Exhibit 10(a)
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[EXECUTION VERSION]
TXU CORP.
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$500,000,000 CREDIT AGREEMENT
Dated as of August 8, 2003
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LOC 2003 TRUST
as Lender
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TABLE OF CONTENTS
Page
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Article I DEFINITIONS; CONSTRUCTION
SECTION 1.01. Defined Terms.................................................................................... 1
SECTION 1.02. Terms Generally................................................................................. 12
Article II THE CREDITS
SECTION 2.01. The Commitment.................................................................................. 12
SECTION 2.02. Loans........................................................................................... 12
SECTION 2.03. Loan Procedure.................................................................................. 13
SECTION 2.04. Letters of Credit............................................................................... 13
SECTION 2.05. Fees............................................................................................ 14
SECTION 2.06. Repayment of Outstanding Credits; Evidence of Indebtedness...................................... 15
SECTION 2.07. Interest on Loans............................................................................... 15
SECTION 2.08. Default Interest................................................................................ 16
SECTION 2.09. Alternate Rate of Interest...................................................................... 16
SECTION 2.10. Termination and Reduction of the Commitment..................................................... 16
SECTION 2.11. Prepayment...................................................................................... 17
SECTION 2.12. Reserve Requirements; Change in Circumstances................................................... 17
SECTION 2.13. Change in Legality.............................................................................. 18
SECTION 2.14. Payments........................................................................................ 19
SECTION 2.15. Taxes........................................................................................... 19
Article III REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization; Powers............................................................................ 21
SECTION 3.02. Authorization................................................................................... 21
SECTION 3.03. Enforceability.................................................................................. 22
SECTION 3.04. Governmental Approvals.......................................................................... 22
SECTION 3.05. Financial Statements............................................................................ 22
SECTION 3.06. Litigation...................................................................................... 23
SECTION 3.07. Federal Reserve Regulations..................................................................... 23
SECTION 3.08. Investment Company Act; Public Utility Holding Company Act...................................... 23
SECTION 3.09. No Material Misstatements....................................................................... 23
SECTION 3.10. Taxes........................................................................................... 23
SECTION 3.11. Employee Benefit Plans.......................................................................... 24
SECTION 3.12. Significant Subsidiaries........................................................................ 24
SECTION 3.13. Environmental Matters........................................................................... 24
SECTION 3.14. Solvency........................................................................................ 25
i
TABLE OF CONTENTS
(Continued)
Article IV CONDITIONS
SECTION 4.01. Conditions to Initial Extension of Credit....................................................... 25
SECTION 4.02. Conditions for All Extensions of Credit......................................................... 26
Article V COVENANTS
SECTION 5.01. Existence. ......................................................................................27
SECTION 5.02. Compliance With Laws; Business and Properties................................................... 27
SECTION 5.03. Financial Statements, Reports, Etc.............................................................. 27
SECTION 5.04. Insurance....................................................................................... 29
SECTION 5.05. Taxes, Etc...................................................................................... 29
SECTION 5.06. Maintaining Records; Access to Properties and Inspections....................................... 29
SECTION 5.07. ERISA........................................................................................... 29
SECTION 5.08. Use of Proceeds................................................................................. 30
SECTION 5.09. Consolidations, Mergers, Sales and Acquisitions of
Assets and Investments in Subsidiaries.......................................................... 30
SECTION 5.10. Limitations on Liens............................................................................ 30
SECTION 5.11. Interest Coverage............................................................................... 32
SECTION 5.12. Equity Capitalization Ratio..................................................................... 33
SECTION 5.13. Restrictive Agreements.......................................................................... 33
Article VI EVENTS OF DEFAULT
Article VII MISCELLANEOUS
SECTION 7.01. Notices......................................................................................... 35
SECTION 7.02. Survival of Agreement........................................................................... 36
SECTION 7.03. Binding Effect.................................................................................. 36
SECTION 7.04. Successors and Assigns.......................................................................... 36
SECTION 7.05. Expenses; Indemnity............................................................................. 36
SECTION 7.06. Right of Setoff................................................................................. 38
SECTION 7.07. Applicable Law.................................................................................. 39
SECTION 7.08. Waivers; Amendment.............................................................................. 39
SECTION 7.09. Entire Agreement................................................................................ 39
SECTION 7.10. Severability.................................................................................... 40
SECTION 7.11. Counterparts.................................................................................... 40
SECTION 7.12. Headings........................................................................................ 40
SECTION 7.13. Interest Rate Limitation........................................................................ 40
SECTION 7.14. Jurisdiction; Venue............................................................................. 40
SECTION 7.15. Confidentiality................................................................................. 41
ii
TABLE OF CONTENTS
(Continued)
EXHIBITS AND SCHEDULES
Exhibit A - Form of Lending Request
Exhibit B - Form of Request for Issuance
Schedule 5.13 - Restrictive Agreements
iii
CREDIT AGREEMENT (this "Agreement"), dated as of August 8,
2003, between TXU Corp., a Texas corporation (the "Borrower"),
and LOC 2003 Trust, a Delaware statutory trust (the "Lender").
The Borrower has requested that the Lender provide the credit facility
hereinafter described in the amounts and on the terms and conditions set forth
herein, and the Lender has so agreed on the terms and conditions set forth
herein;
Accordingly, the parties hereto agree as follows:
Article I
DEFINITIONS; CONSTRUCTION
SECTION 1.01. Defined Terms.
As used in this Agreement, the following terms shall have the meanings
specified below:
"ABR Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with
the provisions of Article II or any Eurodollar Loan converted (pursuant
to Section 2.09 or 2.13(a)(ii)) to a loan bearing interest at a rate
determined by reference to the Alternate Base Rate.
"Acquisition Date" shall mean the date as of which a person or
group of related persons first acquires more than 30% of any
outstanding class of Voting Shares of the Borrower (within the meaning
of Section 13(d) or 14(d) of the Exchange Act and the applicable rules
and regulations thereunder).
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly or indirectly controls or is
controlled by or is under common control with the person specified.
"Agreement" shall have the meaning given such term in the
preamble hereto.
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to
the greater of (i) the Federal Funds Effective Rate in effect on such
day plus .50% and (ii) the Prime Rate in effect on such day. For
purposes hereof, "Prime Rate" shall mean the rate of interest per annum
publicly announced from time to time by the Reference Bank as its base
rate in effect at its principal office in New York City; each change in
the Prime Rate shall be effective on the date such change is announced
publicly as effective; and "Federal Funds Effective Rate" shall mean,
for any day, the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as released on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
released for any day that is a Business Day, the arithmetic average, as
determined by the Reference Bank, of the quotations for the day of such
transactions received by the Reference Bank from three Federal funds
brokers of recognized standing selected by it. If for any reason the
Lender shall have determined (which determination shall be conclusive
absent manifest error; provided that the Lender shall, upon request,
provide to the Borrower a certificate setting forth in reasonable
detail the basis for such determination) that it is unable to ascertain
the Federal Funds Effective Rate for any reason, including the
inability of the Reference Bank to obtain sufficient quotations in
accordance with the terms thereof, the Alternate Base Rate shall be
determined without regard to clause (i) of the first sentence of this
definition until the circumstances giving rise to such inability no
longer exist. Any change in the Alternate Base Rate due to a change in
the Prime Rate or the Federal Funds Effective Rate shall be effective
on the effective date of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
2
"Applicable Margin" shall mean the percentage per annum set
forth in the column identified as Xxxxx 0, Xxxxx 0, Xxxxx 0 or Level 4
below that corresponds to the Debt Rating of Holdings at the time of
determination. If there is a difference of one notch in the Debt
Ratings, then the higher Debt Rating shall be used to determine the
Applicable Margin; if there is a difference of more than one notch in
the Debt Ratings, then the Level that corresponds to the rating that is
one notch higher than the lower Debt Rating shall be used to determine
the Applicable Margin, unless the lower Debt Rating is below Level 2,
in which case the lower Debt Rating will be used to determine the
Applicable Margin. The Applicable Margins set forth below with respect
to each Level (i) shall be increased by 0.25% during any period (and
for only such period) in which the Outstanding Credits are greater than
33?% but less than 66?% of the Commitment, or (ii) shall be increased
by 0.50% during any period (and for only such period) in which the
Outstanding Credits are at least 66?% of the Commitment. Any change in
the Applicable Margin shall be effective on the date on which the
applicable rating agency announces any change in the Debt Rating.
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S&P Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 0
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Xxxxx'x BBB+ or better BBB or BBB- BB+ Lower than BB+*
------- Baa1 or better Baa2 or Xxx0 Xx0 Lower than Ba1*
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Percentage Per Annum
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Eurodollar 1.25% 1.45% 1.75% 2.25%
Margin
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ABR 0.25% 0.45% 0.75% 1.25%
Margin
===========================================================================================
*or unrated
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Board of Directors" shall mean the board of directors of the
Borrower or any duly authorized committee thereof.
"Borrower" shall have the meaning given such term in the
preamble hereto.
"Business Day" shall mean any day (other than a day that is a
Saturday, Sunday or legal holiday in the State of New York or the State
of Delaware) on which banks are open for business in New York City and
Wilmington, Delaware; provided, however, that, when used in connection
with a Eurodollar Loan, the term "Business Day" shall also exclude any
day on which banks are not open for dealings in dollar deposits in the
London interbank market.
3
a "Change in Control" shall be deemed to have occurred if (i)
any person or "group" (within the meaning of Section 13(d) or 14(d) of
the Exchange Act) shall acquire beneficial ownership of more than 30%
of any outstanding class of Voting Shares of the Borrower unless such
acquisition shall have been approved prior to such acquisition date by
a majority of Disinterested Directors of the Borrower or (ii) during
any period of 12 consecutive months, a majority of the members of the
Board of Directors cease to be composed of individuals (A) who were
members of the Board of Directors on the first day of such period, (B)
whose election or nomination to the Board of Directors was approved by
individuals referred to in clause (i) above constituting at the time of
such election or nomination at least a majority of the Board of
Directors or (C) whose election or nomination to the Board of Directors
was approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least a
majority of the Board of Directors.
"Code" shall mean the Internal Revenue Code of 1986, as the
same may be amended from time to time.
"Commission" shall mean the Public Utility Commission of the
State of Texas.
"Commitment" shall mean the commitment of the Lender to make
Loans and to arrange for the issuance of Letters of Credit in an
aggregate amount not in excess of $500,000,000, as such Commitment may
be permanently terminated or reduced from time to time pursuant to
Section 2.10 or modified from time to time pursuant to Section 7.04.
The Commitment shall automatically and permanently terminate on the
Maturity Date if not terminated earlier pursuant to the terms hereof.
"Consolidated Shareholders' Equity" shall mean the sum
(without duplication) of (i) total common stock equity plus (ii)
preferred and preference stock not subject to mandatory redemption,
each (in the case of clauses (i) and (ii)) determined with respect to
the Borrower and its Consolidated Subsidiaries on a consolidated basis,
plus (iii) Equity-Linked Securities plus (iv) Equity-Credit Preferred
Securities in an aggregate liquidation preference amount not in excess
of $3,000,000,000 plus (v) preferred member interests of Energy plus
(or minus) (vi) accumulated other comprehensive loss or income up to
$1,000,000,000; provided, however, that in computing Consolidated
Shareholders' Equity at any time, there shall be excluded any reduction
in total common stock equity resulting from (A) any write-down of
goodwill related to TXU Europe and any of its Subsidiaries and (B) any
write-down related to the sale of (x) stock of TXU Europe or (y) any
assets of TXU Europe or any of its Subsidiaries.
"Consolidated Subsidiary" shall mean, at any date, any
Subsidiary of the Borrower or other entity the accounts of which would
be consolidated with those of the Borrower in its consolidated
financial statements as of such date.
4
"Consolidated Total Capitalization" shall mean the sum
(without duplication) of (i) total common stock equity plus (ii)
preferred and preference stock and preferred securities plus (iii)
long-term debt (less amounts due currently) plus (iv) preferred member
interests of Energy plus (v) short-term debt consisting of commercial
paper, notes payable to unaffiliated entities and long-term debt due
currently, to the extent such short-term debt exceeds $4,000,000,000,
minus (vi) restricted cash, including any cash and investments pledged
as collateral, determined with respect to the Borrower and its
Consolidated Subsidiaries on a consolidated basis. For purposes of such
calculation, long-term debt shall not include the principal amount of,
or interest on, Qualified Transition Bonds or any derivative
instruments related thereto.
"Controlled Group" shall mean all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower,
are treated as a single employer under Section 414(b) or 414(c) of the
Code.
"Covered Subsidiary" shall mean at any time a Subsidiary of
the Borrower other than an Excluded Subsidiary.
"CSFB" shall mean Credit Suisse First Boston and any successor
thereto.
"Debt Rating" shall mean the ratings (whether explicit or
implied) assigned by S&P and Xxxxx'x to Holdings' senior unsecured
non-credit enhanced long term debt.
"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 Subsidiary of the Borrower, the Qualified Transition Bond
Issuer, TXU Europe, any Subsidiary of TXU Europe or any pension,
savings or other employee benefit plan for the benefit of employees of
the Borrower, any Subsidiary of the Borrower, the Qualified Transition
Bond Issuer, TXU Europe and/or any Subsidiary of TXU Europe) acquiring
the beneficial ownership of more than 30% of the outstanding Voting
Shares of the Borrower (within the meaning of Section 13(d) or 14(d) of
the Exchange Act, and the applicable rules and regulations thereunder)
and who either was a member of the Board of Directors prior to the
Acquisition Date or was recommended for election by a majority of the
Disinterested Directors in office prior to the Acquisition Date.
"dollars" or "$" shall mean lawful money of the United States
of America.
"EBITDA" for any twelve-month period shall mean (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) other income plus (viii) 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, book losses or other
charges, all determined for such twelve-month period with respect to
the Borrower and its Consolidated Subsidiaries on a consolidated basis.
5
"Energy" shall mean TXU Energy Company LLC, a Delaware limited
liability company, or any successor thereof.
"Equity-Credit Preferred Securities" shall mean securities,
however denominated, (i) issued by the Borrower or a Consolidated
Subsidiary, (ii) that are not subject to mandatory redemption or the
underlying securities, if any, of which are not subject to mandatory
redemption, (iii) that are perpetual or mature no less than 30 years
from the date of issuance, (iv) the indebtedness issued in connection
with which, including any guaranty, is subordinate in right of payment
to the unsecured and unsubordinated indebtedness of the issuer of such
indebtedness or guaranty, and (v) the terms of which permit the
deferral of the payment of interest or distributions thereon to a date
occurring after the Maturity Date.
"Equity-Linked Securities" shall mean units, however
denominated, consisting of (i) contracts to purchase common stock of
the Borrower and (ii) (A) debt or preferred securities of the Borrower
or a Subsidiary of the Borrower, provided that such debt or preferred
securities may not contain provisions permitting them to be put to the
Borrower or such Subsidiary prior to the settlement of the related
purchase contract or portion thereof or (B) U.S. Treasury securities.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) that is a member of a group of (i) organizations
described in Section 414(b) or (c) of the Code and (ii) solely for
purposes of the Lien created under Section 412(n) of the Code,
organizations described in Section 414(m) or (o) of the Code of which
the Borrower is a member.
"ERISA Event" shall mean (i) any Reportable Event; (ii) the
adoption of any amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code or Section 307 of
ERISA; (iii) the incurrence of any liability under Title IV of ERISA
with respect to the termination of any Plan or the withdrawal or
partial withdrawal of the Borrower or any of its ERISA Affiliates from
any Plan or Multiemployer Plan; (iv) the receipt by the Borrower or any
ERISA Affiliate from the PBGC of any notice relating to the intention
to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (v) the receipt by the Borrower or any ERISA Affiliate of any
notice concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of
ERISA; (vi) the occurrence of a "prohibited transaction" with respect
to which the Borrower or any of its Subsidiaries is liable; and (vii)
any other similar event or condition with respect to a Plan or
Multiemployer Plan that could result in liability of the Borrower other
than a liability to pay premiums or benefits when due.
6
"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 resolving fuel or other issues in any proceeding before
the Commission or the Railroad Commission of Texas in an aggregate
amount not to exceed $100,000,000, (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) up to $100,000,000 of costs
incurred in connection with write-offs relating to the regulatory
settlement plan, which was approved by the Commission in June of 2002
and became final upon resolution of outstanding appeals in January of
2003, of Holdings and certain of its Subsidiaries (as described in the
Borrower's filings with the SEC).
"Excluded Subsidiary" shall mean TXU International Holdings
Limited and each of its Subsidiaries.
"Extension of Credit" shall mean (i) the making of a Loan,
(ii) the issuance of a Letter of Credit or (iii) the amendment of any
Letter of Credit having the effect of extending the stated termination
date thereof or increasing the maximum amount available to be drawn
thereunder.
"Facility Fee" shall have the meaning assigned to such term in
Section 2.05(a).
"Facility Fee Percentage" shall mean, at any time, the
percentage per annum set forth in the column identified as Xxxxx 0,
Xxxxx 0, Xxxxx 0 or Level 4 below, based upon the level corresponding
to the Debt Rating of Holdings at the time of determination. If there
is a difference of one notch in the Debt Ratings, then the higher Debt
Rating shall be used to determine the Facility Fee Percentage; if there
is a difference of more than one notch in the Debt Ratings, then the
Level that corresponds to the rating that is one notch higher than the
lower Debt Rating shall be used to determine the Facility Fee
Percentage, unless the lower Debt Rating is below Level 2, in which
case the lower Debt Rating will be used to determine the Facility Fee
Percentage. 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.
7
===========================================================================================
S&P Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 0
------- ------- ------- -------
Xxxxx'x BBB+ or better BBB or BBB- BB+ Lower than BB+*
Baa1 or better Baa2 or Xxx0 Xx0 Lower than Ba1*
-------------- ------------ --- ---------------
------------------------------------------------------------------------------------------
Percentage Per Annum
-------------------------------------------------------------------------------------------
Facility Fee 0.25% 0.30% 0.50% 0.75%
===========================================================================================
*or unrated
"Federal Funds Effective Rate" shall have the meaning set
forth in the definition of "Alternate Base Rate".
"Fees" shall mean the Facility Fee and the LC Fee.
"Financial Officer" of any corporation shall mean the chief
financial officer, principal accounting officer, treasurer, associate
or assistant treasurer, or any responsible officer designated by one of
the foregoing persons, of such corporation.
"GAAP" shall mean generally accepted accounting principles,
applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Holdings" shall mean TXU US Holdings Company (formerly "TXU
Electric Company"), a Texas corporation, or any successor thereof.
"Indebtedness" of any person shall mean all indebtedness
representing money borrowed which is created, assumed, incurred or
guaranteed in any manner by such person or for which such person is
responsible or liable (whether by agreement to purchase indebtedness
of, or to supply funds to or invest in, others or otherwise).
"Interest 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 and distributions on
preferred member interests minus (vi) interest income generated by
restricted cash investments, including any cash and investments pledged
as collateral accounts, 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 on Qualified Transition Bonds or any derivative
instruments related thereto.
"Interest Payment Date" shall mean, with respect to any Loan,
the last day of the Interest Period applicable thereto and, in the case
of a Eurodollar Loan with an Interest Period of more than three months'
duration, each day that would have been an Interest Payment Date for
such Loan had successive Interest Periods of three months' duration
been applicable to such Loan and, in addition, the date of any
prepayment of each Loan or conversion of such Loan to a Loan of a
different Type.
8
"Interest Period" shall mean (i) as to any Eurodollar Loan,
the period commencing on the date of such Loan and ending on the
numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is 1, 2,
3 or 6 months thereafter; provided that, in the case of any Eurodollar
Loan made during the 30-day period ending on the Maturity Date, such
period may end on the seventh or fourteenth day thereafter, as the
Borrower may elect and (ii) as to any ABR Loan, the period commencing
on the date of such Loan and ending on the earliest of (A) the next
succeeding March 31, June 30, September 30 or December 31, (B) the
Maturity Date, and (C) the date such Loan is repaid or prepaid in
accordance with Section 2.06 or Section 2.11; provided, however, that
if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business
Day unless, in the case of Eurodollar Loans only, such next succeeding
Business Day would fall in the next calendar month, in which case such
Interest Period shall end on the next preceding Business Day. Interest
shall accrue from and including the first day of an Interest Period to
but excluding the last day of such Interest Period.
"LC Fee" shall have the meaning given such term in Section
2.05(b).
"Lender" shall have the meaning given such term in the
preamble hereto.
"Lending Request" shall mean a request made pursuant to
Section 2.03 in the form of Exhibit A.
"Letter of Credit" shall mean a letter of credit arranged for
by the Lender under Section 2.04, as such Letter of Credit from time to
time may be amended, modified or extended in accordance with the terms
hereof.
"LIBO Rate" shall mean, with respect to any Eurodollar Loan
for any Interest Period, the rate appearing on Page 3750 of the
Telerate Service (or on any successor or substitute page of such
service, or any successor to or substitute for such service, providing
rate quotations comparable to those currently provided on such page of
such service, as determined by the Lender from time to time for
purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such
Interest Period as the rate for dollar deposits with a maturity
comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with
respect to such Eurodollar Loan for such Interest Period shall be the
rate at which dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London
office of the Reference Bank in immediately available funds in the
London interbank market at approximately 11:00 a.m. London time, two
Business Days prior to the commencement of such Interest Period.
9
"Lien" shall mean, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in
respect of such asset. For the purposes of this Agreement, any person
shall be deemed to own subject to a Lien any asset which it has
acquired or holds subject to the interest of a vendor or lessor under
any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"Loan" shall mean a revolving loan made pursuant to Section
2.02, whether made as a Eurodollar Loan or an ABR Loan.
"Margin Regulations" shall mean Regulations T, U and X of the
Board as from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Margin Stock" shall have the meaning given such term under
Regulation U of the Board.
"Material Adverse Change" shall mean a materially adverse
change in the business, assets, operations or financial condition of
the Borrower and its Subsidiaries taken as a whole that makes the
Borrower unable to perform any of its obligations under this Agreement
or that impairs the rights of, or benefits available to, the Lender
under this Agreement.
"Maturity Date" shall mean the earlier to occur of (i) July
15, 2008 and (ii) the date of termination or reduction in whole of the
Commitment pursuant to Section 2.10 or Article VI.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Borrower or any
ERISA Affiliate is making, or accruing an obligation to make,
contributions, or has within any of the preceding five plan years made,
or accrued an obligation to make, contributions.
"New Trust Facility" shall mean the Credit Agreement, dated as
of the date hereof, among LOC 2003 Trust, as borrower, the lenders
party thereto, Credit Suisse First Boston, as administrative agent and
as collateral agent, as amended, modified and supplemented from time to
time.
"Oncor" shall mean Oncor Electric Delivery Company, a Texas
corporation, or any successor thereof.
"Outstanding Credits" shall mean, on any date of
determination, an amount equal to (i) the aggregate principal amount of
all Loans outstanding on such date plus (ii) the undrawn stated amounts
of all Letters of Credit that are outstanding on such date plus (ii)
the aggregate principal amount of all unpaid reimbursement obligations
of the Borrower on such date with respect to payments made by the
applicable issuing bank under any Letter of Credit (excluding
reimbursement obligations that have been made with the proceeds of any
Loan) on such date.
10
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
"person" shall mean any natural person, corporation, statutory
trust, joint venture, association, company, limited liability company,
partnership or government, or any agency or political subdivision
thereof.
"Plan" shall mean any employee pension benefit plan described
under Section 3(2) of ERISA (other than a Multiemployer Plan) subject
to the provisions of Title IV of ERISA that is maintained by the
Borrower or any ERISA Affiliate.
"Qualified Transition Bond Issuer" shall mean Oncor Electric
Delivery Transition Bond Company LLC, a Delaware limited liability
company, any successor thereto or any Consolidated Subsidiary 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.
"Qualified Transition Bonds" shall mean the securities,
however denominated, that are issued by the Qualified Transition Bond
Issuer.
"Reference Bank" shall mean CSFB or any other bank acceptable
to the Borrower and the Lender that agrees to provide the information
to be provided by, or with respect to, the "Reference Bank" hereunder.
"Reportable Event" shall mean any reportable event as defined
in Sections 4043(c)(1)-(8) of ERISA or the regulations issued
thereunder (other than a reportable event for which the 30 day notice
requirement has been waived) with respect to a Plan (other than a Plan
maintained by an ERISA Affiliate that is considered an ERISA Affiliate
only pursuant to subsection (m) or (o) of Code Section 414).
"Request for Issuance" shall mean a request made pursuant to
Section 2.04(a) in the form of Exhibit B.
"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.
"S&P" shall mean Standard & Poor's Ratings Services (a
division of The XxXxxx-Xxxx Companies, Inc.).
"SEC" shall mean the United States Securities and Exchange
Commission.
"Significant Disposition" shall mean a sale, lease,
disposition or other transfer by the Borrower or any Significant
Subsidiary, during any 12-month period, of assets constituting, either
individually or in the aggregate with all other assets sold, leased,
disposed or otherwise transferred by such Borrower or Significant
Subsidiary during such period, 10% or more of the assets of the
Borrower and its Subsidiaries taken as a whole, excluding any such
sale, lease, disposition or other transfer to a Wholly Owned Subsidiary
of the Borrower.
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"Significant Subsidiary" shall mean at any time a Subsidiary
of the Borrower that as of such time satisfies the definition of a
"significant subsidiary" contained as of the date of this Agreement in
Regulation S-X of the SEC; provided, that no Excluded Subsidiary shall
in any event be deemed to be a Significant Subsidiary of the Borrower.
"Solvent" means, with respect to any person as of a particular
date, that on such date such person is able to pay its debts and other
liabilities, contingent obligations and other commitments as they
mature in the normal course of business. In computing the amount of
contingent liabilities at any time, it is intended that such
liabilities will be computed as the amount which, in light of all the
facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured
liability.
"Subsidiary" shall mean, with respect to any person (the
"parent"), any corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such parent; provided,
however, that the Qualified Transition Bond Issuer and TXU Europe,
together with its Subsidiaries, shall not be deemed Subsidiaries of the
Borrower.
"Substantial" shall mean an amount in excess of 10% of the
consolidated assets of the Borrower and its Consolidated Subsidiaries
taken as a whole.
"TXU Europe" shall mean TXU Europe Limited, a private limited
company incorporated under the laws of England and Wales.
"Type", when used in respect of any Loan, shall refer to the
Rate by reference to which interest on such Loan is determined. For
purposes hereof, "Rate" shall include the LIBO Rate and the Alternate
Base Rate.
"Voting Shares" shall mean, as to shares or other equity
interests of a particular corporation or other type of person,
outstanding shares of stock or other equity interests of any class of
such corporation or other person entitled to vote in the election of
directors or other comparable managers of such person, excluding shares
or other interests entitled so to vote only upon the happening of some
contingency.
"Wholly Owned Subsidiary" of any person shall mean any
Consolidated Subsidiary of such person all the shares of common stock
and other voting capital stock or other voting ownership interests
having ordinary voting power to vote in the election of the board of
directors or other governing body performing similar functions (except
directors' qualifying shares) of which are at the time directly or
indirectly owned by such person.
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"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.
Article II
THE CREDITS
SECTION 2.01. The Commitment.
Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, the Lender agrees, at any time
and from time to time until the earlier of the Maturity Date and the termination
of the Commitment (i) to make Loans to the Borrower in an aggregate principal
amount at any time outstanding not to exceed 50% of the Commitment and (ii) to
arrange for the issuance of Letters of Credit on behalf of the Borrower in an
aggregate stated amount at any time outstanding not to exceed the Commitment,
subject, however, to the conditions that at no time shall the Outstanding
Credits exceed the Commitment.
Within the foregoing limits, the Borrower may borrow, pay or prepay,
subject to the limitations set forth in Section 2.11(a), and reborrow Loans and
request the Lender to arrange for the issuance of Letters of Credit, on and
after the date of this Agreement and prior to the Maturity Date, subject to the
terms, conditions and limitations set forth herein.
SECTION 2.02. Loans.
(a) Each Loan shall be 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 Commitment).
(b) Each Loan shall be a Eurodollar Loan or an ABR Loan, as the
Borrower may request pursuant to Section 2.03. Loans of more than one Type may
be outstanding at the same time.
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(c) Subject to subsection (d) below, the 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 Borrower, not later than noon, New York City
time, at such account as may be specified from time to time in one or more
notices delivered by the Borrower to the Lender.
(d) The Borrower may refinance all or any part of any Loan with a Loan
of the same or a different Type, subject to the conditions and limitations set
forth in this Agreement. Any Loan or part thereof so refinanced shall be deemed
to be repaid or prepaid in accordance with Section 2.06 or 2.11, as applicable,
with the proceeds of a new Loan.
SECTION 2.03. Loan Procedure.
In order to request a Loan, the Borrower shall hand deliver or telecopy
to the Lender a duly completed Lending Request in the form of Exhibit A (i) in
the case of a Eurodollar Loan, not later than 11:00 a.m., New York City time,
three Business Days before such Loan, and (ii) in the case of an ABR Loan, not
later than 11:00 a.m., New York City time, one Business Day before such Loan.
Such notice shall be irrevocable and shall in each case specify (A) whether the
Loan then being requested is to be a Eurodollar Loan or an ABR Loan; (B) the
date of such Loan (which shall be a Business Day) and the amount thereof; and
(C) if such Loan is to be a Eurodollar Loan, the Interest Period with respect
thereto, which shall not end after the Maturity Date. If no election as to the
Type of Loan is specified in any such notice, then the requested Loan shall be
an ABR Loan. If no Interest Period with respect to any Eurodollar Loan is
specified in any such notice, then the Borrower shall be deemed to have selected
an Interest Period of one month's duration (subject to the limitations set forth
in the definition of "Interest Period"). If the Borrower shall not have given
notice in accordance with this Section 2.03 of its election to refinance a Loan
prior to the end of the Interest Period in effect for such Loan, then the
Borrower shall (unless such Loan is repaid at the end of such Interest Period)
be deemed to have given notice of an election to refinance such Loan with an ABR
Loan. Notwithstanding any other provision of this Agreement to the contrary, no
Loan shall be requested if the Interest Period with respect thereto would end
after the scheduled Maturity Date.
SECTION 2.04. Letters of Credit.
(a) Subject to the terms and conditions hereof, the Lender agrees to
arrange for Letters of Credit to be issued (or the stated maturity thereof
extended or terms thereof modified or amended) on behalf of the Borrower and
its Subsidiaries on not less than three Business Days' prior notice thereof by
delivery by the Borrower of a Request for Issuance to the Lender. Each Request
for Issuance shall specify (i) the date (which shall be a Business Day) of
issuance of such Letter of Credit (or the date of effectiveness of such
extension, modification or amendment) and the stated expiry date thereof (which
shall be no later than the fifth Business Day preceding the Maturity Date),
(ii) the proposed stated amount (denominated in dollars) of such Letter of
Credit (which shall not be less than $1,000,000), (iii) the name and address of
the beneficiary of such Letter of Credit and (iv) a statement of drawing
conditions applicable to such Letter of Credit, and if such Request for
Issuance relates to an amendment or modification of a Letter of Credit, it
shall be accompanied by the consent of the beneficiary of the Letter of Credit
thereto. Each Request for Issuance shall be irrevocable unless modified or
rescinded by the Borrower not less than two days prior to the proposed date of
issuance (or effectiveness) specified therein.
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(b) No Letter of Credit shall be requested or issued hereunder if the
issuance thereof would increase the amount (if any) by which the Outstanding
Credits exceed the Commitment.
(c) The Borrower hereby agrees to pay to the Lender on each date on
which any amount is paid under any Letter of Credit a sum equal to the amount
so paid.
(d) The payment obligations of the Borrower under this Agreement in
respect of any payment under any Letter of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of
this Agreement under all circumstances, including the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any
other agreement or instrument relating hereto or to such Letter of
Credit;
(ii) any amendment or waiver of, or any consent to departure from,
the terms of this Agreement or such Letter of Credit;
(iii) the existence of any claim, set off, defense or other right
that the Borrower may have at any time against any beneficiary, or any
transferee, of such Letter of Credit (or any persons for whom any such
beneficiary or any such transferee may be acting) or any other person,
whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit, or any unrelated
transaction;
(iv) any statement or any other document presented under such Letter
of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in
any respect;
(v) payment in good faith under the Letter of Credit against
presentation of a draft or certificate that does not comply with the
terms of such Letter of Credit; or
(vi)any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
SECTION 2.05. Fees.
(a) The Borrower agrees to pay to the Lender, on each March 31,
June 30, September 30 and December 31 and on each date on which the Commitment
shall be terminated or reduced as provided herein, a facility fee (a "Facility
Fee"), at a rate per annum equal to the applicable Facility Fee Percentage from
time to time in effect on the Commitment 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 shall be terminated).
(b) The Borrower agrees to pay to the Lender, on each March 31,
June 30, September 30 and December 31, a letter of credit fee (the "LC Fee") on
the aggregate undrawn stated amount of all Letters of Credit, at a rate per
annum equal to the Applicable Margin in effect from time to time for Eurodollar
Loans during the preceding quarter (or other period commencing on the date of
this Agreement or ending on the Maturity Date).
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(c) The Fees shall be computed on the basis of the actual number of
days elapsed in a year of 360 days. The Fees shall commence to accrue on the
date of this Agreement, and shall cease to accrue on the date of termination of
the Commitment and the repayment and expiration of all Outstanding Credits as
provided herein. All Fees shall be paid on the dates due, in immediately
available funds, to the Lender. Once paid, none of the Fees shall be refundable
under any circumstances.
SECTION 2.06. Repayment of Outstanding Credits; Evidence of
Indebtedness.
(a) The outstanding principal balance of each Loan shall be due and
payable on the last day of the Interest Period applicable thereto and on the
Maturity Date.
(b) The Lender shall maintain accounts in which it will record (i) the
amount of each Extension of Credit made hereunder, the Type of each Loan made
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to the
Lender hereunder, (iii) the amount and stated expiry date of each Letter of
Credit and (iv) the amount of any sum received by the Lender hereunder from the
Borrower.
(c) The entries made in the accounts maintained pursuant to subsection
(b) of this Section 2.06 shall, to the extent permitted by applicable law, be
prima facie evidence of the existence and amounts of the obligations therein
recorded; provided, however, that the failure of the Lender to maintain such
accounts or any error therein shall not in any manner affect the obligations of
the Borrower to repay the Outstanding Credits in accordance with their terms.
SECTION 2.07. Interest on Loans.
(a) Subject to the provisions of Section 2.08, each Eurodollar Loan shall
bear interest (computed on the basis of the actual number of days elapsed over
a year of 360 days) at a rate per annum equal to the LIBO Rate for the Interest
Period in effect for such Loan plus the Applicable Margin from time to time in
effect.
(b) Subject to the provisions of Section 2.08, each ABR Loan shall bear
interest (computed on the basis of the actual number of days elapsed over a
year of (i) 365 or 366 days, as the case may be, for periods during which the
Alternate Base Rate is determined by reference to the Prime Rate and (ii) 360
days for other periods) at a rate per annum equal to the Alternate Base Rate
plus the Applicable Margin from time to time in effect.
(c) Interest on each Loan shall be payable on each Interest Payment Date
applicable to such Loan except as otherwise provided in this Agreement. The
applicable LIBO Rate or Alternate Base Rate for each Interest Period or day
within an Interest Period, as the case may be, shall be determined by the
Lender, and such determination shall be conclusive absent manifest error;
provided that the Lender shall, upon request, provide to the Borrower a
certificate setting forth in reasonable detail the basis for such determination.
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SECTION 2.08. Default Interest.
If the Borrower shall default in the payment of the principal of or
interest on any Loan, any reimbursement obligation under Section 2.04(c), or any
other amount becoming due hereunder, whether by scheduled maturity, notice of
prepayment, acceleration or otherwise, the Borrower shall on demand from time to
time from the Lender pay interest, to the extent permitted by law, on such
defaulted amount up to (but not including) the date of actual payment (after as
well as before judgment) at a rate per annum (computed as provided in Section
2.07(b)) equal to the Alternate Base Rate plus the Applicable Margin for ABR
Loans plus 2%.
SECTION 2.09. Alternate Rate of Interest.
In the event, and on each occasion, that on the day two Business Days
prior to the commencement of any Interest Period for a Eurodollar Loan the
Lender shall have determined (i) that dollar deposits in the principal amounts
of such Eurodollar Loan are not generally available in the London interbank
market or (ii) that reasonable means do not exist for ascertaining the LIBO
Rate, the Lender shall, as soon as practicable thereafter, give telecopy notice
of such determination to the Borrower. In the event of any such determination
under clause (i) or (ii) above, until the Lender shall have advised the Borrower
that the circumstances giving rise to such notice no longer exist any request by
the Borrower for a Eurodollar Loan pursuant to Section 2.03 shall be deemed to
be a request for an ABR Loan. In the event the Lender determine that the rates
at which dollar deposits are being offered will not adequately and fairly
reflect the cost to the Lender of making or maintaining Eurodollar Loans during
such Interest Period, the Lender shall notify the Borrower and until the Lender
shall determine that the circumstances giving rise to such notice no longer
exist, any request by the Borrower for a Eurodollar Loan shall be deemed a
request for an ABR Loan. Each determination by the Lender hereunder shall be
made in good faith and shall be conclusive absent manifest error; provided that
the Lender, shall, upon request, provide to the Borrower a certificate setting
forth in reasonable detail the basis for such determination.
SECTION 2.10. Termination and Reduction of the Commitment.
(a) The Commitment shall automatically terminate on the Maturity Date.
(b) Upon at least two Business Days' prior irrevocable written notice
to the Lender, the Borrower may at any time in whole permanently terminate, or
from time to time in part permanently reduce, the Commitment; provided, however,
that (i) each partial reduction of the Commitment shall be in an integral
multiple of $10,000,000 and (ii) no such termination or reduction shall be made
that would reduce the Commitment to an amount less than (A) the Outstanding
Credits on the date of such termination or reduction (after giving effect to
any prepayment made pursuant to Section 2.11) or (B) $50,000,000, unless the
result of such termination or reduction referred to in this clause (B) is to
reduce the Commitment to $0.
(c) The Borrower agrees that, upon any reduction in the "Total
Commitment" under the New Trust Facility, the Commitment shall automatically be
reduced by an amount equal to the amount of such reduction.
17
(d) On the second Business Day following any drawing under a Letter of
Credit, the Commitment shall reduce by an amount equal to such drawing unless
on such second Business Day the Lender has been reimbursed for the amount of its
reimbursement obligations in respect of such drawing.
(e) The Borrower shall pay to the Lender, on the date of each
termination or reduction of the Commitment, the Facility Fee on the amount of
the Commitment so terminated or reduced accrued through the date of such
termination or reduction.
SECTION 2.11. Prepayment.
(a) The Borrower shall have the right at any time and from time to time
to prepay any Loan, in whole or in part, upon giving telecopy notice (or
telephone notice promptly confirmed by telecopy) to the Lender: (i) before
11:00 a.m., New York City time, three Business Days prior to prepayment, in the
case of Eurodollar Loans, and (ii) before 11:00 a.m., New York City time, one
Business Day prior to prepayment, in the case of ABR Loans; provided, however,
that each partial prepayment shall be in an amount which is an integral multiple
of $10,000,000 and not less than $10,000,000.
(b) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Loan (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Loan (or portion
thereof) by the amount stated therein on the date stated therein. All
prepayments under this Section 2.11 shall be subject to Section 7.05(b) but
otherwise without premium or penalty. All prepayments under this Section 2.11
shall be accompanied by accrued interest on the principal amount being prepaid
to the date of payment.
SECTION 2.12. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision herein, if after the date of
this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of payments to the Lender
hereunder (except for changes in respect of taxes on the overall net income of
the Lender imposed by the jurisdiction in which the Lender's principal executive
office is located), or shall result in the imposition, modification or
applicability of any reserve, special deposit or similar requirement against
assets of, deposits with or for the account of or credit extended by the Lender,
or shall result in the imposition on the Lender or the London interbank market
of any other condition affecting this Agreement, the Commitment or any
Eurodollar Loan, and the result of any of the foregoing shall be to increase the
cost to the Lender of making or maintaining any Outstanding Credit (other than
an ABR Loan) or to reduce the amount of any sum received or receivable by the
Lender hereunder (whether of principal, interest or otherwise) by an amount
deemed by the Lender to be material, then the Borrower shall, upon receipt of
the notice and certificate provided for in Section 2.12(c), promptly pay to the
Lender such additional amount or amounts as will compensate the Lender for such
additional costs incurred or reduction suffered.
(b) If the Lender shall have determined that the adoption of any law,
rule, regulation or guideline arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards," or the
adoption after the date hereof of any other law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Lender or the Lender's holding
company with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
Lender's capital or on the capital of the Lender's holding company, if any, as a
consequence of this Agreement, the Commitment or the Extensions of Credit made
or arranged for by the Lender pursuant hereto to a level below that which the
Lender or the Lender's holding company could have achieved but for such
adoption, change or compliance (taking into consideration the Lender's policies
and the policies of the Lender's holding company with respect to capital
adequacy) by an amount deemed by the Lender to be material, then from time to
time such additional amount or amounts as will compensate the Lender for any
such reduction suffered will be paid by the Borrower to the Lender.
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(c) A certificate of the Lender setting forth such amount or amounts
as shall be necessary to compensate the Lender or its holding company as
specified in subsection (a) or (b) above, and containing an explanation, in
reasonable detail, of the manner in which such amount or amounts shall have been
determined, shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay the Lender the amount shown as due on any
such certificate delivered by it within 10 days after its receipt of the same.
The Lender shall give prompt notice to the Borrower of any event of which it has
knowledge, occurring after the date hereof, that it has determined will require
compensation by the Borrower pursuant to this Section; provided, however, that
failure by the Lender to give such notice shall not constitute a waiver of the
Lender's right to demand compensation hereunder.
(d) Failure on the part of the Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
the Lender's right to demand compensation with respect to such period or any
other period; provided, however, that the Lender shall not be entitled to
compensation under this Section 2.12 for any costs incurred or reductions
suffered with respect to any date unless it shall have notified the Borrower
that it will demand compensation for such costs or reductions under subsection
(c) above not more than 90 days after the later of (i) such date and (ii) the
date on which it shall have become aware of such costs or reductions. The
protection of this Section shall be available to the Lender regardless of any
possible contention of the invalidity or inapplicability of the law, rule,
regulation, guideline or other change or condition that shall have occurred or
been imposed.
SECTION 2.13. Change in Legality.
(a) Notwithstanding any other provision herein, if any change in any
law or regulation or in the interpretation thereof by any Governmental
Authority charged with the administration or interpretation thereof shall make
it unlawful for the Lender to make or maintain any Eurodollar Loan or to give
effect to its obligations as contemplated hereby with respect to any Eurodollar
Loan, then, by written notice to the Borrower, the Lender may:
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(i) declare that Eurodollar Loans will not thereafter be made by the
Lender hereunder, whereupon any request for a Eurodollar Loan shall, as to
the Lender only, be deemed a request for an ABR Loan unless such
declaration shall be subsequently withdrawn (the Lender delivering such a
declaration hereby agreeing to withdraw such declaration promptly upon
determining that such event of illegality no longer exists); and
(ii) require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such
notice as provided in subsection (b) below.
In the event the Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by the Lender or the
converted Eurodollar Loans of the Lender shall instead be applied to repay the
ABR Loans made by the Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
(b) For purposes of this Section 2.13, a notice by the Lender shall be
effective as to each Eurodollar Loan, if lawful, on the last day of the Interest
Period currently applicable to such Eurodollar Loan; in all other cases such
notice shall be effective on the date of receipt.
SECTION 2.14. Payments.
(a) The Borrower shall make each payment (including principal of or
interest on or any reimbursement obligation in respect of any Outstanding Credit
or any 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 Lender at such account as the Lender may specify from time to time in
writing to the Borrower, in immediately available funds. Each such payment shall
be made without off-set, deduction or counterclaim, provided, that the foregoing
shall not constitute a relinquishment or waiver of the Borrower's rights to any
independent claim that the Borrower may have against the Lender.
(b) Whenever any payment (including principal of or interest on or any
reimbursement obligation in respect of any Outstanding Credit or any Fees or
other amounts) hereunder shall become due, or otherwise would occur, on a day
that is not a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or Fees, if applicable.
SECTION 2.15. Taxes.
(a) Any and all payments of principal and interest on any Outstanding
Credit, 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 such Borrower
Payments, but only to the extent reasonably attributable to such Borrower
Payments, excluding (i) income taxes imposed on the net income of the Lender
(or any transferee or assignee thereof, including a participation holder (any
such entity a "Transferee")and (ii) franchise taxes imposed on the net income
of the Lender (or Transferee), in each case by the jurisdiction under the laws
of which the Lender (or Transferee) is organized or doing business through
offices or branches located therein, or any political subdivision thereof (all
such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities, collectively or individually, "Taxes"). If the Borrower shall be
required to deduct any Taxes from or in respect of any sum payable hereunder to
the Lender (or any Transferee), (i) the sum payable shall be increased by the
amount (an "additional amount") necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.15) the Lender (or Transferee) shall receive an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
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(b) In addition, the Borrower shall pay to the relevant United States
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement
("Other Taxes").
(c) The Borrower shall indemnify the Lender (or Transferee thereof) for
the full amount of Taxes and Other Taxes with respect to Borrower Payments paid
by the Lender (or Transferee) and any liability (including penalties, interest
and expenses (including reasonable attorney's fees and expenses)) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted by the relevant United States Governmental
Authority. A certificate setting forth and containing an explanation in
reasonable detail of the manner in which such amount shall have been determined
and the amount of such payment or liability prepared by the Lender, absent
manifest error, shall be final, conclusive and binding for all purposes. Such
indemnification shall be made within 30 days after the date the Lender (or
Transferee) makes written demand therefor.
(d) If the Lender (or Transferee) shall become aware that it is entitled
to claim a refund from a United States Governmental Authority in respect of
Taxes or Other Taxes as to which it has been indemnified by the Borrower, or
with respect to which the Borrower has paid additional amounts, pursuant to this
Section 2.15, it shall promptly notify the Borrower of the availability of such
refund claim and shall, within 30 days after receipt of a request by the
Borrower, make a claim to such United States Governmental Authority for such
refund at the Borrower's expense. If the Lender (or Transferee) receives a
refund (including pursuant to a claim for refund made pursuant to the preceding
sentence) in respect of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower had paid
additional amounts pursuant to this Section 2.15, it shall within 30 days from
the date of such receipt pay over such refund to the Borrower (but only to the
extent of indemnity payments made, or additional amounts paid, by the Borrower
under this Section 2.15 with respect to the Taxes or Other Taxes giving rise to
such refund), net of all out-of-pocket expenses of the Lender (or Transferee)
and without interest (other than interest paid by the relevant United States
Governmental Authority with respect to such refund); provided, however, that the
Borrower, upon the request of the Lender (or Transferee), agrees to repay the
amount paid over to the Borrower (plus penalties, interest or other charges) to
the Lender (or Transferee) in the event the Lender (or Transferee) is required
to repay such refund to such United States Governmental Authority.
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(e) As soon as practicable, but in any event within 30 days, after the
date of any payment of Taxes or Other Taxes by the Borrower to the relevant
United States Governmental Authority, the Borrower will deliver to the Lender,
at its address referred to in Section 7.01, the original or a certified copy
of a receipt issued by such United States Governmental Authority evidencing
payment thereof.
(f) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.15 shall
survive the payment in full of the principal of and interest on all Outstanding
Credits made hereunder.
(g) If the Lender (or Transferee) shall claim any indemnity payment or
additional amounts payable pursuant to this Section 2.15, it shall use
reasonable efforts (consistent with legal and regulatory restrictions) to file
any certificate or document reasonably requested in writing by the Borrower if
the making of such a filing would avoid the need for or reduce the amount of any
such indemnity payment or additional amounts that may thereafter accrue and
would not, in the good faith determination of the Lender (or Transferee), be
otherwise disadvantageous to the Lender (or Transferee).
(h) Nothing contained in this Section 2.15 shall require the Lender (or
Transferee) to make available to the Borrower any of its tax returns (or any
other information) that it deems to be confidential or proprietary.
Article III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender as follows:
SECTION 3.01. Organization; Powers.
The Borrower (i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization, (ii)
has all requisite power and authority to own its property and assets and to
carry on its business as now conducted and as proposed to be conducted, (iii) is
qualified to do business in every jurisdiction where such qualification is
required, except where the failure so to qualify would not result in a Material
Adverse Change, and (iv) has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement and to request and
receive Extensions of Credit hereunder.
SECTION 3.02. Authorization.
The execution, delivery and performance by the Borrower of this
Agreement and the Extensions of Credit hereunder (i) have been duly authorized
by all requisite corporate action and (ii) will not (A) violate (x) any
provision of any law, statute, rule or regulation (including, the Margin
Regulations) to which the Borrower is subject or of the certificate of
incorporation or other constitutive documents or by-laws of the Borrower or any
of its Subsidiaries, (y) any order of any Governmental Authority or (z) any
provision of any indenture, agreement or other instrument to which the Borrower
or any of its Subsidiaries is a party or by which it or any of its property is
or may be bound, (B) be in conflict with, result in a breach of or constitute
(alone or with notice or lapse of time or both) a default under any such
indenture, agreement or other instrument or (C) result in the creation or
imposition of any Lien upon any property or assets of the Borrower.
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SECTION 3.03. Enforceability.
This Agreement constitutes a legal, valid and binding obligation of the
Borrower enforceable in accordance with its terms except to the extent that
enforcement may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally.
SECTION 3.04. Governmental Approvals.
No action, consent or approval of, registration or filing with or other
action by any Governmental Authority is or will be required in connection with
the execution, delivery and performance by the Borrower of this Agreement,
except those as have been duly obtained and as are (i) in full force and effect,
(ii) sufficient for their purpose and (iii) not subject to any pending or, to
the knowledge of the Borrower, threatened appeal or other proceeding seeking
reconsideration or review thereof.
SECTION 3.05. Financial Statements.
(a) The consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of December 31, 2002 and the related consolidated statements of
income, retained earnings and cash flows for the fiscal year then ended,
reported on by Deloitte & Touche LLP or another nationally recognized accounting
firm and set forth in the Borrower's 2002 Annual Report on Form 10-K, copies of
which have been delivered to the Lender, present fairly, in all material
respects, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such period ending on such date, in conformity
with GAAP. The unaudited consolidated balance sheets of the Borrower and its
Consolidated Subsidiaries as of March 31, 2003 and the related consolidated
statements of income and cash flows for the three-month period ending on such
date, certified by a Responsible Officer of the Borrower, copies of which have
been delivered to the Lender, present fairly (subject 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 date, in conformity
with GAAP.
(b) Except (i) as set forth in the audited financial statements or other
reports of the type referred to in Section 5.03 hereof and that have been
delivered to the Lender on or prior to the date hereof and (ii) with respect to
the Excluded Items, since December 31, 2002, there has been no Material Adverse
Change.
SECTION 3.06. Litigation.
Except as set forth in the financial statements or other reports of the
type referred to in Section 5.03 hereof, which have been delivered to the Lender
on or prior to the date hereof, there is no action, suit or proceeding pending
against, or to the knowledge of the Borrower threatened against or affecting,
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable possibility
of an adverse decision that could materially adversely affect the ability of the
Borrower to pay its obligations hereunder or that in any manner draws into
question the validity of this Agreement.
SECTION 3.07. Federal Reserve Regulations.
(a) Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Extension of Credit will be used by the
Borrower, whether directly or indirectly, and whether immediately, incidentally
or ultimately, to purchase or carry Margin Stock or to refund indebtedness
originally incurred for such purpose, or for any other purpose which entails a
violation of, or which is inconsistent with, the provisions of the Margin
Regulations.
(c) Not more than 25% of the value of the assets of the Borrower subject
to the restrictions of Sections 5.09 and 5.10 are represented by Margin Stock.
SECTION 3.08. Investment Company Act; Public Utility Holding Company Act.
(a) Neither the Borrower nor any of its Subsidiaries is an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940.
(b) The Borrower and each of its Subsidiaries is exempt from all provisions
of the Public Utility Holding Company Act of 1935 and rules and regulations
thereunder, except for Sections 9(a)(2) and 33 of such Act and the rules and
regulations thereunder, and the execution and delivery by the Borrower of this
Agreement and the performance of its obligations hereunder do not violate any
provision of such Act or any rule or regulation thereunder.
SECTION 3.09. No Material Misstatements.
No report, financial statement or other written information furnished
by or on behalf of the Borrower to the Lender pursuant to or in connection with
this Agreement contains or will contain any material misstatement of fact or
omits or 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.
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SECTION 3.11. Employee Benefit Plans.
With respect to each Plan the Borrower and its ERISA Affiliates are in
compliance in all material respects with the applicable provisions of ERISA and
the Code and the final regulations and published interpretations thereunder. No
ERISA Event has occurred that alone or together with any other ERISA Event has
resulted or could reasonably be expected to result in a Material Adverse Change.
Neither the Borrower nor any ERISA Affiliate has incurred any Withdrawal
Liability that could result in a Material Adverse Change. Neither the Borrower
nor any ERISA Affiliate has received any notification that any Multiemployer
Plan is in reorganization or has been terminated within the meaning of Title IV
of ERISA, which such reorganization or termination could result in a Material
Adverse Change, and no Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated where such reorganization or termination has
resulted or can reasonably be expected to result, through an increase in the
contributions required to be made to such Plan or otherwise, in a Material
Adverse Change.
SECTION 3.12. Significant Subsidiaries.
Each of the Borrower's Significant Subsidiaries is a corporation,
limited liability company or other type of person duly incorporated or formed
(as the case may be), validly existing and in good standing under the laws of
its jurisdiction of incorporation or formation (as the case may be) and has all
corporate, limited liability company, partnership or other (as the case may be)
powers necessary to carry on its business substantially as now conducted. The
Borrower's Significant Subsidiaries have all material governmental licenses,
authorizations, consents and approvals required to carry on the business of the
Significant Subsidiaries substantially as now conducted.
SECTION 3.13. Environmental Matters.
Except as set forth in or contemplated by the financial statements or
other reports of the type referred to in Section 5.03 hereof and that have been
delivered to the Lender on or prior to the date hereof, the Borrower and each of
its Subsidiaries has complied in all material respects with all Federal, state,
local and other statutes, ordinances, orders, judgments, rulings and regulations
relating to environmental pollution or to environmental or nuclear regulation or
control, except to the extent that failure to so comply could not reasonably be
expected to result in a Material Adverse Change. Except as set forth in or
contemplated by such financial statements or other reports, neither the Borrower
nor any of its Subsidiaries has received notice of any material failure so to
comply, except where such failure could not reasonably be expected to result in
a Material Adverse Change. Except as set forth in or contemplated by such
financial statements or other reports, the facilities of the Borrower or any of
its Subsidiaries, as the case may be, are not used to manage any hazardous
wastes, hazardous substances, hazardous materials, toxic substances, toxic
pollutants or substances similarly denominated, as those terms or similar terms
are used in the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the Clean Air Act, the
Clean Water Act or any other applicable law relating to environmental pollution,
or any nuclear fuel or other radioactive materials, in violation in any material
respect of any law or any regulations promulgated pursuant thereto, except to
the extent that such violations could not reasonably be expected to result in a
Material Adverse Change. Except as set forth in or contemplated by such
financial statements or other reports, the Borrower is aware of no events,
conditions or circumstances involving environmental pollution or contamination
that could reasonably be expected to result in a Material Adverse Change.
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SECTION 3.14. Solvency.
The Borrower is Solvent.
Article IV
CONDITIONS
The obligations of the Lender to make or arrange for Extensions of
Credit hereunder are subject to the satisfaction of the following conditions:
SECTION 4.01. Conditions to Initial Extension of Credit.
The Commitment of the Lender to make the initial Loan or arrange for
the issuance of the initial Letter of Credit on or after the date hereof is
subject to the conditions that, on or prior to the date of such Loan:
(a) The Lender shall have received a counterpart of this Agreement
executed by the Borrower and the Lender.
(b) The Lender shall have received evidence satisfactory to it of the
closing and satisfaction of all conditions precedent to the initial extension
of credit under the New Trust Facility.
(c) The Lender shall have received favorable written legal opinions of
Xxxxxx Xxxx & Priest LLP, special New York counsel to the Borrower, and Hunton
& Xxxxxxxx LLP, counsel to the Borrower, in each case dated the date hereof,
addressed to the Lender and in form and substance satisfactory to the Lender.
(d) The Lender 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 certifying (A) that attached thereto is a true and
complete copy of the bylaws of the Borrower as in effect on the date hereof and
at all times since a date prior to the date of the resolutions described in
clause (B) below, (B) that attached thereto are true and complete copies of
resolutions duly adopted by the Board of Directors authorizing the execution and
delivery by the Borrower of this Agreement, the Extensions of Credit to be
requested by the Borrower hereunder and the performance by the Borrower of all
of its obligations hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (C) that the certificate
of incorporation referred to in clause (i) above has not been amended since the
date of the last amendment thereto shown on the certificate of good standing
furnished pursuant to such clause (i) and (D) as to the incumbency and specimen
signature of each officer executing this Agreement and any other document
delivered in connection herewith on behalf of the Borrower; (iii) a certificate
of another officer of the Borrower as to the incumbency and specimen signature
of the Secretary or Assistant Secretary executing the certificate pursuant to
(ii) above; and (iv) a certificate of a Responsible Officer of the Borrower
stating that (A) no action, consent or approval of, registration or filing with
or other action by any Governmental Authority is or will be required in
connection with the execution, delivery and performance by the Borrower of this
Agreement, except those as have been duly obtained and as are (1) in full force
and effect, (2) sufficient for their purpose and (3) not subject to any pending
or, to the knowledge of such person, threatened appeal or other proceeding
seeking reconsideration or review thereof, (B) the representations and
warranties set forth in Article III hereof are true and correct in all material
respects on and as of the date hereof, and (C) no Event of Default or Default
has occurred and is continuing on the date hereof.
26
(e) The Lender shall have received payment of all fees and reimbursement
of all expenses for which invoices have been presented as and when due on or
prior to the date of the initial Extension of Credit pursuant to the terms of
this Agreement.
(f) The Lender shall have received such other approvals, opinions,
certificates, instruments and documents as the Lender may have reasonably
requested, in form satisfactory to the Lender (if applicable).
SECTION 4.02. Conditions for All Extensions of Credit.
The Commitment of the Lender to make or arrange for each Extension of
Credit (including the initial Extension of Credit) shall be subject to the
satisfaction of the following conditions precedent on the date of such Extension
of Credit:
(a) The Lender shall have received a notice of such Extension of Credit as
required by Section 2.03 or 2.04, as applicable.
(b) The representations and warranties set forth in Article III hereof
(except in the case of a refinancing of an Extension of Credit with a new
Extension of Credit that does not increase the Outstanding Credits, the
representations set forth in Sections 3.05(b), 3.06, 3.11 and 3.13) shall be
true and correct in all material respects on and as of the date of such
Extension of Credit with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate to an
earlier date.
(c) At the time of and immediately after such Extension of Credit, no
Event of Default or Default shall have occurred and be continuing.
27
(d) The Lender shall have received a certificate of a Responsible Officer
of the Borrower certifying that the matters set forth in subsections (b) and
(c) of this Section 4.02 are true and correct as of such date.
(e) The funds that will be used to make any Loan as part of such Extension
of Credit and any Letter of Credit (or extension or amendment thereof) to be
arranged as part of such Extension of Credit shall have been made available to
the Lender under the New Trust Facility.
Each such Extension of Credit shall be deemed to constitute a representation and
warranty by the Borrower on the date of such Extension of Credit as to the
matters specified in subsections (b) and (c) of this Section 4.02.
Article V
COVENANTS
The Borrower agrees that, so long as the Commitment hereunder exists or
any amount payable hereunder remains unpaid:
SECTION 5.01. Existence.
It will, and will cause each of its Significant Subsidiaries to, do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and all rights, licenses, permits, franchises and
authorizations necessary or desirable in the normal conduct of its business
except as otherwise permitted pursuant to Section 5.09.
SECTION 5.02. Compliance With Laws; Business and Properties.
It will, and will cause each of its Subsidiaries to, comply with all
applicable material laws, rules, regulations and orders of any Governmental
Authority, whether now in effect or hereafter enacted, except where the validity
or applicability of such laws, rules, regulations or orders is being contested
by appropriate proceedings in good faith; and at all times maintain and preserve
all property material to the conduct of its business and keep such property in
good repair, working order and condition and from time to time make, or cause to
be made, all needful and proper repairs, renewals, additions, improvements and
replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times.
SECTION 5.03. Financial Statements, Reports, Etc.
It will furnish to the Lender:
(a) as soon as available, and in any event within 120 days after the end
of each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such fiscal year
and the related consolidated statements of income, retained earnings and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on in a manner reasonably
acceptable to the SEC by Deloitte & Touche LLP or other independent public
accountants of nationally recognized standing;
28
(b) as soon as available, and in any event within 60 days after the end
of each of the first three quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of the end of such quarter and the related consolidated statements of income
for such quarter, for the portion of the Borrower's fiscal year ended at the
end of such quarter, and for the twelve months ended at the end of such quarter,
and the related consolidated statement of cash flows for the portion of the
Borrower's fiscal year ended at the end of such quarter, setting forth
comparative figures for previous dates and periods to the extent required in
Form 10-Q, all certified (subject to normal year-end adjustments) as to
fairness of presentation, GAAP and consistency by a Financial Officer of the
Borrower;
(c) simultaneously with any delivery of each set of financial statements
referred to in subsections (a) and (b) above, (i) an unconsolidated balance
sheet of the Borrower and the related unconsolidated statements of income,
retained earnings and cash flows as of the same date and for the same periods
applicable to the statements delivered pursuant to subsection (a) or (b) above,
as applicable, all certified (subject to normal year-end adjustments in the case
of quarterly statements) as to fairness of presentation, GAAP and consistency by
a Financial Officer of the Borrower and (ii) a certificate of a Financial
Officer of the Borrower (A) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of Sections 5.11 and 5.12 on the date of such financial statements,
and (B) stating whether any Default or Event of Default exists on the date of
such certificate and, if any Default or Event of Default then exists, setting
forth the details thereof and the action that the Borrower is taking or proposes
to take with respect thereto;
(d) simultaneously with the delivery of each set of financial statements
referred to in subsection (a) above, a statement of the firm of independent
public accountants that reported on such statements (i) stating whether anything
has come to their attention to cause them to believe that any Default or Event
of Default existed on the date of such statements and (ii) confirming the
calculations set forth in the Financial Officer's certificate delivered
simultaneously therewith pursuant to subsection (c) above;
(e) forthwith upon becoming aware of the occurrence of any Default or
Event of Default, a certificate of a Financial Officer of the Borrower setting
forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the Borrower
generally, copies of all financial statements, reports and proxy statements so
mailed;
(g) promptly upon the filing thereof, copies of each final prospectus
(other than a prospectus included in any registration statement on Form S-8 or
its equivalent or with respect to a dividend reinvestment plan) and all reports
on Forms 10-K, 10-Q and 8-K and similar reports that the Borrower shall have
filed with the SEC, or any Governmental Authority succeeding to any of or all
the functions of the SEC;
(h) if and when any member of the Controlled Group (i) gives or is
required to give notice to the PBGC of any Reportable Event with respect to any
Plan that might constitute grounds for a termination of such Plan under Title
IV of ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such Reportable Event, a copy of the notice of
such Reportable Event given or required to be given to the PBGC; (ii) receives
notice from a proper representative of a Multiemployer Plan of complete or
partial Withdrawal Liability being imposed upon such member of the Controlled
Group under Title IV of ERISA, a copy of such notice; or (iii) receives notice
from 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
29
(i) promptly, from time to time, such additional information regarding
the financial position or business of the Borrower and its Subsidiaries as the
Lender may reasonably request.
As promptly as practicable after delivering each set of financial statements as
required in subsection (a) of this Section, the Borrower shall make available a
copy of the consolidating workpapers used by the Borrower in preparing such
consolidated statements to the Lender that shall have requested such
consolidating workpapers. The Lender that receives such consolidating workpapers
shall hold them in confidence as required by Section 7.16; provided that the
Lender may not disclose such consolidating workpapers to any other person
pursuant to clause (iv) of Section 7.16.
SECTION 5.04. Insurance.
It will, and will cause each of its Subsidiaries to, maintain such
insurance or self insurance, to such extent and against such risks, including
fire and other risks insured against by extended coverage, as is customary with
companies similarly situated and in the same or similar businesses.
SECTION 5.05. Taxes, Etc.
It will, and will cause each of its Subsidiaries to, pay and discharge
promptly when due all material taxes, assessments and governmental charges
imposed upon it or upon its income or profits or in respect of its property, as
well as all other material liabilities, in each case before the same shall
become delinquent or in default and before penalties accrue thereon, unless and
to the extent that the same are being contested in good faith by appropriate
proceedings and adequate reserves with respect thereto shall, to the extent
required by GAAP, have been set aside.
SECTION 5.06. Maintaining Records; Access to Properties and Inspections.
It will, and will cause each of its Subsidiaries to, maintain financial
records in accordance with GAAP and, upon reasonable notice and at reasonable
times, permit authorized representatives designated by the Lender to visit and
inspect its properties and to discuss its affairs, finances and condition with
its officers.
SECTION 5.07. ERISA.
It will, and will cause each of its Subsidiaries that are members of
the Controlled Group to, comply in all material respects with the applicable
provisions of ERISA and the Code except where any noncompliance, individually or
in the aggregate, would not result in a Material Adverse Change.
30
SECTION 5.08. Use of Proceeds.
It will not, and will not cause or permit any of its Subsidiaries to,
use the proceeds of the Extensions of Credit for purposes other than for the
repayment of other Indebtedness of the Borrower and its Subsidiaries or to
arrange for Letters of Credit.
SECTION 5.09. Consolidations, Mergers, Sales and Acquisitions of Assets
and Investments in Subsidiaries.
It (i) will not, and will not permit any Significant Subsidiary to,
consolidate or merge with or into any person unless, (A) in the case of any such
transaction involving the Borrower, the surviving person is the Borrower or
another person formed under the laws of a state of the United States of America
and assumes or is responsible, by operation of law, for all the obligations of
the Borrower hereunder and (B) in the case of any such transaction involving any
such Significant Subsidiary, the survivor is the Borrower, such Significant
Subsidiary or a Wholly Owned Subsidiary of the Borrower (or a person which as a
result of such transaction becomes a Wholly Owned Subsidiary of the Borrower),
and (ii) will not, and will not permit any Significant Subsidiary to, make a
Significant Disposition to any person other than the Borrower or a Wholly Owned
Subsidiary of the Borrower (or a person which as a result of such transaction
becomes a Wholly Owned Subsidiary of the Borrower), provided that the Borrower
will not in any event permit any such consolidation, merger, sale, lease or
transfer if any Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such transaction.
Notwithstanding the foregoing, (x) neither the Borrower nor any of its
Subsidiaries will engage to a Substantial extent in businesses other than those
currently conducted by them and other businesses reasonably related thereto and
(y) neither the Borrower nor any of its Subsidiaries will acquire any Subsidiary
or make any investment in any Subsidiary if, upon giving effect to such
acquisition or investment, as the case may be, the Borrower would not be in
compliance with the covenants set forth in Sections 5.11.
SECTION 5.10. Limitations on Liens.
(a) The Borrower will not pledge, mortgage, hypothecate or grant a
security interest in, or permit any mortgage, pledge, security interest or
other lien upon, any capital stock of any Subsidiary now or hereafter owned by
the Borrower, to secure any Indebtedness (hereinafter defined) without
concurrently making effective provision whereby the Commitments and the
Outstanding Credits shall (so long as such other Indebtedness shall be so
secured) be equally and ratably secured with any and all such other Indebtedness
and any other indebtedness similarly entitled to be equally and ratably secured;
provided, however, that this restriction shall not apply to nor prevent the
creation or existence of:
(i) any mortgage, pledge, security interest, lien or encumbrance
upon any such capital stock created at the time of the acquisition of
such capital stock by the Borrower or within 270 days after such time to
secure all or a portion of the purchase price for such capital stock;
31
(ii) any mortgage, pledge, security interest, lien or encumbrance
upon any such capital stock existing thereon at the time of the
acquisition thereof by the Borrower (whether or not the obligations
secured thereby are assumed by the Borrower);
(iii) any extension, renewal or refunding of any mortgage, pledge,
security interest, lien or encumbrance permitted by paragraph (i) or (ii)
above on capital stock of any Subsidiary theretofore subject thereto
(or substantially the same capital stock) or any portion thereof; or
(iv) any judgment, levy, execution, attachment or other similar
lien upon such capital stock arising in connection with court
proceedings, provided that either
(A) the execution or enforcement of each such lien is effectively
stayed within 30 days after entry of the corresponding judgment (or the
corresponding judgment has been discharged within such 30 day period)
and the claims secured thereby are being contested in good faith by
appropriate proceedings timely commenced and diligently prosecuted;
(B) the payment of each such lien is covered in full by insurance
and the insurance company has not denied or contested coverage
thereof; or
(C) so long as each such lien is adequately bonded, any
appropriate legal proceedings that may have been duly initiated for the
review of the corresponding judgment, decree or order shall not have
been fully terminated or the period within which such proceedings may
be initiated shall not have expired.
For purposes of this Section 5.10, "Indebtedness" means all
indebtedness, whether or not represented by bonds, debentures, notes or other
securities, created or assumed by the Borrower for the repayment of money
borrowed. All indebtedness for money borrowed secured by a lien upon property
owned by the Borrower and upon which indebtedness for money borrowed the
Borrower customarily pays interest, although the Borrower has not assumed or
become liable for the payment of such indebtedness for money borrowed, shall for
purposes of this Section 5.10 be deemed to be Indebtedness of the Borrower. All
indebtedness of others for money borrowed that is guaranteed as to payment of
principal by the Borrower or in effect guaranteed by the Borrower through a
contingent agreement to purchase such indebtedness for money borrowed shall for
purposes of this Section 5.10 be deemed to be Indebtedness of the Borrower, but
no other contingent obligation of the Borrower in respect of indebtedness for
money borrowed or other obligations incurred by others shall for purposes of
this Section 5.10 be deemed to be Indebtedness of the Borrower.
In case the Borrower shall propose to pledge, mortgage, hypothecate or
grant a security interest in any capital stock of any Subsidiary owned by the
Borrower to secure any Indebtedness, other than as permitted by subsections
(a)(i) through (a)(ii), inclusive, of this Section 5.10, the Borrower will prior
thereto give written notice thereof to the Lender, and the Borrower will prior
to or simultaneously with such pledge, mortgage, hypothecation or grant of
security interest, effectively secure (for so long as such other Indebtedness
shall be so secured), in form satisfactory to the Lender, all the Commitments
and the Outstanding Credits equally and ratably with such Indebtedness and with
any other indebtedness for money borrowed similarly entitled to be equally and
ratably secured.
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(b) The provisions of subsection (a) of this Section 5.10 shall not apply
in the event that the Borrower shall pledge, mortgage, hypothecate or grant a
security interest in or other lien upon any capital stock of any Subsidiary now
or hereafter owned by the Borrower to secure any Indebtedness that would
otherwise be subject to the foregoing restriction up to an aggregate amount
that, together with all other Indebtedness (other than mortgages, pledges,
security interests, liens or encumbrances permitted by subsection (a) of this
Section 5.10) which would otherwise be subject to the foregoing restriction,
does not at the time exceed 5% of Consolidated Capitalization.
(c) For purposes of this Section 5.10:
(i) The term "Consolidated Capitalization" means the sum obtained by
adding(i) Total Consolidated Shareholders' Equity, (ii) Consolidated
Indebtedness for money borrowed (exclusive of any thereof which is due
and payable within one year of the date such sum is determined) and,
without duplication, (iii) any preference or preferred stock of the
Borrower or any Consolidated Subsidiary that is subject to mandatory
redemption or sinking fund provisions.
(ii) The term "Total Consolidated Shareholders' Equity" means the
total Assets of the Borrower and its Consolidated Subsidiaries less all
liabilities of the Borrower and its Consolidated Subsidiaries. As used
in this definition, "liabilities" means all obligations that would, in
accordance with generally accepted accounting principles, be classified
on a balance sheet as liabilities, including withoutlimitation,
(i) indebtedness secured by property of the Borrower or any of its
Consolidated Subsidiaries whether or not the Borrower or such
Consolidated Subsidiary is liable for the payment thereof unless, in
the case that the Borrower or such Consolidated Subsidiary is not so
liable, such property has not been included among the Assets of the
Borrower or such Consolidated Subsidiary on such balance sheet, (ii)
deferred liabilities, (iii) indebtedness of the Borrower or any of its
Consolidated Subsidiaries that is expressly subordinated in right and
priority of payment to other liabilities of the Borrower or such
Consolidated Subsidiary. As used in this definition, "liabilities"
includes preference or preferred stock of the Borrower or any
Consolidated Subsidiary only to the extent of any such preference or
preferred stock that is subject to mandatory redemption or sinking fund
provisions.
(iii) The "Assets" of any person means the whole or any part of its
business, property, assets, cash and receivables.
(iv) The term "Consolidated Indebtedness" means total indebtedness
as shown on the consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries.
SECTION 5.11. Interest Coverage.
The Borrower will not, as of the end of each quarter of each fiscal
year of the Borrower, permit the ratio of EBITDA to Interest Expense for the
twelve months then ended to be less than or equal to 150%.
33
SECTION 5.12. Equity Capitalization Ratio.
The Borrower will not, as of the end of each quarter of each fiscal
year of the Borrower, permit the ratio of Consolidated Shareholders' Equity to
Consolidated Total Capitalization to be less than 35%.
SECTION 5.13. Restrictive Agreements.
The Borrower will not permit Energy or Oncor to enter into any
agreement restricting the ability of Energy or Oncor to make payments, directly
or indirectly, to its shareholders by way of dividends, advances, repayments of
loans or advances, reimbursements of management and other intercompany charges,
expenses and accruals or other returns on investments or any other agreement or
arrangement that restricts the ability of Energy or Oncor to make any payment,
directly or indirectly, to its shareholders, other than pursuant to the terms of
preferred stock or Equity-Credit Preferred Securities issued by Energy or Oncor
or any of their respective Subsidiaries, if the effect of such agreement is to
subject Energy or Oncor or any of their respective Subsidiaries to restrictions
on such payments greater than those to which such Subsidiary was subject on July
31, 2002. All such agreements to which Energy or Oncor is a party as of the date
hereof are listed in Schedule 5.13 hereto.
Article VI
EVENTS OF DEFAULT
In case of the happening of any of the following events (each an "Event
of Default"):
(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
Extensions of Credit hereunder shall prove to have been false or misleading in
any material respect when so made, deemed made or furnished;
(b) default shall be made by the Borrower in the payment of any
principal of any Loan or any reimbursement obligation in respect of any Letter
of Credit when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or by acceleration
thereof;
(c) default shall be made by the Borrower in the payment of any interest
on any Outstanding Credit or 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 (b), (c), (d) or (e)(i) above) and such
default shall continue unremedied for a period of 30 days after notice thereof
from the Lender to the Borrower;
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(f) the Borrower shall (i) fail to pay any principal or interest,
regardless of amount, due in respect of any Indebtedness in a principal amount
in excess of $50,000,000, when and as the same shall become due and payable,
subject to any applicable grace periods, or (ii) fail to observe or perform any
other term, covenant, condition or agreement contained in any agreement or
instrument evidencing or governing any such Indebtedness if the effect of any
failure referred to in this clause (ii) is to cause, or to permit the holder or
holders of such Indebtedness or a trustee on its or their behalf to cause, such
Indebtedness to become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of the Borrower or any Significant Subsidiary, or of a substantial
part of the property or assets of the Borrower or any Significant Subsidiary,
under Title 11 of the United States Bankruptcy Code, as now constituted or
hereafter amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law, (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower or any
Significant Subsidiary or for a substantial part of the property or assets of
the Borrower or any Significant Subsidiary or (iii) the winding up or
liquidation of the Borrower or any Significant Subsidiary; and such proceeding
or petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
(h) the Borrower or any Significant Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Bankruptcy Code, as now constituted or hereafter amended, or
any other Federal or state bankruptcy, insolvency, receivership or similar law,
(ii)consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
(g) above, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower or any
Significant Subsidiary or for a substantial part of the property or assets of it
or such Significant Subsidiary, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors, (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they become due or
(vii) take any action for the purpose of effecting any of the foregoing;
(i) a Change in Control shall occur;
(j) one or more judgments or orders for the payment of money in an
aggregate amount in excess of $50,000,000 shall be rendered against the Borrower
and such judgment or order shall remain undischarged or unstayed for a period
of 30 days, or any action shall be legally taken by a judgment creditor to levy
upon assets or properties of the Borrower to enforce any such judgment or order;
(k) an ERISA Event or ERISA Events shall have occurred that reasonably
could be expected to result in a Material Adverse Change; or
35
(l) The Borrower shall no longer own, directly or indirectly, any of the
following: (i) 80% of the common shares in Holdings, (ii) 80% of the common
membership interests in Energy or (iii) 100% of the beneficial interests in LOC
2003 Trust.
then, and in every such event, and at any time thereafter during the continuance
of such event, the Lender, shall, by notice to the Borrower, take either or both
of the following actions, at the same or different times: (i) terminate
forthwith the right of the Borrower to request and receive Extensions of Credit
and (ii) declare the Loans of the Borrower then outstanding to be forthwith due
and payable in whole or in part, whereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder,
shall become forthwith due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived, anything
contained herein to the contrary notwithstanding; provided that in the case of
any event described in subsection (g) or (h) above with respect to the Borrower,
the right of the Borrower to request and receive Extensions of Credit shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all other
liabilities of the Borrower accrued hereunder shall automatically become due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by the Borrower, anything contained
herein to the contrary notwithstanding.
Article VII
MISCELLANEOUS
SECTION 7.01. Notices.
Notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed or
sent by telecopy, as follows:
If to the Borrower, to TXU Business Services Company, Energy Plaza,
0000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, XX 00000, Attention: Treasurer (Telecopy
No. 214-812-2488);
If to the Lender, c/o Wilmington Trust Company, Xxxxxx Square North,
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000-0000, Attention: Corporate
Capital Markets (facsimile: (000) 000-0000), with a copy to the Administrator,
at TXU Business Services Company, Energy Plaza, 0000 Xxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxx, XX 00000, Attention: Treasurer (Telecopy No. 214-812-2488).
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy to such party as provided in this Section or in accordance with the
latest unrevoked direction from such party given in accordance with this
Section.
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SECTION 7.02. Survival of Agreement.
All covenants, agreements, representations and warranties made by the
Borrower herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement shall be considered
to have been relied upon by the Lender and shall survive the making or
arrangement for of the Extensions of Credit by the Lender regardless of any
investigation made by the Lender or on their behalf, and shall continue in full
force and effect as long as there are any Outstanding Credits or any Fee or any
other amount payable under this Agreement is outstanding and unpaid or the
Commitment have not been terminated or any Letter of Credit is available to be
drawn.
SECTION 7.03. Binding Effect.
This Agreement shall become effective when it shall have been executed
by the Borrower and the Lender, and thereafter shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower shall not have the right to assign any rights
hereunder or any interest herein without the prior consent of the Lender.
SECTION 7.04. Successors and Assigns.
(a) Whenever in this Agreement any of the parties hereto is referred to,
such reference shall be deemed to include the successors and assigns of such
party; and all covenants, promises and agreements by or on behalf of any party
that are contained in this Agreement shall bind and inure to the benefit of its
successors and assigns.
(b) The Borrower shall not assign or delegate any rights and duties
hereunder without the prior written consent of the Lender, and any attempted
assignment or delegation (except as a consequence of a transaction expressly
permitted under Section 5.09) by the Borrower without such consent shall be
void.
(c) The Lender may not assign or grant participations in Extensions of
Credit or the Commitment other than as collateral to secure its obligations
under the New Trust Facility (unless and until the party secured by such
collateral has exercised its remedies as a secured creditor in respect of such
collateral). If and for so long as no Event of Default shall have occurred and
be continuing, the Lender will not agree to any assignment by any lender under
the New Trust Facility without the consent of the Borrower, which consent will
not be unreasonably withheld.
SECTION 7.05. Expenses; Indemnity.
(a) The Borrower agrees to pay all reasonable out-of-pocket expenses
(including reasonable fees, charges and disbursements of counsel) incurred by
the Lender in connection with entering into this Agreement or in connection
with any amendments, modifications or waivers of the provisions hereof (but
only if such amendments, modifications or waivers are requested by the Borrower)
(whether or not the transactions hereby contemplated are consummated), or
incurred by the Lender in connection with the enforcement of its rights in
connection with this Agreement, or the Extensions of Credit made hereunder,
including the reasonable fees and disbursements of counsel for the Lender in
the case of enforcement following an Event of Default.
(b) The Borrower agrees to indemnify the Lender against any loss, calculated
in accordance with the next sentence, or reasonable expense which the Lender may
sustain or incur as a consequence of (i) any failure by the Borrower to borrow
or to refinance, convert or continue any Loan hereunder (including as a result
of the Borrower's failure to fulfill any of the applicable conditions set forth
in Article IV) after irrevocable notice of such Loan, refinancing, conversion or
continuation has been given pursuant to Section 2.03, (ii) any payment,
prepayment or conversion, or assignment of a Eurodollar Loan required by any
provision of this Agreement or otherwise made or deemed made on a date other
than the last day of the Interest Period, if any, applicable thereto, (iii) any
default in payment or prepayment of the principal amount of any Outstanding
Credit or any part thereof or interest accrued thereon, as and when due and
payable (at the due date thereof, whether by scheduled maturity, acceleration,
irrevocable notice of prepayment or otherwise) or (iv) the occurrence of any
Event of Default, including, in each such case, any loss or reasonable expense
sustained or incurred or to be sustained or incurred by the Lender in
liquidating or employing deposits from third parties, or with respect to
Commitment made or obligations undertaken with third parties, to effect or
maintain any Loan hereunder or any part thereof as a Eurodollar Loan. Such loss
shall include an amount equal to the excess, if any, as reasonably determined by
the Lender, of (x) its cost of obtaining the funds for the Loan being paid,
prepaid, refinanced, converted or not borrowed (assumed to be the LIBO Rate) for
the period from the date of such payment, prepayment, refinancing or failure to
borrow or refinance to the last day of the Interest Period for such Loan (or, in
the case of a failure to borrow or refinance the Interest Period for such Loan
that would have commenced on the date of such failure) over (y) the amount of
interest (as reasonably determined by the Lender) that would be realized by the
Lender in reemploying the funds so paid, prepaid or not borrowed or refinanced
for such period or Interest Period, as the case may be.
(c) The Borrower agrees to indemnify the Lender, each of its Affiliates and
the directors, officers, employees and agents of the foregoing (each such person
being called an "Indemnitee") against, and to hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including reasonable counsel fees and expenses, incurred by or asserted against
any Indemnitee arising out of (i) the preparation, execution, delivery,
enforcement, performance and administration of this Agreement, (ii) the use of
proceeds of the Extensions of Credit or (iii) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto, including any of the foregoing arising from the
negligence, whether sole or concurrent, on the part of any Indemnitee; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (A) are
determined by a final judgment of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Indemnitee or
(B) result from any litigation brought by such Indemnitee against the Borrower
or by the Borrower against such Indemnitee, in which a final, nonappealable
judgment has been rendered against such Indemnitee; provided, further, that the
Borrower agrees that it will not, nor will it permit any of its Subsidiaries to,
without the prior written consent of each Indemnitee, settle, compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification could be sought under the
indemnification provisions of this Section 7.05(c) (whether or not any
Indemnitee is an actual or potential party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent does not include any
statement as to an admission of fault, culpability or failure to act by or on
behalf of any Indemnitee and does not involve any payment of money or other
value by any Indemnitee or any injunctive relief or factual findings or
stipulations binding on any Indemnitee.
38
(d) The Borrower hereby agrees to reimburse and indemnify the Lender upon
demand for all costs and expenses incurred by the Lender in connection with
providing the Commitment, the funding of the Loans and the procurement of the
Letters of Credit, including, without limitation, all such costs and expenses
relating to any obligation of the Lender to secure its repayment obligations
with respect to money borrowed to fund the Loans and its reimbursement
obligations with respect to the Letters of Credit.
(e) The provisions of this Section shall remain operative and in full force
and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Outstanding Credits, the invalidity or unenforceability of any term or
provision of this Agreement or any investigation made by or on behalf of the
Lender. All amounts due under this Section shall be payable on written demand
therefor.
(f) A certificate of the Lender setting forth any amount or amounts which
the Lender is entitled to receive pursuant to subsection (b) or (d) of this
Section and containing an explanation in reasonable detail of the manner in
which such amount or amounts shall have been determined shall be delivered to
the Borrower and shall be conclusive absent manifest error.
SECTION 7.06. Limitation on Liability of the Trustee.
It is expressly understood and agreed by the parties that (i) this
document is executed and delivered by Wilmington Trust Company, not individually
or personally, but solely as Trustee, in the exercise of the powers and
authority conferred and vested in it pursuant to the Trust Agreement (LOC 2003
TRUST), dated July 28, 2003, between Wilmington Trust Company, as trustee, and
the Borrower, as beneficial owner, (ii) each of the representations,
undertakings and agreements herein made on the part of the Lender is made and
intended not as a personal representation, undertaking and agreement by
Wilmington Trust Company but is made and intended for the purpose for binding
only the Lender, (iii) nothing herein contained shall be construed as creating
any liability on Wilmington Trust Company, individually or personally, to
perform any covenant, either expressed or implied, contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any
person claiming by, through or under the parties hereto, and (iv) under no
circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Lender or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Lender under this Agreement or any other related documents.
39
SECTION 7.07. Right of Setoff.
If an Event of Default shall have occurred and be continuing, the
Lender is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Lender to or for the credit or the account
of the Borrower against any and all of the obligations of the Borrower now or
hereafter existing under this Agreement held by the Lender, irrespective of
whether or not the Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of the Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which the Lender may have.
SECTION 7.08. Applicable Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.09. Waivers; Amendment.
(a) No failure or delay of the Lender in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Lender hereunder are cumulative and are not exclusive of any rights or
remedies which they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure therefrom shall in any event be effective
unless the same shall be permitted by subsection (b) below, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. No notice or demand on the Borrower or any of its Subsidiaries
in any case shall entitle such party to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Lender.
SECTION 7.10. Entire Agreement.
This Agreement (including the schedules and exhibits hereto) represents
the entire contract among the parties relative to the subject matter hereof and
thereof. Any previous agreement, whether written or oral, among the parties with
respect to the subject matter hereof, is superseded by this Agreement. There are
no unwritten oral agreements between the parties. Nothing in this Agreement,
expressed or implied, is intended to confer upon any party other than the
parties hereto any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
40
SECTION 7.11. Severability.
In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7.12. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute but one contract, and shall become effective as provided in Section
7.03.
SECTION 7.13. Headings.
Article and Section headings and the Table of Contents used herein are
for convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 7.14. Interest Rate Limitation.
(a) Notwithstanding anything herein to the contrary, if at any time the
applicable interest rate, together with all fees and charges that are treated as
interest under applicable law (collectively the "Charges"), as provided for
herein or in any other document executed in connection herewith, or otherwise
contracted for, charged, received, taken or reserved by the Lender, shall exceed
the maximum lawful rate (the "Maximum Rate") that may be contracted for,
charged, taken, received or reserved by the Lender in accordance with applicable
law, the rate of interest payable on the Outstanding Credits, together with all
Charges payable to the Lender, shall be limited to the Maximum Rate.
(b) If the amount of interest, together with all Charges, payable for the
account of the Lender in respect of any interest computation period is reduced
pursuant to subsection (a) of this Section and the amount of interest, together
with all Charges, payable for the Lender's account in respect of any subsequent
interest computation period, computed pursuant to Section 2.07, would be less
than the Maximum Rate, then the amount of interest, together with all Charges,
payable for the Lender's account in respect of such subsequent interest
computation period shall, to the extent permitted by applicable law, be
automatically increased to such Maximum Rate; provided that at no time shall the
aggregate amount by which interest paid for the account of the Lender has been
increased pursuant to this subsection (b) exceed the aggregate amount by which
interest, together with all Charges, paid for its account has theretofore been
reduced pursuant to subsection (a) of this Section.
SECTION 7.15. Jurisdiction; Venue.
(a) The Borrower hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State court
or Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out of
or relating to this Agreement, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Subject to the foregoing and to subsection (b) below, nothing in this Agreement
shall affect any right that any party hereto may otherwise have to bring any
action or proceeding relating to this Agreement against any other party hereto
in the courts of any jurisdiction.
41
(b) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or thereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any New York State court or
Federal court of the United States of America sitting in New York City. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
SECTION 7.16. Confidentiality.
The Lender shall use its best efforts to hold in confidence all
information, memoranda, or extracts furnished to the Lender by the Borrower
hereunder or in connection with the negotiation hereof; provided that the Lender
may disclose any such information, memoranda or extracts (i) to its Affiliates,
accountants or counsel, (ii) to any regulatory agency having authority to
examine the Lender, (iii) as required by any legal or governmental process or
otherwise by law, (iv) except as provided in the last sentence of Section 5.03,
to any person to which the Lender sells or proposes to sell an assignment or a
participation in its Outstanding Credits hereunder, if such other person agrees
for the benefit of the Borrower to comply with the provisions of this Section
and (v) to the extent that such information, memoranda or extracts shall be
publicly available or shall have become known to the Lender independently of any
disclosure by the Borrower hereunder or in connection with the negotiation
hereof. Notwithstanding the foregoing, the Lender may disclose the provisions of
this Agreement and the amounts, maturities and interest rates of its Loans to
any purchaser or potential purchaser of the Lender's interest in any Loan.
Notwithstanding the foregoing, the Borrower and the Lender (and each officer,
director, employee, representative, agent and advisor of each party hereto) may
disclose to any and all persons, without limitation of any kind, the "tax
treatment" and "tax structure" (in each case within the meaning of Treasury
Regulation Section 1.6011-4) of the transactions contemplated by this letter and
all materials of any kind (including opinions or other tax analyses) that are
provided to such person relating to such "tax treatment" and "tax structure".
The foregoing is intended to comply with the presumption set forth in Treasury
Regulation Section 1.6011-4(b)(3)(iii) and should be interpreted in a manner
consistent with such regulation.
[Signature pages follow]
S-1
Signature Page to TXU Corp. Credit Agreement
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/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx
Treasurer and Assistant Secretary
Signature Page to TXU Corp. Credit Agreement
S-2
LOC 2003 TRUST
By WILMINGTON TRUST COMPANY, not in its
individual capacity, but solely in its capacity
as Trustee
By /s/ Xxxxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Financial Services Officer
Signature Page to TXU Corp. Credit Agreement
EXHIBIT A
Form of Lending Request
LENDING REQUEST
[Date]
LOC 2003 Trust
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Corporate Trust Administration
Ladies and Gentlemen:
The undersigned, TXU Corp. (the "Borrower"), refers to the Credit
Agreement, dated as of August 8, 2003 (as amended, modified, extended or
restated from time to time, the "Agreement"), between the Borrower and LOC 2003
Trust (the "Lender"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Agreement. The
Borrower hereby gives you notice pursuant to Section 2.03 of the Agreement that
it requests a Loan under the Agreement, and in that connection sets forth below
the terms on which such Loan is requested to be made:
(A) Date of Loan (which is a Business Day) (B) Principal amount of
Loan1 (C) Interest rate basis2 (D) Interest Period and the last day
thereof3
Upon acceptance of any or all of the Loans made by the Lender in
response to this request, the Borrower shall be deemed to have represented and
warranted that the applicable conditions to lending specified in Article IV of
the Agreement have been satisfied.
Very truly yours,
TXU CORP.
-----------------------
1 Not less than $25,000,000 (and in integral multiples of $5,000,000)
or greater than the 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.
By _________________________________
Name:
Title: [Financial Officer]
A-2
EXHIBIT B
Form of Request for Issuance
REQUEST FOR ISSUANCE
[Date]
LOC 2003 Trust
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Corporate Trust Administration
Ladies and Gentlemen:
The undersigned, TXU Corp. (the "Borrower"), refers to the Credit
Agreement, dated as of August 8, 2003 (as amended, modified, extended or
restated from time to time, the "Agreement"), between the Borrower and LOC 2003
Trust (the "Lender"), and hereby gives you notice, irrevocably, pursuant to
Section ___ of the Agreement, that the undersigned hereby requests the issuance
of a Letter of Credit, and in connection therewith sets forth below the terms on
which such Letter of Credit is to be issued:
(i) the requested date of issuance (which is a Business Day) is
_______________;1 and
(ii) the expiration date (which shall be no later than the fifth
Business Day preceding the Maturity Date) of the Letter of Credit
requested hereby is ______________;2 and
(iii) the proposed stated amount of the Letter of Credit requested
hereby is $_________________;3 and
(iv) the beneficiary of the Letter of Credit requested hereby is
_____________________, with an address at
__________________________; and
(v) the conditions under which a drawing may be made under such Letter
of Credit are as follows:
-----------------------;
-------------------------
1 If the Request for Issuance is a request for extension of the stated
maturity of a Letter of Credit or a modification or amendment of the terms
thereof, set forth the date of effectiveness of such extension, modification
or amendment.
2 Modify request as appropriate if used in connection with the extension,
modification or amendment of a Letter of Credit.
3 The proposed stated amount shall be not less than $1,000,000, unless otherwise
agreed to by the Lender.
(vi) attached hereto is a consent of the beneficiary of the Letter of
Credit to the modification of the Letter of Credit hereby
requested.4
Upon the issuance of the Letter of Credit in response to this request,
the Borrower shall be deemed to have represented and warranted that the
applicable conditions to an issuance of a Letter of Credit that are specified in
Article IV of the Agreement have been satisfied.
Very truly yours,
TXU CORP.
By --------------------------------
Name:
Title: [Financial Officer]
----------------------
4 Include only if the Request for Issuance relates to an amendment or
modification of a Letter of Credit.
B-2
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 Oncor.
