Exhibit 10.1

Execution Version

FIRST AMENDMENT, DIRECTION AND CONSENT

This FIRST AMENDMENT, DIRECTION AND CONSENT, dated as of September 25, 2015
(this “Amendment”) amends that certain Third Amended and Restated Credit
Agreement, dated as of December 10, 2014 (the “Credit Agreement”), by and among
SHARYLAND DISTRIBUTION & TRANSMISSION SERVICES, L.L.C. (the “Borrower”), the
several banks and other financial institutions or entities from time to time
parties thereto (the “Lenders”), and Royal Bank of Canada, as administrative
agent (in such capacity, the “Administrative Agent”), and the other Persons from
time to time parties thereto. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement (as amended by this Amendment) and the rules of interpretation set
forth therein shall apply to this Amendment.

RECITALS

WHEREAS, the Borrower, the Lenders party hereto and the Administrative Agent are
parties to the Credit Agreement;

WHEREAS, in connection with the Credit Agreement, the Borrower and the
Administrative Agent entered into that certain Second Amended and Restated
Collateral Agency Agreement, dated as of December 10, 2014 (as amended,
restated, supplemented or otherwise modified from time to time, the “Collateral
Agency Agreement”), among the Borrower, the holders (or agents thereof) of
Permitted Secured Indebtedness from time to time party thereto, and The Bank of
New York Mellon Trust Company, N.A., acting in its capacity as collateral agent
for itself and the other Secured Parties (in such capacity, the “Collateral
Agent”);

WHEREAS, in connection with the Collateral Agency Agreement and as collateral
for the Borrower’s obligations under the Credit Agreement, the Collateral Agent
has previously entered into that certain Security Agreement, dated as of
December 10, 2014 (the “Security Agreement”), between the Borrower and the
Collateral Agent;

WHEREAS, the Borrower has requested that the Required Lenders and the
Administrative Agent amend the Credit Agreement as more fully described herein;

WHEREAS, the Borrower has further requested that the Required Lenders (i)
consent to the termination and release of any and all liens and security
interests granted in the Security Agreement with respect to all Collateral (as
defined therein) other than Collateral (as defined in the below-defined Amended
and Restated Security Agreement) (all such Collateral to be released, the
“Released Collateral”) and (ii) direct the Administrative Agent, on behalf of
the Lenders, to direct the Collateral Agent to enter into (A) a partial release
(the “Partial Release”) pursuant to which the Collateral Agent will release the
liens and security interests granted in the Security Agreement with respect to
the Released Collateral and (B) an Amended and Restated Security Agreement (the
“Amended and Restated Security Agreement”), pursuant to which the Collateral
Agent will amend and restate the provisions of the Security Agreement in
connection with the release of the Released Collateral;

WHEREAS, in connection with the Collateral Agency Agreement and as further
collateral for the Borrower’s obligations under the Credit Agreement, the 2009
NPA and the 2010 NPA, the Collateral Agent has previously entered into the deeds
of trust described on Schedule I hereto (collectively, the “Deeds of Trust”);

WHEREAS, the Borrower has requested that the Collateral Agent execute and
deliver an amendment to each Deed of Trust (each, a “Deed of Trust Amendment”),
pursuant to which each Deed of Trust will be amended, among other things, to
reflect certain changes in the “Mortgaged Property” as defined therein;

WHEREAS, the Required Lenders are willing to agree to such amendments and
provide such consent and direction, but only upon the terms and subject to the
conditions set forth herein;

NOW THEREFORE, in consideration of the mutual agreement herein contained and
other good and valuable consideration, receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

1. Amendments to the Credit Agreement. The Credit Agreement is hereby amended to
delete the stricken text (indicated textually in the same manner as the
following example: stricken text) and to add the bold underlined text (indicated
textually in the same manner in the following example: underlined text), as set
forth in the Credit Agreement as attached hereto as Annex A.

 

 

 

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2. Conditions to the Amendment Effective Date. This Amendment shall become
effective as of the date first set forth above (the “Amendment Effective Date”)
which shall be a date after the Required Lenders, the Administrative Agent and
the Borrower shall have executed and delivered counterparts of this Amendment.

3. Consent and Direction to Administrative Agent.  In accordance with Section
12.12 of the Credit Agreement, the Lenders party hereto, constituting Required
Lenders under the Credit Agreement, hereby:

 

a.

consent to the termination and release of the liens and security interests
created under the Security Agreement in respect of any and all Released
Collateral and the amendment and restatement of the Security Agreement in
connection therewith;

 

b.

direct the Administrative Agent, and the Administrative Agent hereby agrees, (i)
to execute and deliver to the Collateral Agent a Direction Letter to the
Collateral Agent in substantially the form attached hereto as Exhibit A, (ii) to
execute and deliver the Amended and Restated Security Agreement, substantially
in the form attached hereto as Exhibit B, (iii) to terminate and release any and
all security interests in and liens on the Released Collateral granted
thereunder, (iv) to do, execute and deliver, or cause to be done, executed and
delivered all such further acts, instruments, documents and agreements as may be
reasonably requested by the Borrower (at the expense of the Borrower), which may
be necessary or desirable in order to evidence or effectuate the Partial Release
or the termination and release of all liens and security interests on the
Released Collateral and (v) to authorize the Borrower to amend or terminate, as
necessary, any and all existing UCC-1 financing statements filed by Collateral
Agent to date which relate to any of the Released Collateral;

 

c.

consent to the changes to the “Mortgaged Property” as defined in the Deeds of
Trust and to the other amendments to the Deeds of Trust as more fully described
in the Deed of Trust Amendments;

 

d.

authorize and direct the Collateral Agent, at the sole cost and expense of the
Borrower, to execute and deliver each Deed of Trust Amendment, each in
substantially the form attached hereto as Exhibit C; and

 

e.

authorize and direct the Collateral Agent, at the sole expense of the Borrower,
to authorize the Borrower to file new UCC financing statements, as the Secured
Parties (as defined in the Collateral Agency Agreement) and the Borrower deem
necessary, in connection with the Deed of Trust Amendments.

4. Representations and Warranties of the Borrower. In order to induce the
Administrative Agent and the Required Lenders to enter into this Amendment, the
Borrower hereby represents and warrants that:

 

a.

The Borrower has the requisite power and authority to execute, deliver and carry
out the terms and provisions of this Amendment and has taken all necessary
corporate or other organizational action to authorize the execution, delivery
and performance of this Amendment.  The Borrower has duly executed and delivered
this Amendment, and this Amendment constitutes the legal, valid and binding
obligation of the Borrower enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

 

b.

The execution, delivery and performance by the Borrower of this Amendment do not
and will not (i) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property of the
Borrower under, any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter or limited partnership or limited liability
company agreement, or any other agreement or instrument to which the Borrower is
bound or by which the Borrower or any of its properties may be bound or
affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Borrower or (iii) violate
any provision of any statute or other rule or regulation of any Governmental
Authority applicable to the Borrower, which in the case of any of the foregoing
clauses (i) through (iii), individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

 

c.

No consent, approval or authorization of, or registration, filing or declaration
with, any Governmental Authority is required in connection with the execution,
delivery or performance by the Borrower of this Amendment.

 

d.

No Default or Event of Default has occurred and is continuing on the date hereof
or after giving effect to the amendment contemplated herein.

2

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5. Continuing Effect of Financing Documents. Except as expressly set forth
herein, this Amendment shall not constitute an amendment or waiver of any
provision of the Credit Agreement and shall not be construed as an amendment,
waiver or consent to any further or future action on the part of the Borrower
that would require an amendment, waiver or consent under the Credit
Agreement.  Except as expressly amended hereby, the provisions of the Credit
Agreement are and shall remain in full force and effect. This Amendment shall be
deemed a Credit Document for purposes of the Credit Agreement.

6. Fees. In accordance with Section 12.1 of the Credit Agreement, the Borrower
shall pay the fees, charges and disbursements of the Administrative Agent's
special counsel in connection with this Amendment.

7. Counterparts. This Amendment may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which when
so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.  A set of counterparts executed by all
the parties hereto shall be lodged with the Borrower and the Administrative
Agent.  Delivery of an executed counterpart of a signature page to this
Amendment by telecopy or electronic transmission shall be effective as the
delivery of a manually executed counterpart of this Amendment.

8. Severability. If any provision of this Amendment is held to be illegal,
invalid or unenforceable, (a) the legality, validity and enforceability of the
remaining provisions of this Amendment shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions.  The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

9. Integration. This Amendment and the other Credit Documents represent the
agreement of the Borrower, the Administrative Agent and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Borrower, the Administrative Agent or any
Lender relative to the subject matter hereof not expressly set forth or referred
to herein or in the other Credit Documents.

10. GOVERNING LAW.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

[Signatures on Following Page]

 

 

 

3

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.

 

BORROWER

 

SHARYLAND DISTRIBUTION &
TRANSMISSION SERVICES, L.L.C.

 

 

 

By:

 

/s/ Kristin Boyd

 

 

Kristin Boyd

 

 

Vice President and Treasurer

Signature Page to First Amendment, Direction and Consent to Third Amended and
Restated Credit Agreement

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ROYAL BANK OF CANADA, as Administrative Agent

 

 

 

By:

 

/s/ Ann Hurley

 

 

Ann Hurley

 

 

Manager, Agency

 

 

 

 

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ROYAL BANK OF CANADA, as a Lender

 

 

 

By:

 

/s/ William J. Caggiano

 

 

William J. Caggiano

 

 

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Amegy Bank NA,
As a Lender

 

 

 

By:

 

/s/ Daniel L. Cox

Name:

 

Daniel L. Cox

Title:

 

Senior Vice President

 

 

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BANK OF AMERICA, N.A.,
as a Lender

 

 

 

By:

 

/s/ William Merritt

Name:

 

William Merritt

Title:

 

Vice President

 

 

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CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK BRANCH

 

 

 

By:

 

/s/ Anju Abraham

Name:

 

Anju Abraham

Title:

 

Authorized Signatory

 

 

 

By:

 

/s/ Josh Hogarth

Name:

 

Josh Hogarth

Title:

 

Authorized Signatory

 

 

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Citibank, N.A.

 

By:

 

/s/ Damien Lipke

Name:

 

Damien Lipke

Title:

 

Vice President

 

 

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DNB Capital LLC

By:

 

/s/ Elnar Gulstad

Name:

 

Elnar Gulstad

Title:

 

Senior Vice President

 

 

 

By:

 

/s/ Joe Hykle

Name:

 

Joe Hykle

Title:

 

Senior Vice President

 

 

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MIZUHO BANK, Ltd.

 

 

 

By:

 

/s/ Leon Mo

Name:

 

Leon Mo

Title:

 

Authorized Signatory

 

 

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SOCIETE GENERALE,
as a Lender

By:

 

/s/ Yao Wang

Name:

 

Yao Wang

Title:

 

Director

 

 

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THE BANK OF NOVA SCOTIA

 

 

 

By:

 

/s/ David Dewar

Name:

 

David Dewar

Title:

 

Director

 

 

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Wells Fargo Bank, National Association

 

 

 

By:

 

/s/ Yann Blindert

Name:

 

Yann Blindert

Title:

 

Director

 

 

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MORGAN STANLEY BANK, N.A.

 

 

 

By:

 

/s/ Dmitriy Barskiy

Name:

 

Dmitriy Barskiy

Title:

 

Authorized Signatory

 

 

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Sumitomo Mitsui Banking Corporation, New York
Branch

 

 

 

By:

 

/s/ James D. Weinstein

Name:

 

James D. Weinstein

Title:

 

Managing Director

 

 

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UBS AG, STAMFORD BRANCH

 

 

 

By:

 

/s/ Darlene Arias

Name:

 

Darlene Arias

Title:

 

Director

 

 

 

By:

 

/s/ Craig Pearson

Name:

 

Craig Pearson

Title:

 

Associate Director

 

 

 

 

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Exhibit A

Direction Letter to Collateral Agent

[see attached]

 

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DIRECTION LETTER TO COLLATERAL AGENT

[     ], 2015

This DIRECTION LETTER TO COLLATERAL AGENT (this “Direction Letter”) is by and
among Sharyland Distribution & Transmission Services, L.L.C., a Texas limited
liability company (the “Borrower”), the Secured Parties (or their agents)
parties hereto and The Bank of New York Mellon Trust Company, N.A., as
collateral agent to the Secured Parties (in such capacity, the “Collateral
Agent”).

W I T N E S S E T H :

WHEREAS, the Borrower is a party to (A) that certain Third Amended and Restated
Credit Agreement dated as of December 10, 2014 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”)
among the Borrower, the several lenders from time to time party thereto and
Royal Bank of Canada, as administrative agent to the lenders thereunder (in such
capacity, the “Administrative Agent”), (B) that certain Amended and Restated
Note Purchase Agreement dated as of September 14, 2010 (as amended, restated,
supplemented and otherwise modified from time to time, the “2009 NPA”) among the
Borrower and the holders of the notes issued thereunder (the “2009 Holders”) and
(C) that certain Amended and Restated Note Purchase Agreement dated as of July
13, 2010 (as amended, restated, supplemented and otherwise modified from time to
time, the “2010 NPA”) among the Borrower and the holders of the notes issued
thereunder (the “2010 Holders”);

WHEREAS, the Administrative Agent, the 2009 Holders and the 2010 Holders are
parties to the Second Amended and Restated Collateral Agency Agreement dated as
of December 10, 2014 (the “Collateral Agency Agreement”; capitalized terms used
herein but not otherwise defined shall have the respective meanings provided
such terms in the Collateral Agency Agreement) among the Collateral Agent, the
Borrower, the 2009 Holders, the 2010 Holders, and the Administrative Agent, for
the benefit of itself and the lenders under the Credit Agreement;

WHEREAS, in connection with the Collateral Agency Agreement and as collateral
for the Borrower’s obligations under the Credit Agreement, the 2009 NPA and the
2010 NPA, the Collateral Agent has previously entered into that certain Security
Agreement, dated as of December 10, 2014 (the “Security Agreement”), between the
Borrower and the Collateral Agent;

WHEREAS, the Borrower has requested, and the Secured Parties have agreed, that
the Collateral Agent execute and deliver (i) a partial release (the “Partial
Release”), pursuant to which the Collateral Agent will terminate and release any
and all liens and security interests granted in the Security Agreement with
respect to all Collateral (as defined therein) other than Collateral (as defined
in the below-defined Amended and Restated Security Agreement) (all such
Collateral to be released, the “Released Collateral”) and (ii) an Amended and
Restated Security Agreement (the “Amended and Restated Security Agreement”),
pursuant to which the Collateral Agent will  amend and restate the provisions of
the Security Agreement in connection with the release of the Released
Collateral;

WHEREAS, in connection with the Collateral Agency Agreement and as further
collateral for the Borrower’s obligations under the Credit Agreement, the 2009
NPA and the 2010 NPA, the Collateral Agent has previously entered into the deeds
of trust described on Schedule I hereto (collectively, the “Deeds of Trust”);

WHEREAS, the Borrower has requested, and the Secured Parties have agreed, that
the Collateral Agent execute and deliver an amendment to each Deed of Trust
(each, a “Deed of Trust Amendment”), pursuant to which each Deed of Trust will
be amended, among other things, to reflect certain changes in the “Mortgaged
Property” as defined therein; and

WHEREAS, the Secured Parties party hereto (other than the Collateral Agent),
constituting all of the Secured Parties necessary to grant the direction and
consent set forth herein below, desire to grant such direction and consent.

NOW, THEREFORE, in consideration of the mutual agreements herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

 

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1. LIMITED CONSENT AND DIRECTION BY SECURED PARTIES. In accordance with Sections
5.2, 6.1 and 13 of the Collateral Agency Agreement, the Secured Parties party to
this Direction Letter, which Secured Parties constitute all of the Secured
Parties hereby:

 

a.

consent to the termination and release of the liens and security interests
created under the Security Agreement in respect of any and all Released
Collateral and the amendment and restatement of the Security Agreement in
connection therewith;

 

b.

authorize and direct the Collateral Agent, at the sole cost and expense of the
Borrower, (i) to execute and deliver the Partial Release, substantially in the
form attached hereto as Exhibit A, (ii) to execute and deliver the Amended and
Restated Security Agreement, substantially in the form attached hereto as
Exhibit B, (iii) to terminate and release without recourse or warranty any and
all security interests in and liens on the Released Collateral granted under the
Security Agreement by executing and delivering (at the expense of the Borrower)
such documents as shall be prepared by the Borrower for that purpose, (iv) to
do, execute and deliver, or cause to be done, executed and delivered all such
further acts, instruments, documents and agreements as may be reasonably
requested by the Borrower (at the expense of the Borrower), which may be
necessary or desirable in order to evidence or effectuate the Partial Release or
the termination and release of all liens and security interests on the Released
Collateral and (v) to authorize the Borrower to amend or terminate, as
necessary, any and all existing UCC-1 financing statements filed by or on behalf
of Collateral Agent to date which relate to any of the Released Collateral;

 

c.

consent to the changes to the “Mortgaged Property” as defined in the Deeds of
Trust and to the other amendments to the Deeds of Trust as more fully described
in the Deed of Trust Amendments;

 

d.

authorize and direct the Collateral Agent, at the sole cost and expense of the
Borrower, to execute and deliver each Deed of Trust Amendment, each in
substantially the form attached hereto as Exhibit C; and

 

e.

authorize and direct the Collateral Agent, at the sole expense of the Borrower,
to authorize the Borrower to file new UCC financing statements, as the Secured
Parties and the Borrower deem necessary, in connection with the Deed of Trust
Amendments.

The parties hereto acknowledge and agree that the Collateral Agent shall be a
third party beneficiary of this Section 1 of this Direction Letter.

2. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. In order to induce the
undersigned Secured Parties to enter into this Direction Letter, the Borrower
hereby represents and warrants to the Secured Parties party hereto that no
default or other right of enforcement or acceleration under a Financing
Agreement or Event of Default has occurred and is continuing on the date
hereof.  In order to induce the Collateral Agent to take the actions requested
in Section 1(b) hereof, the Borrower hereby represents and warrants to the
Collateral Agent that no default or other right of enforcement or acceleration
under a Financing Agreement or Event of Default has occurred and is continuing
on the date hereof.

3. CONTINUING EFFECT OF CREDIT DOCUMENTS. Except as expressly set forth herein,
this Direction Letter shall not constitute an amendment or waiver of any
provision of the Credit Agreement, the 2009 NPA or the 2010 NPA, as applicable,
and shall not be construed as an amendment, waiver or consent to any further or
future action on the part of the Borrower that would require an amendment,
waiver or consent of any Secured Party.  Except as expressly waived hereby, the
provisions of the Credit Agreement, the 2009 NPA or the 2010 NPA are and shall
remain in full force and effect. This Direction Letter shall be deemed a Credit
Document for purposes of the Credit Agreement and a Financing Document for
purposes of each of the 2009 NPA and the 2010 NPA.

4. FEES.

 

a.

In accordance with Section 12.1 of the Credit Agreement, the Borrower shall pay
the fees, charges and disbursements of the Administrative Agent’s special
counsel in connection with this Direction Letter.

 

b.

In accordance with Section 15.1 of the 2009 NPA, the Borrower shall pay the
fees, charges and disbursements of the 2009 Holders’ special counsel in
connection with this Direction Letter.

 

c.

In accordance with Section 15.1 of the 2010 NPA, the Borrower shall pay the
fees, charges and disbursements of the 2010 Holders’ special counsel in
connection with this Direction Letter.

 

d.

In accordance with Section 2.8 of the Collateral Agency Agreement, the Borrower
shall pay the fees, charges and disbursements of the Collateral Agent’s special
counsel in connection with this Direction Letter

 

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5. COUNTERPARTS. This Direction Letter may be executed by one or more of the
parties hereto in any number of separate counterparts (including by facsimile),
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument.  Delivery of an executed signature page to this
Direction Letter by facsimile or electronic transmission shall be effective as
the delivery of a manually executed counterpart of this Direction Letter.

6. SEVERABILITY. Any provision of this Direction Letter which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

7. INTEGRATION. This Direction Letter represents the agreement of the Borrower,
the Secured Parties and the Collateral Agent with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by the Borrower, the Secured Parties or the Collateral Agent relative to the
subject matter hereof not expressly set forth or referred to herein.

8. GOVERNING LAW. THIS DIRECTION LETTER AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS DIRECTION LETTER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

[Remainder of page intentionally left blank]

 

 

 

 

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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Direction Letter as of the date first above
written.

 

 

SHARYLAND DISTRIBUTION &
TRANSMISSION SERVICES, L.L.C.,
as the Borrower

 

 

 

 

 

By:

 

 

Name:

 

 

 

Title:

 

 

 

 

Signature Page to Direction Letter to Collateral Agent

 

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SECURED PARTIES

 

 

 

ROYAL BANK OF CANADA, as
Administrative Agent

 

 

 

 

 

By:

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, as a 2009 Holder

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

PRUDENTIAL RETIREMENT INSURANCE
AND ANNUITY COMPANY, as a 2009 Holder

 

 

 

 

 

By:

 

Prudential Investment Management, Inc., as
investment manager

 

 

 

 

 

By:

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, as 2010 Holder

 

 

 

By:

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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ACKNOWLEDGED AND AGREED:

 

THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Collateral Agent

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

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EXHIBIT B

Amended and Restated Security Agreement

[see attached]

 

 

 

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AMENDED AND RESTATED SECURITY AGREEMENT

This AMENDED AND RESTATED SECURITY AGREEMENT (as amended, amended and restated,
supplemented or otherwise modified from time to time, this “Agreement”), dated
as of [_], 2015, is by and between Sharyland Distribution & Transmission
Services, L.L.C., a Texas limited liability company (the “Company”), and The
Bank of New York Mellon Trust Company, N.A., in its capacity as collateral agent
(together with its successors and permitted assigns in such capacity, the
“Collateral Agent”), for the benefit of the Secured Parties.

RECITALS:

The Company is party to that certain Second Amended and Restated Collateral
Agency Agreement dated as of December 10, 2014 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Collateral
Agency Agreement”), by and among the Company, the Collateral Agent and the
Secured Parties (as defined therein)  from time to time party thereto;

In connection with the Collateral Agency Agreement, the Collateral Agent
previously entered into that certain Security Agreement, dated as of December
10, 2014 (the “Original Security Agreement”), between the Company and the
Collateral Agent.

The Company has requested that the Collateral Agent amend and restate the
Original Security Agreement as more fully described herein.

The Company and the Collateral Agent therefore agree as follows:

ARTICLE I

DEFINITIONS

1.1. Definitions. Capitalized defined terms used in this Agreement and not
otherwise defined in this Agreement have the meanings given to those terms in
the Collateral Agency Agreement, or if not defined in the Collateral Agency
Agreement, in the Uniform Commercial Code as in effect from time to time in the
applicable jurisdiction (the “UCC”).  However, if a term is defined in Article 9
of the UCC differently from another Article of the UCC, the term has the meaning
specified in Article 9.

ARTICLE II

ASSIGNMENT AND GRANT OF SECURITY INTEREST

2.1. Grant. As collateral security for the prompt and complete payment and
performance when due of the Obligations, the Company assigns, conveys,
mortgages, pledges, hypothecates and transfers to the Collateral Agent, for the
benefit of the Secured Parties, and grants to the Collateral Agent, for the
benefit of the Secured Parties, a continuing lien on and security interest in,
all of the Company’s right, title and interests, whether now owned or hereafter
acquired or arising, in and to all Deposit Accounts and Securities Accounts and
any cash, deposits, Financial Assets or Securities Entitlements credited thereto
(collectively, the “Collateral”).

2.2. Continuing Security Interest. This Agreement creates a continuing security
interest in the Collateral and will remain in full force and effect until the
indefeasible payment in full in cash of the Obligations (other than contingent
obligations).  If, at any time for any reason (including the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company, any
guarantor, or any other Person or the appointment of any intervenor or
conservator of, or agent or similar official for the Company, any guarantor or
any other Person or any of their respective properties), any payment received by
the Collateral Agent or any Secured Party in respect of the Obligations is
rescinded or must otherwise be restored or returned by such Person, this
Agreement will continue to be effective or will be reinstated, if necessary, as
if such payment had not been made.

ARTICLE III

REPRESENTATIONS, WARRANTIES AND COVENANTS

3.1. Perfection Certificate. The Company has delivered to the Collateral Agent
and each Secured Party a completed Perfection Certificate in the form attached
hereto as Exhibit A, which is true and correct in all material respects as of
the date hereof.

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3.2. Contractual Obligations; Authorization to File UCC Statements.

(a) The Company agrees that:

(i) its liabilities and obligations under any contracts to which it is a
party  and that constitute part of the Collateral will not be released or
terminated by this Agreement or the exercise by the Collateral Agent of its
rights under this Agreement;

(ii) unless it expressly agrees in writing, neither the Collateral Agent nor any
Secured Party will have any liabilities or obligations under any contractual
obligation of the Company as a result of this Agreement, the exercise by the
Collateral Agent of rights under this Agreement or otherwise; and

(iii) neither the Collateral Agent nor any Secured Party has any obligation to
collect or enforce any contractual obligation or claim which constitutes part of
the Collateral, or to take any other action with respect to the Collateral
except as expressly set forth in this Agreement and the other Financing
Agreements.

(b) Subject to Section 6.1 hereof, the Company authorizes the Collateral Agent
and each Secured Party, at any time and from time to time, to give notice to any
Person of this Agreement and of the assignment of the Collateral to the
Collateral Agent, for the benefit of the Secured Parties, and of the Collateral
Agent’s lien on and security interest in the Collateral.  The Company further
irrevocably authorizes the Collateral Agent, at any time and from time to time,
to file in any UCC jurisdiction any financing statements and amendments thereto
that describe the Collateral as described in Section 2.1 and contain other
information required by the UCC for the sufficiency of any financing statement
or amendment.  The Company agrees to furnish any information necessary to
prepare such financing statements and amendments to the Collateral Agent and
each Secured Party upon request.  The Company also ratifies its authorization
for the Collateral Agent to have filed in any UCC jurisdiction any like
financing statements or amendments as set forth in this Section 3.2(b), thereto
if filed prior to the date hereof.  Notwithstanding the foregoing, nothing
herein shall require the Collateral Agent to file financing statements or
continuation statements or be responsible for maintaining the security interest
purported to be created as described herein, and such responsibility shall be
solely the Company’s.

ARTICLE IV

RIGHTS AND REMEDIES

4.1. Collections Prior to Default. Until the occurrence of an Enforcement Event,
the Company will collect with diligence, and at its own expense, any and all
proceeds and amounts in respect of the Collateral in the ordinary course of
business.  Upon the occurrence and during the continuance of an Event of
Default, or after an exercise of remedies by the Collateral Agent, any such
collections made by the Company will be held in trust for the Collateral Agent,
and the Company will keep all such collections separate and apart from all other
funds and property so as to be capable of identification as the property of the
Collateral Agent and will deliver to the Collateral Agent such collections at
such time as the Collateral Agent may request upon the occurrence of an
Enforcement Event in the identical form received, properly endorsed or assigned
when required to enable the Collateral Agent to complete collection thereof.

4.2. Collateral Agent’s Rights Upon the Occurrence of an Enforcement Event. Upon
the occurrence of an Enforcement Event and subject to any required regulatory
approvals, the Collateral Agent may, but shall not be obligated to, in its sole
discretion, take any or all of the following actions, in each case at the
Company’s expense and without prior notice except as required under applicable
law, any Collateral Document or otherwise set forth below:

(a) give a copy of the written demand for Enforcement to any Person requiring
such copy, collect proceeds and amounts in respect of the Collateral, and
enforce all rights of the Company in the Collateral;

(b) take possession of any or all of the Collateral, wherever it may be found,
using reasonable force to the extent permitted under applicable law, to do so,
and hold, store, repair, improve, operate and manage the same;

(c) foreclose its lien upon any or all of the Collateral;

(d) upon 10 days’ prior written notice to the Company of the time and place (as
further set forth in Section 4.5(d)), sell, lease, or otherwise dispose of any
or all of the Collateral at public or private sale, with or without having any
or all of the Collateral at the place of sale, upon terms, in such manner, at
such time or times, and at such place or places as the Collateral Agent may
reasonably determine and as required by law; and

(e) exercise any or all other rights or remedies available to the Collateral
Agent under applicable law or the other Collateral Documents.

Subject to the terms of the Collateral Agency Agreement, the Collateral Agent
may exercise the foregoing rights and remedies in such order, at such times and
in such manner as the Collateral Agent may, in its sole and exclusive judgment,
determine from time to time.

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4.3. Power of Attorney. The Company irrevocably constitutes and appoints the
Collateral Agent and any officer or agent thereof, each with full power of
substitution, as the Company’s true and lawful attorney-in-fact, in the
Company’s name or in such Person’s name or otherwise, and at the Company’s
expense, to take any or all of the following actions, without notice to or the
consent of the Company:

(a) upon the occurrence of an Enforcement Event, take any or all of the actions
described in Section 4.2 of this Agreement, and exercise any other right or
power granted to the Collateral Agent under this Agreement or any other
Collateral Document or by law;

(b) upon the occurrence of an Event of Default, endorse or execute and deliver
any check, draft, note, acceptance, or instrument, document, contract,
agreement, receipt, release, bill of lading, invoice, endorsement, assignment,
bill of sale, deed or instrument of conveyance or transfer constituting or
relating to any Collateral; provided that none of the foregoing actions shall be
taken in connection with an Enforcement until the occurrence of an Enforcement
Event;

(c) upon the occurrence of an Event of Default, assert, institute, file, defend,
settle, compromise or adjust any claim constituting or relating to any
Collateral; provided that none of the foregoing actions shall be taken in
connection with an Enforcement until the occurrence of an Enforcement Event;

(d) upon the occurrence of an Event of Default, perform or comply with any
contractual obligation that constitutes part of the Collateral; and

(e) upon the occurrence of an Event of Default, do any and all things necessary
and proper to carry out the purposes of this Agreement.

The Company recognizes and agrees that the power of attorney granted pursuant to
this Section 4.3 is coupled with an interest and is not revocable until the
termination of this Agreement in accordance with its terms.  The Company
ratifies and confirms all actions taken by the Collateral Agent or its agents
pursuant to this power of attorney.  The Collateral Agent shall exercise the
power of attorney granted hereunder subject to required regulatory approvals.

4.4. Other Rights of Collateral Agent.

(a) The Collateral Agent will have, for the benefit of the Secured Parties, with
respect to the Collateral, in addition to the rights and remedies set forth in
this Agreement, all of the rights and remedies available to a secured party
under the Deeds of Trust, any other Collateral Documents and applicable law (and
limited to the extent that such rights and remedies may be subject to any
required regulatory approvals).

(b) The Collateral Agent may at any time and from time to time release or
relinquish any right, remedy or lien it has with respect to a particular item of
Collateral without thereby releasing, relinquishing or in any way affecting its
rights, remedies or lien with respect to any other item of Collateral.

4.5. Disposition of Collateral.

(a) Upon request by the Collateral Agent or the Required Secured Parties after
the occurrence and during the continuation of an Event of Default, the Company
agrees, promptly and at its own expense, to assemble any or all of the
Collateral and upon the occurrence of an Enforcement Event make it available to
the Collateral Agent.

(b) Upon the occurrence of an Enforcement Event  and subject to the requirements
of Section 4.2(d), the Collateral Agent will be entitled to sell the Collateral
on any commercially reasonable terms, and the Company agrees that a private sale
or a sale on extended payment terms, or in exchange for property, stock or other
consideration will not in and of itself be deemed to be commercially
unreasonable.  The Collateral may be sold in one lot as an entirety or in
separate parcels.  Any Secured Party may purchase any or all of the Collateral
sold at any public sale and, to the extent permitted by applicable law, may
purchase any or all of the Collateral sold at any private sale, including by a
credit bid.

(c) The Collateral Agent may, in its sole discretion, restrict the prospective
bidders or purchasers at any sale as to their number, nature of business,
financial or business expertise, net worth or financial resources and investment
intention or on the basis of any other factors that are commercially
reasonable.  Any sale of Collateral may be subject to the requirement that any
purchase of all or any part of the Collateral constituting a security for
purposes of the Securities Act of 1933 or the Securities Exchange Act of 1934
must be for the purpose of investment and without any intention to make a
distribution thereof.

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(d) The Company expressly agrees that the Collateral Agent need not give more
than 10 days’ notice to the Company of the time and place of any public sale of
Collateral or of the time after which a private sale of Collateral may take
place, and that such notice will constitute reasonable notice under all
circumstances.  The Collateral Agent will not be obligated to hold any sale
pursuant to any such notice and may, without notice or publication, adjourn any
public or private sale by announcement at the time and place fixed for such
sale, and a subsequent sale may be held at the time and place designated in such
announcement without further notice or publication.  To the extent permitted by
applicable law, the Company irrevocably waives any right it may have to make a
demand of performance or other demand, advertisement, judicial hearing or notice
to it or any other Person in connection with the collection, sale or other
disposition of, or realization upon, Collateral.

(e) Upon the occurrence of an Enforcement Event, before any sale or disposition
of Collateral, the Collateral Agent at its option may cause any or all of such
Collateral to be improved, repaired or reconditioned in such manner and to such
extent as the Collateral Agent may request.  The Collateral Agent may also
settle, pay or discharge any or all taxes, liens, claims and other charges with
respect to Collateral, and may procure or continue insurance with respect to
Collateral.  All sums expended by the Collateral Agent pursuant to this Section
4.5(e) will constitute Obligations secured by the liens created hereunder and
under any other Collateral Document.  Neither the Collateral Agent nor any other
Secured Party will have any duty to take any action authorized by this Section
4.5(e), and no sale of Collateral will be deemed to have been commercially
unreasonable by reason of the Collateral Agent’s decision not to take any such
action.

4.6. No Marshaling or Right of Redemption.

(a) Except to the extent required by applicable law, neither the Collateral
Agent nor any other Secured Party will be required to marshal any Collateral or
any guaranties of the Obligations, or to resort to any item of Collateral or any
guaranty in any particular order, and the Collateral Agent’s rights with respect
to the Collateral and any guaranties will be cumulative and in addition to all
other rights, however existing or arising.  To the extent permitted by
applicable law, the Company irrevocably waives, and agrees that it will not
invoke or assert, any law requiring or relating to the marshaling of collateral
or any other law which might cause a delay in or impede the enforcement of the
Collateral Agent’s rights under this Agreement or any other Collateral Document.

(b) To the extent permitted by applicable law, the Company irrevocably waives,
and agrees that it will not invoke or assert, any rights to equity of redemption
or other rights of redemption, appraisement, valuation, stay, extension or
moratorium that it may have in equity, at law, or otherwise with respect to any
Collateral.  The sale or other transfer pursuant to this Agreement of any right,
title or interest of the Company in any item of Collateral will operate to
permanently divest the Company and all Persons claiming under or through the
Company of such right, title or interest, and will be a perpetual bar, both at
law and in equity, to any and all claims by the Company or any such Person with
respect to such item of Collateral.

4.7. Application of Proceeds. Upon the occurrence of an Enforcement Event or
after an exercise of remedies by the Collateral Agent, any cash held by the
Collateral Agent and all cash proceeds received by the Collateral Agent from any
realization upon Collateral may, in the sole discretion of the Collateral Agent,
be held by the Collateral Agent, for the benefit of the Secured Parties, as
collateral security for the payment of the Obligations or applied by the
Collateral Agent in accordance with the Collateral Agency Agreement.

4.8. Collateral Agent’s Duties.

(a) The grant to the Collateral Agent under this Agreement of any right or power
does not impose upon the Collateral Agent any duty to exercise such right or
power.  The Collateral Agent will have no obligation to take any steps to
preserve any claim or other right against any Person or with respect to any
Collateral.

(b) To the extent permitted by applicable law, the Company waives all claims
against the Collateral Agent or its agents arising out of the repossession,
taking, retention, storage, operation or sale of the Collateral except to the
extent such actions constitute gross negligence or willful misconduct of such
Person.  To the extent permitted by applicable law, the Company waives any claim
it may have based on the allegation or fact that the price obtained for
Collateral sold at a private sale made in accordance with this Agreement was
less than could have been obtained for the same Collateral at a public
sale.  All risk of loss, damage, diminution in value or destruction of the
Collateral will be borne by the Company.  The Collateral Agent will have no
responsibility for any act or omission of any carrier, warehouseman, bailee,
forwarding agency, broker, operator or any other Person.  The Collateral Agent
will have no responsibility to the Company for any act or omission of the
Collateral Agent, except to the extent such act or failure to act constitutes
gross negligence or willful misconduct by such Person.

(c) The Collateral Agent does not and will not make any express or implied
representations or warranties with respect to any Collateral or other property
released to the Company.

(d) Except as set forth in this Agreement, the Collateral Agency Agreement or as
required under applicable law, the Collateral Agent will have no duties or
obligations with respect to the Collateral.

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ARTICLE V

OTHER SECURITY DOCUMENTS

5.1. Relation to Other Security Documents.  The provisions of this Agreement
supplement the provisions of the other Collateral Documents, which secure the
payment or performance of any of the Obligations.  Nothing contained in any such
other Collateral Documents shall derogate from any of the rights or remedies of
the Collateral Agent hereunder.

ARTICLE VI

GENERAL PROVISIONS

6.1. Further Assurances.

(a) Subject to clause (c) of this Section 6.1, at any time and from time to
time, including upon the request of the Collateral Agent or the Required Secured
Parties, the Company will, at the Company’s expense, execute and deliver and/or
file such further documents, financing statements, continuation statements,
amendments and instruments and do such other acts as are necessary or required
by applicable law in order to create, perfect, maintain and preserve
first-priority liens (subject to Permitted Liens) on the Collateral in favor of
the Collateral Agent for the benefit of the Secured Parties, and, upon the
occurrence of an Enforcement Event, to facilitate any sale of or other
realization upon Collateral or to make any sale of or other realization upon
Collateral valid, binding and in compliance with applicable law.

(b) The Company shall pay all filing, registration and recording fees or
re-filing, re‑registration and re‑recording fees, and all reasonable expenses
incident to the execution and acknowledgment of this Agreement, and any
instruments of further assurance, and all federal, state, county and municipal
stamp taxes and other taxes, duties, imports, assessments and charges arising
out of or in connection with the execution and delivery of this Agreement, any
agreement supplemental hereto and any instruments of further assurance.

(c) Notwithstanding anything to the contrary in this Agreement, the Company
shall not be required to take any perfection measures under this Agreement with
respect to any Collateral, a security interest in or lien on which cannot be
perfected by the filing of a financing statement, other than within 30 days
after the opening or acquisition thereof (or such longer period as the
Collateral Agent shall agree at the direction of the Required Secured Parties),
with respect to all Deposit Accounts and Securities Accounts (other than such
accounts which (x) hold any Cash Collateral (other than Returned Cash
Collateral) or (y) in the aggregate, have an average daily balance of less than
$1,000,000), the Company shall cause to be delivered to the Secured Parties a
control agreement (which may be an amendment to the Deposit Agreement) duly
executed and delivered by the Company, the Collateral Agent and such depositary
bank or securities intermediary, as the case may be.

6.2. Successors and Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
assigns.  The Company and the Secured Parties will have the right to transfer,
assign, pledge and grant participations in their rights and interests under this
Agreement in accordance with the applicable Financing Agreement.

6.3. Severability. In case any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, and the parties hereto shall enter into
good faith negotiations to replace the invalid, illegal or unenforceable
provision.

6.4. Construction, etc. Each covenant contained herein shall be construed
(absent express provision to the contrary) as being independent of each other
covenant contained herein, so that compliance with any one covenant shall not
(absent such an express contrary provision) be deemed to excuse compliance with
any other covenant. The rules of interpretation set forth in Schedule A of the
Collateral Agency Agreement shall apply to this Agreement.

6.5. Counterparts. This Agreement may be executed in one or more duplicate
counterparts and when signed by all of the parties shall constitute a single
binding agreement.

6.6. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER WILL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, OTHER THAN CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD APPLY THE LAWS
OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF
THE SECURITY INTERESTS OR REMEDIES HEREUNDER IN RESPECT OF ANY PARTICULAR
COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW
YORK.

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6.7. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER FINANCING AGREEMENT, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR
ACTIONS OF THE PARTIES.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES
TO ENTER INTO THIS AGREEMENT AND THE OTHER FINANCING AGREEMENTS.  IN THE EVENT
OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
THE COURT.

6.8. Consent to Jurisdiction.

(a) The parties agree that any legal action or proceeding by or against the
Company or with respect to or arising out of this Agreement or any other
Financing Agreement may be brought in or removed to the courts of the State of
New York, in and for the County of New York, or of the United States of America
for the Southern District of New York, in each case, in the Borough of
Manhattan.  By execution and delivery of this Agreement, each party accepts, for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts.  The Company 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.  Each of the parties hereto irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, (or any substantially
similar form of mail) postage prepaid, return receipt requested to such party at
its address for notices as specified herein.  Each of the parties agrees that
such service upon receipt (i) shall be deemed in every respect effective service
of process upon it in any such suit, action or proceeding and (ii) shall, to the
fullest extent permitted by applicable law, be taken and held to be valid
personal service upon and personal delivery to it.  Notices under this Section
6.8(a) shall be conclusively presumed received as evidenced by a delivery
receipt furnished by the United States Postal Service or any reputable
commercial delivery service.

(b) In addition to and notwithstanding the provisions of Section 6.8(a) above,
the Company hereby irrevocably appoints CT Corporation System as its agent to
receive on its behalf and its property service of copies of the summons and
complaint and any other process which may be served in any action or
proceeding.  Such service may be made by mailing or delivering a copy of such
process to the Company, in care of the process agent at 111 Eighth Avenue, 13th
Floor, New York, New York 10011, and the Company hereby irrevocably authorizes
and directs the process agent to accept such service on its behalf.  Nothing in
this Agreement will affect the right of any party hereto to serve legal process
in any other manner permitted by law or affect the right of any party hereto to
bring any action or proceeding in the courts of any other jurisdiction.  If for
any reason the process agent ceases to be available to act as process agent, the
Company agrees immediately to appoint a replacement process agent satisfactory
to the Collateral Agent.  Each of the parties hereby waives any right to stay or
dismiss any action or proceeding under or in connection with any or all of this
Agreement or any other Financing Agreement brought before the foregoing courts
on the basis of forum non conveniens.

6.9. Release of Liens. Upon the indefeasible payment in cash and satisfaction in
full of all Obligations (other than contingent obligations), the liens and
security interests created by this Agreement shall be automatically released and
the Collateral Agent will, upon the written request of the Company and at the
Company’s expense, execute documentation prepared by the Company and necessary
to effect or evidence such release, any such release to be without recourse to
or warranty of the Collateral Agent.

6.10. No Waiver by Collateral Agent, etc.  The Collateral Agent shall not be
deemed to have waived any of its rights and remedies in respect of the
Obligations or the Collateral unless such waiver shall be in writing and signed
by the Collateral Agent with the requisite consent of the Secured Parties as
provided under the Collateral Agency Agreement.  No delay or omission on the
part of the Collateral Agent in exercising any right or remedy shall operate as
a waiver of such right or remedy or any other right or remedy.  A waiver on any
one occasion shall not be construed as a bar to or waiver of any right or remedy
on any future occasion.  All rights and remedies of the Collateral Agent with
respect to the Obligations or the Collateral, whether evidenced hereby or by any
other instrument or papers, shall be cumulative and may be exercised singularly,
alternatively, successively or concurrently at such time or at such times as the
Collateral Agent deems expedient.

6.11. Overdue Amounts.  Until paid, all amounts due and payable  by the Company
under this Agreement that have not been so paid shall be part of the Obligations
and shall bear interest at the highest rate at which interest is then computed
on any portion of the Obligations.

6.12. Notice, etc.  All notices and communications provided for hereunder shall
be provided in accordance with Article 8 of the Collateral Agency Agreement.

-7-

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6.13. Collateral Agency Agreement.  The Collateral Agent shall act hereunder
only in accordance with the terms and conditions of the Collateral Agency
Agreement. Any and all actions the Collateral Agent takes or omits to take
hereunder shall be covered by the indemnity, exculpation and protective
provisions of the Collateral Agency Agreement, which provisions are incorporated
by reference and made a part of this Agreement.  In the case of a conflict
between this Agreement (including Section 4.8), and the Collateral Agency
Agreement, the Collateral Agency Agreement shall govern the rights and
obligations of the Collateral Agent.

[Remainder of page intentionally left blank]

 

 

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IN WITNESS WHEREOF, each of the parties, intending to be legally bound, has
caused this Agreement to be signed on the date first above written.

 

 

SHARYLAND DISTRIBUTION &
TRANSMISSION SERVICES, L.L.C.,
a Texas limited liability company

 

 

 

 

 

By:

  

 

 

Name:

 

Brant Meleski

 

Title:

 

Senior Vice President and Chief Financial Officer

 

[Signature Page of A&R SDTS Security Agreement]

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THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., not in its individual capacity but
solely in its capacity as the Collateral Agent, for the
benefit of the Secured Parties

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

[Signature Page of A&R SDTS Security Agreement]

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Exhibit A

PERFECTION CERTIFICATE

Dated as of [_____________], ___________

The undersigned, Sharyland Distribution & Transmission Services, L.L.C., a Texas
limited liability company (the “Company”), hereby certifies as follows:

1. Name. The exact legal name of the Company is Sharyland Distribution &
Transmission Services, L.L.C.

2. Other Identifying Factors.

The mailing address of the Company is 1807 Ross Avenue, 4th Floor, Dallas, Texas
75201.

If different from its mailing address, the Company’s place of business or, if
more than one, its chief executive office is located at:

 

Address

 

County

 

State

none

 

 

 

 

 

The type of organization of the Company is limited liability company.

The jurisdiction of the Company’s organization is Texas.

The Company’s state issued organizational identification number is 800674526.

The Company’s EIN is 20-5854323

3. Other Names.

The following is a list of all other names (including trade names or similar
appellations) used by the Company, or any other business or organization to
which the Company became the successor by merger, consolidation, acquisition,
change in form, nature or jurisdiction of organization or otherwise, now or at
any time during the past five years: none.

4. Bank Accounts.  Set forth below is a complete list of all bank accounts
(including securities and commodities accounts) maintained by the Company:

a.

b.

c.

 

 

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties, intending to be legally bound, has
caused this Agreement to be signed on the date first above written.

 

 

SHARYLAND DISTRIBUTION &
TRANSMISSION SERVICES, L.L.C.,
a Texas limited liability company

 

 

 

 

 

By:

 

 

 

Name:

 

Brant Meleski

 

Title:

 

Senior Vice President and Chief Financial Officer

 

 

[Signature Page of A&R SDTS Security Agreement]

--------------------------------------------------------------------------------

 

 

 

THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., not in its individual capacity but
solely in its capacity as the Collateral Agent, for the
benefit of the Secured Parties

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

[Signature Page of A&R SDTS Security Agreement]

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EXHIBIT C

Form of Deed of Trust Amendment

[see attached]

 

 

 

--------------------------------------------------------------------------------

 

AMENDMENT NO. 1 TO AMENDED AND RESTATED FIRST LIEN DEED OF TRUST,
SECURITY AGREEMENT AND FIXTURE FILING (TEXAS)

by and between

SHARYLAND DISTRIBUTION & TRANSMISSION SERVICES, L.L.C., “Grantor”

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in its capacity as Agent (as
defined below),
for the Secured Parties, “Beneficiary”

Dated as of [_], 2015

THE SECURED PARTY (BENEFICIARY) DESIRES THIS FIXTURE FILING TO BE
INDEXED AGAINST THE RECORD OWNER OF THE REAL ESTATE DESCRIBED HEREIN.

PREPARED BY, RECORDING REQUESTED BY
AND, WHEN RECORDED, MAIL TO:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: Elaine Cronin

 

NOTICE OF CONFIDENTIALITY RIGHTS -- IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE
OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS
FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR
DRIVER'S LICENSE NUMBER.

ATTENTION COUNTY RECORDER -- THIS INSTRUMENT COVERS GOODS THAT ARE OR ARE TO
BECOME FIXTURES ON THE REAL PROPERTY DESCRIBED HEREIN AND IS TO BE FILED FOR
RECORD IN THE RECORDS WHERE DEEDS OF TRUST ON REAL ESTATE ARE
RECORDED.  ADDITIONALLY, THIS INSTRUMENT SHOULD BE APPROPRIATELY INDEXED, NOT
ONLY AS A DEED OF TRUST, BUT ALSO AS A FINANCING STATEMENT COVERING GOODS THAT
ARE OR ARE TO BECOME FIXTURES ON THE REAL PROPERTY DESCRIBED HEREIN.  THE
MAILING ADDRESS OF THE GRANTOR (DEBTOR) AND AGENT (SECURED PARTY) ARE SET FORTH
IN THIS INSTRUMENT.

 

 

 

 

--------------------------------------------------------------------------------

 

 

STATE OF TEXAS

§

 

 

§ 

          KNOW ALL MEN BY THESE PRESENTS:

COUNTY OF MIDLAND

§

 

 

THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED FIRST LIEN DEED OF TRUST, SECURITY
AGREEMENT AND FIXTURE FILING (TEXAS) (this “Amendment”) is dated as of the [_]
day of [_], 2015, by and between SHARYLAND DISTRIBUTION & TRANSMISSION SERVICES,
L.L.C., a Texas limited liability company, having an office at 1900 North Akard
Street, Dallas, Texas 75201 (“Grantor”), and THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., whose address is Corporate Trust (Jacksonville), 10161 Centurion
Parkway North, 2nd Floor, Jacksonville, Florida 32256, facsimile: (904)
645-1921, not in its individual capacity but only as collateral agent (in such
capacity and together with its successors and assigns in such capacity, “Agent”
and, collectively with the other Secured Parties and their respective successors
and assigns, “Beneficiary”) for the benefit of itself and the other Secured
Parties.

RECITALS

A. Grantor is a party to (i) that certain Amended and Restated Note Purchase
Agreement dated as of September 14, 2010 (as amended, restated, supplemented and
otherwise modified from time to time, the “2009 Note Purchase Agreement”) by and
among Grantor and the purchasers from time to time party thereto (the “2009 Note
Purchasers”), (ii) that certain Note Purchase Agreement dated as of July 13,
2010 (as amended, restated, supplemented and otherwise modified from time to
time, the “2010 Note Purchase Agreement”) by and among Grantor and the
purchasers from time to time party thereto (the “2010 Note Purchasers”) and
(iii) that certain Third Amended and Restated Credit Agreement dated December
10, 2014 (as amended, restated, supplemented and otherwise modified from time to
time, the “Credit Agreement” and, together with the 2009 Note Purchase Agreement
and the 2010 Note Purchase Agreement, the “Debt Documents”) by and among
Grantor, the lenders party thereto from time to time (in such capacity, the
“Lenders”) and Royal Bank of Canada, as administrative agent (in such capacity,
“RBC”).

B. In connection with the Debt Documents, Grantor entered into that certain
Second Amended and Restated Collateral Agency Agreement, dated as of December
10, 2014 (as amended, restated, supplemented and otherwise modified, the
“Collateral Agency Agreement”), by and among the Grantor, the Secured Parties
(which includes the 2009 Note Purchasers, the 2010 Note Purchasers and the
Lenders) and Agent, as collateral agent for the ratable benefit of the Secured
Parties.

C. The obligations under the Debt Documents are secured by, among other
instruments, that certain Amended and Restated First Lien Deed of Trust,
Security Agreement and Fixture Filing (Texas) dated as of December 10, 2014,
executed by Grantor, as Grantor, to Linda Daugherty, as Trustee, for the benefit
of Beneficiary, filed for record with the County Clerk of [_] County, Texas
under Document No. [_] (the “Deed of Trust”) covering the Mortgaged Property (as
defined therein).  Capitalized terms used and not otherwise defined herein shall
have the meanings assigned to such terms (whether directly or by reference to
another agreement or document) in the Deed of Trust.

D. Grantor desires and Beneficiary has agreed to amend the Deed of Trust to
remove certain property from the Mortgaged Property encumbered and affected
thereby.

NOW, THEREFORE, in consideration of the premises herein contained and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and confessed, the parties, intending to be and being legally
bound, do hereby agree as follows:

(a) Amendment to Deed of Trust.  Effective as of the date hereof, Section 1.1 of
the Deed of Trust is hereby amended by deleting the definition of “Mortgaged
Property” in its entirety and replacing it with the following:

“Mortgaged Property”: The fee interest in the real property described in Exhibit
A attached hereto and incorporated herein by this reference, together with any
greater estate therein as hereafter may be acquired by Grantor (the “Land”), and
all of Grantor’s right, title and interest now or hereafter acquired in and to
(1) all improvements now owned or hereafter acquired by Grantor, now or at any
time situated, placed or constructed upon the Land, including, without
limitation, the integrated electrical transmission and distribution facilities
connected to the Electric Reliability Council of Texas (“ERCOT”) electric grid
located upon the Land (the “Improvements”; the Land and Improvements are
collectively referred to as the “Premises”), (2) all water, gas, electrical,
telephone, storm and sanitary sewer facilities and all other utilities whether
or not situated in easements and other goods, in each case in which Grantor now
has or hereafter acquires any rights or any power to transfer rights and that
are or are to become fixtures (as defined in the UCC, defined below) related to
the Land (the “Fixtures”), (3) all leases, licenses, concessions, occupancy
agreements or other agreements (written or oral, now or at any time in effect)
which grant to any Person a possessory interest in, or the right to use, all or
any part of the Mortgaged Property, together with all related security and other
deposits, (the “Leases”), (4) all of the rents, revenues, royalties, income,
proceeds, profits, accounts receivable, security and other types of deposits,
and other benefits paid or payable by parties to the Leases for using, leasing,
licensing possessing, operating from, residing in,

3

--------------------------------------------------------------------------------

 

selling or otherwise enjoying any Mortgaged Property (the “Rents”), (5) all
rights, privileges, tenements, hereditaments, rights-of-way, easements,
appendages and appurtenances appertaining to the foregoing, and (6)  all
accessions, replacements and substitutions for, and all proceeds of, all or any
portion of the Land, Improvements or Fixtures including,  without limitation,
all awards, damages, remunerations, reimbursements, settlements or compensation
heretofore made or hereafter to be made by any governmental authority pertaining
to any condemnation or other taking (or any purchase in lieu thereof) of all or
any portion of the Land, Improvements, or Fixtures  (the “Proceeds”).  As used
in this Deed of Trust, the term “Mortgaged Property” shall mean all or, where
the context permits or requires, any portion of the above or any interest
therein.

(b) Ratifications. The liens, assignments and security interests created by, and
the terms and provisions set forth in the Deed of Trust are hereby ratified and
confirmed in all respects and shall continue in full force and effect.  Grantor
and Agent agree that the Deed of Trust, as amended hereby, shall continue to be
legal, valid, binding and enforceable in accordance with its terms.  Grantor and
Agent further agree that this Amendment is not intended to be, nor shall it be
construed to create, a novation or accord and satisfaction.  Nothing herein
contained shall in any way (a) impair or affect the validity and priority of the
lien of the Deed of Trust; (b) alter, waive, annul or affect any provision,
condition or covenant in the Deed of Trust, the 2009 Note Purchase Agreement,
the 2010 Note Purchase Agreement, the Credit Agreement, the Collateral Agency
Agreement, or any other Financing Document; or (c) affect or impair any rights,
powers or remedies under the Deed of Trust, the 2009 Note Purchase Agreement,
the 2010 Note Purchase Agreement, the Credit Agreement, the Collateral Agency
Agreement, or any other Financing Document.

(c) References. Each of the Deed of Trust, the 2009 Note Purchase Agreement, the
2010 Note Purchase Agreement, the Credit Agreement, the Collateral Agency
Agreement, the other Financing Documents, and any and all other agreements,
documents or instruments now or hereafter executed and delivered pursuant to the
terms hereof or pursuant to the terms of the Deed of Trust, as amended hereby,
or pursuant to the terms of any other Financing Document are hereby amended so
that any reference to the Deed of Trust shall mean a reference to the Deed of
Trust as amended hereby.

(d) Severability. If any provision of this Amendment or the Deed of Trust, as
amended by this Amendment, shall be held by any court of competent jurisdiction
to be unlawful, void or unenforceable for any reason, such provision shall be
deemed severable from and shall in no way affect the enforceability or validity
of the remaining provisions hereof or thereof.

(e) Successors and Assigns. This Amendment is binding upon and shall inure to
the benefit of Beneficiary, Trustee and Grantor and their respective successors
and permitted assigns.

(f) Counterparts. This Amendment may be executed in one or more counterparts,
each of which when so executed shall be deemed to be an original, but all of
which when taken together shall constitute one and the same instrument.

(g) Headings. The headings, captions, and arrangements used in this Amendment
are for convenience only and shall not affect the interpretation of this
Amendment.

(h) Governing Law. The provisions of this Amendment and the Deed of Trust as
amended hereby regarding the creation, perfection and enforcement of liens and
security interests granted herein or in the Deed of Trust as amended hereby
shall be governed by and construed under the laws of the State of Texas.  All
other provisions of this Amendment and the Deed of Trust as amended hereby shall
be construed and governed in accordance with the laws of the State of New York.

 

 

4

--------------------------------------------------------------------------------

 

WITNESS THE EXECUTION HEREOF, Grantor has on the date set forth in the
acknowledgment hereto, effective as of the date first above written, caused this
instrument to be duly EXECUTED AND DELIVERED by authority duly given.

 

GRANTOR:

SHARYLAND DISTRIBUTION &
TRANSMISSION SERVICES, L.L.C.

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

ACKNOWLEDGMENT

 

STATE OF TEXAS

§

 

 

§

 

COUNTY OF DALLAS

§ 

 

 

This instrument was executed before me this              day of
                               , 2015 by
                                               ,
                                                  of Sharyland Distribution &
Transmission Services, L.L.C. on behalf of said company.

Witness my hand and Official Seal.

 

[SEAL]

 

 

 

 

 

 

 

 

 

 

Notary Public in and for the

 

 

 

State of Texas

 

My commission expires:

 

 

--------------------------------------------------------------------------------

 

WITNESS THE EXECUTION HEREOF, Agent has on the date set forth in the
acknowledgment hereto, effective as of the date first above written, caused this
instrument to be duly EXECUTED AND DELIVERED by authority duly given.

 

AGENT

THE BANK OF NEW YORK
MELLON TRUST
COMPANY, N.A., as Agent

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

ACKNOWLEDGMENT

 

STATE OF ILLINOIS

§

 

 

 

 

§

COUNTY OF CHICAGO

§

 

 

 

On                                                  , before me,
                                                              , Notary Public,
personally appeared
                                                                                  ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of Illinois that
the foregoing paragraph is true and correct.

WITNESS my hand and Official Seal.

 

[SEAL]

 

 

 

 

 

 

 

 

 

 

 

Notary Public in and for the

 

 

 

State of Illinois

 

 

 

 

 

My commission expires:

 

 

 

 

 

--------------------------------------------------------------------------------

 

SCHEDULE I

Deeds of Trust

 

1.

Amended and Restated First Lien Deed of Trust, Security Agreement and Fixture
Filing (Texas) by and from the Borrower to Linda Daugherty, as the Trustee
thereunder, for the benefit of the Collateral Agent, dated as of December 10,
2014 and recorded in the Deed of Trust Records of Borden County, Texas in Volume
107, Page 255.

 

2.

Amended and Restated First Lien Deed of Trust, Security Agreement and Fixture
Filing (Texas) by and from the Borrower to Linda Daugherty, as the Trustee
thereunder, for the benefit of the Collateral Agent, dated as of December 10,
2014 and recorded in the Public Records of Collin County, Texas as Document No.
20141212001353560.

 

3.

Amended and Restated First Lien Deed of Trust, Security Agreement and Fixture
Filing (Texas) by and from the Borrower to Linda Daugherty, as the Trustee
thereunder, for the benefit of the Collateral Agent, dated as of December 10,
2014 and recorded in the Public Records of Concho County, Texas in Book 0264,
Page 0767.

 

4.

Amended and Restated First Lien Deed of Trust, Security Agreement and Fixture
Filing (Texas) by and from the Borrower to Linda Daugherty, as the Trustee
thereunder, for the benefit of the Collateral Agent, dated as of December 10,
2014 and recorded in the Public Records of Glasscock County, Texas in Volume
271, Page 334.

 

5.

Second Amended and Restated First Lien Deed of Trust, Security Agreement and
Fixture Filing (Texas) by and from the Borrower to Linda Daugherty, as the
Trustee thereunder, for the benefit of the Collateral Agent, dated as of
December 10, 2014 and recorded in the Real Property Records of Hidalgo County,
Texas under Document No. 2014-2570658.

 

6.

Amended and Restated First Lien Deed of Trust, Security Agreement and Fixture
Filing (Texas) by and from the Borrower to Linda Daugherty, as the Trustee
thereunder, for the benefit of the Collateral Agent, dated as of December 10,
2014 and recorded in the Public Records of Howard County, Texas in Volume 1430,
Page 215.

 

7.

Amended and Restated First Lien Deed of Trust, Security Agreement and Fixture
Filing (Texas) by and from the Borrower to Linda Daugherty, as the Trustee
thereunder, for the benefit of the Collateral Agent, dated as of December 10,
2014 and recorded in the Real Property Records of Hunt County, Texas as Document
No. 2014-15149.

 

8.

Amended and Restated First Lien Deed of Trust, Security Agreement and Fixture
Filing (Texas) by and from the Borrower to Linda Daugherty, as the Trustee
thereunder, for the benefit of the Collateral Agent, dated as of December 10,
2014 and recorded in the Public Records of Martin County, Texas in Volume 434,
Page 99.

 

9.

Amended and Restated First Lien Deed of Trust, Security Agreement and Fixture
Filing (Texas) by and from the Borrower to Linda Daugherty, as the Trustee
thereunder, for the benefit of the Collateral Agent, dated as of December 10,
2014 and recorded in the Public Records of McCulloch County, Texas in Volume
429, Page 575.

 

10.

Amended and Restated First Lien Deed of Trust, Security Agreement and Fixture
Filing (Texas) by and from the Borrower to Linda Daugherty, as the Trustee
thereunder, for the benefit of the Collateral Agent, dated as of December 10,
2014 and recorded in the Public Records of Midland County, Texas under Document
No. 2014-29351.

 

11.

Amended and Restated First Lien Deed of Trust, Security Agreement and Fixture
Filing (Texas) by and from the Borrower to Linda Daugherty, as the Trustee
thereunder, for the benefit of the Collateral Agent, dated as of December 10,
2014 and recorded in the Public Records of Mitchell County, Texas in Volume 821,
Page 1110.

 

12.

Amended and Restated First Lien Deed of Trust, Security Agreement and Fixture
Filing (Texas) by and from the Borrower to Linda Daugherty, as the Trustee
thereunder, for the benefit of the Collateral Agent, dated as of December 10,
2014 and recorded in the Public Records of Randall County, Texas as Document No.
2014020030.

 

13.

Amended and Restated First Lien Deed of Trust, Security Agreement and Fixture
Filing (Texas) by and from the Borrower to Linda Daugherty, as the Trustee
thereunder, for the benefit of the Collateral Agent, dated as of December 10,
2014 and recorded in the Public Records of Reagan County, Texas in Volume 0211,
Page 0125.

 

14.

Amended and Restated First Lien Deed of Trust, Security Agreement and Fixture
Filing (Texas) by and from the Borrower to Linda Daugherty, as the Trustee
thereunder, for the benefit of the Collateral Agent, dated as of December 10,
2014 and recorded in the Public Records of San Saba County, Texas as Document
No. 015432.

 

15.

First Lien Deed of Trust, Security Agreement and Fixture Filing (Texas) by and
from the Borrower to Linda Daugherty, as the Trustee thereunder, for the benefit
of the Collateral Agent, dated as of December 15, 2014 and recorded in the
Public Records of Martin County, Texas as Document No. 2608 in Volume 459, Page
360.

1

--------------------------------------------------------------------------------

 

 

16.

First Lien Deed of Trust, Security Agreement and Fixture Filing (Texas) by and
from the Borrower to Linda Daugherty, as the Trustee thereunder, for the benefit
of the Collateral Agent, dated as of February 16, 2015 and recorded in the
Public Records of Martin County, Texas as Document No. 661 in Volume 441, Page
285. 

 

17.

First Lien Deed of Trust, Security Agreement and Fixture Filing (Texas) by and
from the Borrower to Linda Daugherty, as the Trustee thereunder, for the benefit
of the Collateral Agent, dated as of February 16, 2015 and recorded in the
Public Records of Potter County, Texas as Document No. 1271003.

 

18.

First Lien Deed of Trust, Security Agreement and Fixture Filing (Texas) by and
from the Borrower to Linda Daugherty, as the Trustee thereunder, for the benefit
of the Collateral Agent, dated as of April 28, 2015 and recorded in the Public
Records of Glasscock County, Texas in Volume 283, Page 001.

 

19.

First Lien Deed of Trust, Security Agreement and Fixture Filing (Texas) by and
from the Borrower to Linda Daugherty, as the Trustee thereunder, for the benefit
of the Collateral Agent, dated as of June 25, 2015 and recorded in the Public
Records of Borden County, Texas in Volume 107, Page 705.

 

20.

First Lien Deed of Trust, Security Agreement and Fixture Filing (Texas) by and
from the Borrower to Linda Daugherty, as the Trustee thereunder, for the benefit
of the Collateral Agent, dated as of June 25, 2015 and recorded in the Public
Records of Glasscock County, Texas in Volume 287, Page 260.

 

21.

First Lien Deed of Trust, Security Agreement and Fixture Filing (Texas) by and
from the Borrower to Linda Daugherty, as the Trustee thereunder, for the benefit
of the Collateral Agent, dated as of June 25, 2015 and recorded in the Public
Records of Howard County, Texas in Volume 1465, Page 34.

 

22.

First Lien Deed of Trust, Security Agreement and Fixture Filing (Texas) by and
from the Borrower to Linda Daugherty, as the Trustee thereunder, for the benefit
of the Collateral Agent, dated as of June 25, 2015 and recorded in the Public
Records of Martin County, Texas as Document 2217 in Volume 454, Page 455.

 

23.

First Lien Deed of Trust, Security Agreement and Fixture Filing (Texas) by and
from the Borrower to Linda Daugherty, as the Trustee thereunder, for the benefit
of the Collateral Agent, dated as of June 25, 2015 and recorded in the Public
Records of Midland County, Texas as Document No. 2015-14589.

 

24.

First Lien Deed of Trust, Security Agreement and Fixture Filing (Texas) by and
from the Borrower to Linda Daugherty, as the Trustee thereunder, for the benefit
of the Collateral Agent, dated as of June 25, 2015 and recorded in the Public
Records of Mitchell County, Texas in Volume 827, Page 134.

 

25.

First Lien Deed of Trust, Security Agreement and Fixture Filing (Texas) by and
from the Borrower to Linda Daugherty, as the Trustee thereunder, for the benefit
of the Collateral Agent, dated as of June 25, 2015 and recorded in the Public
Records of Reagan County, Texas in Volume 0225, Page 0237.

 

26.

First Lien Deed of Trust, Security Agreement and Fixture Filing (Texas) by and
from the Borrower to Linda Daugherty, as the Trustee thereunder, for the benefit
of the Collateral Agent, dated as of June 25, 2015 and recorded in the Public
Records of Upton County, Texas in Volume 00944, Page 00100.

 

 

 

2

--------------------------------------------------------------------------------

 

Annex A

Third Amended and Restated Credit Agreement, as amended by this Amendment

[see attached]

 

 

 

 

--------------------------------------------------------------------------------

 

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

among

SHARYLAND DISTRIBUTION & TRANSMISSION SERVICES, L.L.C.,

as Borrower,

The Several Lenders from Time to Time Parties Hereto

and

ROYAL BANK OF CANADA,

as Administrative Agent

Dated as of December 10, 2014

AS AMENDED BY THE FIRST AMENDMENT DATED AS OF SEPTEMBER [  ], 2015

 

 

 

 

2

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

 

Page

Section 1

Amount and Terms of Credit

1

    1.1.

Revolving Commitment

1

    1.2.

Procedure for Revolving Loan Borrowing

1

    1.3.

Swingline Commitment

2

    1.4.

Procedure for Swingline Borrowing; Refunding of Swingline Loans

2

    1.5.

Termination or Reduction of Revolving Commitments

3

    1.6.

Conversion and Continuation Options

3

    1.7.

Limitations on Eurodollar Tranches

3

    1.8.

Interest Rates and Payment Dates

3

    1.9.

Computation of Interest and Fees

4

    1.10.

Inability to Determine Interest Rate

4

    1.11.

Pro Rata Treatment and Payments

4

    1.12.

Requirements of Law

5

    1.13.

Change of Lending Office

6

    1.14.

Indemnity

6

    1.15.

Replacement of Lenders

6

    1.16.

Defaulting Lenders

7

    1.17.

Increase in Commitments

8

 

 

 

Section 2

Letters of Credit

9

    2.1.

L/C Commitment

9

    2.2.

Procedure for Issuance of Letter of Credit

9

    2.3.

L/C Participations

9

    2.4.

Reimbursement Obligation of the Borrower

10

    2.5.

Obligations Absolute

10

    2.6.

Letter of Credit Payments

10

    2.7.

Applications

10

 

 

 

Section 3

Fees

10

 

 

 

Section 4

PREPAYMENT; TAXES

11

    4.1.

Voluntary Prepayments

11

    4.2.

Mandatory Prepayments

11

    4.3.

Taxes

12

 

 

 

Section 5

Conditions Precedent

15

    5.1.

Conditions to Effectiveness

15

    5.2.

Conditions to All Credit Events

16

 

 

 

Section 6

Representations, Warranties and Agreements

17

    6.1.

Organization; Power and Authority

17

    6.2.

Power and Authority

17

    6.3.

Disclosure

17

    6.4.

Organization and Ownership of Interests

17

    6.5.

Financial Condition; Financial Statements

17

    6.6.

Compliance with Laws, Other Instruments, Etc.

18

    6.7.

Governmental Authorizations, Etc.

18

    6.8.

Litigation; Observance of Agreements, Statutes and Orders

18

    6.9.

Taxes

18

    6.10.

Title to Property

19

    6.11.

Insurance

19

    6.12.

Licenses, Permits, Etc.; Leases; IP Rights

19

    6.13.

Compliance with ERISA

19

    6.14.

Intentionally omitted.

19

    6.15.

Intentionally Omitted

19

    6.16.

Foreign Assets Control Regulations, Etc.

19

    6.17.

Status under Certain Statutes

20

    6.18.

Environmental Matters

20

i

--------------------------------------------------------------------------------

 

    6.19.

Force Majeure Events; Employees

21

    6.20.

Collateral

21

    6.21.

Collateral Agency Agreement

21

    6.22.

Margin Regulations

21

    6.23.

OFAC

21

 

 

 

Section 7

Affirmative Covenants

21

    7.1.

Information Covenants

21

    7.2.

Use of Proceeds

23

    7.3.

Compliance with Law

23

    7.4.

Insurance

24

    7.5.

Maintenance of Properties

24

    7.6.

Payment of Taxes and Claims

24

    7.7.

Existence, Etc.

24

    7.8.

Books and Records; Inspection Rights

24

    7.9.

Collateral; Further Assurances

25

    7.10.

Material Project Documents

26

    7.11.

Financial Ratios

26

 

 

 

Section 8

Negative Covenants

26

    8.1.

Transactions with Affiliates

26

    8.2.

Merger, Consolidation, etc.

26

    8.3.

Line of Business

27

    8.4.

Terrorism Sanctions Regulations

27

    8.5.

Liens

27

    8.6.

Indebtedness

28

    8.7.

Loans, Advances, Investments and Contingent Liabilities

28

    8.8.

No Subsidiaries

29

    8.9.

Restricted Payments

29

    8.10.

Sale of Assets, etc.

29

    8.11.

Sale or Discount of Receivables

29

    8.12.

Amendments to Organizational Documents

29

    8.13.

Sale and Lease-Back

30

    8.14.

ERISA Compliance

30

    8.15.

No Margin Stock

30

    8.16.

Material Project Documents

30

    8.17.

Regulation

31

    8.18.

Swaps

31

    8.19.

Additional Financial Covenants

31

    8.20.

Burdensome Agreements

31

 

 

 

Section 9

Events of Default

32

 

 

 

Section 10

Definitions

34

    10.1.

Defined Terms

34

    10.2.

Other Definitional Provisions

52

 

 

 

Section 11

THE ADMINISTRATIVE AGENT

53

    11.1.

Appointment

53

    11.2.

Delegation of Duties

53

    11.3.

Exculpatory Provisions

53

    11.4.

Reliance by Administrative Agent

53

    11.5.

Notice of Default

54

    11.6.

Non-Reliance on Administrative Agent and Other Lenders

54

    11.7.

Indemnification

54

    11.8.

The Administrative Agent in Its Individual Capacity

54

    11.9.

Successor Administrative Agent

55

    11.10.

Arranger

55

    11.11.

Credit Bidding

55

 

 

 

ii

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Section 12

Miscellaneous.

55

    12.1.

Payment of Expenses, etc.

55

    12.2.

Right of Setoff

56

    12.3.

Notices

56

    12.4.

Benefit of Agreement.

56

    12.5.

No Waiver; Remedies Cumulative

58

    12.6.

Payments Pro Rata

58

    12.7.

Calculations; Computations

59

    12.8.

Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial

59

    12.9.

USA PATRIOT Act

59

    12.10.

Counterparts

59

    12.11.

Headings

59

    12.12.

Amendment or Waiver

59

    12.13.

Survival

60

    12.14.

Domicile of Loans

60

    12.15.

Confidentiality

60

    12.16.

Integration

61

    12.17.

Acknowledgments

61

    12.18.

Severability

61

    12.19.

Amendment and Restatement

61

 

 

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ANNEXES:

 

 

 

1.1A

Lenders’ Commitments and Addresses

6.4

Organization and Ownership of Interests

6.7

Governmental Authorizations

6.12

Leases

8.5

Liens

8.20

Burdensome Agreements

 

 

EXHIBITS:

 

 

 

A

Form of Assignment Agreement

B

Form of Closing Certificate

C

Form of Opinion of Baker Botts L.L.P.

D

Form of Compliance Certificate

E

Form of Opinion of Sutherland Asbill & Brennan LLP

F-1 ~ 4

Forms of Tax Certificates

G

Subordination Terms

H

Form of Subsidiary Guaranty

I

Form of Prepayment Notice

J-1

Form of Notice of Revolving Loan Borrowing

J-2

Form of Notice of Swingline Borrowing

K

Form of Notice of Conversion/Continuation

 

 

 

iv

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 10, 2014,
among SHARYLAND DISTRIBUTION & TRANSMISSION SERVICES, L.L.C. (the “Borrower”), a
Texas limited liability company and a Subsidiary of Transmission and
Distribution Company L.L.C. (“Holdings”), the several lenders from time to time
parties hereto (the “Lenders”), and ROYAL BANK OF CANADA (the “Administrative
Agent”).  Unless otherwise defined herein, all capitalized terms used herein and
defined in ‎Section 10 are used herein as so defined.

W I T N E S S E T H:

WHEREAS,  the Borrower entered into that certain Second Amended and Restated
Credit Agreement, dated as of June 28, 2013, between the Borrower, the
Administrative Agent and the several lenders from time to time parties
thereto  (the “Existing Lenders”) (as amended, supplemented or modified from
time to time prior to the date hereof, the “Original Credit Agreement”); and

WHEREAS, subject to and on the terms and conditions set forth herein, the
parties thereto wish to amend and restate the Original Credit Agreement in its
entirety upon the terms and conditions set forth herein, with the Original
Credit Agreement, as so amended and restated, and as may be further amended,
restated, supplemented or otherwise modified, being hereinafter referred to as
the “Agreement”;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
set forth, the Existing Lenders and the Borrower agree that the Original Credit
Agreement is hereby amended and restated as of the Restatement Date (as
hereinafter defined) to read in its entirety as follows:

 

SECTION 1

AMOUNT AND TERMS OF CREDIT.

1.1. Revolving Commitment.

(a) Subject to the terms and conditions hereof, each Revolving Lender severally
agrees to make revolving credit loans in U.S. dollars (“Revolving Loans”) to the
Borrower from time to time during the Revolving Commitment Period in an
aggregate principal amount at any one time outstanding which, when added to such
Lender’s Revolving Percentage of the sum of (i) the Letter of Credit
Outstandings and (ii) the aggregate principal amount of the Swingline Loans then
outstanding, does not exceed the amount of such Lender’s Revolving
Commitment.  During the Revolving Commitment Period the Borrower may use the
Revolving Commitments by borrowing, prepaying the Revolving Loans in whole or in
part, and reborrowing, all in accordance with the terms and conditions
hereof.  The Revolving Loans may from time to time be Eurodollar Loans or ABR
Loans, as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections ‎1.2 and ‎1.6, provided that all Revolving Loans made
as part of the same Borrowing shall, unless otherwise specifically provided
herein, consist of Revolving Loans of the same Type.

(b) The Borrower shall repay all outstanding Revolving Loans, together with all
accrued and unpaid interest thereon and all other amounts payable hereunder, on
the Revolving Facility Final Maturity Date.

1.2. Procedure for Revolving Loan Borrowing.

The Borrower may borrow under the Revolving Commitment during the Revolving
Commitment Period on any Business Day, provided that the Borrower shall give the
Administrative Agent irrevocable notice substantially in the form of Exhibit J-1
(which notice must be received by the Administrative Agent prior to 11:00 A.M.,
New York City time, (a) three Business Days prior to the requested Borrowing
Date, in the case of Eurodollar Loans, or (b) one Business Day prior to the
requested Borrowing Date, in the case of ABR Loans) (provided that any such
notice of a Borrowing of ABR Loans under the Revolving Facility to finance
payments required by Section ‎2.4 and Section 5.1(e) may be given not later than
10:00 A.M., New York City time, on the Borrowing Date), specifying (i) the
amount and Type of Revolving Loans to be borrowed, (ii) the requested Borrowing
Date and (iii) in the case of Eurodollar Loans, the respective amounts of each
such Type of Loan and the respective lengths of the initial Interest Period
therefor.  Any Revolving Loans made on the Restatement Date shall initially be
ABR Loans.  Each Borrowing under the Revolving Commitment shall be in an amount
equal to (x) in the case of ABR Loans, $500,000 or a whole multiple thereof (or,
if the Total Unutilized Revolving Commitments at such time are less than
$500,000, such lesser amount) and (y) in the case of Eurodollar Loans, $500,000
or a whole multiple of $100,000 in excess thereof; provided, that (i) the
Swingline Lender may request, on behalf of the Borrower, ABR Loans in other
amounts pursuant to Section ‎1.4 and (ii) the Borrower may request ABR Loans in
an amount required to finance payments required by Section 2.4 and Section
5.1(e).  Upon receipt of any such notice from the Borrower, the Administrative
Agent shall promptly notify each Revolving Lender thereof.  Each Revolving
Lender will make the amount of its pro rata share of each Borrowing available to
the Administrative Agent for the account of the Borrower at the Funding Office
prior to 12:00 Noon, New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent.  The
Administrative Agent shall make the proceeds of such Borrowing available to the
Borrower on such Borrowing Date by depositing such proceeds in the Specified
Account of the Borrower on such Borrowing Date in immediately available funds.

1

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1.3. Swingline Commitment.

(a) Subject to the terms and conditions hereof, the Swingline Lender agrees to
make a portion of the credit otherwise available to the Borrower under the
Revolving Commitments from time to time during the Revolving Commitment Period
by making swing line loans (“Swingline Loans”) to the Borrower; provided that
(i) the aggregate principal amount of Swingline Loans outstanding at any time
shall not exceed the Swingline Commitment then in effect (notwithstanding that
the Swingline Loans outstanding at any time, when aggregated with the Swingline
Lender’s other outstanding Revolving Loans, may exceed the Swingline Commitment
then in effect) and (ii) the Borrower shall not request, and the Swingline
Lender shall not make, any Swingline Loan if, after giving effect to the making
of such Swingline Loan, the Total Revolving Extensions of Credit would exceed
the Total Revolving Commitments.  During the Revolving Commitment Period, the
Borrower may use the Swingline Commitment by borrowing, repaying and
reborrowing, all in accordance with the terms and conditions hereof.  Swingline
Loans shall be ABR Loans only.

(b) The Borrower shall repay to the Swingline Lender the then unpaid principal
amount of each Swingline Loan on the earlier of the Revolving Facility Final
Maturity Date and the first date after such Swingline Loan is made that is the
15th or last day of a calendar month and is at least two Business Days after
such Swingline Loan is made; provided that on each date that a Revolving Loan is
borrowed, the Borrower shall repay all Swingline Loans then outstanding.

1.4. Procedure for Swingline Borrowing; Refunding of Swingline Loans.

(a) Whenever the Borrower desires that the Swingline Lender make Swingline Loans
it shall give the Swingline Lender irrevocable telephonic notice confirmed
promptly in writing substantially in the form of Exhibit J-2 (which telephonic
notice must be received by the Swingline Lender not later than 1:00 P.M., New
York City time, on the proposed Borrowing Date), specifying (i) the amount to be
borrowed and (ii) the requested Borrowing Date (which shall be a Business Day
during the Revolving Commitment Period).  Each Borrowing under the Swingline
Commitment shall be in an amount equal to $250,000 or a whole multiple of
$50,000 in excess thereof.  Not later than 3:00 P.M., New York City time, on the
requested Borrowing Date, the Swingline Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the amount of the Swingline Loan to be made by the Swingline
Lender.  The Administrative Agent shall make the proceeds of such Swingline Loan
available to the Borrower on such Borrowing Date by depositing such proceeds in
the Specified Account of the Borrower on such Borrowing Date in immediately
available funds.

(b) The Swingline Lender, at any time and from time to time in its sole and
absolute discretion may, on behalf of the Borrower (which hereby irrevocably
directs the Swingline Lender to act on its behalf), on one Business Day’s notice
given by the Swingline Lender no later than 12:00 Noon, New York City time,
request each Revolving Lender to make, and each Revolving Lender hereby agrees
to make, a Revolving Loan, in an amount equal to such Revolving Lender’s
Revolving Percentage of the aggregate amount of the Swingline Loans (the
“Refunded Swingline Loans”) outstanding on the date of such notice, to repay the
Swingline Lender.  Each Revolving Lender shall make the amount of such Revolving
Loan available to the Administrative Agent at the Funding Office in immediately
available funds, not later than 10:00 A.M., New York City time, one Business Day
after the date of such notice.  The proceeds of such Revolving Loans shall be
immediately made available by the Administrative Agent to the Swingline Lender
for application by the Swingline Lender to the repayment of the Refunded
Swingline Loans.  The Borrower irrevocably authorizes the Swingline Lender to
charge the Specified Account (up to the amount available in each such account)
in order to immediately pay the amount of such Refunded Swingline Loans to the
extent amounts received from the Revolving Lenders are not sufficient to repay
in full such Refunded Swingline Loans.

(c) If prior to the time a Revolving Loan would have otherwise been made
pursuant to Section ‎1.4‎(b), one of the events described in ‎Section 9(j) or
‎Section 9(k) shall have occurred and be continuing with respect to the Borrower
or if for any other reason, as determined by the Swingline Lender in its sole
discretion, Revolving Loans may not be made as contemplated by Section ‎1.4(b),
each Revolving Lender shall, on the date such Revolving Loan was to have been
made pursuant to the notice referred to in Section ‎1.4(b), purchase for cash an
undivided participating interest in the then outstanding Swingline Loans by
paying to the Swingline Lender an amount (the “Swingline Participation Amount”)
equal to (i) such Revolving Lender’s Revolving Percentage times (ii) the sum of
the aggregate principal amount of Swingline Loans then outstanding that were to
have been repaid with such Revolving Loans.

(d) Whenever, at any time after the Swingline Lender has received from any
Revolving Lender such Lender’s Swingline Participation Amount, the Swingline
Lender receives any payment on account of the Swingline Loans, the Swingline
Lender will distribute to such Lender its Swingline Participation Amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender’s participating interest was outstanding and
funded and, in the case of principal and interest payments, to reflect such
Lender’s pro rata portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swingline Loans then due); provided,
however, that in the event that such payment received by the Swingline Lender is
required to be returned, such Revolving Lender will return to the Swingline
Lender any portion thereof previously distributed to it by the Swingline Lender.

2

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(e) Each Revolving Lender’s obligation to make the Loans referred to in Section
‎1.4(b) and to purchase participating interests pursuant to Section ‎1.4(c)
shall be absolute and unconditional and shall not be affected by any
circumstance, including (i) any setoff, counterclaim, recoupment, defense or
other right that such Revolving Lender or the Borrower may have against the
Swingline Lender, the Borrower or any other Person for any reason whatsoever,
(ii) the occurrence or continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions specified in ‎Section 5, (iii)
any adverse change in the condition (financial or otherwise) of the Borrower,
(iv) any breach of this Agreement or any other Credit Documents by the Borrower,
any other Revolving Lender or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.

1.5. Termination or Reduction of Revolving Commitments.

The Borrower shall have the right, upon not less than three Business Days’
notice to the Administrative Agent, to terminate the Revolving Commitments or,
from time to time, to reduce the amount of the Revolving Commitments; provided
that no such termination or reduction of Revolving Commitments shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Loans and Swingline Loans made on the effective date thereof, the
Total Revolving Extensions of Credit would exceed the Total Revolving
Commitments.  Any partial reduction of the Revolving Commitments shall be in an
amount equal to $500,000, or a whole multiple thereof, and shall reduce
permanently the Revolving Commitments then in effect.

1.6. Conversion and Continuation Options.

(a) The Borrower may elect from time to time to convert Eurodollar Loans to ABR
Loans by giving the Administrative Agent prior irrevocable notice of such
election substantially in the form of Exhibit K no later than 11:00 A.M., New
York City time, on the Business Day preceding the proposed conversion date,
provided that any such conversion of Eurodollar Loans may only be made on the
last day of an Interest Period with respect thereto.  The Borrower may elect
from time to time to convert ABR Loans to Eurodollar Loans by giving the
Administrative Agent prior irrevocable notice of such election substantially in
the form of Exhibit K no later than 11:00 A.M., New York City time, on the third
Business Day preceding the proposed conversion date (which notice shall specify
the length of the initial Interest Period therefor), provided that no ABR Loan
under a particular Facility may be converted into a Eurodollar Loan when any
Event of Default has occurred and is continuing and the Administrative Agent or
the Required Lenders have determined in its or their sole discretion not to
permit such conversions.  Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof.

(b) Any Eurodollar Loan may be continued as such upon the expiration of the then
current Interest Period with respect thereto by the Borrower giving irrevocable
notice to the Administrative Agent substantially in the form of Exhibit K, in
accordance with the applicable provisions of the term “Interest Period” set
forth in ‎Section 10, of the length of the next Interest Period to be applicable
to such Eurodollar Loans, provided that no Eurodollar Loan under a particular
Facility may be continued as such (i) when any Event of Default has occurred and
is continuing and the Administrative Agent has or the Required Lenders have
determined in its or their sole discretion not to permit such continuations or
(ii) if an Event of Default specified in Section ‎9(j) or ‎9(k) with respect to
the Borrower is in existence, and provided, further, that if the Borrower shall
fail to give any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso such Loans shall
be automatically converted to ABR Loans on the last day of such then expiring
Interest Period.  Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.

1.7. Limitations on Eurodollar Tranches.

Notwithstanding anything to the contrary in this Agreement, all Borrowings,
conversions and continuations of Eurodollar Loans and all selections of Interest
Periods shall be in such amounts and be made pursuant to such elections so that,
(a) after giving effect thereto, the aggregate principal amount of the
Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $500,000
or a whole multiple of $100,000 in excess thereof and (b) no more than seven
Eurodollar Tranches shall be outstanding at any one time.

1.8. Interest Rates and Payment Dates. (a)  Each Eurodollar Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.

(b) Each ABR Loan shall bear interest at a rate per annum equal to the ABR plus
the Applicable Margin.

3

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(c) (i) If all or a portion of the principal amount of any Loan or Reimbursement
Obligation shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such amount shall bear interest at a rate per annum
equal to (x) in the case of the Revolving Loans, the rate that would otherwise
be applicable thereto pursuant to the foregoing provisions of this Section plus
2% or (y) in the case of Reimbursement Obligations, the rate applicable to ABR
Loans under the Revolving Facility plus 2%, and (ii) if all or a portion of any
interest payable on any Loan or Reimbursement Obligation or any Commitment Fee
or other amount payable hereunder shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to the rate then applicable to ABR Loans
under the Revolving Facility plus 2%, in each case, with respect to clauses (i)
and (ii) above, from the date of such non‑payment until such amount is paid in
full (as well after as before judgment).

(d) Interest shall be payable in arrears on each Interest Payment Date, provided
that interest accruing pursuant to paragraph (c) of this Section shall be
payable from time to time on demand.

1.9. Computation of Interest and Fees (a).  Interest and fees payable pursuant
hereto shall be calculated on the basis of a 360-day year for the actual days
elapsed, except that, with respect to ABR Loans the rate of interest on which is
calculated on the basis of the Prime Rate, the interest thereon shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for the
actual days elapsed.  The Administrative Agent shall as soon as practicable
notify the Borrower and the relevant Lenders of each determination of a
Eurodollar Rate.  Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective.  The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.

(b) Each determination of an interest rate by the Administrative Agent pursuant
to any provision of this Agreement shall be conclusive and binding on the
Borrower and the Lenders in the absence of manifest error.  The Administrative
Agent shall, at the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Administrative Agent in determining any
interest rate pursuant to Section 1.8(a).

1.10. Inability to Determine Interest Rate.

If prior to the first day of any Interest Period for any Eurodollar Loan:

(a) the Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, or

(b) the Administrative Agent shall have received notice from the Required
Lenders that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,

(c) the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the relevant Lenders as soon as practicable thereafter.  If
such notice is given (x) any Eurodollar Loans under the Revolving Facility
requested to be made on the first day of such Interest Period shall be made as
ABR Loans, (y) any Loans under the Revolving Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as ABR Loans and (z) any outstanding Eurodollar Loans under the
Revolving Facility shall be converted, on the last day of the then current
Interest Period with respect to such Eurodollar Loans, to ABR Loans.  Until such
notice has been withdrawn by the Administrative Agent, no further Eurodollar
Loans under the Revolving Facility shall be made or continued as such, nor shall
the Borrower have the right to convert Loans under the Revolving Facility to
Eurodollar Loans.

1.11. Pro Rata Treatment and Payments.

(a) Each Borrowing by the Borrower from the Lenders hereunder, each payment by
the Borrower on account of any Commitment Fee and any reduction of the
Commitments of the Lenders shall be made pro rata.

(b) All payments (including prepayments) to be made by the Borrower hereunder,
whether on account of principal, interest, fees or otherwise, shall be made
without setoff or counterclaim and shall be made prior to 1:00 P.M., New York
City time, on the due date thereof to the Administrative Agent, for the account
of the Lenders, at the Funding Office, in Dollars and in immediately available
funds.  The Administrative Agent shall distribute such payments to each relevant
Lender promptly upon receipt in like funds as received, net of any amounts owing
by such Lender pursuant to Section ‎11.7.  If any payment hereunder (other than
payments on the Eurodollar Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day.  If any payment on a Eurodollar Loan becomes due and payable on a day other
than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend
such payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day.  In the case of any extension of
any payment of principal pursuant to the preceding two sentences, interest
thereon shall be payable at the then applicable rate during such extension.

4

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(c) Unless the Administrative Agent shall have been notified in writing by any
Lender prior to a Borrowing that such Lender will not make the amount that would
constitute its share of such Borrowing available to the Administrative Agent,
the Administrative Agent may assume that such Lender is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount.  If such amount is not made available to the Administrative Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest thereon, at a rate
equal to the greater of (i) the Federal Funds Effective Rate and (ii) a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation, for the period until such Lender makes such amount
immediately available to the Administrative Agent.  A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this paragraph shall be conclusive in the absence of manifest error.  If
such Lender’s share of such Borrowing is not made available to the
Administrative Agent by such Lender within three Business Days after such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to ABR Loans under
the Revolving Facility, on demand, from the Borrower.

(d) Unless the Administrative Agent shall have been notified in writing by the
Borrower prior to the date of any payment due to be made by the Borrower
hereunder that the Borrower will not make such payment to the Administrative
Agent, the Administrative Agent may assume that the Borrower is making such
payment, and the Administrative Agent may, but shall not be required to, in
reliance upon such assumption, make available to the Lenders their respective
pro rata shares of a corresponding amount.  If such payment is not made to the
Administrative Agent by the Borrower within three Business Days after such due
date, the Administrative Agent shall be entitled to recover, on demand, from
each Lender to which any amount which was made available pursuant to the
preceding sentence, such amount with interest thereon at the rate per annum
equal to the daily average Federal Funds Effective Rate.  Nothing herein shall
be deemed to limit the rights of the Administrative Agent or any Lender against
the Borrower.

(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section ‎1.4(b), ‎1.4(c), ‎1.11(d), ‎1.11(e), ‎2.3(a), ‎4.3(e) or
‎11.7, then the Administrative Agent may, in its discretion and notwithstanding
any contrary provision hereof, (i) apply any amounts thereafter received by the
Administrative Agent for the account of such Lender for the benefit of the
Administrative Agent, the Swingline Lender or the Issuing Lender to satisfy such
Lender’s obligations to it under such Sections until all such unsatisfied
obligations are fully paid, and/or (ii) hold any such amounts in a segregated
account as cash collateral for, and application to, any future funding
obligations of such Lender under any such Section, in the case of each of
clauses (i) and (ii) above, in any order as determined by the Administrative
Agent in its discretion.

1.12. Requirements of Law.

(a) If the adoption or taking effect of or any change in any Requirement of Law
or in the implementation, administration, interpretation or application thereof
or compliance by any Lender or other Credit Party with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Entity made subsequent to the date hereof:

(i) shall subject any Credit Party to any Taxes (other than  (A) Indemnified
Taxes, (B) Taxes described in clauses (b) through (d) of the definition of
Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal,
letters of credit, commitments, or other obligations, or its deposits, reserves,
other liabilities or capital attributable thereto;

(ii) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or other
extensions of credit (or participations therein) by, or any other acquisition of
funds by, any office of such Lender that is not otherwise included in the
determination of the Eurodollar Rate; or

(iii) shall impose on such Lender any other condition, cost or expense (other
than Taxes);

and the result of any of the foregoing is to increase the cost to such Lender or
such other Credit Party, by an amount that such Lender or other Credit Party
deems to be material, of making, converting into, continuing or maintaining
Loans or issuing or participating in Letters of Credit, or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the Borrower
shall promptly pay such Lender or such other Credit Party, upon its demand, any
additional amounts necessary to compensate such Lender or such other Credit
Party for such increased cost or reduced amount receivable.  If any Lender or
such other Credit Party becomes entitled to claim any additional amounts
pursuant to this paragraph, it shall promptly notify the Borrower (with a copy
to the Administrative Agent) of the event by reason of which it has become so
entitled.

(b) If any Lender shall have determined that the adoption of or any change in
any Requirement of Law regarding capital or liquidity requirements or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital or liquidity requirements (whether or not having the force of law) from
any Governmental Entity made subsequent to the date hereof shall have the effect
of reducing the rate of return on such Lender’s or such corporation’s capital as
a consequence of its obligations hereunder or under or in respect of any Letter
of Credit to

5

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a level below that which such Lender or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration such Lender’s
or such corporation’s policies with respect to capital adequacy or liquidity) by
an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such corporation
for such reduction.

(c) Notwithstanding anything herein to the contrary, (i) all requests, rules,
guidelines, requirements and directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or by United States or foreign regulatory
authorities, in each case pursuant to Basel III, and (ii) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines,
requirements and directives thereunder or issued in connection therewith or in
implementation thereof, shall in each case be deemed to be a change in a
Requirement of Law, regardless of the date enacted, adopted, issued or
implemented.

(d) A certificate as to any additional amounts payable pursuant to this Section
submitted by any Lender to the Borrower (with a copy to the Administrative
Agent) shall be conclusive in the absence of manifest error.  Notwithstanding
anything to the contrary in this Section, the Borrower shall not be required to
compensate a Lender pursuant to this Section for any amounts incurred more than
nine months prior to the date that such Lender notifies the Borrower of such
Lender’s intention to claim compensation therefor; provided that, if the
circumstances giving rise to such claim have a retroactive effect, then such
nine-month period shall be extended to include the period of such retroactive
effect.  The obligations of the Borrower pursuant to this Section shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.

1.13. Change of Lending Office. Each Lender agrees that, upon the occurrence of
any event giving rise to the operation of Section ‎1.12 or ‎4.3(a) or (d) with
respect to such Lender, it will, if requested by the Borrower, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Loans affected by such event with the object of
avoiding the consequences of such event; provided, that such designation is made
on terms that, in the sole judgment of such Lender, cause such Lender and its
lending offices to suffer no economic, legal or regulatory disadvantage, and
provided, further, that nothing in this Section shall affect or postpone any of
the obligations of the Borrower or the rights of any Lender pursuant to Section
‎1.12 or ‎4.3(a) or (d).

1.14. Indemnity. The Borrower agrees to indemnify each Lender for, and to hold
each Lender harmless from, any loss or expense that such Lender may sustain or
incur as a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment of or conversion
from Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day that is not the last day of an Interest
Period with respect thereto.  Such indemnification may include an amount equal
to the excess, if any, of (i) the amount of interest that would have accrued on
the amount so prepaid, or not so borrowed, converted or continued, for the
period from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market.  A certificate as to any amounts payable
pursuant to this Section submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error.  This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.

1.15. Replacement of Lenders. The Borrower shall be permitted to replace any
Lender if (a) such Lender requests reimbursement for amounts owing pursuant to
Section ‎1.12 or the Borrower is required to pay any Indemnified Taxes or
additional amounts to such Lender or any Governmental Entity for the account of
such Lender pursuant to Section ‎4.3(a) or (d), (b) such Lender becomes a
Defaulting Lender, or (c) such Lender does not consent to any proposed
amendment, supplement, modification, consent or waiver of any provision of this
Agreement or any other Credit Document that requires the consent of each of the
Lenders or each of the Lenders affected thereby (so long as the consent of the
Required Lenders has been obtained), with a replacement financial institution;
provided that (i) such replacement does not conflict with any Requirement of
Law, (ii) no Event of Default shall have occurred and be continuing at the time
of such replacement, (iii) prior to any such replacement, such Lender shall have
taken no action under Section ‎1.13 so as to eliminate the continued need for
payment of amounts owing pursuant to Section ‎1.12 or ‎4.3(a) or (d), (iv) the
replacement financial institution shall purchase, at par, all Loans and other
amounts owing to such replaced Lender on or prior to the date of replacement,
(v) the Borrower shall be liable to such replaced Lender under Section ‎1.14 if
any Eurodollar Loan owing to such replaced Lender shall be purchased other than
on the last day of the Interest Period relating thereto, (vi) the replacement
financial institution shall, subject to Section 12.4(b)(ii) and (iii), be
reasonably satisfactory to the Administrative Agent and the Issuing Lender,
(vii) the replaced Lender shall be obligated to make such replacement in
accordance with the provisions of  Section ‎12.4 (provided that the Borrower
shall be obligated to pay the registration and processing fee referred to
therein),(viii) until such time as such

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replacement shall be consummated, the Borrower shall pay all additional amounts
(if any) required pursuant to Section ‎1.12 or ‎4.3(a) or (d), as the case may
be, and (ix) any such replacement shall not be deemed to be a waiver of any
rights that the Borrower, the Administrative Agent or any other Lender shall
have against the replaced Lender.  Each party hereto agrees that an
assignment  required pursuant to this paragraph may be effected pursuant to an
Assignment and Assumption executed by the Borrower, the Administrative Agent and
the assignee, and that the Lender required to make such assignment need not be a
party thereto in order for such assignment to be effective.

1.16. Defaulting Lenders. Notwithstanding any provision of this Agreement to the
contrary, if any Lender becomes a Defaulting Lender, then the following
provisions shall apply for so long as such Lender is a Defaulting Lender:

(a) fees shall cease to accrue on the unfunded portion of the Revolving
Commitment of such Defaulting Lender pursuant to Section 3;

(b) the Revolving Commitment and Revolving Extensions of Credit of such
Defaulting Lender shall not be included in determining whether the Required
Lenders have taken or may take any action hereunder (including any consent to
any amendment, waiver or other modification pursuant to Section ‎12.12);
provided, that this clause (b) shall not apply to the vote of a Defaulting
Lender in the case of an amendment, waiver or other modification requiring the
consent of such Lender or each Lender affected thereby;

(c) if any Swingline Exposure or L/C Exposure exists at the time such Lender
becomes a Defaulting Lender then:

(i) all or any part of the Swingline Exposure and L/C Exposure of such
Defaulting Lender shall be reallocated among the non-Defaulting Lenders in
accordance with their respective Revolving Percentages but only to the extent
(x) the sum of all non-Defaulting Lenders’ Revolving Extensions of Credit plus
such Defaulting Lender’s Swingline Exposure and L/C Exposure does not exceed the
total of all non-Defaulting Lenders’ Revolving Commitments and (y) such
reallocation does not cause the Revolving Extensions of Credit of any
non-Defaulting Lender to exceed such Lender’s Revolving Commitment;

(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrower shall within one Business Day following
notice by the Administrative Agent (x) first, prepay such Swingline Exposure and
(y) second, in a manner consistent with the Collateral Agency Agreement, cash
collateralize for the benefit of the Issuing Lender only the Borrower’s
obligations corresponding to such Defaulting Lender’s L/C Exposure (after giving
effect to any partial reallocation pursuant to clause (i) above) in accordance
with the procedures set forth in Section ‎8.1 for so long as such L/C Exposure
is outstanding;

(iii) if the Borrower cash collateralizes any portion of such Defaulting
Lender’s L/C Exposure pursuant to clause (ii) above, the Borrower shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 3(b) with
respect to such Defaulting Lender’s L/C Exposure during the period such
Defaulting Lender’s L/C Exposure is cash collateralized;

(iv) if the L/C Exposure of the non-Defaulting Lenders is reallocated pursuant
to clause (i) above, then the fees payable to the Lenders pursuant to Section 3
shall be adjusted in accordance with such non-Defaulting Lenders’ Revolving
Percentages; and

(v) if all or any portion of such Defaulting Lender’s L/C Exposure is neither
reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then,
without prejudice to any rights or remedies of the Issuing Lender or any other
Lender hereunder, all fees payable under Section 3(b) with respect to such
Defaulting Lender’s L/C Exposure shall be payable to the Issuing Lender until
and to the extent that such L/C Exposure is reallocated and/or cash
collateralized; and

(d) so long as such Lender is a Defaulting Lender, the Swingline Lender shall
not be required to fund any Swingline Loan and the Issuing Lender shall not be
required to issue, amend or increase any Letter of Credit, unless it is
satisfied that the related exposure and the Defaulting Lender’s then outstanding
L/C Exposure will be 100% covered by the Revolving Commitments of the
non-Defaulting Lenders and/or cash collateral will be provided by the Borrower
in accordance with Section ‎1.16(c), and participating interests in any newly
made Swingline Loan or any newly issued or increased Letter of Credit shall be
allocated among non-Defaulting Lenders in a manner consistent with Section
‎1.16(c) (and such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event with respect to a Lender Parent of any Lender shall
occur following the date hereof and for so long as such event shall continue or
(ii) the Swingline Lender or the Issuing Lender has a good faith belief that any
Lender has defaulted in fulfilling its obligations under one or more other
agreements in which such Lender commits to extend credit, the Swingline Lender
shall not be required to fund any Swingline Loan and the Issuing Lender shall
not be required to issue, amend or increase any Letter of Credit, unless the
Swingline Lender or the Issuing Lender, as the case may be, shall have entered
into arrangements with the Borrower or such Lender, satisfactory to the
Swingline Lender or the Issuing Lender, as the case may be, to defease any risk
to it in respect of such Lender hereunder.

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In the event that the Administrative Agent, the Borrower, the Swingline Lender
and the Issuing Lender each agrees that a Defaulting Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender, then the
Swingline Exposure and L/C Exposure of the Lenders shall be readjusted to
reflect the inclusion of such Lender’s Revolving Commitment and on such date
such Lender shall purchase at par such of the Loans of the other Lenders (other
than Swingline Loans) as the Administrative Agent shall determine may be
necessary in order for such Lender to hold such Loans in accordance with its
Revolving Percentage.

1.17. Increase in Commitments

(a) Request for Increase.  Provided no Event of Default has occurred and is
continuing, upon notice to the Administrative Agent (which shall promptly notify
the Lenders), the Borrower may from time to time request an increase in the
Total Revolving Commitments by an amount (for all such requests) not exceeding
$75,000,000 in the aggregate; provided that (i) any such request for an increase
shall be in a minimum amount of $10,000,000, (ii) the Borrower may make a
maximum of three such requests, and (iii) the new or increased Commitment of
each new or increasing Lender shall be on terms and conditions identical to
those of the existing Lenders immediately prior to such increase (other than
with respect to fees).  At the time of sending such notice, the Borrower (in
consultation with the Administrative Agent) shall specify the time period within
which each Lender is requested to respond (which shall in no event be less than
ten Business Days from the date of delivery of such notice to the Lenders).

(b) Lender Elections to Increase.  Each Lender shall notify the Administrative
Agent within such time period whether or not it agrees to increase its
Commitment and, if so, whether by an amount equal to, greater than, or less than
its Revolving Percentage of such requested increase.  Any Lender not responding
within such time period shall be deemed to have declined to increase its
Commitment.

(c) Notification by Administrative Agent; Additional Lenders.  The
Administrative Agent shall notify the Borrower and each Lender of the Lenders’
responses to each request made hereunder.  To achieve the full amount of a
requested increase and subject to the approval of the Administrative Agent and
the Issuing Lender, such approval not to be unreasonably withheld or delayed,
the Borrower may also invite additional Eligible Assignees to become Lenders
pursuant to a joinder agreement in form and substance reasonably satisfactory to
the Administrative Agent and its counsel.

(d) Effective Date and Allocations.  If the Total Revolving Commitments are
increased in accordance with this Section, the Administrative Agent and the
Borrower shall determine the effective date (the “Increase Effective Date”) and
the final allocation of such increase.  The Administrative Agent shall promptly
notify the Borrower and the Lenders of the final allocation of such increase and
the Increase Effective Date.

(e) Conditions to Effectiveness of Increase.  As a condition precedent to such
increase, the Borrower shall deliver to the Administrative Agent a certificate
of each Loan Party dated as of the Increase Effective Date (in sufficient copies
for each Lender) signed by a Responsible Officer of such Loan Party (i)
certifying and attaching the resolutions adopted by such Loan Party approving or
consenting to such increase, and (ii) in the case of the Borrower, certifying
that, before and after giving effect to such increase, (A) the representations
and warranties contained in Section 6 and the other Credit Documents are true
and correct on and as of the Increase Effective Date, except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct as of such earlier date, and except that
for purposes of this Section 1.17, the representations and warranties contained
in subsections (a)(i) and (a)(ii) of Section 6.5 shall be deemed to refer to the
most recent statements furnished pursuant to subsections (a) and (b),
respectively, of Section 7.1, and (B) no Default or Event of Default has
occurred and is continuing or would result therefrom.  On the Increase Effective
Date, each Lender (including any new Lender) participating in such Commitment
increase shall purchase and assume from each existing Lender having Loans
outstanding on such Increase Effective Date, without recourse or warranty, an
undivided interest and participation, to the extent of such Lender’s ratable
portion of the Total Revolving Commitments (after giving effect to such
Commitment increase), in the aggregate Loans then outstanding, so as to ensure
that, on the Increase Effective Date after giving effect to such Commitment
increase, each Lender is owed only its ratable portion of the Loans outstanding
on such Increase Effective Date.

(f) Conflicting Provisions.  This Section shall supersede any provisions in
Section 12.6 or 12.12 to the contrary.

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SECTION 2

LETTERS OF CREDIT. 

2.1. L/C Commitment (a).  Subject to the terms and conditions hereof, the
Issuing Lender, in reliance on the agreements of the other Revolving Lenders set
forth in Section ‎2.3(a), agrees to issue letters of credit (“Letters of
Credit”) for the account of the Borrower on any Business Day during the
Revolving Commitment Period in such form as may be approved from time to time by
the Issuing Lender; provided that the Issuing Lender shall have no obligation to
issue any Letter of Credit if, after giving effect to such issuance, (i) the
Letter of Credit Outstandings would exceed the L/C Commitment or (ii) the Total
Revolving Extensions of Credit would exceed the Total Revolving
Commitments.  Each Letter of Credit shall (i) be denominated in Dollars and (ii)
expire no later than the earlier of (x) the first anniversary of its date of
issuance and (y) the date that is five Business Days prior to the Revolving
Facility Final Maturity Date, provided that any Letter of Credit with a one-year
term may provide for the renewal thereof for additional one-year periods (which
shall in no event extend beyond the date referred to in clause (y) above).

(b) The Issuing Lender shall not at any time be obligated to issue any Letter of
Credit if such issuance would conflict with, or cause the Issuing Lender or any
L/C Participant to exceed any limits imposed by, any applicable Requirement of
Law.

2.2. Procedure for Issuance of Letter of Credit.

The Borrower may from time to time request that the Issuing Lender issue a
Letter of Credit by delivering to the Issuing Lender at its address for notices
specified herein an Application therefor, completed to the satisfaction of the
Issuing Lender, and such other certificates, documents and other papers and
information as the Issuing Lender may request.  Upon receipt of any Application,
the Issuing Lender will process such Application and the certificates, documents
and other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue the Letter of
Credit requested thereby (but in no event shall the Issuing Lender be required
to issue any Letter of Credit earlier than three Business Days after its receipt
of the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower.  The Issuing Lender shall furnish a copy of
such Letter of Credit to the Borrower promptly following the issuance
thereof.  The Issuing Lender shall promptly furnish to the Administrative Agent,
which shall in turn promptly furnish to the Lenders, notice of the issuance of
each Letter of Credit (including the amount thereof).

2.3. L/C Participations.

(a) The Issuing Lender irrevocably agrees to grant and hereby grants to each L/C
Participant, and, to induce the Issuing Lender to issue Letters of Credit, each
L/C Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from the Issuing Lender, on the terms and conditions set forth below,
for such L/C Participant’s own account and risk an undivided interest equal to
such L/C Participant’s Revolving Percentage in the Issuing Lender’s obligations
and rights under and in respect of each Letter of Credit and the amount of each
draft paid by the Issuing Lender thereunder.  Each L/C Participant agrees with
the Issuing Lender that, if a draft is paid under any Letter of Credit for which
the Issuing Lender is not reimbursed in full by the Borrower in accordance with
the terms of this Agreement (or in the event that any reimbursement received by
the Issuing Lender shall be required to be returned by it at any time), such L/C
Participant shall pay to the Issuing Lender upon demand at the Issuing Lender’s
address for notices specified herein an amount equal to such L/C Participant’s
Revolving Percentage of the amount that is not so reimbursed (or is so
returned).  Each L/C Participant’s obligation to pay such amount shall be
absolute and unconditional and shall not be affected by any circumstance,
including (i) any setoff, counterclaim, recoupment, defense or other right that
such L/C Participant may have against the Issuing Lender, the Borrower or any
other Person for any reason whatsoever, (ii) the occurrence or continuance of a
Default or an Event of Default or the failure to satisfy any of the other
conditions specified in ‎Section 9, (iii) any adverse change in the condition
(financial or otherwise) of the Borrower, (iv) any breach of this Agreement or
any other Credit Document by the Borrower, any other Loan Party (to the extent
applicable) or any other L/C Participant or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.

(b) If any amount required to be paid by any L/C Participant to the Issuing
Lender pursuant to Section ‎2.3(a) in respect of any unreimbursed portion of any
payment made by the Issuing Lender under any Letter of Credit is paid to the
Issuing Lender within three Business Days after the date such payment is due,
such L/C Participant shall pay to the Issuing Lender on demand an amount equal
to the product of (i) such amount, times (ii) the daily average Federal Funds
Effective Rate during the period from and including the date such payment is
required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360.  If any
such amount required to be paid by any L/C Participant pursuant to Section
‎2.3(a) is not made available to the Issuing Lender by such L/C Participant
within three Business Days after the date such payment is due, the Issuing
Lender shall be entitled to recover from such L/C Participant, on demand, such
amount with interest thereon calculated from such due date at the rate per annum
applicable to ABR Loans under the Revolving Facility.  A certificate of the
Issuing Lender submitted to any L/C Participant with respect to any amounts
owing under this Section shall be conclusive in the absence of manifest error.

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(c) Whenever, at any time after the Issuing Lender has made payment under any
Letter of Credit and has received from any L/C Participant its pro rata share of
such payment in accordance with Section ‎2.3(a), the Issuing Lender receives any
payment related to such Letter of Credit (whether directly from the Borrower or
otherwise, including proceeds of collateral applied thereto by the Issuing
Lender), or any payment of interest on account thereof, the Issuing Lender will
distribute to such L/C Participant its pro rata share

thereof; provided, however, that in the event that any such payment received by
the Issuing Lender shall be required to be returned by the Issuing Lender, such
L/C Participant shall return to the Issuing Lender the portion thereof
previously distributed by the Issuing Lender to it.

2.4. Reimbursement Obligation of the Borrower.

If any draft is paid under any Letter of Credit, the Borrower shall reimburse
the Issuing Lender for the amount of (a) the draft so paid and (b) any taxes,
fees, charges or other costs or expenses incurred by the Issuing Lender in
connection with such payment, not later than 12:00 Noon, New York City time, on
(i) the Business Day that the Borrower receives notice of such draft, if such
notice is received on such day prior to 10:00 A.M., New York City time, or (ii)
if clause (i) above does not apply, the Business Day immediately following the
day that the Borrower receives such notice.  Each such payment shall be made to
the Issuing Lender at its address for notices referred to herein in Dollars and
in immediately available funds.  Interest shall be payable on any such amounts
from the date on which the relevant draft is paid until payment in full at the
rate set forth in (x) until the Business Day next succeeding the date of the
relevant notice, Section ‎1.8(b) and (y) thereafter, Section ‎1.8(c).

2.5. Obligations Absolute.

The Borrower’s obligations under this ‎Section 2 shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment that the Borrower may have or have had
against the Issuing Lender, any beneficiary of a Letter of Credit or any other
Person.  The Borrower also agrees with the Issuing Lender that the Issuing
Lender shall not be responsible for, and the Borrower’s Reimbursement
Obligations under Section 3 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee.  The Issuing Lender shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of the Issuing Lender.  The Borrower agrees
that any action taken or omitted by the Issuing Lender under or in connection
with any Letter of Credit or the related drafts or documents, if done in the
absence of gross negligence or willful misconduct, shall be binding on the
Borrower and shall not result in any liability of the Issuing Lender to the
Borrower.

2.6. Letter of Credit Payments.

If any draft shall be presented for payment under any Letter of Credit, the
Issuing Lender shall promptly notify the Borrower of the date and amount
thereof.  The responsibility of the Issuing Lender to the Borrower in connection
with any draft presented for payment under any Letter of Credit shall, in
addition to any payment obligation expressly provided for in such Letter of
Credit, be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment are
substantially in conformity with such Letter of Credit.

2.7. Applications.

To the extent that any provision of any Application related to any Letter of
Credit is inconsistent with the provisions of this ‎Section 2, the provisions of
this ‎Section 2 shall apply.

SECTION 3 FEES (a).  The Borrower agrees to pay to the Administrative Agent a
commitment fee for the account of each Lender for the period from and including
the Restatement Date to but not including the date the Total Revolving
Commitment has been terminated, computed at a rate per annum equal to the
Applicable Fee Rate per annum times the average daily Unutilized Commitment of
such Lender (the “Commitment Fee”).  Such Commitment Fee shall be due and
payable in arrears on the last Business Day of each March, June, September and
December and on the first date upon which the Total Revolving Commitment shall
have been terminated, commencing with the first such date to fall after the
Restatement Date.

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(b) The Borrower agrees to pay to the Administrative Agent for the account of
each Lender pro rata on the basis of its Revolving Percentage a fee in respect
of each outstanding Letter of Credit (the “Letter of Credit Fee”) for each day
computed at the rate per annum equal to the Applicable Margin for Revolving
Loans that are Eurodollar Loans for such day on the Stated Amount of such Letter
of Credit on such day.  Accrued Letter of Credit Fees shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September and
December of each year and on the date upon which the Total Revolving Commitment
is terminated, commencing with the first such date to fall after the Restatement
Date.  Such fee shall be shared ratably among the Lenders participating in the
Revolving Facility.

(c) The Borrower agrees to pay to the Issuing Lender a fee in respect of each
Letter of Credit (the “Fronting Fee”) computed at the rate of 0.25% per annum on
the average daily Stated Amount of such Letter of Credit.  Accrued Fronting Fees
shall be due and payable quarterly in arrears on the last Business Day of each
March, June, September and December of each year and on the date upon which the
Total Revolving Commitment is terminated, commencing with the first such date to
fall after the Restatement Date.

(d) The Borrower agrees to pay directly to the Issuing Lender upon each issuance
of, drawing under, and/or amendment or transfer by a beneficiary of, a Letter of
Credit such amount as shall at the time of such issuance, drawing, transfer or
amendment be the administrative charge which the Issuing Lender is customarily
charging for issuances of, drawings under or amendments or transfers of, letters
of credit issued by it.

(e) The Borrower shall pay to the Administrative Agent (x) on the Restatement
Date for its own account and/or for distribution to the Lenders the fees
referred to in the Fee Letter and such other fees, if any, as have heretofore
been agreed to by the Borrower and the Administrative Agent and (y) for its own
account such other fees as may be agreed to from time to time between the
Borrower and the Administrative Agent, when and as due.

(f) All computations of Fees shall be made in accordance with Section 1.9(a).

 

SECTION 4

PREPAYMENT; TAXES.

4.1. Voluntary Prepayments.  The Borrower shall have the right to prepay Loans,
in whole or in part, without premium or penalty, from time to time on the
following terms and conditions: (i) the Borrower shall give the Administrative
Agent (and the Swingline Lender, in the case of Swingline Loans) at the Notice
Office written notice of its intent to prepay the Loans, whether such Loans are
Revolving Loans or Swingline Loans, the amount of such prepayment and (in the
case of Eurodollar Loans) the specific Borrowing(s) pursuant to which such
prepayment is made, which notice shall be substantially in the form of Exhibit I
hereto and received by the Administrative Agent by 11:00 A.M. (New York time)
one Business Day prior to the date of such prepayment or in the case of
Eurodollar Loans, three Business Days prior to the date of such prepayment;
(ii) each partial prepayment of any Borrowing shall be in an aggregate principal
amount of at least $250,000 in the case of Eurodollar Loans or $100,000 in the
case of ABR Loans or $100,000 in the case of Swingline Loans and shall include
accrued interest to such date on the amount prepaid, provided that no partial
prepayment of Eurodollar Loans made pursuant to a Borrowing shall reduce the
aggregate principal amount of the Loans outstanding pursuant to such Borrowing
to an amount less than the Minimum Borrowing Amount applicable thereto; (iii) if
a Eurodollar Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto, the Borrower shall also pay any amounts owing
pursuant to Section 1.14 and (iv) each prepayment in respect of any Loans made
pursuant to a Borrowing shall be applied pro rata among such Loans

4.2. Mandatory Prepayments.

(a) Requirements for Revolving Loans.  If on any date (after giving effect to
any other repayments or prepayments on such date) the sum of (i) the aggregate
outstanding principal amount of Revolving Loans and Swingline Loans plus
(ii) the aggregate amount of Letter of Credit Outstandings exceeds the Total
Revolving Commitment as then in effect, the Borrower shall repay on such date
that principal amount of Swingline Loans and, after the Swingline Loans have
been paid in full,  Unpaid Drawings and, after Unpaid Drawings have been paid in
full, Revolving Loans, in an aggregate amount equal to such excess.  If, after
giving effect to the prepayment of all outstanding Swingline Loans, Unpaid
Drawings and Revolving Loans, the aggregate amount of Letter of Credit
Outstandings exceeds the Total Revolving Commitment as then in effect (any such
excess, a “Total Revolving Commitment Excess Amount”), the Borrower shall pay to
the Administrative Agent an amount in cash and/or Cash Equivalents equal to such
Total Revolving Commitment Excess Amount, and the Administrative Agent shall
hold such payment as security for the obligations of the Borrower hereunder
pursuant to a cash collateral agreement to be entered into in form and substance
reasonably satisfactory to the Administrative Agent and the Borrower with terms
that are not inconsistent with the Collateral Agency Agreement, until the
proceeds are applied to the Obligations under the Credit Documents, and which
shall provide that a portion of the balance, if any, held in a cash collateral
account established under such cash collateral agreement equal to the amount by
which such balance exceeds the Total Revolving Commitment Excess Amount from
time to time, shall be released to the Borrower, provided that (x) as a result
of such release, a mandatory prepayment shall not be required under the first
sentence of this paragraph (b) unless such prepayment is made concurrently with
such release, and (y) immediately after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing or would result from such
release.

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(b) Application for Prepayments of Loans.  With respect to each prepayment of
Loans required by this Section ‎4.2, the Borrower may designate the Types of
Loans which are to be prepaid and the specific Borrowing(s) under the affected
Facility pursuant to which made, provided that (i) the Borrower shall first so
designate all ABR Loans and Eurodollar Loans under an affected Facility with
Interest Periods ending on the date of repayment prior to designating any other
Eurodollar Loans and (ii) each prepayment of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans.  If the Borrower is
required by this Section ‎4.2 to repay any Eurodollar Loans and such prepayment
will result in the Borrower being required to pay breakage costs under
Section ‎1.14 (any such Eurodollar Loans, “Affected Loans”), the Borrower may
elect, by notice to the Administrative Agent, to have the provisions of the
following sentence be applicable.  At the time any Affected Loans are otherwise
required to be prepaid, the Borrower may elect to deposit 100% (or such lesser
percentage elected by the Borrower) of the principal amounts that otherwise
would have been paid in respect of the Affected Loans with the Administrative
Agent to be held as security for the obligations of the Borrower hereunder
pursuant to a cash collateral agreement to be entered into in form and substance
reasonably satisfactory to the Administrative Agent with terms that are not
inconsistent with the Collateral Agency Agreement, with such cash collateral to
be released from such cash collateral account (and applied to repay the
principal amount of such Loans) upon each occurrence thereafter of the last day
of an Interest Period applicable to the relevant Loans (or such earlier date or
dates as shall be requested by the Borrower), with the amount to be so released
and applied on the last day of each Interest Period to be the amount of the
relevant Loans to which such Interest Period applies (or, if less, the amount
remaining in such cash collateral account).  In the absence of a designation
and/or election by the Borrower as described in the preceding sentences, the
Administrative Agent shall, subject to the first sentence of this paragraph,
make such designation in its sole discretion with a view, but no obligation, to
minimize breakage costs owing under Section ‎1.14.

4.3. Taxes (a).  Any and all payments by or on account of any obligation of any
Borrower Party under any Credit Document shall be made without deduction or
withholding for any Taxes, except as required by applicable law.  If any
applicable law (as determined in the good faith discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Entity in accordance
with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
by the applicable Borrower Party shall be increased as necessary so that, after
such deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section ‎4.3), the
applicable Credit Party receives an amount equal to the sum it would have
received had no such deduction or withholding been made.

(b) The Borrower Parties shall timely pay to the relevant Governmental Entity in
accordance with applicable law, or at the option of the Administrative Agent
timely reimburse it for the payment of, Other Taxes.

(c) As soon as practicable after any payment of Taxes by any Borrower Party to a
Governmental Entity pursuant to this Section ‎4.3, such Borrower Party shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Entity evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

(d) The Borrower Parties shall jointly and severally indemnify each Credit
Party, within 10 days after demand therefor, for the full amount of any
Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section) payable or paid by such
Credit Party or required to be withheld or deducted from a payment to such
Credit Party and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes were correctly or legally imposed
or asserted by the relevant Governmental Entity.  A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender (with a copy
to the Administrative Agent), or by the Administrative Agent on its own behalf
or on behalf of a Lender, shall be conclusive absent manifest error.

(e) Each Lender shall severally indemnify the Administrative Agent, within 10
days after demand therefor, for (i) any Indemnified Taxes attributable to such
Lender (but only to the extent that any Borrower Party has not already
indemnified the Administrative Agent for any such Taxes which are Indemnified
Taxes and without limiting the obligation of the Borrower Parties to do so),
(ii) any Taxes attributable to such Lender's failure to comply with the
provisions of Section ‎12.4(a) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such lender, in each case,
that are payable or paid by the Administrative Agent in connection with any
Credit Document, and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally imposed or asserted
by the relevant Governmental Entity.  A certificate as to the amount of such
payment or liability delivered to any Lender by the Administrative Agent shall
be conclusive absent manifest error.  Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Credit Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (e).

(f) (i) Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Credit Document shall
deliver to the Borrower and the Administrative Agent, at the time or times
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of

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withholding.  In addition, any Lender, if reasonably requested by the Borrower
or the Administrative Agent, shall deliver such other documentation prescribed
by applicable law or reasonably requested by the Borrower or the Administrative
Agent as will enable the Borrower or the Administrative Agent to determine
whether or not such Lender is subject to backup withholding or information
reporting requirements.  Notwithstanding anything to the contrary in the
preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in Section
‎4.3(f)(ii)(A), ‎(ii)‎(B) and ‎(ii)‎(D) below) shall not be required if in the
Lender's reasonable judgment such completion, execution or submission would
subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.

(ii) Without limiting the generality of the foregoing,

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), executed
originals of IRS Form W-9 certifying that such Lender is exempt from U.S.
federal backup withholding tax;

(B) any Non-U.S. Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Non-U.S. Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), whichever of the following is applicable:

(1) in the case of a Non-U.S. Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Credit Document, executed originals of IRS Form W-8BEN or IRS
Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “interest” article of such tax treaty and (y)
with respect to any other applicable payments under any Credit Document,
executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E establishing an
exemption from, or reduction of, U.S. federal withholding Tax pursuant to the
"business profits" or “other income” article of such tax treaty;

(2) executed originals of IRS Form W-8ECI;

(3) in the case of a Non-U.S. Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit F-1 to the effect that such Non-U.S. Lender
is not (i) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (ii)
a “10 percent shareholder” of the Borrower (or, if the Borrower is disregarded
as an entity separate from its owner for U.S. federal income tax purposes, the
Borrower’s tax owner for U.S. federal income tax purposes) within the meaning of
Section 881(c)(3)(B) of the Code, or (iii) a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) executed originals of IRS Form W-8BEN or IRS Form
W-8BEN-E; or

(4) to the extent a Non-U.S. Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or
IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form
of Exhibit F-2 or Exhibit F-3, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if the
Non-U.S. Lender is a partnership and one or more direct or indirect partners of
such Non-U.S. Lender are claiming the portfolio interest exemption, such
Non-U.S. Lender may provide a U.S. Tax Compliance Certificate substantially in
the form of Exhibit F-4 on behalf of each such direct and indirect partner;

(C) any Non-U.S. Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Non-U.S. Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), executed originals of any other form prescribed by applicable law as a
basis for claiming exemption from or a reduction in U.S. federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrower or the Administrative Agent
to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Credit Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment.  Solely for purposes of
this clause (D), “FATCA” shall include any amendments made to FATCA after the
date of this Agreement.

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Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Administrative
Agent in writing of its legal inability to do so.

(iii) The Administrative Agent shall, to the extent it is legally entitled to do
so, deliver to the Borrower on or prior to the Restatement Date (and from time
to time thereafter upon the reasonable request of the Borrower),

(A) with respect to any amounts payable to the Administrative Agent for its own
account, an executed original of any form prescribed by applicable law as a
basis for claiming exemption from or a reduction in U.S. federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrower to determine the withholding
or deduction required to be made; and

(B) if a payment made to the Administrative Agent under any Credit Document
would be subject to U.S. federal withholding Tax imposed by FATCA if the
Administrative Agent were to fail to comply with the applicable reporting
requirements of FATCA (including those contained in Section 1471(b) or 1472(b)
of the Code, as applicable), the Administrative Agent shall deliver to the
Borrower at the time or times prescribed by law and at such time or times
reasonably requested by the Borrower such documentation prescribed by applicable
law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower as may be
necessary for the Borrower to comply with its obligations under FATCA and to
determine that the Administrative Agent has complied with its obligations under
FATCA or to determine the amount to deduct and withhold from such
payment.  Solely for purposes of this clause (B), “FATCA” shall include any
amendments made to FATCA after the date of this Agreement; and

(C) with respect to any amounts payable to the Administrative Agent for the
account of others, an executed original of IRS Form W-8IMY (or applicable
successor form) certifying in Part I, line 4 that the Administrative Agent is a
U.S. branch of a foreign bank, certifying in Part VI, Line 17b, that the
Administrative Agent agrees to be treated as a U.S. Person with respect to any
such payments made to it under any Credit Document and certifying in Part I,
line 5 the appropriate Chapter 4 status, all of the foregoing in order to permit
the Borrower to make payments to the Administrative Agent without deduction or
withholding of any Taxes imposed by the United States. 

The Administrative Agent agrees that if any form or certification it previously
delivered pursuant to this Section 4.3(f)(iii) expires or becomes obsolete or
inaccurate in any respect, it shall upon request from the Borrower update or
replace such form, as applicable, or promptly notify the Borrower in writing of
its legal inability to do so.

(g) If any party determines, in its sole discretion exercised in good faith,
that it has received a refund of any Taxes as to which it has been indemnified
pursuant to this Section ‎4.3 (including by the payment of additional amounts
pursuant to this Section ‎4.3), it shall pay to the indemnifying party within 30
days from the date of such receipt an amount equal to such refund (but only to
the extent of indemnity payments made under this Section with respect to the
Taxes giving rise to such refund), net of all out-of-pocket expenses (including
Taxes) of such indemnified party and without interest (other than any interest
paid by the relevant Governmental Entity with respect to such refund).  Such
indemnifying party, upon the request of such indemnified party, shall repay to
such indemnified party the amount paid over pursuant to this paragraph (g) (plus
any penalties, interest or other charges imposed by the relevant Governmental
Entity) in the event that such indemnified party is required to repay such
refund to such Governmental Entity.  Notwithstanding anything to the contrary in
this paragraph (g), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (g) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid.  This paragraph shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

(h) Each party’s obligations under this Section ‎4.3 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under the Credit
Documents.

(i) For purposes of this Section 4.3, the term “Lender” includes the Issuing
Lender and the term “applicable law” includes FATCA.

(j) For purposes of determining withholding Taxes imposed under FATCA, from and
after the effective date of the Agreement, the Borrower and the Administrative
Agent shall treat (and the Lenders hereby authorize the Administrative Agent to
treat) the Agreement as not qualifying as a “grandfathered obligation” within
the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

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SECTION 5

CONDITIONS PRECEDENT. 

5.1. Conditions to Effectiveness.  The effectiveness of this Agreement is
subject to the satisfaction of each of the following conditions precedent:

(a) Credit Documents.  The Administrative Agent shall have received (i) this
Agreement, executed and delivered by the Administrative Agent, the Borrower and
each Person listed on Annex 1.1A, (ii) each other Credit Document (including
amended and restated Security Documents and the Security Agreement), executed
and delivered by the Borrower and each other Person party thereto.

(b) Opinions of Counsel.  The Administrative Agent shall have received (i) an
opinion, addressed to the Administrative Agent and each of the Lenders and dated
the Restatement Date, from Baker Botts L.L.P., counsel to the Borrower, which
opinion shall cover the matters covered in Exhibit C and (ii) an opinion,
addressed to the Administrative Agent and dated the Restatement Date, from
Sutherland Asbill & Brennan LLP, regulatory counsel to the Borrower, which
opinion shall cover the matters covered in Exhibit E.

(c) Proceedings.  (i)  The Administrative Agent shall have received from the
Borrower a certificate, dated the Restatement Date, signed by the President or
any Vice-President and the Secretary or Assistant Secretary of the Borrower in
the form of Exhibit B or in a form acceptable to the parties hereto, together
with (w) copies of the certificate of formation, limited liability company
agreement, or other organizational documents of the Borrower, (x) the
resolutions, or such other administrative approval, of the Borrower referred to
in such certificate to be reasonably satisfactory to the Administrative Agent,
(y) an incumbency certificate which shall include the name, position and
specimen signature of each officer of the Borrower executing the Credit
Documents or any other document delivered in connection herewith on behalf of
the Borrower and (z) a statement that all of the applicable conditions set forth
in Section ‎5.2 have been satisfied as of such date; and

(ii) All corporate, limited liability company and legal proceedings and all
instruments and agreements in connection with the transactions contemplated by
this Agreement and the other Credit Documents shall be reasonably satisfactory
in form and substance to the Administrative Agent, and the Administrative Agent
shall have received all information and copies of all certificates, documents
and papers, including long-form good standing certificates and any other records
of corporate or limited liability company proceedings and governmental
approvals, if any, which the Administrative Agent may have reasonably requested
in connection therewith, such documents and papers, where appropriate, to be
certified by proper corporate or governmental authorities.

(d) Adverse Change, etc.  During the period from December 31, 2013 to the
Restatement Date, there shall have been no development or event that has had or
could reasonably be expected to have a Material Adverse Effect.

(e) Repayment of Existing Indebtedness.  The Administrative Agent shall have
received satisfactory evidence that all existing Indebtedness other than
Indebtedness permitted pursuant to Section 8.6, of or related to the Borrower
and its Subsidiaries, shall have been repaid or cancelled and all documentation
representing such indebtedness shall have been terminated.

(f) Security Documents.  The Borrower shall have delivered to the Administrative
Agent:

 

(i)

certified copies of Requests for Information or Copies (Form UCC-11), or
equivalent reports, each of recent date listing all effective financing
statements that name the Borrower as a debtor and that are filed in the
jurisdictions in which filing of a financing statement is necessary to perfect
the security interests purported to be created by the Security Documents,
together with copies of such financing statements (none of which shall cover the
Collateral except (x) those with respect to which appropriate termination
statements executed by the secured lender thereunder have been delivered to the
Administrative Agent and (y) to the extent evidencing Permitted Liens);

 

(ii)

copies of Financing Statements (Form UCC-1) in appropriate form for filing in
each jurisdiction as may be necessary to perfect the first priority security
interests purported to be created by the Security Documents on the UCC
Collateral described therein (subject to no Liens other than Permitted Liens and
the rights of holders of Permitted Secured Indebtedness in compliance with the
Collateral Agency Agreement) that have not been so perfected prior to the
Restatement Date;

 

(iii)

evidence of the completion of, or arrangements to complete, all other recordings
and filings of, or with respect to, any Security Document as may be necessary
or, in the reasonable opinion of the Administrative Agent, desirable to perfect
the security interests intended to be created by such Security Document; and

 

(iv)

evidence that all other actions reasonably necessary or, in the reasonable
opinion of the Administrative Agent, desirable to perfect and protect the first
priority security interests purported to be created by any Security Document on
the Collateral described therein (subject to no Liens other than Permitted Liens
and the rights of holders of Permitted Secured Indebtedness in compliance with
the Collateral Agency Agreement) have been, or are in the process of being,
taken.

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(g) Solvency.  The Administrative Agent shall have received a customary solvency
certificate from the chief financial officer, treasurer or another senior
financial or accounting officer of the Borrower certifying as to the solvency of
the Borrower and its Subsidiaries on a consolidated basis after giving effect to
the transactions contemplated hereby in form reasonably satisfactory to the
Administrative Agent.

(h) Insurance Policies.  The Administrative Agent shall have received evidence
of insurance complying with the requirements of Section ‎7.4.

(i) Fees.  The Borrower shall have paid to the Arranger, the Administrative
Agent and the Lenders all Fees and expenses required hereunder to be paid or
reimbursed by the Borrower or its affiliates and for which invoices have been
presented on or before the Restatement Date. Additionally, on the Restatement
Date, the Borrower shall have paid to Royal Bank of Canada and RBC Capital
Markets, the fees under the Fee Letter.

(j) Financial Information.  The Administrative Agent shall have received copies
of:

(i) (a) the audited consolidated balance sheet of the Borrower for the fiscal
years ended December 31, 2011, 2012 and 2013, the related consolidated statement
of operations, the related consolidated statement of members’ capital and the
related consolidated statement of cash flows for the fiscal years ended on such
dates, each prepared in accordance with GAAP applied on a consistent basis in
accordance with past practice except for any changes required by GAAP or as
noted in the notes to the financial statements, accompanied by an unqualified
report of Ernst & Young LLP and (b) the audited consolidated balance sheet of
Sharyland for the fiscal years ended December 31, 2011, 2012 and 2013, and the
related consolidated statement of operations, the related consolidated statement
of members’ capital and the related consolidated statement of cash flows for the
calendar years ended on such dates, each prepared in accordance with GAAP
applied on a consistent basis in accordance with past practice except for any
changes required by GAAP or as noted in the notes to the financial statements,
accompanied by an unqualified report of Ernst & Young LLP;

(ii) unaudited consolidated financial statements of the Borrower and the
unaudited consolidated financial statements of Sharyland for each fiscal quarter
ended after the latest calendar year referred to above in Section ‎5.1(i), as
applicable, ended at least 45 days prior to the Restatement Date and the related
unaudited consolidated statement of operations, the related consolidated
statement of members’ capital and the related consolidated statement of cash
flows for  the corresponding period certified by an Authorized Officer of
Sharyland and the Borrower, as applicable, as being prepared in good faith and
in accordance with GAAP applied on a consistent basis except for any changes
required by GAAP or as noted in the notes to the financial statements; and

(iii) projections of the Borrower through 2018 that are not, in the reasonable
determination of the Administrative Agent, materially inconsistent in an adverse
manner with any comparable projections delivered to the Administrative Agent
prior to the Restatement Date.

(k) USA PATRIOT Act.  The Administrative Agent shall have received, at least 5
days prior to the Restatement Date, all documentation and other information
required by regulatory authorities under applicable “know your customer” and
anti-money laundering rules and regulations, including the USA PATRIOT Act.

(l) Financial Covenants.  The Borrower shall be in compliance with the financial
covenants contained in Section ‎7.11 on a pro forma basis as of the Restatement
Date.

5.2. Conditions to All Credit Events.  The obligation of the Lenders to make
each Loan hereunder, the Swingline Lender to make Swingline Loans hereunder and
the obligation of the Issuing Lender to issue Letters of Credit hereunder, is
subject, at the time of each such Credit Event, to the satisfaction of the
following conditions:

(a) at the time of such Credit Event and also immediately after giving effect
thereto, there shall exist no Default or Event of Default;

(b) all representations and warranties contained herein or in the other Credit
Documents in effect at such time shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on and as of the date of such Credit Event, except to the extent that
such representations and warranties expressly relate to an earlier date; and

(c) the Administrative Agent shall have received, (i) with respect to any
Revolving Loan Borrowing, a borrowing notice in accordance with Section 1.2,
(ii) with respect to any Swingline Borrowing, a swingline notice in accordance
with Section 1.4 and (iii) with respect to any Letter of Credit, an Application
in accordance with Section 2.2.

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The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to each of the Lenders that all of
the conditions specified in Section ‎5.2 (other than the required satisfaction
of the Administrative Agent or any Lender as specified therein or as waived),
exist as of that time.  All of the certificates, legal opinions and other
documents and papers referred to in this ‎Section 5, unless otherwise specified,
shall be delivered to the Administrative Agent at its Notice Office for the
account of each of the Lenders.

 

SECTION 6

REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

To induce the Administrative Agent and the Lenders to enter into this Agreement
and to make the Loans and issue or participate in the Letter of Credit, the
Borrower hereby represents and warrants to the Administrative Agent and each
Lender that:

6.1. Organization; Power and Authority.  Each of the Borrower and each
Subsidiary is duly organized, validly existing and in good standing under the
laws of its jurisdiction of formation, and is duly qualified and is in good
standing in each jurisdiction in which such qualification is required by law,
other than those jurisdictions as to which the failure to be so qualified or in
good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.  Each of the Borrower and each
Subsidiary has the limited liability company, limited partnership or other
organizational, as applicable, power and authority to own or hold under lease
the properties it purports to own or hold under lease, to transact the business
it transacts and proposes to transact, to execute and deliver this Agreement and
the other Transaction Documents to which it is a party and to perform the
provisions hereof and thereof.

6.2. Power and Authority.  Each of the Borrower and each Subsidiary has the
requisite power and authority to execute, deliver and carry out the terms and
provisions of the Transaction Documents to which it is a party and has taken all
necessary corporate or other organizational action to authorize the execution,
delivery and performance of the Transaction Documents to which it is a
party.  Each of the Borrower and each Subsidiary has duly executed and delivered
each Transaction Document to which it is a party, and each such Transaction
Document constitutes the legal, valid and binding obligation of such Person
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).

6.3. Disclosure.  No report, financial statement, certificate or other
information furnished in writing by the Borrower or its Subsidiaries or their
respective counsel to the Administrative Agent or any Lender in connection with
the transactions contemplated hereby and the negotiation of this Agreement (in
each case, as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to
projected financial information, the Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.

6.4. Organization and Ownership of Interests.  As of the Restatement Date, Annex
6.4 contains a complete and correct list and description of the Borrower’s and
each Subsidiary’s jurisdiction of organization and ownership structure.  As of
the Restatement Date, the Borrower has no Subsidiaries except as shown on Annex
6.4.

6.5. Financial Condition; Financial Statements.

(a) On and as of the Restatement Date, on a pro forma basis after giving effect
to the transactions contemplated hereby, (x) the sum of the assets, at a fair
market valuation, of  the Borrower  and its Subsidiaries on a consolidated basis
will exceed its debts, (y) the Borrower and its Subsidiaries on a consolidated
basis will not have incurred or intended to, or believes that it will, incur
debts beyond its ability to pay such debts as such debts mature and (z) the
Borrower and its Subsidiaries taken on a consolidated basis will have sufficient
capital with which to conduct its business.  For purposes of this Section ‎6.5,
“debt” means any liability on a claim, and “claim” means (i) right to payment
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured; or (ii) right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured.

(i) (a) The audited consolidated balance sheet of the Borrower for the fiscal
years ended December 31, 2011, 2012 and 2013, and the related consolidated
statement of operations, the related consolidated statement of members’ capital
and the related consolidated statement of cash flows for the fiscal years ended
on such dates, accompanied by an unqualified report of Ernst & Young LLP and (b)
the audited consolidated balance sheet of Sharyland for the fiscal years ended
December 31, 2011, 2012 and 2013, and the related consolidated statement of
operations, the related consolidated statement of members’ capital and the
related consolidated statement of cash flows for the fiscal years ended on such
dates, were certified by an Authorized Officer of the Borrower and Sharyland,
respectively, as being prepared in good faith and in accordance with GAAP,
applied on a

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consistent basis except for any changes required by GAAP or as noted in the
notes to the financial statements and, with respect to the items described in
clause (a), fairly presents in all material respects the consolidated financial
position of the Borrower and its Subsidiaries as of its date in accordance with
GAAP, except for the absence of footnotes and subject to changes resulting from
audit and normal year-end adjustments.

(ii) The unaudited consolidated financial statements of the Borrower and the
unaudited consolidated financial statements of Sharyland for each fiscal quarter
ended after the latest calendar year referred to in Section ‎5.1(i), as
applicable, ended at least 45 days prior to the Restatement Date and the related
unaudited consolidated statement of operations, the related consolidated
statement of members’ capital and the related consolidated statement of cash
flows for  the corresponding period were certified by an Authorized Officer of
the Borrower and Sharyland, respectively, as being prepared in good faith and in
accordance with GAAP, applied on a consistent basis except for any changes
required by GAAP or as noted in the notes to the financial statements and, with
respect to such financial statements of the Borrower, fairly presents in all
material respects the consolidated financial position of the Borrower and its
Subsidiaries as of its date in accordance with GAAP, except for the absence of
footnotes and subject to changes resulting from audit and normal year-end
adjustments.

(iii) Since December 31, 2013, there has been no development or change that has
had or could reasonably be expected to have a Material Adverse Effect.

6.6. Compliance with Laws, Other Instruments, Etc.  The execution, delivery and
performance by each of the Borrower and each Subsidiary of this Agreement and
the other Transaction Documents to which such Person is a party, do not and will
not (i) contravene, result in any breach of, or constitute a default under, or
result in the creation of any Lien in respect of any property of such Person
under, any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter or limited partnership or limited liability
company agreement, or any other agreement or instrument to which such Person is
bound or by which such Person or any of its properties may be bound or affected,
(ii) conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any court, arbitrator or
Governmental Authority applicable to such Person or (iii) violate any provision
of any statute or other rule or regulation of any Governmental Authority
applicable to such Person, which in the case of any of the foregoing clauses (i)
through (iii), individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.

6.7. Governmental Authorizations, Etc.  Except as set forth on Annex 6.7, no
consent, approval or authorization of, or registration, filing or declaration
with, any Governmental Authority is required in connection with the execution,
delivery or performance by the Borrower or any Subsidiary of this Agreement or
any of the other Transaction Documents to which it is a party.

6.8. Litigation; Observance of Agreements, Statutes and Orders.

(a) There are no actions, suits, investigations or proceedings pending or, to
the knowledge of any Responsible Officer of the Borrower, threatened against or
affecting the Borrower or any Subsidiary or, to the knowledge of any Responsible
Officer of the Borrower, any Qualified Lessee, or any of their  respective
property in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.  The representation in this
clause (a) excludes any reference to Environmental Laws or ERISA, each of which
is separately addressed in this ‎Section 6.

(b) Neither the Borrower nor any Subsidiary is in default under any term of any
Material Project Document or any other agreement or any order, judgment, decree
or ruling of any court, arbitrator or Governmental Authority or is in violation
of any Applicable Law, ordinance, rule or regulation (including without
limitation Environmental Laws or the USA PATRIOT Act) of any Governmental
Authority, which default or violation, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

(c) To the knowledge of the Borrower, after due inquiry, no breach or default
under any of the Material Project Documents to which it or any of its
Subsidiaries is a party has occurred and is continuing , which breach or
default, individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect.

6.9. Taxes.  Each of the Borrower and each Subsidiary has filed all material Tax
returns that are required to have been filed by it (or timely requests for
extensions have been filed, have been granted and are not expired) in any
jurisdiction, and has paid all Taxes shown to be due and payable by it on such
returns and all other material Taxes levied upon them or their properties,
assets, income or franchises, to the extent such Taxes have become due and
payable and before they have become delinquent, (other than (i) the amount of
which is not individually or in the aggregate material or (ii) those which
are  being contested in good faith by appropriate proceedings and with respect
to which such Person has established adequate reserves in accordance with GAAP),
except to the extent the failure to do so could not reasonably be expected to
have a Material Adverse Effect.  The Borrower knows of no proposed tax
assessment against the Borrower or any of its Subsidiaries that would, if made,
have a Material Adverse Effect.

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6.10. Title to Property.  The Borrower and its Subsidiaries have good and
sufficient title to their respective properties and assets that individually or
in the aggregate are material to them, free and clear of Liens (other than
Permitted Liens).

6.11. Insurance.  Each of the Borrowers and each Subsidiary have all insurance
coverage required by Section ‎7.4.

6.12. Licenses, Permits, Etc.; Leases; IP Rights.  The Borrower and its
Subsidiaries own or possess all governmental licenses, permits, franchises and
authorizations that are necessary for the operation of their respective
businesses (collectively, the “Required Permits”), without known conflict with
the rights of others.  The Leases listed on Annex 6.12 constitute and include
all of the Leases to which the Borrower and its Subsidiaries are parties as of
the Restatement Date.  As of the Restatement Date, each such Lease is in full
force and effect, and constitutes the legal, valid and binding obligation of
each Loan Party that is a party thereto. The Borrower and its Subsidiaries own,
or possess the right to use, all of the material trademarks, service marks,
trade names, copyrights, patents, patent rights, franchises, licenses and other
intellectual property rights (collectively, “IP Rights”) that are necessary for
the operation of their respective businesses, without any conflict, to the
knowledge of the Borrower, with the rights of any other Person, except for any
IP Rights or any conflicts that, either individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.

6.13. Compliance with ERISA (a).   Each Loan Party and each ERISA Affiliate has
operated and administered each Plan in compliance with the terms of the Plan and
with all Applicable Laws except for such instances of noncompliance as have not
resulted in and could not reasonably be expected to result in a Material Adverse
Effect.  Neither any Loan Party nor any ERISA Affiliate has incurred any
liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code applicable to employee benefit plans (as defined in
section 3 of ERISA) and there has been no “prohibited transaction” (as such term
is defined in Section 406 of ERISA and Section 4975(c) of the Code) or violation
of the fiduciary responsibility rules with respect to any Plan or that has
resulted or could reasonably be expected to result in a Material Adverse Effect,
and no event, transaction or condition has occurred or exists that could
reasonably be expected to result in the incurrence of any such liability by any
Loan Party or any ERISA Affiliate, or in the imposition of any Lien on any of
the rights, properties or assets of any Loan Party or any ERISA Affiliate, in
either case pursuant to Title I or IV of ERISA or to such penalty or excise tax
provisions of the Code or to Sections 401(a)(29), 412 or 430(k) of the Code or
Section 4068 of ERISA, and no liability to the PBGC (other than required premium
payments), the IRS, any Plan or any trust established under Title IV of ERISA
has been or is expected to be incurred by any Loan Party or any of their ERISA
Affiliates, other than such liabilities or Liens as would not be individually or
in the aggregate reasonably be expected to result in a Material Adverse Effect.

(b) The present value of the aggregate benefit liabilities under each Plan
(other than a Multiemployer Plan) (determined in accordance with Section 430 of
the Code and the Treasury Regulations promulgated thereunder as of the end of
such Plan’s most recently ended plan year on the basis of the actuarial
assumptions specified for funding purposes in such Plan’s most recent actuarial
valuation report) did not exceed the aggregate actuarial value of assets as
determined in accordance with Section 430(g)(3) of the Code (and the Treasury
Regulations promulgated thereunder) under each such Plan  by an amount that
could reasonably be expected to result in a Material Adverse Effect.

(c) No Loan Party or any ERISA Affiliate has incurred Withdrawal Liabilities
(and is not subject to contingent Withdrawal Liabilities) of ERISA in respect of
Multiemployer Plans that individually or in the aggregate could reasonably be
expected to result in a Material Adverse Effect.  Neither any Loan Party nor any
of its ERISA Affiliates has failed to make by its due date any required
contribution to a Multiemployer Plan or received notice that any Multiemployer
Plan is, or is expected to be, insolvent (within the meaning of Section 4245 of
ERISA), in reorganization (within the meaning of Section 4241 of ERISA), or in
endangered or critical status (within the meaning of Section 432 of the Code or
Section 305 of ERISA).

(d) The expected postretirement benefit obligation (determined as of the last
day of the Borrower’s most recently ended calendar year in accordance with ASC
Topic 715-60, without regard to liabilities attributable to continuation
coverage mandated by Section 4980B of the Code) of the Borrower is not material
to it.

6.14. Intentionally omitted.

6.15. Intentionally Omitted.

6.16. Foreign Assets Control Regulations, Etc.

(a) The use of the proceeds from the Loans hereunder will not violate the
Trading with the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) or any enabling legislation or executive order relating
thereto.

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(b) None of the Borrower, the Subsidiaries or, to the knowledge of any
Responsible Officer of the Borrower, any Qualified Lessee: (i) is a Person
described or designated in the Specially Designated Nationals and Blocked
Persons List of the Office of Foreign Assets Control or in Section 1 of the
Anti‑Terrorism Order or (ii) engages in any dealings or transactions with any
such Person.  The Borrower, the Subsidiaries and, to the knowledge of any
Responsible Officer of the Borrower,  the Qualified Lessees are in compliance,
in all material respects, with the USA PATRIOT Act applicable to them.

(c) No part of the proceeds from the Loans hereunder will be used, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases that
such Act applies to the Borrower and each other Loan Party.

6.17. Status under Certain Statutes.

(a) No Loan Party is, or is required to be registered as, an “investment
company” under the Investment Company Act of 1940 (the “ICA”), as amended.

(b) The Borrower is not a “public utility” under the FPA and the regulations of
FERC thereunder.  The execution, delivery and performance of the Borrower’s
obligations under the Credit Documents requires no authorization of approval by,
or notice to, and is not subject to the jurisdiction of, FERC under the FPA.

(c) Sharyland and the holding company system of which it is a part have obtained
a waiver of the requirements of 18 CFR 366.21, 366.22 and 366.23 (FERC Docket
Nos. PH06-59-000 & PH10-18-000), but are subject to the FERC regulations
relating to regulatory access to books and records.  Sharyland and the holding
company system of which it is a part have filed a notice of holding company
status under FERC Docket No. HC06-1-000 and a revised notice of holding company
status under FERC Docket No. HC10-1-000.  Under FERC’s currently effective
regulations, the Borrower will be deemed not to be a “public-utility company”
and as a result Holdings is not a “holding company” under PUHCA.

(d) The Borrower is subject to regulation as an “electric utility” by the Public
Utility Commission of Texas.  The execution, delivery and performance of the
Borrower’s obligations under the Financing Documents requires no authorization
or approval by, or notice to, the Public Utility Commission of Texas or under
the Public Utility Regulatory Act of Texas other than those that have been
obtained.

(e) Solely by virtue of the execution, delivery and performance of the Credit
Documents to which it is a party, the Administrative Agent or any Lender will
not become subject to any of the provisions of the FPA, PUHCA (based on FERC’s
currently effective definitions under PUHCA) or the Public Utility Regulatory
Act of Texas, or to regulation under any such statute.

(f) The Borrower does not own, operate or control any electrical generating,
transmitting or distribution facility, or effect or control any sale of
electricity, outside of the ERCOT balancing area authority except (i) as
permitted by FERC, as set forth in its declaratory order issued in Docket no.
EL07-93-000 or (ii) interconnected transmission or distribution assets or
systems located substantially in the State of Texas or deriving a majority of
their revenue from customers within the State of Texas.

6.18. Environmental Matters.

(a) The Borrower has no knowledge of any claims nor has it received any notice
of any claim, and no proceeding has been instituted raising any claim against
the Borrower or any Subsidiary or any of their real properties now or formerly
owned, leased or operated by any of them or other assets, alleging any damage to
the environment or violation of any Environmental Laws, except, in each case,
such as could not reasonably be expected to result in a Material Adverse Effect.

(b) The Borrower has no knowledge of any facts which would give rise to any
claim, public or private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way related to real
properties now or formerly owned, leased or operated by the Borrower or any
Subsidiary or to other assets or its use, except, in each case, such as could
not reasonably be expected to result in a Material Adverse Effect.

(c) Neither the Borrower nor any Subsidiary has stored any Hazardous Materials
on real properties now or formerly owned, leased or operated by any of them and
has not disposed of any Hazardous Materials in a manner contrary to any
Environmental Laws in each case in any manner that could reasonably be expected
to result in a Material Adverse Effect; and

(d) All buildings on all real properties now owned, leased or operated by the
Borrower or any of the Subsidiaries are in compliance with applicable
Environmental Laws, except where failure to comply could not reasonably be
expected to result in a Material Adverse Effect.

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6.19. Force Majeure Events; Employees.  None of the  assets of the Borrower or
the Subsidiaries, including the System, has suffered any Force Majeure Event
that is continuing.  Neither the Borrower nor any Subsidiary has any employees.

6.20. Collateral.  As of the Restatement Date, (i) the security interests in the
UCC Collateral granted to the Collateral Agent (for the benefit of the Secured
Parties):  (a) constitute, as to such Collateral, a valid security interest and
Lien under the New York UCC, and (b) constitute first priority Liens on such
Collateral described in the Security Documents, subject to no Liens other than
Permitted Liens and the rights of holders of Permitted Secured Indebtedness in
compliance with the Collateral Agency Agreement, (ii) all action as is required
pursuant to the Security Documents has been taken to establish and perfect the
Collateral Agent’s rights in and to, and the first priority of its Lien (subject
to Permitted Liens) on, the Collateral as set forth in the immediately preceding
clause (i), including any recording, filing, registration, delivery to the
Collateral Agent, giving of notice or other similar action, and (iii) the Deeds
of Trust create in favor of the Trustee named therein, for the benefit of the
Collateral Agent and the other Secured Parties, a valid security interest and
first priority Lien in all the Borrower’s right, title and interest in and to
the real property subject thereto and the proceeds thereof, subject to no Liens
other than Permitted Liens and the rights of holders of Permitted Secured
Indebtedness in compliance with the Collateral Agency Agreement.

6.21. Collateral Agency Agreement.  Each of this Agreement and each other Credit
Document is a “Financing Agreement”, as such term is defined in the Collateral
Agency Agreement.  All of the obligations of the Borrower hereunder and under
the other Credit Documents are “Obligations”, as such term is defined in the
Collateral Agency Agreement, and “Permitted Secured Indebtedness”, as such term
is defined in the Collateral Agency Agreement.

6.22. Margin Regulations.  The Borrower is not engaged, principally or as one of
its important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the Board of Governors of the
Federal Reserve System of the United States), or extending credit for the
purpose of purchasing or carrying margin stock.  Following the application of
the proceeds of each Borrowing or drawing under each Letter of Credit, not more
than 25% of the value of the assets of the Borrower and its Subsidiaries on a
consolidated basis subject to the provisions of Section 8.5 or Section 8.10 or
subject to any restriction contained in any agreement or instrument between the
Borrower and any Lender or any Affiliate of any Lender relating to Indebtedness
and within the scope of Section 9(i) will be margin stock.

6.23. OFAC.  None of the Borrower or any of its Subsidiaries, or any director,
officer, employee, agent, affiliate or representative thereof, is an individual
or entity currently the subject of any Sanctions, nor is the Borrower or any of
its Subsidiaries located, organized or resident in a Designated Jurisdiction.

 

SECTION 7

AFFIRMATIVE COVENANTS.

The Borrower covenants and agrees that until the Commitments have terminated, no
Letters of Credit or Promissory Notes are outstanding and the Loans and Unpaid
Drawings, together with interest, Fees and all other Obligations under the
Credit Documents (other than contingent obligations (including indemnification
obligations) for which no claims have been made) incurred hereunder, are paid in
full:

7.1. Information Covenants.  The Borrower will furnish to the Administrative
Agent (on behalf of each Lender):

(a) Annual Financial Statements.  Within 90 days after the close of each fiscal
year of the Borrower and each Qualified Lessee (other than a Consolidated
Qualified Lessee), as applicable, the consolidated balance sheet of the Borrower
and its Subsidiaries and each such Qualified Lessee, as the case may be (in each
case, with a separately scheduled consolidating balance sheet and income
statement for each Project Finance Subsidiary), as at the end of such fiscal
year, the related consolidated statement of operations, the related consolidated
statement of members’ capital and the related consolidated statement of cash
flows for such fiscal year, in each case setting forth comparative consolidated
figures for the preceding fiscal year, and, other than the separately scheduled
consolidating balance sheet and income statement of each Project Finance
Subsidiary, examined by independent certified public accountants of recognized
national standing whose opinion shall not be qualified as to the scope of audit
and as to the status of the Borrower or any of its Subsidiaries or such
Qualified Lessees, as applicable, as a going concern, together with a
certificate of such accounting firm stating that in the course of its regular
audit of the business of the Borrower or such Qualified Lessees, which audit was
conducted in accordance with generally accepted auditing standards, such
accounting firm has obtained no knowledge of any Default or Event of Default
(or, in the case of a Qualified Lessee, any default or event of default under
any Leases to which such Qualified Lessee is lessee) which has occurred and is
continuing or, if in the opinion of such accounting firm such a Default or Event
of Default (or, in the case of a Qualified lessee, such a default or event of
default under the applicable Lease) has occurred and is continuing, a statement
as to the nature thereof (which certificate may be limited to the extent
required by accounting rules or guidelines).

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(b) Quarterly Financial Statements.  As soon as available and in any event
within 45 days after the close of each of the first three quarterly accounting
periods in each fiscal year, the consolidated balance sheet of the Borrower and
its Subsidiaries and each Qualified Lessee (other than a Consolidated Qualified
Lessee), as the case may be (in each case, with a separately scheduled
supplemental consolidating balance sheet and income statement for each Project
Finance Subsidiary), as at the end of such quarterly period, the related
consolidated statement of operations, the related consolidated statement of
members’ capital and the related consolidated statement of cash flows for such
quarterly period, and for the elapsed portion of the fiscal year ended with the
last day of such quarterly period, and in each case setting forth comparative
consolidated figures for the related periods in the prior fiscal year, all of
which shall be certified by the chief financial officer, controller, chief
accounting officer or other Authorized Officer of the Borrower or such Qualified
Lessee, as applicable, except for the absence of footnotes and subject to
changes resulting from audit and normal year-end audit adjustments.

(c) Annual Budgets.  As soon as available and in any event within 30 days after
the close of each fiscal year of the Borrower and each Qualified Lessee (other
than a Consolidated Qualified Lessee), as the case may be, the annual budget of
the Borrower and its Subsidiaries and each such Qualified Lessee, as applicable,
which shall include details on capital expenditures to be made by the Borrower
and its Subsidiaries and each such Qualified Lessee, as applicable, in the next
twelve months.

(d) Management Discussion and Analysis.  Within 45 days after the close of each
of the first three fiscal quarters in each fiscal year, a management discussion
and analysis of each of each Qualified Lessee’s (other than a Consolidated
Qualified Lessee) and the Borrower’s consolidated performance for that fiscal
quarter and a comparison of performance for that financial quarter to the
corresponding fiscal quarter of the previous fiscal year (in form and substance
reasonably acceptable to the Administrative Agent, which shall not be
unacceptable solely because it does not contain all of the information required
to be included in unaudited interim financial statements by Item 303 of
Regulation S-K of the Securities Act of 1933, as amended).  Within 90 days after
the close of each fiscal year, a management discussion and analysis of each of
each such Qualified Lessee’s and the Borrower’s consolidated performance for
that fiscal year and a comparison of performance for that fiscal year to the
prior year.

All such financial statements delivered pursuant to paragraphs ‎(a) and ‎(b)
above shall present fairly in all material respects in accordance with GAAP the
consolidated financial condition of such Qualified Lessees or the Borrower and
their respective consolidated Subsidiaries, as applicable, as at the applicable
dates, and the consolidated results of their operations, their changes in equity
(deficit) and their consolidated cash flows for the periods reflected therein,
and shall be prepared in accordance with GAAP applied consistently throughout
the periods reflected therein and with prior periods (except as approved by such
accountants or officer, as the case may be, and disclosed therein).

(e) Officer’s Certificates.  At the time of the delivery of the financial
statements provided for in Section ‎7.1(a) and ‎(b), a certificate of the Senior
Financial Officer of each Qualified Lessee (other than a Consolidated Qualified
Lessee) or of the Borrower, as applicable, substantially in the form of Exhibit
D, to the effect that no Default or Event of Default has occurred and is
continuing (or in the case of each such Qualified Lessees, no default or event
of default has occurred and is continuing under any Leases to which it is a
party, which default or event of default constitutes an Event of Default
pursuant to Section 9(f)) or, if any Default or Event of Default has occurred
and is continuing (or in the case of each such Qualified Lessees, any default or
event of default has occurred and is continuing under any Leases to which it is
a party, which default or event of default constitutes an Event of Default
pursuant to Section 9(f)), specifying the nature and extent thereof, which
certificate shall set forth the calculations required to establish whether the
Borrower and its Subsidiaries were in compliance with the provisions of Section
‎7.11 as at the end of such fiscal period or year, as the case may be.  Each
such certificate shall also include a list of deposit accounts and securities
accounts held by any Loan Party.

(f) Notice of Default or Litigation.  Promptly, and in any event within five
Business Days after a Responsible Officer of the Borrower or any of its
Subsidiaries obtains knowledge thereof, notice of (v) the occurrence of any
event which constitutes a Default or Event of Default, which notice shall
specify the nature thereof, the period of existence thereof and what action the
Borrower or such Subsidiary proposes to take with respect thereto, (x)(i) the
commencement of or any material development in any litigation or governmental
proceeding pending against the Borrower or any of its Subsidiaries in which the
amount involved is $750,000 or more (other than proceedings under the Texas
Public Utility Act before the Public Utility Commission of Texas or condemnation
proceedings in which a Qualified Lessee, the Borrower or any of its Subsidiaries
is the condemning party) or is reasonably likely to have a Material Adverse
Effect on the ability of the Borrower or any Loan Party to perform its
obligations hereunder or under any other Credit Document and (ii) the
commencement of any proceeding under the Texas Public Utility Act before the
Public Utility Commission of Texas involving the Borrower (other than
proceedings that are in the ordinary course of business or that are not
material) and the issuance of any final order of the Public Utility Commission
of Texas with respect to such proceeding, and (y) any development or event that
has had or could reasonably be expected to have a Material Adverse
Effect.  Promptly, and in any event within five Business Days after the Borrower
receives a written notice of default under a System Lease from the applicable
Qualified Lessee, a copy of such notice of default or a written notice
specifying the nature and period of existence of such default and what action
the Borrower is taking or proposes to take with respect thereto.

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(g) Insurance Certificates.  At the time of the delivery of the financial
statements provided for in Section ‎7.1(a), the certification required to be
delivered at such time pursuant to Section 7.4(b).

(h) Other Information.  (i) Promptly upon transmission thereof, copies of any
reportings or filings by the Borrower or any of its Subsidiaries with regulatory
agencies (including the Securities and Exchange Commission or any successor
thereto (the “SEC”)) but excluding the Public Utility Commission of Texas (and
the Federal Energy Regulatory Commission, if applicable); provided that the
Borrower shall furnish such reports or filings as the Administrative Agent may
reasonably request from time to time, (ii) promptly upon their becoming
available, each report and filing made by the Company to holders of other
Permitted Secured Indebtedness and (iii) such other information or documents
(financial or otherwise) as the Administrative Agent on its own behalf or on
behalf of the Required Lenders may reasonably request from time to time.

Documents required to be delivered pursuant to Section 7.1(a) or (b) or Section
7.1(g) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date (i) on which such documents are posted on the
Borrower’s behalf on an Internet or intranet website, if any, to which each
Lender and the Administrative Agent have access (whether a commercial,
third-party website or whether sponsored by the Administrative Agent); provided
that: (i) the Borrower shall deliver paper copies of such documents to the
Administrative Agent or any Lender upon its request to the Borrower to deliver
such paper copies until a written request to cease delivering paper copies is
given by the Administrative Agent or such Lender and (ii) the Borrower shall
notify the Administrative Agent and each Lender (by facsimile or electronic
mail) of the posting of any such documents and provide to the Administrative
Agent by electronic mail electronic versions (i.e., soft copies) of such
documents.  The Administrative Agent shall have no obligation to request the
delivery of or to maintain paper copies of the documents referred to above, and
in any event shall have no responsibility to monitor compliance by the Borrower
with any such request by a Lender for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arranger may, but shall not be obligated to, make available to the Lenders and
the Issuing Lender materials and/or information provided by or on behalf of the
Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower
Materials on Debt Domain, IntraLinks, Syndtrak or another similar electronic
system (the “Platform”) and (b) certain of the Lenders (each, a “Public Lender”)
may have personnel who do not wish to receive material non-public information
with respect to the Borrower or its Affiliates, or the respective securities of
any of the foregoing, and who may be engaged in investment and other
market-related activities with respect to such Persons’ securities.  The
Borrower hereby agrees that so long as the Borrower is the issuer of any
outstanding debt or equity securities that are registered or issued pursuant to
a private offering or is actively contemplating issuing any such securities (w)
all Borrower Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that
the word “PUBLIC” shall appear prominently on the first page thereof; (x) by
marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have
authorized the Administrative Agent, the Arranger, the Issuing Lender and the
Lenders to treat such Borrower Materials as not containing any material
non-public information with respect to the Borrower or its securities for
purposes of United States federal and state securities laws (provided, however,
that to the extent such Borrower Materials constitute Information, they shall be
treated as set forth in Section 12.15); (y) all Borrower Materials marked
“PUBLIC” are permitted to be made available through a portion of the Platform
designated “Public Side Information;” and (z) the Administrative Agent and the
Arranger shall be entitled to treat any Borrower Materials that are not marked
“PUBLIC” as being suitable only for posting on a portion of the Platform not
designated “Public Side Information.”

7.2. Use of Proceeds.  All proceeds of the Loans shall be used to refinance any
outstanding amounts under the Original Credit Agreement and to finance the
working capital needs, capital expenditures, dividends and distributions of, and
for the general corporate purposes of, the Borrower and its Subsidiaries,
including future acquisitions not prohibited under this Agreement, but not to
fund, directly or indirectly, any Project Finance Subsidiary other than to make
Investments in any Project Finance Subsidiary not to exceed amounts that the
Borrower would be permitted to make a Distribution under Section 8.9.

7.3. Compliance with Law.  Without limiting Section ‎8.4, the Borrower will, and
will cause its Subsidiaries to, comply with all laws, ordinances or governmental
rules or regulations to which it is subject, including, without limitation,
ERISA, the USA PATRIOT Act and Environmental Laws, and will obtain and maintain
in effect all licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of its properties or to the conduct of
its businesses to the extent necessary to ensure that non-compliance with such
laws, ordinances or governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits, franchises and other
governmental authorizations could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

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7.4. Insurance.

(a) Maintenance of Insurance.  The Borrower will maintain or cause to be
maintained and will cause its Subsidiaries to, maintain, with financially sound
and reputable insurers, insurance with respect to their respective properties
and businesses against such casualties and contingencies, of such types, on such
terms and in such amounts (including deductibles, co-insurance and
self-insurance, if adequate reserves are maintained with respect thereto) as is
customary in the case of entities of established reputations engaged in the same
or a similar business and similarly situated.

(b) Evidence of Insurance.  At the time of the delivery of the certificate
required under Section 7.1(e) for financial statements provided for in Section
7.1(a) or promptly upon request by the Administrative Agent, the Borrower shall
furnish the Administrative Agent and the Collateral Agent with approved
certification of all required insurance.  Such certification shall be executed
by each insurer or by an authorized representative of each insurer where it is
not practical for such insurer to execute the certificate itself.  Such
certification shall identify underwriters, the type of insurance, the insurance
limits, and the policy term, and shall specifically list the special provisions
enumerated for such insurance required by this Section 7.4.  Upon request, the
Borrower will promptly furnish the Administrative Agent and the Collateral Agent
with copies of all insurance certificates, binders, and cover notes or other
evidence of such insurance relating to the Collateral.

(c) No Duty of any Lender to Verify:  No provision of this Section ‎7.4 or any
other provision of this Agreement, any other Financing Document or any Lease
shall impose on the Administrative Agent, the Collateral Agent or any Lender any
duty or obligation to verify the existence or adequacy of the insurance coverage
maintained by the Borrower, nor shall the Administrative Agent or the Collateral
Agent nor any Lender be responsible for any representations or warranties made
by or on behalf of the Borrower to any insurance company or underwriter.

7.5. Maintenance of Properties.  The Borrower will and will cause its
Subsidiaries to, and will use commercially reasonable efforts to cause the
Qualified Lessees to, (a) maintain, preserve and protect all of its respective
properties (including any such properties comprising any portion of the System)
and equipment necessary in the operation of its respective business in good
working order and condition, ordinary wear and tear excepted; and (b) make all
necessary repairs thereto and renewals and replacements thereof, except in the
case of clauses (a) and (b) where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

7.6. Payment of Taxes and Claims.  The Borrower will, and will cause each of its
Subsidiaries to, file all Tax returns required to be filed by it in any
jurisdiction and to pay and discharge all Taxes shown to be due and payable by
it on such returns and all other Taxes imposed on them or any of their
properties, assets, income or franchises, to the extent the same have become due
and payable and before they have become delinquent and all claims for which sums
have become due and payable that have or might become a Lien on properties or
assets of the Borrower or any Subsidiary, provided that none of the Borrower or
any Subsidiary need pay any such Tax or claim if (i) the amount, applicability
or validity thereof is contested by such Person on a timely basis in good faith
and in appropriate proceedings, and such Person has established adequate
reserves therefor in accordance with GAAP on its books or (ii) the nonpayment of
all such Taxes and claims in the aggregate could not reasonably be expected to
have a Material Adverse Effect.

7.7. Existence, Etc.  Except as permitted under Section 8.2, the Borrower will
and will cause each of its Subsidiaries at all times preserve and keep in full
force and effect its respective limited liability company, corporate or limited
partnership existence and all rights and franchises of the Borrower unless
(other than with respect to the Borrower’s existence), in the good faith
judgment of the Borrower, the termination of or failure to preserve and keep in
full force and effect such limited liability company, corporate or limited
partnership existence, right or franchise could not, individually or in the
aggregate, have a Material Adverse Effect.

7.8. Books and Records; Inspection Rights.  The Borrower will, and will cause
each of its Subsidiaries to,  and will use commercially reasonable efforts to
cause any Qualified Lessee to, maintain proper books of record and account in
conformity with GAAP and all applicable requirements of any Governmental
Authority having legal or regulatory jurisdiction over such Person.  The
Borrower will permit representatives and independent contractors of the
Administrative Agent and each Lender to visit and inspect any of its properties,
to examine its corporate, financial and operating records, and make copies
thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at the expense of the Borrower and at such reasonable times during normal
business hours no more than once per each calendar year, upon reasonable advance
notice to the Borrower; provided, however, that when an Event of Default has
occurred and is continuing the Administrative Agent or any Lender (or any of
their respective representatives or independent contractors) may do any of the
foregoing at the expense of the Borrower at any time during normal business
hours and as often as may be reasonably desired.

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7.9. Collateral; Further Assurances.

(a) The Borrower shall take all actions necessary to ensure that the Collateral
Agent, on behalf of the Secured Parties (or in the case of Real Property
Collateral, the Trustee named in the Deeds of Trust, for the benefit of the
Collateral Agent and the other Secured Parties), has and continues to have in
all relevant jurisdictions duly and validly created, attached, perfected and
enforceable first-priority Liens on the Collateral constituting UCC Collateral
and Real Property Collateral, in each case, to the extent required under the
Security Documents (including, in accordance with clauses (c) and (d) of this
Section 7.9, after-acquired Collateral), subject to no Liens other than
Permitted Liens and rights of holders of Permitted Secured Indebtedness in
compliance with the Collateral Agency Agreement.  The Borrower shall cause the
Obligations to constitute direct senior secured obligations of the Borrower and
to be senior in right of payment and to rank senior in right of security (other
than Permitted Liens) with respect to Collateral granted in the Security
Documents to all other Indebtedness of the Borrower (other than Permitted
Secured Indebtedness, with which it shall be pari passu in accordance with the
terms of the Collateral Agency Agreement).

(b) Upon completion of each New Project of a Project Finance Subsidiary, the
Borrower may cause any such Project Finance Subsidiary to Transfer the New
Project to the Borrower and upon such Transfer, the Borrower shall take all
actions necessary to ensure that (w) the New Project becomes a part of the
Collateral to the extent required under the Security Documents and Section
7.9(c), subject to the first priority Lien of the Security Documents (subject to
no Liens other than Permitted Liens and rights of holders of Permitted Secured
Indebtedness in accordance with the Collateral Agency Agreement), (x) no Default
or Event of Default occurs as a result of such Transfer, (y) the Indebtedness of
the Project Finance Subsidiary is either repaid in full at the time of the
Transfer or becomes Permitted Secured Indebtedness, and (z) the Project Finance
Subsidiary is liquidated or merged with and into the Borrower.

(c) If, after the Restatement Date, the Borrower acquires any Real Property
Collateral, the Borrower shall forthwith (and in any event, within five Business
Days of such acquisition, or such longer period of time as reasonably agreed by
the Administrative Agent) deliver to the Collateral Agent a fully executed
mortgage or deed of trust over such real property, in form and substance
substantially similar to a previously delivered Deed of Trust or otherwise
satisfactory to the Required Secured Parties and the Collateral Agent, together
with such surveys, environmental reports and other documents and certificates
with respect to such Real Property Collateral as may be reasonably required by
the Required Secured Parties.  The Borrower further agrees to take all other
actions necessary to create in favor of the Trustee named therein, for the
benefit of the Collateral Agent and the other Secured Parties a valid and
enforceable first priority Lien on such Real Property Collateral, free and clear
of all Liens except for Permitted Liens and rights of holders of Permitted
Secured Indebtedness in compliance with the Collateral Agency Agreement.

(d) If (A) after the Restatement Date, the Borrower acquires or creates any new
Subsidiary that is a Wholly-Owned Subsidiary (other than any Foreign Subsidiary,
any Project Finance Subsidiary and any other Subsidiary that is prohibited from
providing a Guaranty of the Obligations by any Applicable Law), within 30 days
of such creation or acquisition (or such longer time as the Administrative Agent
may agree), or (B) (x) the Cross Valley Project Transfer has not occurred and CV
Project Entity, L.L.C. has not obtained binding commitments for Non-Recourse
Debt to finance the Cross Valley Project or (y) the Golden Spread Project
Transfer has not occurred and the GS Project Entity has not obtained binding
commitments for Non-Recourse Debt to finance the Golden Spread Project, in
either case by January 31, 2015 (or such later date as the Administrative Agent
may agree), then, in each case of the foregoing clauses (A) and (B), the
Borrower shall cause such Wholly-Owned Subsidiary or such Project Finance
Subsidiary, as applicable:

(i) to execute and deliver to the Administrative Agent a Subsidiary Guaranty;

(ii) to deliver to the Administrative Agent a certificate of such Wholly-Owned
Subsidiary, substantially consistent with those delivered on the Restatement
Date pursuant to Section 5.1(c), with appropriate insertions and attachments;

(iii) to take such actions reasonably necessary or advisable to grant to the
Collateral Agent, on behalf of the Secured Parties (or in the case of Real
Property Collateral, the Trustee named in the Deeds of Trust, for the benefit of
the Collateral Agent and the other Secured Parties), a perfected and enforceable
first-priority Lien in the Collateral to the extent required in the Security
Documents with respect to such new Wholly-Owned Subsidiary, subject to no Liens
other than Permitted Liens and rights of holders of Permitted Secured
Indebtedness, and including the filing of UCC financing statements with respect
to the Collateral in such jurisdictions as may be required by the Security
Documents or by law or as may be reasonably requested by the Administrative
Agent; and

(iv) if reasonably requested by the Administrative Agent, to deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance reasonably satisfactory to the
Administrative Agent.

(e) Subject to the provisions of this Agreement and the Security Documents, a
Loan Party shall, prior to the occurrence of an Event of Default, be free to
manage its deposit accounts and security accounts in its sole discretion.

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7.10. Material Project Documents.

(a) The Borrower shall at all times (i) perform and observe all of the covenants
under the Material Project Documents to which it is a party, (ii) take
reasonable actions to enforce all of its rights thereunder, and (iii) maintain
the Leases to which it or any of its Subsidiaries is a party in full force and
effect, except to the extent the same could not reasonably be expected to have a
Material Adverse Effect.

(b) If the term of a Lease with the Borrower or one of its Subsidiaries expires
and the Qualified Lessee under such Lease has either ceased operating the
related assets or has ceased paying rent as required under the applicable Lease,
the Borrower shall or shall cause a Subsidiary to enter into a supplement or a
new Lease with respect to the related Leasehold assets with a Qualified Lessee
that provides for rent that, when combined with all other expected revenue,
will, in the reasonable judgment of the Borrower, as of the commencement date of
such supplement or new Lease, generate sufficient revenue to satisfy the
requirements of Section 7.11(b).  Notwithstanding the foregoing, if (i) such
expired Lease relates to transmission and/or distribution assets that are not
generating significant revenue, (ii) the failure to renew such Lease would not
constitute a Material Adverse Effect and (iii) the Borrower reasonably believes
it will generate sufficient revenue and hold sufficient assets (without giving
effect to the Leasehold assets with respect to such Lease) to satisfy the
requirements of Section 7.11, then this Section 7.10(b) will not require a
supplement or new lease with respect to such Leasehold assets.

7.11. Financial Ratios.

(a) The Borrower shall at all times maintain, on a consolidated basis, a Total
Debt to Capitalization Ratio of not more than 0.65 to 1.00.

(b) The Borrower shall maintain, for each period of four consecutive fiscal
quarters, a Debt Service Coverage Ratio of at least 1.40 to 1.00.

SECTION 8NEGATIVE COVENANTS.  Until the Commitments have terminated, no Letters
of Credit or Promissory Notes are outstanding and the Loans and Unpaid Drawings,
together with interest, Fees and all other Obligations under the Credit
Documents (other than contingent obligations (including indemnification
obligations) for which no claims have been made) incurred hereunder, are paid in
full:

8.1. Transactions with Affiliates.  The Borrower will not and will not permit
any Subsidiary to enter into directly or indirectly any transaction or group of
related transactions (including without limitation the purchase, lease, sale or
exchange of properties of any kind or the rendering of any service) with any
Affiliate, other than, (i) transactions with Project Finance Subsidiaries as
permitted by Section 7.9(b) and other transactions between or among the Borrower
and one or more Subsidiaries, or any subset thereof, to the extent permitted
under Sections 8.2, 8.6, 8.7, 8.10 and 8.14, (ii) any Qualified Lessee Affiliate
Loan and any Indebtedness permitted under Section 8.6(d)(ii), (iii) payment of
customary fees and reasonable out of pocket costs to, and indemnities for the
benefit of, directors, officers and employees of the Borrower and its
Subsidiaries in the ordinary course of business, (iv) transactions entered into
in connection with the Cross Valley Project on or prior to the Cross Valley
Project Transfer and the Golden Spread Project on or prior to the Golden Spread
Project Transfer, (v) ROFO Transfers, and (vi) upon fair and reasonable terms no
less favorable to the Borrower or such Subsidiary than would be obtained in a
comparable arms-length transaction with a Person not an Affiliate; provided that
any transaction will be deemed to meet the requirements of this clause (vi) if,
(x) prior to a Qualifying IPO, such transaction is on terms approved by the
holders of a majority of the Capital Stock of InfraREIT held by Persons who do
not have a separate material interest in such transaction other than by virtue
of their ownership of such Capital Stock, or by a majority of the directors
nominated by such Persons, and (y) upon the completion of a Qualifying IPO and
thereafter, such transaction is on terms approved by a majority of the board of
directors (or comparable governing body) of InfraREIT or an Affiliate thereof
who are “independent” (as such term is defined pursuant to the rules of the
primary exchange on which the Capital Stock is listed for trading), or a
majority of the “independent” members of a committee of any such board of
directors (or comparable governing body).

8.2. Merger, Consolidation, etc.  The Borrower will not nor will it cause or
permit any of its Subsidiaries to consolidate with or merge with any other
Person or Transfer all or substantially all of its assets in a single
transaction or series of transactions to any Person, except (i) pursuant to the
System Leases or any other Lease, (ii) as permitted pursuant to Section ‎7.9(b),
(iii) that so long as both before and after giving effect to such merger or
consolidation or Transfer of all or substantially all of its assets no Default
or Event of Default exists, the Borrower or any Subsidiary may merge or
consolidate with another Person, and the Borrower or any Subsidiary may Transfer
all or substantially all of its assets to another Person, so long as, after
giving effect to such merger or consolidation, or such Transfer of all or
substantially all of its assets, (A) with respect to any merger or consolidation
to which the Borrower is a party, the Borrower shall be the surviving entity,
(B) with respect to any merger or consolidation to which a Subsidiary is a party
but the Borrower is not, a Subsidiary (other than a Project Finance Subsidiary)
shall be the surviving entity and (C) with respect to any Transfer of all or
substantially all of its assets by the Borrower or a Subsidiary, the Borrower or
another Subsidiary (other than a Project Finance Subsidiary) shall be the
transferee or lessee of such assets (except to the extent permitted by clauses
(i) and (ii) of this Section 8.2), or (iv) the FERC Merger.

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8.3. Line of Business.  The Borrower will not and will not permit any Subsidiary
to engage in any business if, as a result, the general nature of the business in
which the Borrower and its Subsidiaries, taken as a whole, would then be engaged
would be substantially changed from the transmission and distribution of
electric power and the provision of ancillary services.

8.4. Terrorism Sanctions Regulations.  The Borrower will not and will not permit
any Subsidiary to, and will use commercially reasonable efforts not to permit
any Qualified Lessee to (a) become a Person described or designated in the
Specially Designated Nationals and Blocked Persons List of the Office of Foreign
Assets Control or in Section 1 of the Anti–Terrorism Order or (b) engage in any
dealings or transactions with any such Person.  The Borrower will not directly
or indirectly, use the proceeds of any Loans hereunder, or lend, contribute or
otherwise make available such proceeds to the parent of the Borrower or any
Subsidiary, joint venture partner or other individual or entity, to fund any
activities of or business with any individual or entity, or in any Designated
Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or
in any other manner that will result in a violation by any individual or entity
(including any individual or entity participating in the transaction, whether as
Lender, the Arranger, Administrative Agent, Issuing Lender, or otherwise) of
Sanctions.

8.5. Liens.  The Borrower will not, nor will it cause or permit any Subsidiary
to, directly or indirectly create, incur, assume or permit to exist (upon the
happening of a contingency or otherwise) any Lien on or with respect to the
Collateral or any other property of the Borrower or such Subsidiary, whether now
owned or held or hereafter acquired, or any income or profits therefrom, or
assign or otherwise convey any right to receive income or profits, or on any
other asset now owned or hereafter acquired by the Borrower or such Subsidiary,
except (each, a “Permitted Lien”):

(a) solely in the case of any Borrower Party, Liens created or permitted by the
Credit Documents, 2010 Financing Documents or the 2009 Financing Documents on
the assets of such Borrower Party; and

(b) (i) solely in the case of a Project Finance Subsidiary, Liens on assets
owned by that Project Finance Subsidiary, (ii) Liens on the Capital Stock in any
Project Finance Subsidiary to secure its Non-Recourse Debt and (iii) Liens in
respect of Guaranties permitted under Section 8.6(c)(iii);

(c) [Reserved]

(d) Liens for Taxes which are not yet due and payable or the payment of which is
not at the time required by Section ‎7.6;

(e) any attachment or judgment Lien, unless such attachment or judgment Lien
constitutes an Event of Default under ‎Section 9(l);

(f) Liens existing on the date of this Agreement set forth in Annex 8.5 hereto;

(g) Liens of a lessor of equipment to the Borrower or any Subsidiary on such
lessor’s leased equipment (but excluding equipment leased pursuant to a Capital
Lease), including any of the foregoing which is evidenced by a protective UCC
filing;

(h) Mechanics’, warehousemen’s, carriers’, workers’, repairers’, landlords’, and
other similar liens arising or incurred in the ordinary course of business and
(i) which do not in the aggregate materially detract from the value of property
or assets subject to such Liens or materially impair the continued use thereof
in the operation of the business or (ii) which are being contested in good faith
by appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or asset subject to such Liens, or other
Liens incurred or deposits made in the ordinary course of business in connection
with workers’ compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, trade contracts, leases, government contracts,
performance and return-of-money bonds and other similar obligations incurred in
the ordinary course of business (exclusive of obligations in respect of the
payment for borrowed money);

(i) zoning, entitlement, restriction, and other land use and environmental
regulations by Governmental Authorities and encroachments, easements, rights of
way, covenants, restrictions or agreements which do not materially interfere
with the continued use of any asset as currently used in the conduct of the
business;

(j) any encumbrances set forth in any franchise or governing ordinance under
which any portion of the business is conducted which could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect;

(k) all rights of condemnation, eminent domain, or other similar right of any
Person

(l) any interest of title of a lessor under leases; and

(m) Liens securing Permitted Secured Indebtedness.

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8.6. Indebtedness.  The Borrower will not, and will not cause or permit any
Subsidiary to incur any Indebtedness and will use commercially reasonable
efforts not to permit any Qualified Lessee (other than Qualified Lessees (1)
with an Investment Grade Credit Rating or (2) whose obligations under the
applicable Leases have been Guaranteed by an entity with an Investment Grade
Credit Rating) or Subsidiaries of Specified Qualified Lessees to incur
Indebtedness for borrowed money, in each case except the following Indebtedness,
which may be incurred subject to the requirements of the last paragraph of this
section:

(a) Indebtedness evidenced by the Credit Documents, the 2010 Financing Documents
and the 2009 Financing Documents;

(b) Indebtedness of the Borrower (i) that is not related to, and does not
support, Non-Recourse Debt of a Project Finance Subsidiary and (ii) if incurred,
would not result in a breach of Section ‎7.11; provided that, if the
Indebtedness is proposed to be secured by any of the Collateral, then at least
five Business Days (or such shorter period reasonably agreed by the
Administrative Agent) prior to the incurrence of such Indebtedness, the Borrower
shall (x) notify the Administrative Agent of its intent to incur such
Indebtedness, which notice shall set forth in reasonable detail (A) the amount
and proposed economic terms of such Indebtedness, (B) by type of lender or
purchaser and (C) the proposed collateral for such Indebtedness (which proposed
collateral may include any or all of the Collateral) and (y) deliver to the
Collateral Agent and the Administrative Agent an executed joinder agreement
substantially in the form of Exhibit A attached to the Collateral Agency
Agreement pursuant to which all the proposed holders of such Indebtedness have
become party to the Collateral Agency Agreement;

(c) (i) Non-Recourse Debt incurred by a Project Finance Subsidiary of the
Borrower (including Non-Recourse Debt incurred by such Project Finance
Subsidiary prior to being acquired by the Borrower or a Subsidiary) to fund a
New Project, (ii) any Indebtedness in the form of a pledge of Capital Stock in a
Project Finance Subsidiary as security for Non-Recourse Debt of such Project
Finance Subsidiary, (iii) Indebtedness in the form of Guaranties by the Borrower
or any Subsidiary of Indebtedness of any Project Finance Subsidiary, the
aggregate amount of which Guaranties shall not exceed $25,000,000 outstanding at
any given time, and (iv) Indebtedness of a Subsidiary (other than a Project
Finance Subsidiary of the Borrower) owed to the Borrower;

(d) Indebtedness of any such Qualified Lessee (i) in an aggregate principal
amount for such Qualified Lessee of up to the greater of (A) $5,000,000 and (B)
an amount equal to 1% of the sum of, without duplication, (x) the total amount
of the Consolidated Net Plant of such Qualified Lessee, plus (y) the total
amount of the Consolidated Net Plant of any guarantor(s) of such Qualified
Lessee’s obligations under the applicable Leases, plus (z) the total amount of
Leased Consolidated Net Plant, in each case on a senior secured basis and (ii)
in an aggregate principal amount for such Qualified Lessee of up to the greater
of (A) $10,000,000 and (B) an amount equal to 1.5% of the sum of, without
duplication, (x) the total amount of the Consolidated Net Plant of such
Qualified Lessee, plus (y) the total amount of the Consolidated Net Plant of any
guarantor(s) of such Qualified Lessee’s obligations under the applicable Leases,
plus (z) the total amount of Leased Consolidated Net Plant, in each case on an
unsecured subordinated basis on terms substantially similar to the terms set
forth on Exhibit G, to the extent allowed under the Leases to which such
Qualified Lessee is a party as a lessee or tenant thereunder; provided, that for
purposes of this clause (d), all Consolidated Qualified Lessees will be treated
as one Qualified Lessee;

(e) Indebtedness of the Borrower to any of its Subsidiaries (other than a
Project Finance Subsidiary), which by its terms is expressly subordinated to the
Obligations, and Indebtedness of any Subsidiary (other than a Project Finance
Subsidiary) to the Borrower or any other Subsidiary of the Borrower (other than
a Project Finance Subsidiary) not to exceed $5,000,000 at any one time
outstanding and in each case to have a maturity date of less than one year;

(f) Qualified Lessees may also incur Indebtedness associated with Qualified
Lessee Affiliate Loans; and

(g) Indebtedness of Subsidiaries of Specified Qualified Lessees incurred in an
aggregate principal amount for each such Specified Qualified Lessee of up to the
product of (x) such Specified Qualified Lessee’s Consolidated Net Plant (derived
from its most recently prepared consolidated balance sheet, prepared in
accordance with GAAP but adjusted to reverse the effects of failed
sale-leaseback accounting in a manner reasonably determined by such Specified
Qualified Lessee in good faith) multiplied by (y) the lesser of (A) the sum of
such Specified Qualified Lessee’s then-current PUCT-regulated debt-to-equity
ratio (expressed as a percentage) and 5% or (B) 65%; provided, that such
Indebtedness must be Non-Recourse Debt to such Specified Qualified Lessee.

Indebtedness of the Borrower or any of its Subsidiaries may be incurred under
this Section ‎8.6 only if no Default or Event of Default is, or as a result of
such incurrence would be, existing.

8.7. Loans, Advances, Investments and Contingent Liabilities.  The Borrower will
not make or permit to remain outstanding any loan or advance to, or extend
credit other than credit extended in the ordinary course of business to any
Person, or own, purchase or acquire any stock, obligations or securities of, or
any other interest in, or make any capital contribution to, any Person
(collectively, “Investments”), or commit to do any of the foregoing, except (a)
Permitted Investments, (b) ownership, purchase, and acquisition of equity
interests in and capital contributions to Project Finance Subsidiaries and
Wholly-Owned Subsidiaries, (c) loans, advances and extensions of credit (i) to
Wholly-Owned Subsidiaries (other than Project Finance Subsidiaries) and (ii) to
Project

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Finance Subsidiaries in the form of Guaranties by the Borrower or any Subsidiary
of Indebtedness of any Project Finance Subsidiary, the aggregate amount of which
Guaranties shall not exceed $25,000,000 outstanding at any given time, (d) any
Qualified Lessee Affiliate Loan or (e) Investments made in connection with the
Cross Valley Project and the Golden Spread Project prior to the Cross Valley
Project Transfer and the Golden Spread Project Transfer and (f) the ROFO
Transfers.

8.8. No Subsidiaries.  The Borrower shall have no subsidiaries other than
Project Finance Subsidiaries and Wholly-Owned Subsidiaries.

8.9. Restricted Payments.  The Borrower will not, directly or indirectly, make
or declare any Distribution unless there does not exist and, after giving effect
to the proposed Distribution, there will not exist, a Default or an Event of
Default.

The Borrower shall deliver to the Administrative Agent and the Collateral Agent
before a Distribution is made a certificate of a Responsible Officer of the
Borrower stating that the foregoing condition has been satisfied and, if
requested, providing supporting data and calculations.

8.10. Sale of Assets, etc.  The Borrower will not, nor will it cause or permit
any Subsidiary to, Transfer, or agree or otherwise commit to Transfer, any of
its assets with a fair market value of greater than $15,000,000, in the
aggregate during the term of this Agreement, (“Asset Sale”) except;

(a) the Borrower or a Subsidiary shall lease Systems or other transmission and
distribution assets and related assets pursuant to a Lease to which the Borrower
or a Subsidiary thereof is a party;

(b) (i) each Project Finance Subsidiary of the Borrower may Transfer its assets
to the Borrower or its Wholly-Owned Subsidiaries in accordance with Section
7.9(b); and (ii) the Borrower may Transfer, or suffer the Transfer of, its
ownership interests in a Project Finance Subsidiary and such Project Finance
Subsidiary may Transfer, or suffer the Transfer of its assets, in each case in
connection with and pursuant to the exercise of remedies under the documentation
governing Non-Recourse Debt incurred by such Project Finance Subsidiary;

(c) Asset Sales (i) among the Borrower and Subsidiary Guarantors (or a subset
thereof), (ii) among Subsidiaries that are not Subsidiary Guarantors and (iii)
from Subsidiaries to the Borrower or a Subsidiary Guarantor;

(d) in connection with an acquisition that is not prohibited under this
Agreement, (i) Asset Sales of operating assets and related assets to a Qualified
Lessee and (ii) Asset Sales that are not electric transmission or distribution
assets, in each case (x) which are, in the aggregate, not material in relation
to the assets acquired and (y) upon fair and reasonable terms no less favorable
to such Person than would be obtained in a comparable arms-length transaction
with a Person not an Affiliate;

(e) Permitted Liens;

(f) Investments permitted by Section 8.7, transactions permitted by Section 8.2
and Distributions permitted by Section 8.9;

(g) Asset Sales made in connection with the Cross Valley Project Transfer and
the Golden Spread Project Transfer;

(h) Asset Sales consisting of goods and inventory from the Borrower or any
Subsidiary  to a Qualified Lessee at cost or on such other terms as may be
approved by a majority of the board of directors (or comparable governing body)
of InfraREIT or an Affiliate thereof who are “independent” (as such term is
defined pursuant to the rules of the primary exchange on which the Capital Stock
of InfraREIT or such Affiliate is listed for trading), or a majority of the
“independent” members of a committee of any such board of directors (or
comparable governing body).

(i) ROFO Transfers; and

(j) Asset Sales of assets that are obsolete or no longer used or useful in such
Person’s business.

8.11. Sale or Discount of Receivables.  The Borrower will not nor will it cause
or permit any Subsidiary to sell with recourse, or discount or otherwise sell
for less than the face value thereof, any of its notes or accounts receivable.

8.12. Amendments to Organizational Documents.  The Borrower will not nor will it
cause or permit any of its Subsidiaries to, and shall use commercially
reasonable efforts not to permit any Qualified Lessee or any of its Subsidiaries
to, amend, supplement, terminate, replace or waive any provision of its
operating agreement or other organization documents after the Restatement
Date.  Notwithstanding, this Section ‎8.12, the Borrower, its Subsidiaries, any
Qualified Lessee and its Subsidiaries may, without the consent of the
Administrative Agent, amend their respective operating agreement or similar
organizational documents as may be required to facilitate or implement any of
the following:

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(a) reflect (i) the contribution of any new capital or additional capital by new
or existing members or partners of such Person, (ii) the addition of new members
or partners of such Person, or (iii) any adjustment, termination, reduction or
redemption of  equity interests of its members or partners or the issuance of
additional equity interests in such Person; provided, that after giving effect
to any such changes, no Event of Default would exist under Sections 8.8, 9.1(n)
or 9.1(o);

(b) to reflect a change that does not adversely affect TDC, the Administrative
Agent or the Lenders in any material respect, or to cure any ambiguity, or
correct or supplement any provision, not inconsistent with law or with the
provisions of this Agreement;

(c) to satisfy any requirements, conditions, or guidelines contained in any
order, directive, opinion, ruling or regulation of a federal or state agency or
contained in federal or state law;

(d) to take actions to avoid any material adverse consequences to such Person as
a result of any change in law or interpretation of law applicable to a Person
subject to regulation by the PUCT and FERC; and

(e) to effect the dissolution, liquidation, merger, or consolidation of any
Person that is otherwise not prohibited under this Agreement.

The Borrower will provide prompt notice to the Administrative Agent upon taking
any such action under the foregoing sentence of this Section ‎8.12.

8.13. Sale and Lease-Back.  Except for the System Leases, the CREZ Lease  and
any other Lease, the Borrower will not, nor will it cause or permit any
Subsidiary to, enter into any arrangement providing for the leasing by the
Borrower or any Subsidiary of real or personal property which has been or is to
be Transferred by the Borrower or such Subsidiary to a lender or investor or to
any Person to whom funds have been or are to be advanced by such lender or
investor on the security of such property or rental obligations of the Borrower
or any Subsidiary.

8.14. ERISA Compliance.

(a) Relationship of Vested Benefits to Plan Assets.  No Loan Party or ERISA
Affiliate will permit any Plan to be “at risk” within the meaning of Section 303
of ERISA to the extent such action could reasonably be expected to result in a
Material Adverse Effect.  The Loan Parties and their ERISA Affiliates will not
incur Withdrawal Liabilities (and will not become subject to contingent
Withdrawal Liabilities) in respect of Multiemployer Plans that individually or
in the aggregate could reasonably be expected to result in a Material Adverse
Effect.

(b) Valuations.  For the purposes of clause (a) above, all assumptions and
methods used to determine the actuarial valuation of vested and unvested
employee benefits under any Plan at any time maintained by a Loan Party or any
ERISA Affiliate and the present value of assets of any such Plan shall be
reasonably consistent with those determinations made for purposes of Section
‎6.13 and shall comply with all requirements of law.

(c) Prohibited Actions.  Neither the Loan Parties nor any ERISA Affiliate, nor
any Plan at any time maintained by any Loan Party or ERISA Affiliate, will:

(i) engage in any action that could reasonably be expected to cause any
transaction contemplated hereunder to result in a non-exempt “prohibited
transaction” (as such term is defined in Section 406 of ERISA and Section
4975(c) of the Code);

(ii) fail to meet the minimum funding standards of Section 302 of ERISA or
Sections 412 and 430 of the Code, or seek or obtain a waiver thereof, or fail to
make any required contribution to a Multiemployer Plan; or

(iii) terminate any such Plan in a manner which could result in the imposition
of a Lien on the Property of the Borrower or any other Loan Party or ERISA
Affiliate pursuant to Section 4068 of ERISA that could reasonably be expected to
result in a Material Adverse Effect.

8.15. No Margin Stock.  Anything herein contained to the contrary
notwithstanding, the Borrower will not, nor will it permit any Subsidiary to,
make or authorize any investment in, or otherwise purchase or carry, any margin
stock (within the meaning of Regulation U issued by the Board of Governors of
the Federal Reserve System of the United States) that violates the provisions,
or for any purpose that violates the provisions, of Regulation U of the Board of
Governors of the Federal Reserve System of the United States.

8.16. Material Project Documents.

(a) The Borrower will not, and will not permit any Subsidiary to, amend, modify,
supplement, replace, terminate or waive any provision of any Lease (other than
an Immaterial Lease) to which the Borrower or such Subsidiary is party, or
consent to any amendment, modification, supplement, replacement, termination or
waiver of any such Lease (other than an Immaterial Lease), other than (x) the
Approved Lease Amendments, (y) amendments, modifications, supplements,
replacements or waivers that do not cause

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such Lease (or its replacement) to be less favorable to the Borrower, taken as a
whole, in any material respect and (z) terminations of any such Lease if the
Borrower or such Subsidiary enters into a replacement Lease within 90 days of
such termination, so long as (A) such replacement Lease contains then-prevailing
market terms and (B) the Borrower reasonably believes that it will be in
compliance with Section 7.11 as of the commencement date of such replacement
Lease.

(b) The Borrower shall use commercially reasonable efforts to ensure that no
Specified Qualified Lessee enters into any lease of transmission or distribution
facilities other than (i) the Leases (including maintaining or entering into new
Leases or replacement Leases and amending or modifying Leases to the extent not
prohibited under this Agreement) and (ii) any other leases consented to by
Required Lenders.

8.17. Regulation.

(a) The Borrower shall not be or become, and shall use commercially reasonable
efforts not to permit any Specified Qualified Lessee to be or become, subject to
FERC jurisdiction as a public utility under the FPA; provided, however, that the
Borrower shall not be in default of the forgoing negative covenant if the
Borrower or any Specified Qualified Lessee becomes subject to FERC jurisdiction
under the FPA solely as a result of a change to the FPA or in FERC’s
interpretation thereof or regulations thereunder, if the Borrower or any
Specified Qualified Lessee takes all necessary actions to comply with applicable
FERC requirements and the operation of the System is uninterrupted; and

(b) The Borrower shall not, and shall use commercially reasonable efforts to
cause any Specified Qualified Lessee not to, violate in any material respect any
regulation or order of the Public Utility Commission of Texas applicable to it.

(c) None of the Borrower nor any Specified Qualified Lessee shall own, operate
or control any electrical generating, transmitting or distribution facility, nor
effect or control any sale of electricity, outside of the ERCOT balancing area
authority except (i) as permitted by FERC, as set forth in its declaratory order
issued in Docket no. EL07-93-000 or (ii) interconnected transmission or
distribution assets or systems located substantially in the State of Texas or
deriving a majority of their revenue from customers within the State of Texas.

8.18. Swaps.  The Borrower will not, nor will it permit any Subsidiary (other
than Project Finance Subsidiaries of the Borrower) to, enter into any Swap
Contracts, except that the Borrower may enter into Swap Contracts solely to
hedge interest rate risk and not for speculative purposes.

8.19. Additional Financial Covenants.   If the Borrower shall at any time enter
into one or more agreements pursuant to which Indebtedness in an aggregate
principal amount greater than $25,000,000 shall be outstanding and such
agreement contains one or more financial covenants which are more restrictive on
the Borrower and its Subsidiaries than the financial covenants contained in
Section 7.11 of this Agreement, then such more restrictive financial covenants
and any related definitions (the "Additional Financial Covenants") shall
automatically be deemed to be incorporated into Section 7.11 of this Agreement
by reference from the time such other agreement becomes binding upon the
Borrower until such time as such other Indebtedness is repaid in full and all
commitments related thereto are terminated; provided, that if at the time of any
such repayment or the termination of any such commitment a Default or Event of
Default shall exist under this Agreement, then such Additional Financial
Covenants shall continue in full force and effect under this Agreement so long
as such Default or Event of Default continues to exist.  So long as such
Additional Financial Covenants shall be in effect, no modification or waiver of
such Additional Financial Covenants shall be effective unless the Required
Lenders shall have consented thereto pursuant to Section 12.12 hereof.  Promptly
but in no event more than 5 Business Days following the execution of any
agreement providing for Additional Financial Covenants, the Borrower shall
furnish Administrative Agent with a copy of such agreement.  Upon written
request of the Required Lenders, the Borrower will enter into an amendment to
this Agreement pursuant to which this Agreement will be formally amended to
incorporate the Additional Financial Covenants on the terms set forth herein.

8.20. Burdensome Agreements.  The Borrower will not enter into or permit any
Subsidiary Guarantor or Subsidiary of a Subsidiary Guarantor to enter into any
Contractual Obligation that limits the right (a) of such Subsidiary to make
Distributions to the Borrower or any Subsidiary Guarantor or to otherwise
transfer property to the Borrower or any Subsidiary Guarantor, (b) of any
Subsidiary of the Borrower to guarantee the Indebtedness of the Borrower or (c)
of the Borrower or any Subsidiary Guarantor to create, incur, assume or suffer
to exist Liens on property of such Person, in each case except for (i)
restrictions arising under Applicable Law, (ii) customary restrictions and
conditions contained in any agreement relating to the sale or other disposition
of assets not prohibited under this Agreement pending the consummation of such
sale or other disposition, (iii) this Agreement, the other Credit Documents,
Permitted Liens (other than Liens permitted under Section 8.5(l)), any document
or instrument evidencing or granting any such Permitted Liens and the agreements
listed on Annex 8.20; (iv) any Contractual Obligation relating to Indebtedness
permitted pursuant to Section 8.6 (including Liens permitted pursuant to Section
8.5) to the extent, in the good faith judgment of the Borrower, such limitations
and requirements described in clauses (a), (b) or (c) above (x) are on customary
market terms for Indebtedness of such type at the time entered into, so long as
the Borrower has determined in good faith that such restrictions would not
reasonably be expected to impair in any material respect the ability of the Loan
Parties to meet their ongoing payment obligations under the Credit

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Documents, or (y) are not materially more restrictive, taken as a whole with
respect to the Borrower and the Subsidiaries than the restrictions in the Credit
Documents, (v) with respect to clause (c), any negative pledge incurred or
provided in favor of any holder of Indebtedness permitted under Section 8.6(c)
solely to the extent any such negative pledge relates to the property financed
by or the subject of such Indebtedness and (vi) non-assignment provisions in
franchise agreements, licenses, easements, leases, indemnities or other
agreements (other than any System Leases).

 

SECTION 9

EVENTS OF DEFAULT.

If any of the following conditions or events (each, an “Event of Default”) shall
occur and be continuing:

(a) the Borrower defaults in the payment of any principal on any Unpaid Drawing,
Loan or Promissory Note when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise; or

(b) the Borrower defaults in the payment of any interest on any Unpaid Drawing,
Loan or Promissory Note , fees or other amounts for more than five days after
the same becomes due and payable; or

(c) the Borrower defaults in the performance of or compliance with any term
contained in Section ‎7.1(f), Section ‎‎7.11 or ‎Section 8; or

(d) the Borrower defaults in the performance of or compliance with any term
contained herein (other than those referred to in Sections ‎9(a), ‎(b) and ‎(c))
or in any other Credit Document (other than those referred to in another
paragraph of this ‎Section 9) and such default is not remedied within 30 days
after the earlier of (i) a Responsible Officer obtaining actual knowledge of
such default and (ii) the Borrower receiving written notice of such default from
the Collateral Agent or Administrative Agent (any such written notice to be
identified as a “notice of default” and to refer specifically to this
‎Section 9(d)); or

(e) any representation or warranty made in writing by or on behalf of the
Borrower or by any officer of the Borrower in this Agreement or any other
Transaction Document or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or incorrect in any
material respect on the date as of which made; or

(f) with respect to any Lease to which the Borrower or a Subsidiary thereof is a
party (other than Immaterial Leases), (i) any such Lease is declared to be null
and void or is otherwise unenforceable, or any party thereto claims that any
such agreement is unenforceable (unless, within 90 days after such declaration
or claim, replaced by a Lease that complies with the provisions of Section
8.16), (ii) one or more payment defaults in an amount in excess of $10,000,000
in the aggregate occurs across all such Leases, after giving effect to any cure
periods specified therefor or (iii) any default or event of default (other than
those referred to in clause (i) or (ii) of this Section 9.01(f)) occurs under
any such Lease that could reasonably be expected to have a Material Adverse
Effect and such failure continues for more than 90 days; or

(g) (i) the Certificate of Convenience and Necessity (#30192, #30026, #30114 and
#30191) issued or transferred by the Public Utility Commission of Texas to
Sharyland and, prior to the FERC Merger, the FERC Operator, is terminated
without being timely replaced, revoked or otherwise is not in effect; or (ii)
except as could not reasonably be expected to result in a Material Adverse
Effect, any other Required Permit is terminated without being timely replaced
(if such terminated Permit continues to be a Required Permit), revoked or
otherwise is not in effect; provided, however, that the termination without
immediate renewal of any franchise agreement pursuant to which the Qualified
Lessee operating the applicable portion of the System is authorized to operate
the System and collect fees for services shall not constitute an Event of
Default if the parties to the franchise agreement continue to perform in
accordance with the terms of such agreement notwithstanding the termination; or

(h) any Security Document or any other security document entered into pursuant
to Section 7.9 ceases to give the Collateral Agent perfected first priority
Liens (subject to Permitted Liens) purported to be created thereby in a material
portion of the Collateral, taken as a whole, for any reason other than as
expressly permitted hereunder or thereunder (including by amendment, waiver
and/or consent granted in accordance with the terms hereunder or thereunder) or
satisfaction in full of the Obligations under the Credit Documents; or any
Credit Document, at any time after its execution and delivery and for any reason
other than as expressly permitted hereunder or thereunder (including by
amendment, waiver and/or consent granted in accordance with the terms hereunder
or thereunder) or satisfaction in full of all the Obligations under the Credit
Documents, ceases to be in full force and effect; or any Loan Party contests in
any manner the validity or enforceability of any Credit Document; or any Loan
Party denies that it has any or further liability or obligation under any Credit
Document, or purports to revoke, terminate or rescind any Credit Document, other
than, for each of the foregoing, as expressly permitted hereunder or thereunder
(including by amendment, waiver and/or consent granted in accordance with the
terms hereunder or thereunder) or satisfaction in full of the Obligations under
the Credit Documents; or

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(i) without limiting clause (h), (i) the Borrower or any Qualified Lessee is in
default (as principal or as guarantor or other surety) in the payment of any
principal of or premium or make-whole amount or interest on any Indebtedness
that is outstanding in an aggregate principal amount of at least the Threshold
Amount applicable to it beyond any period of grace provided with respect
thereto, or (ii) the Borrower or any Qualified Lessee is in default in the
performance of or compliance with any term of any evidence of any Indebtedness
(including any mortgage, indenture or other agreement relating thereto), which
Indebtedness, in the case of the Borrower, is in an aggregate outstanding
principal amount of at least $10,000,000 or, in the case of any Qualified
Lessee, is in an amount that could reasonably be expected to result in a
Material Adverse Effect, and as a consequence of such default or condition one
or more Persons are entitled to declare such Indebtedness to be due and payable
before its stated maturity or before its regularly scheduled dates of payment,
or (iii) as a consequence of the occurrence or continuation of any event or
condition (other than the passage of time or the right of the holder of
Indebtedness to convert such Indebtedness into equity interests), Indebtedness
of the Borrower in an aggregate outstanding principal amount of at least
$10,000,000 has become or has been declared due and payable before its stated
maturity or before its regularly scheduled dates of payment, or (iv) a default
or an event of default occurs under any Note Purchase Agreement, and such
failure continues beyond any period of grace provided with respect thereto and
has not otherwise been waived; or

(j) the Borrower or any Qualified Lessee (other than a Qualified Lessee that is
a lessee solely under Immaterial Leases) (i) is generally not paying, or admits
in writing its inability to pay, its debts as they become due, (ii) files, or
consents by answer or otherwise to the filing against it or, a petition for
relief or reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an assignment
for the benefit of its creditors, (iv) consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for
the purpose of any of the foregoing; or

(k) a court or Governmental Authority of competent jurisdiction enters an order
appointing, without consent by the Borrower, any Subsidiary or any Qualified
Lessee (other than a Qualified Lessee that is a lessee solely under Immaterial
Leases), a custodian, receiver, trustee or other officer with similar powers
with respect to it or with respect to any substantial part of its property, or
constituting an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation or to take
advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding-up or liquidation of any such Person or any such
petition shall be filed against any such Person and such petition shall not be
dismissed within 60 days; or

(l) a final judgment or judgments for the payment of money aggregating in excess
of the applicable Threshold Amount are rendered against the Borrower or, any
Qualified Lessee (other than a Qualified Lessee that is a lessee solely under
Immaterial Leases), other than, in each case, judgments payable by the Borrower
or such Qualified Lessee, if applicable, rendered in connection with
condemnations in favor thereof, and which judgments are not, within 60 days
after entry thereof, bonded, discharged or stayed pending appeal, or are not
discharged within 60 days after the expiration of such stay; or

(m) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA
or the Code for any plan year or part thereof or a waiver of such standards or
extension of any amortization period is sought or granted under Section 412 of
the Code, (ii) a notice of intent to terminate any Plan shall have been or is
reasonably expected to be filed with the PBGC or the PBGC shall have instituted
proceedings under ERISA section 4042 to terminate or appoint a trustee to
administer any Plan or the PBGC shall have notified any Loan Party or any ERISA
Affiliate that a Plan may become a subject of any such proceedings, (iii) any
Plan shall be “at-risk” within the meaning of Section 303 of ERISA as of the
last day of any calendar year, (iv) any Loan Party or any ERISA Affiliate shall
have incurred or is reasonably expected to incur any liability pursuant to Title
I or IV of ERISA or the penalty or excise tax provisions of the Code relating to
employee benefit plans (as defined in Section 3 of ERISA) or Sections
401(a)(29), 412 or 430(k) of the Code, (v) any Loan Party or any ERISA Affiliate
receives any notice concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent
(within the meaning of section 4245 of ERISA), in reorganization (within the
meaning of section 4241 of ERISA), or in endangered or critical status (within
the meaning of Section 432 of the Code or Section 305 of ERISA), or (vi) the
Borrower establishes or amends any employee welfare benefit plan (as defined in
Section 3 of ERISA) that provides post-employment welfare benefits in a manner
that would increase the liability of the Borrower thereunder; and any such event
or events described in clauses (i) through (vi) above, either individually or
together with any other such event or events, could reasonably be expected to
have a Material Adverse Effect; or

(n) Hunt Family Members cease to Control Sharyland, or any Person other than a
Qualified Lessee shall be the lessee under any lease with respect to the System;
or

(o) (i) InfraREIT Partners shall cease to own or control, directly or
indirectly, 90% of the outstanding equity interest of the Borrower; or (ii) Hunt
Family Members cease to own and control, directly or indirectly, at least 5% of
the outstanding equity interests of InfraREIT Partners, unless in case of clause
(ii), (x) the general partner of InfraREIT Partners has become a publicly held
company, or (y) the Borrower has total assets on its balance sheet valued at
$1,000,000,000 or greater;

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(p) the Borrower defaults in the performance of or compliance with Section
‎7.10(b),

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (j) above or paragraph (k) above, in each
case with respect to the Borrower, automatically the Commitments shall
immediately terminate and the Loans (with accrued interest thereon) and all
other amounts owing under this Agreement and the other Credit Documents
(including all amounts of Letter of Credit Outstandings, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) shall immediately become due and payable, and (B)
if such event is any other Event of Default, either or both of the following
actions may be taken:  (i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower declare the Commitments to
be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Administrative Agent may,
or upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower, declare the Loans (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Credit Documents
(including all amounts of Letter of Credit Outstandings, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) to be due and payable forthwith, whereupon the
same shall immediately become due and payable.  With respect to all Letters of
Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this paragraph, the Borrower shall at
such time, in a manner consistent with the Collateral Agency Agreement and the
other Security Documents, deposit in a cash collateral account opened by the
Administrative Agent an amount equal to the aggregate then undrawn and unexpired
amount of such Letters of Credit.  Amounts held in such cash collateral account
shall be applied to the payment of drafts drawn under such Letters of Credit,
and the unused portion thereof after all such Letters of Credit shall have
expired or been fully drawn upon, if any (to the extent received in accordance
with Section 4.1 of the Collateral Agency Agreement), shall be applied to repay
other obligations of the Borrower hereunder and under the other Credit
Documents.  After all such Letters of Credit shall have expired or been fully
drawn upon, all Reimbursement Obligations shall have been satisfied and all
other obligations of the Borrower hereunder and under the other Credit Documents
shall have been paid in full, the balance, if any, in such cash collateral
account shall be returned to the Borrower (or such other Person as may be
lawfully entitled thereto) in accordance with the terms of the Collateral Agency
Agreement. Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived by
the Borrower.

 

SECTION 10

DEFINITIONS.

10.1. Defined Terms. As used herein, the following terms shall have the meanings
herein specified unless the context otherwise requires.  Defined terms in this
Agreement shall include in the singular number the plural and in the plural the
singular:

“2009 Financing Documents” shall mean, collectively, the 2009 Note Purchase
Agreement, the 2029 Notes.

“2009 Note Purchase Agreement” shall mean the Note Purchase Agreement, dated
December 31, 2009, among the Borrower and the holders of the Borrower’s 2029
Notes issued thereunder, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

“2010 Financing Documents” shall mean, collectively, the 2010 Note Purchase
Agreement, the 2030 Notes.

“2010 Note Purchase Agreement” shall mean the Note Purchase Agreement, dated as
of the Original Closing Date, among the Borrower and purchasers listed therein,
as the same may be amended, restated, supplemented or otherwise modified from
time to time.

“2029 Notes” shall mean 7.25% Senior Notes due December 30, 2029 of the
Borrower.

“2030 Notes” shall mean 6.47% Senior Notes due December 30, 2030 of the
Borrower.

“ABR” shall mean, for any day, a rate per annum equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect
on such day plus ½ of 1% and (c) the Eurodollar Rate for a one month Interest
Period in effect on such day plus 1%.  If for any reason the Administrative
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Effective Rate,
for any reason, including the inability or failure of the Administrative Agent
to obtain sufficient quotations in accordance with the terms hereof, ABR shall
be determined without regard to clause (b) of the first sentence of this
definition, as appropriate, until the circumstances giving rise to such
inability no longer exist.  Any change in ABR due to a change in the Prime Rate
or the Federal Funds Effective Rate shall be effective on the effective day of
such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

“ABR Loans” shall mean Loans the rate of interest applicable to which is based
upon ABR.

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“Act” shall have the meaning provided in Section ‎12.9.

“Additional Financial Covenant” shall have the meaning provided in Section 8.19.

“Administrative Agent” shall mean Royal Bank of Canada (“RBC”), together with
its affiliates, as the arranger of the Commitments and as the administrative
agent for the Lenders under this Agreement and the other Credit Documents,
together with any of its successors.

“Affected Loan” shall have the meaning provided in Section ‎4.2(b).

“Affiliate” shall mean, at any time, and with respect to any Person, any other
Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person.

“Agreement” shall have the meaning provided in the recitals.

“Applicable Fee Rate” shall mean (i) from the Restatement Date until the third
Business Day that immediately follows the date on which an officer’s certificate
is delivered pursuant to Section 7.1(e) in respect of the first full fiscal
quarter ending after the Restatement Date, 0.375% per annum, and (ii)
thereafter, the applicable percentage per annum set forth below, as determined
by reference to the Total Debt to Capitalization Ratio as set forth in the most
recent officer’s certificate received by the Administrative Agent pursuant to
Section 7.1(e).

 

Fee Level

Total Debt to Capitalization Ratio

Applicable Fee Rate

1

≤0.50:1.00

0.375%

2

>0.50:1.00

0.500%

Any increase or decrease in the Applicable Fee Rate resulting from a change in
the Total Debt to Capitalization Ratio shall become effective as of the third
Business Day immediately following the date an officer’s certificate is
delivered pursuant to Section 7.1(e); provided, however, that  “Fee Level 2”
shall apply (x) as of the first Business Day at any time after the date on which
an officer’s certificate was required to have been delivered but was not
delivered (or was delivered but did not contain the calculations of the Total
Debt to Capitalization Ratio) until the first Business Day immediately following
the date on which such officer’s certificate (which includes calculations of the
Total Debt to Capitalization Ratio) is delivered and (y) at all times during the
existence of an Event of Default.

“Applicable Law” shall mean as to any Person, any local, state or federal law,
regulation, rule, ordinances or determination, interpretation or order of an
arbitrator or a court or other Governmental Authority, and any Required Permit,
in each case applicable to or binding upon such Person or any of its properties
or its business or to which such Person or any of its properties or its business
is subject.

“Applicable Margin” shall mean (i) from the Restatement Date until the third
Business Day that immediately follows the date on which an officer’s certificate
is delivered pursuant to Section 7.1(e) in respect of the first full fiscal
quarter ending after the Restatement Date, 0.75%, in the case of ABR Loans, and
1.75%, in the case of Eurodollar Loans, and (ii) thereafter, the applicable
percentage set forth below, as determined by reference to the Total Debt to
Capitalization Ratio as set forth in the most recent officer’s certificate
received by the Administrative Agent pursuant to Section 7.1(e).

 

Applicable Margin

Pricing Level

Total Debt to Capitalization Ratio

ABR Loans

Eurodollar Loans

1

≤0.50:1.00

0.75%

1.75%

2

>0.50:1.00

1.00%

2.00%

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Any increase or decrease in the Applicable Margin resulting from a change in the
Total Debt to Capitalization Ratio shall become effective as of the third
Business Day immediately following the date an officer’s certificate is
delivered pursuant to Section 7.1(e); provided, however, that  “Pricing Level 2”
shall apply (x) as of the first Business Day at any time after the date on which
an officer’s certificate was required to have been delivered but was not
delivered (or was delivered but did not contain the calculations of the Total
Debt to Capitalization Ratio) until the first Business Day immediately following
the date on which such officer’s certificate (which includes calculations of the
Total Debt to Capitalization Ratio) is delivered and (y) at all times during the
existence of an Event of Default.

“Application” shall mean an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to open a Letter of
Credit.

“Approved Lease Amendments” shall mean the CREZ Lease Amendment and Restatement,
the McAllen Lease Amendment and Restatement, the Stanton/Brady/Celeste Lease
Amendment and Restatement and, to the extent the FERC Merger has been completed,
the FERC Lease Amendment and Restatement.

“Arranger” shall mean RBC Capital Markets.

“Asset Sale” shall have the meaning set forth in Section ‎8.10.

“Authorized Officer” shall mean any senior officer of the Borrower designated as
such in writing to the Administrative Agent by the Borrower, in each case to the
extent reasonably acceptable to the Administrative Agent.

“Bankruptcy Event” shall mean, with respect to any Person, such Person becomes
the subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business appointed for it, or, in the good faith determination of the
Administrative Agent, has taken any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any such proceeding or appointment,
provided that a Bankruptcy Event shall not result solely by virtue of any
ownership interest, or the acquisition of any ownership interest, in such Person
by a Governmental Authority or instrumentality thereof, provided, further, that
such ownership interest does not result in or provide such Person with immunity
from the jurisdiction of courts within the United States of America or from the
enforcement of judgments or writs of attachment on its assets or permit such
Person (or such Governmental Authority or instrumentality) to reject, repudiate,
disavow or disaffirm any contracts or agreements made by such Person.

“Borrower” shall have the meaning provided in the first paragraph of this
Agreement.

“Borrower Materials” shall have the meaning specified in Section 7.1.

“Borrower Party” shall mean the Borrower and each Subsidiary Guarantor.

“Borrowing” shall mean the incurrence of a Loan under the Revolving Facility by
the Borrower from all of the Lenders having Commitments thereunder on a pro rata
basis on a given date (or resulting from conversions on a given date), having,
in the case of Eurodollar Loans, the same Interest Period; provided that ABR
Loans incurred pursuant to Section ‎1.10 shall be considered part of any related
Borrowing of Eurodollar Loans.

“Borrowing Date” shall mean any Business Day specified by the Borrower as a date
on which the Borrower requests the relevant Lenders to make Loans hereunder.

“Business Day” shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in the City of New York a legal holiday or a day on which banking institutions
are authorized by law or other governmental actions to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) and which is also a day for trading by and between banks
in Dollar deposits in the interbank Eurodollar market.

“Capital Lease” shall mean, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.

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“Capital Stock” of any Person shall mean any and all shares, interests, rights
to purchase, warrants, options, participation, patronage capital or other
equivalents of or interests in (however designated) equity of such Person,
including any preferred stock, any limited or general partnership interest and
any limited liability company membership interest.

“Cash Equivalents” shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than six months from the date of acquisition, (ii) Dollar denominated demand or
time deposits, certificates of deposit and bankers’ acceptances of (x) any
domestic commercial bank of recognized standing having capital and surplus in
excess of $500,000,000 or (y) any bank whose short-term commercial paper rating
from Standard & Poor’s Ratings Service or its successor or assign which remains
in the business of rating creditworthiness of commercial paper (“S&P”) is at
least A-1 or the equivalent thereof or from Moody’s Investors Service or its
successor or assign which remains in the business of rating creditworthiness of
commercial paper (“Moody’s”) is at least P-1 or the equivalent thereof, in each
case with maturities of not more than six months from the date of acquisition,
(iii) commercial paper issued by any Lender or by the parent company of any
Lender and commercial paper issued by, or guaranteed by, any industrial or
financial company with a short-term commercial paper rating of at least A-1 or
the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody’s, or guaranteed by any industrial company with a long term unsecured debt
rating of at least A or A2, or the equivalent of each thereof, from S&P or
Moody’s, as the case may be, and in each case maturing within six months after
the date of acquisition and (iv) money market funds that (x) comply with the
criteria set forth in SEC Rule 2a-7 under the ICA, (y) are rated at least AA+ by
S&P and at least, Aa1 by Moody’s and (z) have portfolio assets of at least
$5,000,000,000.

“Cash Flow” shall mean, for any period, the sum of the following (without
duplication):  (i) all cash paid to the Borrower during such period under the
System Leases, (ii) all cash distributions received by the Borrower from Project
Finance Subsidiaries of the Borrower during such period, (iii) all interest and
investment earnings, if any, paid to the Borrower during such period on amounts
on deposit in the account created under the Deposit Agreement, (iv) revenues, if
any, received by or on behalf of the Borrower during such period under any
insurance policy as business interruption insurance proceeds, and (v) direct
cash equity investments made by Holdings in the Borrower (excluding equity
contributed to a Project Finance Subsidiary) in an amount not greater than the
amount necessary to cause the Borrower to be in compliance with the financial
covenants set forth in Section ‎7.11(b) for such period (each such an
investment, an “Equity Cure”); provided, however, that during any period of four
consecutive fiscal quarters, “Cash Flow” shall include an Equity Cure in no more
than two of such quarters.

“Cash Flow Available for Debt Service” for any period, shall mean (i) Cash Flow
received during such period minus (ii) (A) all O&M Costs paid during such period
and (B) if an Equity Cure has been made with respect to any fiscal quarter for
which Cash Flow Available for Debt Service is calculated, the lesser of (x) the
aggregate amount of such Equity Cure for such period and (y) the aggregate
amount of cash distributions paid by the Borrower during such period.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.

“Collateral” shall mean all of the Collateral as defined in each of the Security
Documents.

“Collateral Agency Agreement” shall mean the Second Amended and Restated
Collateral Agency Agreement, dated as of the Restatement Date, among the
Collateral Agent, the Borrower and the holders (or agents thereof) of Permitted
Secured Indebtedness from time to time party thereto (as may be amended,
restated, amended and restated, supplemented, joined or otherwise modified from
time to time).

“Collateral Agent” shall mean The Bank of New York Mellon Trust Company, N.A., a
national association, acting in its capacity as collateral agent for itself and
the other Secured Parties, or its successors in such capacity appointed pursuant
to the terms of the Collateral Agency Agreement.

“Commitment” shall mean with respect to each Lender, such Lender’s Revolving
Commitment and in the case of the Swingline Lender, the Swingline Commitment.

“Commitment Fee” shall have the meaning provided in Section 3(a).

“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on
or measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

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“Consolidated Net Plant” shall mean, with respect to any Person, as of the date
of determination, the net plant set forth on the face of the consolidated
balance sheet of such Person or absent such amount on the consolidated balance
sheet, the total plant of such Person on a consolidated basis minus accumulated
depreciation as set forth in the footnotes of the  consolidated financial
statements, in each case, for the fiscal quarter ended on the date of the last
financial statements delivered pursuant to Section 7.1.

“Consolidated Net Worth” shall mean at any date, the sum of all amounts that
would, in conformity with GAAP, be included on a consolidated balance sheet of
the Borrower and its consolidated Subsidiaries (and, if positive, of Sharyland
and its consolidated Subsidiaries) under stockholders’ equity at such date, plus
minority interests, as determined in accordance with GAAP minus any stockholders
equity attributable to any Project Finance Subsidiary, provided, however, that
any effects resulting from SFAS 158 shall be excluded for purposes of the
calculation of Consolidated Net Worth.

“Consolidated Qualified Lessee” shall mean any Qualified Lessee that is
consolidated into the financial statements of another Qualified Lessee.

“Contractual Obligation” shall mean as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.

“Credit Documents” shall mean this Agreement, the Promissory Notes, the Security
Documents, the Subsidiary Guaranties and the Fee Letter and any amendment,
waiver, supplement or other modification to any of the foregoing.

“Credit Event” shall mean and include the making of a Loan or the issuance of a
Letter of Credit.

“Credit Party” shall mean the Administrative Agent, the Issuing Lender, the
Swingline Lender or any other Lender, as applicable.

“CREZ Lease” shall mean (A) prior to the effectiveness of the CREZ Lease
Amendment and Restatement, the Amended and Restated Lease Agreement (CREZ
Assets) dated as of April 30, 2013, between SP, as lessor, and Sharyland, as
lessee, and (B) upon the effectiveness of the CREZ Lease Amendment and
Restatement, the CREZ Lease Amendment and Restatement, as such lease may be
amended, restated, supplemented or otherwise modified from time to time, or any
new lease entered into in replacement thereof, in accordance with Section
‎7.10(b) and/or 8.16 of this Agreement, as applicable.

“CREZ Lease Amendment and Restatement” shall mean the Second Amended and
Restated Lease Agreement (CREZ Assets), between SP, as lessor, and Sharyland, as
lessee, with respect to the CREZ Project.

“CREZ Project” shall mean the five transmission lines, four substations and
other facilities in Texas identified and awarded to Sharyland by the Public
Utility Commission of Texas (the “PUCT”) in Docket Number 37902.

“Cross Valley Project” shall mean the approximately 49 mile transmission line in
South Texas near the Mexican border, known as the “North Edinburg to Loma Alta
345 kV single-circuit transmission line” project, subsequently, renamed as the
“North Edinburg to Palmito 345 kV double-circuit transmission line” project,
which is built on double-circuit capable structures and the Palmito substation
located on the eastern terminus of the Cross Valley Project.  The Cross Valley
Project is part of a 100 mile transmission line, which is jointly developed and
permitted by Sharyland and Electric Transmission Texas.

“Cross Valley Project Transfer” shall mean  the sale and Transfer of all of the
Capital Stock of CV Project Entity, L.L.C., a Project Finance Subsidiary of the
Borrower, to Cross Valley Partnership, L.P., a Person Controlled by one or more
Hunt Family Members, for a purchase price at least equal to the Cross Valley
Project’s rate base cost at such time.

“Debt Service” shall mean, for any period, the aggregate (without duplication)
of (i) all amounts of interest on the Loans and in respect of other Indebtedness
of the Borrower required to be paid during such period, plus (ii) all amounts of
principal on the Loans and in respect of other Indebtedness of the Borrower or
required to be paid during such period, excluding any optional prepayments of
principal during such period, plus (iii) all other premiums, fees, costs,
charges, expenses and indemnities due and payable to the Administrative Agent or
the other Secured Parties and holders of other Indebtedness of the Borrower or
and agents acting on their behalf during such period; provided, however, that
for purposes of calculating the Debt Service Coverage Ratio, the Debt Service
shall exclude Non-Recourse Debt of a Project Finance Subsidiary.

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“Debt Service Coverage Ratio” shall mean, for each period of four most recent
consecutive fiscal quarters, the quotient of (i) Cash Flow Available for Debt
Service for such period to (ii) Debt Service for such period.  If, during any
period, the Borrower and/or any Subsidiary enters into a transaction or series
of related transactions not prohibited by this Agreement (including by waiver,
consent or amendment given or made in accordance with Section 12.12) pursuant to
which the Borrower and/or any Subsidiary acquires or disposes of any assets with
a fair market value greater than $1,000,000, the Debt Service Coverage Ratio
shall be calculated on a pro forma basis after giving effect to such transaction
or series of related transactions as a whole (including any related incurrence,
repayment or assumption of Indebtedness), and such transaction or series of
related transactions (including any related incurrence, repayment or assumption
of Indebtedness) shall be deemed to have occurred as of the first day of the
applicable period.

“Deed of Trust” shall mean (i) the Amended and Restated First Lien Deed of
Trust, Security Agreement and Fixture Filing (Texas) and each First Lien Deed of
Trust, Security Agreement, Assignment of Rents and Leases and Fixture Filing
(Texas) by and from the Borrower, as grantor, to Peter M. Oxman, as trustee, for
the benefit of the Collateral Agent and the other Secured Parties, dated as of
July 13, 2010, in each case as the same may be amended, restated, supplemented
or otherwise modified from time to time and (ii) each other deed of trust by and
from the Borrower, as grantor, for the benefit of the Collateral Agent and the
other Secured Parties entered into from time to time.

“Default” shall mean any event or condition which would, with lapse of time or
giving of notice or both, become an Event of Default.

“Defaulting Lender” shall mean any Lender that (a) has failed, within two
Business Days of the date required to be funded or paid, to (i) fund any portion
of its Revolving Loans, (ii) fund any portion of its participations in Letters
of Credit or Swingline Loans or (iii) pay over to any Credit Party any other
amount required to be paid by it hereunder, unless, in the case of clause (i)
above, such Lender notifies the Administrative Agent in writing that such
failure is the result of such Lender’s good faith determination that a condition
precedent to funding (specifically identified and including the particular
default, if any) has not been satisfied, (b) has notified the Borrower or any
Credit Party in writing, or has made a public statement to the effect, that it
does not intend or expect to comply with any of its funding obligations under
this Agreement (unless such writing or public statement indicates that such
position is based on such Lender’s good faith determination that a condition
precedent (specifically identified and including the particular default, if any)
to funding a loan under this Agreement cannot be satisfied) or generally under
other agreements in which it commits to extend credit, (c) has failed, within
three Business Days after request by a Credit Party, acting in good faith, to
provide a certification in writing from an authorized officer of such Lender
that it will comply with its obligations (and is financially able to meet such
obligations) to fund prospective Revolving Loans and participations in then
outstanding Letters of Credit and Swingline Loans under this Agreement, provided
that such Lender shall cease to be a Defaulting Lender pursuant to this clause
(c) upon such Credit Party’s receipt of such certification in form and substance
satisfactory to it and the Administrative Agent, or (d) has become the subject
of a Bankruptcy Event.

“Deposit Agreement” shall mean that certain Amended and Restated Deposit Account
Control Agreement, dated as of the Restatement Date, by and among the Borrower,
The Bank of New York Mellon Trust Company, N.A. and Bank of America, N.A.

“Depositary” shall mean Bank of America, N.A.

“Designated Jurisdiction” shall mean any country or territory to the extent that
such country or territory itself is the subject of any Sanction.

“Development Agreement” shall mean that certain Development Agreement to be
entered into among Hunt Transmission Services, L.L.C., Sharyland, InfraREIT
and/or InfraREIT Partners in connection with one or more New Projects, a copy of
which has been provided to the Lenders, pursuant to which Hunt Transmission
Services, L.L.C. has granted InfraREIT a right of first offer related to the New
Projects identified therein, as amended from time to time in accordance with its
terms.

“Distribution” shall mean any dividend or other distribution (whether in cash,
securities or other property) with respect to any Capital Stock of any Person,
or any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, defeasance, acquisition, cancellation or termination of any such
Capital Stock or on account of any return of capital to such Person’s
stockholders, partners or members (or the equivalent Person thereof), or any
option, warrant or other right to acquire any such dividend or other
distribution or payment.

“Dollars” and “$” shall mean dollars in lawful currency of the United States.

“Eligible Assignee” shall mean any Person that meets the requirements to be an
assignee under Section 12.4.

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“Environmental Law” shall mean any federal, state, foreign or local statute,
law, rule, regulation, ordinance, code and rule of common law formerly, now or
hereafter in effect and in each case as amended, including, without limitation,
any judicial or administrative order, consent decree or judgment, relating to
the environment, including but not limited to Hazardous Materials.

“ERCOT” shall mean Electric Reliability Council of Texas or any successor
thereto.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.  Section references to ERISA are to ERISA, as in effect at the
Restatement Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.

“ERISA Affiliate” shall mean (a) any entity, whether or not incorporated, that
is under common control with a Loan Party within the meaning of Section
4001(a)(14) of ERISA; (b) any corporation which is a member of a controlled
group of corporations within the meaning of Section 414(b) of the Code of which
a Loan Party is a member; (c) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under common
control within the meaning of Section 414(c) of the Code of which a Loan Party
is a member; and (d) with respect to any Loan Party, any member of an affiliated
service group within the meaning of Section 414 (m) or (o) of the Code of which
that Loan Party, any corporation described in clause (a) above or any trade or
business described in clause (b) above is a member.

“Eurocurrency Reserve Requirements” shall mean, for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates (expressed as
a decimal) of the maximum reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto) dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as “Eurocurrency Liabilities” in Regulation D of such Board) maintained by a
member bank of such Federal Reserve System.

“Eurodollar Loans” shall mean Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.

“Eurodollar Rate” shall mean, for any Interest Period for all Eurodollar Loans
comprising part of the same Borrowing (a) the rate of interest per annum
expressed on the basis of a year of 360 days, determined by the Administrative
Agent,  which is equal to the offered rate that appears on the page of the
Reuters LIBOR01 screen (or any successor thereto as may be selected by the
Administrative Agent) that displays an average ICE Benchmark Administration
Interest Settlement Rate for deposits in Dollars with a term equivalent to such
Interest Period, determined as of approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of such Interest Period or (b) if the rates
referenced in the preceding clause (a) are not available, the rate per annum
determined by the Administrative Agent as the rate of interest, expressed on a
basis of a year of 360 days, at which deposits in Dollars for delivery on the
first day of such Interest Period in same day funds in the approximate amount of
the Eurodollar Loan being made, continued or converted by the Administrative
Agent and with a term and amount comparable to such Interest Period and
principal amount of such Eurodollar Loan as would be offered by the
Administrative Agent’s London Branch to major banks in the offshore Dollar
market at their request at approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of such Interest Period; provided that if
the rate determined pursuant to either clause (a) or clause (b) above, as
applicable, is below zero, the Eurodollar Rate shall be deemed to be zero.

“Eurodollar Tranche” shall mean the collective reference to Eurodollar Loans
under a particular Facility the then current Interest Periods with respect to
all of which begin on the same date and end on the same later date (whether or
not such Loans shall originally have been made on the same day).

“Event of Default” shall have the meaning provided in ‎Section 9.

“Excluded Taxes” shall mean any of the following Taxes imposed on or with
respect to a Credit Party or required to be withheld or deducted from a payment
to a Credit Party, (a) Taxes imposed on or measured by net income (however
denominated), franchise Taxes, and branch profits Taxes, in each case, (i)
imposed as a result of such Credit Party being organized under the laws of, or
having its principal office or, in the case of any Lender, its applicable
lending office located in, the jurisdiction imposing such Tax (or any political
subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of
a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for
the account of such Lender with respect to an applicable interest in a Loan or
Commitment (including, for the avoidance of doubt, an interest in a Letter of
Credit) pursuant to a law in effect on the date on which (i) such Lender
acquires such interest in the Loan or Commitment, including, for the avoidance
of doubt, an interest in a Letter of Credit (other than pursuant to an
assignment request by the Borrower under Section ‎1.15) or (ii) such Lender
changes its lending office, except in each case to the extent that, pursuant to
Section ‎4.3, amounts with respect to such Taxes were payable either to such
Lender's assignor immediately before such Lender acquired the applicable
interest in a Loan or Commitment, including, for the avoidance of doubt, an
interest in a Letter of Credit, or to such Lender immediately before it changed
its lending office, (c) Taxes attributable to such Credit Party’s failure to
comply with Section ‎4.3(f) and (d) any U.S. federal withholding Taxes imposed
under FATCA.

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“Existing Lenders” shall have the meaning provided in the recitals.

“Facility” shall mean any of the credit facilities established under this
Agreement, i.e., the Revolving Facility.

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of
this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or
future regulations or official interpretations thereof, any agreements entered
into pursuant to Section 1471(b)(1) of the Code, and any intergovernmental
agreements between the United States and another country which modify the
provisions of the foregoing.

“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 published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three Federal Funds brokers of recognized standing selected by it.

“Fee Letter” shall mean the Fee Letter, dated November 7, 2014, between the
Borrower and Royal Bank of Canada.

“Fees” shall mean all amounts payable pursuant to, or referred to in, Section 3.

“FERC” shall mean the Federal Energy Regulatory Commission, or any successor
agency to its duties and responsibilities.

“FERC Lease” shall mean (A) prior to the effectiveness of the FERC Lease
Amendment and Restatement, the Second Amended and Restated Lease Agreement,
dated as of July 1, 2012, between FERC Owner and FERC Operator and (B) upon the
effectiveness of the FERC Lease Amendment and Restatement, the FERC Lease
Amendment and Restatement, as such lease may be amended, restated, supplemented
or otherwise modified from time to time, or any new lease entered into in
replacement thereof, in accordance with Section ‎7.10(b) and/or 8.16 of this
Agreement, as applicable.

“FERC Lease Amendment and Restatement” shall mean the Third Amended and Restated
Lease Agreement (Stanton Transmission Loop Assets) between FERC Owner, as
lessor, and FERC Operator, as lessee.

“FERC Merger” shall mean the anticipated transaction or series of transactions
pursuant to which SDTS FERC L.L.C. will merge into the Borrower and SU FERC
L.L.C. will merge into Sharyland.

“FERC Operator” shall mean (A) prior to the FERC Merger, SU FERC, L.L.C., a
Subsidiary of Sharyland, and (B) upon the completion of the FERC Merger,
Sharyland.

“FERC Owner” shall mean (A) prior to the FERC Merger, SDTS FERC, L.L.C., a
Subsidiary of the Borrower, and (B) upon the completion of the FERC Merger, the
Borrower.

“Financing Documents” shall mean, collectively, the Credit Documents and the
Note Purchase Agreements.

“Force Majeure Event” shall mean any claim of force majeure by any Person under
any Material Project Document, which would allow such Person to avoid all or any
material part of its obligations thereunder and any other fire, explosion,
accident, strike, slowdown or stoppage, lockout or other labor dispute (whether
pending or, to the Borrower’s knowledge threatened), drought, storm, hail,
earthquake, embargo, act of God or of the public enemy, or other casualty
(whether or not covered by insurance), that could reasonably be expected to
result in a Material Adverse Effect.

“Foreign Subsidiary” shall mean any Subsidiary of the Borrower that is not
organized under the laws of the United States, any state thereof or the District
of Columbia.

“FPA” shall mean the Federal Power Act, 16 U.S.C. §§791 et seq., as amended, and
the regulations of the FERC thereunder.

“Fronting Fee” shall have the meaning provided in Section 3(c).

“Funding Office” shall mean  the office of the Administrative Agent specified in
Section ‎12.3 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.

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“GAAP” shall mean generally accepted accounting principles as in effect in the
United States of America.  In the event that any “Accounting Change” (as defined
below) shall occur and such change results in a change in the method of
calculation of financial covenants, ratios, standards or terms in this
Agreement, then the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
reflect equitably such Accounting Changes with the desired result that the
criteria for evaluating the Borrower’s financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been
made.  Until such time as such an amendment shall have been executed and
delivered by the Borrower and the Administrative Agent, all financial covenants,
ratios, standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Changes had not occurred.  “Accounting Changes”
refers to changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.  For purposes of determining compliance with any covenant
(including the computation of any financial covenant) contained herein,
Indebtedness of a Person shall be deemed to be carried at 100% of the
outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB
ASC 470-20 on financial liabilities shall be disregarded.

“Golden Spread Project” shall mean a new 345 kilovolt transmission line that
will be approximately 55 miles long and will connect the Golden Spread Electric
Cooperative, Inc. Antelope-Elk Energy Center in Hale County, approximately 1.6
miles north of the City of Abernathy on County Road P, to the proposed White
River Station that will be built by Sharyland in Floyd County, approximately 9
miles northeast of the City of Floydada and 1.1 miles east of the intersection
of County Road 231 and County Road 200 and the Abernathy substation that is
located in the western portion of the transmission line.

“Golden Spread Project Transfer” shall mean the sale and Transfer of all of the
Capital Stock of the GS Project Entity to a Person Controlled by one or more
Hunt Family Members for a purchase price at least equal to the Golden Spread
Project’s rate base cost at such time.

“Governmental Authority” shall mean

(a) the government of:

 

(i)

the United States of America or any State or other political subdivision
thereof, or

 

(ii)

any other jurisdiction in which the Borrower conducts all or any part of its
business, or which asserts jurisdiction over any properties of the Borrower, or

(b) any entity exercising executive, legislative, judicial, taxing, regulatory
or administrative functions of, or pertaining to, any such government, or

 

(c)

ERCOT, or

 

(d)

the Texas Regional Entity.

“Governmental Entity” shall mean the government of the United States of America
or any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).

“GS Project Entity” shall mean a Project Finance Subsidiary of the Borrower
created to finance and develop the Golden Spread Project.

“Guaranty” shall mean, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness of any other Person in any manner, whether directly or indirectly,
including (without limitation) obligations incurred through an agreement,
contingent or otherwise, by such Person:

(a) to purchase such Indebtedness or any property constituting security
therefor;

(b) to advance or supply funds (i) for the purchase or payment of such
indebtedness or obligation, or (ii) to maintain any working capital or other
balance sheet condition or any income statement condition of any other Person or
otherwise to advance or make available funds for the purchase or payment of such
Indebtedness;

(c) to lease properties or to purchase properties or services primarily for the
purpose of assuring the owner of such Indebtedness of the ability of any other
Person to make payment of the Indebtedness; or

(d) otherwise to assure the owner of such Indebtedness against loss in respect
thereof.

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The amount of any Guaranty shall be deemed to be an amount equal to the stated
or determinable amount of the related primary obligation (or, if less, the
maximum amount for which such Guaranty is made) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith.  In any computation of the
indebtedness or other liabilities of the obligor under any Guaranty, the
indebtedness or other obligations that are the subject of such Guaranty shall be
assumed to be direct obligations of such obligor.  The term “Guarantee” as a
verb has a corresponding meaning.

“Hazardous Materials” shall mean any and all pollutants, toxic or hazardous
wastes or other substances that might pose a hazard to health and safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage or filtration of which is
or shall be restricted, prohibited or penalized by any Applicable Law including,
but not limited to, asbestos, urea formaldehyde foam insulation, petroleum,
petroleum products, lead based paint, radon gas or similar restricted,
prohibited or penalized substances.

“Holdings” shall have the meaning provided in the preamble.

“Hunt Family Members” shall mean (i) Ray L. Hunt; (ii) the spouse of Ray L. Hunt
and each of his children and siblings; (iii) the spouse and lineal descendants
of any Person identified in the foregoing clause (ii); (iv) any trust or account
primarily for the benefit of any Person or Persons identified in the foregoing
clauses (i), (ii) or (iii); (v) any corporation, partnership or other entity in
which any of the Persons identified in the foregoing clauses (i), (ii), (iii) or
(iv) are the beneficial owners of and Control substantially all of the shares of
capital stock, membership interests, partnership interests or other equity
interests and options or warrants to acquire, or securities convertible into,
capital stock, membership interests, partnership interests or other equity
securities of an entity; and (vi) the personal representative or guardian of any
of the Persons identified in the foregoing clauses (i), (ii) and (iii) upon such
Person’s death for purposes of the administration of such Person’s estate or
upon such Person’s disability or incompetency for purposes of the protection and
management of the assets of such Person.

“ICA” shall have the meaning provided in Section ‎6.17.

“Immaterial Leases” shall mean Leases pursuant to which the Borrower recognized
revenue, in the aggregate, that constituted 10% or less of the total
consolidated revenue of the Borrower and its Subsidiaries (other than Project
Finance Subsidiaries) as set forth on the face of the consolidated statements of
operations for the four consecutive fiscal quarter periods that ended on the
date of the last financial statements delivered pursuant to Section 7.1 prior to
the date on which the determination of whether such Lease falls within the scope
of this definition is required to be made under the Credit Documents.

“Increase Effective Date” shall have the meaning specified in Section 1.17(d).

“Indebtedness” shall mean, with respect to any Person, at any time, without
duplication, (a) its liabilities for borrowed money and its redemption
obligations in respect of Preferred Stock that is mandatorily redeemable prior
to the date that is 91 days after the Maturity Date; (b) its liabilities for the
deferred purchase price of property acquired by such Person (excluding accounts
payable arising in the ordinary course of business but including all liabilities
created or arising under any conditional sale or other title retention agreement
with respect to any such property); (c) (i) all liabilities appearing on its
balance sheet in accordance with GAAP in respect of Capital Leases and (ii) all
liabilities which would appear on its balance sheet in accordance with GAAP in
respect of Synthetic Leases assuming such Synthetic Leases were accounted for as
Capital Leases; provided, however, that for purposes of this definition
(including with respect to clauses (i) and (ii) hereof), the System Leases, any
other Lease and any similar lease shall not be treated as a capital lease; (d)
all liabilities for borrowed money secured by any Lien with respect to any
property owned by such Person (whether or not it has assumed or otherwise become
liable for such liabilities); (e) all its liabilities in respect of letters of
credit or instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not representing
obligations for borrowed money); provided, however, that for purposes of this
definition, any surety bonds or indemnification agreements entered into by any
Qualified Lessee (with respect to which the Borrower or a subsidiary thereof has
a reimbursement or backstop obligation) in connection with condemnation
proceedings shall be excluded; (f) the aggregate Swap Termination Value of all
Swap Contracts of such Person; and (g) any Guaranty of such Person with respect
to liabilities of a type described in any of clauses (a) through (f)
hereof.  Indebtedness of any Person shall include all obligations of such Person
of the character described in clauses (a) through (g) to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.  For all purposes hereof,
the Indebtedness of any Person shall include the Indebtedness of any partnership
or joint venture (other than a joint venture that is itself a corporation or
limited liability company) in which such Person is a general partner or a joint
venturer, unless such Indebtedness is expressly made non-recourse to such
Person. The amount of any Capital Lease or Synthetic Lease obligation (in each
case, to the extent the same is considered Indebtedness hereunder) as of any
date shall be deemed to be the amount of Attributable Indebtedness in respect
thereof as of such date.

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“Indemnified Taxes” shall mean  (a) Taxes, other than Excluded Taxes, imposed on
or with respect to any payment made by or on account of any obligation of any
Borrower Party under any Credit Document and (b) to the extent not otherwise
described in clause (a) above, Other Taxes.

“Information” shall mean all information other than the financial projections
relating to the transactions contemplated hereby that has been or will be made
available to the Lenders.

“InfraREIT” shall mean (x) prior to a Qualifying IPO, InfraREIT, L.L.C., a
Delaware limited liability company, and (y) upon and after a Qualifying IPO,
InfraREIT, Inc., a Maryland corporation and in both cases, any successors to the
foregoing.

“InfraREIT Partners” shall mean InfraREIT Partners, LP, a Delaware limited
partnership.

“Interest Payment Date” shall mean  (a) as to any ABR Loans (other than any
Swingline Loan), the last day of each March, June, September and December to
occur while such Loan is outstanding and the final maturity date of such Loan,
(b) as to any Eurodollar Loans having an Interest Period of three months or
less, the last day of such Interest Period, (c) as to any Eurodollar Loans
having an Interest Period longer than three months, each day that is three
months, or a whole multiple thereof, after the first day of such Interest Period
and the last day of such Interest Period, (d) as to any Loan (other than any
Revolving Loan that is an ABR Loan and any Swingline Loan), the date of any
repayment or prepayment made in respect thereof and (e) as to any Swingline
Loan, the day that such Loan is required to be repaid.

“Interest Period” shall mean as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six (or, if agreed
to by all Lenders under the Revolving Facility twelve) months thereafter, as
selected by the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one, two, three or six (or, if agreed to by all
Lenders under the Revolving Facility, twelve) months thereafter, as selected by
the Borrower by irrevocable notice to the Administrative Agent not later than
11:00 A.M., New York City time, on the date that is three Business Days prior to
the last day of the then current Interest Period with respect thereto; provided
that, all of the foregoing provisions relating to Interest Periods are subject
to the following:

1. if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;

2. the Borrower may not select an Interest Period under a particular Facility
that would extend beyond the Revolving Facility Final Maturity Date;

3. any Interest Period that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of
a calendar month; and

4. the Borrower shall select Interest Periods so as not to require a payment or
prepayment of any Eurodollar Loan during an Interest Period for such Loan;

provided, further, that if the Borrower does not make an Interest Period
election prior to the time indicated in the foregoing clause (b), then the
Borrower shall be deemed to have elected an Interest Period of one month.

“Investments” shall have the meaning given to it in Section 8.7.

“Investment Grade Credit Rating” shall mean with respect to any Person, a rating
of the long-term unsecured debt securities of such Person (or if such rating is
unavailable, issuer rating) equal to or higher than (1) “BBB-” (or the
equivalent) with a stable or better outlook by Standard & Poor’s Financial
Services LLC, or (2) “Baa3” (or the equivalent) with a stable or better outlook
by Moody’s Corporation; provided, that if such Person has a rating from both
Standard & Poor’s Financial Services LLC and Moody’s Corporation, then the
applicable rating shall be deemed to be the lower of the two.

“IRS” shall mean the United States Internal Revenue Service.

“Issuing Lender” shall mean Royal Bank of Canada or any affiliate of Royal Bank
of Canada.

“L/C Commitment” shall mean $25,000,000.

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“L/C Exposure” shall mean, at any time, the total Letter of Credit
Outstandings.  The L/C Exposure of any Revolving Lender at any time shall be its
Revolving Percentage of the total L/C Exposure at such time.

“L/C Participants” shall mean  the collective reference to all the Revolving
Lenders other than the Issuing Lender.

“Leased Consolidated Net Plant” shall mean that portion of the Consolidated Net
Plant of the lessor of a Lease between such lessor and a Qualified Lessee that
is the subject of such Lease.

“Leases” shall mean (i) the System Leases, the CREZ Lease, the FERC Lease and
any other leases of transmission and distribution and related assets to a
Qualified Lessee under which the Borrower or any Subsidiary of the Borrower is a
party as a lessor, and (ii) any lease of transmission and distribution and
related assets pursuant to which Sharyland is the lessee and a Subsidiary of
Sharyland or another Person Controlled by one or more Hunt Family Members is the
lessor; provided, no such lease will qualify as a “Lease” hereunder if each of
the three following criteria apply: (x) Sharyland is the lessee, (y) cash rental
payments have become due and payable pursuant thereto and (z) none of the
Borrower, a Subsidiary of the Borrower or a Subsidiary of Sharyland is the
lessor.

“Leasehold” of any Person, shall mean all of the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.

“Lender” shall have the meaning defined in the preamble hereto. Unless the
context otherwise requires, the term “Lender” shall include a Swingline Lender.

“Lender Affiliate” shall mean (a) any Affiliate of any Lender and (b) any Person
that is administered or managed by any Lender or any Affiliate of any Lender and
that is engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business and (c) with respect to any Lender which is a fund that invests in
commercial loans and similar extensions of credit, any other fund that invests
in a commercial loans and similar extensions of credit and is managed or advised
by the same investment advisor as such Lender or by an Affiliate of such Lender
or investment advisor.

“Lender Parent” shall mean, with respect to any Lender, any Person as to which
such Lender is, directly or indirectly, a Subsidiary.

“Letter of Credit” shall have the meaning provided in Section ‎2.1(a).

“Letter of Credit Fee” shall have the meaning provided in Section 3(b).

“Letter of Credit Outstandings” shall mean, at any time, an amount equal to the
sum of (a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings under
Letters of Credit that have not then been reimbursed pursuant to Section ‎2.4 at
such time.

“Lien” shall mean, with respect to any Person, any mortgage, lien, pledge,
charge, security interest, or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person, in each case in the nature
of a security interest of any kind whatsoever.

“Loan” shall mean a loan made by the Lenders to the Borrower pursuant to this
Agreement.

“Loan Party” shall mean the Borrower and each Subsidiary  that is a party to a
Credit Document, as applicable.

“Material Adverse Effect” shall mean a material adverse effect upon and/or
material adverse developments with respect to (a) the operations, business,
assets, properties, liabilities or financial condition of the Borrower and its
Subsidiaries (taken as a whole), (b) the ability of the Borrower and the
Guarantors (taken as a whole) to perform their obligations under the Credit
Documents, (c) the legality, validity or enforceability of any material
provision of this Agreement or any other Credit Document, (d) the rights or
remedies of the Administrative Agent or the Lenders under the Credit Documents
or (e) the validity, perfection or priority of the Collateral Agent’s Liens on
any material Collateral.

“Material Project Document” shall mean (i) any contract or agreement that is
related to the ownership, operation, management service, maintenance, repair or
use of the System  entered into by the Borrower or any Subsidiary subsequent to
the Restatement Date that involves full payments or obligations of Borrower or
any Subsidiary  in excess of $5,000,000 in any calendar year, and  (ii) System
Leases, but shall exclude any documents subject to Section 8.12 herein.

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“McAllen Lease” shall mean (A) prior to the effectiveness of the McAllen Lease
Amendment and Restatement, the Second Amended and Restated Master System Lease
Agreement, dated as of July 1, 2012, between the Borrower, as lessor, and
Sharyland, as lessee, and (B) upon the effectiveness of the McAllen Lease
Amendment and Restatement, the McAllen Lease Amendment and Restatement, as such
lease may be amended, restated, supplemented or otherwise modified from time to
time, or any new lease entered into in replacement thereof, in accordance with
Section ‎7.10(b) and/or 8.16 of this Agreement, as applicable.

“McAllen Lease Amendment and Restatement” shall mean the Third Amended and
Restated Master System Lease Agreement (McAllen System), between the Borrower,
as lessor, and Sharyland, as lessee.

“Minimum Borrowing Amount” shall mean $500,000 or a whole multiple of $100,000
in excess thereof.

“Multiemployer Plan” shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

“Negative Pledge Agreement” shall mean the Amended and Restated Negative Pledge
Agreement, dated as of the Restatement Date among FERC Owner and the Collateral
Agent.

“New Project” shall mean any transmission or distribution project, including any
such project acquired or built by a Project Finance Subsidiary, any “New
Project” or “Footprint Project” (as defined in the Leases) that the Borrower or
a Subsidiary of the Borrower funds pursuant to a Lease and any such project that
InfraREIT or a Subsidiary thereof acquires pursuant to the Development
Agreement.

“Non-Defaulting Lender” shall mean each Lender other than a Defaulting Lender.

“Non-Recourse Debt” shall mean Indebtedness of a Project Finance Subsidiary or a
Subsidiary of Sharyland, as the case may be, that, if secured, is secured solely
by a pledge of collateral owned by such Project Finance Subsidiary or such
Subsidiary of Sharyland, as the case may be, and the Capital Stock in such
Project Finance Subsidiary or such Subsidiary of Sharyland, as the case may be,
and for which no Person other than such Project Finance Subsidiary or such
Subsidiary of Sharyland, as the case may be, is personally liable.

“Non-U.S. Lender” shall mean a Lender that is not a U.S. Person.

“Note Purchase Agreements” shall mean, collectively, the 2009 Note Purchase
Agreement and the 2010 Note Purchase Agreement.

“Notice Office” shall mean the office of the Administrative Agent at 4th Floor,
20 King Street West, Toronto, Ontario M5H 1C4 or such other office as the
Administrative Agent may designate to the Borrower from time to time.

“Obligations” shall mean the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans, including Revolving Loans,
and Reimbursement Obligations and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) the Loans
and all other obligations and liabilities of the Borrower to the Administrative
Agent or to any Lender (or, in the case of Specified Swap Contracts or Specified
Cash Management Contracts , any affiliate of any Lender), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Credit Document, the Letters of Credit, any Specified Swap
Contracts or any Specified Cash Management Contracts whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid by the
Borrower pursuant hereto) or otherwise.

“Original Closing Date” shall mean July 13, 2010.

“Original Credit Agreement” shall have the meaning provided in the recitals.

“Other Connection Taxes” shall mean with respect to any Credit Party, Taxes
imposed as a result of a present or former connection between such Credit Party
and the jurisdiction imposing such Tax (other than connections arising from such
Credit Party having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to, or enforced, any
Credit Document, or sold or assigned an interest in any Loan or Credit
Document).

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“Other Taxes” shall mean all present or future stamp, court, or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Credit Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 1.15).

“O&M Costs” shall mean actual cash management and operation costs of the
Borrower, taxes payable by the Borrower, insurance premiums, consumables, fees
and expenses of, and other amounts owing to, the Administrative Agent, the
Collateral Agent and the Depositary, and other costs and expenses in connection
with the management or operation of the Borrower, but exclusive in all cases of
(a) non-cash charges, including depreciation or obsolescence charges or reserves
therefor, amortization of intangibles or other bookkeeping entries of a similar
nature, (b) all other payments of Debt Service, (c) costs of repair or
replacement paid with insurance proceeds and (d) development costs related to
any Project Finance Subsidiary.

“Participant Register” shall have the meaning provided in Section 12.4(a).

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Section 4002 of ERISA, or any successor thereto.

“Permit” shall mean any action, approval, consent, waiver, exemption, variance,
franchise, order, permit, authorization, right or license of or from a
Governmental Authority, provided that interests or estates in real property,
shall not be considered Permits.

“Permitted Investments” shall mean any (a) marketable direct obligation of the
United States of America, (b) marketable obligation directly and fully
guaranteed as to interest and principal by the United States of America, (c)
demand deposit with Depositary, or time deposit, certificate of deposit and
banker’s acceptance issued by any member bank of the Federal Reserve System
which is organized under the laws of the United States of America or any state
thereof or any United States branch of a foreign bank, in each case whose equity
capital is in excess of $500,000,000 and whose long-term debt securities are
rated “A” or better by S&P and “A2” or better by Moody’s, (d) commercial paper
or tax exempt obligations given the highest rating by Moody’s and S&P, (e)
obligations of a commercial bank described in clause (c) above, in respect of
the repurchase of obligations of the type as described in clauses (a) and (b)
hereof, provided that such repurchase obligation shall be fully secured by
obligations of the type described in said clauses (a) and (b) and the possession
of such obligation shall be transferred to, and segregated from other
obligations owned by, any such bank, (f) instrument rated “AAA” by S&P and “Aaa”
by Moody’s issued by investment companies and having an original maturity of 180
days or less, (g) eurodollar certificates of deposit issued by any bank
described in clause (c) above, and (h) marketable security rated not less than
“A-1” by S&P or not less than “Prime-1” by Moody’s.  In no event shall Permitted
Investments include any obligation, certificate of deposit, acceptance,
commercial paper or instrument which by its terms matures (A) more than 180 days
after the date of investment, unless a bank meeting the requirements of clause
(c) above shall have agreed to repurchase such obligation, certificate of
deposit, acceptance, commercial paper or instrument at its purchase price plus
earned interest within no more than 90 days after its purchase thereunder or (B)
after the next payment date.

“Permitted Liens” shall mean all Liens permitted pursuant to Section ‎8.5.

“Permitted Secured Indebtedness” shall have the meaning given to it in the
Collateral Agency Agreement.

“Person” shall mean any individual, partnership, joint venture, firm,
cooperative corporation, association, trust or other enterprise or any
government or political subdivision or any agency, department or instrumentality
thereof.

“Plan” shall mean any single-employer plan as defined in Section 4001 of ERISA,
which is maintained or contributed to by (or to which there is an obligation to
contribute of) a Loan Party, a Subsidiary of a Loan Party or an ERISA Affiliate,
and each such plan for the five year period immediately following the latest
date on which a Loan Party, a Subsidiary of a Loan Party or an ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan.

“Pledge Agreement” shall mean the Amended and Restated Assignment of Membership
Interests and Pledge Agreement, dated as of the Restatement Date, by TDC, with
respect to its membership interests in the Borrower, to the Collateral Agent.

“Preferred Stock” shall mean any class of capital stock of a Person that is
preferred over any other class of capital stock (or similar equity interests) of
such Person as to the payment of dividends or the payment of any amount upon
liquidation or dissolution of such Person.

“Prime Rate” shall mean the rate of interest per annum publicly announced from
time to time by the Administrative Agent as its prime rate in effect at its
principal office in New York City.

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“Project Finance Subsidiary” shall mean a special purpose Subsidiary of a Person
created to develop a New Project and to finance such New Project solely with
Non-Recourse Debt and equity (including, for the avoidance of doubt, CV Project
Entity, L.L.C. and GS Project Entity).

“Promissory Notes” shall mean the collective reference to any promissory note
evidencing Loans.

“Public Lender” shall have the meaning specified in Section 7.1.

“Qualified Lessee” shall mean Sharyland and/or any other utility that is (x)
approved or authorized by the applicable public utility commission or similar
regulatory authority to operate and/or lease the transmission and/or
distribution assets of Borrower or any Subsidiary and (y) a party to a
then-effective lease agreement with the Borrower or a Subsidiary thereof
pursuant to which such utility leases and operates such entity’s transmission
and/or distribution assets.

“Qualified Lessee Affiliate Loan” shall mean loans made by InfraREIT Partners or
a Subsidiary thereof to Qualified Lessees from time to time in an aggregate
principal amount not to exceed $10,000,000 at any time outstanding as long as
the use of proceeds of such loans is limited to the acquisition or financing of
equipment or other assets used in the Qualified Lessee’s operation or lease of
transmission or distribution assets from the Borrower or a Subsidiary thereof
pursuant to a Lease.

“Qualifying IPO” shall mean an initial public offering of the Capital Stock of
InfraREIT pursuant to a registration statement filed with the SEC.

“Real Property Collateral” shall mean any fee owned material real property
(other than easements and rights of way).

“Refunded Swingline Loans” shall have the meaning provided in Section ‎1.4(b).

“Register” shall have the meaning set forth in Section ‎12.4(c).

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof establishing reserve requirements.

“Reimbursement Obligation” shall mean the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section ‎2.4 for amounts drawn under
Letters of Credit.

“Required Lenders” shall mean Non-Defaulting Lenders whose outstanding Revolving
Commitments (or, if after the Total Revolving Commitment has been terminated,
Revolving Extensions of Credit) constitute more than 50% of the total
outstanding Revolving Commitments of Non-Defaulting Lenders (or, if after the
Total Revolving Commitment has been terminated, the total Revolving Extensions
of Credit of Non-Defaulting Lenders).

“Required Permit” shall have the meaning provided in Section 6.12.

“Required Secured Parties” shall have the meaning provided in the Collateral
Agency Agreement.

“Requirement of Law” shall mean as to any Person, the certificate of
incorporation or formation and by-laws or partnership or operating agreement or
other organizational or governing documents of such Person, and any local, state
or federal law, regulation, rule, ordinances or determination, interpretation or
order of an arbitrator or a court or other Governmental Authority, and any
Required Permit, in each case applicable to or binding upon such Person or any
of its properties or its business or to which such Person or any of its
properties or its business is subject.

“Responsible Officer” shall mean any Senior Financial Officer and any other
officer of the Borrower with responsibility for the administration of the
relevant portion of this Agreement.

“Restatement Date” shall mean the date on which the conditions precedent set
forth in Section ‎5.1 shall have been satisfied, which date is December 10,
2014.

“Revolving Commitment” shall mean,  as to any Lender, the obligation of such
Lender, if any, to make Revolving Loans and participate in Swingline Loans and
Letters of Credit in an aggregate principal and/or face amount not to exceed the
amount set forth under the heading “Revolving Commitment” opposite such Lender’s
name on Annex 1.1A, as the same may be adjusted from time to time as a result of
assignments to or from each Lender pursuant to Section ‎12.4.

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“Revolving Commitment Period” shall mean the period from and including the
Restatement Date to the Revolving Facility Final Maturity Date.

“Revolving Extensions of Credit” shall mean as to any Revolving Lender at any
time, an amount equal to the sum of (a) the aggregate principal amount of all
Revolving Loans held by such Lender then outstanding, (b) such Lender’s
Revolving Percentage of the Letter of Credit Outstandings then outstanding and
(c) such Lender’s Revolving Percentage of the aggregate principal amount of
Swingline Loans then outstanding.

“Revolving Facility” shall mean the Facility evidenced by the Total Revolving
Commitment and the Swingline Facility.

“Revolving Facility Final Maturity Date” shall mean the fifth anniversary of the
Restatement Date or, if earlier, the date on which the Revolving Commitments are
terminated pursuant to ‎Section 9 hereof.

“Revolving Lender” shall mean each Lender that has a Revolving Commitment or
that holds Revolving Loans.

“Revolving Loan” shall have the meaning provided in Section ‎1.1(a).

“Revolving Percentage” shall mean as to any Revolving Lender at any time, the
percentage which such Lender’s Revolving Commitment then constitutes of the
Total Revolving Commitments or, at any time after the Revolving Commitments
shall have expired or terminated, the percentage which the aggregate principal
amount of such Lender’s Revolving Loans then outstanding constitutes of the
aggregate principal amount of the Revolving Loans then
outstanding.  Notwithstanding the foregoing, in the case of Section ‎1.16 when a
Defaulting Lender shall exist, Revolving Percentages shall be determined without
regard to any Defaulting Lender’s Revolving Commitment.

“ROFO Transfer” shall mean the sale and Transfer to Persons Controlled by one or
more Hunt Family Members of any assets located in the Texas Panhandle related to
the CREZ Project that are categorized as ROFO projects under the Development
Agreement with an aggregate fair market value not to exceed $5,000,000.

“Sanction(s)” shall mean any international economic sanction administered or
enforced by the United States Government (including without limitation, OFAC),
the United Nations Security Council, the European Union, Her Majesty’s Treasury
or other relevant sanctions authority.

“SEC” shall have the meaning provided in Section ‎7.1(g).

“Secured Parties” shall mean the Collateral Agent, Administrative Agent, the
Lenders, the Issuing Lender and any other Persons that become parties to the
Collateral Agency Agreement.

“Security Agreement” shall mean the Security Agreement, dated as of the
Restatement Date, among the Collateral Agent and the Borrower.

“Security Documents” shall mean, to the extent such document has not been
terminated, (i) the Collateral Agency Agreement, the Deeds of Trust, the Pledge
Agreement, the Deposit Agreement, the Security Agreement, and (ii) other
security documents entered into pursuant to Section 7.9 and any other security
documents, financing statements and the like filed or recorded in connection
with the foregoing.

“Senior Financial Officer” shall mean means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Borrower or a
Qualified Lessee, as applicable.

“Sharyland” shall mean Sharyland Utilities, L.P., a Texas limited partnership.

“SP” shall mean Sharyland Projects, L.L.C., a Project Finance Subsidiary.

“Specified Account” shall mean deposit account number 4426868026 maintained with
Bank of America, N.A. in the name of the Borrower, or such other account
designated by the Borrower from time to time.

“Specified Cash Management Contracts” shall mean any cash management service
agreements entered into by the Borrower and any Person that is a Lender or an
affiliate of a Lender at the time such agreement is entered into.

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“Specified Swap Contracts” shall mean any Swap Contracts entered into by the
Borrower and any Person that is a Lender or an affiliate of a Lender at the time
such Swap Contract is entered into.

“Specified Qualified Lessee” shall mean Sharyland and any Qualified Lessee (a)
(i) without an Investment Grade Credit Rating or (ii) whose obligations under
the applicable Leases are not guaranteed by an entity with an Investment Grade
Rating and (b) whose business is limited to the leasing of transmission and/or
distribution assets from the Borrower or any of its Subsidiaries or Affiliates.

“Stanton/Brady/Celeste Lease” shall mean (A) prior to the effectiveness of the
Stanton/Brady/Celeste Lease Amendment and Restatement, the Amended and Restated
Lease Agreement (Stanton/Brady/Celeste Assets), dated as of July 1, 2012,
between the Borrower, as lessor, and Sharyland, as lessee, and (B) upon the
effectiveness of the Stanton/Brady/Celeste Lease Amendment and Restatement, the
Stanton/Brady/Celeste Lease Amendment and Restatement, as such lease may be
amended, restated, supplemented or otherwise modified from time to time, or any
new lease entered into in replacement thereof, in accordance with Section
‎7.10(b) and/or 8.16 of this Agreement, as applicable.

“Stanton/Brady/Celeste Lease Amendment and Restatement” shall mean the Second
Amended and Restated Lease Agreement (Stanton/Brady/Celeste Assets), between the
Borrower, as lessor, and Sharyland, as lessee.

“Stated Amount” of each Letter of Credit shall mean the maximum available to be
drawn thereunder (regardless of whether any conditions for drawing could then be
met).

“Subsidiary” shall mean, as to any Person, any other Person in which such first
Person or one or more of its Subsidiaries or such first Person and one or more
of its Subsidiaries owns sufficient equity or voting interests to enable it or
them (as a group) ordinarily, in the absence of contingencies, to elect a
majority of the directors (or Persons performing similar functions) or such
second Person and any partnership or joint venture if more than a 50% interest
in the profits or capital thereof is owned by such first Person or one or more
of its Subsidiaries or such first Person and one or more of its Subsidiaries
(unless such partnership or joint venture can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries).  Unless otherwise expressly provided, all references herein to a
“Subsidiary” shall mean a Subsidiary of the Borrower and, prior to the
completion of the FERC Merger, shall include the FERC Owner.  Prior to the
completion of the FERC Merger, all references herein to a Subsidiary of
Sharyland shall include the FERC Operator.

“Subsidiary Guaranties” shall mean, collectively or individually, depending on
the context, the guaranties provided by the Subsidiary Guarantors pursuant to
Section 7.9, if any, substantially in the form of Exhibit H attached hereto.

“Subsidiary Guarantor” shall mean any Subsidiary of the Borrower that is a
guarantor under a guaranty pursuant to Section 7.9.

“Swap Contract” shall mean (a) any and all interest rate swap transactions,
basis swap transactions, basis swaps, credit derivative transactions, forward
rate transactions, commodity swaps, commodity options, forward commodity
contracts, equity or equity index swaps or options, bond or bond price or bond
index swaps or options or forward foreign exchange transactions, cap
transactions, floor transactions, currency options, spot contracts or any other
similar transactions or any of the foregoing (including, but without limitation,
any options to enter into any of the foregoing), and (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., or any
International Foreign Exchange Master Agreement.

“Swap Termination Value” shall mean, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

“Swingline Commitment” shall mean the obligation of the Swingline Lender to make
Swingline Loans pursuant to Section ‎1.3 in an aggregate principal amount at any
one time outstanding not to exceed $5,000,000.

“Swingline Exposure” shall mean, at any time, the sum of the aggregate amount of
all outstanding Swingline Loans at such time.  The Swingline Exposure of any
Revolving Lender at any time shall be its Revolving Percentage of the total
Swingline Exposure at such time.

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“Swingline Facility” shall mean the Facility evidenced by the Swingline
Commitment.

“Swingline Lender” shall mean Royal Bank of Canada.

“Swingline Loans” shall have the meaning provided in Section ‎1.3(a).

“Swingline Participation Amount” shall have the meaning provided in Section
‎1.4(c).

“Synthetic Lease” shall mean, at any time, any lease (including leases that may
be terminated by the lessee at any time) of any property (a) that is accounted
for as an operating lease under GAAP and (b) in respect of which the lessee
retains or obtains ownership of the property so leased for U.S. federal income
tax purposes, other than any such lease under which such Person is the lessor.

“System” shall mean the Borrower’s and/or any Subsidiary’s (other than a Project
Finance Subsidiary’s) integrated electrical transmission and distribution
facilities located primarily in the State of Texas and the systems and other
property necessary to operate the transmission and distribution facilities, and
all improvements to and expansions of such facilities, and each New Project
(upon its completion) owned by the Borrower or a Subsidiary thereof; provided
that, for purposes hereof, “System” shall not be deemed to include any easements
held by the Borrower or any Subsidiary.

“System Leases” shall mean (1) the McAllen Lease, (2) the Stanton/Brady/Celeste
Lease, (3) upon the effectiveness thereof, the Lease Agreement (ERCOT
Transmission Assets), between the Borrower, as lessor, and Sharyland, as lessee,
(4) upon the completion of the FERC Merger, the FERC Lease and (5) any and all
other leases and supplements thereto in connection with the System and the
transmission and distribution facilities ancillary thereto and any easements
associated therewith, each as amended, restated, supplemented or otherwise
modified from time to time, or any new lease entered into in replacement
thereof, in accordance with Section ‎7.10(b) and/or 8.16 of this Agreement, as
applicable.

“Taxes” shall mean all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), assessments, fees or
other charges imposed by any Governmental Entity, including any interest,
additions to tax or penalties applicable thereto.

“TDC” shall mean Transmission and Distribution Company, L.L.C., a Texas limited
liability company.

“Texas Regional Entity” shall mean the division of ERCOT authorized to develop,
monitor, assess and enforce compliance with NERC Reliability Standards within
the geographic boundaries of ERCOT and any successor thereto.

“Threshold Amount” shall mean (a) $10,000,000 with respect to the Borrower, (b)
$2,000,000 with respect to any Specified Qualified Lessee and (c) with respect
to any Qualified Lessee (other than a Specified Qualified Lessee), an amount
that could reasonably be expected to result in a Material Adverse Effect.

“Total Debt” shall mean, at any date, with respect to the Borrower, all
Indebtedness of the Borrower on a consolidated basis; provided, however, that
for purposes of calculating the Borrowers’ Total Debt to Capitalization Ratio,
the Borrower’s Total Debt shall (i) exclude Non-Recourse Debt of a Project
Finance Subsidiary of the Borrower and that portion of the Swap Termination
Value defined in clause (b) of the definition of “Swap Termination Value” and
(ii) include Indebtedness of Sharyland on a consolidated basis (excluding, for
the avoidance of doubt, Non-Recourse Debt of a Project Finance Subsidiary of
Sharyland).

“Total Debt to Capitalization Ratio” shall mean the Borrower’s Total Debt,
divided by the sum of Total Debt plus the Borrower’s Consolidated Net Worth.  In
connection with any transaction or series of related transactions not prohibited
by this Agreement (including by waiver, consent or amendment given or made in
accordance with Section 12.12) pursuant to which the Borrower or any Subsidiary
makes any acquisition or disposition of assets with a fair market value greater
than $1,000,000, the Total Debt to Capitalization Ratio shall be calculated on a
pro forma basis after giving effect to such transaction or series of related
transactions as a whole (including any related incurrence, repayment or
assumption of Indebtedness).

“Total Revolving Commitment” shall mean the sum of the Revolving Commitments of
the Lenders.  The amount of the Total Revolving Commitments as of the
Restatement Date is $250,000,000, as the same may be reduced from time to time
pursuant to Section 1.5 and/or Section 9 and increased from time to time
pursuant to Section 1.17.

“Total Revolving Commitment Excess Amount” shall have the meaning provided in
Section ‎4.2(a).

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“Total Revolving Extensions of Credit” shall mean at any time, the aggregate
amount of the Revolving Extensions of Credit of the Revolving Lenders
outstanding at such time.

“Total Unutilized Revolving Commitment” shall mean, at any time, (i) the Total
Revolving Commitment at such time less (ii) the sum of the aggregate principal
amount of all Revolving Loans and Swingline Loans at such time plus the Letter
of Credit Outstandings at such time.

“Transaction Documents” shall mean, collectively the Financing Documents and the
Leases to which the Borrower or a Subsidiary thereof is a party.

“Transfer” shall mean, with respect to any item, the sale, exchange, conveyance,
lease, transfer or other disposition of such item.

“Type” shall mean any type of Loan determined with respect to the interest
option applicable thereto, i.e., an ABR Loan or Eurodollar Loan.

“UCC” shall mean, with respect to any jurisdiction, the Uniform Commercial Code
as in effect in such jurisdiction.

“UCC Collateral” shall mean Collateral that is of a type in which a valid
security interest can be created under Article 9 of the New York UCC.

“Unpaid Drawing” shall mean any payment or disbursement made by the Issuing
Lender under any Letter of Credit that has not been reimbursed by the Borrower.

“Unutilized Commitment” for any Lender at any time shall mean the excess of
(i) the Commitment of such Lender over (ii) the sum of (x) the aggregate
outstanding principal amount of Loans made by such Lender plus (y) an amount
equal to such Lender’s Revolving Percentage, if any, of the Letter of Credit
Outstandings at such time, provided that solely for purposes of calculating the
Commitment Fee pursuant to Section 3(a) Swingline Loans shall be deemed not to
be outstanding and the Swingline Commitment shall not constitute a “Commitment”.

“USA PATRIOT Act” shall mean United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.

“U.S. Person” shall mean a “United States person” within the meaning of Section
7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” shall have the meaning provided in Section
4.3(f)(ii)(B)(3).

“Wholly-Owned Subsidiary” shall mean, at any time, any Subsidiary one hundred
percent of all of the voting interests of which are owned by any one or more of
the Borrower and the Borrower’s other Wholly-Owned Subsidiaries at such time.

“Withdrawal Liability” shall mean a liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

“Withholding Agent” shall mean any Borrower Party and the Administrative Agent.

“Written” or “in writing” shall mean any form of written communication or a
communication by means of telex, facsimile transmission, telegraph or cable.

10.2. Other Definitional Provisions.

(a) Unless otherwise specified therein, all terms defined in this Agreement
shall have the defined meanings set forth herein when used in the other Credit
Documents or any certificate or other document made or delivered pursuant hereto
or thereto.

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(b) As used herein and in the other Credit Documents, and any certificate or
other document made or delivered pursuant hereto or thereto, (i) accounting
terms relating to any Loan Party not defined in Section 10.1 and accounting
terms partly defined in Section 10.1, to the extent not defined, shall have the
respective meanings given to them under GAAP  (provided that all terms of an
accounting or financial nature used herein shall be construed, and all
computations of amounts and ratios referred to herein shall be made, without
giving effect to (A) any election under Accounting Standards Codification
825-10-25 (previously referred to as Statement of Financial Accounting Standards
159) (or any other Accounting Standards Codification or Financial Accounting
Standard having a similar result or effect) to value any Indebtedness or other
liabilities of the Borrower or any Subsidiary at “fair value”, as defined
therein and (B) any treatment of Indebtedness in respect of convertible debt
instruments under Accounting Standards Codification 470-20 (or any other
Accounting Standards Codification or Financial Accounting Standard having a
similar result or effect) to value any such Indebtedness in a reduced or
bifurcated manner as described therein, and such Indebtedness shall at all times
be valued at the full stated principal amount thereof), (ii) the words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”, (iii) the word “incur” shall be construed to mean
incur, create, issue, assume, become liable in respect of or suffer to exist
(and the words “incurred” and “incurrence” shall have correlative meanings),
(iv) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, Capital Stock, securities, revenues, accounts,
Leasehold interests and contract rights, and (v) references to agreements or
other Contractual Obligations shall, unless otherwise specified, be deemed to
refer to such agreements or Contractual Obligations as amended, supplemented,
restated or otherwise modified from time to time.

(c) The words “hereof”, “herein” and “hereunder” and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Annex and Exhibit
references are to this Agreement unless otherwise specified.

 

SECTION 11

THE ADMINISTRATIVE AGENT

11.1. Appointment. Each Lender hereby irrevocably designates and appoints the
Administrative Agent as the agent of such Lender under this Agreement and the
other Credit Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Credit Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental
thereto.   Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Credit Document or otherwise exist against the
Administrative Agent.

11.2. Delegation of Duties. The Administrative Agent may execute any of its
duties under this Agreement and the other Credit Documents by or through agents
or attorneys‑in‑fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.  The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys in‑fact
selected by it with reasonable care.

11.3. Exculpatory Provisions. Neither the Administrative Agent nor any of its
respective officers, directors, employees, agents, advisors, attorneys‑in‑fact
or affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Credit Document (except to the extent that any of the foregoing are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from its or such Person’s own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
Subsidiary or any officer thereof contained in this Agreement or any other
Credit Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or
in connection with, this Agreement or any other Credit Document or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Credit Document or for any failure of any Borrower a
party thereto to perform its obligations hereunder or thereunder.  The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Credit
Document, or to inspect the properties, books or records of any Borrower.

11.4. Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any instrument,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy
or email message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including
counsel to the Borrower), independent accountants and other experts selected by
the Administrative Agent.  The Administrative Agent may deem and treat the payee
of any Promissory Note as the owner thereof for all purposes unless a written
notice of assignment, negotiation or transfer thereof shall have been filed with

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the Administrative Agent.  The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Credit
Document unless it shall first receive such advice or concurrence of the
Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action.  The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Credit Documents in accordance with a
request of the Required Lenders (or, if so specified by this Agreement, all
Lenders), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Loans.

11.5. Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Administrative Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”.  In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
notice thereof to the Lenders.  The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Required Lenders (or, if so specified by this Agreement, all Lenders);
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.

11.6. Non-Reliance on Administrative Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower or any Subsidiary, shall be deemed to constitute any representation
or warranty by the Administrative Agent to any Lender.  Each Lender represents
to the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of the Borrower and its
Subsidiaries and made its own decision to make its Loans hereunder and enter
into this Agreement.  Each Lender also represents that it will, independently
and without reliance upon the Administrative Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such investigation
as it deems necessary to inform itself as to the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Borrower and its Subsidiaries.  The Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, assets, property, financial and other
conditions, prospects or creditworthiness of the Borrower or any Subsidiary
which may come into the possession of the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.

11.7. Indemnification. The Lenders agree to indemnify the Administrative Agent
and its affiliates and their respective officers, directors, employees,
affiliates, agents, advisors and controlling persons (each, an “Agent
Indemnitee”) (to the extent not reimbursed by the Borrower and without limiting
the obligation of the Borrower to do so), ratably according to their respective
Revolving Percentages in effect on the date on which indemnification is sought
under this Section (or, if indemnification is sought after the date upon which
the Commitments shall have terminated and the Loans shall have been paid in
full, ratably in accordance with such Aggregate Exposure Percentages immediately
prior to such date), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever that may at any time (whether before or
after the payment of the Loans) be imposed on, incurred by or asserted against
such Agent Indemnitee in any way relating to or arising out of, the Commitments,
this Agreement, any of the other Credit Documents or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by such Agent Indemnitee under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
that are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from such Agent Indemnitee’s gross negligence or
willful misconduct.  The agreements in this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.

11.8. The Administrative Agent in Its Individual Capacity. The Administrative
Agent and its affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Borrower and its Subsidiaries as though
the Administrative Agent were not the Administrative Agent hereunder.  With
respect to the Loans made by it and all Obligations owing to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms “Lender” and “Lenders” shall include the Administrative
Agent in their individual capacity.

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11.9. Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 10 days’ notice to the Lenders and the Borrower.  If
the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Credit Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under ‎Section 9(a) or
‎Section 9(f) with respect to the Borrower shall have occurred and be
continuing) be subject to approval by the Borrower (which approval shall not be
unreasonably withheld or delayed), whereupon such successor agent shall succeed
to the rights, powers and duties of the Administrative Agent, and the term
“Administrative Agent” shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent’s rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans.  If no successor
agent has accepted appointment as Administrative Agent by the date that is 10
days following a retiring Administrative Agent’s notice of resignation, the
retiring Administrative Agent’s resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above.  After any retiring
Administrative Agent’s resignation as Administrative Agent, the provisions of
this Section ‎11.9 and of Section ‎12.1 shall continue to inure to its benefit.

11.10. Arranger. The Arranger shall have no duties or responsibilities hereunder
in their respective capacities as such.

11.11. Credit Bidding. In each case, subject to the provisions of the Collateral
Agency Agreement, the Lenders hereby irrevocably authorize the Administrative
Agent, at the direction of the Required Lenders, to credit bid all or any
portion of the Obligations (including accepting some or all of the Collateral in
satisfaction of some or all of the Obligations pursuant to a deed in lieu of
foreclosure or otherwise) and in such manner purchase (either directly or
through one or more acquisition vehicles) all or any portion of the Collateral
(a) at any sale thereof conducted under the provisions of the Bankruptcy Code of
the United States, including under Sections 363, 1123 or 1129 of the Bankruptcy
Code of the United States, or any similar Laws in any other jurisdictions to
which a Loan Party is subject, (b) at any other sale or foreclosure or
acceptance of collateral in lieu of debt conducted by (or with the consent or at
the direction of) the Administrative Agent (whether by judicial action or
otherwise) in accordance with any applicable Law.  In connection with any such
credit bid and purchase, the Obligations owed to the Secured Parties shall be
entitled to be, and shall be, credit bid on a ratable basis (with Obligations
with respect to contingent or unliquidated claims receiving contingent interests
in the acquired assets on a ratable basis that would vest upon the liquidation
of such claims in an amount proportional to the liquidated portion of the
contingent claim amount used in allocating the contingent interests) in the
asset or assets so purchased (or in the Capital Stock or debt instruments of the
acquisition vehicle or vehicles that are used to consummate such purchase).  In
connection with any such bid (i) the Administrative Agent shall be authorized to
form one or more acquisition vehicles to make a bid, (ii) to adopt documents
providing for the governance of the acquisition vehicle or vehicles (provided
that any actions by the Administrative Agent with respect to such acquisition
vehicle or vehicles, including any disposition of the assets or Capital Stock
thereof shall be governed, directly or indirectly, by the vote of the Required
Lenders, irrespective of the termination of this Agreement and without giving
effect to the limitations on actions by the Required Lenders contained in
clauses (a) through (g) of Section 12.12 of this Agreement), (iii) the
Administrative Agent shall be authorized to assign the relevant Obligations to
any such acquisition vehicle pro rata by the Lenders, as a result of which each
of the Lenders shall be deemed to have received a pro rata portion of any
Capital Stock and/or debt instruments issued by such an acquisition vehicle on
account of the assignment of the Obligations to be credit bid, all without the
need for any Secured Party or acquisition vehicle to take any further action,
and (iv) to the extent that Obligations that are assigned to an acquisition
vehicle are not used to acquire Collateral for any reason (as a result of
another bid being higher or better, because the amount of Obligations assigned
to the acquisition vehicle exceeds the amount of debt credit bid by the
acquisition vehicle or otherwise), such Obligations shall automatically be
reassigned to the Lenders pro rata and the Capital Stock and/or debt instruments
issued by any acquisition vehicle on account of the Obligations that had been
assigned to the acquisition vehicle shall automatically be cancelled, without
the need for any Secured Party or any acquisition vehicle to take any further
action.

 

SECTION 12

MISCELLANEOUS.

12.1. Payment of Expenses, etc. The Borrower agrees to: (i)  pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent and Arranger in
connection with the syndication of the facilities, negotiation, preparation,
execution and delivery of the Credit Documents and the documents and instruments
referred to therein and any amendment, waiver or consent relating thereto
(including, without limitation, the reasonable fees and disbursements of Simpson
Thacher & Bartlett LLP, counsel to the Administrative Agent and the Arranger);
(ii) pay all reasonable out-of-pocket costs and expenses of the Administrative
Agent, the Arranger and each of the Lenders in connection with the enforcement
(including pursuant to the administration of any bankruptcy proceeding relating
to the Borrower) or preservation of any rights under the Credit Documents and
the documents and instruments referred to therein (including, without
limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent, the Issuing Lender and for each of the Lenders); (iii)
indemnify the Administrative Agent, each Lender, the Issuing Lender, any of
their respective Affiliates and its respective officers, directors, employees,
advisors, trustees, representatives and agents (collectively, the “Indemnitees”)
from and hold each of them harmless against any and all losses, costs,
liabilities, claims, damages or expenses, including without limitation, those
incurred under Environmental Law, incurred by any of them relating in any way to
any Loan,

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Credit Document, Letter of Credit, or any transaction contemplated under any
Credit Document including, without limitation, any and all losses, costs,
liabilities, claims, damages or expenses as a result of, or arising out of, or
in any way related to, or by reason of, any investigation, litigation or other
proceeding (whether or not any Lender or the Issuing Lender is a party thereto
and whether or not such investigation, litigation or other proceeding is brought
by the Borrower, any Loan Party or any other Person) related to the entering
into and/or performance of any Credit Document or the use of the proceeds of any
Loans or Letters of Credit hereunder, the consummation of any transactions
contemplated in any Credit Document, including, without limitation, the
reasonable fees, charges and disbursements of counsel incurred in connection
with any such investigation, litigation or other proceeding (but excluding any
such losses, costs, liabilities, claims, damages or expenses to the extent
incurred by reason of the gross negligence or willful misconduct, found by a
final and nonappealable decision of a court of competent jurisdiction, of the
Person to be indemnified or of any other Indemnitee who is such Person or an
affiliate, agent or representative of such Person).  No Indemnitee shall be
liable for any indirect, special, exemplary, punitive or consequential damages
in connection with this Agreement or the other Credit Documents or the
transactions contemplated hereby or thereby.  Section 12.1(iii) shall not apply
with respect to Taxes other than any Taxes that represent losses or damages
arising from any non-Tax claim.  No Indemnitee shall be liable for any damages
arising from the use of unintended recipients of any information or other
materials distributed by it through telecommunications, electronic or other
information transmission systems in connection with this Agreement or the other
Credit Documents or the transactions contemplated hereby or thereby other than
for direct or actual damages resulting from the gross negligence or willful
misconduct of such Indemnitee as determined by a final and nonappealable
judgment of a court of competent jurisdiction.

12.2. Right of Setoff. In addition to any rights now or hereafter granted under
Applicable Law or otherwise, and not by way of limitation of any such rights,
during the continuance of an Event of Default, the Administrative Agent and each
Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to any Loan Party or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and apply any and all deposits (general or special) and any
liabilities at any time held or owing by the Administrative Agent or such Lender
(including, without limitation, by branches and agencies of the Administrative
Agent or such Lender wherever located) to or for the credit or the account of
any Loan Party against and on account of the Obligations and liabilities of such
Loan Party then due and payable to the Administrative Agent or such Lender under
this Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations of such Loan Party purchased by such
Lender pursuant to Section ‎12.4, and all other claims of any nature or
description then due and payable arising out of or connected with this Agreement
or any other Credit Document, irrespective of whether or not the Administrative
Agent or such Lender shall have made any demand hereunder and although said
deposits or liabilities owing by the Administrative Agent or such Lender, or any
of them, shall be contingent or unmatured.  Each Lender hereby agrees to hold
any such setoff or appropriation amounts to the extent constituting Collateral
under the Collateral Agency Agreement or proceeds thereof in trust for the
Administrative Agent to be turned over to the Collateral Agent to be applied in
accordance with the terms of the Collateral Agency Agreement.

12.3. Notices (a).  Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
telecopier or email communication) and mailed, telecopied or delivered, if to
the Borrower, at the address specified opposite its signature below; if to any
Lender, at its address specified in the administrative questionnaire; or, at
such other address as shall be designated by any party in a written notice to
the other parties hereto.  All such notices and communications shall be mailed,
telecopied or (subject to Section ‎12.3(b)) electronically communicated or sent
by overnight courier, and shall be effective when received.

(b) Notices and other communications to the Administrative Agent and the Lenders
hereunder may be delivered or furnished by electronic communications pursuant to
procedures approved by the Administrative Agent; provided that the foregoing
shall not apply to notices pursuant to ‎Section 1 unless otherwise agreed by the
Administrative Agent and the applicable Lender.  The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.

12.4. Benefit of Agreement. (a)  This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and assigns of
the parties hereto, provided that the Borrower may not assign or transfer any of
its rights or obligations hereunder without the prior written consent of all the
Lenders.  Each Lender may, in accordance with Applicable Law, at any time grant
participations in any of its rights hereunder or under any of the Promissory
Notes to another financial institution, provided that in the case of any such
participation, the participant shall not have any rights under this Agreement or
any of the other Credit Documents (the participant’s rights against such Lender
in respect of such participation to be those set forth in the agreement executed
by such Lender in favor of the participant relating thereto) and all amounts
payable by the Borrower hereunder shall be determined as if such Lender had not
sold such participation, except that the participant shall be entitled to the
benefits of Sections 1.12, 1.14 and 4.3 of this Agreement (subject to the
requirements and limitations therein, including the requirements under Section
4.3(f) (it being understood that the documentation required under Section 4.3(f)
shall be delivered to the participating Lender)) to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to paragraph
(b) of this section; provided that such participant (i) agrees to be subject to
the provisions of Sections 1.12, 1.14 and

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4.3 as if it were an assignee under paragraph (b) of this Section and (ii) shall
not be entitled to receive any greater payment under Sections 1.12, 1.14 and
4.3, with respect to any participation, than its participating Lender would have
been entitled to receive, except to the extent such entitlement to receive a
greater payment results from an adoption of or any change in any Requirement of
Law or in the interpretation or application thereof or compliance by any Lender
with any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority made subsequent to the date hereof
that occurs after the participant acquired the applicable participation.  Each
Lender that sells a participation agrees, at the Borrower’s request and expense,
to use reasonable efforts to cooperate with the Borrower to effectuate the
provisions of Section 1.15 with respect to any participant.  The participant
shall, to the maximum extent permitted by Applicable Law, be deemed to have the
right of setoff in respect of its participation in amounts owing under this
Agreement to the same extent as if the amount of its participation were owing
directly to it as a Lender under this Agreement provided that, in purchasing
such participation, such participant shall be deemed to have agreed to share
with the Lenders the proceeds thereof as provided in Section ‎12.6(b) as fully
as if it were a Lender hereunder, and, provided, further, that no Lender shall
transfer, grant or assign any participation under which the participant shall
have rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Loan or Promissory Note in which such
participant is participating, or reduce the rate or extend the time of payment
of interest or Fees thereon (except in connection with a waiver of the
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof, or increase such participant’s participating interest
in any Commitment over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default or of a mandatory reduction in
the Total Revolving Commitment, or a mandatory prepayment, shall not constitute
a change in the terms of any Commitment), (ii) release all or substantially all
of the Collateral except in accordance with the Credit Documents or
(iii) consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement or any other Credit Document.  Each Lender
that sells a participation shall, acting solely for this purpose as a
nonfiduciary agent of the Borrower, maintain a register on which it enters the
name and address of each participant and the principal amounts (and stated
interest) of each participant’s interest in the Loans or other obligations under
the Credit Documents (the “Participant Register”); provided that no Lender shall
have any obligation to disclose all or any portion of the Participant Register
to any Person (including the identity of any participant or any information
relating to a participant’s interest in any Commitments, Loans, Letters of
Credit or its other obligations under any Credit Document) except to the extent
that such disclosure is necessary to establish that such Commitment, Loan,
Letter of Credit or other obligation is in registered form under Section
5f.103-1(c) of the United States Treasury Regulations.  The entries in the
Participant Register shall be conclusive absent manifest error, and such Lender
shall treat each Person whose name is recorded in the Participant Register as
the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary.  For the avoidance of doubt, the
Administrative Agent (in its capacity as Administrative Agent) shall have no
responsibility for maintaining a Participant Register.

(b) Notwithstanding the foregoing, in accordance with Applicable Law at any time
and from time to time, any Lender may assign all or a portion of its Loans
and/or Commitments and its rights and obligations under this Agreement to one or
more other Persons with the prior written consent (such consent not to be
unreasonably withheld or delayed) of:

(i) the Borrower, provided that, no consent of the Borrower shall be required in
either case for an assignment to a Lender, an Affiliate of a Lender or, if an
Event of Default under ‎Section 9(a), ‎9(b), ‎9(j) or ‎9(k) has occurred and is
continuing, any other assignee;

(ii) the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment of any Revolving Commitment to an
assignee that is a Lender with a Revolving Commitment immediately prior to
giving effect to such assignment; and

(iii) in the case of any assignment of any Revolving Commitment only, the
Issuing Lender (such consent not to be reasonably withheld or delayed);

and, provided further, that no such assignment shall be made (A) to the Borrower
or any of the Borrower’s Affiliates or Subsidiaries (including, without
limitation, any Hunt Family Member), (B) to any Defaulting Lender or any of its
Subsidiaries, or any Person who, upon becoming a Lender hereunder, would
constitute any of the foregoing Persons described in this clause (B), or (C) to
a natural Person.

Any assignment pursuant to this Section ‎12.4(b) need not be ratable as among
the Revolving Commitments of the assigning Lender.  Unless the Borrower and the
Administrative Agent otherwise agree, no assignment pursuant to this Section
12.4(b) shall, to the extent such assignment represents an assignment to an
institution other than one or more Lenders hereunder, be in an aggregate amount
less than $5,000,000 unless the entire Commitment and Loans and other interests
of the assigning Lender are so assigned.  If any Lender so sells or assigns all
or a part of its interests hereunder or under the Promissory Notes, any
reference in this Agreement or the Promissory Notes to such assigning Lender
shall thereafter refer to such Lender and to the respective assignee to the
extent of their respective interests, and the assignee shall have, to the extent
of such assignment (unless otherwise provided therein), the same rights and
benefits as it would if it were such assigning Lender and the assignee shall be
treated as a Lender and a party to this Agreement.  Each assignment pursuant to
this Section ‎12.4(b) shall be effected by the assigning Lender and the assignee
Lender

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executing an Assignment Agreement substantially in the form of Exhibit A
(appropriately completed), subject to acceptance and recording thereof by the
Administrative Agent.  In the event of any such assignment to a Person not
previously a Lender hereunder, either the assigning or the assignee Lender shall
pay to the Administrative Agent a nonrefundable assignment fee of $3,500 which
may, in the Administrative Agent’s sole discretion, be waived (and shall deliver
any information, to be provided by the assignee, requested by the Administrative
Agent), and at the time of any assignment pursuant to this Section ‎12.4(b), (i)
Annex 1.1A shall be deemed to be amended to reflect the Commitment of the
respective assignee (which shall result in a direct reduction to the Commitment
of the assigning Lender) and of the other Lenders, and (ii) if any such
assignment occurs after the Restatement Date, the Borrower will, if requested by
the assignee or assignor, issue new Promissory Notes to the respective assignee
and, if applicable, to the assigning Lender.  Each Lender and the Borrower agree
to execute such documents (including, without limitation, amendments to this
Agreement) as shall be necessary to effect the foregoing.  Nothing in this
clause (b) shall prevent or prohibit any Lender from pledging its Promissory
Notes or Loans, including, without limitation, to a Federal Reserve Bank in
support of borrowings made by such Lender from such Federal Reserve Bank.

(c) The Administrative Agent acting on behalf of the Borrower shall maintain at
one of its offices a copy of each Assignment Agreement delivered to it (as
required hereby) and a register (the “Register”) for the recordation of the
names and addresses of the Lenders and the Commitment of, and principal amount
(and stated interest) of the Loans owing to, each Lender from time to time
(whether or not evidenced by a Promissory Note).  The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as the owner of the Loan recorded therein for all
purposes of this Agreement, notwithstanding any notice to the contrary.  Any
assignment of any Loan whether or not evidenced by a Promissory Note shall be
effective only upon appropriate entries with respect thereto being made in the
Register (and each Promissory Note shall expressly so provide).  The Register
shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.

(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement (including under a note, if any)
to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

12.5. No Waiver; Remedies Cumulative .  No failure or delay on the part of the
Administrative Agent or any Lender in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
any Loan Party and the Administrative Agent or any Lender shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder.  The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Administrative
Agent or any Lender would otherwise have.  No notice to or demand on any Loan
Party in any case shall entitle any Loan Party to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights of
the Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.

12.6. Payments Pro Rata (a). The Administrative Agent agrees that promptly after
its receipt of each payment from or on behalf of any Loan Party in respect of
any Obligations of such Loan Party hereunder, it shall distribute such payment
to the Lenders (other than any Lender that has expressly waived its right to
receive its pro rata share thereof) pro rata based upon their respective shares,
if any, of the Obligations with respect to which such payment was received.

(b) Each of the Lenders agrees that, if it should receive any amount hereunder
(whether by voluntary payment, by realization upon security, by the exercise of
the right of setoff or banker’s lien, by counterclaim or cross action, by the
enforcement of any right under the Credit Documents, or otherwise but excluding
any amounts received pursuant to Section 1.15 or 12.4) which is applicable to
the payment of the principal of, or interest on, the Loans, Fees or
reimbursement obligations in respect of the Letters of Credit, of a sum which
with respect to the related sum or sums received by other Lenders is in a
greater proportion than the total of such Obligation then owed and due to such
Lender bears to the total of such Obligation then owed and due to all of the
Lenders immediately prior to such receipt, then such Lender receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Lenders an interest in the Obligations of the respective Loan Party to
such Lenders in such amount as shall result in a proportional participation by
all of the Lenders in such amount, provided that if all or any portion of such
excess amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.

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12.7. Calculations; Computations. The financial statements to be furnished to
the Lenders pursuant hereto shall be made and prepared in accordance with GAAP
consistently applied throughout the periods involved (except for the absence of
notes and normal year-end adjustments in the case of unaudited financial
statements and except as set forth in the notes thereto or as otherwise
disclosed in writing by the Borrower to the Lenders), provided that, except as
otherwise specifically provided herein, all computations determining compliance
with ‎Section 8, including definitions used therein, shall utilize accounting
principles and policies in effect at the time of the preparation of, and in
conformity with those used to prepare, the December 31, 2013 historical
financial statements of the Borrower delivered to the Administrative Agent
pursuant to Section ‎6.5.

12.8. Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial.
(a)  THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER AND ANY CLAIM OR CONTROVERSY
RELATED TO THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.  Any legal action or proceeding with
respect to this Agreement or any other Credit Documents may be brought in the
courts of the State of New York sitting in New York County or of the United
States for the Southern District of New York, and, by execution and delivery of
this Agreement, the Borrower hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts.  The Borrower further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to it at its address for notices pursuant to Section ‎12.3, such
service to become effective 30 days after such mailing.  Nothing herein shall
affect the right of the Administrative Agent or any Lender to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against any Loan Party in any other jurisdiction.

(b) The Borrower hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause ‎(a) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.

(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

(d) The Borrower hereby irrevocably waives, to the maximum extent not prohibited
by law, any right it may have to claim or recover in any legal action or
proceeding referred to in this Section any indirect, special, exemplary,
punitive or consequential damages.

12.9. USA PATRIOT Act. Each Lender, which is subject to Section 326 of the USA
PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”), hereby notifies the Borrower that, pursuant to the requirements of
the Act, it is required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower
and other information that will allow such Lender to identify the Borrower in
accordance with the Act.

12.10. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.  A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.  Delivery of an executed counterpart of a signature page
of this Agreement by telecopy or electronic transmission shall be effective as
delivery of a manually executed counterpart of this Agreement.

12.11. Headings. The headings of the several sections and subsections of this
Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.

12.12. Amendment or Waiver. Neither this Agreement, any other Credit Document,
nor any terms hereof or thereof may be amended or modified except in accordance
with the provisions of this Section ‎12.12.  The Required Lenders (or , with the
written consent of the Required Lenders, the Administrative Agent) and each Loan
Party party to the relevant Credit Document may, from time to time (i) enter
into written amendments, supplements or modifications hereto and to the other
Credit Documents for the purpose of adding any provisions to this Agreement or
the other Credit Documents or changing in any manner the rights of the Lenders
or of the Loan Parties hereunder or thereunder; provided that with respect to
any amendment or supplement that adversely affects the Collateral Agent, the
written consent of the Collateral Agent shall be required and with respect to
any amendment or supplement that adversely affects the Issuing Lender or
Swingline Lender, the written consent of the Issuing Lender or the Swingline
Lender, as applicable, shall be required or (ii) waive, on such terms and
conditions as the Required Lenders or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement or
the other Credit Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall:

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(a) extend the final scheduled date of maturity of any Loan, reduce the
principal, stated rate of any interest or fee payable hereunder (except in
connection with the waiver of applicability of any post-default increase in
interest rates (which waiver shall be effective with the consent of the Required
Lenders)), or extend the scheduled date of any payment thereof, or increase the
amount or extend the expiration date of any Lender’s Commitment, in each case
without the consent of each Lender directly affected thereby;

(b) eliminate or reduce the voting rights of any Lender under this Section
‎12.12 without the written consent of such Lender;

(c) release all or substantially all of the Subsidiary Guarantors or all or
substantially all of the Collateral in any transaction or series of related
transactions  without the consent of each Lender;

(d) consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement and the other Credit Documents;

(e) amend, modify or waive any provision affecting the rights or duties of an
Issuing Lender or Swingline Lender hereunder without the written consent of the
Issuing Lender or Swingline Lender, as relevant;

(f) change any provision of this Section or the definition of “Required Lenders”
or any other provision hereof specifying the number or percentage of Lenders
required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender;

(g) amend, modify or waive any provision of Section 1.11 or Section 12.6 without
the written consent of each Lender; or

(h) amend, modify or waive any provision of Article 11 or any other provision of
any Credit Document that affects the Administrative Agent without the written
consent of the Administrative Agent.

Notwithstanding anything to the contrary contained in this Section ‎12.12, (i)
any Credit Document, this Agreement or any related document may be amended,
supplemented or waived with the consent of the Administrative Agent at the
request of the Borrower without the need to obtain the consent of any other
Lender if such amendment, supplement or waiver is delivered in order (x) to
comply with local law or advice of local counsel, (y) to cure ambiguities,
omissions, mistakes or defects or (z) to cause such Credit Document or other
document to be consistent with this Agreement and the other Credit Documents,
(ii) the Administrative Agent may direct the Collateral Agent to (x) release any
Subsidiary Guarantor from its Guaranty of the Obligations if, in compliance with
this Agreement, such Subsidiary Guarantor ceases to be a Wholly-Owned Subsidiary
or becomes a Foreign Subsidiary, a Project Finance Subsidiary or any other
Subsidiary that is prohibited from providing a Guaranty of the Obligations by
any Applicable Law and (y) release the liens on or security interests in any
Collateral that is sold, transferred, or otherwise disposed of in accordance
with this Agreement and (iii) the Credit Parties hereto hereby direct the
Collateral Agent, upon the completion of the FERC Merger, to terminate the
Pledge Agreement (FERC) and the Negative Pledge Agreement.

12.13. Survival. All indemnities set forth herein including, without limitation,
in Section ‎1.14, ‎4.3 or ‎12.1 shall survive the execution and delivery of this
Agreement and the making and repayment or assignment of the Loans.

12.14. Domicile of Loans. Each Lender may transfer and carry its Loans at, to or
for the account of any branch office, subsidiary or affiliate of such Lender,
provided that the Borrower shall not be responsible for costs arising under
Sections 1.12 or ‎1.14 resulting from any such transfer to the extent not
otherwise applicable to such Lender prior to such transfer.

12.15. Confidentiality. The Administrative Agent and each Lender agrees to keep
confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender or, subject to an agreement to comply
with the provisions of this Section, any Lender Affiliate (b) subject to an
agreement to comply with the provisions of this Section, to any assignee or
participant or prospective assignee or participant or any actual or prospective
direct or indirect counterparty to any Specified Swap Contracts or Specified
Cash Management Contracts (or any professional advisor to such counterparty),
(c) on a need-to-know basis, to its employees involved in the administration of
this Agreement or any other Credit Document, directors, agents, attorneys,
accountants, consultants and other professional advisors or those of any of its
Affiliates (each of whom shall be instructed to hold the same in confidence),
(d) upon the request or demand of any Governmental Entity having jurisdiction
over such Lender, (e) in response to any order of any court or other
Governmental Entity or as may otherwise be required pursuant to any Requirement
of Law, (f) that has been publicly disclosed other than in breach of this
Agreement, or becomes available to the Administrative Agent, any Lender, the
Issuing Lender or any of their respective Affiliates on a nonconfidential basis
from a source other than the Borrower, (g) to the National Association of
Insurance Commissioners or any similar organization or any nationally recognized
rating agency that requires access to information about a Lender’s investment
portfolio in connection with ratings issued with respect to such Lender, (h) in
connection with the exercise of any remedy hereunder or

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under any other Credit Document, (i) subject to an agreement to comply with the
provisions of this Section, any actual or prospective party (or its related
parties) to any swap, derivative or other transaction under which payments are
to be made by reference to the Borrower and its obligations, this Agreement or
payments hereunder, or (j) on a confidential basis to (i)  any rating agency in
connection with rating the Borrower or its Subsidiaries or the credit facilities
provided hereunder or (ii) the CUSIP Service Bureau or any similar agency in
connection with the issuance and monitoring of CUSIP numbers or other market
identifiers with respect to the credit facilities provided hereunder.  For
purposes of this Section, “information” means  all information received from the
Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of
their respective businesses, other than any such information that is available
to the Administrative Agent, any Lender or the Issuing Lender on a
nonconfidential basis prior to disclosure by the Borrower or any Subsidiary,
provided that, in the case of information received from the Borrower or any
Subsidiary after the date hereof, such information is not designated as “Public
Side Information” or is clearly identified at the time of delivery as
confidential.  Any Person required to maintain the confidentiality of
information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.

12.16. Integration. This Agreement and the other Credit Documents represent the
agreement of the Borrower, the other Loan Parties, the Administrative Agent and
the other Credit Parties with respect to the subject matter hereof, and there
are no promises, undertakings, representations or warranties by the Borrower,
any of its Affiliates, the Administrative Agent or any Lender relative to the
subject matter hereof not expressly set forth or referred to herein or in the
other Credit Documents.

12.17. Acknowledgments. The Borrower hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Credit Documents;

(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Credit Documents, and the relationship
between the Administrative Agent and Lenders, on one hand, and the Borrower, on
the other hand, in connection herewith or therewith is solely that of debtor and
creditor; and

(c) no joint venture is created hereby or by the other Credit Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Borrower and the Lenders.

12.18. Severability. If any provision of this Agreement or the other Credit
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Credit Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions.  The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.  Without limiting the foregoing provisions of this Section
12.18, if and to the extent that the enforceability of any provisions in this
Agreement relating to Defaulting Lenders shall be limited by Bankruptcy Event,
as determined in good faith by the Administrative Agent or the Issuing Lender,
then such provisions shall be deemed to be in effect only to the extent not so
limited.

12.19. Amendment and Restatement. This Agreement amends and restates the
Original Credit Agreement.  All indebtedness, obligations, liabilities and liens
created by the Original Credit Agreement and the Credit Documents referred to
therein owing to Lenders under this Agreement shall continue unimpaired and in
full force and effect, as amended and described in this Agreement and the other
Credit Documents.  All references made to the Original Credit Agreement in any
Credit Document or in any other instrument or document shall, without more, be
deemed to refer to this Agreement.  This Agreement amends and restates the
Original Credit Agreement and is not intended to be or operate as a novation or
an accord and satisfaction of the Original Credit Agreement or the indebtedness,
obligations and liabilities of the Borrower or any Loan Party evidenced or
provided for thereunder.

[signature page follows]

 

 

 

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Agreement to be duly executed and delivered as of the date first above written.

 

Address:

 

 

 

1807 Ross Avenue, 4th Floor

Dallas, Texas 75201

SHARYLAND DISTRIBUTION & TRANSMISSION SERVICES, L.L.C.

 

 

 

 

Attention:  Brant Meleski

 

 

 

E-mail: bmeleski@huntutility.com

 

 

 

cc:  Greg Imhoff

By:

 

 

 

Name:

 

Brant Meleski

 

Title:

 

Chief Financial Officer

 

 

 

 

--------------------------------------------------------------------------------

 

 

Address:

 

 

 

Royal Bank of Canada

 

 

 

20 King Street West, 4th Floor

Royal Bank of Canada, as Administrative Agent

Toronto, Ontario M5H 1C4

Attention:  Manager, Agency Services Group

 

 

 

Email: ann.hurley@rbccm.com

 

 

 

Telecopy:  416-842-4023

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

with a copy to:

 

 

 

RBC Capital Markets

Royal Bank of Canada, as Swingline Lender,  Issuing Lender and a Lender

200 Vesey Street

 

New York, NY 10281

 

 

 

Attention: Frank Lambrinos

 

 

 

Email: frank.lambrinos@rbccm.com

By:

 

 

Telecopy: 212-428-6270

Name:

 

 

 

Title: