS OF DEFAULT
Article VII
THE AGENT
Article VIII
MISCELLANEOUS
SECTION 8.01. Notices.......................................................45
SECTION 8.02. Survival of Agreement.........................................46
SECTION 8.03. Binding Effect................................................46
SECTION 8.04. Successors and Assigns........................................46
SECTION 8.05. Expenses; Indemnity...........................................49
SECTION 8.06. Right of Setoff...............................................50
SECTION 8.07. Applicable Law................................................51
SECTION 8.08. Waivers; Amendment............................................51
SECTION 8.09. Entire Agreement..............................................51
SECTION 8.10. Severability..................................................52
SECTION 8.11. Counterparts..................................................52
SECTION 8.12. Headings......................................................52
SECTION 8.13. Interest Rate Limitation......................................52
SECTION 8.14. Jurisdiction; Venue...........................................52
SECTION 8.15. Confidentiality...............................................53
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EXHIBITS AND SCHEDULES
Exhibit A - Form of Borrowing Request
Exhibit B - Form of Assignment and Assumption
Exhibit C - Form of Administrative Questionnaire
Schedule 1.01(A) - Required Prepayments
Schedule 1.01(B) - Relevant Agreements
Schedule 2.01 - Commitments
Schedule 5.13 - Restrictive Agreements
CREDIT AGREEMENT (this "AGREEMENT"), dated as of November 4,
2004, among TXU Corp., a Texas corporation (the "BORROWER"),
the lenders listed in Schedule 2.01 (together with their
successors and assigns, the "LENDERS"), and Citicorp North
America, Inc., a Delaware corporation (together with its
successors, "CNAI"), as administrative agent for the Lenders
(in such capacity, the "AGENT").
The Borrower has requested the Lenders to provide the credit facility
hereinafter described in the amounts and on the terms and conditions set forth
herein, the Lenders have so agreed on the terms and conditions set forth herein,
and CNAI has agreed to act as administrative agent for the Lenders, on such
terms and conditions;
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
SECTION 1.01. DEFINED TERMS.
As used in this Agreement, the following terms shall have the meanings
specified below:
"ABR BORROWING" shall mean a Borrowing comprised of ABR Loans.
"ABR LOAN" shall mean any Loan bearing interest at a rate determined
by reference to the Alternate Base Rate in accordance with the provisions
of Article II or any Eurodollar Loan converted (pursuant to Section 2.03,
2.07 or 2.11(a)(ii)) to a loan bearing interest at a rate determined by
reference to the Alternate Base Rate.
"ACQUISITION DATE" shall mean the date as of which a person or group of
related persons first acquires more than 30% of any outstanding class of
Voting Shares of the Borrower (within the meaning of Section 13(d) or 14(d)
of the Exchange Act, and the applicable rules and regulations thereunder).
"ADMINISTRATIVE FEES" shall have the meaning assigned to such term in
Section 2.04(b).
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire
in the form of Exhibit C.
"AFFILIATE" shall mean, when used with respect to a specified person,
another person that directly or indirectly controls or is controlled by or
is under common control with the person specified.
"AGENT" shall have the meaning given such term in the preamble hereto.
"AGREEMENT" shall have the meaning given such term in the preamble
hereto.
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"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greater of (i) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1% and (ii) the Prime Rate in effect on such day. For purposes
hereof, "PRIME RATE" shall mean the rate of interest per annum announced
from time to time by Citibank, N.A. 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 publicly announced as effective; and
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
released on the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so released for any day which is a
Business Day, the arithmetic average, as determined by CNAI, of the
quotations for the day of such transactions received by CNAI from three
Federal funds brokers of recognized standing selected by it. If for any
reason CNAI shall have determined (which determination shall be conclusive
absent manifest error; provided that CNAI 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 CNAI to obtain
sufficient quotations in accordance with the terms thereof, the Alternate
Base Rate shall be determined without regard to clause (i) of the first
sentence of this definition until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"APPLICABLE MARGIN" shall mean, for any Type of Loan, the percentage
per annum set forth below corresponding to such Type of Loan in the column
under the Applicable Rating Level at the time of determination. At any time
an Event of Default has occurred and is continuing, the Applicable Margins
set forth below shall be increased for each Applicable Rating Level by
2.00%.
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Applicable
Rating Xxxxx 0 Xxxxx 0 Xxxxx 0
Xxxxx
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Percentage Per Annum
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Eurodollar Loans 1.075% 1.300% 2.00%
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ABR Loans 0.075% 0.300% 1.000%
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"APPLICABLE RATING LEVEL" shall mean the level set forth below in the
row next to the then applicable ratings (whether express or implied)
assigned by S&P and Xxxxx'x to the senior unsecured non-credit-enhanced
long term debt of the Borrower (the "DEBT RATINGS"). Any change in the
Applicable Rating Level shall be effective on the date on which the
applicable rating agency announces any change in the applicable Debt
Rating.
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S&P Debt Rating Applicable Rating Level
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Xxxxx'x Debt Rating
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BBB- or better and 1
Baa3 or better
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Level 1 does not apply and 2
BBB- or better and
Ba1 or better
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Below BBB- (or unrated) or 3
Below Ba1 (or unrated)
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"ASSET SALE PROCEEDS" shall mean, with respect to any sale, lease,
transfer or other disposition of any assets or other property of the
Borrower or any of its Subsidiaries, other than any individual sale, lease
transfer or other disposition made in the ordinary course of business in an
amount of $10,000,000 or less, the aggregate amount of cash proceeds
received from time to time by or on behalf of the Borrower or any of its
Subsidiaries in connection therewith, after deducting therefrom (i)
reasonable and customary brokerage commissions, underwriting fees and
discounts, legal fees, finder's fees, advisory and arrangement fees and
other similar fees and commissions and other transaction costs, (ii) the
amount of any Indebtedness (other than under this Agreement) of the
Borrower or any of its Subsidiaries that is required to be repaid upon such
sale, lease, transfer or other disposition pursuant to the terms of any
bank or credit facility or other debt obligation or other instrument or
agreement, to the extent that such prepayment or repayment is (A) of
Indebtedness incurred to acquire the asset or property so sold, leased,
transferred or disposed of or (B) required by the terms of any agreement to
which the Borrower or such Subsidiary is a party on the date hereof (and
which is described on Schedule 1.01(A)) and (iii) the amount of taxes
payable in connection with or as a result of such transaction (calculated,
in the case of income taxes, on a stand-alone basis), in each case to the
extent, but only to the extent, that the amounts so deducted are paid or to
be paid are properly attributable to such transaction or to the asset that
is the subject thereof. Notwithstanding anything to the contrary herein,
none of the following shall be deemed to constitute Asset Sale Proceeds:
(x) the proceeds of the sale, lease, transfer or other disposition of all
or a portion of the equity interests in or any assets or property relating
to the Twin Oak facility or the Xxxxxxx Town cogeneration facility and (y)
the proceeds of the sale, lease, transfer or other disposition of assets,
if such proceeds cannot be transferred to the Borrower by any means
(whether by dividend, distribution or otherwise) without causing a covenant
default under any agreement, instrument or certificate described on
Schedule 1.01(B).
"ASSIGNMENT AND ASSUMPTION" shall mean an assignment and assumption
entered into by a Lender and an assignee in the form of Exhibit B.
"AVAILABILITY PERIOD" shall have the meaning given such term in
Section 2.01.
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"AVAILABLE COMMITMENT" shall mean, for each Lender, the excess of such
Lender's Commitment over the Loans made by such Lender. "AVAILABLE
COMMITMENTS" shall refer to the aggregate of the Lenders' Available
Commitments hereunder.
"BOARD" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"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.
"BORROWER INFORMATION" shall have the meaning given such term in
Section 3.05(b).
"BORROWING" shall mean a group of Loans of a single Type made by the
Lenders on a single date and as to which a single Interest Period is in
effect.
"BORROWING REQUEST" shall mean a request made pursuant to Section 2.03
in the form of Exhibit A.
"BUSINESS DAY" shall mean any day (other than a day that is a
Saturday, Sunday or legal holiday in the State of New York) on which banks
are open for business in New York City; provided, however, that, when used
in connection with a Eurodollar Loan, the term "Business Day" shall also
exclude any day on which banks are not open for dealings in dollar deposits
in the London interbank market.
"CGMI" shall mean Citigroup Global Markets Inc.
"A CHANGE IN CONTROL" shall be deemed to have occurred if (i) any
person or "group" (within the meaning of Section 13(d) or 14(d) of the
Exchange Act, as amended, and the rules and regulations promulgated
thereunder) 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 the applicable 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 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.
"CNAI" shall have the meaning given such term in the preamble hereto.
"CODE" shall mean the Internal Revenue Code of 1986, as the same may
be amended from time to time.
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"COMMISSION" shall mean the Public Utility Commission of the State of
Texas.
"COMMITMENT" shall mean, with respect to each Lender, the commitment
of such Lender in the amount set forth in Schedule 2.01 hereto to make
Loans, as such Commitment may be permanently terminated or reduced from
time to time pursuant to Section 2.08 or modified from time to time
pursuant to Section 8.04. The Commitment of each Lender shall automatically
and permanently terminate on the Maturity Date if not terminated earlier
pursuant to the terms hereof.
"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 TXU 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 stock or common members'
interest plus (ii) preferred and preference stock or preferred members'
interest not subject to mandatory redemption, each (in the case of clauses
(i) and (ii)) determined with respect to the Borrower and its Consolidated
Subsidiaries on a consolidated basis, plus (iii) Equity-Credit Preferred
Securities in an aggregate liquidation preference amount not in excess of
$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.
"DEFAULT" shall mean any event or condition, which upon notice, lapse
of time or both would constitute an Event of Default.
"DISINTERESTED DIRECTOR" shall mean any member of the Board of
Directors who is not affiliated, directly or indirectly, with, or appointed
by, a person or group of related persons (other than the Borrower, any
6
Subsidiary of the Borrower, TXU Electric Delivery Transition Bond Company,
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, TXU Electric Delivery Transition Bond Company,
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.
"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
7
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 nonexempt "prohibited transaction" as
defined in Section 4975(c) of the Code or Section 406 of ERISA with respect
to which the Borrower or any of its Subsidiaries is liable; and (vii) any
other similar event or condition with respect to a Plan or Multiemployer
Plan that could result in liability of the Borrower other than a liability
to pay premiums or benefits when due.
"EURODOLLAR BORROWING" shall mean a Borrowing comprised of Eurodollar
Loans.
"EURODOLLAR LOAN" shall mean any Loan bearing interest at a rate
determined by reference to the LIBO Rate in accordance with the provisions
of Article II.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in
Article VI.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"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
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.
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"FACILITY FEE" shall have the meaning assigned to such term in Section
2.04(a).
"FACILITY FEE PERCENTAGE" shall mean, at any time, the percentage per
annum set forth below in the column under the Applicable Rating Level of
the Borrower. Any change in the Facility Fee Percentage shall be effective
on the date on which the applicable rating agency announces any change in
the applicable Debt Rating.
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Applicable
Rating Xxxxx Xxxxx 0 Xxxxx 0 Xxxxx 0
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Xxxxxxxxxx Per Annum
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Facility Fee 0.175% 0.200% 0.250%
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"FEDERAL FUNDS EFFECTIVE RATE" shall have the meaning set forth in the
definition of "Alternate Base Rate".
"FEES" shall mean the Facility Fee, the Administrative Fees, and any
other fees provided for in the Letter Agreements.
"FINANCIAL OFFICER" of any corporation shall mean the chief financial
officer, principal accounting officer, treasurer, associate or assistant
treasurer, or any responsible officer designated by one of the foregoing
persons, of such corporation.
"FIRST MORTGAGE" shall mean (i) the TXU Delivery Mortgage, (ii) any
mortgage and deed of trust entered into by TXU Delivery in order to refund
or replace, or in substitution for, the TXU Delivery Mortgage, and (iii) if
and for so long as any first mortgage bonds are issued and outstanding
under the TXU Delivery Mortgage, any other indenture or instrument of TXU
Delivery pursuant to which TXU Delivery issues debt securities secured
directly or indirectly by (A) the Lien created by the TXU Delivery Mortgage
and/or (B) any property of TXU Delivery.
"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.
"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
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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.
"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
such Loan or conversion of such Loan to a Loan of a different Type.
"INTEREST PERIOD" shall mean (i) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the
numerically corresponding day (or, if there is no numerically corresponding
day, on the last day) in the calendar month that is 1, 2, 3 or 6 months
thereafter; provided that, in the case of any Eurodollar Borrowing made
during the 30-day period ending on the Maturity Date, such period may end
on the seventh or fourteenth day thereafter, as the Borrower may elect, and
(ii) as to any ABR Borrowing, the period commencing on the date of such
Borrowing and ending on the earliest of (A) the next succeeding March 31,
June 30, September 30 or December 31, (B) the Maturity Date, and (C) the
10
date such Borrowing is repaid or prepaid in accordance with Section 2.05 or
Section 2.09; provided, however, that if any Interest Period would end on a
day other than a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless, in the case of Eurodollar Loans
only, such next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the next preceding
Business Day. Interest shall accrue from and including the first day of an
Interest Period to but excluding the last day of such Interest Period.
"LENDERS" shall have the meaning given such term in the preamble
hereto.
"LETTER AGREEMENTS" shall mean (i) the Engagement Letter, dated
October 24, 2004, between CGMI and the Borrower, (ii) the Commitment
Letter, dated October 24, 2004, among CNAI, CGMI and the Borrower and (iii)
the Fee Letter, dated October 24, 2004, CNAI, CGMI and the Borrower, each
as amended, modified or supplemented from time to time.
"LIBO RATE" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such service, or any
successor to or substitute for such service, providing rate quotations
comparable to those currently provided on such page of such service, as
determined by CNAI from time to time for purposes of providing quotations
of interest rates applicable to dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, two Business Days prior
to the commencement of such Interest Period as the rate for dollar deposits
with a maturity comparable to such Interest Period. In the event that such
rate is not available at such time for any reason, then the "LIBO RATE"
with respect to such Eurodollar Borrowing for such Interest Period shall be
the rate at which dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London
office of Citibank, N.A. in immediately available funds in the London
interbank market at approximately 11:00 a.m. London time, two Business Days
prior to the commencement of such Interest Period.
"LIEN" shall mean, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset. For the purposes of this Agreement, any person shall be deemed
to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.
"LOAN" shall mean a loan made pursuant to Section 2.03, whether made
as a Eurodollar Loan or as an ABR Loan.
"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.
11
"MATERIAL ADVERSE CHANGE" shall mean, a materially adverse change in
the business, assets, operations or financial condition of the Borrower and
its Subsidiaries, taken as a whole, that makes the Borrower unable to
perform any of its obligations under this Agreement or that impairs the
rights of, or benefits available to, the Lenders under this Agreement.
"MATURITY DATE" shall mean the earlier to occur of 364 days after the
date hereof and the date of termination or reduction in whole of the
Commitments pursuant to Section 2.08 or Article VI.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making, or accruing an obligation to make, contributions, or has within any
of the preceding five plan years made, or accrued an obligation to make,
contributions.
"OPERATING AGREEMENT" shall mean the Operating Agreement, dated April
28, 1978, as amended by the Modification of Operating Agreement, dated
April 20, 1979, among TXU Mining and TXU Holdings and TXU Energy, TXU
Energy Retail Company LP and TXU Generation Company LP (pursuant to the
Assumption Agreement, dated December 31, 2001, by and among TXU Holdings,
TXU Energy, TXU Energy Retail Company LP and TXU Generation Company LP),
and as it may be amended from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"PERMITTED ENCUMBRANCES" shall mean, as to any person at any date, any
of the following:
(a) (i) Liens for taxes, assessments or governmental charges not then
delinquent and Liens for workers' compensation awards and similar
obligations not then delinquent and undetermined Liens or charges
incidental to construction, Liens for taxes, assessments or governmental
charges then delinquent but the validity of which is being contested at the
time by such person in good faith against which an adequate reserve has
been established, with respect to which levy and execution thereon have
been stayed and continue to be stayed and that do not impair the use of the
property or the operation of such person's business, (ii) Liens incurred or
created in connection with or to secure the performance of bids, tenders,
contracts (other than for the payment of money), leases, statutory
obligations, surety bonds or appeal bonds, and mechanics' or materialmen's
Liens, assessments or similar encumbrances, the existence of which does not
impair the use of the property subject thereto for the purposes for which
it was acquired, and other Liens of like nature incurred or created in the
ordinary course of business;
(b) Liens securing indebtedness, neither assumed nor guaranteed by
such person nor on which it customarily pays interest, existing upon real
estate or rights in or relating to real estate acquired by such person for
any substation, transmission line, transportation line, distribution line,
right of way or similar purpose;
12
(c) rights reserved to or vested in any municipality or public
authority by the terms of any right, power, franchise, grant, license or
permit, or by any provision of law, to terminate such right, power,
franchise, grant, license or permit or to purchase or recapture or to
designate a purchaser of any of the property of such person;
(d) rights reserved to or vested in others to take or receive any part
of the power, gas, oil, coal, lignite or other minerals or timber
generated, developed, manufactured or produced by, or grown on, or acquired
with, any property of such person and Liens upon the production from
property of power, gas, oil, coal, lignite or other minerals or timber, and
the by-products and proceeds thereof, to secure the obligations to pay all
or a part of the expenses of exploration, drilling, mining or development
of such property only out of such production or proceeds;
(e) easements, restrictions, exceptions or reservations in any
property and/or rights of way of such person for the purpose of roads, pipe
lines, substations, transmission lines, transportation lines, distribution
lines, removal of oil, gas, lignite, coal or other minerals or timber, and
other like purposes, or for the joint or common use of real property,
rights of way, facilities and/or equipment, and defects, irregularities and
deficiencies in titles of any property and/or rights of way, which do not
materially impair the use of such property and/or rights of way for the
purposes for which such property and/or rights of way are held by such
person;
(f) rights reserved to or vested in any municipality or public
authority to use, control or regulate any property of such person;
(g) any obligations or duties, affecting the property of such person,
to any municipality or public authority with respect to any franchise,
grant, license or permit;
(h) as of any particular time any controls, Liens, restrictions,
regulations, easements, exceptions or reservations of any municipality or
public authority applying particularly to space satellites or nuclear fuel;
(i) any judgment Lien against such person securing a judgment for an
amount not exceeding 25% of Consolidated Shareholders' Equity of such
person, so long as the finality of such judgment is being contested by
appropriate proceedings conducted in good faith and execution thereon is
stayed;
(j) any Lien arising by reason of deposits with or giving of any form
of security to any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic
or foreign, for any purpose at any time as required by law or governmental
regulation as a condition to the transaction of any business or the
exercise of any privilege or license, or to enable such person to maintain
self-insurance or to participate in any fund for liability on any insurance
risks or in connection with workers' compensation, unemployment insurance,
old age pensions or other social security or to share in the privileges or
benefits required for companies participating in such arrangements; or
13
(k) any landlords' Lien on fixtures or movable property located on
premises leased by such person in the ordinary course of business so long
as the rent secured thereby is not in default.
"PERSON" shall mean any natural person, corporation, 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 TXU Energy.
"PRIME RATE" shall have the meaning set forth in the definition of
"Alternate Base Rate".
"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).
"QUALIFIED TRANSITION BOND ISSUER" shall mean each of (i) TXU Electric
Delivery Transition Bond Company, (ii) TXU 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 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.
"REGISTER" shall have the meaning given such term in Section 8.04(d).
"REPORTABLE EVENT" shall mean any reportable event as defined in
Sections 4043(c)(1)-(8) of ERISA or the regulations issued thereunder
(other than a reportable event for which the 30 day notice requirement has
been waived) with respect to a Plan (other than a Plan maintained by an
ERISA Affiliate that is considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Code Section 414).
"REQUIRED LENDERS" shall mean, at any time, Lenders having
Commitments representing in excess of 50% of the Total Commitment or,
(i) for purposes of acceleration pursuant to clause (ii) of the first
subsection of Article VI, or (ii) if the Total Commitment has been
14
terminated, Lenders holding in excess of 50% of the aggregate principal
amount of outstanding Loans.
"RESPONSIBLE OFFICER" of any corporation shall mean any executive
officer or Financial Officer of such corporation and any other officer or
similar official thereof responsible for the administration of the
obligations of such corporation in respect of this Agreement.
"SEC" shall mean the 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 Subsidiary of the Borrower, during
any 12-month period after the date hereof, of assets constituting, either
individually or in the aggregate with all other assets sold, leased,
disposed or otherwise transferred by the Borrower or any Subsidiary 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; provided, however,
that none of the following shall be deemed to be a Significant Disposition:
(i) a sale, lease, transfer or other disposition of any equity interests in
or any assets or property by the Borrower or any Subsidiary of the Borrower
in Qualified Transition Bond Issuers, the Subsidiaries of Qualified
Transition Bond Issuers, TXU International Holdings Limited or the
Subsidiaries of TXU International Holdings Limited, (ii) a sale by TXU
Energy, in an initial public offering, of up to 20% of the equity interests
in any Subsidiary comprising generating assets of TXU Energy, (iii) a sale,
lease, disposition or other transfer by TXU Energy of up to 50% of the
common stock, common members' interests or partnership interests in TXU
Generation Company LP (provided that it shall be a condition precedent to
any such sale, lease, disposition or other transfer that, immediately
thereafter, the Borrower shall be in pro forma compliance with Sections
5.11 and 5.12), (iv) a sale, lease, disposition or other transfer by TXU
Energy of interests in the Comanche Peak nuclear power generation plant, to
the extent that the consideration for such sale, lease, disposition or
other transfer is non-cash, (v) a sale, lease, disposition or other
transfer of assets in connection with outsourcing arrangements in
connection with Capgemini TXU Energy L.P. and (vi) a sale, lease,
disposition or other transfer of assets in connection with the formation or
operation of an energy marketing and trading vehicle in which TXU Energy
15
owns an interest, or will own an interest, upon the formation of such
energy marketing and trading vehicle.
"SIGNIFICANT SUBSIDIARY" shall mean, at any time, any Subsidiary of
the Borrower that as of such time has total assets in excess of 10% of the
total assets of the Borrower and its Consolidated Subsidiaries.
"SOLVENT" shall mean, with respect to any person as of a particular
date, that on such date such person is able to pay its debts and other
liabilities, contingent obligations and other commitments as they mature in
the normal course of business. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be
computed as the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be
expected to become an actual or matured liability.
"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
Qualified Transition Bond Issuers, the Subsidiaries of Qualified Transition
Bond Issuers, TXU International Holdings Limited and the Subsidiaries of
TXU International Holdings Limited shall not be deemed to be 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.
"TOTAL COMMITMENT" shall mean, at any time, the aggregate amount of
Commitments of all the Lenders, as in effect at such time. The amount of
the Total Commitment on the date hereof is $2,300,000,000.
"TXU DELIVERY" shall mean TXU Electric Delivery Company, a Texas
corporation.
"TXU DELIVERY MORTGAGE" shall mean the Mortgage and Deed of Trust,
dated as of December 1, 1983, from TXU Electric Company to Irving Trust
Company (now The Bank of New York), Trustee, as amended and supplemented
from time to time and as assumed by TXU Delivery.
"TXU ELECTRIC DELIVERY TRANSITION BOND COMPANY" shall mean TXU
Electric Delivery Transition Bond Company, a Delaware limited liability
company, and its successors.
"TXU ENERGY" shall mean TXU Energy Company LLC, a Delaware limited
liability company, and its successors.
"TXU EUROPE" shall mean TXU Europe Limited, a private limited company
incorporated under the laws of England and Wales.
16
"TXU HOLDINGS" shall mean TXU US Holdings Company, a Texas
corporation.
"TXU MINING" shall mean TXU Mining Company LP, a Texas limited
partnership, and its successors.
"TYPE", when used in respect of any Loan or Borrowing, shall refer to
the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "RATE" shall
include the LIBO Rate and the Alternate Base Rate.
"VOTING SHARES" shall mean, as to shares or other equity interests of
a particular corporation or other type of person, outstanding shares of
stock or other equity interests of any class of such corporation or other
person entitled to vote in the election of directors or other comparable
managers of such person, excluding shares or other interests entitled so to
vote only upon the happening of some contingency.
"WHOLLY OWNED SUBSIDIARY" of any person shall mean any Consolidated
Subsidiary of such person all the shares of common stock and other voting
capital stock or other voting ownership interests having ordinary voting
power to vote in the election of the board of directors or other governing
body performing similar functions (except directors' qualifying shares) of
which are at the time directly or indirectly owned by such person.
"WITHDRAWAL LIABILITY" shall mean liability of the Borrower
established under Section 4201 of ERISA as a result of a complete or
partial withdrawal from a Multiemployer Plan, as such terms are defined in
Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. TERMS GENERALLY.
The definitions in Section 1.01 shall apply equally to both the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include," "includes" and "including" shall be deemed to be followed
by the phrase "without limitation." All references herein to Articles, Sections,
Exhibits and Schedules shall be deemed references to Articles and Sections of,
and Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided, however, that for purposes of determining
compliance with any covenant set forth in Article V, such terms shall be
construed in accordance with GAAP as in effect on the date hereof applied on a
basis consistent with the application used in preparing the Borrower's audited
financial statements referred to in Section 3.05(a).
17
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS.
Subject to the terms and conditions and relying upon the representations
and warranties herein set forth, each Lender agrees, severally and not jointly,
to make Loans to the Borrower, in no more than five Borrowings, at any time on
or prior to the 30th day after the date hereof (the "AVAILABILITY PERIOD"), up
to the amount of such Lender's Available Commitment, subject, however, to the
conditions that (i) at no time shall Loans outstanding exceed the Total
Commitment, (ii) at no time shall any Lender's outstanding Loans exceed the
amount of such Lender's Commitment, and (iii) at no time shall the outstanding
Loans available to the Borrower exceed the Total Commitment. Within the
foregoing limits, the Borrower may borrow, pay or prepay Loans pursuant to
Section 2.09 on and after the date hereof and prior to the Maturity Date subject
to the terms, conditions and limitations set forth herein, provided, however,
that once any amount is repaid or prepaid in accordance with Section 2.09 (and
excluding deemed repayments and prepayments under Section 2.02(d)), such amount
may not be reborrowed by the Borrower.
SECTION 2.02. LOANS.
(a) Each Loan shall be made as part of a Borrowing consisting of Loans made
by the Lenders ratably in accordance with their respective Commitments;
provided, however, that the failure of any Lender to make any Loan shall not in
itself relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of any
other Lender to make any Loan required to be made by such other Lender). The
Loans comprising any Borrowing shall be in an aggregate principal amount that is
an integral multiple of $5,000,000 and not less than $25,000,000 (or an
aggregate principal amount equal to the remaining balance of the Available
Commitments).
(b) Each Borrowing shall be comprised entirely of Eurodollar Loans or ABR
Loans, as the Borrower may request pursuant to Section 2.03. Each Lender may at
its option make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan; provided that any exercise of such
option shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement. Borrowings of more than one Type
may be outstanding at the same time.
(c) Subject to subsection (d) below, each Lender shall make each Loan to be
made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds to the Agent in New York, New York, not later than
noon, New York City time, and the Agent shall by 2:00 p.m., New York City time,
credit the amounts so received to the account or accounts specified from time to
time in one or more notices delivered by the Borrower to the Agent or, if a
Borrowing shall not occur on such date because any condition precedent herein
specified shall not have been met, return the amounts so received to the
respective Lenders. Loans shall be made by the Lenders pro rata in accordance
with Section 2.12. Unless the Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make available to
the Agent such Lender's portion of such Borrowing, the Agent may assume that
such Lender has made such portion available to the Agent on the date of such
18
Borrowing in accordance with this subsection (c) and the Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have made
such portion available to the Agent, such Lender and the Borrower (without
waiving any claim against such Lender for such Lender's failure to make such
portion available) severally agree to repay to the Agent forthwith on demand
such corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Lender, the Federal Funds Effective Rate. If such Lender shall
repay to the Agent such corresponding amount, such amount shall constitute such
Lender's Loan as part of such Borrowing for purposes of this Agreement.
(d) The Borrower may refinance all or any part of any Borrowing with a
Borrowing of the same or a different Type, subject to the conditions and
limitations set forth in this Agreement. Any Borrowing or part thereof so
refinanced shall be deemed to be repaid or prepaid in accordance with Section
2.05 or 2.09, as applicable, with the proceeds of a new Borrowing, and the
proceeds of the new Borrowing, to the extent they do not exceed the principal
amount of the Borrowing being refinanced, shall not be paid by the Lenders to
the Agent or by the Agent to the Borrower pursuant to subsection (c) above.
SECTION 2.03. BORROWING PROCEDURE.
In order to request a Borrowing, the Borrower shall hand deliver or send
via facsimile to the Agent a duly completed Borrowing Request (i) in the case of
a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before such Borrowing, (ii) in the case of an ABR Borrowing, not
later than 11:00 a.m., New York City time, one Business Day before such
Borrowing, and (iii) in the case of the initial Borrowing, not later than 9:00
a.m., New York City time, on the day of such Borrowing. Such notice shall be
irrevocable and shall in each case specify (A) whether the Borrowing then being
requested is to be a Eurodollar Borrowing or an ABR Borrowing, (B) the date of
such Borrowing (which shall be a Business Day) and the amount thereof, (C) if
such Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect
thereto, which shall not end after the Maturity Date, and (D) the location and
number of the Borrower's account to which funds are to be disbursed, which shall
comply with the requirements of this Agreement. If no election as to the Type of
Borrowing is specified in any such notice, then the requested Borrowing shall be
deemed an ABR Borrowing. If no Interest Period with respect to any Eurodollar
Borrowing is specified in any such notice, then the Borrower shall be deemed to
have selected an Interest Period of one month's duration (subject to the
limitations set forth in the definition of "Interest Period"). If the Borrower
shall not have given notice in accordance with this Section 2.03 of its election
to refinance a Borrowing prior to the end of the Interest Period in effect for
such Borrowing, then the Borrower shall (unless such Borrowing is repaid at the
end of such Interest Period) be deemed to have given notice of an election to
refinance such Borrowing with an ABR Borrowing. Notwithstanding any other
provision of this Agreement to the contrary, no Borrowing shall be requested if
the Interest Period with respect thereto would end after the Maturity Date. The
Agent shall promptly advise the Lenders of any notice given pursuant to this
Section 2.03 and of each Lender's portion of the requested Borrowing.
19
SECTION 2.04. FEES.
(a) The Borrower agrees to pay to each Lender, through the Agent, on each
March 31, June 30, September 30 and December 31 (with the first payment being
due on December 31, 2004) and on each date on which the Commitments shall be
terminated or reduced as provided herein, a facility fee (a "FACILITY FEE") at a
rate per annum equal to the Facility Fee Percentage from time to time in effect
on the Commitment of such Lender (without regard to usage) during the preceding
quarter (or other period commencing on the date of this Agreement or ending on
the Maturity Date or any date on which the Commitment of such Lender shall be
terminated). All Facility Fees shall be computed on the basis of the actual
number of days elapsed in a year of 360 days. The Facility Fee due to each
Lender shall commence to accrue on the date of this Agreement, and shall cease
to accrue on the date of termination of such Lender's Commitment, as provided
herein.
(b) The Borrower agrees to pay the Agent the fees from time to time payable
to it in its capacity as Agent pursuant to the Letter Agreements (the
"ADMINISTRATIVE FEES").
(c) All Fees shall be paid on the dates due, in immediately available
funds, to the Agent for distribution, if and as appropriate, among the Lenders.
Once paid, none of the Fees shall be refundable under any circumstances.
SECTION 2.05. REPAYMENT OF LOANS; EVIDENCE OF INDEBTEDNESS.
(a) The outstanding principal balance of each (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) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness to such Lender resulting from
each Loan made by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Agreement. Upon the request of any Lender that becomes a party hereto after
the date hereof pursuant to a syndication by any Lender that is a party hereto
on the date hereof, the Borrower shall provide to such Lender a promissory note,
payable to the order of such Lender, evidencing the Commitment of such Lender.
The date and amount of each Loan made by such Lender and of each repayment of
principal thereof received by such Lender shall be recorded by such Lender on
its records, or, at its option, on the schedule attached to such promissory
note. The failure to record any such amount on such schedule shall not limit or
otherwise affect the obligations of the Borrower hereunder or under such
promissory note to repay the principal amount of the Loans together with all
interest accruing thereon.
(c) The Agent shall maintain accounts in which it will record (i) the
amount of each Loan made hereunder, the Type of each Loan made and the Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Agent hereunder from the
Borrower and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs (b)
and (c) of this Section 2.05 shall, to the extent permitted by applicable law,
be prima facie evidence of the existence and amounts of the obligations therein
20
recorded; provided, however, that the failure of any Lender or the Agent to
maintain such accounts or any error therein shall not in any manner affect the
obligations of the Borrower to repay the outstanding Loans in accordance with
their terms.
SECTION 2.06. INTEREST ON LOANS.
(a) The Loans comprising each Eurodollar Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360
days) at a rate per annum equal to the LIBO Rate for the Interest Period in
effect for such Borrowing plus the Applicable Margin from time to time in effect
for Eurodollar Borrowings.
(b) The Loans comprising each ABR Borrowing shall bear interest (computed
on the basis of the actual number of days elapsed over a year of (i) 365 or 366
days, as the case may be, for periods during which the Alternate Base Rate is
determined by reference to the Prime Rate and (ii) 360 days for other periods)
at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin
from time to time in effect for ABR Borrowings.
(c) Interest on each Loan shall be payable on each Interest Payment Date
applicable to such Loan except as otherwise provided in this Agreement. The
applicable LIBO Rate or Alternate Base Rate for each Interest Period or day
within an Interest Period, as the case may be, shall be determined by the Agent,
and such determination shall be conclusive absent manifest error, provided that
the Agent shall, upon request, provide to the Borrower a certificate setting
forth in reasonable detail the basis for such determination.
SECTION 2.07. ALTERNATE RATE OF INTEREST.
In the event, and on each occasion, that on the day two Business Days prior
to the commencement of any Interest Period for a Eurodollar Borrowing the Agent
shall have determined (i) that dollar deposits in the principal amounts of the
Eurodollar Loans comprising such Borrowing are not generally available in the
London interbank market or (ii) that reasonable means do not exist for
ascertaining the LIBO Rate, the Agent shall, as soon as practicable thereafter,
give facsimile notice of such determination to the Borrower and the Lenders. In
the event of any such determination under clause (i) or (ii) above, until the
Agent shall have advised the Borrower and the Lenders that the circumstances
giving rise to such notice no longer exist, any request by the Borrower for a
Eurodollar Borrowing pursuant to Section 2.03 shall be deemed to be a request
for an ABR Borrowing. In the event the Required Lenders notify the Agent that
the rates at which dollar deposits are being offered will not adequately and
fairly reflect the cost to such Lenders of making or maintaining Eurodollar
Loans during such Interest Period, the Agent shall notify the Borrower of such
notice and until the Required Lenders shall have advised the Agent that the
circumstances giving rise to such notice no longer exist, any request by the
Borrower for a Eurodollar Borrowing shall be deemed a request for an ABR
Borrowing. Each determination by the Agent hereunder shall be made in good faith
and shall be conclusive absent manifest error; provided that the Agent, shall,
upon request, provide to the Borrower a certificate setting forth in reasonable
detail the basis for such determination.
21
SECTION 2.08. TERMINATION AND REDUCTION OF COMMITMENTS.
(a) The Commitments shall automatically terminate on the Maturity Date.
(b) On the last day of the Availability Period, after giving effect to all
Borrowings and repayments thereof made on such date and all other reductions in
the Total Commitment on such date, the Total Commitment shall automatically and
permanently reduce to an amount equal to the aggregate principal amount of all
Loans then outstanding.
(c) On each day following the last day of the Availability Period on which
the Total Commitment shall exceed the aggregate principal amount of Loans
outstanding, the Total Commitment shall automatically and permanently reduce by
an amount equal to such excess.
(d) On each date on which Loans would be required to be repaid pursuant to
Section 2.09(b) (without regard to the amount of the Loans outstanding and
available to be repaid), the Total Commitment will automatically and permanently
reduce by an amount equal to the amount so repaid.
(e) Upon at least two Business Days' prior irrevocable written notice to
the Agent, the Borrower may, without penalty or premium, at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Total Commitment; provided, however, that (i) each partial reduction of the
Total Commitment shall be in an integral multiple of $10,000,000 and in a
minimum principal amount of $10,000,000 and (ii) no such termination or
reduction shall be made that would reduce the Total Commitment to an amount less
than (1) the aggregate amount of outstanding Loans on the date of such
termination or reduction (after giving effect to any prepayment made pursuant to
Section 2.09) or (2) $50,000,000, unless the result of such termination or
reduction referred to in this clause (2) is to reduce the Total Commitment to
$0. The Agent shall advise the Lenders of any notice given pursuant to this
subsection (e) and of each Lender's portion of any such termination or reduction
of the Total Commitment.
(f) Each reduction in the Total Commitment hereunder shall be made ratably
among the Lenders in accordance with their respective Commitments.
SECTION 2.09. PREPAYMENT.
(a) Optional. The Borrower shall have the right at any time and from time
to time to prepay any Borrowing, in whole or in part, upon giving facsimile
notice (or telephone notice promptly confirmed by facsimile) to the Agent: (i)
before 11:00 a.m., New York City time, three Business Days prior to prepayment,
in the case of Eurodollar Loans, and (ii) before 11:00 a.m., New York City time,
one Business Day prior to prepayment, in the case of ABR Loans; provided,
however, that each partial prepayment shall be in an amount which is an integral
multiple of $10,000,000 and not less than $10,000,000. Each notice of prepayment
shall specify the prepayment date and the principal amount of each Borrowing (or
portion thereof) to be prepaid, shall be irrevocable and shall commit the
Borrower to prepay such Borrowing (or portion thereof) by the amount stated
therein on the date stated therein.
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(b) Mandatory.
(i) The Borrower shall repay Loans in an amount equal to (A) any
proceeds received by the Borrower or any of its Subsidiaries from the
issuance of securities, (B) any Asset Sale Proceeds and (C) the aggregate
principal amount available to be drawn by the Borrower or any of its
Subsidiaries under any bank financing or other financing (including,
without limitation, any synthetic letter of credit facility) entered into
and made available to the Borrower or any of its Subsidiaries after the
date hereof. Notwithstanding the foregoing, proceeds of the following shall
be excluded from any mandatory prepayment required by this paragraph (i):
(1) the issuance of securities by any of the Borrower's Subsidiaries to the
Borrower or to any other of the Borrower's Subsidiaries; (2) any borrowings
or drawings under any bank financing or other financing entered into to
refinance Indebtedness (including drawn and undrawn amounts under financing
facilities in effect on the date hereof) of the Borrower or any of its
Subsidiaries outstanding on the date hereof and, in any event, in an
aggregate principal amount not to exceed the aggregate principal amount of,
and with a maturity not any earlier than the maturity of, such
Indebtedness; (3) the proposed TXU Energy $500,000,000 bridge loan,
revolving credit and letter of credit facility with Wachovia Bank, National
Association; (4) any Indebtedness under the TXU system money pool; (5) any
equity infusion (cash or non-cash) from the Borrower to any of its
Subsidiaries; (6) any debt obligation by any of the Borrower's Subsidiaries
to the Borrower or any debt obligation from any of the Borrower's
Subsidiaries to the Borrower; (7) any debt obligation of one of the
Borrower's Subsidiaries to another of the Borrower's Subsidiaries; and (8)
pollution control revenue bonds, employee benefit plans, direct stock
purchase and dividend reinvestment plans and settlement of equity units.
(ii) On any date on which the amount of outstanding Loans exceeds the
Total Commitment, the Borrower shall repay Loans in an amount equal to such
excess.
(c) All prepayments under this Section 2.09 shall be subject to Section
8.05 but otherwise without premium or penalty. All prepayments under this
Section 2.09 shall be accompanied by accrued interest on the principal amount
being prepaid to the date of payment.
SECTION 2.10. RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES.
(a) Notwithstanding any other provision herein, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender hereunder
(except for changes in respect of taxes on the overall net income of such Lender
(as the case may be) or its lending office imposed by the jurisdiction in which
such Lender's principal executive office or lending office is located), or shall
result in the imposition, modification or applicability of any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of or credit extended by any Lender or shall result in the imposition on
any Lender or the London interbank market of any other condition affecting this
Agreement, such Lender's Commitment or any Loan (other than an ABR Loan) made by
such Lender, and the result of any of the foregoing shall be to increase the
cost to such Lender of making or maintaining any outstanding Loans (other than
an ABR Loan) or to reduce the amount of any sum received or receivable by such
Lender hereunder (whether of principal, interest or otherwise) by an amount
23
deemed by such Lender to be material, then the Borrower shall, upon receipt of
the notice and certificate provided for in Section 2.10(c), promptly pay to such
Lender such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered.
(b) If any Lender shall have determined that the adoption of any law, rule,
regulation or guideline arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards," or the
adoption after the date hereof of any other law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any lending office of
such Lender) or any Lender's holding company with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender's capital or on the capital of such
Lender's holding company, if any, as a consequence of this Agreement, such
Lender's Commitment or the Loans made by such Lender pursuant hereto to a level
below that which such Lender or such Lender's holding company could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies and the policies of such Lender's holding company with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time such additional amount or amounts as will compensate such
Lender for any such reduction suffered will be paid to such Lender by the
Borrower. It is acknowledged that this Agreement is being entered into by the
Lenders on the understanding that the Lenders will not be required to maintain
capital against their Commitments under currently applicable laws, regulations
and regulatory guidelines. In the event the Lenders shall otherwise determine
that such understanding is incorrect, it is agreed that the Lenders, will be
entitled to make claims under this subsection (b) based upon market requirements
prevailing on the date hereof for commitments under comparable credit facilities
against which capital is required to be maintained.
(c) A certificate of each Lender setting forth such amount or amounts as
shall be necessary to compensate such Lender or its holding company as specified
in subsection (a) or (b) above, as the case may be, and containing an
explanation in reasonable detail of the manner in which such amount or amounts
shall have been determined, shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay each Lender the amount
shown as due on any such certificate delivered by it within 10 days after its
receipt of the same. Each Lender shall give prompt notice to the Borrower of any
event of which it has knowledge, occurring after the date hereof, that it has
determined will require compensation by the Borrower pursuant to this Section
2.10; provided, however, that failure by such Lender to give such notice shall
not constitute a waiver of such Lender's right to demand compensation hereunder.
(d) Failure on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
such Lender's right to demand compensation with respect to such period or any
other period; provided, however, that no Lender shall be entitled to
compensation under this Section 2.10 for any costs incurred or reductions
24
suffered with respect to any date unless it shall have notified the Borrower
that it will demand compensation for such costs or reductions under subsection
(c) above not more than 90 days after the later of (i) such date and (ii) the
date on which it shall have become aware of such costs or reductions. The
protection of this Section 2.10 shall be available to each Lender regardless of
any possible contention of the invalidity or inapplicability of the law, rule,
regulation, guideline or other change or condition which shall have occurred or
been imposed.
(e) Each Lender agrees that it will designate a different lending office if
such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the reasonable judgment of such Lender be
disadvantageous to such Lender.
SECTION 2.11. CHANGE IN LEGALITY.
(a) Notwithstanding any other provision herein, if any change in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made by such
Lender hereunder, whereupon any request for a Eurodollar Borrowing shall,
as to such Lender only, be deemed a request for an ABR Loan unless such
declaration shall be subsequently withdrawn (any Lender delivering such a
declaration hereby agreeing to withdraw such declaration promptly upon
determining that such event of illegality no longer exists); and
(ii) require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such
notice as provided in subsection (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.11, a notice by any Lender shall be
effective as to each Eurodollar Loan, if lawful, on the last day of the Interest
Period currently applicable to such Eurodollar Loan; in all other cases such
notice shall be effective on the date of receipt.
SECTION 2.12. PRO RATA TREATMENT.
Except as required under Sections 2.11 and 2.16, each Borrowing, each
payment or prepayment of principal of any Borrowing, each payment of interest on
the Loans, each payment of the Facility Fees, each reduction of the Total
Commitment and each refinancing or conversion of any Borrowing with a Borrowing
of any Type, shall be allocated pro rata among the Lenders in accordance with
their respective Commitments (or, if such Commitments shall have expired or been
terminated, in accordance with the respective principal amounts of their
outstanding Loans). Each Lender agrees that in computing such Lender's portion
25
of any Borrowing to be made hereunder, the Agent may, in its discretion, round
each Lender's percentage of such Borrowing to the next higher or lower whole
dollar amount.
SECTION 2.13. SHARING OF SETOFFS.
Each Lender agrees that if it shall, through the exercise of a right of
banker's lien, setoff or counterclaim, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Bankruptcy Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, obtain payment (voluntary or involuntary) in
respect of any Loans as a result of which the unpaid principal portion of its
Loans shall be proportionately less than the unpaid principal portion of the
Loans of any other Lender, it shall be deemed simultaneously to have purchased
from such other Lender at face value, and shall promptly pay to such other
Lender the purchase price for, a participation in the Loans of such other
Lender, so that the aggregate unpaid principal amount of the Loans and
participations in the Loans held by each Lender shall be in the same proportion
to the aggregate unpaid principal amount of all Loans then outstanding as the
principal amount of its Loans prior to such exercise of banker's lien, setoff or
counterclaim or other event was to the principal amount of all Loans outstanding
prior to such exercise of banker's lien, setoff or counterclaim or other event;
provided, however, that, if any such purchase or purchases or adjustments shall
be made pursuant to this Section 2.13 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. The Borrower expressly consents to the
foregoing arrangements and agrees that any Lender holding a participation in a
Loan deemed to have been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any and all moneys owing
by the Borrower to such Lender by reason thereof as fully as if such Lender had
made a Loan in the amount of such participation.
SECTION 2.14. PAYMENTS.
(a) The Borrower shall make each payment (including principal of or
interest on any outstanding Loans or any Fees or other amounts) hereunder from
an account in the United States not later than 12:00 noon, New York City time,
on the date when due in dollars to the Agent at its offices at Xxx Xxxxx Xxx,
Xxxxx 000, Xxx Xxxxxx, Xxxxxxxx 00000, Attention: Bank Loan Syndications, in
immediately available funds as instructed from time to time by the Agent. Each
such payment shall be made without off-set, deduction or counterclaim, provided,
that the foregoing shall not constitute a relinquishment or waiver of the
Borrower's rights to any independent claim that the Borrower may have against
the Agent or any Lender.
(b) Whenever any payment (including principal of or interest on any
outstanding Loans or any Fees or other amounts) hereunder shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.
26
SECTION 2.15. TAXES.
(a) Any and all payments of principal and interest on any of the
outstanding Loans, or of any Fees or indemnity or expense reimbursements by the
Borrower hereunder ("BORROWER PAYMENTS") shall be made, in accordance with
Section 2.14, free and clear of and without deduction for any and all current or
future United States Federal, state and local taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect to the
Borrower Payments, but only to the extent reasonably attributable to the
Borrower Payments, excluding (i) income taxes imposed on the net income of the
Agent or any Lender (or any transferee or assignee thereof, including a
participation holder (any such entity a "TRANSFEREE")) and (ii) franchise taxes
imposed on the net income of the Agent or any Lender (or Transferee), in each
case by the jurisdiction under the laws of which the Agent or such Lender (or
Transferee) is organized or doing business through offices or branches located
therein, or any political subdivision thereof (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities, collectively
or individually, "TAXES"). If the Borrower shall be required to deduct any Taxes
from or in respect of any sum payable hereunder to any Lender (or any
Transferee) or the Agent, (i) the sum payable shall be increased by the amount
(an "ADDITIONAL AMOUNT") necessary so that after making all required deductions
(including deductions applicable to additional amounts payable under this
Section 2.15) such Lender (or Transferee) or the Agent (as the case may be)
shall receive an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay to the relevant United States
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or the
Letter Agreements ("OTHER TAXES").
(c) The Borrower shall indemnify each Lender (or Transferee thereof) and
the Agent for the full amount of Taxes and Other Taxes with respect to Borrower
Payments paid by such person, and any liability (including penalties, interest
and expenses (including reasonable attorney's fees and expenses)) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted by the relevant United States Governmental
Authority. A certificate setting forth and containing an explanation in
reasonable detail of the manner in which such amount shall have been determined
and the amount of such payment or liability prepared by a Lender or the Agent on
their behalf, absent manifest error, shall be final, conclusive and binding for
all purposes. Such indemnification shall be made within 30 days after the date
the Lender (or Transferee) or the Agent, as the case may be, makes written
demand therefor.
(d) If any Lender (or Transferee) or the Agent shall become aware that it
is entitled to claim a refund from a United States Governmental Authority in
respect of Taxes or Other Taxes as to which it has been indemnified by the
Borrower, or with respect to which the Borrower has paid additional amounts,
pursuant to this Section 2.15, it shall promptly notify the Borrower of the
availability of such refund claim and shall, within 30 days after receipt of a
27
request by the Borrower, make a claim to such United States Governmental
Authority for such refund at the Borrower's expense. If any Lender (or
Transferee) or the Agent receives a refund (including pursuant to a claim for
refund made pursuant to the preceding sentence) in respect of any Taxes or Other
Taxes as to which it has been indemnified by the Borrower or with respect to
which the Borrower had paid additional amounts pursuant to this Section 2.15, it
shall within 30 days from the date of such receipt, pay over such refund to the
Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section 2.15 with respect to the Taxes
or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
such Lender (or Transferee) or the Agent and without interest (other than
interest paid by the relevant United States Governmental Authority with respect
to such refund); provided, however, that the Borrower, upon the request of such
Lender (or Transferee) or the Agent, agrees to repay the amount paid over to the
Borrower (plus penalties, interest or other charges) to such Lender (or
Transferee) or the Agent in the event such Lender (or Transferee) or the Agent
is required to repay such refund to such United States Governmental Authority.
(e) As soon as practicable, but in any event within 30 days, after the date
of any payment of Taxes or Other Taxes by the Borrower to the relevant United
States Governmental Authority, the Borrower will deliver to the Agent, at its
address referred to in Section 8.01, the original or a certified copy of a
receipt issued by such United States Governmental Authority evidencing payment
thereof.
(f) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.15 shall
survive the payment in full of the principal of and interest on all outstanding
Loans hereunder.
(g) Each of the Agent and each Lender (or Transferee) that is organized
under the laws of a jurisdiction other than the United States, any State thereof
or the District of Columbia (a "NON-U.S. LENDER" or "NON-U.S. AGENT", as
applicable) shall deliver to the Borrower and the Agent two copies of either
United States Internal Revenue Service Form W-8BEN or Form W-8ECI, properly
completed and duly executed by such Non-U.S. Lender claiming complete exemption
from, or reduced rate of, United States Federal withholding tax on payments by
the Borrower under this Agreement. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement (or,
in the case of a Transferee that is a participation holder, on or before the
date such participation holder becomes a Transferee hereunder) and on or before
the date, if any, such Non-U.S. Lender changes its applicable lending office by
designating a different lending office (a "NEW LENDING OFFICE"). In addition,
each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender.
Notwithstanding any other provision of this Section 2.15(g), a Non-U.S. Lender
shall not be required to deliver any form pursuant to this Section 2.15(g) that
such Non-U.S. Lender is not legally able to deliver.
(h) The Borrower shall not be required to indemnify any Non-U.S. Lender or
Non-U.S. Agent (including any Transferee), or to pay any additional amounts to
any Non-U.S. Lender or Non-U.S. Agent (including any Transferee), in respect of
United States Federal, state or local withholding tax pursuant to subsection (a)
or (c) above to the extent that (i) the obligation to withhold amounts with
respect to United States Federal, state or local withholding tax existed on the
date such Non-U.S. Lender became a party to this Agreement (or, in the case of a
28
Transferee that is a participation holder, on the date such participation holder
became a Transferee hereunder) or, with respect to payments to a New Lending
Office, the date such Non-U.S. Lender designated such New Lending Office with
respect to a Loan; provided, however, that this clause (i) shall not apply to
any Transferee or New Lending Office that becomes a Transferee or New Lending
Office as a result of an assignment, participation, transfer or designation made
at the request of the Borrower; and provided further, however, that this clause
(i) shall not apply to the extent the indemnity payment or additional amounts
any Transferee or any Lender (or Transferee) through a New Lending Office, would
be entitled to receive (without regard to this clause (i)) do not exceed the
indemnity payment or additional amounts that the person making the assignment,
participation or transfer to such Transferee or Lender (or Transferee) making
the designation of such New Lending Office, would have been entitled to receive
in the absence of such assignment, participation, transfer or designation or
(ii) the obligation to pay such additional amounts or such indemnity payments
would not have arisen but for a failure by such Non-U.S. Lender (including any
Transferee) to comply with the provisions of subsection (g) above and (i) below.
(i) Any Lender (or Transferee) claiming any indemnity payment or additional
amounts payable pursuant to this Section 2.15 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document reasonably requested in writing by the Borrower or to change the
jurisdiction of its applicable lending office if the making of such a filing or
change would avoid the need for or reduce the amount of any such indemnity
payment or additional amounts that may thereafter accrue and would not, in the
good faith determination of such Lender (or Transferee) be otherwise
disadvantageous to such Lender (or Transferee).
(j) Nothing contained in this Section 2.15 shall require any Lender (or
Transferee) or the Agent to make available to the Borrower any of its tax
returns (or any other information) that it deems to be confidential or
proprietary.
SECTION 2.16. ASSIGNMENT OF COMMITMENTS UNDER CERTAIN CIRCUMSTANCES.
In the event that any Lender shall have delivered a notice or certificate
pursuant to Section 2.10 or 2.11, or the Borrower shall be required to make
additional payments to any Lender under Section 2.15, the Borrower shall have
the right, at its own expense, upon notice to such Lender and the Agent, to
require such Lender to transfer and assign without recourse (in accordance with
and subject to the restrictions contained in Section 8.04) all such Lender's
interests, rights and obligations contained hereunder to another financial
institution approved by the Agent and the Borrower (which approval shall not be
unreasonably withheld or delayed) which shall assume such obligations; provided
that (i) no such assignment shall conflict with any law, rule or regulation or
order of any Governmental Authority and (ii) the assignee shall pay to the
affected Lender in immediately available funds on the date of such assignment
the principal of and interest accrued to the date of payment on the Loans made
by it hereunder and all other amounts accrued for its account or owed to it
hereunder and the Borrower shall pay the processing and recordation fee due
pursuant to Section 8.04.
29
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each Lender as follows:
SECTION 3.01. ORGANIZATION; POWERS.
The Borrower (i) is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Texas, (ii) has all requisite power
and authority to own its property and assets and to carry on its business as now
conducted and as proposed to be conducted, (iii) is qualified to do business in
every jurisdiction where such qualification is required, except where the
failure so to qualify would not result in a Material Adverse Change, and (iv)
has the corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to request and receive Borrowings
hereunder.
SECTION 3.02. AUTHORIZATION.
The execution, delivery and performance by the Borrower of this Agreement
and the making of the Loans hereunder (i) have been duly authorized by all
requisite corporate action of the Borrower and (ii) will not (A) violate (x) any
provision of any law, statute, rule or regulation (including, without
limitation, the Margin Regulations) to which the Borrower is subject, or of the
certificate of incorporation or other constitutive documents 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
30
statements of income, shareholders' equity and cash flows for the fiscal year
then ended, reported on by Deloitte & Touche LLP and set forth in the Borrower's
Annual Report on Form 10-K for such fiscal year, and (ii) the unaudited
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of June 30, 2004 and the related consolidated statements of income and cash
flows for the fiscal quarter then ended, set forth in the Borrower's report on
Form 10-Q for such fiscal quarter, 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
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 financial statements or other reports of
the type referred to in Section 5.03 and that have been made available to the
Lenders on or prior to the date hereof (collectively, the "BORROWER
INFORMATION"), and (ii) with respect to the Excluded Items, since June 30, 2004,
there has been no Material Adverse Change, other than as a result of the matters
excluded from the computation of Consolidated Shareholder's Equity as set forth
in the definition thereof .
SECTION 3.06. LITIGATION.
Except as set forth in the Borrower Information, there is no action, suit
or arbitral or governmental proceeding pending against, or to the knowledge of
the Borrower threatened against or affecting, the Borrower or any of its
Subsidiaries before any court or arbitrator or any governmental body, agency or
official in which there is a reasonable possibility of an adverse decision that
could result in a Material Adverse Change.
SECTION 3.07. FEDERAL RESERVE REGULATIONS.
(a) Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used by the Borrower,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry Margin Stock or to refund indebtedness
originally incurred for such purpose, or for any other purpose which entails a
violation of, or which is inconsistent with, the provisions of the Margin
Regulations.
(c) Not more than 25% of the value of the assets of the Borrower subject to
the restrictions of Sections 5.10 and 5.11 is represented by Margin Stock.
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.
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(b) The Borrower and each of its Subsidiaries is exempt from all provisions
of the Public Utility Holding Company Act of 1935 and rules and regulations
thereunder, except for Sections 9(a)(2) and 33 of such Act and the rules and
regulations thereunder, and the execution and delivery by the Borrower of this
Agreement and the performance of its obligations hereunder do not violate any
provision of such Act or any rule or regulation thereunder.
SECTION 3.09. NO MATERIAL MISSTATEMENTS.
No report, financial statement or other written information furnished by or
on behalf of the Borrower to the Agent or any Lender pursuant to or in
connection with this Agreement contains or will contain any material
misstatement of fact or omits or will omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were or will be made, not misleading.
SECTION 3.10. TAXES.
The Borrower and its Subsidiaries have filed or caused to be filed within 3
days of the date on which due, all material Federal, state and local tax returns
that to their knowledge are required to be filed by them, and have paid or
caused to be paid all material taxes shown to be due and payable on such returns
or on any assessments received by them, other than any taxes or assessments the
validity of which is being contested in good faith by appropriate proceedings
and with respect to which appropriate accounting reserves have to the extent
required by GAAP been set aside.
SECTION 3.11. EMPLOYEE BENEFIT PLANS.
With respect to each Plan, the Borrower and its ERISA Affiliates are in
compliance in all material respects with the applicable provisions of ERISA and
the Code and the final regulations and published interpretations thereunder. No
ERISA Event has occurred that alone or together with any other ERISA Event has
resulted or could reasonably be expected to result in a Material Adverse Change.
Neither the Borrower nor any ERISA Affiliate has incurred any Withdrawal
Liability that could result in a Material Adverse Change. Neither the Borrower
nor any ERISA Affiliate has received any notification that any Multiemployer
Plan is in reorganization or has been terminated within the meaning of Title IV
of ERISA, which such reorganization or termination could result in a Material
Adverse Change, and no Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated where such reorganization or termination has
resulted or can reasonably be expected to result, through an increase in the
contributions required to be made to such Plan or otherwise, in a Material
Adverse Change.
SECTION 3.12. SIGNIFICANT SUBSIDIARIES.
Each of the Borrower's Significant Subsidiaries is a corporation, limited
liability company or other type of person duly incorporated or formed (as the
case may be), validly existing and in good standing under the laws of its
jurisdiction of incorporation, organization or formation (as the case may be)
and has all corporate, limited liability company, partnership or other (as the
case may be) powers necessary to carry on its business substantially as now
conducted. Each of the Borrower's Significant Subsidiaries has all material
32
governmental licenses, authorizations, consents and approvals required to carry
on its business substantially as now conducted.
SECTION 3.13. ENVIRONMENTAL MATTERS.
Except as set forth in or contemplated by the Borrower Information, the
Borrower and each of its Subsidiaries has complied in all material respects with
all Federal, state, local and other statutes, ordinances, orders, judgments,
rulings and regulations relating to environmental pollution or to environmental
or nuclear regulation or control, except to the extent that failure to so comply
could not reasonably be expected to result in a Material Adverse Change. Except
as set forth in or contemplated by such Borrower Information, neither the
Borrower nor any of its Subsidiaries has received notice of any material failure
so to comply, except where such failure could not reasonably be expected to
result in a Material Adverse Change. Except as set forth in or contemplated by
such Borrower Information, 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 Borrower Information, the
Borrower is aware of no events, conditions or circumstances involving
environmental pollution or contamination that could reasonably be expected to
result in a Material Adverse Change.
SECTION 3.14. SOLVENCY.
The Borrower is Solvent.
ARTICLE IV
CONDITIONS
The obligations of the Lenders to make Loans hereunder are subject to the
satisfaction of the following conditions:
SECTION 4.01. INITIAL LOANS.
The Commitment of each Lender to make its initial Loan on or after the date
hereof is subject to the conditions that on or prior to the date of such Loan:
(a) The Agent shall have received favorable written legal opinions of (i)
(A) Xxxxx X. Xxxxx, Senior Vice President and Associate General Counsel of TXU
Business Services Company, and (B) Xxxxxx Xxxx & Priest LLP, counsel to the
Borrower, and (ii) King & Spalding LLP, special New York counsel to the Agent,
in each case dated the date hereof, addressed to the Agent and the Lenders and
in form and substance satisfactory to the Agent.
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(b) The Agent shall have received (i) a copy of the certificate of
incorporation, including all amendments thereto, of the Borrower, certified as
of a recent date by the Secretary of State of 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; (ii) a certificate of the Secretary or an Assistant
Secretary of the Borrower dated the date of this Agreement and certifying (A)
that attached thereto is a true and complete copy of the bylaws of the Borrower
as in effect on such date and at all times since a date prior to the date of the
resolutions described in clause (B) below, (B) that attached thereto are true
and complete copies of resolutions duly adopted by the Board of Directors
authorizing the execution and delivery by the Borrower of this Agreement, the
Loans to be made hereunder and the performance by the Borrower of all of its
obligations hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (C) that the certificate
of incorporation referred to in clause (i) above has not been amended since the
date of the last amendment thereto shown on the certificate of good standing
furnished pursuant to such clause (i) and (D) as to the incumbency and specimen
signature of each officer executing this Agreement and any other document
delivered in connection herewith on behalf of the Borrower; (iii) a certificate
of another officer of the Borrower as to the incumbency and specimen signature
of the Secretary or Assistant Secretary executing the certificate pursuant to
(ii) above; and (iv) a certificate of a Responsible Officer of the Borrower,
dated the date of this Agreement, stating that (A) no action, consent or
approval of, registration or filing with or other action by any Governmental
Authority is or will be required in connection with the execution, delivery and
performance by the Borrower of this Agreement, except those as have been duly
obtained and as are (1) in full force and effect, (2) sufficient for their
purpose and (3) not subject to any pending or, to the knowledge of such person,
threatened appeal or other proceeding seeking reconsideration or review thereof,
(B) the representations and warranties set forth in Article III hereof are true
and correct in all material respects on and as of the date hereof, and (C) no
Event of Default or Default has occurred and is continuing on the date hereof.
(c) The Agent shall have received such other approvals, opinions,
certificates, instruments and documents as the Agent, or any of the Lenders may
have reasonably requested, in form satisfactory to the Agent and the requesting
Lender.
(d) The Agent shall have received all documentation and information
required by regulatory authorities under applicable "know your customer" and
anti-money laundering rules and regulations, including without limitation the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)).
(e) The Lenders, the Agent and the Lead Arranger named in the Letter
Agreements shall have received payment of all fees and reimbursements of all
expenses for which invoices have been presented as and when due on or prior to
the date of the initial Loan pursuant to the terms of this Agreement or the
Letter Agreements.
SECTION 4.02. CONDITIONS FOR ALL LOANS.
The Commitment of each Lender to make each Loan hereunder shall be subject
to the satisfaction of the following conditions precedent on the date of such
Loan:
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(a) The Agent shall have received from the Borrower a notice requesting
such Loan as required by Section 2.03.
(b) The representations and warranties of the Borrower set forth in Article
III hereof (except, in the case of any Loan that does not increase the aggregate
principal amount of the Loans outstanding to the Borrower, the representations
set forth in Sections 3.05(b), 3.06, 3.11 and 3.13 and except, in the case of
any Loan that is to be used to repay commercial paper of the Borrower, the
representation set forth in Section 3.05(b)) shall be true and correct in all
material respects on and as of the date of such Loan with the same effect as
though made on and as of such date, except to the extent such representations
and warranties expressly relate to an earlier date.
(c) At the time of and immediately after such Loan, no Default or Event of
Default shall have occurred and be continuing at the time of such Loan or would
result from the making of such Loan.
(d) The Agent shall have received a certificate of a Responsible Officer of
the Borrower certifying that the matters set forth in paragraphs (b) and (c) of
this Section 4.02 are true and correct as of such date.
Each Loan shall be deemed to constitute a representation and warranty by
the Borrower on the date of such Loan as to the matters specified in paragraphs
(b) and (c) of this Section 4.02.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Lender has any Commitment
hereunder or any amount payable hereunder remains unpaid:
SECTION 5.01. EXISTENCE.
It will, and will cause each of its Significant Subsidiaries to, do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and all rights, licenses, permits, franchises and
authorizations necessary or desirable in the normal conduct of its business
except as otherwise permitted pursuant to Section 5.09.
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.
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SECTION 5.03. FINANCIAL STATEMENTS, REPORTS, ETC.
It will furnish to the Agent for each Lender:
(a) as soon as available and in any event within 120 days after the end of
each fiscal year of the Borrower, a consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income, retained earnings and cash flows for
such fiscal year, setting forth in each case in comparative form the figures for
the previous fiscal year, all reported on in a manner reasonably acceptable to
the SEC by Deloitte & Touche LLP or other independent public accountants of
nationally recognized standing;
(b) as soon as available and in any event within 75 days after the end of
each of the first three quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such quarter and the related consolidated statements of income for
such quarter, for the portion of the Borrower's fiscal year ended at the end of
such quarter, and for the twelve months ended at the end of such quarter, and
the related consolidated statement of cash flows for the portion of the
Borrower's fiscal year ended at the end of such quarter, setting forth
comparative figures for previous dates and periods to the extent required in
Form 10-Q, all certified (subject to normal year-end adjustments) as to fairness
of presentation, GAAP and consistency by a Financial Officer of the Borrower;
(c) simultaneously with any delivery of each set of financial statements
referred to in paragraphs (a) and (b) above, a balance sheet of TXU Delivery,
TXU Energy and TXU Holdings and related 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 that the Borrower is taking or proposes to
take with respect thereto;
36
(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
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
Agent, at the request of any Lender, may reasonably request.
As promptly as practicable after delivering each set of financial statements as
required in subsection (a) of this Section 5.03, the Borrower shall make
available a copy of the consolidating workpapers used by the Borrower in
preparing such consolidated statements to and each Lender that shall have
requested such consolidating workpapers. Each Lender that receives such
consolidating workpapers shall hold them in confidence as required by Section
8.15; provided that no Lender may disclose such consolidating workpapers to any
other person pursuant to clause (iv) of Section 8.15.
SECTION 5.04. INSURANCE.
It will, and will cause each of its Subsidiaries to, maintain such
insurance or self insurance, to such extent and against such risks, including
fire and other risks insured against by extended coverage, as is customary with
companies similarly situated and in the same or similar businesses.
SECTION 5.05. TAXES, ETC.
It will, and will cause each of its Subsidiaries to, pay and discharge
promptly when due all material taxes, assessments and governmental charges
imposed upon it or upon its income or profits or in respect of its property, as
well as all other material liabilities, in each case before the same shall
become delinquent or in default and before penalties accrue thereon, unless and
to the extent that the same are being contested in good faith by appropriate
proceedings and adequate reserves with respect thereto shall, to the extent
required by GAAP, have been set aside.
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SECTION 5.06. MAINTAINING RECORDS; ACCESS TO PROPERTIES AND INSPECTIONS.
It will, and will cause each of its Subsidiaries to, maintain financial
records in accordance with GAAP and, upon reasonable notice and at reasonable
times, permit authorized representatives designated by any Lender to visit and
inspect its properties and to discuss its affairs, finances and condition with
its officers.
SECTION 5.07. ERISA.
It will, and will cause each of its Subsidiaries that are members of the
Controlled Group to, comply in all material respects with the applicable
provisions of ERISA and the Code except where any noncompliance, individually or
in the aggregate, would not result in a Material Adverse Change.
SECTION 5.08. USE OF PROCEEDS.
It may use the proceeds of Loans for the purchase of common stock of the
Borrower and may use the proceeds of Loans in an amount of up to $1,000,000,000
for working capital and other general corporate purposes, including the making
of advances to Subsidiaries of the Borrower and the refinancing of short-term
borrowings used for working capital and other general corporate purposes.
SECTION 5.09. CONSOLIDATIONS, MERGERS, SALES AND ACQUISITIONS OF ASSETS AND
INVESTMENTS IN SUBSIDIARIES.
(a) It will not, and will not permit any of its Significant Subsidiaries
to, consolidate or merge with or into any person unless (i) 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 (ii) 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).
(b) It will not, and will not permit any of its Significant Subsidiaries
to, make a Significant Disposition to any person unless (i) such Significant
Disposition is made to the Borrower, a Wholly Owned Subsidiary of the Borrower
or a person that, as a result of such transaction, becomes a Wholly Owned
Subsidiary of the Borrower or (ii) the proceeds of such Significant Disposition
are reinvested in the business of the Borrower and its Subsidiaries or are used
to reduce the Indebtedness of the Borrower and its Subsidiaries.
Notwithstanding anything to the contrary contained in this Section 5.09,
(i) 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,
(ii) 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, (iii) 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
38
forth in Sections 5.11 and 5.12 and (iv) nothing in this Section 5.09 shall
prohibit any sales of assets permitted by Section 5.10(d).
SECTION 5.10. LIMITATIONS ON LIENS.
(a) It 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 (as defined in this Section 5.10) without concurrently
making effective provision whereby the Commitments and the outstanding Loans
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, 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;
(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:
(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; or
(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
39
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 subsection
(a)(i) or (a)(ii) of this Section 5.10, the Borrower will prior thereto give
written notice thereof to the Agent, 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 Lenders, all the Commitments and the
outstanding Loans equally and ratably with such Indebtedness and with 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 (as defined in
subsection (c) below).
(c) For purposes of this Section 5.10:
(i) The term "Consolidated Capitalization" means the sum obtained by
adding (A) Total Consolidated Shareholders' Equity (as defined in
subsection (c)(ii) below), (B) Consolidated Indebtedness (as defined in
subsection (c)(iv) below) 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, (C) 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 (as defined in subsection (c)(iii) below) 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, (A) indebtedness secured by property of the
Borrower or any of its Consolidated Subsidiaries whether or not the
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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, (B)
deferred liabilities, (C) 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.
It 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.
SECTION 5.12. CONSOLIDATED SENIOR DEBT TO EBITDA RATIO.
It 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 TXU Energy or TXU Delivery (the "SUBJECT
SUBSIDIARIES") to enter into any agreement restricting the ability of any
Subject Subsidiary 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 any Subject Subsidiary 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 any Subject Subsidiary or any of
their respective Subsidiaries, if the effect of such agreement is to subject any
Subject Subsidiary or any of their respective Subsidiaries to restrictions on
such payments greater than those to which such Subsidiary was subject on the
date hereof. All such agreements to which any Subject Subsidiary is a party as
of the date hereof are listed in Schedule 5.13 hereto.
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ARTICLE VI
EVENTS OF DEFAULT
In case of the happening of any of the following events (each an "EVENT
OF DEFAULT"):
(a) any representation or warranty made or deemed made by the Borrower in
or in connection with the execution and delivery of this Agreement or the Loans
made hereunder shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;
(b) default shall be made by the Borrower in the payment of any principal
of any outstanding Loans when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise;
(c) default shall be made by the Borrower in the payment of any interest on
any outstanding Loans or any Fee or any other amount (other than an amount
referred to in 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;
(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 or 5.12;
(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 paragraphs (b), (c), (d) or (e)(i) above)
or in the Letter Agreements and such default shall continue unremedied for a
period of 30 days after notice thereof from the Agent at the request of any
Lender to the Borrower;
(f) (i) the Borrower shall no longer own, directly or indirectly, 80% of
the outstanding common stock or common members' interest in TXU Energy or TXU
Delivery, or (ii) TXU Energy shall no longer own, directly or indirectly, (A)
50% of the common stock, common members' interest or partnership interests in
TXU Energy Retail Company LP or (B) 50% of the common stock, common members'
interest or partnership interests in TXU Generation Company LP;
(g) the Borrower, TXU Energy or TXU Delivery 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;
(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in
respect of the Borrower or any Significant Subsidiary, or of a substantial part
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of the property or assets of the Borrower or any Significant Subsidiary, under
Title 11 of the United States Bankruptcy Code, as now constituted or hereafter
amended, or any other Federal or state bankruptcy, insolvency, receivership or
similar law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Significant Subsidiary or for a substantial part of the property or assets of
the Borrower or any Significant Subsidiary or (iii) the winding up or
liquidation of the Borrower or any Significant Subsidiary; and such proceeding
or petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
(i) the Borrower or any Significant Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Bankruptcy Code, as now constituted or hereafter amended, or
any other Federal or state bankruptcy, insolvency, receivership or similar law,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
(h) above, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower or any
Significant Subsidiary or for a substantial part of the property or assets of it
or such Significant Subsidiary, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors, (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they become due or
(vii) take any action for the purpose of effecting any of the foregoing;
(j) A Change in Control shall occur;
(k) one or more judgments or orders for the payment of money in an
aggregate amount in excess of $50,000,000 shall be rendered against the
Borrower, TXU Energy or TXU Delivery 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,
TXU Energy or TXU Delivery (as the case may be) to enforce any such judgment or
order;
(l) an ERISA Event or ERISA Events shall have occurred that reasonably
could be expected to result in a Material Adverse Change;
then, and in every such event, and at any time thereafter during the continuance
of such event, the Agent, at the request of the Required Lenders, shall, by
notice to the Borrower, take one or all of the following actions, at the same or
different times: (i) terminate forthwith the right of the Borrower to request
and receive Loans; and (ii) declare the Loans then outstanding to be forthwith
due and payable in whole or in part, whereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder,
shall become forthwith due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived, anything
contained herein to the contrary notwithstanding; provided that in the case of
any event described in subsection (h) or (i) 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 Fees and all other liabilities of the
Borrower accrued hereunder shall automatically become due and payable, without
43
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein to the
contrary notwithstanding.
ARTICLE VII
THE AGENT
(a) In order to expedite the transactions contemplated by this Agreement,
CNAI is hereby appointed to act as Agent on behalf of the Lenders. Each Lender
hereby irrevocably authorizes the Agent to take such actions on behalf of such
Lender and to exercise such powers as are specifically delegated to the Agent by
the terms and provisions hereof, together with such actions and powers as are
reasonably incidental thereto. The Agent is hereby expressly authorized by the
Lenders, without hereby limiting any implied authority, (i) to receive on behalf
of the Lenders and all payments of principal of and interest on the outstanding
Loans and all other amounts due to the Lenders hereunder, and promptly to
distribute to each Lender, its proper share of each payment so received; (ii) to
give notice on behalf of each Lender to the Borrower of any Event of Default of
which the Agent has actual knowledge acquired in connection with its agency
hereunder; and (iii) to distribute to each Lender copies of all notices,
financial statements and other materials delivered by the Borrower pursuant to
this Agreement as received by the Agent.
(b) Neither the Agent nor any of its directors, officers, employees or
agents shall be liable as such for any action taken or omitted by any of them
except for its or his or her own gross negligence or willful misconduct, or be
responsible for any statement, warranty or representation herein or the contents
of any document delivered in connection herewith, or be required to ascertain or
to make any inquiry concerning the performance or observance by the Borrower of
any of the terms, conditions, covenants or agreements contained in this
Agreement. The Agent shall not be responsible to the Lenders for the due
execution, genuineness, validity, enforceability or effectiveness of this
Agreement or other instruments or agreements. The Agent may deem and treat the
Lender that makes any Loan as the holder of the indebtedness resulting therefrom
for all purposes hereof until it shall have received notice from such Lender,
given as provided herein, of the transfer thereof. The Agent shall in all cases
be fully protected in acting, or refraining from acting, in accordance with
written instructions signed by the Required Lenders and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Lenders. The Agent shall, in the
absence of knowledge to the contrary, be entitled to rely on any instrument or
document believed by it in good faith to be genuine and correct and to have been
signed or sent by the proper person or persons. Neither the Agent nor any of its
directors, officers, employees or agents shall have any responsibility to the
Borrower on account of the failure of or delay in performance or breach by any
Lender of any of its obligations hereunder or to any Lender on account of the
failure of or delay in performance or breach by any other Lender or the Borrower
of any of their respective obligations hereunder or in connection herewith. The
Agent may execute any and all duties hereunder by or through agents or employees
and shall be entitled to rely upon the advice of legal counsel selected by it
with respect to all matters arising hereunder and shall not be liable for any
action taken or suffered in good faith by it in accordance with the advice of
such counsel.
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(c) The Lenders hereby acknowledge that the Agent shall not be under any
duty to take any discretionary action permitted to be taken by it pursuant to
the provisions of this Agreement unless it shall be requested in writing to do
so by the Required Lenders.
(d) Subject to the appointment and acceptance of a successor Agent as
provided below, the Agent may resign at any time by notifying the Lenders and
the Borrower. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor Agent acceptable to the Borrower. If no successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, having a combined capital and surplus of at least $500,000,000
or an Affiliate of any such bank. Upon the acceptance of any appointment as
Agent hereunder by a successor bank, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After the Agent's resignation hereunder, the provisions of this
Article and Section 8.05 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was acting as the Agent.
(e) The Lenders may remove the Agent upon 30 days' prior notice by so
notifying the Borrower and, in such event, the Lenders shall appoint a successor
Agent acceptable to the Borrower. Either the Required Lenders or the Borrower
may remove any Agent if (i) such Agent is adjudged bankrupt or insolvent or (ii)
a receiver or other public officer takes charge of such Agent or its property.
If no successor Agent shall have been appointed by the Lenders and shall have
accepted such appointment within 30 days after delivery by the Lenders of the
notice required by the first sentence of this subsection (e), the Required
Lenders or the Borrower may petition any court of competent jurisdiction for the
appointment of a successor Agent. After the Agent's removal hereunder, the
provisions of this Article and Section 8.05 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
(f) With respect to the Loans made by it hereunder, the Agent, in its
individual capacity and not as Agent, shall have the same rights and powers as
any other Lender and may exercise the same as though it were not the Agent, and
the Agent and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not Agent.
(g) Each Lender agrees (i) to reimburse the Agent, on demand, in the amount
of its pro rata share (based on its Commitment hereunder or, if the Commitments
shall have been terminated, the amount of its percentage of outstanding Loans)
of any expenses incurred for the benefit of the Lenders, in its role as Agent,
including fees and expenses of counsel and compensation of agents and employees
paid for services rendered on behalf of the Lenders, which shall not have been
reimbursed by the Borrower and (ii) to indemnify and hold harmless the Agent and
any of its directors, officers, employees or agents, on demand, in the amount of
such pro rata share, from and against any and all liabilities, taxes,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against it in any way relating to or arising out of
this Agreement or any action taken or omitted by it under this Agreement to the
45
extent the same shall not have been reimbursed by the Borrower; provided that no
Lender shall be liable to the Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of the Agent or any of its directors, officers, employees or agents.
Each Lender agrees that any allocation made in good faith by the Agent of
expenses or other amounts referred to in this subsection shall be conclusive and
binding for all purposes.
(h) Each Lender acknowledges that it has, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement or any related agreement or any document
furnished hereunder or thereunder.
(i) Neither CGMI, by virtue of its designation as "Sole Lead Arranger and
Bookrunner", nor Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated or Wachovia
Capital Markets, LLC, by their designation as "Co-Syndication Agents" on the
cover page of this Agreement, shall have any duties, liabilities, obligations or
responsibilities under this Agreement other than, if applicable, as a Lender
hereunder.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. NOTICES.
(a) Notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed or
sent by facsimile, as follows:
(i) if to the Borrower, c/o TXU Business Services Company, 0000 Xxxx
Xxxxxx, 15th Floor, Bank Xxx Xxxxxx, Xxxxxx, XX 00000, Attention: Treasurer
(Facsimile No. 214-875-8311);
(ii) if to CNAI, as Agent, to Xxx Xxxxx Xxx, Xxxxx 000, Xxx Xxxxxx,
Xxxxxxxx 00000, Attention: Bank Loan Syndications, (facsimile:
000-000-0000,);
(iii) if to a Lender, to it at its address (or facsimile number) set
forth in the Register or in the Assignment and Assumption pursuant to which
such Lender became a party hereto; and
(iv) as to each party hereto, at such other address as shall be
designated by such party in a written notice to each other party hereto.
(b) 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 facsimile or electronic mail to such party as provided in this
46
Section 8.01 or in accordance with the latest unrevoked direction from such
party given in accordance with this Section 8.01. Electronic forms of
communication not otherwise described herein require the consent of the Borrower
and the Agent.
SECTION 8.02. SURVIVAL OF AGREEMENT.
All covenants, agreements, representations and warranties made by the
Borrower herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement shall be considered
to have been relied upon by the Lenders and shall survive the making by the
Lenders of the Loans regardless of any investigation made by the Lenders or on
their behalf, and shall continue in full force and effect as long as there are
any outstanding Loans or any Fee or any other amount payable under this
Agreement is outstanding and unpaid or the Commitments have not been terminated.
SECTION 8.03. BINDING EFFECT.
This Agreement shall become effective when it shall have been executed by
the Borrower and the Agent and when the Agent shall have received copies hereof
(via facsimile or otherwise) which, when taken together, bear the signature of
each Lender, and thereafter shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that the
Borrower shall not have the right to assign any rights hereunder or any interest
herein without the prior consent of all the Lenders.
SECTION 8.04. SUCCESSORS AND ASSIGNS.
(a) Whenever in this Agreement any of the parties hereto is referred to,
such reference shall be deemed to include the successors and assigns of such
party; and all covenants, promises and agreements by or on behalf of any party
that are contained in this Agreement shall bind and inure to the benefit of its
successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and its outstanding Loans); provided, however, that
(i) except in the case of an assignment to a Lender or an Affiliate of such
Lender, an assignment to a Federal Reserve Bank or an assignment made at any
time an Event of Default shall have occurred and be continuing, the Borrower and
the Agent must give their prior written consent to such assignment (which
consent shall not be unreasonably withheld), (ii) the amount of the Commitment
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Agent) shall not be less than $5,000,000 (or, if less, the entire
remaining amount of such Lender's Commitment) and shall be in an amount that is
an integral multiple of $5,000,000 (or the entire remaining amount of such
Lender's Commitment ), (iii) the parties to each such assignment shall execute
and deliver to the Agent an Assignment and Assumption (such Assignment and
Assumption to be manually executed and delivered together with a processing and
recordation fee of $3,500) and (iv) the assignee, if it shall not be a Lender
immediately prior to the assignment, shall deliver to the agent an
Administrative Questionnaire and applicable tax form(s). Upon acceptance and
recording pursuant to Section 8.04(e), from and after the effective date
specified in each Assignment and Assumption (A) the assignee thereunder shall be
a party hereto and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this Agreement
and (B) the assigning Lender thereunder shall, to the extent of the interest
47
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto (but shall
continue to be entitled to the benefits of Sections 2.10, 2.15 and 8.05 as well
as to any Fees accrued for its account hereunder and not yet paid)).
(c) By executing and delivering an Assignment and Assumption, the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim; (ii) except
as set forth in (i) above, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement, or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto or the financial condition of the Borrower or the performance or
observance by the Borrower of any obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignor and such
assignee represents and warrants that it is legally authorized to enter into
such Assignment and Assumption; (iv) such assignee confirms that it has received
a copy of this Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 5.03 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Assumption; (v) such assignee will
independently and without reliance upon the Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (vi) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all the obligations that by the terms of this Agreement are required to be
performed by it as a Lender.
(d) The Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices in the City of New York a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitment of, and the principal amount of
the outstanding Loans of, each Lender pursuant to the terms hereof from time to
time (the "REGISTER"). The entries in the Register shall be conclusive in the
absence of manifest error and the Borrower, the Agent and the Lenders may treat
each person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by each party hereto, at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Assumption executed
by an assigning Lender and an assignee, an Administrative Questionnaire and, if
necessary, applicable tax form(s) completed in respect of the assignee (unless
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the assignee shall already be a Lender hereunder), the written consent of the
Agent to such assignment, and the processing and recordation fee referred to in
subsection (b) above and, if required, the written consent of the Borrower and
the Agent to such assignment, the Agent shall (i) accept such Assignment and
Assumption and (ii) record the information contained therein in the Register. No
assignment shall be effective unless it has been recorded in the Register as
provided in this subsection (e).
(f) Each Lender may without the consent of the Borrower or the Agent sell
participations to one or more banks or other entities in all or a portion of its
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and its Loans); provided, however, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) each participating bank or other entity shall be
entitled to the benefit of the cost protection provisions contained in Sections
2.10, 2.15 and 8.06 to the same extent as if it were the selling Lender (and
limited to the amount that could have been claimed by the selling Lender had it
continued to hold the interest of such participating bank or other entity),
except that all claims made pursuant to such Sections shall be made through such
selling Lender, and (iv) the Borrower, the Agent and the other Lenders shall
continue to deal solely and directly with such selling Lender in connection with
such Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower under this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement (other than amendments, modifications or waivers (x)
decreasing any fees payable hereunder or the amount of principal of, or the rate
at which interest is payable on, the outstanding Loans, (y) extending any
scheduled principal payment date or date fixed for the payment of interest on
the outstanding Loans or (z) extending the Commitments).
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender by
or on behalf of the Borrower; provided that, prior to any such disclosure, each
such assignee or participant or proposed assignee or participant shall execute
an agreement whereby such assignee or participant shall agree (subject to
customary exceptions) to preserve the confidentiality of any such information.
(h) The Borrower shall not assign or delegate any rights and duties
hereunder without the prior written consent of all Lenders, and any attempted
assignment or delegation (except as a consequence of a transaction expressly
permitted under Section 5.10) by the Borrower without such consent shall be
void.
(i) Any Lender may at any time pledge all or any portion of its rights
under this Agreement to a Federal Reserve Bank; provided that no such pledge
shall release any Lender from its obligations hereunder or substitute any such
Bank for such Lender as a party hereto. In order to facilitate such an
assignment to a Federal Reserve Bank, the Borrower shall, at the request of the
assigning Lender, duly execute and deliver to the assigning Lender a promissory
note or notes evidencing the Loans made to the Borrower by the assigning Lender
hereunder.
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SECTION 8.05. EXPENSES; INDEMNITY.
(a) The Borrower agrees to pay all reasonable out-of-pocket expenses
(including reasonable fees, charges and disbursements of one counsel, unless in
the good faith opinion of the Agent or such counsel, it would be inappropriate
under applicable standards of legal professional conduct, due to an actual or
potential conflict of interest, to have only one counsel) incurred by the Agent
in connection with the preparation, execution and delivery of this Agreement or
in connection with any amendments, modifications or waivers of the provisions
hereof (but only if such amendments, modifications or waivers are requested by
the Borrower) (whether or not the transactions hereby contemplated are
consummated), or incurred by the Agent or any Lender in connection with the
enforcement of their rights in connection with this Agreement (including in
respect of workouts and restructurings) or in connection with the Loans made
hereunder, including the reasonable fees and disbursements of one counsel
(unless in the good faith opinion of the Agent or such counsel, it would be
inappropriate under applicable standards of legal professional conduct, due to
an actual or potential conflict of interest, to have only one counsel) for the
Agent or, in the case of enforcement following an Event of Default, the Lenders.
(b) The Borrower agrees to indemnify each Lender against any loss,
calculated in accordance with the next sentence, or reasonable expense that such
Lender may sustain or incur as a consequence of (i) any failure by the Borrower
to borrow or to refinance, convert or continue any Loan hereunder (including as
a result of the Borrower's failure to fulfill any of the applicable conditions
set forth in Article IV) after irrevocable notice of such borrowing,
refinancing, conversion or continuation has been given pursuant to Section 2.03,
(ii) any payment, prepayment or conversion of a Eurodollar Loan of the Borrower,
or assignment of a Eurodollar Loan of the Borrower required by any other
provision of this Agreement or otherwise made or deemed made, on a date other
than the last day of the Interest Period, if any, applicable thereto, (iii) any
default in payment or prepayment of the principal amount of any outstanding Loan
or any part thereof or interest accrued thereon, as and when due and payable (at
the due date thereof, whether by scheduled maturity, acceleration, irrevocable
notice of prepayment or otherwise) or (iv) the occurrence of any Event of
Default relating to the Borrower, including, in each such case, any loss or
reasonable expense sustained or incurred or to be sustained or incurred by such
Lender in liquidating or employing deposits from third parties, or with respect
to commitments made or obligations undertaken with third parties, to effect or
maintain any Loan hereunder or any part thereof as a Eurodollar Loan. Such loss
shall include an amount equal to the excess, if any, as reasonably determined by
such Lender, of (x) its cost of obtaining the funds for the Loan being paid,
prepaid, refinanced, converted or not borrowed (assumed to be the LIBO Rate for
the period from the date of such payment, prepayment, refinancing or failure to
borrow or refinance to the last day of the Interest Period for such Loan (or, in
the case of a failure to borrow or refinance, the Interest Period for such Loan
that would have commenced on the date of such failure) over (y) the amount of
interest (as reasonably determined by such Lender) that would be realized by
such Lender in reemploying the funds so paid, prepaid or not borrowed or
refinanced for such period or Interest Period, as the case may be.
(c) The Borrower agrees to indemnify the Agent, each Lender, each of their
respective Affiliates and the directors, officers, employees and agents of the
foregoing (each such person being called an "INDEMNITEE") against, and to hold
each Indemnitee harmless from, any and all costs, losses, claims, damages,
50
liabilities and related expenses, including reasonable fees and expenses of one
counsel for all Indemnitees (unless in the good faith opinion of such
Indemnitee, it would be inappropriate under applicable standards of legal
professional conduct, due to an actual or potential conflict of interest, to
have only one counsel), incurred by or asserted against any Indemnitee arising
out of the Borrower's acts or omissions in connection with (i) the preparation,
execution, delivery, enforcement, performance and administration of this
Agreement, (ii) the use of the proceeds of the Loans or (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, including any of the foregoing
arising from the negligence, whether sole or concurrent, on the part of any
Indemnitee. Notwithstanding the foregoing, such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (i) are determined by a final, non-appealable
judgment of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnitee, or (ii) result from any
litigation brought by such Indemnitee against the Borrower or by the Borrower
against such Indemnitee, in which a final, non-appealable judgment has been
rendered against such Indemnitee; provided, further, that the Borrower agrees
that it will not, nor will it permit any Subsidiary to, without the prior
written consent of each Indemnitee, settle, compromise or consent to the entry
of any judgment in any pending or threatened claim, action, suit or proceeding
in respect of which indemnification could be sought under the indemnification
provisions of this Section 8.05(c) (whether or not any Indemnitee is an actual
or potential party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent does not include any statement as to an
admission of fault, culpability or failure to act by or on behalf of any
Indemnitee and does not involve any payment of money or other value by any
Indemnitee or any injunctive relief or factual findings or stipulations binding
on any Indemnitee.
(d) The provisions of this Section 8.05 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans outstanding, the invalidity or unenforceability of any term or
provision of this Agreement or any investigation made by or on behalf of the
Agent or any Lender. All amounts due under this Section 8.06 shall be payable on
written demand therefor.
(e) A certificate of any Lender or the Agent setting forth any amount or
amounts that such Lender or such Agent is entitled to receive pursuant to
subsection (b) of this Section 8.05 and containing an explanation in reasonable
detail of the manner in which such amount or amounts shall have been determined
shall be delivered to the Borrower and shall be conclusive absent manifest
error.
SECTION 8.06. RIGHT OF SETOFF.
If an Event of Default shall have occurred and be continuing, each Lender
is hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender to or for the credit or the account of the
Borrower against any of and all the obligations of the Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender, shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
51
8.06 are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.
SECTION 8.07. APPLICABLE LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
SECTION 8.08. WAIVERS; AMENDMENT.
(a) No failure or delay of the Agent or any Lender in exercising any power
or right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure therefrom shall in
any event be effective unless the same shall be permitted by subsection (b)
below, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice or demand on the
Borrower or any Subsidiary in any case shall entitle such party to any other or
further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders; provided, however, that no such
agreement shall (i) decrease the principal amount of, or extend the maturity of
or any scheduled principal payment date or date for the payment of any interest
on, any Loan or date for the payment of any Facility Fee, or waive or excuse any
such payment or any part thereof, or decrease the rate of interest on any Loan,
without the prior written consent of each Lender affected thereby, (ii) increase
the Commitment of any Lender or decrease the Facility Fee payable to any Lender
without the prior written consent of such Lender, or (iii) amend or modify the
provisions of Section 2.12, 2.13 or Section 8.04(h), the provisions of this
Section 8.08 or the definition of the "Required Lenders", without the prior
written consent of each Lender; provided further, however, that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Agent without the prior written consent of the Agent. Each Lender shall be bound
by any waiver, amendment or modification authorized by this Section 8.08, and
any consent by any Lender or the Agent pursuant to this Section 8.08 shall bind
any assignee of its rights and interests hereunder.
SECTION 8.09. ENTIRE AGREEMENT.
This Agreement (including the schedules and exhibits hereto) and the Letter
Agreements represent the entire contract among the parties relative to the
subject matter hereof and thereof. Any previous agreement, whether written or
oral, among the parties with respect to the subject matter hereof, is superseded
by this Agreement and the Letter Agreements. There are no unwritten oral
agreements between the parties. Nothing in this Agreement, expressed or implied,
is intended to confer upon any party other than the parties hereto any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
52
SECTION 8.10. SEVERABILITY.
In the event any one or more of the provisions contained in this Agreement
should be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 8.11. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of which
shall constitute an original but all of which when taken together shall
constitute but one contract, and shall become effective as provided in Section
8.02.
SECTION 8.12. HEADINGS.
Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 8.13. INTEREST RATE LIMITATION.
(a) Notwithstanding anything herein to the contrary, if at any time the
applicable interest rate, together with all fees and charges which are treated
as interest under applicable law (collectively the "CHARGES"), as provided for
herein or in any other document executed in connection herewith, or otherwise
contracted for, charged, received, taken or reserved by any Lender, shall exceed
the maximum lawful rate (the "MAXIMUM RATE") which may be contracted for,
charged, taken, received or reserved by such Lender in accordance with
applicable law, the rate of interest payable on the outstanding Loans of such
Lender, together with all Charges payable to such Lender, shall be limited to
the Maximum Rate.
(b) If the amount of interest, together with all Charges, payable for the
account of any Lender in respect of any interest computation period is reduced
pursuant to subsection (a) of this Section 8.13 and the amount of interest,
together with all Charges, payable for such Lender's account in respect of any
subsequent interest computation period, computed pursuant to Section 2.06, would
be less than the Maximum Rate, then the amount of interest, together with all
Charges, payable for such Lender's account in respect of such subsequent
interest computation period shall, to the extent permitted by applicable law, be
automatically increased to such Maximum Rate; provided that at no time shall the
aggregate amount by which interest paid for the account of any Lender has been
increased pursuant to this 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 8.13.
SECTION 8.14. JURISDICTION; VENUE.
(a) The Borrower hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State court
53
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 8.15. CONFIDENTIALITY.
Each Lender shall use its best efforts to hold in confidence all
information, memoranda, or extracts furnished to such Lender (directly or
through the Agent) by the Borrower hereunder or in connection with the
negotiation hereof; provided that such Lender may disclose any such information,
memoranda or extracts (i) to its Affiliates, accountants or counsel, (ii) to any
regulatory agency having authority to examine such Lender (as the case may be),
(iii) as required by any legal or governmental process or otherwise by law, (iv)
except as provided in the last sentence of Section 5.03, to any person to which
such Lender sells or proposes to sell an assignment or a participation in its
outstanding Loans hereunder, if such other person agrees for the benefit of the
Borrower to comply with the provisions of this Section 8.15 and (v) to the
extent that such information, memoranda or extracts shall be publicly available
or shall have become known to such Lender independently of any disclosure by the
Borrower hereunder or in connection with the negotiation hereof. Notwithstanding
the foregoing, any Lender may disclose the provisions of this Agreement, the
amounts, maturities and interest rates of its outstanding Loans, and any Fees to
which it is entitled, to any purchaser or potential purchaser of such Lender's
interest in any Loans outstanding. Notwithstanding any other provision in this
Agreement, the Agent hereby confirms that the Borrower and the Borrower's
representatives shall not be limited from disclosing the US tax treatment or the
US tax structure of the transactions contemplated by this Agreement.
[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/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President and Treasurer
CITICORP NORTH AMERICA, INC.,
as Agent and as Lender
By /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
[Signature Page to TXU Corp. Credit Agreement]
S-2
XXXXXXX XXXXX CAPITAL CORP.,
as Lender
By /s/ Xxxxxx XxXxxxxxxxxx
-----------------------------------------
Name: Xxxxxx XxXxxxxxxxxx
Title: Vice President
[Signature Page to TXU Corp. Credit Agreement]
S-3
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Lender
By /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Director
[Signature Page to TXU Corp. Credit Agreement]
EXHIBIT A
FORM OF BORROWING REQUEST
BORROWING REQUEST
[Date]
Citicorp North America, Inc.,
as Agent for the lenders referred to below,
[Address] Attention:
Facsimile No.:
Ladies and Gentlemen:
The undersigned, TXU Corp. (the "BORROWER"), refers to the Credit
Agreement, dated as of November 4, 2004 (as it may hereafter be amended,
modified, extended or restated from time to time, the "AGREEMENT"), among the
Borrower, the lenders party thereto (the "LENDERS") and Citicorp North America,
Inc., as Agent. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Agreement. The Borrower
hereby gives you notice pursuant to Section 2.03 of the Agreement that it
requests a Borrowing under the Agreement, and in that connection sets forth
below the terms on which such Borrowing is requested to be made:
(A) Date of Borrowing (which is a Business Day) ________________
(B) Principal amount of Borrowing1 ________________
(C) Interest rate basis2 ________________
(D) Interest Period and the last day thereof3 ________________
(E) Borrower Account No. and Location ________________
--------
1 Not less than $25,000,000 (and in integral multiples of $5,000,000) or
greater than the Total Commitment then available.
2 Eurodollar Loan or ABR Loan.
3 Which shall be subject to the definition of "INTEREST PERIOD" and end not
later than the Maturity Date.
Upon acceptance of any or all of the Loans made by the Lenders in response
to this request, the Borrower shall be deemed to have represented and warranted
that the applicable conditions to lending specified in Article IV of the
Agreement have been satisfied.
Very truly yours,
TXU CORP.
By_________________________________
Name:
Title:
A-2
EXHIBIT B
FORM OF ASSIGNMENT AND ASSUMPTION
ASSIGNMENT AND ASSUMPTION
[Date]
This Assignment and Assumption (the "ASSIGNMENT AND ASSUMPTION") is dated
as of the Effective Date set forth below and is entered into by and between
[insert name of Assignor] (the "ASSIGNOR") and [insert the name of Assignee]
(the "ASSIGNEE"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended,
modified, extended or restated from time to time, the "CREDIT AGREEMENT"). The
Standard Terms and Condition set forth in Annex 1 attached hereto are hereby
agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Agent as contemplated below (i) all of the Assignor's rights and obligations
in its capacity as a Lender under the Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to the amount
and percentage interest identified below of all of such outstanding rights and
obligation of the Assignor under the respective facilities identified below and
(ii) to the extent permitted to be assigned under applicable law, all claims,
suits, causes of action and any other right of the Assignor (in its capacity as
a Lender) against any person, whether known or unknown, arising under or in
connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby or in any
way based on or related to any of the foregoing, including, but not limited to,
contract claims, tort claims, malpractice claims, statutory claims and all other
claims at law or in equity related to the rights and obligations sold and
assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as, the "ASSIGNED INTEREST"). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.
1. Assignor: ________________________________________________
2. Assignee: ________________________________________________
[and is an Affiliate/Approved Fund of [identify Lender]1]
3. Borrower: ________________________________________________
4. Agent: ________________________________________, as the administrative
agent under the Credit Agreement
-------------
1 Select as applicable.
5. Credit Agreement The $2,300,000,000 Credit Agreement dated as of
November 4, 2004 among TXU Corp., as borrower, the
lenders party thereto, and Citicorp North America, Inc.,
as administrative agent for the Lenders.
6. Assigned Interest:
-------------------------------- ---------------------------- ---------------------------------
Aggregate Amount of Amount of Percentage Assigned of
Commitment/Loans for all Commitment/Loans Commitment/Loans2
Lenders Assigned
-------------------------------- ---------------------------- ---------------------------------
$ $ %
-------------------------------- ---------------------------- ---------------------------------
$ $ %
-------------------------------- ---------------------------- ---------------------------------
$ $ %
-------------------------------- ---------------------------- ---------------------------------
$ $ %
-------------------------------- ---------------------------- ---------------------------------
------------
2 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
Effective Date: __________, 20__ [TO BE INSERTED BY AGENT AND WHICH SHALL
BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
----------------
3 Describe Credit Agreement at option of Administrative Agent.
B-2
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR:
[NAME OF ASSIGNOR]
By:_____________________________
Title:
ASSIGNEE:
[NAME OF ASSIGNEE]
By:_____________________________
Title:
Consented to and Accepted:
[NAME OF AGENT], as
Agent
By:_____________________________
Title:
By:_____________________________
Title:
B-3
ANNEX 1
[ ]3
STANDARD TERM AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned interest, (ii) the Assigned
interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other document related thereto, (ii) the
execution, legality, enforceability, genuineness, sufficiency or value of the
Credit Agreement or any collateral thereunder, (iii) the financial condition of
the Borrower, any of its Subsidiaries or Affiliates or any other person
obligated in respect of the Credit Agreement or (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
person of any of their respective obligations under the Credit Agreement.
1.2 Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) from
and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest,
shall have the obligations of a Lender thereunder, (iv) it has received a copy
of the Credit Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 5.03 thereof, as applicable, and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Agent or any other
Lender, and (v) if it is a Non-U.S. Lender, attached to the Assignment and
Assumption is any documentation required to be delivered by it pursuant to the
terms of the Credit Agreement, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and without reliance on the Agent,
the Assignor or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Credit Agreement, and (ii) it will
perform in accordance with their terms all of the obligations which by the terms
of the Credit Agreement are required to be performed by it as a Lender.
2. Payments. From and after the Effective Date, the Agent shall make
all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
---------------
3 Describe Credit Agreement at option of Administrative Agent.
B-4
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.
3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by facsimile shall be effective as delivery of a manually executed counterpart
of this Assignment and Assumption. This Assignment and Assumption shall be
governed by, and construed in accordance with, the law of the State of New York.
B-5
EXHIBIT C
FORM OF ADMINISTRATIVE QUESTIONNAIRE
Administrative Details Form
TXU Corp. $2,300,000,000 Credit Agreement
GENERAL INFORMATION
YOUR INSTITUTION'S LEGAL NAME:
________________________________________________________________________________
TAX WITHHOLDING:
NOTE: TO AVOID THE POTENTIAL OF HAVING INTEREST INCOME WITHHELD, ALL INVESTORS
MUST DELIVER 2 ORIGINAL AND CURRENT TAX FORMS TO:
TAX ADMINISTRATOR, GLOBAL LOANS SUPPORT SERVICES, CITIGROUP-DELAWARE, 0 XXXX'X
XXX, 0XX XXXXX, XXX XXXXXX, XX 00000
TAX ID #:
____________________________________
SUB-ALLOCATION: (United States only)
Note: If your institution is sub-allocating its allocation, please fill out the
information below. Additionally, an administrative detail form is required for
each legal entity. Execution copies (e.g. Credit Agreement/Assignment Agreement)
will be sent for signature to the Sub-Allocation Contact below.
Sub-Allocated Amount: $____________________________
Signing Credit Agreement? [_]Yes [_]No
Coming In Via Assignment? [_]Yes [_]No
________________________________________________________________________________
SUB-ALLOCATION CONTACT:
________________________________________________________________________________
NAME:
_____________________________________________________________________
Address: _________________________E-mail: ________
_________________________
City: __________State: ________Phone #: ________
Postal Code: Country: Fax #:
_____________________________________________________________________
CONTACT LIST
________________________________________________________________________________
BUSINESS/CREDIT MATTERS: (Responsible for trading and credit approval process
of the deal)
________________________________________________________________________________
Primary:
_____________________________________________________________________
NAME:
_____________________________________________________________________
Address: _________________________E-mail: ________
_________________________
City: __________State: ________Phone #: ________
Postal Code: Country: Fax #:
_____________________________________________________________________
Backup:
_____________________________________________________________________
NAME:
_____________________________________________________________________
Address: _________________________E-mail: ________
_________________________
City: __________State: ________Phone #: ________
Postal Code: Country: Fax #:
_____________________________________________________________________
Admin Details can be submitted online, via Citigroup's Global Loans Web Site.
Send an e-mail to xxxxxxxxxxxxxxx@xxxxxxxxx.xxx with your contact information
and the deal name to request a user ID/password to submit/modify Admin Details
online.
________________________________________________________________________________
ADMIN/OPERATIONS MATTERS: (Responsible for interest, fee, principal payment,
borrowing & pay-downs)
________________________________________________________________________________
Primary:
_____________________________________________________________________
NAME:
_____________________________________________________________________
Address: _________________________E-mail: ________
_________________________
City: __________State: ________Phone #: ________
Postal Code: Country: Fax #:
_____________________________________________________________________
Backup:
_____________________________________________________________________
NAME:
_____________________________________________________________________
Address: _________________________E-mail: ________
_________________________
City: __________State: ________Phone #: ________
Postal Code: Country: Fax #:
_____________________________________________________________________
________________________________________________________________________________
CLOSING CONTACT: (Responsible for Deal Closing matters)
________________________________________________________________________________
NAME:
_____________________________________________________________________
Address: _________________________E-mail: ________
_________________________
City: __________State: ________Phone #: ________
Postal Code: Country: Fax #:
_____________________________________________________________________
________________________________________________________________________________
DISCLOSURE CONTACT: (Receives disclosure materials, such as financial reports,
via our web site)
________________________________________________________________________________
NAME:
_____________________________________________________________________
Address: _________________________E-mail: ________
_________________________
City: __________State: ________Phone #: ________
Postal Code: Country: Fax #:
_____________________________________________________________________
WIRING INSTRUCTIONS
________________________________________________________________________________
YOUR WIRING INSTRUCTIONS FOR THIS DEAL:
________________________________________________________________________________
CORRESPONDENT BANK:
_____________________________________________________________________
City: __________State: ________Account Name: __
Postal Code: _____________ Account#: __
BENEFICIARY ACCT.
Payment Type: NAME (FFC): __
[_]Fed [_}ABA [_]CHIPS BENEFCIARY ACCT.#:__
_____________________________________________________________________
ABA/CHIPS #:
___________________________________________________________________________
Admin Details can be submitted online, via Citigroup's Global Loans Web Site.
Send an e-mail to xxxxxxxxxxxxxxx@xxxxxxxxx.xxx with your contact information
and the deal name to request a user ID/password to submit/modify Admin Details
online.
C-2
REFERENCE: _________________
Attention: _________________
================================================================================
ADMINISTRATIVE AGENT INFORMATION
================================================================================
AGENT WIRING
BANK LOANS SYNDICATION - AGENT CONTACT INSTRUCTIONS
Name: Xxxx Xxxxxxx
Telephone: 000-000-0000 Citibank, NA
Fax: 000-000-0000 ABA #: 021-00-0089
Acct Name: Agency
Address: 2 Penn's Way Medium Term Finance
Suite 200 Acct #: 36852248
Xxx Xxxxxx, Xx 00000
INITIAL FUNDING STANDARDS: LIBOR - Fund 2 days after rates are set.
Admin Details can be submitted online, via Citigroup's Global Loans Web Site.
Send an e-mail to xxxxxxxxxxxxxxx@xxxxxxxxx.xxx with your contact information
and the deal name to request a user ID/password to submit/modify Admin Details
online.
C-3
SCHEDULE 1.01(A)
REQUIRED PREPAYMENTS
None.
SCHEDULE 1.01(B)
RELEVANT AGREEMENTS
TXU Electric Delivery Company
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1. Indenture and Deed of Trust dated as of May 1, 2002
(a) Officer's Certificate for $700,000,000 of 6.375% Senior Secured Notes
due 2012 and $500,000,000 of 7.000% Senior Secured Notes due 2032 Due May
1, 2012 Due May 1, 2032
Each Supplemental Officer's Certificate from time to time entered into, but
only to the extent that such Supplemental Officer's Certificate provides
for covenants that are the same as, or less restrictive than, the Indenture
and Officer's Certificates described above in this item 1(a).
(b) Officer's Certificate for $500,000,000 of 6.375% Senior Secured Notes
due 2015 and $350,000,000 of 7.250% Senior Secured Notes due 2033 Due
January 15, 2015 Due January 15, 2033
Each Supplemental Officer's Certificate from time to time entered into, but
only to the extent that such Supplemental Officer's Certificate provides
for covenants that are the same as, or less restrictive than, the Indenture
and Officer's Certificates described above in this item 1(b).
2. Indenture (For Unsecured Debt Securities) Dated as of August 1, 2002
Officer's Certificate for $200,000,000 of 5% Debentures due 2007 and
$800,000,000 of 7% Debentures due 2022
Due September 1, 2007
Due September 1, 2022
Each Supplemental Officer's Certificate from time to time entered into, but
only to the extent that such Supplemental Officer's Certificate provides
for covenants that are the same as, or less restrictive than, the Indenture
and Officer's Certificates described above in this item 2.
3. Mortgage and Deed of Trust, dated as of December 1, 1983, with The Bank of
New York, as Trustee
Each Supplemental Indenture from time to time entered into, but only to the
extent that such Supplemental Indenture provides for covenants that are the
same as, or less restrictive than, the Mortgage and Deed of Trust described
above in this item 3.
TXU Energy Company LLC
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1. Indenture (for Unsecured Debt Securities) dated as of March 1, 2003
Officer's Certificate for $250,000,000 6.125% Senior Notes due 2008 Due
March 15, 2008
Officer's Certificate for $1,000,000,000 7.000% Senior Notes due 2013 Due
March 15, 2013
Officer's Certificate for $800,000,000 Floating Rate Senior Notes due 2006
Due January 17, 2006
Each Supplemental Officer's Certificate from time to time entered into, but
only to the extent that such Supplemental Officer's Certificate provides
for covenants that are the same as, or less restrictive than, the Indenture
and Officer's Certificates described above in this item 1.
1.01(B)-2
SCHEDULE 2.01
COMMITMENTS
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NAME OF LENDER COMMITMENT
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Citicorp North America, Inc. $1,700,000,000
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Xxxxxxx Xxxxx Capital Corp. $300,000,000
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Wachovia Bank, National Association $300,000,000
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TOTAL $2,300,000,000
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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 TXU Delivery.
