Exhibit 10(c)

                                                            [EXECUTION VERSION]
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                             TXU ENERGY COMPANY LLC
                                   AS BORROWER
                   ------------------------------------------

                                  $500,000,000
                                CREDIT AGREEMENT


                          Dated as of November 4, 2004

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


                      WACHOVIA BANK, NATIONAL ASSOCIATION,
                    AS ADMINISTRATIVE AGENT AND FRONTING BANK



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                                TABLE OF CONTENTS
                                -----------------
                                                               Page
                                                               ----

ARTICLE I DEFINITIONS; CONSTRUCTION...............................1


      SECTION 1.01. Defined Terms.................................1
      SECTION 1.02. Terms Generally..............................15

ARTICLE II THE CREDITS...........................................16

      SECTION 2.01. Commitments..................................16
      SECTION 2.02. Loans........................................16
      SECTION 2.03. Borrowing Procedure..........................18
      SECTION 2.04. Fees.........................................18
      SECTION 2.05. Repayment of Loans; Evidence of
        Indebtedness.............................................19
      SECTION 2.06. Interest on Loans............................20
      SECTION 2.07. Alternate Rate of Interest...................21
      SECTION 2.08. Termination and Reduction of Total
      COMMITMENT................................................ 21
      SECTION 2.09. Optional Prepayment..........................21
      SECTION 2.10. Mandatory Prepayment.........................22
      SECTION 2.11. Reserve Requirements; Change in
        Circumstances............................................22
      SECTION 2.12. Change in Legality...........................24
      SECTION 2.13. Pro Rata Treatment...........................25
      SECTION 2.14. Sharing of Setoffs...........................25
      SECTION 2.15. Payments.....................................26
      SECTION 2.16. Taxes........................................26
      SECTION 2.17. Assignment of Commitments Under Certain
       Circumstances.............................................29
      SECTION 2.18. Letters of Credit............................29
      SECTION 2.19. Reinstatement of Letter of Credit Amounts
        with respect to Bond Letters of Credit...................33

ARTICLE III REPRESENTATIONS AND WARRANTIES.......................33

      SECTION 3.01. Organization; Powers.........................33
      SECTION 3.02. Authorization................................33
      SECTION 3.03. Enforceability...............................34
      SECTION 3.04. Governmental Approvals.......................34
      SECTION 3.05. Financial Statements.........................34
      SECTION 3.06. Litigation...................................35
      SECTION 3.07. Federal Reserve Regulations..................35
      SECTION 3.08. Investment Company Act; Public Utility
        Holding Company Act......................................35
      SECTION 3.09. No Material Misstatements....................35
      SECTION 3.10. Taxes........................................36
      SECTION 3.11. Employee Benefit Plans.......................36
      SECTION 3.12. Significant Subsidiaries.....................36
      SECTION 3.13. Environmental Matters........................36


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      SECTION 3.14. Solvency.....................................37

ARTICLE IV CONDITIONS............................................37

      SECTION 4.01. Initial Extensions of Credit.................37
      SECTION 4.02. Conditions for All Extensions of Credit......38
      SECTION 4.03. Conditions to Issuance of a Bond Letter
        of Credit................................................39

ARTICLE V THE PROVIDER BONDS.....................................40

ARTICLE VI COVENANTS.............................................42

      SECTION 6.01. Corporate Existence..........................42
      SECTION 6.02. Compliance with Laws; Maintenance of
        Properties...............................................42
      SECTION 6.03. Financial Statements, Reports, Etc...........42
      SECTION 6.04. Annual Officer's Certificate as to
        Compliance...............................................43
      SECTION 6.05. Consolidation, Merger, Conveyance or
        Other Transfer...........................................44
      SECTION 6.06. Limitations on Liens.........................45
      SECTION 6.07. Limitations on Debt..........................46
      SECTION 6.08. Limitations on Asset Sales...................46
      SECTION 6.09. Bond Documents...............................46
      SECTION 6.10. Use of Proceeds..............................47

ARTICLE VII EVENTS OF DEFAULT....................................47

      SECTION 7.01. Events of Default............................47
      SECTION 7.02. Letter  of Credit Remedies...................49

ARTICLE VIII THE AGENT...........................................50

ARTICLE IX MISCELLANEOUS.........................................52

      SECTION 9.01. Notices......................................52
      SECTION 9.02. Survival of Agreement........................53
      SECTION 9.03. Binding Effect...............................53
      SECTION 9.04. Successors and Assigns.......................53
      SECTION 9.05. Expenses; Indemnity..........................56
      SECTION 9.06. Right of Setoff..............................58
      SECTION 9.07. Pari Passu...................................58
      SECTION 9.08. Applicable Law...............................58
      SECTION 9.09. Waivers; Amendment...........................59
      SECTION 9.10. Entire Agreement.............................59
      SECTION 9.11. Severability.................................59
      SECTION 9.12. Counterparts.................................60
      SECTION 9.13. Headings.....................................60
      SECTION 9.14. Interest Rate Limitation.....................60
      SECTION 9.15. Jurisdiction; Venue..........................60


                                       ii


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     SECTION 9.16. Confidentiality...............................61


EXHIBITS AND SCHEDULES

Exhibit A   -    Form of Assignment and Acceptance
Exhibit B   -    Form of Borrowing Request
Exhibit C   -    Form of Prepayment Notice
Exhibit D   -    Form of Notice of Interest Period

Schedule 2.01     -    Commitments
Schedule 2.18(i)  -    Fronting Bank LC Limits




















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      CREDIT AGREEMENT (this "AGREEMENT"), dated as of November 4, 2004, among
TXU Energy Company LLC, a Delaware limited liability company (the "BORROWER"),
the lenders listed in Schedule 2.01 (together with their successors and assigns,
the "LENDERS") and Wachovia Bank, National Association as administrative agent
for the Lenders (in such capacity, the "AGENT") and as the fronting bank for
letters of credit issued hereunder (in such capacity, the "FRONTING BANK").

      The Borrower has requested that the Lenders and the Fronting Bank provide
the credit facility hereinafter described in the amounts and on the terms and
conditions set forth herein, the Lenders and the Fronting Bank have so agreed on
the terms and conditions set forth herein, and Wachovia Bank, National
Association has agreed to act as administrative agent for the Lenders, on such
terms and conditions;

      Accordingly, the parties hereto agree as follows:

                                   ARTICLE I
                            DEFINITIONS; CONSTRUCTION

     SECTION 1.01. ..DEFINED TERMS.

     As used in this Agreement, the following terms shall have the meanings
     specified below:

          "ABR BORROWING" shall mean a Borrowing comprised of ABR Loans.

          "ABR LOAN" shall mean any Loan bearing interest at a rate determined
     by reference to the Alternate Base Rate in accordance with the provisions
     of Article II or any Eurodollar Loan converted (pursuant to Section 2.03,
     2.08 or 2.12(a)(ii)) to a loan bearing interest at a rate determined by
     reference to the Alternate Base Rate.

          "AFFILIATE" shall mean, when used with respect to a specified person,
     another person that directly or indirectly controls or is controlled by or
     is under common control with the person specified.

          "AGENT" shall have the meaning given such term in the preamble hereto.

          "AGREEMENT" shall have the meaning given such term in the preamble
     hereto.

          "ALTERNATE BASE RATE" shall mean, for any day, a rate per annum
     (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
     greater of (i) the Federal Funds Effective Rate in effect on such day plus
     1/2 of 1% and (ii) the Base Rate in effect on such day. For purposes
     hereof, "BASE RATE" shall mean the rate of interest per annum publicly
     announced from time to time by Wachovia as its base rate in effect at its
     principal office in Charlotte, North Carolina; each change in the Base Rate
     shall be effective on the date such change is publicly announced as
     effective; and "FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the
     weighted average of the rates on overnight Federal funds transactions with
     members of the Federal Reserve System arranged by Federal funds brokers, as
     released on the next succeeding Business Day by the Federal Reserve Bank of
     New York, or, if such rate is not so released for any day which is a


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                                                                               2


     Business Day, the arithmetic average (rounded upwards to the next 1/100th
     of 1%), as determined by Wachovia, of the quotations for the day of such
     transactions received by Wachovia from three Federal funds brokers of
     recognized standing selected by it. If for any reason Wachovia shall have
     determined (which determination shall be conclusive absent manifest error;
     provided that Wachovia shall, upon request, provide to the Borrower a
     certificate setting forth in reasonable detail the basis for such
     determination) that it is unable to ascertain the Federal Funds Effective
     Rate for any reason, including the inability of Wachovia to obtain
     sufficient quotations in accordance with the terms thereof, the Alternate
     Base Rate shall be determined without regard to clause (i) of the first
     sentence of this definition until the circumstances giving rise to such
     inability no longer exist. Any change in the Alternate Base Rate due to a
     change in the Base Rate or the Federal Funds Effective Rate shall be
     effective on the effective date of such change in the Base Rate or the
     Federal Funds Effective Rate, respectively.

          "APPLICABLE MATURITY DATE" shall mean, with respect to any Bridge
     Loan, the Bridge Maturity Date and with respect to any other Loan, the
     Facility Maturity Date.

          "APPLICABLE PERIOD" shall have the meaning set forth in Section
     2.04(a).

          "ASSET SALE" means any sale of any properties or assets of the
     Borrower or any of its Subsidiaries including by way of the sale by the
     Borrower or any such Subsidiary of equity interests in any such Subsidiary
     or by way of a sale-leaseback or similar transaction; provided, however,
     that "Asset Sale" shall not include (i) any sales of accounts receivable,
     energy, fuel or other commodities or the right or obligation to purchase,
     or other contracts or derivatives associated with, energy, fuel or other
     commodities, (ii) any energy and commodity trading, marketing or risk
     management activities, (iii) any sale-leaseback or similar transaction that
     results in Debt, or (iv) any sale-leaseback or similar transaction
     completed within twelve months from the later of the time the property that
     is the subject of such transaction is acquired and the time it is placed
     into commercial operation by the Borrower or any of its Subsidiaries.

          "ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance
     entered into by a Lender and an assignee in the form of Exhibit A.

          "AVAILABLE COMMITMENT" shall mean, for each Lender, the excess of such
     Lender's Commitment over such Lender's Outstanding Credits. "AVAILABLE
     COMMITMENTS" shall refer to the aggregate of the Lenders' Available
     Commitment hereunder.

          "AVAILABLE REVOLVER SUB-COMMITMENT" shall mean, for each Lender, the
     lesser of (A) such Lender's Revolver Sub-Commitment or (B) the excess of
     such Lender's Commitment over such Lender's Outstanding Credits. "AVAILABLE
     REVOLVER SUB-COMMITMENTS" shall refer to the aggregate of the Lenders'
     Available Revolver Sub-Commitment hereunder.

          "BOARD" shall mean the Board of Governors of the Federal Reserve
     System of the United States.


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                                                                               3


          "BOND COUNSEL" means McCall, Parkhurst & Horton L.L.P., Dallas, Texas,
     or an attorney or firm of attorneys of nationally recognized standing in
     the field of law relating to municipal, state and public agency financing,
     selected by the Borrower and reasonably acceptable to the Trustee, the
     Issuer and the Agent.

          "BOND LETTER OF CREDIT" means any Letter of Credit issued under the
     terms of this Agreement whereby such Letter of Credit has been issued by
     the Fronting Bank to support the payment of the principal of and interest
     on, the purchase price of, and, if applicable, the premium of a certain
     Series of Bonds.

          "BONDS" means any pollution control revenue bonds issued, or to be
     issued, by a Governmental Authority (or similar entity) whereby the
     proceeds of such bonds are to be or have been loaned, advanced or otherwise
     applied or distributed to the Borrower, at the direction of the Borrower,
     for the purposes of purchasing or otherwise financing or refinancing any
     pollution control facility as identified in the particular Indenture under
     which such bonds were or are to be issued.

          "BORROWER" has the meaning given such term in the preamble hereto.

          "BORROWER INFORMATION" shall have the meaning given such term in
     Section 3.05(b) hereof.

          "BORROWING" shall mean a group of Loans of a single Type made by the
     Lenders on a single date and as to which a single Interest Period is in
     effect.

          "BORROWING REQUEST" shall mean a request made pursuant to Section 2.03
     in the form of Exhibit B.

          "BRIDGE AVAILABILITY PERIOD" shall mean the period commencing on the
     Closing Date and ending on the earlier to occur of (i) December 3, 2004 or
     (ii) the date on which the Bridge Loans have been fully drawn.

          "BRIDGE MATURITY DATE" shall mean the earlier of November 3, 2005 and
     the date that all amounts due under the Bridge Loans are fully paid in
     accordance with Section 2.10.

          "BRIDGE LOAN" shall mean any bridge loan made pursuant to Section
     2.02(a), whether made as a Eurodollar Loan or as an ABR Loan.

          "BUSINESS DAY" shall mean any day (other than a day that is a
     Saturday, Sunday or legal holiday in the State of New York or North
     Carolina) on which banks are open for business in New York City or
     Charlotte, North Carolina; provided, however, that, when used in connection
     with a Eurodollar Loan, the term "Business Day" shall also exclude any day
     on which banks are not open for dealings in dollar deposits in the London
     interbank market.

          "CAPITALIZED LEASE LIABILITIES" of any person means the amount, if
     any, shown as liabilities on such person's unconsolidated balance sheet for
     capitalized leases of property not owned by such person, which amount shall


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                                                                               4


     be determined in accordance with GAAP and practices applicable to the type
     of business in which such person is engaged.

          "CASH COLLATERAL ACCOUNT" shall have the meaning assigned to such term
     in Section 7.02.

          "CLOSING DATE" means November 4, 2004.

          "CODE" shall mean the Internal Revenue Code of 1986, as the same may
     be amended from time to time.

          "COMMISSION" shall mean the Public Utility Commission of the State of
     Texas.

          "COMMITMENT" shall mean, with respect to any Lender, the commitment of
     such Lender, as set forth in Schedule 2.01 hereto, to make Bridge Loans
     during the Bridge Availability Period, to make Revolving Loans during the
     Revolver Availability Period not to exceed the Revolver Sub-Commitment and
     to purchase Term Loan participations in the Letters of Credit, as such
     Commitment may be permanently terminated or reduced from time to time
     pursuant to Section 2.08 or modified from time to time pursuant to Section
     9.04.

          "COMMITMENT REDUCTION AMOUNT" means, as of any Reduction Date, the
     amount by which the Total Commitment is being reduced on such Reduction
     Date.

          "COMPARABLE TREASURY ISSUE" means the United States Treasury security
     having a maturity comparable to the period remaining from the Reduction
     Date to the Facility Maturity Date at the time of selection and in
     accordance with customary financial practice, in pricing new issues of
     corporate debt securities of comparable maturity.

          "COMPARABLE TREASURY PRICE" means, with respect to any Reduction Date,
     (i) the average of the bid and asked prices for the Comparable Treasury
     Issue (expressed in each case as a percentage of its principal amount) on
     the third Business Day preceding such Reduction Date, as set forth in the
     daily statistical release (or any successor release) published by the
     Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
     Quotations for U.S. Government Securities" or (ii) if such release (or any
     successor release) is not published or does not contain such prices on such
     Business Day, (a) the average of the Reference Treasury Dealer Quotations
     for such Reduction Date or (b) if only one Reference Treasury Dealer
     Quotation is available, such quotation.

          "CONSOLIDATED SUBSIDIARY" of any person shall mean at any date any
     Subsidiary or other entity the accounts of which would be consolidated with
     those of such person in such person's consolidated financial statements as
     of such date.

          "CONTROLLED GROUP" shall mean all members of a controlled group of
     corporations and all trades or businesses (whether or not incorporated)
     under common control which, together with the Borrower, are treated as a
     single employer under Section 414(b) or 414(c) of the Code.


<PAGE>


                                                                               5


           "CORPORATION" shall mean a corporation, association, company, limited
      liability company, partnership, joint stock company, business or statutory
      trust or other business entity, and references to "corporate" and other
      derivations of "corporation" herein shall be deemed to include appropriate
      derivations of such entities.

           "DEBT," with respect to any person, means:

          (a) indebtedness of such person for borrowed money evidenced by a
     bond, debenture, note or other similar written instrument or agreement by
     which such person is obligated to repay such borrowed money,

          (b) Capitalized Lease Liabilities of such person, and

          (c) any guaranty by such person of any such indebtedness or
     Capitalized Lease Liabilities of another person.

     However, "Debt" does not include, among other things,

          (x) indebtedness of such person under any installment sale or
     conditional sale agreement or any other agreement relating to indebtedness
     for the deferred purchase price of property or services,

          (y) any trade obligations (including obligations under agreements
     relating to the purchase and sale of any commodity, including fuel or power
     purchase or sale agreements, tolling agreements, and any commodity,
     currency, interest rate, weather or other hedges or derivatives regardless
     of whether such transaction is a "financial" or physical transaction) or
     other obligations of such person in the ordinary course of business, or

          (z) obligations of such person under any lease agreement (including
     any lease intended as security), other than Capitalized Lease Liabilities.

          "DEFAULT" shall mean any event or condition, which upon notice, lapse
     of time or both would constitute an Event of Default.

          "DOLLARS" or "$" shall mean lawful money of the United States of
     America.

          "DTC" shall mean The Depository Trust Company.

          "ERISA" shall mean the Employee Retirement Income Security Act of
     1974, as the same may be amended from time to time.

          "ERISA AFFILIATE" shall mean any trade or business (whether or not
     incorporated) that is a member of a group of (i) organizations described in
     Section 414(b) or (c) of the Code and (ii) solely for purposes of the Lien
     created under Section 412(n) of the Code, organizations described in
     Section 414(m) or (o) of the Code of which the Borrower is a member.


<PAGE>


                                                                               6


          "ERISA EVENT" shall mean (i) any Reportable Event; (ii) the adoption
     of any amendment to a Plan that would require the provision of security
     pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (iii)
     the incurrence of any liability under Title IV of ERISA with respect to the
     termination of any Plan or the withdrawal or partial withdrawal of the
     Borrower or any of its ERISA Affiliates from any Plan or Multiemployer
     Plan; (iv) the receipt by the Borrower or any ERISA Affiliate from the PBGC
     of any notice relating to the intention to terminate any Plan or Plans or
     to appoint a trustee to administer any Plan; (v) the receipt by the
     Borrower or any ERISA Affiliate of any notice concerning the imposition of
     Withdrawal Liability or a determination that a Multiemployer Plan is, or is
     expected to be, insolvent or in reorganization, within the meaning of Title
     IV of ERISA; (vi) the occurrence of a nonexempt "prohibited transaction" as
     defined in Section 4975(c) of the Code or Section 406 of ERISA with respect
     to which the Borrower or any of its Subsidiaries is liable; and (vii) any
     other similar event or condition with respect to a Plan or Multiemployer
     Plan that could result in liability of the Borrower other than a liability
     to pay premiums or benefits when due.

          "EURODOLLAR BORROWING" shall mean a Borrowing comprised of Eurodollar
     Loans.

          "EURODOLLAR LOAN" shall mean any Loan bearing interest at a rate
     determined by reference to the LIBO Rate in accordance with the provisions
     of Article II.

          "EVENT OF DEFAULT" shall have the meaning assigned to such term in
     Section 7.01.

          "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
     amended.

          "EXCLUDED ITEMS" shall mean (i) any non-cash book losses relating to
     the sale or write-down of assets and (ii) any write-down of the regulated
     assets related to Qualified Transition Bonds.

          "EXTENSION OF CREDIT" shall mean (i) the making of a Loan or (ii) the
     issuance of a Letter of Credit or the amendment of any Letter of Credit
     having the effect of extending the stated termination date thereof or
     increasing the maximum amount available to be drawn thereunder.

           "FACILITY MATURITY DATE" shall mean December 15, 2009.

          "FEDERAL FUNDS EFFECTIVE RATE" shall have the meaning set forth in the
     definition of "Alternate Base Rate".

          "FEES" shall mean, collectively, the Termination Fee, the Unused
     Commitment Fee and the Letter of Credit Fee and other fees, administrative
     costs or expenses set forth in Section 2.04.

          "FINANCIAL OFFICER" of any corporation shall mean the chief financial
     officer, principal accounting officer, treasurer, associate or assistant
     treasurer, or any responsible officer designated by one of the foregoing
     persons, of such corporation.


<PAGE>


                                                                               7


          "FRONTING BANK" shall mean Wachovia or any Affiliate of Wachovia
     acceptable to the Borrower that delivers an instrument in form and
     substance satisfactory to the Borrower and the Agent whereby such Affiliate
     agrees to act as the "Fronting Bank" hereunder and states the amount of its
     LC Fronting Bank Commitment.

          "GAAP" shall mean generally accepted accounting principles, applied on
     a consistent basis.

          "GOVERNMENTAL AUTHORITY" means the government of the United States or
     of any state or territory thereof or of the District of Columbia or of any
     county, municipality or other political subdivision of any of the
     foregoing, or any department, agency, authority or other instrumentality of
     any of the foregoing.

          "INDENTURE" means, with respect to a Series of Bonds, the indenture or
     trust agreement, as amended or supplemented, under which such Series of
     Bonds are issued.

          "INSTALLMENT PAYMENT AND BOND AMORTIZATION AGREEMENT" means, with
     respect to a Series of Bonds, the agreement between the Borrower and the
     Issuer, as amended or supplemented, related to the issuance of such Series
     of Bonds.

          "INTEREST PAYMENT DATE" shall mean, with respect to any Loan, the last
     day of the Interest Period applicable thereto and, in the case of a
     Eurodollar Loan with an Interest Period of more than three months'
     duration, each day that would have been an Interest Payment Date for such
     Loan had successive Interest Periods of three months' duration or 90 days'
     duration, as the case may be, been applicable to such Loan and, in
     addition, the date of any prepayment of such Loan or conversion of such
     Loan to a Loan of a different Type.

          "INTEREST PERIOD" shall mean (i) as to any Eurodollar Borrowing, the
     period commencing on the date of such Borrowing and ending on the
     numerically corresponding day (or, if there is no numerically corresponding
     day, on the last day) in the calendar month that is 1, 2, 3 or 6 months
     thereafter; provided that, in the case of any Eurodollar Borrowing made
     during the 30-day period ending on the Applicable Maturity Date, such
     period may end on the seventh or fourteenth day thereafter, as the Borrower
     may elect (ii) as to any ABR Borrowing, the period commencing on the date
     of such Borrowing and ending on the earliest of (A) the next succeeding
     March 31, June 30, September 30 or December 31, (B) the Applicable Maturity
     Date, and (C) the date such Borrowing is repaid or prepaid in accordance
     with Section 2.05 or Section 2.09; provided, however, that if any Interest
     Period would end on a day other than a Business Day, such Interest Period
     shall be extended to the next succeeding Business Day unless, in the case
     of Eurodollar Loans only, such next succeeding Business Day would fall in
     the next calendar month, in which case such Interest Period shall end on
     the next preceding Business Day. Interest shall accrue from and including
     the first day of an Interest Period to but excluding the last day of such
     Interest Period.

          "ISSUER" means, with respect to a Series of Bonds, the applicable
     Governmental Authority (or similar entity) that issues or issued such
     Series of Bonds.


<PAGE>


                                                                               8


          "LC FRONTING BANK COMMITMENT" shall mean $500,000,000.

          "LC OUTSTANDINGS" shall mean, on any date of determination, the sum of
     (i) the undrawn Stated Amounts of all Letters of Credit that are
     outstanding on such date and (ii) the aggregate principal amount of all
     unpaid reimbursement obligations of the Borrower on such date with respect
     to payments made by the Fronting Bank under Letters of Credit (excluding
     reimbursement obligations that have been repaid with the proceeds of any
     Term Loan). A Lender's "LC Outstandings" shall mean such Lender's
     participation interest in undrawn Letters of Credit and its Percentage of
     all unpaid reimbursement obligations in respect of the Letters of Credit.

          "LC PAYMENT NOTICE" shall have the meaning assigned to such term in
     Section 2.18(e).

          "LENDERS" shall have the meaning given such term in the preamble
     hereto.

          "LETTER OF CREDIT" shall mean a letter of credit that is issued by a
     Fronting Bank pursuant to a Request for Issuance, as such letter of credit
     may from time to time be amended, modified or extended in accordance with
     the terms of this Agreement.

          "LETTER OF CREDIT FEE" shall have the meaning set forth in Section
     2.04(b).

          "LIBO RATE" shall mean, with respect to any Eurodollar Borrowing for
     any Interest Period, the rate appearing on Page 3750 of the Telerate
     Service (or on any successor or substitute page of such service, or any
     successor to or substitute for such service, providing rate quotations
     comparable to those currently provided on such page of such service, as
     determined by Wachovia from time to time for purposes of providing
     quotations of interest rates applicable to dollar deposits in the London
     interbank market) at approximately 11:00 a.m., London time, two Business
     Days prior to the commencement of such Interest Period as the rate for
     dollar deposits with a maturity comparable to such Interest Period. In the
     event that such rate is not available at such time for any reason, then the
     "LIBO RATE" with respect to such Eurodollar Borrowing for such Interest
     Period shall be the rate at which dollar deposits of $5,000,000 and for a
     maturity comparable to such Interest Period are offered by the principal
     London office of Wachovia in immediately available funds in the London
     interbank market at approximately 11:00 a.m. London time, two Business Days
     prior to the commencement of such Interest Period.

          "LIEN" shall mean any lien, mortgage, deed of trust, pledge or
     security interest, in each case, intended to secure the repayment of Debt.

          "LOAN" shall mean any Bridge Loan, Revolving Loan or Term Loan made
     pursuant to Section 2.02 or 2.18(c).

          "MARGIN REGULATIONS" shall mean Regulations T, U and X of the Board as
     from time to time in effect, and all official rulings and interpretations
     thereunder or thereof.


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                                                                               9


          "MARGIN STOCK" shall have the meaning given such term under Regulation
     U of the Board.

          "MATERIAL ADVERSE CHANGE" shall mean a materially adverse change in
     the business, assets, operations or financial condition of the Borrower and
     its Subsidiaries, taken as a whole, that makes the Borrower unable to
     perform any of its obligations under this Agreement or that impairs the
     rights of, or benefits available to, the Agent, the Lenders or the Fronting
     Bank under this Agreement.

          "MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in
     Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
     making, or accruing an obligation to make, contributions, or has within any
     of the preceding five plan years made, or accrued an obligation to make,
     contributions.

          "OFFERING CIRCULAR" means, with respect to a Series of Bonds, the
     offering circular, together with the documents incorporated therein by
     reference, including any amendments, supplements or reoffering circulars
     related thereto, relating to such Series of Bonds.

          "OUTSTANDING CREDITS" of any Lender shall mean, on any date of
     determination, an amount equal to (i) the aggregate principal amount of all
     outstanding Loans made by such Lender plus (ii) such Lender's LC
     Outstandings on such date.

          "PARENT CREDIT AGREEMENT" shall mean the $2,300,000,000 Credit
     Agreement, dated as of November 4, 2004, among TXU Corp. as borrower,
     Citicorp North America, Inc., as administrative agent and the lenders party
     thereto.

          "PAYMENT DATE" shall have the meaning set forth in Section 2.04(a).

          "PBGC" shall mean the Pension Benefit Guaranty Corporation or any
     entity succeeding to any or all of its functions under ERISA.

          "PERCENTAGE" shall mean, for any Lender on any date of determination,
     the percentage obtained by dividing such Lender's Commitment on such date
     by the Total Commitment on such date.

          "PERMITTED BUSINESS" means a business that is the same or similar to
     the business of the Borrower or any Subsidiary as of November 4, 2004, or
     any business reasonably related thereto.

          "PERMITTED LIENS" means

          (a) any Liens existing at November 4, 2004;

          (b) any vendors' Liens, purchase money Liens and other Liens placed on
     property at, or within twelve months following the later of the date of
     acquisition of such property and the date such property is placed into
     commercial operation by the Borrower or any of its Subsidiaries and Liens
     to secure or provide for the acquisition, construction, improvement,


<PAGE>


                                                                              10


     expansion or development of any property by the Borrower or any such
     Subsidiary, provided that no such Lien in this clause (b) shall extend to
     or cover any other property of the Borrower or any such Subsidiary;

          (c) any Liens on cash or securities (other than equity interests
     issued by any Subsidiary) on hand or in banks or other financial
     institutions, deposit accounts and interests in general or limited
     partnerships (other than equity interests issued by any Subsidiary of the
     Borrower);

          (d) any Liens on property or equity interests, or arising out of any
     Debt, of any person existing at the time the person is merged into or
     consolidated with the Borrower or any of its Subsidiaries;

          (e) any Liens in connection with the issuance of tax-exempt pollution
     control bonds or other similar bonds issued pursuant to Section 103(b) of
     the Internal Revenue Code of 1986, as amended (or any successor provision),
     and any taxable bonds that the Borrower intends to refinance with such
     tax-exempt bonds, to finance all or any part of the purchase price of or
     the cost of constructing, equipping or improving property, provided that
     such Liens are limited to the property acquired or constructed or improved
     and to substantially unimproved real property on which such construction or
     improvement is located; provided further, that the Borrower or any of its
     Subsidiaries may further secure all or any part of such purchase price or
     the cost of construction or improvement by an interest on additional
     property of the Borrower or any of its Subsidiaries only to the extent
     necessary for the construction, maintenance and operation of, and access
     to, such property so acquired or constructed or such improvement;

          (f) any Liens on contracts, leases and other agreements of whatsoever
     kind and nature; any Liens on contract rights, bills, notes and other
     instruments; any Liens on revenues, accounts, accounts receivable and
     unbilled revenues, claims, credits, demands and judgments; any Liens on
     governmental and other licenses, permits, franchises, consents and
     allowances; and any Liens on patents, patent licenses and other patent
     rights, patent applications, trade names, trademarks, copyrights, claims,
     credits, choses in action and other intangible property and general
     intangibles including, but not limited to, computer software;

          (g) any Liens, including in connection with sale-leaseback
     transactions, on natural gas, coal, lignite, oil or other mineral
     properties or nuclear fuel owned or leased by the Borrower or any of its
     Subsidiaries;

          (h) any Liens on automobiles, buses, trucks and other similar vehicles
     and movable equipment; vessels, boats, barges and other marine equipment;
     airplanes, helicopters, aircraft engines and other flight equipment; and
     parts, accessories and supplies used in connection with any of the
     foregoing;

          (i) any Liens on furniture and furnishings, and computers, data
     processing, data storage, data transmission, telecommunications and other
     equipment, facilities and apparatus, which, in any case, are used primarily
     for administrative or clerical purposes;


<PAGE>


                                                                              11


          (j) any Liens on property that is the subject of a lease agreement
     (other than any lease agreement for which the Borrower or any of its
     Subsidiaries has incurred Capitalized Lease Liabilities) designating the
     Borrower or any of its Subsidiaries as lessee and all right, title and
     interest of the Borrower or any of its Subsidiaries in and to such property
     and in, to and under such lease agreement, whether or not such lease
     agreement is intended as security;

          (k) any Liens on the rights of TXU Mining Company LP, or its
     successors, existing under the Operating Agreement, dated April 28, 1978,
     as amended by the Modification of Operating Agreement, dated April 20,
     1979, among TXU Mining Company LP and TXU US Holdings Company (formerly TXU
     Electric Company, successor to Dallas Power & Light Company, Texas Electric
     Service Company and Texas Power & Light Company) and the Borrower, TXU
     Energy Retail Company LP and TXU Generation Company LP (pursuant to the
     Assumption Agreement, dated December 31, 2001, by and among TXU US Holdings
     Company, the Borrower, TXU Energy Retail Company LP and TXU Generation
     Company LP), and as it may be amended from time to time; provided that any
     amendment thereof shall not increase the scope of any Liens permitted under
     this clause (k);

          (l) any other Liens securing Debt, provided that the sum of (i) the
     aggregate principal amount of the Debt of the Borrower and any of its
     Subsidiaries secured by such Liens, plus (ii) the aggregate principal
     amount of Debt of any such Subsidiary issued under clause (e) of the
     definition of Permitted Subsidiary Debt, does not exceed 10% of the total
     assets of the Borrower and its Consolidated Subsidiaries as shown on the
     Borrower's most recent quarterly audited or unaudited consolidated balance
     sheet; and provided further that in so calculating the total amount of Debt
     for purposes of this clause (l), no Debt (whether or not secured) shall be
     counted more than once; and

          (m) any Liens granted in connection with extending, renewing,
     replacing or refinancing, in whole or in part, the Debt secured by Liens
     described in the foregoing clauses (a) through (l), to the extent of the
     principal amount of the Debt so extended, renewed, replaced or refinanced.

     In determining whether any Lien is a Permitted Lien, the Borrower may rely
     on one or more of clauses (a) through (m) of this definition of Permitted
     Lien with respect to such Lien.

          "PERMITTED SUBSIDIARY DEBT" means:

          (a) any Debt of any Subsidiary of the Borrower existing at November 4,
     2004;

          (b) any Debt of any such Subsidiary incurred at the time of, or within
     twelve months following the later of the acquisition of property and the
     placement of such property into commercial operation by such Subsidiary, or
     incurred to provide for the construction, improvement, expansion or
     development of property, provided that no such Debt shall be incurred in an
     amount greater than the fair value of the property so acquired,
     constructed, improved, expanded or developed;


<PAGE>


                                                                              12


          (c) any Debt of any corporation existing at the time the corporation
     was merged into or consolidated with any Subsidiary of the Borrower;

          (d) any Debt incurred in connection with borrowings from the Borrower
     or any wholly-owned Subsidiary of the Borrower;

          (e) any other Debt of a Subsidiary of the Borrower (whether or not
     secured), provided that the sum of (i) the aggregate principal amount of
     the Debt of the Borrower and any such Subsidiary issued pursuant to clause
     (l) of the definition of Permitted Liens, plus (ii) the aggregate principal
     amount of Debt of the Borrower's Subsidiaries issued pursuant to this
     clause (e), does not exceed 10% of the total assets of the Borrower and its
     Consolidated Subsidiaries as shown on the Borrower's most recent quarterly
     audited or unaudited consolidated balance sheet; and provided further that
     in so calculating the total amount of Debt for purposes of this clause (e),
     no Debt (whether or not secured) shall be counted more than once; and

          (f) any Debt incurred in connection with extending, renewing,
     replacing or refinancing, in whole or in part, the Debt described in the
     foregoing clauses (a) through (e), to the extent of the principal amount of
     the Debt so extended, renewed, replaced or refinanced.

     In determining whether any Debt is Permitted Subsidiary Debt, the Borrower
     may rely on one or more of clauses (a) through (f) of this definition of
     Permitted Subsidiary Debt with respect to such Debt.

          "PERSON" shall mean any individual, corporation, joint venture trust
     or unincorporated organization or any Governmental Authority.

          "PLAN" shall mean any employee pension benefit plan described under
     Section 3(2) of ERISA (other than a Multiemployer Plan) subject to the
     provisions of Title IV of ERISA that is maintained by the Borrower or any
     ERISA Affiliate.

          "PREPAYMENT NOTICE" shall mean a notice of prepayment made pursuant to
     Section 2.09(a) or 2.10(c), substantially in the form of Exhibit C.

          "PRIOR REIMBURSEMENT AGREEMENT" means, with respect to a Series of
     Bonds, any reimbursement agreement between the Borrower and a prior letter
     of credit provider, whereby the prior letter of credit provider issued a
     letter of credit for such Series of Bonds, which letter of credit is to be
     terminated and replaced by a Bond Letter of Credit and all obligations
     under the reimbursement agreement related to such prior letter of credit
     are to be satisfied.

          "PROVIDER BONDS" shall have the meaning assigned to such term in
     Section 5.01(a) of this Agreement (which bonds may be referred to as "Bank
     Bonds" or another defined term in the applicable Indenture).

          "QUALIFIED TRANSITION BOND ISSUER" shall mean (i) the Borrower or (ii)
     a subsidiary of such Borrower formed and operating solely for the purpose
     of (A) purchasing and owning transition property created under a "financing


<PAGE>


                                                                              13


     order" (as such term is defined in the Texas Utilities Code) issued by the
     Commission, (B) issuing such securities pursuant to such order, (C)
     pledging its interests in such transition property to secure such
     securities and (D) engaging in activities ancillary to those described in
     clauses (A), (B) and (C) above.

          "QUALIFIED TRANSITION BONDS" shall mean securities, however
     denominated, that are (i) issued by a Qualified Transition Bond Issuer,
     (ii) secured by or otherwise payable from transition charges authorized
     pursuant to the financing order referred to in clause (iii)(A) of the
     definition of "Qualified Transition Bond Issuer", and (iii) non-recourse to
     the Borrower or any of its Consolidated Subsidiaries (other than the issuer
     of such securities).

          "REDUCTION DATE" shall have the meaning set forth in Section 2.04(c).

          "REFERENCE TREASURY DEALER" means a primary U.S. Government securities
     dealer in New York City selected by the Agent and reasonably acceptable to
     the Borrower.

          "REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
     Reference Treasury Dealer and any Reduction Date, the average of the bid
     and asked prices for the Comparable Treasury Issue (expressed in each case
     as a percentage of its principal amount) quoted by three Reference Treasury
     Dealers at 5:00 p.m. on the third Business Day preceding such Reduction
     Date.

          "REGISTER" shall have the meaning given such term in Section 9.04(d).

          "RELATED DOCUMENTS" means, with respect to a Series of Bonds supported
     or to be supported by a Bond Letter of Credit, the relevant Series of
     Bonds, the Indenture or Installment Payment and Bond Amortization Agreement
     related thereto, the Offering Circular, the Remarketing Agreement or any
     other agreement or instrument relative thereto

          "REMARKETING AGENT" means, with respect to a Series of Bonds, any
     remarketing agent appointed under the Indenture for such Series of Bonds,
     and its successors and assigns.

          "REPORTABLE EVENT" shall mean any reportable event as defined in
     Sections 4043(c)(1)-(8) of ERISA or the regulations issued thereunder
     (other than a reportable event for which the 30 day notice requirement has
     been waived) with respect to a Plan (other than a Plan maintained by an
     ERISA Affiliate that is considered an ERISA Affiliate only pursuant to
     subsection (m) or (o) of Code Section 414).

          "REQUEST FOR ISSUANCE" shall have the meaning given such term in
     Section 2.18(a).

          "REQUIRED LENDERS" shall mean, at any time, Lenders having Commitments
     representing in excess of 50% of the Total Commitment or, (i) for purposes
     of acceleration pursuant to clause (ii) of the first paragraph of Section
     7.01 hereof, or (ii) if the Total Commitment has been terminated, Lenders


<PAGE>


                                                                              14


     with Outstanding Credits in excess of 50% of the aggregate amount of
     Outstanding Credits.

          "RESPONSIBLE OFFICER" of any corporation shall mean any executive
     officer or Financial Officer of such corporation and any other officer or
     similar official thereof responsible for the administration of the
     obligations of such corporation in respect of this Agreement.

          "REVOLVER AVAILABILITY PERIOD" shall mean the period commencing on the
     first date after the Bridge Availability Period when there are no Bridge
     Loans outstanding and terminating on the Facility Maturity Date.

          "REVOLVER SUB-COMMITMENT" shall mean, with respect to any Lender, the
     commitment of such Lender, as set forth in Schedule 2.01 hereto, to make
     Revolving Loans during the Revolver Availability Period, as such Commitment
     may be permanently terminated or reduced from time to time pursuant to
     Section 2.09 or modified from time to time pursuant to Section 9.04.

          "REVOLVING LOAN" shall mean a revolving loan made pursuant to Section
     2.02(a), whether made as a Eurodollar Loan or as an ABR Loan.

          "SEC" shall mean the United States Securities and Exchange Commission.

          "SERIES" means any series of Bonds.

          "SIGNIFICANT SUBSIDIARY" shall mean, with respect to the Borrower at
     any time, any Subsidiary of the Borrower that as of such time has total
     assets in excess of 10% of the total assets of the Borrower and its
     Consolidated Subsidiaries.

          "SOLVENT" shall mean, with respect to any person as of a particular
     date, that on such date such person is able to pay its debts and other
     liabilities, contingent obligations and other commitments as they mature in
     the normal course of business. In computing the amount of contingent
     liabilities at any time, it is intended that such liabilities will be
     computed as the amount which, in light of all the facts and circumstances
     existing at such time, represents the amount that can reasonably be
     expected to become an actual or matured liability.

          "STATED AMOUNT" shall mean, with respect to a Letter of Credit, the
     maximum amount available to be drawn by a beneficiary under such Letter of
     Credit.

          "STATED EXPIRATION DATE" shall mean the stated expiration date of a
     Letter of Credit or shall have the meaning assigned to such term in the
     applicable Bond Letter of Credit and shall not be a date later than the
     Facility Maturity Date..

          "SUBSIDIARY" shall mean, with respect to any person (the "PARENT"),
     any corporation or other entity of which securities or other ownership
     interests having ordinary voting power to elect a majority of the board of
     directors or other persons performing similar functions are at the time
     directly or indirectly owned by such parent; provided, however, that any


<PAGE>


                                                                              15


     Qualified Transition Bond Issuer that is a subsidiary of the Borrower or
     any subsidiary of any such Qualified Transition Bond Issuer shall not be
     deemed a Subsidiary of the Borrower.

          "TERM LOAN" shall mean a term loan made pursuant to Section 2.18(c).

          "TENDER DRAFT" has the meaning assigned to that term in the applicable
     Bond Letter of Credit.

          "TENDERED BONDS" means, with respect to a Series of Bonds, the Bonds
     of such Series tendered or deemed tendered for purchase, the purchase price
     of which was paid by a draw under a Bond Letter of Credit.

          "TERMINATION FEE" shall have the meaning set forth in Section 2.04(c).

          "TOTAL COMMITMENT" shall mean, at any time, the aggregate amount of
     Commitments of all the Lenders, as in effect at such time. The amount of
     the Total Commitment on the date hereof is $500,000,000.

          "TREASURY RATE" means, with respect to any Reduction Date, the rate
     per annum equal to the semiannual equivalent yield to maturity of the
     Comparable Treasury Issue, assuming a price for the Comparable Treasury
     Issue (expressed as a percentage of its principal amount) equal to the
     Comparable Treasury Price for such Reduction Date.

          "TRUSTEE" means, with respect to a Series of Bonds, any trustee
     appointed under the Indenture for a particular Series of Bonds, its
     successors and assigns.

          "TXU" shall mean TXU Corp., a Texas corporation, and its successors.

          "TYPE", when used in respect of any Loan or Borrowing, shall refer to
     the Rate by reference to which interest on such Loan or on the Loans
     comprising such Borrowing is determined. For purposes hereof, "RATE" shall
     include the LIBO Rate and the Alternate Base Rate.

          "UNUSED COMMITMENT FEE" shall have the meaning set forth in Section
     2.04(a).

          "WACHOVIA " shall mean Wachovia Bank, National Association.

          "WITHDRAWAL LIABILITY" shall mean liability of the Borrower
     established under Section 4201 of ERISA as a result of a complete or
     partial withdrawal from a Multiemployer Plan, as such terms are defined in
     Part I of Subtitle E of Title IV of ERISA.

     SECTION 1.02. TERMS GENERALLY.

          The definitions in Section 1.01 shall apply equally to both the
     singular and plural forms of the terms defined. Whenever the context may
     require, any pronoun shall include the corresponding masculine, feminine
     and neuter forms. The words "include," "includes" and "including" shall be
     deemed to be followed by the phrase "without limitation." All references


<PAGE>


                                                                              16


     herein to Articles, Sections, Exhibits and Schedules shall be deemed
     references to Articles and Sections of, and Exhibits and Schedules to, this
     Agreement unless the context shall otherwise require. Except as otherwise
     expressly provided herein, all terms of an accounting or financial nature
     shall be construed in accordance with GAAP, as in effect from time to time.

                                   ARTICLE II
                                   THE CREDITS

          SECTION 2.01. COMMITMENTS.

          (a) Subject to the terms and conditions and relying upon the
     representations and warranties herein set forth, each Lender and the
     Fronting Bank (as applicable) agrees, severally and not jointly, as
     follows: (i) each Lender agrees to make Bridge Loans to the Borrower at any
     time and from time to time during the Bridge Availability Period up to the
     amount of such Lender's Available Commitment, (ii) each Lender agrees to
     make Revolving Loans to the Borrower at any time and from time to time
     during the Revolving Availability Period up to the amount of such Lender's
     Available Revolver Sub-Commitment, (iii) the Fronting Bank agrees to issue
     Letters of Credit for the account of the Borrower at any time and from time
     to time until the fifth Business Day preceding the Facility Maturity Date
     in an aggregate Stated Amount at any time outstanding not to exceed the LC
     Fronting Bank Commitment, and (iv) each Lender agrees to purchase its pro
     rata share of Term Loans made by the Fronting Bank as more fully set forth
     in Section 2.18. Notwithstanding the foregoing, at no time shall (A) the
     Outstanding Credits exceed the aggregate amount of the Lenders'
     Commitments, (B) any Lender's Outstanding Credits exceed the amount of such
     Lender's Commitment, (C) the Fronting Bank make any Extension of Credit
     relating to a Letter of Credit if such Extension of Credit would cause (x)
     the aggregate amount of Outstanding Credits to exceed the aggregate amount
     of the Lenders' Commitments, or (y) the aggregate LC Outstandings of the
     Fronting Bank to exceed the LC Fronting Bank Commitment.

          (b) The Borrower may not reborrow Bridge Loans (other than
     refinancings under Section 2.02(d)).

          (c) Within the foregoing limits, the Borrower may borrow, pay or
     prepay Loans and request new Extensions of Credit on and after the date
     hereof and prior to the Facility Maturity Date subject to the terms,
     conditions and limitations set forth herein.

          SECTION 2.02. LOANS.

          (a) Each Loan shall be made as part of a Borrowing consisting of (i)
     Bridge Loans during the Bridge Availability Period, made by the Lenders
     ratably in accordance with their respective Commitments, (ii) Revolving
     Loans during the Revolver Availability Period, made by the Lenders ratably
     in accordance with their respective Revolver Sub-Commitments, and (iii)
     Term Loans made in accordance with Section 2.18(d) upon payment by the
     Fronting Bank of any Letter of Credit. The failure of any Lender to make
     any Loan shall not in itself relieve any other Lender of its obligation to
     lend hereunder (it being understood, however, that no Lender shall be
     responsible for the failure of any other Lender to make any Loan required
     to be made by such other Lender). The Loans comprising any Borrowing shall


<PAGE>


                                                                              17


     be in an aggregate principal amount that is an integral multiple of
     $5,000,000 and not less than $25,000,000 (or an aggregate principal amount
     equal to the remaining balance of the Available Commitments); provided,
     that Term Loans shall be made in the principal amount of the Letter of
     Credit payment constituting the Term Loan in accordance with Section
     2.18(c).

          (b) Except as provided in Section 2.18(e), each Borrowing shall be
     comprised entirely of Eurodollar Loans or ABR Loans, as the Borrower may
     request pursuant to Section 2.03. Each Lender may at its option make any
     Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
     such Lender to make such Loan; provided that any exercise of such option
     shall not affect the obligation of the Borrower to repay such Loan in
     accordance with the terms of this Agreement. Borrowings of more than one
     Type may be outstanding at the same time.

          (c) Subject to subsection (d) below, each Lender shall make each Loan
     to be made by it hereunder on the proposed date thereof by wire transfer of
     immediately available funds to the Agent in Charlotte, North Carolina, not
     later than noon, New York City time, and the Agent shall by 2:00 p.m., New
     York City time, credit the amounts so received to the account or accounts
     specified from time to time in one or more notices delivered by the
     Borrower to the Agent or, if a Borrowing shall not occur on such date
     because any condition precedent herein specified shall not have been met,
     return the amounts so received to the respective Lenders. Loans shall be
     made by the Lenders pro rata in accordance with Section 2.13. Unless the
     Agent shall have received notice from a Lender prior to the date of any
     Borrowing that such Lender will not make available to the Agent such
     Lender's portion of such Borrowing, the Agent may assume that such Lender
     has made such portion available to the Agent on the date of such Borrowing
     in accordance with this subsection (c) and the Agent may, in reliance upon
     such assumption, make available to the Borrower on such date a
     corresponding amount. If and to the extent that such Lender shall not have
     made such portion available to the Agent, such Lender and the Borrower
     (without waiving any claim against such Lender for such Lender's failure to
     make such portion available) severally agree to repay to the Agent
     forthwith on demand such corresponding amount together with interest
     thereon, for each day from the date such amount is made available to the
     Borrower until the date such amount is repaid to the Agent, at (i) in the
     case of the Borrower, the interest rate applicable at the time to the Loans
     comprising such Borrowing and (ii) in the case of such Lender, the Federal
     Funds Effective Rate. If such Lender shall repay to the Agent such
     corresponding amount, such amount shall constitute such Lender's Loan as
     part of such Borrowing for purposes of this Agreement.

          (d) The Borrower may refinance all or any part of any Borrowing with a
     Borrowing of the same or a different Type, subject to the conditions and
     limitations set forth in this Agreement. Any Borrowing or part thereof so
     refinanced shall be deemed to be repaid or prepaid in accordance with
     Section 2.05, 2.09 or 2.10, as applicable, with the proceeds of a new
     Borrowing, and the proceeds of the new Borrowing, to the extent they do not
     exceed the principal amount of the Borrowing being refinanced, shall not be
     paid by the Lenders to the Agent or by the Agent to the Borrower pursuant
     to subsection (c) above.


<PAGE>


                                                                              18


          SECTION 2.03. BORROWING PROCEDURE.

          In order to request a Borrowing, the Borrower shall hand deliver or
     send via facsimile to the Agent a duly completed Borrowing Request (i) in
     the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York
     City time, three Business Days before such Borrowing, (ii) in the case of
     an ABR Borrowing, not later than 11:00 a.m., New York City time, one
     Business Day before such Borrowing and (iii) in the case of the initial
     Borrowing, not later than 9:00 a.m. New York City time, on the day of such
     Borrowing. Such notice shall be irrevocable and shall in each case specify
     (A) whether the Borrowing then being requested is to be a Eurodollar
     Borrowing or an ABR Borrowing, (B) the date of such Borrowing (which shall
     be a Business Day) and the amount thereof, (C) if such Borrowing is to be a
     Eurodollar Borrowing, the Interest Period with respect thereto, which shall
     not end after the Applicable Maturity Date and (D) the location and number
     of the Borrower's account to which funds are to be disbursed, which shall
     comply with the requirements of this Agreement. If no election as to the
     Type of Borrowing is specified in any such notice, then the requested
     Borrowing shall be an ABR Borrowing. If no Interest Period with respect to
     any Eurodollar Borrowing is specified in any such notice, then the Borrower
     shall be deemed to have selected an Interest Period of one month's duration
     (subject to the limitations set forth in the definition of "INTEREST
     PERIOD"). If the Borrower shall not have given notice in accordance with
     this Section 2.03 of its election to refinance a Borrowing prior to the end
     of the Interest Period in effect for such Borrowing, then the Borrower
     shall (unless such Borrowing is repaid at the end of such Interest Period)
     be deemed to have given notice of an election to refinance such Borrowing
     with an ABR Borrowing. Notwithstanding any other provision of this
     Agreement to the contrary, no Borrowing shall be requested if the Interest
     Period with respect thereto would end after the Applicable Maturity Date.
     The Agent shall promptly advise the Lenders of any notice given pursuant to
     this Section 2.03 and of each Lender's portion of the requested Borrowing.

          SECTION 2.04. FEES.

          (a) The Borrower hereby agrees to pay to the Agent, for the benefit of
     the Lenders, an unused commitment fee (the "UNUSED COMMITMENT FEE") equal
     to (i) the average daily amount during the Applicable Period of the Total
     Commitment minus (ii) the sum of the average daily amount during the
     Applicable Period of (x) the aggregate available amount of each Letter of
     Credit (with no reduction for interest draws) issued plus (y) the aggregate
     principal amount of the Bridge Loans or Revolving Loans outstanding plus
     (z) the aggregate principal amount of the Term Loans outstanding,
     multiplied by 125 basis points per annum. The Unused Commitment Fee, if
     any, shall be payable in arrears on (1) March 31, June 30, September 30 and
     December 31 of each year, commencing December 31, 2004, (2) each date of
     reduction or termination of the Total Commitment pursuant to Section 2.08
     hereof, and (3) the Facility Maturity Date (each such date described in
     clauses (1) through (3) above, a "PAYMENT DATE"); provided, however, that
     the Borrower's obligation to pay the Unused Commitment Fee shall cease
     immediately after its payment made in respect of any Payment Date that is
     the date of termination of the Total Commitment. "APPLICABLE PERIOD" shall
     mean (A) with respect to the payment due on the first Payment Date, the
     period from the Closing Date to and including such Payment Date and (B)
     with respect to each other Payment Date, the period from the first day
     following the Payment Date immediately prior thereto to and including such
     Payment Date.


<PAGE>


                                                                              19


          (b) The Borrower hereby agrees to pay to the Agent, for the benefit of
     the Lenders, a letter of credit fee (the "LETTER OF CREDIT FEE") equal to
     the aggregate available amount of each Letter of Credit (with no reduction
     for interest draws) issued and outstanding multiplied by 125 basis points
     per annum. The Letter of Credit Fee shall be payable in arrears on each
     Payment Date and on the date of the cancellation of any Letter of Credit;
     provided, however, that Borrower's obligation to pay Letter of Credit Fees
     shall cease immediately after its payment in respect of any Payment Date
     that is the date of termination of the Total Commitment.

          (c) In the event the Total Commitment, other than with respect to the
     Bridge Loans, is reduced or terminated on a date prior to the Facility
     Maturity Date (each such date a "REDUCTION DATE"), the Borrower agrees to
     pay to Wachovia a termination fee (the "TERMINATION FEE") for its own
     account, in an amount equal to the present value of all Letter of Credit
     Fees (excluding the portion of any Letter of Credit Fees accrued to the
     Reduction Date) that would have been payable on the Commitment Reduction
     Amount as if the Letters of Credit were issued and outstanding in such
     amount through the Facility Maturity Date discounted from each scheduled
     payment date to the Reduction Date at the Treasury Rate plus 50 basis
     points (assuming semiannual compounding and an actual / 360 day count
     convention). The Termination Fee shall be due and payable in immediately
     available funds on each Reduction Date.

          (d) The Borrower hereby agrees to pay to the Agent, for the account of
     the Fronting Bank, a letter of credit transfer fee in the amount of $1,000
     per transfer of a Letter of Credit in accordance with the terms thereof,
     which fee shall be payable simultaneously with any such transfer.

          (e) The Borrower hereby agrees to pay to the Agent, for the account of
     the Fronting Bank, a drawing fee in the amount of $100 in connection with,
     and at the time of, each drawing under a Letter of Credit.

          (f) The amount of Fees under this Section 2.04 allocated or paid by
     the Agent to any Lender may be subject to a separate written agreement
     between the Agent and such Lender.


          SECTION 2.05. REPAYMENT OF LOANS; EVIDENCE OF INDEBTEDNESS.

          (a) The outstanding principal balance of each Eurodollar Loan shall be
     due and payable on the last day of the Interest Period applicable thereto
     and on the Applicable Maturity Date; and the outstanding principal balance
     of each ABR Loan shall be due and payable on the Applicable Maturity Date.

          (b) Each Lender shall maintain in accordance with its usual practice
     an account or accounts evidencing the indebtedness to such Lender resulting
     from each Extension of Credit made by such Lender from time to time,
     including the amounts of principal and interest payable and paid to such
     Lender from time to time under this Agreement. Upon the request of any
     Lender that becomes a party hereto after the date hereof pursuant to a
     syndication by any Lender that is a party hereto on the date hereof, the
     Borrower shall provide to such Lender a promissory note, payable to the
     order of such Lender, evidencing the Commitment and the Revolver Sub-


<PAGE>


                                                                              20


     Commitment of such Lender. The date and amount of each Loan made by
     such Lender and of each repayment of principal thereof received by such
     Lender shall be recorded by such Lender on its records, or, at its option,
     on the schedule attached to such promissory note. The failure to record any
     such amount on such schedule shall not limit or otherwise affect the
     obligations of the Borrower hereunder or under such promissory note to
     repay the principal amount of the Loans together with all interest accruing
     thereon.

          (c) The Agent shall maintain accounts in which it will record (i) the
     amount of each Extension of Credit made hereunder, the Type of each Loan
     made and the Interest Period applicable thereto, (ii) the amount of any
     principal or interest due and payable or to become due and payable from the
     Borrower to each Lender hereunder and (iii) the amount of any sum received
     by the Agent hereunder from the Borrower and each Lender's share thereof.

          (d) The entries made in the accounts maintained pursuant to
     subsections (b) and (c) of this Section 2.05 shall, to the extent permitted
     by applicable law, be prima facie evidence of the existence and amounts of
     the obligations therein recorded; provided, however, that the failure of
     any Lender or the Agent to maintain such accounts or any error therein
     shall not in any manner affect the obligations of the Borrower to repay the
     Outstanding Credits in accordance with their terms.

          SECTION 2.06. INTEREST ON LOANS.

          (a) The Loans comprising each Eurodollar Borrowing shall bear interest
     (computed on the basis of the actual number of days elapsed over a year of
     360 days) at a rate per annum equal to the LIBO Rate for the Interest
     Period in effect for such Borrowing from time to time in effect plus 1.25%.

          (b) The Loans comprising each ABR Borrowing shall bear interest
     (computed on the basis of the actual number of days elapsed over a year of
     (i) 365 or 366 days, as the case may be, for periods during which the
     Alternate Base Rate is determined by reference to the Base Rate and (ii)
     360 days for other periods) at a rate per annum equal to the Alternate Base
     Rate from time to time in effect.

          (c) Interest on each Loan shall be payable on each Interest Payment
     Date applicable to such Loan except as otherwise provided in this
     Agreement. The applicable LIBO Rate or Alternate Base Rate for each
     Interest Period or day within an Interest Period, as the case may be, shall
     be determined by the Agent, and such determination shall be conclusive
     absent manifest error; provided that the Agent shall, upon request, provide
     to the Borrower a certificate setting forth in reasonable detail the basis
     for such determination.

          (d) Upon the occurrence and during the continuance of an Event of
     Default (i) all Loans shall bear interest at a rate per annum of two
     percent (2%) in excess of the interest rate then applicable thereto and
     (ii) without duplication of the penalty rate described in clause (i)
     immediately above, any overdue interest, fee or other amount owing to the
     Agent, the Fronting Bank or any Lender shall bear interest at a rate per
     annum that is the rate described in Section 2.06(b) applicable to an ABR
     Borrowing plus two percent (2%).


<PAGE>


                                                                              21


          SECTION 2.07. ALTERNATE RATE OF INTEREST.

          In the event, and on each occasion, that on the day two Business Days
     prior to the commencement of any Interest Period for a Eurodollar Borrowing
     the Agent shall have determined (i) that dollar deposits in the principal
     amounts of the Eurodollar Loans comprising such Borrowing are not generally
     available in the London interbank market or (ii) that reasonable means do
     not exist for ascertaining the LIBO Rate, the Agent shall, as soon as
     practicable thereafter, give telecopy notice of such determination to the
     Borrower and the Lenders. In the event of any such determination under
     clause (i) or (ii) above, until the Agent shall have advised the Borrower
     and the Lenders that the circumstances giving rise to such notice no longer
     exist, any request by the Borrower for a Eurodollar Borrowing pursuant to
     Section 2.03 shall be deemed to be a request for an ABR Borrowing. In the
     event the Required Lenders notify the Agent that the rates at which dollar
     deposits are being offered will not adequately and fairly reflect the cost
     to such Lenders of making or maintaining Eurodollar Loans during such
     Interest Period, the Agent shall notify the Borrower of such notice and
     until the Required Lenders shall have advised the Agent that the
     circumstances giving rise to such notice no longer exist, any request by
     the Borrower for a Eurodollar Borrowing shall be deemed a request for an
     ABR Borrowing. Each determination by the Agent hereunder shall be made in
     good faith and shall be conclusive absent manifest error; provided that the
     Agent, shall, upon request, provide to the Borrower a certificate setting
     forth in reasonable detail the basis for such determination.

          SECTION 2.08. TERMINATION AND REDUCTION OF TOTAL COMMITMENT.

          (a) The Total Commitments shall terminate automatically on the
     Facility Maturity Date; provided, that the Commitments of the Lenders to
     make Bridge Loans shall terminate on the last day of the Bridge
     Availability Period.

          (b) Upon at least two Business Days' prior irrevocable written notice
     to the Agent, the Borrower may, at any time in whole permanently terminate,
     or from time to time in part permanently reduce (in each case subject to
     the Borrower's obligation to pay the applicable Fees), the Total
     Commitment; provided, however, that (i) each partial reduction of the Total
     Commitment shall be in an integral multiple of $10,000,000 and in a minimum
     principal amount of $10,000,000, (ii) no such termination or reduction
     shall be made that would reduce the Total Commitment to an amount less than
     (1) the aggregate amount of Outstanding Credits on the date of such
     termination or reduction (after giving effect to any prepayment made
     pursuant to Section 2.09) or (2) $50,000,000, unless the result of such
     termination or reduction referred to in this clause (2) is to reduce the
     Total Commitment to $0, and (iii) the Borrower, on the date of such
     reduction or termination, shall pay to the Agent any amounts owed under
     Section 2.04 of this Agreement. The Agent shall advise the Lenders of any
     notice given pursuant to this subsection (b) and of each Lender's portion
     of any such termination or reduction of the Total Commitment.

          SECTION 2.09. OPTIONAL PREPAYMENT.

          (a) The Borrower shall have the right at any time and from time to
     time to prepay any Borrowing, in whole or in part, upon giving a Prepayment
     Notice via telecopy (or telephone notice promptly confirmed by telecopy) to
     the Agent: (i) before 11:00 a.m., New York City time, three Business Days
     prior to prepayment, in the case of Eurodollar Loans, and (ii) before


<PAGE>


                                                                              22


     11:00 a.m., New York City time, one Business Day prior to prepayment, in
     the case of ABR Loans; provided, however, that each partial prepayment
     shall be in an amount which is an integral multiple of $10,000,000 and not
     less than $10,000,000.

          (b) Each Prepayment Notice shall specify the prepayment date and the
     principal amount of each Borrowing (or portion thereof) to be prepaid,
     shall be irrevocable and shall commit the Borrower to prepay such Borrowing
     (or portion thereof) by the amount stated therein on the date stated
     therein. All prepayments under this Section 2.09 shall be subject to
     Section 9.05 but otherwise without premium or penalty. All prepayments
     under this Section 2.09 and Section 2.10 shall be accompanied by accrued
     interest on the principal amount being prepaid to the date of payment.

          SECTION 2.10. MANDATORY PREPAYMENT.

          (a) Prior to or at the closing of any remarketing or reissuance of any
     Bonds supported by a letter of credit or other credit enhancement, the
     Borrower shall make a mandatory prepayment of the Bridge Loans in the
     amount of the lesser of (i) the outstanding Bridge Loans or (ii) the face
     value of such Bonds, whether the letter of credit (or other credit
     enhancement) is issued pursuant to this Agreement or otherwise.

          (b) The Borrower shall make a mandatory prepayment of Loans in the
     event the Outstanding Credits of all Lenders at any time exceeds the Total
     Commitment in the amount of such excess. Any prepayments made pursuant to
     this subsection (b) shall be applied first to the Bridge Loans until paid
     in full and then to the Term Loans until paid in full and then to the
     Revolving Loans.

          (c) Any prepayment under this Section 2.10 shall be pursuant to a
     Prepayment Notice and subject to 2.09(b).

          SECTION 2.11. RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES.

          (a) Notwithstanding any other provision herein, if after the date of
     this Agreement any change in applicable law or regulation or in the
     interpretation or administration thereof by any Governmental Authority
     charged with the interpretation or administration thereof (whether or not
     having the force of law) shall change the basis of taxation of payments to
     any Lender or the Fronting Bank hereunder (except for changes in respect of
     taxes on the overall net income of such Lender or the Fronting Bank (as the
     case may be) or its lending office imposed by the jurisdiction in which
     such Lender's or the Fronting Bank's (as the case may be) principal
     executive office or lending office is located), or shall result in the
     imposition, modification or applicability of any reserve, special deposit
     or similar requirement against assets of, deposits with or for the account
     of or credit extended by any Lender or the Fronting Bank (as the case may
     be) or shall result in the imposition on any Lender, the Fronting Bank or
     the London interbank market of any other condition affecting this
     Agreement, such Lender's Commitment or any Extension of Credit (other than
     an ABR Loan) made by such Lender or the Fronting Bank, and the result of
     any of the foregoing shall be to increase the cost to such Lender or the
     Fronting Bank (as the case may be) of making or maintaining any Outstanding
     Credit (other than an ABR Loan) or to reduce the amount of any sum received
     or receivable by such Lender or the Fronting Bank (as the case may be)
     hereunder (whether of principal, interest or otherwise) by an amount deemed


<PAGE>


                                                                              23


     by such Lender or the Fronting Bank (as the case may be) to be material,
     then the Borrower shall, upon receipt of the notice and certificate
     provided for in Section 2.11(c), promptly pay to such Lender or the
     Fronting Bank (as the case may be) such additional amount or amounts as
     will compensate such Lender or the Fronting Bank (as the case may be) for
     such additional costs incurred or reduction suffered.

          (b) If any Lender or the Fronting Bank shall have determined that the
     adoption of any law, rule, regulation or guideline arising out of the July
     1988 report of the Basle Committee on Banking Regulations and Supervisory
     Practices entitled "International Convergence of Capital Measurement and
     Capital Standards," or the adoption after the date hereof of any other law,
     rule, regulation or guideline regarding capital adequacy, or any change in
     any of the foregoing or in the interpretation or administration of any of
     the foregoing by any Governmental Authority, central bank or comparable
     agency charged with the interpretation or administration thereof, or
     compliance by any Lender or the Fronting Bank (or any lending office of
     such Lender or the Fronting Bank) or any Lender's or the Fronting Bank's
     holding company with any request or directive regarding capital adequacy
     (whether or not having the force of law) of any such authority, central
     bank or comparable agency, has or would have the effect of reducing the
     rate of return on such Lender's or the Fronting Bank's (as the case may be)
     capital or on the capital of such Lender's or the Fronting Bank's (as the
     case may be) holding company, if any, as a consequence of this Agreement,
     such Lender's Commitment or the Extensions of Credit made by such Lender or
     the Fronting Bank (as the case may be) pursuant hereto to a level below
     that which such Lender or the Fronting Bank (as the case may be) or such
     Lender's or the Fronting Bank's (as the case may be) holding company could
     have achieved but for such adoption, change or compliance (taking into
     consideration such Lender's or the Fronting Bank's (as the case may be)
     policies and the policies of such Lender's or the Fronting Bank's (as the
     case may be) holding company with respect to capital adequacy) by an amount
     deemed by such Lender or the Fronting Bank (as the case may be) to be
     material, then from time to time such additional amount or amounts as will
     compensate such Lender or the Fronting Bank (as the case may be) for any
     such reduction suffered will be paid to such Lender or the Fronting Bank
     (as the case may be) by the Borrower. It is acknowledged that this
     Agreement is being entered into by the Lenders and the Fronting Bank on the
     understanding that neither the Lenders nor the Fronting Bank will be
     required to maintain capital against their respective Commitments or
     agreements to issue Letters of Credit, as the case may be, under currently
     applicable laws, regulations and regulatory guidelines. In the event the
     Lenders or the Fronting Bank shall otherwise determine that such
     understanding is incorrect, it is agreed that the Lenders or the Fronting
     Bank, as the case may be, will be entitled to make claims under this
     subsection (b) based upon market requirements prevailing on the date hereof
     for commitments under comparable credit facilities against which capital is
     required to be maintained.

          (c) A certificate of each Lender or the Fronting Bank setting forth
     such amount or amounts as shall be necessary to compensate such Lender or
     the Fronting Bank (as the case may be) or its holding company as specified
     in subsection (a) or (b) above, as the case may be, and containing an
     explanation in reasonable detail of the manner in which such amount or
     amounts shall have been determined, shall be delivered to the Borrower, and
     shall be conclusive absent manifest error. The Borrower shall pay each
     Lender or the Fronting Bank (as the case may be) the amount shown as due on
     any such certificate delivered by it within 10 days after its receipt of


<PAGE>


                                                                              24


     the same. Each Lender and the Fronting Bank shall give prompt notice to the
     Borrower of any event of which it has knowledge, occurring after the date
     hereof, that it has determined will require compensation by the Borrower
     pursuant to this Section 2.11; provided, however, that failure by such
     Lender or the Fronting Bank to give such notice shall not constitute a
     waiver of such Lender's or the Fronting Bank's (as the case may be) right
     to demand compensation hereunder.

          (d) Failure on the part of any Lender or the Fronting Bank to demand
     compensation for any increased costs or reduction in amounts received or
     receivable or reduction in return on capital with respect to any period
     shall not constitute a waiver of such Lender's or the Fronting Bank's (as
     the case may be) right to demand compensation with respect to such period
     or any other period; provided, however, that no Lender nor the Fronting
     Bank shall be entitled to compensation under this Section 2.11 for any
     costs incurred or reductions suffered with respect to any date unless it
     shall have notified the Borrower that it will demand compensation for such
     costs or reductions under subsection (c) above not more than 90 days after
     the later of (i) such date and (ii) the date on which it shall have become
     aware of such costs or reductions. The protection of this Section 2.11
     shall be available to each Lender and the Fronting Bank regardless of any
     possible contention of the invalidity or inapplicability of the law, rule,
     regulation, guideline or other change or condition which shall have
     occurred or been imposed.

          (e) Each Lender and the Fronting Bank agrees that it will designate a
     different lending office if such designation will avoid the need for, or
     reduce the amount of, such compensation and will not, in the reasonable
     judgment of such Lender or the Fronting Bank (as the case may be), be
     disadvantageous to such Lender or the Fronting Bank (as the case may be).

          SECTION 2.12. CHANGE IN LEGALITY.

          (a) Notwithstanding any other provision herein, if any change in any
     law or regulation or in the interpretation thereof by any Governmental
     Authority charged with the administration or interpretation thereof shall
     make it unlawful for any Lender to make or maintain any Eurodollar Loan or
     to give effect to its obligations as contemplated hereby with respect to
     any Eurodollar Loan, then, by written notice to the Borrower and to the
     Agent, such Lender may:

              (i) declare that Eurodollar Loans will not thereafter be made by
         such Lender hereunder, whereupon any request for a Eurodollar Borrowing
         shall, as to such Lender only, be deemed a request for an ABR Loan
         unless such declaration shall be subsequently withdrawn (any Lender
         delivering such a declaration hereby agreeing to withdraw such
         declaration promptly upon determining that such event of illegality no
         longer exists); and

              (ii) require that all outstanding Eurodollar Loans made by it be
         converted to ABR Loans, in which event all such Eurodollar Loans shall
         be automatically converted to ABR Loans as of the effective date of
         such notice as provided in subsection (b) below.

     In the event any Lender shall exercise its rights under (i) or (ii) above,
     all payments and prepayments of principal which would otherwise have been
     applied to repay the Eurodollar Loans that would have been made by such


<PAGE>


                                                                              25


     Lender or the converted Eurodollar Loans of such Lender shall instead be
     applied to repay the ABR Loans made by such Lender in lieu of, or resulting
     from the conversion of, such Eurodollar Loans.

          (b) For purposes of this Section 2.12, a notice by any Lender shall be
     effective as to each Eurodollar Loan, if lawful, on the last day of the
     Interest Period currently applicable to such Eurodollar Loan; in all other
     cases such notice shall be effective on the date of receipt.

          SECTION 2.13. PRO RATA TREATMENT.

          Except as required under Sections 2.11 and 2.16, each Extension of
     Credit, each payment or prepayment of principal of any Borrowing, each
     payment of interest on the Loans, each payment of a reimbursement
     obligation in respect of a drawn Letter of Credit, each payment of the
     Fees, each reduction of the Total Commitment and each refinancing or
     conversion of any Borrowing with a Borrowing of any Type, shall be
     allocated pro rata among the Lenders in accordance with their respective
     Commitments (or, if such Commitments shall have expired or been terminated,
     in accordance with the respective principal amounts of their Outstanding
     Credits). For purposes of determining the Available Commitments of the
     Lenders at any time, the LC Outstandings shall be deemed to have utilized
     the Commitments of the Lenders pro rata at such time. Each Lender agrees
     that in computing such Lender's portion of any Extension of Credit to be
     made hereunder, the Agent may, in its discretion, round each Lender's
     percentage of such Extension of Credit to the next higher or lower whole
     dollar amount.

          SECTION 2.14. SHARING OF SETOFFS.

          Each Lender agrees that if it shall, through the exercise of a right
     of banker's lien, setoff or counterclaim, or pursuant to a secured claim
     under Section 506 of Title 11 of the United States Bankruptcy Code or other
     security or interest arising from, or in lieu of, such secured claim,
     received by such Lender under any applicable bankruptcy, insolvency or
     other similar law or otherwise, or by any other means, obtain payment
     (voluntary or involuntary) in respect of any Loans or LC Outstandings as a
     result of which the unpaid principal portion of its Loans and LC
     Outstandings shall be proportionately less than the unpaid principal
     portion of the Loans and LC Outstandings of any other Lender, it shall be
     deemed simultaneously to have purchased from such other Lender at face
     value, and shall promptly pay to such other Lender the purchase price for,
     a participation in the Loans or LC Outstandings of such other Lender, so
     that the aggregate unpaid principal amount of the Loans and LC Outstandings
     and participations in the Loans and LC Outstandings held by each Lender
     shall be in the same proportion to the aggregate unpaid principal amount of
     all Loans and LC Outstandings then outstanding as the principal amount of
     its Loans and LC Outstandings prior to such exercise of banker's lien,
     setoff or counterclaim or other event was to the principal amount of all
     Loans and LC Outstandings outstanding prior to such exercise of banker's
     lien, setoff or counterclaim or other event; provided, however, that, if
     any such purchase or purchases or adjustments shall be made pursuant to
     this Section 2.14 and the payment giving rise thereto shall thereafter be
     recovered, such purchase or purchases or adjustments shall be rescinded to
     the extent of such recovery and the purchase price or prices or adjustment
     restored without interest. The Borrower expressly consents to the foregoing
     arrangements and agrees that any Lender holding a participation in a Loan
     or any LC Outstandings deemed to have been so purchased may exercise any
     and all rights of banker's lien, setoff or counterclaim with respect to any
     and all moneys owing by the Borrower to such Lender by reason thereof as


<PAGE>


                                                                              26


     fully as if such Lender had made an Extension of Credit in the amount of
     such participation.

          SECTION 2.15. PAYMENTS.

          (a) The Borrower shall make each payment (including principal of or
     interest on any Outstanding Credit or any Fees or other amounts) hereunder
     from an account in the United States not later than 12:00 noon, New York
     City time, on the date when due in dollars to the Agent at its offices at
     301 South College Street, Charlotte, North Carolina, in immediately
     available funds. Each such payment shall be made without off-set, deduction
     or counterclaim, provided, that the foregoing shall not constitute a
     relinquishment or waiver of the Borrower's rights to any independent claim
     that the Borrower may have against the Agent, the Fronting Bank or any
     Lender.

          (b) Whenever any payment (including principal of or interest on any
     Outstanding Credit or any Fees or other amounts) hereunder shall become
     due, or otherwise would occur, on a day that is not a Business Day, such
     payment may be made on the next succeeding Business Day, and such extension
     of time shall in such case be included in the computation of interest or
     Fees, if applicable.

          SECTION 2.16. TAXES.

          (a) Any and all payments of principal and interest on any of the
     Outstanding Credits or of any Fees or indemnity or expense reimbursements
     by the Borrower hereunder ("BORROWER PAYMENTS") shall be made, in
     accordance with Section 2.15, free and clear of and without deduction for
     any and all current or future United States Federal, state and local taxes,
     levies, imposts, deductions, charges or withholdings, and all liabilities
     with respect to the Borrower Payments, but only to the extent reasonably
     attributable to the Borrower Payments, excluding (i) income taxes imposed
     on the net income of the Agent, the Fronting Bank or any Lender (or any
     transferee or assignee thereof, including a participation holder (any such
     entity a "Transferee")) and (ii) franchise taxes imposed on the net income
     of the Agent, the Fronting Bank or any Lender (or Transferee), in each case
     by the jurisdiction under the laws of which the Agent, the Fronting Bank or
     such Lender (or Transferee) is organized or doing business through offices
     or branches located therein, or any political subdivision thereof (all such
     nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
     liabilities, collectively or individually, "TAXES"). If the Borrower shall
     be required to deduct any Taxes from or in respect of any sum payable
     hereunder to any Lender (or any Transferee) or the Agent or the Fronting
     Bank, (i) the sum payable shall be increased by the amount (an "ADDITIONAL
     AMOUNT") necessary so that after making all required deductions (including
     deductions applicable to additional amounts payable under this Section
     2.16) such Lender (or Transferee) or the Agent or the Fronting Bank (as the
     case may be) shall receive an amount equal to the sum it would have
     received had no such deductions been made, (ii) the Borrower shall make
     such deductions and (iii) the Borrower shall pay the full amount deducted
     to the relevant Governmental Authority in accordance with applicable law.

          (b) In addition, the Borrower shall pay to the relevant United States
     Governmental Authority in accordance with applicable law any current or
     future stamp or documentary taxes or any other excise or property taxes,


<PAGE>


                                                                              27


     charges or similar levies that arise from any payment made hereunder or
     from the execution, delivery or registration of, or otherwise with respect
     to, this Agreement ("OTHER TAXES").

          (c) The Borrower shall indemnify each Lender (or Transferee thereof),
     the Agent and the Fronting Bank for the full amount of Taxes and Other
     Taxes with respect to Borrower Payments paid by such person, and any
     liability (including penalties, interest and expenses (including reasonable
     attorney's fees and expenses)) arising therefrom or with respect thereto,
     whether or not such Taxes or Other Taxes were correctly or legally asserted
     by the relevant United States Governmental Authority. A certificate setting
     forth and containing an explanation in reasonable detail of the manner in
     which such amount shall have been determined and the amount of such payment
     or liability prepared by a Lender, the Fronting Bank or the Agent on their
     behalf, absent manifest error, shall be final, conclusive and binding for
     all purposes. Such indemnification shall be made within 30 days after the
     date the Lender (or Transferee) or the Agent or the Fronting Bank, as the
     case may be, makes written demand therefor.

          (d) If a Lender (or Transferee) or the Agent or the Fronting Bank
     shall become aware that it is entitled to claim a refund from a United
     States Governmental Authority in respect of Taxes or Other Taxes as to
     which it has been indemnified by the Borrower, or with respect to which the
     Borrower has paid additional amounts, pursuant to this Section 2.16, it
     shall promptly notify the Borrower of the availability of such refund claim
     and shall, within 30 days after receipt of a request by the Borrower, make
     a claim to such United States Governmental Authority for such refund at the
     Borrower's expense. If a Lender (or Transferee) or the Agent or the
     Fronting Bank receives a refund (including pursuant to a claim for refund
     made pursuant to the preceding sentence) in respect of any Taxes or Other
     Taxes as to which it has been indemnified by the Borrower or with respect
     to which the Borrower had paid additional amounts pursuant to this Section
     2.16, it shall within 30 days from the date of such receipt, pay over such
     refund to the Borrower (but only to the extent of indemnity payments made,
     or additional amounts paid, by the Borrower under this Section 2.16 with
     respect to the Taxes or Other Taxes giving rise to such refund), net of all
     out-of-pocket expenses of such Lender (or Transferee) or the Agent or the
     Fronting Bank and without interest (other than interest paid by the
     relevant United States Governmental Authority with respect to such refund);
     provided, however, that the Borrower, upon the request of such Lender (or
     Transferee) or the Agent or the Fronting Bank, agrees to repay the amount
     paid over to the Borrower (plus penalties, interest or other charges) to
     such Lender (or Transferee) or the Agent or the Fronting Bank in the event
     such Lender (or Transferee) or the Agent or the Fronting Bank is required
     to repay such refund to such United States Governmental Authority.

          (e) As soon as practicable, but in any event within 30 days, after the
     date of any payment of Taxes or Other Taxes by the Borrower to the relevant
     United States Governmental Authority, the Borrower will deliver to the
     Agent, at its address referred to in Section 9.01, the original or a
     certified copy of a receipt issued by such United States Governmental
     Authority evidencing payment thereof.

          (f) Without prejudice to the survival of any other agreement contained
     herein, the agreements and obligations contained in this Section 2.16 shall
     survive the payment in full of the principal of and interest on all
     Outstanding Credits hereunder.


<PAGE>


                                                                              28


          (g) Each of the Agent, the Fronting Bank and each Lender (or
     Transferee) that is organized under the laws of a jurisdiction other than
     the United States, any state thereof or the District of Columbia (a
     "NON-U.S. LENDER" or "NON U.S. AGENT", as applicable) shall deliver to the
     Borrower and the Agent two copies of either United States Internal Revenue
     Service Form W-8BEN or Form W-8ECI, properly completed and duly executed by
     such Non-U.S. Lender claiming complete exemption from, or reduced rate of,
     United States Federal withholding tax on payments by the Borrower under
     this Agreement. Such forms shall be delivered by each Non-U.S. Lender on or
     before the date it becomes a party to this Agreement (or, in the case of a
     Transferee that is a participation holder, on or before the date such
     participation holder becomes a Transferee hereunder) and on or before the
     date, if any, such Non-U.S. Lender changes its applicable lending office by
     designating a different lending office (a "NEW LENDING OFFICE"). In
     addition, each Non-U.S. Lender shall deliver such forms promptly upon the
     obsolescence or invalidity of any form previously delivered by such
     Non-U.S. Lender. Notwithstanding any other provision of this subsection
     (g), a Non-U.S. Lender shall not be required to deliver any form pursuant
     to this subsection (g) that such Non-U.S. Lender is not legally able to
     deliver.

          (h) The Borrower shall not be required to indemnify any Non-U.S.
     Lender or Non-U.S. Agent (including any Transferee), or to pay any
     additional amounts to any Non-U.S. Lender or Non-U.S. Agent (including any
     Transferee), in respect of United States Federal, state or local
     withholding tax pursuant to subsection (a) or (c) above to the extent that
     (i) the obligation to withhold amounts with respect to United States
     Federal, state or local withholding tax existed on the date such Non-U.S.
     Lender became a party to this Agreement (or, in the case of a Transferee
     that is a participation holder, on the date such participation holder
     became a Transferee hereunder) or, with respect to payments to a New
     Lending Office, the date such Non-U.S. Lender designated such New Lending
     Office with respect to an Extension of Credit; provided, however, that this
     clause (i) shall not apply to any Transferee or New Lending Office that
     becomes a Transferee or New Lending Office as a result of an assignment,
     participation, transfer or designation made at the request of the Borrower;
     and provided further, however, that this clause (i) shall not apply to the
     extent the indemnity payment or additional amounts any Transferee, or the
     Fronting Bank or any Lender (or Transferee) through a New Lending Office,
     would be entitled to receive (without regard to this clause (i)) do not
     exceed the indemnity payment or additional amounts that the person making
     the assignment, participation or transfer to such Transferee, or the
     Fronting Bank or Lender (or Transferee) making the designation of such New
     Lending Office, would have been entitled to receive in the absence of such
     assignment, participation, transfer or designation or (ii) the obligation
     to pay such additional amounts or such indemnity payments would not have
     arisen but for a failure by such Non-U.S. Lender (including any Transferee)
     to comply with the provisions of subsection (g) above and (i) below.

          (i) The Fronting Bank or any Lender (or Transferee) claiming any
     indemnity payment or additional amounts payable pursuant to this Section
     2.16 shall use reasonable efforts (consistent with legal and regulatory
     restrictions) to file any certificate or document reasonably requested in
     writing by the Borrower or to change the jurisdiction of its applicable
     lending office if the making of such a filing or change would avoid the
     need for or reduce the amount of any such indemnity payment or additional
     amounts that may thereafter accrue and would not, in the good faith
     determination of the Fronting Bank or such Lender (or Transferee) (as the
     case may be), be otherwise disadvantageous to the Fronting Bank or such
     Lender (or Transferee) (as the case may be).


<PAGE>


                                                                              29


          (j) Nothing contained in this Section 2.16 shall require any Lender
     (or Transferee) or the Agent or the Fronting Bank to make available to the
     Borrower any of its tax returns (or any other information) that it deems to
     be confidential or proprietary.

          SECTION 2.17. ASSIGNMENT OF COMMITMENTS UNDER CERTAIN CIRCUMSTANCES.

          In the event that any Lender shall have delivered a notice or
     certificate pursuant to Section 2.11 or 2.12, or the Borrower shall be
     required to make additional payments to any Lender under Section 2.16, the
     Borrower shall have the right, at its own expense, upon notice to such
     Lender and the Agent, to require such Lender to transfer and assign without
     recourse (in accordance with and subject to the restrictions contained in
     Section 9.04) all such Lender's interests, rights and obligations contained
     hereunder to another financial institution approved by the Agent and the
     Borrower (which approval shall not be unreasonably withheld) which shall
     assume such obligations; provided that (i) no such assignment shall
     conflict with any law, rule or regulation or order of any Governmental
     Authority and (ii) the assignee shall pay to the affected Lender in
     immediately available funds on the date of such assignment the principal of
     and interest accrued to the date of payment on the Loans made by it
     hereunder and all other amounts accrued for its account or owed to it
     hereunder and the Borrower shall pay the processing and recordation fee due
     pursuant to Section 9.04.

          SECTION 2.18. LETTERS OF CREDIT.

          (a) Subject to the terms and conditions hereof, each Letter of Credit
     shall be issued (or the Stated Expiration Date thereof extended or terms
     thereof modified or amended) on not less than three Business Days' prior
     notice thereof (or longer, in the case of a Bond Letter of Credit, as
     required under the terms of the applicable Indenture relating to such
     Series of Bonds) by the delivery by the Borrower of a request for issuance
     to the Agent (which shall promptly distribute copies thereof to the
     Lenders) and the Fronting Bank. Each request for issuance (a "REQUEST FOR
     ISSUANCE") shall specify (i) if such Letter of Credit is to be a Bond
     Letter of Credit, the Series of Bonds which such Letter of Credit shall
     support, the payment of the principal of and interest on, the purchase
     price of, and, if applicable, the premium thereon, (ii) the date (which
     shall be a Business Day) of issuance of such Letter of Credit (or the date
     of effectiveness of such extension, modification or amendment) and the
     Stated Expiration Date thereof (which shall be no later than the fifth
     Business Day preceding the Facility Maturity Date), (iii) the proposed
     Stated Amount (denominated in dollars) of such Letter of Credit (which
     shall not be less than $1,000,000, unless otherwise agreed to by the
     Fronting Bank), (iv) the name and address of the beneficiary of such Letter
     of Credit and (v) a statement of drawing conditions applicable to such
     Letter of Credit, and if such Request for Issuance relates to an amendment
     or modification of a Letter of Credit, it shall be accompanied by the
     consent of the beneficiary of such Letter of Credit. In addition, if such
     Letter of Credit is to be a Bond Letter of Credit, the Borrower shall
     comply with the terms of the applicable Indenture under which the Series of
     Bonds was or is to be issued and provide those items listed in Section 4.03
     of this Agreement. Each Request for Issuance shall be irrevocable unless
     modified or rescinded by the Borrower that delivered such Request for
     Issuance not less than two days prior to the proposed date of issuance (or
     effectiveness) specified therein. Not later than 12:00 noon (New York City
     time) on the proposed date of issuance (or effectiveness) specified in such
     Request for Issuance, and upon fulfillment of the applicable conditions
     precedent and the other requirements set forth herein, the Fronting Bank
     shall issue (or extend, amend or modify) such Letter of Credit and provide


<PAGE>

                                                                              30


     notice and a copy thereof to the Agent, which shall promptly furnish copies
     thereof to the Lenders. Each Lender shall, upon the issuance of any Letter
     of Credit, acquire a participation interest in such Letter of Credit,
     automatically and without any action on its part or the part of the
     Fronting Bank, whereby such Lender shall become obligated to perform such
     obligations in respect of such Letter of Credit as are expressly set forth
     herein. The Fronting Bank shall not at any time be obligated to issue any
     Letter of Credit if such issuance would conflict with any applicable
     requirement of law.

          (b) No Letter of Credit shall be issued hereunder if, after the
     issuance thereof, the aggregate Stated Amounts of all outstanding Letters
     of Credit, plus the principal amount of all Term Loans outstanding plus the
     principal amount of all outstanding Bridge Loans or Revolving Loans would
     exceed the Commitment.

          (c) If the Fronting Bank shall make any payment under the Letter of
     Credit the amount of such payment shall be deemed to constitute a Term Loan
     made by the Lenders, ratably in accordance with their respective
     Commitments, to the Borrower on the date of such payment in the amount of
     such payment.

          (d) On and after each date on which the Fronting Bank shall make a
     Term Loan as a result of the payment of any amount under any Letter of
     Credit issued by the Fronting Bank for the account of the Borrower, such
     Term Loan shall initially be an ABR Loan (which the Borrower may, at its
     option, convert to a Eurodollar Loan); provided, however, if the Borrower
     pays or cause to be paid to the Agent, for the account of the Lenders (or
     the Fronting Bank if the Lenders have not reimbursed the Fronting Bank
     pursuant to subsection (e) below), such Term Loan no later than 3:00 p.m.
     (New York City time) on the date of such payment no interest shall bear or
     be due and payable on such Term Loan.

          (e) If the Fronting Bank shall not have been reimbursed in full by a
     Borrower for any payment made by the Fronting Bank under a Letter of Credit
     issued by the Fronting Bank for the account of the Borrower on the date of
     such payment, the Fronting Bank shall give the Agent and each Lender prompt
     notice thereof (an "LC PAYMENT NOTICE") no later than 12:00 noon (New York
     City time) on the Business Day immediately succeeding the date of such
     payment by the Fronting Bank. Notwithstanding any provision of this
     Agreement to the contrary, each Lender having a Commitment for the
     applicable Letter of Credit severally agrees to fund its participation in
     the reimbursement obligation of the Borrower to the Fronting Bank by paying
     to the Agent for the account of the Fronting Bank an amount equal to such
     Lender's Percentage of such unreimbursed amount paid by the Fronting Bank,
     plus interest on such amount at a rate per annum equal to the Federal Funds
     Effective Rate from the date of the payment by the Fronting Bank to the
     date of payment to the Fronting Bank by such Lender. Each such payment by a
     Lender shall be made not later than 3:00 p.m. (New York City time) on the
     later to occur of (i) the Business Day immediately following the date of
     such payment by the Fronting Bank and (ii) the Business Day on which the
     Lender shall have received an LC Payment Notice from the Fronting Bank.
     Each Lender's obligation to make each such payment to the Agent for the
     account of the Fronting Bank shall be several and shall not be affected by
     the occurrence or continuance of a Default or Event of Default or the


<PAGE>


                                                                              31


     failure of any other Lender to make any payment under this subsection. Each
     Lender further agrees that each such payment shall be made without any
     offset, abatement, withholding or reduction whatsoever.

          (f) The failure of any Lender to make any payment to the Agent for the
     account of the Fronting Bank in accordance with subsection (e) above shall
     not relieve any other Lender of its own obligation to make any similar
     payment to the Agent, but no Lender shall be responsible for the failure of
     any other Lender to make any such payment. If any Lender (a "NON-PERFORMING
     Lender") shall fail to make any payment to the Agent for the account of the
     Fronting Bank in accordance with subsection (e) above within five Business
     Days after delivery by the Fronting Bank of the LC Payment Notice relating
     thereto, then, for so long as such failure shall continue, (i) the Fronting
     Bank shall be deemed to be a Lender hereunder owed a Loan, and for purposes
     of voting rights hereunder, having a Commitment for the applicable Letter
     of Credit, in an amount equal to the outstanding amount due and payable by
     such non-performing Lender to the Agent for the account of the Fronting
     Bank pursuant to subsection (e) above and (ii) for purposes of voting
     rights hereunder, the Commitment of such non-performing Lender shall be
     reduced in an amount equal to such outstanding amount due and payable by
     such non-performing Lender. Any non-performing Lender and the Borrower
     (without waiving any claim against such Lender for such Lender's failure to
     fund a participation in the reimbursement obligations of the Borrower under
     subsection (e) above) severally agree to pay to the Agent for the account
     of the Fronting Bank such amount, together with interest thereon for each
     day from the date such Lender would have funded its participation had it
     complied with the requirements of subsection (e) above until the date such
     amount is paid to the Agent at (A) in the case of the Borrower, the
     interest rate applicable at the time to Base Rate Loans (or the interest
     rate that would be applicable if Base Rate Loans were outstanding) and (B)
     in the case of such Lender, the Federal Funds Effective Rate.

          (g) The payment obligations of each Lender under subsection (d) and of
     the Borrower under this Agreement in respect of any payment under any
     Letter of Credit shall be unconditional and irrevocable, and shall be paid
     strictly in accordance with the terms of this Agreement under all
     circumstances, including, without limitation, the following circumstances:

              (i) any lack of validity or enforceability of this Agreement or
         any other agreement or instrument relating hereto or to such Letter of
         Credit;

              (ii) any amendment or waiver of, or any consent to departure from,
         the terms of this Agreement or such Letter of Credit;

              (iii)the existence of any claim, set-off, defense or other right
         that the Borrower for the account of which such Letter of Credit was
         issued may have at any time against any beneficiary, or any transferee,
         of such Letter of Credit (or any persons for whom any such beneficiary
         or any such transferee may be acting), the Fronting Bank, or any other
         person, whether in connection with this Agreement, the transactions
         contemplated hereby or by such Letter of Credit, or any unrelated
         transaction;

              (iv) any statement or any other document presented under such
         Letter of Credit proving to be forged, fraudulent, invalid or
         insufficient in any respect or any statement therein being untrue or
         inaccurate in any respect;


<PAGE>


                                                                              32


              (v) payment in good faith by the Fronting Bank under such Letter
         of Credit issued by the Fronting Bank against presentation of a draft
         or certificate which does not comply with the terms of such Letter of
         Credit; or

              (vi) any other circumstance or happening whatsoever, whether or
         not similar to any of the foregoing.

          (h) The Borrower assumes all risks of the acts and omissions of any
     beneficiary or transferee of any Letter of Credit issued for the account of
     the Borrower. Neither the Fronting Bank, any Lender nor any of their
     respective officers, directors, employees, agents or Affiliates shall be
     liable or responsible for (i) the use that may be made of such Letter of
     Credit or any acts or omissions of any beneficiary or transferee thereof in
     connection therewith; (ii) the validity, sufficiency or genuineness of
     documents, or of any endorsement thereon, even if such documents should
     prove to be in any or all respects invalid, insufficient, fraudulent or
     forged; (iii) payment by the Fronting Bank against presentation of
     documents that do not comply with the terms of such Letter of Credit,
     including failure of any documents to bear any reference or adequate
     reference to such Letter of Credit; or (iv) any other circumstances
     whatsoever in making or failing to make payment under such Letter of
     Credit, except that the Borrower for the account of which such Letter of
     Credit was issued and each Lender shall have the right to bring suit
     against the Fronting Bank, and the Fronting Bank shall be liable to the
     Borrower and any Lender, to the extent of any direct, as opposed to
     consequential, damages suffered by the Borrower or such Lender which the
     Borrower or such Lender proves were caused by the Fronting Bank's willful
     misconduct or gross negligence, including, in the case of the Borrower, the
     Fronting Bank's willful failure to make timely payment under such Letter of
     Credit following the presentation to it by the beneficiary thereof of a
     draft and accompanying certificate(s) which strictly comply with the terms
     and conditions of such Letter of Credit. In furtherance and not in
     limitation of the foregoing, the Fronting Bank may accept sight drafts and
     accompanying certificates presented under any Letter of Credit issued by
     the Fronting Bank that appear on their face to be in order, without
     responsibility for further investigation, regardless of any notice or
     information to the contrary, and payment against such documents shall not
     constitute willful misconduct or gross negligence by the Fronting Bank.
     Without limiting the foregoing, no Lender shall be obligated to indemnify
     the Borrower for damages caused by the Fronting Bank's willful misconduct
     or gross negligence.

          (i) The Bond Letter of Credit shall provide that upon receipt of
     written notice of an Event of Default under this Agreement from the Agent
     or Fronting Bank such Bond Letter of Credit shall be promptly drawn upon by
     the Trustee under the Indenture relating to the Bonds being supported by
     such Bond Letter of Credit and if such Bond Letter of Credit is not drawn,
     such Bond Letter of Credit may be cancelled by the Fronting Bank in
     accordance with its terms subsequent to the Trustee's receipt of written
     notice from the Agent or Fronting Bank of an Event of Default under this
     Agreement that directs the Trustee to accelerate the maturity of all of the
     relevant Bonds.

          (j) The Letters of Credit shall be governed by, and construed in
     accordance with, International Standby Practices (1998) International
     Chamber of Commerce Publication No. 590 ("ISP98"). As to matters not
     covered by the ISP98, the Letters of Credit shall be governed by the


<PAGE>


                                                                              33


     laws of the state of New York, including, to the extent not inconsistent
     with the ISP98, the Uniform Commercial Code as in effect in the state of
     New York.

          SECTION 2.19. REINSTATEMENT OF LETTER OF CREDIT AMOUNTS WITH RESPECT
     TO BOND LETTERS OF CREDIT.

          Prior to or simultaneously with the resale of any Series of Bonds
     which were acquired by the Trustee with the proceeds of one or more draws
     under a Bond Letter of Credit by one or more Tender Drafts, the Borrower
     shall, or shall cause the Remarketing Agent or Trustee for such Series of
     Bonds on behalf of the Borrower to, prepay the then outstanding Term Loans
     (in the order in which they were made) by paying to the Agent for the
     account of the Lenders (or, if the Fronting Bank has not been reimbursed
     pursuant to Section 2.18(e), for the account of the Fronting Bank) an
     amount equal to the sum of (i) the aggregate principal amount of the Bonds
     of such Series being resold or to be resold plus (ii) the aggregate amount
     of accrued and unpaid interest on such Bonds which was paid by a drawing or
     drawings under such Tender Draft or Drafts plus (iii) in the case of
     prepayments of Eurodollar Loans, any amount payable to the Lenders in
     respect thereof pursuant to Section 9.05(b) plus (iv) amounts, if any, due
     and owing under Section 2.04(c), resulting from the termination or
     reduction of the Commitment. Such payments shall be applied in
     reimbursement of such drawings and as prepayment of Term Loans resulting
     from such drawings in the manner described above, as applicable. The
     Borrower irrevocably authorizes the Fronting Bank, upon receipt of such
     payments, to reinstate such Bond Letter of Credit to the extent thereof and
     in connection therewith to provide notice thereof to the Remarketing Agent
     and the Trustee for such Series of Bonds.

                                  ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

          The Borrower represents and warrants to each Lender and the Fronting
     Bank as follows:

          SECTION 3.01. ORGANIZATION; POWERS.

          The Borrower is a limited liability company, duly formed, validly
     existing and in good standing under the laws of the State of Delaware, (ii)
     has all requisite power and authority to own its property and assets and to
     carry on its business as now conducted and as proposed to be conducted,
     (iii) is qualified to do business in every jurisdiction where such
     qualification is required, except where the failure so to qualify would not
     result in a Material Adverse Change, and (iv) has the limited liability
     company power and authority to execute, deliver and perform its obligations
     under this Agreement and to request and receive Extensions of Credit
     hereunder.

          SECTION 3.02. AUTHORIZATION.

          The execution, delivery and performance by the Borrower of this
     Agreement and the Extensions of Credit hereunder (i) have been duly
     authorized by all requisite limited liability company action of the
     Borrower and (ii) will not (A) violate (x) any provision of any law,
     statute, rule or regulation (including, without limitation, the Margin
     Regulations) to which the Borrower is subject or of the certificate of
     incorporation or other constitutive documents (including the limited
     liability company agreement) or by-laws of the Borrower or any of its
     Subsidiaries, (y) any order of any Governmental Authority or (z) any
     provision of any indenture, agreement or other instrument to which the
     Borrower


<PAGE>


                                                                              34


     or any of its Subsidiaries is a party or by which it or any of its
     property is or may be bound, (B) be in conflict with, result in a breach of
     or constitute (alone or with notice or lapse of time or both) a default
     under any such indenture, agreement or other instrument or (C) result in
     the creation or imposition of any Lien upon any property or assets of the
     Borrower.

          SECTION 3.03. ENFORCEABILITY.

          This Agreement constitutes a legal, valid and binding obligation of
     the Borrower enforceable in accordance with its terms except to the extent
     that enforcement may be limited by bankruptcy, insolvency or similar laws
     affecting the enforcement of creditors' rights generally.

          SECTION 3.04. GOVERNMENTAL APPROVALS.

          No action, consent or approval of, registration or filing with or
     other action by any Governmental Authority is or will be required in
     connection with the execution, delivery and performance by the Borrower of
     this Agreement, except those as have been duly obtained and as are (i) in
     full force and effect, (ii) sufficient for their purpose and (iii) not
     subject to any pending or, to the knowledge of the Borrower, threatened
     appeal or other proceeding seeking reconsideration or review thereof.

          SECTION 3.05. FINANCIAL STATEMENTS.

          (a) The consolidated balance sheet of the Borrower and its
     Consolidated Subsidiaries as of December 31, 2003 and the related
     consolidated statements of income, cash flows and membership interests for
     the fiscal year then ended, reported on by Deloitte & Touche LLP and set
     forth in the Borrower's Annual Report on Form 10-K for such fiscal year,
     and the unaudited consolidated balance sheet of the Borrower and its
     Consolidated Subsidiaries as of June 30, 2004 and the related consolidated
     statements of income and cash flows for the fiscal quarter then ended, set
     forth in the Borrower's Quarterly Report on Form 10-Q for such fiscal
     quarter, copies of each of which have been made available to each of the
     Lenders and the Fronting Bank, present fairly (subject, in the case of such
     balance sheet and statements of income and cash flows set forth in such
     Quarterly Report on Form 10-Q, to year-end adjustments), in all material
     respects, the consolidated financial position of the Borrower and its
     Consolidated Subsidiaries as of such dates and their consolidated results
     of operations and cash flows for the periods ending on such dates in
     conformity with GAAP.

          (b) Except (i) as set forth in the financial statements or other
     reports of the type referred to in Section 6.03 hereof that have been made
     available to the Lenders and the Fronting Bank on or prior to the date
     hereof (collectively, the "Borrower Information") and (ii) with respect to
     the Excluded Items, since June 30, 2004, there has been no Material Adverse
     Change, other than as a result of (A) any non-cash book losses or charges,
     (B) any cash charges, in an amount of up to $500,000,000 (calculated on an
     aggregate basis throughout the term of this Agreement), as a result of (1)
     rulings by federal or state regulatory bodies having jurisdiction over the
     Borrower or its Consolidated Subsidiaries, (2) the early retirement,
     repurchase or termination of debt or other securities or financing
     arrangements, including premiums, relating to liability management
     activities and (3) initiatives implemented pursuant to TXU's 4+4


<PAGE>


                                                                              35


     performance improvement program, including, but not limited to, severance
     costs, plant or mine closings, asset dispositions, restructuring charges
     and transaction costs and (C) any losses incurred in connection with the
     repurchase by TXU of the $750,000,000 aggregate liquidation preference
     amount of exchangeable preferred membership interests in the Borrower and
     any subsequent purchase or purchases of such interests in the Borrower by
     any affiliate of TXU

          SECTION 3.06. LITIGATION.

          Except as set forth in the Borrower Information, since June 30, 2004,
     there is no action, suit or arbitral or governmental proceeding pending
     against, or to the knowledge of the Borrower threatened against or
     affecting, the Borrower or any of its Subsidiaries before any court or
     arbitrator or any governmental body, agency or official in which there is a
     reasonable possibility of an adverse decision that could result in a
     Material Adverse Change.

          SECTION 3.07. FEDERAL RESERVE REGULATIONS.

          (a) Neither the Borrower nor any of its Subsidiaries is engaged
     principally, or as one of its important activities, in the business of
     extending credit for the purpose of purchasing or carrying Margin Stock.

          (b) No part of the proceeds of any Extension of Credit will be used by
     the Borrower, whether directly or indirectly, and whether immediately,
     incidentally or ultimately, to purchase or carry Margin Stock or to refund
     indebtedness originally incurred for such purpose, or for any other purpose
     which entails a violation of, or which is inconsistent with, the provisions
     of the Margin Regulations.

          (c) Not more than 25% of the value of the assets of the Borrower
     subject to the restrictions of Sections 6.05 and 6.06 is represented by
     Margin Stock.

          SECTION 3.08. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
     ACT.

          (a) Neither the Borrower nor any of its Subsidiaries is an "investment
     company" as defined in, or subject to regulation under, the Investment
     Company Act of 1940.

          (b) The Borrower and each of its Subsidiaries is exempt from all
     provisions of the Public Utility Holding Company Act of 1935 and rules and
     regulations thereunder, except for Sections 9(a)(2) and 33 of such Act and
     the rules and regulations thereunder, and the execution and delivery by the
     Borrower of this Agreement and the performance of its obligations hereunder
     do not violate any provision of such Act or any rule or regulation
     thereunder.

          SECTION 3.09. NO MATERIAL MISSTATEMENTS.

          No report, financial statement or other written information furnished
     by or on behalf of the Borrower to the Agent, the Fronting Bank or any
     Lender pursuant to or in connection with this Agreement contains or will
     contain any material misstatement of fact or omits or will omit to state
     any material fact necessary to make the statements therein, in the light of
     the circumstances under which they were or will be made, not misleading.


<PAGE>


                                                                              36


          SECTION 3.10. TAXES.

          The Borrower and its Subsidiaries have filed or caused to be filed
     within 3 days of the date on which due, all material Federal, state and
     local tax returns that to their knowledge are required to be filed by them,
     and have paid or caused to be paid all material taxes shown to be due and
     payable on such returns or on any assessments received by them, other than
     any taxes or assessments the validity of which is being contested in good
     faith by appropriate proceedings and with respect to which appropriate
     accounting reserves have to the extent required by GAAP been set aside.

          SECTION 3.11. EMPLOYEE BENEFIT PLANS.

          With respect to each Plan, the Borrower and its ERISA Affiliates are
     in compliance in all material respects with the applicable provisions of
     ERISA and the Code and the final regulations and published interpretations
     thereunder. No ERISA Event has occurred that alone or together with any
     other ERISA Event has resulted or could reasonably be expected to result in
     a Material Adverse Change. Neither the Borrower nor any ERISA Affiliate has
     incurred any Withdrawal Liability that could result in a Material Adverse
     Change. Neither the Borrower nor any ERISA Affiliate has received any
     notification that any Multiemployer Plan is in reorganization or has been
     terminated within the meaning of Title IV of ERISA, which such
     reorganization or termination could result in a Material Adverse Change,
     and no Multiemployer Plan is reasonably expected to be in reorganization or
     to be terminated where such reorganization or termination has resulted or
     can reasonably be expected to result, through an increase in the
     contributions required to be made to such Plan or otherwise, in a Material
     Adverse Change.

          SECTION 3.12. SIGNIFICANT SUBSIDIARIES.

          Each of the Borrower's Significant Subsidiaries is a corporation,
     limited liability company or other type of person duly incorporated or
     formed (as the case may be), validly existing and in good standing under
     the laws of its jurisdiction of incorporation, organization or formation
     (as the case may be) and has all corporate, limited liability company,
     partnership or other (as the case may be) powers necessary to carry on its
     business substantially as now conducted. Each of the Borrower's Significant
     Subsidiaries has all material governmental licenses, authorizations,
     consents and approvals required to carry on its business substantially as
     now conducted.

          SECTION 3.13. ENVIRONMENTAL MATTERS.

          Except as set forth in the Borrower Information, the Borrower and each
     of its Subsidiaries has complied in all material respects with all Federal,
     state, local and other statutes, ordinances, orders, judgments, rulings and
     regulations relating to environmental pollution or to environmental or
     nuclear regulation or control, except to the extent that failure to so
     comply could not reasonably be expected to result in a Material Adverse
     Change. Except as set forth in or contemplated by the Borrower Information,
     neither the Borrower nor any of its Subsidiaries has received notice of any
     material failure so to comply, except where such failure could not
     reasonably be expected to result in a Material Adverse Change. Except as
     set forth in or contemplated by the Borrower Information, the facilities of


<PAGE>


                                                                              37


     the Borrower or any of its Subsidiaries, as the case may be, are not used
     to manage any hazardous wastes, hazardous substances, hazardous materials,
     toxic substances, toxic pollutants or substances similarly denominated, as
     those terms or similar terms are used in the Resource Conservation and
     Recovery Act, the Comprehensive Environmental Response Compensation and
     Liability Act, the Hazardous Materials Transportation Act, the Toxic
     Substance Control Act, the Clean Air Act, the Clean Water Act or any other
     applicable law relating to environmental pollution, or any nuclear fuel or
     other radioactive materials, in violation in any material respect of any
     law or any regulations promulgated pursuant thereto, except to the extent
     that such violations could not reasonably be expected to result in a
     Material Adverse Change. Except as set forth in or contemplated by the
     Borrower Information, the Borrower is aware of no events, conditions or
     circumstances involving environmental pollution or contamination that could
     reasonably be expected to result in a Material Adverse Change.

          SECTION 3.14. SOLVENCY.

          The Borrower is Solvent.

                             ARTICLE IV CONDITIONS

          The obligations of the Lenders and the Fronting Bank to make
     Extensions of Credit hereunder are subject to the satisfaction of the
     following conditions:

          SECTION 4.01. INITIAL EXTENSIONS OF CREDIT.

          The Commitment of each Lender to make its initial Loan and of the
     Fronting Bank to issue its initial Letter of Credit on or after the date
     hereof is subject to the conditions that on or prior to the date of such
     Extension of Credit:

          (a) The Agent shall have received favorable written legal opinions of
     (i) (A) David P. Poole, Senior Vice President and Associate General Counsel
     of TXU Business Services Company, and (B) Thelen Reid & Priest LLP, counsel
     to the Borrower, and (ii) King & Spalding LLP, special New York counsel to
     the Agent and Fronting Bank in each case dated the date hereof, addressed
     to the Agent, the Fronting Bank and the Lenders and in form and substance
     satisfactory to the Agent.

          (b) The Agent shall have received (i) a copy of the certificate of
     formation, including all amendments thereto, of the Borrower, certified as
     of a recent date by the Secretary of State of the State of Delaware, and a
     certificate as to the good standing of the Borrower as of a recent date
     from such Secretary of State; (ii) a certificate of the Secretary or an
     Assistant Secretary or analogous officer of the Borrower, dated the date of
     this Agreement and certifying (A) that attached thereto is a true and
     complete copy of the limited liability company agreement of the Borrower as
     in effect on such date and at all times since a date prior to the date of
     the resolutions described in clause (B) below, (B) that attached thereto
     are true and complete copies of resolutions duly adopted by the Board of
     Managers (or any duly authorized committee thereof) of the Borrower
     authorizing the execution and delivery by the Borrower of this Agreement,
     the Extensions of Credit to be made hereunder and the performance by the
     Borrower of all of its obligations hereunder, and that such resolutions
     have not been modified, rescinded or amended and are in full force and
     effect, (C) that the certificate of formation referred to in clause (i)


<PAGE>


                                                                              38


     above has not been amended since the date of the last amendment thereto
     shown on the certificate of good standing furnished pursuant to such clause
     (i) and (D) as to the incumbency and specimen signature of each officer
     executing this Agreement and any other document delivered in connection
     herewith on behalf of the Borrower; (iii) a certificate of another officer
     of the Borrower as to the incumbency and specimen signature of the
     Secretary or Assistant Secretary or analogous officer executing the
     certificate pursuant to (ii) above; and (iv) a certificate of a Responsible
     Officer of the Borrower, dated the date of this Agreement, stating that (A)
     no action, consent or approval of, registration or filing with or other
     action by any Governmental Authority is or will be required in connection
     with the execution, delivery and performance by the Borrower of this
     Agreement, except those as have been duly obtained and as are (1) in full
     force and effect, (2) sufficient for their purpose and (3) not subject to
     any pending or, to the knowledge of such person, threatened appeal or other
     proceeding seeking reconsideration or review thereof, (B) the
     representations and warranties set forth in Article III hereof are true and
     correct in all material respects on and as of the date hereof, and (C) no
     Event of Default or Default has occurred and is continuing on the date
     hereof.

          (c) The Agent shall have received such other approvals, opinions,
     certificates, instruments and documents as the Agent, the Fronting Bank or
     any of the Lenders may have reasonably requested, in form satisfactory to
     the Agent and the requesting Fronting Bank or Lender (if applicable).

          (d) The Lenders, the Fronting Bank, and the Agent shall have received
     payment of all fees and reimbursements of all expenses for which invoices
     have been presented as and when due on or prior to the date of the initial
     Extension of Credit pursuant to the terms of this Agreement.

          (e) The Agent shall have received all documentation and information
     required by regulatory authorities under applicable "know your customer"
     and anti-money laundering rules and regulations, including without
     limitation the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
     law October 26, 2001)).


          SECTION 4.02. CONDITIONS FOR ALL EXTENSIONS OF CREDIT.

          The Commitment of each Lender to make each Loan and of the Fronting
     Bank to make each Extension of Credit relating to a Letter of Credit
     hereunder shall be subject to the satisfaction of the following conditions
     precedent on the date of such Extension of Credit:

          (a) The Agent and the Fronting Bank, if applicable, shall have
     received from the Borrower a notice requesting such Extension of Credit as
     required by Section 2.03 or Section 2.17, as applicable.

          (b) The representations and warranties of the Borrower set forth in
     Article III hereof (except, in the case of any Extension of Credit that
     does not increase the aggregate principal amount of the Outstanding Credits
     to the Borrower, the representations set forth in Sections 3.05(b), 3.06,
     3.11 and 3.13 and except, in the case of any Extension of Credit that is to
     be used to repay commercial paper, the representation set forth in Section
     3.05(b)) shall be true and correct in all material respects on and as of


<PAGE>


                                                                              39


     the date of such Extension of Credit with the same effect as though made on
     and as of such date, except to the extent such representations and
     warranties expressly relate to an earlier date.

          (c) At the time of and immediately after such Extension of Credit, no
     Default or Event of Default shall have occurred and be continuing at the
     time of such Extension of Credit or would result from the making of such
     Extension of Credit.

          (d) The Agent shall have received a certificate of a Responsible
     Officer of the Borrower certifying that the matters set forth in
     subsections (b) and (c) of this Section 4.02 are true and correct as of
     such date.

          (e) With respect to the making of any Bridge Loan, (i) TXU shall have
     obtained funding of not less than $2,300,000,000 in the aggregate on or
     after November 4, 2004 by entering into the Parent Credit Agreement and/or
     one or more other financing arrangements on terms and conditions
     satisfactory to the Agent, it being understood and agreed that a sale of
     senior notes by TXU shall be deemed to be a financing arrangement on terms
     and conditions satisfactory to the Agent, and (ii) the Agent shall have
     received a certificate of a Responsible Officer certifying as to the
     availability of, and absence of any event of default under, the Parent
     Credit Agreement and/or any other financing arrangement or arrangements
     referred to in clause (i) above.

          (f) With respect to the making of any Revolving Loan, the Revolver
     Availability Period shall have commenced.

          Each Extension of Credit shall be deemed to constitute a
     representation and warranty by the Borrower for which such Extension of
     Credit was made on the date of such Extension of Credit as to the matters
     specified in subsections (b) and (c) of this Section 4.02.

          SECTION 4.03. CONDITIONS TO ISSUANCE OF A BOND LETTER OF CREDIT.

          In addition to the satisfaction of the conditions precedent set forth
     in Section 4.02 above, the Commitment of the Fronting Bank to make each
     Extension of Credit relating to a Bond Letter of Credit hereunder shall be
     subject to the receipt by the Agent and the Fronting Bank of the following
     (each in form and substance reasonably satisfactory to the Agent and
     Fronting Bank):

          (a) Copies of the Related Documents with respect to the Series of
     Bonds for which the Bond Letter of Credit is issued, duly executed by the
     parties thereto or duplicate copies certified as of the issuance date of
     the Bond Letter of Credit by the Borrower to be true and complete copies
     thereof.

          (b) If applicable, evidence satisfactory to the Agent that the Prior
     Reimbursement Agreement has been or will be terminated and all amounts
     owing thereunder have been or will be paid in full.

          (c) A true and correct copy of the Offering Circular to be used in
     connection with the offering or reoffering of such Series of Bonds.


<PAGE>

                                                                              40


          (d) An opinion of Bond Counsel, as required under the terms of the
     applicable Indenture.

          (e) A Certificate of a Responsible Officer of the Borrower to the
     effect that:

              (i) the representations and warranties contained in Article III of
          this Agreement and in each other Related Document to which the
          Borrower is a party are true and correct on and as of the closing date
          or the issuance date of such Bond Letter of Credit, as though made on
          and as of such date;

              (ii) no Default or Event of Default has occurred and is
          continuing, or would result from the entering into of this Agreement
          or the issuance of such Bond Letter of Credit hereunder; and

              (iii)the information provided by the Borrower set forth in the
          Offering Circular, including any supplements or amendments thereof and
          the appendices thereto to be used in connection with the offering or
          reoffering of such Series of Bonds, is accurate in all material
          respects (subject to customary and usual qualifications and
          exclusions, including qualifications and exclusions contained in
          letters of representation provided by the Borrower to underwriters in
          connection with such Offering Circular).

          (f) Such other customary and usual approvals, opinions or other
     documents as the Required Lenders (through the Agent) may reasonably
     request that are commonly required in connection with the closing of such
     Series of Bonds and such Bond Letter of Credit.

                                   ARTICLE V
                               THE PROVIDER BONDS

          (a) In the event that the applicable Indenture provides that Bonds
     purchased with proceeds of a Tender Draft or Drafts on a Bond Letter of
     Credit become "Bank Bonds" (or other designation reflecting ownership
     rights or security in such Bonds) and are registered to or held for the
     benefit of the Fronting Bank or the Agent, as appropriate, whether by
     direct registration upon purchase of the Bonds, by assignment by the
     Trustee or otherwise, such Indenture provisions shall establish the rights
     and security of the Fronting Bank, Agent or the Lenders, as applicable,
     with respect to such Bonds. In the event that the applicable Indenture does
     not so provide for the ownership or security of the Fronting Bank or Agent,
     as applicable, with respect to Bonds purchased with proceeds of a Tender
     Draft or Drafts on a Bond Letter of Credit and the Borrower purchases Bonds
     (i) with proceeds from a Tender Draft or Drafts on a Bond Letter of Credit,
     and (ii) such Bonds were not remarketed on the date such Bonds were
     purchased, and (iii) the Fronting Bank was not reimbursed under Section
     2.18(e) of this Agreement ("PROVIDER BONDS") for the proceeds drawn under
     the Bond Letter of Credit, then such Bonds shall be deemed Provider Bonds,
     and the Borrower hereby pledges, assigns, hypothecates, transfers and
     grants to the Agent, subject to the provisions of the applicable Indenture
     and this Section 5.01(a), for the benefit of the Lenders, a first lien on,
     and security interest in, its right, title and interest in and to each of
     the Provider Bonds, the interest thereon and all proceeds thereof, as
     collateral security for the prompt and complete payment when due from time
     to time by the Borrower (by acceleration, at stated maturity or otherwise)
     of all obligations to the Agent, the Fronting Bank and the Lenders
     hereunder. The Borrower hereby authorizes and directs the Trustee for such


<PAGE>


                                                                              41


     Provider Bonds to either register such Provider Bonds in the name of the
     Agent or to hold such Provider Bonds in accordance with the applicable
     sections of the Indenture as pledgee. The Provider Bonds shall, upon
     payment of the related Term Loan in accordance with this Agreement, be
     released and delivered to the Trustee as provided in the Indenture and the
     Agent shall take all actions necessary to effectuate such release and
     delivery. The Borrower shall deliver, or cause to be delivered, the
     Provider Bonds to the Trustee or to another pledge agent designated by the
     Agent immediately upon receipt thereof or, in the case of Provider Bonds
     held under a book-entry system administered by DTC (or any other clearing
     corporation), the Borrower shall cause the Provider Bonds to be reflected
     on the records of DTC (or such other clearing corporation) as a position
     held by the Agent (or a pledge agent acceptable to the Agent) as a DTC
     participant (or a participant in such other clearing corporation) and the
     Agent (or its pledge agent) shall reflect on its records that the Provider
     Bonds are owned beneficially by the Borrower subject to the pledge in favor
     of the Agent. Any payments in respect of Bank Bonds or Provider Bonds made
     by the Issuer to the Trustee shall be paid over to the Agent for the
     benefit of the Lenders and shall be applied to the payment of amounts due
     in respect of Term Loans.

          (b) The Agent shall not be liable for failure to realize upon the
     Provider Bonds or any collateral security or guarantee therefor, or any
     part thereof, or for any delay in so doing, nor shall it be under any
     obligation to take any action whatsoever with regard thereto. If an "EVENT
     OF DEFAULT" has occurred and is continuing under the Indenture under which
     the Provider Bonds were issued, the Agent may (or shall at the request of
     the Required Lenders) thereafter without notice, exercise all rights,
     privileges or options pertaining to any Provider Bonds as if it were the
     absolute owner thereof, upon such terms and conditions as it may determine,
     all without liability except to account to the Borrower for property
     actually received by it.

          (c) Except as contemplated herein, without the prior written consent
     of the Agent, the Borrower agrees that it will not sell, assign, transfer,
     exchange, or otherwise dispose of, or grant any option with respect to, the
     Provider Bonds (other than a sale thereof by the Remarketing Agent in
     accordance with the terms of the applicable Indenture), nor will it create,
     incur or permit to exist any pledge, lien, mortgage, hypothecation,
     security interest, charge, option or any other encumbrance with respect to
     any of the Provider Bonds, or any interest therein, or any proceeds
     thereof, except for the lien and security interest provided for by this
     Agreement and the Indenture under which the Provider Bonds were issued. The
     Borrower further agrees to do or cause to be done all such other reasonable
     acts and things as may be necessary to make any disposition or sale of any
     portion or all of the Provider Bonds by the Agent permitted by this
     Agreement valid and binding and in compliance with applicable law, all at
     the Borrower's expense.

          (d) Provider Bonds, or such portion thereof, shall be released from
     the pledge and security interest created under this Agreement to the extent
     of, and upon satisfaction of the Borrower's reimbursement obligations
     under, this Agreement with respect to such Provider Bonds.


<PAGE>


                                                                              42


                                   ARTICLE VI
                                    COVENANTS

      The Borrower agrees that, so long as any Lender has any Commitment
hereunder, the Fronting Bank has any obligation to issue Letters of Credit
hereunder, any Letter of Credit remains available to be drawn or any amount
payable hereunder remains unpaid:

          SECTION 6.01. CORPORATE EXISTENCE.

      Subject to the rights of the Borrower under Section 6.05, the Borrower
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.

          SECTION 6.02. COMPLIANCE WITH LAWS; MAINTENANCE OF PROPERTIES.

          The Borrower shall, and shall cause each of its Subsidiaries to,
     comply with all applicable material laws, rules, regulations and orders of
     any Governmental Authority, whether now in effect or hereafter enacted,
     except where the validity or applicability of such laws, rules, regulations
     or orders is being contested by appropriate proceedings in good faith; and
     the Borrower shall cause (or, with respect to property owned in common with
     others, make reasonable effort to cause) all its properties used or useful
     in the conduct of its business to be maintained and kept in good condition,
     repair and working order and shall cause (or, with respect to property
     owned in common with others, make reasonable effort to cause) to be made
     all necessary repairs, renewals, replacements, betterments and improvements
     thereof, all as, in the judgment of the Borrower, may be necessary so that
     the business carried on in connection therewith may be properly conducted;
     provided, however, that nothing in this Section 6.02 shall prevent the
     Borrower from discontinuing, or causing the discontinuance of, the
     operation and maintenance of any of its properties if such discontinuance
     is, in the judgment of the Borrower, desirable in the conduct of its
     business.

          SECTION 6.03. FINANCIAL STATEMENTS, REPORTS, ETC.

          The Borrower will furnish to the Agent, for each Lender and the
     Fronting Bank:

          (a) as soon as available and in any event within 120 days after the
     end of each fiscal year of the Borrower, a consolidated balance sheet of
     the Borrower and its Consolidated Subsidiaries as of the end of such fiscal
     year and the related consolidated statements of income, retained earnings
     and cash flows for such fiscal year, setting forth in each case in
     comparative form the figures for the previous fiscal year, all reported on
     in a manner reasonably acceptable to the SEC by Deloitte & Touche LLP or
     other independent public accountants of nationally recognized standing;

          (b) as soon as available and in any event within 75 days after the end
     of each of the first three quarters of each fiscal year of the Borrower, a
     consolidated balance sheet of the Borrower and its Consolidated
     Subsidiaries as of the end of such quarter and the related consolidated
     statements of income for such quarter, for the portion of the Borrower's
     fiscal year ended at the end of such quarter, and for the twelve months
     ended at the end of such quarter, and the related consolidated statement of
     cash flows for the portion of the Borrower's fiscal year ended at the end


<PAGE>


                                                                              43


     of such quarter, setting forth comparative figures for previous dates and
     periods to the extent required in Form 10-Q, all certified (subject to
     normal year-end adjustments) as to fairness of presentation, GAAP and
     consistency by a Financial Officer of the Borrower;

          (c) simultaneously with the delivery of each set of financial
     statements referred to in subsection (a) above, a statement of the firm of
     independent public accountants that reported on such statements stating
     whether anything has come to their attention to cause them to believe that
     any Default or Event of Default existed on the date of such statements;

          (d) forthwith upon becoming aware of the occurrence of any Default or
     Event of Default, a certificate of a Financial Officer of the Borrower
     setting forth the details thereof and the action that the Borrower is
     taking or proposes to take with respect thereto;

          (e) promptly upon the filing thereof, copies of each final prospectus
     (other than a prospectus included in any registration statement on Form S-8
     or its equivalent or with respect to a dividend reinvestment plan) and all
     reports on Forms 10-K, 10-Q and 8-K and similar reports that the Borrower
     shall have filed with the SEC, or any Governmental Authority succeeding to
     any of or all the functions of the SEC;

          (f) if and when any member of the Controlled Group (i) gives or is
     required to give notice to the PBGC of any Reportable Event with respect to
     any Plan that might constitute grounds for a termination of such Plan under
     Title IV of ERISA, or knows that the plan administrator of any Plan has
     given or is required to give notice of any such Reportable Event, a copy of
     the notice of such Reportable Event given or required to be given to the
     PBGC; (ii) receives notice from a proper representative of a Multiemployer
     Plan of complete or partial Withdrawal Liability being imposed upon such
     member of the Controlled Group under Title IV of ERISA, a copy of such
     notice; or (iii) receives notice from the PBGC under Title IV of ERISA of
     an intent to terminate, or appoint a trustee to administer, any Plan, a
     copy of such notice; and

          (g) promptly, from time to time, such additional information regarding
     the financial position or business of the Borrower and its Subsidiaries as
     the Agent, at the request of any Lender or the Fronting Bank, may
     reasonably request.

     As promptly as practicable after delivering each set of financial
     statements as required in sub-subsection (a) of this Section 6.03, the
     Borrower shall make available a copy of the consolidating workpapers used
     by the Borrower in preparing such consolidated statements to the Fronting
     Bank and each Lender that shall have requested such consolidating
     workpapers. Each Lender and the Fronting Bank that receives such
     consolidating workpapers shall hold them in confidence as required by
     Section 9.16; provided that neither any Lender nor the Fronting Bank may
     disclose such consolidating workpapers to any other person pursuant to
     clause (iv) of Section 9.16.

          SECTION 6.04. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.

          Not later than June 1 in each year, commencing June 1, 2005, the
     Borrower shall deliver to the Agent, with sufficient copies for the Lenders
     and the Fronting Bank, a certificate, executed by a Responsible Officer, as
     to such officer's knowledge of the Borrower's compliance with all
     conditions and


<PAGE>


                                                                              44


     covenants under this Agreement, such compliance to be determined
     without regard to any period of grace or requirement of notice under this
     Agreement.

          SECTION 6.05. CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER.

          The Borrower shall not consolidate with or merge into any other
     corporation, in each case in a transaction in which it is not the successor
     corporation or convey, transfer or lease its properties and assets as an
     entirety or substantially as an entirety to any person, unless:

          (a) the corporation formed by such consolidation or into which the
     Borrower is merged, or the corporation that acquires by conveyance or
     transfer, or that leases, the properties and assets of the Borrower as an
     entirety or substantially as an entirety, shall be a corporation organized
     and validly existing under the laws of the United States, any state thereof
     or the District of Columbia, and shall expressly assume, by an agreement
     supplemental hereto, executed and delivered to the Agent, in form
     satisfactory to the Agent, the due and punctual payment of the principal of
     and interest, if any, on any Loan, all reimbursement obligations, fees and
     other amounts payable by the Borrower hereunder and the performance of
     every covenant of this Agreement on the part of the Borrower to be
     performed or observed;

          (b) immediately after giving effect to such transaction, no Event of
     Default and no Default shall have occurred and be continuing; and

          (c) the Borrower shall have delivered to the Agent a certificate of a
     Responsible Officer and an opinion of counsel, each stating that such
     consolidation, merger, conveyance or other transfer or lease and such
     agreement supplemental hereto comply with this Section 6.05 and that all
     conditions precedent herein provided for relating to such transactions have
     been complied with.

          Upon any consolidation by the Borrower with or merger by the Borrower
     into any other corporation, or any conveyance or other transfer or lease of
     the properties and assets of the Borrower as an entirety or substantially
     as an entirety in accordance with this Section 6.05, the successor formed
     by such consolidation or into which the Borrower is merged or the person to
     which such conveyance, or other transfer or lease is made shall succeed to,
     and be substituted for, and may exercise every right and power of, the
     Borrower under this Agreement with the same effect as if such successor
     person had been named as the Borrower herein, and thereafter, except in the
     case of a lease, the predecessor person shall be relieved of and released
     from all obligations and covenants under this Agreement (unless the
     Borrower shall have delivered to the Agent an instrument waiving such
     relief and release), and the Agent shall acknowledge in writing that the
     Borrower has been so relieved and released.

          For purposes of clarification and not in limitation of the provisions
     of this Section 6.05, nothing in this Agreement shall be deemed to prevent
     or restrict:

              (i) any consolidation or merger after the consummation of which
          the Borrower would be the surviving or resulting corporation, or


<PAGE>


                                                                              45


              (ii) any conveyance or other transfer, or lease of any part of the
          properties of the Borrower which does not constitute the entirety, or
          substantially the entirety, thereof, or

              (iii) the approval by the Borrower of, or the consent by the
          Borrower to, any consolidation or merger of any direct or indirect
          subsidiary or affiliate of the Borrower, or any conveyance, transfer
          or lease by any such subsidiary or affiliate of any of its assets.

          SECTION 6.06. ..LIMITATIONS ON LIENS.

          The Borrower shall not, and shall not permit any of its Subsidiaries
     to, create incur or assume any Lien upon any of their respective properties
     or assets in order to secure any Debt (other than Permitted Liens). The
     provisions of the preceding sentence shall not prohibit the creation,
     incurrence or assumption of any Lien if, contemporaneously therewith,
     either

          (a) the Borrower shall make effective provision whereby all
     Outstanding Credits shall be secured equally and ratably with such other
     Debt with a Lien on the same properties or assets (unless such other Debt
     is subordinated to the Outstanding Credits, in which case all of the
     Outstanding Credits will be secured prior to such other Debt with a Lien on
     the same properties or assets); or

          (b) the Borrower shall deliver to the Agent bonds, notes or other
     evidences of indebtedness secured equally and ratably with such other Debt
     with a Lien on the same properties or assets (unless such other Debt is
     subordinated to the Outstanding Credits, in which case all of the
     Outstanding Credits will be secured prior to such other Debt with a Lien on
     the same properties or assets) (hereinafter called "SECURED OBLIGATIONS"):

              (i) in an aggregate principal amount equal to the aggregate
          principal amount of the Outstanding Credits,

              (ii) maturing (or being subject to mandatory redemption) on such
          dates and in such principal amounts that, upon repayment of any
          Outstanding Credits, there shall mature (or be redeemed) Secured
          Obligations equal in principal amount to such Outstanding Credits then
          to mature and

              (iii) containing, in addition to any mandatory redemption
          provisions applicable to all Secured Obligations outstanding under
          such Lien and any mandatory redemption provisions contained therein
          pursuant to clause (ii) above, mandatory redemption provisions
          correlative to the provisions, if any, for the mandatory redemption
          (pursuant to a sinking fund or otherwise) of the Outstanding Credits
          or for the redemption thereof at the option of the Lenders, as well as
          a provision for mandatory redemption upon an acceleration of the
          maturity of all Outstanding Credits following an Event of Default
          (such mandatory redemption to be rescinded upon the rescission of such
          acceleration);

          it being expressly understood that such Secured Obligations

          (x) may, but need not, bear interest,


<PAGE>


                                                                              46


          (y) may, but need not, contain provisions for the redemption thereof
     at the option of the issuer, any such redemption to be made at a redemption
     price or prices not less than the principal amount thereof, and

          (z) shall be held by the Agent for the benefit of the Lenders subject
     to such terms and conditions relating to surrender to the Borrower,
     transfer restrictions, voting, application of payments of principal,
     premiums, if any, and interest and other matters as shall be set forth in
     an amendment hereto specifically providing for the delivery to the Agent of
     such Secured Obligations.

          SECTION 6.07. LIMITATIONS ON DEBT.

          The Borrower shall not permit any of its Subsidiaries to create, incur
     or assume any Debt other than Permitted Subsidiary Debt.

          SECTION 6.08. LIMITATIONS ON ASSET SALES.

          Except for the sale of the properties and assets of the Borrower as an
     entirety or substantially as an entirety pursuant to Section 6.05, and
     other than properties or assets required to be sold to conform with
     governmental requirements, the Borrower shall not, and shall not permit any
     of its Subsidiaries to, consummate any Asset Sale, if the aggregate net
     book value of all such Asset Sales consummated during the four calendar
     quarters immediately preceding any date of determination would exceed 10%
     of the total assets of the Borrower and its Consolidated Subsidiaries as
     shown on the Borrower's most recent quarterly audited or unaudited
     consolidated balance sheet; provided, however, that any such Asset Sale
     will be disregarded for purposes of the 10% limitation specified above

          (a) to the extent that such properties or assets are, in the
     Borrower's opinion, worn out or are not useful or necessary in connection
     with the operation of the business of the Borrower or its Subsidiaries;

          (b) to the extent such properties or assets are being transferred to a
     wholly-owned Subsidiary of the Borrower;

          (c) to the extent that the cash or other proceeds thereof

              (i) are, within 12 months of the consummation of such Asset Sale,
          invested or reinvested by the Borrower or any Subsidiary in a
          Permitted Business,

              (ii) are used by the Borrower or a Subsidiary to repay Debt of the
          Borrower or such Subsidiary, or

              (iii) are retained by the Borrower or any Subsidiary.

          SECTION 6.09. BOND DOCUMENTS.

          The Borrower shall not modify any Related Document in respect of a
     Series of Bonds at any time subsequent to the issuance of a Bond Letter of
     Credit in respect thereto in a manner that is or could be adverse to the


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                                                                              47


     Agent, the Fronting Bank or any Lender, without the Agent's prior written
     consent.

          SECTION 6.10. USE OF PROCEEDS.

          The Borrower shall use proceeds of Bridge Loans to lend, advance or
     distribute funds to TXU to be used by TXU to purchase its common stock and
     for general corporate purposes of the Borrower. The Borrower shall use
     proceeds of Revolving Loans for general corporate purposes of the Borrower.
     Letters of Credit shall be issued to support Bonds and for general
     corporate purposes of the Borrower.

                                  ARTICLE VII.
                                EVENTS OF DEFAULT

          SECTION 7.01. EVENTS OF DEFAULT.

          In case of the happening of any of the following events (each an
     "EVENT OF DEFAULT"):

          (a) failure to pay interest, if any, on any Loan, or any portion of
     the Fees, or any other amount payable hereunder (other than the principal
     amount of any Loan) within 30 days after the same becomes due and payable;
     or

          (b) failure to pay the principal amount of any Loan when the same
     becomes due and payable; or

          (c) failure to perform or breach of any covenant or warranty of the
     Borrower in this Agreement (other than a covenant or warranty a default in
     the performance of which or breach of which is elsewhere in this Section
     7.01 specifically dealt with) for a period of 90 days after there has been
     given, by registered or certified mail, to the Borrower by the Agent, or to
     the Borrower and the Agent by the Required Lenders, a written notice
     specifying such default or breach and requiring it to be remedied and
     stating that such notice is a "Notice of Default" hereunder, unless the
     Agent, or the Agent and the Required Lenders, as the case may be, shall
     agree in writing to an extension of such period prior to its expiration;
     provided, however, that the Agent, or the Agent and the Required Lenders,
     as the case may be, shall be deemed to have agreed to an extension of such
     period if corrective action is initiated by the Borrower within such period
     and is being diligently pursued; or

          (d) the entry by a court having jurisdiction in the premises of (i) a
     decree or order for relief in respect of the Borrower in an involuntary
     case or proceeding under any applicable Federal or state bankruptcy,
     insolvency, reorganization or other similar law or (ii) a decree or order
     adjudging the Borrower a bankrupt or insolvent, or approving as properly
     filed a petition by one or more persons other than the Borrower seeking
     reorganization, arrangement, adjustment or composition of or in respect of
     the Borrower under any applicable Federal or state bankruptcy, insolvency
     or similar law, or appointing a custodian, receiver, liquidator, assignee,
     trustee, sequestrator or other similar official for the Borrower or for any
     substantial part of its property, or ordering the winding up or liquidation
     of its affairs, and any such decree or order for relief or any such other
     decree or order shall have remained unstayed and in effect for a period of
     90 consecutive days;


<PAGE>


                                                                              48


          (e) the commencement by the Borrower of a voluntary case or proceeding
     under any applicable Federal or state bankruptcy, insolvency,
     reorganization or other similar law or of any other case or proceeding to
     be adjudicated a bankrupt or insolvent, or the consent by the Borrower to
     the entry of a decree or order for relief in respect of the Borrower in a
     case or proceeding under any applicable Federal or state bankruptcy,
     insolvency, reorganization or other similar law or to the commencement of
     any bankruptcy or insolvency case or proceeding against the Borrower, or
     the filing by the Borrower of a petition or answer or consent seeking
     reorganization or relief under any applicable Federal or state bankruptcy,
     insolvency, reorganization or similar law, or the consent by the Borrower
     to the filing of such petition or to the appointment of or taking
     possession by a custodian, receiver, liquidator, assignee, trustee,
     sequestrator or similar official of the Borrower or of any substantial part
     of its property, or the making by the Borrower of a general assignment for
     the benefit of creditors, or the admission by the Borrower in writing of
     its inability to pay its debts generally as they become due, or the
     authorization of such action by the Board of Managers of the Borrower;

          (f) the occurrence of any default or similar event under the terms of
     the Borrower's 9% Exchangeable Subordinated Notes due 2012 (the
     "SUBORDINATED NOTES") (or any security of the Borrower or any Subsidiary
     issued directly or indirectly upon the conversion, exchange or extension
     (in whole or in part) of such Subordinated Notes) that results in the
     acceleration (or other mandatory repayment prior to the maturity date) of
     such Subordinated Notes or such other security or the failure to pay such
     Subordinated Notes or such other security at maturity shall constitute an
     Event of Default; or

          (g) during the Bridge Availability Period or while any amount of
     Bridge Loans remains outstanding, an event of default shall occur under the
     $2,500,000,000 Revolving Credit Agreement, dated as of June 24, 2004
     between the Borrower, the lenders party thereto, JP Morgan Chase Bank, as
     administrative agent, and Citibank, N.A. as fronting bank or under any
     credit facility that replaces or refinances such agreement;

     then, and in every such event, and at any time thereafter during the
     continuance of such event, the Agent, at the request of the Required
     Lenders, shall, by notice to the Borrower, take one or all of the following
     actions, at the same or different times: (i) terminate forthwith the right
     of the Borrower to request and receive Extensions of Credit; and (ii)
     declare the Loans of the Borrower then outstanding to be forthwith due and
     payable in whole or in part, whereupon the principal of the Loans so
     declared to be due and payable, together with accrued interest thereon and
     any unpaid accrued Fees and all other liabilities of the Borrower accrued
     hereunder, shall become forthwith due and payable, without presentment,
     demand, protest or any other notice of any kind, all of which are hereby
     expressly waived, anything contained herein to the contrary
     notwithstanding; provided that in the case of any event described in
     subsection (d) or (e) above, the right of the Borrower to request and
     receive Extensions of Credit shall automatically terminate and the
     principal of the Loans then outstanding, together with accrued interest
     thereon and any unpaid accrued Fees and all other liabilities of the
     Borrower accrued hereunder shall automatically become due and payable,
     without presentment, demand, protest or any other notice of any kind, all
     of which are hereby expressly waived by the Borrower, anything contained
     herein to the contrary notwithstanding.


<PAGE>


                                                                              49


          SECTION 7.02. LETTER OF CREDIT REMEDIES.

          Notwithstanding anything to the contrary contained herein, but subject
     to the paragraph concerning Bond Letters of Credit below, no notice given
     or declaration made by the Agent pursuant to this Article VII shall affect
     (i) the obligation of the Fronting Bank to make any payment under any
     Letter of Credit issued by the Fronting Bank in accordance with the terms
     of such Letter of Credit or (ii) the obligations of each Lender in respect
     of each such Letter of Credit; provided, however, that upon the occurrence
     and during the continuance of any Event of Default, the Agent shall at the
     request, or may with the consent, of the Required Lenders, upon notice to
     the Borrower, require the Borrower to deposit and maintain with the Agent
     an amount in the cash collateral account (the "CASH COLLATERAL ACCOUNT")
     described below equal to the aggregate maximum amount available to be drawn
     under all Letters of Credit outstanding at such time and at any time during
     the continuance of such Event of Default. Such Cash Collateral Account
     shall at all times be free and clear of all rights or claims of third
     parties. The Cash Collateral Account shall be maintained with the Agent in
     the name of, and under the sole dominion and control of, the Agent, and
     amounts deposited in the Cash Collateral Account shall bear interest at a
     rate equal to the rate generally offered by Wachovia for deposits equal to
     the amount deposited by the Borrower in the Cash Collateral Account, for a
     term to be determined by the Agent in its sole discretion. The Borrower
     hereby grants to the Agent for the benefit of the Fronting Bank and the
     Lenders a Lien on, and hereby assigns to the Agent for the benefit of the
     Fronting Bank and the Lenders all of its right, title and interest in, the
     Cash Collateral Account and all funds from time to time on deposit therein
     to secure its reimbursement obligations in respect of Letters of Credit
     issued for its account. If any drawings then outstanding or thereafter made
     are not reimbursed in full immediately upon demand or, in the case of
     subsequent drawings, upon being made, then, in any such event, the Agent
     may apply the amounts then on deposit in the Cash Collateral Account, in
     such priority as the Agent shall elect, toward the payment in full of any
     or all of the Borrower's obligations hereunder as and when such obligations
     shall become due and payable, regardless of whether the amounts to be so
     applied were deposited by the Borrower for the account of which the
     Letter(s) of Credit then being drawn were issued. Upon payment in full,
     after the termination of the Letters of Credit, of all such obligations,
     the Agent will repay and reassign to the Borrower any cash then on deposit
     in the Cash Collateral Account and the Lien of the Agent on the Cash
     Collateral Account and the funds therein shall automatically terminate.

          With respect to the obligations of the Fronting Bank, Agent and the
     Lenders under a Bond Letter of Credit and upon the occurrence of an Event
     of Default, and at any time thereafter during the continuance of such Event
     of Default, the Agent, at the request of the Required Lenders, may provide
     for the establishment of a Cash Collateral Account (as provided for and as
     described in the previous paragraph), and, by notice to the Borrower, take
     one or more of the following actions, as applicable, at the same or
     different times: (a) give notice to the Trustee pursuant to the applicable
     default provisions of the Indenture of the occurrence of an Event of
     Default hereunder that requires acceleration of the related Series of
     Bonds, (b) give notice to the Trustee pursuant to the applicable default
     provisions of the Indenture that the Fronting Bank has not been reimbursed
     for a drawing that requires acceleration of such Series of Bonds, (c)
     declare the Term Loans, with respect to such Bond Letter of Credit, all
     interest thereon and any other amounts outstanding hereunder, to be
     forthwith due and payable, whereupon the Term Loans, with respect to such
     Bond Letter of Credit, all such interest and all such amounts shall become


<PAGE>


                                                                              50


     and be forthwith due and payable, without presentment, demand, protest, or
     further notice of any kind, all of which are hereby expressly waived by the
     Company, (d) cancel the Bond Letter of Credit on the cancellation date of
     the Bond Letter of Credit as provided therein, and (e) exercise all the
     rights and remedies provided for herein or by law.

                                  ARTICLE VIII
                                    THE AGENT

          (a) In order to expedite the transactions contemplated by this
     Agreement, Wachovia is hereby appointed to act as Agent on behalf of the
     Lenders and the Fronting Bank. Each Lender and the Fronting Bank hereby
     irrevocably authorizes the Agent to take such actions on behalf of such
     Lender and the Fronting Bank and to exercise such powers as are
     specifically delegated to the Agent by the terms and provisions hereof,
     together with such actions and powers as are reasonably incidental thereto.
     The Agent is hereby expressly authorized by the Lenders and the Fronting
     Bank, without hereby limiting any implied authority, (i) to receive on
     behalf of the Lenders and the Fronting Bank all payments of principal of
     and interest on the Outstanding Credits and all other amounts due to the
     Lenders and the Fronting Bank hereunder, and promptly to distribute to each
     Lender and the Fronting Bank, its proper share of each payment so received;
     (ii) to give notice on behalf of each Lender and the Fronting Bank to the
     Borrower of any Event of Default of which the Agent has actual knowledge
     acquired in connection with its agency hereunder; and (iii) to distribute
     to each Lender and the Fronting Bank copies of all notices, financial
     statements and other materials delivered by the Borrower pursuant to this
     Agreement as received by the Agent.

          (b) Neither the Agent nor any of its directors, officers, employees or
     agents shall be liable as such for any action taken or omitted by any of
     them except for its or his or her own gross negligence or willful
     misconduct, or be responsible for any statement, warranty or representation
     herein or the contents of any document delivered in connection herewith, or
     be required to ascertain or to make any inquiry concerning the performance
     or observance by the Borrower of any of the terms, conditions, covenants or
     agreements contained in this Agreement. The Agent shall not be responsible
     to the Lenders or the Fronting Bank for the due execution, genuineness,
     validity, enforceability or effectiveness of this Agreement or other
     instruments or agreements. The Agent may deem and treat the Lender or the
     Fronting Bank that makes any Extension of Credit as the holder of the
     indebtedness resulting therefrom for all purposes hereof until it shall
     have received notice from such Lender or the Fronting Bank, given as
     provided herein, of the transfer thereof. The Agent shall in all cases be
     fully protected in acting, or refraining from acting, in accordance with
     written instructions signed by the Required Lenders and, except as
     otherwise specifically provided herein, such instructions and any action or
     inaction pursuant thereto shall be binding on all the Lenders and the
     Fronting Bank. The Agent shall, in the absence of knowledge to the
     contrary, be entitled to rely on any instrument or document believed by it
     in good faith to be genuine and correct and to have been signed or sent by
     the proper person or persons. Neither the Agent nor any of its directors,
     officers, employees or agents shall have any responsibility to the Borrower
     on account of the failure of or delay in performance or breach by any
     Lender or the Fronting Bank of any of its obligations hereunder or to any
     Lender or the Fronting Bank on account of the failure of or delay in
     performance or breach by any other Lender, the Fronting Bank or the
     Borrower of any of their respective obligations hereunder or in connection
     herewith. The Agent may execute any and all duties hereunder by or through
     agents or employees and shall be entitled to rely upon the advice of legal


<PAGE>


                                                                              51


     counsel selected by it with respect to all matters arising hereunder and
     shall not be liable for any action taken or suffered in good faith by it in
     accordance with the advice of such counsel.

          (c) The Lenders and the Fronting Bank hereby acknowledge that the
     Agent shall not be under any duty to take any discretionary action
     permitted to be taken by it pursuant to the provisions of this Agreement
     unless it shall be requested in writing to do so by the Required Lenders.

          (d) Subject to the appointment and acceptance of a successor Agent as
     provided below, the Agent may resign at any time by notifying the Lenders,
     the Fronting Bank and the Borrower. Upon any such resignation, the Required
     Lenders shall have the right to appoint a successor Agent acceptable to the
     Borrower. If no successor shall have been so appointed by the Required
     Lenders and shall have accepted such appointment within 30 days after the
     Agent gives notice of its resignation, then the Agent may, on behalf of the
     Lenders and the Fronting Bank, appoint a successor Agent, having a combined
     capital and surplus of at least $500,000,000 or an Affiliate of any such
     bank. Upon the acceptance of any appointment as Agent hereunder by a
     successor bank, such successor shall succeed to and become vested with all
     the rights, powers, privileges and duties of the retiring Agent and the
     Agent shall be discharged from its duties and obligations hereunder. After
     the Agent's resignation hereunder, the provisions of this Article VIII and
     Section 9.05 shall continue in effect for its benefit in respect of any
     actions taken or omitted to be taken by it while it was acting as the
     Agent.

          (e) The Lenders may remove the Agent upon 30 days' prior notice by so
     notifying the Borrower and, in such event, the Lenders shall appoint a
     successor Agent acceptable to the Borrower. Either the Required Lenders or
     the Borrower may remove any Agent if (i) such Agent is adjudged bankrupt or
     insolvent or (ii) a receiver or other public officer takes charge of such
     Agent or its property. If no successor Agent shall have been appointed by
     the Lenders and shall have accepted such appointment within 30 days after
     delivery by the Lenders of the notice required by the first sentence of
     this subsection (e), the Required Lenders or the Borrower may petition any
     court of competent jurisdiction for the appointment of a successor Agent.
     After the Agent's removal hereunder, the provisions of this Article VIII
     and Section 9.05 shall continue in effect for its benefit in respect of any
     actions taken or omitted to be taken by it while it was acting as Agent.

          (f) With respect to the Extensions of Credit made by it hereunder, the
     Agent, in its individual capacity and not as Agent, shall have the same
     rights and powers as any other Lender and may exercise the same as though
     it were not the Agent, and the Agent and its Affiliates may accept deposits
     from, lend money to and generally engage in any kind of business with the
     Borrower or any Subsidiary or other Affiliate thereof as if it were not
     Agent.

          (g) Each Lender agrees (i) to reimburse the Agent, on demand, in the
     amount of its pro rata share (based on its Commitment hereunder or, if the
     Total Commitment shall have been terminated, the amount of its percentage
     of Outstanding Credits) of any expenses incurred for the benefit of the
     Lenders or the Fronting Bank, in its role as Agent, including fees and
     expenses of counsel and compensation of agents and employees paid for
     services rendered on behalf of the Lenders or the Fronting Bank, which
     shall not have been reimbursed by the Borrower and (ii) to indemnify and
     hold harmless the Agent and any of its directors, officers, employees or
     agents, on demand, in the amount of such pro rata share, from and against


<PAGE>


                                                                              52


     any and all liabilities, taxes, obligations, losses, damages, penalties,
     actions, judgments, suits, costs, expenses or disbursements of any kind or
     nature whatsoever which may be imposed on, incurred by or asserted against
     it in any way relating to or arising out of this Agreement or any action
     taken or omitted by it under this Agreement to the extent the same shall
     not have been reimbursed by the Borrower; provided that neither any Lender
     nor the Fronting Bank shall be liable to the Agent for any portion of such
     liabilities, obligations, losses, damages, penalties, actions, judgments,
     suits, costs, expenses or disbursements resulting from the gross negligence
     or willful misconduct of the Agent or any of its directors, officers,
     employees or agents. Each Lender and the Fronting Bank agrees that any
     allocation made in good faith by the Agent of expenses or other amounts
     referred to in this subsection shall be conclusive and binding for all
     purposes.

          (h) Each Lender and the Fronting Bank acknowledges that it has,
     independently and without reliance upon the Agent, the Fronting Bank or any
     other Lender, and based on such documents and information as it has deemed
     appropriate, made its own credit analysis and decision to enter into this
     Agreement. Each Lender and the Fronting Bank also acknowledges that it
     will, independently and without reliance upon the Agent, the Fronting Bank
     or any other Lender, and based on such documents and information as it
     shall from time to time deem appropriate, continue to make its own
     decisions in taking or not taking action under or based upon this Agreement
     or any related agreement or any document furnished hereunder or thereunder.

                                   ARTICLE IX
                                  MISCELLANEOUS

          SECTION 9.01. NOTICES.

          Notices and other communications provided for herein shall be in
     writing and shall be delivered by hand or overnight courier service, mailed
     or sent by telecopy, as follows:

          (a) if to the Borrower, c/o TXU Business Services Company, TXU Energy
     Plaza, 1601 Bryan Street, Dallas, TX 75201, Attention: General Counsel
     (facsimile No. 214-812-6032);

          (b) if to the Agent, to Wachovia Bank, National Association, 301 South
     College Street, 7th Floor Charlotte, North Carolina 28288-0760 Attention:
     Michael J. Kolosowsky, Debt Capital Markets (Telecopy No. 704-383-0661),
     with a copy to Wachovia Bank, National Association, 201 S. College St.
     NC0680 Charlotte, North Carolina 28288-0680, Attention: Agency Services
     (Telecopy No. 704-383-3612), with a copy to Wachovia Bank, National
     Association, 191 Peachtree Street NE, Atlanta, Georgia 30303, Attention:
     Rotcher Watkins (Telecopy No. 404-332-4136), with a copy to Parker Poe
     Adams & Bernstein, L.L.P., 401 S. Tryon Street, Ste. 3000, Charlotte, North
     Carolina 28202, Attention: Paul S. Donohue, Esq. (Telecopy No.
     704-334-4706); to

          (c) if to the Fronting Bank, to Wachovia Bank, National Association,
     301 South College Street, 7th Floor, Charlotte, North Carolina 28288-0760,
     Attention: Michael J. Kolosowsky, Debt Capital Markets (Telecopy No.


<PAGE>


                                                                              53


     704-383-0661), with a copy to Wachovia Bank, National Association, 191
     Peachtree Street NE, Atlanta, Georgia 30303, Attention: Rotcher Watkins
     (Telecopy No. 404-332-4136), with a copy to Wachovia Bank, National
     Association, 401 Linden Street, Winston-Salem, North Carolina 27101
     Attention: International Operations, Standby Letters of Credit, NC-6034
     (Telecopy No. 336-735-0952/0953);

          (d) if to a Lender, to it at its address (or telecopy number) set
     forth in the Register or in the Assignment and Acceptance pursuant to which
     such Lender became a party hereto; and

          (e) as to each party hereto, at such other address as shall be
     designated by such party in a written notice to each other party hereto.

          All notices and other communications given to any party hereto in
     accordance with the provisions of this Agreement shall be deemed to have
     been given on the date of receipt if delivered by hand or overnight courier
     service or sent by telecopy to such party as provided in this Section 9.01
     or in accordance with the latest unrevoked direction from such party given
     in accordance with this Section 9.01.

          SECTION 9.02. SURVIVAL OF AGREEMENT.

          All covenants, agreements, representations and warranties made by the
     Borrower herein and in the certificates or other instruments prepared or
     delivered in connection with or pursuant to this Agreement shall be
     considered to have been relied upon by the Lenders and the Fronting Bank
     and shall survive the making by the Lenders and the Fronting Bank of the
     Extensions of Credit regardless of any investigation made by the Lenders or
     the Fronting Bank or on their behalf, and shall continue in full force and
     effect as long as there are any Outstanding Credits or any Fee or any other
     amount payable under this Agreement is outstanding and unpaid or the Total
     Commitment has not been terminated or any Letter of Credit is available to
     be drawn.

          SECTION 9.03. BINDING EFFECT.

          This Agreement shall become effective when it shall have been executed
     by the Borrower, the Fronting Bank and the Agent and when the Agent shall
     have received copies hereof (telecopied or otherwise) which, when taken
     together, bear the signature of each Lender, and thereafter shall be
     binding upon and inure to the benefit of the parties hereto and their
     respective successors and assigns, except that the Borrower shall not have
     the right to assign any rights hereunder or any interest herein without the
     prior consent of all the Lenders and the Fronting Bank.

          SECTION 9.04. SUCCESSORS AND ASSIGNS.

          (a) Whenever in this Agreement any of the parties hereto is referred
     to, such reference shall be deemed to include the successors and assigns of
     such party; and all covenants, promises and agreements by or on behalf of
     any party that are contained in this Agreement shall bind and inure to the
     benefit of its successors and assigns.

          (b) Each Lender may assign to one or more assignees all or a portion
     of its interests, rights and obligations under this Agreement (including
     all or a portion of its Commitment and the its Outstanding Credits);


<PAGE>


                                                                              54


     provided, however, that (i) except in the case of an assignment to (A) a
     Lender or an Affiliate of such Lender, (B) a Federal Reserve Bank, or (C)
     any direct or indirect contractual counterparties in swap agreements to the
     extent required in connection with the physical settlement of any Lender's
     obligations pursuant thereto, the Borrower (so long as no Default or Event
     of Default shall have occurred and be continuing), the Agent and the
     Fronting Bank must give their prior written consent to such assignment
     (which consent shall not be unreasonably withheld), (ii) the amount of the
     Commitment of the assigning Lender subject to each such assignment
     (determined as of the date the Assignment and Acceptance with respect to
     such assignment is delivered to the Agent) shall not be less than
     $1,000,000 or, if the amount of the Commitment of the assigning Lender is
     less than $1,000,000, the aggregate amount of such Lender's Commitment,
     (iii) each such assignment shall be of a constant, and not a varying,
     percentage of all the assigning Lender's rights and obligations under this
     Agreement and (iv) the parties to each such assignment shall execute and
     deliver to the Agent an Assignment and Acceptance, and a processing and
     recordation fee of $3,500. Upon acceptance and recording pursuant to
     Section 9.04(e), from and after the effective date specified in each
     Assignment and Acceptance, which effective date shall be at least five
     Business Days after the execution thereof unless otherwise agreed by the
     Agent (the Borrower to be given reasonable notice of any shorter period),
     (A) the assignee thereunder shall be a party hereto and, to the extent of
     the interest assigned by such Assignment and Acceptance, have the rights
     and obligations of a Lender under this Agreement and (B) the assigning
     Lender thereunder shall, to the extent of the interest assigned by such
     Assignment and Acceptance, be released from its obligations under this
     Agreement (and, in the case of an Assignment and Acceptance covering all or
     the remaining portion of an assigning Lender's rights and obligations under
     this Agreement, such Lender shall cease to be a party hereto (but shall
     continue to be entitled to the benefits of Sections 2.11, 2.16 and 9.05
     afforded to such Lender prior to its assignment as well as to any Fees
     accrued for its account hereunder and not yet paid)).

          (c) By executing and delivering an Assignment and Acceptance, the
     assigning Lender thereunder and the assignee thereunder shall be deemed to
     confirm to and agree with each other and the other parties hereto as
     follows: (i) such assigning Lender warrants that it is the legal and
     beneficial owner of the interest being assigned thereby free and clear of
     any adverse claim; (ii) except as set forth in (i) above, such assigning
     Lender makes no representation or warranty and assumes no responsibility
     with respect to any statements, warranties or representations made in or in
     connection with this Agreement, or the execution, legality, validity,
     enforceability, genuineness, sufficiency or value of this Agreement or any
     other instrument or document furnished pursuant hereto or the financial
     condition of the Borrower or the performance or observance by the Borrower
     of any obligations under this Agreement or any other instrument or document
     furnished pursuant hereto; (iii) such assignor and such assignee represents
     and warrants that it is legally authorized to enter into such Assignment
     and Acceptance; (iv) such assignee confirms that it has received a copy of
     this Agreement, together with copies of the most recent financial
     statements delivered pursuant to Section 6.03 and such other documents and
     information as it has deemed appropriate to make its own credit analysis
     and decision to enter into such Assignment and Acceptance; (v) such
     assignee will independently and without reliance upon the Agent, such
     assigning Lender or any other Lender or the Fronting Bank and based on such
     documents and information as it shall deem appropriate at the time,
     continue to make its own credit decisions in taking or not taking action
     under this Agreement; (vi) such assignee appoints and authorizes the Agent
     to take such action as agent on its behalf and to exercise such powers


<PAGE>


                                                                              55


     under this Agreement as are delegated to the Agent by the terms hereof,
     together with such powers as are reasonably incidental thereto; and (vii)
     such assignee agrees that it will perform in accordance with their terms
     all the obligations that by the terms of this Agreement are required to be
     performed by it as a Lender.

          (d) The Agent, acting for this purpose as an agent of the Borrower,
     shall maintain at one of its offices in the Charlotte, North Carolina a
     copy of each Assignment and Acceptance delivered to it and a register for
     the recordation of the names and addresses of the Lenders, and the
     Commitment of, and the principal amount of the Outstanding Credits of, each
     Lender pursuant to the terms hereof from time to time (the "REGISTER"). The
     entries in the Register shall be conclusive in the absence of manifest
     error and the Borrower, the Fronting Bank, the Agent and the Lenders may
     treat each person whose name is recorded in the Register pursuant to the
     terms hereof as a Lender hereunder for all purposes of this Agreement. The
     Register shall be available for inspection by each party hereto, at any
     reasonable time and from time to time upon reasonable prior notice.

          (e) Upon its receipt of a duly completed Assignment and Acceptance
     executed by an assigning Lender and an assignee, the processing and
     recordation fee referred to in subsection (b) above and, if required, the
     written consent of the Borrower, the Fronting Bank and the Agent to such
     assignment, the Agent shall (i) accept such Assignment and Acceptance and
     (ii) record the information contained therein in the Register. No
     assignment shall be effective unless it has been recorded in the Register
     as provided in this subsection (e).

          (f) Each Lender may without the consent of the Borrower or the Agent
     sell participations to one or more banks or other entities in all or a
     portion of its rights and/or obligations under this Agreement (including
     all or a portion of its Commitment, its Loans and its LC Outstandings);
     provided, however, that (i) such Lender's obligations under this Agreement
     shall remain unchanged, (ii) such Lender shall remain solely responsible to
     the other parties hereto for the performance of such obligations, (iii)
     each participating bank or other entity shall be entitled to the benefit of
     the cost protection provisions contained in Sections 2.11, 2.16 and 9.05 to
     the same extent as if it were the selling Lender (and limited to the amount
     that could have been claimed by the selling Lender had it continued to hold
     the interest of such participating bank or other entity), except that all
     claims made pursuant to such Sections shall be made through such selling
     Lender, and (iv) the Borrower, the Agent, the Fronting Bank and the other
     Lenders shall continue to deal solely and directly with such selling Lender
     in connection with such Lender's rights and obligations under this
     Agreement, and such Lender shall retain the sole right to enforce the
     obligations of the Borrower under this Agreement and to approve any
     amendment, modification or waiver of any provision of this Agreement (other
     than amendments, modifications or waivers (x) decreasing any fees payable
     hereunder or the amount of principal of, or the rate at which interest is
     payable on, the Outstanding Credits, (y) extending any principal payment
     date or date fixed for the payment of interest on the Outstanding Credits
     or (z) extending the Commitments).

          (g) Any Lender or participant may, in connection with any assignment
     or participation or proposed assignment or participation pursuant to this
     Section 9.04, disclose to the assignee or participant or proposed assignee
     or participant any information relating to the Borrower furnished to such
     Lender by or on behalf of the Borrower; provided that, prior to any such


<PAGE>


                                                                              56


     disclosure, each such assignee or participant or proposed assignee or
     participant shall execute an agreement whereby such assignee or participant
     shall agree (subject to customary exceptions) to preserve the
     confidentiality of any such information.

          (h) The Borrower shall not assign or delegate any rights and duties
     hereunder without the prior written consent of all Lenders, and any
     attempted assignment or delegation (except as a consequence of a
     transaction expressly permitted under Section 6.05 by the Borrower without
     such consent shall be void.

          (i) Any Lender may at any time pledge all or any portion of its rights
     under this Agreement to a Federal Reserve Bank; provided that no such
     pledge shall release any Lender from its obligations hereunder or
     substitute any such Bank for such Lender as a party hereto. In order to
     facilitate such an assignment to a Federal Reserve Bank, the Borrower
     shall, at the request of the assigning Lender, duly execute and deliver to
     the assigning Lender a promissory note or notes evidencing the Loans made
     to the Borrower by the assigning Lender hereunder.

          (j) Subject to the appointment and acceptance of a successor Fronting
     Bank as provided below, the Fronting Bank may resign at any time by
     notifying the Lenders and the Borrower. Upon any such resignation, the
     Required Lenders shall have the right to appoint a successor Fronting Bank
     acceptable to the Borrower. If no successor shall have been so appointed by
     the Required Lenders and shall have accepted such appointment within 30
     days after the retiring Fronting Bank gives notice of its resignation, then
     the retiring Fronting Bank may appoint a successor Fronting Bank, having a
     combined capital and surplus of at least $500,000,000 or an Affiliate of
     any such bank. Upon the acceptance of any appointment as Fronting Bank
     hereunder by a successor bank, such successor shall succeed to and become
     vested with all the rights, powers, privileges and duties of the retiring
     Fronting Bank, and the retiring Fronting Bank shall be discharged from its
     duties and obligations hereunder. After the Fronting Bank's resignation
     hereunder, the provisions of Sections 2.11, 2.16 and 9.05 shall continue in
     effect for its benefit in respect of any actions taken or omitted to be
     taken by it while it was acting as Fronting Bank.

          SECTION 9.05. EXPENSES; INDEMNITY.

          (a) The Borrower agrees to pay all reasonable out-of-pocket expenses
     (including reasonable fees, charges and disbursements of one counsel,
     unless in the good faith opinion of the Agent or such counsel, it would be
     inappropriate under applicable standards of legal professional conduct, due
     to an actual or potential conflict of interest, to have only one counsel)
     incurred by the Agent in connection with the preparation, execution and
     delivery of this Agreement or in connection with any amendments,
     modifications or waivers of the provisions hereof (but only if such
     amendments, modifications or waivers are requested by the Borrower)
     (whether or not the transactions hereby contemplated are consummated), or
     incurred by the Agent, the Fronting Bank or any Lender in connection with
     the enforcement of their rights in connection with this Agreement
     (including in respect of workouts and restructurings) or in connection with
     the Extensions of Credit made hereunder, including the reasonable fees and
     disbursements of one counsel (unless in the good faith opinion of the Agent
     or such counsel, it would be inappropriate under applicable standards of


<PAGE>


                                                                              57


     legal professional conduct, due to an actual or potential conflict of
     interest, to have only one counsel) for the Agent or, in the case of
     enforcement following an Event of Default, the Lenders and the Fronting
     Bank.

          (b) The Borrower agrees to indemnify each Lender and the Fronting Bank
     against any loss, calculated in accordance with the next sentence, or
     reasonable expense that such Lender or the Fronting Bank may sustain or
     incur as a consequence of (i) any failure by the Borrower to borrow or to
     refinance, convert or continue any Loan hereunder (including as a result of
     the Borrower's failure to fulfill any of the applicable conditions set
     forth in Article IV) after irrevocable notice of such borrowing,
     refinancing, conversion or continuation has been given pursuant to Section
     2.03, (ii) any payment, prepayment or conversion of a Eurodollar Loan of
     the Borrower, or assignment of a Eurodollar Loan of the Borrower required
     by any other provision of this Agreement or otherwise made or deemed made,
     on a date other than the last day of the Interest Period, if any,
     applicable thereto, (iii) any default in payment or prepayment of the
     principal amount of any Outstanding Credit or any part thereof or interest
     accrued thereon, as and when due and payable (at the due date thereof,
     whether by scheduled maturity, acceleration, irrevocable notice of
     prepayment or otherwise) or (iv) the occurrence of any Event of Default
     relating to the Borrower, including, in each such case, any loss or
     reasonable expense sustained or incurred or to be sustained or incurred by
     such Lender in liquidating or employing deposits from third parties, or
     with respect to commitments made or obligations undertaken with third
     parties, to effect or maintain any Loan hereunder or any part thereof as a
     Eurodollar Loan. Such loss shall include an amount equal to the excess, if
     any, as reasonably determined by such Lender, of (x) its cost of obtaining
     the funds for the Loan being paid, prepaid, refinanced, converted or not
     borrowed (assumed to be the LIBO Rate for the period from the date of such
     payment, prepayment, refinancing or failure to borrow or refinance to the
     last day of the Interest Period for such Loan (or, in the case of a failure
     to borrow or refinance, the Interest Period for such Loan that would have
     commenced on the date of such failure) over (y) the amount of interest (as
     reasonably determined by such Lender) that would be realized by such Lender
     in reemploying the funds so paid, prepaid or not borrowed or refinanced for
     such period or Interest Period, as the case may be.

          (c) The Borrower agrees to indemnify the Agent, the Fronting Bank,
     each Lender, each of their respective Affiliates and the directors,
     officers, employees and agents of the foregoing (each such person being
     called an "INDEMNITEE") against, and to hold each Indemnitee harmless from,
     any and all costs, losses, claims, damages, liabilities and related
     expenses, including reasonable fees and expenses of one counsel for all
     Indemnitees (unless in the good faith opinion of such Indemnitee, it would
     be inappropriate under applicable standards of legal professional conduct,
     due to an actual or potential conflict of interest, to have only one
     counsel), incurred by or asserted against any Indemnitee arising out of the
     Borrower's acts or omissions in connection with (i) the preparation,
     execution, delivery, enforcement, performance and administration of this
     Agreement, (ii) the use of the proceeds of the Extensions of Credit or
     (iii) any claim, litigation, investigation or proceeding relating to any of
     the foregoing, whether or not any Indemnitee is a party thereto, including
     any of the foregoing arising from the negligence, whether sole or
     concurrent, on the part of any Indemnitee. Notwithstanding the foregoing,
     such indemnity shall not, as to any Indemnitee, be available to the extent
     that such losses, claims, damages, liabilities or related expenses (i) are
     determined by a final, non-appealable judgment of a court of competent
     jurisdiction to have resulted from the gross negligence or willful
     misconduct of such Indemnitee, or (ii) result from any litigation brought
     by such Indemnitee against the Borrower or by the Borrower against such


<PAGE>


                                                                              58


     Indemnitee, in which a final, non-appealable judgment has been rendered
     against such Indemnitee; provided, further, that the Borrower agrees that
     it will not, nor will it permit any Subsidiary to, without the prior
     written consent of each Indemnitee, settle, compromise or consent to the
     entry of any judgment in any pending or threatened claim, action, suit or
     proceeding in respect of which indemnification could be sought under the
     indemnification provisions of this subsection (c) of this Section 9.05
     (whether or not any Indemnitee is an actual or potential party to such
     claim, action, suit or proceeding), unless such settlement, compromise or
     consent does not include any statement as to an admission of fault,
     culpability or failure to act by or on behalf of any Indemnitee and does
     not involve any payment of money or other value by any Indemnitee or any
     injunctive relief or factual findings or stipulations binding on any
     Indemnitee.

          (d) The provisions of this Section 9.05 shall remain operative and in
     full force and effect regardless of the expiration of the term of this
     Agreement, the consummation of the transactions contemplated hereby, the
     repayment of any of the Outstanding Credits, the invalidity or
     unenforceability of any term or provision of this Agreement or any
     investigation made by or on behalf of the Agent, any Lender or the Fronting
     Bank. All amounts due under this Section 9.05 shall be payable on written
     demand therefor.

          (e) A certificate of any Lender, the Fronting Bank or the Agent
     setting forth any amount or amounts that such Lender, the Fronting Bank or
     such Agent is entitled to receive pursuant to subsection (b) of this
     Section 9.05 and containing an explanation in reasonable detail of the
     manner in which such amount or amounts shall have been determined shall be
     delivered to the Borrower and shall be conclusive absent manifest error.

          SECTION 9.06. RIGHT OF SETOFF.

          If an Event of Default shall have occurred and be continuing, each
     Lender and the Fronting Bank is hereby authorized at any time and from time
     to time, to the fullest extent permitted by law, to set off and apply any
     and all deposits (general or special, time or demand, provisional or final)
     at any time held and other indebtedness at any time owing by such Lender or
     the Fronting Bank to or for the credit or the account of the Borrower
     against any of and all the obligations of the Borrower now or hereafter
     existing under this Agreement held by such Lender or the Fronting Bank (as
     the case may be), irrespective of whether or not such Lender or the
     Fronting Bank (as the case may be), shall have made any demand under this
     Agreement and although such obligations may be unmatured. The rights of
     each Lender and the Fronting Bank under this Section 9.06 are in addition
     to other rights and remedies (including other rights of setoff) which such
     Lender or the Fronting Bank may have.

          SECTION 9.07. PARI PASSU

          Except as otherwise provided herein, this Agreement shall rank pari
     passu with other unsecured and unsubordinated indebtedness of the Borrower.

          SECTION 9.08. APPLICABLE LAW.

          THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
     THE LAWS OF THE STATE OF NEW YORK.


<PAGE>


                                                                              59



          SECTION 9.09. WAIVERS; AMENDMENT.

          (a) No failure or delay of the Agent, the Fronting Bank or any Lender
     in exercising any power or right hereunder shall operate as a waiver
     thereof, nor shall any single or partial exercise of any such right or
     power, or any abandonment or discontinuance of steps to enforce such a
     right or power, preclude any other or further exercise thereof or the
     exercise of any other right or power. The rights and remedies of the Agent,
     the Fronting Bank and the Lenders hereunder are cumulative and are not
     exclusive of any rights or remedies that they would otherwise have. No
     waiver of any provision of this Agreement or consent to any departure
     therefrom shall in any event be effective unless the same shall be
     permitted by subsection (b) below, and then such waiver or consent shall be
     effective only in the specific instance and for the purpose for which
     given. No notice or demand on the Borrower or any Subsidiary in any case
     shall entitle such party to any other or further notice or demand in
     similar or other circumstances.

          (b) Neither this Agreement nor any provision hereof may be waived,
     amended or modified except pursuant to an agreement or agreements in
     writing entered into by the Borrower and the Required Lenders; provided,
     however, that no such agreement shall (i) decrease the principal amount of,
     or extend the maturity of or any scheduled principal payment date or date
     for the payment of any interest on, any Loan or reimbursement obligation in
     respect of a Letter of Credit, or waive or excuse any such payment or any
     part thereof, or decrease the rate of interest on any Loan or any
     reimbursement obligation in respect of a Letter of Credit, without the
     prior written consent of each Lender affected thereby, (ii) increase the
     Commitment of any Lender without the prior written consent of such Lender,
     or (iii) amend or modify the provisions of Section 2.13, 2.14 or Section
     9.04(h), the provisions of this Section 9.09 or the definition of the
     "Required Lenders", without the prior written consent of each Lender;
     provided further, however, that no such agreement shall amend, modify or
     otherwise affect the rights or duties of the Agent or the Fronting Bank
     hereunder without the prior written consent of the Agent or the Fronting
     Bank, as the case may be. Each Lender and the Fronting Bank shall be bound
     by any waiver, amendment or modification authorized by this Section 9.09,
     and any consent by any Lender, the Agent or the Fronting Bank pursuant to
     this Section 9.09 shall bind any assignee of its rights and interests
     hereunder.

          SECTION 9.10. ENTIRE AGREEMENT.

          This Agreement (including the schedules and exhibits hereto)
     represents the entire contract among the parties relative to the subject
     matter hereof and thereof. Any previous agreement, whether written or oral,
     among the parties with respect to the subject matter hereof, is superseded
     by this Agreement. There are no unwritten oral agreements between the
     parties. Nothing in this Agreement, expressed or implied, is intended to
     confer upon any party other than the parties hereto any rights, remedies,
     obligations or liabilities under or by reason of this Agreement.

          SECTION 9.11. SEVERABILITY.

          In the event any one or more of the provisions contained in this
     Agreement should be held invalid, illegal or unenforceable in any respect,
     the validity, legality and enforceability of the remaining provisions
     contained herein shall not in any way be affected or impaired thereby. The


<PAGE>


                                                                              60


     parties shall endeavor in good-faith negotiations to replace the invalid,
     illegal or unenforceable provisions with valid provisions the economic
     effect of which comes as close as possible to that of the invalid, illegal
     or unenforceable provisions.

          SECTION 9.12. COUNTERPARTS.

          This Agreement may be executed in two or more counterparts, each of
     which shall constitute an original but all of which when taken together
     shall constitute but one contract, and shall become effective as provided
     in Section 9.03.

          SECTION 9.13. HEADINGS.

          Article and Section headings and the Table of Contents used herein are
     for convenience of reference only, are not part of this Agreement and are
     not to affect the construction of, or to be taken into consideration in
     interpreting, this Agreement.

          SECTION 9.14. INTEREST RATE LIMITATION.

          (a) Notwithstanding anything herein to the contrary, if at any time
     the applicable interest rate, together with all fees and charges which are
     treated as interest under applicable law (collectively the "CHARGES"), as
     provided for herein or in any other document executed in connection
     herewith, or otherwise contracted for, charged, received, taken or reserved
     by any Lender or the Fronting Bank, shall exceed the maximum lawful rate
     (the "MAXIMUM RATE") which may be contracted for, charged, taken, received
     or reserved by such Lender or the Fronting Bank (as the case may be) in
     accordance with applicable law, the rate of interest payable on the
     Outstanding Credits of such Lender or the Fronting Bank (as the case may
     be), together with all Charges payable to such Lender or the Fronting Bank
     (as the case may be), shall be limited to the Maximum Rate.

          (b) If the amount of interest, together with all Charges, payable for
     the account of any Lender or the Fronting Bank in respect of any interest
     computation period is reduced pursuant to subsection (a) of this Section
     9.14 and the amount of interest, together with all Charges, payable for
     such Lender's or the Fronting Bank's (as the case may be) account in
     respect of any subsequent interest computation period, computed pursuant to
     Section 2.06, would be less than the Maximum Rate, then the amount of
     interest, together with all Charges, payable for such Lender's or the
     Fronting Bank's (as the case may be) account in respect of such subsequent
     interest computation period shall, to the extent permitted by applicable
     law, be automatically increased to such Maximum Rate; provided that at no
     time shall the aggregate amount by which interest paid for the account of
     any Lender or the Fronting Bank has been increased pursuant to this
     subsection (b) exceed the aggregate amount by which interest, together with
     all Charges, paid for its account has theretofore been reduced pursuant to
     subsection (a) of this Section 9.14.

          SECTION 9.15. JURISDICTION; VENUE.

          (a) The Borrower hereby irrevocably and unconditionally submits, for
     itself and its property, to the nonexclusive jurisdiction of any New York
     State court or Federal court of the United States of America sitting in New
     York City, and any appellate court from any thereof, in any action or
     proceeding arising out of or relating to this Agreement, or for recognition


<PAGE>


                                                                              61


     or enforcement of any judgment, and each of the parties hereto hereby
     irrevocably and unconditionally agrees that all claims in respect of any
     such action or proceeding may be heard and determined in such New York
     State or, to the extent permitted by law, in such Federal court. Each of
     the parties hereto agrees that a final judgment in any such action or
     proceeding shall be conclusive and may be enforced in other jurisdictions
     by suit on the judgment or in any other manner provided by law. Subject to
     the foregoing and to subsection (b) below, nothing in this Agreement shall
     affect any right that any party hereto may otherwise have to bring any
     action or proceeding relating to this Agreement against any other party
     hereto in the courts of any jurisdiction.

          (b) The Borrower hereby irrevocably and unconditionally waives, to the
     fullest extent it may legally and effectively do so, any objection that it
     may now or thereafter have to the laying of venue of any suit, action or
     proceeding arising out of or relating to this Agreement in any New York
     State court or Federal court of the United States of America sitting in New
     York City. Each of the parties hereto hereby irrevocably waives, to the
     fullest extent permitted by law, the defense of an inconvenient forum to
     the maintenance of such action or proceeding in any such court.

          SECTION 9.16. CONFIDENTIALITY.

          Each Lender and the Fronting Bank shall use its best efforts to hold
     in confidence all information, memoranda, or extracts furnished to such
     Lender or the Fronting Bank (as the case may be) (directly or through the
     Agent) by the Borrower hereunder or in connection with the negotiation
     hereof; provided that such Lender and the Fronting Bank may disclose any
     such information, memoranda or extracts (i) to its Affiliates, accountants
     or counsel, (ii) to any regulatory agency having authority to examine such
     Lender or the Fronting Bank (as the case may be), (iii) as required by any
     legal or governmental process or otherwise by law, (iv) except as provided
     in the last sentence of Section 6.03, to any person to which such Lender or
     the Fronting Bank (as the case may be) sells or proposes to sell an
     assignment or a participation in its Outstanding Credits hereunder, if such
     other person agrees for the benefit of the Borrower to comply with the
     provisions of this Section 9.16 and (v) to the extent that such
     information, memoranda or extracts shall be publicly available or shall
     have become known to such Lender or the Fronting Bank (as the case may be)
     independently of any disclosure by the Borrower hereunder or in connection
     with the negotiation hereof. Notwithstanding the foregoing, any Lender and
     the Fronting Bank may disclose the provisions of this Agreement, the
     amounts, maturities and interest rates of its Outstanding Credits, and any
     Fees to which it is entitled, to any purchaser or potential purchaser of
     such Lender's interest in any Outstanding Credits. Notwithstanding any
     other provision in this Agreement, the Agent hereby confirms that the
     Borrower and the Borrower's representatives shall not be limited from
     disclosing the U.S. tax treatment or the U.S. tax structure of the
     transactions contemplated by this Agreement.



                            [Signature pages follow]


<PAGE>



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


                               TXU ENERGY COMPANY LLC


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






<PAGE>




                               WACHOVIA BANK, NATIONAL ASSOCIATION
                                as Agent, as Fronting Bank and as
                                    a Lender


                               By      /s/ Michael J. Kolosowsky
                                  ---------------------------------
                                  Name:  Michael J. Kolosowsky
                                  Title:    Director


<PAGE>



                                                                       EXHIBIT A
                                               FORM OF ASSIGNMENT AND ACCEPTANCE


                            ASSIGNMENT AND ACCEPTANCE

                                     [Date]

      Reference is made to the Credit Agreement, dated as of November 4, 2004
(as amended, modified, extended or restated from time to time, the "AGREEMENT"),
among TXU Energy Company LLC (the "BORROWER"), the lenders party thereto (the
"LENDERS"), and Wachovia Bank, National Association, as Agent for the Lenders
and as Fronting Bank for the letters of credit issued thereunder. Terms defined
in the Agreement are used herein with the same meanings.

      1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of [Effective Date of Assignment set forth below],
the interests set forth on the reverse hereof (the "ASSIGNED INTEREST") in the
Assignor's rights and obligations under the Agreement, including, without
limitation, the interests set forth on the reverse hereof in the Commitment of
the Assignor on the [Effective Date of Assignment] and the Loans owing to the
Assignor that are outstanding on the [Effective Date of Assignment], together
with unpaid interest accrued on the assigned Loans to the [Effective Date of
Assignment] and the amount, if any, set forth on the reverse hereof of the Fees
accrued to the [Effective Date of Assignment] for the account of the Assignor.
Each of the Assignor and the Assignee hereby makes and agrees to be bound by all
the representations, warranties and agreements set forth in Section 9.04 of the
Agreement, a copy of which has been received by each such party. From and after
the [Effective Date of Assignment], (i) the Assignee shall be a party to and be
bound by the provisions of the Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent of the interests
assigned by this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement.

      2. This Assignment and Acceptance is being delivered to the Agent together
with (i) if the Assignee is organized under the laws of a jurisdiction outside
the United States, the forms specified in Section 2.15(g) of the Agreement, duly
completed and executed by such Assignee and (ii) a processing and recordation
fee of $3,500.

      3. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.

Date of Assignment:



Legal Name of Assignor:


<PAGE>


Legal Name of Assignee:



Assignee's Address for Notices:







Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment
unless otherwise agreed by the Agent):




------------------      ---------------   ---------------------------
                                            Percentage Assigned of
                                             Facility/Commitment
                                           (set forth, to at least
                                               8 decimals, as a
     Facility                                 percentage of the
                       Principal Amount        Facility and the
                           Assigned         aggregate Commitments
                                                of all Lenders
                                                 thereunder


Commitment              $                                  %
Assigned:

Loans:                  $                                  %

Fees Assigned (if
any):                   $                                  %





















                                      A-2


<PAGE>


The  terms  set  forth  and on      Accepted:
the  reverse  side  hereof are
hereby agreed to:

                                    TXU ENERGY COMPANY LLC
[ASSIGNOR], as
Assignor


                                    By ______________________
By _________________, as            Name:
      Name:                         Title:
      Title:


[ASSIGNEE], as                       WACHOVIA BANK,
Assignee,                            NATIONAL ASSOCIATION , as
                                     Agent



                                    By _______________________
By _________________, as            Name:
      Name:                         Title:
      Title:



















                                      A-3


<PAGE>






                                                                       EXHIBIT B
                                                       FORM OF BORROWING REQUEST


                                BORROWING REQUEST

                                     [Date]

Wachovia Bank, National Association
as Agent for the lenders and Fronting Bank
to the Credit Agreement referred to below

Ladies and Gentlemen:

      The undersigned, TXU Energy Company LLC (the "BORROWER"), refers to the
Credit Agreement, dated as of November 4, 2004 (as it may hereafter be amended,
modified, extended or restated from time to time, the "AGREEMENT"), among the
Borrower, TXU Energy Company LLC, the lenders party thereto (the "LENDERS"),
Wachovia Bank, National Association, as Agent and as Fronting Bank for the
letters of credit issued thereunder. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Agreement. The Borrower hereby gives you notice pursuant to Section 2.03 of the
Agreement that it requests a Borrowing under the Agreement, and in that
connection sets forth below the terms on which such Borrowing is requested to be
made:

      (A) Date of Borrowing (which is a Business Day)           _________

      (B) Principal amount of Borrowing1                        _________

      (C) Interest rate basis2                                  _________

      (D) Interest Period and the last day thereof3             _________

      (E) Borrower account number and location                  _________


__________________

1     Not less than $25,000,000 (and in integral multiples of $5,000,000) or
      greater than the Total Commitment then available.

2     Eurodollar Loan or ABR Loan.

3     Which  shall  be  subject  to  the  definition  of  "INTEREST
      Period" and end not later than the Applicable Maturity Date.



<PAGE>


      Upon acceptance of any or all of the Loans made by the Lenders in response
to this request, the Borrower shall be deemed to have represented and warranted
that the applicable conditions to lending specified in Article IV of the
Agreement have been satisfied.

                               Very truly yours,

                               TXU ENERGY COMPANY LLC



                               By _________________________________
                                  Name:
                                  Title:















                                      B-2


<PAGE>






                                                                       EXHIBIT C
                                                       FORM OF PREPAYMENT NOTICE

                                PREPAYMENT NOTICE

                                     [Date]

Wachovia Bank, National Association
as Agent for the lenders and Fronting Bank
to the Credit Agreement referred to below


Ladies and Gentlemen:

      The undersigned, TXU Energy Company LLC (the "BORROWER"), refers to the
Credit Agreement dated as of November 4, 2004 (as it may hereafter be amended,
modified, extended or restated from time to time, the "AGREEMENT"), among the
Borrower, the lenders party thereto (the "LENDERS") and Wachovia Bank, National
Association, as Agent and as Fronting Bank for the letters of credit issued
thereunder. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Agreement. The Borrower hereby
gives you irrevocable notice of prepayment pursuant to Section 2.10 of the
Agreement and, in that connection, acknowledges that it is committed hereby to
prepay the Borrowing (or portion thereof) identified below by the amount and on
the date stated below, and that such prepayment will be accompanied by accrued
interest on the principal amount being prepaid to the date of prepayment.

      (A)Interest rate basis1 of Borrowing
         to be prepaid (in whole or in part)
      (B)Principal amount to be prepaid2
      (C)Date of prepayment (which is a Business Day)



____________________

1     Eurodollar Loan or ABR Loan.
2     If a partial  prepayment,  not less than  $10,000,000  and in
      integral multiples of $10,000,000.


<PAGE>


                               Very truly yours,

                               TXU Energy Company LLC



                               By _________________________________
                                  Name:
                                  Treasurer



















                                      C-2


<PAGE>






                                                                       EXHIBIT D
                                               FORM OF NOTICE OF INTEREST PERIOD

                                     [Date]

Wachovia Bank, National Association
as Agent for the lenders and Fronting Bank
to the Credit Agreement referred to below

Ladies and Gentlemen:

      The undersigned, TXU Energy Company LLC (the "BORROWER"), refers to the
Credit Agreement, dated as of November 4, 2004 (as it may hereafter be amended,
modified, extended or restated from time to time, the "AGREEMENT"), among the
Borrower, the lenders party thereto (the "LENDERS"), Wachovia Bank, National
Association, as Agent and as Fronting Bank for the letters of credit issued
thereunder. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Agreement. The Borrower hereby
gives you notice pursuant to Section 2.06(a) of the Agreement that it requests
that the Interest Period be converted as follows:

        (A) Principal amount of Eurodollar Borrowings1          __________
        (B) Interest Period and the last day thereof2           __________








_____________________

1     Shall equal the aggregate principal amount of all Borrowings consisting of
      Eurodollar Borrowings on the Applicable Maturity Date.
2     Which  shall  be  subject  to  the  definition  of  "INTEREST
      Period".


<PAGE>


                               Very truly yours,

                               TXU ENERGY COMPANY LLC




                               By _________________________________
                                  Name:
                                  Title:


<PAGE>




                                                                   SCHEDULE 2.01

---------------------------------------------------------------------------
|         NAME OF LENDER  |     COMMITMENT     |        REVOLVING          |
|                         |                    |      SUB-COMMITMENT       |
---------------------------------------------------------------------------
| Wachovia Bank, National |    $500,000,000    |      $250,000,000         |
| Association             |                    |                           |
---------------------------------------------------------------------------
|                 Total   |    $500,000,000    |       $250,000,000        |
---------------------------------------------------------------------------






<PAGE>




                                                                SCHEDULE 2.18(I)

                          LC FRONTING BANK COMMITMENTS


--------------------------------------------------------------------------
|  FRONTING BANK                       |  LC FRONTING BANK COMMITMENT     |
--------------------------------------------------------------------------
|  Wachovia Bank, National Association |  $500,000,000                    |
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