Exhibit 10.2

EXECUTION VERSION

TRADE RECEIVABLES SALE AGREEMENT

Dated as of November 30, 2012

Among

TXU ENERGY RETAIL COMPANY LLC

as Originator, as Collection Agent and as Originator Agent

and

TXU ENERGY RECEIVABLES COMPANY LLC

as Buyer

and

ENERGY FUTURE HOLDINGS CORP.

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TABLE OF CONTENTS

 

         Page  

ARTICLE I DEFINITIONS

     1   

SECTION 1.01.

  Certain Defined Terms      1   

SECTION 1.02.

  Other Terms      7   

SECTION 1.03.

  Computation of Time Periods      7   

SECTION 1.04.

  References to Agreements, Laws, Etc      7   

ARTICLE II SALE OF ORIGINATOR RECEIVABLES

     7   

SECTION 2.01.

  Sale of Originator Receivables      7   

SECTION 2.02.

  Terms of Sales      8   

SECTION 2.03.

  Purchase Price Credit Adjustments      12   

SECTION 2.04.

  Settlement Procedures      12   

SECTION 2.05.

  Payments and Computations, Etc      13   

SECTION 2.06.

  Characterization      14   

SECTION 2.07.

  Addition of Originators      15   

SECTION 2.08.

  No Repurchase      17   

SECTION 2.09.

  Intercompany Note      17   

ARTICLE III CONDITIONS OF PURCHASES

     18   

SECTION 3.01.

  Conditions Precedent to Initial Purchase from the Initial Originator      18
  

SECTION 3.02.

  Conditions Precedent to All Purchases      18   

SECTION 3.03.

  Conditions Precedent to Originator’s Obligations      19   

ARTICLE IV REPRESENTATIONS AND WARRANTIES

     19   

SECTION 4.01.

  Representations and Warranties of each of the Originators, EFH Corp. and the
Collection Agent      19   

SECTION 4.02.

  Article 9 Representations and Warranties      24   

ARTICLE V GENERAL COVENANTS OF THE ORIGINATORS, EFH CORP. AND THE COLLECTION
AGENT

     24   

SECTION 5.01.

  Affirmative Covenants of each of the Originators, EFH Corp. and the Collection
Agent      24   

SECTION 5.02.

  Reporting Requirements of each of the Originators, EFH Corp. and the
Collection Agent      27   

SECTION 5.03.

  Negative Covenants of each of the Originators, EFH Corp. and the Collection
Agent      29   

ARTICLE VI ADMINISTRATION AND COLLECTION

     32   

SECTION 6.01.

  Designation of Collection Agent      32   

 

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SECTION 6.02.

  Rights of the Buyer and the Administrative Agents      32   

SECTION 6.03.

  Responsibilities of the Originators      34   

SECTION 6.04.

  Further Actions      34   

SECTION 6.05.

  Consent and Agreement of the Originators      35   

SECTION 6.06.

  Lock-Boxes      37   

ARTICLE VII INDEMNIFICATION

     37   

SECTION 7.01.

  Indemnities by each Originator      37   

SECTION 7.02.

  Duty to Advise Buyer and Administrative Agents      39   

ARTICLE VIII MISCELLANEOUS

     40   

SECTION 8.01.

  Amendments, Etc      40   

SECTION 8.02.

  Notices, Etc      40   

SECTION 8.03.

  Binding Effect; Assignability      40   

SECTION 8.04.

  Costs, Expenses and Taxes      41   

SECTION 8.05.

  No Proceedings      42   

SECTION 8.06.

  Confidentiality      42   

SECTION 8.07.

  Governing Law      42   

SECTION 8.08.

  No Waiver; Remedies      42   

SECTION 8.09.

  Execution in Counterparts      43   

SECTION 8.10.

  Entire Agreement      43   

SECTION 8.11.

  Severability of Provisions      43   

SECTION 8.12.

  Jurisdiction, Etc      43   

SECTION 8.13.

  Waiver      44   

SECTION 8.14.

  WAIVER OF JURY TRIAL      44   

 

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TRADE RECEIVABLES SALE AGREEMENT

Dated as of November 30, 2012

TXU ENERGY RETAIL COMPANY LLC, a Texas limited liability company (“TXU Energy
Retail”), as an originator (the “Initial Originator”, and together with each
Additional Originator that becomes a party hereto in accordance with
Section 2.07, the “Originators”), as the Collection Agent (as defined below) and
as agent for the Originators (the “Originator Agent”), TXU ENERGY RECEIVABLES
COMPANY LLC, a Delaware limited liability company as buyer (the “Buyer”), and
ENERGY FUTURE HOLDINGS CORP., a Texas corporation (“EFH Corp.”) agree as
follows:

PRELIMINARY STATEMENTS:

(1) Certain terms which are capitalized and used throughout this Agreement (in
addition to those defined above) are defined in Article I of this Agreement.

(2) The Initial Originator and any Additional Originator have Receivables that
they wish to sell to the Buyer, and the Buyer is prepared to purchase such
Receivables on the terms set forth herein.

NOW, THEREFORE, the parties agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Certain Defined Terms.

Capitalized terms used herein but not otherwise defined herein shall have the
meanings specified in that certain First Lien Trade Receivables Financing
Agreement, dated as of the date hereof, by and among the Buyer, the Collection
Agent, CAFCO, LLC, a Delaware limited liability company, CRC Funding, LLC, a
Delaware limited liability company, Charta, LLC, a Delaware limited liability
company, CIESCO, LLC, a Delaware limited liability company, and Citibank, as the
Initial Bank, as the Citi Group Managing Agent, and as First Lien Agent, as the
same may, from time to time, be amended, restated, modified or supplemented in
accordance with the terms thereof (the “First Lien Receivables Financing
Agreement”). In addition, as used in this Agreement and unless otherwise stated
herein, the following terms shall have the following meanings (such meanings to
be equally applicable to both the singular and plural forms of the terms
defined):

“Actual Closing Date Purchase Price” has the meaning specified in
Section 2.02(b).

“Additional Originator” has the meaning specified in Section 2.07.

“Additional Originator Receivable Assets” has the meaning specified in
Section 2.01(a).

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“Additional Originator Supplement Agreement” has the meaning specified in
Section 2.07(c).

“Administrative Agents” means, as applicable, the First Lien Agent and/or, on
and after the Second Lien Effective Date, the Second Lien Agent.

“Aggregate Purchase Price” has the meaning specified in Section 2.02(f).

“Aggregate Purchase Price Credits” has the meaning specified in Section 2.02(f).

“Agreement” means this Agreement as the same may from time to time be amended,
supplemented or otherwise modified.

“Allocable Share” means with respect to any claim or request for
indemnification, payment of increased costs or reimbursement of expenses or
otherwise pursuant to Article VII or Section 8.04 from or against any
Originator, the ratio of the aggregate Outstanding Balance of Originator
Receivables of such Originator owned by the Buyer over the aggregate Outstanding
Balance of all Originator Receivables owned by the Buyer, determined as at the
time such claim or request is initially asserted against such Originator.

“Buyer” has the meaning specified in the introductory paragraph hereof.

“Cash Payments” has the meaning specified in Section 2.02(h)(i).

“Citibank” means Citibank, N.A., a national banking association.

“Closing Reconciliation Date” has the meaning specified in Section 2.02(b).

“Collection Agent” has the meaning specified in Section 6.01.

“Collections” means, with respect to any Originator Receivable, all cash
collections and other cash proceeds of such Originator Receivable, including,
without limitation, collections of the Outstanding Balance and any finance
charge, late payment fee or other charge, all cash proceeds of the Related
Security with respect to such Originator Receivable and any Purchase Price
Credits paid pursuant to the terms hereof.

“Contract” means an open account agreement, as evidenced by one of the forms of
invoice attached hereto as Schedule III or as attached to the Originator Report,
or a tariff, or a written agreement between any Originator and an Obligor. The
Majority Group Managing Agents, or, after a Discharge of Senior Obligations
following the Second Lien Effective Date, the Second Lien Agent, may, by written
notice to any Originator, disapprove of any form of invoice within ten Business
Days after each Group Managing Agent or the Second Lien Agent, as applicable,
receives from the Buyer the Originator Report with a copy of such new form
attached thereto and any other agreement or instrument pursuant to which a
Receivable arises or which evidences an Originator Receivable.

 

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“Controlling Agent” means (i) prior to the Discharge of Senior Obligations, the
First Lien Agent, and (ii) following the Discharge of Senior Obligations after
the Second Lien Effective Date, the Second Lien Agent.

“Credit and Collection Policy” means those credit and collection policies and
practices of (i) the Initial Originator existing on the date hereof (as more
particularly set forth in Schedule II attached) and (ii) each Additional
Originator as delivered to each Group Managing Agent, in form and substance
satisfactory to the Group Managing Agents, in each case, which are being
followed by the Collection Agent and the applicable Originator with respect to
Contracts and Originator Receivables related thereto, including those policies
and practices maintained by the Collection Agent’s or the applicable
Originator’s computer system, with such changes to such credit and collection
policies and practices as are not prohibited by Section 5.03(c).

“Cutoff Date” means November 28, 2012.

“Discharge of Senior Obligations” (i) except as set forth in the following
clause (ii), means the reduction of the Facility Principal to zero and the
indefeasible payment in full of all other amounts due to the First Lien Agent,
each Group Managing Agent, each Bank and each Investor under the First Lien Loan
Documents after the Facility Termination Date and (ii) after the Second Lien
Effective Date, has the meaning set forth in the Second Lien Intercreditor
Agreement.

“Discount” means, in respect of (i) the initial Purchase from the Initial
Originator on the date hereof, $16,893,125.00 and (ii) each Purchase thereafter,
the Discount Percentage multiplied by the aggregate Outstanding Balance of the
Originator Receivables that are the subject of such Purchase.

“Discount Percentage” has the meaning specified in Schedule V to this Agreement.

“EFH Corp.” has the meaning specified in the introductory paragraph hereof.

“Eligible Originator” means an Originator that is a direct or indirect
majority-owned subsidiary of TCEH and is an “Eligible Originator” under the
First Lien Receivables Financing Agreement.

“Financing Agreements” means, as applicable, the First Lien Receivables
Financing Agreement and/or, on and after the Second Lien Effective Date, the
Second Lien Credit Agreement.

“First Lien Agent” means, Citibank, N.A., as administrative agent under the
First Lien Receivables Financing Agreement, and any successor administrative
agent thereunder.

“First Lien Loan Documents” means the First Lien Receivables Financing Agreement
and each other Transaction Document (as defined therein), and after the Second
Lien Effective Date, the “Senior Debt Documents” as defined in the Second Lien
Intercreditor Agreement.

 

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“First Lien Receivables Financing Agreement” has the meaning specified in the
introductory paragraph to Section 1.01.

“Indemnified Amounts” has the meaning specified in Section 7.01.

“Indemnified Party” has the meaning specified in Section 7.01.

“Initial Originator” has the meaning specified in the introductory paragraph
hereof.

“Initial Originator Receivable Assets” has the meaning specified in
Section 2.01(a).

“Initial Purchase Price” means an amount equal to (a) the aggregate Outstanding
Balance of the Originator Receivables of the Initial Originator existing as of
the Cutoff Date minus (b) the Discount in respect of the initial Purchase from
the Initial Originator on the date hereof.

“Intercompany Note” means the promissory note, in substantially the form of
Exhibit B hereto, executed by the Buyer to the order of the Originator Agent on
behalf of the Originators.

“Lender” means any lender under the Second Lien Credit Agreement.

“Material Adverse Effect” means a material adverse effect on (i) the financial
condition or operations of TCEH and its Subsidiaries which would be reasonably
likely to materially and adversely affect the ability of TCEH to perform its
obligations under the Parent Undertaking or, if this term “Material Adverse
Effect” is used in relation to the Collection Agent or any Originator, the
financial condition or operations of the Collection Agent or such Originator and
their respective Subsidiaries which would be reasonably likely to materially and
adversely affect the ability of the Collection Agent or such Originator to
perform its obligations under the Transaction Documents to which it is a party,
(ii) the legality, validity or enforceability of this Agreement or any other
Transaction Document, (iii) the interest of any Originator, the Buyer, the First
Lien Agent, any Group Managing Agent, any Holder or, on and after the Second
Lien Effective Date, any Lender or the Second Lien Agent in the Receivables
generally or in any significant portion of the Receivables, the Related Security
or Collections with respect thereto, or (iv) the collectibility of the
Receivables generally or of any significant portion of the Receivables.

“Maturity Date” means the date on which all obligations become due and payable
under the Second Lien Loan Documents (whether scheduled, by acceleration or
otherwise).

“Modified Aggregate Purchase Price” has the meaning specified in
Section 2.02(h)(i).

“Non-Payment Event” has the meaning specified in Section 2.02(e).

 

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“Obligor” means a Person obligated to make payments for purchase of goods or
services (including, without limitation, electricity) pursuant to a Contract.

“Originator” has the meaning specified in the introductory paragraph hereof.

“Originator Agent” has the meaning specified in the introductory paragraph
hereof.

“Originator Receivable” means, with respect to any Originator, all present and
future Receivables of such Originator.

“Post-Termination Date Receivables” has the meaning specified in
Section 2.04(b).

“Purchase” means a purchase by the Buyer of Receivable Assets from an Originator
pursuant to Article II.

“Purchase Date” means each day on which a Purchase is made pursuant to Article
II.

“Purchase Price” means, for (i) the initial Purchase from the Initial Originator
on the date hereof being paid for on the date hereof pursuant to Article II, the
Initial Purchase Price and (ii) each subsequent Purchase pursuant to Article II,
an amount equal to (a) the aggregate Outstanding Balance of the Originator
Receivables that are the subject of such Purchase minus (b) the Discount in
respect of such Purchase.

“Purchase Price Credit” has the meaning specified in Section 2.03.

“Purchase Settlement Period” has the meaning specified in Section 2.02(f).

“Receivable Assets” has the meaning specified in Section 2.01(a).

“Receivables Activity Report” means a report prepared by the Originator Agent,
in substantially the form attached hereto as Exhibit A.

“Records” means, with respect to any Receivable, all documents, books, records
and other information (including, without limitation, computer programs, tapes,
disks, punch cards, data processing software and related property and rights)
relating to such Receivable, any Related Security therefor and the related
Obligor, other than the related Contract.

“Related Security” means with respect to any Receivable:

(i) all of the interest of the relevant Originator in the goods (including
returned, repossessed or foreclosed goods), if any, relating to the sale which
gave rise to such Receivable;

 

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(ii) all other security interests or liens and property subject thereto from
time to time purporting to secure payment of such Receivable, whether pursuant
to the Contract related to such Receivable or otherwise;

(iii) all guarantees, letters of credit, security agreements, insurance and
other agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether pursuant to the
Contract related to such Receivable or otherwise; and

(iv) all Contracts relating to such Receivable (except to the extent any
assignment thereof under this Agreement would breach a legally enforceable
provision of such Contract) and all Records relating to such Receivable, any of
the other property described in this definition or the related Obligor.

“Second Lien Agent” means the administrative agent under the Second Lien Credit
Agreement, and any successor administrative agent thereunder.

“Second Lien Credit Agreement” means a second lien credit agreement, among the
Buyer, certain lenders party thereto, TXU Energy Retail, as collection agent,
and the Second Lien Agent, as the same may be amended, modified or restated from
time to time in accordance with the terms of the Second Lien Intercreditor
Agreement.

“Second Lien Intercreditor Agreement” means a Second Lien Intercreditor
Agreement, effective as of the Second Lien Effective Date, by and among the
First Lien Agent, TXU Energy Retail, as the collection agent, the Buyer and the
Second Lien Agent, as the same may be amended, modified or restated from time to
time.

“Second Lien Loan Documents” means, collectively, the Second Lien Credit
Agreement and the “Second Priority Debt Documents” as such term is defined in
the Second Lien Intercreditor Agreement.

“Settlement Date” means (i) except as set forth in the following clause (ii),
the second Business Day after each Determination Date, and (ii) after the
Discharge of Senior Obligations following the Second Lien Effective Date, each
date on which accrued interest payments are required to be paid under the Second
Lien Credit Agreement.

“Settlement Period” means, initially, the period from the date hereof to the
next succeeding Determination Date, and thereafter, each period from a
Determination Date to the next succeeding Determination Date.

“TCEH” means Texas Competitive Electric Holdings Company LLC, a Delaware limited
liability company.

“Termination Date” means the earlier of (i) the later of (a) the Facility
Termination Date and (b) in the event the Second Lien Effective Date shall have
occurred, the Maturity Date, (ii) the date on which an Originator delivers a
notice of a Non-Payment Event as described in Section 2.02(e), and (iii) the
date the Originator Agent declares the occurrence of the Termination Date
pursuant to Section 2.02(h)(i).

 

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“Transaction Documents” means the First Lien Loan Documents and, on and after
the Second Lien Effective Date, the Second Lien Loan Documents.

“TXU Collection Agent” means (i) TXU Energy Retail, in its capacity as
Collection Agent hereunder and as collection agent under the Financing
Agreements, or (ii) if another Person that is an Affiliate of EFH Corp. has been
designated as the collection agent under the Financing Agreements, such Person,
in its capacity as Collection Agent hereunder and as collection agent under the
Financing Agreements.

“TXU Energy Retail” has the meaning specified in the introductory paragraph
hereof.

SECTION 1.02. Other Terms.

All accounting terms not specifically defined herein shall be construed in
accordance with GAAP. All terms used in Article 9 of the UCC in the State of New
York and not specifically defined herein are used herein as defined in such
Article 9.

SECTION 1.03. Computation of Time Periods.

Unless otherwise stated in this Agreement, in the computation of a period of
time from a specified date to a later specified date, the word “from” means
“from and including” and each of the words “to” and “until” means “to but
excluding”.

SECTION 1.04. References to Agreements, Laws, Etc.

Unless otherwise expressly provided herein, (a) references herein to agreements,
documents and instruments 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 not prohibited by any Transaction Document; and (b) references
herein to any requirement of law shall include all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting
such requirement of law.

ARTICLE II

SALE OF ORIGINATOR RECEIVABLES

SECTION 2.01. Sale of Originator Receivables.

(a) The Initial Originator hereby sells, transfers and assigns, without recourse
(except as expressly provided in Sections 2.01(b) and 2.03), to the Buyer, on
the terms and subject to the conditions specifically set forth herein, all its
right, title and interest in, to and under all of its Originator Receivables
existing on the date hereof and hereafter arising from time to time until the
Termination Date, all Related Security with respect thereto, all Collections and
other amounts received with respect thereto and all proceeds of the foregoing,
together with all of the Initial Originator’s rights, remedies, powers and
privileges with respect to its Originator

 

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Receivables, all Related Security with respect thereto, all Collections and
other amounts received with respect thereto and all proceeds of the foregoing
(collectively, the “Initial Originator Receivable Assets”). Each Additional
Originator, by entering into an Additional Originator Supplement Agreement, will
thereby sell, transfer and assign, without recourse (except as expressly
provided in Sections 2.01(b) and 2.03), to the Buyer, on the terms and subject
to the conditions specifically set forth herein, all its right, title and
interest in, to and under all of its Originator Receivables existing on the date
set forth in such Additional Originator Supplement Agreement as the effective
date thereunder and thereafter arising from time to time until the Termination
Date, all Related Security with respect thereto, all Collections and other
amounts received with respect thereto and all proceeds of the foregoing,
together with all such Additional Originator’s rights, remedies, powers and
privileges with respect to such Originator Receivables, all Related Security
with respect thereto, all Collections and other amounts received with respect
thereto and all proceeds of the foregoing (collectively, the “Additional
Originator Receivable Assets”, and together with the Initial Originator
Receivable Assets, the “Receivable Assets”). On the terms and subject to the
conditions specifically set forth herein, the Buyer hereby agrees to purchase
all such Receivable Assets from time to time until the Termination Date.

(b) The parties to this Agreement intend that the transactions contemplated
hereby shall be, and shall be treated as, a purchase by the Buyer and a sale by
each of the Originators of Receivable Assets and not as a lending transaction,
which sales are absolute and irrevocable and provide the Buyer with the full
benefits of ownership of the Receivable Assets. Each sale of Originator
Receivables hereunder is made without recourse to the applicable Originator;
provided, however, that (i) each Originator shall be liable to the Buyer for all
representations, warranties, covenants and indemnities made by such Originator
pursuant to the terms of this Agreement, (ii) each such sale shall be subject to
the provisions set forth in Section 2.03 and (iii) the foregoing sales,
transfers and assignments do not constitute and are not intended to result in a
creation or assumption by the Buyer of any obligation or liability with respect
to any Originator Receivable or Contract, nor shall the Buyer be obligated to
perform or otherwise be responsible for any obligation of any Originator or any
other Person in connection with any Receivable Assets or under any agreement or
instrument relating thereto.

(c) In connection with the foregoing sales, transfers and assignments, each
Originator hereby agrees to record and file, in each case, at its own expense,
proper financing statements (and proper continuation statements with respect to
such financing statements when applicable) with respect to the Receivable Assets
now and hereafter from time to time acquired by the Buyer under this Agreement,
in such manner and in such jurisdictions as are necessary or desirable in the
Buyer’s sole discretion to perfect the sales, transfers and assignments of the
Receivable Assets to the Buyer hereunder, and to deliver copies of such
financing statements to the Buyer and the applicable Administrative Agent on or
prior to the initial advances made under the applicable Financing Agreement.
Such financing statements under this Agreement shall name such Originator as
debtor/Originator and the Buyer (or its assignee) as secured party/buyer.

SECTION 2.02. Terms of Sales.

(a) In the case of the Initial Originator, on the date hereof and, in the case
of an Additional Originator, on the date set forth in the applicable Additional
Originator Supplement Agreement as the effective date thereunder, and in the
case of all Originators, on the date of creation of each

 

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newly arising Originator Receivable thereafter, all of each Originator’s right,
title and interest in, to and under (i) in the case of the date hereof or such
date set forth in the applicable Additional Originator Supplement Agreement as
the effective date thereunder, all then existing Receivable Assets of the
Initial Originator or the applicable Additional Originator, respectively, and
(ii) in the case of each such date of creation thereafter (but only so long as
the Termination Date has not occurred), all such newly created Receivable Assets
of the Originators, shall be immediately and automatically sold, assigned,
transferred and conveyed to the Buyer pursuant to Section 2.01(a) above without
any further action by the Originators, the Buyer or any other Person.

(b) The Purchase Price for each Purchase from an Originator shall be payable in
full by the Buyer to the Originator Agent on behalf of such Originator on each
Purchase Date in the manner provided in paragraph (c) below of this
Section 2.02. On the first Settlement Date occurring after the date of the
initial Purchase from the Initial Originator on the date hereof (the “Closing
Reconciliation Date”), the Initial Originator shall determine the Purchase Price
for the Initial Originator Receivable Assets existing on the date hereof based
on the Originator Receivables of the Initial Originator existing on the date
hereof (the “Actual Closing Date Purchase Price”). If the Initial Purchase Price
paid by the Buyer is greater than the Actual Closing Date Purchase Price, the
Originator Agent on behalf of the Initial Originator shall apply that excess as
a credit to the Purchase Price of the Originator Receivable Assets being paid to
the Originator Agent on behalf of the Initial Originator by the Buyer on the
Closing Reconciliation Date. If the Initial Purchase Price paid by the Buyer is
less than the Actual Closing Date Purchase Price, the Buyer shall pay that
difference to the Originator Agent on behalf of the Initial Originator on the
Closing Reconciliation Date.

(c) The Purchase Price for Receivable Assets purchased from each Originator
shall be paid by the Buyer on each Purchase Date (including the initial Purchase
Date) as follows:

(i) by netting the amount of any Purchase Price Credits with respect to such
Originator pursuant to Section 2.03 (or, on the Closing Reconciliation Date, any
credit pursuant to clause (b) of this Section 2.02) against such Purchase Price;

(ii) to the extent available for such purpose, in cash from Collections released
to the Buyer pursuant to the Financing Agreements on such Purchase Date;

(iii) to the extent available for such purpose, in cash from the proceeds of an
Advance made to the Buyer pursuant to the First Lien Receivables Financing
Agreement on such Purchase Date and/or, on the Second Lien Effective Date, the
proceeds of borrowings under the Second Lien Credit Agreement;

(iv) to the extent available for such purpose, in cash from the proceeds of
capital contributed by TCEH, if any, in respect of its equity interest in the
Buyer; and

 

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(v) subject to the provisions of Section 2.09(b), by means of an addition to the
principal amount of the Intercompany Note in an aggregate amount up to the
remaining unpaid portion of the Purchase Price. Any such addition to the
principal amount of the Intercompany Note shall be allocated among the
Originators in accordance with the provisions of this Section 2.02(c)(v) and
Section 2.09(c). The Originator Agent may evidence such additional principal
amounts by recording the date and amount thereof on the grid attached to the
Intercompany Note; provided, however, that the failure to make any such
recordation or any error in such grid shall not in any manner affect the
obligation of the Buyer to repay the obligations thereunder in accordance with
the terms thereof.

(d) The Originator Agent shall be responsible, in its sole discretion but in
accordance with Section 2.02(c), for allocating among the Originators the
payment of the Purchase Price for Receivable Assets and any amounts netted
therefrom pursuant to Section 2.02(c)(i) or, in the form of cash to be paid
pursuant to Sections 2.02(c)(ii), (iii) or (iv), or in the form of an addition
to the principal amount of the Intercompany Note pursuant to Sections 2.02(c)(v)
and 2.09. The Buyer shall be entitled to pay all amounts in respect of the
Purchase Price of Receivable Assets to an account of the Originator Agent for
allocation by the Originator Agent to the Originators, and each of the
Originators hereby appoints the Originator Agent as its agent for purposes of
receiving such payments, making such allocations and taking any other actions
hereunder on its behalf, and hereby authorizes the Buyer to make all payments
due to such Originator directly to, or as directed by, the Originator Agent. The
Originator Agent hereby accepts and agrees to such appointment.

(e) If any Originator (or the Originator Agent on its behalf) shall not have
received payment in full from the Buyer of the Purchase Price for any Receivable
Asset on the Purchase Date therefor in accordance with the terms of
Section 2.02(c) (a “Non-Payment Event”), whether or not the conditions set forth
in Article III have been fulfilled, such Receivable Asset shall, upon
(x) receipt of notice from such Originator (or the Originator Agent on its
behalf) of such failure to receive payment (which notice shall be provided only
on such Purchase Date and may not be delivered at any time thereafter) and
(y) the return of any cash payment received from the Buyer with respect to such
Receivable Asset on such date, immediately and automatically be sold, assigned,
transferred and reconveyed by the Buyer to such Originator without any further
action by the Buyer or any other Person. The foregoing shall in no event impact
in any manner any other Receivable Asset Purchased on such Purchase Date for
which such Non-Payment Event does not apply.

(f) At least two Business Days prior to each Settlement Date and promptly after
the occurrence of the Termination Date, the Originator Agent shall deliver to
the Originators, the Buyer and the Administrative Agents a Receivables Activity
Report containing information regarding all Purchases from each Originator, the
aggregate Purchase Prices paid by the Buyer to each Originator and the aggregate
Purchase Price Credits in respect of the Receivable Assets of each Originator,
in each case occurring during the calendar month most recently ended or, in the
case of the Termination Date, during the period from the end of the preceding
calendar month to the Termination Date (each such period, a “Purchase Settlement
Period”), including, without limitation, (i) the aggregate Outstanding Balances
of the Originator Receivables sold by each Originator during such calendar month
or portion thereof, (ii) the aggregate Purchase Prices for such Receivable
Assets of each Originator (the “Aggregate Purchase Price”), (iii) the aggregate

 

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Purchase Price Credits for each Originator (the “Aggregate Purchase Price
Credits”) and (iv) the components of payment as provided in Section 2.02(c)
above with respect to each Originator (including the adjustments to and current
balance, if any, of the Intercompany Note), and in connection therewith, the
Buyer and each Originator (or the Originator Agent on its behalf) shall, after
giving effect to the application of payments provided in Sections 2.02(c) and
2.02(g) in respect of such calendar month or portion thereof, reconcile the
amounts owed to each other in respect of that period as provided in
Section 2.02(h). Each Originator (other than TXU Energy Retail) shall provide to
the Originator Agent all information in respect of such Originator’s Originator
Receivables and Purchase Price Credits required by the Originator Agent in order
to fulfill its obligations as Originator Agent hereunder, including, all
information in respect of such Originator’s Originator Receivables to be
included in each Receivables Activity Report.

(g) Each Originator hereby agrees that all amounts received by the Originator
Agent on behalf of such Originator on any Business Day shall be applied in the
following order of priority on such Business Day:

(i) first, to pay the Purchase Price for Receivable Assets purchased from such
Originator as contemplated by Section 2.02(c)(ii);

(ii) second, to make payments of interest on, and then principal of the
Intercompany Note in accordance with Section 2.09 and the Intercompany Note; and

(iii) third, in such manner as the Buyer may specify.

(h) If on any Settlement Date,

(i) the Aggregate Purchase Price for the related Purchase Settlement Period
minus the Aggregate Purchase Price Credits for such Purchase Settlement Period
with respect to any Originator (such difference, the “Modified Aggregate
Purchase Price”) exceeds the amount of Collections and other cash payments
received by the Originator Agent on behalf of such Originator as provided herein
for such Purchase Settlement Period (such amount, the “Cash Payments”), the
Originator Agent shall, subject to the terms of this Agreement and to the extent
it has not already done so, record the increase in the principal amount
outstanding under the Intercompany Note up to the amount of such excess, and if
any excess remains after giving effect to the increase in the principal amount
of the Intercompany Note (as a result of the limitations set forth in
Section 2.09(b)), the Originator Agent may declare the Termination Date to have
occurred by delivering notice to that effect to the Buyer and the Administrative
Agents;

(ii) the Cash Payments for the related Purchase Settlement Period exceed the
Modified Aggregate Purchase Price for such Purchase Settlement Period with
respect to any Originator, the Originator Agent shall, subject to the terms of
this Agreement, record the application of that excess, (x) first, to the payment
of unpaid and accrued interest on the Intercompany Note, as applicable and
(y) second, as a reduction in the principal amount of the Intercompany Note, as
applicable, and cause the applicable Originator to pay any remaining excess to
the Buyer.

 

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SECTION 2.03. Purchase Price Credit Adjustments.

If on any day (i) the Outstanding Balance of any Originator Receivable is
(a) reduced as a result of any defective, rejected or returned services, any
cash discount, or any noncash adjustment by the applicable Originator or
(b) reduced or canceled as a result of a setoff arising from any claim by the
Obligor thereof against such Originator (whether such claim arises out of the
same or a related transaction or an unrelated transaction), (ii) any of the
representations or warranties in Section 4.01(k) is not true, with respect to
any Originator Receivable on the date when made or deemed made or (iii) any
Adverse Claim or any Dispute, claim, offset or defense, as referred to in
Section 7.01(vi), has arisen or been asserted with respect to any Originator
Receivable, the Buyer shall be entitled to a credit (a “Purchase Price Credit”)
against the Purchase Price payable to such Originator hereunder equal to (x) the
full amount of such reduction or adjustment (in the case of clause (i) above) or
(y) the outstanding balance of the applicable Originator Receivable (in the case
of clause (ii) or (iii) above) less any Collections received in respect thereof;
provided, that no Purchase Price Credit shall be granted or paid by any
Originator in the case of clause (ii) above unless requested by the Buyer (which
request must be made within six (6) months following the date the Buyer receives
notice of such breach or inaccuracy from the applicable Originator). If the
aggregate Purchase Price Credits in respect of any Originator exceeds the
aggregate Purchase Price in respect of the Receivable Assets of such Originator
payable on any Purchase Date, such Originator shall pay to the Buyer an amount
equal to the remaining amount of such Purchase Price Credits by depositing such
amount in the Collection Account on or prior to the first Settlement Date after
the date on which such Purchase Price Credits arose. On (x) the Termination Date
(or, if not a Business Day, the first Business Day thereafter), each Originator
shall pay to the Buyer an amount equal to the aggregate Purchase Price Credits
in respect of such Originator as of such date that have not as of such time been
netted against the Purchase Price payable to such Originator pursuant to
Section 2.02(c) and (y) each Business Day after the Termination Date on which a
Purchase Price Credit in respect of an Originator exists, such Originator shall
pay to the Buyer an amount equal to such Purchase Price Credit, in each case, by
depositing such amount in the Collection Account on such Business Day.
Simultaneously with the granting or payment of any Purchase Price Credit by an
Originator in respect of an Originator Receivable under clause (ii) or
(iii) above, such Originator Receivable and the other Receivable Assets with
respect thereto shall immediately and automatically be sold, assigned,
transferred and reconveyed (without recourse) by the Buyer to such Originator
without any further action by the Buyer or any other Person.

SECTION 2.04. Settlement Procedures.

(a) Except as otherwise required by law or the related Contract, all Collections
received from an Obligor of any Originator Receivable shall be applied to
Originator Receivables then outstanding of such Obligor in the order of the age
of such Originator Receivables, starting with the oldest such Originator
Receivable, except if payment is designated by such Obligor for application
against specific Originator Receivables.

 

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(b) With respect to any Originator Receivables of an Obligor arising from and
after the Termination Date which were not sold to the Buyer hereunder but which
were billed on the same invoice as Originator Receivables of such Obligor sold
by such Originator to the Buyer hereunder (such Originator Receivables,
“Post-Termination Date Receivables”), such Originator shall identify to the
Collection Agent, and the Collection Agent shall allocate, Collections with
respect to such Obligor on the following basis:

(i) for any Obligor with an advanced metering system allowing electricity
consumption to be recorded by the Originator every fifteen minutes, the portion
thereof relating to electricity consumed by such Obligor prior to the
Termination Date shall be treated as Originator Receivables and the portion
thereof relating to electricity consumed by such Obligor on or after the
Termination Date shall be treated as Post-Termination Date Receivables; and

(ii) for any Obligor with any other type of metering system, using the algorithm
published by the Electric Reliability Council of Texas that such Originator uses
to assign electricity consumption by an Obligor to particular days during a
period based on customer-specific variables and actual weather variables, the
portion thereof relating to electricity consumption by such Obligor assigned by
such Originator to days prior to the Termination Date shall be treated as
Originator Receivables and the portion thereof relating to electricity
consumption by such Obligor assigned by such Originator to the Termination Date
and days thereafter shall be treated as Post-Termination Date Receivables.

Except as otherwise required by law or the related Contract, all payments
received from any such Obligor with respect to such Receivables shall be
allocated first to the Originator Receivables and then to the Post-Termination
Date Receivables, except if payment is designated by such Obligor for
application against specific Originator Receivables or Post-Termination Date
Receivables, as applicable.

SECTION 2.05. Payments and Computations, Etc.

(a) All amounts to be paid or deposited by any Originator or the Originator
Agent or the Collection Agent on behalf of any Originator hereunder shall be
paid or deposited in the Collection Account in accordance with the terms hereof
no later than 11:00 a.m. (New York City time) on the day when due in lawful
money of the United States in same day funds, subject to Section 6.05(b)(i). All
amounts to be paid or deposited by the Buyer hereunder shall be paid or
deposited in accordance with the terms hereof no later than 3:00 p.m. (New York
City time) on the day when due in lawful money of the United States in same day
funds to the account of the Originator Agent designated from time to time or as
otherwise directed by the Originator Agent to the Buyer in writing. Each
Originator shall, to the extent permitted by law, pay to the Buyer interest on
all amounts not paid or deposited by or on behalf of such Originator when due
hereunder at a rate equal to 2% per annum above the Alternate Base Rate, payable
on demand; provided that such interest shall accrue at the Assignee Rate, or,
after a Discharge of Senior Obligations following the Second Lien Effective
Date, the interest rate payable on the principal outstanding under the Second
Lien Credit Agreement at such time prior to expiration of the cure period
specified in Section 7.01(b) of the First Lien Receivables Financing Agreements
or the

 

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analogous provision of the Second Lien Credit Agreement with respect to such
payment, and provided further, however, that such interest rate shall not at any
time exceed the maximum rate permitted by applicable law. The Buyer shall, to
the extent permitted by law, pay to the applicable Originator interest on all
amounts not paid or deposited by the Buyer when due hereunder at a rate equal to
2% per annum above the Alternate Base Rate, payable on demand; provided, that
such interest rate shall not at any time exceed the maximum rate permitted by
applicable law, and provided further, however, that any payments to be made by
the Buyer in respect of the foregoing shall be made solely from funds available
to the Buyer which are not otherwise required to be applied or set-aside for the
payment of any obligations of the Buyer under the Financing Agreements, shall be
non-recourse other than with respect to such funds and shall not constitute a
claim against the Buyer to the extent that insufficient funds exist to make such
payment.

(b) All computations of interest and fees hereunder shall be made on the basis
of a year of 360 days for the actual number of days (including the first but
excluding the last day) elapsed. Each Originator hereby irrevocably and
unconditionally waives and relinquishes to the fullest extent it may legally do
so any express or implied vendor’s lien, and any other lien, security interest,
charge or encumbrance, or any setoff, counterclaim, recoupment, defense and
other right or claim which would otherwise be imposed on or affect any
Originator Receivable or any Receivable Asset of such Originator on account of
any unpaid amount of the Initial Purchase Price or any Purchase Price therefor
or on account of any other unpaid amounts otherwise payable by the Buyer under
or in connection with this Agreement or the Intercompany Note or otherwise.

SECTION 2.06. Characterization.

If, notwithstanding the intention of the parties expressed in Section 2.01(b),
any sale by any Originator to the Buyer of any Receivable Assets hereunder shall
be characterized as a secured loan and not as a sale or absolute transfer
thereof or such sale or transfer shall for any reason be ineffective or
unenforceable, then this Agreement shall be deemed to constitute a security
agreement under the UCC and other applicable law. For this purpose and without
being in derogation of the parties’ intention that the sale of Originator
Receivables hereunder shall constitute a true sale thereof, each Originator
hereby grants to the Buyer a security interest in all of such Originator’s
right, title and interest in, to and under all of its Originator Receivables now
existing and hereafter arising, all Collections and Related Security with
respect thereto, each lock-box and lock-box account to which any Collections are
remitted or deposited, all other rights and payments relating to the Originator
Receivables and all proceeds of the foregoing to secure the prompt and complete
payment of a loan deemed to have been made in an amount equal to the Initial
Purchase Price or the Purchase Price (as applicable) of the Originator
Receivables together with all other obligations of such Originator hereunder,
and such Originator covenants that it shall take all actions reasonably
necessary to ensure that such security interest shall be prior to all other
Adverse Claims thereto. Furthermore, in the event the sale of the Receivable
Assets hereunder is characterized other than as a sale, each of the Buyer and
the Originators represents, as to itself, that each remittance of Collections by
such Originator to the Buyer or its assignees under this Agreement will have
been (i) in payment of a debt incurred by such Originator in the ordinary course
of business or financial affairs of such Originator and the Buyer and (ii) made
in the ordinary course of business or financial affairs of such Originator and

 

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the Buyer. After the Termination Date, the Buyer and its assigns shall have, in
addition to the rights and remedies which they may have under this Agreement,
all other rights and remedies provided to a secured creditor under the UCC and
other applicable law, which rights and remedies shall be cumulative.

SECTION 2.07. Addition of Originators.

Any majority-owned Subsidiary of TCEH that satisfies the criteria set forth in
the definition of “Eligible Originator” may become an additional Originator (an
“Additional Originator”) hereunder and sell Additional Originator Receivable
Assets to the Buyer hereunder, upon satisfaction of the following conditions
precedent:

(a) Each of the Buyer, each Administrative Agent and each of the Group Managing
Agents shall have received at least 5 Business Days’ prior written notice of the
proposed effective date of such Subsidiary becoming an Additional Originator;

(b) Each Administrative Agent and each Group Managing Agent shall have been
provided access to the officers of the proposed Additional Originator and its
books, records and accounting systems to enable each Administrative Agent and
each Group Managing Agent to conduct a due diligence review of the proposed
Additional Originator’s accounts receivable and accounting systems, and each
Administrative Agent and each Group Managing Agent shall have found such review
to be satisfactory;

(c) A supplement to this Agreement in substantially the form of Exhibit D (an
“Additional Originator Supplement Agreement”) hereto shall have been executed by
the proposed Additional Originator, the Originator Agent and the Buyer and
delivered to each Administrative Agent; and

(d) Each Administrative Agent and each Group Managing Agent shall have received
the following:

(i) proper financing statements naming the Additional Originator as debtor, the
Buyer as secured party and Citibank, as First Lien Agent, as assignee, to be
filed under the UCC of all jurisdictions that the First Lien Agent may deem
necessary or desirable in order to perfect the Buyer’s interests created or
purported to be created hereunder in such Additional Originator’s Additional
Originator Receivable Assets;

(ii) if the addition of such Additional Originator is occurring after the Second
Lien Effective Date, proper financing statements naming the Additional
Originator as debtor, the Buyer as secured party and the Second Lien Agent, as
assignee, to be filed under the UCC of all jurisdictions that the Second Lien
Agent may deem necessary or desirable in order to perfect the Buyer’s interests
created or purported to be created hereunder in such Additional Originator’s
Additional Originator Receivable Assets;

(iii) proper financing statements or other termination documentation, if any,
necessary to release all security interests and other rights of any Person in
the Receivables, Related Security, Collections, Contracts, lock-boxes and
lock-box accounts to which Collections are remitted or deposited or any proceeds
of the foregoing of such Additional Originator previously granted by such
Additional Originator;

 

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(iv) completed requests for information, dated on or a date reasonably near to
the effective date of the Additional Originator Supplement Agreement, listing
all effective financing statements which name the Additional Originator (under
its present name and any previous name) as debtor and which are filed in the
jurisdictions in which filings were made pursuant to subsection (d)(i) above and
such other jurisdictions specified by the Administrative Agents, together with
copies of such financing statements (none of which, except those filed pursuant
to subsection (d)(i) above, shall cover any Receivables, Related Security,
Collections, Contracts, lock-boxes and lock-box accounts to which Collections
are remitted or deposited or any proceeds of the foregoing of the Additional
Originator);

(v) a Consent and Agreement, duly executed by the Buyer and the Additional
Originator;

(vi) an amendment or joinder to the Intercompany Note in respect of such
Additional Originator, in substantially the form of Exhibit B to this Agreement,
duly executed by the Buyer;

(vii) certified copies of the charter and by-laws, partnership agreement,
limited liability company agreement, or any other applicable formation documents
governing the organization, in each case, as amended, of the Additional
Originator;

(viii) good standing certificates issued by the state of the Additional
Originator’s jurisdiction of organization and each state where it has material
operations;

(ix) a copy of the resolutions authorizing the Additional Originator Supplement
Agreement, this Agreement and each other Transaction Document to which the
Additional Originator will become a party, adopted by the board of directors,
general partner, managing member or any other managing authority of such
Additional Originator with the power to authorize the transactions contemplated
by the Transaction Documents;

(x) a certificate certifying the names and true signatures of the officers,
partners, managers, members or other applicable persons authorized on behalf of
the Additional Originator to sign the Additional Originator Supplement Agreement
and the other documents to be delivered hereunder (on which certificates the
Buyer, the Administrative Agents, the Group Managing Agents, the Holders and (on
and after the Second Lien Effective Date) the Lenders may conclusively rely
unless and until such time as each Administrative Agent and each Group Managing
Agent shall receive a revised certificate meeting the requirements of this
clause) executed by the Secretary, Assistant Secretary, general partner,
managing member, or any other officer of such Additional Originator with the
authority to execute such certificate;

 

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(xi) an executed copy of a Lock-Box Agreement for each Lock-Box Account of the
Additional Originator or an undated executed copy of a Post Office Box Notice
for each Post Office Box of the Additional Originator;

(xii) the favorable opinion of counsel to the Additional Originator in form and
substance satisfactory to the Administrative Agents and the Majority Group
Managing Agents; and

(xiii) such other agreements, instruments and other documents and amendments or
other modifications to the Transaction Documents, each in form and substance
satisfactory to the Administrative Agents, that the Administrative Agents
determine is reasonably necessary to effect such addition.

SECTION 2.08. No Repurchase.

Except to the extent expressly set forth herein, no Originator shall have any
right or obligation under this Agreement, by implication or otherwise, to
repurchase from the Buyer any of its Receivable Assets or to rescind or
otherwise retroactively affect any Purchase of any Receivable Assets after they
are sold to the Buyer hereunder.

SECTION 2.09. Intercompany Note.

(a) On the date of the initial Purchase from the Initial Originator on the date
hereof, the Buyer shall issue to the Originator Agent (on behalf of the Initial
Originator) the Intercompany Note. The aggregate principal amount of the
Intercompany Note at any time shall be equal to the difference between (a) the
sum of the principal amount on the date of issuance thereof plus each addition
to the principal amount of the Intercompany Note with respect to each Originator
pursuant to the terms of this Agreement as of such time, minus (b) the aggregate
amount of all payments made in respect of the principal of the Intercompany Note
as of such time. All payments made in respect of the Intercompany Note shall be
allocated, first, to pay accrued and unpaid interest thereon, and second, to pay
the outstanding principal amount thereof. Interest on the outstanding principal
amount of the Intercompany Note shall accrue at a rate per annum equal to the
Alternate Base Rate in effect from time to time from and including the date of
the initial Purchase to but excluding the last day of each Settlement Period and
shall, subject to the terms and conditions hereof, be paid (x) on each
Settlement Date with respect to the principal amount of the Intercompany Note
outstanding from time to time during the Settlement Period immediately preceding
such Settlement Date (but only to the extent the Buyer has funds available to
make such payment) and/or (y) on the maturity date thereof; provided, however,
that, to the maximum extent permitted by law, accrued interest on the
Intercompany Note which is not so paid shall be added to the principal amount of
the Intercompany Note. Upon receipt of any such payment, the Originator Agent
shall distribute such payment to the Originators ratably based on their
respective interests in the Intercompany Note as described in Section 2.09(c).
Principal of the Intercompany Note not paid or prepaid pursuant to the terms
thereof shall be payable on the maturity date thereof. Notwithstanding anything
to the contrary contained in this Agreement, any payments to be made by the
Buyer in respect of the Intercompany Note shall be made solely from funds
available to the Buyer which are not otherwise required to be applied or
set-aside for the payment of any obligations of the Buyer under the Financing
Agreements, shall be non-recourse other than with respect to such funds and
shall not constitute a claim against the Buyer to the extent that insufficient
funds exist to make such payment.

 

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(b) Anything herein to the contrary notwithstanding, the Buyer may not make any
payment of any Purchase Price on any Purchase Date by increasing the aggregate
principal amount of the Intercompany Note outstanding unless the aggregate
principal amount of the Intercompany Note outstanding on such Purchase Date
(after giving effect to all repayments thereof on or before such Purchase Date)
would not exceed 25% of the aggregate Outstanding Balance of the Pool
Receivables on such Purchase Date.

(c) The initial principal amount of the Intercompany Note shall be allocated to
the Initial Originator by the Originator Agent. Each addition to the principal
amount of the Intercompany Note on the date of each Purchase pursuant to
Section 2.02(c) shall be allocated among the Originators by the Originator Agent
ratably in proportion to the remaining unpaid portion of the Purchase Price
owing to each Originator on such date. All payments of the Intercompany Note
pursuant to Section 2.02(g) shall be allocated by the Originator Agent ratably
to each Originator (according to the aggregate Outstanding Balances of the
Originator Receivables sold by each Originator as of such date).

ARTICLE III

CONDITIONS OF PURCHASES

SECTION 3.01. Conditions Precedent to Initial Purchase from the Initial
Originator.

The Buyer’s obligation to pay the Purchase Price for the initial Purchase of
Initial Originator Receivable Assets from the Initial Originator hereunder is
subject to the satisfaction (or waiver by the Group Managing Agents) of the
conditions precedent set forth in Section 3.01 of the First Lien Receivables
Financing Agreement.

SECTION 3.02. Conditions Precedent to All Purchases.

The Buyer’s obligation to accept and pay for any Purchase (including the initial
Purchase) from an Originator hereunder shall be subject to the further
conditions precedent that:

(a) the representation and warranties of such Originator contained in
Section 4.01 shall be true and correct in all material respects on and as of
such date, except to the extent any such representation or warranty is expressly
made only as of another date (in which case it shall be true and correct in all
material respects on and as of such other date);

(b) the Termination Date shall not have occurred;

(c) no voluntary or involuntary case or proceeding is pending against such
Originator under the U.S. Bankruptcy Code;

 

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(d) the Buyer shall have received (after giving effect to Section 2.02(c)(i))
payment in full of all amounts for which payment is due from such Originator
pursuant to this Agreement; and

(e) such Originator shall have delivered to the Buyer such information
concerning such Receivable Assets as may reasonably be requested by the Buyer.

Notwithstanding the foregoing, unless on or prior to such date the Buyer shall
specifically instruct such Originator in writing (with a copy to each
Administrative Agent) to the contrary, each Purchase from such Originator shall
occur automatically on each day prior to the Termination Date, with the result
that the title to all Receivable Assets with respect thereto shall vest in the
Buyer automatically on the date each such Receivable Assets arise and without
any further action of any kind by the Buyer, such Originator, the Originator
Agent or the Collection Agent, whether or not the conditions precedent specified
above were in fact satisfied on such date and notwithstanding any delay in
making payment of the Purchase Price for such Receivable Assets (but without
impairing the Buyer’s obligation to pay such Purchase Price in accordance with
the terms hereof). The Buyer agrees that such instruction may only be sent upon
the failure to satisfy one of the conditions set forth in this Section 3.02.

SECTION 3.03. Conditions Precedent to Originator’s Obligations.

The obligation of:

(a) the Initial Originator to sell the Initial Originator Receivable Assets
generated by it and existing on the date hereof to the Buyer is subject to the
satisfaction (or waiver by the Group Managing Agents) of the conditions
precedent set forth in Section 3.01 of the First Lien Receivables Financing
Agreement; and

(b) each Originator to sell any Receivable Assets generated by it on any date
(including on the date hereof) shall be subject to the further conditions
precedent that on such date no voluntary or involuntary case or proceeding is
pending against such Originator or the Buyer under the U.S. Bankruptcy Code.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.01. Representations and Warranties of each of the Originators, EFH
Corp. and the Collection Agent.

Each of the Originators, EFH Corp. and the Collection Agent represents and
warrants as follows:

(a) It is a corporation, partnership, limited partnership or limited liability
company, as applicable, duly formed, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, formation or organization, as
applicable, and is duly qualified to do business, and is in good standing, in
every jurisdiction where the nature of its business requires it to be so
qualified and where the failure to be so qualified would reasonably be

 

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expected to have a Material Adverse Effect. All of the issued and outstanding
limited liability company membership interests in the Buyer are owned by TCEH on
the date hereof. All of the issued and outstanding limited liability company
membership interests in the Buyer are owned free and clear of any Adverse Claim.

(b) The execution, delivery and performance by it of the Transaction Documents
to which it is or will be a party and all other instruments and documents to be
delivered by it hereunder or thereunder, and the transactions contemplated
hereby and thereby, including its use of the proceeds of the sales, transfers
and assignments of Receivable Assets hereunder, are within its corporate,
partnership, limited partnership or limited liability company powers, as
applicable, have been duly authorized by all necessary corporate, partnership,
limited partnership or limited liability company action, as applicable, do not
contravene (i) as applicable, its charter and by-laws, partnership agreement,
limited liability company agreement or any other organizational documents, as
amended, or (ii) in any material way, any applicable law, rule or regulation
binding on or affecting it or any of its property, and do not violate any
contractual restriction binding on it or any of its property or any order,
judgment or decree binding on or affecting it or any of its property or result
in or require the creation of any lien, security interest or other charge or
encumbrance upon or with respect to any of its properties, other than in favor
of the Buyer pursuant to this Agreement, in favor of the First Lien Agent
pursuant to the First Lien Receivables Financing Agreement and, on and after the
Second Lien Effective Date, in favor of the Second Lien Agent pursuant to the
Second Lien Credit Agreement; and no transaction contemplated hereby or thereby
requires compliance with any bulk sales act or similar law. Each of this
Agreement and the other Transaction Documents to which it is a party has been
duly executed and delivered by it.

(c) No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required for the due
execution, delivery and performance by it of any Transaction Document to which
it is or will be a party or any other document or instrument to be delivered by
it hereunder or thereunder, except, with respect to the Initial Originator or
any Additional Originator for the filing of the UCC financing statements
referred to in Section 2.01(c) or 2.07(d)(i), respectively, or such other
documents or instruments requested pursuant to Section 6.04, all of which, at
the time required in Section 2.01(c) or 2.07(d)(i), respectively, or as
requested pursuant to Section 6.04, as the case may be, shall have been duly
made and shall be in full force and effect.

(d) This Agreement constitutes, and the other Transaction Documents to which it
is or will be a party, when delivered hereunder or thereunder shall constitute,
its legal, valid and binding obligation enforceable against it, in accordance
with their respective terms (in each case except as limited by applicable
bankruptcy or other similar laws and except as specific enforcement may be
subject to general principles of equity).

(e) Each Receivables Activity Report and Originator Report (if prepared by it or
to the extent that information contained therein is supplied by it),
information, exhibit, financial statement, report, book, record or other
document furnished or to be furnished at any time by or on behalf of it to the
Buyer, either Administrative Agent, any Group Managing Agent, any Bank, any
Investor or any Lender in connection with this Agreement, the Financing
Agreements or any other Transaction Document is or will be accurate in all
material respects as of its date or (except

 

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as otherwise disclosed to such Person at such time) as of the date so furnished,
and no such document contains, or will contain, as of its date of delivery or
the date so furnished, any material misstatement of a fact or omits to state, or
will omit to state, as of its date of delivery or the date so furnished, a
material fact or any fact necessary in order to make the statements contained
therein, in the light of the circumstances under which they were made, not
materially misleading.

(f) In the case of an Originator, its chief place of business and chief
executive office and the offices where it keeps all its books, records and
documents evidencing its Originator Receivables or the related Contracts are
located at its address referred to in Schedule IV hereto and its jurisdiction of
organization is the jurisdiction specified in Schedule IV hereto (or at such
other locations or jurisdictions, notified to the Administrative Agents in
accordance with Section 5.01(f), in jurisdictions where all action required by
the First Lien Agent or, after the Second Lien Effective Date, the Second Lien
Agent has been taken and completed); provided that the foregoing shall not
prohibit duplicate books, records or documents from being kept elsewhere.

(g) The names and addresses of all of the Lock-Box Banks, together with the
account numbers for all of the Lock-Box Accounts and each Post Office Box are
specified in Schedule I or as otherwise notified to each Administrative Agent in
writing in accordance with Section 5.03(d).

(h) In the case of an Originator, each of its Receivables is an “eligible asset”
as defined in Rule 3a-7 promulgated under the Investment Company Act of 1940, as
amended.

(i) In the case of an Originator, no proceeds of any of the initial purchase and
assignment of its Receivable Assets or subsequent purchases and assignments of
its Receivable Assets will be used by it to acquire any security in any
transaction which is subject to Sections 12, 13 or 14 of the Securities Exchange
Act of 1934, as amended, or for a purpose that violates, or would be
inconsistent with, Regulation T, U or X promulgated by the Board of Governors of
the Federal Reserve System from time to time.

(j) It has fulfilled its obligations under the minimum funding standards of
ERISA and the Internal Revenue Code of 1986, as amended from time to time, with
respect to any Plan, subject to such funding standards, and is in compliance in
all material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code of 1986, as amended from time to time, and has not
incurred any liability to the Pension Benefit Guaranty Corporation or a Plan
under Title IV of ERISA other than a liability to the Pension Benefit Guaranty
Corporation for premiums under Section 407 of ERISA.

(k) Each Originator Receivable characterized in any Originator Report or in any
other written statement or report made by or on behalf of any Originator
(including in any such statement or report delivered by the Originator Agent) or
the Collection Agent, in each case based on information supplied by or on behalf
of such Originator, as an Eligible Receivable was, as of the date of such
Originator Report or other statement or report, an Eligible Receivable. In the
case of an Originator, immediately prior to the time of the initial creation of
an interest hereunder in any of its Receivable Assets, it is the legal and
beneficial owner of such Receivable

 

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Assets, free and clear of any Adverse Claim except as created by this Agreement.
Upon each sale, transfer or assignment of each Receivable Asset by it hereunder,
the Buyer shall have a valid and perfected first priority undivided 100%
ownership interest in such Receivable Asset free and clear of any Adverse Claim
except as created or permitted by this Agreement. No effective financing
statement or other instrument similar in effect covering any Contract or any
Receivable Asset sold, transferred or assigned by it hereunder is on file in any
recording office, except those filed or in favor of the Buyer relating to this
Agreement, in favor of the First Lien Agent relating to the First Lien
Receivables Financing Agreement and, on and after the Second Lien Effective
Date, in favor of the Second Lien Agent relating to the Second Lien Credit
Agreement.

(l) Except as otherwise disclosed in writing to the Buyer and the Administrative
Agents and accepted in writing by the Buyer and the Controlling Agent, there are
no actions, suits or proceedings pending, or to its knowledge, threatened
against or affecting it or its property in any court, or before any arbitrator
of any kind, or before or by any governmental body, which, if adversely
determined, would reasonably be expected to have a Material Adverse Effect. It
is not in default with respect to (i) orders of any governmental agencies which
materially adversely affect its business or operations and that of its
consolidated subsidiaries taken as a whole or (ii) orders of any court or
arbitrator.

(m) It has not sold, assigned, transferred, pledged or hypothecated any interest
in any Receivable Asset to any Person other than as contemplated by this
Agreement.

(n) It has complied with its Credit and Collection Policy in all material
respects and since the date of this Agreement there has been no change in its
Credit and Collection Policy except as permitted hereunder.

(o) It has not extended or modified the terms of any Originator Receivable or
the Contract under which any such Originator Receivable arose, except in
accordance with the Credit and Collection Policy.

(p) Except pursuant to the Lock-Box Agreements or the Post Office Box Notices,
it has not granted to any Person control within the meaning of Section 9-104 of
the UCC of any Lock-Box Account or any Post Office Box or the right to take
control within the meaning of Section 9-104 of the UCC over any Lock-Box Account
or Post Office Box at a future time or upon the occurrence of a future event.

(q) In the case of an Originator, the consideration to be furnished or payable
by the Buyer to it pursuant to Section 2.02 for the Receivable Assets sold,
transferred or assigned by it hereunder on the date hereof, or, in the case of
an Additional Originator, on the date set forth in the applicable Additional
Originator Supplement Agreement, and the Purchase Price furnished or payable on
each Purchase Date thereafter pursuant to Section 2.02 for its Receivable Assets
created thereafter, in each case constitutes fair consideration and approximates
fair market value for such Receivable Assets, and the terms and conditions
(including, without limitation, the Initial Purchase Price or Purchase Price, as
applicable, therefor) of the sale, transfer and assignment of such Receivable
Assets pursuant to Sections 2.01 and 2.02 reasonably approximate an arm’s length
transaction between unaffiliated parties. No such sale, transfer or assignment
has been made for or on account of an antecedent debt owed by it to the Buyer
and no such sale, transfer or assignment is or may be voidable or subject to
avoidance under any section of the U.S. Bankruptcy Code.

 

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(r) It has filed, or caused to be filed or be included in, all tax reports and
returns (federal, state, local and foreign), if any, required to be filed by it
and paid, or caused to be paid, all amounts of taxes, including interest and
penalties required to be paid by it, except for such taxes (i) as are being
contested in good faith by proper proceedings and (ii) against which adequate
reserves shall have been established in accordance with and to the extent
required by GAAP, but only so long as the proceedings referred to in clause (i)
above could not subject either Administrative Agent or any other Indemnified
Party to any civil or criminal penalty or liability or involve any material risk
of the loss, sale or forfeiture of any property, rights or interests covered
hereunder or under any Financing Agreement.

(s)(i) The consolidated balance sheet of TCEH and its consolidated subsidiaries,
as at December 31, 2011, and the related statement of income and stockholders’
equity and of cash flows of TCEH and its consolidated subsidiaries for the
fiscal year then ended, certified by Deloitte & Touche, copies of which have
been furnished to the Buyer and the First Lien Agent, fairly present in all
material respects the consolidated financial condition of TCEH and its
consolidated subsidiaries as at such date and the consolidated results of the
operations of TCEH and its consolidated subsidiaries for the periods ended on
such date, all in accordance with generally accepted accounting principles
consistently applied, and (ii) since (x) October 10, 2007, there shall not have
been any material adverse change in the financial condition or operations of the
Initial Originator, the Originator Agent or the Collection Agent or other event
which materially adversely affects (1) the ability of the Collection Agent to
collect Originator Receivables or (2) the ability of the Initial Originator, EFH
Corp., the Originator Agent or the Collection Agent to perform hereunder or
under any other Transaction Document, (y) the date hereof, there shall not have
occurred any event which materially adversely affects the legality, validity or
enforceability of this Agreement or any other Transaction Document, or (z) the
date of an Additional Originator Supplement Agreement with respect to an
Additional Originator, there shall not have been any material adverse change in
the financial condition or operations of such Additional Originator or other
event which materially adversely affects the ability of such Additional
Originator to perform hereunder or under any other Transaction Document to which
it is a party, except, in any case, as may have been disclosed in writing to
each Administrative Agent and each Group Managing Agent and accepted in writing
by the Controlling Agent.

(t) In the case of the Initial Originator, in the five years preceding the date
hereof, or, in the case of an Additional Originator, in the five years preceding
the date of the applicable Additional Originator Supplement Agreement, such
Originator has not used any company name other than the name in which it has
executed this Agreement or such Additional Originator Supplement Agreement, as
the case may be, or any trade names, fictitious names, assumed names or “doing
business as” names other than as set forth in Schedule VI.

(u) Since October 10, 2007, no event has occurred that would reasonably be
expected to have a Material Adverse Effect.

 

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(v) Such Originator is not, and each of EFH Corp. and the Collection Agent is
not, an “investment company” within the meaning of the Investment Company Act of
1940, as amended, or any successor statute.

(w) As of the date hereof (with respect to the Initial Originator) or as of the
effective date of any Additional Originator Supplement Agreement (with respect
to the applicable Additional Originator party thereto), such Originator is
solvent.

SECTION 4.02. Article 9 Representations and Warranties. Each of the Originators
represents and warrants as follows as to its Originator Receivables:

(a) This Agreement creates a valid and continuing security interest (as defined
in the applicable UCC) in such Originator Receivables in favor of the Buyer,
which security interest is prior to all other Adverse Claims, and is enforceable
as such against creditors of and purchasers from such Originator.

(b) Such Originator Receivables constitute “accounts” within the meaning of the
applicable UCC.

(c) Immediately prior to the transfer thereof pursuant hereto, such Originator
owns and has good and marketable title to its Originator Receivables free and
clear of any Adverse Claim, claim or encumbrance of any Person.

(d) Such Originator has caused or will have caused, in the case of the Initial
Originator, within ten days after the date hereof, or, in the case of an
Additional Originator, within ten days after the date of the applicable
Additional Originator Supplement Agreement, the filing of all appropriate
financing statements in the proper filing office in the appropriate
jurisdictions under applicable law in order to perfect the security interest in
its Originator Receivables granted to the Buyer hereunder.

(e) Other than the security interest granted to the Buyer pursuant to this
Agreement, such Originator has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of its Originator Receivables. Such
Originator has not authorized the filing of and is not aware of any financing
statements against such Originator that include a description of collateral
covering the Originator Receivables other than any financing statement relating
to the security interest granted to the Buyer hereunder or that has been
terminated. Such Originator is not aware of any judgment or tax lien filings
against such Originator.

ARTICLE V

GENERAL COVENANTS OF THE ORIGINATORS, EFH CORP. AND THE COLLECTION AGENT

SECTION 5.01. Affirmative Covenants of each of the Originators, EFH Corp. and
the Collection Agent.

 

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Until the latest of (x) the Termination Date, (y) the first date following the
Facility Termination Date on which the Facility Principal shall have been
reduced to zero and all other amounts due to the First Lien Agent, the Group
Managing Agents, the Banks and the Investors under the First Lien Loan Documents
shall have been paid and (z) after the Second Lien Effective Date, the first
date following the Maturity Date upon which no principal shall be outstanding
and no other amounts are payable by the Buyer under the Second Lien Loan
Documents, each of the Originators, EFH Corp. and the Collection Agent shall,
unless the Buyer and the Majority Group Managing Agents and (on and after the
Second Lien Effective Date) the Second Lien Agent shall otherwise consent in
writing:

(a) Compliance with Laws, Etc. Comply in all respects with all applicable laws,
rules, regulations and orders with respect to it, its business and properties
and all its Receivable Assets and Contracts where the failure to so comply would
reasonably be expected to have a Material Adverse Effect.

(b) Preservation of Existence. Preserve and maintain its organizational
existence, rights and privileges in the jurisdiction of its organization, and
qualify and remain qualified and in good standing as a foreign Person, in each
jurisdiction where the failure to preserve and maintain such existence, rights,
franchises, privileges and qualification would reasonably be expected to have a
Material Adverse Effect; provided, however, that it may consummate any merger or
consolidation not prohibited under Section 5.03(e).

(c) Audits. (i) At any time and from time to time during regular business hours,
at its sole cost, permit either Administrative Agent, any Group Managing Agent
or their respective agents or representatives (such as independent audit and
consulting firms specializing in securitization transactions), upon reasonable
advance notice to such Person (A) to examine and make copies of and abstracts
from all books, records and documents (including, without limitation, computer
tapes and disks) in its possession or under its control relating to its
Receivable Assets, including, without limitation, the related Contracts (to the
extent not prohibited by a legally enforceable provision under the terms of the
applicable Contracts), and (B) to visit its offices and properties located at
its address specified in Schedule IV (or at such other locations as are notified
to the Administrative Agents from time to time in accordance with
Section 5.01(f)) for the purpose of examining such materials described in
clause (A) above, and to discuss matters relating to its Receivable Assets or
its performance hereunder or any Person’s performance under the Contracts with
any of its officers or its employees having knowledge of such matters.

(ii) (A) Within 120 days after the end of each fiscal year of an Originator and
(B) additionally, promptly upon the request of the Majority Group Managing
Agents or, on and after the Second Lien Effective Date, the Second Lien Agent if
an Event of Termination shall have occurred and be continuing or if the
immediately preceding audit under this clause (ii) was not complete and
acceptable to the Majority Group Managing Agents or, on and after the Second
Lien Effective Date, the Second Lien Agent, cause an independent audit and
consulting firm specializing in securitization transactions and selected by the
Administrative Agents to perform, at such Originator’s expense, an audit (in
scope and form requested by the Administrative Agents) of all the records of
such Originator in respect of the Receivable Assets of such Originator and
collections thereof and the performance by such Originator of its obligations,
covenants and duties hereunder.

 

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(d) Keeping of Records and Books of Account. (i) In the case of an Originator,
keep, or cause to be kept, proper books of record and account, which shall be
maintained or caused to be maintained by it and shall be separate and apart from
those of the Buyer, in which full and correct entries shall be made of all
financial transactions and its assets and business in accordance with GAAP,
which shall include the keeping and maintaining of all documents, books, records
and other information reasonably necessary or advisable for the collection of
all its Receivable Assets (including, without limitation, records adequate to
permit the daily identification of each of its Originator Receivables, the
Outstanding Balance of each of its Originator Receivables and the dates payments
are due thereon and all Collections of and adjustments to each of its existing
Originator Receivables); (ii) maintain and implement, or cause to be maintained
and implemented, administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing its Receivable Assets in
the event of the destruction of the originals thereof); and (iii) on or prior to
the date hereof (or for any Additional Originator, on or prior to the date it
becomes an Additional Originator hereunder), mark its master data processing
records and other books and records relating to its Originator Receivables with
a legend, acceptable to the Buyer and the Administrative Agents or, following a
Discharge of Senior Obligations after the Second Lien Effective Date, the Second
Lien Agent, describing the Buyer’s ownership of the Originator Receivables and
further describing the grants of security interests therein under the Financing
Agreements.

(e) Performance and Compliance with Originator Receivables and Contracts. In the
case of an Originator, at its expense timely and fully (i) perform and comply
with all material provisions, covenants and other promises required to be
observed by it under the Contracts to which it is a party related to the
Originator Receivables, except where the failure to so perform or comply would
not have a Material Adverse Effect and (ii) as beneficiary of any Related
Security, enforce such Related Security as reasonably requested by the
Controlling Agent.

(f) Location of Records. In the case of an Originator, keep its chief place of
business and chief executive office, and the offices where it keeps its records
concerning its Originator Receivables and all Contracts related thereto (and all
original documents relating thereto), at its address referred to in
Section 4.01(f) or, upon 30 days’ prior written notice to the Administrative
Agents, at such other locations in a jurisdiction where all action required by
Section 6.04 shall have been taken and completed, provided that the foregoing
shall not prohibit the keeping of duplicate records concerning its Originator
Receivables and Contracts related thereto at any other location.

(g) Credit and Collection Policies. In the case of an Originator and the
Collection Agent, comply in all material respects with the Credit and Collection
Policy in regard to each of its Originator Receivables and the Contract related
thereto and provide to the Administrative Agents (i) promptly upon adoption a
statement of each change in the Credit and Collection Policy not prohibited by
Section 5.03(c) and (ii) not less frequently than annually an updated statement
of the then current Credit and Collection Policy.

(h) Deposits to Lock-Box Accounts. In the case of an Originator and the
Collection Agent, instruct, or cause to be instructed, all Obligors to make
payments in respect of the Originator Receivables sold, transferred or assigned
by it hereunder to a Lock-Box Account or a Post Office Box subject to a Lock-Box
Agreement or Post Office Box Notice, as applicable,

 

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and, if it shall otherwise receive any Collections, deposit such Collections, or
cause such Collections to be deposited, to such a Lock-Box Account by the first
Business Day following such receipt and, at all times prior to such remittance,
hold itself or, if applicable, cause such payments to be held in trust for the
exclusive benefit of the First Lien Agent, the Group Managing Agents and the
Holders and (on and after the Second Lien Effective Date) the Second Lien Agent
and the Lenders. Such Originator and the Collection Agent will not grant the
right to take control within the meaning of Section 9-104 of the UCC of any
Lock-Box Account or Post Office Box at a future time or upon the occurrence of a
future event to any Person, except to Buyer (or its assigns) as contemplated by
the Lock-Box Agreements, this Agreement or the Financing Agreements.

(i) Use of Proceeds. In the case of an Originator, use all proceeds of each
sale, transfer and assignment of Receivable Assets by it hereunder for its
general corporate, limited liability company, partnership, limited partnership
or other entity purposes in the conduct of its business and in no event use any
such proceeds to acquire any security in any transaction which would be subject
to Sections 12, 13 or 14 of the Securities Exchange Act of 1934 or for any
purpose that violates, or would be inconsistent with, Regulation T, U or X
promulgated by the Board of Governors of the Federal Reserve System from time to
time.

(j) Separateness. Take all reasonable steps, including, without limitation, all
steps that the Buyer or any assignee of the Buyer may from time to time
reasonably request to maintain the Buyer’s identity as a separate legal entity
and to make it manifest to third parties that the Buyer is an entity with assets
and liabilities distinct from those of it and its Affiliates and not just a
division of it or any such Affiliate. Without limiting the generality of the
foregoing and in addition to the other covenants set forth herein, such
Originator and the Collection Agent (i) will not hold itself out to third
parties as liable for the debts of the Buyer nor purport to own the Originator
Receivables and other assets acquired by the Buyer and (ii) will take all other
actions necessary on its part to ensure that the Buyer is at all times in
compliance with the covenants set forth in Section 5.01(i) of the Financing
Agreements.

SECTION 5.02. Reporting Requirements of each of the Originators, EFH Corp. and
the Collection Agent.

Until the latest of (x) the Termination Date, (w) the first date following the
Facility Termination Date on which the Facility Principal shall have been
reduced to zero and all other amounts due to the First Lien Agent, the Group
Managing Agents, the Banks and the Investors under the First Lien Loan Documents
shall have been paid and (z) after the Second Lien Effective Date, the first
date following the Maturity Date upon which no principal shall be outstanding
and no other amounts are payable by the Buyer under the Second Lien Loan
Documents, each of the Originators, EFH Corp. and the Collection Agent shall,
unless the Buyer and the Majority Group Managing Agents and (on and after the
Second Lien Effective Date) the Second Lien Agent shall otherwise consent in
writing, furnish or cause to be furnished to the Buyer and each Administrative
Agent:

(a) as soon as possible and in any event within five days after the occurrence
of each Event of Termination or each event which, with the giving of notice or
lapse of time or both, would constitute an Event of Termination, the statement
of an appropriate officer of such Person setting forth details of such Event of
Termination or event and the action which it proposes to take with respect
thereto;

 

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(b) not later than 30 days after the end of each calendar quarter, a certificate
of an appropriate officer of such Person, in substantially the form appended
hereto as Exhibit C, (i) restating and reconfirming the continuing truth and
accuracy in all respects (in the case of any representation or warranty
containing any materiality qualification and in the case of any Non-Qualifiable
Representations and Warranties) or (in the case of any representation or
warranty, other than any Non-Qualifiable Representations and Warranties, that
does not contain any materiality qualification) in all material respects, of
each of the representations and warranties set forth in Section 4.01 (other than
Section 4.01(s)(i)) or (ii) setting forth therein any qualifications or
conditions thereto, which qualifications or conditions shall be accepted or
rejected by the Majority Group Managing Agents, the Second Lien Agent (on and
after the Second Lien Effective Date) and the Buyer in writing within five days
of receipt thereof, and (iii) certifying as to the absence of any Event of
Termination or unmatured Event of Termination;

(c) [Intentionally Omitted].

(d) [Intentionally Omitted].

(e) in the case of the Originator Agent, at least two Business Days prior to
each Settlement Date, a Receivables Activity Report, in form and substance
satisfactory to the Administrative Agents, certified by its treasurer, assistant
controller, controller or chief financial officer as of its close of business on
the last day of the immediately preceding calendar month, relating to the
Receivable Assets sold, transferred or assigned hereunder during such calendar
month and setting forth the items required pursuant to Section 2.02(f);

(f) in the case of EFH Corp., promptly after the sending or filing thereof,
copies of all regular and periodic reports including current reports on Form 8-K
(without exhibits) which it filed with the Securities and Exchange Commission or
any national securities exchange, other than registration statements relating to
registrations of securities, and all proxy statements, financial statements and
reports which it shall send to its security holders, and upon specific request
of the Administrative Agents, copies of all registration statements (without
exhibits) filed with the Securities and Exchange Commission and any other
regular or periodic report which it may be required to file with any state or
federal regulatory commission, department or agency, provided such report is
generally available to the public;

(g) promptly after the filing or receiving by such Person thereof, copies of all
reports and notices with respect to any Reportable Event defined in Article IV
of ERISA which it files under ERISA with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation or the U.S. Department of Labor or which it
receives from the Pension Benefit Guaranty Corporation, provided that such
Reportable Event, individually or in the aggregate with all other such
Reportable Events, would be reasonably likely to have a Material Adverse Effect;

 

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(h) promptly, from time to time, such other information, documents, records or
reports respecting Receivable Assets as the Buyer or either Administrative Agent
may from time to time reasonably request in order to identify or protect, as
applicable, the Buyer’s, the Group Managing Agents’, the Holders’, the Lenders’
or such Administrative Agent’s interests under or contemplated by this Agreement
or the other Transaction Documents, including, without limitation, a listing of
current Subcontractors;

(i) promptly (i) in the case of EFH Corp., upon the furnishing thereof to its
shareholders, copies of all financial statements, reports and proxy statements
so furnished; and (ii) upon its receipt of any notice, request for consent,
financial statements, certification, report or other communication under or in
connection with any Transaction Document from any Person other than such
Administrative Agent, Group Managing Agent, Holder or Lender from which such
notice, request or other communication is received, copies of the same;

(j) at least thirty (30) days prior to the effectiveness of any material change
in or material amendment to the Credit and Collection Policy, a copy of the
Credit and Collection Policy then in effect and a notice indicating such change
or amendment;

(k) promptly, and in any event within 5 days after such Person has knowledge
thereof, notice of (i) the entry of any judgment or decree against an Originator
or the Collection Agent; (ii) the institution of any litigation, arbitration
proceeding or governmental proceeding against an Originator or the Collection
Agent; (iii) the occurrence of any event or condition that has had, or would
reasonably be expected to have, a Material Adverse Effect; (iv) the occurrence
of a default or an event of default under any other financing arrangement
pursuant to which an Originator or the Collection Agent is a debtor or an
obligor; and (v) any downgrade in the rating of any Indebtedness of any
Originator, TCEH or the Collection Agent by Standard & Poor’s or by Moody’s,
setting forth the Indebtedness affected and the nature of such change;

(l) [Intentionally Omitted]; and

(m) at least five Business Days prior to the date of any change of ownership of
any limited liability company membership interests in the Buyer, the name and
the jurisdiction of organization of the proposed new owner of such membership
interests, and on or before the date of any such change of ownership,
(A) executed counterparts of all instruments and other documents that effect, or
otherwise relate to, such change of ownership and (B) a certificate of the new
owner of such membership interests confirming that, on the date of such change
of ownership and giving effect to such change of ownership, the representations
and warranties of such new owner contained in Section 4.01 of this Agreement are
true and correct on and as of such date as though made on and as of such date.

SECTION 5.03. Negative Covenants of each of the Originators, EFH Corp. and the
Collection Agent.

Until the latest of (x) the Termination Date, (y) the first date following the
Facility Termination Date on which the Facility Principal shall have been
reduced to zero and all other amounts due to the First Lien Agent, the Group
Managing Agents, the Banks and the Investors under the First Lien Loan Documents
shall have been paid and (z) after the Second Lien Effective Date, the first
date following the Maturity Date upon which no principal shall be outstanding
and no other amounts are payable by the Buyer under the Second Lien Loan
Documents, each of the

 

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Originators, EFH Corp. and the Collection Agent shall not, without the prior
written consent of the Buyer, the Majority Group Managing Agents, the First Lien
Agent and (on and after the Second Lien Effective Date) the Second Lien Agent
(and in the case of subsection (d) below, the prior written consent of each
Group Managing Agent and (on and after the Second Lien Effective Date) the
Second Lien Agent):

(a) Sales, Liens, Adverse Claims, Etc. Except as otherwise provided herein,
sell, assign (by operation of law or otherwise), or otherwise dispose of, or
create or suffer to exist any Adverse Claim upon or with respect to, any
interest in any Receivable Asset sold, transferred or assigned by it hereunder
or Contract related thereto or upon or with respect to any lock-box or lock-box
account to which any Collections of any Originator Receivables are sent, or
assign any right to receive income in respect thereof.

(b) Extension or Amendment of Receivables. Except as otherwise permitted in
Section 6.02(c) of the Financing Agreements, or to correct any undisputed
billing errors, extend, amend or otherwise modify the terms of any Originator
Receivable sold, transferred or assigned by it hereunder.

(c) Change in Business or Credit and Collection Policy. Make any change in the
character of its business or in the Credit and Collection Policy which change
would, in either case, impair in any material respect the collectibility of any
Receivable Asset sold, transferred or assigned by it hereunder.

(d) Change in Payment Instructions to Obligors. Add or terminate any Lock-Box
Account or any bank as a Lock-Box Bank or any Post Office Box from those
specified in Schedule I unless the Buyer, each Group Managing Agent and each
Administrative Agent shall have received at least ten days before the proposed
effective date therefor, notice of such addition or termination and an executed
copy of a Lock-Box Agreement for each new Lock-Box Account and an undated
executed copy of a Post Office Box Notice for each new Post Office Box.

(e) Merger. Enter into a transaction of consolidation or merger with any Person
unless (i) before and after giving effect on a pro forma basis to such
consolidation or merger, no event shall have occurred and be continuing, or
would result from such consolidation or merger, that constitutes an Event of
Termination or that would constitute an Event of Termination but for the
requirement that notice be given or time elapse or both, (ii) such Person is not
the Buyer and either (A) it shall survive such consolidation or merger or
(B) such other corporation or entity formed by such consolidation or into which
it shall be merged shall assume, in a writing on terms reasonably satisfactory
to the Buyer, the Majority Group Managing Agents and the Administrative Agents,
all of its rights, obligations and liabilities under the Transaction Documents
to which it is a party, (iii) at least 10 days prior to the effective date of
such transaction, it delivers to the Buyer and each Administrative Agent such
financing statements or amendments to financing statements (Form UCC-1 and
UCC-3) executed by it which the Buyer or either Administrative Agent may request
with such other documents and instruments that either Administrative Agent may
request in connection therewith and (iv) if so requested by the Buyer or either
Administrative Agent, within 30 days after the effective date of such
transaction, provide to the Buyer and the Administrative Agents a favorable
opinion reasonably acceptable to the Administrative Agents of counsel covering
UCC perfection and UCC search priority with respect to the assuming corporation
or entity or such new jurisdiction.

 

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(f) Deposits to Lock-Box Accounts. Deposit or otherwise credit, or cause or
permit to be so deposited or credited, to any Lock-Box Account or Post Office
Box specified in Schedule I or in any notice to the Buyer and the Administrative
Agents in accordance with Section 5.03(d), cash or cash proceeds other than
Collections of (i) Originator Receivables and Related Security with respect
thereto, (ii) Transition Charges, (iii) Nuclear Decommissioning Obligations and
(iv) Customer Deposits, if any, securing payment of the items specified in
clauses (ii) and (iii).

(g) Jurisdiction of Organization. Change, in the case of any Originator, its
jurisdiction of organization without (i) giving the Buyer and each
Administrative Agent 30 days’ prior written notice thereof, (ii) delivering
financing statements or amendments to financing statements executed by it as
requested by either Administrative Agent, and (iii) if so requested by the Buyer
or either Administrative Agent, within 30 days after such change, providing to
the Buyer and the Administrative Agents a favorable opinion of counsel
reasonably acceptable to the Administrative Agents covering UCC perfection and
UCC search priority with respect to such new jurisdiction.

(h) Adverse Claims. Sell, in the case of any Originator, to the Buyer an
Originator Receivable which is not owned by it free and clear of all Adverse
Claims.

(i) Change in Name. In the case of any Originator, make any change to its legal
name, or use any trade names, fictitious names, assumed names or “doing business
as” names, or change the location where its books, records and documents
evidencing the Originator Receivables or the related Contracts are kept from
those specified in Schedule IV hereto, unless at least 10 days prior to the
effective date of such change or use, it delivers to the Buyer and each
Administrative Agent such financing statements or amendments to financing
statements (Form UCC-1 and UCC-3) executed by it which the Buyer or either
Administrative Agent may request to reflect such change or use, together with
such other documents and instruments that either Administrative Agent may
request in connection therewith.

(j) Accounting of Purchases. Unless otherwise required by GAAP and disclosed in
writing to the Buyer and the Administrative Agents, prepare, in the case of any
Originator, any financial statements which shall account for the transactions
contemplated hereby in any manner other than the sale, transfer and assignment
of the Receivable Assets by it to the Buyer or in any other respect account for
or treat the transactions contemplated hereby (including but not limited to
accounting purposes, but excluding tax reporting purposes) in any manner other
than as a sale, transfer and assignment of the Receivable Assets by it to the
Buyer.

(k) Organization. Cause, permit or authorize the Buyer’s limited liability
company agreement to be amended, supplemented or otherwise modified.

(l) Limited Liability Company Membership Interest. Cause, permit, or authorize
to be issued to, or sell or otherwise transfer to, any Person other than TCEH
any limited liability company membership interests in the Buyer, and in the case
of any such issue, sale or transfer, without notifying each Administrative Agent
of such issue, sale or transfer in accordance with, and complying with the other
condition set forth in, Section 5.02(m).

 

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ARTICLE VI

ADMINISTRATION AND COLLECTION

SECTION 6.01. Designation of Collection Agent.

The Originator Receivables shall be serviced, administered and collected by the
Person (the “Collection Agent”) designated from time to time to perform the
duties of the Collection Agent in accordance with Section 6.01 of the Financing
Agreements, and shall be serviced, administered and collected by the Collection
Agent in the manner set forth in Section 6.02 of the Financing Agreements. Until
a new Collection Agent is designated under the First Lien Receivables Financing
Agreement, or, after a Discharge of Senior Obligations following the Second Lien
Effective Date, under the Second Lien Credit Agreement, TXU Energy Retail is
hereby designated to act as, and TXU Energy Retail hereby agrees to perform the
duties and obligations of, the Collection Agent hereunder.

SECTION 6.02. Rights of the Buyer and the Administrative Agents.

(a) Each of the Buyer and the Controlling Agent, acting together or alone, may
notify the Obligors of Originator Receivables, at any time and at the Collection
Agent’s, such Controlling Agent’s or the relevant Originator’s expense, of the
Buyer’s interest in the Originator Receivables and such Person’s security
interest therein.

(b) At any time following the designation of a Collection Agent other than TXU
Energy Retail pursuant to Section 6.01 of the applicable Financing Agreement:

(i) Each of the Buyer and the Controlling Agent, acting together or alone, may,
at the relevant Originator’s expense, direct the Obligors of Originator
Receivables, or any of them, to make payment of all amounts due or to become due
to the Collection Agent or such Originator under Originator Receivables directly
to such Controlling Agent or its designee.

(ii) The Collection Agent shall, at the Buyer’s or the Controlling Agent’s
request and at the relevant Originator’s expense, give notice of the Buyer’s
ownership of, and the interests of the Administrative Agents in, the Receivable
Assets, to such Obligors and direct them to make such payments directly to such
Controlling Agent or its designee.

(iii) Each Originator shall, at the Buyer’s or the Controlling Agent’s request
and at such Originator’s expense, (A) assemble all of the Records that evidence
or relate to the Receivable Assets, and the related Contracts (to the extent not
prohibited by a legally enforceable provision under the terms of the applicable
Contracts) and Related Security, and shall make the same available to such
Controlling Agent at a place selected by such Controlling Agent or its designee,
and (B) segregate all cash, checks and other instruments received by it from
time to time constituting Collections of Originator Receivables in a manner
acceptable to such Controlling Agent and, promptly upon receipt, remit all such
cash, checks and instruments, duly endorsed or with duly executed instruments of
transfer, to such Controlling Agent or its designee.

 

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(iv) The Controlling Agent may take any and all steps in the Collection Agent’s,
the relevant Originator’s or the Buyer’s name and on behalf of the Collection
Agent, such Originator, the Buyer, the Holders or Lenders, as applicable, that
are necessary or desirable, in the determination of such Controlling Agent, to
collect amounts due under the Originator Receivables, including, without
limitation, endorsing the Collection Agent’s or the relevant Originator’s name
on checks and other instruments representing Collections of Originator
Receivables and enforcing the Originator Receivables and the Related Security
and related Contracts. Each of the Buyer, the Originators and the Collection
Agent hereby irrevocably appoints the First Lien Agent and, following a
Discharge of Senior Obligations after the Second Lien Effective Date, the Second
Lien Agent as their respective attorney-in-fact, with full authority in its
place and stead and in its name or otherwise, from time to time in such
applicable Administrative Agent’s discretion to take any action and to execute
any instrument that such applicable Administrative Agent may deem necessary or
advisable to accomplish the foregoing.

(c) Upon the occurrence of an Event of Termination, or at such time as TCEH’s
Debt Rating is below Rating Level 4, but not otherwise, the Controlling Agent is
hereby authorized at any time to date and to deliver to each Lock-Box Bank
written notice that such Controlling Agent is taking exclusive control over the
Lock-Box Accounts maintained with such Lock-Box Bank (a “Notice of Exclusive
Control”) and to the United States Post Office where any Post Office Box is
being maintained, a Post Office Box Notice. Buyer shall include in each
Financing Agreement a provision that such Controlling Agent shall send copies to
the Originators and the Collection Agent of each Notice of Exclusive Control and
Post Office Box Notice delivered by such Controlling Agent. Each Originator and
the Collection Agent each hereby acknowledges and agrees that upon delivery of a
Notice of Exclusive Control with respect to any Lock-Box Account and a Post
Office Box Notice with respect to any Post Office Box in accordance with this
Section 6.02(c), such Controlling Agent shall have exclusive ownership and
control of the Lock-Box Account subject to such Notice of Exclusive Control and
the Post Office Box subject to such Post Office Box Notice, and such Originator
and the Collection Agent shall take any further action necessary or desirable,
or that such Controlling Agent may reasonably request, to effect the transfer of
exclusive ownership and control of such Lock-Box Account and such Post Office
Box to such Controlling Agent (it being understood and agreed that upon delivery
of a copy of such Notice of Exclusive Control with respect to any Lock-Box
Account and Post Office Box Notice with respect to any Post Office Box, neither
the Collection Agent, nor any Originator, nor any of their respective Affiliates
shall have access to such Lock-Box Account or such Post Office Box), provided
that in no event shall the foregoing transfer of exclusive ownership and control
alter or impair the obligation to remit Collections to the Buyer in accordance
with the provisions of Sections 2.07 and 2.08 of the First Lien Receivables
Financing Agreement and, after the Second Lien Effective Date, in accordance
with the Second Lien Financing Agreement. In case any authorized signatory of
the Collection Agent or any Originator whose signature shall appear on any
Lock-Box Agreement or Post Office Box Notice shall cease to have such authority
before the delivery of any Notice of Exclusive Control

 

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or any Post Office Box Notice, such signature shall nevertheless be valid and
sufficient for all purposes as if such authority had remained in force at the
time of such delivery. Each Administrative Agent shall safeguard the retention
of the Post Office Box Notices delivered pursuant to Sections 2.07(d)(xi) and
5.03(d) until such time as such Administrative Agent shall deliver the same to
the relevant post offices or redeliver the same to the Collection Agent at such
time following the Discharge of Senior Obligations or, after the Second Lien
Effective Date, the date following the Maturity Date upon which no principal
shall be outstanding and no other amounts are payable by the Buyer under the
Second Lien Loan Documents, as applicable.

SECTION 6.03. Responsibilities of the Originators.

Anything herein to the contrary notwithstanding:

(a) Each Originator shall perform its obligations under the Contracts related to
the Originator Receivables sold or contributed by it hereunder to the same
extent as if the Receivable Assets sold or contributed by it hereunder had not
been sold or contributed and the exercise by the Buyer or either Administrative
Agent of its rights hereunder shall not release such Originator from any of its
duties or obligations with respect to such Originator Receivables or under the
related Contracts;

(b) None of the Buyer, the Administrative Agents, the Group Managing Agents, the
Holders, the Lenders or any other Indemnified Party shall have any obligation or
liability with respect to any Originator Receivables or related Contracts, nor
shall any of them be obligated to perform the obligations of any Originator
thereunder; and

(c) Each Originator shall not make any material change in its systems or
procedures without at least 30 days’ prior written notice thereof to the Buyer
and each Administrative Agent.

SECTION 6.04. Further Actions.

(a) Each Originator agrees that from time to time, at its expense, it will as
soon as practicable execute and deliver all further instruments and documents,
and take all further action, that may be necessary, or that the Buyer or either
Administrative Agent may reasonably request, to perfect, protect or more fully
evidence the sale, transfer and assignment of Receivable Assets by such
Originator to the Buyer hereunder and the security interest therein granted
under the Financing Agreements, or to enable any of them, any Group Managing
Agent or either Administrative Agent to exercise and enforce their respective
rights and remedies hereunder or under the Financing Agreements. Without
limiting the foregoing, each Originator will, upon the request of the Buyer or
either Administrative Agent execute and file, or facilitate the execution and
filing of, such financing or continuation statements or amendments thereto, and
such other instruments and documents, that may be necessary, or that the Buyer
or such Administrative Agent may reasonably request to perfect, protect or
evidence such sales, transfers and assignments and such security interests.

(b) Each Originator hereby authorizes each of the Buyer and each Administrative
Agent, acting together or alone (upon prior written notice to such Originator),
to file one or more financing or continuation statements and amendments thereto
relating to all or any of its Receivable Assets.

 

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(c) If the Collection Agent fails to perform any of its obligations hereunder,
the Buyer or the Controlling Agent may, but shall not be required to, itself
perform, or cause the performance of, such obligation; and the reasonable costs
and expenses of such Controlling Agent and the Buyer shall be payable by the
Collection Agent or the relevant Originator (if the Collection Agent that fails
to so perform is such Originator or its designee), as provided in Section 7.01
or 8.04, as applicable.

SECTION 6.05. Consent and Agreement of the Originators.

(a) The Buyer hereby notifies the Originators that, (i) as of the date hereof,
it has assigned and pledged to Citibank, as first lien agent for the benefit of
itself, the Banks, the Investors and each other Indemnified Party (as defined in
the First Lien Receivables Financing Agreement) under the First Lien Receivables
Financing Agreement from time to time, and has granted to Citibank, as first
lien agent for the benefit of itself, the Banks, the Investors and each other
Indemnified Party (as defined in the First Lien Receivables Financing Agreement)
from time to time a security interest and, (ii) as of the Second Lien Effective
Date, it shall have assigned and pledged to the Second Lien Agent for the
benefit of itself and the Lenders under the Second Lien Credit Agreement from
time to time, and shall have granted to the Second Lien Agent for the benefit of
itself and the Lenders under the Second Lien Credit Agreement from time to time
a security interest, in each case, in and to, all of its right, title and
interest in and to the following (collectively the “Collateral”): (1) this
Agreement; (2) all rights to receive moneys due and to become due under or
pursuant to this Agreement; (3) all rights to receive proceeds of any indemnity,
warranty or guaranty with respect to this Agreement; (4) claims for damages
arising out of or for breach of or default under this Agreement; (5) all
security interests and property subject thereto from time to time purporting to
secure payment of the Receivable Assets; (6) its right to perform under this
Agreement and to compel performance and otherwise exercise all remedies
hereunder; (7) all Pool Receivables now existing and hereafter arising, all
Collections and Related Security with respect thereto, each lock-box, post
office box and lock-box account to which any Collections are remitted or
deposited and all other rights and payments relating to the Pool Receivables;
and (8) all proceeds of any and all of the foregoing Collateral (including,
without limitation, proceeds which constitute property of the types described in
clauses (1) through (7) above). As more fully described in the Second Lien
Intercreditor Agreement, it has been agreed among the parties thereto that such
security interest in favor of Citibank, as first lien agent for the benefit of
itself, the Banks, the Investors and each other Indemnified Party (as defined in
the First Lien Receivables Financing Agreement) under the First Lien Receivables
Financing Agreement from time to time shall be a security interest senior in all
respects to the security interest in favor of the Second Lien Agent for the
benefit of itself and the Lenders under the Second Lien Credit Agreement from
time to time.

(b) In connection with the assignment, pledge and grant described above, the
Buyer hereby irrevocably instructs each Originator, and each Originator hereby
agrees and acknowledges for the benefit of each Administrative Agent, the Group
Managing Agents, the Holders, and the Lenders, as applicable, in each case
effective as of the date hereof (or with respect to the Second Lien Agent and
the Lenders, effective as of the Second Lien Effective Date), as follows:

 

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(i) It shall make all payments to be made by it to the Buyer under or in
connection with this Agreement directly to the Collection Account; provided that
(x) if an Event of Termination has occurred and is continuing, such payments
shall be made to the First Lien Agent by payment to the account (Remittance
Account number 40636695) of the First Lien Agent maintained at the office of
Citibank, N.A. at 111 Wall St, New York, New York or otherwise in accordance
with the instructions of the First Lien Agent and (y) after the Discharge of
Senior Obligations following the Second Lien Effective Date, if an event of
default has occurred under the Second Lien Credit Agreement, such payments shall
be made in accordance with the instructions of the Second Lien Agent.

(ii) All payments to be made by it to the Buyer under or in connection with this
Agreement shall be made by it irrespective of, and without deduction for, any
counterclaim, defense, recoupment or set off (including, without limitation, any
counterclaim, defense, recoupment or setoff under or otherwise in respect of the
Intercompany Note), and shall be final, and it will not seek to recover from
either Administrative Agent, any Group Managing Agent, any Bank, any Investor or
any Lender for any reason any such payment once made.

(c) In connection with the assignment, pledge and grant described above, each of
the Originators and the Collection Agent acknowledges and agrees as follows:

(i) It will (A) timely and fully perform and comply in all material respects
with all provisions, covenants and other promises required to be observed by it
hereunder, (B) maintain this Agreement in full force and effect and (C) with
respect to its obligations hereunder, take all such action as may be from time
to time reasonably requested by either Administrative Agent.

(ii) It will promptly and in any event within five Business Days after its
receipt or delivery thereof, deliver to each Administrative Agent copies of all
notices, requests, reports, certificates, and other documents and information
delivered or received by it from time to time under or in connection with this
Agreement.

(iii) It will not (A) cancel or terminate this Agreement or consent to any
cancellation or termination thereof, (B) amend or otherwise modify any term or
condition of this Agreement or give any consent, waiver or approval hereunder
allowing departure from the terms hereof, except in accordance with Section 8.01
hereof, (C) waive any default under or breach of this Agreement except in
accordance with Section 8.01 hereof, or (D) take any other action under this
Agreement not required or permitted to be taken by it under the terms hereof
that would impair the value of any Collateral or its rights or interests
hereunder or the rights or interests of the Administrative Agents, the Group
Managing Agents, the Holders or the Lenders hereunder.

 

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(d) EFH Corp. agrees to cause the due and punctual performance and observance by
the TXU Collection Agent of all of the terms, covenants, agreements,
undertakings and other obligations on the part of the TXU Collection Agent to be
performed or observed under this Agreement, the Financing Agreements and the
other Transaction Documents in accordance with the terms thereof, including,
without limitation, the obligations to pay when due all monetary obligations of
the TXU Collection Agent now or hereafter existing under this Agreement, the
Financing Agreements and the other Transaction Documents, whether for
Collections received, interest, indemnifications, fees, costs, expenses or
otherwise (such terms, covenants, agreements, undertakings and other obligations
being the “Collection Agent Obligations”). In the event that the TXU Collection
Agent shall fail in any manner whatsoever to perform or observe any of the
Collection Agent Obligations when the same shall be required to be performed or
observed, then EFH Corp. shall itself duly and punctually perform or observe, or
cause to be duly and punctually performed and observed, such Collection Agent
Obligations.

(e) The parties hereto agree and acknowledge that the Administrative Agents, the
Group Managing Agents, the Banks, the Investors, the Lenders and the Indemnified
Parties (as defined in the Financing Agreements) are intended third party
beneficiaries of this Agreement and are entitled to enforce both their
respective rights and remedies hereunder and the Buyer’s rights and remedies
hereunder, subject to the terms of the Second Lien Intercreditor Agreement (on
and after the Second Lien Effective Date) and the applicable Financing
Agreement.

SECTION 6.06. Lock-Boxes

(a) The Collection Agent hereby agrees and acknowledges that, notwithstanding
that each Lock-Box Account and Post Office Box is currently held in the name of
the Collection Agent, all Collections and any other proceeds of Receivables in
the Lock-Box Accounts or Post Office Boxes are solely the property of the Buyer.
Accordingly, the Collection Agent agrees that any interest it may have in the
Collections and any other proceeds of Receivables in the Lock-Box Accounts or
Post Office Boxes as owner of the Lock-Box Accounts or Post Office Boxes, as
applicable, is solely as bailee for the Buyer, as owner, and waives any other
right or interest it may have in such Collections.

(b) In the event that, contrary to the mutual intent of the Collection Agent,
the Originators and the Buyer, the Collection Agent shall be deemed to have any
interest in the funds or other instruments of payment deposited in any Lock-Box
Account or Post Office Box as a result of the Collection Agent being the
accountholder of such Lock-Box Account or holder of such Post Office Box, the
Collection Agent hereby hypothecates and grants to the Buyer a security interest
in all of the Collection Agent’s right, title and interest in and to such funds
or instruments of payment and, in each case, all proceeds thereof, as collateral
security for the performance by the Collection Agent of all the terms, covenants
and agreements on the part of the Collection Agent to be performed hereunder in
accordance with the terms hereof.

ARTICLE VII

INDEMNIFICATION

SECTION 7.01. Indemnities by each Originator.

 

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Without prejudice to any other rights which any Indemnified Party may have under
this Agreement or under applicable law, each of the Originators hereby agrees,
severally, but not jointly, to indemnify and save harmless (and pay upon demand
to) the Buyer and its respective officers, directors, employees and agents and
its assigns and transferees (each, an “Indemnified Party”) from and against any
and all damages, losses, claims, taxes, liabilities, and costs and expenses,
including attorneys’ fees (which attorneys may be employees of such Indemnified
Party), (all of the foregoing being collectively referred to as “Indemnified
Amounts”) arising out of or resulting from this Agreement or any other
Transaction Document to which it is a party in its capacity as an Originator,
any Purchase hereunder, or in respect of any Originator Receivables of such
Originator or related Contracts or Related Security with respect thereto,
including, without limitation, arising out of or as a result of any of the
following, but excluding, however, damages, losses, claims, liabilities and
related costs and expenses (a) to the extent resulting from the gross negligence
or willful misconduct of such Indemnified Party seeking indemnification, (b) for
Originator Receivables which are not collected, not paid or uncollectible on
account of the insolvency, bankruptcy, or financial inability to pay of the
applicable Obligor or (c) attributable to any income or franchise taxes imposed
on (or measured by) the Buyer’s net income:

(i) the characterization in any Originator Report or in any other report or
statement made by or on behalf of such Originator or the Collection Agent, in
each case based on information supplied by or on behalf of such Originator, of
any Originator Receivable transferred by such Originator hereunder as an
Eligible Receivable which is not an Eligible Receivable as of the date of such
Originator Report, other report or statement;

(ii) its reliance on any representation or warranty made by such Originator (or
any of its officers) under or in connection with this Agreement or any other
Transaction Document to which such Originator is a party in its capacity as an
Originator or any Originator Report, any Receivables Activity Report or any
other information or report delivered by such Originator pursuant to this
Agreement or any such other Transaction Document, which shall have been false or
incorrect in any respect when made or deemed made;

(iii) the failure by such Originator to comply with any applicable law, rule or
regulation with respect to any Originator Receivable of such Originator or the
related Contract or Related Security with respect thereto, or the nonconformity
of any Originator Receivable of such Originator or the related Contract or
Related Security with any such applicable law, rule or regulation;

(iv) the failure of such Originator to vest in the Buyer absolute ownership of
each Originator Receivable and the related Contracts (except to the extent any
assignment under this Agreement would breach a legally enforceable provision of
such Contract) , Related Security and Collections free and clear of any Adverse
Claim;

(v) the failure of such Originator to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any Originator
Receivable of such Originator, the Related Security and Collections in respect
thereof whether at the time of the initial sale and assignment hereunder or at
any subsequent time;

 

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(vi) any Dispute, claim, offset or defense (other than discharge in bankruptcy
of the Obligor) of the Obligor to the payment of any Originator Receivable of
such Originator (including, without limitation, a defense based on such
Originator Receivable or the related Contract not being a legal, valid and
binding obligation of such Obligor enforceable against it in accordance with its
terms), or any other claim resulting from the sale of the merchandise or
services related to such Originator Receivable or the furnishing or failure to
furnish such merchandise or services (including, without limitation, any
products liability claim or personal injury or property damage suit or other
similar or related claim or action of whatever sort);

(vii) any failure of such Originator to perform its duties or obligations in
accordance with the provisions of this Agreement or any other Transaction
Document to which it is a party in its capacity as an Originator or to perform
its duties or obligations under any Contract;

(viii) the commingling by such Originator of Collections of Originator
Receivables at any time with other funds;

(ix) any investigation, litigation or proceeding relating to or arising from
this Agreement, any other Transaction Document to which an Originator is a party
in its capacity as an Originator or any Contract, the use of the proceeds by
such Originator of any Purchase hereunder or the ownership of the Receivable
Assets;

(x) any failure by such Originator to pay when due any taxes, including without
limitation, sales, excise or personal property taxes, payable by it in
connection with any Originator Receivable sold, transferred or assigned by it or
Related Security or Contract related thereto;

(xi) any claim brought by any Person other than an Indemnified Party arising
from any activity by such Originator in servicing, administering or collecting
any Originator Receivable; or

(xii) any act or omission by such Originator under this Agreement that reduces
or impairs the rights of the Buyer or any other Indemnified Party with respect
to the Originator Receivables of such Originator or the value of any such
Originator Receivables.

SECTION 7.02. Duty to Advise Buyer and Administrative Agents.

Each Originator and the Collection Agent will use its best efforts to identify
situations involving possible liability or obligations under this Article VII
and to determine the amount of any such liability or obligations, and, upon
having notice of such situations, it will promptly advise the Buyer and each
Administrative Agent thereof.

 

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ARTICLE VIII

MISCELLANEOUS

SECTION 8.01. Amendments, Etc.

No amendment or waiver of any provision of this Agreement or consent to any
departure by the Originator Agent, any Originator, the Collection Agent, EFH
Corp. or the Buyer therefrom shall be effective unless in a writing signed by
the Buyer and, if any Financing Agreement shall then be in effect, the
Controlling Agent, and, in the case of any amendment, also signed by the
Collection Agent, the Originator Agent, EFH Corp. and each Originator, and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
the Buyer or any of its assigns or transferees to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. It is expressly understood
and acknowledged that during the period any Financing Agreement shall be in
effect, the prior consent of the Controlling Agent may be required in accordance
with the terms thereof in order for the Buyer to grant any consent,
authorization or approval requested of the Buyer hereunder, or for the Buyer to
agree to any amendment, waiver or other modification to the terms or conditions
of this Agreement.

SECTION 8.02. Notices, Etc.

All notices and other communications hereunder shall, unless otherwise stated
herein, be in writing (including facsimile) and mailed, faxed or delivered, to
each party hereto, at its address set forth under its name on the signature
pages hereof, or at such other address as shall be designated by such party in a
written notice to the other parties hereto. All such notices and communications
shall, when mailed or faxed, be effective when deposited in the mails or faxed,
respectively, except that notices and communications to the Buyer and either
Administrative Agent pursuant to Article II shall not be effective until
received by the Buyer and such Administrative Agent.

SECTION 8.03. Binding Effect; Assignability.

This Agreement shall become effective when it shall have been executed by the
Initial Originator, the Originator Agent, the Collection Agent, EFH Corp. and
the Buyer, and thereafter shall be binding upon and inure to the benefit of the
Initial Originator, the Originator Agent, any Additional Originator (upon its
execution and delivery of an Additional Originator Supplement Agreement), the
Collection Agent, EFH Corp., the Buyer and each other Indemnified Party, except
that each of the Originators, the Originator Agent, the Collection Agent and EFH
Corp. shall not have the right to assign its rights or obligations hereunder or
any interest herein without the prior written consent of the Buyer and each
Administrative Agent, and the Buyer shall not have the right to assign its
rights or obligations hereunder or any interest herein other than to the First
Lien Agent pursuant to the First Lien Receivables Financing Agreement and, on or
after the Second Lien Effective Date, to the Second Lien Agent pursuant to the
Second Lien Loan Documents, without the prior written consent of each
Originator, the Originator Agent, the

 

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Collection Agent, EFH Corp. and each Administrative Agent. This Agreement shall
create and constitute the continuing obligation of the parties hereto in
accordance with its terms, and shall remain in full force and effect until the
later of the Termination Date and the date on which (x) the Facility Principal
shall have been reduced to zero and all other amounts due to the First Lien
Agent, the Group Managing Agents, the Banks and the Investors under the First
Lien Loan Documents shall have been paid and (y) after the Second Lien Effective
Date, the date following the Maturity Date upon which no principal shall be
outstanding and no other amounts are payable by the Buyer under the Second Lien
Loan Documents; provided, however, that rights and remedies with respect to any
breach of any representation and warranty made by an Originator, the Collection
Agent or EFH Corp. pursuant to Article IV, the indemnification provisions of
Article VII and Sections 8.04 and 8.05 shall be continuing and shall survive any
termination of this Agreement.

SECTION 8.04. Costs, Expenses and Taxes.

(a) In addition to the rights of indemnification granted under this Agreement,
each of the Originators severally, but not jointly, agrees to pay on demand its
Allocable Share of all costs and expenses in connection with the preparation,
execution, delivery and administration (including periodic auditing of
Originator Receivables) of, and searches and filings in respect of, this
Agreement and the other documents and agreements to be delivered hereunder,
including, without limitation, in each case, the reasonable fees and
disbursements of counsel for the Buyer with respect thereto and advising the
Buyer as to its rights and remedies hereunder. Each of the Originators further
agrees severally, but not jointly, to pay on demand its Allocable Share of all
costs and expenses, if any (including, without limitation, reasonable counsel
fees and disbursements) in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement and the other
instruments and documents to be delivered in connection herewith.

(b) Any and all payments by the Originators, any TXU Collection Agent and EFH
Corp. hereunder shall be made free and clear and without deduction for any and
all present or future Taxes. If any Originator, any TXU Collection Agent or EFH
Corp. shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder to the Buyer, the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Article VIII) the Buyer
receives an amount equal to the sum it would have received had no such
deductions been made.

(c) In addition, each Originator severally, but not jointly, agrees to pay on
demand its Allocable Share of any and all stamp and other taxes and fees payable
by the Buyer and any other Indemnified Party in connection with the execution,
delivery, filing and recording of this Agreement or the other documents or
agreements to be delivered hereunder and agrees to hold each Indemnified Party
harmless from and against any liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes and fees. This indemnification
shall be made within 10 days from the date such Indemnified Party makes written
demand therefor (with a copy to each Administrative Agent).

 

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SECTION 8.05. No Proceedings.

Each of the Originators, the Originator Agent, the Collection Agent and EFH
Corp. hereby agrees that it will not institute against the Buyer or any Investor
any proceeding of the type referred to in Section 7.01(h) of the First Lien
Receivables Financing Agreement so long as (a) in the case of the Buyer, there
shall not have elapsed one year plus one day since the later of (i) the
Discharge of Senior Obligations and (ii) the date following the Maturity Date
upon which no principal shall be outstanding and no other amounts are payable by
the Buyer under the Second Lien Loan Documents, and (b) in the case of any
Investor, any Promissory Notes issued by such Investor shall be outstanding or
there shall not have elapsed one year plus one day since the last day on which
any such Promissory Notes shall have been outstanding.

SECTION 8.06. Confidentiality.

Except as otherwise required by applicable law, regulation, ruling, accounting
requirement or the rules of the applicable stock exchange wherein the securities
of EFH Corp. may be listed, each of the parties hereto agrees to maintain the
confidentiality of this Agreement, the Financing Agreements, the Fee Letters and
all non-public information delivered in connection herewith in communications
with third parties and otherwise; provided that this Agreement, the Financing
Agreements, the Fee Letters and such information may be disclosed (i) to third
parties to the extent such disclosure is made pursuant to a written
confidentiality agreement in form and substance substantially identical to this
Section 8.06, (ii) to each Originator’s, the Collection Agent’s, the Originators
Agent’s, the Buyer’s, each Administrative Agent’s, each Group Managing Agent’s,
each Holder’s and each Lender’s legal counsel, accountants and auditors if they
agree to hold it confidential, (iii) to any rating agency, commercial paper
dealer or provider of a surety, guaranty or credit or liquidity enhancement to
any Investor or any subordinated investor in any Investor or any Investor
Trustee, (iv) to any regulatory authority having jurisdiction over any
Originator, the Originator Agent, the Collection Agent, EFH Corp., the Buyer,
either Administrative Agent, any Group Managing Agent, any Bank, any Investor or
any Lender and (v) pursuant to court order or subpoena.

SECTION 8.07. Governing Law.

This Agreement shall be governed by, and construed in accordance with, the
internal laws of the State of New York, except to the extent that the perfection
or effect of non-perfection of the interests of the Buyer in the Originator
Receivables, or remedies hereunder in respect thereof, are governed by the laws
of a jurisdiction other than the State of New York.

SECTION 8.08. No Waiver; Remedies.

No failure on the part of the Buyer, any Originator, the Originator Agent, the
Collection Agent or EFH Corp. to exercise, and no delay in exercising, any right
hereunder or under any other Transaction Document to which it is a party shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

 

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SECTION 8.09. Execution in Counterparts.

This Agreement may be executed in any number of counterparts, each of which when
so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile or by electronic
mail attachment in portable document format (.pdf) shall be effective as
delivery of a manually executed counterpart of this Agreement.

SECTION 8.10. Entire Agreement.

This Agreement contains a final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire agreement and understanding among the parties hereto
with respect to the subject matter hereof and supersede all prior agreements and
understandings, written or oral, relating to the subject matter hereof.

SECTION 8.11. Severability of Provisions.

Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

SECTION 8.12. Jurisdiction, Etc.

(a) Each of the parties hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or Federal court of the United States of America sitting in the
Borough of Manhattan in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or any
of the other Transaction Documents to which it is a party, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to
the fullest extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or any of the other Transaction Documents in the
courts of any jurisdiction.

(b) Each of the parties hereto irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any of the other Transaction
Documents to which it is a party in any New York State or Federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

 

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SECTION 8.13. Waiver.

With respect to Finding of Fact No. 58(e) of the Financing Order, TXU Energy
Retail, for the benefit of the Receivables Parties (as defined in the
Intercreditor Agreement), hereby agrees to the following:

(i) it irrevocably and unconditionally waives all right to select and implement
the option pursuant to Finding of Fact No. 58(e)(3) of the Financing Order; and

(ii) if it selects the option pursuant to Finding of Fact No. 58(e)(2) of the
Financing Order, it (x) shall provide written notice within three (3) Business
Days to each Administrative Agent and each Group Managing Agent, including a
written report in reasonable detail of the proposed arrangements to pay
Transition Charges (as defined in Section 39.302(7) of Subchapter G of the Texas
Utilities Code) then due, (y) shall not implement such proposed arrangements
unless such proposed arrangements are in form and substance reasonably
satisfactory to each Administrative Agent and each Group Managing Agent (taking
into account continuity of perfection and priority of security interests,
priority of payment and such other matters as each Administrative Agent and each
Group Managing Agent shall deem relevant to protect their interests) and each
Administrative Agent and each Group Managing Agent consents to such proposed
arrangements in writing, such consent not to be unreasonably withheld or
delayed.

SECTION 8.14. WAIVER OF JURY TRIAL.

EACH PARTY HERETO HEREBY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE
LAW, TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTED WITH, THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.

 

TXU ENERGY RETAIL COMPANY LLC,

as Originator, as Originator Agent and as Collection Agent

By   /s/ Anthony R. Horton   Name:    Anthony R. Horton   Title:      Treasurer
 

1601 Bryan Street

Energy Plaza

Dallas, Texas 75201-3411

 

Attention: Treasurer

Telephone: 214-812-4600

Facsimile No.: 214 812-2488

Signature Page to Trade Receivables Sale Agreement

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TXU ENERGY RECEIVABLES COMPANY LLC,

as Buyer

By   /s/ Anthony R. Horton   Name:    Anthony R. Horton   Title:      Treasurer
and Assistant Secretary  

1601 Bryan Street

Energy Plaza

Dallas, Texas 75201-3411

 

Attention: Treasurer

Facsimile No.: 214 812-2488

Signature Page to Trade Receivables Sale Agreement

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ENERGY FUTURE HOLDINGS CORP. By   /s/ Anthony R. Horton   Name:    Anthony R.
Horton   Title:      Senior Vice President and Treasurer  

1601 Bryan Street

Energy Plaza

Dallas, Texas 75201-3411

 

Attention: Treasurer

Facsimile No.: 214 812-2488

Signature Page to Trade Receivables Sale Agreement