Exhibit 10.1

EXECUTION VERSION

 

 

 

SENIOR SECURED SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AGREEMENT

Dated as of May 5, 2014

among

ENERGY FUTURE COMPETITIVE HOLDINGS COMPANY LLC,

as Parent Guarantor,

TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC,

as the Borrower,

The Several Lenders

from Time to Time Parties Hereto,

CITIBANK, N.A.,

as Administrative Agent and Collateral Agent,

DEUTSCHE BANK AG NEW YORK BRANCH,

BANK OF AMERICA, N.A. AND

MORGAN STANLEY SENIOR FUNDING, INC.,

as Co-Syndication Agents,

BARCLAYS BANK PLC,

ROYAL BANK OF CANADA AND

UNION BANK, N.A.,

as Co-Documentation Agents,

and

CITIGROUP GLOBAL MARKETS INC.,

DEUTSCHE BANK SECURITIES INC.,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

MORGAN STANLEY SENIOR FUNDING, INC.,

BARCLAYS BANK PLC,

RBC CAPITAL MARKETS1 AND

UNION BANK, N.A.

as Joint Lead Arrangers and Joint Bookrunners

 

 

 

 

1  RBC Capital Markets is a brand name for the capital markets businesses of
Royal Bank of Canada and its affiliates.

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TABLE OF CONTENTS

 

          Page  

SECTION 1.

   Definitions      2   

1.1.

   Defined Terms      2   

1.2.

   Other Interpretive Provisions      60   

1.3.

   Accounting Terms      60   

1.4.

   Rounding      61   

1.5.

   References to Agreements, Laws, Etc.      61   

1.6.

   Times of Day      61   

1.7.

   Timing of Payment of Performance      61   

1.8.

   Currency Equivalents Generally      61   

1.9.

   Classification of Loans and Borrowings      61   

1.10.

   Hedging Agreements      61   

SECTION 2.

   Amount and Terms of Credit      62   

2.1.

   Commitments      62   

2.2.

   Minimum Amount of Each Borrowing; Maximum Number of Borrowings      64   

2.3.

   Notice of Borrowing; Determination of Class of Loans      64   

2.4.

   Disbursement of Funds      65   

2.5.

   Repayment of Loans; Evidence of Debt      65   

2.6.

   Conversions and Continuations      66   

2.7.

   Pro Rata Borrowings      67   

2.8.

   Interest      67   

2.9.

   Interest Periods      68   

2.10.

   Increased Costs, Illegality, Etc.      69   

2.11.

   Compensation      70   

2.12.

   Change of Lending Office      70   

2.13.

   Notice of Certain Costs      71   

2.14.

   Incremental Facilities      71   

2.15.

   [Reserved]      73   

2.16.

   Defaulting Lenders      73   

SECTION 3.

   Letters of Credit      74   

3.1.

   Issuance of Letters of Credit      74   

3.2.

   Letter of Credit Requests      75   

3.3.

   [Reserved].      76   

3.4.

   Agreement to Repay Letter of Credit Drawings      76   

3.5.

   Increased Costs      77   

3.6.

   New or Successor Letter of Credit Issuer      77   

3.7.

   Role of Letter of Credit Issuer      78   

3.8.

   General L/C Collateral Account      79   

3.9.

   RCT L/C Collateral Account      80   

 

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          Page  

3.10.

   Drawings from General L/C Collateral Accounts and RCT L/C Collateral Account
     81   

3.11.

   Applicability of ISP and UCP      81   

3.12.

   Conflict with Issuer Documents      81   

3.13.

   Letters of Credit Issued for Others      81   

SECTION 4.

   Fees; Commitments      82   

4.1.

   Fees      82   

4.2.

   Voluntary Reduction of Revolving Credit Commitments and Delayed-Draw Term
Loan Commitments      83   

4.3.

   Mandatory Termination of Commitments      83   

4.4.

   RCT Carve Out Support Rejection Notice.      84   

SECTION 5.

   Payments      84   

5.1.

   Voluntary Prepayments      84   

5.2.

   Mandatory Prepayments      84   

5.3.

   Method and Place of Payment      86   

5.4.

   Net Payments      87   

5.5.

   Computations of Interest and Fees      89   

5.6.

   Limit on Rate of Interest      90   

SECTION 6.

   Conditions Precedent to Initial Borrowing      90   

6.1.

   Credit Documents      90   

6.2.

   Collateral      91   

6.3.

   Legal Opinions      91   

6.4.

   Initial Budget      91   

6.5.

   [Reserved]      91   

6.6.

   Closing Certificates      92   

6.7.

   Authorization of Proceedings of Each Credit Party      92   

6.8.

   Fees      92   

6.9.

   Representations and Warranties      92   

6.10.

   Interim Order      92   

6.11.

   First Day Orders      92   

6.12.

   Trustees and Examiners      92   

6.13.

   Projections      92   

6.14.

   Patriot Act      92   

6.15.

   Petition Date      93   

6.16.

   Restructuring Support Agreement      93   

SECTION 7.

   Conditions Precedent to All Credit Events      93   

7.1.

   No Default; Representations and Warranties      93   

7.2.

   Notice of Borrowing      93   

7.3.

   Full Availability      94   

7.4.

   Availability of Delayed-Draw Term Loans and RCT Letters of Credit      95   

 

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          Page  

SECTION 8.

   Representations, Warranties and Agreements      95   

8.1.

   Corporate Status; Compliance with Laws      95   

8.2.

   Corporate Power and Authority      95   

8.3.

   No Violation      95   

8.4.

   Litigation      96   

8.5.

   Margin Regulations      96   

8.6.

   Governmental Approvals      96   

8.7.

   Investment Company Act      96   

8.8.

   True and Complete Disclosure      96   

8.9.

   Financial Condition; Projections; Material Adverse Effect      96   

8.10.

   Tax Matters      97   

8.11.

   Compliance with ERISA      97   

8.12.

   Subsidiaries      98   

8.13.

   Intellectual Property      98   

8.14.

   Environmental Laws      98   

8.15.

   Properties      98   

8.16.

   Orders      99   

8.17.

   Status of Obligations; Perfection and Priority of Security Interests      99
  

8.18.

   Insurance      99   

8.19.

   Labor Matters      99   

8.20.

   Sanctioned Persons; Anti-Corruption Laws; Patriot Act      100   

SECTION 9.

   Affirmative Covenants      100   

9.1.

   Information Covenants      100   

9.2.

   Books, Records and Inspections      104   

9.3.

   Maintenance of Insurance      104   

9.4.

   Payment of Taxes      105   

9.5.

   Consolidated Corporate Franchises      105   

9.6.

   Compliance with Statutes, Regulations, Etc.      105   

9.7.

   ERISA      105   

9.8.

   Maintenance of Properties      106   

9.9.

   Transactions with Affiliates      106   

9.10.

   End of Fiscal Years; Fiscal Quarters      108   

9.11.

   Additional Guarantors and Grantors      108   

9.12.

   Pledge of Additional Stock and Evidence of Indebtedness      108   

9.13.

   [Reserved]      108   

9.14.

   Further Assurances      108   

9.15.

   Bankruptcy Matters      109   

9.16.

   Ratings      110   

9.17.

   Use of Proceeds      110   

SECTION 10.

   Negative Covenants      110   

10.1.

   Limitation on Indebtedness      110   

10.2.

   Limitation on Liens      115   

10.3.

   Limitation on Fundamental Changes      118   

 

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          Page  

10.4.

   Limitation on Sale of Assets      119   

10.5.

   Limitation on Investments      122   

10.6.

   Limitation on Dividends      126   

10.7.

   Limitation on Prepaying Indebtedness      130   

10.8.

   Limitations on Sale Leasebacks      130   

10.9.

   Consolidated Superpriority Secured Net Debt to Consolidated EBITDA Ratio     
130   

10.10.

   Changes in Business      131   

10.11.

   Bankruptcy Provisions      131   

10.12.

   Affiliate Value Transfers      131   

SECTION 11.

   Events of Default      131   

11.1.

   Payments      131   

11.2.

   Representations, Etc.      131   

11.3.

   Covenants      131   

11.4.

   Default Under Other Agreements      132   

11.5.

   [Reserved]      132   

11.6.

   ERISA      132   

11.7.

   Credit Documents      132   

11.8.

   [Reserved]      132   

11.9.

   [Reserved]      133   

11.10.

   [Reserved]      133   

11.11.

   Judgments      133   

11.12.

   Hedging Agreements      133   

11.13.

   Change of Control      133   

11.14.

   Final Order      133   

11.15.

   Matters Related to the Cases      133   

11.16.

   Automatic Stay      134   

11.17.

   Status of Orders      134   

11.18.

   Confirmation of Plan      135   

11.19.

   Application of Proceeds      135   

SECTION 12.

   The Agents      137   

12.1.

   Appointment      137   

12.2.

   Delegation of Duties      138   

12.3.

   Exculpatory Provisions      138   

12.4.

   Reliance by Agents      139   

12.5.

   Notice of Default      140   

12.6.

   Non-Reliance on Administrative Agent, Collateral Agent and Other Lenders     
140   

12.7.

   Indemnification      140   

12.8.

   Agents in its Individual Capacities      141   

12.9.

   Successor Agents      141   

12.10.

   Withholding Tax      142   

12.11.

   Trust Indenture Act      142   

12.12.

   [Reserved]      143   

12.13.

   Security Documents and Guarantee      143   

 

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          Page  

SECTION 13.

   Miscellaneous      143   

13.1.

   Amendments, Waivers and Releases      143   

13.2.

   Notices      147   

13.3.

   No Waiver; Cumulative Remedies      147   

13.4.

   Survival of Representations and Warranties      148   

13.5.

   Payment of Expenses; Indemnification      148   

13.6.

   Successors and Assigns; Participations and Assignments      149   

13.7.

   Replacements of Lenders under Certain Circumstances      153   

13.8.

   Adjustments; Set-off      154   

13.9.

   Counterparts      154   

13.10.

   Severability      154   

13.11.

   INTEGRATION      155   

13.12.

   GOVERNING LAW      155   

13.13.

   Submission to Jurisdiction; Waivers      155   

13.14.

   Acknowledgments      156   

13.15.

   WAIVERS OF JURY TRIAL      157   

13.16.

   Confidentiality      157   

13.17.

   Direct Website Communications      157   

13.18.

   USA PATRIOT Act      159   

13.19.

   Payments Set Aside      159   

13.20.

   Separateness      159   

13.21.

   Keepwell      160   

SECTION 14.

   Security; Secured Commodity Hedging Agreements      160   

14.1.

   Security      160   

14.2.

   Secured Commodity Hedging Agreements      163   

14.3.

   Permitted Property Interests      163   

 

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SCHEDULES

 

Schedule 1.1(a)    Commitments Schedule 1.1(b)    Excluded Subsidiaries
Schedule 1.1(c)    Unrestricted Subsidiaries Schedule 1.1(d)    First Day
Motions Schedule 8.4    Litigation Schedule 8.12    Subsidiaries Schedule 8.15
   Property Schedule 9.9    Closing Date Affiliate Transactions Schedule 10.1   
Closing Date Indebtedness Schedule 10.2    Closing Date Liens Schedule 10.4   
Scheduled Dispositions Schedule 10.5    Closing Date Investments Schedule 13.2
   Notice Addresses

EXHIBITS

 

Exhibit A    Form of Notice of Borrowing Exhibit B    Form of Guarantee
Exhibit C    Form of Budget Notice Exhibit D    [Reserved] Exhibit E   
[Reserved] Exhibit F    Form of Security Agreement Exhibit G    Form of Letter
of Credit Request Exhibit H    Form of Credit Party Closing Certificate Exhibit
I    Form of Assignment and Acceptance Exhibit J-1    Form of Promissory Note
(Revolving Credit Loans) Exhibit J-2    Form of Promissory Note (Term Loans)
Exhibit J-3    Form of Promissory Note (Delayed-Draw Term Loans) Exhibit K   
Form of Incremental Amendment Exhibit L    Form of Non-U.S. Lender Certification
Exhibit M    Initial Budget Exhibit N    Form of Interim Order

 

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SENIOR SECURED SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AGREEMENT, dated as of
May 5, 2014, among ENERGY FUTURE COMPETITIVE HOLDINGS COMPANY LLC, a Delaware
limited liability company and a debtor and debtor-in-possession (“Parent
Guarantor”), TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC, a Delaware limited
liability company and a debtor and debtor-in-possession (“TCEH” or the
“Borrower”) in a case pending under chapter 11 of the Bankruptcy Code (“Chapter
11”), the lending institutions from time to time parties hereto (each, a
“Lender” and, collectively, the “Lenders”), CITIBANK, N.A., as Administrative
Agent and Collateral Agent and CITIGROUP GLOBAL MARKETS INC., DEUTSCHE BANK
SECURITIES INC., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, MORGAN
STANLEY SENIOR FUNDING, INC., BARCLAYS BANK PLC, RBC CAPITAL MARKETS and UNION
BANK, N.A., as Joint Lead Arrangers and Joint Bookrunners.

RECITALS:

WHEREAS, capitalized terms used and not defined in the preamble and these
recitals shall have the respective meanings set forth for such terms in
Section 1.1 hereof;

WHEREAS, on April 29, 2014 (the “Petition Date”), the Borrower, Parent Guarantor
and each of the other Guarantors (collectively, the “TCEH Debtors”) filed
voluntary petitions for relief under Chapter 11 in the United States Bankruptcy
Court for the District of Delaware (such court, together with any other court
having exclusive jurisdiction over any Case from time to time and any Federal
appellate court thereof, the “Bankruptcy Court”) and commenced cases numbered
14-10979 through 14-11048 respectively (each, a “Case” and, collectively, the
“Cases”), and have continued in the possession and operation of their assets and
in the management of their businesses pursuant to sections 1107 and 1108 of the
Bankruptcy Code;

WHEREAS, in connection with the foregoing, the Borrower has requested that the
Lenders and Letter of Credit Issuers extend credit to the Borrower in the form
of (a) $1,425,000,000 in aggregate principal amount of Term Loans,
(b) $1,950,000,000 in aggregate principal amount of Revolving Credit Commitments
to be made available to the Borrower at any time and from time to time prior to
the Revolving Credit Termination Date, (c) up to $1,100,000,000 in aggregate
principal amount of Delayed-Draw Term Loan Commitments to be made available to
the Borrower at any time and from time to time prior to the Delayed-Draw
Termination Date, (d) $1,100,000,000 in RCT Letter of Credit Commitments for the
issuance of RCT Letters of Credit to be made available to the Borrower from time
to time prior to the RCT L/C Termination Date and (e) $800,000,000 in General
Letter of Credit Commitments for the issuance of General Letters of Credit to be
made available to the Borrower from time to time prior to the General L/C
Termination Date, in each case subject to the terms and conditions set forth
herein; and

WHEREAS, the Lenders and Letter of Credit Issuers are willing to make available
to the Borrower such loans and facilities upon the terms and subject to the
conditions set forth herein;

AGREEMENT:

NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:

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SECTION 1. Definitions.

1.1. Defined Terms.

(a) As used herein, the following terms shall have the meanings specified in
this Section 1.1 unless the context otherwise requires:

“ABR” shall mean for any day a fluctuating rate per annum equal to the greatest
of (a) the Federal Funds Effective Rate plus 1/2 of 1%, (b) the rate of interest
in effect for such day as publicly announced from time to time by the
Administrative Agent as its “prime rate” and (c) the LIBOR Rate for a one month
Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1.00%; provided that, for the avoidance
of doubt, for purposes of calculating the LIBOR Rate pursuant to clause (c), the
LIBOR Rate for any day shall be based on the rate per annum determined by the
Administrative Agent at approximately 11:00 a.m. (London time) on such day by
reference to the ICE Benchmark Administration (or any successor organization)
LIBOR Rate (the “Relevant LIBOR Rate”) for deposits in Dollars (as published by
Reuters or any other commonly available source providing quotations of the
Relevant LIBOR Rate as designated by the Administrative Agent) for a period
equal to one month. The “prime rate” is a rate set by the Administrative Agent
based upon various factors including the Administrative Agent’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. If the Administrative Agent is unable to ascertain the
Federal Funds Effective Rate due to its inability to obtain sufficient
quotations in accordance with the definition thereof, after notice is provided
to the Borrower, the ABR shall be determined without regard to clause (a) above
until the circumstances giving rise to such inability no longer exist. Any
change in the ABR due to a change in such rate announced by the Administrative
Agent or in the Federal Funds Effective Rate shall take effect at the opening of
business on the day specified in the public announcement of such change or on
the effective date of such change in the Federal Funds Effective Rate or the
Relevant LIBOR Rate, as applicable.

“ABR Loan” shall mean each Loan bearing interest based on the ABR.

“Acceptable Reinvestment Commitment” shall mean a binding commitment of the
Borrower or any Restricted Subsidiary entered into at any time prior to the end
of the Reinvestment Period to reinvest the proceeds of a Prepayment Event.

“Acceptable Reorganization Plan” shall mean a Reorganization Plan that is in
form and substance consistent in all material respects with, and as it may be
amended in accordance with the terms of, the Restructuring Support Agreement and
the Restructuring Term Sheet, and is in form and substance reasonably
satisfactory to the Administrative Agent (provided, however, that with respect
to provisions of the plan that relate to the payment of the Credit Facilities,
such provisions must be in form and substance satisfactory to the Administrative
Agent) and provides for, among other things, the termination of the Revolving
Credit Commitments and the payment in full in cash of the Obligations
outstanding under the Credit Documents (other than Contingent Obligations) and,
with respect to any Letter of Credit that does not become a letter of credit
under the Exit Facilities, cash collateralization of such Letter of Credit, in
each case, on or prior to the earlier of the Plan Effective Date or substantial
consummation of such Reorganization Plan.

“Accession Agreement” shall mean an accession agreement substantially in the
form attached to the Security Agreement as Exhibit B thereto.

 

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“Acquired EBITDA” shall mean, with respect to any Acquired Entity or Business or
any Converted Restricted Subsidiary (any of the foregoing, a “Pro Forma Entity”)
for any period, the amount for such period of Consolidated EBITDA of such Pro
Forma Entity (determined using such definitions as if references to the Borrower
and the Restricted Subsidiaries therein were to such Pro Forma Entity and its
Restricted Subsidiaries), all as determined on a consolidated basis for such Pro
Forma Entity in a manner not inconsistent with GAAP.

“Acquired Entity or Business” shall have the meaning provided in the definition
of the term “Consolidated EBITDA”.

“Additional Lender” shall mean, at any time, any Person (other than any such
Person that is a Lender at such time) that agrees to provide any portion of an
Incremental Term Loan, or Incremental Revolving Commitment Increase pursuant to
an Incremental Amendment in accordance with Section 2.14(h).

“Adequate Protection Payments” shall have the meaning ascribed thereto in the
Interim Cash Collateral Order.

“Adjusted Available Delayed-Draw Term Loan Commitment” shall mean at any time
the Available Delayed-Draw Term Loan Commitment less the Available Delayed-Draw
Term Loan Commitments of all Defaulting Lenders.

“Adjusted Total Revolving Credit Commitment” shall mean at any time the Total
Revolving Credit Commitment less the aggregate Revolving Credit Commitments of
all Defaulting Lenders.

“Administrative Agent” shall mean Citibank, N.A., as the administrative agent
for the Lenders under this Agreement and the other Credit Documents, or any
successor administrative agent pursuant to Section 12.

“Administrative Agent’s Office” shall mean the Administrative Agent’s address
and, as appropriate, account as set forth on Schedule 13.2, or such other
address or account as the Administrative Agent may from time to time notify to
the Borrower and the Lenders.

“Administrative Questionnaire” shall have the meaning provided in
Section 13.6(b)(ii)(D).

“Advisors” shall mean legal counsel, financial advisors and third-party
appraisers and consultants advising the Agents, the Letter of Credit Issuers,
the Lenders and their Related Parties in connection with their participation in
the Cases, limited in the case of legal counsel to one primary counsel for the
Agents (as of the Closing Date, Milbank, Tweed, Hadley & McCloy LLP) and, if
necessary, one firm of regulatory counsel and/or one firm of local counsel in
each appropriate jurisdiction (and, in the case of an actual or perceived
conflict of interest where the Person affected by such conflict informs the
Borrower of such conflict and thereafter, after receipt of the consent of the
Borrower (which consent shall not be unreasonably withheld or delayed), retains
its own counsel, of another firm of counsel for such affected Person).

“Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control another Person if
such Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities, by contract or otherwise. The terms
“controlling” and “controlled” shall have meanings correlative thereto.

 

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“Affiliate Value Transfer” shall mean any Investment made in reliance on
Section 10.5(c), (g), (h), (i), (k), (l), (m), (p), (q), (t), (u), (v), (aa),
(cc), (dd), (ee) or (ff) (including the issuance of Letters of Credit for the
direct or indirect benefit of the Ultimate Parent and its Subsidiaries (other
than the Borrower and the Restricted Subsidiaries)), any Disposition made in
reliance on Section 10.4(b), (g) or (m) or any distribution made in reliance on
Section 10.6(u), in each case made by the Borrower or any Restricted Subsidiary
to an Affiliate thereof (other than the Borrower and the Restricted
Subsidiaries), excluding payments, transfers or Dispositions to such Affiliates
(including the issuance of Letters of Credit for the benefit of Ultimate Parent
and its Subsidiaries) pursuant to the Shared Services Agreement or the Tax
Sharing Agreement.

“Agent Parties” shall have the meaning provided in Section 13.17(d).

“Agents” shall mean the Administrative Agent, the Collateral Agent, the
Co-Syndication Agents, each Joint Lead Arranger and the Co-Documentation Agents.

“Aggregate Revolving Credit Outstandings” shall have the meaning provided in
Section 5.2(b).

“Agreement” shall mean this Senior Secured Superpriority Debtor-in-Possession
Credit Agreement.

“Annual Operating Forecast” shall have the meaning provided in Section 9.1(d).
For the avoidance of doubt, no Annual Operating Forecast shall constitute a cap
or limitation on the amount of “Allowed Professional Fees” (as defined in the
Orders) payable by the TCEH Debtors.

“Anti-Corruption Laws” shall have the meaning provided in Section 8.20.

“Applicable ABR Margin” shall mean at any date:

(a) with respect to each ABR Loan that is a Term Loan, 1.75% per annum, (b) with
respect to each ABR Loan that is a Delayed-Draw Term Loan, 1.75% per annum and
(c) with respect to each ABR Loan that is a Revolving Credit Loan, 1.50% per
annum.

“Applicable Amount” shall mean, at any time (the “Applicable Amount Reference
Time”), an amount (which amount may not in any event be less than zero (0))
equal to the sum, without duplication, of:

(i) 50% of Cumulative Consolidated Net Income of the Borrower and the Restricted
Subsidiaries for the period from the first day of the first fiscal quarter
commencing after the Closing Date until the last day of the then most recent
fiscal quarter or fiscal year, as applicable, for which Section 9.1 Financials
have been delivered;

(ii) to the extent not (A) already included in the calculation of Consolidated
Net Income of the Borrower and the Restricted Subsidiaries or (B) already
reflected as a return of capital or deemed reduction in the amount of such
Investment, the aggregate JV Distribution Amount received by the Borrower or any
Restricted Subsidiary during the period from and including the Business Day
immediately following the Closing Date through and including the Applicable
Amount Reference Time;

 

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(iii) to the extent not (A) already included in the calculation of Consolidated
Net Income or (B) already reflected as a return of capital or deemed reduction
in the amount of any such Investment, the aggregate amount of all cash
repayments of principal received by the Borrower or any Restricted Subsidiary
from any Minority Investments or Unrestricted Subsidiaries during the period
from and including the Business Day immediately following the Closing Date
through and including the Applicable Amount Reference Time in respect of loans
made by the Borrower or any Restricted Subsidiary to such Minority Investments
or Unrestricted Subsidiaries; and

(iv) to the extent not (A) already included in the calculation of Consolidated
Net Income of the Borrower and the Restricted Subsidiaries, (B) already
reflected as a return of capital or deemed reduction in the amount of such
Investment or (C) applied to prepay the Term Loans and Delayed-Draw Term Loans
in accordance with Section 5.2(a), the aggregate amount of all Net Cash Proceeds
received by the Borrower or any Restricted Subsidiary in connection with the
sale, transfer or other disposition of its ownership interest in any Minority
Investments or in any Unrestricted Subsidiary during the period from and
including the Business Day immediately following the Closing Date through and
including the Applicable Amount Reference Time;

minus (b) the sum, without duplication of:

(i) the aggregate amount of Investments made pursuant to Section 10.5(g)(ii)(y),
10.5(h)(iii), 10.5(i)(y) or 10.5(v)(y) following the Closing Date and prior to
the Applicable Amount Reference Time; and

(ii) the aggregate amount of prepayments pursuant to Section 10.7(ii) following
the Closing Date and prior to the Applicable Amount Reference Time.

Notwithstanding the foregoing, in making any calculation or other determination
under this Agreement involving the Applicable Amount, if the Applicable Amount
at such time is less than zero, then the Applicable Amount shall be deemed to be
zero for purposes of such calculation or determination.

“Applicable Equity Amount” shall mean, at any time (the “Applicable Equity
Amount Reference Time”), an amount equal to, without duplication, (a) the amount
of any capital contributions made in cash to, or any proceeds of an equity
issuance received by the Borrower during the period from and including the
Business Day immediately following the Closing Date through and including the
Applicable Equity Amount Reference Time, including proceeds from the issuance of
Stock or Stock Equivalents of Parent Guarantor or any direct or indirect parent
of Parent Guarantor (to the extent the proceeds of any such issuance are
contributed to the Borrower), but excluding all proceeds from the issuance of
Disqualified Stock

minus (b) the sum, without duplication, of:

(i) the aggregate amount of Investments made pursuant to Section 10.5(g)(ii)(x),
10.5(h)(ii), 10.5(i)(x) or 10.5(v)(x) following the Closing Date and prior to
the Applicable Equity Amount Reference Time; and

(ii) the aggregate amount of dividends pursuant to Section 10.6(c)(y) following
the Closing Date and prior to the Applicable Equity Amount Reference Time.

 

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“Applicable Laws” shall mean, as to any Person, any law (including common law),
statute, regulation, ordinance, rule, order, decree, judgment, consent decree,
writ, injunction, settlement agreement or governmental requirement enacted,
promulgated or imposed or entered into or agreed by any Governmental Authority
(including the PUCT and ERCOT), in each case applicable to or binding on such
Person or any of its property or assets or to which such Person or any of its
property or assets is subject.

“Applicable LIBOR Margin” shall mean at any date:

(a) with respect to each LIBOR Loan that is a Term Loan, 2.75% per annum,
(b) with respect to each LIBOR Loan that is a Delayed-Draw Term Loan, 2.75% per
annum and (c) with respect to each LIBOR Loan that is a Revolving Credit Loan,
2.50% per annum.

“Approved Fund” shall mean any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.

“Asset Sale Prepayment Event” shall mean any Disposition of any business units,
assets or other property of the Borrower and the Restricted Subsidiaries not in
the ordinary course of business (including any Disposition of any Stock or Stock
Equivalents of any Subsidiary of the Borrower owned by the Borrower or any
Restricted Subsidiary). Notwithstanding the foregoing, the term “Asset Sale
Prepayment Event” shall not include any transaction permitted by Section 10.4
(other than transactions permitted by Section 10.4(b), Section 10.4(g), the
first proviso to Section 10.4(i), Section 10.4(j), Section 10.4(m),
Section 10.4(q), Section 10.4(r), Section 10.4(s) and Section 10.4(t), which
shall constitute Asset Sale Prepayment Events).

“Assignment and Acceptance” shall mean an assignment and acceptance
substantially in the form of Exhibit I, or such other form as may be approved by
the Administrative Agent.

“Authorized Officer” shall mean the President, the Chief Executive Officer, the
Chief Financial Officer, the Chief Operating Officer, the Treasurer, the
Assistant Treasurer, the Controller, any Senior Vice President, with respect to
certain limited liability companies or partnerships that do not have officers,
any manager, managing member or general partner thereof, any other senior
officer of Parent Guarantor, the Borrower or any other Credit Party designated
as such in writing to the Administrative Agent by Parent Guarantor, the Borrower
or any other Credit Party, as applicable, and, with respect to any document
(other than the solvency certificate) delivered on the Closing Date, the
Secretary or the Assistant Secretary of any Credit Party. Any document delivered
hereunder that is signed by an Authorized Officer shall be conclusively presumed
to have been authorized by all necessary corporate, limited liability company,
partnership and/or other action on the part of Parent Guarantor, the Borrower or
any other Credit Party and such Authorized Officer shall be conclusively
presumed to have acted on behalf of such Person.

“Auto-Extension Letter of Credit” shall have the meaning provided in
Section 3.2(b).

“Available Delayed-Draw Term Loan Commitment” shall mean, as of any date, an
amount equal to the excess, if any, of (a) the amount of the Total Delayed Draw
Term Loan Commitment over (b) the sum of the aggregate principal amount of all
Delayed Draw Term Loans made hereunder prior to such date.

 

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“Available Revolving Commitment” shall mean, as of any date, an amount equal to
the excess, if any, of (a) the amount of the Total Revolving Credit Commitment
over (b) the aggregate principal amount of all Revolving Credit Loans
then-outstanding at such time.

“Available Term Loan Commitment” shall mean, (a) as of the Closing Date, the
Interim Availability Amount and (b) as of the Full Availability Date, an amount
equal to the excess, if any, of (i) the amount of the Total Term Loan Commitment
over (ii) the sum of the aggregate principal amount of all Term Loans made
hereunder prior to such date.

“Avoidance Actions” shall mean the Credit Parties’ claims and causes of action
under chapter 5 of the Bankruptcy Code or any other avoidance actions under the
Bankruptcy Code (but excluding causes of action arising under section 549 of the
Bankruptcy Code and any related action under section 550 of the Bankruptcy
Code).

“Bankruptcy Code” shall mean The Bankruptcy Reform Act of 1978, as heretofore
and hereafter amended, and codified as 11 U.S.C. §§ 101-1532.

“Bankruptcy Court” shall have the meaning assigned in the Recitals hereto.

“Baseload Assets” shall mean (a) any Baseload Generation Assets and (b) any
other assets comprising an electric generating facility or unit acquired,
constructed or redesignated as such, in each such case after the Closing Date
that is certified by an Authorized Officer of the Borrower to be a baseload
asset.

“Baseload Generation Assets” shall mean the assets comprising the following
generation facilities, each owned by the Borrower and its Restricted
Subsidiaries on the Closing Date:

 

  •   Comanche Peak Unit 1 shall mean the approximately 1,150 megawatt (net
load) nuclear fueled power generation facility known as “Comanche Peak Unit 1”
being operated and owned by Luminant Generation Company LLC in Somervell County
and Hood County, Texas;

 

  •   Comanche Peak Unit 2 shall mean the approximately 1,150 megawatt (net
load) nuclear fueled power generation facility known as “Comanche Peak Unit 2”
being operated and owned by Luminant Generation Company LLC in Somervell County
and Hood County, Texas;

 

  •   Big Brown Unit 1 shall mean the approximately 575 megawatt (net load)
lignite/coal fired power generation facility, excluding mining properties, known
as “Big Brown Unit 1” being operated and owned by Big Brown Power Company LLC in
Freestone County, Texas;

 

  •   Big Brown Unit 2 shall mean the approximately 575 megawatt (net load)
lignite/coal fired power generation facility, excluding mining properties, known
as “Big Brown Unit 2” being operated and owned by Big Brown Power Company LLC in
Freestone County, Texas;

 

  •   Monticello Unit 1 shall mean the approximately 565 megawatt (net load)
lignite/coal fired power generation facility, excluding mining properties, known
as “Monticello Unit 1” being operated and owned by Luminant Generation Company
LLC in Titus County, Franklin County and Hopkins County, Texas;

 

  •   Monticello Unit 2 shall mean the approximately 565 megawatt (net load)
lignite/coal fired power generation facility, excluding mining properties, known
as “Monticello Unit 2” being operated and owned by Luminant Generation Company
LLC in Titus County, Franklin County and Hopkins County, Texas;

 

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  •   Monticello Unit 3 shall mean the approximately 750 megawatt (net load)
lignite/coal fired power generation facility, excluding mining properties, known
as “Monticello Unit 3” being operated and owned by Luminant Generation Company
LLC in Titus County, Franklin County and Hopkins County, Texas;

 

  •   Martin Lake Unit 1 shall mean the approximately 750 megawatt (net load)
lignite/coal fired power generation facility, excluding mining properties, known
as “Martin Lake Unit 1” being operated and owned by Luminant Generation Company
LLC in Panola County and Rusk County, Texas;

 

  •   Martin Lake Unit 2 shall mean the approximately 750 megawatt (net load)
lignite/coal fired power generation facility, excluding mining properties, known
as “Martin Lake Unit 2” being operated and owned by Luminant Generation Company
LLC in Panola County and Rusk County, Texas;

 

  •   Martin Lake Unit 3 shall mean the approximately 750 megawatt (net load)
lignite/coal fired power generation facility, excluding mining properties, known
as “Martin Lake Unit 3” being operated and owned by Luminant Generation Company
LLC in Panola County and Rusk County, Texas;

 

  •   Oak Grove Unit 1 shall mean the approximately 800 megawatt (net load),
lignite coal-fired, power generation facility, excluding mining properties,
known as “Oak Grove Unit 1”, being operated and owned by Oak Grove Management
Company LLC in Robertson County, Texas;

 

  •   Oak Grove Unit 2 shall mean the approximately 800 megawatt (net load),
lignite coal-fired, power generation facility, excluding mining properties,
known as “Oak Grove Unit 2”, being operated and owned by Oak Grove Management
Company LLC in Robertson County, Texas;

 

  •   Sandow Unit 4; and

 

  •   Sandow Unit 5 shall mean the approximately 580 megawatt (net load),
lignite coal fired, circulating fluidized bed power generation facility,
excluding mining properties, known as “Sandow Unit 5” being operated and owned
by Sandow Power Company LLC in Milam County, Texas.

“Benefited Lender” shall have the meaning provided in Section 13.8(a).

“Board” shall mean the Board of Governors of the Federal Reserve System of the
United States (or any successor).

“Borrower” shall have the meaning provided in the preamble to this Agreement.

“Borrowing” shall mean and include (a) the incurrence of one Class and Type of
Loan on a given date having a single Maturity Date and in the case of LIBOR
Loans, the same Interest Period (provided that ABR Loans incurred pursuant to
Section 2.10(b) shall be considered part of any related Borrowing of LIBOR
Loans).

“Budget” shall mean the Borrower and the Guarantors’ consolidated budget
attached hereto as Exhibit M (the “Initial Budget”) setting forth a statement of
cash sources and uses of all free cash flow for the next full 3 calendar months
of the TCEH Debtors following the Interim Order Entry Date, broken down month by
month, including the anticipated uses of the Credit Facilities in such detail as
provided therein, and after such initial 3 calendar month period, at the end of
each fiscal quarter (or, at the election of the Borrower, at the end of each
calendar month or such other earlier period as may be agreed), an updated 3
month statement of the matters set forth above for the subsequent 3 month period
in similar detail, in each case certified as to its reasonableness when made by
an Authorized Officer of the Borrower in the form of Exhibit C.

 

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For the avoidance of doubt, no Budget shall constitute a cap or limitation on
the amount of “Allowed Professional Fees” (as defined in the Orders) payable by
the TCEH Debtors.

“Bundled Payment” shall mean an amount paid or payable by an obligor to a Credit
Party pursuant to a bundled bill, which amount includes both (a) Excluded
Property under clauses (a) or (c) (or both such clauses) of the definition of
such term, and (b) other amounts.

“Bundled Payment Amount” shall mean amounts paid or payable to any Credit Party
and described in clause (b) of the definition of “Bundled Payment”.

“Business Day” shall mean any day excluding Saturday, Sunday and any other day
on which banking institutions in New York City are authorized by law or other
governmental actions to close, and, if such day relates to (a) any interest rate
settings as to a LIBOR Loan, (b) any fundings, disbursements, settlements and
payments in respect of any such LIBOR Loan, or (c) any other dealings pursuant
to this Agreement in respect of any such LIBOR Loan, such day shall be a day on
which dealings in deposits in Dollars are conducted by and between banks in the
London interbank eurodollar market.

“Capital Expenditures” shall mean, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including in
all events all amounts expended or capitalized under Capital Leases) by the
Borrower and the Restricted Subsidiaries during such period that, in conformity
with GAAP, are or are required to be included as capital expenditures on a
consolidated statement of cash flows of the Borrower.

“Capital Lease” shall mean, as applied to the Borrower and the Restricted
Subsidiaries, any lease of any property (whether real, personal or mixed) by the
Borrower or any Restricted Subsidiary as lessee that, in conformity with GAAP,
is, or is required to be, accounted for as a capital lease on the balance sheet
of the Borrower; provided, however, that, notwithstanding anything to the
contrary in this Agreement or in any other Credit Document, any leases that were
not capital leases when entered into but are recharacterized as capital leases
due to a change in accounting rules after the Closing Date shall for all
purposes of this agreement not be treated as Capital Leases.

“Capitalized Lease Obligations” shall mean, as applied to the Borrower and the
Restricted Subsidiaries at the time any determination is to be made, the amount
of the liability in respect of a Capital Lease that would at such time be
required to be capitalized and reflected as a liability on the balance sheet
(excluding the footnotes thereto) of the Borrower in accordance with GAAP, and
the Stated Maturity thereof shall be the date of the last payment of rent or any
other amount due under such Capital Lease prior to the first date upon which
such Capital Lease may be prepaid by the lessee without payment of a penalty;
provided, however, that, notwithstanding anything to the contrary in this
Agreement or in any other Credit Document, any obligations that were not
required to be included on the balance sheet of the Borrower as capital lease
obligations when incurred but are recharacterized as capital lease obligations
due to a change in accounting rules after the Closing Date shall for all
purposes of this Agreement not be treated as Capitalized Lease Obligations.

“Capitalized Software Expenditures” shall mean, for any period, the aggregate of
all expenditures (whether paid in cash or accrued as liabilities) by the
Borrower and the Restricted Subsidiaries during such period in respect of
purchased software or internally developed software and software enhancements
that, in conformity with GAAP are or are required to be reflected as capitalized
costs on the consolidated balance sheet of the Borrower.

 

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“Carve Out” shall have the meaning assigned to such term in the Orders (and
shall exclude, for the avoidance of doubt, cash or other amounts of cash
equivalents on deposit to cash collateralize Letters of Credit (including cash
in the RCT L/C Collateral Accounts or General L/C Collateral Accounts)).

“Case” and “Cases” shall each have the meaning assigned in the Recitals hereto.

“Cash Collateral Account” shall mean a blocked deposit account under the sole
dominion and control of the Collateral Agent, and otherwise established in a
manner reasonably satisfactory to the Collateral Agent.

“Cash Management Agreement” shall mean any agreement or arrangement to provide
Cash Management Services.

“Cash Management Bank” shall mean any Person that either (x) at the time it
enters into a Cash Management Agreement or provides Cash Management Services or
(y) on the Closing Date, is a Lender or an Affiliate of a Lender, in its
capacity as a party to such Cash Management Agreement or a provider of such Cash
Management Services.

“Cash Management Obligations” shall mean obligations owed by the Borrower or any
Restricted Subsidiary to any Cash Management Bank in connection with, or in
respect of, any Cash Management Services or under any Cash Management Agreement.

“Cash Management Order” shall mean that certain Order (A) Authorizing the
Debtors To (I) Continue Using Their Existing Cash Management System, (II)
Maintain Existing Bank Accounts and Business Forms, and (III) Continue Using
Certain Investment Accounts, (B) Authorizing Continued Intercompany Transactions
and Netting of Intercompany Claims, and (C) Granting Postpetition Intercompany
Claims Administrative Expense Priority [Docket No. 304].

“Cash Management Services” shall mean treasury, depository, overdraft, credit or
debit card, purchase card, electronic funds transfer (including automated
clearing house fund transfer services) and other cash management services.

“Change in Law” shall mean (a) the adoption of any Applicable Law after the
Closing Date, (b) any change in any Applicable Law or in the interpretation or
application thereof by any Governmental Authority after the Closing Date or
(c) compliance by any party with any guideline, request, directive or order
issued or made after the Closing Date by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law);
provided, that notwithstanding anything herein to the contrary, (x) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines or directives thereunder or issued in connection therewith and
(y) all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Change of Control” shall mean and be deemed to have occurred if, at any time,
Parent Guarantor shall cease to own directly 100% of the Stock and Stock
Equivalents of the Borrower.

 

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“Chapter 11” shall have the meaning provided in the preamble to this Agreement.

“Citi” shall mean Citigroup Global Markets Inc.

“Class”, when used in reference to any Loan or Borrowing, shall refer to whether
such Loan, or the Loans comprising such Borrowing, is a Revolving Credit Loan, a
Term Loan, a Delayed-Draw Term Loan or an Incremental Term Loan and, when used
in reference to any Commitment, refers to whether such Commitment is a Term Loan
Commitment, a Delayed-Draw Term Loan Commitment, a Revolving Credit Commitment
or an Incremental Term Loan Commitment.

“Closing Date” shall mean the first date following the Interim Order Entry Date
on which the conditions precedent set forth in Section 6 and in Sections 7.1 and
7.2 shall have been satisfied or waived in accordance with Section 13.1 hereof
(which in no event shall be more than five (5) Business Days following the
Interim Order Entry Date (or such later date as the Administrative Agent and the
Required Lenders may agree in their sole discretion)).

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time. Section references to the Code are to the Code, as in effect on the
Closing Date, and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.

“Co-Documentation Agents” shall mean Barclays Bank PLC, Royal Bank of Canada and
Union Bank, N.A., as documentation agents for the Lenders under this Agreement
and the other Credit Documents.

“Collateral” shall mean all property pledged, mortgaged or purported to be
pledged or mortgaged pursuant to the Security Documents.

“Collateral Agent” shall mean, Citibank, N.A., in its capacity as collateral
agent for the Secured Parties under this Agreement and the Security Documents,
or any successor collateral agent appointed pursuant hereto.

“Commitment Letter” shall mean the commitment letter, dated April 28, 2014,
among the Borrower and the Joint Lead Arrangers.

“Commitments” shall mean, with respect to each Lender (to the extent
applicable), such Lender’s Revolving Credit Commitment, New Revolving Credit
Commitment, Incremental Term Loan Commitment, Term Loan Commitment or
Delayed-Draw Term Loan Commitment, and with respect to each Letter of Credit
Issuer, such Letter of Credit Issuer’s General Letter of Credit Commitment or
RCT Letter of Credit Commitment.

“Ad Hoc TCEH Committee” shall have the meaning given therefor in the
Restructuring Term Sheet.

“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. 1 et
seq.), as amended from time to time, and any successor statute.

“Commodity Hedging Agreement” shall mean any agreement (including each
confirmation pursuant to any Master Agreement) or transaction providing for one
or more swaps, caps, collars, floors, futures, options, spots, forwards,
derivative, any physical or financial commodity contracts or agreements, power
purchase or sale agreements, fuel purchase or sale agreements, environmental
credit purchase or sale agreements, power transmission agreements, ancillary
service agreements, commodity

 

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transportation agreements, fuel storage agreements, weather derivatives, netting
agreements (including Netting Agreements), capacity agreements or commercial or
trading agreements, each with respect to the purchase, sale or exchange of (or
the option to purchase, sell or exchange), transmission, transportation,
storage, distribution, processing, lease or hedge of, any Covered Commodity,
price or price indices for any such Covered Commodity or services or any other
similar derivative agreements, and any other similar agreements.

“Communications” shall have the meaning provided in Section 13.17(a).

“Confidential Information” shall have the meaning provided in Section 13.16.

“Consolidated Depreciation and Amortization Expense” shall mean, with respect to
the Borrower and the Restricted Subsidiaries for any period, the total amount of
depreciation and amortization expense, including the amortization of deferred
financing fees, nuclear fuel costs, depletion of coal or lignite reserves, debt
issuance costs, commissions, fees and expenses and Capitalized Software
Expenditures, of the Borrower and the Restricted Subsidiaries for such period on
a consolidated basis and otherwise determined in accordance with GAAP.

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for
such period, plus:

(a) without duplication and to the extent deducted (and not added back) in
arriving at such Consolidated Net Income, the sum of the following amounts for
the Borrower and the Restricted Subsidiaries for such period:

(i) Consolidated Interest Expense (including (x) net losses on Hedging
Obligations or other derivative instruments entered into for the purpose of
hedging interest rate risk and (y) costs of surety bonds in connection with
financing activities in each case to the extent included in Consolidated
Interest Expense), together with items excluded from Consolidated Interest
Expense pursuant to clause (1)(u), (v), (w), (x), (y) and (z) of the definition
thereof,

(ii) provision for taxes based on income or profits or capital gains, including
federal, foreign, state, franchise, excise, value-added and similar taxes and
foreign withholding taxes (including penalties and interest related to such
taxes or arising from tax examinations) paid or accrued during such period,

(iii) Consolidated Depreciation and Amortization Expense for such period,

(iv) any fees, expenses or charges (other than depreciation or amortization
expense) related to any offering of Stock or Stock Equivalents (including any
Equity Offering), Investment, acquisition (including any Permitted Acquisition),
Disposition, recapitalization or the issuance or incurrence of Indebtedness
permitted to be incurred by the Borrower and the Restricted Subsidiaries
pursuant hereto (including any refinancing transaction or amendment or other
modification of any debt instrument), including (A) such fees, expenses or
charges related to the negotiation, execution and delivery and other
transactions contemplated by this Agreement, the other Credit Documents and any
Permitted Receivables Financing, (B) any amendment or other modification of this
Agreement and the other Credit Documents, (C) any such transaction consummated
prior to the Closing Date and any such transaction undertaken but not completed
and (D) any charges or non-recurring merger costs as a result of any such
transaction;

 

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(v) the amount of any restructuring charge or reserve (including any costs
incurred in connection with acquisitions after the Closing Date and costs
related to the closure and/or consolidation of facilities),

(vi) any other non-cash charges, including any write-offs or write-downs for
such period (provided that if any such non-cash charges represent an accrual or
reserve for potential cash items in any future period, the cash payment in
respect thereof in such future period shall be subtracted from Consolidated
EBITDA to such extent, and excluding amortization of a prepaid cash item that
was paid in a prior period),

(vii) the amount of any minority interest expense consisting of Subsidiary
income attributable to minority equity interests of third parties in any
non-Wholly Owned Subsidiary,

(viii) the amount of management, monitoring, consulting and advisory fees and
related indemnities and expenses paid in such period to (or on behalf of) the
Management Investors to the extent otherwise permitted pursuant to Section 9.9,

(ix) the amount of net cost savings projected by the Borrower in good faith to
be realized as a result of specified actions taken or to be taken prior to or
during such period (which cost savings shall be added to Consolidated EBITDA
until fully realized, shall be subject to certification by management of the
Borrower and shall be calculated on a Pro Forma Basis as though such cost
savings had been realized on the first day of such period), net of the amount of
actual benefits realized during such period from such actions; provided that
(A) such cost savings are reasonably identifiable and factually supportable,
(B) such actions have been taken or are to be taken within 12 months after the
date of determination to take such action and some portion of the benefit is
expected to be realized within 12 months of taking such action, (C) no cost
savings shall be added pursuant to this clause (ix) to the extent duplicative of
any expenses or charges relating to such cost savings that are included in
clause (v) above with respect to such period and (D) the aggregate amount of
cost savings added pursuant to this clause (ix) shall not exceed $150,000,000
for any Test Period (which adjustments may be incremental to any Pro Forma
Adjustments),

(x) the amount of losses on Dispositions of receivables and related assets in
connection with any Permitted Receivables Financing and any losses, costs, fees
and expenses in connection with the early repayment, accelerated amortization,
repayment, termination or other payoff (including as a result of the exercise of
remedies) of any Permitted Receivables Financing,

(xi) any costs or expenses incurred pursuant to any management equity plan or
stock option plan or any other management or employee benefit plan or agreement
or any stock subscription or shareholder agreement, to the extent that such
costs or expenses are funded with cash proceeds contributed to the capital of
the Borrower or net cash proceeds of an issuance of Stock or Stock Equivalents
(other than Disqualified Stock) of the Borrower (or any direct or indirect
parent thereof) solely to the extent that such net cash proceeds are excluded
from the calculation of the Applicable Equity Amount,

(xii) Expenses Relating to a Unit Outage (if positive); provided that the only
Expenses Relating to a Unit Outage that may be included as Consolidated EBITDA
shall be, without duplication, (A) up to $250,000,000 per fiscal year of
Expenses Relating to a

 

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Unit Outage incurred within the first 12 months of any planned or unplanned
outage of any Unit by reason of any action by any regulatory body or other
Governmental Authority or to comply with any Applicable Law, (B) up to
$100,000,000 per fiscal year of Expenses Relating to a Unit Outage incurred
within the first 12 months of any planned outage of any Unit for purposes of
expanding or upgrading such Unit and (C) solely for the purposes of calculating
“Consolidated EBITDA” for purposes of Section 10.9, all Expenses Relating to a
Unit Outage incurred within the first 12 months of any unplanned outage of any
Unit,

(xiii) solely for the purposes of calculating “Consolidated EBITDA” for purposes
of Section 10.9, the proceeds of any business interruption insurance and,
without duplication of such amounts, all EBITDA Lost as a Result of a Unit
Outage and all EBITDA Lost as a Result of a Grid Outage less, in all such cases,
the absolute value of Expenses Relating to a Unit Outage (if negative); provided
that the amount calculated pursuant to this clause (xiii) shall not be less than
zero,

(xiv) restructuring-related or other similar charges, fees, costs, commissions
and expenses or other charges incurred during such period in connection with
this Agreement, the other Credit Documents, the Credit Facilities, the Cases,
any reorganization plan in connection with the Cases, any Exit Credit Agreements
and Exit Facilities, and any and all transactions contemplated by the foregoing,
including the write-off of any receivables, the termination or settlement of
executory contracts, professional and accounting costs fees and expenses,
management incentive, employee retention or similar plans (in each case to the
extent such plan is approved by the Bankruptcy Court to the extent required),
litigation costs and settlements, asset write-downs, income and gains recorded
in connection with the corporate reorganization of the TCEH Debtors,

(xv) unusual or non-recurring charges (including unusual or non-recurring
expenses), severance, relocation costs, consolidation and closing costs,
business optimization costs, transition costs, restructuring costs, signing,
retention or completion bonuses, and curtailments or modifications to pension
and post-retirement employee benefit plans for such period,

(xvi) any impairment charge or asset write-off or write-down including
impairment charges or asset write-offs or write-downs related to intangible
assets, long-lived assets and Investments in debt and equity securities, in each
case pursuant to GAAP, and the amortization of intangibles arising pursuant to
GAAP,

(xvii) cash receipts (or any netting arrangements resulting in increased cash
receipts) not added in arriving at Consolidated EBITDA or Consolidated Net
Income in any period to the extent the non-cash gains relating to such receipts
were deducted in the calculation of Consolidated EBITDA pursuant to paragraph
(b) below for any previous period and not added, and

(xviii) to the extent covered by insurance and actually reimbursed, or, so long
as the Borrower has made a determination that there exists reasonable evidence
that such amount will in fact be reimbursed by the insurer and only to the
extent that such amount is (i) not denied by the applicable carrier in writing
within 180 days and (ii) in fact reimbursed within 365 days of the date of such
evidence (with a deduction for any amount so added back to the extent not so
reimbursed within 365 days), expenses with respect to liability or casualty
events or business interruption, less

 

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(b) without duplication and to the extent included in arriving at such
Consolidated Net Income for the Borrower and the Restricted Subsidiaries, the
sum of the following amounts for such period:

(i) non-cash gains increasing Consolidated Net Income for such period (excluding
any non-cash gain to the extent it represents the reversal of an accrual or
reserve for a potential cash item that reduced Consolidated Net Income or
Consolidated EBITDA in any prior period),

(ii) unusual or non-recurring gains,

(iii) cash expenditures (or any netting arrangements resulting in increased cash
expenditures) not deducted in arriving at Consolidated EBITDA or Consolidated
Net Income in any period to the extent non-cash losses relating to such
expenditures were added in the calculation of Consolidated EBITDA pursuant to
paragraph (a) above for any previous period and not deducted, and

(iv) the amount of any minority interest income consisting of Subsidiary losses
attributable to minority equity interests of third parties in any non-Wholly
Owned Subsidiary,

in each case, as determined on a consolidated basis for the Borrower and the
Restricted Subsidiaries in accordance with GAAP; provided that

(i) to the extent included in Consolidated Net Income, there shall be excluded
in determining Consolidated EBITDA any gain or loss resulting in such period
from currency translation gains and losses related to currency remeasurements of
Indebtedness or intercompany balances (including the net loss or gain resulting
from Hedging Obligations for currency exchange risk),

(ii) there shall be included in determining Consolidated EBITDA for any period,
without duplication, (A) the Acquired EBITDA of any Person or business, or
attributable to any property or asset, acquired by the Borrower or any
Restricted Subsidiary during such period (but not the Acquired EBITDA of any
related Person or business or any Acquired EBITDA attributable to any assets or
property, in each case to the extent not so acquired) to the extent not
subsequently sold, transferred, abandoned or otherwise disposed by the Borrower
or such Restricted Subsidiary (each such Person, business, property or asset
acquired (including pursuant to the Transactions) and not subsequently so
disposed of, an “Acquired Entity or Business”) and the Acquired EBITDA of any
Unrestricted Subsidiary that is converted into a Restricted Subsidiary during
such period (each, a “Converted Restricted Subsidiary”), in each case based on
the actual Acquired EBITDA of such Pro Forma Entity for such period (including
the portion thereof occurring prior to such acquisition or conversion) and
(B) an adjustment in respect of each Pro Forma Entity equal to the amount of the
Pro Forma Adjustment with respect to such Pro Forma Entity for such period
(including the portion thereof occurring prior to such acquisition) as specified
in a Pro Forma Adjustment Certificate and delivered to the Administrative Agent
(for further delivery to the Lenders),

(iii) [Reserved],

 

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(iv) to the extent included in Consolidated Net Income, there shall be excluded
in determining Consolidated EBITDA for any period the Disposed EBITDA of any
Person, property, business or asset (other than an Unrestricted Subsidiary)
sold, transferred, abandoned or otherwise disposed of, closed or classified as
discontinued operations by the Borrower or any Restricted Subsidiary during such
period (each such Person, property, business or asset so sold, transferred,
abandoned or otherwise disposed of, or closed or so classified, a “Sold Entity
or Business”), and the Disposed EBITDA of any Restricted Subsidiary that is
converted into an Unrestricted Subsidiary during such period (each, a “Converted
Unrestricted Subsidiary”), in each case based on the actual Disposed EBITDA of
such Sold Entity or Business or Converted Unrestricted Subsidiary for such
period (including the portion thereof occurring prior to such sale, transfer or
disposition, closure, classification or conversion).

Notwithstanding anything to the contrary contained herein, for purposes of
determining Consolidated EBITDA under this Agreement (i) for any period that
includes any of the fiscal quarters ended September 30, 2013, December 31, 2013,
or March 31, 2014, Consolidated EBITDA for such quarter, shall be $500,000,000,
$300,000,000 and $350,000,000, respectively and (ii) for any period that
includes any fiscal month ended April 30, 2014, Consolidated EBITDA for such
month shall be $10,000,000.

“Consolidated Interest Expense” shall mean, with respect to any period, without
duplication, the sum of:

(1) consolidated interest expense of the Borrower and the Restricted
Subsidiaries for such period, to the extent such expense was deducted (and not
added back) in computing Consolidated Net Income (including (a) amortization of
original issue discount resulting from the issuance of Indebtedness at less than
par, (b) all commissions, discounts and other fees and charges owed with respect
to letters of credit, bankers’ acceptances or collateral posting facilities,
(c) non-cash interest payments (but excluding any non-cash interest expense
attributable to the movement in the mark to market valuation of Hedging
Obligations or other derivative instruments pursuant to GAAP), (d) the interest
component of Capitalized Lease Obligations and (e) net payments, if any,
pursuant to interest rate Hedging Obligations with respect to Indebtedness, and
excluding (u) accretion of asset retirement obligations and accretion or accrual
of discounted liabilities not constituting Indebtedness, (v) any expense
resulting from the discounting of any Indebtedness in connection with the
application of purchase accounting, (w) [reserved], (x) amortization of
reacquired Indebtedness, deferred financing fees, debt issuance costs,
commissions, fees and expenses, (y) any expensing of bridge, commitment and
other financing fees and (z) commissions, discounts, yield and other fees and
charges (including any interest expense) related to any Permitted Receivables
Financing); plus

(2) consolidated capitalized interest of (A) the Borrower and the Restricted
Subsidiaries, in each case for such period, whether paid or accrued; less

(3) interest income for such period; plus

(4) all cash dividends or other distributions paid (excluding items eliminated
in consolidation) on any series of Preferred Stock during such period; plus

(5) all cash dividends or other distributions paid (excluding items eliminated
in consolidation) on any series of Disqualified Stock during such period.

 

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For purposes of this definition, interest on a Capitalized Lease Obligation
shall be deemed to accrue at an interest rate reasonably determined by such
Person to be the rate of interest implicit in such Capitalized Lease Obligation
in accordance with GAAP.

“Consolidated Net Income” shall mean, for any period, the net income (loss) of
the Borrower and the Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, excluding, without duplication,

(a) any after-tax effect of extraordinary losses and gains for such period,

(b) Transaction Expenses,

(c) the cumulative effect of a change in accounting principles during such
period,

(d) any after-tax effect of income (or loss) from disposed, abandoned or
discontinued operations and any net after-tax gains or losses on disposal of
disposed, abandoned, transferred, closed or discontinued operations,

(e) any after-tax effect of gains or losses (less all fees and expenses relating
thereto) attributable to asset dispositions or abandonments other than in the
ordinary course of business, as determined in good faith by the Borrower,

(f) any income (or loss) during such period of any Person that is an
Unrestricted Subsidiary, and any income (or loss) during such period of any
Person that is not a Subsidiary or that is accounted for by the equity method of
accounting; provided that the Consolidated Net Income of the Borrower and the
Restricted Subsidiaries shall be increased by the amount of dividends or
distributions or other payments that are actually paid in cash (or to the extent
converted into cash) to the Borrower or any Restricted Subsidiary during such
period,

(g) solely for the purpose of determining the Applicable Amount, any income (or
loss) during such period of any Restricted Subsidiary (other than any Credit
Party) to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of its net income is not at the date
of determination wholly permitted without any prior governmental approval or an
order of the Bankruptcy Court (which has not been obtained) or, directly or
indirectly, by the operation of the terms of its Organizational Documents or any
agreement, instrument or Applicable Law applicable to that Restricted Subsidiary
or its stockholders, unless such restriction with respect to the payment of
dividends or similar distributions has been legally waived (in each case, other
than restrictions pursuant to this Agreement); provided that Consolidated Net
Income of the Borrower and the Restricted Subsidiaries will be increased by the
amount of dividends or other distributions or other payments actually paid in
cash (or to the extent converted into cash) to the Borrower or any Restricted
Subsidiary during such period, to the extent not already included therein,

(h) effects of all adjustments (including the effects of such adjustments pushed
down to the Borrower and the Restricted Subsidiaries) in the Borrower’s
consolidated financial statements pursuant to GAAP resulting from the
application of purchase accounting in relation to the Transactions or any
consummated acquisition whether consummated before or after the Closing Date or
the amortization or write-off of any amounts thereof, net of taxes,

 

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(i) any net after-tax effect of income (or loss) for such period attributable to
the early extinguishment of Indebtedness (other than Hedging Obligations, but
including, for the avoidance of doubt, debt exchange transactions),

(j) any net after-tax effect of any unrealized income (or loss) for such period
attributable to Hedging Obligations or other derivative instruments,

(k) any impairment charge or asset write-off or write-down including impairment
charges or asset write-offs or write-downs related to intangible assets,
long-lived assets and investments in debt and equity securities to the extent
relating to changes in commodity prices, in each case pursuant to GAAP to the
extent offset by gains from Hedging Obligations,

(l) any non-cash compensation expense recorded from grants of stock appreciation
or similar rights, stock options, restricted stock or other rights, and any cash
charges associated with the rollover, acceleration or payout of Stock or Stock
Equivalents by management of the Borrower or any of its direct or indirect
parent companies in connection with the Transactions, and

(m) accruals and reserves established or adjusted within twelve months after the
Closing Date that are so required to be established as a result of the
Transactions in accordance with GAAP or changes as a result of adoption of or
modification of accounting policies during such period.

“Consolidated Superpriority Secured Net Debt” shall mean, as of any date of
determination as determined in respect of the Borrower and its Restricted
Subsidiaries for such period on a consolidated basis in a balance sheet in
accordance with GAAP, (a) all Indebtedness of the types described in clause (a),
clause (b), clause (d) (but, in the case of clause (d), only to the extent of
any unreimbursed drawings under any RCT Letter of Credit or General Letter of
Credit) and clause (f) of the definition thereof, in each case, solely to the
extent consisting of the outstanding Term Loans, Delayed-Draw Term Loans and the
Revolving Credit Exposure (determined for this purpose as if the Revolving
Credit Commitment of each Lender outstanding from time to time has been fully
drawn), minus (b) the aggregate amount of all Unrestricted Cash.

“Consolidated Superpriority Secured Net Debt to Consolidated EBITDA Ratio” shall
mean, as of any date of determination, the ratio of (a) Consolidated
Superpriority Secured Net Debt as of such date of determination to
(b) Consolidated EBITDA for such Test Period.

“Consolidated Total Assets” shall mean, as of any date of determination, the
amount that would, in conformity with GAAP, be set forth opposite the caption
“total assets” (or any like caption), after intercompany eliminations, on a
consolidated balance sheet of the Borrower and the Restricted Subsidiaries at
such date.

“Contingent Obligation” shall mean indemnification Obligations and other similar
contingent Obligations for which no claim has been made in writing (but
excluding, for the avoidance of doubt, amounts available to be drawn under
Letters of Credit).

“Continuing Director” shall mean, at any date, an individual (a) who is a member
of the board of directors of the Borrower on the Closing Date, (b) who, as of
the date of determination, has been a member of such board of directors for at
least the twelve preceding months, (c) who has been nominated to be a member of
such board of directors, directly or indirectly, by a Permitted Holder or
Persons nominated by a Permitted Holder or (d) who has been nominated to be a
member of such board of directors by a majority of the other Continuing
Directors then in office.

 

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“Contractual Requirement” shall have the meaning provided in Section 8.3.

“Converted Restricted Subsidiary” shall have the meaning provided in the
definition of the term “Consolidated EBITDA”.

“Converted Unrestricted Subsidiary” shall have the meaning provided in the
definition of the term “Consolidated EBITDA”.

“Co-Syndication Agents” shall mean Deutsche Bank AG New York Branch, Bank of
America, N.A. and Morgan Stanley Senior Funding, Inc., as syndication agents for
the Lenders under this Agreement and the other Credit Documents.

“Covered Commodity” shall mean any energy, electricity, generation capacity,
power, heat rate, congestion, natural gas, nuclear fuel (including enrichment
and conversion), diesel fuel, fuel oil, other petroleum-based liquids, coal,
lignite, weather, emissions and other environmental credits, waste by-products,
renewable energy credit, or any other energy related commodity or service
(including ancillary services and related risks (such as location basis)).

“Credit Documents” shall mean this Agreement, the Guarantee, the Security
Documents, each Letter of Credit and any promissory notes issued by the Borrower
hereunder.

“Credit Event” shall mean and include the making (but not the conversion or
continuation) of a Loan and the issuance of a Letter of Credit.

“Credit Facility” shall mean any of the Term Loan Facility, the Delayed-Draw
Term Facility, any Incremental Term Loan Facility and the Revolving Credit
Facility.

“Credit Party” shall mean each of Parent Guarantor, the Borrower, each of the
Subsidiary Guarantors and each other Subsidiary of the Borrower that is a party
to a Credit Document.

“CT Lease Indebtedness” shall mean obligations owing by Parent Guarantor (or
certain trusts directly or indirectly beneficially owned by Parent Guarantor)
under Indebtedness issued by such trusts and secured by the combustion turbines
owned by such trusts that are subject to the CT Leases.

“CT Leases” shall mean (a) the leveraged lease with respect to combustion
turbines at the Permian Basin and DeCordova facilities (with approximately
$35,000,000 of 7.48% trust issued debt outstanding as of March 31, 2014) and
(b) the leveraged lease with respect to combustion turbines at the Morgan Creek
and Permian Basin facilities (with approximately $4,000,000 of 7.46% trust
issued debt outstanding as of March 31, 2014).

“Cumulative Consolidated Net Income” shall mean, for any period, Consolidated
Net Income for such period, taken as a single accounting period. Cumulative
Consolidated Net Income may be a positive or negative amount.

“DBSI” shall mean Deutsche Bank Securities Inc.

“Debtor Relief Laws” shall mean the Bankruptcy Code and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Applicable Laws of the United States or other applicable
jurisdictions from time to time in effect.

 

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“Deemed Cash” shall have the meaning provided in Section 10.4(b).

“Default” shall mean any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.

“Default Rate” shall have the meaning provided in Section 2.8(d).

“Defaulting Lender” shall mean any Lender with respect to which a Lender Default
is in effect.

“Deferred Net Cash Proceeds” shall have the meaning provided such term in the
definition of “Net Cash Proceeds”.

“Deferred Net Cash Proceeds Payment Date” shall have the meaning provided such
term in the definition of “Net Cash Proceeds”.

“Delayed-Draw Term Facility” shall mean the facility providing for the
Delayed-Draw Term Loans.

“Delayed-Draw Term Facility Reduction Amount” shall mean the sum of (1) the
aggregate amount of voluntary reductions to the Delayed-Draw Term Loan
Commitment made pursuant to Sections 4.2 or 4.3 and (2) the amount of Available
Delayed-Draw Term Loan Commitments permanently terminated on the Delayed-Draw
Termination Date.

“Delayed-Draw Term Loan Commitment” shall mean, (a) in the case of each Lender
that is a Lender on the date hereof, the amount set forth opposite such Lender’s
name on Schedule 1.1(a) as such Lender’s “Delayed-Draw Term Loan Commitment” and
(b) in the case of any Lender that becomes a Lender after the date hereof, the
amount specified as such Lender’s “Delayed Draw Term Loan Commitment” in the
Assignment and Acceptance pursuant to which such Lender assumed a portion of the
Total Delayed-Draw Term Loan Commitment, in each case as the same may be changed
from time to time pursuant to the terms hereof. The aggregate amount of
Delayed-Draw Term Loan Commitments outstanding as of the Closing Date is
$1,100,000,000.

“Delayed-Draw Term Loan Lender” shall mean each Lender holding a Delayed-Draw
Term Loan.

“Delayed-Draw Term Loans” shall have the meaning provided in Section 2.1(b). As
set forth in Section 2.1(b)(ii), immediately after any Delayed-Draw Term Loans
are funded pursuant to Section 2.1(b), such Loans will automatically be deemed
to constitute Term Loans, and to not constitute Delayed-Draw Term Loans, for all
purposes of this Credit Agreement and the other Credit Documents (except for
purposes of the definitions of “Available Delayed-Draw Term Loan Commitment” and
“Available Term Loan Commitment”).

“Delayed-Draw Termination Date” shall mean the date that is 90 days after the
Closing Date.

“Delayed-Draw Ticking Fee” shall have the meaning provided in Section 4.1(e).

 

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“Designated Non-Cash Consideration” shall mean the fair market value of non-cash
consideration received by the Borrower or any Restricted Subsidiary in
connection with a Disposition pursuant to Section 10.4(b) or Section 10.4(m)
that is designated as Designated Non-Cash Consideration pursuant to a
certificate of an Authorized Officer of the Borrower, setting forth the basis of
such valuation (which amount will be reduced by the fair market value of the
portion of the non-cash consideration converted to cash within 180 days
following the consummation of the applicable Disposition).

“Disclosure Statement” shall mean a Disclosure Statement that is in form and
substance consistent in all material respects with, and as it may be amended in
accordance with the terms of, the Restructuring Support Agreement and the
Restructuring Term Sheet, and is in form and substance reasonably satisfactory
to the Administrative Agent (provided, however, that with respect to provisions
of the Disclosure Statement that relate to the payment of the Credit Facilities,
such provisions must be in form and substance satisfactory to the Administrative
Agent).

“Disposed EBITDA” shall mean, with respect to any Sold Entity or Business or any
Converted Unrestricted Subsidiary for any period, the amount for such period of
Consolidated EBITDA of such Sold Entity or Business or Converted Unrestricted
Subsidiary (determined as if references to the Borrower and the Restricted
Subsidiaries in the definition of Consolidated EBITDA were references to such
Sold Entity or Business or Converted Unrestricted Subsidiary and its respective
Subsidiaries), all as determined on a consolidated basis for such Sold Entity or
Business or Converted Unrestricted Subsidiary, as the case may be.

“Disposition” shall have the meaning provided in Section 10.4.

“Disqualified Institutions” shall mean (a) any company engaged principally in
the business of energy or power generation and/or transmission and identified in
writing to the Administrative Agent by the Borrower from time to time, (b) any
company whose principal business is that of an energy or power merchant and
identified in writing to the Administrative Agent by the Borrower from time to
time, (c) any Person identified in writing to the Administrative Agent by the
Borrower on or prior to April 28, 2014 (including any such Person’s affiliates
that are clearly identifiable on the basis of such affiliates’ names) and
(d) any Defaulting Lender. The list of all Disqualified Institutions shall be
made available to all Lenders by posting such list to the Platform. Upon the
identification in writing by the Borrower to the Administrative Agent of any
additional Disqualified Institutions pursuant to clause (a) or (b) above, the
Administrative Agent shall promptly post such addition to the list to the
Platform; provided that any additional Person so identified shall not be deemed
a Disqualified Institution until such time as such addition to the list is
posted to the Platform.

“Disqualified Stock” shall mean, with respect to any Person, any Stock or Stock
Equivalents of such Person which, by its terms, or by the terms of any security
into which it is convertible or for which it is putable or exchangeable, or upon
the happening of any event, matures or is mandatorily redeemable (other than
solely for Stock or Stock Equivalents that is not Disqualified Stock), other
than as a result of a change of control, asset sale or similar event so long as
any rights of the holders thereof upon the occurrence of such change of control,
asset sale or similar event shall be subject to the prior repayment in full of
the Loans and all other Obligations (other than Hedging Obligations under
Secured Hedging Agreements and/or Secured Commodity Hedging Agreements, Cash
Management Obligations under Secured Cash Management Agreements or Contingent
Obligations and the termination of the Commitments), pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof
(other than as a result of a change of control, asset sale or similar event so
long as any rights of the holders thereof upon the occurrence of such change of
control, asset sale or similar event shall be subject to the prior repayment in
full of the Loans and all other Obligations (other than Hedging Obligations
under Secured Hedging Agreements and/or Secured Commodity Hedging Agreements,
Cash

 

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Management Obligations under Secured Cash Management Agreements or Contingent
Obligations and the termination of the Commitments), in whole or in part, in
each case prior to the date that is ninety-one (91) days after the Latest
Maturity Date; provided that if such Stock or Stock Equivalents are issued to
any plan for the benefit of employees of the Borrower or any of its Subsidiaries
or by any such plan to such employees, such Stock or Stock Equivalents shall not
constitute Disqualified Stock solely because it may be required to be
repurchased by the Borrower (or any direct or indirect parent company thereof)
or any of its Subsidiaries in order to satisfy applicable statutory or
regulatory obligations; provided, further, that any Stock or Stock Equivalents
held by any present or former employee, officer, director, manager or
consultant, of the Borrower, any of its Subsidiaries or any of its direct or
indirect parent companies or any other entity in which the Borrower or any
Restricted Subsidiary has an Investment and is designated in good faith as an
“affiliate” by the Board of Directors of the Borrower, in each case pursuant to
any stockholders’ agreement, management equity plan or stock incentive plan or
any other management or employee benefit plan or agreement shall not constitute
Disqualified Stock solely because it may be required to be repurchased by the
Borrower or any of its Subsidiaries.

“dividends” shall have the meaning provided in Section 10.6.

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

“Domestic Subsidiary” shall mean each Subsidiary of the Borrower that is
organized under the laws of the United States or any state thereof, or the
District of Columbia.

“Drawing” shall have the meaning provided in Section 3.4(b).

“EBITDA Lost as a Result of a Grid Outage” shall mean, to the extent that any
transmission or distribution lines go out of service, the revenue not actually
earned by the Borrower and its Restricted Subsidiaries that would otherwise have
been earned with respect to any Unit within the first 12 month period that such
transmission or distribution lines were out of service had such transmission or
distribution lines not been out of service during such period.

“EBITDA Lost as a Result of a Unit Outage” shall mean, to the extent that any
Unit is out of service as a result of any unplanned outage or shut down, the
revenue not actually earned by the Borrower and its Restricted Subsidiaries that
would otherwise have been earned with respect to any such Unit during the first
12 month period of any such outage or shut down had such Unit not been out of
service during such period.

“EFIH” shall mean Energy Future Intermediate Holding Company LLC, a Delaware
limited liability company.

“Employee Benefit Plan” shall mean an employee benefit plan (as defined in
Section 3(3) of ERISA), other than a Foreign Plan, that is maintained or
contributed to by the Ultimate Parent, Parent Guarantor, Borrower or any
Subsidiary (or, with respect to an employee benefit plan subject to Title IV of
ERISA, any ERISA Affiliate).

“Environmental CapEx” shall mean Capital Expenditures deemed reasonably
necessary by the Borrower or any Restricted Subsidiary or otherwise undertaken
voluntarily by the Borrower or any Restricted Subsidiary, to comply with, or in
anticipation of having to comply with, applicable Environmental Laws or Capital
Expenditures otherwise undertaken voluntarily by the Borrower or any Restricted
Subsidiary in connection with environmental matters.

 

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“Environmental Claims” shall mean any and all actions, suits, proceedings,
orders, decrees, demands, demand letters, claims, liens, notices of
noncompliance, violation or potential responsibility or investigation (other
than reports prepared by or on behalf of the Ultimate Parent, Parent Guarantor,
the Borrower or any other Subsidiary of the Ultimate Parent (a) in the ordinary
course of such Person’s business or (b) as required in connection with a
financing transaction or an acquisition or disposition of Real Estate) or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereinafter, “Claims”),
including (i) any and all Claims by Governmental Authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law and (ii) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief relating to the presence, release or threatened release into
the environment of Hazardous Materials or arising from alleged injury or threat
of injury to human health or safety (to the extent relating to human exposure to
Hazardous Materials), or to the environment, including ambient air, indoor air,
surface water, groundwater, land surface and subsurface strata and natural
resources such as wetlands.

“Environmental Law” shall mean any applicable Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code and rule of common law now or,
with respect to any post-Closing Date requirements of the Credit Documents,
hereafter in effect and in each case as amended, and any binding judicial or
administrative interpretation thereof, including any binding judicial or
administrative order, consent decree or judgment, relating to the protection of
the environment, including ambient air, indoor air, surface water, groundwater,
land surface and subsurface strata and natural resources such as wetlands, or to
human health or safety (to the extent relating to human exposure to Hazardous
Materials), or Hazardous Materials.

“Equity Offering” shall mean any public or private sale of common stock or
Preferred Stock of the Borrower or any of its direct or indirect parent
companies (excluding Disqualified Stock), other than: (a) public offerings with
respect to the Borrower’s or any direct or indirect parent company’s common
stock registered on Form S-8, and (b) issuances to any Subsidiary of the
Borrower or any such parent.

“ERCOT” shall mean the Electric Reliability Council of Texas or any other entity
succeeding thereto.

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

“ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA)
that together with the Borrower or any Subsidiary of the Borrower would be
deemed to be a “single employer” within the meaning of Section 414(b) or (c) of
the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the
Code, is treated as a single employer under Section 414 of the Code.

“Event of Default” shall have the meaning provided in Section 11.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
rules and regulations promulgated thereunder.

“Exchange Rate” shall mean on any day, with respect to any currency, the rate at
which such currency may be exchanged into another currency, which shall be the
Historical Exchange Rate on the immediately prior day as determined by OANDA
Corporation and made available on its website at

 

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http://www.oanda.com/convert/fxhistory; provided, that the Administrative Agent
may obtain such spot rate from another financial institution designated by the
Administrative Agent if at the time of any such determination, for any reason,
no such rate is being quoted.

“Excluded Collateral” shall mean (a) Excluded Stock and Stock Equivalents,
(b) Excluded Subsidiaries, (c) Excluded Property and (d) (i) property or assets
subject to capital leases, purchase money obligations and other arrangements
described in Section 10.1(f) to the extent subject to a Lien, in each case
permitted by this Agreement, and the terms of the Indebtedness secured by such
Lien prohibit assignment of, or granting of a security interest in, the
applicable Credit Party’s rights and interests therein (other than to the extent
that any such prohibition would be rendered ineffective pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions) of any relevant jurisdiction or any other Applicable Law), provided,
that immediately upon the repayment of all Indebtedness secured by such Lien,
such property shall no longer constitute “Excluded Collateral” and such Credit
Party shall be deemed to have granted a security interest in all the rights and
interests with respect to such property or assets pursuant to the applicable
Credit Documents, (ii) any assets as to which the Collateral Agent and the
Borrower have reasonably determined (after giving effect to the effectiveness of
the Orders) that the costs or other consequences (including adverse tax
consequences) of providing a security interest in such assets is excessive in
view of the benefits to be gained thereby by the Lenders, (iii) any property
that would otherwise constitute Collateral to the extent (and only to the
extent) that the grant of a security interest therein or perfection of a Lien
thereon pursuant to the applicable Credit Documents would violate any Applicable
Law or regulation (including regulations adopted by Federal Energy Regulatory
Commission and/or the Nuclear Regulatory Commission) applicable to such property
and (iv) the Borrower’s Avoidance Actions (other than, upon entry of the Final
Order, proceeds or property recovered, unencumbered, or otherwise the subject of
successful Avoidance Actions, whether by judgment, settlement or otherwise).

“Excluded Property” shall mean (a) Receivables Facility Assets purported to be
sold, contributed or pledged by any Credit Party that is or becomes a
participant in a Permitted Receivables Financing pursuant to a Permitted
Receivables Financing, (b) collections or proceeds of Receivables Facility
Assets repurchased by any Credit Party that is or becomes a participant in a
Permitted Receivables Financing pursuant to the provisions of a Permitted
Receivables Financing, while such collections or proceeds are in a lockbox,
collateral account or similar account established pursuant to such Permitted
Receivables Financing to receive collections of Receivables Facility Assets or
are in an account subject to an intercreditor agreement related to Transition
Charges or Transition Property, (c) amounts payable to any Credit Party that
such Credit Party is collecting on behalf of Persons that are not Credit
Parties, including Transition Property and Transition Charges, and any customer
deposits related to the foregoing, and (d) any Bundled Payment Amounts, while
such Bundled Payment Amounts are in a lockbox, collateral account or similar
account established pursuant to a Permitted Receivables Financing to receive
collections of Receivables Facility Assets or are in an account subject to an
intercreditor agreement related to Transition Charges or Transition Property.

“Excluded Stock and Stock Equivalents” shall mean (i) any Stock or Stock
Equivalents with respect to which, in the reasonable judgment of the Collateral
Agent (confirmed in writing by notice to the Borrower and the Administrative
Agent), the cost or other consequences (including any adverse tax or accounting
consequences) of pledging such Stock or Stock Equivalents in favor of the
Secured Parties under the Security Documents shall be excessive in view of the
benefits to be obtained by the Secured Parties therefrom, (ii) solely in the
case of any pledge of Voting Stock of any Foreign Subsidiary or Foreign
Subsidiary Holding Company to secure the Obligations, any Stock or Stock
Equivalents of any class of such Foreign Subsidiary or Foreign Subsidiary
Holding Company in excess of 65% of the outstanding Voting Stock of such class
(such percentage to be adjusted upon any Change in Law as may be required to
avoid adverse U.S. federal income tax consequences to Parent Guarantor, the
Borrower or

 

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any Subsidiary of the Borrower), (iii) any Stock or Stock Equivalents to the
extent the pledge thereof would violate any Applicable Law, (iv) in the case of
any Stock or Stock Equivalents of any Subsidiary of the Borrower that is not
Wholly Owned by the Borrower or any Subsidiary Guarantor at the time such
Subsidiary becomes a Subsidiary, any Stock or Stock Equivalents of each such
Subsidiary to the extent (A) that a pledge thereof to secure the Obligations is
prohibited by any applicable Contractual Requirement (other than customary
non-assignment provisions which are ineffective under the Uniform Commercial
Code or other Applicable Law or any Organizational Document), (B) any
Contractual Requirement prohibits such a pledge without the consent of any other
party; provided that this clause (B) shall not apply if (x) such other party is
a Credit Party or Wholly Owned Subsidiary or (y) consent has been obtained to
consummate such pledge (it being understood that the foregoing shall not be
deemed to obligate the Borrower or any Subsidiary of the Borrower to obtain any
such consent)) and for so long as such Contractual Requirement or replacement or
renewal thereof is in effect, or (C) a pledge thereof to secure the Obligations
would give any other party (other than a Credit Party or Wholly Owned
Subsidiary) to any contract, agreement, instrument or indenture governing such
Stock or Stock Equivalents the right to terminate its obligations thereunder
(other than customary non-assignment provisions which are ineffective under the
Uniform Commercial Code or other applicable law), (v) the Stock or Stock
Equivalents of any Subsidiary of a Foreign Subsidiary, (vi) any Stock or Stock
Equivalents of any Subsidiary to the extent that (A) the pledge of such Stock or
Stock Equivalents would result in adverse tax or accounting consequences to the
Borrower or any Subsidiary as reasonably determined by the Borrower and (B) such
Stock or Stock Equivalents have been identified in writing to the Collateral
Agent by an Authorized Officer of the Borrower, (vii) the Stock or Stock
Equivalents of any Unrestricted Subsidiary or Immaterial Subsidiary and
(viii) the Stock or Stock Equivalents of any Receivables Entity if, after using
commercially reasonable efforts, the Borrower is unable to obtain the consent of
the funding sources under the applicable Permitted Receivables Financing to the
pledge of such Stock or Stock Equivalents. Notwithstanding the foregoing, the
term “Excluded Stock and Stock Equivalents” shall not in any event include the
Stock or Stock Equivalents of any Subsidiary that is a debtor and
debtor-in-possession in the Cases.

“Excluded Subsidiary” shall mean (a) each Domestic Subsidiary listed on
Schedule 1.1(b) hereto and each future Domestic Subsidiary, in each case, for so
long as any such Subsidiary does not constitute a Material Subsidiary, (b) each
Domestic Subsidiary that is not a Wholly Owned Subsidiary on any date such
Subsidiary would otherwise be required to become a Subsidiary Guarantor pursuant
to the requirements of Section 9.11 (for so long as such Subsidiary remains a
non-Wholly Owned Restricted Subsidiary), (c) any Foreign Subsidiary Holding
Company, (d) each Domestic Subsidiary that is prohibited by any applicable
Contractual Requirement, Applicable Law or Organizational Document from
guaranteeing or granting Liens to secure the Obligations at the time such
Subsidiary becomes a Restricted Subsidiary (and for so long as such restriction
or any replacement or renewal thereof is in effect), (e) each Domestic
Subsidiary that is a Subsidiary of a Foreign Subsidiary, (f) any other Domestic
Subsidiary with respect to which, in the reasonable judgment of the
Administrative Agent (confirmed in writing by notice to the Borrower), the cost
or other consequences (including any adverse tax or accounting consequences) of
guaranteeing the Obligations shall be excessive in view of the benefits to be
obtained by the Secured Parties therefrom, (g) each Unrestricted Subsidiary,
(h) any Foreign Subsidiary, (i) any Receivables Entity and (j) any Subsidiary to
the extent that (A) the guarantee of the Obligations by would result in adverse
tax or accounting consequences and (B) such Subsidiaries have been identified in
writing to the Collateral Agent by an Authorized Officer of the Borrower.
Notwithstanding the foregoing, the term “Excluded Subsidiary” shall not in any
event include any Subsidiary that is a debtor and debtor-in-possession in the
Cases.

“Excluded Swap Obligation” shall mean, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the Guarantee of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
such Swap Obligation (or any Guarantee thereof) is or

 

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becomes illegal or unlawful under the Commodity Exchange Act or any rule,
regulation or order of the Commodity Futures Trading Commission (or the
application or official interpretation of any thereof) by virtue of such
Guarantor’s failure for any reason to constitute an “eligible contract
participant” as defined in the Commodity Exchange Act and the regulations
thereunder at the time the Guarantee of such Guarantor or the grant of such
security interest would otherwise have become effective with respect to such
Swap Obligation but for such Guarantor’s failure to constitute an “eligible
contract participant” at such time.

“Excluded Taxes” shall mean, with respect to any Agent or any Lender, (a) net
income taxes and franchise and excise taxes (imposed in lieu of net income
taxes) imposed on such Agent or Lender, (b) any Taxes imposed on any Agent or
any Lender as a result of any current or former connection between such Agent or
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising from such Agent or Lender having executed, delivered or
performed its obligations or received a payment under, or having been a party to
or having enforced, this Agreement or any other Credit Document), (c) any U.S.
federal withholding tax that is imposed on amounts payable to any Lender under
the law in effect at the time such Lender becomes a party to this Agreement (or
designates a new lending office other than a new lending office designated at
request of the Borrower); provided that this subclause (c) shall not apply to
the extent that (x) the indemnity payments or additional amounts any Lender
would be entitled to receive (without regard to this subclause (c)) do not
exceed the indemnity payment or additional amounts that the person making the
assignment, participation or transfer to such Lender (or designation of a new
lending office by such Lender) would have been entitled to receive in the
absence of such assignment or (y) any Tax is imposed on a Lender in connection
with an interest in any Loan or other obligation that such Lender was required
to acquire pursuant to Section 13.8(a) or that such Lender acquired pursuant to
Section 13.7 (it being understood and agreed, for the avoidance of doubt, that
any withholding tax imposed on a Lender as a result of a Change in Law occurring
after the time such Lender became a party to this Agreement (or designates a new
lending office) shall not be an Excluded Tax),(d) any Tax to the extent
attributable to such Lender’s failure to comply with Sections 5.4(d) and (e) (in
the case of any Non-U.S. Lender) or Section 5.4(h) (in the case of a U.S.
Lender), and (e) any Taxes imposed by FATCA.

“Exit Credit Agreements” shall mean each of the credit agreements for the Exit
Facilities of the reorganized Borrower and consistent in form and substance in
all material respects with the Exit Facility Term Sheet, with such amendments,
modifications, supplements and changes permitted or agreed to pursuant to the
terms of the Restructuring Support Agreement or otherwise.

“Exit Facilities” shall mean, collectively, the credit facilities under the Exit
Credit Agreements.

“Exit Facility Term Sheet” shall mean the term sheet in respect of the Exit
Credit Agreements attached as Exhibit C to the Restructuring Term Sheet.

“Expenses Relating to a Unit Outage” shall mean an amount (which may be
negative) equal to (x) any expenses or other charges as a result of any outage
or shut-down of any Unit, including any expenses or charges relating to
(a) restarting any such Unit so that it may be placed back in service after such
outage or shut-down, (b) purchases of power, natural gas or heat rate to meet
commitments to sell, or offset a short position in, power, natural gas or heat
rate that would otherwise have been met or offset from production generated by
such Unit during the period of such outage or shut-down and (c) starting up,
operating, maintaining and shutting down any other Unit that would not otherwise
have been operating absent such outage or shut-down, including the fuel and
other operating expenses, incurred to start-up, operate, maintain and shut-down
such Unit and that are required during the period of time that

 

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the shut-down or outaged Unit is out of service in order to meet the commitments
of such shut-down or outaged Unit to sell, or offset a short position in, power,
natural gas or heat rate less (y) any expenses or charges not in fact incurred
(including fuel and other operating expenses) that would have been incurred
absent such outage or shut-down.

“Extension Conditions” shall have the meaning provided in the definition of
“Maturity Date”.

“FATCA” shall mean Sections 1471 through 1474 of the Code as of the Closing Date
(or any amended or successor version that is substantively comparable and not
materially more onerous to comply with) and any current or future Treasury
regulations or official administrative interpretations thereof.

“Federal Funds Effective Rate” shall mean, for any day, the weighted average of
the per annum rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers on such day, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York; provided that (a) if such day is not a Business Day, the Federal Funds
Effective Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business Day, and
(b) if no such rate is so published on such next succeeding Business Day, the
Federal Funds Effective Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to the
Administrative Agent on such day on such transactions as determined by the
Administrative Agent.

“Fee Letter” shall mean the fee letter, dated April 28, 2014, among the Borrower
and the Joint Lead Arrangers.

“Fees” shall mean all amounts payable pursuant to, or referred to in,
Section 4.1.

“Final Cash Collateral Order” shall mean a final order of the Bankruptcy Court
entered in the Cases in form and substance satisfactory to the Administrative
Agent on a motion by the TCEH Debtors that is in form and substance satisfactory
to the TCEH Debtors, authorizing and approving on a final basis, among other
things, the matters and provisions in the Interim Cash Collateral Order.

“Final Order” shall mean a final order of the Bankruptcy Court entered in the
Cases in form and substance satisfactory to the Left Lead Arrangers on a motion
by the TCEH Debtors that is in form and substance satisfactory to the Left Lead
Arrangers, authorizing and approving on a final basis, among other things, the
matters and provisions in the Interim Order and the borrowing by the Borrower of
the full amount of the Credit Facilities, as such order or orders may be
extended, amended, supplemented or modified in a manner satisfactory to the Left
Lead Arrangers.

“Final Order Entry Date” shall mean the date that the Final Order is entered by
the Bankruptcy Court in the Cases.

“Financial Advisor” shall mean Millstein & Co., L.P.

“First Day Orders” shall mean all orders entered or to be entered by the
Bankruptcy Court based on the motions identified on Schedule 1.1(d) hereto,
which shall each be in form and substance reasonably satisfactory to the Left
Lead Arrangers (other than the Cash Management Order, the Interim Order, and the
Interim Cash Collateral Order, which shall each be in form and substance
satisfactory to the Left Lead Arrangers).

 

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“Fiscal Year” shall have the meaning provided in Section 9.10.

“Foreign Asset Sale” shall have the meaning provided in Section 5.2(i).

“Foreign Plan” shall mean any employee benefit plan, program, policy,
arrangement or agreement maintained or contributed to by the Borrower or any of
its Subsidiaries with respect to employees employed outside the United States.

“Foreign Recovery Event” shall have the meaning provided in Section 5.2(i).

“Foreign Subsidiary” shall mean each Subsidiary of the Borrower that is not a
Domestic Subsidiary.

“Foreign Subsidiary Holding Company” shall mean any Subsidiary that owns no
material assets other than equity interest (including, for this purpose, any
debt or other instrument treated as equity for U.S. federal income tax purposes)
in one or more (a) Foreign Subsidiaries and/or (b) other Subsidiaries that own
no material assets other than equity interests (including, for this purpose, any
debt or other instrument treated as equity for U.S. federal income tax purposes)
in one or more Foreign Subsidiaries.

“Fronting Fee” shall have the meaning provided in Section 4.1(c).

“Full Availability Date” shall mean the first date following the Final Order
Entry Date on which the conditions precedent set forth in Section 6 and
Section 7 shall have been satisfied or waived in accordance with Section 13.1.

“Fund” shall mean any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course.

“GAAP” shall mean generally accepted accounting principles in the United States
of America, as in effect from time to time; provided, however, that if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the Closing Date in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.

“General L/C Cash Coverage Requirement” shall have the meaning provided in
Section 3.8.

“General L/C Collateral Account” shall mean one or more Cash Collateral Accounts
or securities accounts established pursuant to, and subject to the terms of,
Section 3.8 for the purpose of collateralizing the General L/C Obligations in
respect of General Letters of Credit.

“General L/C Collateral Account Balance” shall mean, at any time, with respect
to any General L/C Collateral Account, the aggregate amount on deposit in such
General L/C Collateral Account. References herein and in the other Credit
Documents to the General L/C Collateral Account Balance shall be deemed to refer
to the General L/C Collateral Account Balance in respect of the applicable
General L/C Collateral Account or to the General L/C Collateral Account Balance
in respect of all General L/C Collateral Accounts, as the context requires.

 

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“General L/C Collateral Account Depositary Bank” shall have the meaning provided
in Section 3.8.

“General L/C Obligations” shall mean, as at any date of determination and
without duplication, the aggregate Stated Amount of all outstanding General
Letters of Credit plus the aggregate principal amount of all Unpaid Drawings
under all General Letters of Credit. For all purposes of this Agreement, if on
any date of determination a General Letter of Credit has expired by its terms
but any amount may still be drawn thereunder by reason of the operation of Rule
3.14 of the ISP, such General Letter of Credit shall be deemed to be
“outstanding” in the amount so remaining available to be drawn.

“General L/C Permitted Investments” shall mean:

(a) any Permitted Investments described in clauses (a) through (g) of the
definition thereof; and

(b) such other securities as agreed to by the TCEH Debtors with the applicable
General Letter of Credit Issuer from time to time.

“General L/C Termination Date” shall mean the Maturity Date.

“General Letter of Credit” shall have the meaning provided in Section 3.1(a)(i).

“General Letter of Credit Commitment” shall mean $800,000,000 (as such amount
may be increased as agreed in writing between the Borrower and the General
Letter of Credit Issuers providing such increased General Letter of Credit
Commitment, and as such amount may be reduced pursuant to Section 4.2(d)).

“General Letter of Credit Issuers” shall mean (a) on the date hereof, Citibank,
N.A. and (b) at any time such Person who shall become a General Letter of Credit
Issuer pursuant to Section 3.6 (it being understood that if any such Person
ceases to be a Lender hereunder, such Person will remain a General Letter of
Credit Issuer with respect to any General Letters of Credit issued by such
Person that remained outstanding as of the date such Person ceased to be a
Lender). Any General Letter of Credit Issuer may, in its discretion, arrange for
one or more General Letters of Credit to be issued by Affiliates of such General
Letter of Credit Issuer, and in each such case the term “General Letter of
Credit Issuer” shall include any such Affiliate with respect to General Letters
of Credit issued by such Affiliate. References herein and in the other Credit
Documents to the General Letter of Credit Issuer shall be deemed to refer to the
General Letter of Credit Issuer in respect of the applicable General Letter of
Credit or to all General Letter of Credit Issuers, as the context requires.

“General Letters of Credit Outstanding” shall mean, at any time, with respect to
any General Letter of Credit Issuer, the sum of, without duplication, (a) the
aggregate Stated Amount of all outstanding General Letters of Credit issued by
such General Letter of Credit Issuer and (b) the aggregate principal amount of
all Unpaid Drawings in respect of all such General Letters of Credit. References
herein and in the other Credit Documents to the General Letters of Credit
Outstanding shall be deemed to refer to the General Letters of Credit
Outstanding in respect of all General Letters of Credit issued by the applicable
General Letter of Credit Issuer or to the General Letters of Credit Outstanding
in respect of all General Letters of Credit, as the context requires.

 

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“General Letter of Credit Reimbursement Obligations” shall mean the obligations
of the TCEH Debtors to reimburse and repay Unpaid Drawings on any General Letter
of Credit pursuant to the terms and conditions set forth in Section 3.4 of this
Agreement.

“General L/C Collateral Account Depositary Bank” shall have the meaning provided
in Section 3.8.

“Governmental Authority” shall mean any nation, sovereign or government, any
state, province, territory or other political subdivision thereof, and any
entity or authority exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including a central
bank, stock exchange, PUCT or ERCOT.

“Granting Lender” shall have the meaning provided in Section 13.6(g).

“Guarantee” shall mean the Guarantee made by each Guarantor in favor of the
Collateral Agent for the benefit of the Secured Parties, substantially in the
form of Exhibit B.

“Guarantee Obligations” shall mean, as to any Person, any obligation of such
Person guaranteeing or intended to guarantee any Indebtedness of any other
Person (the “primary obligor”) in any manner, whether directly or indirectly,
including any obligation of such Person, whether or not contingent, (a) to
purchase any such Indebtedness or any property constituting direct or indirect
security therefor, (b) to advance or supply funds (i) for the purchase or
payment of any such Indebtedness or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such
Indebtedness of the ability of the primary obligor to make payment of such
Indebtedness or (d) otherwise to assure or hold harmless the owner of such
Indebtedness against loss in respect thereof; provided, however, that the term
“Guarantee Obligations” shall not include endorsements of instruments for
deposit or collection in the ordinary course of business or customary and
reasonable indemnity obligations in effect on the Closing Date or entered into
in connection with any acquisition or disposition of assets permitted under this
Agreement (other than such obligations with respect to Indebtedness). The amount
of any Guarantee Obligation shall be deemed to be an amount equal to the stated
or determinable amount of the Indebtedness in respect of which such Guarantee
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.

“Guarantors” shall mean (a) Parent Guarantor, (b) each Domestic Subsidiary that
is a party to the Guarantee on the Closing Date, which will in any event include
all Subsidiaries that are debtors and debtors-in-possession in the Cases, and
(c) each Domestic Subsidiary that becomes a party to the Guarantee on or after
the Closing Date pursuant to Section 9.11 or otherwise.

“Hazardous Materials” shall mean (a) any petroleum or petroleum products spilled
or released into the environment, radioactive materials, friable asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, and radon gas; (b) any
chemicals, materials or substances defined as or included in the definition of
“hazardous substances”, “hazardous waste”, “hazardous materials”, “extremely
hazardous waste”, “restricted hazardous waste”, “toxic substances”, “toxic
pollutants”, “contaminants”, or “pollutants”, or words of similar import, under
any applicable Environmental Law; and (c) any other chemical, material or
substance, for which a release into the environment is prohibited, limited or
regulated by any Environmental Law.

 

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“Hedge Bank” shall mean any Person (other than Parent Guarantor, the Borrower or
any other Subsidiary of the Borrower) that either (i) is a party to a Secured
Commodity Hedging Agreement and has executed and delivered to the Collateral
Agent an Accession Agreement, and become a party to the Security Agreement,
pursuant to Section 14.2 or (ii) with respect to any other Hedging Agreement
(other than a Commodity Hedging Agreement) either (x) at the time it enters into
a Secured Hedging Agreement or (y) on the Closing Date, is a Lender or an
Affiliate of a Lender, in its capacity as a party to a Secured Hedging
Agreement.

“Hedging Agreements” shall mean (a) any and all rate 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
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, (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., any International Foreign
Exchange Master Agreement or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement and (c) physical
or financial commodity contracts or agreements, power purchase or sale
agreements, fuel purchase or sale agreements, environmental credit purchase or
sale agreements, power transmission agreements, ancillary service agreements,
commodity transportation agreements, fuel storage agreements, weather
derivatives, netting agreements (including Netting Agreements), capacity
agreements and commercial or trading agreements, each with respect to the
purchase, sale or exchange of (or the option to purchase, sell or exchange),
transmission, transportation, storage, distribution, processing, sale, lease or
hedge of, any Covered Commodity, price or price indices for any such Covered
Commodity or services or any other similar derivative agreements, and any other
similar agreements.

“Hedging and Trading Order” shall mean that certain Final Order Authorizing the
Debtors To (A) Continue Performance Under the Hedging and Trading Arrangements,
(B) Pledge Collateral and Honor Obligations Thereunder, and (C) Enter Into and
Perform Under New Postpetition Hedging and Trading Arrangements.

“Hedging Obligations” shall mean, with respect to any Person, the obligations of
such Person under Hedging Agreements.

“Holdings” shall mean Texas Energy Future Holdings Limited Partnership, a
Delaware limited partnership, and its successors.

“Immaterial Subsidiary” shall mean each Subsidiary of the Borrower that is not a
Material Subsidiary.

“Incremental Amendment” shall have the meaning set forth in Section 2.14(h).

“Incremental Facility” shall have the meaning provided in Section 2.14(a).

“Incremental Revolving Commitment Increase” shall have the meaning provided in
Section 2.14(a).

 

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“Incremental Term Loan Commitment” shall mean the commitment of any lender to
make Incremental Term Loans of a particular tranche pursuant to Section 2.14(a).

“Incremental Term Loan Facility” shall mean each tranche of Incremental Term
Loans made pursuant to Section 2.14.

“Incremental Term Loans” shall have the meaning provided in Section 2.14(a).

“Indebtedness” of any Person shall mean (a) all indebtedness of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes, loan agreements or other similar instruments, (c) the
deferred purchase price of assets or services that in accordance with GAAP would
be included as a liability on the balance sheet of such Person, (d) the face
amount of all letters of credit issued for the account of such Person and,
without duplication, all drafts drawn thereunder, (e) all Indebtedness of any
other Person secured by any Lien on any property owned by such Person, whether
or not such Indebtedness has been assumed by such Person, (f) the principal
component of all Capitalized Lease Obligations of such Person, (g) net Hedging
Obligations of such Person, (h) without duplication, all Guarantee Obligations
of such Person and (i) Disqualified Stock of such Person; provided that
Indebtedness shall not include (i) trade and other ordinary course payables and
accrued expenses arising in the ordinary course of business, (ii) deferred or
prepaid revenue, (iii) purchase price holdbacks in respect of a portion of the
purchase price of an asset to satisfy warranty or other unperformed obligations
of the respective seller, (iv) amounts payable by and between Parent Guarantor,
the Borrower and any other Subsidiary of the Ultimate Parent in connection with
retail clawback or other regulatory transition issues and (v) any Indebtedness
defeased by such Person or by any Subsidiary of such Person. The amount of any
net Hedging Obligations on any date shall be deemed to be the Swap Termination
Value. The amount of Indebtedness of any Person for purposes of clause (e) shall
be deemed to be equal to the lesser of (i) the aggregate unpaid amount of such
Indebtedness and (ii) the fair market value of the property encumbered thereby
as determined by such Person in good faith.

“indemnified liabilities” shall have the meaning provided in Section 13.5.

“Indemnified Taxes” shall mean all Taxes (including Other Taxes) other than
(i) Excluded Taxes and (ii) any interest, penalties or expenses caused by an
Agent’s or Lender’s gross negligence or willful misconduct.

“Initial Budget” shall have the meaning provided in the definition of the term
“Budget”.

“Intercompany Subordinated Note” shall mean the Intercompany Note, dated as of
April 7, 2011, executed by Parent Guarantor, the Borrower and each Restricted
Subsidiary of the Borrower.

“Interest Period” shall mean, with respect to any Term Loan, Delayed-Draw Term
Loan or Revolving Credit Loan, the interest period applicable thereto, as
determined pursuant to Section 2.9.

“Interim Availability Amount” shall mean, as of any date of determination
(x) with respect to the Revolving Credit Facility, the lesser of
(a) $533,000,000 and (b) such amount as the Bankruptcy Court may order or as may
be agreed by the Required Lenders and the Borrower, (y) with respect to the Term
Loan Facility, the lesser of (a) $700,000,000 and (b) such amount as the
Bankruptcy Court may order or as may be agreed by the Required Lenders and the
Borrower, and (z) with respect to the Delayed-Draw Term Facility, the lesser of
(a) $1,100,000,000 and (b) such amount as the Bankruptcy Court may order or as
may be agreed by the Required Lenders and the Borrower.

 

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“Interim Cash Collateral Order” shall mean that certain Interim Order
(A) Authorizing Use of Cash Collateral, (B) Granting Adequate Protection,
(C) Modifying the Automatic Stay, and (D) Scheduling a Final Hearing [Docket
No. 324].

“Interim Order” shall mean that certain Interim Order (A) Approving Postpetition
Financing for Texas Competitive Electric Holdings Company LLC and Certain of Its
Debtor Affiliates, (B) Granting Liens and Providing Superpriority Administrative
Expense Claims, (C) Modifying the Automatic Stay, and (D) Scheduling a Final
Hearing [Docket No. 325] attached as Exhibit N hereto, in form and substance
satisfactory to the Left Lead Arrangers on a motion by the TCEH Debtors that is
in form and substance satisfactory to the Left Lead Arrangers, as such order or
orders may be extended, amended, supplemented or modified in a manner
satisfactory to the Left Lead Arrangers.

“Interim Order Entry Date” shall mean the date on which the Interim Order is
entered by the Bankruptcy Court.

“Interim Period” shall mean the period of time between the Interim Order Entry
Date and the Final Order Entry Date.

“Investment” shall mean, for any Person: (a) the acquisition (whether for cash,
property, services or securities or otherwise) of Stock, Stock Equivalents,
bonds, notes, debentures, partnership, limited liability company membership or
other ownership interests or other securities of any other Person (including any
“short sale” or any sale of any securities at a time when such securities are
not owned by the Person entering into such sale), (b) the making of any deposit
with, or advance, loan or other extension of credit to, any other Person
(including the purchase of property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such property to
such Person) (including any partnership or joint venture), (c) the entering into
of any guarantee of, or other contingent obligation with respect to,
Indebtedness; or (d) the purchase or other acquisition (in one transaction or a
series of transactions) of all or substantially all of the property and assets
or business of another Person or assets constituting a business unit, line of
business or division of such Person; provided that, in the event that any
Investment is made by the Borrower or any Restricted Subsidiary in any Person
through substantially concurrent interim transfers of any amount through one or
more other Restricted Subsidiaries, then such other substantially concurrent
interim transfers shall be disregarded for purposes of Section 10.5.

“ISP” shall mean, with respect to any Letter of Credit, the “International
Standby Practices 1998” published by the Institute of International Banking
Law & Practice (or such later version thereof as may be in effect at the time of
issuance).

“Issuer Documents” shall mean with respect to any Letter of Credit, the Letter
of Credit Request, and any other document, agreement and instrument entered into
by a Letter of Credit Issuer and the Ultimate Parent, Parent Guarantor, the
Borrower or any Subsidiary of the Ultimate Parent (other than the Oncor
Subsidiaries) or in favor of a Letter of Credit Issuer and relating to such
Letter of Credit.

“Joint Lead Arrangers” shall mean Citi, DBSI, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Morgan Stanley Senior Funding, Inc., Barclays Bank PLC, RBC
Capital Markets and Union Bank, N.A., as joint lead arrangers and joint
bookrunners for the Lenders under this Agreement and the other Credit Documents.

“JV Distribution Amount” shall mean, at any time, the aggregate amount of cash
dividends and other cash distributions received by the Borrower or any
Restricted Subsidiary from any Minority Investments or any Unrestricted
Subsidiary since the Closing Date and prior to such time and only to the extent
that neither the Borrower nor any Restricted Subsidiary is under any obligation
to repay such amount to such Minority Investments or such Unrestricted
Subsidiary.

 

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“Latest Maturity Date” shall mean, at any date of determination, the latest
maturity date applicable to any Credit Facility hereunder as of such date of
determination, including the latest maturity date of any Incremental Facility,
in each case as extended in accordance with this Agreement from time to time.

“Left Lead Arrangers” shall mean Citi and DBSI.

“Lender” shall have the meaning provided in the preamble to this Agreement.

“Lender Default” shall mean (a) the failure (which has not been cured) of a
Lender to make available its portion of any Borrowing or (b) a Lender having
notified the Administrative Agent and/or the Borrower that it does not intend to
comply with the obligations under Section 2.1(a), 2.1(b) or 2.1(c), as the case
may be, or (c) a Lender having (i) become the subject of a proceeding under any
Debtor Relief Law, or (ii) had appointed for it a receiver, custodian,
conservator, trustee, administrator, assignee for the benefit of creditors or
similar Person charged with reorganization or liquidation of its business or
assets, including the Federal Deposit Insurance Corporation or any other state
or federal regulatory authority acting in such a capacity.

“Letter of Credit” shall mean each RCT Letter of Credit and each General Letter
of Credit.

“Letter of Credit Issuer” shall mean, with respect to any RCT Letter of Credit,
each RCT Letter of Credit Issuer, and with respect to any General Letter of
Credit, any General Letter of Credit Issuer.

“Letter of Credit Request” shall have the meaning provided in Section 3.2(a).

“LIBOR Loan” shall mean any Term Loan, Delayed-Draw Term Loan or Revolving
Credit Loan bearing interest at a rate determined by reference to the LIBOR
Rate.

“LIBOR Rate” shall mean, for any Interest Period with respect to a LIBOR Loan
the rate per annum equal to the ICE Benchmark Administration (or any successor
organization) LIBOR Rate (“ICE LIBOR”), as published by Reuters (or other
commercially available source providing quotations of ICE LIBOR as designated by
the Administrative Agent from time to time) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, for
deposits in dollars (for delivery on the first day of such Interest Period) with
a term equivalent to such Interest Period. If such rate is not available at such
time for any reason, then the “LIBOR Rate” for such Interest Period, as
applicable, shall be a rate per annum as may be agreed upon by the Borrower and
the Administrative Agent to be a rate 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 LIBOR Loan being made, continued or converted by the
Administrative Agent and with a term equivalent to such Interest Period, would
be offered by the Administrative Agent’s London Branch to major banks in the
applicable London interbank eurodollar market at their request at approximately
11:00 a.m. (London time) two Business Days prior to the commencement of such
Interest Period. Notwithstanding anything to the contrary contained herein, with
respect to Term Loans and Delayed-Draw Term Loans, in no event shall the LIBOR
Rate be less than 0.75% per annum.

 

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“Lien” shall mean any mortgage, pledge, security interest, hypothecation,
collateral assignment, lien (statutory or other) or similar encumbrance
(including any conditional sale or other title retention agreement or any lease
or license in the nature thereof); provided that in no event shall an operating
lease be deemed to be a Lien.

“Liquidity” shall mean the sum, as of any date of determination, of
(i) Unrestricted Cash plus (ii) the excess of (A) the Adjusted Total Revolving
Credit Commitment over (B) the Revolving Credit Exposure of all Lenders.

“Loan” shall mean any Revolving Credit Loan, Term Loan or Delayed-Draw Term Loan
made by any Lender hereunder.

“Management Investors” shall mean the directors, management, officers and
employees of the Ultimate Parent and its Subsidiaries who are or become
investors (directly or indirectly) in Holdings, any of its direct or indirect
parent entities or in the Ultimate Parent at any time prior to the first
anniversary of Closing Date.

“Master Agreement” shall have the meaning provided in the definition of the term
“Hedging Agreements”.

“Material Adverse Effect” shall mean any circumstance or conditions affecting
the business, assets, operations, properties or financial condition of the
Borrower and its Subsidiaries taken as a whole, that would individually or in
the aggregate, materially adversely affect the ability of the TCEH Debtors
(taken as a whole) to perform their payment obligations under the Credit
Documents to which they are a party, or the rights and remedies of the
Administrative Agent, the Letter of Credit Issuers and the Lenders under the
Credit Documents other than, in each case, as a result of the events leading up
to, and following the commencement of a proceeding under Chapter 11 and the
continuation and prosecution thereof, including circumstances or conditions
resulting from, or incidental to, such events, commencement, continuation and
prosecution, which shall not, individually or in the aggregate, constitute a
Material Adverse Effect, and provided that nothing disclosed in any of the
following filings by the Ultimate Parent and/or Parent Guarantor: (1) the annual
report on Form 10-K for the year ended December 31, 2013 (to the extent
substantially the same in form and substance as the version provided to the Left
Lead Arrangers at least two days prior to the date of the Commitment Letter),
(2) any filings on Form 8-K made through the date of the Commitment Letter
and/or (3) any disclosure statement related to any plan of reorganization or
liquidation of TCEH Debtors provided to the Joint Lead Arrangers on or prior to
the date of the Commitment Letter, shall, in any case, in and of itself and
based solely on facts as disclosed therein (without giving effect to any
developments not disclosed therein) constitute a Material Adverse Effect.

“Material Subsidiary” shall mean, at any date of determination, each Restricted
Subsidiary of the Borrower (a) whose total assets (when combined with the assets
of such Restricted Subsidiary’s Subsidiaries, after eliminating intercompany
obligations) at the last day of the most recent Test Period for which
Section 9.1 Financials have been delivered were equal to or greater than 2.5% of
the Consolidated Total Assets of the Borrower and the Restricted Subsidiaries at
such date or (b) whose total revenues (when combined with the revenues of such
Restricted Subsidiary’s Subsidiaries, after eliminating intercompany
obligations) during such Test Period were equal to or greater than 2.5% of the
consolidated revenues of the Borrower and the Restricted Subsidiaries for such
period, in each case determined in accordance with GAAP; provided that if, at
any time and from time to time after the Closing Date, Restricted Subsidiaries
that are not Material Subsidiaries have, in the aggregate, (x) total assets
(when combined with the assets of such Restricted Subsidiary’s Subsidiaries,
after eliminating intercompany obligations) at the last day of such Test Period
equal to or greater than 10.0% of the

 

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Consolidated Total Assets of the Borrower and the Restricted Subsidiaries at
such date or (y) total revenues (when combined with the revenues of such
Restricted Subsidiary’s Subsidiaries, after eliminating intercompany
obligations) during such Test Period equal to or greater than 10.0% of the
consolidated revenues of the Borrower and the Restricted Subsidiaries for such
period, in each case determined in accordance with GAAP, then the Borrower
shall, on the date on which financial statements for such quarter are delivered
pursuant to this Agreement, designate in writing to the Administrative Agent one
or more of such Restricted Subsidiaries as “Material Subsidiaries” so that such
condition no longer exists. It is agreed and understood that no Receivables
Entity shall be a Material Subsidiary.

“Maturity Date” shall mean the earliest to occur of (a) May 5, 2016; provided,
however, that the Maturity Date shall be subject to a six-month extension as
requested by the Borrower if (1) as of the first day of such extension no Event
of Default is continuing, (2) an Acceptable Reorganization Plan has been filed,
(3) a hearing has been scheduled for the confirmation of such Acceptable
Reorganization Plan, (4) the TCEH Debtors are working in good faith to confirm
such Acceptable Reorganization Plan, (5) an updated Budget and Annual Operating
Forecast have been delivered by the Borrower at least ten (10) days prior to the
first day of such extension, which Budget and Annual Operating Forecast
demonstrate Liquidity sufficient to provide for Adequate Protection Payments
required by the Interim Cash Collateral Order, the Final Cash Collateral Order
and the Orders through such additional six-month period plus an additional
$250,000,000, and (6) the Borrower pays an extension fee in the amount of 0.25%
of the then outstanding Commitments and Loans on the date of such payment to the
Administrative Agent for distribution to the Lenders on a pro rata basis based
on the respective Commitments and Loans held by each Lender (subclauses
(1) through (6), the “Extension Conditions”); (b) the effective date of any
Reorganization Plan; (c) the date that is 45 days after the Interim Order Entry
Date if the Final Order Entry Date has not occurred by such date; (d) the
consummation of a sale of all or substantially all of the TCEH Debtors’ assets
or stock under section 363 of the Bankruptcy Code; or (e) the acceleration of
any Loans and the termination of any then outstanding Commitments in accordance
with the terms of this Agreement; provided, however, that the Maturity Date will
occur in any event no later than November 7, 2016.

“Minimum Borrowing Amount” shall mean (a) with respect to any Borrowing of Loans
(other than Delayed-Draw Term Loans), $5,000,000, (b) with respect to a
borrowing of Delayed-Draw Term Loans, $250,000,000 (or, in each case, if less,
the entire remaining Commitments of any applicable Credit Facility at the time
of such Borrowing).

“Minority Investment” shall mean any Person (other than a Subsidiary) in which
the Borrower or any Restricted Subsidiary owns Stock or Stock Equivalents,
including any joint venture (regardless of form of legal entity).

“Moody’s” shall mean Moody’s Investors Service, Inc. or any successor by merger
or consolidation to its business.

“Mortgage” shall mean a mortgage or a deed of trust, deed to secure debt, trust
deed or other security document entered into by the owner of a Mortgaged
Property and the Collateral Agent for the benefit of the Secured Parties in
respect of that Mortgaged Property.

“Mortgaged Property” shall mean all Real Estate, if any, with respect to which a
Lien for the benefit of the Collateral Agent and the other Secured Parties is
granted and perfected pursuant to the terms and conditions of any Order.

“Multiemployer Plan” shall mean a plan that is a “multiemployer plan” as defined
in Section 4001(a)(3) of ERISA (i) to which any of the Borrower, any Subsidiary
of the Borrower or any ERISA Affiliate is then making or has an obligation to
make contributions or (ii) with respect to which the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate could incur liability pursuant to Title IV
of ERISA.

 

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“Narrative Report” shall mean, with respect to the financial statements for
which such narrative report is required, a management’s discussion and analysis
of the financial condition and results of operations of the Borrower and its
consolidated Subsidiaries for the applicable period to which such financial
statements relate.

“Necessary CapEx” shall mean Capital Expenditures that are required by
Applicable Law (other than Environmental Law) or otherwise undertaken
voluntarily for health and safety reasons (other than as required by
Environmental Law). The term “Necessary CapEx” does not include any Capital
Expenditure undertaken primarily to increase the efficiency of, expand or
re-power any power generation facility.

“Net Cash Proceeds” shall mean, with respect to any Prepayment Event, (a) the
gross cash proceeds (including payments from time to time in respect of
installment obligations, if applicable) received by or on behalf of the Borrower
or any Restricted Subsidiary in respect of such Prepayment Event, as the case
may be, less (b) the sum of:

(i) the amount, if any, of all taxes paid or estimated by the Borrower in good
faith to be payable by the Borrower or any Restricted Subsidiary in connection
with such Prepayment Event,

(ii) the amount of any reasonable reserve established in accordance with GAAP
against any liabilities (other than any taxes deducted pursuant to clause
(i) above) (x) associated with the assets that are the subject of such
Prepayment Event and (y) retained by the Borrower or any Restricted Subsidiary
(including any pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with such transaction); provided that the amount of any
subsequent reduction of such reserve (other than in connection with a payment in
respect of any such liability) shall be deemed to be Net Cash Proceeds of such
Prepayment Event occurring on the date of such reduction,

(iii) the amount of any Indebtedness (other than Indebtedness hereunder) secured
by a Lien on the assets that are the subject of such Prepayment Event to the
extent that the instrument creating or evidencing such Indebtedness requires
that such Indebtedness be repaid upon consummation of such Prepayment Event,

(iv) in the case of any Asset Sale Prepayment Event (other than any Asset Sale
Prepayment Event pursuant to Section 10.4(m)) or Recovery Prepayment Event, the
amount of any proceeds of such Prepayment Event that the Borrower or any
Restricted Subsidiary has reinvested (or intends to reinvest within the
Reinvestment Period, has entered into an Acceptable Reinvestment Commitment
prior to the last day of the Reinvestment Period to reinvest or, with respect to
any Recovery Prepayment Event, provided an Acceptable Reinvestment Commitment or
a Restoration Certification prior to the last day of the Reinvestment Period) in
the business of the Borrower or any Restricted Subsidiary (subject to
Section 9.15), including for the repair, restoration or replacement of an asset
or assets subject to a Recovery Prepayment Event; provided that any portion of
such proceeds that has not been so reinvested within such Reinvestment Period
(with respect to such Prepayment Event, the “Deferred Net Cash Proceeds”) shall,
unless the Borrower or any Restricted Subsidiary has entered into an Acceptable
Reinvestment Commitment or provided a Restoration Certification prior to the
last day of such Reinvestment

 

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Period to reinvest such proceeds, (x) be deemed to be Net Cash Proceeds of an
Asset Sale Prepayment Event or Recovery Prepayment Event occurring on the last
day of such Reinvestment Period or, if later, 180 days after the date the
Borrower or such Restricted Subsidiary has entered into such Acceptable
Reinvestment Commitment or provided such Restoration Certification, as
applicable (such last day or 180th day, as applicable, the “Deferred Net Cash
Proceeds Payment Date”), and (y) be applied to the repayment of Term Loans and
Delayed-Draw Term Loans in accordance with Section 5.2(a),

(v) in the case of any Asset Sale Prepayment Event with respect to Baseload
Assets pursuant to Section 10.4(m), the amount of any proceeds of such Asset
Sale Prepayment Event that the Borrower or any Restricted Subsidiary has
reinvested (or intends to reinvest within the Reinvestment Period or has entered
into an Acceptable Reinvestment Commitment prior to the last day of the
Reinvestment Period to reinvest) in other Baseload Assets; provided that any
Deferred Net Cash Proceeds with respect to such Asset Sale Prepayment Event
shall, unless the Borrower or any Restricted Subsidiary has entered into an
Acceptable Reinvestment Commitment prior to the last day of such Reinvestment
Period to reinvest such proceeds, (x) be deemed to be Net Cash Proceeds of an
Asset Sale Prepayment Event occurring on the Deferred Net Cash Proceeds Payment
Date and (y) be applied to the repayment of Term Loans and Delayed-Draw Term
Loans in accordance with Section 5.2(a),

(vi) in the case of any Asset Sale Prepayment Event or Recovery Prepayment Event
by a non-Wholly Owned Restricted Subsidiary, the pro rata portion of the Net
Cash Proceeds thereof (calculated without regard to this clause (vi))
attributable to minority interests and not available for distribution to or for
the account of the Borrower or a Wholly Owned Restricted Subsidiary as a result
thereof, and

(vii) reasonable and customary fees, commissions, expenses (including attorney’s
fees, investment banking fees, survey costs, title insurance premiums and
recording charges, transfer taxes, deed or mortgage recording taxes and other
customary expenses and brokerage, consultant and other customary fees), issuance
costs, discounts and other costs paid by the Borrower or any Restricted
Subsidiary, as applicable, in connection with such Prepayment Event, in each
case only to the extent not already deducted in arriving at the amount referred
to in clause (a) above.

“Netting Agreement” shall mean, in respect of Hedging Obligations, a netting
agreement, master netting agreement or other similar document having the same
effect as a netting agreement or master netting agreement and, as applicable,
any collateral annex, security agreement or other similar document related to
any master netting agreement or Permitted Contract.

“New Revolving Credit Commitments” shall have the meaning provided in
Section 2.14(i)(ii).

“New Revolving Credit Loan” shall have the meaning provided in
Section 2.14(i)(ii).

“New Revolving Credit Series” shall have the meaning provided in
Section 2.14(i)(ii).

“Non-Consenting Lender” shall have the meaning provided in Section 13.7(b).

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

 

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“Non-Extension Notice Date” shall have the meaning provided in Section 3.2(b).

“Non-U.S. Lender” shall mean any Agent or Lender that is not, for United States
federal income tax purposes, (a) an individual who is a citizen or resident of
the United States, (b) a corporation, partnership or entity treated as a
corporation or partnership created or organized in or under the laws of the
United States, or any political subdivision thereof, (c) an estate whose income
is subject to U.S. federal income taxation regardless of its source or (d) a
trust if a court within the United States is able to exercise primary
supervision over the administration of such trust and one or more United States
persons have the authority to control all substantial decisions of such trust or
a trust that has a valid election in effect under applicable U.S. Treasury
regulations to be treated as a United States person.

“Notice of Borrowing” shall mean a request of the Borrower in accordance with
the terms of Section 2.3 and substantially in the form of Exhibit A or such
other form as shall be approved by the Administrative Agent (acting reasonably).

“Notice of Conversion or Continuation” shall have the meaning provided in
Section 2.6(a).

“Obligations” shall mean all advances to, and debts, liabilities, obligations,
covenants and duties of, any Credit Party arising under any Credit Document or
otherwise with respect to any Loan or Letter of Credit or under any Secured Cash
Management Agreement, Secured Commodity Hedging Agreement or Secured Hedging
Agreement, in each case, entered into with Parent Guarantor, the Borrower or any
Restricted Subsidiary, whether direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the
commencement by or against any Credit Party of any proceeding under the Cases or
any bankruptcy or insolvency law naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding, in each case other than Excluded Swap Obligations. Without
limiting the generality of the foregoing, the Obligations of the Credit Parties
under the Credit Documents (and any of their Restricted Subsidiaries to the
extent they have obligations under the Credit Documents) (i) include the
obligation (including guarantee obligations) to pay principal, interest,
charges, expenses, fees, attorney costs, indemnities and other amounts payable
by any Credit Party under any Credit Document and (ii) exclude, notwithstanding
any term or condition in this Agreement or any other Credit Documents, any
Excluded Swap Obligations.

“Oncor” shall mean Oncor Electric Delivery Company LLC, a Delaware limited
liability company.

“Oncor Credit Facility” shall mean the revolving credit agreement, dated as of
October 10, 2007, among Oncor, the lenders from time to time party thereto,
JPMorgan Chase Bank, N.A., as administrative agent, Citibank, N.A., as
syndication agent, and J.P. Morgan Securities Inc., Citigroup Global Markets
Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs Credit Partners L.P.,
Lehman Brothers Inc. and Morgan Stanley Senior Funding, Inc., as joint lead
arrangers and bookrunners, as amended, supplemented or otherwise modified from
time to time.

“Oncor Notes” shall mean:

 

  •   Oncor’s 6.375% Senior Notes due 2015;

 

  •   Oncor’s 5.000% Senior Secured Notes due 2017;

 

  •   Oncor’s 6.800% Senior Secured Notes due 2018;

 

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  •   Oncor’s 5.750% Senior Secured Notes due 2020;

 

  •   Oncor’s 4.100% Senior Secured Notes due 2022;

 

  •   Oncor’s 7.000% Fixed Debentures due 2022;

 

  •   Oncor’s 7.000% Senior Notes due 2032;

 

  •   Oncor’s 7.250% Senior Notes due 2033;

 

  •   Oncor’s 7.500% Senior Secured Notes due 2038;

 

  •   Oncor’s 5.250% Senior Secured Notes due 2040;

 

  •   Oncor’s 4.550% Senior Secured Notes due 2041; and

 

  •   Oncor’s 5.300% Senior Secured Notes due 2042.

“Oncor Subsidiaries” shall mean Oncor Electric Delivery Holdings Company LLC and
its Subsidiaries.

“Orders” shall mean the Interim Order or the Final Order or both, as the context
may require.

“Organizational Documents” shall mean, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction),
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement and (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and, if applicable, any agreement, instrument, filing or notice
with respect thereto filed in connection with its formation or organization with
the applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

“Other Taxes” shall mean any and all present or future stamp, registration,
documentary or any other excise, property or similar taxes (including interest,
fines, penalties, additions to tax and related expenses with regard thereto)
arising from any payment made or required to be made under this Agreement or any
other Credit Document or from the execution or delivery of, registration or
enforcement of, consummation or administration of, or otherwise with respect to,
this Agreement or any other Credit Document.

“Overnight Rate” shall mean, for any day, the greater of (a) the Federal Funds
Effective Rate and (b) an overnight rate determined by the Administrative Agent,
the General Letter of Credit Issuer or the RCT Letter of Credit Issuer, as the
case may be, in accordance with banking industry rules on interbank
compensation.

“Parent Guarantor” shall have the meaning provided in the preamble to this
Agreement.

“Participant” shall have the meaning provided in Section 13.6(c)(i).

 

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“Participant Register” shall have the meaning provided in Section 13.6(c)(iii).

“Participating Receivables Grantor” shall mean the Borrower or any Restricted
Subsidiary that is or that becomes a participant or originator in a Permitted
Receivables Financing.

“Patriot Act” shall have the meaning provided in Section 13.18.

“Payment Default” shall mean any event, act or condition that with notice or
lapse of time, or both, would constitute an Event of Default under Section 11.1.

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

“Pension Act” shall mean the Pension Protection Act of 2006, as it presently
exists or as it may be amended from time to time.

“Perfection Certificate” shall mean a certificate of the Borrower in a form
approved by the Administrative Agent.

“Permitted Acquisition” shall mean the acquisition, by merger or otherwise, by
the Borrower or any Restricted Subsidiary of assets (including assets
constituting a business unit, line of business or division) or Stock or Stock
Equivalents, so long as (a) such acquisition and all transactions related
thereto shall be consummated in accordance with Applicable Law, (b) if such
acquisition involves any Stock or Stock Equivalents, such acquisition shall
result in the issuer of such Stock or Stock Equivalents and its Subsidiaries
becoming a Restricted Subsidiary and a Subsidiary Guarantor, to the extent
required by Section 9.11, (c) such acquisition shall result in the Collateral
Agent, for the benefit of the applicable Secured Parties, being granted a
security interest in any Stock, Stock Equivalent or any assets so acquired, to
the extent required by Sections 9.11, 9.12 and/or 9.14, (d) after giving effect
to such acquisition, the Borrower and the Restricted Subsidiaries shall be in
compliance with Section 9.15, (e) both before and after giving effect to such
acquisition, no Default or Event of Default shall have occurred and be
continuing and (f) the Borrower shall be in compliance, on a Pro Forma Basis,
after giving effect to such acquisition (including any Indebtedness assumed or
permitted to exist or incurred pursuant to Section 10.1, and any related Pro
Forma Adjustment), with the covenant set forth in Section 10.9.

“Permitted Contract” shall have the meaning provided in Section 10.2(bb).

“Permitted Holders” shall mean (a) the Sponsors and (b) the Management
Investors.

“Permitted Investments” shall mean:

(a) securities issued or unconditionally guaranteed by the United States
government or any agency or instrumentality thereof, in each case having
maturities and/or reset dates of not more than 24 months from the date of
acquisition thereof;

(b) securities issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof or
any political subdivision of any such state or any public instrumentality
thereof having maturities of not more than 24 months from the date of
acquisition thereof and, at the time of acquisition, having an investment grade
rating generally obtainable from either S&P or Moody’s (or, if at any time
neither S&P nor Moody’s shall be rating such obligations, then from another
nationally recognized rating service);

 

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(c) commercial paper or variable or fixed rate notes maturing no more than
12 months after the date of creation thereof and, at the time of acquisition,
having a rating of at least A-3 or P-3 from either S&P or Moody’s (or, if at any
time neither S&P nor Moody’s shall be rating such obligations, an equivalent
rating from another nationally recognized rating service);

(d) time deposits with, or domestic and LIBOR certificates of deposit or
bankers’ acceptances maturing no more than two years after the date of
acquisition thereof issued by, any Lender or any other bank having combined
capital and surplus of not less than $500,000,000 in the case of domestic banks
and $100,000,000 (or the dollar equivalent thereof) in the case of foreign
banks;

(e) repurchase agreements with a term of not more than 90 days for underlying
securities of the type described in clauses (a), (b) and (d) above entered into
with any bank meeting the qualifications specified in clause (d) above or
securities dealers of recognized national standing;

(f) marketable short-term money market and similar funds (x) either having
assets in excess of $500,000,000 or (y) having a rating of at least A-3 or P-3
from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be
rating such obligations, an equivalent rating from another nationally recognized
rating service);

(g) shares of investment companies that are registered under the Investment
Company Act of 1940 and substantially all the investments of which are one or
more of the types of securities described in clauses (a) through (f) above; and

(h) in the case of Investments by any Restricted Foreign Subsidiary or
Investments made in a country outside the United States of America, other
customarily utilized high-quality Investments in the country where such
Restricted Foreign Subsidiary is located or in which such Investment is made.

“Permitted Liens” shall mean:

(a) Liens for taxes, assessments or governmental charges or claims not yet
delinquent or that are being contested in good faith and by appropriate
proceedings for which appropriate reserves have been established to the extent
required by and in accordance with GAAP;

(b) Liens in respect of property or assets of the Borrower or any Subsidiary of
the Borrower imposed by Applicable Law, such as carriers’, warehousemen’s and
mechanics’ Liens and other similar Liens, arising in the ordinary course of
business or in connection with the construction or restoration of facilities for
the generation, transmission or distribution of electricity, in each case so
long as such Liens arise in the ordinary course of business and do not
individually or in the aggregate have a Material Adverse Effect;

(c) Liens arising from judgments or decrees in circumstances not constituting an
Event of Default under Section 11.11;

(d) Liens incurred or deposits made in connection with workers’ compensation,
unemployment insurance and other types of social security or similar
legislation, or to secure the performance of tenders, statutory obligations,
trade contracts (other than for payment of money),

 

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leases, statutory obligations, surety, stay, customs and appeal bonds, bids,
leases, government contracts, performance and return-of-money bonds and other
similar obligations, in each case incurred in the ordinary course of business
(including in connection with the construction or restoration of facilities for
the generation, transmission or distribution of electricity) or otherwise
constituting Investments permitted by Section 10.5;

(e) ground leases or subleases, licenses or sublicenses in respect of real
property on which facilities owned or leased by the Borrower or any of the
Subsidiaries of the Borrower are located;

(f) easements, rights-of-way, licenses, reservations, servitudes, permits,
conditions, covenants, rights of others, restrictions (including zoning
restrictions), oil, gas and other mineral interests, royalty interests and
leases, minor defects, exceptions or irregularities in title or survey,
encroachments, protrusions and other similar charges or encumbrances (including
those to secure health, safety and environmental obligations), which do not
interfere in any material respect with the business of the Borrower and the
Subsidiaries of the Borrower, taken as a whole;

(g) any exception on the title policies issued in connection with any Mortgaged
Property;

(h) any interest or title of a lessor, sublessor, licensor, sublicensor or
grantor of an easement or secured by a lessor’s, sublessor’s, licensor’s,
sublicensor’s interest or grantor of an easement under any lease, sublease,
license, sublicense or easement to be entered into by the Borrower or any
Restricted Subsidiary of the Borrower as lessee, sublessee, licensee, grantee or
sublicensee to the extent permitted by this Agreement;

(i) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payment of customs duties in connection with the importation of goods;

(j) Liens on goods or inventory the purchase, shipment or storage price of which
is financed by a documentary letter of credit or banker’s acceptance issued or
created for the account of the Borrower or any Subsidiary of the Borrower;
provided that such Lien secures only the obligations of the Borrower or such
Subsidiary in respect of such letter of credit or banker’s acceptance to the
extent permitted under Section 10.1;

(k) leases, licenses, subleases or sublicenses granted to others not interfering
in any material respect with the business of the Borrower and the Subsidiaries
of the Borrower, taken as a whole;

(l) Liens arising from precautionary Uniform Commercial Code financing statement
or similar filings made in respect of operating leases entered into by the
Borrower or any Subsidiary of the Borrower;

(m) Liens created in the ordinary course of business in favor of banks and other
financial institutions over credit balances of any bank accounts of the Borrower
and the Subsidiaries held at such banks or financial institutions, as the case
may be, to facilitate the operation of cash pooling and/or interest set-off
arrangements in respect of such bank accounts in the ordinary course of
business;

(n) Liens arising under Section 9.343 of the Texas Uniform Commercial Code or
similar statutes of states other than Texas;

 

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(o) Liens on accounts receivable, other Receivables Facility Assets, or accounts
into which collections or proceeds of Receivables Facility Assets are deposited,
in each case arising in connection with a Permitted Receivables Financing;

(p) any zoning, land use, environmental or similar law or right reserved to or
vested in any Governmental Authority to control or regulate the use of any real
property that does not materially interfere with the ordinary conduct of the
business of the Borrower and the Subsidiaries of the Borrower, taken as a whole;

(q) any Lien arising by reason of deposits with or giving of any form of
security to any Governmental Authority for any purpose at any time as required
by Applicable Law as a condition to the transaction of any business or the
exercise of any privilege or license, or to enable the Borrower or any
Subsidiary to maintain self-insurance or to participate in any fund for
liability on any insurance risks;

(r) Liens, restrictions, regulations, easements, exceptions or reservations of
any Governmental Authority applying to nuclear fuel;

(s) rights reserved to or vested in any Governmental Authority by the terms of
any right, power, franchise, grant, license or permit, or by any provision of
Applicable Law, to terminate or modify such right, power, franchise, grant,
license or permit or to purchase or recapture or to designate a purchaser of any
of the property of such person;

(t) Liens arising under any obligations or duties affecting any of the property,
the Borrower or any Restricted Subsidiary to any Governmental Authority with
respect to any franchise, grant, license or permit which do not materially
impair the use of such property for the purposes for which it is held;

(u) rights reserved to or vested in any Governmental Authority to use, control
or regulate any property of such person, which do not materially impair the use
of such property for the purposes for which it is held;

(v) any obligations or duties, affecting the property of Parent Guarantor, the
Borrower or any Restricted Subsidiary, to any Governmental Authority with
respect to any franchise, grant, license or permit; and

(w) a set-off or netting rights granted by Parent Guarantor, the Borrower or any
Subsidiary of the Borrower pursuant to any Hedging Agreements, Netting
Agreements or Permitted Contracts solely in respect of amounts owing under such
agreements.

Notwithstanding anything to the contrary, Permitted Liens shall not include
Liens securing any of the Prepetition Debt.

“Permitted Property Interest” shall have the meaning provided in Section 14.3.

“Permitted Receivables Financing” shall mean any of one or more receivables
financing programs as amended, supplemented, modified, extended, renewed,
restated or refunded from time to time, the obligations of which are
non-recourse (except for customary representations, warranties, covenants and
indemnities and other customary forms of support, in each case made in
connection with such facilities) to the Borrower and the Restricted Subsidiaries
(other than a Receivables Entity) providing for the sale, conveyance, or
contribution to capital of Receivables Facility Assets by

 

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Participating Receivables Grantors in transactions purporting to be sales of
Receivables Facility Assets to either (a) a Person that is not a Restricted
Subsidiary or (b) a Receivables Entity that in turn funds such purchase by the
direct or indirect sale, transfer, conveyance, pledge, or grant of participation
or other interest in such Receivables Facility Assets to a Person that is not a
Restricted Subsidiary.

“Permitted Sale Leaseback” shall mean any Sale Leaseback existing on the Closing
Date or consummated by the Borrower or any Restricted Subsidiary after the
Closing Date; provided that any such Sale Leaseback consummated after the
Closing Date not between (a) a Credit Party and another Credit Party or (b) a
Restricted Subsidiary that is not a Credit Party and another Restricted
Subsidiary that is not a Credit Party is consummated for fair value as
determined at the time of consummation in good faith by (i) the Borrower or such
Restricted Subsidiary and (ii) in the case of any Sale Leaseback (or series of
related Sale Leasebacks) the aggregate proceeds of which exceed $100,000,000,
the board of directors of the Borrower or such Restricted Subsidiary (which such
determination may take into account any retained interest or other Investment of
the Borrower or such Restricted Subsidiary in connection with, and any other
material economic terms of, such Sale Leaseback). Notwithstanding anything to
the contrary contained in this Agreement, the term “Permitted Sale Leaseback”
shall not in any event include any direct or indirect Sale Leaseback of all or
any portion of one or more Baseload Generation Assets.

“Person” shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any Governmental Authority.

“Petition Date” shall have the meaning set forth in the Recitals hereto.

“Plan” shall mean an employee pension benefit plan (other than a Multiemployer
Plan) -which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code or Section 302 of ERISA and is
maintained or contributed to by the Borrower, any Subsidiary or ERISA Affiliate
or with respect to which the Borrower or any Subsidiary could incur liability
pursuant to Title IV of ERISA.

“Plan Effective Date” shall mean the date of the effectiveness of an Acceptable
Reorganization Plan that has been confirmed pursuant to a final order of the
Bankruptcy Court.

“Platform” shall have the meaning provided in Section 13.17(c).

“Pledge Agreement” shall mean any pledge agreement with respect to any or all of
the Obligations delivered pursuant to Section 9.12.

“Post-Acquisition Period” shall mean, with respect to any Specified Transaction,
the period beginning on the date such Specified Transaction is consummated and
ending on the last day of the sixth full consecutive fiscal quarter immediately
following the date on which such Specified Transaction is consummated.

“Preferred Stock” shall mean any Stock or Stock Equivalents with preferential
rights of payment of dividends or upon liquidation, dissolution or winding up.

“Prepayment Event” shall mean any Asset Sale Prepayment Event or Recovery
Prepayment Event.

“Prepetition” shall mean, when used with respect to any agreement or instrument
or any claim or proceeding or any other matter with respect of any Credit Party,
an agreement or instrument that was entered into or became effective, a claim or
proceeding that first arose or was first instituted, or another matter that
first occurred or, by operation of law, is deemed to have occurred, prior to the
Petition Date.

 

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“Prepetition Credit Agreement” shall mean that certain Credit Agreement, dated
as of October 10, 2007, by and among Texas Competitive Electric Holdings Company
LLC, as borrower, Energy Future Competitive Holdings Company, LLC, the
guarantors party thereto, the lenders party thereto and Citibank, N.A., as
administrative agent, collateral agent, swingline lender and an issuing bank, as
amended, supplemented or otherwise modified from time to time.

“Prepetition Credit Agreement Lender” shall mean each “Lender” (under and as
defined in the Prepetition Credit Agreement) from time to time party to the
Prepetition Credit Agreement.

“Prepetition Debt” shall mean collectively all Prepetition First Lien
Obligations and Prepetition Second Lien Obligations.

“Prepetition First Lien Intercreditor Agreement” shall mean that certain Amended
and Restated Collateral Agency and Intercreditor Agreement, dated as of
October 10, 2007 and amended and restated as of August 7, 2009, among Energy
Future Competitive Holdings Company LLC, Texas Competitive Electric Holdings
Company LLC, the subsidiary guarantors party thereto, Citibank, N.A., as
Administrative Agent and Collateral Agent, Credit Suisse Energy LLC, J. Aron &
Company, Morgan Stanley Capital Group Inc., Citigroup Energy Inc., and the other
parties from time to time party thereto, as amended, restated, supplemented or
modified from time to time to the extent permitted by this Agreement

“Prepetition First Lien Obligations” shall mean the “Secured Obligations” (as
defined in the Prepetition First Lien Intercreditor Agreement).

“Prepetition First Lien Secured Parties” shall mean the “Secured Parties” (as
defined in the Prepetition First Lien Intercreditor Agreement).

“Prepetition Second Lien Documents” shall mean the Prepetition Second Lien
Indenture, the other Collateral Documents (as defined in the Prepetition Second
Lien Indenture), including each collateral trust agreement, mortgage and other
security documents and any guarantee entered into in connection therewith and
any related notes, the Prepetition Second Lien Notes, and the other Collateral
Documents (as defined in the Prepetition Second Lien Indenture), including the
Prepetition Second Lien Intercreditor Agreement and each mortgage and other
security documents and any guarantee entered into in connection therewith and
any related notes.

“Prepetition Second Lien Indenture” shall mean that certain indenture, dated as
of October 6, 2010, among the Borrower, TCEH Finance, Inc., the guarantors party
thereto and The Bank of New York Mellon Trust Company, as trustee, The Bank of
New York Mellon Trust Company, as collateral agent for the Prepetition Second
Lien Secured Parties, as amended, restated, supplemented or modified from time
to time to the extent permitted by this Agreement.

“Prepetition Second Lien Intercreditor Agreement” shall mean that certain Second
Lien Intercreditor Agreement, dated as of October 6, 2010, among Energy Future
Competitive Holdings Company, Texas Competitive Electric Holdings Company LLC,
the subsidiary guarantors party thereto, Citibank, N.A., as senior collateral
agent for the senior secured parties and as representative for the credit
agreement secured parties, The Bank of New York Mellon Trust Company, as the
initial second priority representative, and the other parties from time to time
party thereto, as amended, restated, supplemented or modified from time to time
to the extent permitted by this Agreement.

 

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“Prepetition Second Lien Notes” shall mean (i) the 15% senior secured second
lien notes due April 1, 2021 and (ii) the 15% senior secured second lien notes
due April 1, 2021, Series B issued by Borrower and TCEH Finance, Inc. under the
Prepetition Second Lien Indenture and any notes issued in connection therewith
(or increases thereto) resulting from payment of interest in kind and any notes
issued in exchange therefor having the same economic terms, including guarantees
thereof by the guarantors thereof.

“Prepetition Second Lien Obligations” shall mean the “Second Priority Debt
Obligations” as defined in the Prepetition Second Lien Intercreditor Agreement.

“Prepetition Second Lien Secured Parties” shall mean The Bank of New York Mellon
Trust Company, in its capacities as Trustee under the Prepetition Second Lien
Indenture and as collateral agent under the Prepetition Second Lien Documents,
its successors and assigns in such capacities and each person that is a holder
of Prepetition Second Lien Notes.

“Pro Forma Adjustment” shall mean, for any Test Period that includes all or any
part of a fiscal quarter included in any Post-Acquisition Period, with respect
to the Acquired EBITDA of the applicable Pro Forma Entity or the Consolidated
EBITDA of the Borrower, the pro forma increase or decrease in such Acquired
EBITDA or such Consolidated EBITDA, as the case may be, projected by the
Borrower in good faith as a result of (a) actions taken or to be taken, prior to
or during such Post-Acquisition Period for the purposes of realizing reasonably
identifiable and factually supportable cost savings or (b) any additional costs
incurred prior to or during such Post-Acquisition Period, in each case in
connection with the combination of the operations of such Pro Forma Entity with
the operations of the Borrower and the Restricted Subsidiaries; provided that
(A) at the election of the Borrower, such Pro Forma Adjustment shall not be
required to be determined for any Pro Forma Entity to the extent the aggregate
consideration paid in connection with such acquisition was less than $50,000,000
and (ii) so long as such actions are taken, or to be taken, prior to or during
such Post-Acquisition Period or such costs are incurred prior to or during such
Post-Acquisition Period, as applicable, it may be assumed, for purposes of
projecting such pro forma increase or decrease to such Acquired EBITDA or such
Consolidated EBITDA, as the case may be, that the applicable amount of such cost
savings will be realizable during the entirety of such Test Period, or the
applicable amount of such additional costs, as applicable, will be incurred
during the entirety of such Test Period; provided, further that any such
pro forma increase or decrease to such Acquired EBITDA or such Consolidated
EBITDA, as the case may be, shall be without duplication for cost savings or
additional costs already included in such Acquired EBITDA or such Consolidated
EBITDA, as the case may be, for such Test Period.

“Pro Forma Adjustment Certificate” shall mean any certificate of an Authorized
Officer of the Borrower delivered pursuant to Section 9.1(h) or setting forth
the information described in clause (iii) to Section 9.1(c).

“Pro Forma Basis”, “Pro Forma Compliance” and “Pro Forma Effect” shall mean,
with respect to compliance with any test or covenant hereunder, that (A) to the
extent applicable, the Pro Forma Adjustment shall have been made and (B) all
Specified Transactions and the following transactions in connection therewith
shall be deemed to have occurred as of the first day of the applicable period of
measurement in such test or covenant: (a) income statement items (whether
positive or negative) attributable to the property or Person subject to such
Specified Transaction, (i) in the case of a Disposition of all or substantially
all Stock in any Subsidiary of the Borrower or any division, product line, or
facility used for operations of the Borrower or any Subsidiary of the Borrower,
shall be excluded, and (ii) in the case of a Permitted Acquisition or Investment
described in the definition of “Specified Transaction”, shall be included,
(b) any retirement or repayment of Indebtedness, and (c) any incurrence or
assumption of Indebtedness by the Borrower or any Restricted Subsidiary in
connection therewith (it

 

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being agreed that if such Indebtedness has a floating or formula rate, such
Indebtedness shall have an implied rate of interest for the applicable period
for purposes of this definition determined by utilizing the rate that is or
would be in effect with respect to such Indebtedness as at the relevant date of
determination); provided that, without limiting the application of the Pro Forma
Adjustment pursuant to (A) above (but without duplication thereof), the
foregoing pro forma adjustments may be applied to any such test or covenant
solely to the extent that such adjustments are consistent with the definition of
Consolidated EBITDA and give effect to events (including operating expense
reductions) that are (i) (x) directly attributable to such transaction,
(y) expected to have a continuing impact on the Borrower and the Restricted
Subsidiaries and (z) factually supportable or (ii) otherwise consistent with the
definition of Pro Forma Adjustment.

“Pro Forma Entity” shall have the meaning provided in the definition of the term
“Acquired EBITDA”.

“PUCT” shall mean the Public Utility Commission of Texas or any successor.

“Qualified ECP Guarantor” shall mean, in respect of any Swap Obligation, each
Guarantor that has total assets exceeding $10,000,000 at the time the relevant
Guarantee or grant of the relevant security interest becomes effective with
respect to such Swap Obligation or such other person as constitutes an “eligible
contract participant” under the Commodity Exchange Act or any regulations
promulgated thereunder and can cause another person to qualify as an “eligible
contract participant” at such time by entering into a keepwell under
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Qualifying IPO” shall mean the issuance by the Ultimate Parent, Parent
Guarantor or any other direct or indirect parent of Parent Guarantor of its
common Stock in an underwritten primary public offering (other than a public
offering pursuant to a registration statement on Form S-8) pursuant to an
effective registration statement filed with the SEC in accordance with the
Securities Act (whether alone or in connection with a secondary public
offering).

“RCT” shall mean the Railroad Commission of Texas.

“RCT Carve Out Support Rejection Notice” shall have the meaning provided in
Section 4.4.

“RCT L/C Cash Coverage Requirement” shall have the meaning provided in
Section 3.9.

“RCT L/C Collateral Account” shall mean one or more Cash Collateral Accounts or
securities accounts established pursuant to, and subject to the terms of,
Section 3.9 for the purpose of cash collateralizing the RCT L/C Obligations in
respect of RCT Letters of Credit.

“RCT L/C Collateral Account Balance” shall mean, at any time, with respect to
any RCT L/C Collateral Account, the aggregate amount on deposit in such RCT L/C
Collateral Account. References herein and in the other Credit Documents to the
RCT L/C Collateral Account Balance shall be deemed to refer to the RCT L/C
Collateral Account Balance in respect of the applicable RCT L/C Collateral
Account or to the RCT L/C Collateral Account Balance in respect of all RCT L/C
Collateral Accounts, as the context requires.

“RCT L/C Collateral Account Depositary Bank” shall have the meaning provided in
Section 3.9.

 

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“RCT L/C Obligations” shall mean, as at any date of determination and, without
duplication, the aggregate Stated Amount of all outstanding RCT Letters of
Credit plus the aggregate principal amount of all Unpaid Drawings under all RCT
Letters of Credit. For all purposes of this Agreement, if on any date of
determination a RCT Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such RCT Letter of Credit shall be deemed to be “outstanding” in the amount so
remaining available to be drawn.

“RCT L/C Permitted Investments” shall mean:

(a) any Permitted Investments described in clauses (a) through (g) of the
definition thereof; and

(b) such other securities as agreed to by the TCEH Debtors with the applicable
RCT Letter of Credit Issuer from time to time.

“RCT L/C Termination Date” shall mean the Maturity Date.

“RCT Letter of Credit” shall have the meaning provided in Section 3.1(b)(i).

“RCT Letter of Credit Commitment” shall mean $1,100,000,000 (as such amount may
be reduced pursuant to Section 4.2(c) or Section 4.4).

“RCT Letter of Credit Issuers” shall mean (a) on the date hereof, (i) Citibank,
N.A., (ii) Deutsche Bank AG New York Branch, (iii) Bank of America, N.A.,
(iv) Morgan Stanley Senior Funding, Inc., (v) Barclays Bank PLC, (vi) Royal Bank
of Canada and (vii) Union Bank, N.A. and (b) at any time such Person who shall
become an RCT Letter of Credit Issuer pursuant to Section 3.6 (it being
understood that if any such Person ceases to be a Lender hereunder, such Person
will remain an RCT Letter of Credit Issuer with respect to any RCT Letters of
Credit issued by such Person that remained outstanding as of the date such
Person ceased to be a Lender). Any RCT Letter of Credit Issuer may, in its
discretion, arrange for one or more RCT Letters of Credit to be issued by
Affiliates of such RCT Letter of Credit Issuer, and in each such case the term
“RCT Letter of Credit Issuer” shall include any such Affiliate with respect to
RCT Letters of Credit issued by such Affiliate. References herein and in the
other Credit Documents to the RCT Letter of Credit Issuer shall be deemed to
refer to the RCT Letter of Credit Issuer in respect of the applicable RCT Letter
of Credit or to all RCT Letter of Credit Issuers, as the context requires.

“RCT Letter of Credit Reimbursement Obligations” shall mean the obligations of
the TCEH Debtors to reimburse and repay Unpaid Drawings on any RCT Letter of
Credit pursuant to the terms and conditions set forth in Section 3.4 of this
Agreement.

“RCT Letters of Credit Outstanding” shall mean, at any time, with respect to any
RCT Letter of Credit Issuer, the sum of, without duplication, (a) the aggregate
Stated Amount of all outstanding RCT Letters of Credit issued by such RCT Letter
of Credit Issuer and (b) the aggregate principal amount of all Unpaid Drawings
in respect of all such RCT Letters of Credit. References herein and in the other
Credit Documents to the RCT Letters of Credit Outstanding shall be deemed to
refer to the RCT Letters of Credit Outstanding in respect of all RCT Letters of
Credit issued by the applicable RCT Letter of Credit Issuer or to the RCT
Letters of Credit Outstanding in respect of all RCT Letters of Credit, as the
context requires.

 

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“RCT Reclamation Support Carve Out” shall mean (unless and until the Borrower
issues and delivers the RCT Carve Out Support Rejection Notice pursuant to
Section 4.4 hereof) all amounts up to $1,100,000,000 required to be paid by the
TCEH Debtors to the RCT pursuant to amounts due and owing in respect of
reclamation obligations incurred by the RCT and for which any of the TCEH
Debtors may be liable under Applicable Law.

“Real Estate” shall have the meaning provided in Section 9.1(f).

“Receivables Entity” shall mean any Person formed solely for the purpose of
(i) facilitating or entering into one or more Permitted Receivables Financings,
and (ii) in each case, engaging in activities reasonably related or incidental
thereto. TXU Receivables Company, a Delaware corporation and TXU Energy
Receivables Company LLC, a Delaware corporation, shall each be deemed to be a
Receivables Entity.

“Receivables Facility Assets” shall mean currently existing and hereafter
arising or originated Accounts, Payment Intangibles and Chattel Paper (as each
such term is defined in the UCC) owed or payable to any Participating
Receivables Grantor, and to the extent related to or supporting any Accounts,
Chattel Paper or Payment Intangibles, or constituting a receivable, all General
Intangibles (as each such term is defined in the UCC) and other forms of
obligations and receivables owed or payable to any Participating Receivables
Grantor, including the right to payment of any interest, finance charges, late
payment fees or other charges with respect thereto (the foregoing, collectively,
being “receivables”), all of such Participating Receivables Grantor’s rights as
an unpaid vendor (including rights in any goods the sale of which gave rise to
any receivables), all security interests or liens and property subject to such
security interests or liens from time to time purporting to secure payment of
any receivables or other items described in this definition, all guarantees,
letters of credit, security agreements, insurance and other agreements or
arrangements from time to time supporting or securing payment of any receivables
or other items described in this definition, all customer deposits with respect
thereto, all rights under any contracts giving rise to or evidencing any
receivables or other items described in this definition, and all documents,
books, records and information (including computer programs, tapes, disks, data
processing software and related property and rights) relating to any receivables
or other items described in this definition or to any obligor with respect
thereto, and all proceeds of the foregoing.

“Receivables Fees” shall mean distributions or payments made directly or by
means of discounts with respect to any accounts receivable or participation
interest therein issued or sold in connection with, and other fees paid to a
Person that is not a Restricted Subsidiary in connection with any Permitted
Receivables Financing.

“Recovery Event” shall mean (a) any damage to, destruction of or other casualty
or loss involving any property or asset or (b) any seizure, condemnation,
confiscation or taking (or transfer under threat of condemnation) under the
power of eminent domain of, or any requisition of title or use of or relating
to, or any similar event in respect of, any property or asset.

“Recovery Prepayment Event” shall mean the receipt of cash proceeds with respect
to any settlement or payment in connection with any Recovery Event in respect of
any property or asset of the Borrower or any Restricted Subsidiary; provided
that the term “Recovery Prepayment Event” shall not include any Asset Sale
Prepayment Event.

“Register” shall have the meaning provided in Section 13.6(b)(iv).

“Regulation T” shall mean Regulation T of the Board as from time to time in
effect and any successor to all or a portion thereof establishing margin
requirements.

 

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“Regulation U” shall mean Regulation U of the Board as from time to time in
effect and any successor to all or a portion thereof establishing margin
requirements.

“Regulation X” shall mean Regulation X of the Board as from time to time in
effect and any successor to all or a portion thereof establishing margin
requirements.

“Reimbursement Date” shall have the meaning provided in Section 3.4(a).

“Reinvestment Period” shall mean 15 months following the date of receipt of Net
Cash Proceeds of an Asset Sale Prepayment Event or Recovery Prepayment Event.

“Related Parties” shall mean, with respect to any specified Person, such
Person’s Affiliates and the directors, officers, employees, agents, trustees and
advisors of such Person and any Person that possesses, directly or indirectly,
the power to direct or cause the direction of the management or policies of such
Person, whether through the ability to exercise voting power, by contract or
otherwise.

“Reorganization Plan” shall mean a plan of reorganization of the TCEH Debtors in
the Cases.

“Reportable Event” shall mean an event described in Section 4043 of ERISA and
the regulations thereunder, other than any event as to which the thirty day
notice period has been waived.

“Required Delayed-Draw Term Loan Lenders” shall mean, at any date,
Non-Defaulting Lenders having or holding a majority of the sum of (a) the
aggregate outstanding principal amount of the Delayed-Draw Term Loans (excluding
Delayed Draw Term Loans held by Defaulting Lenders) at such date and (b) the
Adjusted Available Delayed Draw Term Loan Commitment at such date.

“Required Lenders” shall mean, at any date, Non-Defaulting Lenders having or
holding a majority of the sum of (a) the outstanding amount of the Term Loans in
the aggregate at such date, (b) the sum of (i) the aggregate outstanding
principal amount of the Delayed-Draw Term Loans (excluding Delayed-Draw Term
Loans held by Defaulting Lenders) at such date and (ii) the Adjusted Available
Delayed-Draw Term Loan Commitment at such date and (c) (i) the Adjusted Total
Revolving Credit Commitment at such date or (ii) if the Total Revolving Credit
Commitment has been terminated or for the purposes of acceleration pursuant to
Section 11, the outstanding principal amount of the Revolving Credit Loans
(excluding the Revolving Credit Loans of Defaulting Lenders) in the aggregate at
such date.

“Required Revolving Credit Lenders” shall mean, at any date, (i) Non-Defaulting
Lenders holding a majority of the Adjusted Total Revolving Credit Commitment at
such date or (ii) if the Total Revolving Credit Commitment has been terminated
or for the purposes of acceleration pursuant to Section 11, the outstanding
principal amount of the Revolving Credit Loans (excluding Revolving Credit Loans
of Defaulting Lenders) in the aggregate at such date.

“Required Term Loan Lenders” shall mean, at any date, Lenders having or holding
a majority of the aggregate outstanding principal amount of the Term Loans at
such date.

“Restoration Certification” shall mean, with respect to any Recovery Prepayment
Event, a certification made by an Authorized Officer of the Borrower or any
Restricted Subsidiary, as applicable, to the Administrative Agent prior to the
end of the Reinvestment Period certifying (a) that the Borrower or such
Restricted Subsidiary intends to use the proceeds received in connection with
such Recovery Prepayment Event to repair, restore or replace the property or
assets in respect of which such Recovery Prepayment Event occurred, (b) the
approximate costs of completion of such repair, restoration

 

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or replacement and (c) that such repair, restoration or replacement will be
completed within the later of (x) fifteen months after the date on which cash
proceeds with respect to such Recovery Prepayment Event were received and
(y) 180 days after delivery of such Restoration Certification.

“Restricted Foreign Subsidiary” shall mean a Foreign Subsidiary that is a
Restricted Subsidiary.

“Restricted Subsidiary” shall mean any Subsidiary of the Borrower other than an
Unrestricted Subsidiary.

Restructuring Support Agreement” shall mean that certain Restructuring Support
and Lock-Up Agreement dated April 29, 2014 by and among the Credit Parties and
the other parties signatory thereto, as amended and restated, supplemented or
otherwise modified in accordance with the terms thereof.

“Restructuring Term Sheet” shall mean the Term Sheet attached as Exhibit A to
the Restructuring Support Agreement, as amended, amended and restated,
supplemented or otherwise modified in accordance with the terms thereof.

“Revolving Credit Commitment” shall mean, (a) in the case of each Lender that is
a Lender on the date hereof, the amount set forth opposite such Lender’s name on
Schedule 1.1(a) as such Lender’s “Revolving Credit Commitment” and (b) in the
case of any Lender that becomes a Lender after the date hereof, the amount
specified as such Lender’s “Revolving Credit Commitment” in the Assignment and
Acceptance pursuant to which such Lender assumed a portion of the Total
Revolving Credit Commitment, in each case as the same may be changed from time
to time pursuant to the terms hereof. Subject to Section 2.1(c), the aggregate
amount of Revolving Credit Commitments outstanding as of the Closing Date is
$1,950,000,000. Unless the context shall otherwise require, the term “Revolving
Credit Commitment” shall include any New Revolving Credit Commitment.

“Revolving Credit Commitment Fee” shall have the meaning provided in
Section 4.1(a).

“Revolving Credit Commitment Fee Rate” shall mean, (x) at any time the Revolving
Credit Facilities are rated at least Ba3 by Moody’s and BB- by S&P, 0.375% per
annum or (y) at any other time, 0.50% per annum.

“Revolving Credit Commitment Percentage” shall mean at any time, for each
Lender, the percentage obtained by dividing (a) such Lender’s Revolving Credit
Commitment at such time by (b) the amount of the Total Revolving Credit
Commitment at such time; provided that at any time when the Total Revolving
Credit Commitment shall have been terminated, each Lender’s Revolving Credit
Commitment Percentage shall be the percentage obtained by dividing (a) such
Lender’s Revolving Credit Exposure at such time by (b) the Revolving Credit
Exposure of all Lenders at such time.

“Revolving Credit Exposure” shall mean, with respect to any Lender at any time,
the aggregate principal amount of the Revolving Credit Loans of such Lender
then-outstanding at such time.

“Revolving Credit Facility” shall mean the revolving credit facility represented
by the Revolving Credit Commitments.

“Revolving Credit Lender” shall mean, at any time, any Lender that has a
Revolving Credit Commitment at such time.

 

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“Revolving Credit Loans” shall have the meaning provided in Section 2.1(c).
Unless the context shall otherwise require, the term “Revolving Credit Loans”
shall include any New Revolving Credit Loans.

“Revolving Credit Termination Date” shall mean the Maturity Date.

“S&P” shall mean Standard & Poor’s Ratings Services or any successor by merger
or consolidation to its business.

“Sale Leaseback” shall mean any transaction or series of related transactions
pursuant to which the Borrower or any Restricted Subsidiary (a) sells, transfers
or otherwise disposes of any property, real or personal, whether now owned or
hereafter acquired, and (b) as part of such transaction, thereafter rents or
leases such property or other property that it intends to use for substantially
the same purpose or purposes as the property being sold, transferred or
disposed.

“Sandow Unit 4” shall mean the approximately 557 megawatt (net load) lignite
fired power generation facility, excluding mining properties, known as “Sandow
Unit 4” being operated and owned by Luminant Generation Company LLC in Milam
County, Texas.

“Sanctions” shall have the meaning provided in Section 8.20.

“Sanctions Laws” shall have the meaning provided in Section 8.20.

“SEC” shall mean the Securities and Exchange Commission or any successor
thereto.

“Section 9.1 Financials” shall mean the financial statements delivered, or
required to be delivered, pursuant to Section 9.1(a) or (b) together with the
accompanying officer’s certificate delivered, or required to be delivered,
pursuant to Section 9.1(c).

“Secured Cash Management Agreement” shall mean any agreement relating to Cash
Management Services that is entered into by and between the Borrower or any
Restricted Subsidiary and any Cash Management Bank.

“Secured Commodity Hedging Agreement” shall mean (a) any Commodity Hedging
Agreement that (i) is entered into by and between the Borrower or any Restricted
Subsidiary and any Hedge Bank and (ii) individually or together with other
Commodity Hedging Agreements (other than Commodity Hedging Agreements that are
unsecured) entered into or being entered into with such Hedge Bank or its
affiliates, is structured such that, at the time it is first entered into, the
net mark-to-market credit exposure calculated as of the date of entry into such
Commodity Hedging Agreement of (x) the counterparties to such Commodity Hedging
Agreements (taken as a whole) to (y) the Borrower or any other TCEH Debtor, is
positively correlated with the price of the relevant commodity or positively
correlated with changes in the relevant spark spread and (b) any other Commodity
Hedging Agreement that (i) is entered into by and between the Borrower or any
Restricted Subsidiary and any Hedge Bank and (ii) is entered into to unwind or
offset any existing Secured Commodity Hedging Agreement of the type described in
clause (a) above; provided that any Commodity Hedging Agreement entered into
prior to the Petition Date shall not constitute a “Secured Commodity Hedging
Agreement” unless (x) as of the Petition Date, the Swap Termination Value in
respect of such Commodity Hedging Agreement would be payable to the Borrower or
the Restricted Subsidiary party to such Commodity Hedging Agreement if such
Commodity Hedging Agreement were terminated as of the Petition Date and (y) such
Commodity Hedging Agreement has not been terminated as of the Petition Date and
the counterparty thereto has waived its right to terminate such Commodity
Hedging Agreement.

 

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“Secured Hedging Agreement” shall mean any Hedging Agreement that is entered
into by and between the Borrower or any Restricted Subsidiary and any Hedge
Bank.

“Secured Parties” shall mean the Administrative Agent, the Collateral Agent, the
Letter of Credit Issuers, each Lender, each Hedge Bank that is party to any
Secured Hedging Agreement or a Secured Commodity Hedging Agreement, as
applicable, each Cash Management Bank that is a party to a Secured Cash
Management Agreement and each sub-agent pursuant to Section 12 appointed by the
Administrative Agent with respect to matters relating to the Credit Facilities
or by the Collateral Agent with respect to matters relating to any Security
Document.

“Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

“Securitization” shall mean a public or private offering by a Lender or any of
its Affiliates or their respective successors and assigns of securities or notes
which represent an interest in, or which are collateralized, in whole or in
part, by the Loans and the Lender’s rights under the Credit Documents.

“Security Agreement” shall mean the Security Agreement entered into by the
Borrower, the other grantors party thereto and the Collateral Agent for the
benefit of the Secured Parties, substantially in the form of Exhibit F.

“Security Documents” shall mean, collectively, (a) the Security Agreement,
(b) any Pledge Agreement, (c) the Orders, (d) Section 14 of this Agreement and
(e) each other security agreement or other instrument or document executed and
delivered pursuant to Section 9.11, 9.12 or 9.14 or pursuant to any other such
Security Documents to secure or perfect the security interest in any or all of
the Obligations. The Security Documents (other than the Orders) shall
supplement, and shall not limit, the grant of a Lien on and security interest in
the Collateral pursuant to the Orders.

“Shared Services Agreement” shall mean the Shared Services Agreement, dated on
or about October 23, 2013 between EFH Corporate Services Company and the
Borrower, as amended, supplemented or otherwise modified from time to time in a
manner that is not, in the Borrower’s reasonable judgment, adverse, taken as a
whole, to the Lenders in any material respect.

“Sold Entity or Business” shall have the meaning provided in the definition of
the term “Consolidated EBITDA”.

“Specified Affiliates” shall mean, collectively, the following affiliates of the
Borrower: (i) Comanche Peak Nuclear Power Company LLC; (ii) EFH Corporate
Services Company; (iii) EFH Properties Company; (iv) the Ultimate Parent; and
(v) the Oncor Subsidiaries.

“Specified Default” shall mean any Event of Default under Section 11.1.

“Specified RCT Letter of Credit Commitment” shall mean, with respect to any RCT
Letter of Credit Issuer, (a) in the case of each RCT Letter of Credit Issuer
that is a RCT Letter of Credit Issuer on the date hereof, the percentage of the
RCT Letter of Credit Commitment set forth opposite such RCT Letter of Credit
Issuer’s name on Schedule 1.1(a) as such RCT Letter of Credit Issuer’s
“Specified RCT Letter of Credit Commitment” or such other percentage as the
Borrower and such RCT Letter of Credit Issuer may agree in writing from time to
time and (b) in the case of any other RCT Letter of Credit Issuer, 100% of the
RCT Letter of Credit Commitment or such lower percentage as is specified in the
agreement pursuant to which such Person becomes a RCT Letter of Credit Issuer
entered into pursuant to Section 3.6(a) hereof.

 

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“Specified General Letter of Credit Commitment” shall mean, with respect to any
General Letter of Credit Issuer, (a) in the case of each General Letter of
Credit Issuer that is a General Letter of Credit Issuer on the date hereof, the
percentage of the General Letter of Credit Commitment set forth opposite such
General Letter of Credit Issuer’s name on Schedule 1.1(a) as such General Letter
of Credit Issuer’s “Specified General Letter of Credit Commitment” or such other
percentage as the Borrower and such General Letter of Credit Issuer may agree in
writing from time to time and (b) in the case of any other General Letter of
Credit Issuer, 100% of the General Letter of Credit Commitment or such lower
percentage as is specified in the agreement pursuant to which such Person
becomes a General Letter of Credit Issuer entered into pursuant to
Section 3.6(a) hereof.

“Specified Transaction” shall mean, with respect to any period, any Investment,
any Disposition of assets, Permitted Sale Leaseback, incurrence or repayment of
Indebtedness, dividend, Subsidiary designation, Incremental Term Loan,
Incremental Revolving Commitment Increase or other event that by the terms of
this Agreement requires “Pro Forma Compliance” with a test or covenant hereunder
or requires such test or covenant to be calculated on a “Pro Forma Basis”.

“Sponsors” shall mean any of Kohlberg Kravis Roberts & Co., L.P., KKR
Associates, L.P., TPG Capital, L.P. and Goldman, Sachs & Co., and each of their
respective Affiliates, but excluding portfolio companies of any of the
foregoing.

“SPV” shall have the meaning provided in Section 13.6(g).

“Stated Amount” of any Letter of Credit shall mean the maximum amount from time
to time available to be drawn thereunder, determined without regard to whether
any conditions to drawing could then be met.

“Stated Maturity” shall mean, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for payment thereof; provided that, with respect to any
pollution control revenue bonds or similar instruments, the Stated Maturity of
any series thereof shall be deemed to be the date set forth in any instrument
governing such Indebtedness for the remarketing of such Indebtedness.

“Stock” shall mean shares of capital stock or shares in the capital, as the case
may be (whether denominated as common stock or preferred stock or ordinary
shares or preferred shares, as the case may be), beneficial, partnership or
membership interests, participations or other equivalents (regardless of how
designated) of or in a corporation, partnership, limited liability company or
equivalent entity, whether voting or non-voting.

“Stock Equivalents” shall mean all securities convertible into or exchangeable
for Stock and all warrants, options or other rights to purchase or subscribe for
any Stock, whether or not presently convertible, exchangeable or exercisable.

“Subsidiary” of any Person shall mean and include (a) any corporation more than
50% of whose Stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time Stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any

 

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contingency) is at the time owned by such Person directly or indirectly through
Subsidiaries and (b) any limited liability company, partnership, association,
joint venture or other entity of which such Person directly or indirectly
through Subsidiaries has more than a 50% equity interest at the time or is a
controlling general partner. Unless otherwise expressly provided, all references
herein to a “Subsidiary” shall mean a Subsidiary of the Borrower.

“Subsidiary Guarantor” shall mean each Guarantor that is a Subsidiary of the
Borrower.

“Superpriority Claim” shall mean superpriority administrative expense claim with
priority over any and all other obligations, liabilities and indebtedness, now
existing or hereafter arising, of any kind whatsoever, including any and all
administrative expenses or other claims of the kind specified in or arising
under sections 105, 326, 328, 330, 331, 365, 503(a), 503(b), 506(c) (subject
only to and effective upon entry of the Final Order), 507(a), 507(b), 546(c),
726, 1113 and 1114 of the Bankruptcy Code.

“Swap Obligation” shall mean, with respect to any Guarantor, any obligation to
pay or perform under any agreement, contract or transaction that constitutes a
“swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

“Swap Termination Value” shall mean, in respect of any one or more Hedging
Agreements, after taking into account the effect of any legally enforceable
netting agreement relating to such Hedging Agreements, (a) for any date on or
after the date such Hedging Agreements 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 Hedging Agreements, as
determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Hedging Agreements (which
may include a Lender or any Affiliate of a Lender).

“Tax Order” shall mean that certain Order Authorizing the Debtors To Pay Certain
Prepetition Taxes and Fees.

“Tax Sharing Agreements” shall mean (i) the Federal and State Income Tax
Allocation Agreement among the Members of the Energy Future Holdings Corp.
Consolidated Group, dated May 15, 2012 by and among Energy Future Holdings Corp.
and the other parties thereto, (ii) the Amended and Restated Tax Sharing
Agreement, dated November 5, 2008, among Energy Future Holdings Corp., Oncor
Electric Delivery Holdings Company LLC, Oncor Electric Delivery Company LLC,
Texas Transmission Investment LLC and Oncor Management Investment LLC and
(iii) any other tax sharing agreement, each as amended, supplemented or
otherwise modified from time to time in a manner that is not, in the Borrower’s
reasonable judgment, adverse, taken as a whole, to the Lenders in any material
respect.

“Taxes” shall mean any and all present or future taxes, duties, levies, imposts,
assessments, deductions, withholdings or other similar charges imposed by any
Governmental Authority whether computed on a separate, consolidated, unitary,
combined or other basis and any interest, fines, penalties or additions to tax
with respect to the foregoing.

“TCEH” shall have the meaning provided in the preamble to this Agreement.

“TCEH Debtors” shall have the meaning set forth in the Recitals hereto.

 

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“Term Loan Commitment” shall mean, on the date hereof, the amount set forth
opposite such Lender’s name on Schedule 1.1(a) as such Lender’s “Term Loan
Commitment” and (b) in the case of any Lender that becomes a Lender after the
date hereof, the amount specified as such Lender’s “Term Loan Commitment” in the
Assignment and Acceptance pursuant to which such Lender assumed a portion of the
Total Term Loan Commitment, in each case as the same may be changed from time to
time pursuant to the terms hereof.

“Term Loan Facility” shall mean the facility providing for the Term Loans.

“Term Loan Lender” shall mean each Lender holding a Term Loan.

“Term Loans” shall have the meaning provided in Section 2.1(a). Unless the
context shall otherwise require, the term “Term Loans” shall include any
Incremental Term Loans. As set forth in Section 2.1(b)(ii), immediately after
any Delayed-Draw Term Loans are funded pursuant to Section 2.1(b), such Loans
will automatically be deemed to constitute Term Loans, and to not constitute
Delayed-Draw Term Loans, for all purposes of this Credit Agreement and the other
Credit Documents (except for purposes of the definitions of “Available
Delayed-Draw Term Loan Commitment” and “Available Term Loan Commitment”).

“Test Period” shall mean, for any determination under this Agreement, the four
consecutive fiscal quarters of the Borrower then last ended and for which
Section 9.1 Financials have been or were required to have been delivered.

“Tex-La Indebtedness” shall mean the obligations owing by Parent Guarantor in
respect of obligations between Parent Guarantor (or its legal predecessors in
interest) and the Tex-La Electric Cooperative of Texas, Inc., in aggregate
principal amount of approximately $62,000,000 as of the Closing Date, which
obligations are secured by a Lien on a 2.17% undivided interest in “Comanche
Peak Unit 1” and “Comanche Peak Unit 2” (each as defined in the definition of
“Baseload Generation Assets”).

“Total Credit Exposure” shall mean, at any date, the sum, without duplication,
of (a) the Total Revolving Credit Commitment (if any) at such date or, if the
Total Revolving Credit Commitment shall have terminated on or prior to such
date, the aggregate outstanding principal amount of all Revolving Credit Loans
(if any) at such date (which shall be equal to the aggregate Revolving Credit
Exposure of all Revolving Credit Lenders), (b) the Available Delayed-Draw Term
Loan Commitment (if any) at such date, (c) the aggregate outstanding principal
amount of all Delayed-Draw Term Loans (if any) at such date, (d) the Available
Total Term Loan Commitment (if any) at such date and (e) the aggregate
outstanding principal amount of all Term Loans (if any) at such date.

“Total Delayed-Draw Term Loan Commitment” shall mean the sum of the Delayed-Draw
Term Loan Commitments of all the Lenders.

“Total Revolving Credit Commitment” shall mean the sum of the Revolving Credit
Commitments of all the Lenders.

“Total Term Loan Commitment” shall mean the sum of the Term Loan Commitments of
all the Lenders.

“Transaction Expenses” shall mean any fees, costs, liabilities or expenses
incurred or paid by the Ultimate Parent, Parent Guarantor or any of their
respective Subsidiaries in connection with the Transactions, this Agreement and
the other Credit Documents and the transactions contemplated hereby and thereby
including in respect of the commitments, negotiation, syndication, documentation
and closing (and post-closing actions in connection with the Collateral) of the
Credit Facilities.

 

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“Transactions” shall mean, collectively, the transactions contemplated by this
Agreement to occur on or around the Closing Date (including the entering into
and funding hereunder, the preparation and filing of the Cases, the preparation
and documentation of the other transactions set forth in the Restructuring
Support Agreement), the payment of fees, costs, liabilities and expenses in
connection with each of the foregoing, and the consummation of any other
transaction connected with the foregoing.

“Transferee” shall have the meaning provided in Section 13.6(e).

“Transition Charges” shall have the meaning provided in in Section 39.302(7) of
the Texas Utilities Code.

“Transition Property” shall have the meaning provided in Section 39.302(8) of
the Texas Utilities Code.

“Trust Indenture Act” shall have the meaning provided in Section 12.11.

“Type” shall mean, (a) as to any Term Loan, its nature as an ABR Loan or a LIBOR
Loan, (b) as to any Delayed-Draw Term Loan, its nature as an ABR Loan or a LIBOR
Loan and (c) as to any Revolving Credit Loan, its nature as an ABR Loan or a
LIBOR Loan.

“UCC” shall mean the Uniform Commercial Code of the State of New York or the
State of Texas, as applicable, or of any other state the laws of which are
required to be applied in connection with the perfection of security interests
in any Collateral.

“Ultimate Parent” shall mean Energy Future Holdings Corp., a Texas corporation.

“Unfunded Current Liability” of any Plan shall mean the amount, if any, by which
the Accumulated Benefit Obligation (as defined under Statement of Financial
Accounting Standards No. 87 (“SFAS 87”)) under the Plan as of the close of its
most recent plan year, determined in accordance with SFAS 87 as in effect on the
Closing Date, exceeds the fair market value of the assets allocable thereto.

“Unit” shall mean an individual power plant generation system comprised of all
necessary physically connected generators, reactors, boilers, combustion
turbines and other prime movers operated together to independently generate
electricity.

“Unpaid Drawing” shall have the meaning provided in Section 3.4(a).

“Unrestricted Cash” shall mean, without duplication, (a) all cash and cash
equivalents (in each case, free and clear of all Liens, other than nonconsensual
Liens permitted by Section 10.2(l) and Liens permitted by Sections 10.2(a),
(j) and (bb) and clauses (i) and (ii) of Section 10.2(o)) included in the cash
and cash equivalents accounts listed on the consolidated balance sheet of the
Borrower and the Restricted Subsidiaries as at such date and (b) all margin
deposits related to commodity positions listed as assets on the consolidated
balance sheet of the Borrower and the Restricted Subsidiaries; provided that
Unrestricted Cash shall not include any amounts on deposit in or credited to any
RCT L/C Collateral Account or General L/C Collateral Account.

 

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“Unrestricted Subsidiary” shall mean (a) the Subsidiaries set forth on Schedule
1.1(c) hereto; (b) any Subsidiary of the Borrower that is formed or acquired
after the Closing Date; provided that at such time (or promptly thereafter) the
Borrower designates such Subsidiary an Unrestricted Subsidiary in a written
notice to the Administrative Agent, (c) any Restricted Subsidiary subsequently
designated as an Unrestricted Subsidiary by the Borrower in a written notice to
the Administrative Agent; provided that in the case of (b) and (c), (x) such
designation shall be deemed to be an Investment (or reduction in an outstanding
Investment, in the case of a designation of an Unrestricted Subsidiary as a
Restricted Subsidiary) on the date of such designation in an amount equal to the
net book value of the investment therein and such designation shall be permitted
only to the extent permitted under Section 10.5 on the date of such designation
and (y) no Default or Event of Default would result from such designation after
giving Pro Forma Effect thereto and (d) each Subsidiary of an Unrestricted
Subsidiary. The Borrower may, by written notice to the Administrative Agent,
re-designate any Unrestricted Subsidiary as a Restricted Subsidiary, and
thereafter, such Subsidiary shall no longer constitute an Unrestricted
Subsidiary, but only if (x) to the extent such Subsidiary has outstanding
Indebtedness on the date of such designation, immediately after giving effect to
such designation, the Borrower shall be in compliance, on a Pro Forma Basis,
after giving effect to the incurrence of such Indebtedness, with the covenant
set forth in Section 10.9 and (y) no Default or Event of Default would result
from such re-designation. On or promptly after the date of its formation,
acquisition, designation or re-designation, as applicable, each Unrestricted
Subsidiary (other than an Unrestricted Subsidiary that is a Foreign Subsidiary)
shall have entered into a tax sharing agreement containing terms that, in the
reasonable judgment of the Administrative Agent, provide for an appropriate
allocation of tax liabilities and benefits; provided that the tax sharing
agreements described in clauses (i) and (ii) of the definition of “Tax Sharing
Agreements” as in effect on the date hereof shall be deemed to satisfy such
standard.

“U.S. Lender” shall have the meaning provided in Section 5.4(h).

“Voting Stock” shall mean, with respect to any Person, such Person’s Stock or
Stock Equivalents having the right to vote for the election of directors or
other governing body of such Person under ordinary circumstances.

“Wages Order” shall mean the “Final Order Authorizing Energy Future Holdings
Corp., et al., To (A) (i) Pay Certain Prepetition Compensation and Reimbursable
Employee Expenses, (ii) Pay and Honor Employee and Retiree Medical and Similar
Benefits, and (iii) Continue Employee Compensation and Retiree Benefit Programs
and (B) Modifying the Automatic Stay” as in effect from time to time.

“Wholly Owned” shall mean, with respect to the ownership by a Person of a
Subsidiary, that all of the Stock of such Subsidiary (other than directors’
qualifying shares or nominee or other similar shares required pursuant to
Applicable Law) are owned by such Person or another Wholly Owned Subsidiary of
such Person.

“Yield” shall mean, with respect to any Commitments and/or Loans, on any date of
determination, the yield to maturity, in each case, based on the interest rate
applicable to such Commitments and/or Loans on such date and giving effect to
interest rate floors and any original issue discount or upfront fees, but
excluding any customary arrangement, administrative, advisory, origination or
similar fees in connection therewith that are not paid to all of the Lenders
providing such Commitments and/or Loans).

 

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1.2. Other Interpretive Provisions. With reference to this Agreement and each
other Credit Document, unless otherwise specified herein or in such other Credit
Document:

(a) The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms.

(b) The words “herein”, “hereto”, “hereof” and “hereunder” and words of similar
import when used in any Credit Document shall refer to such Credit Document as a
whole and not to any particular provision thereof.

(c) Article, Section, Exhibit and Schedule references are to the Credit Document
in which such reference appears.

(d) The term “including” is by way of example and not limitation.

(e) The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.

(f) The words “asset” and “property” shall be construed to have the same meaning
and effect and refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.

(g) All references to “knowledge” or “awareness” of any Credit Party or a
Restricted Subsidiary thereof means the actual knowledge of an Authorized
Officer of a Credit Party or such Restricted Subsidiary.

(h) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including”; the words “to” and
“until” each mean “to but excluding”; and the word “through” means “to and
including”.

(i) Section headings herein and in the other Credit Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Credit Document.

(j) For purposes of determining compliance with any one of Sections 10.1, 10.2,
10.3, 10.4, 10.5, 10.6, 10.7 and 1.1(a), in the event that any Lien, Investment,
Indebtedness, merger, consolidation, amalgamation or similar fundamental change,
Disposition, dividend, affiliate transaction, contractual obligation or
prepayment of Indebtedness meets the criteria of more than one of the categories
of transactions permitted pursuant to any clause of such Section, such
transaction (or portion thereof) at any time shall be permitted under one or
more of such clauses as determined by the Borrower (and the Borrower shall be
entitled to redesignate use of any such clauses from time to time) in its sole
discretion at such time.

1.3. Accounting Terms.

(a) All accounting terms not specifically or completely defined herein shall be
construed in conformity with, and all financial data (including financial ratios
and other financial calculations) required to be submitted pursuant to this
Agreement shall be prepared in conformity with, GAAP.

(b) Notwithstanding anything to the contrary herein, for purposes of determining
compliance with any test or covenant contained in this Agreement with respect to
any period during which any Specified Transaction occurs, the Consolidated
Superpriority Secured Net Debt to Consolidated EBITDA Ratio shall each be
calculated with respect to such period and such Specified Transaction on a Pro
Forma Basis.

 

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1.4. Rounding. Any financial ratios required to be maintained by the Borrower
pursuant to this Agreement (or required to be satisfied in order for a specific
action to be permitted under this Agreement) shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).

1.5. References to Agreements, Laws, Etc. Unless otherwise expressly provided
herein, (a) references to organizational documents, agreements (including the
Credit Documents) and other Contractual Requirements shall be deemed to include
all subsequent amendments, restatements, amendment and restatements, extensions,
supplements and other modifications thereto, but only to the extent that such
amendments, restatements, amendment and restatements, extensions, supplements
and other modifications are permitted by any Credit Document; and (b) references
to any Applicable Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such
Applicable Law.

1.6. Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Eastern time (daylight or standard, as applicable).

1.7. Timing of Payment of Performance. When the payment of any obligation or the
performance of any covenant, duty or obligation is stated to be due or
performance required on a day which is not a Business Day, the date of such
payment (other than as described in the definition of Interest Period) or
performance shall extend to the immediately succeeding Business Day.

1.8. Currency Equivalents Generally. For purposes of determining compliance
under Sections 10.4, 10.5 and 10.6 with respect to any amount denominated in any
currency other than Dollars (other than with respect to (a) any amount derived
from the financial statements of the Borrower and the Subsidiaries of the
Borrower or (b) any Indebtedness denominated in a currency other than Dollars),
such amount shall be deemed to equal the Dollar equivalent thereof based on the
average Exchange Rate for such other currency for the most recent twelve-month
period immediately prior to the date of determination determined in a manner
consistent with that used in calculating Consolidated EBITDA for the related
period. For purposes of determining compliance with Sections 10.1, 10.2 and
10.5, with respect to any amount of Indebtedness in a currency other than
Dollars, compliance will be determined at the time of incurrence or advancing
thereof using the Dollar equivalent thereof at the Exchange Rate in effect at
the time of such incurrence or advancement.

1.9. Classification of Loans and Borrowings. For purposes of this Agreement,
Loans may be classified and referred to by Class (e.g., a “Revolving Credit
Loan”) or by Type (e.g., a “LIBOR Loan”) or by Class and Type (e.g., a “LIBOR
Revolving Credit Loan”). Borrowings also may be classified and referred to by
Class (e.g., a “Revolving Credit Borrowing”) or by Type (e.g., a “LIBOR
Borrowing”) or by Class and Type (e.g., a “LIBOR Revolving Credit Borrowing”).

1.10. Hedging Agreements. For the avoidance of doubt, it is understood that the
following Hedging Agreements and/or Commodity Hedging Agreements shall not be
deemed to be speculative or entered into for speculative purposes for any
purpose of this Agreement and all other Credit Documents: (a) any Commodity
Hedging Agreement intended, at inception or execution, to hedge or manage any of
the risks related to existing and/or forecasted power generation or load of the
Borrower or the Restricted Subsidiaries (whether owned or contracted), (b) any
Hedging Agreement intended, at

 

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inception or execution, (i) to hedge or manage the interest rate exposure
associated with any debt securities, debt facilities or leases (existing or
forecasted) of the Borrower or the Restricted Subsidiaries, (ii) for foreign
exchange or currency exchange management, (iii) to manage commodity portfolio
exposure associated with changes in interest rates or (iv) to hedge any exposure
that the Borrower or the Restricted Subsidiaries may have to counterparties
under other Hedging Agreements such that the combination of such Hedging
Agreements is not speculative taken as a whole and (c) any Hedging Agreement
and/or Commodity Hedging Agreement, as applicable, entered into by the Borrower
or any Restricted Subsidiary (in each case, entered into in the ordinary course
of business or consistent with past practice) that was intended, at inception or
execution, to unwind or offset any Hedging Agreement and/or Commodity Hedging
Agreement, as applicable, described in clauses (a) and (b) of this Section 1.10.

SECTION 2. Amount and Terms of Credit.

2.1. Commitments.

(a) Subject to and upon the terms and conditions set forth in this Agreement,
each Lender having a Term Loan Commitment, severally, but not jointly, agrees to
make a loan (each a “Term Loan” and, collectively, the “Term Loans”) in Dollars
to the Borrower (x) on the Closing Date, which Term Loans shall equal the amount
requested by the Borrower, not to exceed (i) for any such Lender, the Available
Term Loan Commitment of such Lender, and (ii) in the aggregate, the Available
Term Loan Commitment, and (y) on the Full Availability Date, which Term Loans
shall equal the amount requested by the Borrower, not to exceed (i) for any such
Lender, the Available Term Loan Commitment of such Lender, and (ii) in the
aggregate, the Available Term Loan Commitment.

(i) The Term Loans may, at the option of the Borrower, be incurred, maintained
as, and/or converted into, ABR Loans or LIBOR Loans in accordance with
Section 2.6; provided that all such Term Loans made by each of the Lenders
pursuant to the same Borrowing shall, unless otherwise specifically provided
herein, consist entirely of Term Loans of the same Type. The Term Loans may be
repaid or prepaid in accordance with the provisions hereof, but once repaid or
prepaid may not be reborrowed.

(ii) All Term Loans funded on the Full Availability Date will be of the same
Type and, in the case of LIBOR Loans, have the same Interest Periods and LIBOR
Rate as all other LIBOR Term Loans then outstanding (on a ratable basis if there
is more than one Borrowing of Term Loans then outstanding); provided that the
initial Interest Period of any such LIBOR Term Loans funded on the Full
Availability Date shall commence on the Full Availability Date and shall end on
the last day of the then-current Interest Period for all other LIBOR Term Loans
then outstanding (on a ratable basis if there is more than one Borrowing of
other LIBOR Term Loans then outstanding).

(b) Subject to and upon the terms and conditions herein set forth, each Lender
having a Delayed-Draw Term Loan Commitment severally, but not jointly, agrees to
make a loan or loans (each a “Delayed-Draw Term Loan” and, collectively, the
“Delayed-Draw Term Loans”) in Dollars to the Borrower.

(i) Such Delayed-Draw Term Loans (A) shall be made at any time and from time to
time on and after the Closing Date and prior to Delayed-Draw Termination Date,
but only if the Borrower shall have theretofore issued and delivered the RCT
Carve Out Support Rejection Notice pursuant to Section 4.4, (B) shall equal the
amount requested by the Borrower, not to exceed, for any such Lender, the
Available Delayed-Draw Term Loan Commitment of such Lender, (C) shall equal the
amount requested by the Borrower, not to exceed, in the aggregate, the

 

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Total-Delayed Draw Term Loan Commitment and (D) may, at the option of the
Borrower, be maintained as, and/or converted into, ABR Loans or LIBOR Loans in
accordance with Section 2.6; provided that all such Delayed Draw Term Loans made
by each of the Lenders pursuant to the same Borrowing shall, unless otherwise
specifically provided herein, consist entirely of Delayed Draw Term Loans of the
same Type. The Delayed-Draw Term Loans may be repaid or prepaid in accordance
with the provisions hereof, but once repaid or prepaid may not be reborrowed.

(ii) Notwithstanding anything to the contrary herein, immediately after any
Delayed-Draw Term Loans are funded pursuant to this Section 2.1(b), such Loans
will automatically be deemed to constitute Term Loans, and to not constitute
Delayed-Draw Term Loans, for all purposes of this Credit Agreement and the other
Credit Documents (except for purposes of the definitions of “Available
Delayed-Draw Term Loan Commitment” and “Available Term Loan
Commitment”). Without limitation of the foregoing, all such Loans (x) will have
the same terms, be part of the same Class and be assigned the same CUSIP as all
other Term Loans and (y) be of the same Type and, in the case of LIBOR Loans,
have the same Interest Periods and LIBOR Rate as all other LIBOR Term Loans then
outstanding (on a ratable basis if there is more than one Borrowing of Term
Loans then outstanding); provided that the initial Interest Period of any such
LIBOR Loans shall commence on the date such Loans are made and shall end on the
last day of the then-current Interest Period for all other LIBOR Term Loans then
outstanding (on a ratable basis if there is more than one Borrowing of other
LIBOR Term Loans then outstanding).

(c) Subject to and upon the terms and conditions herein set forth, each Lender
having a Revolving Credit Commitment severally, but not jointly, agrees to make
a loan or loans (each a “Revolving Credit Loan” and, collectively, the
“Revolving Credit Loans”) in Dollars to the Borrower; provided that prior to the
Full Availability Date, the aggregate principal amount of the Lenders’ Revolving
Credit Exposures shall not exceed the Interim Availability Amount. Such
Revolving Credit Loans (A) shall be made at any time and from time to time on
and after the Closing Date and prior to Revolving Credit Termination Date,
(B) may, at the option of the Borrower, be incurred and maintained as, and/or
converted into, ABR Loans or LIBOR Loans; provided that all Revolving Credit
Loans made by each of the Lenders pursuant to the same Borrowing shall, unless
otherwise specifically provided herein, consist entirely of Revolving Credit
Loans of the same Type, (C) may be repaid and reborrowed in accordance with the
provisions hereof, (D) shall not, for any Lender at any time with respect to any
Class of Revolving Credit Loan, after giving effect thereto and to the
application of the proceeds thereof, result in such Lender’s Revolving Credit
Exposure with respect to such Class at such time exceeding such Lender’s
Revolving Credit Commitment with respect to such Class at such time and
(E) shall not, after giving effect thereto and to the application of the
proceeds thereof, result at any time in the aggregate amount of the Lenders’
Revolving Credit Exposures at such time exceeding the Total Revolving Credit
Commitment then in effect.

(d) Each Lender may at its option make any LIBOR Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan; provided that
(A) any exercise of such option shall not affect the obligation of the Borrower
to repay such Loan and (B) in exercising such option, such Lender shall use its
reasonable efforts to minimize any increased costs to the Borrower resulting
therefrom (which obligation of the Lender shall not require it to take, or
refrain from taking, actions that it determines would result in increased costs
for which it will not be compensated hereunder or that it determines would be
otherwise disadvantageous to it and in the event of such request for costs for
which compensation is provided under this Agreement, the provisions of
Section 2.10 shall apply).

 

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2.2. Minimum Amount of Each Borrowing; Maximum Number of Borrowings. The
aggregate principal amount of each Borrowing of Loans shall be in a minimum
amount of at least the Minimum Borrowing Amount for such Type of Loan and in a
multiple of $1,000,000 in excess thereof; provided that there shall be no more
than two drawings of Delayed-Draw Term Loans. More than one Borrowing may be
incurred on any date; provided that at no time shall there be outstanding more
than (i) twenty (20), in the case of Revolving Credit Loans (ii) ten (10), in
the case of Term Loan Borrowings of LIBOR Loans and (iii) ten (10), in the case
of Delayed-Draw Term Loan Borrowings under this Agreement. For the avoidance of
doubt, unless otherwise determined by the Borrower, all Loans of the same Class
subject to the same Interest Period and drawn on the same date will constitute
one Borrowing.

2.3. Notice of Borrowing; Determination of Class of Loans.

(a) When the Borrower desires to incur Term Loans, the Borrower shall deliver to
the Administrative Agent at the Administrative Agent’s Office a Notice of
Borrowing (or telephonic notice promptly confirmed by delivery of a Notice of
Borrowing) (i) prior to 1:00 p.m. (New York City time) at least three Business
Days’ prior to the date of the proposed Borrowing of Term Loans or Delayed-Draw
Term Loans if all or any of such Loans are to be initially LIBOR Loans, and
(ii) prior to 10:00 a.m. (New York City time) on the date of the proposed
Borrowing of Term Loans or Delayed-Draw Term Loans if all or any of such Loans
are to be ABR Loans. Each Notice of Borrowing shall specify (i) the aggregate
principal amount of Loans to be made, (ii) the date of the Borrowing and
(iii) whether such Loans shall consist of ABR Loans and/or LIBOR Loans and, if
the Loans are to include LIBOR Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall promptly give each applicable
Lender written notice (or telephonic notice promptly confirmed in writing) of
the proposed Borrowing of Loans, of such Lender’s proportionate share thereof
and of the other matters covered by the related Notice of Borrowing.

(b) [Reserved].

(c) [Reserved].

(d) Whenever the Borrower desires to incur Revolving Credit Loans, the Borrower
shall give the Administrative Agent at the Administrative Agent’s Office,
(i) prior to 1:00 p.m. (New York City time) at least three Business Days’ prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Revolving Credit Loans if all or any of such Revolving Credit Loans
are to be initially LIBOR Loans and (ii) prior to 1:00 p.m. (New York City time)
at least one Business Day’s prior written notice (or telephonic notice promptly
confirmed in writing) of each Borrowing of Revolving Credit Loans if all or any
of such Revolving Credit Loans are to be ABR Loans. Each such Notice of
Borrowing shall specify (i) the aggregate principal amount of the Revolving
Credit Loans to be made pursuant to such Borrowing, (ii) the date of the
Borrowing (which shall be a Business Day) and (iii) whether the Borrowing shall
consist of ABR Loans and/or LIBOR Loans and, if LIBOR Loans, the Interest Period
to be initially applicable thereto. The Administrative Agent shall promptly give
each Revolving Credit Lender written notice (or telephonic notice promptly
confirmed in writing) of each proposed Borrowing of Revolving Credit Loans, of
such Lender’s Revolving Credit Commitment Percentage thereof and of the other
matters covered by the related Notice of Borrowing.

(e) [Reserved].

(f) [Reserved].

(g) [Reserved].

(h) Without in any way limiting the obligation of the Borrower to confirm in
writing any notice it may give hereunder by telephone, the Administrative Agent
may act prior to receipt of written confirmation without liability upon the
basis of such telephonic notice believed by the Administrative Agent in good
faith to be from an Authorized Officer of the Borrower.

 

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2.4. Disbursement of Funds.

(a) No later than 2:00 p.m. (New York City time) on the date specified in each
Notice of Borrowing, each Lender will make available its pro rata portion, if
any, of each Borrowing requested to be made on such date in the manner provided
below.

(b) Each Lender shall make available all amounts required under any Borrowing
for its applicable Commitments in immediately available funds to the
Administrative Agent at the Administrative Agent’s Office in Dollars, and the
Administrative Agent will make available to the Borrower, by depositing to an
account designated by the Borrower to the Administrative Agent the aggregate of
the amounts so made available in Dollars. Unless the Administrative Agent shall
have been notified by any Lender prior to the date of any such Borrowing that
such Lender does not intend to make available to the Administrative Agent its
portion of the Borrowing or Borrowings to be made on such date, the
Administrative Agent may assume that such Lender has made such amount available
to the Administrative Agent on such date of Borrowing, and the Administrative
Agent, in reliance upon such assumption, may (in its sole discretion and without
any obligation to do so) make available to the Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the Administrative
Agent by such Lender and the Administrative Agent has made available such amount
to the Borrower, the Administrative Agent shall be entitled to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent’s demand therefor
the Administrative Agent shall promptly notify the Borrower and the Borrower
shall immediately pay such corresponding amount to the Administrative Agent in
Dollars. The Administrative Agent shall also be entitled to recover from such
Lender or the Borrower interest on such corresponding amount in respect of each
day from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (i) if paid
by such Lender, the Overnight Rate or (ii) if paid by the Borrower, the
then-applicable rate of interest or fees, calculated in accordance with
Section 2.8, for the Loans of the applicable Class.

(c) Nothing in this Section 2.4 shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights that
the Borrower may have against any Lender as a result of any default by such
Lender hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to fulfill its commitments
hereunder).

2.5. Repayment of Loans; Evidence of Debt.

(a) The Borrower shall repay to the Administrative Agent, for the benefit of the
applicable Lenders, on the Maturity Date, (i) the then outstanding Term Loans,
(ii) the then outstanding Delayed-Draw Term Loans and (iii) the then outstanding
Revolving Credit Loans.

(b) [Reserved].

(c) In the event any Incremental Term Loans are made, such Incremental Term
Loans, as applicable, shall be repaid in amounts and on dates as agreed between
the Borrower and the relevant Lenders of such Incremental Term Loans, subject to
the requirements set forth in Section 2.14.

 

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(d) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrower to the appropriate
lending office of such Lender resulting from each Loan made by such lending
office of such Lender from time to time, including the amounts of principal and
interest payable and paid to such lending office of such Lender from time to
time under this Agreement.

(e) The Administrative Agent shall maintain the Register pursuant to
Section 13.6(b), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount of each Loan made
hereunder, whether such Loan is a Term Loan, an Incremental Term Loan, a
Delayed-Draw Term Loan, a Revolving Credit Loan or a New Revolving Credit Loan,
as applicable, the Type of each Loan made and the Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender hereunder, and (iii) the
amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender’s share thereof.

(f) The entries made in the Register and accounts and subaccounts maintained
pursuant to clauses (d) and (e) of this Section 2.5 shall, to the extent
permitted by Applicable Law, be prima facie evidence of the existence and
amounts of the obligations of the Borrower therein recorded; provided, however,
that the failure of any Lender or the Administrative Agent to maintain such
account, such Register or such subaccount, as applicable, or any error therein,
shall not in any manner affect the obligation of the Borrower to repay (with
applicable interest) the Loans made to the Borrower by such Lender in accordance
with the terms of this Agreement.

2.6. Conversions and Continuations.

(a) Subject to the penultimate sentence of this clause (a), (x) the Borrower
shall have the option on any Business Day to convert all or a portion equal to
no less than the Minimum Borrowing Amount of the outstanding principal amount of
Term Loans, Delayed-Draw Term Loans or Revolving Credit Loans of one Type into a
Borrowing or Borrowings of another Type and (y) the Borrower shall have the
option on any Business Day to continue the outstanding principal amount of any
LIBOR Loans as LIBOR Loans for an additional Interest Period; provided that
(i) no partial conversion of LIBOR Loans shall reduce the outstanding principal
amount of LIBOR Loans made pursuant to a single Borrowing to less than the
Minimum Borrowing Amount, (ii) ABR Loans may not be converted into LIBOR Loans
if a Payment Default or Event of Default is in existence on the date of the
conversion and the Administrative Agent has or the Required Lenders have
determined in its or their sole discretion not to permit such conversion,
(iii) LIBOR Loans may not be continued as LIBOR Loans for an additional Interest
Period if a Default or Event of Default is in existence on the date of the
proposed continuation and the Administrative Agent has or the Required Lenders
have determined in its or their sole discretion not to permit such continuation
and (iv) Borrowings resulting from conversions pursuant to this Section 2.6
shall be limited in number as provided in Section 2.2. Each such conversion or
continuation shall be effected by the Borrower by giving the Administrative
Agent at the Administrative Agent’s Office prior to 1:00 p.m. (New York City
time) at least (i) three Business Days’, in the case of a continuation of, or
conversion to, LIBOR Loans or (ii) one Business Day’s in the case of a
conversion into ABR Loans, prior written notice (or telephonic notice promptly
confirmed in writing) (each, a “Notice of Conversion or Continuation”)
specifying the Loans to be so converted or continued, the Type of Loans to be
converted into or continued and, if such Loans are to be converted into, or
continued as, LIBOR Loans, the Interest Period to be initially applicable
thereto (if no Interest Period is selected, the Borrower shall be deemed to have
selected an Interest Period of one month’s duration). The Administrative Agent
shall give each applicable Lender notice as promptly as practicable of any such
proposed conversion or continuation affecting any of its Loans.

 

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(b) If any Payment Default or Event of Default is in existence at the time of
any proposed continuation of any LIBOR Loans and the Administrative Agent has or
the Required Lenders have determined in its or their sole discretion not to
permit such continuation, such LIBOR Loans shall be automatically converted on
the last day of the current Interest Period into ABR Loans. If upon the
expiration of any Interest Period in respect of LIBOR Loans, the Borrower has
failed to elect a new Interest Period to be applicable thereto as provided in
clause (a) above, the Borrower shall be deemed to have elected to convert such
Borrowing of LIBOR Loans into a Borrowing of ABR Loans, effective as of the
expiration date of such current Interest Period.

(c) Notwithstanding anything to the contrary herein, the Borrower may deliver a
Notice of Conversion or Continuation pursuant to which the Borrower elects to
irrevocably continue the outstanding principal amount of any Term Loans or
Delayed-Draw Term Loans subject to an interest rate Hedging Agreement as LIBOR
Loans for each Interest Period until the expiration of the term of such
applicable Hedging Agreement.

2.7. Pro Rata Borrowings. Subject to Section 2.1(c), each Borrowing of Revolving
Credit Loans under this Agreement shall be made by the Lenders pro rata on the
basis of their then applicable Revolving Credit Commitments without regard to
the Class of Revolving Credit Commitments held by such Lender. It is understood
that (a) no Lender shall be responsible for any default by any other Lender in
its obligation to make Loans hereunder and that each Lender severally but not
jointly shall be obligated to make the Loans provided to be made by it
hereunder, regardless of the failure of any other Lender to fulfill its
commitments hereunder and (b) failure by a Lender to perform any of its
obligations under any of the Credit Documents shall not release any Person from
performance of its obligation under any Credit Document.

2.8. Interest.

(a) The unpaid principal amount of each ABR Loan shall bear interest from the
date of the Borrowing thereof until maturity (whether by acceleration or
otherwise) at a rate per annum that shall at all times be the Applicable ABR
Margin plus the ABR, in each case, in effect from time to time.

(b) The unpaid principal amount of each LIBOR Loan shall bear interest from the
date of the Borrowing thereof until maturity thereof (whether by acceleration or
otherwise) at a rate per annum that shall at all times be the Applicable LIBOR
Margin plus the relevant LIBOR Rate, in each case in effect from time to time.

(c) [Reserved].

(d) If all or a portion of (i) the principal amount of any Loan or (ii) any
interest payable thereon or any other amount hereunder shall not be paid when
due (whether at the stated maturity, by acceleration or otherwise), and an Event
of Default shall exist as a result of such failure to pay, then upon the giving
of written notice by the Administrative Agent to the Borrower, such overdue
amount shall bear interest at a rate per annum (the “Default Rate”) that is
(x) in the case of overdue principal, the rate that would otherwise be
applicable thereto plus 2% or (y) in the case of any overdue interest or other
amounts due hereunder, to the extent permitted by Applicable Law, the rate
described in Section 2.8(a) plus 2% from the date of such non-payment to the
date on which such amount is paid in full (after as well as before judgment).

(e) Interest on each Loan shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable in Dollars; provided that any Loan that is repaid on the same date on
which it is made shall bear interest for one day. Except as

 

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provided below, interest shall be payable (i) in respect of each ABR Loan,
monthly in arrears on the third Business Day of each calendar month, (ii) in
respect of each LIBOR Loan, on the last day of each Interest Period applicable
thereto and, in the case of an Interest Period in excess of three months, on
each date occurring at three-month intervals after the first day of such
Interest Period and (iii) in respect of each Loan, (A) on any prepayment;
provided that interest on ABR Loans shall only become due pursuant to this
subclause (A) if the aggregate principal amount of the ABR Loans
then-outstanding is repaid in full, (B) at maturity (whether by acceleration or
otherwise) and (C) after such maturity, on demand.

(f) All computations of interest hereunder shall be made in accordance with
Section 5.5.

(g) The Administrative Agent, upon determining the interest rate for any
Borrowing of LIBOR Loans, shall promptly notify the Borrower and the relevant
Lenders thereof. Each such determination shall, absent clearly demonstrable
error, be final and conclusive and binding on all parties hereto.

2.9. Interest Periods. At the time the Borrower gives a Notice of Borrowing or
Notice of Conversion or Continuation in respect of the making of, or conversion
into or continuation as, a Borrowing of LIBOR Loans in accordance with
Section 2.6(a), the Borrower shall give the Administrative Agent written notice
(or telephonic notice promptly confirmed in writing) of the Interest Period
applicable to such Borrowing, which Interest Period shall, at the option of the
Borrower, be a one week (solely with respect to LIBOR Revolving Credit Loans) or
a one, two, three or six or (if available to all relevant Lenders participating
in the relevant Credit Facility) a twelve month period or a period of less than
one month; provided that, notwithstanding the foregoing, the initial Interest
Period beginning on the Closing Date may be for a period of less than one month
if agreed upon by the Borrower and the Administrative Agent.

Notwithstanding anything to the contrary contained above:

(a) the initial Interest Period for any Borrowing of LIBOR Loans shall commence
on the date of such Borrowing (including the date of any conversion from a
Borrowing of ABR Loans) and each Interest Period occurring thereafter in respect
of such Borrowing shall commence on the day on which the next preceding Interest
Period expires;

(b) if any Interest Period relating to a Borrowing of LIBOR Loans begins on the
last Business Day of a calendar month or begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period, such Interest Period shall end on the last Business Day of the calendar
month at the end of such Interest Period;

(c) if any Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day; provided that if any Interest Period in respect of a LIBOR Loan would
otherwise expire on a day that is not a Business Day but is a day of the month
after which no further Business Day occurs in such month, such Interest Period
shall expire on the next preceding Business Day; and

(d) the Borrower shall not be entitled to elect any Interest Period in respect
of any LIBOR Loan if such Interest Period would extend beyond the applicable
Maturity Date of such Loan.

 

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2.10. Increased Costs, Illegality, Etc.

(a) In the event that (x) in the case of clause (i) below, the Administrative
Agent or (y) in the case of clauses (ii) and (iii) below, any Lender shall have
reasonably determined (which determination shall, absent clearly demonstrable
error, be final and conclusive and binding upon all parties hereto):

(i) on any date for determining the LIBOR Rate for any Interest Period that
(x) deposits in the principal amounts and currencies of the Loans comprising
such LIBOR Borrowing, are not generally available in the relevant market or
(y) by reason of any changes arising on or after the Closing Date affecting the
interbank LIBOR market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
LIBOR Rate; or

(ii) at any time, that such Lender shall incur increased costs or reductions in
the amounts received or receivable hereunder with respect to any LIBOR Loans
(other than any increase or reduction attributable to (i) Taxes indemnifiable
under Section 5.4, (ii) net income taxes and franchise and excise taxes (imposed
in lieu of net income taxes) imposed on any Agent or Lender or (iii) Taxes
included under clauses (c) and (d) of the definition of “Excluded Taxes”)
because of (x) any change since the Closing Date in any Applicable Law (or in
the interpretation or administration thereof and including the introduction of
any new Applicable Law), such as, for example, without limitation, a change in
official reserve requirements, and/or (y) other circumstances affecting the
interbank LIBOR market or the position of such Lender in such market; or

(iii) at any time, that the making or continuance of any LIBOR Loan has become
unlawful as a result of compliance by such Lender in good faith with any
Applicable Law (or would conflict with any such Applicable Law not having the
force of law even though the failure to comply therewith would not be unlawful),
or has become impracticable as a result of a contingency occurring after the
Closing Date that materially and adversely affects the interbank LIBOR market;

then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall within a reasonable time thereafter give notice
(if by telephone, confirmed in writing) to the Borrower and to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in
the case of clause (i) above, LIBOR Loans shall no longer be available until
such time as the Administrative Agent notifies the Borrower and the Lenders that
the circumstances giving rise to such notice by the Administrative Agent no
longer exist (which notice the Administrative Agent agrees to give at such time
when such circumstances no longer exist), and any Notice of Borrowing or Notice
of Conversion or Continuation given by the Borrower with respect to LIBOR Loans,
that have not yet been incurred shall be deemed rescinded by the Borrower, as
applicable, (y) in the case of clause (ii) above, the Borrower shall pay to such
Lender, promptly after receipt of written demand therefor such additional
amounts (in the form of an increased rate of or a different method of
calculating, interest or otherwise, as such Lender in its reasonable discretion
shall determine) as shall be required to compensate such Lender for such
increased costs or reductions in amounts receivable hereunder (it being agreed
that a written notice as to the additional amounts owed to such Lender, showing
in reasonable detail the basis for the calculation thereof, submitted to the
Borrower by such Lender shall, absent clearly demonstrable error, be final and
conclusive and binding upon all parties hereto) and (z) in the case of
subclause (iii) above, the Borrower shall take one of the actions specified in
Section 2.10(b) as promptly as possible and, in any event, within the time
period required by Applicable Law.

 

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(b) At any time that any LIBOR Loan is affected by the circumstances described
in Section 2.10(a)(ii) or (iii), the Borrower may (and in the case of a LIBOR
Loan affected pursuant to Section 2.10(a)(iii) shall) either (x) if the affected
LIBOR Loan is then being made pursuant to a Borrowing, cancel such Borrowing by
giving the Administrative Agent telephonic notice (confirmed promptly in
writing) thereof on the same date that the Borrower was notified by a Lender
pursuant to Section 2.10(a)(ii) or (iii) or (y) if the affected LIBOR Loan is
then-outstanding, upon at least three Business Days’ notice to the
Administrative Agent require the affected Lender to convert each such LIBOR Loan
into an ABR Loan; provided that if more than one Lender is affected at any time,
then all affected Lenders must be treated in the same manner pursuant to this
Section 2.10(b).

(c) If, after the Closing Date, any Change in Law relating to capital adequacy
or liquidity of any Lender or compliance by any Lender or its parent with any
Change in Law relating to capital adequacy or liquidity occurring after the
Closing Date, has or would have the effect of reducing the rate of return on
such Lender’s or its parent’s or its Affiliate’s capital or assets as a
consequence of such Lender’s commitments or obligations hereunder to a level
below that which such Lender or its parent or its Affiliate could have achieved
but for such Change in Law (taking into consideration such Lender’s or its
parent’s policies with respect to capital adequacy), then from time to time,
promptly after demand by such Lender (with a copy to the Administrative Agent,
the Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or its parent for such reduction, it being understood and
agreed, however, that a Lender shall not be entitled to such compensation as a
result of such Lender’s compliance with, or pursuant to any request or directive
to comply with, any Applicable Law as in effect on the Closing Date. Each
Lender, upon determining in good faith that any additional amounts will be
payable pursuant to this Section 2.10(c), will give prompt written notice
thereof to the Borrower, which notice shall set forth in reasonable detail the
basis of the calculation of such additional amounts, although the failure to
give any such notice shall not, subject to Section 2.13, release or diminish the
Borrower’s obligations to pay additional amounts pursuant to this
Section 2.10(c) upon receipt of such notice.

2.11. Compensation. If (i) any payment of principal of any LIBOR Loan is made by
the Borrower to or for the account of a Lender other than on the last day of the
Interest Period for such LIBOR Loan as a result of a payment or conversion
pursuant to Section 2.5, 2.6, 2.10, 5.1, 5.2 or 13.7, as a result of
acceleration of the maturity of the Loans pursuant to Section 11 or for any
other reason, (ii) any Borrowing of LIBOR Loans is not made as a result of a
withdrawn Notice of Borrowing, (iii) any ABR Loan is not converted into a LIBOR
Loan as a result of a withdrawn Notice of Conversion or Continuation, (iv) any
LIBOR Loan is not continued as a LIBOR Loan, as the case may be, as a result of
a withdrawn Notice of Conversion or Continuation or (v) any prepayment of
principal of any LIBOR Loan is not made as a result of a withdrawn notice of
prepayment pursuant to Section 5.1 or 5.2, the Borrower shall, after receipt of
a written request by such Lender (which request shall set forth in reasonable
detail the basis for requesting such amount), pay to the Administrative Agent
for the account of such Lender any amounts required to compensate such Lender
for any additional losses, costs or expenses that such Lender may reasonably
incur as a result of such payment, failure to convert, failure to continue or
failure to prepay, including any loss, cost or expense (excluding loss of
anticipated profits) actually incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such LIBOR Loan.

2.12. Change of Lending Office. Each Lender agrees that, upon the occurrence of
any event giving rise to the operation of Section 2.10(a)(ii), 2.10(a)(iii),
2.10(b), 3.5 or 5.4 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; provided that such designation is made on such terms that such Lender and
its lending office suffer no economic, legal or regulatory disadvantage, with
the object of avoiding the consequence of the event giving rise to the operation
of any such Section. Nothing in this Section 2.12 shall affect or postpone any
of the obligations of the Borrower or the right of any Lender provided in
Section 2.10, 3.5 or 5.4.

 

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2.13. Notice of Certain Costs. Notwithstanding anything in this Agreement to the
contrary, to the extent any notice required by Section 2.10, 2.11, 3.5 or 5.4 is
given by any Lender more than 180 days after such Lender has knowledge (or
should have had knowledge) of the occurrence of the event giving rise to the
additional cost, reduction in amounts, loss, tax or other additional amounts
described in such Sections, such Lender shall not be entitled to compensation
under Section 2.10, 2.11, 3.5 or 5.4, as the case may be, for any such amounts
incurred or accruing prior to the 181st day prior to the giving of such notice
to the Borrower.

2.14. Incremental Facilities.

(a) The Borrower may, at any time or from time to time after the Closing Date,
by notice to the Administrative Agent (whereupon the Administrative Agent shall
promptly deliver a copy to each of the Lenders), request (i) one or more
additional tranches of term loans (the “Incremental Term Loans”) or (ii) one or
more increases in the amount of the Revolving Credit Commitments; (each such
increase, an “Incremental Revolving Commitment Increase”); together with the
Incremental Term Loans, the “Incremental Facilities”), provided that (A) both at
the time of any such request and after giving effect to the effectiveness of any
Incremental Amendment referred to below, no Default or Event of Default shall
exist and at the time that any such Incremental Term Loan or Incremental
Revolving Commitment Increase is made or effected (and after giving effect
thereto), the conditions in Section 7.1 shall be satisfied and (B) the Full
Availability Date shall have occurred and (C) solely with respect to an
Incremental Revolving Commitment Increase, the Borrower shall be in compliance
with the covenant set forth in Section 10.9 for the most recently ended fiscal
quarter determined on a Pro Forma Basis as of the date of the making of such
Incremental Revolving Commitment Increase.

(b) Each tranche of Incremental Term Loans and each Incremental Revolving
Commitment Increase shall be in an aggregate principal amount that is not less
than $100,000,000 (provided that such amount may be less than $100,000,000 if
such amount represents all remaining availability under the limit set forth in
the next sentence).

(c) The aggregate principal amount of all Incremental Facilities shall not
exceed the sum of (1) $750,000,000 plus (2) if the RCT Carve Out Support
Rejection Notice shall have been issued and delivered prior to the Delayed-Draw
Termination Date, the Delayed-Draw Term Facility Reduction Amount determined on
a Pro Forma Basis after the incurrence of such Incremental Facility.

(d) The Incremental Term Loans (i) shall rank pari passu in right of payment and
of security with the Revolving Credit Loans, Delayed-Draw Term Loans and all
other Term Loans (ii) shall not mature earlier than the Latest Maturity Date,
(iii) shall have interest rates, interest margins, rate floors, fees, funding
discounts, premiums and amortization schedules determined by the Borrower and
the lenders thereof and (iv) may have terms and conditions different from those
of the other Term Loans; provided that, except with respect to the differences
set forth in clauses (ii) and (iii) above, any differences must be reasonably
acceptable to the Administrative Agent; provided, further that the Yield on any
tranche of Incremental Term Loans does not exceed the Yield on the initial Term
Loans or the Delayed Draw Term Loans by more than 50 basis points per annum,
unless the interest rate on the initial Term Loans and the Delayed Draw Term
Loans, as applicable, is increased on or prior to the date of the incurrence of
such Incremental Term Loans in order to comply with this proviso.

(e) [Reserved].

 

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(f) [Reserved].

(g) Each notice from the Borrower pursuant to this Section 2.14 shall set forth
the requested amount and proposed terms of the relevant Incremental Facility.
Incremental Term Loans may be made, and Incremental Revolving Commitment
Increases may be provided, by any existing Lender (it being understood that
(i) no existing Lender will have an obligation to make a portion of any
Incremental Facility and (ii) the Borrower shall have no obligation to offer any
existing Lender the opportunity to provide any such Credit Facility); provided
that the Administrative Agent shall have consented (not to be unreasonably
withheld) to such Lender’s or Additional Lender’s making such Incremental Term
Loans or providing such Incremental Revolving Commitment Increases if such
consent would be required under Section 13.6(b) for an assignment of Loans or
Commitments, as applicable, to such Lender or Additional Lender.

(h) Commitments in respect of Incremental Term Loans and Incremental Revolving
Commitment Increases shall become Commitments (or in the case of an Incremental
Revolving Commitment Increase to be provided by an existing Lender with a
Revolving Credit Commitment, an increase in such Lender’s applicable Revolving
Credit Commitment) under this Agreement pursuant to an amendment (an
“Incremental Amendment”) to this Agreement (which shall be substantially in the
form of Exhibit K to this Agreement) and, as appropriate, the other Credit
Documents, executed by the Borrower, each Lender agreeing to provide such
Commitment, if any, each Additional Lender, if any, and the Administrative Agent
(notwithstanding any provision to the contrary in Section 13.1 of this
Agreement). The Incremental Amendment may, subject to Section 2.14(c) and (f))
as the case may be, without the consent of any other Lenders, effect such
amendments to this Agreement and the other Credit Documents as may be necessary,
in the reasonable opinion of the Administrative Agent and the Borrower, to
effect the provisions of this Section (notwithstanding any provision to the
contrary in Section 13.1 of this Agreement). The effectiveness of any
Incremental Amendment shall be subject to the satisfaction on the date thereof
of the conditions in Section 7.1 and such other conditions as the parties
thereto shall agree. The Borrower may use the proceeds of the Incremental Term
Loans and Incremental Revolving Commitment Increases for any purpose not
prohibited by this Agreement.

(i) (i) unless it so agrees, the Borrower shall not be obligated to offer any
existing Lender the opportunity to provide any Incremental Facility. If, on the
date of any increase in the Revolving Credit Commitments pursuant to an
Incremental Revolving Commitment Increase, there are any Revolving Credit Loans
outstanding, such Revolving Credit Loans shall on or prior to the effectiveness
of such Incremental Revolving Commitment Increase be prepaid from the proceeds
of additional Revolving Credit Loans made hereunder (reflecting such increase in
Revolving Credit Commitments), which prepayment shall be accompanied by accrued
interest on the Revolving Credit Loans being prepaid and any costs incurred by
any Lender in accordance with Section 2.11. The Administrative Agent and the
Lenders hereby agree that the minimum borrowing, pro rata borrowing and pro rata
payment requirements contained elsewhere in this Agreement shall not apply to
the transactions effected pursuant to the immediately preceding sentence.

(ii) At the option of the Borrower and the Lenders providing such Incremental
Revolving Commitment Increases, any Incremental Revolving Commitment Increases
may be in the form of one or more separate classes of revolving credit
commitments (the “New Revolving Credit Commitments”) which shall constitute a
separate Class of Commitments from the Revolving Credit Commitments and/or any
other New Revolving Credit Commitments (each such separate Class of New
Revolving Credit Commitments, a “New Revolving Credit Series” and each Loan
thereunder, a “New Revolving Credit Loan”) and the related Loans shall
constitute a separate Class of Loans from the Revolving Credit Loans, and/or any
other New Revolving Credit Loans (it being understood that New Revolving Credit
Commitments of a single New Revolving Credit Series may be established on more
than one date); provided that:

 

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(A) Each tranche of New Revolving Credit Commitments shall be in an aggregate
principal amount of not less than $100,000,000 (provided that such amount may be
less than $100,000,000 if such amount represents all remaining availability
under the limit set forth in Section 2.14(b) above).

(B) the terms of such New Revolving Credit Commitments, except for (w) the tenor
of the New Revolving Credit Commitments (which shall have a scheduled expiration
date no earlier than the Maturity Date), (x) the size of any letter of credit
subfacilities under such New Revolving Credit Commitments, (y) the applicable
interest rates, interest margins, rate floors, premiums, funding discounts and
fees payable with respect to such New Revolving Credit Commitments and (z) the
borrowing, repayment and termination of Commitment procedures (in each case
which shall be as specified in the applicable Incremental Amendment), shall be
similar to the terms of the Revolving Credit Commitments (unless otherwise
consented to by the Administrative Agent); provided that the Yield on the New
Revolving Credit Commitments does not exceed the Yield on the initial Revolving
Credit Commitments by more than 50 basis points, unless the interest rate on the
initial Revolving Credit Commitments is increased on or prior to the date of the
incurrence of such New Revolving Credit Commitments in order to comply with this
proviso.

(C) in connection with the establishment of any New Revolving Credit Commitments
that will include letter of credit subfacilities, any amendment to this
Agreement pursuant to this Section 2.14(i)(ii) may include provisions relating
to letters of credit issued thereunder, which issuances shall be on terms
similar (except for the overall size of such subfacilities and the identity of
the letter of credit issuer, and borrowing, repayment and termination of
commitment procedures, in each case which shall be specified in the applicable
Incremental Amendment) to the terms relating to Letters of Credit with respect
to the Revolving Credit Commitments or otherwise reasonably acceptable to the
Administrative Agent and any applicable letter of credit issuer thereunder.

2.15. [Reserved].

2.16. Defaulting Lenders. Notwithstanding any provision of this Agreement to the
contrary, if any Lender becomes a Defaulting Lender, then for so long as such
Lender is a Defaulting Lender, fees shall cease to accrue on the unfunded
portion of the Commitment of such Defaulting Lender pursuant to Section 4.1(a).
If the Borrower and the Administrative Agent agree in writing in their
discretion that a Lender that is a Defaulting Lender should no longer be deemed
to be a Defaulting Lender, the Administrative Agent will so notify the parties
hereto, whereupon, as of the effective date specified in such notice and subject
to any conditions set forth therein, such Lender will cease to be a Defaulting
Lender and will be a Non-Defaulting Lender; provided that, except to the extent
otherwise expressly agreed by the affected parties, no change hereunder from
Defaulting Lender to Non-Defaulting Lender will constitute a waiver or release
of any claim of any party hereunder arising from such Lender’s having been a
Defaulting Lender.

 

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SECTION 3. Letters of Credit.

3.1. Issuance of Letters of Credit.

(a) General Letters of Credit. (i) Subject to and upon the terms and conditions
herein set forth (including Section 3.8), at any time and from time to time on
and after the Closing Date and prior to the General L/C Termination Date, each
General Letter of Credit Issuer agrees to issue upon the request of the Borrower
(x) for the direct or indirect benefit of the Borrower and the Restricted
Subsidiaries and (y) for the direct or indirect benefit of the Ultimate Parent
and its other Subsidiaries (excluding the Oncor Subsidiaries) (in the case of
this sub-clause (y), so long as the aggregate Stated Amount of all Letters of
Credit issued by the General Letter of Credit Issuers from the Closing Date for
the Ultimate Parent and its other Subsidiaries’ benefit does not exceed
$50,000,000), a letter of credit or letters of credit (the “General Letters of
Credit” and each, a “General Letter of Credit”) in such form and with such
Issuer Documents as may be approved by such General Letter of Credit Issuer in
its reasonable discretion; provided that the Borrower shall be a co-applicant,
and jointly and severally liable with respect to each General Letter of Credit
issued for the account of the Ultimate Parent and its Subsidiaries other than
the Borrower; provided further that General Letters of Credit issued for the
direct or indirect benefit of the Ultimate Parent and its other Subsidiaries
(excluding the Oncor Subsidiaries) other than the Borrower and the Restricted
Subsidiaries shall be subject to Sections 10.5(b), (g), (i) and/or (v) and
Section 10.12 hereof.

(ii) Notwithstanding the foregoing, (A) no General Letter of Credit shall be
issued, the Stated Amount of which, when added to the General Letters of Credit
Outstanding at such time, would exceed the lesser of (x) the General Letter of
Credit Commitment then in effect and (y) the General L/C Collateral Account
Balance, (B) no General Letter of Credit shall be issued by any General Letter
of Credit Issuer the Stated Amount of which, when added to the General Letters
of Credit Outstanding with respect to such General Letter of Credit Issuer,
would exceed the lesser of (x) the Specified General Letter of Credit Commitment
of such General Letter of Credit Issuer then in effect and (y) the General L/C
Collateral Account Balance of the relevant General L/C Collateral Account,
(C) each General Letter of Credit shall have an expiration date occurring no
later than the earlier of (x) one year after the date of issuance thereof,
unless otherwise agreed upon by the Administrative Agent and the relevant
General Letter of Credit Issuer or as provided under Section 3.2(b) and (y) the
General L/C Termination Date, (D) each General Letter of Credit shall be
denominated in Dollars, (E) no General Letter of Credit shall be issued if it
would be illegal under any Applicable Law for the beneficiary of the General
Letter of Credit to have a General Letter of Credit issued in its favor and
(F) no General Letter of Credit shall be issued after the relevant General
Letter of Credit Issuer has received a written notice from the Borrower or the
Administrative Agent or the Required Lenders stating that a Default or an Event
of Default has occurred and is continuing until such time as such General Letter
of Credit Issuer shall have received a written notice (x) of rescission of such
notice from the party or parties originally delivering such notice, (y) of the
waiver of such Default or Event of Default in accordance with the provisions of
Section 13.1 or (z) that such Default or Event of Default is no longer
continuing.

(b) RCT Letters of Credit. (i) Subject to and upon the terms and conditions
herein set forth (including Section 3.9), at any time and from time to time on
and after the Closing Date and prior to the RCT L/C Termination Date, but only
if the Borrower shall have theretofore issued and delivered the RCT Carve Out
Support Rejection Notice pursuant to Section 4.4 prior to the Delayed-Draw
Termination Date, each RCT Letter of Credit Issuer agrees to issue upon the
request of the Borrower and for the benefit of the RCT a letter of credit or
letters of credit (the “RCT Letters of Credit” and each, a “RCT Letter of
Credit”) in such form and with such Issuer Documents as may be approved by such
RCT Letter of Credit Issuer in its reasonable discretion. RCT Letters of Credit
shall be used for the purpose of satisfying bonding requirements of the RCT.

 

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(ii) Notwithstanding the foregoing, (A) no RCT Letter of Credit shall be issued,
the Stated Amount of which, when added to the RCT Letters of Credit Outstanding
at such time, would exceed the lesser of (x) the RCT Letter of Credit Commitment
then in effect and (y) the RCT L/C Collateral Account Balance, (B) no RCT Letter
of Credit shall be issued by any RCT Letter of Credit Issuer the Stated Amount
of which, when added to the RCT Letters of Credit Outstanding with respect to
such RCT Letter of Credit Issuer, would exceed the lesser of (x) the Specified
RCT Letter of Credit Commitment of such RCT Letter of Credit Issuer then in
effect and (y) the RCT L/C Collateral Account Balance of the relevant RCT L/C
Collateral Account, (C) each RCT Letter of Credit shall have an expiration date
occurring no later than the earlier of (x) one year after the date of issuance
thereof, unless otherwise agreed upon by the Administrative Agent and the
relevant RCT Letter of Credit Issuer or as provided under Section 3.2(b) and
(y) the RCT L/C Termination Date, (D) each RCT Letter of Credit shall be
denominated in Dollars, (E) no RCT Letter of Credit shall be issued if it would
be illegal under any Applicable Law for the beneficiary of the RCT Letter of
Credit to have a RCT Letter of Credit issued in its favor and (F) no RCT Letter
of Credit shall be issued after the relevant RCT Letter of Credit Issuer has
received a written notice from the Borrower or the Administrative Agent or the
Required Lenders stating that a Default or an Event of Default has occurred and
is continuing until such time as such RCT Letter of Credit Issuer shall have
received a written notice (x) of rescission of such notice from the party or
parties originally delivering such notice, (y) of the waiver of such Default or
Event of Default in accordance with the provisions of Section 13.1 or (z) that
such Default or Event of Default is no longer continuing.

3.2. Letter of Credit Requests.

(a) Whenever the Borrower desires that a Letter of Credit be issued, the
Borrower shall give the Administrative Agent and the applicable Letter of Credit
Issuer a Letter of Credit Request by no later than 1:00 p.m. (New York City
time) at least two (or such lesser number as may be agreed upon by the
Administrative Agent and such Letter of Credit Issuer) Business Days prior to
the proposed date of issuance. Each notice shall be executed by the Borrower,
shall specify whether such Letter of Credit is to be a General Letter of Credit
or RCT Letter of Credit and shall be in the form of Exhibit G, or such other
form (including by electronic or fax transmission) as agreed between the
Borrower, the Administrative Agent and the applicable Letter of Credit Issuer
(each a “Letter of Credit Request”).

(b) If the Borrower so requests in any applicable Letter of Credit Request, any
Letter of Credit Issuer may, in its sole and absolute discretion, agree to issue
a Letter of Credit that has automatic extension provisions (each, an
“Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter
of Credit must permit the Letter of Credit Issuer to prevent any such extension
at least once in each twelve-month period (commencing with the date of issuance
of such Letter of Credit) by giving prior notice to the beneficiary thereof not
later than a day (the “Non-Extension Notice Date”) in each such twelve-month
period to be agreed upon at the time such Letter of Credit is issued. Unless
otherwise directed by a Letter of Credit Issuer, the Borrower shall not be
required to make a specific request to such Letter of Credit Issuer for any such
extension. Once an Auto-Extension Letter of Credit has been issued, the Borrower
shall be deemed to have authorized (but may not require) such Letter of Credit
Issuer to permit the extension of such Letter of Credit at any time to an expiry
date not later than, in the case of any General Letter of Credit, the General
L/C Termination Date, and in the case of any RCT Letter of Credit, the RCT L/C
Termination Date; provided, however, that such Letter of Credit Issuer shall not
permit any such extension if (A) such Letter of Credit Issuer has determined
that it would not be permitted, or would have no obligation, at such time to
issue such Letter of Credit in its revised form (as

 

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extended) under the terms hereof (by reason of the provisions of clause(ii) of
either Sections 3.1(a) or (b), as applicable or otherwise), or (B) it has
received notice (which may be by telephone or in writing) on or before the day
that is five Business Days before the Non-Extension Notice Date from the
Administrative Agent or the Borrower that one or more of the applicable
conditions specified in Section 7 are not then satisfied, and in each such case
directing such Letter of Credit Issuer not to permit such extension.

(c) Each Letter of Credit Issuer shall, at least once each month, provide the
Administrative Agent a list of all Letters of Credit issued by it that are
outstanding at such time and specifying whether such Letters of Credit are
General Letters of Credit or RCT Letters of Credit; provided that upon written
request from the Administrative Agent, such Letter of Credit Issuer shall
thereafter notify the Administrative Agent in writing on each Business Day of
all Letters of Credit issued on the prior Business Day by such Letter of Credit
Issuer and specifying whether such Letters of Credit are General Letters of
Credit or RCT Letters of Credit.

(d) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that the Letter of Credit may be
issued in accordance with, and will not violate the requirements of,
Section 3.1(a)(ii) or Section 3.1(b)(ii), as applicable.

3.3. [Reserved].

3.4. Agreement to Repay Letter of Credit Drawings.

(a) The Borrower hereby agrees to reimburse the applicable Letter of Credit
Issuer, by making payment in Dollars to such Letter of Credit Issuer in
immediately available funds, for any payment or disbursement made by such Letter
of Credit Issuer under any Letter of Credit (each such amount so paid until
reimbursed, an “Unpaid Drawing”) (i) within one Business Day of the date of such
payment or disbursement, if such Letter of Credit Issuer provides notice to the
Borrower of such payment or disbursement prior to 10:00 a.m. (New York City
time) on such next succeeding Business Day from the date of such payment or
disbursement or (ii) if such notice is received after such time, on the first
Business Day following the date of receipt of such notice (such required date
for reimbursement under clause (i) or (ii), as applicable, the “Reimbursement
Date”), with interest on the amount so paid or disbursed by such Letter of
Credit Issuer, from and including the date of such payment or disbursement to
but excluding the Reimbursement Date, at the per annum rate for each day equal
to the Overnight Rate; provided that, notwithstanding anything contained in this
Agreement to the contrary, (i) in the case of any Unpaid Drawing under any
General Letter of Credit, if the Borrower shall have notified the Administrative
Agent and the relevant General Letter of Credit Issuer that it does not intend
to reimburse the relevant General Letter of Credit Issuer for the amount of such
drawing with its own funds, or if the Borrower has not notified the
Administrative Agent and the relevant General Letter of Credit Issuer prior to
10:00 a.m. (New York City time) on the Reimbursement Date that it intends to
reimburse the relevant General Letter of Credit Issuer for the amount of such
drawing with its own funds, in either case the Collateral Agent shall promptly
cause the amounts on deposit in the relevant General L/C Collateral Account to
be applied to repay in full the amount of such Unpaid Drawing and (ii) in the
case of any payment or disbursement made by any RCT Letter of Credit Issuer
under any RCT Letter of Credit, upon notification by such RCT Letter of Credit
Issuer to the Collateral Agent of such payment or disbursement, the Collateral
Agent shall promptly cause the amounts on deposit in the relevant RCT L/C
Collateral Account to be applied to repay in full the amount of such payment or
disbursement.

(b) The obligations of the Borrower under this Section 3.4 to reimburse the
Letter of Credit Issuers with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment that the Borrower or any other Person may have or have had against any
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Credit Issuer, the Administrative Agent or any Lender including any defense
based upon the failure of any drawing under a Letter of Credit (each a
“Drawing”) to conform to the terms of the Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of such
Drawing; provided that the Borrower shall not be obligated to reimburse any
Letter of Credit Issuer for any wrongful payment made by such Letter of Credit
Issuer under the Letter of Credit issued by it as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such Letter
of Credit Issuer.

3.5. Increased Costs. If after the Closing Date, the adoption of any Applicable
Law, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or actual
compliance by a Letter of Credit Issuer with any request or directive made or
adopted after the Closing Date (whether or not having the force of law), by any
such authority, central bank or comparable agency shall either (a) impose,
modify or make applicable any reserve, deposit, capital adequacy, liquidity or
similar requirement against letters of credit issued by any Letter of Credit
Issuer, or (b) impose on any Letter of Credit Issuer any other conditions or
liabilities affecting its obligations under this Agreement in respect of Letters
of Credit or any Letter of Credit, and the result of any of the foregoing is to
increase the cost to such Letter of Credit Issuer of issuing or maintaining any
Letter of Credit, or to reduce the amount of any sum received or receivable by
such Letter of Credit Issuer hereunder (other than any such increase or
reduction attributable to (i) taxes indemnifiable under Section 5.4, or
(ii) Excluded Taxes) in respect of Letters of Credit, then, promptly after
receipt of written demand to the Borrower by such Letter of Credit Issuer (a
copy of which notice shall be sent by such Letter of Credit Issuer to the
Administrative Agent), the Borrower shall pay to such Letter of Credit Issuer
such additional amount or amounts as will compensate such Letter of Credit
Issuer for such increased cost or reduction, it being understood and agreed,
however, that any Letter of Credit Issuer shall not be entitled to such
compensation as a result of such Person’s compliance with, or pursuant to any
request or directive to comply with, any such Applicable Law as in effect on the
Closing Date. A certificate submitted to the Borrower by the relevant Letter of
Credit Issuer (a copy of which certificate shall be sent by such Letter of
Credit Issuer to the Administrative Agent), setting forth in reasonable detail
the basis for the determination of such additional amount or amounts necessary
to compensate such Letter of Credit Issuer as aforesaid shall be conclusive and
binding on the Borrower absent clearly demonstrable error.

3.6. New or Successor Letter of Credit Issuer.

(a) Any Letter of Credit Issuer may resign as a Letter of Credit Issuer upon 30
days’ prior written notice to the Administrative Agent, the Lenders and the
Borrower. The Borrower may add General Letter of Credit Issuers or RCT Letter of
Credit Issuers at any time upon notice to the Administrative Agent. If a Letter
of Credit Issuer shall resign or be replaced, or if the Borrower shall decide to
add a new Letter of Credit Issuer under this Agreement, then the Borrower may
appoint from among the Lenders a successor or new issuer of Letters of Credit
or, with the consent of the Administrative Agent (such consent not to be
unreasonably withheld), another successor or new issuer of Letters of Credit,
whereupon such successor issuer of Letters of Credit shall succeed to the
rights, powers and duties of the replaced or resigning Letter of Credit Issuer
under this Agreement and the other Credit Documents, or such new issuer of
Letters of Credit shall be granted the rights, powers and duties of a General
Letter of Credit Issuer or RCT Letter of Credit Issuer, as applicable,
hereunder, and the term “General Letter of Credit Issuer” or “RCT Letter of
Credit Issuer”, as applicable, shall mean such successor or include such new
issuer of Letters of Credit effective upon such appointment. At the time such
resignation or replacement shall become effective, the Borrower shall pay to the
resigning or replaced Letter of Credit Issuer all accrued and unpaid fees owing
to such Letter of Credit Issuer pursuant to Section 4.1(c). The acceptance of
any appointment as a Letter of Credit Issuer hereunder whether as a successor or
new issuer of Letters of Credit in accordance with this Agreement, shall be
evidenced by an agreement entered into by such new or successor issuer of
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Borrower and the Administrative Agent and, from and after the effective date of
such agreement, such new or successor issuer of Letters of Credit shall become a
“General Letter of Credit Issuer” or “RCT Letter of Credit Issuer”, as
applicable, hereunder. After the resignation or replacement of a Letter of
Credit Issuer hereunder, the resigning or replaced Letter of Credit Issuer shall
remain a party hereto and shall continue to have all the rights and obligations
of a Letter of Credit Issuer under this Agreement and the other Credit Documents
with respect to Letters of Credit issued by it prior to such resignation or
replacement, but shall not be required to issue additional Letters of Credit. In
connection with any resignation or replacement pursuant to this clause (a) (but,
in case of any such resignation, only to the extent that a successor issuer of
Letters of Credit shall have been appointed), either (i) the Borrower, the
resigning or replaced Letter of Credit Issuer and the successor issuer of
Letters of Credit shall arrange to have any outstanding Letters of Credit issued
by the resigning or replaced Letter of Credit Issuer replaced with Letters of
Credit issued by the successor issuer of Letters of Credit or (ii) the Borrower
shall cause the successor issuer of Letters of Credit, if such successor issuer
is satisfactory to the replaced or resigning Letter of Credit Issuer, to issue
“back-stop” Letters of Credit naming the resigning or replaced Letter of Credit
Issuer as beneficiary for each outstanding Letter of Credit issued by the
resigning or replaced Letter of Credit Issuer, which new Letters of Credit shall
have a face amount equal to the Letters of Credit being back-stopped and the
sole requirement for drawing on such new Letters of Credit shall be a drawing on
the corresponding back-stopped Letters of Credit. After any resigning or
replaced Letter of Credit Issuer’s resignation or replacement as Letter of
Credit Issuer, the provisions of this Agreement relating to a Letter of Credit
Issuer shall inure to its benefit as to any actions taken or omitted to be taken
by it (A) while it was a Letter of Credit Issuer under this Agreement or (B) at
any time with respect to Letters of Credit issued by such Letter of Credit
Issuer.

(b) To the extent that there are, at the time of any resignation or replacement
as set forth in clause (a) above, any outstanding Letters of Credit, nothing
herein shall be deemed to impact or impair any rights and obligations of any of
the parties hereto with respect to such outstanding Letters of Credit
(including, without limitation, any obligations related to the payment of Fees
or the reimbursement or funding of amounts drawn), except that the Borrower, the
resigning or replaced Letter of Credit Issuer and the successor issuer of
Letters of Credit shall have the obligations regarding outstanding Letters of
Credit described in clause (a) above.

3.7. Role of Letter of Credit Issuer. Each Lender and the Borrower agree that,
in paying any Drawing under a Letter of Credit, the relevant Letter of Credit
Issuer shall not have any responsibility to obtain any document (other than any
sight draft, certificates and documents expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity or accuracy of any such
document or the authority of the Person executing or delivering any such
document. None of the Letter of Credit Issuers, the Administrative Agent, any of
their respective affiliates nor any correspondent, participant or assignee of
any Letter of Credit Issuer shall be liable to any Lender for (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Required Lenders; (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution, effectiveness,
validity or enforceability of any document or instrument related to any Letter
of Credit or Issuer Document. The Borrower hereby assumes all risks of the acts
or omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided that this assumption is not intended to, and shall
not, preclude the Borrower’s pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. None
of the Letter of Credit Issuers, the Administrative Agent, any of their
respective affiliates nor any correspondent, participant or assignee of any
Letter of Credit Issuer shall be liable or responsible for (i) any lack of
validity or enforceability of this Agreement or any of the other Credit
Documents, (ii) the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against a beneficiary named in a Letter of
Credit, any transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, any Letter of Credit
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connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transaction between the Borrower and the beneficiary named in any such Letter of
Credit), (iii) any draft, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect,
(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Credit Documents or (v) the
occurrence of any Default or Event of Default; provided that anything in this
Section to the contrary notwithstanding, the Borrower may have a claim against a
Letter of Credit Issuer, and such Letter of Credit Issuer may be liable to the
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrower which the Borrower
proves were caused by such Letter of Credit Issuer’s willful misconduct or gross
negligence or such Letter of Credit Issuer’s willful failure to pay under any
Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions of a
Letter of Credit. In furtherance and not in limitation of the foregoing, each
Letter of Credit Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and no Letter of Credit Issuer shall be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.

3.8. General L/C Collateral Account. On or prior to the date of initial issuance
of any General Letters of Credit, the Borrower shall establish under its name
one or more General L/C Collateral Accounts for the purpose of cash
collateralizing the Borrower’s obligations to any General Letter of Credit
Issuer (including the General Letter of Credit Reimbursement Obligation) and may
transfer all or any portion of the funds in any General L/C Collateral Account
to any other General L/C Collateral Account, subject to the satisfaction of the
conditions set forth in this Section 3.8; provided that each General Letter of
Credit Issuer may require that the General L/C Collateral Account Depositary
Bank for the General L/C Collateral Account corresponding to its General L/C
Obligations is such General Letter of Credit Issuer or an Affiliate thereof. The
Borrower agrees that at all times, and shall immediately cause additional funds
to be deposited and held in each General L/C Collateral Account from time to
time in order that the General L/C Collateral Account Balance of each General
L/C Collateral Account shall at least equal the General Letters of Credit
Outstanding (the “General L/C Cash Coverage Requirement”) of the relevant
General Letter of Credit Issuer. The Borrower hereby grants to the Collateral
Agent, for the benefit of all General Letter of Credit Issuers, a security
interest in the General L/C Collateral Accounts and all cash and balances
therein and all proceeds of the foregoing, as security for the General L/C
Obligations (including the General Letter of Credit Reimbursement Obligation)
(and, in addition, grants a security interest therein, for the benefit of the
Secured Parties as collateral security for the other Obligations; provided that
amounts on deposit in any General L/C Collateral Account shall be applied,
first, to repay the corresponding General L/C Obligations (including the General
Letter of Credit Reimbursement Obligation) and, then, to repay all other
Obligations, in each case in such order as set forth in Section 11.19 hereof).
Except as expressly provided herein or in any other Credit Document, no Person
shall have the right to make any withdrawal from any General L/C Collateral
Account or to exercise any right or power with respect thereto; provided that at
any time the Borrower shall fail to reimburse any General Letter of Credit
Issuer for any Unpaid Drawing in accordance with Section 3.4(a), the Borrower
hereby absolutely, unconditionally and irrevocably agrees that such General
Letter of Credit Issuer shall be entitled to instruct the Collateral Agent, and
the Collateral Agent shall instruct the applicable depositary bank (each, a
“General L/C Collateral Account Depositary Bank”) of the applicable General L/C
Collateral Account, to withdraw therefrom and pay to the Administrative Agent
for account of such General Letter of Credit Issuer amounts equal to such Unpaid
Drawings. Amounts in any General L/C Collateral Account shall be invested by the
applicable General L/C Collateral Account Depositary Bank in the manner
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which such General L/C Collateral Account Depositary Bank has ready access;
provided, however, that the General L/C Collateral Account Depositary Bank shall
determine such investments in General L/C Permitted Investments during the
existence of any Event of Default as long as made in General L/C Permitted
Investments, it being understood and agreed that neither the Borrower nor the
General L/C Collateral Account Depositary Bank nor any other Person may direct
the investment of funds in the General L/C Collateral Account in any assets
other than General L/C Permitted Investments. The Borrower shall bear the risk
of loss of principal with respect to any investments in any General L/C
Collateral Account. In addition, the Collateral Agent hereby agrees to instruct
each General L/C Collateral Account Depositary Bank to release and pay to the
Borrower amounts (if any) (x) remaining on deposit in each relevant General L/C
Collateral Account after the termination of all General Letter of Credit
Commitments, the termination or cancellation of all General Letters of Credit
and the repayment in full of all outstanding General L/C Obligations and/or
(y) as set forth in Section 3.10(a) below. Each General L/C Collateral Account
Depositary Bank shall inform the applicable General L/C Issuer of the balance in
the applicable General L/C Collateral Account upon the request of such General
L/C Issuer.

3.9. RCT L/C Collateral Account. On or prior to the date of initial drawing of
Delayed-Draw Term Loans, the Borrower shall establish under its name one or more
RCT L/C Collateral Accounts for the purpose of cash collateralizing the
Borrower’s obligations to any RCT Letter of Credit Issuer (including the RCT
Letter of Credit Reimbursement Obligation) and may transfer all or any portion
of the funds in any RCT L/C Collateral Account to any other RCT L/C Collateral
Account, subject to the satisfaction of the conditions set forth in this
Section 3.9; provided that each RCT Letter of Credit Issuer may require that the
RCT L/C Collateral Account Depositary Bank for the RCT L/C Collateral Account
corresponding to its RCT L/C Obligations is such RCT Letter of Credit Issuer or
an Affiliate thereof. The Borrower agrees that at all times, and shall
immediately cause additional funds to be deposited and held in each RCT L/C
Collateral Account from time to time in order that, the RCT L/C Collateral
Account Balance of each RCT L/C Collateral Account shall at least equal the RCT
Letters of Credit Outstanding (the “RCT L/C Cash Coverage Requirement”) of the
relevant RCT Letter of Credit Issuer. The Borrower hereby grants to the
Collateral Agent, for the benefit of all RCT Letter of Credit Issuers, a
security interest in the RCT L/C Collateral Accounts and all cash and balances
therein and all proceeds of the foregoing, as security for the RCT L/C
Obligations (including the RCT Letter of Credit Reimbursement Obligation) (and,
in addition, grants a security interest therein, for the benefit of the Secured
Parties as collateral security for the other Obligations; provided that amounts
on deposit in any RCT L/C Collateral Account shall be applied, first, to repay
the corresponding RCT L/C Obligations (including the RCT Letter of Credit
Reimbursement Obligation) and, then, to repay all other Obligations, in each
case in such order as set forth in Section 11.19 hereof). Except as expressly
provided herein or in any other Credit Document, no Person shall have the right
to make any withdrawal from any RCT L/C Collateral Account or to exercise any
right or power with respect thereto; provided that at any time the Borrower
shall fail to reimburse any RCT Letter of Credit Issuer for any Unpaid Drawing
in accordance with Section 3.4(a), the Borrower hereby absolutely,
unconditionally and irrevocably agrees that such RCT Letter of Credit Issuer
shall be entitled to instruct the Collateral Agent, and the Collateral Agent
shall instruct the applicable depositary bank (each, a “RCT L/C Collateral
Account Depositary Bank”) of the applicable RCT L/C Collateral Account, to
withdraw therefrom and pay to the Administrative Agent for account of such RCT
Letter of Credit Issuer amounts equal to such Unpaid Drawings. Amounts in any
RCT L/C Collateral Account shall be invested by the applicable RCT L/C
Collateral Account Depositary Bank in the manner instructed by the Borrower in
RCT L/C Permitted Investments to which such RCT L/C Collateral Account
Depositary Bank has ready access; provided, however, that the RCT L/C Collateral
Account Depositary Bank shall determine such investments in RCT L/C Permitted
Investments during the existence of any Event of Default as long as made in RCT
L/C Permitted Investments, it being understood and agreed that neither the
Borrower nor the RCT L/C Collateral Account Depositary Bank nor any other Person
may direct the investment of funds in the RCT L/C Collateral Account in any
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risk of loss of principal with respect to any investments in any RCT L/C
Collateral Account. In addition, the Collateral Agent hereby agrees to instruct
each RCT L/C Collateral Account Depositary Bank to release and pay to the
Borrower amounts (if any) (x) remaining on deposit in each relevant RCT L/C
Collateral Account after the termination of all RCT Letter of Credit
Commitments, the termination or cancellation of all RCT Letters of Credit and
the repayment in full of all outstanding RCT L/C Obligations and/or (y) as set
forth in Section 3.10(b) below. Each RCT L/C Collateral Account Depositary Bank
shall inform the applicable RCT L/C Issuer of the balance in the applicable RCT
L/C Collateral Account upon the request of such RCT L/C Issuer.

3.10. Drawings from General L/C Collateral Accounts and RCT L/C Collateral
Accounts.

(a) At any time and from time to time (other than during the existence of an
Event of Default), upon at least two (2) Business Days’ prior written notice to
the Collateral Agent, the Administrative Agent, the relevant General Letter of
Credit Issuer and the relevant General L/C Collateral Account Depositary Bank,
the Borrower may draw amounts in any General L/C Collateral Account, provided,
however, that after giving effect to any such drawing, the General L/C Cash
Coverage Requirement shall be satisfied. For the avoidance of doubt, the
conditions set forth in Sections 6 and 7 of this Agreement will not be
applicable to any withdrawals made pursuant to this Section 3.10(a) or the last
sentence of Section 3.8.

(b) At any time and from time to time (other than during the existence of an
Event of Default), upon at least two (2) Business Days’ prior written notice to
the Collateral Agent, the Administrative Agent, the relevant RCT Letter of
Credit Issuer and the relevant RCT L/C Collateral Account Depositary Bank, the
Borrower may draw amounts in any RCT L/C Collateral Account, provided, however,
that (x) after giving effect to any such drawing, the RCT L/C Cash Coverage
Requirement shall be satisfied (y) such drawn amounts may not be used for any
purpose other than prepaying the Term Loans or the Delayed-Draw Term Loans in
accordance with Section 5.1. For the avoidance of doubt, the conditions set
forth in Sections 6 and 7 of this Agreement will not be applicable to any
withdrawals made pursuant to this Section 3.10(b) or the last sentence of
Section 3.9.

3.11. Applicability of ISP and UCP. Unless otherwise expressly agreed by the
relevant Letter of Credit Issuer and the Borrower when a Letter of Credit is
issued, (i) the rules of the ISP shall apply to each Standby Letter of Credit,
and (ii) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce at the time
of issuance, shall apply to each Commercial Letter of Credit, and in each case
to the extent not inconsistent with the above referred rules, the laws of the
State of New York shall apply to each Letter of Credit.

3.12. Conflict with Issuer Documents. In the event of any conflict between the
terms hereof and the terms of any Issuer Document, the terms hereof shall
control.

3.13. Letters of Credit Issued for Others. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or
is for the account of, the Ultimate Parent or its Subsidiaries other than the
Borrower, the Borrower shall be obligated to reimburse the relevant Letter of
Credit Issuer hereunder for any and all drawings under such Letter of Credit.
The Borrower hereby acknowledges that the issuance of Letters of Credit for the
account of the Ultimate Parent or its Subsidiaries other than the Borrower
inures to the benefit of the Borrower, and that the Borrower’s business derives
substantial benefits from the businesses of the Ultimate Parent and its
Subsidiaries other than the Borrower.

 

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SECTION 4. Fees; Commitments.

4.1. Fees.

(a) The Borrower agrees to pay to the Administrative Agent in Dollars, for the
account of each Revolving Credit Lender (in each case pro rata according to the
respective Revolving Credit Commitments of all such Lenders), a commitment fee
(the “Revolving Credit Commitment Fee”) for each day from the Closing Date to,
but excluding, the Maturity Date. The Revolving Credit Commitment Fee shall be
payable by the Borrower (x) quarterly in arrears on the tenth Business Day
following the end of each March, June, September and December (for the
three-month period (or portion thereof) ended on such day for which no payment
has been received) and (y) on the Revolving Credit Termination Date, (for the
period ended on such date for which no payment has been received pursuant to
clause (x) above) and shall be computed for each day during such period at a
rate per annum equal to the Revolving Credit Commitment Fee Rate on the
applicable portion of the Available Revolving Commitment in effect on such day.

(b) [Reserved].

(c) The Borrower agrees to pay to each Letter of Credit Issuer a fee in respect
of each Letter of Credit issued by it (the “Fronting Fee”), for the period from
the date of issuance of such Letter of Credit to the termination date of such
Letter of Credit, computed at the rate for each day equal to 0.25% per annum on
the average daily Stated Amount of such Letter of Credit (or at such other rate
per annum as agreed in writing between the Borrower and such Letter of Credit
Issuer). Such Fronting Fees shall be due and payable by the Borrower
(x) quarterly in arrears on the tenth Business Day following the end of each
March, June, September and December and (y) on the later of (A) the Maturity
Date and (B) the day on which the General Letters of Credit Outstanding or RCT
Letters of Credit Outstanding, as applicable, shall have been reduced to zero
(0).

(d) The Borrower agrees to pay directly to the Letter of Credit Issuer upon each
issuance of, drawing under, and/or amendment of, a Letter of Credit issued by it
such amount as the Letter of Credit Issuer and the Borrower shall have agreed
upon for issuances of, drawings under or amendments of, letters of credit issued
by it.

(e) The Borrower agrees to pay to the Administrative Agent in Dollars, for the
account of each Lender holding a Delayed-Draw Term Loan Commitment, a fee equal
to 50% of the Applicable LIBOR Margin calculated on the Available Delayed-Draw
Term Loan Commitment of such Lenders (the “Delayed-Draw Ticking Fee”) for each
day from (and including) the date that is sixty (60) days following the Closing
Date until (but excluding) the Delayed-Draw Termination Date. The Delayed-Draw
Ticking Fee shall be payable by the Borrower quarterly in arrears on the tenth
Business Day following the end of each March, June, September and December (for
the three-month period (or portion thereof) ended on such day for which no
payment has been received and (y) on the Delayed Draw Termination Date (for the
period ended on such date for which no payment has been received pursuant to
clause (x) above), and shall be computed for each day during such period on the
applicable portion of the Delayed-Draw Term Loan Commitment in effect on such
day.

(f) The Borrower agrees to pay directly to the Administrative Agent for its own
account the administrative agent fees as set forth in the Fee Letter.

(g) Notwithstanding the foregoing, the Borrower shall not be obligated to pay
any amounts to any Defaulting Lender pursuant to this Section 4.1.

 

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4.2. Voluntary Reduction of Revolving Credit Commitments and Delayed-Draw Term
Loan Commitments.

(a) Upon at least one Business Day’s prior written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent at the Administrative
Agent’s Office (which notice the Administrative Agent shall promptly transmit to
each of the Revolving Credit Lenders), the Borrower shall have the right,
without premium or penalty, on any day, permanently to terminate or reduce the
Revolving Credit Commitments in whole or in part; provided that (a) any such
termination or reduction of Revolving Credit Commitments shall apply
proportionately and permanently to reduce the Total Revolving Credit Commitment
on a pro rata basis as between each of the Revolving Credit Lenders, (b) any
partial reduction pursuant to this Section 4.2 shall be in the amount of at
least the Minimum Borrowing Amount and (c) after giving effect to such
termination or reduction and to any prepayments of the Revolving Credit Loans
made on the date thereof in accordance with this Agreement (including pursuant
to Section 5.2(b)), the aggregate amount of the Revolving Credit Lenders’
Revolving Credit Exposures shall not exceed the Total Revolving Credit
Commitment.

(b) Upon at least one Business Day’s prior written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent at the Administrative
Agent’s Office (which notice the Administrative Agent shall promptly transmit to
each of the Delayed-Draw Term Loan Lenders), the Borrower shall have the right,
without premium or penalty, on any day, permanently to terminate or reduce the
Delayed-Draw Term Loan Commitments in whole or in part; provided that (a) any
such termination or reduction of Delayed-Draw Term Loan Commitments shall apply
proportionately and permanently to reduce the Total Delayed-Draw Term Loan
Commitment on a pro rata basis as between each of the Delayed-Draw Term Loan
Lenders and (b) any partial reduction pursuant to this Section 4.2 shall be in
the amount of at least $50,000,000.

(c) Upon at least one Business Day’s prior written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent and the RCT Letter of
Credit Issuers, the Borrower shall have the right, without premium or penalty,
on any day, permanently to terminate or reduce the RCT Letter of Credit
Commitment in whole or in part; provided that, after giving effect to such
termination or reduction, (i) the RCT Letters of Credit Outstanding shall not
exceed the RCT Letter of Credit Commitment, (ii) the RCT Letters of Credit
Outstanding with respect to each RCT Letter of Credit Issuer shall not exceed
the Specified RCT Letter of Credit Commitment of such RCT Letter of Credit
Issuer and (iii) the RCT L/C Cash Coverage Requirement shall be satisfied.

(d) Upon at least one Business Day’s prior written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent and the General
Letter of Credit Issuers, the Borrower shall have the right, without premium or
penalty, on any day, permanently to terminate or reduce the General Letter of
Credit Commitment in whole or in part; provided that, after giving effect to
such termination or reduction, (i) the General Letters of Credit Outstanding
shall not exceed the General Letter of Credit Commitment, (ii) the General
Letters of Credit Outstanding with respect to each General Letter of Credit
Issuer shall not exceed the Specified General Letter of Credit Commitment of
such General Letter of Credit Issuer and (iii) the General L/C Cash Coverage
Requirement shall be satisfied.

4.3. Mandatory Termination of Commitments.

(a) The Delayed-Draw Term Loan Commitment shall terminate at 5:00 p.m. (New York
City time) on the Delayed-Draw Termination Date.

(b) The Total Revolving Credit Commitment shall terminate at 5:00 p.m. (New York
City time) on the Maturity Date.

 

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4.4. RCT Carve Out Support Rejection Notice.

If the RCT denies or rejects the TCEH Debtors’ application to utilize the RCT
Reclamation Support Carve Out to satisfy the RCT’s bonding requirements, then
the Borrower shall be obligated to promptly terminate the RCT Reclamation
Support Carve Out by issuing and delivering a notice in writing to the
Administrative Agent (the “RCT Carve Out Support Rejection Notice”). Upon
issuance and delivery by the Borrower of the RCT Carve Out Support Rejection
Notice to the Administrative Agent, immediately, automatically and without
further action, the RCT Reclamation Support Carve Out will terminate and be
permanently reduced to $0 for all purposes hereunder and under the Orders, and
the RCT shall thereafter cease to have any rights in respect of the RCT
Reclamation Support Carve Out. Except as set forth in this Section 4.4, the
Borrower may not terminate the RCT Reclamation Support Carve Out.

SECTION 5. Payments.

5.1. Voluntary Prepayments. The Borrower shall have the right to prepay Term
Loans, Delayed-Draw Term Loans and Revolving Credit Loans, without premium or
penalty, in whole or in part, from time to time on the following terms and
conditions: (a) the Borrower shall give the Administrative Agent at the
Administrative Agent’s Office written notice (or telephonic notice promptly
confirmed in writing) of its intent to make such prepayment, the amount of such
prepayment and, in the case of LIBOR Loans, the specific Borrowing(s) pursuant
to which made, which notice shall be given by the Borrower no later than 1:00
p.m. (New York City time) (x) one Business Day prior to (in the case of ABR
Loans) or (y) three Business Days prior to (in the case of LIBOR Loans), the
date of such prepayment and shall promptly be transmitted by the Administrative
Agent to each of the relevant Lenders, (b) each partial prepayment of any
Borrowing of Term Loans, Delayed-Draw Term Loans or Revolving Credit Loans shall
be in a multiple of $1,000,000 and in an aggregate principal amount of at least
$5,000,000; provided that no partial prepayment of LIBOR Loans made pursuant to
a single Borrowing shall reduce the outstanding LIBOR Loans made pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount for LIBOR
Loans and (c) any prepayment of LIBOR Loans pursuant to this Section 5.1 on any
day other than the last day of an Interest Period applicable thereto shall be
subject to compliance by the Borrower with the applicable provisions of
Section 2.11. Each prepayment in respect of any tranche of Term Loans or
Delayed-Draw Term Loans pursuant to this Section 5.1 shall be applied to the
Class or Classes of Term Loans or Delayed Draw Term Loans in such manner as the
Borrower may determine. All prepayments under this Section 5.1 shall also be
subject to the provisions of Section 5.2(d) or (e), as applicable. At the
Borrower’s election in connection with any prepayment pursuant to this
Section 5.1, such prepayment shall not be applied to any Loan of a Defaulting
Lender.

5.2. Mandatory Prepayments.

(a) Loan Prepayments. On each occasion that a Prepayment Event occurs, the
Borrower shall, within three Business Days after the occurrence of such
Prepayment Event (or, in the case of Deferred Net Cash Proceeds, within three
Business Days after the Deferred Net Cash Proceeds Payment Date), prepay
(subject to Section 11.19 when applicable), in accordance with clauses (c)and
(d) below, Loans in a principal amount equal to 100% of the Net Cash Proceeds
from such Prepayment Event.

(b) Repayment of Revolving Credit Loans. Subject to Section 11.19 when
applicable, if on any date the aggregate amount of the Lenders’ Revolving Credit
Exposures (collectively, the “Aggregate Revolving Credit Outstandings”) for any
reason exceeds 100% of the Total Revolving Credit Commitment then in effect (or,
prior to the Full Availability Date, the Interim Availability Amount), the
Borrower shall, forthwith repay within two (2) Business Days of such date the
principal amount of any Revolving Credit Loans in an amount necessary to
eliminate such deficiency.

 

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(c) Application to Repayments. Subject to Section 11.19 when applicable, each
prepayment of Loans required by Section 5.2(a) shall be allocated (i) first, to
the Term Loans and any Incremental Term Loans in direct order of maturity until
paid in full, (ii) to any Delayed-Draw Term Loans then outstanding in direct
order of maturity until paid in full, and (iii) thereafter, to the Revolving
Credit Facility (without any permanent reduction in commitments thereof).

(d) Application to Term Loans and Delayed-Draw Term Loans. With respect to each
prepayment of Term Loans and Delayed-Draw Term Loans elected to be made by the
Borrower pursuant to Section 5.1 or required by Section 5.2(a), subject to
Section 11.19 when applicable, the Borrower may designate the Types of Loans
that are to be prepaid and the specific Borrowing(s) pursuant to which made;
provided that the Borrower pays any amounts, if any, required to be paid
pursuant to Section 2.11 with respect to prepayments of LIBOR Loans made on any
date other than the last day of the applicable Interest Period. In the absence
of a designation by the Borrower as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such designation in its
reasonable discretion with a view, but no obligation, to minimize breakage costs
owing under Section 2.11.

(e) Application to Revolving Credit Loans. With respect to each prepayment of
Revolving Credit Loans elected to be made by the Borrower pursuant to
Section 5.1 or required by Section 5.2(a) or (b), the Borrower may designate
(i) the Types of Loans that are to be prepaid and the specific Borrowing(s)
pursuant to which made and (ii) the Revolving Credit Loans to be prepaid;
provided that (x) each prepayment of any Loans made pursuant to a Borrowing
shall be applied pro rata among such Loans; and (y) notwithstanding the
provisions of the preceding clause (x), no prepayment made pursuant to
Section 5.1 or 5.2 of Revolving Credit Loans shall be applied to the Revolving
Credit Loans of any Defaulting Lender. In the absence of a designation by the
Borrower as described in the preceding sentence, the Administrative Agent shall,
subject to the above, make such designation in its reasonable discretion with a
view, but no obligation, to minimize breakage costs owing under Section 2.11.

(f) LIBOR Interest Periods. In lieu of making any payment pursuant to this
Section 5.2 in respect of any LIBOR Loan other than on the last day of the
Interest Period therefor so long as no Event of Default shall have occurred and
be continuing, the Borrower at its option may deposit with the Administrative
Agent an amount equal to the amount of the LIBOR Loan to be prepaid and such
LIBOR Loan shall be repaid on the last day of the Interest Period therefor in
the required amount. Such deposit shall be held by the Administrative Agent in a
corporate time deposit account established on terms reasonably satisfactory to
the Administrative Agent, earning interest at the then customary rate for
accounts of such type. Such deposit shall constitute cash collateral for the
LIBOR Loans to be so prepaid; provided that the Borrower may at any time direct
that such deposit be applied to make the applicable payment required pursuant to
this Section 5.2.

(g) Minimum Amount. No prepayment shall be required pursuant to Section 5.2(a)
(i) in the case of any Prepayment Event yielding Net Cash Proceeds of less than
$5,000,000 in the aggregate and (ii) unless and until the amount at any time of
Net Cash Proceeds from Prepayment Events required to be applied at or prior to
such time pursuant to such Section and not yet applied at or prior to such time
to prepay Term Loans or Delayed-Draw Term Loans pursuant to such Section exceeds
(x) $25,000,000 for a single Prepayment Event or (y) $100,000,000 in the
aggregate for all Prepayment Events (other than those that are either under the
threshold specified in subclause (i) or over the threshold specified in
subclause (ii)(x)) in any one fiscal year, at which time all such Net Cash
Proceeds referred to in this subclause (ii) with respect to such fiscal year
shall be applied as a prepayment in accordance with this Section 5.2.

 

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(h) [Reserved].

(i) Foreign Net Cash Proceeds. Notwithstanding any other provisions of this
Section 5.2, (i) to the extent that any or all of the Net Cash Proceeds from a
Recovery Prepayment Event (a “Foreign Recovery Event”) of, or any Disposition
by, a Restricted Foreign Subsidiary giving rise to an Asset Sale Prepayment
Event (a “Foreign Asset Sale”) are prohibited or delayed by applicable local law
from being repatriated to the United States, such portion of the Net Cash
Proceeds so affected will not be required to be applied to repay Term Loans or
Delayed-Draw Term Loans at the times provided in this Section 5.2 but may be
retained by the applicable Restricted Foreign Subsidiary so long, but only so
long, as the applicable local law will not permit repatriation to the United
States (the Borrower hereby agreeing to cause the applicable Restricted Foreign
Subsidiary to promptly take all actions required by the applicable local law to
permit such repatriation), and once such repatriation of any of such affected
Net Cash Proceeds is permitted under the applicable local law, such repatriation
will be immediately effected and such repatriated Net Cash Proceeds will be
promptly (and in any event not later than two Business Days after such
repatriation) applied (net of additional taxes payable or reserved against as a
result thereof) to the repayment of the Term Loans or Delayed-Draw Term Loans as
required pursuant to this Section 5.2 and (ii) to the extent that the Borrower
has determined in good faith that repatriation of any of or all the Net Cash
Proceeds of any Foreign Recovery Event on any Foreign Asset Sale would have a
material adverse tax consequence with respect to such Net Cash Proceeds, the Net
Cash Proceeds so affected may be retained by the applicable Restricted Foreign
Subsidiary; provided that, in the case of this clause (ii), on or before the
date on which any Net Cash Proceeds so retained would otherwise have been
required to be applied to reinvestments or prepayments pursuant to
Section 5.2(a), (x) the Borrower applies an amount equal to such Net Cash
Proceeds to such reinvestments or prepayments as if such Net Cash Proceeds had
been received by the Borrower rather than such Restricted Foreign Subsidiary,
less the amount of additional taxes that would have been payable or reserved
against if such Net Cash Proceeds had been repatriated (or, if less, the Net
Cash Proceeds that would be calculated if received by such Foreign Subsidiary)
or (y) such Net Cash Proceeds are applied to the repayment of Indebtedness of a
Restricted Foreign Subsidiary.

5.3. Method and Place of Payment.

(a) Except as otherwise specifically provided herein, all payments under this
Agreement shall be made by the Borrower without set-off, counterclaim or
deduction of any kind, to the Administrative Agent for the ratable account of
the Lenders entitled thereto or the Letter of Credit Issuer entitled thereto, as
the case may be, not later than 2:00 p.m. (New York City time), in each case, on
the date when due and shall be made in immediately available funds at the
Administrative Agent’s Office or at such other office as the Administrative
Agent shall specify for such purpose by notice to the Borrower, it being
understood that written or facsimile notice by the Borrower to the
Administrative Agent to make a payment from the funds in the Borrower’s account
at the Administrative Agent’s Office shall constitute the making of such payment
to the extent of such funds held in such account. All repayments or prepayments
of any Loans (whether of principal, interest or otherwise) hereunder and all
other payments under each Credit Document shall be made in Dollars. The
Administrative Agent will thereafter cause to be distributed on the same day (if
payment was actually received by the Administrative Agent prior to 2:00 p.m.
(New York City time) or, otherwise, on the next Business Day) like funds
relating to the payment of principal or interest or fees ratably to the Lenders
entitled thereto.

(b) Any payments under this Agreement that are made later than 2:00 p.m. (New
York City time) shall be deemed to have been made on the next succeeding
Business Day. Whenever any

 

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payment to be made hereunder shall be stated to be due on a day that is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable during such extension at the applicable rate in effect immediately prior
to such extension.

5.4. Net Payments.

(a) Any and all payments made by or on behalf of the Borrower or any Guarantor
under this Agreement or any other Credit Document shall be made free and clear
of, and without deduction or withholding for or on account of, any Indemnified
Taxes; provided that if the Borrower or any Guarantor or the Administrative
Agent shall be required by Applicable Law to deduct or withhold any Indemnified
Taxes from such payments, then (i) the sum payable by the Borrower or any
Guarantor shall be increased as necessary so that after making all required
deductions and withholdings (including deductions or withholdings applicable to
additional sums payable under this Section 5.4) the Administrative Agent, the
Collateral Agent or any Lender (which term shall include each Letter of Credit
Issuer for purposes of Section 5.4 and for the purposes of the definition of
Excluded Taxes), as the case may be, receives an amount equal to the sum it
would have received had no such deductions or withholdings been made, (ii) the
Borrower or such Guarantor or the Administrative Agent shall make such
deductions or withholdings and (iii) the Borrower or such Guarantor or the
Administrative Agent shall timely pay the full amount deducted or withheld to
the relevant Governmental Authority within the time allowed and in accordance
with Applicable Law. Whenever any Indemnified Taxes are payable by the Borrower
or such Guarantor, as promptly as possible thereafter, the Borrower or Guarantor
shall send to the Administrative Agent for its own account or for the account of
such Lender, as the case may be, a certified copy of an original official
receipt (or other evidence acceptable to such Lender, acting reasonably)
received by the Borrower or such Guarantor showing payment thereof.

(b) The Borrower shall timely pay and shall indemnify and hold harmless the
Administrative Agent, the Collateral Agent and each Lender with regard to any
Other Taxes (whether or not such Other Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority).

(c) The Borrower shall indemnify and hold harmless the Administrative Agent, the
Collateral Agent and each Lender within fifteen Business Days after written
demand therefor, for the full amount of any Indemnified Taxes imposed on the
Administrative Agent, the Collateral Agent or such Lender as the case may be, on
or with respect to any payment by or on account of any obligation of the
Borrower or any Guarantor hereunder or under any other Credit Document
(including Indemnified Taxes imposed or asserted on or attributable to amounts
payable under this Section 5.4) and any reasonable out-of-pocket expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate setting forth reasonable detail as to the amount of
such payment or liability delivered to the Borrower by a Lender, the
Administrative Agent or the Collateral Agent (as applicable) on its own behalf
or on behalf of a Lender shall be conclusive absent manifest error.

(d) Any Non-U.S. Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
resident for tax purposes, or under any treaty to which such jurisdiction is a
party, with respect to payments hereunder or under any other Credit Document
shall, to the extent it is legally able to do so, deliver to the Borrower (with
a copy to the Administrative Agent), at the time or times prescribed by
Applicable Law or reasonably requested by the Borrower or the Administrative
Agent, such properly completed and executed documentation prescribed by
Applicable Law as will permit such payments to be made without withholding or at
a reduced rate of withholding. A Lender’s obligation under the prior sentence
shall apply only if the

 

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Borrower or the Administrative Agent has made a request for such documentation.
In addition, any Lender, if 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.

(e) Each Non-U.S. Lender with respect to any Loan made to the Borrower shall, to
the extent it is legally entitled to do so:

(i) deliver to the Borrower and the Administrative Agent, prior to the date on
which the first payment to the Non-U.S. Lender is due hereunder, two copies of
(x) in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of “portfolio interest”, United States Internal Revenue Service
Form W-8BEN (together with a certificate substantially in the form of Exhibit L
representing that such Non-U.S. Lender is not a bank for purposes of
Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Code) of the Borrower, any interest payment
received by such Non-U.S. Lender under this Agreement or any other Credit
Document is not effectively connected with the conduct of a trade or business in
the United States and is not a controlled foreign corporation related to the
Borrower (within the meaning of Section 864(d)(4) of the Code)), (y) Internal
Revenue Service Form W-8BEN or Form W-8ECI, in each case properly completed and
duly executed by such Non-U.S. Lender claiming complete exemption from, or
reduced rate of, U.S. Federal withholding tax on payments by the Borrower under
this Agreement or (z) if a Non-U.S. Lender does not act or ceases to act for its
own account with respect to any portion of any sums paid or payable to such
Lender under any of the Credit Documents (for example, in the case of a typical
participation or where Non-U.S. Lender is a pass through entity) Internal
Revenue Service Form W-8IMY and all necessary attachments (including the forms
described in clauses (x) and (y) above, as required); and

(ii) deliver to the Borrower and the Administrative Agent two further copies of
any such form or certification (or any applicable successor form) on or before
the date that any such form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower.

If in any such case any Change in Law has occurred prior to the date on which
any such delivery would otherwise be required that renders any such form
inapplicable or would prevent such Non-U.S. Lender from duly completing and
delivering any such form with respect to it, such Non-U.S. Lender shall promptly
so advise the Borrower and the Administrative Agent.

(f) If any Lender, the Administrative Agent or the Collateral Agent, as
applicable, determines, in its sole discretion exercised in good faith, that it
had received and retained a refund of an Indemnified Tax (including an Other
Tax) for which a payment has been made by the Borrower pursuant to this
Agreement, which refund in the good faith judgment of such Lender, the
Administrative Agent or the Collateral Agent, as the case may be, is
attributable to such payment made by the Borrower, then the Lender, the
Administrative Agent or the Collateral Agent, as the case may be, shall
reimburse the Borrower for such amount (net of all out-of-pocket expenses of
such Lender, the Administrative Agent or the Collateral Agent, as the case may
be, and without interest other than any interest received thereon from the
relevant Governmental Authority with respect to such refund) as the Lender,
Administrative Agent or the Collateral Agent, as the case may be, determines in
its sole discretion exercised in good faith to be the proportion of the refund
as will leave it, after such reimbursement, in no better or worse position
(taking into account expenses or any taxes imposed on the refund) than it would
have been in if the payment had not been required; provided that the Borrower,
upon the request of the Lender, the

 

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Administrative Agent or the Collateral Agent, agrees to repay the amount paid
over to the Borrower (plus any penalties, interest or other charges imposed by
the relevant Governmental Authority) to the Lender, the Administrative Agent or
the Collateral Agent in the event the Lender, the Administrative Agent or the
Collateral Agent is required to repay such refund to such Governmental
Authority. A Lender, the Administrative Agent or the Collateral Agent shall
claim any refund that it determines is available to it, unless it concludes in
its sole discretion that it would be adversely affected by making such a claim.
Neither the Lender, the Administrative Agent nor the Collateral Agent shall be
obliged to disclose any information regarding its tax affairs or computations to
any Credit Party in connection with this clause (f) or any other provision of
this Section 5.4.

(g) If the Borrower determines that a reasonable basis exists for contesting a
Tax, each Lender or Agent, as the case may be, shall use reasonable efforts to
cooperate with the Borrower as the Borrower may reasonably request in
challenging such Tax. Subject to the provisions of Section 2.12, each Lender and
Agent agrees to use reasonable efforts to cooperate with the Borrower as the
Borrower may reasonably request to minimize any amount payable by the Borrower
or any Guarantor pursuant to this Section 5.4. The Borrower shall indemnify and
hold each Lender and Agent harmless against any out-of-pocket expenses incurred
by such Person in connection with any request made by the Borrower pursuant to
this Section 5.4(g). Nothing in this Section 5.4(g) shall obligate any Lender or
Agent to take any action that such Person, in its sole judgment, determines may
result in a material detriment to such Person.

(h) Each Lender with respect to any Loan made to the Borrower that is a United
States person under Section 7701(a)(30) of the Code and each Agent (each, a
“U.S. Lender”) shall deliver to the Borrower and the Administrative Agent two
United States Internal Revenue Service Forms W-9 (or substitute or successor
form), properly completed and duly executed, certifying that such Lender or
Agent is exempt from United States backup withholding (i) on or prior to the
Closing Date (or on or prior to the date it becomes a party to this Agreement),
(ii) on or before the date that such form expires or becomes obsolete,
(iii) after the occurrence of a change in such Agent’s or Lender’s circumstances
requiring a change in the most recent form previously delivered by it to the
Borrower and the Administrative Agent and (iv) from time to time thereafter if
reasonably requested by the Borrower or the Administrative Agent.

(i) If a payment made to any Lender would be subject to U.S. federal withholding
Tax imposed under FATCA if such Lender were to fail to comply with the
applicable reporting requirements of FATCA (including those contained in
Sections 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 Agent, such documentation prescribed by applicable law (including as
prescribed by Section 1471(b)(3)(C)(i) of the Code) and such other documentation
reasonably requested by the Administrative Agent and the Borrower as may be
necessary for the Administrative Agent and the Borrower to comply with their
obligations under FATCA, to determine whether such Lender has or has not
complied with such Lender’s FATCA obligations and to determine the amount, if
any, to deduct and withhold from such payment. Solely for purposes of this
subsection (i), “FATCA” shall include any amendments after the date of this
Agreement.

(j) The agreements in this Section 5.4 shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.

5.5. Computations of Interest and Fees.

(a) Except as provided in the next succeeding sentence, interest on LIBOR Loans,
and ABR Loans shall be calculated on the basis of a 360-day year for the actual
days elapsed. Interest on ABR Loans in respect of which the rate of interest is
calculated on the basis of the Administrative Agent’s prime rate and interest on
overdue interest shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed.

 

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(b) Fees and the average daily Stated Amount of Letters of Credit shall be
calculated on the basis of a 360-day year for the actual days elapsed.

5.6. Limit on Rate of Interest.

(a) No Payment Shall Exceed Lawful Rate. Notwithstanding any other term of this
Agreement, the Borrower shall not be obligated to pay any interest or other
amounts under or in connection with this Agreement or otherwise in respect of
the Obligations in excess of the amount or rate permitted under or consistent
with any applicable law, rule or regulation.

(b) Payment at Highest Lawful Rate. If the Borrower is not obliged to make a
payment that it would otherwise be required to make, as a result of
Section 5.6(a), the Borrower shall make such payment to the maximum extent
permitted by or consistent with applicable laws, rules and regulations.

(c) Adjustment if Any Payment Exceeds Lawful Rate. If any provision of this
Agreement or any of the other Credit Documents would obligate the Borrower to
make any payment of interest or other amount payable to any Lender in an amount
or calculated at a rate that would be prohibited by any Applicable Law, then
notwithstanding such provision, such amount or rate shall be deemed to have been
adjusted with retroactive effect to the maximum amount or rate of interest, as
the case may be, as would not be so prohibited by Applicable Law, such
adjustment to be effected, to the extent necessary, by reducing the amount or
rate of interest required to be paid by the Borrower to the affected Lender
under Section 2.8.

(d) Spreading. In determining whether the interest hereunder is in excess of the
amount or rate permitted under or consistent with any Applicable Law, the total
amount of interest shall be spread throughout the entire term of this Agreement
until its payment in full.

(e) Notwithstanding the foregoing, and after giving effect to all adjustments
contemplated thereby, if any Lender shall have received from the Borrower an
amount in excess of the maximum permitted by any Applicable Law, then the
Borrower shall be entitled, by notice in writing to the Administrative Agent to
obtain reimbursement from that Lender in an amount equal to such excess, and
pending such reimbursement, such amount shall be deemed to be an amount payable
by that Lender to the Borrower.

SECTION 6. Conditions Precedent to Initial Borrowing.

The initial Borrowing under this Agreement is subject to the satisfaction of the
following conditions precedent, except as otherwise agreed between the Borrower
and the Administrative Agent.

6.1. Credit Documents. The Administrative Agent shall have received:

(a) this Agreement, executed and delivered by a duly authorized officer of
Parent Guarantor, the Borrower, each Agent, each Lender and each Letter of
Credit Issuer;

(b) the Guarantee, executed and delivered by a duly authorized officer of each
Guarantor as of the Closing Date; and

 

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(c) the Security Agreement, executed and delivered by a duly authorized officer
of each party thereto as of the Closing Date.

6.2. Collateral.

(a) All outstanding Stock of the Borrower directly owned by Parent Guarantor and
all Stock of each Subsidiary of the Borrower directly owned by the Borrower or
any Subsidiary Guarantor, in each case, as of the Closing Date, shall have been
pledged pursuant to the Interim Order (except that such Credit Parties shall not
be required to pledge any Excluded Stock and Stock Equivalents).

(b) All Indebtedness of the Borrower and each Subsidiary of the Borrower that is
owing to the Borrower or a Subsidiary Guarantor (other than indebtedness of a
Foreign Subsidiary that is owing to the Borrower or a Subsidiary Guarantor), to
the extent exceeding $10,000,000 in aggregate principal amount, shall have been
pledged pursuant to the Interim Order.

(c) All documents and instruments, including Uniform Commercial Code or other
applicable personal property and financing statements, reasonably requested by
the Collateral Agent to be filed, registered or recorded to create the Liens
intended to be created by any Security Document to be executed on the Closing
Date and perfect such Liens to the extent required by, and with the priority
required by, such Security Document shall have been delivered to the Collateral
Agent in proper form for filing, registration or recording and none of the
Collateral shall be subject to any other pledges, security interests or
mortgages, except for Liens permitted hereunder; provided, however, that
notwithstanding anything to the contrary contained in this Agreement or in any
other Credit Document, but without limiting the grant of a Lien on and security
interest in the Collateral pursuant to the Orders and the Security Documents,
the TCEH Debtors will not be obligated to enter into any mortgages (including a
Mortgage), authorize any fixture filing, enter into any agreement requiring
“control” as defined in Section 9-104, 9-105, 9-106 and 9-107 of the UCC as in
effect in any relevant jurisdiction) or to undertake any registration in respect
of assets subject to a certificate of title.

(d) [Reserved].

(e) The Guarantee shall be in full force and effect.

(f) [Reserved].

6.3. Legal Opinions. The Administrative Agent shall have received the executed
legal opinions (which legal opinion will address customary matters for a
debtor-in-possession financing) of (a) Kirkland & Ellis LLP, special New York
counsel to Parent Guarantor and the Borrower, and (b) Gibson, Dunn & Crutcher
LLP, special Texas counsel to Parent Guarantor and the Borrower, in each case,
in form and substance reasonably acceptable to the Administrative Agent. Parent
Guarantor, the Borrower, the other Credit Parties and the Administrative Agent
hereby instruct such counsel to deliver such legal opinions.

6.4. Initial Budget. The Borrower shall have delivered the Initial Budget to the
Administrative Agent and the Lenders, which shall be in form and substance
reasonably satisfactory to the Administrative Agent and the Joint Lead
Arrangers, and the Administrative Agent and the Joint Lead Arrangers hereby
confirm the receipt of the Initial Budget dated April 24, 2014 in form and
substance reasonably satisfactory to the Administrative Agent and the Joint Lead
Arrangers prior to the date hereof.

6.5. [Reserved].

 

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6.6. Closing Certificates. The Administrative Agent shall have received a
certificate of the Credit Parties, dated the Closing Date, substantially in the
form of Exhibit H, with appropriate insertions, executed by an Authorized
Officer of each Credit Party, and attaching the documents referred to in Section
6.7.

6.7. Authorization of Proceedings of Each Credit Party. The Administrative Agent
shall have received (a) a copy of the resolutions of the board of directors,
other managers or general partner of each Credit Party (or a duly authorized
committee thereof) authorizing (i) the execution, delivery and performance of
the Credit Documents (and any agreements relating thereto) to which it is a
party and (ii) in the case of the Borrower, the extensions of credit
contemplated hereunder and (b) true and complete copies of the Organizational
Documents of each Credit Party as of the Closing Date.

6.8. Fees. The Agents shall have received the fees in the amounts previously
agreed in writing by the Agents to be received on the Closing Date and all
expenses (including the reasonable fees, disbursements and other charges of any
Advisors) payable by the Credit Parties for which invoices have been presented
prior to the Closing Date shall have been paid.

6.9. Representations and Warranties. On the Closing Date, the representations
and warranties made by the Credit Parties in Section 8, shall be true and
correct in all material respects (or in all respects for representations and
warranties qualified by materiality or Material Adverse Effect).

6.10. Interim Order. The Interim Order, in form and substance satisfactory to
the Left Lead Arrangers, shall have been entered by the Bankruptcy Court in the
Cases, upon motion in form and substance satisfactory to the Left Lead
Arrangers, by the Bankruptcy Court in the Cases no later than ten (10) Business
Days after the date of commencement of the Cases and shall be in full force and
effect and shall not have been reversed, modified, amended, stayed or vacated,
in the case of any modification or amendment, in a manner that is adverse to the
Lenders, without the consent of the Left Lead Arrangers. The TCEH Debtors shall
be in compliance in all material respects with the Interim Order.

6.11. First Day Orders. The Left Lead Arrangers shall have received evidence of
the entry of all First Day Orders, which shall be reasonably satisfactory in
form and substance to the Left Lead Arrangers (but in the case of the Interim
Cash Collateral Order, the Cash Management Order and the Interim Order, in form
and substance satisfactory to the Left Lead Arrangers), and which First Day
Orders shall have been received by the Left Lead Arrangers.

6.12. Trustees and Examiners. No trustee or examiner with enlarged powers
(having powers beyond those set forth in Bankruptcy Code sections 1106(a)(3) and
(4)) shall have been appointed with respect to the operations or the business of
the TCEH Debtors.

6.13. Projections. The Administrative Agent and the Lenders shall have received
a base case model, including a statement of cash sources and uses of all free
cash flow of the TCEH Debtors for the tenor of the Credit Facilities, which
shall be in form and substance reasonably satisfactory to the Administrative
Agent and the Joint Lead Arrangers, and the Administrative Agent and the Joint
Lead Arrangers hereby confirm the receipt of a base case model dated April 24,
2014 in form and substance reasonably satisfactory to the Administrative Agent
and the Joint Lead Arrangers prior to the date hereof.

6.14. Patriot Act. The Joint Lead Arrangers shall have received at least 5 days
prior to the Closing Date such documentation and information as is reasonably
requested in writing at least 10 days prior to the Closing Date by the
Administrative Agent about Parent Guarantor, the Borrower and the Subsidiary
Guarantors mutually agreed to be required by U.S. regulatory authorities under
applicable “know your customer” and anti-money laundering rules and regulations,
including, without limitation, the Patriot Act.

 

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6.15. Petition Date. The Petition Date shall have occurred.

6.16. Restructuring Support Agreement. The Restructuring Support Agreement shall
have been duly executed by the Credit Parties and each other party thereto, all
conditions to the effectiveness of the Restructuring Support Agreement shall
have been satisfied or waived and the Restructuring Support Agreement shall be
in full force and effect, subject to any necessary Bankruptcy Court approvals.

For purposes of determining compliance with the conditions specified in this
Section 6 on the Closing Date, each Agent and each Lender that has signed this
Agreement shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to such Agent or
Lender unless the Borrower shall have received notice from such Agent or Lender
(or from the Administrative Agent on behalf of such Lender) prior to the
proposed Closing Date specifying its objection thereto, but excluding for the
avoidance of doubt any subsequent changes or modifications to such documents or
matters made after release of such party’s signature page.

SECTION 7. Conditions Precedent to All Credit Events.

(a) The agreement of each Lender to make any Loan requested to be made by it on
any date, and the obligation of any Letter of Credit Issuer to issue Letters of
Credit on any date, is subject to the satisfaction of the conditions precedent
set forth in the following Sections 7.1 and 7.2; (b) the obligation of each
Lender to make Loans hereunder and of each Letter of Credit Issuer to issue
Letters of Credit hereunder in an aggregate amount in excess of the Interim
Availability Amount shall not become effective until the date on which each of
the conditions in Section 7.3 is satisfied; and (c) the obligation of each
Lender to make Delayed-Draw Term Loans hereunder and of each RCT Letter of
Credit Issuer to issue RCT Letters of Credit hereunder shall not become
effective until the date on which each of the conditions in Section 7.4 is
satisfied.

7.1. No Default; Representations and Warranties. At the time of each Credit
Event and also after giving effect thereto (a) no Default or Event of Default
shall have occurred and be continuing and (b) all representations and warranties
made by any Credit Party contained herein or in the other Credit Documents 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 where such representations and warranties expressly relate
to an earlier date, in which case such representations and warranties shall have
been true and correct in all material respects as of such earlier date).

7.2. Notice of Borrowing.

(a) Prior to the making of each Term Loan, the Administrative Agent shall have
received a Notice of Borrowing (whether in writing or by telephone) meeting the
requirements of Section 2.3.

(b) Prior to the making of each Delayed-Draw Term Loan, the Administrative Agent
shall have received a Notice of Borrowing (whether in writing or by telephone)
meeting the requirements of Section 2.3.

 

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(c) Prior to the making of each Revolving Credit Loan, the Administrative Agent
shall have received a Notice of Borrowing (whether in writing or by telephone)
meeting the requirements of Section 2.3.

(d) Prior to the issuance of each General Letter of Credit, the Administrative
Agent and the General Letter of Credit Issuer shall have received a Letter of
Credit Request meeting the requirements of Section 3.2(a).

(e) Prior to the issuance of each RCT Letter of Credit, the Administrative Agent
and the RCT Letter of Credit Issuer shall have received a Letter of Credit
Request meeting the requirements of Section 3.2(a).

(f) The Interim Order or the Final Order, as the case may be, shall be in full
force and effect.

7.3. Full Availability.

(a) [Reserved].

(b) Orders. (i) The Interim Order shall be in full force and effect and shall
not have been stayed, reversed, vacated, modified or amended, in the case of any
modification or amendment, in a manner adverse to the interests (taken as a
whole) of the Lenders without the consent of the Left Lead Arrangers; (ii) the
Left Lead Arrangers shall have received a certified copy of the Final Order, in
form and substance satisfactory to the Left Lead Arrangers, which, in any event,
shall have been entered by the Bankruptcy Court, upon motion in form and
substance satisfactory to the Left Lead Arrangers, no later than forty-five
(45) days after the Interim Order Entry Date (or such later date agreed to by
the Required Lenders in their sole discretion) and at the time of any such
extension of credit the Final Order shall be in full force and effect, and shall
not have been stayed, reversed, vacated, modified or amended, in the case of any
modification or amendment, in a manner that is adverse to the interests (taken
as a whole) of the Lenders without the prior written consent of the Left Lead
Arrangers; and (iii) if either the Interim Order or the Final Order is the
subject of a pending appeal in any respect, none of the making of such
extensions of credit, the grant of Liens and Superpriority Claims as set forth
in Section 8.17 and the performance by the Borrower or any Guarantor of any of
their respective obligations under any of the Credit Documents shall be the
subject of a then effective stay. The TCEH Debtors shall be in compliance with
the Final Order.

(c) (i) No Default or Event of Default shall have occurred and be continuing and
(ii) all representations and warranties made by any Credit Party contained
herein or in the other Credit Documents 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 such date (except where such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties shall have been true and correct in all
material respects as of such earlier date).

(d) The Agents shall have received the fees in the amounts previously agreed in
writing by the Agents to be received on or prior to such date and all expenses
(including the reasonable fees, disbursements and other charges of any Advisors)
payable by the Credit Parties for which invoices have been presented prior to
such date shall have been paid

(e) The Administrative Agent shall have received a copy of, or a certificate as
to coverage under, the insurance policies required by Section 9.3 and the
applicable provisions of the Security Documents, each of which shall be endorsed
or otherwise amended to name the Collateral

 

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Agent, on behalf of the Secured Parties, as “loss payee” and, solely if
available from the relevant insurance company in respect of the Collateral
perfected pursuant to the Orders, as “mortgagee” under any casualty insurance
policies, and the Secured Parties, as “additional insureds”, under any liability
insurance policies.

7.4. Availability of Delayed-Draw Term Loans and RCT Letters of Credit. The RCT
Carve Out Support Rejection Notice shall have been issued and delivered
(a) prior to the Delayed-Draw Termination Date and (b) prior to the making of
such Delayed-Draw Term Loans or the issuance of such RCT Letters of Credit.

The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by each Credit Party to each of the Lenders that all
the applicable conditions specified in Section 7 above have been satisfied or
waived as of that time.

SECTION 8. Representations, Warranties and Agreements.

In order to induce the Lenders and the Letter of Credit Issuers to enter into
this Agreement, to make the Loans and issue or participate in Letters of Credit
as provided for herein, each of Parent Guarantor and the Borrower makes (on the
Closing Date and on each other date as required or otherwise set forth in this
Agreement) the following representations and warranties to, and agreements with,
the Lenders and the Letter of Credit Issuers, all of which shall survive the
execution and delivery of this Agreement, the making of the Loans and the
issuance of the Letters of Credit:

8.1. Corporate Status; Compliance with Laws. Each of Parent Guarantor, the
Borrower and each Material Subsidiary of the Borrower that is a Restricted
Subsidiary (a) is a duly organized and validly existing corporation or other
entity in good standing (as applicable) under the laws of the jurisdiction of
its organization and has the corporate or other organizational power and
authority to own its property and assets and to transact the business in which
it is engaged, (b) has duly qualified and is authorized to do business and is in
good standing (if applicable) in all jurisdictions where it is required to be so
qualified, except where the failure to be so qualified could not reasonably be
expected to result in a Material Adverse Effect and (c) is in compliance with
all Applicable Laws, except to the extent that the failure to be in compliance
could not reasonably be expected to result in a Material Adverse Effect.

8.2. Corporate Power and Authority. Subject to the entry of the Orders and the
terms thereof, each Credit Party has the corporate or other organizational power
and authority to execute, deliver and carry out the terms and provisions of the
Credit 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 Credit Documents to which it is a party. Each Credit Party has duly
executed and delivered each Credit Document to which it is a party and, subject
to the entry of the Orders and the terms thereof, each such Credit Document
constitutes the legal, valid and binding obligation of such Credit Party
enforceable in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization and other similar laws
relating to or affecting creditors’ rights generally and general principles of
equity (whether considered in a proceeding in equity or law).

8.3. No Violation. Subject to the entry of the Orders and the terms thereof,
neither the execution, delivery or performance by any Credit Party of the Credit
Documents to which it is a party nor the compliance with the terms and
provisions thereof will (a) contravene any applicable provision of any material
Applicable Law (including material Environmental Laws), (b) result in any breach
of any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of Parent
Guarantor, the Borrower or any Restricted Subsidiary (other than Liens created
under the Credit

 

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Documents, Permitted Liens or Liens securing any of the Prepetition Debt)
pursuant to the terms of any material indenture, loan agreement, lease
agreement, mortgage, deed of trust or other material agreement or instrument to
which Parent Guarantor, the Borrower or any Restricted Subsidiary is a party or
by which it or any of its property or assets is bound, in each case to the
extent any such agreement was entered into after the Petition Date (any such
term, covenant, condition or provision, a “Contractual Requirement”) other than
any such breach, default or Lien that could not reasonably be expected to result
in a Material Adverse Effect, or (c) violate any provision of the Organizational
Documents of Parent Guarantor, the Borrower or any Restricted Subsidiary.

8.4. Litigation. Other than the Cases, except as set forth on Schedule 8.4,
there are no actions, suits or proceedings (including Environmental Claims)
pending or, to the knowledge of the Borrower, threatened with respect to Parent
Guarantor, the Borrower or any of the Restricted Subsidiaries that could
reasonably be expected to result in a Material Adverse Effect.

8.5. Margin Regulations. Neither the making of any Loan hereunder nor the use of
the proceeds thereof will violate the provisions of Regulation T, U or X of the
Board.

8.6. Governmental Approvals. Subject to the entry of the Orders and the terms
thereof, the execution, delivery and performance of the Credit Documents does
not require any consent or approval of, registration or filing with, or other
action by, any Governmental Authority, except for (i) such as have been obtained
or made and are in full force and effect, (ii) filings and recordings in respect
of the Liens created pursuant to the Security Documents and (iii) such consents,
approvals, registrations, filings or actions the failure of which to obtain or
make could not reasonably be expected to have a Material Adverse Effect.

8.7. Investment Company Act. None of the Credit Parties is an “investment
company” within the meaning of, and subject to registration under, the
Investment Company Act of 1940, as amended.

8.8. True and Complete Disclosure. None of the written factual information and
written data (taken as a whole) heretofore or contemporaneously furnished by or
on behalf of Parent Guarantor, the Borrower, any of the Subsidiaries of the
Borrower or any of their respective authorized representatives to the
Administrative Agent, any Joint Lead Arranger and/or any Lender on or before the
Closing Date (including all such information and data contained in the Credit
Documents) for purposes of or in connection with this Agreement or any
transaction contemplated herein contained any untrue statement of any material
fact or omitted to state any material fact necessary to make such information
and data (taken as a whole) not materially misleading at such time in light of
the circumstances under which such information or data was furnished, it being
understood and agreed that for purposes of this Section 8.8, such factual
information and data shall not include projections or estimates (including
financial estimates, forecasts and other forward-looking information) and
information of a general economic or general industry nature.

8.9. Financial Condition; Projections; Material Adverse Effect.

(a) The Borrower has heretofore furnished to the Lenders the consolidated
balance sheet and statements of earnings, shareholders’ equity and cash flows of
the Borrower as of and for the fiscal year ended December 31, 2013, reported on
by Deloitte & Touche LLP, an independent registered public accounting firm;
provided that if such consolidated balance sheet and statement of earnings,
shareholders’ equity and cash flows have not been filed with the SEC on or prior
to the Closing Date, then the Borrower has heretofore furnished to the Lenders
the consolidated balance sheet and statements of earnings, shareholders’ equity
and cash flows of the Borrower as of and for the fiscal year ended

 

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December 31, 2012, reported on by Deloitte & Touche LLP, and the unaudited
consolidated balance sheet and statement of earnings, shareholders’ equity and
cash flows of the Borrower as of and for the fiscal quarters and the portions of
the fiscal year ended March 31, 2013, June 30, 2013 and September 30, 2013. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower and its
consolidated subsidiaries as of such date and for such period in accordance with
GAAP consistently applied (except to the extent provided in the notes thereto).

(b) The projections, forward-looking statements, estimates and pro forma
financial information contained in this Agreement, any other Credit Document or
any other document, certificate or statement furnished to any Agent, any Joint
Lead Arranger or any Lenders (including, without limitation, each Budget and
Annual Operating Forecast) are based upon good faith estimates and assumptions
believed by the Borrower to be reasonable at the time made, it being recognized
by the Agents, Joint Lead Arrangers and the Lenders that such projections,
forward-looking statements, estimates and pro forma financial information are
not to be viewed as facts and are subject to material contingencies and
assumptions, many of which are beyond the control of the Credit Parties, and
that actual results during the period or periods covered by any such
projections, forward-looking statements, estimates and pro forma financial
information may differ materially from the projected results.

(c) There has been no Material Adverse Effect since the Petition Date.

8.10. Tax Matters. Except where the failure of which could not be reasonably
expected to have a Material Adverse Effect, (a) each of Parent Guarantor, the
Borrower and each of the Restricted Subsidiaries has filed all federal income
Tax returns and all other Tax returns, domestic and foreign, required to be
filed by it and has paid all material Taxes payable by it that have become due
(whether or not shown on such Tax return), other than those (i) not yet
delinquent or (ii) contested in good faith as to which adequate reserves have
been provided to the extent required by law and in accordance with GAAP,
(b) each of Parent Guarantor, the Borrower and each of the Restricted
Subsidiaries has provided adequate reserves in accordance with GAAP for the
payment of, all federal, state, provincial and foreign Taxes not yet due and
payable and (c) each of Parent Guarantor, the Borrower and each of the
Restricted Subsidiaries has satisfied all of its Tax withholding obligations.

8.11. Compliance with ERISA.

(a) Each Employee Benefit Plan is in compliance with ERISA, the Code and any
Applicable Law; no Reportable Event has occurred (or is reasonably likely to
occur) with respect to any Plan; no Multiemployer Plan is insolvent or in
reorganization (or is reasonably likely to be insolvent or in reorganization),
and no written notice of any such insolvency or reorganization has been given to
the Borrower or any ERISA Affiliate; no Plan has an accumulated or waived
funding deficiency (or is reasonably likely to have such a deficiency); on and
after the effectiveness of the Pension Act, each Plan has satisfied the minimum
funding standards (within the meaning of Section 412 of the Code or Section 302
of ERISA) applicable to such Plan, and there has been no determination that any
such Plan is, or is expected to be, in “at risk” status (within the meaning of
Section 4010(d)(2) of ERISA); none of the Borrower or any ERISA Affiliate has
incurred (or is reasonably likely to incur) any liability to or on account of a
Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201
or 4204 of ERISA or Section 4971 or 4975 of the Code; no proceedings have been
instituted (or are reasonably likely to be instituted) to terminate or to
reorganize any Plan or to appoint a trustee to administer any Plan, and no
written notice of any such proceedings has been given to the Borrower or any
ERISA Affiliate; and no Lien imposed under the Code or ERISA on the assets of
the Borrower or any ERISA Affiliate exists (or is reasonably likely to exist)
nor has the Borrower or any ERISA Affiliate been notified in writing that such a
Lien will be imposed on the assets of the Ultimate Parent, Parent Guarantor, the
Borrower or any ERISA Affiliate on account of any Plan, except to the extent
that a breach of any of

 

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the representations, warranties or agreements in this Section 8.11(a) would not
result, individually or in the aggregate, in an amount of liability that would
be reasonably likely to have a Material Adverse Effect. No Plan has an Unfunded
Current Liability that would, individually or when taken together with any other
liabilities referenced in this Section 8.11(a), be reasonably likely to have a
Material Adverse Effect. With respect to Plans that are Multiemployer Plans, the
representations and warranties in this Section 8.11(a), other than any made with
respect to (i) liability under Section 4201 or 4204 of ERISA or (ii) liability
for termination or reorganization of such Multiemployer Plans under ERISA, are
made to the best knowledge of the Borrower.

(b) All Foreign Plans are in compliance with, and have been established,
administered and operated in accordance with, the terms of such Foreign Plans
and Applicable Law, except for any failure to so comply, establish, administer
or operate the Foreign Plans as would not reasonably be expected to have a
Material Adverse Effect. All contributions or other payments which are due with
respect to each Foreign Plan have been made in full and there are no funding
deficiencies thereunder, except to the extent any such events would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

8.12. Subsidiaries. Schedule 8.12 lists each Subsidiary of Parent Guarantor (and
the direct and indirect ownership interest of Parent Guarantor therein), in each
case existing on the Closing Date. Each Material Subsidiary as of the Closing
Date has been so designated on Schedule 8.12.

8.13. Intellectual Property. Each of Parent Guarantor, the Borrower and the
Restricted Subsidiaries has good and marketable title to, or a valid license or
right to use, all patents, trademarks, servicemarks, trade names, copyrights and
all applications therefor and licenses thereof, and all other intellectual
property rights, free and clear of all Liens (other than Liens permitted by
Section 10.2), that are necessary for the operation of their respective
businesses as currently conducted, except where the failure to have any such
title, license or rights could not reasonably be expected to have a Material
Adverse Effect.

8.14. Environmental Laws. Except as could not reasonably be expected to have a
Material Adverse Effect: (a) Parent Guarantor, the Borrower and the Restricted
Subsidiaries and all Real Estate are in compliance with all Environmental Laws;
(b) Parent Guarantor, the Borrower and the Restricted Subsidiaries have, and
have timely applied for renewal of, all permits under Environmental Law to
construct and operate their facilities as currently constructed; (c) except as
set forth on Schedule 8.4, neither Parent Guarantor, the Borrower nor any
Restricted Subsidiary is subject to any pending or, to the knowledge of the
Borrower, threatened Environmental Claim or any other liability under any
Environmental Law including any such Environmental Claim or, to the knowledge of
the Borrower, any other liability under Environmental Law related to, or
resulting from the business or operations of any predecessor in interest of any
of them; (d); neither Parent Guarantor, the Borrower nor any Restricted
Subsidiary is conducting or financing or is required to conduct or finance, any
investigation, removal, remedial or other corrective action pursuant to any
Environmental Law at any location; (e) to the knowledge of the Borrower, no
Hazardous Materials have been released into the environment at, on or under any
Real Estate currently owned or leased by Parent Guarantor, the Borrower or any
Restricted Subsidiary and (f) neither Parent Guarantor, the Borrower nor any
Restricted Subsidiary has treated, stored, transported, released or disposed or
arranged for disposal or transport for disposal of Hazardous Materials at, on,
under or from any currently or, to the knowledge of the Borrower, formerly owned
or leased Real Estate or facility.

8.15. Properties. Except as set forth on Schedule 8.15, Parent Guarantor, the
Borrower and the Restricted Subsidiaries have good and indefeasible title to or
valid leasehold or easement interests or other license or use rights in all
properties that are necessary for the operation of their respective

 

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businesses as currently conducted, free and clear of all Liens (other than any
Liens permitted by this Agreement) and except where the failure to have such
good title, leasehold or easement interests or other license or use rights could
not reasonably be expected to have a Material Adverse Effect.

8.16. Orders. The Interim Order is (and the Final Order when entered will be)
effective to create in favor of the Collateral Agent, for the benefit of the
Secured Parties, a legal, valid, binding and enforceable perfected security
interest in the Collateral and the proceeds and products thereof without the
necessity of the execution of mortgages, security agreements, pledge agreements,
financing statements or other agreements or documents.

8.17. Status of Obligations; Perfection and Priority of Security Interests. The
Obligations are, subject to the Carve Out, the RCT Reclamation Support Carve Out
and the Orders:

(a) upon entry of the Interim Order, and pursuant to the Interim Order and the
Final Order, allowed administrative expense claims in the Cases, having priority
over any and all administrative expense claims, diminution claims, unsecured
claims, and all other claims against each of the Borrower, Parent Guarantor and
each other Guarantor or their estates, now existing or hereafter arising, of any
kind or nature whatsoever, including, without limitation, administrative
expenses of the kinds specified in, or ordered pursuant to, sections 105, 326,
328, 330, 331, 365, 503(a), 503(b), 506(c) (subject only to, and effective upon
entry of, the Final Order), 507(a), 507(b), 546(c), 546(d), 726, 1113, and 1114
of the Bankruptcy Code, and any other provision of the Bankruptcy Code or
otherwise, as provided under section 364(c)(1) of the Bankruptcy Code;

(b) after the entry of the Interim Order and pursuant to the Interim Order and
the Final Order, as applicable, secured by a valid and perfected Lien with the
priority provided in Section 14.1(a) on all of the Collateral, subject to the
Carve Out and the RCT Reclamation Support Carve Out; and

(c) notwithstanding the provisions of section 362 of the Bankruptcy Code and
subject to the applicable provisions of the Interim Order or the Final Order, as
applicable, upon the Maturity Date (whether by acceleration or otherwise) of any
of the Obligations, the Administrative Agent and Lenders shall be entitled to
immediate payment of such Obligations in cash and to enforce the remedies
provided for hereunder or under applicable law, without further application to
or order by the Bankruptcy Court, subject to the terms of the Credit Documents
and the Interim Order and the Final Order.

8.18. Insurance. The properties of Parent Guarantor, the Borrower and the
Restricted Subsidiaries are insured pursuant to self-insurance arrangements or
with insurance companies that the Borrower believes (in the good faith judgment
of the management of the Borrower, as applicable) are financially sound and
responsible, in at least such amounts (after giving effect to any self-insurance
which the Borrower believes (in the good faith judgment of management of the
Borrower, as applicable) is reasonable and prudent in light of the size and
nature of its business) and against at least such risks (and with such risk
retentions) as the Borrower believes (in the good faith judgment of management
of the Borrower, as applicable) is reasonable and prudent in light of the size
and nature of its business.

8.19. Labor Matters. Except as, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect: (a) there are no strikes or other
labor disputes against any Parent Guarantor, the Borrower or any Restricted
Subsidiary pending or, to the knowledge of the Borrower, threatened in writing;
and (b) hours worked by and payment made to employees of Parent Guarantor, the
Borrower and each Restricted Subsidiary have not been in violation of the Fair
Labor Standards Act or any other applicable Requirement of Law dealing with such
matters.

 

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8.20. Sanctioned Persons; Anti-Corruption Laws; Patriot Act. None of Parent
Guarantor, the Borrower or any of its Subsidiaries or any of their respective
directors or officers is subject to any economic embargoes or similar sanctions
administered or enforced by the U.S. Department of State or the U.S. Department
of Treasury (including the Office of Foreign Assets Control) or any other
applicable sanctions authority (collectively, “Sanctions”, and the associated
laws, rules, regulations and orders, collectively, “Sanctions Laws”). Each of
Parent Guarantor, the Borrower and its Subsidiaries and their respective
directors and officers is in compliance, in all material respects, with (i) all
Sanctions Laws, (ii) the United States Foreign Corrupt Practices Act of 1977, as
amended, and any other applicable anti-bribery or anti-corruption laws, rules,
regulations and orders (collectively, “Anti-Corruption Laws”) and (iii) the
Patriot Act and any other applicable terrorism and money laundering laws, rules,
regulations and orders. No part of the proceeds of the Loans or Letters of
Credit will be used, directly or indirectly, (A) for the purpose of financing
any activities or business of or with any Person or in any country or territory
that at such time is the subject of any Sanctions or (B) 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 any Anti-Corruption Law.

SECTION 9. Affirmative Covenants.

The Borrower hereby covenants and agrees that on the Closing Date and
thereafter, until all Commitments and all Letters of Credit have terminated
(unless such Letters of Credit have been collateralized on terms and conditions
reasonably satisfactory to the applicable Letter of Credit Issuer following the
termination of the Revolving Credit Commitments) and the Loans and Unpaid
Drawings, together with interest, fees and all other Obligations (other than
Hedging Obligations under Secured Hedging Agreements and/or Secured Commodity
Hedging Agreements, Cash Management Obligations under Secured Cash Management
Agreements or Contingent Obligations), are paid in full:

9.1. Information Covenants. The Borrower will furnish to the Administrative
Agent (which shall promptly make such information available to the Lenders in
accordance with its customary practice):

(a) Annual Financial Statements. As soon as available and in any event on or
before the date on which such financial statements are required to be filed with
the SEC (after giving effect to any permitted extensions) (or, if such financial
statements are not required to be filed with the SEC, on or before the date that
is 90 days after the end of each such fiscal year), the consolidated balance
sheet of (x) the Borrower and its consolidated Subsidiaries and (y) if
different, the Borrower and the Restricted Subsidiaries (provided, however, that
the Borrower shall be under no obligation to deliver the consolidated financial
statements described in sub-clause (y) if the Consolidated Total Assets and the
Consolidated EBITDA of the Borrower and its consolidated Subsidiaries (which
Consolidated Total Assets and Consolidated EBITDA shall be calculated in
accordance with the definitions of such terms, but determined based on the
financial information of the Borrower and its consolidated Subsidiaries, and not
the financial information of the Borrower and its Restricted Subsidiaries) do
not differ from the Consolidated Total Assets and the Consolidated EBITDA,
respectively, of the Borrower and its Restricted Subsidiaries by more than
2.5%), in each case as at the end of such fiscal year, and the related
consolidated statements of operations and cash flows for such fiscal year,
setting forth comparative consolidated figures for the preceding fiscal years
(or, unless the consolidated financial statements described in sub-clause
(y) are not required to be delivered pursuant to the immediately preceding
proviso, in lieu of such audited financial statements of the Borrower and the
Restricted Subsidiaries, a detailed reconciliation, reflecting such financial
information for the Borrower and the Restricted Subsidiaries, on the one hand,
and the Borrower and its consolidated Subsidiaries, on the other hand), all in
reasonable detail and prepared in accordance with GAAP, and, in each case,
(i) except with respect to

 

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any such reconciliation, certified by independent certified public accountants
of recognized national standing whose opinion shall not be qualified as to the
scope of audit, (ii) certified by an Authorized Officer of the Borrower as
fairly presenting in all material respects the financial condition, results of
operations, stockholders’ equity and cash flows of the Borrower and its
consolidated Subsidiaries (or the Borrower and the Restricted Subsidiaries, as
the case may be) in accordance with GAAP and (iii) accompanied by a Narrative
Report with regard thereto.

(b) Quarterly Financial Statements. As soon as available and in any event on or
before the date on which such financial statements are required to be filed with
the SEC (after giving effect to any permitted extensions) with respect to each
of the first three quarterly accounting periods in each fiscal year of the
Borrower (or, if such financial statements are not required to be filed with the
SEC, on or before the date that is 45 days after the end of each such quarterly
accounting period), the consolidated balance sheets of (x) the Borrower and its
consolidated Subsidiaries and (y) if different, the Borrower and the Restricted
Subsidiaries (provided, however, that the Borrower shall be under no obligation
to deliver the consolidated financial statements described in sub-clause (y) if
the Consolidated Total Assets and the Consolidated EBITDA of the Borrower and
its consolidated Subsidiaries (which Consolidated Total Assets and Consolidated
EBITDA shall be calculated in accordance with the definitions of such terms, but
determined based on the financial information of the Borrower and its
consolidated Subsidiaries, and not the financial information of the Borrower and
its Restricted Subsidiaries) do not differ from the Consolidated Total Assets
and the Consolidated EBITDA, respectively, of the Borrower and its Restricted
Subsidiaries by more than 2.5%), in each case as at the end of such quarterly
period and the related consolidated statements of operations for such quarterly
accounting period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly period, and the related consolidated statement of
cash flows for such quarterly accounting period and for the elapsed portion of
the fiscal year ended with the last day of such quarterly period, and setting
forth comparative consolidated figures for the related periods in the prior
fiscal year or, in the case of such consolidated balance sheet, for the last day
of the prior fiscal year (or, unless the consolidated financial statements
described in sub-clause (y) are not required to be delivered pursuant to the
immediately preceding proviso, in lieu of such unaudited financial statements of
the Borrower and the Restricted Subsidiaries, a detailed reconciliation
reflecting such financial information for the Borrower and the Restricted
Subsidiaries, on the one hand, and the Borrower and its consolidated
Subsidiaries, on the other hand), all of which shall be (i) certified by an
Authorized Officer of the Borrower as fairly presenting in all material respects
the financial condition, results of operations, stockholders’ equity and cash
flows of the Borrower and its consolidated Subsidiaries (or the Borrower and the
Restricted Subsidiaries, as the case may be) in accordance with GAAP, subject to
changes resulting from audit, normal year-end audit adjustments and absence of
footnotes and (ii) accompanied by a Narrative Report with respect thereto.

(c) Officer’s Certificate. At the time of the delivery of the financial
statements provided for in Section 9.1(a) and (b), a certificate of an
Authorized Officer of the Borrower to the effect that no Default or Event of
Default exists or, if any Default or Event of Default does exist, specifying the
nature and extent thereof, which certificate shall set forth (i) the
calculations required to establish whether the Borrower and its Restricted
Subsidiaries were in compliance with the provisions of Section 10.9 as at the
end of such fiscal year or period, as the case may be (including calculations in
reasonable detail of any amount added back to Consolidated EBITDA pursuant to
clause (a)(xii), clause (a)(xiii) and any amount excluded from Consolidated Net
Income pursuant to clause k of the definition thereof), (ii) a specification of
any change in the identity of the Restricted Subsidiaries and Unrestricted
Subsidiaries as at the end of such fiscal year or period, as the case may be,
from the Restricted Subsidiaries and Unrestricted Subsidiaries, respectively,
provided to the Lenders on the Closing Date of the most recent fiscal year or
period, as the case may be and (iii) the amount of any Pro Forma Adjustment not
previously set forth in a Pro Forma Adjustment Certificate or any change in the
amount of a Pro Forma Adjustment set forth in any Pro Forma Adjustment
Certificate previously provided and, in either case, in reasonable detail, the

 

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calculations and basis therefor. At the time of the delivery of the financial
statements provided for in Section 9.1(a), a certificate of an Authorized
Officer of the Borrower setting forth (A) in reasonable detail the Applicable
Amount and the Applicable Equity Amount as at the end of the fiscal year to
which such financial statements relate and (B) the information required pursuant
to Section 1 of the Perfection Certificate or confirming that there has been no
change in such information since the Closing Date or the date of the most recent
certificate delivered pursuant to this clause (c)(B), as the case may be.

(d) Annual Operating Forecast. Beginning on the date 60 days after the Interim
Order Entry Date (and again no later than December 1, 2014 for the business plan
and operating budget covering 2015, and no later than December 1, 2015 for the
business plan and operating budget covering 2016), the approved annual business
plan and projected operating budget (the “Annual Operating Forecast”), on an
annual basis, through the Maturity Date (as set forth in clause (a) of the
definition thereof), broken down by month, including, without limitation, income
statements, balance sheets, cash flow statements, projected capital
expenditures, asset sales, a line item for total available liquidity for the
period of such Annual Operating Forecast, and which shall set forth the
anticipated uses of the Credit Facilities for such period, certified as to its
reasonableness when made by an Authorized Officer of the Borrower in the form of
Exhibit C.

(e) Notice of Default; Litigation. Promptly after an Authorized Officer of the
Borrower or any Restricted Subsidiary obtains knowledge thereof, notice of
(i) the occurrence of any event that constitutes a Default or Event of Default,
which notice shall specify the nature thereof, the period of existence thereof
and what action the Borrower proposes to take with respect thereto and (ii) any
litigation, regulatory or governmental proceeding pending against the Borrower
or any Restricted Subsidiary that could reasonably be expected to be determined
adversely and, if so determined, to result in a Material Adverse Effect.

(f) Environmental Matters. Promptly after obtaining knowledge of any one or more
of the following environmental matters, unless such environmental matters known
to the Borrower and the Restricted Subsidiaries would not, individually, or when
aggregated with all other such matters, be reasonably expected to result in a
Material Adverse Effect, notice of:

(i) any pending or threatened Environmental Claim against any Credit Party or
any Real Estate or any Credit Party or any predecessor in interest of the
Borrower or any Restricted Subsidiary or any other Person for which any Credit
Party is alleged to be liable by contract or operation of law;

(ii) any condition or occurrence on any Real Estate that (x) could reasonably be
expected to result in noncompliance by any Credit Party with any applicable
Environmental Law or (y) could reasonably be anticipated to form the basis of
any Environmental Claim against any Credit Party or any Real Estate;

(iii) any condition or occurrence on any Real Estate or any circumstance that
could reasonably be anticipated to cause such Real Estate to be subject to any
restrictions on the ownership, occupancy, use or transferability of such Real
Estate under any Environmental Law that would be inconsistent with the present
use or operation of such Real Estate; and

(iv) the conduct of any investigation, or any removal, remedial or other
corrective action in response to the actual or alleged presence, release or
threatened release into the environment of any Hazardous Material on, at, under
or from any Real Estate.

 

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All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence, removal or remedial or other corrective
action and the response thereto. The term “Real Estate” shall mean any interest
in land, buildings and improvements owned, leased or otherwise held by any
Credit Party, but excluding all operating fixtures and equipment.

(g) Other Information. Promptly upon filing thereof, copies of any filings
(including on Form 10-K, 10-Q or 8-K) or registration statements with, and
reports to, the SEC or any analogous Governmental Authority in any relevant
jurisdiction by Parent Guarantor, the Borrower or any Restricted Subsidiary
(other than amendments to any registration statement (to the extent such
registration statement, in the form it becomes effective, is delivered to the
Administrative Agent), exhibits to any registration statement and, if
applicable, any registration statements on Form S-8) and copies of all financial
statements, proxy statements, notices and reports that Parent Guarantor, the
Borrower or any Restricted Subsidiary shall send to the holders of any publicly
issued debt of Parent Guarantor, the Borrower and/or any Restricted Subsidiary
in their capacity as such holders (in each case to the extent not theretofore
delivered to the Administrative Agent pursuant to this Agreement) and, with
reasonable promptness, such other information (financial or otherwise) as the
Administrative Agent on its own behalf or on behalf of any Lender (acting
through the Administrative Agent) may reasonably request in writing from time to
time.

(h) Pro Forma Adjustment Certificate. Not later than any date on which financial
statements are delivered with respect to any Test Period in which a Pro Forma
Adjustment is made, a certificate of an Authorized Officer of the Borrower
setting forth the amount of such Pro Forma Adjustment and, in reasonable detail,
the calculations and basis therefor.

(i) Budget and Variance Report. (i) Commencing with the end of the first full
fiscal quarter ended after the entry of the Interim Order (or, at the election
of the Borrower, at the end of each calendar month or such earlier period as may
be agreed), the Borrower shall promptly provide an updated Budget for the
subsequent 3-month period to the Administrative Agent.

(ii) With respect to each calendar month, no later than the end of the
subsequent calendar month in each case with respect to Parent Guarantor and its
Restricted Subsidiaries, a variance report showing a statement of actual cash
sources and uses of all free cash flow for the immediately such preceding
calendar month, noting therein all material variances from values set forth for
such historical periods in the most recently delivered Budget, including
narrative explanations as to any material variances and certified as to its
reasonableness when made by an Authorized Officer of the Borrower.

(j) Monthly Reporting. As soon as available, but in any event not later than
twenty five days after the end of each calendar month, a report detailing
(i) any material Dispositions consummated by any Credit Party (or the entry into
any binding contracts for a material Disposition by any Credit Party),
(ii) material developments in connection with any cost savings programs by any
Credit Party and (iii) such other matters as the Administrative Agent may
reasonably request; provided that, notwithstanding anything to the contrary in
this clause (iii) (but without limitation of any other requirement set forth in
this Section 9.1), none of the Parent Guarantor, the Borrower or any of its
Restricted Subsidiaries will be required under this clause (iii) to provide any
information to the extent that the provision thereof would violate any
attorney-client privilege (as reasonably determined by counsel to the Credit
Parties), law, rule or regulation, or any contractual obligation of
confidentiality binding on the Credit Parties or their respective affiliates
(provided that (x) the Administrative Agent shall be notified if any such
information is being withheld and (y) the Credit Parties shall use commercially
reasonable efforts to obtain a consent to disclosure to the Administrative Agent
of any such information being withheld as a result of any contractual obligation
of confidentiality (other than, for purposes of this clause (y), any such
information being withheld as a result of attorney-client privilege).

 

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Notwithstanding the foregoing, the obligations in clauses (f), (h) and (i) of
this Section 9.1 may be satisfied with respect to financial information of the
Borrower and the Restricted Subsidiaries by furnishing (A) the applicable
financial statements of Parent Guarantor, the Ultimate Parent or any direct or
indirect parent of the Ultimate Parent or (B) the Borrower’s (or Parent
Guarantor’s, the Ultimate Parent’s or any direct or indirect parent thereof), as
applicable, Form 10-K or 10-Q, as applicable, filed with the SEC; provided that,
with respect to each of subclauses (A) and (B) of this paragraph, to the extent
such information relates to Parent Guarantor, the Ultimate Parent or a parent of
the Ultimate Parent, such information is accompanied by consolidating or other
information that explains in reasonable detail the differences between the
information relating to Parent Guarantor, the Ultimate Parent or such parent, on
the one hand, and the information relating to the Borrower and the Restricted
Subsidiaries on a standalone basis, on the other hand.

9.2. Books, Records and Inspections. The Borrower will, and will cause each
Restricted Subsidiary to, permit officers and designated representatives of the
Administrative Agent (including Financial Advisor) or the Required Lenders (as
accompanied by the Administrative Agent) to visit and inspect any of the
properties or assets of the Borrower or such Restricted Subsidiary in
whomsoever’s possession to the extent that it is within such party’s control to
permit such inspection (and shall use commercially reasonable efforts to cause
such inspection to be permitted to the extent that it is not within such party’s
control to permit such inspection), and to examine the books and records of the
Borrower and any such Restricted Subsidiary and discuss the affairs, finances
and accounts (including, without limitation, strategic planning, cash and
liquidity management and operational and restructuring activities) of the
Borrower and of any such Restricted Subsidiary with, and be advised as to the
same by, its and their officers and independent accountants, all at such
reasonable times and intervals and to such reasonable extent as the
Administrative Agent or Required Lenders may desire (and subject, in the case of
any such meetings or advice from such independent accountants, to such
accountants’ customary policies and procedures); provided that, excluding any
such visits and inspections during the continuation of an Event of Default
(a) only the Administrative Agent, whether on its own or in conjunction with the
Required Lenders, may exercise rights of the Administrative Agent and the
Lenders under this Section 9.2, (b) the Administrative Agent shall not exercise
such rights more than two times in any calendar year and (c) only one such visit
shall be at the Borrower’s expense; provided further that when an Event of
Default exists, the Administrative Agent (or any of its representatives or
independent contractors) or any representative of any Lender may do any of the
foregoing at the expense of the Borrower at any time during normal business
hours and upon reasonable advance notice. The Administrative Agent and the
Required Lenders shall give the Borrower the opportunity to participate in any
discussions with the Borrower’s independent public accountants. Notwithstanding
anything to the contrary in this Section 9.2, neither the Borrower nor any
Restricted Subsidiary will be required under this Section 9.2 to disclose or
permit the inspection or discussion of any document, information or other matter
to the extent that such action would violate any attorney-client privilege (as
reasonably determined by counsel to the Credit Parties), law, rule or
regulation, or any contractual obligation of confidentiality binding on the
Credit Parties or their respective affiliates (provided that (x) the
Administrative Agent shall be notified if any such information is being withheld
and (y) the Credit Parties shall use commercially reasonable efforts to obtain a
consent to such disclosure or action being withheld as a result of any
contractual obligation of confidentiality (other than, for purposes of this
clause (y), any such information being withheld as a result of attorney-client
privilege).

9.3. Maintenance of Insurance. The Borrower will, and will cause each Material
Subsidiary that is a Restricted Subsidiary to, at all times maintain in full
force and effect, pursuant to self-insurance arrangements or with insurance
companies that the Borrower believes (in the good faith

 

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judgment of the management of the Borrower, as applicable) are financially sound
and responsible at the time the relevant coverage is placed or renewed,
insurance in at least such amounts (after giving effect to any self-insurance
which the Borrower believes (in the good faith judgment of management of the
Borrower, as applicable) is reasonable and prudent in light of the size and
nature of its business) and against at least such risks (and with such risk
retentions) as the Borrower believes (in the good faith judgment of management
of the Borrower, as applicable) is reasonable and prudent in light of the size
and nature of its business; and will furnish to the Administrative Agent, upon
written reasonable request from the Administrative Agent, information presented
in reasonable detail as to the insurance so carried. With respect to each
Mortgaged Property, obtain flood insurance in such total amount as the
Administrative Agent may from time to time require, if at any time the area in
which any improvements located on any Mortgaged Property is designated a “flood
hazard area” in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency (or any successor agency), and otherwise comply with the
National Flood Insurance Program as set forth in the Flood Disaster Protection
Act of 1973, as amended from time to time.

9.4. Payment of Taxes. The Borrower will pay and discharge, and will cause each
of the Restricted Subsidiaries to pay and discharge, all Taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims in respect of any Taxes imposed, assessed or
levied that, if unpaid, could reasonably be expected to become a material Lien
upon any properties of the Borrower or any Restricted Subsidiary of the
Borrower; provided that neither the Borrower nor any such Restricted Subsidiary
shall be required to pay any such tax, assessment, charge, levy or claim that is
being contested in good faith and by proper proceedings if it has maintained
adequate reserves (in the good faith judgment of management of the Borrower)
with respect thereto in accordance with GAAP or the failure to pay could not
reasonably be expected to result in a Material Adverse Effect.

9.5. Consolidated Corporate Franchises. The Borrower will do, and will cause
each Material Subsidiary that is a Restricted Subsidiary to do, or cause to be
done, all things necessary to preserve and keep in full force and effect its
existence, corporate rights and authority, except to the extent that the failure
to do so could not reasonably be expected to have a Material Adverse Effect;
provided, however, that the Borrower and the Restricted Subsidiaries may
consummate any transaction permitted under Section 10.3, 10.4 or 10.5.

9.6. Compliance with Statutes, Regulations, Etc. The Borrower will, and will
cause each Restricted Subsidiary to, comply with all Applicable Laws applicable
to it or its property, including all governmental approvals or authorizations
required to conduct its business, and to maintain all such governmental
approvals or authorizations in full force and effect, in each case except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.

9.7. ERISA.

(a) Promptly after the Borrower or any ERISA Affiliate knows or has reason to
know of the occurrence of any of the following events that, individually or in
the aggregate (including in the aggregate such events previously disclosed or
exempt from disclosure hereunder, to the extent the liability therefor remains
outstanding), would be reasonably likely to have a Material Adverse Effect, the
Borrower will deliver to the Administrative Agent a certificate of an Authorized
Officer or any other senior officer of the Borrower setting forth details as to
such occurrence and the action, if any, that the Borrower or such ERISA
Affiliate is required or proposes to take, together with any notices (required,
proposed or otherwise) given to or filed with or by the Borrower, such ERISA
Affiliate, the PBGC, a Plan participant (other than notices relating to an
individual participant’s benefits) or the Plan administrator with respect
thereto: that a Reportable Event has occurred; that an accumulated funding
deficiency has

 

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been incurred or an application is to be made to the Secretary of the Treasury
for a waiver or modification of the minimum funding standard (including any
required installment payments) or an extension of any amortization period under
Section 412 of the Code with respect to a Plan; that a Plan having an Unfunded
Current Liability has been or is to be terminated, reorganized, partitioned or
declared insolvent under Title IV of ERISA (including the giving of written
notice thereof); that a Plan has an Unfunded Current Liability that has or will
result in a lien under ERISA or the Code; that proceedings will be or have been
instituted to terminate a Plan having an Unfunded Current Liability (including
the giving of written notice thereof); that a proceeding has been instituted
against the Borrower or an ERISA Affiliate pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; that the PBGC has notified the
Borrower or any ERISA Affiliate of its intention to appoint a trustee to
administer any Plan; that the Borrower or any ERISA Affiliate has failed to make
a required installment or other payment pursuant to Section 412 of the Code with
respect to a Plan; or that the Borrower or any ERISA Affiliate has incurred or
will incur (or has been notified in writing that it will incur) any liability
(including any contingent or secondary liability) to or on account of a Plan
pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or
4204 of ERISA or Section 4971 or 4975 of the Code.

(b) Promptly following any request therefor, on and after the effectiveness of
the Pension Act, the Borrower will deliver to the Administrative Agent copies of
(i) any documents described in Section 101(k) of ERISA that the Borrower and any
of the Restricted Subsidiaries or any ERISA Affiliate may request with respect
to any Multiemployer Plan and (ii) any notices described in Section 101(l) of
ERISA that the Borrower and any of the Restricted Subsidiaries or any ERISA
Affiliate may request with respect to any Multiemployer Plan; provided that if
the Borrower, any of such Restricted Subsidiaries or any ERISA Affiliate has not
requested such documents or notices from the administrator or sponsor of the
applicable Multiemployer Plan, the Borrower, the applicable Restricted
Subsidiary(ies) or the ERISA Affiliate(s) shall promptly make a request for such
documents or notices from such administrator or sponsor and shall provide copies
of such documents and notices promptly after receipt thereof.

(c) Upon the reasonable request of the Administrative Agent, the Borrower shall
deliver to the Administrative Agent copies of: (i) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by the Borrower or
any ERISA Affiliate with the Internal Revenue Service with respect to each Plan,
(ii) the most recent actuarial valuation report for each Plan, (iii) all notices
received by the Borrower or any ERISA Affiliate from a Multiemployer Plan
sponsor or any governmental agency and (iv) such other documents or governmental
reports or filings relating to any Employee Benefit Plan as the Administrative
Agent shall reasonably request.

9.8. Maintenance of Properties. The Borrower will, and will cause the Restricted
Subsidiaries to, keep and maintain all property material to the conduct of its
business in good working order and condition (ordinary wear and tear excepted),
except to the extent that the failure to do so could reasonably be expected to
have a Material Adverse Effect.

9.9. Transactions with Affiliates. The Borrower will conduct, and cause the
Restricted Subsidiaries to conduct, all transactions with any of its Affiliates
(other than transactions between or among the Borrower and the Restricted
Subsidiaries and, between or among the Borrower, the Restricted Subsidiaries and
to the extent in the ordinary course or consistent with past practice the
Ultimate Parent and any of its other Subsidiaries, including the Oncor
Subsidiaries) on terms that are, taken as a whole, substantially as favorable to
the Borrower or such Restricted Subsidiary as it would obtain in a comparable
arm’s-length transaction with a Person that is not an Affiliate; provided that,
subject to the Cash Management Order, the Tax Order, the Wages Order and any
other orders of the Bankruptcy Court, the foregoing restrictions shall not apply
to:

 

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(a) [reserved],

(b) transactions permitted by Sections 10.5(c) (other than clause
(iii) thereof), (k), (l), (m), (p), (z), and (bb) and Section 10.6,

(c) the Transactions and the payment of the Transaction Expenses,

(d) the issuance of Stock or Stock Equivalents of the Borrower (or any direct or
indirect parent thereof) to the management of the Borrower (or any direct or
indirect parent thereof) or any Subsidiary of the Borrower in connection with
the Transactions or pursuant to arrangements described in clause (f) of this
Section 9.9,

(e) loans, advances and other transactions between or among the Borrower, any
Subsidiary of the Borrower or any joint venture (regardless of the form of legal
entity) in which the Borrower or any Subsidiary of the Borrower has invested
(and which Subsidiary or joint venture would not be an Affiliate of the Borrower
but for the Borrower’s or such Subsidiary’s Subsidiary ownership of Stock or
Stock Equivalents in such joint venture or Subsidiary) to the extent permitted
under Section 10,

(f) payments, advances or loans (or cancellation of loans), employment and
severance arrangements and health and benefit plans or agreements between the
Ultimate Parent, Parent Guarantor, the Borrower and the other Subsidiaries of
the Ultimate Parent and their respective officers, employees or consultants
(including management and employee benefit plans or agreements, stock option
plans and other compensatory arrangements) in the ordinary course of business,

(g) payments by the Borrower (and any direct or indirect parent thereof), and
the Subsidiaries of the Ultimate Parent pursuant to the Tax Sharing Agreements
among the Borrower (and any such parent) and the Subsidiaries of the Borrower to
the extent attributable to the ownership or operation of the Borrower and the
Subsidiaries of the Ultimate Parent,

(h) the payment of customary fees and reasonable out of pocket costs to, and
indemnities provided on behalf of, directors, managers, consultants, officers
and employees of the Borrower (or, to the extent attributable to the ownership
of the Borrower by such parent, any direct or indirect parent thereof) and the
Subsidiaries of the Borrower in the ordinary course of business,

(i) the payment of indemnities and reasonable out-of-pocket expenses incurred by
the Sponsors and their Affiliates in connection with services provided to the
Borrower (or any direct or indirect parent thereof), or any of the Subsidiaries
of the Borrower,

(j) the issuance of Stock or Stock Equivalents (other than Disqualified Stock)
of the Borrower (or any direct or indirect parent thereof) to Ultimate Parent,
any Permitted Holder or to any director, officer, employee or consultant,

(k) sales of Receivables Facility Assets in connection with any Permitted
Receivables Financing,

(l) the performance of any and all obligations (including payment obligations)
pursuant to the Shared Services Agreement and other ordinary course transactions
under the intercompany cash management systems with Specified Affiliates and
subleases of property from any Specified Affiliate to the Borrower or any of the
Restricted Subsidiaries, or as disclosed in any Budget approved by the
Administrative Agent and the Joint Lead Arrangers, and

 

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(m) transactions pursuant to permitted agreements in existence on the Closing
Date and set forth on Schedule 9.9 or any amendment thereto to the extent such
an amendment (together with any other amendment or supplemental agreements) is
not adverse, taken as a whole, to the Lenders in any material respect.

9.10. End of Fiscal Years; Fiscal Quarters. The Borrower will, for financial
reporting purposes, cause (a) each of its, and the Restricted Subsidiaries’
fiscal years to end on December 31 of each year (each a “Fiscal Year”) and
(b) each of its, and the Restricted Subsidiaries’, fiscal quarters to end on
dates consistent with such fiscal year-end; provided, however, that the Borrower
may, upon written notice to the Administrative Agent change the financial
reporting convention specified above to any other financial reporting convention
reasonably acceptable to the Administrative Agent, in which case the Borrower
and the Administrative Agent will, and are hereby authorized by the Lenders to,
make any adjustments to this Agreement that are necessary in order to reflect
such change in financial reporting.

9.11. Additional Guarantors and Grantors. Subject to any applicable limitations
set forth in the Guarantee and the Security Documents, the Borrower will cause
each direct or indirect Domestic Subsidiary of the Borrower (excluding any
Excluded Subsidiary) formed or otherwise purchased or acquired after the Closing
Date and each other Domestic Subsidiary of the Borrower that ceases to
constitute an Excluded Subsidiary to, within 30 days from the date of such
formation, acquisition or cessation, as applicable (or such longer period as the
Administrative Agent may agree in its reasonable discretion), (i) become a
Guarantor under the Guarantee and a grantor under the Security Agreement
pursuant to (A) the Interim Order or (when applicable) the Final Order or (B) if
reasonably requested by the Administrative Agent, a supplement to each of the
Guarantee and the Security Agreement and (ii) if reasonably requested by the
Administrative Agent, execute a joinder to the Intercompany Subordinated Note.

9.12. Pledge of Additional Stock and Evidence of Indebtedness.

(a) Subject to any applicable limitations set forth in the Security Documents,
the Borrower will promptly notify the Administrative Agent in writing of any
Stock or Stock Equivalents issued or otherwise purchased or acquired after the
Closing Date and of any Indebtedness in excess of $10,000,000 that is owing to
the Borrower or any Subsidiary Guarantor (or Person required to become a
Subsidiary Guarantor pursuant to Section 9.11) incurred (individually or in a
series of related transactions) after the Closing Date and, in each case, if
reasonably requested by the Administrative Agent, will pledge, and, if
applicable, will cause each other Subsidiary Guarantor (or Person required to
become a Subsidiary Guarantor pursuant to Section 9.11), to pledge to the
Collateral Agent for the benefit of the Secured Parties, (i) all such Stock and
Stock Equivalents (other than any Excluded Stock and Stock Equivalents),
pursuant to a Pledge Agreement or supplement thereto, and (ii) all evidences of
such Indebtedness, pursuant to a Pledge Agreement or supplement thereto.

(a) The Borrower agrees that, at the reasonable request of the Administrative
Agent, all Indebtedness of the Borrower and the Restricted Subsidiaries of the
Borrower and that is owing to the Borrower or to any Subsidiary Guarantor (or
Person required to become a Subsidiary Guarantor pursuant to Section 9.11) shall
be evidenced by the Intercompany Subordinated Note.

9.13. [Reserved].

9.14. Further Assurances.

(a) Subject to the applicable limitations set forth in this Agreement and in the
Security Documents, the Borrower will, and will cause each other Credit Party
to, execute any and all

 

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further documents, financing statements, agreements and instruments, and take
all such further actions (including the filing and recording of financing
statements, fixture filings, and other documents) that may be required under any
Applicable Law, or that the Collateral Agent or the Required Lenders may
reasonably request, in order to grant, preserve, protect and perfect the
validity and priority of the security interests created or intended to be
created by the applicable Security Documents, all at the expense of Parent
Guarantor, the Borrower and the other Guarantors; provided, however, that
notwithstanding anything to the contrary contained in this Agreement or in any
other Credit Document, but without limiting the grant of a Lien on and security
interest in the Collateral pursuant to the Orders and the Security Documents,
the TCEH Debtors will not be obligated to enter into any Mortgage, authorize any
fixture filing, enter into any agreement providing “control” as defined in
Section 9-104, 9-105, 9-106 and 9-107 of the UCC as in effect in any relevant
jurisdiction) or to undertake any registration in respect of assets subject to a
certificate of title.

(b) [Reserved].

(c) [Reserved].

(d) [Reserved].

(e) Notwithstanding anything herein to the contrary, if the Collateral Agent
determines (taking into account the existence and effect of the Orders) in its
reasonable judgment (confirmed in writing to the Borrower and the Administrative
Agent) that the cost or other consequences (including adverse tax and accounting
consequences) of creating or perfecting any Lien on any property is excessive in
relation to the benefits afforded to the Secured Party thereby, then such
property may be excluded from the Collateral for all purposes of the Credit
Documents.

9.15. Bankruptcy Matters.

(a) The Borrower will deliver to the Administrative Agent and its legal counsel,
at least two Business Days in advance of filing with the Bankruptcy Court,
copies of all proposed First Day Orders and motions seeking approval of the
First Day Orders, which shall be in form and substance reasonably satisfactory
to the Administrative Agent (but in the case of the Cash Management Order, the
Interim Cash Collateral Order, and the Interim Order, shall be satisfactory in
form and substance to the Administrative Agent).

(b) The Borrower will deliver to the Administrative Agent, and in the case of
(iii) below to its legal counsel, as soon as practicable in advance of filing
with the Bankruptcy Court (i) the Final Order (which must be in form and
substance satisfactory to the Administrative Agent), (ii) all other proposed
material orders and pleadings related to the Credit Facilities (which must be in
form and substance reasonably satisfactory to the Administrative Agent) and
(iii) the Acceptable Reorganization Plan (or any other plan of reorganization or
liquidation), the Disclosure Statement (or any other disclosure statements
related to any such plan) and the Plan Restructuring Documents (as defined in
the Restructuring Support Agreement) and other material definitive documents
with respect to the Cases (which shall be in form and substance reasonably
satisfactory to the Administrative Agent; provided that with respect to
provisions of the Acceptable Reorganization Plan (or any other plan of
reorganization) and/or the Disclosure Statement (or any other disclosure
statements) that relate to the payment of the Credit Facilities, such provisions
must be in form and substance satisfactory to the Administrative Agent).

(c) The Borrower shall maintain a cash management system in accordance with the
Cash Management Order and the Orders each of which shall be in form and
substance satisfactory to the Administrative Agent.

 

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(d) The Borrower shall file with the Bankruptcy Court a plan of reorganization
and a disclosure statement relating thereto, each in form and substance
reasonably satisfactory to the Administrative Agent, within 18 months after the
Petition Date; provided, however, that with respect to provisions of the plan of
reorganization and/or any disclosure statement that relate to payment of the
Credit Facilities, such provisions must be in form and substance satisfactory to
the Administrative Agent.

(e) The Borrower shall contest, if requested by the Administrative Agent, any
motion seeking entry of an order, and entry of an order, that is materially
adverse to the interests of the Administrative Agent or the Lenders or their
respective material rights and remedies under the Credit Documents in any of the
Cases;

9.16. Ratings. The Borrower shall use commercially reasonable efforts to obtain
ratings from each of Moody’s and S&P as soon as reasonably practicable after the
Closing Date.

9.17. Use of Proceeds. Parent Guarantor and the Borrower shall not, and shall
not permit any other Credit Party or any other Restricted Subsidiary to:

(a) use the proceeds of the Credit Facilities or any Letters of Credit issued
hereunder for purposes other than those permitted under this Agreement and
contained in the Interim Order or the Final Order, as applicable;

(b) use the proceeds of the Credit Facilities or any Letters of Credit issued
hereunder for purposes that would violate the provisions of Regulation T, U or X
of the Board;

(c) use the proceeds of any Revolving Credit Loan to fund any RCT L/C Collateral
Account until (i) the earlier to occur of (x) the funding of the Delayed-Draw
Term Loans in an amount equal to the aggregate amount of Delayed-Draw Term Loan
Commitments as of the Closing Date and (y) the termination in full of the
Delayed-Draw Term Loan Commitments and (ii) the funding of the Term Loans as of
the Full Availability Date;

(d) use the proceeds of the Delayed-Draw Term Loans for purposes other than
funding the RCT L/C Collateral Accounts; and

(e) use the proceeds of the Term Loans to fund the General L/C Collateral
Accounts in an amount exceeding $800,000,000 in the aggregate.

SECTION 10. Negative Covenants.

The Borrower hereby covenants and agrees that on the Closing Date and
thereafter, until all Commitments and all Letters of Credit have terminated
(unless such Letters of Credit have been collateralized on terms and conditions
reasonably satisfactory to the applicable Letter of Credit Issuer following the
termination of the Revolving Credit Commitments) and the Loans and Unpaid
Drawings, together with interest, fees and all other Obligations (other than
Hedging Obligations under Secured Hedging Agreements and/or Secured Commodity
Hedging Agreements, Cash Management Obligations under Secured Cash Management
Agreement or Contingent Obligations) are paid in full:

10.1. Limitation on Indebtedness. The Borrower will not, and will not permit the
Restricted Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness.

Notwithstanding the foregoing, the limitations set forth in the immediately
preceding paragraph shall not apply to any of the following items:

 

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(a) Indebtedness arising under the Credit Documents (including any Indebtedness
incurred pursuant to Section 2.14);

(b) subject to compliance with Section 10.5, Indebtedness of the Borrower or any
Restricted Subsidiary owed to the Borrower or any Restricted Subsidiary;
provided that all such Indebtedness of any Credit Party owed to any Person that
is not a Credit Party shall be (x) evidenced by the Intercompany Subordinated
Note or (y) otherwise be subject to subordination terms substantially identical
to the subordination terms set forth in the Intercompany Subordinated Note or
otherwise reasonably acceptable to the Administrative Agent;

(c) Indebtedness in respect of any bankers’ acceptance, bank guarantees, letter
of credit, warehouse receipt or similar facilities entered into in the ordinary
course of business (including in respect of construction and restoration
activities and in respect of workers compensation claims, health, disability or
other employee benefits or property, casualty or liability insurance or
self-insurance or other Indebtedness with respect to reimbursement-type
obligations regarding workers compensation claims);

(d) subject to compliance with Section 10.5, Guarantee Obligations incurred by
(i) Restricted Subsidiaries in respect of Indebtedness of the Borrower or any
other Restricted Subsidiary that is permitted to be incurred under this
Agreement (except that a Restricted Subsidiary that is not a Credit Party may
not, by virtue of this Section 10.1(d) guarantee Indebtedness that such
Restricted Subsidiary could not otherwise incur under this Section 10.1) and
(ii) the Borrower in respect of Indebtedness of Restricted Subsidiaries that is
permitted to be incurred under this Agreement; provided that (A) if the
Indebtedness being guaranteed under this Section 10.1(d) is subordinated to the
Obligations, such Guarantee Obligations shall be subordinated to the Guarantee
of the Obligations on terms at least as favorable to the Lenders as those
contained in the subordination of such Indebtedness, (B) [Reserved] and (C) the
aggregate amount of Guarantee Obligations incurred by Restricted Subsidiaries
that are not Subsidiary Guarantors under this clause (d), when combined with the
total amount of Indebtedness incurred by Restricted Subsidiaries that are not
Subsidiary Guarantors pursuant to Section 10.1(j) and Section 10.1(n), shall not
exceed $200,000,000 at any time outstanding;

(e) Guarantee Obligations (i) incurred in the ordinary course of business
(including in respect of construction or restoration activities) in respect of
obligations of (or to) suppliers, customers, franchisees, lessors and licensees
or (ii) otherwise constituting Investments permitted by Sections 10.5(d),
10.5(g), 10.5(i), 10.5(q), 10.5(t) and 10.5(v);

(f) (i) Indebtedness (including Indebtedness arising under Capital Leases)
incurred to finance the purchase price, cost of design, acquisition,
construction, repair, restoration, replacement, expansion, installation or
improvement of fixed or capital assets or otherwise in respect of Capital
Expenditures, so long as such Indebtedness, except in the case of Environmental
CapEx or Necessary CapEx, is incurred within 270 days of the acquisition,
construction, repair, restoration, replacement, expansion, installation or
improvement of such fixed or capital assets or incurrence of such Capital
Expenditure, (ii) Indebtedness arising under Capital Leases entered into in
connection with Permitted Sale Leasebacks and (iii) Indebtedness arising under
Capital Leases, other than Capital Leases in effect on the Closing Date and
Capital Leases entered into pursuant to subclauses (i) and (ii) above; provided,
that the aggregate amount of Indebtedness incurred pursuant to this clause (iii)
at any time outstanding shall not exceed $400,000,000 and (iv) any modification,
replacement, refinancing, refunding, renewal or extension of any Indebtedness
specified in subclause (i), (ii) or (iii) above; provided that, except to the
extent otherwise expressly permitted hereunder, the principal amount thereof
does not exceed the principal amount thereof outstanding immediately prior to
such modification, replacement, refinancing, refunding, renewal or extension
except by an amount equal to the unpaid accrued interest and premium thereon
plus the reasonable amounts paid in respect of fees and expenses incurred in
connection with such modification, replacement, refinancing, refunding, renewal
or extension;

 

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(g) Indebtedness outstanding on the Closing Date listed on Schedule 10.1 and the
Prepetition Debt and any modification, replacement, refinancing, refunding,
renewal or extension thereof; provided that except to the extent otherwise
expressly permitted hereunder, in the case of any such modification,
replacement, refinancing, refunding, renewal or extension, (i) the principal
amount thereof (including any unused commitments) does not exceed the principal
amount thereof outstanding immediately prior to such modification, replacement,
refinancing, refunding, renewal or extension except by an amount equal to the
unpaid accrued interest and premium thereon plus the reasonable amounts paid in
respect of fees and expenses incurred in connection with such modification,
replacement, refinancing, refunding, renewal or extension, (ii) the direct and
contingent obligors with respect to such Indebtedness are not changed (iii) no
portion of such Indebtedness matures prior to the Stated Maturity of such
Indebtedness as in effect as of the Closing Date and (iv) if the Indebtedness
being refinanced, or any guarantee thereof, constituted subordinated
Indebtedness, then such replacement or refinancing Indebtedness, or such
guarantee, respectively, shall be subordinated to the Obligations to
substantially the same extent (it being understood that an Incremental Amendment
may provide, without the consent of any other Lender required, for restrictions
similar and in addition to those set forth in this Section 10.1(g)(iv) on
modification, replacement, refinancing, refunding, renewal or extension of
Indebtedness which matures on or after the Maturity Date but on or before the
final maturity date for the Incremental Term Loans in such Incremental
Amendment);

(h) Indebtedness in respect of Hedging Agreements; provided that (i) other than
in the case of Commodity Hedging Agreements, such Hedging Agreements are not
entered into for speculative purposes (as determined by the Borrower in its
reasonable discretion acting in good faith) and (ii) any speculative Commodity
Hedging Agreements must be entered into in the ordinary course of business and
shall be consistent with past practice;

(i) [reserved];

(j) (i) Indebtedness of a Person or Indebtedness attaching to assets of a Person
that, in either case, becomes a Restricted Subsidiary (or is a Restricted
Subsidiary that survives a merger with such Person or any of its Subsidiaries)
or Indebtedness attaching to assets that are acquired by the Borrower or any
Restricted Subsidiary, in each case after the Closing Date as the result of a
Permitted Acquisition; provided that

(x) such Indebtedness existed at the time such Person became a Restricted
Subsidiary or at the time such assets were acquired and, in each case, was not
created in anticipation thereof,

(y) such Indebtedness is not guaranteed in any respect by the Borrower or any
Restricted Subsidiary (other than by any such Person that so becomes a
Restricted Subsidiary or is the survivor of a merger with such Person or any of
its Subsidiaries), and

(z) (A) the Stock and Stock Equivalents of such Person are pledged to the
Collateral Agent to the extent required under Section 9.12 and (B) such Person
executes a supplement to each of the Guarantee and the Security Documents (or
alternative guarantee and security arrangements in relation to the Obligations
reasonably acceptable to the Collateral Agent); provided, further, that the
requirements of this subclause (z) shall not apply to any Indebtedness of the
type that could have been incurred under Section 10.1(f);

 

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(ii) any modification, replacement, refinancing, refunding, renewal or extension
of any Indebtedness specified in subclause (j)(i) above; provided that, except
to the extent otherwise expressly permitted hereunder, (x) the principal amount
of any such Indebtedness does not exceed the principal amount thereof
outstanding immediately prior to such modification, replacement, refinancing,
refunding, renewal or extension except by an amount equal to the unpaid accrued
interest and premium thereon plus the reasonable amounts paid in respect of fees
and expenses incurred in connection with such modification, replacement,
refinancing, refunding, renewal or extension, (y) the direct and contingent
obligors with respect to such Indebtedness are not changed and (z) if the
Indebtedness being refinanced, or any guarantee thereof, constituted
subordinated Indebtedness, then such replacement or refinancing Indebtedness, or
such guarantee, respectively, shall be subordinated to the Obligations to
substantially the same extent; and

provided further that the aggregate amount of Indebtedness incurred under this
Section 10.1(j) (A) shall not exceed $200,000,000 at any time outstanding and
(B) by Restricted Subsidiaries that are not Subsidiary Guarantors, when combined
with the total amount of Indebtedness incurred by Restricted Subsidiaries that
are not Subsidiary Guarantors pursuant to Sections 10.1(d) and 10.1(n), shall
not exceed $200,000,000 at any time outstanding;

(k) [reserved].

(l) Indebtedness in respect of performance bonds, bid bonds, appeal bonds,
surety bonds and completion guarantees and similar obligations not in connection
with money borrowed, in each case provided in the ordinary course of business
(including in respect of construction or restoration activities) or consistent
with past practice or in respect of coal mine reclamation, including those
incurred to secure health, safety and environmental obligations in the ordinary
course of business (including in respect of construction or restoration
activities) or consistent with past practice;

(m) (i) Indebtedness incurred in connection with any Permitted Sale Leaseback
and (ii) any modification, replacement, refinancing, refunding, renewal or
extension of any Indebtedness specified in subclause (m)(i) above; provided
that, except to the extent otherwise permitted hereunder, (x) the principal
amount of any such Indebtedness is not increased above the principal amount
thereof outstanding immediately prior to such modification, replacement,
refinancing, refunding, renewal or extension except by an amount equal to the
unpaid accrued interest and premium thereon plus the reasonable amounts paid in
respect of fees and expenses incurred in connection with such modification,
replacement, refinancing, refunding, renewal or extension and (y) the direct and
contingent obligors with respect to such Indebtedness are not changed;

(n) additional Indebtedness; provided that the aggregate amount of Indebtedness
incurred and remaining outstanding pursuant to this Section 10.1(n) shall not at
any time exceed $250,000,000; provided, that the aggregate amount of
Indebtedness incurred by Restricted Subsidiaries that are not Subsidiary
Guarantors under this Section 10.1(n), when combined with the total amount of
Indebtedness incurred by Restricted Subsidiaries that are not Subsidiary
Guarantors pursuant to Section 10.1(d) and 10.1(j), shall not exceed
$200,000,000 at any time outstanding;

(o) [reserved];

(p) Cash Management Obligations and other Indebtedness in respect of overdraft
facilities, employee credit card programs, netting services, automatic
clearinghouse arrangements and other cash management and similar arrangements in
the ordinary course of business;

 

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(q) (i) Indebtedness incurred in the ordinary course of business in respect of
obligations of the Borrower or any Restricted Subsidiary to pay the deferred
purchase price of goods or services or progress payments in connection with such
goods and services, including turbines, transformers and similar equipment and
(ii) Indebtedness in respect of intercompany obligations of the Borrower or any
Restricted Subsidiary with the Borrower or any Restricted Subsidiary of the
Borrower in respect of accounts payable incurred in connection with goods sold
or services rendered in the ordinary course of business and not in connection
with the borrowing of money;

(r) Indebtedness arising from agreements of the Borrower or any Restricted
Subsidiary providing for indemnification, adjustment of purchase price or
similar obligations (including earn-outs), in each case entered into in
connection with Permitted Acquisitions, other Investments and the Disposition of
any business, assets or Stock or Stock Equivalents permitted hereunder;

(s) Indebtedness of the Borrower or any Restricted Subsidiary consisting of
(i) obligations to pay insurance premiums or (ii) take or pay obligations
contained in supply agreements, in each case arising in the ordinary course of
business (including in respect of construction or restoration activities);

(t) Indebtedness representing deferred compensation to employees, consultants or
independent contractors of the Borrower (or, to the extent such work is done for
the Borrower or its Subsidiaries, any direct or indirect parent thereof) and the
Restricted Subsidiaries incurred in the ordinary course of business;

(u) Indebtedness consisting of promissory notes issued by any Credit Party to
current or former officers, managers, consultants, directors and employees (or
their respective spouses, former spouses, successors, executors, administrators,
heirs, legatees or distributees) to finance the purchase or redemption of Stock
or Stock Equivalents of the Borrower (or any direct or indirect parent thereof)
permitted by Section 10.6(b);

(v) Indebtedness consisting of obligations of the Borrower and the Restricted
Subsidiaries under deferred compensation or other similar arrangements incurred
by such Person in connection with the Transactions and Permitted Acquisitions or
any other Investment permitted hereunder;

(w) Indebtedness in respect of Permitted Receivables Financings;

(x) Indebtedness of the Borrower or any Restricted Subsidiary to the Ultimate
Parent or any of its other Subsidiaries in the aggregate amount at any time
outstanding not in excess of $25,000,000;

(y) [reserved];

(z) [reserved]; and

(aa) all premiums (if any), interest (including post-petition interest), fees,
expenses, charges, and additional or contingent interest on obligations
described in clauses (a) through (x) above.

For purposes of determining compliance with this Section 10.1, in the event that
an item of Indebtedness meets the criteria of more than one of the categories of
Indebtedness described clauses (a) through (aa) above, the Borrower shall, in
its sole discretion, classify and reclassify or later divide, classify or
reclassify such item of Indebtedness (or any portion thereof) and will only be
required to

 

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include the amount and type of such Indebtedness in one or more of the above
paragraph or clauses; provided that all Indebtedness outstanding under the
Credit Documents will be deemed at all times to have been incurred in reliance
only on the exception in clause (a) of Section 10.1.

10.2. Limitation on Liens. The Borrower will not, and will not permit the
Restricted Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon any property or assets of any kind (real or personal, tangible or
intangible) of the Borrower or such Restricted Subsidiary, whether now owned or
hereafter acquired, except:

(a) Liens arising under (i) the Credit Documents and/or created pursuant to the
Interim Order and the Final Order, in each case securing the Obligations;

(b) Liens on the Collateral securing obligations under Secured Cash Management
Agreements, Secured Hedging Agreements and Secured Commodity Hedging Agreements;
provided that (i) such obligations shall be secured by the Liens granted in
favor of the Collateral Agent in the manner set forth in, and be otherwise
subject to (and in compliance with), this Agreement and governed by the
applicable Security Documents and (ii) such agreements were not entered into for
speculative purposes (as determined by the Borrower at the time such agreement
was entered into in its reasonable discretion acting in good faith) and, in the
case of any Secured Commodity Hedging Agreement or any Secured Hedging Agreement
of the type described in clause (c) of the definition of “Hedging Agreement”,
entered into in order to hedge against or manage fluctuations in the price or
availability of any Covered Commodity);

(c) Permitted Liens;

(d) Liens securing Indebtedness permitted pursuant to Section 10.1(f); provided
that (x) except with respect to any Indebtedness incurred in connection with
Environmental CapEx or Necessary CapEx, such Liens attach concurrently with or
within two hundred and seventy (270) days after completion of the acquisition,
construction, repair, restoration, replacement, expansion, installation or
improvement (as applicable) of the property subject to such Liens and (y) such
Liens attach at all times only to the assets so financed except (1) for
accessions to the property financed with the proceeds of such Indebtedness and
the proceeds and the products thereof and (2) that individual financings of
equipment provided by one lender may be cross collateralized to other financings
of equipment provided by such lender;

(e) Liens existing on the Closing Date; provided that any Lien securing
Indebtedness or other obligations in excess of (x) $20,000,000 individually or
(y) $100,000,000 in the aggregate (when taken together with all other Liens
securing obligations outstanding in reliance on this clause (e) that are not set
forth on Schedule 10.2) shall only be permitted to the extent such Lien is
listed on Schedule 10.2;

(f) the modification, replacement, extension or renewal of any Lien permitted by
clauses (a) through (e) and clause (g) of this Section 10.2 upon or in the same
assets theretofore subject to such Lien (or upon or in after-acquired property
that is affixed or incorporated into the property covered by such Lien or any
proceeds or products thereof) or the modification, refunding, refinancing,
replacement, extension or renewal (without increase in the amount or change in
any direct or contingent obligor except to the extent otherwise permitted
hereunder) of the Indebtedness or other obligations secured thereby (including
any unused commitments), to the extent such modification, refunding,
refinancing, replacement, extension or renewal is permitted by Section 10.1;

(g) Liens existing on the assets of any Person that becomes a Restricted
Subsidiary (or is a Restricted Subsidiary that survives a merger with such
Person or any of its Subsidiaries) pursuant

 

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to a Permitted Acquisition or other permitted Investment, or existing on assets
acquired after the Closing Date, to the extent the Liens on such assets secure
Indebtedness permitted by Section 10.1(j); provided that such Liens (i) are not
created or incurred in connection with, or in contemplation of, such Person
becoming such a Restricted Subsidiary or such assets being acquired and
(ii) attach at all times only to the same assets to which such Liens attached
(and after-acquired property that is affixed or incorporated into the property
covered by such Lien), and secure only the same Indebtedness or obligations that
such Liens secured, immediately prior to such Permitted Acquisition and any
modification, replacement, refinancing, refunding, renewal or extension thereof
permitted by Section 10.1(j);

(h) [reserved];

(i) Liens securing Indebtedness or other obligations (i) of the Borrower or any
Restricted Subsidiary in favor of a Credit Party and (ii) of any other
Restricted Subsidiary that is not a Credit Party in favor of any other
Restricted Subsidiary that is not a Credit Party;

(j) Liens (i) of a collecting bank arising under Section 4-210 of the Uniform
Commercial Code on items in the course of collection and (ii) in favor of a
banking institution arising as a matter of law encumbering deposits (including
the right of set-off);

(k) Liens (i) on cash advances in favor of the seller of any property to be
acquired in an Investment permitted pursuant to Section 10.5 to be applied
against the purchase price for such Investment and (ii) consisting of an
agreement to sell, transfer, lease or otherwise dispose of any property in a
transaction permitted under Section 10.4, in each case, solely to the extent
such Investment or sale, disposition, transfer or lease, as the case may be,
would have been permitted on the date of the creation of such Lien;

(l) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for sale or purchase of goods entered into by the Borrower
or any Restricted Subsidiary in the ordinary course of business (including in
respect of construction or restoration activities) permitted by this Agreement;

(m) Liens deemed to exist in connection with Investments in repurchase
agreements permitted under Section 10.5;

(n) any amounts held by a trustee in the funds and accounts under an indenture
securing any revenue bonds issued for the benefit of the Borrower or any
Restricted Subsidiary;

(o) Liens that are contractual rights of set-off (i) relating to the
establishment of depository relations with banks not given in connection with
the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts
of the Borrower or any Restricted Subsidiary to permit satisfaction of overdraft
or similar obligations incurred in the ordinary course of business of the
Borrower and the Restricted Subsidiaries or (iii) relating to purchase orders
and other agreements entered into with customers of the Borrower or any
Restricted Subsidiary in the ordinary course of business;

(p) Liens solely on any cash earnest money deposits made by the Borrower or any
Restricted Subsidiary in connection with any letter of intent or purchase
agreement permitted hereunder;

(q) Liens on insurance policies and the proceeds thereof securing the financing
of the premiums with respect thereto;

 

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(r) Liens on specific items of inventory or other goods and the proceeds thereof
securing such Person’s obligations in respect of documentary letters of credit
or banker’s acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or goods in the
ordinary course of business or consistent with past practice;

(s) [reserved];

(t) [reserved];

(u) Liens in respect of Permitted Sale Leasebacks;

(v) Liens on Receivables Facility Assets in respect of any Permitted Receivables
Financing;

(w) rights reserved to or vested in others to take or receive any part of, or
royalties related to, the power, gas, oil, coal, lignite or other minerals or
timber generated, developed, manufactured or produced by, or grown on, or
acquired with, any property of the Borrower and the Restricted Subsidiaries and
Liens upon the production from property of power, gas, oil, coal, lignite or
other minerals or timber, and the by-products and proceeds thereof, to secure
the obligations to pay all or a part of the expenses of exploration, drilling,
mining or development of such property only out of such production or proceeds;

(x) Liens arising out of all presently existing and future division and transfer
orders, advance payment agreements, processing contracts, gas processing plant
agreements, operating agreements, gas balancing or deferred production
agreements, pooling, unitization or communitization agreements, pipeline,
gathering or transportation agreements, platform agreements, drilling contracts,
injection or repressuring agreements, cycling agreements, construction
agreements, shared facilities agreements, salt water or other disposal
agreements, leases or rental agreements, farm-out and farm-in agreements,
exploration and development agreements, and any and all other contracts or
agreements covering, arising out of, used or useful in connection with or
pertaining to the exploration, development, operation, production, sale, use,
purchase, exchange, storage, separation, dehydration, treatment, compression,
gathering, transportation, processing, improvement, marketing, disposal or
handling of any property of the Borrower and the Restricted Subsidiaries;
provided that such agreements are entered into in the ordinary course of
business (including in respect of construction or restoration activities);

(y) any restrictions on any Stock or Stock Equivalents or other joint venture
interests of the Borrower or any Restricted Subsidiary providing for a breach,
termination or default under any owners, participation, shared facility, joint
venture, stockholder, membership, limited liability company or partnership
agreement between such Person and one or more other holders of such Stock or
Stock Equivalents or interest of such Person, if a security interest or other
Lien is created on such Stock or Stock Equivalents or interest as a result
thereof and other similar Liens;

(z) Rights of first refusal and purchase options in favor of Aluminum Company of
America (“Alcoa”) to purchase Sandow Unit 4 and/or the real property related
thereto, as described in (i) Sandow Unit 4 Agreement dated August 13, 1976, as
amended, between Alcoa and Texas Power & Light Company (“TPL”) and in (ii) Deeds
dated March 14, 1978 and July 21, 1980, as amended, executed by Alcoa conveying
to TPL the Sandow Unit 4 real property;

(aa) Lien and other exceptions to title, in either case on or in respect of any
facilities of the Borrower or any Restricted Subsidiary, arising as a result of
any shared facility agreement entered into with respect to such facility, except
to the extent that any such Liens or exceptions, individually or in the
aggregate, materially adversely affect the value of the relevant property or
materially impair the use of the relevant property in the operation of business
the Borrower and the Restricted Subsidiaries, taken as a whole;

 

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(bb) Liens on cash and Permitted Investments (i) deposited by the Borrower or
any Restricted Subsidiary in margin accounts with or on behalf of brokers,
credit clearing organizations, independent system operators, regional
transmission organizations, pipelines, state agencies, federal agencies, futures
contract brokers, customers, trading counterparties, or any other parties or
issuers of surety bonds or (ii) pledged or deposited as collateral by the
Borrower or any Restricted Subsidiary with any of the entities described in
clause (i) above to secure their respective obligations, in the case of each of
clauses (i) and (ii) above, with respect to: (A) any contracts and transactions
for the purchase, sale, exchange of, or the option (whether physical or
financial) to purchase, sell or exchange (1) natural gas, (2) electricity,
(3) coal, (4) petroleum-based liquids, (5) oil, (6) nuclear fuel (including
enrichment and conversion), (7) emissions or other environmental credits,
(8) waste byproducts, (9) weather, (10) power and other generation capacity,
(11) heat rate, (12) congestion, (13) renewal energy credit or (14) any other
energy-related commodity or services or derivative (including ancillary services
and related risk (such as location basis) or weather related risk); (B) any
contracts or transactions for the purchase, processing, transmission,
transportation, distribution, sale, lease, hedge or storage of, or any other
services related to any commodity or service identified in subparts
(1)—(14) above, including any capacity agreement; (C) any financial derivative
agreement (including but not limited to swaps, options or swaptions) related to
any commodity identified in subparts (1)—(14) above, or to any interest rate or
currency rate management activities; (D) any agreement for membership or
participation in an organization that facilitates or permits the entering into
or clearing of any Netting Agreement, any insurance or self-insurance
arrangements or any agreement described in this Section 10.2(bb); (E) any
agreement combining part or all of a Netting Agreement or part or all of any of
the agreements described in this Section 10.2(bb); (F) any document relating to
any agreement described in this Section 10.2(bb) that is filed with a
Governmental Authority and any related service agreements; or (G) any commercial
or trading agreements, each with respect to, or involving the purchase,
transmission, distribution, sale, lease or hedge of, any energy, generation
capacity or fuel, or any other energy related commodity or service, price or
price indices for any such commodities or services or any other similar
derivative agreements, and any other similar agreements (such agreements
described in clauses (A) through (G) of this Section 10.2(bb) being
collectively, “Permitted Contracts”), Netting Agreements, Hedging Agreements and
letters of credit supporting Permitted Contracts, Netting Agreements and Hedging
Agreements; and

(cc) additional Liens so long as the aggregate amount of obligations secured
thereby at any time outstanding does not exceed $20,000,000.

10.3. Limitation on Fundamental Changes. Except as permitted by Section 10.4 or
10.5, the Borrower will not, and will not permit the Restricted Subsidiaries to,
consummate any merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise consummate the disposition of, all or
substantially all its business units, assets or other properties, except that:

(a) so long as (i) both before and after giving effect to such transaction, no
Payment Default or Event of Default has occurred and is continuing or would
result therefrom and (ii) after giving effect to such transaction the Borrower
shall be in compliance, on a Pro Forma Basis, with the covenant set forth in
Section 10.9, any Subsidiary of the Borrower or any other Person may be merged,
amalgamated or consolidated with or into the Borrower; provided that the
Borrower shall be the continuing or surviving company;

 

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(b) so long as no Payment Default or Event of Default has occurred and is
continuing, or would result therefrom, any Subsidiary of the Borrower or any
other Person (in each case, other than the Borrower) may be merged, amalgamated
or consolidated with or into any one or more Subsidiaries of the Borrower;
provided that (i) in the case of any merger, amalgamation or consolidation
involving one or more Restricted Subsidiaries, (A) a Restricted Subsidiary shall
be the continuing or surviving Person or (B) the Borrower shall cause the Person
formed by or surviving any such merger, amalgamation or consolidation (if other
than a Restricted Subsidiary) to become a Restricted Subsidiary, (ii) in the
case of any merger, amalgamation or consolidation involving one or more
Guarantors, a Guarantor shall be the continuing or surviving Person or the
Person formed by or surviving any such merger, amalgamation or consolidation (if
other than a Guarantor) shall execute a supplement to the Guarantee and the
relevant Security Documents and a joinder to the Intercompany Subordinated Note,
each in form and substance reasonably satisfactory to the Administrative Agent
in order to become a Guarantor and pledgor, mortgagor and grantor, as
applicable, thereunder for the benefit of the Secured Parties and to acknowledge
and agree to the terms of the Intercompany Subordinated Note and (iii) the
Borrower shall have delivered to the Administrative Agent an officers’
certificate stating that such merger, amalgamation or consolidation and any such
supplements to the Guarantee and any Security Document preserve the
enforceability of the Guarantee and the perfection and priority of the Liens
under the applicable Security Documents;

(c) [reserved];

(d) any Restricted Subsidiary that is not a Credit Party may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any other Restricted Subsidiary;

(e) the Borrower or any Subsidiary of the Borrower may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to any Credit Party; provided that the consideration for any such
disposition by any Person other than a Guarantor shall not exceed the fair value
of such assets;

(f) any Restricted Subsidiary may liquidate or dissolve if (i) the Borrower
determines in good faith that such liquidation or dissolution is in the best
interests of the Borrower and is not materially disadvantageous to the Lenders
and (ii) to the extent such Restricted Subsidiary is a Credit Party, any assets
or business of such Restricted Subsidiary not otherwise disposed of or
transferred in accordance with Section 10.4 or 10.5, or in the case of any such
business, discontinued, shall be transferred to, or otherwise owned or conducted
by, a Credit Party after giving effect to such liquidation or dissolution; and

(g) to the extent that no Payment Default or Event of Default has occurred and
is continuing or would result from the consummation of such Disposition, the
Borrower and the Restricted Subsidiaries may consummate a merger, dissolution,
liquidation, consolidation or disposition, the purpose of which is to effect a
Disposition permitted pursuant to Section 10.4.

10.4. Limitation on Sale of Assets. The Borrower will not, and will not permit
the Restricted Subsidiaries to, (i) convey, sell, lease, assign, transfer or
otherwise consummate the disposition of any of its property, business or assets
(including receivables and leasehold interests), whether now owned or hereafter
acquired or (ii) consummate the sale to any Person (other than to the Borrower
or a Subsidiary Guarantor) any shares owned by it of the Borrower’s or any
Restricted Subsidiary’s Stock and Stock Equivalents (each of the foregoing a
“Disposition”), except that:

 

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(a) the Borrower and the Restricted Subsidiaries may sell, transfer or otherwise
dispose of (i) obsolete, worn-out, scrap, used, or surplus or mothballed
equipment (including any such equipment that has been refurbished in
contemplation of such disposition), vehicles and other assets to the extent such
assets are not necessary for the operation of the Borrower’s and the Restricted
Subsidiaries’ business, (ii) inventory or goods (or other assets) held for sale
in the ordinary course of business, (iii) cash and Permitted Investments and
(iv) assets for the purposes of charitable contributions or similar gifts to the
extent such assets are not material to the ability of the Borrower and the
Restricted Subsidiaries, taken as a whole, to conduct its business in the
ordinary course;

(b) the Borrower and the Restricted Subsidiaries may make Dispositions of
assets, excluding any Disposition of accounts receivable except in connection
with the Disposition of any business to which such accounts receivable relate,
for fair value; provided that (i) to the extent required, the Net Cash Proceeds
thereof to the Borrower and the Restricted Subsidiaries are promptly applied to
the prepayment of Term Loans or Delayed-Draw Term Loans as provided for in
Section 5.2(a), (ii) after giving effect to any such Disposition, no Default or
Event of Default shall have occurred and be continuing, (iii) the aggregate
consideration for all Dispositions made in reliance on this Section 10.4(b),
when aggregated with the amount of Permitted Sale Leaseback transactions
consummated pursuant to Section 10.4(g), shall not exceed at any time 5% of
Consolidated Total Assets (determined at the time of each Disposition) for all
such transactions consummated after the Closing Date, (iv) with respect to any
Disposition pursuant to this clause (b) for a purchase price in excess of
$50,000,000, the Person making such Disposition shall receive not less than 75%
of such consideration in the form of cash or Permitted Investments; provided
that for the purposes of this subclause (iv) and Section 10.4(g) the following
shall be deemed to be cash (“Deemed Cash”): (A) any liabilities (as shown on the
Borrower’s or such Restricted Subsidiary’s most recent balance sheet provided
hereunder or in the footnotes thereto) of the Borrower or such Restricted
Subsidiary, other than liabilities that are by their terms (1) subordinated to
the payment in cash of the Obligations or (2) not secured by the assets that are
the subject of such Disposition, that are assumed by the transferee with respect
to the applicable Disposition and for which the Borrower and all of the
Restricted Subsidiaries shall have been validly released by all applicable
creditors in writing, (B) any securities received by the Person making such
Disposition from the purchaser that are converted by such Person into cash (to
the extent of the cash received) within 180 days following the closing of the
applicable Disposition, (C) any Designated Non-Cash Consideration received by
the Person making such Disposition having an aggregate fair market value, taken
together with all other Designated Non-Cash Consideration received pursuant to
this Section 10.4(b) that is at that time outstanding, not in excess of 1.5% of
Consolidated Total Assets at the time of the receipt of such Designated Non-Cash
Consideration, with the fair market value of each item of Designated Non-Cash
Consideration being measured at the time received and without giving effect to
subsequent changes in value and (v) any non-cash proceeds received in the form
of Real Estate, Indebtedness or Stock and Stock Equivalents are pledged to the
Collateral Agent to the extent required under Section 9.12 or 9.14;

(c) (i) the Borrower and the Restricted Subsidiaries may make Dispositions to
the Borrower or any other Credit Party and (ii) any Restricted Subsidiary that
is not a Credit Party may make Dispositions to the Borrower or any other
Subsidiary of the Borrower; provided that with respect to any such Dispositions,
such sale, transfer or disposition shall be for fair value;

(d) the Borrower and any Restricted Subsidiary may effect any transaction
permitted by Section 10.3, 10.5 or 10.6;

(e) the Borrower and any Restricted Subsidiary may lease, sublease, license
(only on a non-exclusive basis with respect to any intellectual property) or
sublicense (only on a non-exclusive basis with respect to any intellectual
property) real, personal or intellectual property in the ordinary course of
business;

 

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(f) Dispositions of property (including like-kind exchanges) to the extent that
(i) such property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are applied to the
purchase price of such replacement property, in each case under Section 1031 of
the Code or otherwise;

(g) Dispositions pursuant to Permitted Sale Leaseback transactions in an
aggregate amount pursuant to this Section 10.4(g), when aggregated with the
amount of Dispositions made pursuant to Section 10.4(b), not to exceed the
limitations set forth in Section 10.4(b).

(h) Dispositions of (i) Investments in joint ventures (regardless of the form of
legal entity) to the extent required by, or made pursuant to, customary buy/sell
arrangements or put/call arrangements between the joint venture parties set
forth in joint venture arrangements and similar binding arrangements or (ii) to
joint ventures in connection with the dissolution or termination of a joint
venture to the extent required pursuant to joint venture and similar
arrangements;

(i) Dispositions of Receivables Facility Assets in connection with any Permitted
Receivables Financing; provided that to the extent that any new Participating
Receivables Grantor is added to any Permitted Receivables Financing after the
Closing Date, the Net Cash Proceeds of any Dispositions of Receivables Facility
Assets by such new Participating Receivables Grantor must be promptly applied to
the prepayment of Loans as provided for in Section 5.2(a) without giving effect
to any reinvestment rights under the definition of “Net Cash Proceeds”;
provided, further, that no Net Cash Proceeds shall be required to be used to
prepay the Loans pursuant to Section 5.2(a) to the extent that any new
Participating Receivables Grantor replaces (by merger or otherwise) any existing
Participating Receivables Grantor and at the time of such replacement, the
volume of Receivables Facility Assets sold into any Permitted Receivables
Financing does not increase as a result of such replacement;

(j) Dispositions listed on Schedule 10.4;

(k) transfers of property subject to a Recovery Event or in connection with any
condemnation proceeding upon receipt of the Net Cash Proceeds of such Recovery
Event or condemnation proceeding;

(l) Dispositions of accounts receivable in connection with the collection or
compromise thereof;

(m) the Borrower and the Restricted Subsidiaries may make Dispositions
(excluding any Disposition of accounts receivable except in connection with the
Disposition of any business to which such accounts receivable relate), for fair
value to the extent that (i) the aggregate consideration for all such
Dispositions consummated after the Closing Date, when combined with all
Dispositions made pursuant to Section 10.4(b), does not exceed 7.5% of
Consolidated Total Assets (determined at the time of each Disposition), (ii) the
Net Cash Proceeds of any such Disposition are promptly applied to the prepayment
of Loans as provided in Section 5.2(a) without giving effect to any reinvestment
rights under the definition of “Net Cash Proceeds”; provided that, in the case
of a Disposition of a Baseload Asset pursuant to this Section 10.4(m), the
Borrower shall be permitted to reinvest the Net Cash Proceeds received in such
Disposition in other Baseload Assets within the reinvestment periods set forth
in the definition of “Net Cash Proceeds”, (iii) after giving effect to any such
Disposition, no Default or Event of Default shall have occurred and be
continuing, (iv) with respect to any Disposition pursuant to this
Section 10.4(m) for a purchase price in excess of $50,000,000, the Person making
such Disposition shall, subject to the parenthetical below, receive not less
than 75% of such consideration in the form of cash or Permitted Investments (or,
to the extent that less than 75% of such consideration is in the form of cash or
Permitted Investments, the Borrower shall apply the amount of such difference to
the prepayment of

 

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Loans as provided in clause (ii) above); provided that for the purposes of this
subclause (iv), Deemed Cash shall be deemed to be cash and (v) any non-cash
proceeds received in the form of Real Estate, Indebtedness or Stock and Stock
Equivalents are pledged to the Collateral Agent to the extent required under
Section 9.12 or 9.14;

(n) [reserved];

(o) Dispositions of power, capacity, heat rate, renewable energy credits, waste
by-products, energy, electricity, coal and lignite, oil and other
petroleum-based liquids, emissions and other environmental credits, ancillary
services, fuel (including all forms of nuclear fuel and natural gas) and other
related assets or products of services, including assets related to trading
activities or the sale of inventory or contracts related to any of the
foregoing, in each case in the ordinary course of business;

(p) the execution of (or amendment to), settlement of or unwinding of any
Hedging Agreement;

(q) any Disposition of mineral rights, other than mineral rights in respect of
coal or lignite;

(r) any Disposition of any real property that is (i) primarily used or intended
to be used for mining which has either been reclaimed, or has not been used for
mining in a manner which requires reclamation, and in either case has been
determined by the Borrower not to be necessary for use for mining, (ii) used as
buffer land, but no longer serves such purpose, or its use is restricted such
that it will continue to be buffer land, or (iii) was acquired in connection
with power generation facilities, but has been determined by the Borrower to no
longer be commercially suitable for such purpose;

(s) any Disposition of any assets required by any Governmental Authority;

(t) any Disposition of assets in connection with salvage activities;

(u) any Disposition of assets pursuant to any First Day Orders or the order
governing de minimis asset dispositions, in each case to the extent approved by
the Joint Lead Arrangers; and

(v) Dispositions of any asset between or among the Borrower and/or any
Restricted Subsidiary as a substantially concurrent interim Disposition in
connection with a Disposition otherwise permitted pursuant to clauses
(a) through (t) above; provided that after giving effect to any such
Disposition, to the extent the assets subject to such Dispositions constituted
Collateral, such assets shall remain subject to, or be rejoined to, the Lien of
the Security Documents.

10.5. Limitation on Investments. The Borrower will not, and will not permit the
Restricted Subsidiaries, to make any Investment except, subject to the Cash
Management Order, the Tax Order, the Wages Order and any other orders of the
Bankruptcy Court:

(a) extensions of trade credit, asset purchases (including purchases of
inventory, fuel (including all forms of nuclear fuel), supplies, materials and
equipment) and the licensing or contribution of intellectual property pursuant
to joint marketing arrangements or development agreements with other Persons, in
each case in the ordinary course of business (including in respect of
construction or restoration activities);

(b) Investments that were Permitted Investments when such Investments were made;

 

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(c) loans and advances to officers, directors, employees and consultants of the
Borrower (or any direct or indirect parent thereof) or any Subsidiary of the
Borrower (i) for reasonable and customary business-related travel,
entertainment, relocation and analogous ordinary business purposes (including
employee payroll advances), (ii) in connection with such Person’s purchase of
Stock or Stock Equivalents of the Ultimate Parent (or any direct or indirect
parent thereof; provided that, to the extent such loans and advances are made in
cash, the amount of such loans and advances used to acquire such Stock or Stock
Equivalents shall be contributed to the Borrower in cash) and (iii) for purposes
not described in the foregoing subclauses (i) and (ii); provided that the
aggregate principal amount outstanding pursuant to subclause (iii) shall not
exceed $25,000,000 at any one time outstanding;

(d) Investments (i) existing on, or made pursuant to legally binding written
commitments in existence on, the Closing Date as set forth on Schedule 10.5 and
any modifications, extensions, renewals or reinvestments thereof and
(ii) existing on the Closing Date of the Borrower or any Restricted Subsidiary
in the Borrower or any Subsidiary of the Borrower and any modification,
extension, renewal or reinvestment thereof, only to the extent that the amount
of any Investment made pursuant to this clause (d) does not at any time exceed
the amount of such Investment set forth on Schedule 10.5;

(e) Investments received in connection with the bankruptcy or reorganization of
suppliers or customers and in settlement of delinquent obligations of, and other
disputes with, customers arising in the ordinary course of business or upon
foreclosure with respect to any secured Investment or other transfer of title
with respect to any secured Investment;

(f) Investments to the extent that payment for such Investments is made with
Stock or Stock Equivalents (other than Disqualified Stock) of the Borrower (or
any direct or indirect parent thereof);

(g) Investments (i) (A) by the Borrower or any Restricted Subsidiary in any
Credit Party, (B) between or among Restricted Subsidiaries that are not Credit
Parties, and (C) consisting of intercompany Investments incurred in the ordinary
course of business in connection with the cash management operations (including
with respect to intercompany self-insurance arrangements) among the Borrower and
the Restricted Subsidiaries (provided that any such intercompany Investment in
connection with cash management arrangements by a Credit Party in a Subsidiary
of the Borrower that is not a Credit Party is in the form of an intercompany
loan or advance and the Borrower or such Restricted Subsidiary complies with
Section 9.12 to the extent applicable, and subject in each case to the Cash
Management Orders); (ii) by Credit Parties in any Restricted Subsidiary that is
not a Credit Party, to the extent that the aggregate amount of all Investments
made on or after the Closing Date pursuant to this subclause (ii), when valued
at the fair market value (determined by the Borrower acting in good faith) of
each such Investment at the time each such Investment was made, is not in excess
of, when combined with, and without duplication, the aggregate amount of
Investments made pursuant to the proviso to Section 10.5(h) an amount equal to
the sum of (w) $200,000,000 plus (x) the Applicable Equity Amount at such time
plus (y) if no Event of Default has occurred and is continuing at the time the
Investment is first made, the Applicable Amount at such time plus (z) to the
extent not otherwise included in the determination of the Applicable Equity
Amount or the Applicable Amount, an amount equal to any repayments, interest,
returns, profits, distributions, income and similar amounts actually received in
cash in respect of any such Investment (which amount referred to in this
subclause (z) shall not exceed the amount of such Investment valued at the fair
market value of such Investment at the time such Investment was made) (subject
in each case to the Cash Management Order); and (iii) by Credit Parties in any
Restricted Subsidiary that is not a Credit Party so long as such Investment is
part of a series of simultaneous Investments by Restricted Subsidiaries in other
Restricted Subsidiaries that result in the proceeds of the initial Investment
being invested in one or more Credit Parties;

 

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(h) Investments constituting Permitted Acquisitions; provided that the aggregate
amount of any such Investment, as valued at the fair market value (determined by
the Borrower acting in good faith) of such Investment at the time each such
Investment is made, made by the Borrower or any Subsidiary Guarantor in any
Restricted Subsidiary that, after giving effect to such Investment, shall not be
a Guarantor, shall not cause the aggregate amount of all such Investments made
pursuant to this clause (h) (as so valued at the time each such investment is
made) to exceed, when combined with, and without duplication of, the aggregate
amount of Investments made pursuant to clause (ii) of Section 10.5(g), an amount
equal to the sum of (i) $200,000,000 plus (ii) the Applicable Equity Amount at
such time plus (iii) if no Event of Default has occurred and is continuing at
the time such Investment is first made, the Applicable Amount at such time plus
(iv) to the extent not otherwise included in the determination of the Applicable
Equity Amount or the Applicable Amount, an amount equal to any repayments,
interest, returns, profits, distributions, income and similar amounts actually
received in cash in respect of any such Investment (which amount referred to in
this clause (iv) shall not exceed the amount of such Investment valued at the
fair market value of such Investment at the time such Investment was made);

(i) Investments (including but not limited to (i) Minority Investments and
Investments in Unrestricted Subsidiaries, (ii) Investments in joint ventures
(regardless of the form of legal entity) or similar Persons that do not
constitute Restricted Subsidiaries and (iii) Investments in Subsidiaries that
are not Credit Parties), in each case valued at the fair market value
(determined the Borrower acting in good faith) of such Investment at the time
each such Investment is made, in an aggregate amount pursuant to this clause
(i) that, at the time each such Investment is made, would not exceed the sum of
(w) $500,000,000 plus (x) the Applicable Equity Amount at such time plus (y) if
no Event of Default has occurred and is continuing at the time such Investment
is first made, the Applicable Amount at such time plus (z) to the extent not
otherwise included in the determination of the Applicable Equity Amount or the
Applicable Amount, an amount equal to any repayments, interest, returns,
profits, distributions, income and similar amounts actually received in cash in
respect of any such Investment (which amount referred to in this subclause
(z) shall not exceed the amount of such Investment valued at the fair market
value of such Investment at the time such Investment was made);

(j) Investments constituting non-cash proceeds of Dispositions of assets to the
extent permitted by Section 10.4;

(k) Investments made to repurchase or retire Stock or Stock Equivalents of the
Borrower or any direct or indirect parent thereof owned by any employee or any
stock ownership plan or key employee stock ownership plan of the Borrower (or
any direct or indirect parent thereof) in an aggregate amount, when combined
with distributions made pursuant to Section 10.6(b), not to exceed the
limitations set forth in such Section;

(l) Investments consisting of dividends permitted under Section 10.6;

(m) loans and advances to any direct or indirect parent of the Borrower in lieu
of, and not in excess of the amount of, dividends to the extent permitted to be
made to such parent in accordance with Section 10.6; provided that the aggregate
amount of such loans and advances shall reduce the ability of the Borrower and
the Restricted Subsidiaries to make dividends under the applicable clauses of
Section 10.6 by such amount;

(n) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors and other credits
to suppliers in the ordinary course of business;

 

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(o) Investments in the ordinary course of business consisting of endorsements
for collection or deposit and customary trade arrangements with customers
consistent with past practices;

(p) advances of payroll payments to employees, consultants or independent
contractors or other advances of salaries or compensation to employees,
consultants or independent contractors, in each case in the ordinary course of
business;

(q) Guarantee Obligations of the Borrower or any Restricted Subsidiary of leases
(other than Capital Leases) or of other obligations that do not constitute
Indebtedness, in each case entered into in the ordinary course of business;

(r) Investments held by a Person acquired (including by way of merger,
amalgamation or consolidation) after the Closing Date otherwise in accordance
with this Section 10.5 to the extent that such Investments were not made in
contemplation of or in connection with such acquisition, merger, amalgamation or
consolidation and were in existence on the date of such acquisition, merger,
amalgamation or consolidation;

(s) Investments in Hedging Agreements permitted by Section 10.1;

(t) Investments arising out of, or in connection with, any Permitted Receivables
Financing;

(u) Investments consisting of deposits of cash and Permitted Investments as
collateral support permitted under Section 10.2;

(v) other Investments, which, when aggregated with (i) all aggregate principal
amounts paid pursuant to Section 10.7(ii) from the Closing Date and (ii) all
loans and advances made to any direct or indirect parent of the Borrower
pursuant to Section 10.5(m) in lieu of dividends permitted by Section 10.6(c)
and (iii) all dividends paid pursuant to Section 10.6(c), shall not exceed an
amount equal to (w) $250,000,000 plus (x) the Applicable Equity Amount at the
time such Investments are made plus (y) if no Event of Default has occurred and
is continuing at the time such Investment is first made, the Applicable Amount
at such time plus (z) to the extent not otherwise included in the determination
of the Applicable Equity Amount or the Applicable Amount, an amount equal to any
repayments, interest, returns, profits, distributions, income and similar
amounts actually received in cash in respect of any such Investment (which
amount referred to in this subclause (z) shall not exceed the amount of such
Investment valued at the fair market value of such Investment at the time such
Investment was made);

(w) to the extent constituting Investments, transactions pursuant to the Shared
Services Agreement, transactions pursuant to the Tax Sharing Agreements
permitted under Section 10.6(d)(i) or transactions disclosed in any Budget
approved by Administrative Agent and the Joint Lead Arrangers;

(x) Investments consisting of purchases and acquisitions of assets and services
in the ordinary course of business (including in respect of construction or
restoration activities);

(y) Investments in the ordinary course of business consisting of Article 3
endorsements for collection or deposit and Article 4 customary trade
arrangements with customers consistent with past practice;

(z) to the extent constituting Investments, any payments made or obligations
acquired pursuant to the Wages Order;

 

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(aa) Investments consisting of Indebtedness permitted by Section 10.1 (but only
to the extent such Indebtedness was permitted without reference to Section 10.5)
or fundamental changes permitted by Section 10.3;

(bb) Investments relating to pension trusts;

(cc) Investments by Credit Parties in any Restricted Subsidiary that is not a
Credit Party so long as such Investment is part of a series of simultaneous
Investments by the Borrower and the Restricted Subsidiaries in other Restricted
Subsidiaries that result in the proceeds of the intercompany Investment being
invested in one or more Credit Parties;

(dd) Investments relating to nuclear decommission trusts and nuclear insurance
and self-insurance organizations or arrangements;

(ee) Investments in the form of, or pursuant to, operating agreements, working
interests, royalty interests, mineral leases, processing agreements, farm-out
agreements, contracts for the sale, transportation or exchange of oil and
natural gas or other fuel or commodities, unitization agreements, pooling
agreements, area of mutual interest agreements, production sharing agreements or
other similar or customary agreements, transactions, properties, interests or
arrangements, and Investments and expenditures in connection therewith or
pursuant thereto, in each case, made or entered into in the ordinary course of
business; and

(ff) Investments in wind or other renewable energy projects or in any nuclear
power or energy joint venture in an aggregate amount not to exceed $200,000,000
at any time outstanding; provided that, notwithstanding the definition of
Excluded Stock and Stock Equivalents, all Stock and Stock Equivalents
representing any such Investment shall be pledged to the Collateral Agent for
the benefit of the Secured Parties.

Notwithstanding anything to the contrary contained in this Agreement, the
Borrower and the Restricted Subsidiaries may not rely on clause (g), (h), (i) or
(j) of this Section 10.5 to directly or indirectly make an Investment of all or
any portion of one or more Baseload Generation Assets.

10.6. Limitation on Dividends. The Borrower will not declare or pay any
dividends (other than dividends payable solely in its Stock or Stock Equivalents
(other than Disqualified Stock)) or return any capital to its stockholders or
make any other distribution, payment or delivery of property or cash to its
stockholders as such, or redeem, retire, purchase or otherwise acquire, directly
or indirectly, for consideration, any shares of any class of its Stock or Stock
Equivalents or the Stock or Stock Equivalents of any direct or indirect parent
now or hereafter outstanding, or set aside any funds for any of the foregoing
purposes, or permit any Restricted Subsidiary to purchase or otherwise acquire
for consideration (other than in connection with an Investment permitted by
Section 10.5) any Stock or Stock Equivalents of the Borrower now or hereafter
outstanding (all of the foregoing, “dividends”), provided, subject to the Cash
Management Order, the Tax Order and the Wages Order:

(a) the Borrower may (or may pay dividends to permit any direct or indirect
parent thereof to) redeem in whole or in part any of its Stock or Stock
Equivalents for another class of its (or such parent’s) Stock or Stock
Equivalents or with proceeds from substantially concurrent equity contributions
or issuances of new Stock or Stock Equivalents; provided that (i) such new Stock
or Stock Equivalents contain terms and provisions at least as advantageous to
the Lenders, taken as a whole, in all respects material to their interests as
those contained in the Stock or Stock Equivalents redeemed thereby and (ii) the
cash proceeds from any such contribution or issuance have not otherwise been
applied pursuant to the Applicable Equity Amount;

 

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(b) so long as no Payment Default or Event of Default shall have occurred and is
continuing or would result therefrom, the Borrower may (or may pay dividends to
permit any direct or indirect parent thereof to) redeem, acquire, retire or
repurchase shares of its (or such parent’s) Stock or Stock Equivalents held by
any present or former officer, manager, consultant, director or employee (or
their respective Affiliates, spouses, former spouses, successors, executors,
administrators, heirs, legatees, distributees, estates or immediate family
members) of the Borrower (or any direct or indirect parent thereof) and any
Subsidiaries, so long as such repurchase is pursuant to, and in accordance with
the terms of, any stock option or stock appreciation rights plan, any
management, director and/or employee benefit, stock ownership or option plan,
stock subscription plan or agreement, employment termination agreement or any
employment agreements or stockholders’ or shareholders’ agreement; provided,
however, that the aggregate amount of payments made under this Section 10.6(b)
do not exceed in any calendar year $25,000,000 (with unused amounts in any
calendar year being carried over to succeeding calendar years subject to a
maximum (without giving effect to the following proviso) of $50,000,000 in any
calendar year); provided, further, that such amount in any calendar year may be
increased by an amount not to exceed:

(i) the cash proceeds from the sale of Stock (other than Disqualified Stock) of
the Borrower and, to the extent contributed to the Borrower, Stock of any of the
Borrower’s direct or indirect parent companies, in each case to present or
former officers, managers, consultants, directors or employees (or their
respective Affiliates, spouses, former spouses, successors, executors,
administrators, heirs, legatees, distributees, estates or immediate family
members) of the Borrower (or any of its direct or indirect parent companies) or
any Subsidiary of the Borrower that occurs after the Closing Date, to the extent
the cash proceeds from the sale of such Stock have not otherwise been applied
pursuant to the Applicable Equity Amount; plus

(ii) the cash proceeds of key man life insurance policies received the Borrower
or any Restricted Subsidiary after the Closing Date; less

(iii) the amount of any dividends or distributions previously made with the cash
proceeds described in clauses (i) and (ii) above;

and provided, further, that cancellation of Indebtedness owing to the Borrower
or any Restricted Subsidiary from present or former officers, managers,
consultants, directors or employees (or their respective Affiliates, spouses,
former spouses, successors, executors, administrators, heirs, legatees,
distributees, estates or immediate family members) of the Borrower (or any of
its direct or indirect parent companies), or any Subsidiary of the Borrower in
connection with a repurchase of Stock or Stock Equivalents of the Borrower or
any of its direct or indirect parent companies will not be deemed to constitute
a dividend for purposes of this covenant or any other provision of this
Agreement;

(c) so long as no Payment Default or Event of Default shall have occurred and is
continuing or would result therefrom, the Borrower may pay dividends on its
Stock or Stock Equivalents; provided that the amount of all such dividends paid
from the Closing Date pursuant to this clause (c), when aggregated with (i) all
aggregate principal amounts paid pursuant to Section 10.7 from the Closing Date
and (ii) (A) all loans and advances made to any direct or indirect parent of the
Borrower pursuant to Section 10.5(m) in lieu of dividends permitted by this
clause (c) and (B) all Investments made pursuant to Section 10.5(v), shall not
exceed an amount equal to (x) $0 plus (y) the Applicable Equity Amount at the
time such dividends are paid;

(d) the Borrower may make dividends, distributions or loans to any direct or
indirect parent company of the Borrower in amount required for any such direct
or indirect parent to pay, in each case without duplication:

 

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(i) foreign, federal, state and local income taxes, to the extent such income
taxes are attributable to the income of the Borrower and its Subsidiaries;
provided that the amount of such payments in any fiscal year does not exceed the
amount that the Ultimate Parent and its Subsidiaries are required to pay in
respect of foreign, federal, state and local income taxes attributable to the
income of the Borrower and its Subsidiaries for such fiscal year;

(ii) (A) such parents’ and their respective Subsidiaries’ (other than the Oncor
Subsidiaries) general operating expenses incurred in the ordinary course of
business and other corporate overhead costs and expenses (including
administrative, legal, accounting and similar expenses provided by third
parties), which are reasonable and customary and incurred in the ordinary course
of business and to the extent such costs and expenses are attributable to the
ownership or operation of the Borrower and its Subsidiaries, (B) any reasonable
and customary indemnification claims made by directors or officers of the
Borrower (or any parent thereof and such parent’s Subsidiaries (other than the
Oncor Subsidiaries) to the extent such claims are attributable to the ownership
or operation of the Borrower and its Subsidiaries) or any Restricted Subsidiary
or (C) fees and expenses otherwise due and payable by the Borrower (or any
parent thereof and such parent’s Subsidiaries (other than the Oncor
Subsidiaries) to the extent such fees and expenses are attributable to the
ownership or operation of the Borrower and its Subsidiaries) or any Restricted
Subsidiary and not prohibited to be paid by the Borrower and its Restricted
Subsidiaries hereunder;

(iii) franchise and excise taxes and other fees, taxes and expenses required to
maintain the corporate existence of any direct or indirect parent of the
Borrower;

(iv) to any direct or indirect parent of the Borrower to finance any Investment
permitted to be made by the Borrower or any Restricted Subsidiary pursuant to
Section 10.5; provided that (A) such dividend shall be made substantially
concurrently with the closing of such Investment, (B) such parent shall,
immediately following the closing thereof, cause (1) all property acquired
(whether assets, Stock or Stock Equivalents) to be contributed to the Borrower
or such Restricted Subsidiary or (2) the merger (to the extent permitted in
Section 10.5) of the Person formed or acquired into the Borrower or any
Restricted Subsidiary, (C) the Borrower shall comply with Section 9.11 and
Section 9.12 to the extent applicable and (D) the aggregate amount of such
dividends shall reduce the ability of the Borrower and the Restricted Subsidiary
to make Investments under the applicable clauses of Section 10.5 by such amount;

(v) customary costs, fees and expenses (other than to Affiliates) related to any
unsuccessful equity or debt offering or acquisition or disposition transaction
payable by the Borrower or the Restricted Subsidiaries; and

(vi) customary salary, bonus and other benefits payable to officers, employees
or consultants of any direct or indirect parent company (and such parent’s
Subsidiaries (other than the Oncor Subsidiaries)) of the Borrower to the extent
such salaries, bonuses and other benefits are attributable to the ownership or
operation of the Borrower and its Subsidiaries;

(e) to the extent (if any) constituting dividends, transactions pursuant to the
Shared Services Agreement or described in any Budget approved by the
Administrative Agent and the Joint Lead Arrangers;

(f) to the extent constituting dividends, the Borrower may enter into and
consummate transactions expressly permitted by any provision of Section 10.3;

 

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(g) the Borrower may repurchase Stock or Stock Equivalents of the Borrower (or
any direct or indirect parent thereof) deemed to occur upon exercise of stock
options or warrants if such Stock or Stock Equivalents represents a portion of
the exercise price of such options or warrants, and the Borrower may pay
dividends to any direct or indirect parent thereof as and when necessary to
enable such parent to effect such repurchases;

(h) the Borrower may (i) pay cash in lieu of fractional shares in connection
with any dividend, split or combination thereof or any Permitted Acquisition and
(ii) honor any conversion request by a holder of convertible Indebtedness and
make cash payments in lieu of fractional shares in connection with any such
conversion and may make payments on convertible Indebtedness in accordance with
its terms;

(i) the Borrower may pay any dividend or distribution within 60 days after the
date of declaration thereof, if at the date of declaration such payment would
have complied with the provisions of this Agreement;

(j) [reserved];

(k) the Borrower may pay dividends in an amount equal to withholding or similar
Taxes payable or expected to be payable by any present or former employee,
director, manager or consultant (or their respective Affiliates, estates or
immediate family members) and any repurchases of Stock or Stock Equivalents in
consideration of such payments including deemed repurchases in connection with
the exercise of stock options;

(l) [reserved];

(m) the Borrower may make payments described in Sections 9.9(a), 9.9(c), 9.9(f),
9.9(g), 9.9(h), 9.9(i), 9.9(k), 9.9(l) and 10.5(z);

(n) the Borrower may pay dividends or make distributions in connection with the
Transactions, including payments in respect of the Ultimate Parent’s and its
Subsidiaries’ long term incentive plan or in respect of tax gross-ups and other
deferred compensation;

(o) [reserved];

(p) the Borrower may make distributions or payments of Receivables Fees;

(q) [reserved];

(r) [reserved];

(s) the Borrower may make distributions of, or Investments in, Receivables
Facility Assets for purposes of inclusion in any Permitted Receivables
Financing, in each case made in the ordinary course of business or consistent
with past practices;

(t) the Borrower may make distributions, loans or other advances to Parent
Guarantor, in an amount not to exceed $125,000,000 in the aggregate for all such
distributions, loans or other advances made from the Closing Date solely to the
extent that the proceeds of such distributions, loans or other advances are used
by Parent Guarantor to satisfy payment obligations (including, without
limitation, payment of principal, interest and any make-whole, prepayment or
similar fees) owed by Parent Guarantor under (i) the Tex-La Indebtedness and
(ii) the CT Lease Indebtedness; provided that no

 

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such distribution, loan or other advance shall be permitted pursuant to this
clause (ii) unless (x) the Borrower or the Restricted Subsidiary, as applicable,
that is the lessee under the applicable CT Lease retains its leasehold interest
in respect of such CT Lease or (y) the assets subject to such CT Lease are
contributed to the Borrower or a Restricted Subsidiary; and

(u) the Borrower may make loans to, or permit letters of credit (including
Letters of Credit) to be issued on behalf of, any of its direct or indirect
parent companies or such parents’ Subsidiaries for working capital purposes or
the cost of maintaining the headquarters building at Energy Plaza, in each case
so long as made in the ordinary course of business and consistent with past
practices and in an amount not to exceed $50,000,000.

Notwithstanding anything to the contrary contained in Section 10 (including
Section 10.5 and this Section 10.6), the Borrower will not, and will not permit
any of its Restricted Subsidiaries to, pay any cash dividend or make any cash
distribution on or in respect of the Borrower’s Stock or Stock Equivalents or
purchase or otherwise acquire for cash any Stock or Stock Equivalents of the
Borrower or any direct or indirect parent of the Borrower, for the purpose of
paying any cash dividend or making any cash distribution to, or acquiring any
Stock or Stock Equivalents of the Borrower or any direct or indirect parent of
the Borrower for cash from the Permitted Holders, or guarantee any Indebtedness
of any Affiliate of the Borrower for the purpose of paying such dividend, making
such distribution or so acquiring such Stock or Stock Equivalents to or from the
Permitted Holders, in each case by means of utilization of the cumulative
dividend and investment credit provided by the use of the Applicable Amount or
the exceptions provided by Sections 10.5(i), (m) and (v), and Section 10.7(ii),
unless at the time and after giving effect to such payment, no Event of Default
has occurred and is continuing.

10.7. Limitation on Prepaying Indebtedness. Except as permitted by the terms and
conditions set forth in the Acceptable Reorganization Plan, the First Day
Orders, the Orders or as specifically permitted hereunder, Borrower shall not,
and shall not permit the Restricted Subsidiaries to, without the express prior
written consent of the Required Lenders, make any payment or transfer with
respect to any Indebtedness incurred or arising prior to the filing of the
Cases, whether by way of “adequate protection” under the Bankruptcy Code or
otherwise (in each case, other than any (i) to the extent permitted under the
Hedging and Trading Order, payments under any financial or physical trading
transaction, including commodities transactions and any payments under any
Hedging Agreements, and (ii) payments in an aggregate amount not to exceed the
sum of (A) $200,000,000 and (B) the Applicable Amount).

10.8. Limitations on Sale Leasebacks. The Borrower will not, and will not permit
the Restricted Subsidiaries to, enter into or effect any Sale Leasebacks after
the Closing Date, other than Permitted Sale Leasebacks.

10.9. Consolidated Superpriority Secured Net Debt to Consolidated EBITDA Ratio.
The Borrower will not permit the Consolidated Superpriority Secured Net Debt to
Consolidated EBITDA Ratio for any Test Period beginning with the Test Period
ending on June 30, 2014 to be greater than (x) if the RCT Carve Out Support
Rejection Notice has not been issued and delivered during or prior to such Test
Period, 3.50 to 1.00 and (y) for all other Test Periods, 4.50 to 1.00.

Any provision of this Agreement that contains a requirement for the Borrower to
be in compliance with the covenant contained in this Section 10.9 prior to the
time that this covenant is otherwise applicable shall be deemed to require that
the Consolidated Superpriority Secured Net Debt to Consolidated EBITDA Ratio for
the applicable Test Period not be greater than (x) if the RCT Carve Out Support
Rejection Notice has not been issued and delivered during or prior to such Test
Period, 3.50 to 1.00 and (y) for all other Test Periods, 4.50 to 1.00.

 

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10.10. Changes in Business. The Borrower and the Restricted Subsidiaries, taken
as a whole, will not fundamentally and substantively alter the character of
their business, taken as a whole, from the business conducted by the Borrower
and the Restricted Subsidiaries, taken as a whole, on the Closing Date and other
business activities incidental or reasonably related to any of the foregoing
except as required by the Bankruptcy Code or pursuant to the Interim Order or
the Final Order.

10.11. Bankruptcy Provisions.

(a) Parent Guarantor and the Borrower shall not, and shall not permit any other
Credit Party or any other Restricted Subsidiary to, consent to the termination
or reduction of the TCEH Debtors’ exclusive plan filing and plan solicitation
periods under section 1121 of the Bankruptcy Code (the “Exclusivity Periods”) or
fail to object to any motion by a party in interest (other than a Lender or the
Administrative Agent) seeking to terminate or reduce the Exclusivity Periods, in
each case without the prior written consent of the Administrative Agent.

(b) Parent Guarantor and the Borrower shall not, and shall not permit any other
Credit Party or any other Restricted Subsidiary to create or permit to exist any
other Superpriority Claim (other than the Carve Out, the RCT Reclamation Support
Carve Out or the Obligations) or any “claim” (as such word is defined in the
Bankruptcy Code) that is pari passu with or senior to the claims of the Secured
Parties or any lien that is pari passu with or senior to the liens of the
Secured Parties in any of the Cases except (A) with the prior written consent of
the Administrative Agent or (B) to the extent such lien constitutes a Permitted
Lien securing Indebtedness or obligations not prohibited by this Agreement.

10.12. Affiliate Value Transfers. The Borrower will not, and will not permit the
Restricted Subsidiaries to, make any Affiliate Value Transfers in an aggregate
amount in excess of $50,000,000 for all such Affiliate Value Transfers made from
the Closing Date.

SECTION 11. Events of Default.

Upon the occurrence of any of the following specified events (each an “Event of
Default”):

11.1. Payments. The Borrower shall (a) default in the payment when due of any
principal of the Loans or any Unpaid Drawings or (b) default, and such default
shall continue for five or more days, in the payment when due of any interest on
the Loans or any Fees or any other amounts owing hereunder or under any other
Credit Document; or

11.2. Representations, Etc. Any representation, warranty or statement made or
deemed made by any Credit Party herein or in any other Credit Document or any
certificate delivered or required to be delivered pursuant hereto or thereto
shall prove to be untrue in any material respect on the date as of which made or
deemed made; or

11.3. Covenants. Any Credit Party shall:

(a) default in the due performance or observance by it of any term, covenant or
agreement contained in Section 9.1(e), Section 9.5 (solely with respect to the
Borrower), Section 9.15 or Section 10; provided that an Event of Default under
Section 10.9 shall not constitute an Event of Default for purposes of any Term
Loan or Delayed-Draw Term Loan, or result in the availability of any remedies
for the Term Loan Lenders or Delayed-Draw Term Loan Lenders, unless and until
the Required Revolving Credit Lenders have actually declared all Revolving
Credit Loans and all related Obligations to be immediately due and payable in
accordance with this Agreement and such declaration has not been rescinded on or
before the date the Required Term Loan Lenders or Required Delayed-Draw Term
Loan Lenders declare an Event of Default with respect to Section 10.9; or

 

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(b) default in the due performance or observance by it of any term, covenant or
agreement (other than those referred to in Section 11.1 or 11.2 or clause (a) of
this Section 11.3) contained in this Agreement or any other Credit Document and
such default shall continue unremedied for a period of at least 30 days after
receipt of written notice by the Borrower from the Administrative Agent or the
Required Lenders; or

11.4. Default Under Other Agreements. (a) The Borrower or any Restricted
Subsidiary shall (i) default in any payment with respect to any Indebtedness
incurred after the Petition Date (other than any Indebtedness described in
Section 11.1, Hedging Obligations or Indebtedness under any Permitted
Receivables Financing) in excess of $150,000,000 in the aggregate for the
Borrower and such Restricted Subsidiaries, beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created or (ii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist (other than any agreement or condition relating to, or
provided in any instrument or agreement, under which such Hedging Obligations or
such Permitted Receivables Financing was created), in each case, after giving
effect to any applicable period of grace, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause, any such Indebtedness to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity; or (b) without limiting the provisions of clause (a) above, any such
Indebtedness shall be declared to be due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment (other than any Hedging
Obligations or Indebtedness under any Permitted Receivables Financing) or as a
mandatory prepayment, prior to the stated maturity thereof; provided that this
clause (b) shall not apply to secured Indebtedness that becomes due as a result
of the voluntary sale or transfer of the property or assets securing such
Indebtedness, if such sale or transfer is permitted hereunder and under the
documents providing for such Indebtedness; or

11.5. [Reserved].

11.6. ERISA. (a) Any Plan shall fail to satisfy the minimum funding standard
required for any plan year or part thereof or a waiver of such standard or
extension of any amortization period is sought or granted under Section 412 of
the Code; any Plan is or shall have been terminated or is the subject of
termination proceedings under ERISA (including the giving of written notice
thereof); an event shall have occurred or a condition shall exist in either case
entitling the PBGC to terminate any Plan or to appoint a trustee to administer
any Plan (including the giving of written notice thereof); any Plan shall have
an accumulated funding deficiency (whether or not waived); the Borrower or any
ERISA Affiliate has incurred or is likely to incur a liability to or on account
of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201
or 4204 of ERISA or Section 4971 or 4975 of the Code (including the giving of
written notice thereof); (b) there could result from any event or events set
forth in clause (a) of this Section 11.6 the imposition of a Lien, the granting
of a security interest, or a liability, or the reasonable likelihood of
incurring a Lien, security interest or liability; and (c) such Lien, security
interest or liability will or would be reasonably likely to have a Material
Adverse Effect; or

11.7. Credit Documents. Any Credit Document or any material provision thereof
shall cease to be in full force and effect (other than pursuant to the terms
hereof or thereof); or

11.8. [Reserved].

 

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11.9. [Reserved].

11.10. [Reserved].

11.11. Judgments. Any single judgment in excess of $150,000,000 as to any
post-petition obligation, or any judgments that are in the aggregate in excess
of $250,000,000 as to any one or more post-petition obligations, shall be
rendered against the TCEH Debtors and the enforcement thereof shall not be
stayed (by operation of law, the rules or orders of a court with jurisdiction
over the matter or by consent of the party litigants, in each case, to the
extent not paid or covered by insurance provided by a carrier not disputing
coverage) or there shall be rendered against the TCEH Debtors a non-monetary
judgment with respect to a post-petition event that causes or is reasonably
expected to cause a Material Adverse Effect; provided, however, that this
Section 11.11 shall not apply to any judgments as to any pre-petition
obligation; or

11.12. Hedging Agreements. The Borrower or any of the Restricted Subsidiaries
shall default (and have knowledge of such default) in any required payment
obligation that is not being contested in good faith and by appropriate
proceedings by the Borrower or any Restricted Subsidiary under any one or more
Hedging Agreements entered into after the Petition Date and involving
liabilities in the aggregate in excess of $150,000,000 and payable by the
Borrower and the Restricted Subsidiaries, after giving effect to any grace
periods, dispute resolution provisions or similar provisions contained in such
Hedging Agreements; and such default shall not have been cured within 60 days
after the date on which the date on which the counterparty under such Hedging
Agreement is permitted to cause the obligation to become due and payable; or

11.13. Change of Control. A Change of Control shall occur; or

11.14. Final Order. The Final Order Entry Date shall not have occurred within 45
days of the Interim Order Entry Date; or

11.15. Matters Related to the Cases.

(i) any of the Cases shall be dismissed or converted to a case under chapter 7
of the Bankruptcy Code; or

(ii) a trustee, receiver, interim receiver, or manager shall be appointed in any
of the Cases, or a responsible officer or an examiner with enlarged powers shall
be appointed in any of the Cases (having powers beyond those set forth in
sections 1106(a)(3) and 1106(a)(4) of the Bankruptcy Code); or

(iii) Any other Superpriority Claim (other than the Carve Out, the RCT
Reclamation Support Carve Out or the Obligations) or any “claim” (as such word
is defined in the Bankruptcy Code) that is pari passu with or senior to the
claims of the Secured Parties or any lien that is pari passu with or senior to
the liens of the Secured Parties shall be granted in any of the Cases except
(A) with the prior written consent of the Administrative Agent or (B) to the
extent such lien constitutes a Permitted Lien securing Indebtedness or
obligations not prohibited by this Agreement.

(iv) the Bankruptcy Court shall enter an order approving any claims for recovery
of amounts under section 506(c) of the Bankruptcy Code or otherwise arising from
the preservation of any Collateral; or

 

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(v) any TCEH Debtor makes any material payments relating to prepetition
obligations (including any “adequate protection” payments) other than in
accordance with the First Day Orders, the Interim Order, the Final Order,
Section 10.7 or as otherwise agreed to by the Administrative Agent; or

(vi) the use of cash collateral by the TCEH Debtors shall be terminated and the
TCEH Debtors shall not have obtained use of cash collateral (consensually or
non-consensually) pursuant to an order in form and substance acceptable to the
Left Lead Arrangers; or

(vii) the Credit Parties or any of their Subsidiaries, or any person claiming by
or through the Credit Parties or any of their Subsidiaries, shall obtain court
authorization to commence, or shall commence, join in, assist or otherwise
participate as an adverse party in any suit or other proceeding against any of
the Administrative Agent or Lenders, in each case, relating to the Credit
Facilities; or

(viii) (i) Any TCEH Debtor shall file a motion or pleading or commence a
proceeding that could reasonably be expected to result in an impairment of the
Administrative Agent’s or any of the Lenders’ material rights or interests in
their capacities as such under the Credit Facilities or (ii) a determination by
a court with respect to a motion, pleading or proceeding brought by another
party that results in such an impairment; provided, however, that this subclause
(viii) will not apply to the termination of use of cash collateral (which shall
be exclusively governed by subclause (vi) above); or

(ix) the Bankruptcy Court shall enter a final non-appealable order that is
adverse in any material respect to the interests (taken as a whole) of the
Administrative Agent or the Lenders or their respective material rights and
remedies in their capacity as such under the Credit Facilities in any of the
Cases; provided, however, that this subclause (viii) will not apply to the
termination of use of cash collateral (which shall be governed exclusively by
subclause (vi) above); or

(x) any TCEH Debtor shall file any pleading seeking, or otherwise consenting to,
or shall support or acquiesce in any other person’s motion as to any matter set
forth in Section 11.11, this Section 11.15 (other than this subclause (x)),
Section 11.16, Section 11.17(i) and (ii), or Section 11.18.

11.16. Automatic Stay. The Bankruptcy Court shall enter an order or orders
granting relief from the automatic stay applicable under section 362 of the
Bankruptcy Code to any creditor or party in interest to permit foreclosure (or
the granting of a deed in lieu of foreclosure or the like) on any assets of the
TCEH Debtors that have an aggregate value in excess of $150,000,000; or

11.17. Status of Orders. (i) An order shall be entered reversing, supplementing,
staying for a period of five (5) Business Days or more, vacating or otherwise
amending, supplementing or modifying the Interim Order or the Final Order in a
manner that is adverse to the interests of the Administrative Agent or the
Lenders, or the Borrower or any Guarantor shall apply for authority to do so,
without the prior written consent of the Administrative Agent or the Required
Lenders, (ii) the Interim Order or Final Order shall cease to create a valid and
perfected lien on the Collateral or to be in full force and effect; or (iii) the
Borrower or any Guarantor shall fail to comply with the Orders in any material
respect; or

 

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11.18. Confirmation of Plan. A plan shall be confirmed in any of the Cases that
does not provide for termination of the Commitments hereunder and the
indefeasible payment in full in cash of the Obligations (other than Contingent
Obligations) on the effective date of such plan;

then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, subject in each case to the terms and conditions of
the Interim Order and (once entered) the Final Order, the Administrative Agent
may and, upon the written request of the Required Lenders, shall, by five
calendar days’ written notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of the Administrative Agent or any
Lender to enforce its claims against the Borrower, except as otherwise
specifically provided for in this Agreement: (i) declare the Commitments
terminated, whereupon the Commitments, if any, of each Lender and each Letter of
Credit Issuer shall forthwith terminate immediately and any Fees theretofore
accrued shall forthwith become due and payable without any other notice of any
kind; (ii) declare the principal of and any accrued interest and Fees in respect
of any or all Loans and any or all Obligations owing hereunder and under any
other Credit Document to be, whereupon the same shall become, forthwith due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower; and/or (iii) terminate any Letter of
Credit that may be terminated in accordance with its terms.

11.19. Application of Proceeds. Subject to the Carve Out and the RCT Reclamation
Support Carve Out, during the existence of an Event of Default any Net Cash
Proceeds received by the Collateral Agent, any distribution made in respect of
any Collateral in any bankruptcy or insolvency proceeding of any Credit Party,
all proceeds of any sale, collection or other liquidation of any Collateral,
including all insurance proceeds received in respect thereof, and all proceeds
of any such distribution, and any proceeds received by the Collateral Agent in
respect of any sale of, collection from or other realization upon all or any
part of the Collateral pursuant to the exercise by the Collateral Agent of its
remedies shall be applied, in full or in part, together with any other sums then
held by the Collateral Agent pursuant to this Agreement and/or any other Credit
Document, promptly as follows:

(a) with respect to any Collateral other than the RCT L/C Collateral Accounts
and the General L/C Collateral Accounts:

(i) First, to the payment of all reasonable costs and expenses, fees,
commissions and taxes of such sale, collection or other realization including
compensation to the Administrative Agent, Collateral Agent and their agents and
counsel, and all expenses, liabilities and advances made or incurred by the
Administrative Agent and Collateral Agent in connection therewith and all
amounts for which the Administrative Agent and Collateral Agent is entitled to
indemnification pursuant to the provisions of any Credit Document, together with
interest on each such amount at the highest rate then in effect under this
Agreement from and after the date such amount is due, owing or unpaid until paid
in full;

(ii) Second, to the payment of all other reasonable costs and expenses of such
sale, collection or other realization including all costs, liabilities and
advances made or incurred by the other Secured Parties in connection therewith,
together with interest on each such amount at the highest rate then in effect
under this Agreement from and after the date such amount is due, owing or unpaid
until paid in full;

(iii) Third, without duplication of amounts applied pursuant to clauses (i) and
(ii) above, to the indefeasible payment in full in cash, pro rata, of interest
and other amounts constituting Obligations (other than principal, reimbursement
obligations in respect of Letters of Credit and obligations to cash
collateralize Letters of Credit) and any fees, premiums and scheduled periodic
payments due under Secured Hedging Agreement, Secured Commodity

 

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Hedging Agreements and Secured Cash Management Agreements to the extent
constituting Obligations and any interest accrued thereon (excluding any
breakage, termination or other payments thereunder), in each case equally and
ratably in accordance with the respective amounts thereof then due and owing;

(iv) Fourth, to the payment in full in cash, pro rata, of principal amount of
the Obligations (including reimbursement obligations in respect of Letters of
Credit and obligations to cash collateralize Letters of Credit) and any premium
thereon and any breakage, termination or other payments under Secured Hedging
Agreement, Secured Commodity Hedging Agreements or Secured Cash Management
Agreements to the extent constituting Obligations and any interest accrued
thereon; and

(v) Fifth, the balance, if any, to the person lawfully entitled thereto
(including the applicable Credit Party or its successors or assigns) or as a
court of competent jurisdiction may direct.

(b) with respect to any RCT L/C Collateral Account:

(i) First, on a pro rata basis, to the payment of all amounts due to the
relevant RCT Letter of Credit Issuer under any of the Credit Documents,
excluding amounts payable in connection with any RCT Letter of Credit
Reimbursement Obligation;

(ii) Second, on a pro rata basis, to the payment of all amounts due to the
relevant RCT Letter of Credit Issuer in an amount equal to 100% of all relevant
RCT Letter of Credit Reimbursement Obligations;

(iii) Third, on a pro rata basis, to any Secured Party which has theretofore
advanced or paid any fees to the relevant RCT Letter of Credit Issuer, other
than any amounts covered by priority Second, an amount equal to the amount
thereof so advanced or paid by such Secured Party and for which such Secured
Party has not been previously reimbursed;

(iv) Fourth, on a pro rata basis, to the payment of all other relevant RCT L/C
Obligations; and

(v) Last, the balance, if any, after all of the relevant RCT L/C Obligations
have been indefeasibly paid in full in cash, as set forth above in
Section 11.19(a).

(c) with respect to any General L/C Collateral Account:

(i) First, on a pro rata basis, to the payment of all amounts due to the
relevant General Letter of Credit Issuer under any of the Credit Documents,
excluding amounts payable in connection with any General Letter of Credit
Reimbursement Obligation;

(ii) Second, on a pro rata basis, to the payment of all amounts due to the
relevant General Letter of Credit Issuer in an amount equal to 100% of all
General Letter of Credit Reimbursement Obligations;

(iii) Third, on a pro rata basis, to any Secured Party which has theretofore
advanced or paid any fees to the relevant General Letter of Credit Issuer, other
than any amounts covered by priority Second, an amount equal to the amount
thereof so advanced or paid by such Secured Party and for which such Secured
Party has not been previously reimbursed;

 

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(iv) Fourth, on a pro rata basis, to the payment of all other relevant General
L/C Obligations; and

(v) Last, the balance, if any, after all of the relevant General L/C Obligations
have been indefeasibly paid in full in cash, as set forth above in
Section 11.19(a).

In the event that any such proceeds are insufficient to pay in full the items
described in clauses (a), (b) and (c) of this Section 11.19, the Credit Parties
shall remain liable, jointly and severally, for any deficiency.

Notwithstanding anything to the contrary contained herein, any Event of Default
under this Agreement or similarly defined term under any other Credit Document,
other than any Event of Default which cannot be waived without the written
consent of each Lender directly and adversely affected thereby, shall be deemed
not to be “continuing” if the events, act or condition that gave rise to such
Event of Default have been remedied or cured (including by payment, notice,
taking of any action or omitting to take any action) or have ceased to exist and
the Borrower is in compliance with this Agreement and/or such other Credit
Document.

SECTION 12. The Agents.

12.1. Appointment.

(a) 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 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. The provisions of this Section 12 (other than
Sections 12.9 and 12.13 with respect to the Borrower) are solely for the benefit
of the Agents and the Lenders, and the Borrower shall not have any rights as a
third party beneficiary of such provision. Notwithstanding any provision to the
contrary elsewhere in this Agreement, no Agent shall have any duties or
responsibilities, except those expressly set forth herein or in any other Credit
Document, any fiduciary relationship with any Lender or any agency or trust
obligations with respect to any Credit Party, 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 such
Agent.

(b) The Administrative Agent, each Lender, each Hedge Bank with respect to any
Secured Commodity Hedging Agreement and the Letter of Credit Issuers hereby
irrevocably designate and appoint the Collateral Agent as the agent with respect
to the Collateral, and each of the Administrative Agent, each Lender and each
Letter of Credit Issuer irrevocably authorizes the Collateral 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 Collateral 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 Collateral Agent shall not have any
duties or responsibilities except those expressly set forth herein or in any
other Credit Document, any fiduciary relationship with any of the Administrative
Agent, the Lenders, or the Letter of Credit Issuers or any agency or trust
obligations with respect to any Credit Party, 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
Collateral Agent.

 

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(c) Each of the Co-Syndication Agents, the Joint Lead Arrangers and the
Co-Documentation Agents, each in its capacity as such, shall not have any
obligations, duties or responsibilities under this Agreement but shall be
entitled to all benefits of this Section 12.

12.2. Delegation of Duties. The Administrative Agent and the Collateral Agent
may each execute any of its duties under this Agreement and the other Credit
Documents by or through agents, sub-agents, employees or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. Neither the Administrative Agent nor the Collateral Agent shall be
responsible for the negligence or misconduct of any agents, sub-agents or
attorneys-in-fact selected by it in the absence of gross negligence or willful
misconduct (as determined in the final judgment of a court of competent
jurisdiction).

12.3. Exculpatory Provisions.

(a) No Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by any of them under or in connection with this
Agreement or any other Credit Document (except for its or such Person’s own
gross negligence or willful misconduct, as determined in the final judgment of a
court of competent jurisdiction, in connection with its duties expressly set
forth herein) or (ii) responsible in any manner to any of the Lenders or any
participant for any recitals, statements, representations or warranties made by
any of Parent Guarantor, the Borrower, any other Guarantor, any other Credit
Party 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 such 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 the perfection or priority of any Lien or security
interest created or purported to be created under the Security Documents, or for
any failure of Parent Guarantor, the Borrower, any other Guarantor or any other
Credit Party to perform its obligations hereunder or thereunder. No Agent shall
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 Credit Party or any Affiliate thereof. The Collateral
Agent shall not be under any obligation to the Administrative Agent, any Lender
or any Letter of Credit Issuer 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 Credit Party.

(b) Each Lender confirms to the Administrative Agent, each other Lender and each
of their respective Related Parties that it (i) possesses (individually or
through its Related Parties) such knowledge and experience in financial and
business matters that it is capable, without reliance on the Administrative
Agent, any other Lender or any of their respective Related Parties, of
evaluating the merits and risks (including tax, legal, regulatory, credit,
accounting and other financial matters) of (x) entering into this Agreement,
(y) making Loans and other extensions of credit hereunder and under the other
Credit Documents and (z) in taking or not taking actions hereunder and
thereunder, (ii) is financially able to bear such risks and (iii) has determined
that entering into this Agreement and making Loans and other extensions of
credit hereunder and under the other Credit Documents is suitable and
appropriate for it.

(c) Each Lender acknowledges that (i) it is solely responsible for making its
own independent appraisal and investigation of all risks arising under or in
connection with this Agreement and the other Credit Documents, (ii) that it has,
independently and without reliance upon the Administrative Agent, any other
Lender or any of their respective Related Parties, made its own appraisal and
investigation of all risks associated with, and its own credit analysis and
decision to enter into, this Agreement based on such documents and information,
as it has deemed appropriate and (iii) it will,

 

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independently and without reliance upon the Administrative Agent, any other
Lender or any of their respective Related Parties, continue to be solely
responsible for making its own appraisal and investigation of all risks arising
under or in connection with, and its own credit analysis and decision to take or
not take action under, this Agreement and the other Credit Documents based on
such documents and information as it shall from time to time deem appropriate,
which may include, in each case:

(i) the financial condition, status and capitalization of the Borrower and each
other Credit Party;

(ii) the legality, validity, effectiveness, adequacy or enforceability of this
Agreement and each other Credit Document and any other agreement, arrangement or
document entered into, made or executed in anticipation of, under or in
connection with any Credit Document;

(iii) determining compliance or non-compliance with any condition hereunder to
the making of a Loan or the issuance of a Letter of Credit and the form and
substance of all evidence delivered in connection with establishing the
satisfaction of each such condition; and

(iv) the adequacy, accuracy and/or completeness of any information delivered by
the Administrative Agent, any other Lender or by any of their respective Related
Parties under or in connection with this Agreement or any other Credit Document,
the transactions contemplated hereby and thereby or any other agreement,
arrangement or document entered into, made or executed in anticipation of, under
or in connection with any Credit Document.

12.4. Reliance by Agents. The Administrative Agent and the Collateral Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex, electronic mail, or teletype message, statement, order or other document
or instruction 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 Parent Guarantor and/or the Borrower),
independent accountants and other experts selected by the Administrative Agent
or the Collateral Agent. The Administrative Agent may deem and treat the Lender
specified in the Register with respect to any amount owing hereunder as the
owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent. The Administrative Agent and the Collateral 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 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 and the Collateral 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, 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; provided that the Administrative Agent and Collateral Agent shall not be
required to take any action that, in its opinion or in the opinion of its
counsel, may expose it to liability or that is contrary to any Credit Document
or Applicable Law. For purposes of determining compliance with the conditions
specified in Sections 6 and 7 on the Closing Date, each Lender that has signed
this Agreement shall be deemed to have consented to, approved or accepted or to
be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless the
Administrative Agent shall have received notice from such Lender prior to the
proposed Closing Date specifying its objection thereto.

 

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12.5. Notice of Default. Neither the Administrative Agent nor the Collateral
Agent shall be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder unless the Administrative Agent or
Collateral Agent, as applicable, has received notice from a Lender, Parent
Guarantor 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, it shall give
notice thereof to the Lenders, the Administrative Agent and the Collateral
Agent. 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; 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 is within its authority to take under
this Agreement and otherwise as it shall deem advisable in the best interests of
the Lenders except to the extent that this Agreement requires that such action
be taken only with the approval of the Required Lenders or each of the Lenders,
as applicable.

12.6. Non-Reliance on Administrative Agent, Collateral Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent nor the
Collateral Agent nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by the Administrative Agent or Collateral Agent
hereinafter taken, including any review of the affairs of Parent Guarantor, the
Borrower, any other Guarantor or any other Credit Party, shall be deemed to
constitute any representation or warranty by the Administrative Agent or
Collateral Agent to any Lender or the Letter of Credit Issuer. Each Lender and
the Letter of Credit Issuer represents to the Administrative Agent and the
Collateral Agent that it has, independently and without reliance upon the
Administrative Agent, Collateral 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, operations, property, financial and
other condition and creditworthiness of Parent Guarantor, the Borrower, each
other Guarantor and each other Credit Party 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,
Collateral 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 the other Credit Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of Parent Guarantor, the
Borrower, each other Guarantor and each other Credit Party. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, neither the Administrative Agent nor the
Collateral Agent shall have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, assets,
operations, properties, financial condition, prospects or creditworthiness of
Parent Guarantor, the Borrower, any other Guarantor or any other Credit Party
that may come into the possession of the Administrative Agent or Collateral
Agent any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates.

12.7. Indemnification. The Lenders agree to indemnify each Agent, each in its
capacity as such (to the extent not reimbursed by the Credit Parties and without
limiting the obligation of the Credit Parties to do so), ratably according to
their respective portions of the Total Credit Exposure in effect on the date on
which indemnification is sought (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 their respective portions of the Total
Credit Exposure in effect 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 occur (including at any time following the payment of the Loans)
be imposed on, incurred by or asserted against such Agent, including all fees,
disbursements and other charges of counsel to the extent required to be
reimbursed by the Credit Parties pursuant to Section 13.5, 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

 

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therein or the transactions contemplated hereby or thereby or any action taken
or omitted by such Agent under or in connection with any of the foregoing
(SUBJECT TO THE PROVISO BELOW, WHETHER OR NOT CAUSED BY OR ARISING IN WHOLE OR
IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE ORDINARY NEGLIGENCE OF THE
INDEMNIFIED PERSON); provided that no Lender shall be liable to any Agent for
the payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Agent’s gross negligence or willful misconduct as determined by a
final judgment of a court of competent jurisdiction; provided, further, that no
action taken in accordance with the directions of the Required Lenders (or such
other number or percentage of the Lenders as shall be required by the Credit
Documents) shall be deemed to constitute gross negligence or willful misconduct
for purposes of this Section 12.7. In the case of any investigation, litigation
or proceeding giving rise to any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever that may at any time occur, be imposed upon, incurred by or
asserted against the Administrative Agent or the Collateral Agent 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 under or in connection with any of the foregoing
(including at any time following the payment of the Loans), this Section 12.7
applies whether any such investigation, litigation or proceeding is brought by
any Lender or any other Person. Without limitation of the foregoing, each Lender
shall reimburse such Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including attorneys’ fees) incurred by such Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice rendered in respect of rights or
responsibilities under, this Agreement, any other Credit Document, or any
document contemplated by or referred to herein, to the extent that such Agent is
not reimbursed for such expenses by or on behalf of the Borrower; provided that
such reimbursement by the Lenders shall not affect the Borrower’s continuing
reimbursement obligations with respect thereto. If any indemnity furnished to
any Agent for any purpose shall, in the opinion of such Agent, be insufficient
or become impaired, such Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against until such additional indemnity
is furnished; provided in no event shall this sentence require any Lender to
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement in excess of such Lender’s
pro rata portion thereof; and provided further, this sentence shall not be
deemed to require any Lender to indemnify any Agent against any liability,
obligation, loss, damage, penalty, action, judgment, suit, cost, expense or
disbursement resulting from such Agent’s gross negligence or willful misconduct
(as determined by a final judgment of court of competent jurisdiction). The
agreements in this Section 12.7 shall survive the payment of the Loans and all
other amounts payable hereunder.

12.8. Agents in its Individual Capacities. Each Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with Parent Guarantor, the Borrower, any other Guarantor, and any other Credit
Party as though such Agent were not an Agent hereunder and under the other
Credit Documents. With respect to the Loans made by it, each Agent shall have
the same rights and powers under this Agreement and the other Credit Documents
as any Lender and may exercise the same as though it were not an Agent, and the
terms “Lender” and “Lenders” shall include each Agent in its individual
capacity.

12.9. Successor Agents. Each of the Administrative Agent and Collateral Agent
may resign at any time by notifying the other Agent, the Lenders, the Letter of
Credit Issuers and the Borrower. Upon receipt of any such notice of resignation,
the Required Lenders shall have the right, subject to the consent of the
Borrower (not to be unreasonably withheld or delayed), to appoint a successor,
which shall be a bank with an office in the United States, or an Affiliate of
any such bank with

 

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an office in the United States. If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent gives notice of its resignation, then
the retiring Agent may on behalf of the Lenders and the Letter of Credit
Issuers, appoint a successor Agent meeting the qualifications set forth above;
provided that if such Agent shall notify the Borrower and the Lenders that no
qualifying person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (x) the retiring
Agent shall be discharged from its duties and obligations hereunder and under
the other Credit Documents (except that in the case of any collateral security
held by the Collateral Agent on behalf of the Secured Parties under any of the
Credit Documents, the retiring Collateral Agent shall continue to hold such
collateral security until such time as a successor Collateral Agent is
appointed) and (y) all payments, communications and determinations provided to
be made by, to or through such Agent shall instead be made by or to each Lender
and the Letter of Credit Issuer directly, until such time as the Required
Lenders with (except after the occurrence and during the continuation of a
Default or Event of Default) the consent of the Borrower (not to be unreasonably
withheld) appoint successor Agents as provided for above in this paragraph. Upon
the acceptance of a successor’s appointment as the Administrative Agent or
Collateral Agent, as the case may be, hereunder, and upon the execution and
filing or recording of such financing statements, or amendments thereto, and
such amendments or supplements to the Mortgages, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Security Documents, such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Agent, and the retiring Agent shall be discharged from all
of its duties and obligations hereunder or under the other Credit Documents (if
not already discharged therefrom as provided above in this Section). The fees
payable by the Borrower (following the effectiveness of such appointment) to
such Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor. After the retiring
Agent’s resignation hereunder and under the other Credit Documents, the
provisions of this Section 12 (including 12.7) and Section 13.5 shall continue
in effect for the benefit of such retiring Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Agent was acting as an Agent.

12.10. Withholding Tax. To the extent required by any Applicable Law, the
Administrative Agent may withhold from any interest payment to any Lender an
amount equivalent to any applicable withholding tax. If the Internal Revenue
Service or any authority of the United States or other jurisdiction asserts a
claim that the Administrative Agent did not properly withhold tax from amounts
paid to or for the account of any Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to notify
the Administrative Agent or of a change in circumstances that rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason), such Lender shall indemnify the Administrative Agent (to the extent
that the Administrative Agent has not already been reimbursed by the Borrower
(solely to the extent required by this Agreement) and without limiting the
obligation of the Borrower to do so) fully for all amounts paid, directly or
indirectly, by the Administrative Agent as tax or otherwise, including penalties
and interest, together with all expenses incurred, including legal expenses,
allocated staff costs and any out of pocket expenses.

12.11. Trust Indenture Act. In the event that Citibank, N.A. or any of its
Affiliates shall be or become an indenture trustee under the Trust Indenture Act
of 1939 (as amended, the “Trust Indenture Act”) in respect of any securities
issued or guaranteed by any Credit Party, and agree that any payment or property
received in satisfaction of or in respect of any Obligation of such Credit Party
hereunder or under any other Credit Document by or on behalf of Citibank, N.A.,
in its capacity as the Administrative Agent or the Collateral Agent for the
benefit of any Lender or Secured Party under any Credit Document (other than
Citibank, N.A. or an Affiliate of Citibank, N.A.) and which is applied in
accordance with the Credit Documents shall be deemed to be exempt from the
requirements of Section 311 of the Trust Indenture Act pursuant to
Section 311(b)(3) of the Trust Indenture Act.

 

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12.12. [Reserved].

12.13. Security Documents and Guarantee. (a) Agents under Security Documents and
Guarantee. Each Secured Party hereby further authorizes the Administrative Agent
or Collateral Agent, as applicable, on behalf of and for the benefit of the
Secured Parties, to be the agent for and representative of the Secured Parties
with respect to the Collateral and the Security Documents. Subject to
Section 13.1, without further written consent or authorization from any Secured
Party, the Administrative Agent or Collateral Agent, as applicable, may execute
any documents or instruments necessary to in connection with a sale or
disposition of assets permitted by this Agreement, (i) release any Lien
encumbering any item of Collateral that is the subject of such sale or other
disposition of assets, or with respect to which Required Lenders (or such other
Lenders as may be required to give such consent under Section 13.1) have
otherwise consented or (ii) release any Guarantor from the Guarantee, or with
respect to which Required Lenders (or such other Lenders as may be required to
give such consent under Section 13.1) have otherwise consented.

(b) Right to Realize on Collateral and Enforce Guarantee. Anything contained in
any of the Credit Documents to the contrary notwithstanding, Parent Guarantor,
the Borrower, the Agents and each Secured Party hereby agree that (i) no Secured
Party shall have any right individually to realize upon any of the Collateral or
to enforce the Guarantee, it being understood and agreed that all powers, rights
and remedies hereunder may be exercised solely by the Administrative Agent, on
behalf of the Lenders in accordance with the terms hereof and all powers, rights
and remedies under the Security Documents and Guarantee may be exercised solely
by the Collateral Agent, on behalf of the Secured Parties, and (ii) in the event
of a foreclosure by the Collateral Agent on any of the Collateral pursuant to a
public or private sale or other disposition, the Collateral Agent or any Secured
Party may be the purchaser or licensor of any or all of such Collateral at any
such sale or other disposition and the Collateral Agent, as agent for and
representative of the Secured Parties (but not any Lender or Lenders in its or
their respective individual capacities unless Required Lenders shall otherwise
agree in writing) shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any collateral payable by the
Collateral Agent at such sale or other disposition.

SECTION 13. Miscellaneous.

13.1. Amendments, Waivers and Releases. Neither this Agreement nor any other
Credit Document, nor any terms hereof or thereof, may be amended, supplemented
or modified except in accordance with the provisions of this Section 13.1. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent and/or the Collateral Agent may, from time to time,
(a) enter into with the relevant Credit Party or Credit Parties 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 Credit Parties hereunder or thereunder or (b) waive in writing, on such
terms and conditions as the Required Lenders or the Administrative Agent and/or
Collateral 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 each such waiver
and each such amendment, supplement or modification shall be effective only in
the specific instance and for the specific purpose for which given; and
provided, further, that no such waiver and no such amendment, supplement or
modification shall:

 

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(i) forgive or reduce any portion of any Loan or extend the final scheduled
maturity date of any Loan or reduce the stated rate (it being understood that
only the consent of the Required Lenders shall be necessary to waive any
obligation of the Borrower to pay interest or principal at the Default Rate or
amend Section 2.8(d)), or forgive any portion, or extend the date for the
payment, of any interest or Fee payable hereunder (other than as a result of
waiving the applicability of any post-default increase in interest rates, or the
applicability of the “most favorable nation” clause in respect of any
Incremental Facility), or extend the final expiration date of any Lender’s
Commitment or extend the final expiration date of any Letter of Credit beyond
the General L/C Termination Date or the RCT L/C Termination Date, as applicable,
or increase the aggregate amount of the Commitments of any Lender, or amend or
modify any provisions of Section 5.3(a) (with respect to the ratable allocation
of any payments only) and 13.8(a) and 13.19 or make any Loan, interest, Fee or
other amount payable in any currency other than expressly provided herein, in
each case without the written consent of each Lender directly and adversely
affected thereby; provided that the Extension Conditions (other than the
Extension Conditions set forth under clauses (1) (solely with respect to an
Event of Default under Section 11.1) and (6) of the definition thereof) may be
amended, supplemented or modified or waived with the written consent of the
Required Lenders, or

(ii) amend, modify or waive any provision of this Section 13.1 or reduce the
percentages specified in the definition of the term “Required Lenders”,
“Required Revolving Credit Lenders”, “Required Delayed-Draw Term Loan Lenders”
or “Required Term Loan Lenders”, consent to the assignment or transfer by Parent
Guarantor or the Borrower of their respective rights and obligations under any
Credit Document to which it is a party (except as permitted pursuant to
Section 10.3) or alter the order of application set forth in Section 5.2(c)(i),
in each case without the written consent of each Lender directly and adversely
affected thereby, or

(iii) amend, modify or waive any provision of Section 12 without the written
consent of the then-current Administrative Agent and Collateral Agent or any
other former or current Agent to whom Section 12 then applies in a manner that
directly and adversely affects such Person, or

(iv) amend, modify or waive any provision of Section 3 (or amend, modify or
waive any defined term in such Section 3, or any underlying definition thereto,
in each case in a manner directly adverse to any Letter of Credit Issuer in its
capacity as such) without the written consent of the applicable Letter of Credit
Issuer in its capacity as such, or

(v) amend, waive or otherwise modify any term or provision of Section 10.9 or
11.3 (solely as it relates to Section 10.9), or the definition of “Consolidated
Superpriority Secured Net Debt to Consolidated EBITDA Ratio” (or any of its
component definitions (as used in such Section but not as used in other Sections
of this Agreement)), without the written consent of the Required Revolving
Credit Lenders (it being understood and agreed that the consent of no other
Lender shall be required to amend, waive or modify any such terms or provision),
or

(vi) change any Revolving Credit Commitment to an Incremental Term Loan
Commitment, or change any Incremental Term Loan Commitment to a Revolving Credit
Commitment, in each case without the prior written consent of each Lender
directly and adversely affected thereby, or

(vii) release all or substantially all of the Guarantors under the Guarantee
(except as expressly permitted by the Guarantee or this Agreement) or release
all or substantially all of the Collateral under the Security Documents (except
as expressly permitted by the Security Documents or this Agreement), in either
case without the prior written consent of each Lender, or

 

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(viii) amend Section 2.9 (or any related definitions) so as to permit Interest
Period intervals greater than six months without regard to availability to
Lenders, without the written consent of each Lender directly and adversely
affected thereby, or

(ix) affect the rights or duties of, or any Fees or other amounts payable to,
any Agent under this Agreement or any other Credit Document without the prior
written consent of such Agent, or

(x) decrease the amount or allocation of any mandatory prepayment to be received
by any Term Loan Lender (other than Term Loan Lenders holding Incremental Term
Loans) without the written consent of the Required Term Loan Lenders (but not
including in such calculation any Incremental Term Loans), or

(xi) decrease the amount or allocation of any mandatory prepayment to be
received by any Delayed-Draw Term Loan Lender without the written consent of the
Required Delayed-Draw Term Loan Lenders, or

(xii) waive the provisions of the proviso of Section 2.14(d) without the written
consent of the Non-Defaulting Lenders having or holding a majority of the sum of
(a) the aggregate outstanding principal amount of the Term Loans (excluding Term
Loans held by Defaulting Lenders) at such date plus (b) the aggregate
outstanding principal amount of the Delayed-Draw Term Loans (excluding Delayed
Draw Term Loans held by Defaulting Lenders) at such date plus (c) the Adjusted
Available Delayed Draw Term Loan Commitment at such date (but not including in
such calculation any Incremental Term Loans, and it being understood and agreed
that the consent of no other Lender shall be required to waive such provisions),
or

(xiii) waive the provisions of the proviso of Section 2.14(i)(ii) without the
written consent of the Required Revolving Credit Lenders (but not including in
such calculation any New Revolving Credit Commitments), or

(xiv) increase the maximum amount of the RCT Reclamation Support Carve Out.

Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the affected Lenders and shall be binding upon Parent
Guarantor, the Borrower, the applicable Credit Parties, such Lenders, the
Administrative Agent and all future holders of the affected Loans.

In the case of any waiver, Parent Guarantor, the Borrower, the applicable Credit
Parties, the Lenders, the Administrative Agent shall be restored to their former
positions and rights hereunder and under the other Credit Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing, it being understood that no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon. In connection with the foregoing provisions, the Administrative Agent
may, but shall have no obligations to, with the concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf of such Lender.

Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, modification, supplement,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender (it being understood
that any Commitments, Loans held or deemed held by any Defaulting Lender shall
be excluded for a vote of the Lenders hereunder requiring any consent of the
Lenders, except as expressly provided for by this Agreement).

 

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Notwithstanding the foregoing, in addition to any credit extensions and related
Incremental Amendment(s) effectuated without the consent of Lenders in
accordance with Section 2.14, this Agreement may be amended (or amended and
restated) with the written consent of the Required Lenders, the Administrative
Agent, Parent Guarantor and the Borrower (a) to add one or more additional
credit facilities to this Agreement and to permit the extensions of credit from
time to time outstanding thereunder and the accrued interest and fees in respect
thereof to share ratably in the benefits of this Agreement and the other Credit
Documents with the Loans and Commitments and the accrued interest and Fees in
respect thereof and (b) to include appropriately the Lenders holding such credit
facilities in any determination of the Required Lenders and other definitions
related to such new Loans and Commitments.

In addition, notwithstanding the foregoing, (i) the Administrative Agent, the
Collateral Agent and the relevant Credit Parties may amend, supplement or modify
the Security Documents to make such ministerial changes as may be required to
effect the provisions of Section 10.2(a) without the consent of any Lender so
long as such amendments do not adversely affect the Lenders and (ii) the
Administrative Agent, the Collateral Agent and the relevant Credit Parties may
amend, supplement or modify this Agreement or any of the Security Documents and
any other document delivered in connection therewith 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 (i) to comply with local
law or advice of local counsel, (ii) to cure ambiguities, omissions, mistakes or
defects, (iii) to cause such any such Security Document or other document to be
consistent with this Agreement and the other Credit Documents or (iv) add
syndication or documentation agents and make customary changes and references
related thereto.

In addition, notwithstanding the foregoing, the Administrative Agent may amend,
supplement or modify the last sentence of the definition of “Delayed-Draw Term
Loans”, the last sentence of the definition of “Term Loans”, Section 2.1(a)(ii),
Section 2.1(b)(ii) and related provisions to make such ministerial changes as
may be required to make the Delayed-Draw Term Loans and the Term Loans fungible
for loan trading purposes, or to remove such provisions if the Administrative
Agent reasonably determines that the Delayed-Draw Term Loans and the Term Loans
will not be fungible for loan trading purposes.

The Lenders hereby irrevocably agree that the Liens granted to the Collateral
Agent by the Credit Parties on any Collateral shall be automatically released
(i) in full, upon the Obligations (except for Hedging Obligations in respect of
any Secured Hedging Agreement and/or any Secured Commodity Hedging Agreement,
Cash Management Obligations in respect of Secured Cash Management Agreements and
Contingent Obligations) having been indefeasibly paid in full, in cash, all
Commitments having been terminated, and all Letters of Credit having been
cancelled (or all such Letters of Credit having been fully cash collateralized
or otherwise back-stopped, in each case to the satisfaction of the applicable
Letter of Credit Issuers), (ii) upon the sale or other disposition of such
Collateral (including as part of or in connection with any other sale or other
disposition permitted hereunder) to any Person other than another Credit Party,
to the extent such sale or other disposition is made in compliance with the
terms of this Agreement (and the Collateral Agent may rely conclusively on a
certificate to that effect provided to it by any Credit Party upon its
reasonable request without further inquiry), (iii) to the extent such Collateral
is comprised of property leased to a Credit Party, upon termination (in
accordance with the terms of this Agreement) or expiration of such lease,
(iv) if the release of such Lien is approved, authorized or ratified in writing
by the Required Lenders (or such other percentage of the Lenders whose consent
may be required in accordance with this Section 13.1), (v) to the extent the
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such Collateral is owned by any Subsidiary Guarantor, upon the release of such
Subsidiary Guarantor from its obligations under the Guarantee (in accordance
with the following sentence) and (vi) as required to effect any sale or other
disposition of Collateral in connection with any exercise of remedies of the
Collateral Agent pursuant to the Credit Documents. Any such release shall not in
any manner discharge, affect or impair the Obligations or any Liens (other than
those being released) upon (or obligations (other than those being released) of
the Credit Parties in respect of) all interests retained by the Credit Parties,
including the proceeds of any sale, all of which shall continue to constitute
part of the Collateral except to the extent otherwise released in accordance
with the provisions of the Credit Documents. Additionally, the Lenders hereby
irrevocably agree that the Subsidiary Guarantors shall be released from the
Guarantee upon consummation of any transaction resulting in such Subsidiary
ceasing to constitute a Restricted Subsidiary. The Lenders hereby authorize the
Administrative Agent and the Collateral Agent, as applicable, to execute and
deliver any instruments, documents, and agreements necessary or desirable to
evidence and confirm the release of any Subsidiary Guarantor or Collateral
pursuant to the foregoing provisions of this paragraph, all without the further
consent or joinder of any Lender.

13.2. Notices. Unless otherwise expressly provided herein, all notices and other
communications provided for hereunder or under any other Credit Document shall
be in writing (including by facsimile or other electronic transmission). All
such written notices shall be mailed, faxed or delivered to the applicable
address, facsimile number or electronic mail address, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:

(a) if to Parent Guarantor, the Borrower, the Administrative Agent, the
Collateral Agent or any Letter of Credit Issuer, to the address, facsimile
number, electronic mail address or telephone number specified for such Person on
Schedule 13.2 or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a notice to
the other parties; and

(b) if to any other Lender, to the address, facsimile number, electronic mail
address or telephone number specified in its Administrative Questionnaire or to
such other address, facsimile number, electronic mail address or telephone
number as shall be designated by such party in a notice to Parent Guarantor, the
Borrower, the Administrative Agent and the Collateral Agent.

All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, three Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail, when delivered; provided that notices and other communications to the
Administrative Agent or the Lenders pursuant to Sections 2.3, 2.6, 2.9, 4.2 and
5.1 shall not be effective until received.

13.3. No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent, the Collateral Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other
Credit Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

 

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13.4. Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Credit Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.

13.5. Payment of Expenses; Indemnification. The Borrower agrees (a) to pay or
reimburse the Agents, the Joint Lead Arrangers, the Letter of Credit Issuers and
the Lenders for all their reasonable and documented out-of-pocket costs and
expenses incurred in connection with the development, negotiation, preparation
and execution and delivery of, and any amendment, supplement or modification to,
this Agreement and the other Credit Documents and any other documents prepared
in connection herewith or therewith, the syndication of the Credit Facilities,
the consummation and administration of the transactions contemplated hereby and
thereby, any Event of Default or the enforcement or preservation of any rights
under this Agreement, the other Credit Documents and any such other documents,
including the reasonable and documented out-of-pocket Prepetition and
post-Petition Date fees, disbursements and other charges of Advisors; (b) to
pay, indemnify, and hold harmless each Agent, each Joint Lead Arranger, each
Letter of Credit Issuer and each Lender from, any and all recording and filing
fees and (c) to pay, indemnify, and hold harmless each Agent, each Joint Lead
Arranger, each Letter of Credit Issuer and their respective Affiliates,
directors, officers, partners, employees and agents from and against any and all
other liabilities, obligations, losses, damages, penalties, claims, demands,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever, including reasonable and documented out-of-pocket fees,
disbursements and other charges of Advisors, related to the Transactions
(including the Cases) or, with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Credit Documents and
any such other documents, including, any of the foregoing relating to the
violation of, noncompliance with or liability under, any Environmental Law
(other than by such indemnified Person or any of its Related Parties (other than
trustees and advisors)) or to any actual or alleged presence, release or
threatened release into the environment of Hazardous Materials attributable to
the operations of Parent Guarantor, the Borrower, any of the Borrower’s
Subsidiaries or any of the Real Estate (all the foregoing in this clause (c),
collectively, the “indemnified liabilities”) (SUBJECT TO THE PROVISO BELOW,
WHETHER OR NOT CAUSED BY OR ARISING IN WHOLE OR IN PART, OUT OF THE COMPARATIVE,
CONTRIBUTORY OR SOLE ORDINARY NEGLIGENCE OF THE INDEMNIFIED PERSON); provided
that neither the Borrower nor any other Credit Party shall have any obligation
hereunder to any Agent, any Letter of Credit Issuer or any Lender or any of
their respective Related Parties with respect to indemnified liabilities to the
extent they result from (A) the gross negligence, bad faith or willful
misconduct of such indemnified Person or any of its Related Parties, as
determined by a final non-appealable judgment of a court of competent
jurisdiction, (B) a material breach of the obligations of such indemnified
Person or any of its Related Parties under the Credit Documents, as determined
by a final non-appealable judgment of a court of competent jurisdiction or
(C) disputes not involving an act or omission of Parent Guarantor, the Borrower
or any other Credit Party and that is brought by an indemnified Person against
any other indemnified Person, other than any claims against any indemnified
Person in its capacity or in fulfilling its role as an Agent or Joint Lead
Arranger or any similar role under the Credit Facilities. The agreements in this
Section 13.5 shall survive repayment of the Loans and all other amounts payable
hereunder.

All amounts payable under this Section 13.5 shall be paid within ten days of
receipt by the Borrower of an invoice relating thereto setting forth such
expense in reasonable detail; provided, that the TCEH Debtors shall promptly
provide copies of invoices received on account of fees and expenses of the
professionals retained as provided for in the Credit Documents to counsel to the
Ad Hoc TCEH Committee and the United States Trustee, and the Bankruptcy Court
shall have exclusive jurisdiction over any objections raised to the invoiced
amount of the fees and expenses proposed to be paid, which objections may only
be raised within ten days after receipt thereof. In the event that within ten
days from receipt of such invoices, the Credit Parties, the United States
Trustee or counsel to the Ad Hoc TCEH Committee raise an objection to a
particular invoice, and the parties are unable to resolve any dispute

 

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regarding the fees and expenses included in such invoice, the Bankruptcy Court
shall hear and determine such dispute; provided, that payment of invoices shall
not be delayed based on any such objections and the relevant professional shall
only be required to disgorge amounts objected to upon being “so ordered”
pursuant to a final order of the Bankruptcy Court.

No Credit Party nor any indemnified Person shall have any liability for any
special, punitive, indirect or consequential damages resulting from this
Agreement or any other Credit Document or arising out of its activities in
connection herewith or therewith (whether before or after the Closing Date)
(except, in the case of the Borrower’s obligation hereunder to indemnify and
hold harmless the indemnified Persons, to the extent any indemnified Persons is
found liable for special, punitive, indirect or consequential damages to a third
party). No indemnified Persons shall be liable for any damages arising from the
use by 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, except to the extent that such
damages have resulted from the willful misconduct, bad faith or gross negligence
of any indemnified Person or any of its Related Parties (as determined by a
final non-appealable judgment of a court of competent jurisdiction). This
Section 13.5 shall not apply to Taxes.

13.6. Successors and Assigns; Participations and Assignments.

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of a Letter of Credit Issuer that
issues any Letter of Credit), except that (i) except as expressly permitted by
Section 10.3, neither Parent Guarantor nor the Borrower may assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of the Administrative Agent and each Lender (and any attempted
assignment or transfer by Parent Guarantor or the Borrower without such consent
shall be null and void) and (ii) no Lender may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this Section 13.6.
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby (including any Affiliate of a Letter of Credit Issuer
that issues any Letter of Credit), Participants (to the extent provided in
clause (c) of this Section 13.6), to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent, the Collateral Agent,
the Letter of Credit Issuers and the Lenders and each other Person entitled to
indemnification under Section 13.5 and, to the extent expressly contemplated by
Section 13.20, the Oncor Subsidiaries) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

(b) (i) Subject to the conditions set forth in clause (b)(ii) below, any Lender
may at any time assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitments and the Loans at the time owing to it) with the prior written
consent (such consent not be unreasonably withheld or delayed; it being
understood that, without limitation, the Borrower shall have the right to
withhold or delay its consent to any assignment if in order for such assignment
to comply with Applicable Law, the Borrower would be required to obtain the
consent of, or make any filing or registration with, any Governmental Authority)
of:

(A) the Borrower (which consent shall not be unreasonably withheld or delayed);
provided that no consent of the Borrower shall be required for an assignment
(1) to a Lender (other than in respect of an assignment of a Revolving Credit
Commitment and Revolving Credit Loans), an Affiliate of a Lender (other than in
respect of an assignment of a Revolving Credit Commitment and Revolving Credit
Loans (except to an Affiliate of such Revolving Credit Lender having a combined
capital and surplus of not less than the greater of (x) $100,000,000 and (y) an
amount equal to twice the amount of Revolving Credit Commitments to be held by
such

 

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assignee after giving effect to such assignment, in which case no such Borrower
consent shall be required) or an Approved Fund (other than in respect of an
assignment of a Revolving Credit Commitment and Revolving Credit Loans) or
(2) if Specified Default has occurred and is continuing with respect to the
Borrower, to any other assignee; and

(B) the Administrative Agent (which consent shall not be unreasonably withheld
or delayed); provided that no consent of the Administrative Agent shall be
required for any assignment of any Term Loan to a Lender, an Affiliate of a
Lender or an Approved Fund.

Notwithstanding the foregoing or any other term or condition herein to the
contrary, no such assignment shall be made to (x) a natural person or (y) a
Disqualified Institution.

(ii) Assignments shall be subject to the following additional conditions:

(A) except (i) in the case of an assignment to a Lender, an Affiliate of a
Lender or an Approved Fund or an assignment of the entire remaining amount of
the assigning Lender’s Commitment or Loans of any Class, (ii) an assignment to a
Federal Reserve Bank or (iii) in connection with the initial syndication of the
Commitments or Loans, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the
Administrative Agent), shall not be less than, in the case of Loans and
Commitments, $5,000,000 and increments of $1,000,000 in excess thereof unless
each of the Borrower and the Administrative Agent otherwise consents (which
consents shall not be unreasonably withheld or delayed); provided that no such
consent of the Borrower shall be required if a Specified Default has occurred
and is continuing with respect to Parent Guarantor or the Borrower; provided,
further, that contemporaneous assignments to a single assignee made by
Affiliates of Lenders and related Approved Funds shall be aggregated for
purposes of meeting the minimum assignment amount requirements stated above;

(B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;
provided that this clause shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender’s rights and obligations in
respect of one Class of Commitments or Loans;

(C) The parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee in the amount of $3,500; provided that the Administrative
Agent may, in its sole discretion, elect to waive such processing and
recordation fee in the case of any assignment; and

(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an administrative questionnaire in a form approved by the
Administrative Agent (the “Administrative Questionnaire”).

(iii) Subject to acceptance and recording thereof pursuant to clause (b)(iv) of
this Section 13.6, from and after the effective date specified in each
Assignment and Acceptance, the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue

 

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to be entitled to the benefits of Sections 2.10, 2.11, 3.5, 5.4 and 13.5). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this Section 13.6 shall be treated for purposes of
this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with clause (c) of this Section 13.6.

(iv) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at the Administrative Agent’s Office a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amount of the Loans and any payment made by any Letter of Credit Issuer under
any Letter of Credit owing to, each Lender pursuant to the terms hereof from
time to time (the “Register”). Further, each Register shall contain the name and
address of the Administrative Agent and the lending office through which each
such Person acts under this Agreement. The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Collateral Agent,
the Letter of Credit Issuers and the Lenders shall treat each Person whose name
is recorded in the Register pursuant to the terms hereof as a Lender hereunder
for all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by Parent Guarantor, the Borrower,
the Collateral Agent, the Letter of Credit Issuers and any Lender, at any
reasonable time and from time to time upon reasonable prior notice. This Section
shall be construed so that the Loans and Letters of Credit are at all times
maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2)
and 881(c)(2) of the Code.

(v) Upon its receipt of a duly completed Assignment and Acceptance executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in clause (b) of this Section 13.6
(unless waived) and any written consent to such assignment required by clause
(b) of this Section 13.6, the Administrative Agent shall accept such Assignment
and Acceptance and record the information contained therein in the Register.

(c) (i) Any Lender may, without the consent of Parent Guarantor, the Borrower,
the Administrative Agent or any Letter of Credit Issuer, sell participations to
one or more banks or other entities that are not Disqualified Institutions
(each, a “Participant”) in all or a portion of such Lender’s rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Loans owing to it); provided that (A) such Lender’s obligations under
this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) Parent Guarantor, the Borrower, the Administrative Agent, the Letter of
Credit Issuers and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce this Agreement and to approve any amendment, modification or waiver
of any provision of this Agreement or any other Credit Document; provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any consent, amendment, modification,
supplement or waiver described in clause (i) or (vii) of the second proviso of
the first paragraph of Section 13.1 that affects such Participant. Subject to
clause (c)(ii) of this Section 13.6, the Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.10, 2.11 and 5.4 to the same
extent as if it were a Lender, and provided that such Participant agrees to be
subject to the requirements of those Sections as though it were a Lender and had
acquired its interest by assignment pursuant to clause (b) of this Section 13.6
To the extent permitted by Applicable Law, each Participant also shall be
entitled to the benefits of Section 13.8(b) as though it were a Lender; provided
such Participant agrees to be subject to Section 13.8(a) as though it were a
Lender.

 

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(ii) A Participant shall not be entitled to receive any greater payment under
Section 2.10, 2.11, or 5.4 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower’s
prior written consent (which consent shall not be unreasonably withheld or
delayed).

(iii) Each Lender that sells a participation shall, acting for this purpose as a
non-fiduciary agent of the Borrower, maintain a register on which it enters the
name and address of each participant and the principal amounts of each
participant’s interest in the Loans (or other rights or obligations) held by it
(the “Participant Register”). The entries in the Participant Register shall be
conclusive, and such lender shall treat each Person whose name is recorded in
the Participant Register as the owner of such Loan or other obligation hereunder
as the owner thereof for all purposes of this Agreement notwithstanding any
notice to the contrary. No Lender shall have any obligation to disclose all or
any portion of the Participant Register (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) to any Person 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. This Section shall be construed so that the Loans are at all times
maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2)
and 881(c)(2) of the Code.

(d) Any Lender may, without the consent of Parent Guarantor, the Borrower, the
Administrative Agent, at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section 13.6 shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto. In
order to facilitate such pledge or assignment or for any other reason, the
Borrower hereby agrees that, upon request of any Lender at any time and from
time to time after any Borrower has made its initial borrowing hereunder, the
Borrower shall provide to such Lender, at the Borrower’s own expense, a
promissory note, substantially in the form of Exhibit J-1, J-2 or J-3,
evidencing the Revolving Credit Loans, Term Loans and Delayed-Draw Term Loans,
respectively, owing to such Lender.

(e) Subject to this Section 13.16, the Borrower authorizes each Lender to
disclose to any Participant, secured creditor of such Lender or assignee (each,
a “Transferee”), any prospective Transferee and any prospective direct or
indirect contractual counterparties to any swap or derivative transactions to be
entered into in connection with or relating to Loans made hereunder any and all
financial information in such Lender’s possession concerning the Borrower and
its Affiliates that has been delivered to such Lender by or on behalf of the
Borrower and its Affiliates pursuant to this Agreement or that has been
delivered to such Lender by or on behalf of the Borrower and its Affiliates in
connection with such Lender’s credit evaluation of the Borrower and its
Affiliates prior to becoming a party to this Agreement.

(f) The words “execution,” “signed,” “signature,” and words of like import in
any Assignment and Acceptance shall be deemed to include electronic signatures
or the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or the
use of a paper-based recordkeeping system, as the case may be, to the extent and
as provided for in any applicable law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.

 

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(g) SPV Lender. Notwithstanding anything to the contrary contained herein, any
Lender (a “Granting Lender”) may grant to a special purpose funding vehicle (a
“SPV”), identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Borrower, the option to provide to the
Borrower all or any part of any Loan that such Granting Lender would otherwise
be obligated to make the Borrower pursuant to this Agreement; provided that
(i) nothing herein shall constitute a commitment by any SPV to make any Loan and
(ii) if an SPV elects not to exercise such option or otherwise fails to provide
all or any part of such Loan, the Granting Lender shall be obligated to make
such Loan pursuant to the terms hereof. The making of a Loan by an SPV hereunder
shall utilize the Commitment of the Granting Lender to the same extent, and as
if, such Loan were made by such Granting Lender. Each party hereto hereby agrees
that no SPV shall be liable for any indemnity or similar payment obligation
under this Agreement (all liability for which shall remain with the Granting
Lender). In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other senior indebtedness of any SPV, it shall not institute
against, or join any other person in instituting against, such SPV any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States or any State thereof. In addition,
notwithstanding anything to the contrary contained in this Section 13.6, any SPV
may (i) with notice to, but without the prior written consent of, the Borrower
and the Administrative Agent and without paying any processing fee therefor,
assign all or a portion of its interests in any Loans to the Granting Lender or
to any financial institutions (consented to by the Borrower and Administrative
Agent) providing liquidity and/or credit support to or for the account of such
SPV to support the funding or maintenance of Loans and (ii) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPV. This Section 13.6(g) may not be
amended without the written consent of the SPV. Notwithstanding anything to the
contrary in this Agreement, (x) no SPV shall be entitled to any greater rights
under Sections 2.10, 2.11, and 5.4 than its Granting Lender would have been
entitled to absent the use of such SPV and (y) each SPV agrees to be subject to
the requirements of Sections 2.10, 2.11, and 5.4 as though it were a Lender and
has acquired its interest by assignment pursuant to clause (b) of this
Section 13.6.

13.7. Replacements of Lenders under Certain Circumstances.

(a) The Borrower shall be permitted to replace any Lender that (a) requests
reimbursement for amounts owing pursuant to Section 2.10, 3.5 or 5.4, (b) is
affected in the manner described in Section 2.10(a)(iii) and as a result thereof
any of the actions described in such Section is required to be taken or
(c) becomes a Defaulting Lender, with a replacement bank or other financial
institution; provided that (i) such replacement does not conflict with any
Applicable Law, (ii) no Specified Default shall have occurred and be continuing
at the time of such replacement, (iii) the Borrower shall repay (or the
replacement bank or institution shall purchase, at par) all Loans and other
amounts (other than any disputed amounts), pursuant to Section 2.10, 2.11, 3.5
or 5.4, as the case may be) owing to such replaced Lender prior to the date of
replacement, (iv) the replacement bank or institution, if not already a Lender,
and the terms and conditions of such replacement, shall be reasonably
satisfactory to the Administrative Agent, (v) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of
Section 13.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein) and (vi) 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.

 

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(b) If any Lender (such Lender, a “Non-Consenting Lender”) has failed to consent
to a proposed amendment, modification, supplement, waiver, discharge or
termination that pursuant to the terms of Section 13.1 requires the consent of
all of the Lenders or all Lenders affected and with respect to which the
Required Lenders shall have granted their consent, then provided no Event of
Default then exists, the Borrower shall have the right (unless such
Non-Consenting Lender grants such consent) to replace such Non-Consenting Lender
by requiring such Non-Consenting Lender to assign its Loans and its Commitments
hereunder to one or more assignees reasonably acceptable to the Administrative
Agent; provided that: (a) all Obligations of the Borrower owing to such
Non-Consenting Lender being replaced shall be paid in full to such
Non-Consenting Lender concurrently with such assignment, and (b) the replacement
Lender shall purchase the foregoing by paying to such Non-Consenting Lender a
price equal to the principal amount thereof plus accrued and unpaid interest
thereon. In connection with any such assignment, the Borrower, Administrative
Agent, such Non-Consenting Lender and the replacement Lender shall otherwise
comply with Section 13.6.

13.8. Adjustments; Set-off. Subject in each case to the Orders:

(a) If any Lender (a “Benefited Lender”) shall at any time receive any payment
of all or part of its Loans, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off, or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender’s Loans,
or interest thereon, such Benefited Lender shall purchase for cash from the
other Lenders a participating interest in such portion of each such other
Lender’s Loan, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
Benefited Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
Benefited Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.

(b) After the occurrence and during the continuance of an Event of Default, in
addition to any rights and remedies of the Lenders provided by Applicable Law,
each Lender shall have the right, without prior notice to Parent Guarantor, the
Borrower, any such notice being expressly waived by Parent Guarantor, the
Borrower to the extent permitted by Applicable Law, upon any amount becoming due
and payable by the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of the Borrower. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such set-off and application made by such Lender; provided that the failure to
give such notice shall not affect the validity of such set-off and application.

13.9. Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by facsimile
or other electronic transmission), and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. A set of the copies
of this Agreement signed by all the parties shall be lodged with the Borrower
and the Administrative Agent.

13.10. Severability. Any provision of this Agreement that 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.

 

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13.11. INTEGRATION. THIS WRITTEN AGREEMENT AND THE OTHER CREDIT DOCUMENTS
REPRESENT THE FINAL AGREEMENT OF PARENT GUARANTOR, THE BORROWER, THE COLLATERAL
AGENT, THE ADMINISTRATIVE AGENT, THE LETTER OF CREDIT ISSUERS AND THE LENDERS
WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND (1) THERE ARE NO PROMISES,
UNDERTAKINGS, REPRESENTATIONS OR WARRANTIES BY PARENT GUARANTOR, THE BORROWER,
THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE LETTER OF CREDIT ISSUERS OR
ANY LENDER RELATIVE TO SUBJECT MATTER HEREOF NOT EXPRESSLY SET FORTH OR REFERRED
TO HEREIN OR IN THE OTHER CREDIT DOCUMENTS, (2) THIS AGREEMENT AND THE OTHER
CREDIT DOCUMENTS MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES AND (3) THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES; PROVIDED THAT THE SYNDICATION PROVISIONS AND THE
BORROWER’S AND PARENT GUARANTOR’S CONFIDENTIALITY OBLIGATIONS IN THE COMMITMENT
LETTER SHALL REMAIN IN FULL FORCE AND EFFECT. IT IS SPECIFICALLY AGREED THAT THE
PROVISION OF THE CREDIT FACILITIES HEREUNDER BY THE LENDERS SUPERSEDES AND IS IN
SATISFACTION OF THE OBLIGATIONS OF THE AGENTS (AS DEFINED IN THE COMMITMENT
LETTER) TO PROVIDE THE COMMITMENTS SET FORTH IN THE COMMITMENT LETTER.

13.12. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK AND TO THE EXTENT APPLICABLE,
THE BANKRUPTCY CODE.

13.13. Submission to Jurisdiction; Waivers. Each party hereto irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Credit Documents to which it is a
party, or for recognition and enforcement of any judgment in respect thereof, to
the exclusive jurisdiction of the Bankruptcy Court, and to the extent the
Bankruptcy Court does not have (or abstains from exercising) jurisdiction, the
courts of the State of New York, the courts of the United States of America for
the Southern District of New York and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Person at its
address set forth on Schedule 13.2 at such other address of which the
Administrative Agent shall have been notified pursuant to Section 13.2;

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction;

 

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(e) subject to the last paragraph of Section 13.5, waives, to the maximum extent
not prohibited by Applicable Law, any right it may have to claim or recover in
any legal action or proceeding referred to in this Section 13.13 any special,
exemplary, punitive or consequential damages; and

(f) agrees that a final judgment in any 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 Applicable Law.

13.14. Acknowledgments. Each of Parent Guarantor and 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) (i) the credit facilities provided for hereunder and any related arranging
or other services in connection therewith (including in connection with any
amendment, waiver or other modification hereof or of any other Credit Document)
are an arm’s-length commercial transaction between Parent Guarantor and the
Borrower, on the one hand, and the Administrative Agent, the Letter of Credit
Issuer, the Lenders and the other Agents on the other hand, and Parent
Guarantor, the Borrower and the other Credit Parties are capable of evaluating
and understanding and understand and accept the terms, risks and conditions of
the transactions contemplated hereby and by the other Credit Documents
(including any amendment, waiver or other modification hereof or thereof);
(ii) in connection with the process leading to such transaction, each of the
Administrative Agent and the other Agents, is and has been acting solely as a
principal and is not the financial advisor, agent or fiduciary for any of Parent
Guarantor, the Borrower, any other Credit Parties or any of their respective
Affiliates, stockholders, creditors or employees or any other Person;
(iii) neither the Administrative Agent nor any other Agent has assumed or will
assume an advisory, agency or fiduciary responsibility in favor of Parent
Guarantor, the Borrower or any other Credit Party with respect to any of the
transactions contemplated hereby or the process leading thereto, including with
respect to any amendment, waiver or other modification hereof or of any other
Credit Document (irrespective of whether the Administrative Agent or any other
Agent has advised or is currently advising Parent Guarantor, the Borrower, the
other Credit Parties or their respective Affiliates on other matters) and
neither the Administrative Agent or other Agent has any obligation to Parent
Guarantor, the Borrower, the other Credit Parties or their respective Affiliates
with respect to the transactions contemplated hereby except those obligations
expressly set forth herein and in the other Credit Documents; (iv) the
Administrative Agent, each other Agent and each Affiliate of the foregoing may
be engaged in a broad range of transactions that involve interests that differ
from those of Parent Guarantor, the Borrower and their respective Affiliates,
and neither the Administrative Agent nor any other Agent has any obligation to
disclose any of such interests by virtue of any advisory, agency or fiduciary
relationship; and (v) neither the Administrative Agent nor any other Agent has
provided and none will provide any legal, accounting, regulatory or tax advice
with respect to any of the transactions contemplated hereby (including any
amendment, waiver or other modification hereof or of any other Credit Document)
and Parent Guarantor and the Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate. Parent
Guarantor and the Borrower agree not to claim that the Administrative Agent or
any other Agent has rendered advisory services of any nature or respect, or owes
a fiduciary or similar duty to Parent Guarantor, the Borrower or any other
Affiliates, in connection with the transactions contemplated hereby or the
process leading hereto.

(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 Parent Guarantor and the Borrower, on the one hand, and any
Lender, on the other hand.

 

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13.15. WAIVERS OF JURY TRIAL. PARENT GUARANTOR, THE BORROWER, EACH AGENT AND
EACH LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

13.16. Confidentiality. The Administrative Agent, each Letter of Credit Issuer,
each other Agent and each Lender shall hold all non-public information furnished
by or on behalf of Parent Guarantor, the Borrower or any Subsidiary of the
Borrower in connection with such Lender’s evaluation of whether to become a
Lender hereunder or obtained by such Lender, the Administrative Agent, Letter of
Credit Issuer or such other Agent pursuant to the requirements of this Agreement
or in connection with any amendment, supplement, modification or waiver or
proposed amendment, supplement, modification or waiver hereto or the other
Credit Documents (“Confidential Information”), confidential in accordance with
its customary procedure for handling confidential information of this nature and
(in the case of a Lender that is a bank) in accordance with safe and sound
banking practices and in any event may make disclosure as required or requested
by any governmental, regulatory or self-regulatory agency or representative
thereof or pursuant to legal process or Applicable Law or (a) to such Lender’s
or the Administrative Agent’s or such Letter of Credit Issuer’s or such other
Agent’s attorneys, professional advisors, independent auditors, trustees or
Affiliates, (b) to an investor or prospective investor in a Securitization that
agrees its access to information regarding the Credit Parties, the Loans and the
Credit Documents is solely for purposes of evaluating an investment in a
Securitization and who agrees to treat such information as confidential, (c) to
a trustee, collateral manager, servicer, backup servicer, noteholder or secured
party in connection with the administration, servicing and reporting on the
assets serving as collateral for a Securitization and who agrees to treat such
information as confidential and (d) to a nationally recognized ratings agency
that requires access to information regarding the Credit Parties, the Loans and
Credit Documents in connection with ratings issued with respect to a
Securitization; provided that unless specifically prohibited by Applicable Law
or court order, each Lender, the Administrative Agent, each Letter of Credit
Issuer and each other Agent shall use commercially reasonable efforts to notify
the Borrower of any request made to such Lender, the Administrative Agent, such
Letter of Credit Issuer or such other Agent, as applicable, by any governmental,
regulatory or self-regulatory agency or representative thereof (other than any
such request in connection with a routine examination of such Lender by such
governmental regulatory or self-regulatory agency) for disclosure of any such
non-public information prior to disclosure of such information; and provided
further that in no event shall any Lender, the Administrative Agent, any Letter
of Credit Issuer or any other Agent be obligated or required to return any
materials furnished by Parent Guarantor, the Borrower or any Subsidiary of the
Borrower. Each Lender, the Administrative Agent, each other Letter of Credit
Issuer and each other Agent agrees that it will not provide to prospective
Transferees or to any pledgee referred to in Section 13.6 or to prospective
direct or indirect contractual counterparties to any swap or derivative
transactions to be entered into in connection with or relating to Loans made
hereunder any of the Confidential Information unless such Person is advised of
and agrees to be bound by the provisions of this Section 13.16 or
confidentiality provisions at least as restrictive as those set forth in this
Section 13.16.

13.17. Direct Website Communications.

(a) Parent Guarantor and the Borrower may, at their option, provide to the
Administrative Agent any information, documents and other materials that they
are obligated to furnish to the Administrative Agent pursuant to the Credit
Documents, including, all notices, requests, financial statements, financial and
other reports, certificates and other information materials, but excluding any
such communication that (A) relates to a request for a new, or a conversion of
an existing, Borrowing or other extension of credit (including any election of
an interest rate or Interest Period relating thereto), (B) relates to the
payment of any principal or other amount due under this Agreement prior to the
scheduled

 

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date therefor, (C) provides notice of any Default or Event of Default under this
Agreement or (D) is required to be delivered to satisfy any condition precedent
to the effectiveness of this Agreement and/or any Borrowing or other extension
of credit thereunder (all such non-excluded communications being referred to
herein collectively as “Communications”), by transmitting the Communications in
an electronic/soft medium in a format reasonably acceptable to the
Administrative Agent at glagentofficeops@citi.com; provided that: (i) upon
written request by the Administrative Agent, Parent Guarantor or the Borrower
shall deliver paper copies of such documents to the Administrative Agent for
further distribution to each Lender until a written request to cease delivering
paper copies is given by the Administrative Agent and (ii) Parent Guarantor or
the Borrower shall notify (which may be by facsimile or electronic mail) the
Administrative Agent 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. Each Lender shall be solely responsible for timely accessing
posted documents or requesting delivery of paper copies of such documents from
the Administrative Agent and maintaining its copies of such documents. Nothing
in this Section 13.17 shall prejudice the right of Parent Guarantor, the
Borrower, the Administrative Agent, any other Agent or any Lender to give any
notice or other communication pursuant to any Credit Document in any other
manner specified in such Credit Document.

(b) The Administrative Agent agrees that the receipt of the Communications by
the Administrative Agent at its e-mail address set forth above shall constitute
effective delivery of the Communications to the Administrative Agent for
purposes of the Credit Documents. Each Lender agrees that notice to it (as
provided in the next sentence) specifying that the Communications have been
posted to the Platform shall constitute effective delivery of the Communications
to such Lender for purposes of the Credit Documents. Each Lender agrees (A) to
notify the Administrative Agent in writing (including by electronic
communication) from time to time of such Lender’s e-mail address to which the
foregoing notice may be sent by electronic transmission and (B) that the
foregoing notice may be sent to such e-mail address.

(c) Parent Guarantor and the Borrower further agree that the Agents may make the
Communications available to the Lenders by posting the Communications on
Intralinks or a substantially similar electronic transmission system (the
“Platform”), so long as the access to such Platform is limited (i) to the
Agents, the Letter of Credit Issuers, the Lenders or any bona fide potential
Transferee and (ii) remains subject the confidentiality requirements set forth
in Section 13.16.

(d) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENT PARTIES (AS
DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS
OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN
OR OMISSIONS FROM THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED
OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM
VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE
COMMUNICATIONS OR THE PLATFORM. In no event shall any Agent or their Related
Parties (collectively, the “Agent Parties” and each an “Agent Party”) have any
liability to Parent Guarantor, the Borrower, any Lender, any Letter of Credit
Issuer or any other Person for losses, claims, damages, liabilities or expenses
of any kind (whether in tort, contract or otherwise) arising out of Parent
Guarantor’, the Borrower’s or any Agent’s transmission of Communications through
the internet, except to the extent the liability of any Agent Party resulted
from such Agent Party’s (or any of its Related Parties’ (other than trustees or
advisors)) gross negligence, bad faith or willful misconduct or material breach
of the Credit Documents (as determined in a final non-appealable judgment of a
court of competent jurisdiction).

 

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(e) The Borrower and each Lender acknowledge that certain of the Lenders may be
“public-side” Lenders (Lenders that do not wish to receive material non-public
information with respect to Parent Guarantor, the Borrower, the Subsidiaries of
the Borrower or their securities) and, if documents or notices required to be
delivered pursuant to the Credit Documents or otherwise are being distributed
through the Platform, any document or notice that Parent Guarantor or the
Borrower has indicated contains only publicly available information with respect
to Parent Guarantor, the Borrower and the Subsidiaries of the Borrower and their
securities may be posted on that portion of the Platform designated for such
public-side Lenders. If Parent Guarantor or the Borrower has not indicated
whether a document or notice delivered contains only publicly available
information, the Administrative Agent shall post such document or notice solely
on that portion of the Platform designated for Lenders who wish to receive
material nonpublic information with respect to Parent Guarantor, the Borrower,
the Subsidiaries of the Borrower and their securities. Notwithstanding the
foregoing, Parent Guarantor and the Borrower shall use commercially reasonable
efforts to indicate whether any document or notice contains only publicly
available information.

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

13.19. Payments Set Aside. To the extent that any payment by or on behalf of the
Borrower is made to any Agent or any Lender, or any Agent or any Lender
exercises its right of setoff, and such payment or the proceeds of such setoff
or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by such Agent or such Lender in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any proceeding or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share of any amount so recovered from or repaid
by any Agent, plus interest thereon from the date of such demand to the date
such payment is made at a rate per annum equal to the applicable Overnight Rate
from time to time in effect.

13.20. Separateness.

(a) The Secured Parties hereby acknowledge (i) the legal separateness of Parent
Guarantor, the Borrower and the Subsidiaries of the Borrower from the Oncor
Subsidiaries, (ii) that the lenders under the Oncor Credit Facility and the
noteholders under the Oncor Notes and under the transition bonds have likely
advanced funds thereunder in reliance upon the separateness of the Oncor
Subsidiaries from Parent Guarantor, the Borrower and the Subsidiaries of the
Borrower, (iii) that the Oncor Subsidiaries have assets and liabilities that are
separate from those of Parent Guarantor, the Borrower and the Subsidiaries of
the Borrower, (iv) that the Obligations are obligations and liabilities of the
Borrower and the other Credit Parties only, and are not the obligations or
liabilities of any of the Oncor Subsidiaries, (v) that the Secured Parties shall
look solely to the Borrower and the Guarantors and such Persons’ assets, and not
to any assets, or to the pledge of any assets, owned by any of the Oncor
Subsidiaries, for the repayment of any amounts payable pursuant to this
Agreement and for satisfaction of any other Obligations and (vi) that none of
the Oncor Subsidiaries shall be personally liable to the Secured Parties for any
amounts payable, or any other Obligation, under the Credit Documents.

 

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(b) The Secured Parties hereby acknowledge and agree that the Secured Parties
shall not (i) initiate any legal proceeding to procure the appointment of an
administrative receiver, or (ii) institute any bankruptcy, reorganization,
insolvency, winding up, liquidation, or any like proceeding under applicable
law, against any of the Oncor Subsidiaries, or against any of the Oncor
Subsidiaries’ assets. The Secured Parties further acknowledge and agree that
each of the Oncor Subsidiaries is a third party beneficiary of the foregoing
covenant and shall have the right to specifically enforce such covenant in any
proceeding at law or in equity.

13.21. Keepwell. Each Qualified ECP Guarantor hereby jointly and severally
absolutely, unconditionally and irrevocably undertakes to provide such funds or
other support as may be needed from time to time by each other Guarantor to
honor all of its obligations under this Guarantee in respect of Swap Obligations
(provided, however, that each Qualified ECP Guarantor shall only be liable for
the maximum amount of such liability that can be hereby incurred without
rendering its obligations under this Section 13.21, or otherwise under this
Agreement, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer, and not for any greater amount). Each Qualified ECP
Guarantor intends that this Section 13.21 constitute, and this Section 13.21
shall be deemed to constitute, a “keepwell, support, or other agreement” for the
benefit of each other Guarantor for all purposes of Section 1a(18)(A)(v)(II) of
the Commodity Exchange Act.

SECTION 14. Security; Secured Commodity Hedging Agreements.

14.1. Security.

(a) Collateral; Grant of Lien and Security Interest.

(i) Pursuant to the Interim Order and (when applicable) the Final Order and in
accordance with the terms thereof (and subject to the terms and conditions set
forth therein), as security for the prompt and complete payment and performance
when due (whether at the stated maturity, by acceleration, or otherwise) of the
Obligations, the Borrower hereby assigns, pledges, and grants to the Collateral
Agent, for the benefit of the Secured Parties (subject, in each case, to the
Carve Out and the RCT Reclamation Support Carve Out):

(A) a fully-perfected first priority senior security interest in and Lien upon,
pursuant to section 364(c)(2) of the Bankruptcy Code, all prepetition and
postpetition property of the Borrower, whether existing on the Petition Date or
thereafter acquired that, on or as of the Petition Date, is not subject to
valid, perfected, and non-avoidable Liens, including, without limitation, all
real and personal property, inventory, plant, fixtures, machinery, equipment,
the RCT L/C Collateral Accounts, the General L/C Collateral Accounts, cash, any
investment of such cash, accounts receivable, other rights to payment whether
arising before or after the Petition Date (including, without limitation,
post-petition intercompany claims of the Borrower), deposit accounts, investment
property, supporting obligations, minerals, oil, gas, and as-extracted
collateral, causes of action (including those arising under section 549 of the
Bankruptcy Code and any related action under section 550 of the Bankruptcy
Code), royalty interests, chattel paper, contracts, general intangibles,
documents, instruments, interests in leaseholds, letter of credit rights,
patents, copyrights, trademarks, trade names, other intellectual property, Stock
and Stock Equivalents of Subsidiaries, books and records pertaining to the
foregoing, and to the extent not otherwise included, all proceeds, products,
offspring, and profits of any and all of the foregoing (the “Unencumbered
Property”); provided that the Unencumbered Property shall exclude the Borrower’s
Avoidance Actions, but subject only to, and effective upon, entry of the Final
Order, shall include any proceeds or property recovered, unencumbered, or
otherwise the subject of successful Avoidance Actions, whether by judgment,
settlement, or otherwise;

 

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(B) a fully-perfected first priority senior priming security interest in and
Lien upon, pursuant to section 364(d)(1) of the Bankruptcy Code, all prepetition
and postpetition property of the Borrower, whether existing on the Petition Date
or thereafter acquired, that is subject to valid, perfected, and non-avoidable
Liens currently held by any of the Prepetition Secured Creditors (as defined in
the Interim Cash Collateral Order and (when applicable) the Final Cash
Collateral Order), excluding the “Deposit L/C Loan Collateral Account” to the
extent of the “Deposit L/C Obligations” (each as defined in the Prepetition
Credit Agreement); provided that such security interests and Liens shall be
senior in all respects to the interests in such property of any of the
Prepetition Secured Creditors arising from current and future Liens of any of
the Prepetition Secured Creditors (including, without limitation, Adequate
Protection Liens) (as defined in the Interim Cash Collateral Order and (when
applicable) the Final Cash Collateral Order), but shall not be senior to any
valid, perfected, and non-avoidable interests of other parties arising out of
Liens, if any, on such property existing immediately prior to the Petition Date,
including the Liens securing the Tex-La Indebtedness, or to any valid,
perfected, and non-avoidable interests in such property arising out of Liens to
which the Liens of any of the Prepetition Secured Creditors become subject
subsequent to the Petition Date as permitted by section 546(b) of the Bankruptcy
Code; and

(C) a fully-perfected junior security interest in and Lien upon, pursuant to
section 364(c)(3) of the Bankruptcy Code, all prepetition and postpetition
property of the Borrower (other than the property described in clauses (A) and
(B) of this Section 14.1(a)(i), as to which the Liens and security interests in
favor of the Collateral Agent, for the benefit of the Secured Parties, will be
as described in such clauses), whether existing on the Petition Date or
thereafter acquired, that is subject to valid, perfected, and non-avoidable
Liens in existence immediately prior to the Petition Date, or to any valid and
non-avoidable Liens in existence immediately prior to the Petition Date that are
perfected subsequent to the Petition Date as permitted by section 546(b) of the
Bankruptcy Code (in each case, other than the Adequate Protection Liens (as
defined in the Interim Cash Collateral Order and (when applicable) the Final
Cash Collateral Order));

provided, that notwithstanding anything to the contrary in this
Section 14.1(a)(i), the Collateral shall exclude Excluded Collateral.

(ii) The security interests and Liens in favor of the Collateral Agent in the
Collateral shall be effective immediately upon the entry of the Interim Order
and subject, only in the event of the occurrence and during the continuance of
an Event of Default, to the Carve Out, the RCT Reclamation Support Carve Out and
the terms and conditions set forth in the Interim Order and (when applicable)
the Final Order. Such Liens and security interests and their priority shall
remain in effect until the Obligations (except for Hedging Obligations in
respect of any Secured Hedging Agreement and/or any Secured Commodity Hedging
Agreement, Cash Management Obligations in respect of Secured Cash Management
Agreements and Contingent Obligations) have been indefeasibly paid in full, in
cash, all Commitments have been terminated, and all Letters of Credit have been
cancelled (or all such Letters of Credit have been fully cash collateralized or
otherwise back-stopped, in each case to the satisfaction of the applicable
Letter of Credit Issuers).

(iii) Subject only to the prior payment of the Carve Out and the RCT Reclamation
Support Carve Out, no costs or expenses of administration which have been or may
be incurred in the Cases or any Successor Cases (as defined in the Orders) or in
any other proceedings related thereto, and no priority claims, are or will be
senior to, or pari passu with, any claim of any Secured Party or the Collateral
Agent against any Credit Party.

 

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(b) Administrative Priority. The Borrower agrees that its Obligations shall,
pursuant to section 364(c)(1) of the Bankruptcy Code, constitute allowed
superpriority administrative expense claims in the Cases or any Successor Cases,
ranking on a parity with each other and having priority over all administrative
expense claims, diminution claims, unsecured claims, and all other claims
against the TCEH Debtors or their estates in any of the Cases and any Successor
Cases, existing on the Petition Date or thereafter, of any kind or nature
whatsoever, including, without limitation, all administrative expenses of the
kinds specified in, or ordered pursuant to, sections 105, 326, 328, 330, 331,
365, 503(a), 503(b), 506(c) (subject only to, and upon entry of, the Final
Order), 507(a), 507(b), 546(c), 546(d), 726, 1113, and 1114 of the Bankruptcy
Code, and any other provision of the Bankruptcy Code, subject only to the Carve
Out and the RCT Reclamation Support Carve Out, to the extent specifically
provided for in the Interim Order and (when applicable) the Final Order.

(c) Grants, Rights and Remedies. The Liens and security interests granted
pursuant to Section 14.1(a)(i) hereof and the administrative priority granted
pursuant to Section 14.1(b) hereof may be independently granted by the Credit
Documents and by other Credit Documents hereafter entered into. This Agreement,
the Interim Order and (when applicable) the Final Order, and such other Credit
Documents supplement each other, and the grants, priorities, rights, and
remedies of the Agents and the Secured Parties hereunder and thereunder are
cumulative.

(d) No Filings Required. The Liens and security interests referred to in this
Section 14 shall be deemed valid and perfected by entry of the Interim Order and
(when applicable) the Final Order, and entry of the Interim Order shall have
occurred on or before any Loan is made during the Interim Period and entry of
the Final Order shall have occurred on or before any Loan is made after the
Interim Period. The Collateral Agent shall not be required to file or record any
financing statements, patent filings, trademark filings, mortgages, notices of
Lien, or other instrument or document in any jurisdiction or filing office, take
possession or control of any Collateral, or take any other action in order to
validate or perfect the Liens and security interests granted by or pursuant to
this Agreement, the Interim Order or (when applicable) the Final Order or any
other Credit Document.

(e) Survival. The Liens, lien priority, administrative priorities and other
rights and remedies granted to the Collateral Agent and the Secured Parties
pursuant to this Agreement, the Interim Order and (when applicable) the Final
Order, and the other Credit Documents (specifically including, but not limited
to, the existence, perfection and priority of the Liens and security interests
provided herein and therein, and the administrative priority provided herein and
therein) shall not be modified, altered, or impaired in any manner by any other
financing or extension of credit or incurrence of Indebtedness by the TCEH
Debtors (pursuant to section 364 of the Bankruptcy Code or otherwise), or by any
dismissal or conversion of any of the Cases, or by any other act or omission
whatsoever. Without limitation, notwithstanding any such order, financing,
extension, incurrence, dismissal, conversion, act or omission:

(i) except to the extent of the Carve Out or the RCT Reclamation Support Carve
Out, no fees, charges, disbursements, costs or expenses of administration which
have been or may be incurred in the Cases or any Successor Cases, or in any
other proceedings related thereto, and no priority claims, are or will be
superior to or pari passu with any claim of the Collateral Agent and the Secured
Parties against the TCEH Debtors;

(ii) subject to the Carve Out and the RCT Reclamation Support Carve Out and
subject to the terms of the Interim Order and (when applicable) the Final Order,
the Liens in favor of the Collateral Agent and the Secured Parties set forth in
Section 14.1(a)(i) hereof shall

 

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constitute valid and perfected first priority Liens and security interests, and
shall be superior to all other Liens and security interests, existing as of the
Petition Date or thereafter arising, in favor of any other creditor or any other
Person whatsoever (subject to Permitted Liens); and

(iii) the Liens in favor of the Collateral Agent and the Secured Parties set
forth herein and in the other Credit Documents shall continue to be valid and
perfected without the necessity that the Collateral Agent files financing
statements or mortgages, takes possession or control of any Collateral, or
otherwise perfects its Lien under applicable non-bankruptcy law.

14.2. Secured Commodity Hedging Agreements.

(a) Subject to the limitations set forth in this Agreement, the Borrower and
each Secured Party acknowledges and agrees that the Collateral may secure
additional obligations of the Borrower and the other Credit Parties in respect
of Secured Commodity Hedging Agreements, subject to compliance with this
Section 14.2. Upon (x) execution and delivery to the Collateral Agent of an
Accession Agreement and (y) compliance with the procedures set forth in
Section 8.16 of the Security Agreement, such Person shall become a “Hedge Bank”
under clause (i) of the definition thereof and a “Secured Party” hereunder and
under the other Credit Documents, and the Credit Parties’ obligations to such
Person shall become “Obligations” hereunder and under the Credit Documents and
“Secured Obligations” under the Security Agreement; provided that, for the
avoidance of doubt, no such Person in such capacity shall have any consent or
voting rights under this Agreement or any of the Credit Documents. Each Credit
Party and each Secured Party agrees that this Agreement and the applicable
Security Documents may be amended by the Credit Parties and the Collateral Agent
without the consent of any Secured Party to the extent necessary or desirable to
cause the Liens granted thereby to be in favor of such Persons (to the extent
Liens in favor of such Persons are permitted by the terms of this Agreement).

(b) Notwithstanding the foregoing, nothing in this Agreement will be construed
to allow any Credit Party to incur additional Indebtedness or grant additional
Liens unless in each case permitted by the terms of this Agreement.

14.3. Permitted Property Interests. Upon the written request of any Credit Party
following such Credit Party’s execution of an easement, right-of-way or other
real or personal property interest that (i) constitutes in whole or in part a
Permitted Lien pursuant to clause (f) of the definition of Permitted Liens in
the Agreement (a Permitted Lien pursuant to such clause (f), a “Permitted
Property Interest”), and (ii) in the commercially reasonable determination of
such Credit Party is required in the ordinary course of business, the Collateral
Agent will promptly subordinate any Liens and any Superpriority Claim held by it
for the benefit of any Secured Party, to the rights of third parties with
respect to such Permitted Property Interest.

 

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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 written above.

 

ENERGY FUTURE COMPETITIVE HOLDINGS COMPANY LLC, as Parent Guarantor By:   LOGO
[g721011dsp337a.jpg]   Name: Anthony R. Horton   Title:   Treasurer TEXAS
COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC, as the Borrower By:   LOGO
[g721011dsp337b.jpg]   Name: Anthony R. Horton   Title:   Treasurer

[Signature Page to Credit Agreement]

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

CITIBANK, N.A.,

as Lender, General Letter of Credit Issuer and RCT Letter of Credit Issuer

By:   LOGO [g721011dsp338.jpg]   Name: Shapleigh B. Smith   Title: Managing
Director and Vice President

[Signature Page to Credit Agreement]

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

DEUTSCHE BANK AG NEW YORK BRANCH,

as Lender and RCT Letter of Credit Issuer

By:   LOGO [g721011dsp339a.jpg]   Name: Marcus M. Tarkington   Title: Director
By:   LOGO [g721011dsp339b.jpg]   Name: Lisa Wong   Title: Vice President

[Signature Page to Credit Agreement]

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

BANK OF AMERICA, N.A.,

as Lender and RCT Letter of Credit Issuer

By:   LOGO [g721011dsp340.jpg]   Name:   Title: Managing Director

[Signature Page to Credit Agreement]

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

MORGAN STANLEY SENIOR FUNDING, INC.,

as Lender and RCT Letter of Credit Issuer

By:   LOGO [g721011dsp341.jpg]   Name: William Graham   Title:  Managing
Director

[Signature Page to Credit Agreement]

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

BARCLAYS BANK PLC,

as Lender and RCT Letter of Credit Issuer

By:   LOGO [g721011dsp342.jpg]   Name: Noam Azachi   Title: Vice President

[Signature Page to Credit Agreement]

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

ROYAL BANK OF CANADA,

as Lender and RCT Letter of Credit Issuer

By:   LOGO [g721011dsp343.jpg]   Name: Frank Lambrinos   Title: Authorized
Signatory

[Signature Page to Credit Agreement]

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

UNION BANK, N.A.,

as Lender and RCT Letter of Credit Issuer

By:   LOGO [g721011dsp344.jpg]   Name: Jeffrey Fesenmaier   Title: Director

[Signature Page to Credit Agreement]

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

CITIBANK, NA.,

as Administrative Agent

By:   LOGO [g721011dsp345.jpg]   Name: Shapleigh B. Smith   Title: Managing
Director and Vice President

[Signature Page to Credit Agreement]

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

CITIBANK, N.A.,

as Collateral Agent

By:   LOGO [g721011dsp346.jpg]   Name: Shapleigh B. Smith   Title: Managing
Director and Vice President

[Signature Page to Credit Agreement]

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

Schedule 1.1(a)

Commitments

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

Schedule 1.1(b)

Excluded Subsidiaries

 

1. TXU Energy Receivables Company LLC

 

2. TXU Receivables Company

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

Schedule 1.1(c)

Unrestricted Subsidiaries

 

1. Greenway Development Holding Company LLC

 

2. Nuclear Energy Future Holdings LLC

 

3. Nuclear Energy Future Holdings II LLC

 

4. Comanche Peak Nuclear Power Company LLC

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

Schedule 1.1(d)

First Day Motions

 

1. Motion of Energy Future Holdings Corp., et. al., for Entry of an Order
Directing Joint Administration of the Debtors’ Chapter 11 Cases

 

2. Motion of Energy Future Intermediate Holding Company LLC and EFIH Finance,
Inc. for Entry of (I) An Interim Order (A) Approving Certain Fees Related to
Postpetition Financing and Granting Such Fees Administrative Expense Priority
and (B) Scheduling a Final Hearing; and (II) A Final Order (A) Approving
Postpetition Financing, (B) Granting Liens and Providing Superpriority
Administrative Expense Claims, (C) Authorizing the Use of Cash Collateral,
(D) Authorizing the EFIH First Lien Refinancing, (E) Authorizing Issuance of
Roll-Up Debt to the Extent Authorized by the Settlement Motion, (F) Determining
the Value of Secured Claims, and (G) Modifying the Automatic Stay

 

3. Motion Authorizing Energy Future Intermediate Holding Company LLC and EFIH
Finance, Inc. to File Under Seal the Certain Fee Letter Related to Proposed
Debtor-in-Possession Financing

 

4. Motion of Texas Competitive Electric Holdings Company LLC and Certain of its
Debtor Affiliates, for Entry of Interim and Final Orders (A) Approving
Postpetition Financing, (B) Granting Liens and Providing Superpriority
Administrative Expense Claims, (C) Modifying the Automatic Stay, and
(D) Scheduling a Final Hearing

 

5. Motion Authorizing Texas Competitive Electric Holdings Company LLC and
Certain of its Debtor Affiliates to File Under Seal Certain Fee Letters Related
to Proposed Debtor-In-Possession Financing

 

6. Motion of Texas Competitive Electric Holdings Company LLC and Certain of its
Debtor Affiliates for Entry of Interim and Final Orders (A) Authorizing Use of
Cash Collateral, (B) Granting Adequate Protection, (C) Modifying the Automatic
Stay, and (D) Scheduling a Final Hearing

 

7. Motion of Energy Future Holdings Corp., et al., for Entry of Interim and
Final Orders (A) Authorizing the Debtors to (I) Pay Certain Prepetition
Compensation and Reimbursable Employee Expenses, (II) Pay and Honor Employee and
Retiree Medical and Similar Benefits, and (III) Continue Employee and Retiree
Benefit Programs, and (B) Modifying the Automatic Stay

 

8. Motion of Energy Future Holdings Corp., et al., for Entry of an Order
(A) Authorizing the Debtors to (I) Continue Using Their Existing Cash Management
System, (II) Maintain Existing Bank Accounts and Business Forms, and (III)
Continue Using Certain Investment Accounts; (B) Authorizing Continued
Intercompany Transactions and Netting of Intercompany Claims; and (C) Granting
Postpetition Intercompany Claims Administrative Expense Priority

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

9. Motion of Energy Future Holdings Corp., et al., for Entry of (A) An Order
Authorizing the Debtors to (I) Maintain and Administer Customer Programs and
Customer Agreements, (II) Honor Prepetition Obligations Related Thereto, (III)
Pay Certain Expenses on Behalf of Certain Organizations, (IV) Fix Deadlines to
File Proofs of Claim for Certain Customer Claims, and (V) Establish Procedures
for Notifying Customers of Commencement of the Debtors’ Chapter 11 Cases,
Assumption of Customer Agreements, and the Bar Dates for Customer Claims and
(B) An Order Authorizing Certain of the Debtors to Assume the Customer
Agreements1

 

10. Motion of Energy Future Holdings Corp., et al., for Entry of Interim and
Final Orders Authorizing the Debtors to Pay Prepetition Critical Vendor Claims

 

11. Motion of Energy Future Holdings Corp., et al., for Entry of Interim and
Final Orders Authorizing the Debtors to (A) Grant Administrative Expense
Priority to All Undisputed Obligations for Goods and Services Ordered
Prepetition and Delivered Postpetition and Satisfy Such Obligations in the
Ordinary Course of Business, and (B) Pay Prepetition Claims of Shippers,
Warehousemen, and Materialmen

 

12. Motion of Energy Future Holdings Corp., et al., For Entry of Interim and
Final Orders Authorizing the Debtors to (A) Continue Performing Under
Prepetition Hedging and Trading Arrangements, (B) Pledge Collateral and Honor
Obligations Thereunder, and (C) Enter into and Perform under Trading
Continuation Agreements and New Postpetition Hedging and Trading Arrangements

 

13. Motion of Energy Future Holdings Corp., et al., for Entry of (A) An Order
Authorizing Certain of the Debtors to Pay Certain Prepetition Transition Charges
and Delivery Charges and (B) An Order Authorizing Certain of the Debtors to
Assume Transmission and Distribution Service Agreements

 

14. Motion of Energy Future Holdings Corp., et al., for Entry of Interim and
Final Orders Determining Adequate Assurance of Payment for Future Utility
Services

 

15. Motion of Energy Future Holdings Corp., et al., for Entry of Interim and
Final Orders Authorizing the Debtors to Pay Certain Prepetition Taxes and Fees

 

16. Application of Energy Future Holdings Corp., et al., for Entry of an Order
Approving the Retention and Appointment of Epiq Bankruptcy Solutions, LLC as the
Claims and Noticing Agent for the Debtors

 

17. Motion of Energy Future Holdings Corp., et. al., for Entry of an Order
Authorizing the Debtors to File a Consolidated List of Creditors in Lieu of
Submitting a Separate Mailing Matrix for Each Debtor

 

1  The hearing on the Assumption Order (as such term is defined in the motion)
will be heard at a later date and is excluded from the condition precedent in
Section 6.11 on such basis.

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

18. Motion of Energy Future Holdings Corp., et. al., for Entry of An Order
Authorizing Certain of the Debtors to Assume Standard Form Market Participant
Agreements with ERCOT2

 

2  Will not be heard at first day hearing and is excluded from the condition
precedent in Section 6.11 on such basis.

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

Schedule 8.4

Litigation

Litigation Related to Generation Facilities — In November 2010, an
administrative appeal challenging the decision of the TCEQ to renew and amend
Oak Grove Management Company LLC’s (Oak Grove) (a wholly owned subsidiary of
TCEH) Texas Pollutant Discharge Elimination System (TPDES) permit related to
water discharges was filed by Robertson County: Our Land, Our Lives and Roy
Henrichson in the Travis County, Texas District Court. Plaintiffs sought a
reversal of the TCEQ’s order and a remand back to the TCEQ for further
proceedings. The district court affirmed the TCEQ’s issuance of the TPDES permit
to Oak Grove. In December 2012, plaintiffs appealed the district court’s
decision to the Third Court of Appeals in Austin, Texas. Oral argument is
scheduled for April 2014. While we cannot predict the timing or outcome of this
proceeding, we believe the renewal and amendment of the Oak Grove TPDES permit
are protective of the environment and were in accordance with applicable law.

In September 2010, the Sierra Club filed a lawsuit in the US District Court for
the Eastern District of Texas (Texarkana Division) against EFH Corp. and
Luminant Generation Company LLC (a wholly owned subsidiary of TCEH) for alleged
violations of the Clean Air Act (CAA) at Luminant’s Martin Lake generation
facility. In May 2012, the Sierra Club filed a lawsuit in the US District Court
for the Western District of Texas (Waco Division) against EFH Corp. and Luminant
Generation Company LLC for alleged violations of the CAA at Luminant’s Big Brown
generation facility. The Big Brown trial was held in February 2014. At the
conclusion of the trial, the district court ruled in favor of EFH Corp. and
Luminant on all claims and denied all relief requested by Sierra Club. At this
time, we are uncertain if Sierra Club will appeal the district court’s decision
to the US Court of Appeals for the Fifth Circuit upon entry of final judgment by
the district court. The Martin Lake case is currently scheduled for trial in May
2014. While we are unable to estimate any possible loss or predict the outcome
of the Martin Lake case, we believe that, as the judge ruled in the Big Brown
case, the Sierra Club’s claims are without merit, and we intend to vigorously
defend that lawsuit. In addition, in December 2010 and again in October 2011,
the Sierra Club informed Luminant that it may sue Luminant for allegedly
violating CAA provisions in connection with Luminant’s Monticello generation
facility. In May 2012, the Sierra Club informed us that it may sue us for
allegedly violating CAA provisions in connection with Luminant’s Sandow 4
generation facility. While we cannot predict whether the Sierra Club will
actually file suit regarding Monticello or Sandow 4 or the outcome of any
resulting proceedings, we believe we have complied with the requirements of the
CAA at all of our generation facilities.

Litigation Related to EPA Reviews — In June 2008, the EPA issued an initial
request for information to TCEH under the EPA’s authority under Section 114 of
the CAA. The stated purpose of the request is to obtain information necessary to
determine compliance with the CAA, including New Source Review Standards and air
permits issued by the TCEQ for the Big Brown, Monticello and Martin Lake
generation facilities. In April 2013, we received an additional information
request from the EPA under Section 114 related to the Big Brown, Martin Lake and
Monticello facilities as well as an initial information request related to the
Sandow 4 generation facility. Historically, as the EPA has pursued its New
Source Review enforcement initiative, companies that have received a large and
broad request under Section 114, such as the request received by TCEH, have in
many instances subsequently received a notice of violation from the EPA, which
has in some cases progressed to litigation or settlement.

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

In July 2012, the EPA sent us a notice of violation alleging noncompliance with
the CAA’s New Source Review Standards and the air permits at our Martin Lake and
Big Brown generation facilities. In September 2012, we filed a petition for
review in the US Court of Appeals for the Fifth Circuit (Fifth Circuit Court)
seeking judicial review of the EPA’s notice of violation. Given recent legal
precedent subjecting agency orders like the notice of violation to judicial
review, we filed the petition for review to preserve our ability to challenge
the EPA’s issuance of the notice and its defects. In October 2012, the EPA filed
a motion to dismiss our petition. In December 2012, the Fifth Circuit Court
issued an order that will delay a ruling on the EPA’s motion to dismiss until
after the case has been fully briefed and oral argument is held.

In July 2013, the EPA sent us a second notice of violation alleging
noncompliance with the CAA’s New Source Review Standards at our Martin Lake and
Big Brown generation facilities. In July 2013, we filed a petition for review in
the Fifth Circuit Court seeking judicial review of the EPA’s July 2013 notice of
violation. In September 2013, the Fifth Circuit Court consolidated the petitions
for review of the July 2012 and July 2013 notices of violation. The consolidated
cases are now fully briefed and before the Fifth Circuit Court. Oral argument
has been tentatively scheduled for June 2014.

In August 2013, the US Department of Justice, acting as the attorneys for the
EPA, filed a civil enforcement lawsuit against Luminant Generation Company LLC
and Big Brown Power Company LLC in federal district court in Dallas, alleging
violations of the CAA at our Big Brown and Martin Lake generation facilities. In
September 2013, we filed a motion to stay this lawsuit pending the outcome of
the Fifth Circuit Court’s review of the July 2012 and July 2013 notices of
violation. In January 2014, the district court granted our motion to stay the
lawsuit until the Fifth Circuit Court resolves our petitions for review of the
July 2012 and July 2013 notices of violation. We believe that we have complied
with all requirements of the CAA and intend to vigorously defend against these
allegations. We cannot predict the outcome of these proceedings, including the
financial effects, if any.

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

Schedule 8.12

Subsidiaries

 

   

Subsidiary

  

Jurisdiction of
Organization

  

Record Owner

  

Material
Subsidiary

1.   Texas Competitive Electric Holdings Company LLC    DE    Energy Future
Competitive Holdings Company    Yes 2.   Generation MT Company LLC    DE   
Texas Competitive Electric Holdings Company LLC    No 3.   Luminant Holding
Company LLC    DE    Texas Competitive Electric Holdings Company LLC    Yes 4.  
TCEH Finance, Inc.    DE    Texas Competitive Electric Holdings Company LLC   
No 5.   Luminant Energy Company LLC    TX    Luminant Holding Company LLC    Yes
6.   Luminant ET Services Company    TX    Luminant Energy Company LLC    No 7.
  Luminant Energy Trading California Company    TX    Luminant Energy Company
LLC    No 8.   Big Brown 3 Power Company LLC    TX    Luminant Holding Company
LLC    No 9.   Big Brown Power Company LLC    TX    Luminant Holding Company LLC
   Yes 10.   Collin Power Company LLC    DE    Luminant Holding Company LLC   
No 11.   DeCordova Power Company LLC    TX    Luminant Holding Company LLC    No
12.   Luminant Mineral Development Company LLC    TX    Luminant Holding Company
LLC    No 13.   Lake Creek 3 Power Company LLC    TX    Luminant Holding Company
LLC    No 14.   Martin Lake 4 Power Company LLC    TX    Luminant Holding
Company LLC    No 15.   Monticello 4 Power Company LLC    TX    Luminant Holding
Company LLC    No 16.   Morgan Creek 7 Power Company LLC        TX    Luminant
Holding Company LLC    No

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

17.   NCA Resources Development Company LLC    TX    Luminant Holding Company
LLC    No 18.   Oak Grove Management Company LLC    DE    Luminant Holding
Company LLC    Yes 19.   Oak Grove Power Company LLC    TX    Luminant Holding
Company LLC    No 20.   Sandow Power Company LLC    TX    Luminant Holding
Company LLC    Yes 21.   Tradinghouse 3 & 4 Power Company LLC    TX    Luminant
Holding Company LLC    No 22.   Generation SVC Company    TX    Luminant Holding
Company LLC    No 23.   Tradinghouse Power Company LLC    TX    Luminant Holding
Company LLC    No 24.   Valley Power Company LLC    TX    Luminant Holding
Company LLC    No 25.   Decordova II Power Company LLC    DE    Luminant Holding
Company LLC    No 26.   Greenway Development Holding Company LLC    DE   
Luminant Holding Company LLC    No 27.   Big Brown Lignite Company LLC    TX   
Luminant Holding Company LLC    No 28.   Luminant Big Brown Mining Company LLC
   TX    Luminant Holding Company LLC    No 29.   Luminant Mining Company LLC   
TX    Luminant Holding Company LLC    Yes 30.   Oak Grove Mining Company LLC   
TX    Luminant Holding Company LLC    No 31.   Luminant Generation Company LLC
   TX    Luminant Holding Company LLC    Yes 32.   Eagle Mountain Power Company
LLC    DE    Luminant Holding Company LLC    No 33.   Luminant Renewables
Company LLC    TX    Luminant Generation Company LLC    No 34.   Valley NG Power
Company LLC    TX    Luminant Generation Company LLC    No 35.   Nuclear Energy
Future Holdings LLC    DE    Luminant Generation Company LLC    No 36.   Nuclear
Energy Future Holdings II LLC    DE    Nuclear Energy Future Holdings LLC    No
37.   Comanche Peak Nuclear Power Company LLC    DE    Nuclear Energy Future
Holdings II LLC    No 38.   TXU Energy Retail Company LLC    TX    Texas
Competitive Electric Holdings Company LLC        Yes

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

39.   TXU Energy Receivables Company LLC    DE    Texas Competitive Electric
Holdings Company LLC    No 40.   TXU Retail Services Company    DE    TXU Energy
Retail Company LLC    No 41.   TXU Energy Solutions Company LLC    TX    TXU
Energy Retail Company LLC    No 42.   TXU SEM Company    DE    TXU Energy
Solutions Company LLC    No 43.   4Change Energy Holdings LLC    TX    Texas
Competitive Electric Holdings Company LLC    No 44.   4Change Energy Company   
TX    4Change Energy Holdings LLC    No

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

Schedule 8.15

Property

None.

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

Schedule 9.9

Closing Date Affiliate Transactions

None.

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

Schedule 10.1

Closing Date Indebtedness

 

1. Indebtedness in connection with the liens listed on Schedule 10.2.

 

2. Capital Leases

 

  (i) $51,792,000 capital lease with respect to rail cars (TXU 2007-1 Railcar
Leasing LLC, a subsidiary of General Electric Capital Corporation).

 

  (ii) $7,250,000 capital lease for mining equipment (FCC Equipment Finance).

 

  (iii) $5,087,843 capital lease for mining equipment (FCC Equipment Finance)

 

  (iv) $5,716,189 capital lease for mining equipment (FCC Equipment Finance)

 

  (v) $558,974 capital lease for mining equipment (FCC Equipment Finance)

 

  (vi) $1,142,250 capital lease for mining equipment (FCC Equipment Finance)

 

  (vii) $1,082,594 capital lease for mining equipment (FCC Equipment Finance)

 

  (viii) $13,815,930 capital lease for mining equipment (Caterpillar Financial
Services Corp)

 

  (ix) $4,802,752 capital lease for mining equipment (CAT Finance)

 

  (x) $525,803 capital lease for mining equipment (CAT Finance)

 

  (xi) $3,240,831 capital lease for mining equipment (CAT Finance)

 

  (xii) $2,467,875 capital lease for mining equipment (CAT Finance)

 

  (xiii) $810,296 capital lease for mining equipment (CAT Finance)

 

  (xiv) $790,942 capital lease for mining equipment (Caterpillar Financial
Services Corp)

 

3. CT Lease Indebtedness

 

  (i) $34,552,000 leveraged lease with respect to combustion turbines at the
Permian Basin and DeCordova facilities (a/k/a 7.480% Fixed Secured Facility
Bonds with amortizing payments through January 2017).

 

  (ii) $3,707,900 leveraged lease with respect to combustion turbines at the
Morgan Creek and Permian Basin facilities (a/k/a 7.460% Fixed Secured Facility
Bonds with amortizing payments through January 2015).

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

4. Other Existing Leases

 

  (i) $14,483,320 leveraged lease with respect to rail cars (Wachovia).

 

  (ii) $7,575,523 leveraged lease with respect to rail cars (Sojitz).

 

  (iii) $70,714,236 leveraged lease with respect to rail cars (Key Equipment).

 

5. $7,472,500 Oak Grove Power Company LLC Promissory Note in favor of North
American Coal Royalty Company due in 7 annual installments of $1,067,500, on
December 22 of each year until December 22, 2017.

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

Schedule 10.2

Closing Date Liens

 

1. Liens in respect of the leases listed as items 2, 3 and 4 on Schedule 10.1.

 

2. Liens relating to Pollution Control Revenue Bonds are comprised of liens on
cash held in a collateral account (approximately $20 million) relating to two
series of pollution control revenue bonds (i) Floating Series 2001D-2 due May 1,
2033 and (ii) Floating Taxable Series 2001I due December 1, 2036, which are
being remarketed on a daily and weekly basis, respectively.

 

3. Liens relating to the Master Netting, Setoff, Security and Collateral
Agreement dated March 1, 2003, as amended or supplemented, among TXU Portfolio
Management LP, BP Corporation North America, Inc., BP Energy Company, BP Canada
Energy Company, BP Canada Energy Marketing Corp. and IG Resources, Inc.

 

4. Liens relating to the Master Netting, Setoff, Security and Collateral
Agreement dated March 1, 2003, as amended or supplemented, among TXU Fuel
Company, BP Corporation North America, Inc., BP Energy Company, BP Canada Energy
Company, BP Canada Energy Marketing Corp. and IG Resources, Inc.

 

5. Liens relating to the Master Netting, Setoff, Security and Collateral
Agreement dated March 1, 2003, as amended or supplemented, among TXU Portfolio
Management LP and Reliant Energy Services, Inc. (including the underlying master
agreements and any transaction thereunder).

 

6. Call option of Cap Gemini America Inc. in respect of the Borrower and its
Subsidiaries in TXU CG Holdings Company LP.

 

7. Liens securing the Prepetition First Lien Obligations and the Prepetition
Second Lien Obligations.

 

Debtor

 

Secured Party

 

File No. / File Date

(as of the Closing Date)

 

Collateral/Lien

Description

Energy Future Competitive Holdings Company LLC

  Dallas County et al  

Case No. 201100215640

 

8/17/2011

  $7,942.20 judgment

Luminant Big Brown Mining Company LLC

  Holt Cat  

07-003853876

 

2/9/2009

  Equipment

Luminant Big Brown Mining Company LLC

  Holt Cat  

07-003381218

 

2/4/2010

  Equipment

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

Luminant Big Brown Mining Company LLC   ROMCO Equipment Co., LLC  

10-0033403195

 

11/19/2010

  Equipment Luminant Big Brown Mining Company LLC   Holt Cat  

10-0035960438

 

12/15/2010

  Equipment Luminant Big Brown Mining Company LLC   Holt Cat  

11-0001704185

 

1/18/2011

  Equipment Luminant Big Brown Mining Company LLC   Caterpillar Financial
Services Corporation  

12-0008854159

 

3/21/2012

  Equipment Luminant Big Brown Mining Company LLC   Holt Texas, LTD.  

13-0008640072

 

3/19/2013

  Equipment

Luminant Big Brown Mining Company LLC

Luminant Mining Company LLC

Oak Grove Mining Company LLC

  Holt Texas, LTD.  

13-0002684492

 

8/21/2013

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0015714108

 

6/3/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0018332248

 

6/29/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0018598373

 

7/1/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0018602389

 

7/1/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0021091941

 

7/27/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0021094126

 

7/27/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0021097523

 

7/27/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0024449072

 

8/31/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0024653221

 

9/2/2009

  Equipment

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

Luminant Mining Company LLC   Holt Cat  

09-0024744363

 

9/2/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0025581646

 

9/11/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0028877869

 

10/15/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0028878335

 

10/15/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0033771565

 

12/8/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0034934315

 

12/21/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0034935992

 

12/21/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0034937156

 

12/21/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0035267597

 

12/24/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

09-0035784884

 

12/31/2009

  Equipment Luminant Mining Company LLC   Holt Cat  

10-0000474036

 

1/7/2010

  Equipment Luminant Mining Company LLC   Holt Cat  

10-0000814317

 

1/11/2010

  Equipment Luminant Mining Company LLC   Holt Cat  

10-0006504884

 

3/8/2010

  Equipment Luminant Mining Company LLC   Holt Cat  

10-0007480434

 

3/16/2010

  Equipment Luminant Mining Company LLC   Holt Cat  

10-0007480555

 

3/16/2010

  Equipment Luminant Mining Company LLC   Holt Cat  

10-0013529203

 

5/11/2010

  Equipment Luminant Mining Company LLC   Holt Cat  

10-0014160770

 

5/17/2010

  Equipment

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

Luminant Mining Company LLC   Holt Cat  

10-0031239271

 

10/28/2010

  Equipment Luminant Mining Company LLC   Holt Cat  

10-0033379561

 

11/19/2010

  Equipment Luminant Mining Company LLC   ROMCO Equipment Co., LLC  

10-0033402063

 

11/19/2010

  Equipment Luminant Mining Company LLC   Holt Cat  

11-000051598

 

1/6/2011

  Equipment Luminant Mining Company LLC   Caterpillar Financial Services
Corporation  

12-0008854038

 

3/21/2012

  Equipment Luminant Mining Company LLC   ROMCO Equipment Co., LLC  

13-0005491508

 

2/20/2013

  Equipment Luminant Mining Company LLC   Holt Texas Ltd.  

13-0006213066

 

2/27/2013

  Equipment

Luminant Mining Company LLC

Oak Grove Mining Company LLC

  Holt Texas Ltd.  

13-0006294277

 

2/27/2013

  Equipment

Luminant Mining Company LLC

Oak Grove Mining Company LLC

  Holt Texas Ltd.  

13-0006294398

 

2/27/2013

  Equipment

Luminant Mining Company LLC

Oak Grove Mining Company LLC

  Holt Texas Ltd.  

13-0006294772

 

2/27/2013

  Equipment

Luminant Mining Company LLC

Oak Grove Mining Company LLC

  Holt Texas Ltd.  

13-0006294893

 

2/27/2013

  Equipment Luminant Mining Company LLC   Holt Texas Ltd.  

13-0009560266

 

3/27/2013

  Equipment Luminant Mining Company LLC   Holt Texas Ltd.  

13-0026765797

 

8/21/2013

  Equipment Luminant Mining Company LLC   Holt Texas Ltd.  

13-0035596092

 

11/11/2013

  Equipment Luminant Mining Company LLC   Holt Texas Ltd.  

13-0039003493

 

12/13/2013

  Equipment

Luminant Mining Company

Oak Grove Mining Company LLC

  Holt Texas Ltd.  

14-0001712642

 

1/17/2014

  Equipment Luminant Mining Company LLC   Holt Texas Ltd.  

14-0003007641

 

1/29/2014

  Equipment

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

Luminant Generation Company LLC   General Electric Capital Corporation  

04-0079425526

 

8/24/2004

  Equipment Luminant Generation Company LLC   Wells Fargo Bank, N.A.  

10-0025293062

 

8/31/2010

  Equipment Luminant Generation Company LLC   Holt Texas Ltd.  

13-0009336368

 

3/25/2013

  Equipment Luminant Generation Company LLC   Equipment Depot  

13-0025496333

 

8/8/2013

  Equipment Luminant Generation Company LLC   Tex-La Electric Cooperative of
Texas, Inc.  

13-0026122845

 

8/14/2013

  All property subject to specified Deed of Trust Oak Grove Management Company
LLC   Caterpillar Financial Services Corporation  

2012 1088956

 

3/21/2012

  Equipment Oak Grove Management Company LLC   Holt Texas Ltd.   2014 0225045  
Equipment Oak Grove Mining Company LLC   ROMCO Equipment Co., LLC  

10-0033404227

 

11/19/2010

  Equipment Sandow Power Company LLC   ROMCO Equipment Co., LLC  

13-0039129644

 

12/16/2013

  Equipment TXU SEM Company   Fleet Business Credit, LLC  

2011872 3

 

1/15/2002

  Assigned contract rights TXU SEM Company   Fleet Business Credit, LLC  

2011881 4

 

1/15/2002

  Payments under certain agreements

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

Schedule 10.4

Scheduled Dispositions

None.

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

Schedule 10.5

Closing Date Investments

 

1. Employee Appliance Purchase Plan (approximately $700,000 balance).

 

2. Energy Conservation program (approximately $650,000 balance).

 

3. 20% limited liability company interest in STARS Alliance LLC owned by
Luminant Generation Company LLC.

 

4. 1.1% ownership interest in Skyonic Corporation owned by Luminant Generation
Company LLC.

 

5. 5.39% ownership interest in Perfect Commerce, Inc. owned by TXU Energy Retail
Company LLC.

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Schedule 13.2

Notice Addresses

If to Parent Guarantor or the Borrower:

1601 Bryan Street

Dallas, Texas 75201

Attention: Legal Department

Telephone: 214-812-4660

Facsimile: 214-812-2717

1601 Bryan Street

Dallas, Texas 75201

Attention: Treasury Department

Telephone: 214-812-4660

Email: tony.horton@energyfutureholdings.com

Email: stacey.dore@energyfutureholdings.com

with a copy to (which shall not constitute notice):

Kirkland & Ellis LLP

Attention: Linda K. Myers

300 N. La Salle Street

Chicago, Illinois 60654

Telephone: (312) 862-2322

Facsimile: (312) 862-2200

Kirkland & Ellis LLP

Attention: Andres Mena

601 Lexington Avenue

New York, NY 10022

Telephone: (212) 446-4737

Facsimile: (212) 446-6460

If to the Administrative Agent:

Citibank, N.A.

1615 Brett Road, Building III

New Castle, DE 19720

Attention: Bank Loan Syndications Department

Telephone: (302) 894-6010

Facsimile: (212) 994-0961

Email: glagentofficeops@citi.com

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with a copy to (which shall not constitute notice):

Owen Coyle

1615 Brett Road

New Castle, DE 19720

Telephone: (302) 894-6123

Facsimile: (212) 994-0961

Email: owen.leonard.coyle@citi.com

with a copy to (which shall not constitute notice):

Citibank, N.A.

Email: shane.azzara@citi.com

Email: kirkwood.roland@citi.com

Email: allister.chan@citi.com

Email: chido.ugochukwu@citi.com

with a copy to (which shall not constitute notice):

Milbank, Tweed, Hadley & McCloy LLP

1 Chase Manhattan Plaza

New York, NY 10005

Attention: Karen Gartenberg

Telephone: (212) 530-5630

Facsimile: (212) 822-5630

If to the Collateral Agent:

Citibank, N.A.

1615 Brett Road, Building III

New Castle, DE 19720

Attention: Bank Loan Syndications Department

Telephone: (302) 894-6010

Facsimile: (212) 994-0961

If to the General Letter of Credit Issuer:

Citibank, N.A.

3800 Citibank Center

Building B, 3rd Floor

Tampa, FL 33610

Attention: US Standby Unit

Telephone: (866) 498-8670

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Zorijana Migliorini

388 Greenwich Street

New York, NY 10013

Telephone: (212) 816-8663

Facsimile: (646) 291-3258

Email: zorijana.migliorini@citi.com

If to Citibank, N.A. as RCT Letter of Credit Issuer:

Citibank, N.A.

3800 Citibank Center

Building B, 3rd Floor

Tampa, FL 33610

Attention: US Standby Unit

Telephone: (866) 498-8670

Zorijana Migliorini

388 Greenwich Street

New York, NY 10013

Telephone: (212) 816-8663

Facsimile: (646) 291-3258

Email: zorijana.migliorini@citi.com

If to Deutsche Bank AG New York Branch as RCT Letter of Credit Issuer:

Deutsche Bank AG New York Branch

Everardus J Rozing

Vice President

Standby Letter of Credit Unit

Deutsche Bank

60 Wall Street, New York, NY 10005

Mail Stop NYC60-3118

Phone 212 250-1014

Fax 212 797-0403

If to Bank of America, N.A. as RCT Letter of Credit Issuer:

Bank of America, N.A.

Global Trade Operations

One Fleet Way, 2nd Floor

Mail Code PA6-580-02-30

Scranton, PA 18507

Telephone: 1.800.370.7519 and choose Trade product opt. #1

Client Servicing E-mail Address: tradeclientserviceteamus@baml.com

General Fax: 1. 800.755.8743

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If to Morgan Stanley Senior Funding, Inc. as RCT Letter of Credit Issuer:

Morgan Stanley Loan Servicing

1300 Thames Street Wharf, 4th floor

Baltimore, MD 21231

Telephone: 443-627-4355

Fax: 718-233-2140

Email: msloanservicing@morganstanley.com

If to Barclays Bank PLC as RCT Letter of Credit Issuer:

Barclays Bank PLC, New York Branch

200 Park Avenue

New York, New York 10116

Tel: (201) 499-4970

E-mail: xraLetterofCredit@barclays.com / Michelle.hsiao@barclays.com

If to Royal Bank of Canada as RCT Letter of Credit Issuer:

Royal Bank of Canada

Global Loans Administration, NY

Three World Financial Center

200 Vesey Street

New York, NY 10281

Phone: (212) 428-6322

Fax: (212) 428-2372

If to Union Bank, N.A. as RCT Letter of Credit Issuer:

Union Bank, N.A.

Commercial Loan Operations Supervisor

Commercial Loan Operations

1980 Saturn Street

Monterey Park, CA 91754

Facsimile: 1-800-446-9951

     1-323-724-6198

E-Mail: #clo_synd@unionbank.com

Telephone: Marvin Morales: 323-720-2113

     Maria Suncin: 323-720-2666

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EXHIBIT A

TO THE CREDIT AGREEMENT

FORM OF NOTICE OF BORROWING

To: Citibank, N.A., as Administrative Agent

[            ]

[            ]

Attention:

[            ], 201[    ]

Reference is hereby made to the Senior Secured Superpriority
Debtor-in-Possession Credit Agreement dated as of May [    ], 2014 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Energy Future Competitive Holdings Company LLC, a Delaware
limited liability company, Texas Competitive Electric Holdings Company LLC, a
Delaware limited liability company (the “Borrower”), the lending institutions
from time to time parties thereto (each a “Lender” and, collectively, the
“Lenders”), Citibank, N.A., as Administrative Agent and Collateral Agent and
each other Agent party thereto. Terms used but not defined herein shall have the
meanings given to such terms in the Credit Agreement.

The Borrower hereby gives notice to the Administrative Agent pursuant to
Section 2.3 of the Credit Agreement that Loans under the Credit Agreement, and
of the Class, Type and amount, set forth below are requested to be made on the
date indicated below:

 

Class of Loans

  

Type of Loans

  

[Interest

Period]1

  

Aggregate

Principal Amount

  

Date of Borrowings

 

 

1  To be included for LIBOR Loans.

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The Borrower hereby requests that the proceeds of Loans described in this Notice
of Borrowing be deposited in the account set forth below:

 

[    ] [    ] [    ] [    ] ABA: [    ] GLA #:[    ] A/C Name: [    ]
A/C Number [                ]

[Rest of page left intentionally blank]

 

-2-

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

TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC By:      

Name:

 

Title:

 

[Signature Page to Notice of Borrowing]

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

EXHIBIT B

TO THE CREDIT AGREEMENT

FORM OF GUARANTEE

[See attached]

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

EXECUTION VERSION

GUARANTEE

GUARANTEE, dated as of May 5, 2014, by each of the signatories listed on the
signature pages hereto and each of the other entities that becomes a party
hereto pursuant to Section 20 (the “Guarantors” and, each individually, a
“Guarantor”), each a debtor and debtor-in-possession under the Chapter 11 of the
Bankruptcy Code, in favor of Citibank, N.A., as the Collateral Agent (the
“Collateral Agent”) for the benefit of the Secured Parties.

W I T N E S S E T H:

WHEREAS, Texas Competitive Electric Holdings Company LLC, a Delaware limited
liability company (the “Company”) is party to the Senior Secured Superpriority
Debtor-in-Possession Credit Agreement, dated as of May 5, 2014 (as amended,
restated, supplemented or otherwise modified from time to time, the “DIP Credit
Agreement”), among Energy Future Competitive Holdings Company LLC, a Texas
limited liability company (“Parent Guarantor”), the Company, the financial
institutions from time to time party thereto as lenders (the “Lenders”),
Citibank, N.A., as Administrative Agent, the Collateral Agent, and the other
agents and entities from time to time party thereto;

WHEREAS, it is a condition precedent to the making of the Loans and other
financial accommodations described in the DIP Credit Agreement (collectively,
“Lender Extensions of Credit”) that the Guarantors shall have executed and
delivered this Guarantee to the Collateral Agent for the benefit of the Secured
Parties;

WHEREAS, each Subsidiary Guarantor is a direct or indirect wholly-owned Domestic
Subsidiary of the Company;

WHEREAS, the proceeds of the Lender Extensions of Credit will be used in part to
enable the Company to make valuable transfers to the Guarantors in connection
with the operation of their respective businesses;

WHEREAS, each Guarantor acknowledges that it will derive substantial direct and
indirect benefit from the making of the Lender Extensions of Credit;

WHEREAS, to supplement the Interim Order and (when applicable) the Final Order
without in any way diminishing or limiting the effect of the Interim Order and
(when applicable) the Final Order or the guarantee thereunder, the parties
hereto desire to more fully set forth their respective rights in connection with
such guarantee;

WHEREAS, this Guarantee has been approved by the Interim Order and (after its
entry by the Bankruptcy Court) will have been approved by the Final Order; and

NOW, THEREFORE, in consideration of the premises and agreements set forth herein
and to induce the Administrative Agent, the Collateral Agent, the Lenders and
the Letter of Credit Issuers to enter into the DIP Credit Agreement and to
induce the Lenders and the Letter of Credit Issuers to make their respective
extensions of credit (including, for the avoidance of doubt, the issuance of
Letters of Credit and making of Loans under the Incremental Facilities) to the
Company under the DIP Credit Agreement, to induce each Cash Management Bank to
enter into Secured Cash Management Agreements and to induce each Hedge Bank to
enter into Secured Hedging Agreements and/or Secured Commodity Hedging
Agreements with Parent Guarantor, the Company and/or its Subsidiaries, the
Guarantors hereby agree with the Collateral Agent, for the benefit of the
Secured Parties, as follows:

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

1. Defined Terms.

(a) Unless otherwise defined herein, terms defined in the DIP Credit Agreement
or the Security Agreement and used herein shall have the meanings given to them
in the DIP Credit Agreement or the Security Agreement, as applicable.

(b) The following terms have the following meanings:

“Guarantee Termination Date” has the meaning set forth in Section 2(e).

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Credit
Party that has total assets exceeding $10,000,000 at the time the relevant
Guarantee or grant of the relevant security interest becomes effective with
respect to such Swap Obligation or such other person as constitutes an “eligible
contract participant” under the Commodity Exchange Act or any regulations
promulgated thereunder and can cause another person to qualify as an “eligible
contract participant” at such time by entering into a keepwell under
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

(c) The words “hereof”, “herein” and “hereunder” and words of similar import
when used in this Guarantee shall refer to this Guarantee as a whole and not to
any particular provision of this Guarantee, and Section references are to
Sections of this Guarantee unless otherwise specified. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”.

(d) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

2. Guarantee.

(a) Subject to the provisions of Section 2(b) and the terms and provisions of
the Interim Order and (when applicable) the Final Order, each of the Guarantors
hereby, jointly and severally, unconditionally and irrevocably, guarantees, as
primary obligor and not merely as surety, to the Collateral Agent, for the
ratable benefit of the Secured Parties, the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations of anyone other than such Guarantor (including
amounts that would become due but for operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)).

(b) Anything herein or in any other Credit Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Credit Documents shall in no event exceed the amount that can be
guaranteed by such Guarantor under the Bankruptcy Code or any applicable laws
relating to fraudulent conveyances, fraudulent transfers or the insolvency of
debtors.

(c) Each Guarantor further agrees to pay any and all reasonable and documented
out-of-pocket costs and expenses (including all reasonable and documented fees,
disbursements and other charges) of Advisors that may be paid or incurred by the
Administrative Agent or the Collateral Agent, or any other Secured Party in
enforcing, or obtaining advice of counsel in respect of, any rights with respect
to, or collecting, any or all of the Obligations and/or enforcing any rights
with respect to, or collecting against, such Guarantor under this Guarantee.

(d) Each Guarantor agrees that the Obligations may at any time and from time to
time exceed the amount of the liability of such Guarantor hereunder without
impairing this Guarantee or affecting the rights and remedies of the Collateral
Agent or any other Secured Party hereunder.

 

2

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

(e) No payment or payments made by the Company, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Collateral Agent
or any other Secured Party from the Company, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Guarantor hereunder, which
shall, notwithstanding any such payment or payments, other than payments made by
such Guarantor in respect of the Obligations or payments received or collected
from such Guarantor in respect of the Obligations, remain liable for the
Obligations up to the maximum liability of such Guarantor hereunder until all
Obligations (other than Contingent Obligations) are paid in full, the
Commitments are terminated and no Letters of Credit shall be outstanding or all
Letters of Credit shall have been Cash Collateralized or otherwise back stopped
to the reasonable satisfaction of the applicable Letter of Credit Issuers (the
“Guarantee Termination Date”), notwithstanding that from time to time during the
term of the DIP Credit Agreement and any Secured Cash Management Agreement,
Secured Hedging Agreement or Secured Commodity Hedging Agreement the Credit
Parties may be free from any Obligations.

(f) Each Guarantor agrees that whenever, at any time, or from time to time, it
shall make any payment to the Collateral Agent or any other Secured Party on
account of its liability hereunder, it will notify the Collateral Agent in
writing that such payment is made under this Guarantee for such purpose.

3. Right of Contribution. Each Subsidiary Guarantor hereby agrees that to the
extent a Subsidiary Guarantor shall have paid more than its proportionate share
of any payment made hereunder (including by way of set-off rights being
exercised against it), such Subsidiary Guarantor shall be entitled to seek and
receive contribution from and against any other Guarantor hereunder who has not
paid its proportionate share of such payment. Each Subsidiary Guarantor’s right
of contribution shall be subject to the terms and conditions of Section 5
hereof. The provisions of this Section 3 shall in no respect limit the
obligations and liabilities of any Subsidiary Guarantor to the Collateral Agent
and the other Secured Parties, and each Subsidiary Guarantor shall remain liable
to the Collateral Agent and the other Secured Parties up to the maximum
liability of such Guarantor hereunder.

4. Right of Set-off. In addition to any rights and remedies of the Secured
Parties provided by law, each Guarantor hereby irrevocably authorizes each
Secured Party at any time and from time to time following the occurrence and
during the continuance of an Event of Default and without further action of the
Bankruptcy Court, without notice to such Guarantor or any other Guarantor, any
such notice being expressly waived by each Guarantor, upon any amount becoming
due and payable by such Guarantor hereunder (whether at stated maturity, by
acceleration or otherwise) to set off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Secured Party to or for
the credit or the account of such Guarantor. Each Secured Party shall notify
such Guarantor promptly in writing of any such set-off and the appropriation and
application made by such Secured Party, provided that the failure to give such
notice shall not affect the validity of such set-off and application.

5. No Subrogation. Notwithstanding any payment or payments made by any of the
Guarantors hereunder or any set-off or appropriation and application of funds of
any of the Guarantors by the Collateral Agent or any other Secured Party, no
Guarantor shall be entitled to be subrogated to any of the rights (or if
subrogated by operation of law, such Guarantor hereby waives such rights to the
extent permitted by applicable law) of the Collateral Agent or any other Secured
Party against the Company or any other Guarantor or any collateral security or
guarantee or right of offset held by the Collateral Agent or any other Secured
Party for the payment of any of the Obligations, nor shall any Guarantor seek or
be

 

3

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entitled to seek any contribution or reimbursement from the Company or any other
Guarantor in respect of payments made by such Guarantor hereunder, until the
Guarantee Termination Date. If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time prior to the Guarantee
Termination Date, such amount shall be held by such Guarantor in trust for the
Collateral Agent and the other Secured Parties, segregated from other funds of
such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned
over to the Collateral Agent in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Collateral Agent, if required), to be applied
against the Obligations, whether due or to become due, in such order as the
Collateral Agent may determine.

6. Amendments, etc. with Respect to the Obligations; Waiver of Rights. Subject
in any event to the terms and conditions of the Orders, each Guarantor shall
remain obligated hereunder notwithstanding that, without any reservation of
rights against any Guarantor and without notice to or further assent by any
Guarantor, (a) any demand for payment of any of the Obligations made by the
Collateral Agent or any other Secured Party may be rescinded by such party and
any of the Obligations continued, (b) the Obligations, or the liability of any
other party upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Collateral Agent or any
other Secured Party, (c) the DIP Credit Agreement, the other Credit Documents,
the Letters of Credit and any other documents executed and delivered in
connection therewith (including the Secured Cash Management Agreements, Secured
Hedging Agreements, Secured Commodity Hedging Agreements), and any other
documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Administrative
Agent (or the Required Lenders, as the case may be, or, in the case of any
Secured Cash Management Agreement, Secured Hedging Agreement or Secured
Commodity Hedging Agreements, the party thereto) may deem advisable from time to
time and (d) any collateral security, guarantee or right of offset at any time
held by the Collateral Agent or any other Secured Party for the payment of any
of the Obligations may be sold, exchanged, waived, surrendered or released.
Neither the Collateral Agent nor any other Secured Party shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Obligations or for this Guarantee or any property subject
thereto. When making any demand hereunder against any Guarantor, the Collateral
Agent or any other Secured Party may, but shall be under no obligation to, make
a similar demand on the Company or any Guarantor or any other person, and any
failure by the Collateral Agent or any other Secured Party to make any such
demand or to collect any payments from the Company or any Guarantor or any other
person or any release of the Company or any Guarantor or any other person shall
not relieve any Guarantor in respect of which a demand or collection is not made
or any Guarantor not so released of its several obligations or liabilities
hereunder, and shall not impair or affect the rights and remedies, express or
implied, or as a matter of law, of the Collateral Agent or any other Secured
Party against any Guarantor. For the purposes hereof “demand” shall include the
commencement and continuance of any legal proceedings.

Further, each Guarantor expressly waives each and every right to which it may be
entitled by virtue of the suretyship law of the state of Texas, including
without limitation, any rights pursuant to Rule 31, Texas Rules of Civil
Procedure, Articles 1986 and 1987, Revised Civil Statutes of Texas and Chapter
34 of the Texas Business and Commerce Code.

7. Guarantee Absolute and Unconditional.

(a) Subject to the Orders, each Guarantor waives any and all notice of the
creation, contraction, incurrence, renewal, extension, amendment, waiver or
accrual of any of the Obligations, and notice of or proof of reliance by the
Collateral Agent or any other Secured Party upon this Guarantee or acceptance of
this Guarantee. All Obligations shall conclusively be deemed to have been
created,

 

4

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

contracted or incurred, or renewed, extended, amended, waived or accrued, in
reliance upon this Guarantee, and all dealings between the Company and any of
the Guarantors, on the one hand, and the Collateral Agent and the other Secured
Parties, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon this Guarantee. To the fullest extent
permitted by applicable law, each Guarantor waives diligence, promptness,
presentment, protest and notice of protest, demand for payment or performance,
notice of default or nonpayment, notice of acceptance and any other notice in
respect of the Obligations or any part of them, and any defense arising by
reason of any disability or other defense of the Company or any of the
Guarantors with respect to the Obligations. Each Guarantor understands and
agrees that this Guarantee shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity,
regularity or enforceability of the DIP Credit Agreement, any other Credit
Document, any Letter of Credit, any Secured Cash Management Agreement, Secured
Commodity Hedging Agreement or Secured Hedging Agreement, any of the Obligations
or any collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Collateral Agent or any
other Secured Party, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) that may at any time be available to or be
asserted by the Company against the Collateral Agent or any other Secured Party
or (c) any other circumstance whatsoever (with or without notice to or knowledge
of the Company or such Guarantor) that constitutes, or might be construed to
constitute, an equitable or legal discharge of the Company for the Obligations,
or of such Guarantor under this Guarantee, in bankruptcy or in any other
instance. When pursuing its rights and remedies hereunder against any Guarantor,
the Collateral Agent and any other Secured Party may, but shall be under no
obligation to, pursue such rights and remedies as it may have against the
Company or any other Person or against any collateral security or guarantee for
the Obligations or any right of offset with respect thereto, and any failure by
the Collateral Agent or any other Secured Party to pursue such other rights or
remedies or to collect any payments from the Company or any such other Person or
to realize upon any such collateral security or guarantee or to exercise any
such right of offset, or any release of the Company or any such other Person or
any such collateral security, guarantee or right of offset, shall not relieve
such Guarantor of any liability hereunder, and shall not impair or affect the
rights and remedies, whether express, implied or available as a matter of law,
of the Collateral Agent and the other Secured Parties against such Guarantor.

(b) This Guarantee shall remain in full force and effect and be binding in
accordance with and to the extent of its terms upon each Guarantor and the
successors and assigns thereof and shall inure to the benefit of the Collateral
Agent and the other Secured Parties and their respective successors, indorsees,
transferees and assigns until the Guarantee Termination Date, notwithstanding
that from time to time during the term of the DIP Credit Agreement and any
Secured Cash Management Agreement, Secured Hedging Agreement or Secured
Commodity Hedging Agreement the Credit Parties may be free from any Obligations.

(c) A Guarantor shall automatically and without further action be released from
its obligations hereunder and the Guarantee of such Guarantor shall be
automatically and without further action be released under the circumstances
described in Section 13.1 of the DIP Credit Agreement.

8. Reinstatement. This Guarantee shall continue to be effective, or be
reinstated, as the case may be (in each case, without further order of the
Bankruptcy Court), if at any time payment, or any part thereof, of any of the
Obligations is rescinded or must otherwise be restored or returned by the
Collateral Agent or any other Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Company or any Guarantor, or
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, the Company or any Guarantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.

 

5

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9. Payments. Each Guarantor hereby guarantees that payments hereunder will be
paid to the Collateral Agent without set-off or counterclaim in U.S. Dollars.
Each Guarantor agrees that the provisions of Sections 5.4 and 13.19 of the DIP
Credit Agreement shall apply to such Guarantor’s obligations under this
Guarantee.

10. Keepwell. Each Qualified ECP Guarantor hereby jointly and severally
absolutely, unconditionally and irrevocably undertakes to provide such funds or
other support as may be needed from time to time by each other Credit Party to
honor all of its obligations under this Guarantee in respect of Swap Obligations
(provided, however, that each Qualified ECP Guarantor shall only be liable under
this Section 10 for the maximum amount of such liability that can be hereby
incurred without rendering its obligations under this Section 10, or otherwise
under this Guarantee, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not for any greater amount). The
obligations of each Qualified ECP Guarantor under this Section 10 shall remain
in full force and effect until the discharge and indefeasible payment in full in
cash of the Guarantee Obligations. Each Qualified ECP Guarantor intends that
this Section 10 constitute, and this Section 10 shall be deemed to constitute, a
“keepwell, support, or other agreement” for the benefit of each other Credit
Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange
Act.

11. Representations and Warranties; Covenants.

(a) Each Guarantor hereby represents and warrants that the representations and
warranties set forth in Section 8 of the DIP Credit Agreement as they relate to
such Guarantor and in the other Credit Documents to which such Guarantor is a
party, all of which are hereby incorporated herein by reference, are true and
correct in all material respects as of the Closing Date (or where such
representations and warranties expressly relate to an earlier date, as of such
earlier date), and the Collateral Agent and each other Secured Party shall be
entitled to rely on each of them as if they were fully set forth herein.

(b) Each Guarantor hereby covenants and agrees with the Collateral Agent and
each other Secured Party that, from and after the date of this Guarantee until
the Guarantee Termination Date, such Guarantor shall take, or shall refrain from
taking, as the case may be, all actions that are necessary to be taken or not
taken so that no violation of any provision, covenant or agreement contained in
Section 9 or Section 10 of the DIP Credit Agreement and so that no Default or
Event of Default, is caused by any act or failure to act of such Guarantor or
any of its Subsidiaries.

12. Authority of the Collateral Agent.

(a) The Collateral Agent enters into this Guarantee in its capacity as agent for
the Secured Parties from time to time. The rights and obligations of the
Collateral Agent under this Guarantee at any time are the rights and obligations
of the Secured Parties at that time. Each of the Secured Parties has (subject to
the terms of the Credit Documents) a several entitlement to each such right, and
a several liability in respect of each such obligation, in the proportions
described in the Credit Documents. The rights, remedies and discretions of the
Secured Parties, or any of them, under this Guarantee may be exercised by the
Collateral Agent (subject in any event to the terms and conditions of the
Orders). No party to this Guarantee is obliged to inquire whether an exercise by
the Collateral Agent of any such right, remedy or discretion is within the
Collateral Agent’s authority as agent for the Secured Parties.

(b) Each party to this Guarantee acknowledges and agrees that any changes (in
accordance with the provisions of the Credit Documents) in the identity of the
persons from time to time comprising the Secured Parties gives rise to an
equivalent change in the Secured Parties, without any further act. Upon such an
occurrence, the persons then comprising the Secured Parties are vested with the
rights, remedies and discretions and assume the obligations of the Secured
Parties under this Guarantee. Each party to this Guarantee irrevocably
authorizes the Collateral Agent to give effect to the change in Lenders
contemplated in this Section 12(b) by countersigning an Assignment and
Acceptance.

 

6

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13. Notices. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 13.2 of the DIP Credit Agreement. All communications and
notices hereunder to any Guarantor shall be given to it in care of the Company
at the Company’s address set forth in Section 13.2 of the DIP Credit Agreement.

14. Counterparts. This Guarantee may be executed by one or more of the parties
to this Guarantee on any number of separate counterparts (including by facsimile
or other electronic transmission (e.g. a “pdf” or “tif” file)), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Guarantee signed by all the parties
shall be lodged with the Collateral Agent and the Company.

15. Severability. Any provision of this Guarantee that 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. The parties hereto shall endeavor in good-faith negotiations
to replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.

16. Integration. This Guarantee together with the other Credit Documents
represent the agreement of each Guarantor and the Collateral Agent with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Collateral Agent or any other Secured Party
relative to the subject matter hereof not expressly set forth or referred to
herein or in the other Credit Documents.

17. Amendments in Writing; No Waiver; Cumulative Remedies.

(a) None of the terms or provisions of this Guarantee may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the affected Guarantors and the Collateral Agent in accordance with Section 13.1
of the DIP Credit Agreement.

(b) Neither the Collateral Agent nor any other Secured Party shall by any act
(except by a written instrument pursuant to Section 17(a)), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default or in any breach of any of
the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Collateral Agent or any other Secured Party, any
right, power or privilege hereunder shall operate as a waiver thereof. No single
or partial exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. A waiver by the Collateral Agent or any other Secured Party of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy that the Collateral Agent or any Secured Party would
otherwise have on any future occasion.

(c) The rights, remedies, powers and privileges herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.

18. Section Headings. The Section headings used in this Guarantee are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

 

7

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19. Successors and Assigns. This Guarantee shall be binding upon the successors
and assigns of each Guarantor and shall inure to the benefit of the Collateral
Agent and the other Secured Parties and their respective successors and assigns
except that no Guarantor may assign, transfer or delegate any of its rights or
obligations under this Guarantee without the prior written consent of the
Collateral Agent, except pursuant to a transfer expressly permitted by the DIP
Credit Agreement.

20. Additional Guarantors. Each Subsidiary of the Company that is required to
become a party to this Guarantee pursuant to Section 9.11 of the DIP Credit
Agreement shall become a Guarantor, with the same force and effect as if
originally named as a Guarantor herein, for all purposes of this Guarantee upon
execution and delivery by such Subsidiary of a written supplement substantially
in the form of Annex A hereto or in such other form reasonably satisfactory to
the Collateral Agent. The execution and delivery of any instrument adding an
additional Guarantor as a party to this Guarantee shall not require the consent
of any other Guarantor hereunder. The rights and obligations of each Guarantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor as a party to this Guarantee.

21. WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
GUARANTEE, ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

22. Submission to Jurisdiction; Waivers; Service of Process. Each Guarantor
hereby irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Guarantee and the other Credit Documents to which it is a
party, or for recognition and enforcement of any judgment in respect thereof, to
the exclusive jurisdiction of the Bankruptcy Court, and to the extent the
Bankruptcy Court does not have (or abstains from exercising) jurisdiction, the
courts of the State of New York, the courts of the United States of America for
the Southern District of New York and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Guarantor in care
of the Company at the Company’s address set forth in the DIP Credit Agreement,
and such Person hereby irrevocably authorizes and directs the Company to accept
such service on its behalf;

(d) agrees that nothing herein shall affect the right of the Collateral Agent or
any other Secured Party to effect service of process in any other manner
permitted by law or shall limit the right of the Collateral Agent or any other
Secured Party to sue in any other jurisdiction; and

(e) 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 22 any special, exemplary, punitive or consequential damages.

 

8

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23. GOVERNING LAW. THIS GUARANTEE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK AND, TO THE EXTENT APPLICABLE, THE
BANKRUPTCY CODE.

24. Oncor Separateness. (a) The Collateral Agent, on behalf of itself and the
Secured Parties, acknowledges (i) the legal separateness of the Company and the
Guarantors from Oncor Holdings and its Subsidiaries, (ii) that the lenders under
the Oncor Credit Facility and the noteholders under Oncor and its Subsidiaries’
indentures have likely advanced funds thereunder in reliance upon the
separateness of Oncor and its Subsidiaries (and in the case of the Oncor Credit
Facility, Oncor Holdings, and its Subsidiaries) from the Company and the
Guarantors, (iii) that Oncor Holdings and its Subsidiaries have assets and
liabilities that are separate from those of TCEH and its other Subsidiaries,
(iv) that the Obligations owing under the Credit Documents are obligations and
liabilities of the Company and the Guarantors only, and are not the obligations
or liabilities of Oncor Holdings or any of its Subsidiaries, (v) that the
Secured Parties shall look solely to the Company, the Guarantors and their
assets, and not to any assets, or to the pledge of any assets, owned by Oncor
Holdings or any of its Subsidiaries, for the repayment of any amounts payable
pursuant to the Credit Documents or any Secured Cash Management Agreement,
Secured Hedging Agreement or Secured Commodity Hedging Agreement and for
satisfaction of any other Obligations owing to the Secured Parties under the
Credit Documents or any Secured Cash Management Agreement, Secured Hedging
Agreement or Secured Commodity Hedging Agreement and (vi) that none of Oncor
Holdings or its Subsidiaries shall be personally liable to the Secured Parties
for any amounts payable, or any other liability, under the Credit Documents or
any Secured Cash Management Agreement, Secured Hedging Agreement or Secured
Commodity Hedging Agreement.

(b) The Collateral Agent, on behalf of itself and the Secured Parties, shall not
(i) initiate any legal proceeding to procure the appointment of an
administrative receiver, or (ii) institute any bankruptcy, reorganization,
insolvency, winding up, liquidation, or any like proceeding under applicable
law, against Oncor Holdings, Oncor, or any of their Subsidiaries, or against any
of Oncor Holdings’s, Oncor’s, or any of their Subsidiaries’ assets. The
Collateral Agent, on behalf of itself and the Secured Parties, acknowledges and
agrees that each of Oncor Holdings, Oncor, and their Subsidiaries is a third
party beneficiary of the foregoing covenant and shall have the right to
specifically enforce such covenant in any proceeding at law or in equity.

[Signature pages follow.]

 

9

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IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly
executed and delivered by its duly authorized officer or other representative as
of the day and year first above written.

 

ENERGY FUTURE COMPETITIVE HOLDINGS COMPANY LLC,

as a Guarantor

By:  

 

  Name:   Title:

[Signature Page to Guarantee]

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4CHANGE ENERGY COMPANY

 

4CHANGE ENERGY HOLDINGS LLC

 

BIG BROWN 3 POWER COMPANY LLC

 

BIG BROWN LIGNITE COMPANY LLC

 

BIG BROWN POWER COMPANY LLC

 

COLLIN POWER COMPANY LLC

 

DECORDOVA POWER COMPANY LLC

 

DECORDOVA II POWER COMPANY LLC

 

EAGLE MOUNTAIN POWER COMPANY LLC

 

GENERATION MT COMPANY LLC

 

GENERATION SVC COMPANY

 

LAKE CREEK 3 POWER COMPANY LLC

 

LUMINANT BIG BROWN MINING COMPANY LLC

 

LUMINANT ENERGY COMPANY LLC

 

LUMINANT ENERGY TRADING CALIFORNIA COMPANY

 

LUMINANT ET SERVICES COMPANY

 

LUMINANT GENERATION COMPANY LLC

 

LUMINANT HOLDING COMPANY LLC

 

LUMINANT MINERAL DEVELOPMENT COMPANY LLC

 

LUMINANT MINING COMPANY LLC

 

LUMINANT RENEWABLES COMPANY LLC

 

MARTIN LAKE 4 POWER COMPANY LLC

 

MONTICELLO 4 POWER COMPANY LLC

 

MORGAN CREEK 7 POWER COMPANY

 

NCA RESOURCES DEVELOPMENT COMPANY LLC

 

OAK GROVE MANAGEMENT COMPANY LLC

 

OAK GROVE MINING COMPANY LLC

 

OAK GROVE POWER COMPANY LLC

 

SANDOW POWER COMPANY LLC

TCEH FINANCE, INC.

 

TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC

 

TRADINGHOUSE 3 & 4 POWER COMPANY LLC

 

TRADINGHOUSE POWER COMPANY LLC

 

TXU ENERGY RETAIL COMPANY LLC

 

TXU ENERGY SOLUTIONS COMPANY LLC

 

TXU RETAIL SERVICES COMPANY

 

TXU SEM COMPANY

 

VALLEY NG POWER COMPANY LLC

 

VALLEY POWER COMPANY LLC,

each as a Guarantor

By:       Name:   Title:

[Signature Page to Guarantee]

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CITIBANK, N.A.,

as Collateral Agent

By:  

 

  Name:   Title:

[Signature Page to Guarantee]

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ANNEX A TO

THE GUARANTEE

SUPPLEMENT NO. [    ] dated as of [            ] to the GUARANTEE (this
“Supplement”) dated as of [    ], 20[    ], among each of the Guarantors listed
on the signature pages thereto (each such Affiliate individually, a “Guarantor”
and, collectively, the “Guarantors”), and [    ], as Collateral Agent for the
benefit of the Secured Parties.

A. Reference is made to the DIP Credit Agreement, dated as of May 5, 2014 (as
amended, restated, supplemented or otherwise modified from time to time, the
“DIP Credit Agreement”) among Energy Future Competitive Holdings Company LLC, a
Texas limited liability company (“Parent Guarantor”), Texas Competitive Electric
Holdings Company LLC, a Delaware limited liability company (the “Company”), the
lending institutions from time to time party thereto (the “Lenders”), [    ], as
Administrative Agent, the Collateral Agent, and the other agents and entities
from time to time party thereto.

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Guarantee or the DIP Credit Agreement, as
applicable.

C. The Guarantors have entered into the Guarantee in order to induce the
Administrative Agent, the Collateral Agent, the Lenders and the Letter of Credit
Issuers to enter into the DIP Credit Agreement and to induce the Lenders and the
Letter of Credit Issuers make their respective Lender Extensions of Credit to
the Company under the DIP Credit Agreement and to induce one or more Cash
Management Banks or Hedge Banks to enter into Secured Cash Management
Agreements, Secured Hedging Agreements and Secured Commodity Hedging Agreements.

D. Section 9.11 of the DIP Credit Agreement and Section 20 of the Guarantee
provide that additional Subsidiaries may become Guarantors under the Guarantee
by execution and delivery of an instrument in the form of this Supplement. Each
undersigned Subsidiary (each a “New Guarantor”) is executing this Supplement in
accordance with the requirements of the DIP Credit Agreement to become a
Guarantor under the Guarantee in order to induce the Lenders and the Letter of
Credit Issuer to make additional Lender Extensions of Credit, and to induce one
or more Cash Management Banks or Hedge Banks to enter into Secured Cash
Management Agreements, Secured Hedging Agreements and Secured Commodity Hedging
Agreements, and as consideration for Lender Extensions of Credit previously
made.

Accordingly, the Collateral Agent and each New Guarantor agree as follows:

SECTION 1. In accordance with Section 20 of the Guarantee, each New Guarantor by
its signature below becomes a Guarantor under the Guarantee with the same force
and effect as if originally named therein as a Guarantor and each New Guarantor
hereby (a) agrees to all the terms and provisions of the Guarantee applicable to
it as a Guarantor thereunder and (b) represents and warrants that the
representations and warranties made by it as a Guarantor thereunder are true and
correct on and as of the date hereof (or, where such representations and
warranties expressly relate to an earlier date, as of such earlier date). Each
reference to a Guarantor in the Guarantee shall be deemed to include each New
Guarantor. The Guarantee is hereby incorporated herein by reference.

SECTION 2. Each New Guarantor represents and warrants to the Collateral Agent
and the other Secured Parties that this Supplement, subject to the Interim Order
and (when applicable) the Final Order, has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization and similar laws
related to or affecting creditors’ rights generally and general principles of
equity (whether considered in a proceeding in equity or law).

 

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SECTION 3. This Supplement may be executed by one or more of the parties to this
Supplement on any number of separate counterparts (including by facsimile or
other electronic transmission), and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. A set of the copies
of this Supplement signed by all the parties shall be lodged with the Company
and the Collateral Agent. This Supplement shall become effective as to each New
Guarantor when the Collateral Agent shall have received counterparts of this
Supplement that, when taken together, bear the signatures of such New Guarantor
and the Collateral Agent.

SECTION 4. Except as expressly supplemented hereby, the Guarantee shall remain
in full force and effect.

SECTION 5. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK AND, TO THE EXTENT APPLICABLE, THE
BANKRUPTCY CODE.

SECTION 6. Any provision of this Supplement that 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 in the Guarantee, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

SECTION 7. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 13.2 of the DIP Credit Agreement. All communications and
notices hereunder to each New Guarantor shall be given to it in care of the
Company at the Company’s address set forth in Section 13.2 of the DIP Credit
Agreement.

[SIGNATURE PAGES FOLLOW]

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

IN WITNESS WHEREOF, each New Guarantor and the Collateral Agent have duly
executed this Supplement to the Guarantee as of the day and year first above
written.

 

[    ],

as a New Guarantor

By:  

 

  Name:   Title:

 

[    ],

as Collateral Agent

By:  

 

  Name:   Title:

Signature Page to

Supplement No. [    ] to Guarantee

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EXHIBIT C

TO THE CREDIT AGREEMENT

FORM OF BUDGET NOTICE

[            ], 201[    ]

Reference is hereby made to the Senior Secured Superpriority
Debtor-in-Possession Credit Agreement dated as of May [    ], 2014 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Energy Future Competitive Holdings Company LLC, a Delaware
limited liability company, Texas Competitive Electric Holdings Company LLC, a
Delaware limited liability company (the “Borrower”), the lending institutions
from time to time parties thereto (each a “Lender” and, collectively, the
“Lenders”), Citibank, N.A., as Administrative Agent and Collateral Agent and
each other Agent party thereto. Terms used but not defined herein shall have the
meanings given to such terms in the Credit Agreement.

The undersigned, as an Authorized Officer of the Borrower, certifies that the
[Budget] [Annual Operating Forecast] attached hereto as Exhibit I was reasonable
when made.

 

TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC By:    

Name:

 

Title:

 

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

Exhibit I

[Budget] [Annual Operating Forecast]

See attached.

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EXHIBIT D

TO THE CREDIT AGREEMENT

RESERVED

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

EXHIBIT E

TO THE CREDIT AGREEMENT

RESERVED

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

EXHIBIT F

TO THE CREDIT AGREEMENT

FORM OF SECURITY AGREEMENT

[See attached]

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

EXECUTION VERSION

SECURITY AGREEMENT

THIS SECURITY AGREEMENT, dated as of May 5, 2014, among Energy Future
Competitive Holdings Company LLC, a Texas limited liability company (“Parent
Guarantor”), Texas Competitive Electric Holdings Company LLC, a Delaware limited
liability company (the “Borrower”), each of the Subsidiaries of the Borrower
listed on the signature pages hereto or that becomes a party hereto pursuant to
Section 8.13 (each such entity being a “Subsidiary Grantor” and, collectively,
the “Subsidiary Grantors”; the Subsidiary Grantors, Parent Guarantor and the
Borrower are referred to collectively as the “Grantors”), each a debtor and
debtor-in-possession under Chapter 11 of the Bankruptcy Code, and Citibank,
N.A., as Collateral Agent (in such capacity, the “Collateral Agent”) under the
DIP Credit Agreement (as defined below) for the benefit of the Secured Parties
(as defined below).

W I T N E S S E T H:

WHEREAS, the Borrower is party to the Senior Secured Superpriority
Debtor-in-Possession Credit Agreement, dated as of May 5, 2014 (as amended,
restated, supplemented or otherwise modified from time to time, the “DIP Credit
Agreement”), among Parent Guarantor, the Borrower, the financial institutions
from time to time party thereto as lenders (the “Lenders”), Citibank, N.A., as
Administrative Agent, the Collateral Agent, and the other agents and entities
from time to time party thereto;

WHEREAS, it is a condition precedent to the making of the Loans and other
financial accommodations described in the DIP Credit Agreement (collectively,
“Extensions of Credit”) that the Grantors shall have granted a security
interest, pledge and Lien on the Collateral (as defined below) as more fully set
forth in the Orders;

WHEREAS, the grant of such security interest, pledge and Lien has been
authorized pursuant to Sections 364(c)(2), 364(c)(3) and 364(d)(1) of the
Bankruptcy Code by the Interim Order and (after its entry by the Bankruptcy
Court) will have been authorized by the Final Order;

WHEREAS, to supplement the Interim Order and (when applicable) the Final Order
without in any way diminishing or limiting the effect of the Interim Order and
(when applicable) the Final Order or the security interest, pledge and Lien
granted thereunder, the parties hereto desire to more fully set forth their
respective rights in connection with such security interest, pledge and Lien;

WHEREAS, this Security Agreement has been approved by the Interim Order and
(after its entry by the Bankruptcy Court) will have been approved by the Final
Order;

WHEREAS, pursuant to the Orders certain permitted commodity hedging obligations
shall be secured on a pari passu basis with the other Secured Obligations (as
defined below); and

NOW, THEREFORE, in consideration of the premises and agreements set forth herein
and to induce the Administrative Agent, the Collateral Agent, the Lenders and
the Letter of Credit Issuers to enter into the DIP Credit Agreement and to
induce the Lenders and the Letter of Credit Issuers to make their respective
Extensions of Credit (including, for the avoidance of doubt, the issuance of
Letters of Credit and making of Loans under the Incremental Facilities) to the
Borrower under the DIP Credit Agreement, to induce each Cash Management Bank to
enter into Secured Cash Management Agreements and to induce each Hedge Bank to
enter into Secured Hedging Agreements and/or Secured Commodity Hedging
Agreements with Parent Guarantor, the Borrower and/or its Subsidiaries, the
Grantors hereby agree with the Collateral Agent, for the benefit of the Secured
Parties, as follows:

 

-1-

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1. Defined Terms.

(a) Unless otherwise defined herein, terms defined in the DIP Credit Agreement
and used herein shall have the meanings given to them in the DIP Credit
Agreement.

(b) Terms used herein without definition that are defined in the UCC have the
meanings given to them in the UCC, including the following terms (which are
capitalized herein): Account, As-Extracted Collateral, Certificated Securities,
Chattel Paper, Commercial Tort Claim, Commodity Account, Commodity Contract,
Documents, Fixtures, Instruments, Letter-of-Credit Right, Securities, Securities
Account, Security Entitlement and Tangible Chattel Paper.

(c) The following terms shall have the following meanings:

“Accession Agreement” means an Accession Agreement substantially in the form of
Annex B to this Agreement.

“Bundled Payment” shall mean an amount paid or payable by an obligor to a
Grantor pursuant to a bundled bill, which amount includes both (a) Excluded
Property under clauses (a) or (c) (or both such clauses) of the definition of
such term, and (b) other amounts.

“Bundled Payment Amount” shall mean amounts paid or payable to any Grantor and
described in clause (b) of the definition of Bundled Payment.

“Collateral” shall have the meaning provided in Section 2(a).

“Collateral Account” shall mean any collateral account established by the
Collateral Agent as provided in Section 5.1 or Section 5.3.

“Collateral Agent” shall have the meaning provided in the preamble to this
Security Agreement.

“Copyright License” shall mean any written agreement, now or hereafter in
effect, granting any right to any third party under any copyright now or
hereafter owned by any Grantor (including all Copyrights) or that any Grantor
otherwise has the right to license, or granting any right to any Grantor under
any copyright now or hereafter owned by any third party, and all rights of any
Grantor under any such agreement.

“copyrights” shall mean, with respect to any Person, all of the following now
owned or hereafter acquired by such Person: (i) all copyright rights in any work
subject to the copyright laws of the United States or any other country, whether
as author, assignee, transferee or otherwise, and (ii) all registrations and
applications for registration of any such copyright in the United States or any
other country, including registrations, recordings, supplemental registrations
and pending applications for registration in the United States Copyright Office.

“Copyrights” shall mean all copyrights now owned or hereafter acquired by any
Grantor.

 

-2-

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“equipment” shall mean all “equipment,” as such term is defined in Article 9 of
the UCC, now or hereafter owned by any Grantor or to which any Grantor has
rights and, in any event, shall include all machinery, equipment, furnishings,
movable trade fixtures and vehicles now or hereafter owned by any Grantor or to
which any Grantor has rights and any and all Proceeds, additions, substitutions
and replacements of any of the foregoing, wherever located, together with all
attachments, components, parts, equipment and accessories installed thereon or
affixed thereto; but excluding equipment to the extent it is subject to a Lien,
in each case permitted by the DIP Credit Agreement and the terms of the
Indebtedness secured by such Lien prohibit assignment of, or granting of a
security interest in, such Grantor’s rights and interests therein (other than to
the extent that any such prohibition would be rendered ineffective pursuant to
Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law), provided,
that immediately upon the repayment of all Indebtedness secured by such Lien,
such Grantor shall be deemed to have granted a Security Interest in all the
rights and interests with respect to such equipment.

“Extensions of Credit” shall have the meaning assigned to such term in the
recitals hereto.

“Financing Documents” means, collectively (without duplication), each Credit
Document, each Secured Commodity Hedging Agreement, each Secured Hedging
Agreement, each Secured Cash Management Agreement and any other agreement,
document or instrument providing for or evidencing any Secured Obligations.

“Grantor” shall have the meaning assigned to such term in the recitals hereto.

“Intellectual Property” shall mean all of the following now owned or hereafter
acquired by any Grantor: (A) all Copyrights, Trademarks and Patents, and (B) all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise now
owned or hereafter acquired, including (a) all information used or useful
arising from the business including all goodwill, trade secrets, trade secret
rights, know-how, customer lists, processes of production, ideas, confidential
business information, techniques, processes, formulas and all other proprietary
information, and (b) rights, priorities and privileges relating to the
Copyrights, the Patents, the Trademarks and the Licenses and all rights to sue
at law or in equity for any infringement or other impairment thereof, including
the right to receive all proceeds and damages therefrom, in each case to the
extent the grant by such Grantor of a Security Interest pursuant to this
Security Agreement in any such rights, priorities and privileges relating to
intellectual property (i) is not prohibited by any contract, agreement or other
instrument governing such rights, priorities and privileges without the consent
of any other party thereto (other than a Credit Party), (ii) would not give any
other party (other than a Credit Party) to any such contract, agreement or other
instrument the right to terminate its obligations thereunder or (iii) is
permitted with consent if all necessary consents to such grant of a Security
Interest have been obtained from the relevant parties (other than to the extent
that any such prohibition referred to in clauses (i), (ii) and (iii) would be
rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the
UCC (or any successor provision or provisions) of any relevant jurisdiction or
any other applicable law) (it being understood that the foregoing shall not be
deemed to obligate such Grantor to obtain such consents).

“License” shall mean any Patent License, Trademark License, Copyright License or
other license or sublicense to which any Grantor is a party.

“Patent License” shall mean any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a patent, now or hereafter owned by any Grantor (including all Patents) or
that any Grantor otherwise has the right to license, is in existence, or
granting to any Grantor any right to make, use or sell any invention on which a
patent, now or hereafter owned by any third party, is in existence, and all
rights of any Grantor under any such agreement.

 

-3-

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“patents” shall mean, with respect to any Person, all of the following now owned
or hereafter acquired by such Person: (a) all letters patent of the United
States or the equivalent thereof in any other country, all registrations and
recordings thereof, and all applications for letters patent of the United States
or the equivalent thereof in any other country, including registrations,
recordings and pending applications in the United States Patent and Trademark
Office or any similar offices in any other country, and (b) all reissues,
continuations, divisions, continuations-in-part, renewals or extensions thereof,
and the inventions disclosed or claimed therein, including the right to make,
use and/or sell the inventions disclosed or claimed therein.

“Patents” shall mean all patents now owned or hereafter acquired by any Grantor.

“Proceeds” shall mean all “proceeds” as such term is defined in Article 9 of the
UCC and, in any event, shall include with respect to any Grantor, any
consideration received from the sale, exchange, license, lease or other
disposition of any asset or property that constitutes Collateral, any value
received as a consequence of the possession of any Collateral and any payment
received from any insurer or other Person or entity as a result of the
destruction, loss, theft, damage or other involuntary conversion of whatever
nature of any asset or property that constitutes Collateral, and shall include
(a) all cash and negotiable instruments received by or held on behalf of the
Collateral Agent, (b) any claim of any Grantor against any third party for (and
the right to sue and recover for and the rights to damages or profits due or
accrued arising out of or in connection with) (i) past, present or future
infringement of any Patent now or hereafter owned by any Grantor, or licensed
under a Patent License, (ii) past, present or future infringement or dilution of
any Trademark now or hereafter owned by any Grantor or licensed under a
Trademark License or injury to the goodwill associated with or symbolized by any
Trademark now or hereafter owned by any Grantor, (iii) past, present or future
breach of any License and (iv) past, present or future infringement of any
Copyright now or hereafter owned by any Grantor or licensed under a Copyright
License and (c) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.

“Secured Obligations” shall mean the “Obligations” as defined in the DIP Credit
Agreement.

“Security Agreement” shall mean this Security Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.

“Security Interest” shall have the meaning provided in Section 2(a).

“Subject Accounts” shall have the meaning provided in Section 5.1(a).

“Trademark License” shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to use any trademark now or
hereafter owned by any Grantor (including any Trademark) or that any Grantor
otherwise has the right to license, or granting to any Grantor any right to use
any trademark now or hereafter owned by any third party, and all rights of any
Grantor under any such agreement.

“trademarks” shall mean, with respect to any Person, all of the following now
owned or hereafter acquired by such Person: (i) all trademarks, service marks,
trade names, corporate names, company names, business names, fictitious business
names, trade styles, trade dress, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter
adopted or

 

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acquired, all registrations and recordings thereof (if any), and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and
Trademark Office or any similar offices in any State of the United States or any
other country or any political subdivision thereof, and all extensions or
renewals thereof, (ii) all goodwill associated therewith or symbolized thereby
and (iii) all other assets, rights and interests that uniquely reflect or embody
such goodwill.

“Trademarks” shall mean all trademarks now owned or hereafter acquired by any
Grantor; provided that any United States “intent to use” trademark applications
for which a “statement of use” or “amendment to allege use” has not been filed
and accepted in the United States Patent and Trademark Office (but only until
such statement is filed and accepted), or to the extent that, and solely during
the period in which, the grant of a security interest therein would impair the
validity or enforceability of such intent-to-use trademark applications under
applicable United States federal law, are excluded from this definition.

“UCC” shall mean the Uniform Commercial Code as from time to time in effect in
the State of New York; provided, however, that, in the event that, by reason of
mandatory provisions of law, any of the attachment, perfection or priority of
the Collateral Agent’s and the Secured Parties’ security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term “UCC” shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.

(d) The words “hereof”, “herein”, “hereto” and “hereunder” and words of similar
import when used in this Security Agreement shall refer to this Security
Agreement as a whole and not to any particular provision of this Security
Agreement, and Section, subsection, clause and Schedule references are to this
Security Agreement unless otherwise specified. The words “include”, “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation”.

(e) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

(f) Where the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Grantor, shall refer to such Grantor’s
Collateral or the relevant part thereof.

(g) References to “Lenders” in this Security Agreement shall be deemed to
include Cash Management Banks and Hedge Banks.

2. Grant of Security Interest.

(a) Collateral; Grant of Lien and Security Interest.

(i) Pursuant to the Interim Order and (when applicable) the Final Order and in
accordance with the terms thereof (and subject to the terms and conditions set
forth therein), as security for the prompt and complete payment and performance
when due (whether at the stated maturity, by acceleration, or otherwise) of the
Obligations, each Grantor hereby assigns, pledges, and grants to the Collateral
Agent, for the benefit of the Secured Parties (subject, in each case, to the
Carve Out and the RCT Reclamation Support Carve Out):

 

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(A) a fully-perfected first priority senior security interest in and Lien upon,
pursuant to section 364(c)(2) of the Bankruptcy Code, all prepetition and
postpetition property of such Grantor, whether existing on the Petition Date or
thereafter acquired that, on or as of the Petition Date, is not subject to
valid, perfected, and non-avoidable Liens, including, without limitation, all
real and personal property, inventory, plant, fixtures, machinery, equipment,
the RCT L/C Collateral Accounts, the General L/C Collateral Accounts, cash, any
investment of such cash, accounts receivable, other rights to payment whether
arising before or after the Petition Date (including, without limitation,
post-petition intercompany claims of such Grantor), deposit accounts, investment
property, supporting obligations, minerals, oil, gas, and as-extracted
collateral, causes of action (including those arising under section 549 of the
Bankruptcy Code and any related action under section 550 of the Bankruptcy
Code), royalty interests, chattel paper, contracts, general intangibles,
documents, instruments, interests in leaseholds, letter of credit rights,
patents, copyrights, trademarks, trade names, other intellectual property, Stock
and Stock Equivalents of Subsidiaries, books and records pertaining to the
foregoing, and to the extent not otherwise included, all proceeds, products,
offspring, and profits of any and all of the foregoing (the “Unencumbered
Property”); provided that the Unencumbered Property shall exclude the Grantors’
Avoidance Actions, but subject only to, and effective upon, entry of the Final
Order, shall include any proceeds or property recovered, unencumbered, or
otherwise the subject of successful Avoidance Actions, whether by judgment,
settlement, or otherwise;

(B) a fully-perfected first priority senior priming security interest in and
Lien upon, pursuant to section 364(d)(1) of the Bankruptcy Code, all prepetition
and postpetition property of such Grantor, whether existing on the Petition Date
or thereafter acquired, that is subject to valid, perfected, and non-avoidable
Liens currently held by any of the Prepetition Secured Creditors (as defined in
the Interim Cash Collateral Order and (when applicable) the Final Cash
Collateral Order), excluding the “Deposit L/C Loan Collateral Account” to the
extent of the “Deposit L/C Obligations” (each as defined in the Prepetition
Credit Agreement); provided that such security interests and Liens shall be
senior in all respects to the interests in such property of any of the
Prepetition Secured Creditors arising from current and future Liens of any of
the Prepetition Secured Creditors (including, without limitation, Adequate
Protection Liens) (as defined in the Interim Cash Collateral Order and (when
applicable) the Final Cash Collateral Order), but shall not be senior to any
valid, perfected, and non-avoidable interests of other parties arising out of
Liens, if any, on such property existing immediately prior to the Petition Date,
including the liens securing the Tex-La Indebtedness, or to any valid,
perfected, and non-avoidable interests in such property arising out of Liens to
which the Liens of any of the Prepetition Secured Creditors become subject
subsequent to the Petition Date as permitted by section 546(b) of the Bankruptcy
Code; and

(C) a fully-perfected junior security interest in and Lien upon, pursuant to
section 364(c)(3) of the Bankruptcy Code, all prepetition and postpetition
property of such Grantor (other than the property described in clauses (A) and
(B) of this Section 14.1(a)(i), as to which the Liens and security interests in
favor of the Collateral Agent, for the benefit of the Secured Parties, will be
as described in such clauses), whether existing on the Petition Date or
thereafter acquired, that is subject to valid, perfected, and non-avoidable
Liens in existence immediately prior to the Petition Date, or to any valid and
non-avoidable Liens in existence immediately prior to the Petition Date that are
perfected subsequent to the Petition Date as permitted by section 546(b) of the
Bankruptcy Code (in each case, other than the Adequate Protection Liens (as
defined in the Interim Cash Collateral Order and (when applicable) the Final
Cash Collateral Order));

 

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collectively, the “Collateral” and such security interest, the “Security
Interest”; provided, that notwithstanding anything to the contrary in this
Security Agreement, the Collateral (and each defined term used therein) shall
exclude Excluded Collateral.

(ii) The Security Interest and Liens in favor of the Collateral Agent in the
Collateral shall be effective immediately upon the entry of the Interim Order
and subject, only in the event of the occurrence and during the continuance of
an Event of Default, to the Carve Out, the RCT Reclamation Support Carve Out and
the terms and conditions set forth in the Interim Order and (when applicable)
the Final Order. Such Liens and security interests and their priority shall
remain in effect until the Obligations (except for Hedging Obligations in
respect of any Secured Hedging Agreement and/or any Secured Commodity Hedging
Agreement, Cash Management Obligations in respect of Secured Cash Management
Agreements and Contingent Obligations) have been indefeasibly paid in full, in
cash, all Commitments have been terminated, and all Letters of Credit have been
cancelled (or all such Letters of Credit have been fully cash collateralized or
otherwise back-stopped, in each case to the satisfaction of the applicable
Letter of Credit Issuers).

(iii) Subject only to the prior payment of the Carve Out and the RCT Reclamation
Support Carve Out, no costs or expenses of administration which have been or may
be incurred in the Cases or any Successor Cases (as defined in the Orders) or in
any other proceedings related thereto, and no priority claims, are or will be
senior to, or pari passu with, any claim of any Secured Party or the Collateral
Agent against any Grantor.

(b) Administrative Priority. Each Grantor agrees that its Obligations shall,
pursuant to section 364(c)(1) of the Bankruptcy Code, constitute allowed
superpriority administrative expense claims in the Cases or any Successor Cases,
ranking on a parity with each other and having priority over all administrative
expense claims, diminution claims, unsecured claims, and all other claims
against the TCEH Debtors or their estates in any of the Cases and any Successor
Cases, existing on the Petition Date or thereafter, of any kind or nature
whatsoever, including, without limitation, all administrative expenses of the
kinds specified in, or ordered pursuant to, sections 105, 326, 328, 330, 331,
365, 503(a), 503(b), 506(c) (subject only to, and upon entry of, the Final
Order), 507(a), 507(b), 546(c), 546(d), 726, 1113, and 1114 of the Bankruptcy
Code, and any other provision of the Bankruptcy Code, subject only to the Carve
Out and the RCT Reclamation Support Carve Out, to the extent specifically
provided for in the Interim Order and (when applicable) the Final Order.

(c) Grants, Rights and Remedies. The Liens and Security Interest granted
pursuant to this Security Agreement and the administrative priority granted
pursuant to Section 2(a) hereof may be independently granted by the Credit
Documents and by other Credit Documents hereafter entered into. This Security
Agreement, the Interim Order and (when applicable) the Final Order, and such
other Credit Documents supplement each other, and the grants, priorities,
rights, and remedies of the Agents and the Secured Parties hereunder and
thereunder are cumulative.

(d) No Filings Required. The Liens and Security Interest referred to in this
Section 2 shall be deemed valid and perfected by entry of the Interim Order and
(when applicable) the Final Order, and entry of the Interim Order shall have
occurred on or before any Loan is made during the Interim Period and entry of
the Final Order shall have occurred on or before any Loan is made after the
Interim Period. The Collateral Agent shall not be required to file or record any
financing statements, patent filings, trademark filings, mortgages, notices of
Lien, or other instrument or document in any jurisdiction or filing office, take
possession or control of any Collateral, or take any other action in order to
validate or perfect the Liens and security interests granted by or pursuant to
this Security Agreement, the Interim Order or (when applicable) the Final Order
or any other Credit Document.

 

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(e) Survival. The Liens, lien priority, administrative priorities and other
rights and remedies granted to the Collateral Agent and the Secured Parties
pursuant to this Security Agreement, the Interim Order and (when applicable) the
Final Order, and the other Credit Documents (specifically including, but not
limited to, the existence, perfection and priority of the Liens and security
interests provided herein and therein, and the administrative priority provided
herein and therein) shall not be modified, altered, or impaired in any manner by
any other financing or extension of credit or incurrence of Indebtedness by the
TCEH Debtors (pursuant to section 364 of the Bankruptcy Code or otherwise), or
by any dismissal or conversion of any of the Cases, or by any other act or
omission whatsoever. Without limitation, notwithstanding any such order,
financing, extension, incurrence, dismissal, conversion, act or omission:

(i) except to the extent of the Carve Out or the RCT Reclamation Support Carve
Out, no fees, charges, disbursements, costs or expenses of administration which
have been or may be incurred in the Cases or any Successor Cases, or in any
other proceedings related thereto, and no priority claims, are or will be
superior to or pari passu with any claim of the Collateral Agent and the Secured
Parties against the TCEH Debtors;

(ii) subject to the Carve Out and the RCT Reclamation Support Carve Out and
subject to the terms of the Interim Order and (when applicable) the Final Order,
the Liens in favor of the Collateral Agent and the Secured Parties set forth in
Section 2(a) hereof shall constitute valid and perfected first priority Liens
and security interests, and shall be superior to all other Liens and security
interests, existing as of the Petition Date or thereafter arising, in favor of
any other creditor or any other Person whatsoever (subject to Permitted Liens);
and

(iii) the Liens in favor of the Collateral Agent and the Secured Parties set
forth herein and in the other Credit Documents shall continue to be valid and
perfected without the necessity that the Collateral Agent files financing
statements or mortgages, takes possession or control of any Collateral, or
otherwise perfects its Lien under applicable non-bankruptcy law.

3. Representations and Warranties.

Each Grantor hereby represents and warrants to the Collateral Agent and each
Secured Party that:

3.1 Title; No Other Liens. Except for (a) the Security Interest granted to the
Collateral Agent for the benefit of the Secured Parties pursuant to this
Security Agreement, (b) the Liens created by the Interim Order and (when
applicable) the Final Order, (c) the Liens permitted under the DIP Credit
Agreement and (d) any Liens securing Indebtedness which is no longer outstanding
or any Liens with respect to commitments to lend which have been terminated,
such Grantor owns each item of the Collateral free and clear of any and all
Liens. For the avoidance of doubt, any reference herein to Liens permitted to be
outstanding shall mean only Liens permitted to be outstanding under the DIP
Credit Agreement, the Interim Order and/or (when applicable) the Final Order.

3.2 [Reserved].

4. Covenants.

 

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Each Grantor hereby covenants and agrees with the Collateral Agent and the
Secured Parties that, from and after the date of this Security Agreement until
the Obligations (except for Hedging Obligations in respect of any Secured
Hedging Agreement and/or any Secured Commodity Hedging Agreement, Cash
Management Obligations in respect of Secured Cash Management Agreements and
Contingent Obligations) have been indefeasibly paid in full, in cash, all
Commitments have been terminated, and all Letters of Credit have been cancelled
(or all such Letters of Credit have been fully cash collateralized or otherwise
back-stopped, in each case to the satisfaction of the applicable Letter of
Credit Issuers):

4.1 Maintenance of Perfected Security Interest; Further Documentation.

(a) Subject to the Initial Order and (when applicable) the Final Order, such
Grantor shall maintain the Security Interest created by this Security Agreement
as a perfected Security Interest having at least the priority described in
Section 3.1 and shall defend such Security Interest against the claims and
demands of all Persons whomsoever, in each case subject to Section 3.2(c).

(b) Such Grantor will furnish (without further order of the Bankruptcy Court) to
the Collateral Agent, the Lenders and any other Secured Parties from time to
time statements and schedules further identifying and describing the assets and
property of such Grantor and such other reports in connection therewith as the
Collateral Agent may reasonably request.

(c) Subject to clause (d) below, each Grantor agrees that at any time and from
time to time, at the expense of such Grantor, it will execute any and all
further documents, financing statements, agreements and instruments, and take
all such further actions (including the filing and recording of financing
statements and other documents which may be required under any applicable law,
or which the Collateral Agent or the Administrative Agent may reasonably
request, in order (i) to grant, preserve, protect and perfect the validity and
priority of the Security Interests created or intended to be created hereby or
(ii) to enable the Collateral Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral, including the filing of any
financing or continuation statements under the Uniform Commercial Code in effect
in any jurisdiction with respect to the Security Interests created hereby, all
at the expense of such Grantor.

(d) Notwithstanding anything in this Section 4.1 to the contrary and subject to
the terms and conditions of the Interim Order and (when applicable) the Final
Order, (i) with respect to any assets acquired by such Grantor after the date
hereof that are required by the DIP Credit Agreement to be subject to the Lien
created hereby or (ii) with respect to any Person that, subsequent to the date
hereof, becomes a Domestic Subsidiary that is required by the DIP Credit
Agreement to become a party hereto, the relevant Grantor after the acquisition
or creation thereof shall promptly take (without further order of the Bankruptcy
Court), all actions required by the DIP Credit Agreement or this Section 4.1.

4.2 Changes in Locations, Name, etc. Each Grantor will furnish (without further
order of the Bankruptcy Court), to the Collateral Agent promptly (and in any
event within 30 days of such change) a written notice of any change (i) in its
legal name, (ii) in its jurisdiction of organization or location for purposes of
the UCC, (iii) in its identity or type of organization or corporate structure or
(iv) in its Federal Taxpayer Identification Number or organizational
identification number. Each Grantor agrees promptly to provide the Collateral
Agent with certified organizational documents reflecting any of the changes
described in the first sentence of this paragraph.

4.3 Notices. Each Grantor will advise the Collateral Agent and the Lenders
promptly, in reasonable detail, of any Lien of which it has knowledge (other
than the Security Interests created hereby or pursuant to the Interim Order or
(when applicable) the Final Order or Liens permitted under the DIP Credit
Agreement, the Interim Order or (when applicable) the Final Order) on any of the
Collateral which would adversely affect, in any material respect, the ability of
the Collateral Agent to exercise any of its remedies hereunder

 

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4.4 Bundled Payments. From and after the date hereof, no Grantor shall voluntary
include Bundled Payment Amounts in a bundled bill.

5. Remedial Provisions.

5.1 Certain Matters Relating to Accounts.

(a) At any time after the occurrence and during the continuance of an Event of
Default and after giving reasonable written notice to the Borrower and any other
relevant Grantor (and subject in any event to the terms and conditions of the
Orders), the Administrative Agent shall have the right, but not the obligation,
to instruct the Collateral Agent to (and upon such instruction, the Collateral
Agent shall) make test verifications of the Accounts that are Collateral (the
“Subject Accounts”) in any manner and through any medium that the Administrative
Agent reasonably considers advisable, and each Grantor shall furnish all such
assistance and information as the Administrative Agent may require in connection
with such test verifications. The Administrative Agent shall have the absolute
right to share any information it gains from such inspection or verification
with any Secured Party.

(b) The Collateral Agent hereby authorizes each Grantor to collect such
Grantor’s Subject Accounts and the Collateral Agent may (subject in any event to
the terms and conditions of the Orders) curtail or terminate said authority at
any time after the occurrence and during the continuance of an Event of Default.
If required in writing by the Collateral Agent at any time after the occurrence
and during the continuance of an Event of Default (and subject in any event to
the terms and conditions of the Order), any payments of Subject Accounts, when
collected by any Grantor, (i) shall be forthwith (and, in any event, within two
Business Days) deposited by such Grantor in the exact form received, duly
endorsed by such Grantor to the Collateral Agent if required, in a Collateral
Account maintained under the sole dominion and control of and on terms and
conditions reasonably satisfactory to the Collateral Agent, subject to
withdrawal by the Collateral Agent for the account of the Secured Parties only
as provided in Section 5.5, and (ii) until so turned over, shall be held by such
Grantor in trust for the Collateral Agent and the Secured Parties, segregated
from other funds of such Grantor. Each such deposit of Proceeds of Subject
Accounts shall be accompanied by a report identifying in reasonable detail the
nature and source of the payments included in the deposit.

(c) At the Collateral Agent’s written request (and subject in any event to the
terms and conditions of the Orders) at any time after the occurrence and during
the continuance of an Event of Default (and subject in any event to the terms
and conditions of the Orders), each Grantor shall deliver to the Collateral
Agent all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to the Subject Accounts, including
all original orders, invoices and shipping receipts.

(d) Upon the occurrence and during the continuance of an Event of Default (and
subject in any event to the terms and conditions of the Orders), a Grantor shall
not grant any extension of the time of payment of any of the Subject Accounts,
compromise, compound or settle the same for less than the full amount thereof,
release, wholly or partly, any Person liable for the payment thereof, or allow
any credit or discount whatsoever thereon if the Collateral Agent shall have
instructed the such Grantor in writing not to grant or make any such extension,
credit, discount, compromise or settlement under any circumstances during the
continuance of such Event of Default.

 

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(e) At the direction of the Collateral Agent, upon the occurrence and during the
continuance of an Event of Default (and subject in any event to the terms and
conditions of the Orders), each Grantor shall grant to the Collateral Agent to
the extent assignable, an irrevocable, non-exclusive, fully paid-up,
royalty-free, worldwide license to use, assign, license or sublicense any of the
Intellectual Property now owned or hereafter acquired by such Grantor. Such
license shall include access to all media in which any of the licensed items may
be recorded or stored and to all computer programs used for the compilation of
printout thereof.

5.2 Communications with Credit Parties; Grantors Remain Liable.

(a) The Collateral Agent in its own name or in the name of others may at any
time after the occurrence and during the continuance of an Event of Default,
after giving reasonable written notice to the relevant Grantor of its intent to
do so, communicate with obligors under the Subject Accounts to verify with them
to the Collateral Agent’s satisfaction the existence, amount and terms of any
Subject Accounts. The Collateral Agent shall have the absolute right to share
any information it gains from such inspection or verification with any Secured
Party.

(b) Upon the written request of the Collateral Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Subject Accounts that the Subject Accounts have been
assigned to the Collateral Agent for the benefit of the Secured Parties and that
payments in respect thereof shall be made directly to the Collateral Agent.

(c) Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each of the Subject Accounts to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. Neither the
Collateral Agent nor any Secured Party shall have any obligation or liability
under any Subject Account (or any agreement giving rise thereto) by reason of or
arising out of this Security Agreement or the receipt by the Collateral Agent or
any Secured Party of any payment relating thereto, nor shall the Collateral
Agent or any Secured Party be obligated in any manner to perform any of the
obligations of any Grantor under or pursuant to any Subject Account (or any
agreement giving rise thereto), to make any payment, to make any inquiry as to
the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.

5.3 Proceeds to be Turned Over to Collateral Agent. In addition to the rights of
the Collateral Agent and the Secured Parties specified in Section 5.1 with
respect to payments of Subject Accounts, if an Event of Default shall occur and
be continuing and the Collateral Agent so requires by notice in writing to the
relevant Grantor (and subject in any event to the terms and conditions of the
Orders), all Proceeds received by any Grantor consisting of cash, checks and
other near-cash items shall be held (without further order of the Bankruptcy
Court) by such Grantor in trust for the Collateral Agent and the Secured
Parties, segregated from other funds of such Grantor, and shall, forthwith upon
receipt by such Grantor, be turned over to the Collateral Agent in the exact
form received by such Grantor (duly endorsed by such Grantor to the Collateral
Agent, if required). All Proceeds received by the Collateral Agent hereunder
shall be held by the Collateral Agent in a Collateral Account maintained under
its dominion and control and on terms and conditions reasonably satisfactory to
the Collateral Agent. All Proceeds while held by the Collateral Agent in a
Collateral Account (or by such Grantor in trust for the Collateral Agent and the
Secured Parties) shall continue to be held as collateral security for all the
Secured Obligations and shall not constitute payment thereof until applied as
provided in Section 5.4.

 

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5.4 Application of Proceeds. The Collateral Agent shall apply the proceeds of
any collection or sale of the Collateral as well as any Collateral consisting of
cash, at any time after receipt in the order specified in Section 5.2 of the DIP
Credit Agreement and in accordance with the Orders. Upon any sale of the
Collateral by the Collateral Agent (including pursuant to a power of sale
granted by statute or under a judicial proceeding), the receipt of the
Collateral Agent or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Collateral Agent or such officer or
be answerable in any way for the misapplication thereof.

5.5 Code and Other Remedies. If an Event of Default shall occur and be
continuing and following the giving of five (5) calendar days’ notice to the
Borrower (the “Remedies Notice Period”), and subject in any event to the terms
and conditions of the Orders, the Collateral Agent may exercise in respect of
the Collateral, in addition to all other rights and remedies provided for herein
or otherwise available to it and subject in any event to the terms and
conditions of the Orders, all the rights and remedies of a secured party upon
default under the UCC or any other applicable law and also may, with notice to
the relevant Grantor, sell the Collateral or any part thereof in one or more
parcels at one or more public or private sales, at any exchange, broker’s board
or office of the Collateral Agent or any Lender or elsewhere for cash or on
credit or for future delivery at such price or prices and upon such other terms
as are commercially reasonable irrespective of the impact of any such sales on
the market price of the Collateral. The Collateral Agent shall be authorized at
any such sale (if it deems it advisable to do so) to restrict the prospective
bidders or purchasers of Collateral to Persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and, upon consummation of any
such sale, the Collateral Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold. Each
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of any Grantor, and each Grantor hereby waives (to
the extent permitted by law) all rights of redemption, stay and/or appraisal
that it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. The Collateral Agent and any Secured
Party shall have the right upon any such public sale, and, to the extent
permitted by law, upon any such private sale, to purchase the whole or any part
of the Collateral so sold, and, subject to the terms of the DIP Credit
Agreement, the Collateral Agent or such Secured Party may pay the purchase price
by crediting the amount thereof against the Secured Obligations. Each Grantor
agrees that, to the extent notice of sale shall be required by law, at least ten
days’ notice to such Grantor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Collateral Agent
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. To the extent permitted
by law, each Grantor hereby waives any claim against the Collateral Agent
arising by reason of the fact that the price at which any Collateral may have
been sold at such a private sale was less than the price that might have been
obtained at a public sale, even if the Collateral Agent accepts the first offer
received and does not offer such Collateral to more than one offeree. Each
Grantor further agrees, at the Collateral Agent’s request to assemble the
Collateral and make it available to the Collateral Agent, at places which the
Collateral Agent shall reasonably select, whether at such Grantor’s premises or
elsewhere. The Collateral Agent shall apply the net proceeds of any action taken
by it pursuant to this Section 5.5 in accordance with the provisions of
Section 5.4.

5.6 Deficiency. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Secured Obligations and the reasonable and documented fees,
disbursements and other charges of one firm of counsel and, if necessary, one
firm of regulatory counsel and/or one firm of local counsel in each appropriate
jurisdiction, to the Administrative Agent and Collateral Agent (and, in the case
of an actual or perceived

 

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conflict of interest where the Person affected by such conflict informs the
Borrower of such conflict and thereafter, after receipt of the consent of the
Borrower (which consent shall not be unreasonably withheld or delayed), retains
its own counsel, of another firm of counsel for such affected Person) to collect
such deficiency.

5.7 Amendments, etc. with Respect to the Secured Obligations; Waiver of Rights.
Subject in any event to the terms and conditions of the Orders, each Grantor
shall remain obligated hereunder notwithstanding that, without any reservation
of rights against any Grantor and without notice to or further assent by any
Grantor, (a) any demand for payment of any of the Secured Obligations made by
the Collateral Agent or any other Secured Party may be rescinded by such party
and any of the Secured Obligations continued, (b) the Secured Obligations, or
the liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Collateral
Agent or any other Secured Party, (c) the DIP Credit Agreement, the other Credit
Documents, the Letters of Credit and any other documents executed and delivered
in connection therewith (including any Secured Cash Management Agreements,
Secured Hedging Agreements, and Secured Commodity Hedging Agreements) and any
other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Administrative
Agent (or the Required Lenders, as the case may be, or, in the case of any
Secured Cash Management Agreement, Secured Hedging Agreement or Secured
Commodity Hedging Agreement, the applicable Cash Management Bank or Hedge Bank)
may deem advisable from time to time, and (d) any collateral security, guarantee
or right of offset at any time held by the Collateral Agent or any other Secured
Party for the payment of the Secured Obligations may be sold, exchanged, waived,
surrendered or released. Neither the Collateral Agent nor any other Secured
Party shall have any obligation to protect, secure, perfect or insure any Lien
at any time held by it as security for the Secured Obligations or for this
Security Agreement or any property subject thereto. When making any demand
hereunder against any Grantor, the Collateral Agent or any other Secured Party
may, but shall be under no obligation to, make a similar demand on the Borrower
or any Grantor or any other Person, and any failure by the Collateral Agent or
any other Secured Party to make any such demand or to collect any payments from
the Borrower or any Grantor or any other Person or any release of the Borrower
or any Grantor or any other Person shall not relieve any Grantor in respect of
which a demand or collection is not made or any Grantor not so released of its
several obligations or liabilities hereunder, and shall not impair or affect the
rights and remedies, express or implied, or as a matter of law, of the
Collateral Agent or any other Secured Party against any Grantor. For the
purposes hereof “demand” shall include the commencement and continuance of any
legal proceedings.

6. The Collateral Agent.

6.1 Collateral Agent’s Appointment as Attorney-in-Fact, etc.

(a) Each Grantor hereby appoints, which appointment is irrevocable and coupled
with an interest, effective upon the occurrence and during the continuance of an
Event of Default, the Collateral Agent and any officer or agent thereof, with
full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in
the name of such Grantor or otherwise, for the purpose of carrying out the terms
of this Security Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Security Agreement (in each case
subject in any event to the terms and conditions of the Orders), and, without
limiting the generality of the foregoing, each Grantor hereby gives the
Collateral Agent the power and right, on behalf of such Grantor, either in the
Collateral Agent’s name or in the name of such Grantor or otherwise, without
assent by such Grantor, to do any or all of the following, in each case after
the occurrence and during the continuance of an Event

 

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of Default, after the Remedies Notice Period and after written notice by the
Collateral Agent of its intent to do so:

(i) take possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any Subject
Account or with respect to any other Collateral and file any claim or take any
other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Collateral Agent for the purpose of collecting any and all
such moneys due under any Subject Account or with respect to any other
Collateral whenever payable;

(ii) in the case of any Intellectual Property, execute and deliver, and have
recorded, any and all agreements, instruments, documents and papers as the
Collateral Agent may reasonably request to evidence the Collateral Agent’s and
the Secured Parties’ Security Interest in such Intellectual Property and the
goodwill and general intangibles of such Grantor relating thereto or represented
thereby;

(iii) pay or discharge taxes and Liens levied or placed on or threatened against
the Collateral;

(iv) execute, in connection with any sale provided for in Section 5.5, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral;

(v) obtain and adjust insurance required to be maintained by such Grantor
pursuant to Section 9.3 of the DIP Credit Agreement;

(vi) direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder directly to the
Collateral Agent or as the Collateral Agent shall direct;

(vii) ask or demand for, collect and receive payment of and receipt for, any and
all moneys, claims and other amounts due or to become due at any time in respect
of or arising out of any Collateral;

(viii) sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral;

(ix) commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the Collateral or any
portion thereof and to enforce any other right in respect of any Collateral;

(x) defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral (with such Grantor’s consent to the extent such action
or its resolution could materially affect such Grantor or any of its Affiliates
in any manner other than with respect to its continuing rights in such
Collateral);

(xi) settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Collateral Agent
may deem appropriate (with such Grantor’s consent to the extent such action or
its resolution could materially affect such Grantor or any of its affiliates in
any manner other than with respect to its continuing rights in such Collateral);

 

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(xii) assign any Intellectual Property (along with the goodwill of the business
to which any such Intellectual Property pertains), throughout the world for such
term or terms, on such conditions, and in such manner, as the Collateral Agent
shall in its reasonable business discretion determine; and

(xiii) generally, sell, transfer, pledge and make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
the Collateral Agent were the absolute owner thereof for all purposes, and do,
at the Collateral Agent’s option and such Grantor’s expense, at any time, or
from time to time, all acts and things that the Collateral Agent deems necessary
to protect, preserve or realize upon the Collateral and the Collateral Agent’s
and the Secured Parties’ Security Interests therein and to effect the intent of
this Security Agreement, all as fully and effectively as such Grantor might do.

Anything in this Section 6.1(a) to the contrary notwithstanding, the Collateral
Agent agrees that it will not exercise any rights under the power of attorney
provided for in this Section 6.1(a) unless an Event of Default shall have
occurred and be continuing.

(b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Collateral Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.

(c) The expenses of the Collateral Agent incurred in connection with actions
undertaken as provided in this Section 6.1 (to the extent required to be
reimbursed by the Grantors pursuant to the Credit Documents), together with
interest thereon at a rate per annum equal to the highest rate per annum at
which interest would then be payable on any category of past due ABR Loans under
the DIP Credit Agreement, from the date of payment by the Collateral Agent to
the date reimbursed by the relevant Grantor, shall be payable by such Grantor to
the Collateral Agent on demand.

(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Security Agreement are coupled with an interest and are
irrevocable until this Security Agreement is terminated and the Security
Interests created hereby are released.

6.2 Duty of Collateral Agent. The Collateral Agent’s sole duty with respect to
the custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the UCC or otherwise, shall be to deal with
it in the same manner as the Collateral Agent deals with similar property for
its own account. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which the Collateral Agent accords its own property. Neither the Collateral
Agent, any Secured Party nor any of their respective officers, directors,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof. The powers conferred on the
Collateral Agent and the Secured Parties hereunder are solely to protect the
Collateral Agent’s and the Secured Parties’ interests in the Collateral and
shall not impose any duty upon the Collateral Agent or any Secured Party to
exercise any such powers. The Collateral Agent and the Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.

 

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6.3 Authority of Collateral Agent. Each Grantor acknowledges that the rights and
responsibilities of the Collateral Agent under this Security Agreement with
respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Security Agreement shall, as between the Collateral Agent and the
Secured Parties, be governed by this Security Agreement, and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Collateral Agent and the Grantors, the Collateral Agent shall be
conclusively presumed to be acting as agent for the applicable Secured Parties
with full and valid authority so to act or refrain from acting, and no Grantor
shall be under any obligation, or entitlement, to make any inquiry respecting
such authority.

6.4 Security Interest Absolute. All rights of the Collateral Agent hereunder,
the Security Interest and all obligations of the Grantors hereunder shall be
absolute and unconditional.

6.5 Continuing Security Interest; Assignments Under the DIP Credit Agreement;
Release.

(a) This Security Agreement shall remain in full force and effect and be binding
in accordance with and to the extent of its terms upon each Grantor and the
successors and assigns thereof and shall inure to the benefit of the Collateral
Agent and the other Secured Parties and their respective successors, indorsees,
transferees and assigns until all Secured Obligations (except for Hedging
Obligations in respect of any Secured Hedging Agreement and/or Secured Commodity
Hedging Agreement, Cash Management Obligations in respect of Secured Cash
Management Agreements and Contingent Obligations) and the obligations of each
Grantor under this Security Agreement shall have been satisfied by payment in
full, the Commitments shall be terminated and no Letters of Credit shall be
outstanding (or all such Letters of Credit shall have been fully Cash
Collateralized or otherwise back-stopped to the reasonable satisfaction of the
applicable Letter of Credit Issuers), notwithstanding that from time to time
during the term of the DIP Credit Agreement, any Secured Cash Management
Agreement, Secured Hedging Agreement or Secured Commodity Hedging Agreement the
Credit Parties may be free from any Secured Obligations.

(b) A Subsidiary Grantor shall automatically be released from its obligations
hereunder and the Security Interest in the Collateral of such Subsidiary Grantor
shall be automatically released upon the consummation of any transaction
permitted under the DIP Credit Agreement as a result of which such Subsidiary
Grantor ceases to be a Subsidiary Guarantor.

(c) The Security Interest granted hereby in any Collateral shall automatically
and without further action be released (i) if (and to the extent) provided in
Section 13.1 of the DIP Credit Agreement and (ii) upon the effectiveness of any
written consent to the release of the security interest granted hereby in such
Collateral pursuant to Section 13.1 of the DIP Credit Agreement. Any such
release in connection with any sale, transfer or other disposition of such
Collateral shall result in such Collateral being sold, transferred or disposed
of, as applicable, free and clear of the Lien and Security Interest created
hereby.

(d) In connection with any termination or release pursuant to paragraph (a),
(b) or (c), the Collateral Agent shall execute and deliver to any Grantor, at
such Grantor’s expense, all documents that such Grantor shall reasonably request
to evidence such termination or release. Any execution and delivery of documents
pursuant to this Section 6.5 shall be without recourse to or warranty by the
Collateral Agent.

 

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6.6 Reinstatement. Each Grantor further agrees that, if any payment made by any
Credit Party or other Person and applied to the Secured Obligations is at any
time annulled, avoided, set aside, rescinded, invalidated, declared to be
fraudulent or preferential or otherwise required to be refunded or repaid, or
the Proceeds of Collateral are required to be returned by the Collateral Agent
or any Secured Party to such Credit Party, its estate, trustee, receiver or any
other party, including any Grantor, under any bankruptcy law, state or federal
law, common law or equitable cause, then, to the extent of such payment or
repayment, any Lien or other Collateral securing such liability shall be and
remain in full force and effect, as fully as if such payment had never been made
or, if prior thereto the Lien granted hereby or other Collateral securing such
liability hereunder shall have been released or terminated by virtue of such
cancellation or surrender), such Lien or other Collateral shall be reinstated in
full force and effect, and such prior cancellation or surrender shall not
diminish, release, discharge, impair or otherwise affect any Lien or other
Collateral securing the obligations of any Grantor in respect of the amount of
such payment.

7. Collateral Agent.

(a) Citibank, N.A. is hereby appointed Collateral Agent hereunder and under the
other Credit Documents and the Administrative Agent (for itself and on behalf of
each Lender Party) hereby authorizes Citibank, N.A. to act as Collateral Agent
in accordance with the terms hereof and the other Security Documents. Each Hedge
Bank, each Secured Cash Management Bank and each other Secured Party by their
acceptance of the benefits of this Security Agreement hereby authorizes
Citibank, N.A. to act as Collateral Agent in accordance with the terms of this
Security Agreement and the other Security Documents. The Collateral Agent hereby
agrees to act in its capacity as such upon the express conditions contained
herein and the other Security Documents, as applicable. In performing its
functions and duties hereunder, the Collateral Agent shall act solely as an
agent of the Secured Parties and does not assume and shall not be deemed to have
assumed any obligation towards or relationship of agency or trust with or for
any Credit Party or any of its Subsidiaries. Each of the Administrative Agent
(for itself and on behalf of each Lender Party), each Hedge Bank, each Secured
Cash Management Bank and each other Secured Party irrevocably authorizes the
Collateral Agent to take such action on their behalf and to exercise such
powers, rights and remedies hereunder and under the other Security Documents as
are specifically delegated or granted to the Collateral Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. The Collateral Agent shall have only those duties
and responsibilities that are expressly specified herein and the other Credit
Documents. The Collateral Agent may exercise such powers, rights and remedies
and perform such duties by or through its agents or employees. The Collateral
Agent shall not have, by reason hereof or any of the other Credit Documents, a
fiduciary relationship in respect of any Secured Party, and nothing herein or in
any of the other Credit Documents, expressed or implied, is intended to or shall
be so construed as to impose upon the Collateral Agent any obligations in
respect hereof or any of the other Credit Documents except as expressly set
forth herein or in the other Security Documents. In furtherance of the foregoing
provisions of this Section 7(a), each Secured Party, by its acceptance of the
benefits hereof, agrees that it shall have no right individually to realize upon
any of the Collateral hereunder, it being understood and agreed by such Secured
Party that all rights and remedies hereunder may be exercised solely by the
Collateral Agent for the benefit of the applicable Secured Parties in accordance
with the terms of this Section 7(a).

 

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(b) The Collateral Agent shall at all times be the same Person that is the
Collateral Agent under the DIP Credit Agreement. Written notice of resignation
by the Collateral Agent pursuant to Section 12.9 of the DIP Credit Agreement
shall also constitute notice of resignation as Collateral Agent under this
Security Agreement; removal of the Collateral Agent shall also constitute
removal under this Security Agreement; and appointment of a Collateral Agent
pursuant to Section 12.9 of the DIP Credit Agreement shall also constitute
appointment of a successor Collateral Agent under this Security Agreement. Upon
the acceptance of any appointment as Collateral Agent under Section 12.9 of the
DIP Credit Agreement by a successor Collateral Agent, that successor Collateral
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Collateral Agent under this
Security Agreement, and the retiring or removed Collateral Agent under this
Security Agreement shall promptly (i) transfer to such successor Collateral
Agent all sums, securities and other items of Collateral held hereunder,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Collateral Agent
under this Security Agreement, and (ii) execute and deliver to such successor
Collateral Agent or otherwise authorize the filing of such amendments to
financing statements and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Collateral Agent
of the Security Interests created hereunder, whereupon such retiring or removed
Collateral Agent shall be discharged from its duties and obligations under this
Security Agreement. After any retiring or removed Collateral Agent’s resignation
or removal hereunder as Collateral Agent, the provisions of this Security
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Security Agreement while it was Collateral Agent
hereunder.

(c) The Collateral Agent shall not be deemed to have any duty whatsoever with
respect to any Secured Party that is a counterparty to a Secured Cash Management
Agreement, Secured Commodity Hedging Agreement or Secured Hedging Agreement the
obligations under which constitute Secured Obligations, unless it shall have
received a written notice in form and substance reasonably satisfactory to the
Collateral Agent from a Grantor or any such Secured Party as to the existence
and terms of the applicable Secured Cash Management Agreement, Secured Commodity
Hedging Agreement or Secured Hedging Agreement, it being agreed by the
Collateral Agent that delivery of a duly executed Accession Agreement (in the
case of any such Secured Cash Management Agreement or Secured Hedging Agreement
other than a Secured Commodity Hedging Agreement, with such modifications to the
form of Accession Agreement set forth as Annex B hereto as are necessary to
reflect that such additional Secured Obligations constitute obligations under a
Secured Cash Management Agreement or a Secured Hedging Agreement) shall comply
with the requirements of this clause (c).

8. Miscellaneous.

8.1 Amendments in Writing. None of the terms or provisions of this Security
Agreement may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by the affected Grantor and the Collateral Agent in
accordance with Section 13.1 of the DIP Credit Agreement.

8.2 Notices. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 13.2 of the DIP Credit Agreement (whether or not then in
effect). All communications and notices hereunder to any Subsidiary Grantor
shall be given to it in care of the Borrower at the Borrower’s address set forth
in Section 13.2 of the DIP Credit Agreement (whether or not then in effect).

8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Collateral
Agent nor any Secured Party shall by any act (except by a written instrument
pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced in any Default
or Event of Default or in any breach of any of the terms and conditions

 

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hereof. No failure to exercise, nor any delay in exercising, on the part of the
Collateral Agent or any other Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Collateral Agent or any other Secured Party of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy that the Collateral Agent or such other Secured Party would otherwise
have on any future occasion. The rights, remedies, powers and privileges herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.

8.4 Enforcement Expenses; Indemnification. Each Grantor agrees (a) to pay or
reimburse the Collateral Agent for all its reasonable and documented
out-of-pocket costs and expenses incurred in connection with the development,
negotiation, preparation and execution and delivery of, and any amendment,
supplement or modification to, this Security Agreement and any other documents
prepared in connection herewith, the consummation and administration of the
transactions contemplated hereby, any Event of Default or the enforcement or
preservation of any rights under this Security Agreement; (b) to pay, indemnify,
and hold harmless the Collateral Agent from, any and all recording and filing
fees and (c) to pay, indemnify, and hold harmless the Collateral Agent against
any and all other liabilities, obligations, losses, damages, penalties, claims,
demands, actions, judgments, suits, costs, expenses or disbursements of any kind
or nature whatsoever, including reasonable and documented out-of-pocket fees,
disbursements and other charges of the Collateral Agent, or, with respect to the
execution, delivery, enforcement, performance and administration of this
Security Agreement and any such other documents (all the foregoing in this
clause (c), collectively, the “indemnified liabilities”) (SUBJECT TO THE PROVISO
BELOW, WHETHER OR NOT CAUSED BY OR ARISING IN WHOLE OR IN PART, OUT OF THE
COMPARATIVE, CONTRIBUTORY OR SOLE ORDINARY NEGLIGENCE OF THE INDEMNIFIED
PERSON); provided that no Grantor shall have any obligation hereunder to the
Collateral Agent with respect to indemnified liabilities to the extent they
result from (A) the gross negligence, bad faith or willful misconduct of such
indemnified Person or any of its Related Parties, as determined by a final
non-appealable judgment of a court of competent jurisdiction, (B) a material
breach of the obligations of such indemnified Person or any of its Related
Parties under the Credit Documents, as determined by a final non-appealable
judgment of a court of competent jurisdiction or (C) disputes not involving an
act or omission of such Grantor or any other Credit Party and that is brought by
an indemnified Person against any other indemnified Person, other than any
claims against any indemnified Person in its capacity or in fulfilling its role
as the Collateral Agent. All amounts payable under this Section 8.4 shall be
paid pursuant to Section 13.5 of the DIP Credit Agreement.

No Grantor nor any indemnified Person shall have any liability for any special,
punitive, indirect or consequential damages resulting from this Security
Agreement or any other Credit Document or arising out of its activities in
connection herewith or therewith (whether before or after the Closing Date)
(except, in the case of any Grantor’s obligation hereunder to indemnify and hold
harmless the indemnified Persons, to the extent any indemnified Persons is found
liable for special, punitive, indirect or consequential damages to a third
party). No indemnified Persons shall be liable for any damages arising from the
use by unintended recipients of any information or other materials distributed
by it through telecommunications, electronic or other information transmission
systems in connection with this Security Agreement or the other Credit Documents
or the transactions contemplated hereby or thereby, except to the extent that
such damages have resulted from the willful misconduct, bad faith or gross
negligence of any indemnified Person or any of its Related Parties (as
determined by a final non-appealable judgment of a court of competent
jurisdiction). This Section 8.4 shall not apply to Taxes.

 

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8.5 Successors and Assigns. The provisions of this Security Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that no Grantor may assign,
transfer or delegate any of its rights or obligations under this Security
Agreement without the prior written consent of the Collateral Agent except
pursuant to a transaction permitted by the DIP Credit Agreement.

8.6 Counterparts. This Security Agreement may be executed by one or more of the
parties to this Security Agreement on any number of separate counterparts
(including by facsimile or other electronic transmission (e.g., a “pdf’ or “tif’
file)), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Security
Agreement signed by all the parties shall be lodged with the Collateral Agent
and the Borrower.

8.7 Severability. Any provision of this Security Agreement that 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. The parties hereto shall endeavor in good-faith negotiations
to replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.

8.8 Section Headings. The Section headings used in this Security Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.

8.9 Integration. This Security Agreement together with the other Credit
Documents represents the agreement of each of the Grantors with respect to the
subject matter hereof and there are no promises, undertakings, representations
or warranties by the Collateral Agent or any other Secured Party relative to the
subject matter hereof not expressly set forth or referred to herein or in the
other Credit Documents.

8.10 GOVERNING LAW. THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK AND, TO THE EXTENT APPLICABLE,
THE BANKRUPTCY CODE.

8.11 Submission to Jurisdiction Waivers. Each party hereto hereby irrevocably
and unconditionally:

a. submits for itself and its property in any legal action or proceeding
relating to this Security Agreement and the other Financing Documents to which
it is a party, or for recognition and enforcement of any judgment in respect
thereof, to the exclusive jurisdiction of the Bankruptcy Court, and to the
extent the Bankruptcy Court does not have (or abstains from exercising)
jurisdiction, the courts of the State of New York, the courts of the
United States of America for the Southern District of New York and appellate
courts from any thereof;

b. consents that any such action or proceeding may be brought in such courts and
waives any objection that it may now or hereafter have to the venue of any such
action or proceeding in any such court or that such action or proceeding was
brought in an inconvenient court and agrees not to plead or claim the same;

c. agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Person at its
address referred to in Section 8.2 or at such other address of which the
Collateral Agent shall have been notified pursuant thereto;

 

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d. agrees that nothing herein shall affect the right of any other party hereto
(or any Secured Party) to effect service of process in any other manner
permitted by law or shall limit the right of any party hereto (or any Secured
Party) to sue in any other jurisdiction;

e. 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 8.11 any special, exemplary, punitive or consequential damages; and

f. agrees that a final judgment in any 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 Applicable Law.

8.12 Acknowledgments. Each party hereto hereby acknowledges that:

a. it has been advised by counsel in the negotiation, execution and delivery of
this Security Agreement and the other Financing Documents to which it is a
party;

b. neither the Collateral Agent nor any other Secured Party has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Security Agreement or any of the other Financing Documents, and the
relationship between the Grantors, on the one hand, and the Collateral Agent and
the other Secured Parties, 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 Financing Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders and any other Secured Party or among the Grantors and the Lenders and
any other Secured Party.

8.13 Additional Grantors. Each Subsidiary of the Borrower that is required to
become a party to this Security Agreement pursuant to Section 9.11 of the DIP
Credit Agreement shall become a Grantor, with the same force and effect as if
originally named as a Grantor herein, for all purposes of this Security
Agreement upon execution and delivery by such Subsidiary of a written supplement
substantially in the form of Annex A hereto or in such other form reasonably
satisfactory to the Collateral Agent. The execution and delivery of any
instrument adding an additional Grantor as a party to this Security Agreement
shall not require the consent of any other Grantor hereunder. The rights and
obligations of each Grantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Grantor as a party to this Security
Agreement.

8.14 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS SECURITY AGREEMENT, ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.

 

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8.15 Oncor Separateness.

(a) The Collateral Agent, on behalf of itself and the Secured Parties,
acknowledges (i) the legal separateness of the Borrower and the Grantors from
Oncor and its Subsidiaries, (ii) that the lenders under the Oncor Credit
Facility and the noteholders under Oncor and its Subsidiaries’ indentures have
likely advanced funds thereunder in reliance upon the separateness of Oncor and
its Subsidiaries (and in the case of the Oncor Credit Facility, Oncor and its
respective Subsidiaries) from the Borrower and the Grantors, (iii) that Oncor
and its Subsidiaries have assets and liabilities that are separate from those of
Energy Future Holdings Corp. and its other Subsidiaries, (iv) that the Secured
Obligations owing under the Credit Documents are obligations and liabilities of
the Borrower and the Guarantors only, and are not the obligations or liabilities
of Oncor or any of its Subsidiaries, (v) that the Secured Parties shall look
solely to the Borrower, the Guarantors and their assets, and not to any assets,
or to the pledge of any assets, owned by Oncor or any of its Subsidiaries, for
the repayment of any amounts payable pursuant to the Credit Documents or any
Secured Cash Management Agreement, Secured Hedging Agreement or Secured
Commodity Hedging Agreement and for satisfaction of any other Secured
Obligations owing to the Secured Parties under the Credit Documents or any
Secured Cash Management Agreement, Secured Hedging Agreement or Secured
Commodity Hedging Agreement, and (vi) that none of Oncor or its Subsidiaries
shall be personally liable to the Secured Parties for any amounts payable, or
any other liability, under the Credit Documents or any Secured Cash Management
Agreement, Secured Hedging Agreement or Secured Commodity Hedging Agreement.

(b) The Collateral Agent, on behalf of itself and the Secured Parties, shall not
(i) initiate any legal proceeding to procure the appointment of an
administrative receiver, or (ii) institute any bankruptcy, reorganization,
insolvency, winding up, liquidation, or any like proceeding under applicable
law, against Oncor, or any of its Subsidiaries, or against any of Oncor’s, or
any of their Subsidiaries’ assets. The Collateral Agent, on behalf of itself and
the Secured Parties, acknowledges and agrees that each of Oncor, and its
Subsidiaries is a third party beneficiary of the forgoing covenant and shall
have the right to specifically enforce such covenant in any proceeding at law or
in equity.

8.16 Secured Commodity Hedging Agreements.

(a) Subject to the limitations set forth in this Agreement, each Grantor and
each Secured Party acknowledges and agrees that the Collateral may secure
additional obligations of the Borrower and the other Grantors in respect of
Secured Commodity Hedging Agreements, subject to compliance with this 8.16. Upon
(x) execution and delivery to the Collateral Agent of an Accession Agreement by
any Person (other than Parent Guarantor, the Borrower or any other Subsidiary of
the Borrower) that is party to a Commodity Hedging Agreement satisfying the
requirements set forth in clause (b) of the definition of “Secured Commodity
Hedging Agreement” set forth in the Credit Agreement and (y) compliance with the
procedures set forth in clause (b) below, such Person shall become a “Hedge
Bank” under clause (i) of the definition thereof set forth in the Credit
Agreement and a “Secured Party” hereunder and under the other Credit Documents,
and a party to this Agreement, and the Grantors’ obligations to such Person
shall become “Secured Obligations” hereunder and under the other Credit
Documents and “Obligations” under the Credit Agreement and the other Credit
Documents. Each Grantor and each Secured Party agrees that this Agreement and
the applicable Security Documents may be amended by the Grantors and the
Collateral Agent without the consent of any Secured Party to the extent
necessary or desirable to (i) effectuate the intent of this Section 8.16 and
(ii) cause the Liens granted thereby to be in favor of such Persons (to the
extent Liens in favor of such Persons are permitted by the terms of the Credit
Agreement).

(b) With respect to the accession of any such Hedge Bank pursuant to
Section 8.16(a) above, the Borrower will deliver to the Collateral Agent each of
the following:

(1) a certificate of an Authorized Officer of the Borrower stating that Parent
Guarantor, the Borrower or the relevant Subsidiary Guarantor intends to enter
into a Secured Commodity Hedging Agreement, and that such additional obligations
will be Secured Obligations and satisfy clause (b) of the definition of “Secured
Commodity Hedging Agreement” set forth in the Credit Agreement and are otherwise
permitted by the terms of the Credit Agreement and this Agreement; and

(2) a written notice specifying the name and address of the Hedge Bank for such
additional obligations for purposes of the Credit Agreement and this Agreement.

 

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(c) Notwithstanding the foregoing, nothing in this Agreement will be construed
to allow any Grantor to incur additional Indebtedness or grant additional Liens
unless in each case permitted by the terms of the Credit Agreement.

8.17 Permitted Property Interests. Upon the written request of any Grantor
following such Grantor’s execution of an easement, right-of-way or other real or
personal property interest that (i) constitutes in whole or in part a Permitted
Property Interest, and (ii) in the commercially reasonable determination of such
Grantor is required in the ordinary course of business, the Collateral Agent
will promptly subordinate any Liens and any Superpriority Claim held by it for
the benefit of any Secured Party, to the rights of third parties with respect to
such Permitted Property Interest.

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Security Agreement
to be duly executed and delivered as of the date first above written.

 

ENERGY FUTURE COMPETITIVE HOLDINGS COMPANY LLC, as Parent Guarantor By:      
Name:   Title: TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC, as the Borrower
By:       Name:   Title:

 

Signature Page to

Security Agreement

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4CHANGE ENERGY COMPANY

4CHANGE ENERGY HOLDINGS LLC

BIG BROWN 3 POWER COMPANY LLC

BIG BROWN LIGNITE COMPANY LLC

BIG BROWN POWER COMPANY LLC

COLLIN POWER COMPANY LLC

DECORDOVA POWER COMPANY LLC

DECORDOVA II POWER COMPANY LLC

EAGLE MOUNTAIN POWER COMPANY LLC

GENERATION MT COMPANY LLC

GENERATION SVC COMPANY

LAKE CREEK 3 POWER COMPANY LLC

LUMINANT BIG BROWN MINING COMPANY LLC

LUMINANT ENERGY COMPANY LLC

LUMINANT ENERGY TRADING CALIFORNIA COMPANY

LUMINANT ET SERVICES COMPANY

LUMINANT GENERATION COMPANY LLC

LUMINANT HOLDING COMPANY LLC

LUMINANT MINERAL DEVELOPMENT COMPANY LLC

LUMINANT MINING COMPANY LLC

LUMINANT RENEWABLES COMPANY LLC

MARTIN LAKE 4 POWER COMPANY LLC

MONTICELLO 4 POWER COMPANY LLC

MORGAN CREEK 7 POWER COMPANY

NCA RESOURCES DEVELOPMENT COMPANY LLC

OAK GROVE MANAGEMENT COMPANY LLC

OAK GROVE MINING COMPANY LLC

OAK GROVE POWER COMPANY LLC

SANDOW POWER COMPANY LLC

TCEH FINANCE, INC.

TRADINGHOUSE 3 & 4 POWER COMPANY LLC

TRADINGHOUSE POWER COMPANY LLC

TXU ENERGY RETAIL COMPANY LLC

TXU ENERGY SOLUTIONS COMPANY LLC

TXU RETAIL SERVICES COMPANY

TXU SEM COMPANY

VALLEY NG POWER COMPANY LLC

VALLEY POWER COMPANY LLC,

each as a Subsidiary Grantor

 

 

Signature Page to

Security Agreement

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By:      

Name:

Title:

 

Signature Page to

Security Agreement

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CITIBANK, N.A.,

as Collateral Agent

By:      

Name:

Title:

 

Signature Page to

Security Agreement

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ANNEX A TO

THE SECURITY AGREEMENT

SUPPLEMENT NO. [    ], dated as of [    ], to the SECURITY AGREEMENT dated as of
May 5, 2014, among each of the Grantors listed on the signature pages thereto
(each such subsidiary individually, a “Grantor” and, collectively, the
“Grantors”), and Citibank, N.A., as Collateral Agent for the Secured Parties (as
defined therein).

A. Reference is made to the Senior Secured Superpriority Debtor-in-Possession
Credit Agreement, dated as of May 5, 2014 (as amended, restated, supplemented or
otherwise modified from time to time, the “DIP Credit Agreement”) among Energy
Future Competitive Holdings Company LLC, Texas Competitive Electric Holdings
Company (the “Borrower”), the lending institutions from time to time parties
thereto (the “Lenders”), Citibank, N.A., as Administrative Agent, the Collateral
Agent, and the other agents and entities party thereto.

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Security Agreement.

C. The Grantors have entered into the Security Agreement in order to induce the
Administrative Agent, the Collateral Agent, the Lenders and the Letter of Credit
Issuers to enter into the DIP Credit Agreement and to induce the respective
Lenders and the Letter of Credit Issuers to make their respective Extensions of
Credit to the Borrower under the DIP Credit Agreement and to induce the Cash
Management Banks and Hedge Banks to enter into Secured Cash Management
Agreements, Secured Hedging Agreements and Secured Commodity Hedging Agreements.

D. Section 9.11 of the DIP Credit Agreement and Section 8.13 of the Security
Agreement provide that additional Subsidiaries may become Grantors under the
Security Agreement by execution and delivery of this Supplement. Each
undersigned Domestic Subsidiary (each a “New Grantor”) is executing this
Supplement in accordance with the requirements of the Security Agreement to
become a Subsidiary Grantor under the Security Agreement in order to induce the
Lenders and the Letter of Credit Issuer to make additional Extensions of Credit
and as consideration for Extensions of Credit previously made and to induce one
or more Cash Management Banks and/or Hedge Banks to enter into Secured Cash
Management Agreements, Secured Hedging Agreements and Secured Commodity Hedging
Agreements.

Accordingly, the Collateral Agent and the New Grantors agree as follows:

SECTION 1. In accordance with Section 8.13 of the Security Agreement, each New
Grantor by its signature below becomes a Grantor under the Security Agreement
with the same force and effect as if originally named therein as a Grantor and
each New Grantor hereby (a) agrees to all the terms and provisions of the
Security Agreement applicable to it as a Grantor thereunder and (b) represents
and warrants that the representations and warranties made by it as a Grantor
thereunder are true and correct on and as of the date hereof (except where such
representations and warranties expressly related to an earlier date, in which
case such representations and warranties shall have been true and correct as of
such earlier date). In furtherance of the foregoing, each New Grantor, as
security for the payment and performance in full of the Obligations, does hereby
bargain, sell, convey, assign, set over, mortgage, pledge, hypothecate and
transfer to the Collateral Agent, for the benefit of the Secured Parties, and
hereby grants to the Collateral Agent, for the benefit of the Secured Parties, a
Security Interest in all of the Collateral of such New Grantor, in each case
whether now or hereafter existing or in which it now has or hereafter acquires
an interest. Each reference to a “Grantor” in the Security Agreement shall be
deemed to include each New Grantor. The Security Agreement is hereby
incorporated herein by reference.

 

B-1

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SECTION 2. Each New Grantor represents and warrants to the Collateral Agent and
the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting creditors’ rights generally and general equitable
principles (whether considered in a proceeding in equity or law).

SECTION 3. This Supplement may be executed by one or more of the parties to this
Supplement on any number of separate counterparts (including by facsimile or
other electronic transmission (e.g. a “pdf” or “tif’ file)), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Supplement signed by all the parties
shall be lodged with the Collateral Agent and the Borrower. This Supplement
shall become effective as to each New Grantor when the Collateral Agent shall
have received counterparts of this Supplement that, when taken together, bear
the signatures of such New Grantor and the Collateral Agent.

SECTION 4. Each New Grantor hereby represents and warrants that set forth on
Schedule I hereto is (i) the legal name of such New Grantor, (ii) the
jurisdiction of incorporation or organization of such New Grantor, (iii) the
type of organization or corporate structure of such New Grantor (iv) the Federal
Taxpayer Identification Number and organizational number of such New Grantor and
(v) the true and correct location of the chief executive office and principal
place of business and any office in which it maintains books of records relating
to Collateral owned by it.

SECTION 5. Except as expressly supplemented hereby, the Security Agreement shall
remain in full force and effect.

SECTION 6. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 7. Any provision of this Supplement that 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 in the Security Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

SECTION 8. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 8.2 of the Security Agreement. All communications and
notices hereunder to each New Grantor shall be given to it in care of the
Borrower at the Borrower’s address set forth in Section 13.2 of the DIP Credit
Agreement (whether or not then in effect).

SECTION 9. Each New Grantor agrees to reimburse the Collateral Agent for its
respective reasonable and documented out-of-pocket costs and expenses in
connection with this Supplement, including the reasonable and documented fees,
other charges and disbursements of one firm of counsel, and, if necessary, one
firm of regulatory counsel and/or one firm of local counsel in each appropriate
jurisdiction, in each case to the Administrative Agent and Collateral Agent
(and, in the case of an actual or perceived conflict of interest where the
Person affected by such conflict informs the Borrower of such conflict and
thereafter, after receipt of the consent of the Borrower (which consent shall
not be unreasonably withheld or delayed), retains its own counsel, of another
firm of counsel for such affected Person).

 

B-2

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[SIGNATURE PAGES FOLLOW]

 

B-3

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IN WITNESS WHEREOF, each New Grantor and the Collateral Agent have duly executed
this Supplement to the Security Agreement as of the day and year first above
written.

 

[    ], as Grantor By:       Name:   Title:

CITIBANK, N.A.,

as Collateral Agent

By:       Name:   Title:

[SIGNATURE PAGE TO SUPPLEMENT NO. [    ] TO SECURITY AGREEMENT]

 

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Schedule I

COLLATERAL

 

Legal Name

 

Jurisdiction of
Incorporation or
Organization

 

Type of
Organization or
Corporate Structure

   Federal Taxpayer
Identification
Number and
Organizational
Identification
Number    Chief Executive Officer
and Principal Place of
Business

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

ANNEX B TO

THE SECURITY AGREEMENT

[FORM OF]

ACCESSION AGREEMENT

THIS ACCESSION AGREEMENT (this “Agreement”), dated as of [    ], 20    , is
entered into by [    ], a [    ], as an Additional Secured Party (as defined
below) (the “Additional Secured Party”), and acknowledged by TEXAS COMPETITIVE
ELECTRIC HOLDINGS COMPANY LLC, a Delaware limited liability company (the
“Borrower”), and Citibank, N.A., in its capacity as Collateral Agent (in such
capacity, the “Collateral Agent”) for the Secured Parties, under the Security
Agreement (as defined below). Capitalized terms used herein without definition
shall have the meaning assigned to them in the Security Agreement.

Reference is made to that certain Security Agreement (as amended, restated,
supplemented or otherwise modified from time to time, the “Security Agreement”),
dated as of May 5, 2014, by and among the Borrower, the Subsidiary Grantors
party thereto, the Collateral Agent and the other Persons from time to time
parties thereto.

Pursuant to Section 8.16 of the Security Agreement, the Additional Secured Party
hereby notifies the Collateral Agent that the Additional Secured Party is a
Hedge Bank pursuant to the [    ], dated as of [    ], [between][among] [    ]
and the Additional Secured Party (the “Additional Document”), which Additional
Document is a Secured Commodity Hedging Agreement, under and as defined in the
DIP Credit Agreement and is entitled to the benefit of the Security Agreement.

The undersigned is entering into this Accession Agreement in order to become a
Secured Party under and as defined in the Security Agreement, and to benefit
from the Collateral under and in accordance with the terms of the Security
Agreement (an “Additional Secured Party”).

Attached hereto as Annex 1 is a certificate of a Responsible Officer of the
Borrower stating that [Parent Guarantor] [the Borrower] [name of Subsidiary
Guarantor] intends to enter into a Secured Commodity Hedging Agreement, and that
such additional obligations will be Secured Obligations and are permitted (if
addressed therein, or, otherwise, not prohibited) by the terms of the DIP Credit
Agreement, the Orders and the other applicable Credit Documents to be incurred
by the relevant Credit Party and secured by a first lien equally and ratably
with all previously existing and future Secured Obligations.

The Additional Secured Party hereby becomes a Secured Party as a Hedge Bank.

The Additional Secured Party hereby agrees for the benefit of the Collateral
Agent and the other Secured Parties as follows:

The Additional Secured Party hereby acknowledges, agrees and confirms that, by
its execution of this Agreement, the Additional Secured Party will be deemed to
be a party to the Security Agreement, and, from and after the date hereof, shall
have all of the obligations of a Hedge Bank thereunder as if it had originally
executed the Security Agreement. The Additional Secured Party hereby ratifies,
as of the date hereof, and accedes to and agrees to be bound by, all of the
terms, provisions and conditions applicable to a Secured Party and a Hedge Bank
contained in the Security Agreement and the other Credit Documents.

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

To the extent the Additional Secured Party is an agent or trustee for one or
more other parties, the Additional Secured Party acknowledges that it has the
authority to bind such other parties to the Security Agreement and such other
parties are hereby bound by the terms and conditions of the Security Agreement.
The Additional Secured Party hereby agrees (on behalf of itself and any other
party claiming through it) to comply with the terms of the Security Agreement.

As of the date hereof, Schedule I hereto sets forth the “Floor Amount” of the
Additional Secured Party. The amount of credit to be extended to the Borrower or
the applicable Subsidiary Grantor under the Additional Document will be $[    ].

The address of the Additional Secured Party for purposes of all notices and
other communications is [    ], Attention of [    ] (Facsimile No. [    ],
electronic mail address: [    ]).

This Agreement may be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together shall constitute one
contract.

THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED UNDER, THE LAWS OF THE STATE
OF NEW YORK.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

7

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IN WITNESS WHEREOF, the Additional Secured Party has caused this Accession
Agreement to be duly executed by its authorized representative, and each of the
Borrower and the Collateral Agent have caused the same to be accepted by its
authorized representative, as of the day and year first above written.

 

[ADDITIONAL SECURED PARTY] By:     Name:  

Title:

  ACKNOWLEDGED:

TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC,

as Borrower

By:     Name:  

Title:

  ACKNOWLEDGED AND ACCEPTED:

Citibank, N.A.,

as Collateral Agent

By:     Name:  

Title:

 

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EXHIBIT G

TO THE CREDIT AGREEMENT

FORM OF LETTER OF CREDIT REQUEST [AMENDMENT]

([GENERAL][RCT] LETTER OF CREDIT)

 

No.             1    Dated             2

 

To: Citibank, N.A., as Administrative Agent,

[            ], as the [General][RCT] Letter of Credit Issuer,

under the Senior Secured Superpriority Debtor-in-Possession Credit Agreement,
dated as of May [    ], 2014 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among Energy Future
Competitive Holdings Company LLC, a Delaware limited liability company, Texas
Competitive Electric Holdings Company LLC, a Delaware limited liability company
(the “Company”), the lending institutions from time to time parties thereto,
(each a “Lender” and, collectively, the “Lenders”) and Citibank, N.A., as
Administrative Agent and as Collateral Agent.

Ladies and Gentlemen:

The undersigned hereby requests that the [General][RCT] Letter of Credit Issuer
[issue] [amend]3 a [General][RCT] Letter of Credit on             4 (the “Date
of Issuance”) in the aggregate stated amount of $            .

For purposes of this [General][RCT] Letter of Credit Request, unless otherwise
defined, all capitalized terms used herein that are defined in the Credit
Agreement shall have the respective meanings provided therein.

The beneficiary of the requested [General][RCT] Letter of Credit [will be] [is]
            ,5 and such [General][ RCT] Letter of Credit [will be] [is] in
support of             6 and [will have] [has] a stated expiration date of
            .7

 

1  Letter of Credit Request Number.

2  Date of standby Letter of Credit Request (to be dated at least two Business
Days prior to the Date of Issuance or such lesser number of Business Days as may
be agreed by the Administrative Agent and such Letter of Credit Issuer).

3  If an amendment, include a description of the proposed amendment.

4  Date of Issuance.

5  Insert name and address of beneficiary.

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[The undersigned hereby certifies that:

(a) All representations and warranties made by any Credit Party contained in the
Credit Agreement or in the other Credit Documents 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 Issuance (except where such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties were true and correct in all material
respects as of such earlier date); and

(b) No Default or Event of Default has occurred and is continuing as of the Date
of Issuance before or after giving effect to the issuance of the [General][RCT]
Letter of Credit requested hereby.]8

Attached hereto as Exhibit A is a true and correct copy of the documents to be
presented by the beneficiary of the requested [General][RCT] Letter of Credit in
the case of any drawing thereunder.

Attached hereto as Exhibit B is the full text of any certificate to be presented
by such beneficiary in case of any drawing thereunder.

Copies of all documentation with respect to the supported transaction are
attached hereto.

 

6  Insert description of supported obligations and name of agreement to which it
relates, if any.

7  Insert last date upon which drafts may be presented.

8  To be included for issuances only.

 

-2-

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TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC By:      

Name:

Title:

 

[Signature Page to Letter of Credit Request]

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

EXHIBIT H

TO THE CREDIT AGREEMENT

FORM OF CREDIT PARTY CLOSING CERTIFICATE

[See attached]

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

CLOSING CERTIFICATE

OF THE COMPANIES LISTED ON SCHEDULE I HERETO

[            ], 2014

Reference is made to the Senior Secured Superpriority Debtor-in-Possession
Credit Agreement, dated as of [            ], 2014 (as amended, restated,
supplemented or otherwise modified, from time to time, the “Credit Agreement”),
among Energy Future Competitive Holdings Company LLC, a Delaware limited
liability company and a debtor and debtor-in-possession (the “Parent
Guarantor”), Texas Competitive Electric Holdings Company LLC, a Delaware limited
liability company and a debtor and debtor-in-possession (“TCEH” or the
“Borrower”) in a case pending under chapter 11 of the Bankruptcy Code, the
lending institutions from time to time parties thereto (each a “Lender” and,
collectively, the “Lenders”) and Citibank, N.A., as Administrative Agent and
Collateral Agent. Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Credit Agreement.

1. The undersigned, Anthony Horton, in his capacity as an officer of the Parent
Guarantor, solely in his capacity as such and not individually, hereby certifies
as follows:

(a) On the Closing Date, the representations and warranties made by the Credit
Parties in Section 8 of the Credit Agreement, are true and correct in all
material respects (or in all respects for representations and warranties
qualified by materiality or Material Adverse Effect).

(b) At the time of and after giving effect to the Closing Date, no Default or
Event of Default shall have occurred and be continuing.

2. The undersigned, Anthony Horton, in his capacity as an officer of the
entities listed on Schedule I hereto (each, a “Company”), solely in his capacity
as such and not individually, hereby certifies as follows:

(a) Betty Fleshman is duly elected and qualified to serve as Assistant Secretary
of each Company listed on Schedule IV hereto, and the signature set forth on the
signature line below is such Assistant Secretary’s true and genuine signature.

(b) Ashley Burton is duly elected and qualified to serve as Assistant Secretary
of each Company listed on Schedule V hereto, and the signature set forth on the
signature line below is such Assistant Secretary’s true and genuine signature.

3. The undersigned secretary or assistant secretary of each applicable Company,
solely in their respective capacity as secretary or assistant secretary of each
applicable Company and not individually, hereby certifies as follows:

(a) attached hereto as Exhibit A is a complete and correct copy of the
resolutions duly adopted by the board of directors, sole member, managing
member, manager, general partner or equivalent body, as applicable, (or a duly
authorized committee thereof), respectively, of each Company authorizing (i) the
execution, delivery and performance of each

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

of the Credit Documents (and any agreements relating thereto) to which such
Company is a party and (ii) in the case of the Borrower, the extensions of
credit contemplated under the Credit Documents; such resolutions have not in any
way been amended, modified, revoked or rescinded and have been in full force and
effect since their adoption to and including the date hereof;

(b) attached hereto as Exhibit B or filed with the SEC in the filing identified
in Schedule III hereto (and hereby incorporated herein by reference as if
attached hereto) are true and complete copies of the Organizational Documents,
respectively, of each Company, as in effect as of the date hereof;

(c) attached hereto as Exhibit C is a certificate of good standing (and
certificate of existence, as applicable) for each Company from each such
Company’s jurisdiction of incorporation or formation, dated a recent date prior
to the Closing Date; and

(d) the persons listed on Schedule II are now duly elected and qualified
officers of the Companies indicated on Schedule I, holding the offices indicated
on Schedule II, and the signatures appearing opposite their respective names are
the true and genuine signatures of such officers, and each of such officers is
duly authorized to execute and deliver on behalf of each applicable Company each
Credit Document, to which it is a party and any certificate or other document to
be delivered by each applicable Company pursuant to each Credit Document.

For the avoidance of doubt, it is understood that the parties executing this
Closing Certificate are acting in their capacities as officers for each of the
applicable Companies, and each of the Companies may be acting in its capacity as
a shareholder, member, managing member, manager, general partner, trustee,
beneficiary, or other controlling or significant interest owner, or other type
of representative, of another Company, as may be required or permitted by
applicable law or the Companies’ organizational documents.

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

IN WITNESS WHEREOF, the undersigned have hereto set our names as of the date set
forth above.

 

By:     Name:   Anthony Horton Title:   Treasurer

FOR THE COMPANIES LISTED ON
SCHEDULE IV HERETO:

By:     Name:   Betty Fleshman Title:   Assistant Secretary

FOR THE COMPANIES LISTED ON
SCHEDULE V HERETO:

By:     Name:   Ashley Burton Title:   Assistant Secretary

[Closing Certificate of the Companies listed on Schedule I hereto]

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

SCHEDULE I

COMPANIES

4Change Energy Company

4Change Energy Holdings LLC

Big Brown 3 Power Company LLC

Big Brown Lignite Company LLC

Big Brown Power Company LLC

Collin Power Company LLC

DeCordova Power Company LLC

DeCordova II Power Company LLC

Eagle Mountain Power Company LLC

Energy Future Competitive Holdings Company LLC

Generation MT Company LLC

Generation SVC Company

Lake Creek 3 Power Company LLC

Luminant Big Brown Mining Company LLC

Luminant Energy Company LLC

Luminant Energy Trading California Company

Luminant ET Services Company

Luminant Generation Company LLC

Luminant Holding Company LLC

Luminant Mineral Development Company LLC

Luminant Mining Company LLC

Luminant Renewables Company LLC

Martin Lake 4 Power Company LLC

Monticello 4 Power Company LLC

Morgan Creek 7 Power Company LLC

NCA Resources Development Company LLC

Oak Grove Management Company LLC

Oak Grove Mining Company LLC

Oak Grove Power Company LLC

Sandow Power Company LLC

TCEH Finance, Inc.

Texas Competitive Electric Holdings Company LLC

Tradinghouse 3 & 4 Power Company LLC

Tradinghouse Power Company LLC

TXU Energy Retail Company LLC

TXU Energy Solutions Company LLC

TXU Retail Services Company

TXU SEM Company

Valley NG Power Company LLC

Valley Power Company LLC

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

SCHEDULE II

AUTHORIZED SIGNATORIES

 

Name

  

Title

   Signature Anthony R. Horton    Treasurer    Betty R. Fleshman   

Assistant Secretary

(for the Companies listed on Schedule IV hereto)

   Ashley A. Burton   

Assistant Secretary

(for the Companies listed on Schedule V hereto)

  

[Closing Certificate-Incumbency Signature Page]

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

SCHEDULE III

 

Entity Name

  

Document Type

  

Filing

  

Exhibit

   Filing
Date    ID Number

4Change Energy Company (f/k/a TXU SESCO Energy Services Company)

  

Certificate of Amendment to Articles of Incorporation1

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(UUU)    3/27/2012    333-157057-44

4Change Energy Company

  

Bylaws

   S-4    EX-3.(GGGG)    9/26/2008    333-153700-04

4Change Energy Holdings LLC (f/k/a TXU SESCO Company LLC)

  

Certificate of Amendment of Certificate of Formation (together with Certificate
of Conversion to TXU SESCO Company LLC)2

   See Exhibit B         

4Change Energy Holdings LLC

  

Amended & Restated LLCA

   See Exhibit B         

Big Brown 3 Power Company LLC

  

Certificate of Formation

   S-4    EX-3.(H)    9/26/2008    333-153700-42

Big Brown 3 Power Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(I)    3/27/2012    333-157057-37

Big Brown Lignite Company LLC

  

Certificate of Formation

   S-4    EX-3.(J)    9/26/2008    333-153700-41

Big Brown Lignite Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(K)    3/27/2012    333-157057-38

Big Brown Power Company LLC

  

Certificate of Formation

   S-4    EX-3.(L)    9/26/2008    333-153700-40

Big Brown Power Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(M)    3/27/2012    333-157057-39

Collin Power Company LLC

  

Certificate of Formation

   S-4    EX-3.(N)    9/26/2008    333-153700-39

Collin Power Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(O)    3/27/2012    333-157057-40

Decordova Power Company LLC

  

Certificate of Formation

   S-4    EX-3.(P)    9/26/2008    333-153700-38

 

1  Articles of Incorporation of TXU Sesco Energy Services Company are filed on
Form S-4 (ID Number 333-153700, filed 9/26/2008) as exhibit 3(ffff).

2  Articles of Organization of TXU Sesco Company LLC are filed on Form S-4 (ID
Number 333-153700, filed 9/26/2008) as exhibit 3(dddd).

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

Entity Name

  

Document Type

  

Filing

  

Exhibit

   Filing
Date    ID Number

Decordova Power Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(Q)    3/27/2012    333-157057-41

Decordova II Power Company LLC

  

Certificate of Formation

   See Exhibit B         

Decordova II Power Company LLC

  

LLC Agreement

   See Exhibit B         

Eagle Mountain Power Company LLC

  

Certificate of Formation

   [Requested]         

Eagle Mountain Power Company LLC

  

LLC Agreement

   [Requested]         

Energy Future Competitive Holdings Company LLC

  

Certificate of Formation

   10-Q    EX-3.(A)    5/2/2013    001-34543

Energy Future Competitive Holdings Company LLC

  

Amended & Restated LLCA

   10-Q    EX-3.(B)    5/2/2013    001-34543

Generation MT Company LLC

  

Certificate of Formation

   S-4    EX-3.(T)    9/26/2008    333-153700-36

Generation MT Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(S)    3/27/2012    333-157057-43

Generation SVC Company

  

Articles of Incorporation

   S-4    EX-3.(V)    9/26/2008    333-153700-35

Generation SVC Company

  

Bylaws

   S-4    EX-3.(W)    9/26/2008    333-153700-35

Lake Creek 3 Power Company LLC

  

Certificate of Formation

   S-4    EX-3.(X)    9/26/2008    333-153700-34

Lake Creek 3 Power Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(W)    3/27/2012    333-157057-03

Luminant Big Brown Mining Company LLC

  

Certificate of Formation

   S-4    EX-3.(Z)    9/26/2008    333-153700-33

Luminant Big Brown Mining Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(Y)    3/27/2012    333-157057-04

Luminant Energy Company LLC

  

Certificate of Formation

   S-4    EX-3.(BB)    9/26/2008    333-153700-32

Luminant Energy Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(AA)    3/27/2012    333-157057-05

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

Entity Name

  

Document Type

  

Filing

  

Exhibit

   Filing
Date    ID Number

Luminant Energy Trading California Company

  

Articles of Incorporation

   S-4    EX-3.(FF)    9/26/2008    333-153700-30

Luminant Energy Trading California Company

  

Restated Bylaws

   S-4    EX-3.(GG)    9/26/2008    333-153700-30

Luminant ET Services Company

  

Articles of Incorporation

   S-4    EX-3.(HH)    9/26/2008    333-153700-29

Luminant ET Services Company

  

Bylaws

   S-4    EX-3.(II)    9/26/2008    333-153700-29

Luminant Generation Company LLC

  

Certificate of Formation

   S-4    EX-3.(JJ)    9/26/2008    333-153700-28

Luminant Generation Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(GG)    3/27/2012    333-157057-09

Luminant Holding Company LLC

  

Certificate of Formation

   S-4    EX-3.(LL)    9/26/2008    333-153700-27

Luminant Holding Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(II)    3/27/2012    333-157057-10

Luminant Mineral Development Company LLC

  

Certificate of Formation

   S-4    EX-3.(NN)    9/26/2008    333-153700-26

Luminant Mineral Development Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(KK)    3/27/2012    333-157057-11

Luminant Mining Company LLC

  

Certificate of Formation

   S-4    EX-3.(PP)    9/26/2008    333-153700-25

Luminant Mining Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(MM)    3/27/2012    333-157057-12

Luminant Renewables Company LLC

  

Certificate of Formation

   S-4    EX-3.(VV)    9/26/2008    333-153700-22

Luminant Renewables Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(OO)    3/27/2012    333-157057-15

Martin Lake 4 Power Company LLC

  

Certificate of Formation

   S-4    EX-3.(XX)    9/26/2008    333-153700-21

Martin Lake 4 Power Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(QQ)    3/27/2012    333-157057-34

Monticello 4 Power Company LLC

  

Certificate of Formation

   S-4    EX-3.(ZZ)    9/26/2008    333-153700-20

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

Entity Name

  

Document Type

  

Filing

  

Exhibit

   Filing
Date    ID Number

Monticello 4 Power Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(SS)    3/27/2012    333-157057-35

Morgan Creek 7 Power Company LLC

  

Certificate of Formation

   S-4    EX-3.(BBB)    9/26/2008    333-153700-19

Morgan Creek 7 Power Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(UU)    3/27/2012    333-157057-36

NCA Resources Development Company LLC

  

Certificate of Formation

   S-4    EX-3.(DDD)    9/26/2008    333-153700-18

NCA Resources Development Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(WW)    3/27/2012    333-157057-16

Oak Grove Management Company LLC

  

Certificate of Formation

   S-4    EX-3.(FFF)    9/26/2008    333-153700-17

Oak Grove Management Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(YY)    3/27/2012    333-157057-17

Oak Grove Mining Company LLC

  

Certificate of Formation

   S-4    EX-3.(HHH)    9/26/2008    333-153700-16

Oak Grove Mining Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(AAA)    3/27/2012    333-157057-18

Oak Grove Power Company LLC

  

Certificate of Formation

   S-4    EX-3.(JJJ)    9/26/2008    333-153700-15

Oak Grove Power Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(CCC)    3/27/2012    333-157057-19

Sandow Power Company LLC

  

Certificate of Formation

   S-4    EX-3.(LLL)    9/26/2008    333-153700-14

Sandow Power Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(EEE)    3/27/2012    333-157057-20

TCEH Finance, Inc.

  

Certificate of Incorporation

   See Exhibit B         

TCEH Finance, Inc.

  

Bylaws

   S-4    EX-3.(G)    9/26/2008    333-153700-43

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

Entity Name

  

Document Type

  

Filing

  

Exhibit

   Filing
Date    ID Number

Texas Competitive Electric Holdings Company LLC (f/k/a TXU Energy Company LLC)

  

Certificate of Amendment of Certificate of Formation (together with Certificate
of Formation of TXU Energy Company LLC)

   See Exhibit B         

Texas Competitive Electric Holdings Company LLC

  

Amended & Restated LLCA

   See Exhibit B         

Tradinghouse 3 & 4 Power Company LLC

  

Certificate of Formation

   S-4    EX-3.(NNN)    9/26/2008    333-153700-13

Tradinghouse 3 & 4 Power Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(GGG)    3/27/2012    333-157057-21

Tradinghouse Power Company LLC

  

Certificate of Formation

   S-4    EX-3.(PPP)    9/26/2008    333-153700-12

Tradinghouse Power Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(III)    3/27/2012    333-157057-22

TXU Energy Retail Company LLC

  

Certificate of Formation

   S-4    EX-3.(TTT)    9/26/2008    333-153700-10

TXU Energy Retail Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(KKK)    3/27/2012    333-157057-24

TXU Energy Solutions Company LLC

  

Certificate of Formation

   S-4    EX-3.(XXX)    9/26/2008    333-153700-08

TXU Energy Solutions Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(MMM)    3/27/2012    333-157057-26

TXU Retail Services Company

  

Certificate of Incorporation

   S-4    EX-3.(ZZZ)    9/26/2008    333-153700-07

TXU Retail Services Company

  

Bylaws

   S-4    EX-3.(AAAA)    9/26/2008    333-153700-07

TXU SEM Company

  

Certificate of Incorporation

   S-4    EX-3.(BBBB)    9/26/2008    333-153700-06

TXU SEM Company

  

Amended & Restated Bylaws

   S-4    EX-3.(CCCC)    9/26/2008    333-153700-06

Valley NG Power Company LLC

  

Certificate of Formation

   S-4    EX-3.(HHHH)    9/26/2008    333-153700-03

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

Entity Name

  

Document Type

  

Filing

  

Exhibit

   Filing
Date    ID Number

Valley NG Power Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(XXX)    3/27/2012    333-157057-31

Valley Power Company LLC

  

Certificate of Formation

   S-4    EX-3.(JJJJ)    9/26/2008    333-153700-02

Valley Power Company LLC

  

Amended & Restated LLCA

  

S-1 Pos. Am.

(Amend. No. 4 to S-1)

   EX-3.(ZZZ)    3/27/2012    333-157057-32

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

SCHEDULE IV

COMPANIES

Big Brown 3 Power Company LLC

Big Brown Lignite Company LLC

Big Brown Power Company LLC

Collin Power Company LLC

DeCordova Power Company LLC

DeCordova II Power Company LLC

Eagle Mountain Power Company LLC

Energy Future Competitive Holdings Company LLC

Generation MT Company LLC

Generation SVC Company

Lake Creek 3 Power Company LLC

Luminant Big Brown Mining Company LLC

Luminant Energy Company LLC

Luminant Energy Trading California Company

Luminant ET Services Company

Luminant Generation Company LLC

Luminant Holding Company LLC

Luminant Mineral Development Company LLC

Luminant Mining Company LLC

Luminant Renewables Company LLC

Martin Lake 4 Power Company LLC

Monticello 4 Power Company LLC

Morgan Creek 7 Power Company LLC

NCA Resources Development Company LLC

Oak Grove Management Company LLC

Oak Grove Mining Company LLC

Oak Grove Power Company LLC

Sandow Power Company LLC

TCEH Finance, Inc.

Texas Competitive Electric Holdings Company LLC

Tradinghouse 3 & 4 Power Company LLC

Tradinghouse Power Company LLC

Valley NG Power Company LLC

Valley Power Company LLC

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

SCHEDULE V

COMPANIES

4Change Energy Company

4Change Energy Holdings LLC

TXU Energy Retail Company LLC

TXU Energy Solutions Company LLC

TXU Retail Services Company

TXU SEM Company

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

EXHIBIT A

[Resolutions]

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

EXHIBIT B

[Organizational Documents]

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

EXHIBIT C

[Good Standings]

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

EXHIBIT I

TO THE CREDIT AGREEMENT

ASSIGNMENT AND ACCEPTANCE

This Assignment and Acceptance (this “Assignment and Acceptance”) is dated as of
the Effective Date set forth below and is entered into by and between
[the][each]1 Assignor identified in item 1 below ([the][each, an] “Assignor”)
and [the][each]2 Assignee identified in item 2 below ([the][each, an]
“Assignee”). [It is understood and agreed that the rights and obligations of
[the Assignors][the Assignees]3 hereunder are several and not joint.]4
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (as amended, restated,
supplemented or otherwise modified from time to time the “Credit Agreement”),
receipt of a copy of which is hereby acknowledged by the Assignee. The Standard
Terms and Conditions set forth in Annex 1 attached hereto (the “Standard Terms
and Conditions”) are hereby agreed to and incorporated herein by reference and
made a part of this Assignment and Acceptance as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of [the Assignor’s][the
respective Assignors’] rights and obligations in [its capacity as a
Lender][their respective capacities as Lenders] under the Credit Agreement and
any other documents or instruments delivered pursuant thereto to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of [the Assignor][the respective Assignors]
under the respective facilities5 identified below [(including, without
limitation, the RCT Letters of Credit included in such facilities)]6[(including,
without limitation, the General Letters of Credit Loans included in such
facilities)]7 and (ii) to the extent permitted to be assigned under applicable
law, all claims, suits, causes of action and any other right of [the Assignor
(in its capacity as a Lender)][the respective Assignors (in their respective
capacities as Lenders)] against any Person, whether known or unknown, arising
under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby
or in any way based on or related to any of the foregoing,

 

 

1  For bracketed language here and elsewhere in this form relating to the
Assignor(s), if the assignment is from a single Assignor, choose the first
bracketed language. If the assignment is from multiple Assignors, choose the
second bracketed language.

2  For bracketed language here and elsewhere in this form relating to the
Assignee(s), if the assignment is to a single Assignee, choose the first
bracketed language. If the assignment is to multiple Assignees, choose the
second bracketed language.

3  Select as appropriate.

4  Include bracketed language if there are either multiple Assignors or multiple
Assignees.

5  Include all applicable subfacilities.

6  Include only in assignment includes an RCT Letter of Credit Commitment.

7 

Include only if assignment involves a General Letter of Credit Commitment.

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

including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned by [the][any] Assignor to [the][any] Assignee
pursuant to clauses (i) and (ii) above being referred to herein collectively as
[the][an] “Assigned Interest”). Each such sale and assignment is without
recourse to [the][any] Assignor and, except as expressly provided in this
Assignment and Acceptance, without representation or warranty by [the][any]
Assignor.

 

1. Assignor[s]:                                                  

 

                                                                          

 

2. Assignee[s]:                                                  

 

                                                                          

[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]

 

3. Borrower: Texas Competitive Electric Holdings Company LLC, a Delaware limited
liability company

 

4. Administrative Agent: Citibank, N.A., as the Administrative Agent under the
Credit Agreement

 

5. Credit Agreement: Senior Secured Superpriority Debtor-in-Possession Credit
Agreement, dated as of May [    ], 2014, among Energy Future Competitive
Holdings Company LLC, Texas Competitive Electric Holdings Company LLC, the
Lenders from time to time party thereto and Citibank, N.A., as Administrative
Agent and Collateral Agent

 

6. Assigned Interest:

 

Assignor[s]8

  

Assignee[s]9

   Facility
Assigned10      Aggregate
Amount of
Commitment /
Loans
for all Lenders11      Amount of
Commitment /
Loans
Assigned      Percentage
Assigned of
Commitment /
Loans12      CUSIP
Number                           _____         $                      $
                                  %               _____         $             
        $                                   %               _____         $
                     $                                   %      

 

 

8  List each Assignor, as appropriate.

9  List each Assignee, as appropriate.

10  Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g. “General
Letter of Credit Commitment”, “Term Loan Commitment”, “RCT Letter of Credit
Commitment”, “Delayed-Draw Term Loan Commitment”, etc.).

11  Amounts in this column and in the column immediately to the right to be
adjusted by the counterparties to take into account any payments or prepayments
made between the Trade Date and the Effective Date.

12  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.

 

-2-

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

[7. Trade Date:                                     ]13

Effective Date:             , 20            [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

The terms set forth in this Assignment and Acceptance are hereby agreed to:

 

ASSIGNOR [NAME OF ASSIGNOR] By:       Title: ASSIGNEE [NAME OF ASSIGNEE] By:    
  Title:

Consented to and Accepted:

 

CITIBANK, N.A., as     Administrative Agent By:       Title: Consented to:14 By:
      Title:

 

13  To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

14  Insert for the Borrower or any other entity whose consent is required under
the credit agreement.

 

-3-

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

ANNEX 1 TO ASSIGNMENT AND ACCEPTANCE

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ACCEPTANCE

1. Representations and Warranties.

1.1. Assignor. [The][Each] Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of [the][the relevant] Assigned Interest,
(ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or
other adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Acceptance and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Credit Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any collateral thereunder, (iii) the
financial condition of the Borrower, any of its Subsidiaries or Affiliates or
any other Person obligated in respect of any Credit Document or (iv) the
performance or observance by the Borrower, any of its Subsidiaries or Affiliates
or any other Person of any of their respective obligations under any Credit
Document.

1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Acceptance and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all the requirements to be an assignee under Section 13.6(b)(ii) and
(iii) and (v) of the Credit Agreement (subject to such consents, if any, as may
be required under Section 13.6(b)(i) of the Credit Agreement), (iii) from and
after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of [the][the relevant]
Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is
sophisticated with respect to decisions to acquire assets of the type
represented by [the][such] Assigned Interest and either it, or the Person
exercising discretion in making its decision to acquire [the][such] Assigned
Interest, is experienced in acquiring assets of such type, (v) it has received a
copy of the Credit Agreement and has received or has been accorded the
opportunity to receive copies of the most recent financial statements delivered
pursuant to Section 9.1 of the Credit Agreement, as applicable, and such other
documents and information as it deems appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance and to
purchase [the][such] Assigned Interest, (vi) 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 credit
analysis and decision to enter into this Assignment and Acceptance and to
purchase [the][such] Assigned Interest and (vii) it is not a Disqualified
Institution; and (b) agrees that (i) it will, independently and without reliance
upon the Administrative Agent, [the][any] Assignor or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Credit Documents are
required to be performed by it as a Lender.

 

-4-

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

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of [the][each] Assigned Interest (including
payments of principal, interest, fees and other amounts) to [the][the relevant]
Assignor for amounts which have accrued to but excluding the Effective Date and
to [the][the relevant] Assignee for amounts which have accrued from and after
the Effective Date.

3. General Provisions. This Assignment and Acceptance shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Acceptance may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Acceptance by
telecopy or other electronic transmission shall be effective as delivery of a
manually executed counterpart of this Assignment and Acceptance. This Assignment
and Acceptance and the rights and obligations of the parties hereunder shall be
governed by, and construed and interpreted in accordance with, the law of the
State of New York and, to the extent applicable, the Bankruptcy Code.

 

-5-

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

EXHIBIT J-1

TO THE CREDIT AGREEMENT

FORM OF PROMISSORY NOTE

(REVOLVING CREDIT LOANS)

 

$                New York, New York    [            , 201    ]

FOR VALUE RECEIVED, TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC, a Delaware
limited liability company (the “Borrower”), hereby unconditionally promises to
pay to [Revolving Credit Lender] or its registered assign (the “Revolving Credit
Lender”), at the Administrative Agent’s office or such other place as Citibank,
N.A., (the “Administrative Agent”) shall have specified, in immediately
available funds, in accordance with Section 2.5 of the Credit Agreement (as
defined below; capitalized terms used and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement) on the
Maturity Date (a) [AMOUNT] ($][            ])], or, if less, (b) the aggregate
unpaid principal amount, if any, of all advances made by the Lender to the
Borrower in respect of Revolving Credit Loans pursuant to the Credit Agreement.
The Borrower further promises to pay interest in like money at such office on
the unpaid principal amount hereof from time to time outstanding at the rates
per annum and on the dates specified in Section 2.8 of the Credit Agreement.

This promissory note (this “Promissory Note”) is one of the promissory notes
referred to in the Senior Secured Superpriority Debtor-in-Possession Credit
Agreement, dated as of May [    ], 2014 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among Energy
Future Competitive Holdings Company LLC, the Borrower, the Lenders party thereto
from time to time, Citibank, N.A., as Administrative Agent and Collateral Agent
and the other parties named therein. This Promissory Note is subject to, and the
Revolving Credit Lender is entitled to the benefits of, the provisions of the
Credit Agreement, and the Revolving Credit Loans evidenced hereby are guaranteed
and secured as provided therein and in the other Credit Documents. The Revolving
Credit Loans evidenced hereby are subject to prepayment prior to the Maturity
Date, in whole or in part, as provided in the Credit Agreement.

All parties now and hereafter liable with respect to this Promissory Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and notice of any kind whatsoever in connection
with this Promissory Note.

All payments in respect of the principal of and interest on this Promissory Note
shall be made to the Person recorded in the Register as the holder of this
Promissory Note, as described more fully in Section 2.5(e) of the Credit
Agreement, and such Person shall be treated as the Revolving Credit Lender
hereunder for all purposes of the Credit Agreement.

THIS PROMISSORY NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK AND TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE.

(signature page follows)

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

TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC By:      

Name:

 

Title:

 

[Signature Page to Revolving Credit Loan Note]

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

TRANSACTIONS ON

REVOLVING CREDIT LOAN NOTE

 

Date

 

Amount of

Revolving Credit

Loan Made This

Date

 

Amount of Principal

Paid This Date

   Outstanding Principal
Balance This Date    Notation
Made By

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

EXHIBIT J-2

TO THE CREDIT AGREEMENT

FORM OF PROMISSORY NOTE

(TERM LOANS)

 

$                               

New York, New York

[                , 201    ]

FOR VALUE RECEIVED, TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC, a Delaware
limited liability company (the “Borrower”), hereby unconditionally promises to
pay to [Term Loan Lender] or its registered assign (the “Term Loan Lender”), at
the Administrative Agent’s office or such other place as Citibank, N.A., (the
“Administrative Agent”) shall have specified, in immediately available funds, in
accordance with Section 2.5 of the Credit Agreement (as defined below;
capitalized terms used and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement) on the Maturity Date
(a) [AMOUNT] ($][                    ])], or, if less, (b) the aggregate unpaid
principal amount, if any, of all advances made by the Lender to the Borrower in
respect of Term Loans pursuant to the Credit Agreement. The Borrower further
promises to pay interest in like money at such office on the unpaid principal
amount hereof from time to time outstanding at the rates per annum and on the
dates specified in Section 2.8 of the Credit Agreement.

This promissory note (this “Promissory Note”) is one of the promissory notes
referred to in the Senior Secured Superpriority Debtor-in-Possession Credit
Agreement, dated as of May [        ], 2014 (as amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”), among Energy
Future Competitive Holdings Company LLC, the Borrower, the Lenders party thereto
from time to time, Citibank, N.A., as Administrative Agent and Collateral Agent
and the other parties named therein. This Promissory Note is subject to, and the
Term Loan Lender is entitled to the benefits of, the provisions of the Credit
Agreement, and the Term Loans evidenced hereby are guaranteed and secured as
provided therein and in the other Credit Documents. The Term Loans evidenced
hereby are subject to prepayment prior to the Maturity Date, in whole or in
part, as provided in the Credit Agreement.

All parties now and hereafter liable with respect to this Promissory Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and notice of any kind whatsoever in connection
with this Promissory Note.

All payments in respect of the principal of and interest on this Promissory Note
shall be made to the Person recorded in the Register as the holder of this
Promissory Note, as described more fully in Section 2.5(e) of the Credit
Agreement, and such Person shall be treated as the Term Loan Lender hereunder
for all purposes of the Credit Agreement.

THIS PROMISSORY NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK AND TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE.

(signature page follows)

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

TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC

By:

     

Name:

Title:

[Signature Page to Term Loan Note]

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

TRANSACTIONS ON

TERM LOAN NOTE

 

Date

 

Amount of

Term Loans Made This
Date

 

Amount of Principal

Paid This Date

   Outstanding Principal
Balance This Date    Notation
Made By

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

EXHIBIT J-3

TO THE CREDIT AGREEMENT

FORM OF PROMISSORY NOTE

(DELAYED-DRAW TERM LOANS)

 

$                                   

New York, New York

[                , 201    ]

FOR VALUE RECEIVED, TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC, a Delaware
limited liability company (the “Borrower”), hereby unconditionally promises to
pay to [Delayed-Draw Term Loan Lender] or its registered assign (the
“Delayed-Draw Term Loan Lender”), at the Administrative Agent’s office or such
other place as Citibank, N.A., (the “Administrative Agent”) shall have
specified, in immediately available funds, in accordance with Section 2.5 of the
Credit Agreement (as defined below; capitalized terms used and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement) on the Maturity Date (a) [AMOUNT] ($][                    ])], or, if
less, (b) the aggregate unpaid principal amount, if any, of all advances made by
the Lender to the Borrower in respect of Delayed-Draw Term Loans pursuant to the
Credit Agreement. The Borrower further promises to pay interest in like money at
such office on the unpaid principal amount hereof from time to time outstanding
at the rates per annum and on the dates specified in Section 2.8 of the Credit
Agreement.

This promissory note (this “Promissory Note”) is one of the promissory notes
referred to in the Senior Secured Superpriority Debtor-in-Possession Credit
Agreement, dated as of May [        ], 2014 (as amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”), among Energy
Future Competitive Holdings Company LLC, the Borrower, the Lenders party thereto
from time to time, Citibank, N.A., as Administrative Agent and Collateral Agent
and the other parties named therein. This Promissory Note is subject to, and the
Delayed-Draw Term Loan Lender is entitled to the benefits of, the provisions of
the Credit Agreement, and the Delayed-Draw Term Loans evidenced hereby are
guaranteed and secured as provided therein and in the other Credit Documents.
The Delayed-Draw Term Loans evidenced hereby are subject to prepayment prior to
the Maturity Date, in whole or in part, as provided in the Credit Agreement.

All parties now and hereafter liable with respect to this Promissory Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and notice of any kind whatsoever in connection
with this Promissory Note.

All payments in respect of the principal of and interest on this Promissory Note
shall be made to the Person recorded in the Register as the holder of this
Promissory Note, as described more fully in Section 2.5(e) of the Credit
Agreement, and such Person shall be treated as the Delayed-Draw Term Loan Lender
hereunder for all purposes of the Credit Agreement.

THIS PROMISSORY NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK AND TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE.

(signature page follows)

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

TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC

By:

     

Name:

Title:

[Signature Page to Delayed-Draw Term Loan Note]

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

TRANSACTIONS ON

DELAYED-DRAW TERM LOAN NOTE

 

Date

 

Amount of

Delayed-Draw Term Loans
Made This Date

 

Amount of Principal

Paid This Date

   Outstanding Principal
Balance This Date    Notation
Made By

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

EXHIBIT K

TO THE CREDIT AGREEMENT

FORM OF INCREMENTAL AMENDMENT

INCREMENTAL AMENDMENT, dated as of [                    , 201    ] (this
“Agreement”), by and among [NEW LOAN LENDERS] (each, a “New Loan Lender” and,
collectively, the “New Loan Lenders”), TEXAS COMPETITIVE ELECTRIC HOLDINGS
COMPANY LLC, a Delaware limited liability company (the “Company”) and CITIBANK,
N.A., as Administrative Agent and as Collateral Agent.

RECITALS:

WHEREAS, reference is hereby made to the Senior Secured Superpriority
Debtor-in-Possession Credit Agreement, dated as of May [    ], 2014 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Energy Future Competitive Holdings Company LLC, the Company,
the Lenders party thereto, Citibank, N.A., as Administrative Agent and
Collateral Agent and the other parties named therein (capitalized terms used but
not defined herein having the meaning provided in the Credit Agreement); and

WHEREAS, subject to the terms and conditions of the Credit Agreement, the
Borrower may establish Incremental Term Loans and/or Incremental Revolving
Commitment Increases by, among other things, entering into one or more
Incremental Amendments with Additional Lenders and/or Lenders, as applicable;

NOW, THEREFORE, in consideration of the premises and agreements, provisions and
covenants herein contained, the parties hereto agree as follows:

Each New Loan Lender party hereto hereby agrees to commit to provide its
respective Incremental Revolving Commitment Increase (in the case of each New
Loan Lender that is providing a portion of the Incremental Revolving Commitment
Increase (each, an “Incremental Revolving Commitment Increase Lender”)) and/or
Incremental Term Loans (in the case of each New Loan Lender that is lending
Incremental Term Loans (each, an “Incremental Term Loan Lender”)), as set forth
on Schedule A annexed hereto, on the terms and subject to the conditions set
forth below.

Each New Loan Lender (i) confirms that it has received a copy of the Credit
Agreement and the other Credit Documents and the exhibits thereto, together with
copies of the financial statements referred to therein and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Agreement; (ii) agrees that it will, independently
and without reliance upon the Administrative Agent or any other New Loan Lender
or any other Lender or Agent and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers

 

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

under the Credit Agreement and the other Credit Documents as are delegated to
the Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; and (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as an Incremental Term Loan
Lender and/or Incremental Revolving Commitment Increase Lender, as the case may
be.

Each New Loan Lender hereby agrees to make its respective Commitment on the
following terms and conditions:1

 

1. Applicable Margin. The Applicable ABR Margin or Applicable LIBOR Margin, as
applicable, for each Incremental Term Loan and/or Incremental Revolving
Commitment Increase shall mean, as of any date of determination,
[[            ]% per annum] [the applicable percentage per annum as set forth
below [based on the Consolidated Superpriority Secured Net Debt to Consolidated
EBITDA Ratio in effect on such date:2]

 

[Incremental Term Loans][Incremental Revolving Credit Increases]

 

Consolidated

Superpriority

Secured Net

Debt to

Consolidated

EBITDA

Ratio

   LIBOR Loans     ABR Loans  

    :    

              %               % 

 

2. [Principal Payments. The Borrower shall make principal payments on the
Incremental Term Loans in installments on the dates and in the amounts set forth
below:]

 

(A)

Payment

Date

   (B)
Scheduled Repayment of
Incremental Term Loans      $                            $                     
      $                            $                            $
                           $                            $                     
      $                        

 

1  Insert completed items 1-7 as applicable, with respect to Incremental Term
Loans and/or Incremental Revolving Commitment Increases with such modifications
as may be agreed to by the parties hereto to the extent consistent with the
Credit Agreement.

2  Include reserve amount if applicable.

 

-2-

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

3. Voluntary and Mandatory Prepayments. Scheduled installments of principal of
the Incremental Term Loans set forth above shall be reduced in connection with
any voluntary or mandatory prepayments of the Incremental Term Loans in
accordance with Sections 5.1 and 5.2 of the Credit Agreement respectively.

 

4. Prepayment Fees. Borrower agrees to pay to each New Loan Lender the following
prepayment fees, if any: [                            ].

[Insert other additional prepayment provisions with respect to Incremental Term
Loans]

 

5. Other Fees. The Borrower agrees to pay each [Incremental Term Loan Lender]
[Incremental Revolving Commitment Increase Lender] its pro rata share
(determined based upon each [Incremental Term Loan Lender’s] [Incremental
Revolving Commitment Increase Lender’s] share of the [Incremental Term
Loans][Incremental Revolving Commitment Increase]) of an aggregate fee equal to
[                    ] on [                        ,             ].

 

6. Proposed Borrowing. This Agreement represents the Borrower’s request to
borrow Incremental Term Loans from the Incremental Term Loan Lenders as follows
(the “Proposed Borrowing”):

 

  (a) Business Day of Proposed Borrowing:                         ,             

 

  (b) Amount of Proposed Borrowing: $                        

 

  (c) Interest rate option:

 

  (i) ABR Loan(s)

 

  (ii) LIBOR Loans

with an initial Interest

Period of             month(s)

 

7. [New Loan Lenders. Each New Loan Lender acknowledges and agrees that upon its
execution of this Agreement and the making of [Incremental Term Loans] and/or
[Revolving Credit Loans pursuant to an Incremental Revolving Commitment
Increase], as the case may be, that such New Loan Lender shall become a “Lender”
under, and for all purposes of, the Credit Agreement and the other Credit
Documents, and shall be subject to and bound by the terms thereof, and shall
perform all the obligations of and shall have all rights of a Lender
thereunder.]3

 

8. Credit Agreement Governs. Except as set forth in this Agreement, the
[Incremental Term Loans][Revolving Credit Loans pursuant to an Incremental
Revolving Commitment Increase] shall otherwise be subject to the provisions of
the Credit Agreement and the other Credit Documents.

 

 

3  Insert bracketed language if the lending institution is not already a Lender.

 

-3-

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

9. Borrower’s Certifications. By its execution of this Agreement, the
undersigned hereby certifies, on behalf of the Borrower and not in his/her
individual capacity, that:

 

  (a) The representations and warranties contained in the Credit Agreement and
the other Credit Documents are true and correct in all material respects on and
as of the date hereof to the same extent as though made on and as of the date
hereof, except to the extent such representations and warranties expressly
relate to an earlier date, in which case such representations and warranties
were true and correct in all material respects on and as of such earlier date;
and

 

  (b) No event has occurred and is continuing or would result from the
consummation of the proposed Borrowing contemplated hereby that would constitute
a Default or an Event of Default.

 

10. Borrower Covenants. By its execution of this Agreement, the Borrower hereby
covenants that:

 

  (a) [The Borrower shall make any payments required pursuant to Section 2.11 of
the Credit Agreement in connection with the Incremental Revolving Commitment
Increase;]4 and

 

  (b) Set forth on the attached Officers’ Certificate are the calculations (in
reasonable detail) demonstrating compliance with the financial covenant set
forth in Section 10.9 of the Credit Agreement for the most recently ended Fiscal
Quarter.

 

11. Notice. For purposes of the Credit Agreement, the initial notice address of
each New Loan Lender shall be as set forth below its signature below.

 

12. Tax Forms. For each relevant New Loan Lender, delivered herewith to the
Administrative Agent are such forms, certificates or other evidence with respect
to United States federal income tax withholding matters as such New Loan Lender
may be required to deliver to the Administrative Agent pursuant to
Section 5.4(c) and/or Section 5.4(e) of the Credit Agreement.

 

13. Recordation of the New Loans. Upon execution and delivery hereof, the
Administrative Agent will record the Incremental Term Loans and/or Revolving
Credit Loans pursuant to an Incremental Revolving Commitment Increase, as the
case may be, made by each New Loan Lender in the Register.

 

14. Amendment, Modification and Waiver. This Agreement may not be amended,
modified or waived except by an instrument or instruments in writing signed and
delivered on behalf of each of the parties hereto.

 

4  Select this provision in the circumstance where the Lender is an Incremental
Revolving Commitment Increase Lender.

 

-4-

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

15. Entire Agreement. This Agreement, the Credit Agreement and the other Credit
Documents constitute the entire agreement among the parties with respect to the
subject matter hereof and thereof and supersede all other prior agreements and
understandings, both written and verbal, among the parties or any of them with
respect to the subject matter hereof.

 

16. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK AND TO THE EXTENT APPLICABLE, THE BANKRUPTCY
CODE.

 

17. Severability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, the provision shall be interpreted to be only
so broad as would be enforceable.

 

18. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which shall constitute one and the
same agreement.

 

-5-

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

IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized
officer to execute and deliver this Incremental Amendment as of the date first
set forth above.

 

[NAME OF NEW LOAN LENDER] By:      

Name:

Title:

Notice Address:

Attention:

Telephone:

Facsimile:

TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC By:      

Name:

Title:

[Signature Page to Incremental Amendment]

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

Consented to by:

 

CITIBANK, N.A., as Administrative Agent

By:      

Name:

Title:

[Signature Page to Incremental Amendment]

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

SCHEDULE A

TO INCREMENTAL AMENDMENT

 

Name of New Loan Lender

  

Type of Commitment

   Amount  

[                                 ]

  

[Incremental Term Loans]

[Incremental Revolving Commitment Increase]

   $                        

[                                 ]

  

[Incremental Term Loans]

[Incremental Revolving Commitment Increase]

   $                               Total: $                        

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

EXHIBIT L

TO THE CREDIT AGREEMENT

FORM OF NON-U.S. LENDER CERTIFICATION

Reference is hereby made to the Senior Secured Superpriority
Debtor-in-Possession Credit Agreement dated as of May [        ], 2014 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among ENERGY FUTURE COMPETITIVE HOLDINGS COMPANY LLC, a Delaware
limited liability company (“Holdings”), TEXAS COMPETITIVE ELECTRIC HOLDINGS
COMPANY LLC, a Delaware limited liability company (the “Borrower”), the lending
institutions from time to time parties thereto (each a “Lender” and,
collectively, the “Lenders”) and Citibank, N.A., as Administrative Agent and
Collateral Agent. Pursuant to the provisions of Section 5.4(e) of the Credit
Agreement, the undersigned hereby certifies that (i) it is the sole record and
beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s))
in respect of which it is providing this certificate, (ii) it is not a “bank” as
such term is used in Section 881(c)(3)(A) of the Internal Revenue Code of 1986,
as amended, (the “Code”), (iii) it is not a ten percent shareholder of the
Borrower within the meaning of Code Section 871(h)(3)(B), (iv) it is not a
“controlled foreign corporation” described in Section 881(c)(3)(C) of the Code,
and (v) no interest payments in connection with the Credit Documents are
effectively connected with the undersigned’s conduct of a U.S. trade or
business.

The undersigned has furnished the Administrative Agent with a certificate of its
non-U.S. person status on Internal Revenue Service Form W-8BEN. By executing
this certificate, the undersigned agrees that (1) if the information provided on
this certificate changes, the undersigned shall so inform the Borrower and the
Administrative Agent in writing within 30 days of such change and (2) the
undersigned shall furnish the Borrower and the Administrative Agent a properly
completed and currently effective certificate in either the calendar year in
which payment is to be made by the Borrower to the undersigned, or in either of
the two calendar years preceding such payment.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER] By:      

Name:

Title:

Date:                     , 201[    ]

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

EXHIBIT M

TO THE CREDIT AGREEMENT

INITIAL BUDGET

[See attached]

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

TEXAS COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC ("TCEH")

 

DIP Budget

                                                   

$ in millions

                                                    Month Ending   5/31/14    
6/30/14     7/31/14     8/31/14     9/30/14     10/31/14     11/30/14    
12/31/14     1/31/15     2/28/15     3/31/15     4/30/15     5/31/15     6/30/15
    7/31/15     8/31/15     9/30/15     10/31/15     11/30/15     12/31/15    
1/31/16     2/29/16     3/31/16     4/30/16     5/31/16     Total   Months in
Bankruptcy   1     2     3     4     5     6     7     8     9     10     11    
12     13     14     15     16     17     18     19     20     21     22     23
    24     25    

Unlevered Free Cash Flow

                                                   

Open EBITDA

    $123        $170        $220        $241        $162        $58        $79
       $125        $156        $131        $78        $79        $116       
$169        $227        $270        $181        $48        $88        $113     
  $144        $123        $81        $33        $124        $3,339   

Hedge Value(1)

    —          —          —          —          —          —          —         
—          —          —          —          —          —          —          —  
       —          —          —          —          —          —          —     
    —          —          —          —     

Cash Impacts of Adjustments to EBITDA

    (1 )      (9 )      (1 )      (1 )      (3 )      (1 )      (1 )      (3 ) 
    (2 )      (3 )      (6 )      (2 )      (2 )      (10 )      (1 )      (1 ) 
    (4 )      (1 )      (1 )      (4 )      (1 )      (1 )      (1 )      (1 ) 
    (1 )      (64 )   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

    $121        $161        $219        $240        $159        $57        $79
       $122        $154        $128        $72        $77        $114       
$159        $226        $269        $177        $47        $87        $109     
  $144        $122        $80        $32        $123        $3,276   

Capital Expenditures

    (57 )      (66 )      (87 )      (57 )      (53 )      (45 )      (49 )     
(62 )      (55 )      (40 )      (33 )      (41 )      (58 )      (76 )     
(100 )      (38 )      (32 )      (36 )      (36 )      (61 )      (30 )     
(41 )      (38 )      (23 )      (75 )      (1,288 ) 

Working Capital

    (96 )      (16 )      (78 )      (3 )      30        100        (9 )     
(27 )      (70 )      57        11        23        (24 )      (25 )      (98 ) 
    (41 )      56        119        (14 )      (23 )      (21 )      30       
35        60        (98 )      (121 ) 

Margin Deposits

    (30 )      (28 )      (30 )      (30 )      (29 )      (29 )      (28 )     
(2 )      (0 )      (0 )      (0 )      (0 )      (0 )      0        (0 )     
(0 )      (0 )      (0 )      (0 )      0        0        (0 )      0        0
       0        (205 ) 

Other Cash Flow Items

    (6 )      25        (4 )      (10 )      45        5        8        36     
  (65 )      (38 )      12        (25 )      6        32        (15 )      0   
    28        0        7        30        (73 )      (43 )      16        (31 ) 
    3        (56 ) 

External Tax Payments to EFH Corp.

    (27 )      (0 )      (0 )      (3 )      (0 )      (0 )      (0 )      (0 ) 
    (0 )      (0 )      (0 )      (0 )      (26 )      (0 )      (0 )      (3 ) 
    (0 )      (0 )      (0 )      0        0        0        0        0       
(23 )      (81 )   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Unlevered Free Cash Flow

    ($95 )      $77        $19        $137        $153        $88        $1     
  $67        ($37 )      $108        $63        $34        $12        $90       
$12        $188        $229        $130        $44        $56        $20       
$68        $93        $39        ($70 )      $1,524   

Ch. 11 Adjustments

                                                   

Margin Deposits Adjustment (2)

    30        28        30        30        29        29        28        2     
  0        0        0        0        0        (0 )      0        0        0   
    0        0        (0 )      (0 )      0        (0 )      (0 )      (0 )     
205   

Adequate Protection Interest (3)

    (102 )      (102 )      (102 )      (103 )      (102 )      (103 )      (103
)      (104 )      (104 )      (105 )      (106 )      (107 )      (108 )     
(110 )      (111 )      (113 )      (115 )      (116 )      (119 )      (121 ) 
    (122 )      (125 )      (127 )      (129 )      (131 )      (2,790 ) 

Payments to Structurally Senior Creditors(4)

    (1 )      (4 )      (11 )      (0 )      (3 )      (1 )      (0 )      (12
)      (7 )      (0 )      (3 )      (0 )      (0 )      (4 )      (11 )      (0
)      (3 )      (0 )      (0 )      (13 )      (3 )      (0 )      (3 )      (0
)      (0 )      (83 ) 

RRC Mine Reclamation Bond

    —          (1,100 )      —          —          —          —          —     
    —          —          —          —          —          —          —         
—          —          —          —          —          —          —          —  
       —          —          —          (1,100 ) 

LUME and L/C Collateral / Utility Adequate Assurance (5)

    (910 )      (300 )      —          —          —          —          —       
  —          —          —          —          —          —          —         
—          —          —          —          —          —          —          —  
       —          —          —          (1,210 ) 

Professional Fees / Financing / Business Impacts / Other (6)

    (149 )      (105 )      (21 )      (20 )      (31 )      (29 )      (29 )   
  (28 )      (27 )      (28 )      (27 )      (28 )      (27 )      (27 )     
(27 )      (28 )      (28 )      (28 )      (28 )      (27 )      (28 )      (28
)      (28 )      (29 )      (53 )      (908 ) 

DIP Facility Financing

    1,079        1,515        94        (35 )      (37 )      24        112     
  83        183        34        83        111        134        62        148
       (36 )      (72 )      25        114        118        146        98     
  79        133        270        4,462   

DIP Facility Interest

    (3 )      (8 )      (8 )      (8 )      (8 )      (8 )      (8 )      (9 ) 
    (9 )      (9 )      (9 )      (9 )      (10 )      (10 )      (10 )      (10
)      (11 )      (11 )      (11 )      (12 )      (12 )      (13 )      (14 ) 
    (14 )      (15 )      (251 ) 

Release of Restricted Cash

    —          —          —          —          —          —          —         
—          —          —          —          —          —          —          —  
       —          —          —          —          —          —          —     
    —          —          —          —       

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Ch. 11 Adjustments

    ($56 )      ($77 )      ($19 )      ($137 )      ($153 )      ($88 )     
($1 )      ($67 )      $37        ($108 )      ($63 )      ($34 )      ($12 )   
  ($90 )      ($12 )      ($188 )      ($229 )      ($130 )      ($44 )     
($56 )      ($20 )      ($68 )      ($93 )      ($39 )      $70        ($1,675
)   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Cash Flow

    ($151 )      $—          $—          $—          $—          $—         
$—          $—          $—          $—          $—          $—          $—     
    $—          $—          $—          $—          $—          $—          $—  
       $—          $—          $—          $—          $—          ($151 ) 

Beginning Cash Balance (7)

    251        100        100        100        100        100        100       
100        100        100        100        100        100        100        100
       100        100        100        100        100        100        100   
    100        100        100        251   

Total Cash Flow

    (151 )      —          —          —          —          —          —       
  —          —          —          —          —          —          —         
—          —          —          —          —          —          —          —  
       —          —          —          (151 )   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending Cash Balance

    $100        $100        $100        $100        $100        $100        $100
       $100        $100        $100        $100        $100        $100       
$100        $100        $100        $100        $100        $100        $100   
    $100        $100        $100        $100        $100        $100   

Total Liquidity

                                                   

DIP Facility Revolving Facility Availability

    154        1,881        1,787        1,822        1,859        1,836       
1,724        1,641        1,457        1,423        1,340        1,229       
1,095        1,033        886        922        994        969        855       
738        592        494        415        282        13        13   

L/C Restricted Cash Availability

    200        150        150        150        150        150        150       
150        150        150        150        150        150        150        150
       150        150        150        150        150        150        150   
    150        150        150        150   

Plus: Ending Cash Balance

    100        100        100        100        100        100        100       
100        100        100        100        100        100        100        100
       100        100        100        100        100        100        100   
    100        100        100        100     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Available Liquidity

    $454        $2,131        $2,037        $2,072        $2,109        $2,086
       $1,974        $1,891        $1,707        $1,673        $1,590       
$1,479        $1,345        $1,283        $1,136        $1,172        $1,244   
    $1,219        $1,105        $988        $842        $744        $665       
$532        $263        $263   

Unavailable Unencumbered Cash

    150        150        150        150        150        150        150       
150        150        150        150        150        150        150        150
       150        150        150        150        150        150        150   
    150        150        150        150   

 

Notes:

 

(1) Reflects removal of benefit of gas hedges totaling $391m for the May
2014—December 2014 time period.

(2) Reflects reversal of all margin deposit activity related to gas hedges
totaling $206m for the May 2014—December 2014 time period.

(3) Assumes L + [4.5]% (1-month LIBOR curve) on principal amount of all first
lien debt, as well as retirement of accrued and unpaid first lien interest
expense as of April 30, 2014.

(4) Includes debt service payments related to capital leases and other
structurally senior debt.

(5) Combination of collateral for LUME trading parties and L/C cash collateral,
as well as adequate assurance for utility providers.

(6) Payment of professional fees subject to Court approval.

(7) Cash balance net of $150m adjustment to account for Unavailable Unencumbered
cash.

 

303

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

EXHIBIT N

TO THE CREDIT AGREEMENT

FORM OF INTERIM ORDER

[See attached]