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EXHIBIT (b)(6)
EXECUTION COPY
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TEXAS UTILITIES COMPANY
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$900,000,000
364-DAY COMPETITIVE ADVANCE AND
REVOLVING CREDIT FACILITY AGREEMENT
"INTERIM FACILITY"
Dated as of March 6, 1998
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CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT
AND
THE CHASE MANHATTAN BANK,
AS COMPETITIVE ADVANCE FACILITY AGENT
INITIAL UNDERWRITERS
THE CHASE MANHATTAN BANK
XXXXXX COMMERCIAL PAPER INC.
XXXXXXX XXXXX CAPITAL CORPORATION
JOINT LEAD ARRANGERS
CHASE SECURITIES INC.
XXXXXX BROTHERS INC.
XXXXXXX XXXXX & CO.
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TABLE OF CONTENTS
Section Page
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ARTICLE I DEFINITIONS; CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Terms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE II THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.01. Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.02. Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.03. Competitive Bid Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.04. Standby Borrowing Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.05. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.06. Repayment of Loans; Evidence of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.07. Interest on Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.08. Default Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.09. Alternate Rate of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.10. Termination and Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.11. Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.12. Reserve Requirements; Change in Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.13. Change in Legality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.14. Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.15. Sharing of Setoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.16. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.17. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.18. Assignment of Commitments Under Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE III REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.01. Organization; Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.02. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.03. Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.04. Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 3.05. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 3.06. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.07. Federal Reserve Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.08. Investment Company Act; Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.09. No Material Misstatements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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SECTION 3.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.11. Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.12. Significant Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.13. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE IV CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.01. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.02. All Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE V COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.01. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.02. Business and Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.03. Financial Statements, Reports, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.04. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.05. Taxes, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.06. Maintaining Records; Access to Properties and Inspections . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.07. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.08. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.09. Consolidations, Mergers, Sales and Acquisitions
of Assets and Investments in Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.10. Limitations on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 5.11. Fixed Charge Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.12. Equity Capitalization Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.13. Indebtedness of the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.14. Restrictive Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE VI EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE VII THE AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 8.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 8.02. Survival of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.03. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.04. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.05. Expenses; Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 8.06. Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.07. Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.08. Waivers; Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.09. ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
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SECTION 8.10. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 8.11. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 8.12. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 8.13. Interest Rate Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 8.14. Jurisdiction; Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 8.15. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
EXHIBITS AND SCHEDULES
Exhibit A-1 - Form of Competitive Bid Request
Exhibit A-2 - Form of Notice of Competitive Bid Request
Exhibit A-3 - Form of Competitive Bid
Exhibit A-4 - Form of Competitive Bid Accept/Reject Letter
Exhibit A-5 - Form of Standby Borrowing Request
Exhibit B - Administrative Questionnaire
Exhibit C - Form of Assignment and Acceptance
Exhibit D-1 - Opinion of Xxxx & Priest LLP,
special counsel to the Borrower, TU Electric and Enserch
Exhibit D-2 - Opinion of Xxxxxxx, Xxxxxxxx & Xxxxxxxxxx, L.L.P.,
general counsel for the Borrower, TU Electric and Enserch
Schedule 2.01 - Commitments
Schedule 3.06 - Litigation
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COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT
(the "AGREEMENT"), dated as of March 6, 1998, among TEXAS
UTILITIES COMPANY, a Texas corporation (the "BORROWER"); the
lenders listed in Schedule 2.01 (together with their
successors and assigns, the "LENDERS"); THE CHASE MANHATTAN
BANK ("CHASE"), as Competitive Advance Facility Agent (in such
capacity, the "CAF AGENT"); and CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION ("CHASE BANK OF TEXAS"), as administrative agent
for the Lenders (in such capacity, the "ADMINISTRATIVE AGENT";
and, together with the CAF Agent, the "AGENTS").
The Borrower has requested the Lenders to extend credit in the form of
Standby Borrowings (such term and each other capitalized term used herein
having the meaning given it in Article I) to the Borrower in an aggregate
principal amount at any time outstanding not in excess of $900,000,000. The
Borrower has also requested the Lenders to provide a procedure pursuant to
which the Borrower may invite the Lenders to bid on an uncommitted basis on
short-term borrowings by the Borrower. Subject to the terms and conditions set
forth herein, the proceeds of any such borrowings are to be used to finance or
refinance (directly or indirectly, including as a commercial paper back-up)
equity or subordinated loan advances from the Borrower to XxxXx 1 and XxxXx 2
in connection with the Acquisition. The Lenders are willing to extend such
credit to the Borrower on the terms and subject to the conditions herein set
forth.
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 Standby 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 2.13(ii)) to a loan bearing interest at a rate
determined by reference to the Alternate Base Rate.
"ACQUISITION" shall mean the acquisition by Bidco of the
Target Shares, whether pursuant to the Offer or pursuant to the
procedures contained in Part XIIIA of the Companies Xxx 0000 (UK) or
by way of open market purchases (and includes where the
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context permits payments by Bidco to TEG's share option holders to
purchase or cancel the benefit of such options).
"ACQUISITION COMPANY" shall mean each of XxxXx 1, XxxXx 2 and
Bidco.
"ACQUISITION DATE" shall mean the date as of which a person or
group of related persons first acquires more than 30% of the
outstanding Voting Shares of the Borrower (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended, and the applicable rules and regulations thereunder).
"ADMINISTRATIVE QUESTIONNAIRE" shall mean an Administrative
Questionnaire in the form of Exhibit B hereto.
"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.
"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 greatest of (a) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%, (b) the Base CD Rate in effect on such day plus
1% and (c) the Prime Rate in effect on such day. For purposes hereof,
"PRIME RATE" shall mean the rate of interest per annum publicly
announced from time to time by Chase as its prime rate in effect at
its principal office in New York City; each change in the Prime Rate
shall be effective on the date such change is publicly announced as
effective; "BASE CD RATE" shall mean the sum of (a) the product of (i)
the Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b)
the Assessment Rate; "THREE-MONTH SECONDARY CD RATE" shall mean, for
any day, the secondary market rate for three-month certificates of
deposit reported as being in effect on such day (or, if such day shall
not be a Business Day, the next preceding Business Day) by the Board
through the public information telephone line of the Federal Reserve
Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day, the average
of the secondary market quotations for three-month certificates of
deposit of major money center banks in New York City received at
approximately 10:00 a.m., New York City time, on such day (or, if such
day shall not be a Business Day, on the next preceding Business Day)
by the CAF Agent from three New York City negotiable certificate of
deposit dealers of recognized standing selected by it; "ASSESSMENT
RATE" shall mean, for any day, the annual rate (rounded upwards to the
next 1/100 of 1%) most recently estimated by Chase as the then current
net annual assessment rate that will be employed in determining
amounts payable by Chase to the Federal Deposit Insurance Corporation
(or any successor) for insurance by such Corporation (or such
successor) of time deposits made in US dollars at
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Chase's domestic offices; 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 Business Day, the arithmetic
average (rounded upwards to the next 1/100th of 1%), as determined by
Chase, of the quotations for the day of such transactions received by
Chase from three Federal funds brokers of recognized standing selected
by it. If for any reason Chase shall have determined (which
determination shall be conclusive absent manifest error; provided that
Chase, 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 Chase to obtain sufficient
quotations in accordance with the terms thereof, the Alternate Base
Rate shall be determined without regard to clause (a) of the first
sentence of this definition until the circumstances giving rise to
such inability no longer exist. Any change in the Alternate Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective on the effective date of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.
"APPLICABLE MARGIN" shall mean 0.0% per annum for ABR Loans
and 1.05% per annum for Eurodollar Loans.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and
acceptance entered into by a Lender and an assignee in the form of
Exhibit C.
"AUCTION FEES" shall mean the competitive advance auction fees
provided for in the Letter Agreement, payable to the CAF Agent by the
Borrower at the time of each competitive advance auction request made
by the Borrower pursuant to Section 2.03.
"BIDCO" shall mean TU Acquisition plc, a direct wholly owned
subsidiary of XxxXx 2.
"BOARD" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"BOARD OF DIRECTORS" shall mean the Board of Directors of a
Borrower or any duly authorized committee thereof.
"BORROWER" shall have the meaning given such term in the
preamble hereto.
"BORROWING" shall mean a group of Loans of a single Type made
by the Lenders (or, in the case of a Competitive Borrowing, by the
Lender or Lenders whose Competitive
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Bids have been accepted pursuant to Section 2.03) on a single date and
as to which a single Interest Period is in effect.
"BUSINESS DAY" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York or the
State of Texas) on which banks are open for business in New York City
and Houston; 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.
"A CHANGE IN CONTROL" shall be deemed to have occurred if (a)
any person or group of related persons (other than the Borrower, any
Subsidiary of the Borrower, or any pension, savings or other employee
benefit plan for the benefit of employees of the Borrower and/or any
Subsidiary of the Borrower) shall have acquired beneficial ownership
of more than 30% of the outstanding Voting Shares of the Borrower
(within the meaning of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended, and the applicable rules and
regulations thereunder); provided that a Change in Control shall not
be deemed to have occurred if such acquisition has been approved,
prior to the Acquisition Date and the date on which any tender offer
for Voting Shares of the Borrower was commenced, by a majority of the
Disinterested Directors of the Borrower, or (b) during any period of
12 consecutive months, commencing before or after the date of this
Agreement, individuals who on the first day of such period were
directors of the Borrower (together with any replacement or additional
directors who were nominated or elected by a majority of directors
then in office) cease to constitute a majority of the Board of
Directors of the Borrower.
"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 each Lender, the
commitment of such Lender set forth in Schedule 2.01 hereto, as such
commitment may be permanently terminated or reduced from time to time
pursuant to Section 2.10 or modified from time to time pursuant to
Section 8.04. The Commitment of each Lender shall automatically and
permanently terminate on the Maturity Date if not terminated earlier
pursuant to the terms hereof.
"COMPETITIVE BID" shall mean an offer by a Lender to make a
Competitive Loan pursuant to Section 2.03.
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"COMPETITIVE BID ACCEPT/REJECT LETTER" shall mean a
notification made by a Borrower pursuant to Section 2.03(d) in the
form of Exhibit A-4.
"COMPETITIVE BID MARGIN" shall mean, as to any Eurodollar
Competitive Loan, the margin (expressed as a percentage rate per annum
in the form of a decimal to no more than four decimal places) to be
added to or subtracted from the LIBO Rate in order to determine the
interest rate applicable to such Loan, as specified in the Competitive
Bid relating to such Loan.
"COMPETITIVE BID RATE" shall mean, as to any Competitive Bid,
(i) in the case of a Eurodollar Loan, the LIBO Rate for the Interest
Period requested in such Competitive Bid plus the Competitive Bid
Margin, and (ii) in the case of a Fixed Rate Loan, the fixed rate of
interest offered by the Lender making such Competitive Bid.
"COMPETITIVE BID REQUEST" shall mean a request made pursuant
to Section 2.03 in the form of Exhibit A-1.
"COMPETITIVE BORROWING" shall mean a Borrowing consisting of a
Competitive Loan or concurrent Competitive Loans from the Lender or
Lenders whose Competitive Bids for such Borrowing have been accepted
under the bidding procedure described in Section 2.03.
"COMPETITIVE LOAN" shall mean a Loan made pursuant to the
bidding procedure described in Section 2.03. Each Competitive Loan
shall be a Eurodollar Competitive Loan or a Fixed Rate Loan.
"CONSOLIDATED EARNINGS AVAILABLE FOR FIXED CHARGES" for any
twelve-month period shall mean (i) consolidated net income, calculated
after deducting preferred stock dividends and preferred securities
distributions of Subsidiaries, but before any extraordinary items and
before the effect in such twelve-month period of any change in
accounting principles promulgated by the Financial Accounting
Standards Board becoming effective after December 31, 1997, less (ii)
allowances for equity funds used during construction to the extent
that such allowances, taken as a whole, increased such consolidated
net income, plus (iii) provisions for Federal income taxes, to the
extent that such provisions, taken as a whole, decreased such
consolidated net income, plus (iv) Consolidated Fixed Charges, all
determined for such twelve-month period with respect to the Borrower
and its Consolidated Subsidiaries on a consolidated basis; provided,
however, that in computing Consolidated Earnings Available for Fixed
Charges for any twelve-month period the following amounts shall be
excluded: (A) the effect of any regulatory disallowances resolving
fuel or other issues in any proceeding before the Commission or the
Railroad Commission of Texas in an aggregate amount not to exceed
$100,000,000, (B) any non-cash book losses relating to the sale or
write-down of assets
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and (C) one-time costs incurred in connection with the Mergers in an
aggregate amount not to exceed $100,000,000.
"CONSOLIDATED FIXED CHARGES" for any twelve-month period shall
mean the sum of (i) interest on mortgage bonds, (ii) interest on other
long-term debt, (iii) other interest expense, and (iv) preferred stock
dividends and preferred securities distributions of Subsidiaries, all
determined for such twelve-month period with respect to the Borrower
and its Consolidated Subsidiaries on a consolidated basis.
"CONSOLIDATED SHAREHOLDERS' EQUITY" shall mean the sum of (i)
total common stock equity plus (ii) preferred stock not subject to
mandatory redemption, both determined with respect to the Borrower and
its Consolidated Subsidiaries on a consolidated basis.
"CONSOLIDATED SUBSIDIARY" shall mean at any date any
Subsidiary or other entity the accounts of which would be consolidated
with those of the Borrower in its consolidated financial statements as
of such date.
"CONSOLIDATED TOTAL CAPITALIZATION" shall mean the sum of (i)
total common stock equity, (ii) preferred stock and preferred
securities and (iii) long-term debt (less amounts due currently), all
determined with respect to the Borrower and its Consolidated
Subsidiaries on a consolidated basis, but without giving effect to any
acceleration or potential acceleration of long-term debt.
"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.
"CORPORATE REVOLVERS" shall mean the Amended and Restated
Competitive Advance and Revolving Credit Facility Agreements, each
dated as of April 24, 1997, as amended as of November 10, 1997, among
TUC Holding Company (predecessor to the Borrower), Texas Utilities
Company (predecessor to TEII), TU Electric, Enserch, the lenders
parties thereto from time to time, Texas Commerce Bank National
Association (predecessor to Chase Bank of Texas), as Administrative
Agent, and Chase, as Competitive Advance Facility Agent.
"DEFAULT" shall mean any event or condition which upon notice,
lapse of time or both would constitute an Event of Default.
"DISINTERESTED DIRECTOR" shall mean any member of the Board of
Directors of the Borrower who is not affiliated, directly or
indirectly, with, or appointed by, a person or group of related
persons (other than the Borrower, any Subsidiary of the Borrower, or
any
INTERIM FACILITY
11
pension, savings or other employee benefit plan for the benefit of
employees of the Borrower and/or any Subsidiary of the Borrower)
acquiring the beneficial ownership of more than 30% of the outstanding
Voting Shares of the Borrower (within the meaning of Section 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended, and the
applicable rules and regulations thereunder) and who either was a
member of the Board of Directors of the Borrower prior to the
Acquisition Date or was recommended for election by a majority of the
Disinterested Directors in office prior to the Acquisition Date.
"DOLLARS" or "$" shall mean lawful money of the United States
of America.
"EFFECTIVE DATE" shall mean the later of the date of this
Agreement and the date on which each condition set forth in Section
4.01 has been satisfied.
"ENSERCH" shall mean Enserch Corporation, a Texas corporation
and wholly owned subsidiary of the Borrower.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time.
"ERISA AFFILIATE" shall mean any trade or business (whether or
not incorporated) that is a member of a group of (i) organizations
described in Section 414(b) or (c) of the Code and (ii) solely for
purposes of the Lien created under Section 412(n) of the Code,
organizations described in Section 414(m) or (o) of the Code of which
the Borrower is a member.
"ERISA EVENT" shall mean (i) any "Reportable Event"; (ii) the
adoption of any amendment to a Plan that would require the provision
of security pursuant to Section 401(a)(29) of the Code or Section 307
of ERISA; (iii) the incurrence of any liability under Title IV of
ERISA with respect to the termination of any Plan or the withdrawal or
partial withdrawal of the Borrower or any of its ERISA Affiliates from
any Plan or Multiemployer Plan; (iv) the receipt by the Borrower or
any ERISA Affiliate from the PBGC of any notice relating to the
intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan; (v) the receipt by the Borrower or any ERISA
Affiliate of any notice concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA; (vi) the occurrence of a "prohibited transaction"
with respect to which the Borrower or any of its subsidiaries is
liable; and (vii) any other similar event or condition with respect to
a Plan or Multiemployer Plan that could result in liability of the
Borrower other than a liability to pay premiums or benefits when due.
"EURODOLLAR BORROWING" shall mean a Borrowing comprised of
Eurodollar Loans.
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12
"EURODOLLAR COMPETITIVE LOAN" shall mean any Competitive Loan
bearing interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
"EURODOLLAR LOAN" shall mean any Eurodollar Competitive Loan
or Eurodollar Standby Loan.
"EURODOLLAR STANDBY LOAN" shall mean any Standby Loan bearing
interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
"EVENT OF DEFAULT" shall have the meaning assigned to such
term in Article VI.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"EXISTING TU CREDIT AGREEMENTS" shall mean the Competitive
Advance and Revolving Credit Facility Agreements for Facility A and
Facility B, each dated as of March 2, 1998, as amended, modified, or
supplemented from time to time, among the Borrower, TU Electric,
Enserch, the lenders parties thereto from time to time, Chase Bank of
Texas), as Administrative Agent, and Chase, as Competitive Advance
Facility Agent.
"FACILITY FEE" shall have the meaning assigned to such term in
Section 2.05(a).
"FACILITY FEE PERCENTAGE" shall mean .20% per annum.
"FEES" shall mean the Facility Fee, the Auction Fees and any
other fees provided for in the Letter Agreement.
"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.
"XXXXX 1" shall mean TU Finance No. 1 Ltd, a private limited
company organized under English law, 100% of the share capital of
which is owned directly or indirectly by the Borrower.
"XXXXX 2" shall mean TU Finance No. 2 Ltd, a private limited
company organized under English law, 90% of the share capital of which
is owned directly by XxxXx 1 and 10% of the share capital of which is
owned directly or indirectly by the Borrower.
"FIRST MORTGAGE" shall mean (i) the TU Electric Mortgage and
(ii) any Mortgage and Deed of Trust of TU Electric issued to refund,
to replace or in substitution for the TU Electric Mortgage.
INTERIM FACILITY
13
"FIXED RATE BORROWING" shall mean a Borrowing comprised of
Fixed Rate Loans.
"FIXED RATE LOAN" shall mean any Competitive Loan bearing
interest at a fixed percentage rate per annum (the "FIXED RATE")
(expressed in the form of a decimal to no more than four decimal
places) specified by the Lender making such Loan in its Competitive
Bid.
"FUEL COMPANY" shall mean Texas Utilities Fuel Company, a
Texas corporation, and its successors.
"GAAP" shall mean generally accepted accounting principles,
applied on a consistent basis.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"INDEBTEDNESS" of any corporation shall mean all indebtedness
representing money borrowed which is created, assumed, incurred or
guaranteed in any manner by such corporation or for which such
corporation is responsible or liable (whether by agreement to purchase
indebtedness of, or to supply funds to or invest in, others or
otherwise).
"INITIAL UNDERWRITERS" shall mean each of Chase, Xxxxxx
Commercial Paper Inc. and Xxxxxxx Xxxxx Capital Corporation, each in
its capacity as an initial underwriter of the credit facility
evidenced by this Agreement.
"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 or a Fixed Rate Loan with an Interest Period of more
than 90 days' 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 each Loan or conversion of such Loan to a Loan of a different Type.
"INTEREST PERIOD" shall mean (a) 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 period commencing on the
Effective Date and ending on the date on which syndication of the
Total Commitment has been fully completed (as determined by the Joint
Lead Arrangers and notified by them to the Borrower and the
Administrative Agent), such period shall be 1 month or such other
periods as the Joint Lead Arrangers and the Borrower agree as being
necessary to effect the assignment of
INTERIM FACILITY
14
Commitments in connection with syndication and, in addition in the
case of any Eurodollar Borrowing made during the 30-day period ending
on the Maturity Date, the period commencing on the date of such
Borrowing and ending on the seventh or fourteenth day thereafter, as
the Borrower may elect, (b) as to any ABR Borrowing, the period
commencing on the date of such Borrowing and ending on the earliest of
(i) the next succeeding March 31, June 30, September 30 or December
31, (ii) the Maturity Date, and (iii) the date such Borrowing is
repaid or prepaid in accordance with Section 2.06 or Section 2.11 and
(c) as to any Fixed Rate Borrowing, the period commencing on the date
of such Borrowing and ending on the date specified in the Competitive
Bids in which the offers to make the Fixed Rate Loans comprising such
Borrowing were extended, which shall not be earlier than seven days
after the date of such Borrowing or later than 360 days after the date
of such Borrowing; 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.
"JOINT LEAD ARRANGER" shall mean each of Chase Securities
Inc., Xxxxxx Brothers Inc. and Xxxxxxx Xxxxx & Co., each in its
capacity as a joint lead arranger of the credit facility evidenced by
this Agreement.
"LETTER AGREEMENT" shall mean, collectively (i) the Amended
and Restated Syndication Letter, dated as of March 2, 1998, among the
Borrower, the Joint Lead Arrangers and the Initial Underwriters, (ii)
the Amended and Restated Underwriting Fee Letter, dated as of March 2,
1998, between the Borrower and the Initial Underwriters, and (iii) the
Agent Fee Letter, dated March 6, 1998, between the CAF Agent and the
Borrower, each as amended, modified or supplemented from time to time.
"LIBO RATE" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the rate at
which dollar deposits approximately equal in principal amount to (i)
in the case of a Standby Borrowing, the Administrative Agent's portion
of such Eurodollar Borrowing and (ii) in the case of a Competitive
Borrowing, a principal amount that would have been the Administrative
Agent's portion of such Competitive Borrowing had such Competitive
Borrowing been a Standby Borrowing, and for a maturity comparable to
such Interest Period are offered to the principal London offices of
Chase 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.
INTERIM FACILITY
15
"LIEN" shall mean, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in
respect of such asset. For the purposes of this Agreement, any person
shall be deemed to own subject to a Lien any asset which it has
acquired or holds subject to the interest of a vendor or lessor under
any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"LOAN" shall mean a Competitive Loan or a Standby Loan,
whether made as a Eurodollar Loan, an ABR Loan or a Fixed Rate Loan,
as permitted hereby.
"MARGIN REGULATIONS" shall mean Regulations G, T, U and X of
the Board as from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"MARGIN STOCK" shall have the meaning given such term under
Regulation U of the Board.
"MATERIAL ADVERSE CHANGE" shall mean a materially adverse
change in the business, assets, operations or financial condition of
the Borrower and its Subsidiaries taken as a whole which makes the
Borrower, TU Electric or Enserch unable to perform any of its
obligations under this Agreement or the Existing TU Credit Agreements,
or which impairs the rights of, or benefits available to, the Lenders
under this Agreement or the Existing TU Credit Agreements; provided
that it is agreed and understood that the Acquisition, as contemplated
by the Offer Documents and the Offer Press Release, shall not be
deemed to be a Material Adverse Change.
"MATURITY DATE" shall mean the earliest to occur of (i) the
364th day after the date hereof, (ii) the 14th day following the
Unconditional Date, (iii) the date of the initial Loan under and as
defined in the Existing TU Credit Agreements and (iv) the date of
termination or reduction in whole of the Commitments pursuant to
Section 2.10 or Article VI.
"MERGERS" shall have the meaning assigned to that term in the
Joint Proxy Statement/Prospectus dated September 25, 1996 for Texas
Utilities Company (as predecessor to TEII) and Enserch.
"MINING COMPANY" shall mean Texas Utilities Mining Company, a
Texas corporation, and its successors.
"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.
INTERIM FACILITY
16
"NOTICE OF COMPETITIVE BID REQUEST" shall mean a notification
made pursuant to Section 2.03 in the form of Exhibit A-2.
"OFFER" shall mean the offer to be made by and on behalf of
Bidco, on the terms and conditions set forth in the Offer Press
Release, to acquire the whole of the ordinary share capital (whether
in issue or failing to be allotted) of TEG not already owned by Bidco,
as such offer may from time to time be amended, revised, renewed or
waived in accordance with Section 5.14 of this Agreement.
"OFFER DOCUMENTS" shall mean each of the documents issued or
to be issued by Bidco to the shareholders of TEG in respect of the
Offer (including the forms of acceptance).
"OFFER PRESS RELEASE" shall mean the press announcement
released in connection with the Offer.
"OPERATING AGREEMENTS" shall mean the (i) Operating Agreement,
dated April 28, 1978, between Mining Company and Dallas Power & Light
Company, Texas Electric Service Company and Texas Power & Light
Company, as amended by the Modification of Operating Agreement, dated
April 20, 1979, between the same parties and (ii) the Operating
Agreement, dated December 15, 1976, between Fuel Company and Dallas
Power & Light Company, Texas Electric Service Company and Texas Power
& Light Company, as the same may be amended from time to time,
provided that any resulting amended agreement shall not increase the
scope of Liens permitted under Section 5.10(i).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
"PERMITTED ENCUMBRANCES" shall mean, as to any person at any
date, any of the following:
(a) (i) Liens for taxes, assessments or governmental
charges not then delinquent and Liens for workers' compensation awards
and similar obligations not then delinquent and undetermined Liens or
charges incidental to construction, Liens for taxes, assessments or
governmental charges then delinquent but the validity of which is
being contested at the time by such person in good faith against which
an adequate reserve has been established, with respect to which levy
and execution thereon have been stayed and continue to be stayed and
which do not impair the use of the property or the operation of such
person's business, (ii) Liens incurred or created in connection with
or to secure the performance of bids, tenders, contracts (other than
for the payment of money), leases, statutory obligations, surety bonds
or appeal bonds, and mechanics' or materialmen's Liens, assessments or
similar encumbrances, the existence of which does not impair the
INTERIM FACILITY
17
use of the property subject thereto for the purposes for which it was
acquired, and other Liens of like nature incurred or created in the
ordinary course of business;
(b) Liens securing indebtedness, neither assumed nor
guaranteed by such person nor on which it customarily pays interest,
existing upon real estate or rights in or relating to real estate
acquired by such person for any substation, transmission line,
transportation line, distribution line, right of way or similar
purpose;
(c) rights reserved to or vested in any municipality or
public authority by the terms of any right, power, franchise, grant,
license or permit, or by any provision of law, to terminate such
right, power, franchise, grant, license or permit or to purchase or
recapture or to designate a purchaser of any of the property of such
person;
(d) rights reserved to or vested in others to take or
receive any part of the power, gas, oil, coal, lignite or other
minerals or timber generated, developed, manufactured or produced by,
or grown on, or acquired with, any property of such person and Liens
upon the production from property of power, gas, oil, coal, lignite or
other minerals or timber, and the by-products and proceeds thereof, to
secure the obligations to pay all or a part of the expenses of
exploration, drilling, mining or development of such property only out
of such production or proceeds;
(e) easements, restrictions, exceptions or reservations
in any property and/or rights of way of such person for the purpose of
roads, pipe lines, substations, transmission lines, transportation
lines, distribution lines, removal of oil, gas, lignite, coal or other
minerals or timber, and other like purposes, or for the joint or
common use of real property, rights of way, facilities and/or
equipment, and defects, irregularities and deficiencies in titles of
any property and/or rights of way, which do not materially impair the
use of such property and/or rights of way for the purposes for which
such property and/or rights of way are held by such person;
(f) rights reserved to or vested in any municipality or
public authority to use, control or regulate any property of such
person;
(g) any obligations or duties, affecting the property of
such person, to any municipality or public authority with respect to
any franchise, grant, license or permit;
(h) as of any particular time any controls, Liens,
restrictions, regulations, easements, exceptions or reservations of
any municipality or public authority applying particularly to space
satellites or nuclear fuel;
(i) any judgment Lien against such person securing a
judgment for an amount not exceeding 25% of Consolidated Shareholders'
Equity, so long as the finality of such
INTERIM FACILITY
18
judgment is being contested by appropriate proceedings conducted in
good faith and execution thereon is stayed;
(j) any Lien arising by reason of deposits with or giving
of any form of security to any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, for any purpose at any time as
required by law or governmental regulation as a condition to the
transaction of any business or the exercise of any privilege or
license, or to enable such person to maintain self-insurance or to
participate in any fund for liability on any insurance risks or in
connection with workers' compensation, unemployment insurance, old age
pensions or other social security or to share in the privileges or
benefits required for companies participating in such arrangements; or
(k) any landlords' Lien on fixtures or movable property
located on premises leased by such person in the ordinary course of
business so long as the rent secured thereby is not in default.
"PERSON" shall mean any natural person, corporation, business
trust, joint venture, association, company, partnership or government,
or any agency or political subdivision thereof.
"PLAN" shall mean any employee pension benefit plan described
under Section 3(2) of ERISA (other than a Multiemployer Plan) subject
to the provisions of Title IV of ERISA that is maintained by the
Borrower or any ERISA Affiliate.
"REGISTER" shall have the meaning given such term in Section
8.04(d).
"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).
"REQUIRED LENDERS" shall mean (i) if and for so long as the
Initial Underwriters shall be the only Lenders, all the Lenders and
(ii) at any other time, Lenders having Commitments representing in
excess of 50% of the Total Commitment or, for purposes of acceleration
pursuant to clause (ii) of Article VI, Lenders holding Loans
representing in excess of 50% of the aggregate principal amount of the
Loans outstanding.
"RESPONSIBLE OFFICER" of any corporation shall mean any
executive officer or Financial Officer of such corporation and any
other officer or similar official thereof
INTERIM FACILITY
19
responsible for the administration of the obligations of such
corporation in respect of this Agreement.
"SEC" shall mean the Securities and Exchange Commission.
"SIGNIFICANT SUBSIDIARY" shall mean at any time a Subsidiary
of the Borrower that as of such time satisfies the definition of a
"significant subsidiary" contained as of the date hereof in Regulation
S-X of the SEC; provided, that each of TU Electric and Enserch shall
at all times be considered a Significant Subsidiary of the Borrower.
"STANDBY BORROWING" shall mean a Borrowing consisting of
simultaneous Standby Loans from each of the Lenders.
"STANDBY BORROWING REQUEST" shall mean a request made pursuant
to Section 2.04 in the form of Exhibit A-5.
"STANDBY LOANS" shall mean the revolving loans made pursuant
to Section 2.04. Each Standby Loan shall be a Eurodollar Standby Loan
or an ABR Loan.
"STATUTORY RESERVES" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator
of which is the number one minus the aggregate (without duplication)
of the maximum reserve percentages (including any marginal, special,
emergency or supplemental reserves) expressed as a decimal established
by the Board and any other banking authority to which the
Administrative Agent is subject for new negotiable nonpersonal time
deposits in dollars of over $100,000 with maturities approximately
equal to three months. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any
reserve percentage.
"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.
"SUBSTANTIAL" shall mean an amount in excess of 10% of the
consolidated assets of the Borrower and its Consolidated Subsidiaries
taken as a whole.
"TARGET SHARES" means the issued and to be issued shares in
the capital of TEG (including TEG's American Depositary Shares) that
are the subject of the Offer.
"TEII" shall mean Texas Energy Industries, Inc., predecessor
to Texas Utilities Company.
INTERIM FACILITY
20
"TEG" shall mean The Energy Group PLC.
"TOTAL COMMITMENT" shall mean, at any time, the aggregate
amount of Commitments of all the Lenders, as in effect at such time.
"TRANSACTIONS" shall have the meaning assigned to such term in
Section 3.02.
"TU ELECTRIC" shall mean Texas Utilities Electric Company, a
wholly owned subsidiary of the Borrower.
"TU ELECTRIC MORTGAGE" shall mean the Mortgage and Deed of
Trust, dated as of December 1, 1983, from TU Electric to Irving Trust
Company (now The Bank of New York), Trustee, as amended or
supplemented from time to time.
"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, the Alternate Base Rate
and the Fixed Rate.
"UNCONDITIONAL DATE" shall mean the date the Offer becomes or
is declared unconditional in all respects.
"VOTING SHARES" shall mean, as to shares of a particular
corporation, outstanding shares of stock of any class of such
corporation entitled to vote in the election of directors, excluding
shares entitled so to vote only upon the happening of some
contingency.
"WHOLLY OWNED SUBSIDIARY" shall mean any Consolidated
Subsidiary all the shares of common stock and other voting capital
stock or other voting ownership interests having ordinary voting power
to vote in the election of the board of directors or other governing
body performing similar functions (except directors' qualifying
shares) of which are at the time directly or indirectly owned by the
Borrower.
"WITHDRAWAL LIABILITY" shall mean liability of a Borrower
established under Section 4201 of ERISA as a result of a complete or
partial withdrawal from a Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. TERMS GENERALLY. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include," "includes" and
"including" shall be deemed to be followed by the phrase "without limitation."
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the
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21
context shall otherwise require. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided, however, that
for purposes of determining compliance with any covenant set forth in Article
V, such terms shall be construed in accordance with GAAP as in effect on the
date hereof applied on a basis consistent with the application used in
preparing the Borrower's audited financial statements referred to in Section
3.05.
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, to make Standby Loans, at any time and from
time to time until the earlier of the Maturity Date and the termination of the
Commitment of such Lender, to the Borrower in an aggregate principal amount at
any time outstanding not to exceed such Lender's Commitment minus the amount by
which the Competitive Loans made to the Borrower and outstanding at such time
shall be deemed to have used such Commitment pursuant to Section 2.14, subject,
however, to the conditions that (i) at no time shall the sum of (x) the
outstanding aggregate principal amount of all Standby Loans plus (y) the
outstanding aggregate principal amount of all Competitive Loans exceed the
Total Commitment, (ii) Loans shall be made in no more than ten Borrowings that
would, after giving effect to any such Borrowing, increase the principal amount
of Loans outstanding, (iii) at no time shall the sum of (x) the outstanding
aggregate principal amount of Loans hereunder plus (y) the outstanding
aggregate principal amount of all other Indebtedness of the Borrower used for
purposes described in Section 5.08 exceed $2,000,000,000, (iv) at no time shall
the outstanding aggregate principal amount of all Standby Loans made by any
Lender exceed the amount of such Lender's Commitment and (v) at all times, the
outstanding aggregate principal amount of all Standby Loans made by each Lender
to the Borrower shall equal the product of (A) the percentage which such
Lender's Commitment represents of the Total Commitment times (B) the
outstanding aggregate principal amount of all Standby Loans made to the
Borrower.
Within the foregoing limits, the Borrowers may borrow, pay or prepay
and, subject to the limitations set forth in Section 2.11(a), reborrow Standby
Loans hereunder, on and after the Effective Date and prior to the Maturity
Date, subject to the terms, conditions and limitations set forth herein.
SECTION 2.02. LOANS. (a) Each Standby Loan shall be made as part of
a Borrowing consisting of Loans made by the Lenders ratably in accordance with
their respective Commitments; provided, however, that the failure of any Lender
to make any Standby 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). Each Competitive Loan shall be made
in accordance with the
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procedures set forth in Section 2.03. The Standby Loans or Competitive Loans
comprising any Borrowing shall be (i) in the case of Competitive Loans, in an
aggregate principal amount which is an integral multiple of $1,000,000 and not
less than $5,000,000 and (ii) in the case of Standby Loans, in an aggregate
principal amount which 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).
(b) Each Competitive Borrowing shall be comprised entirely of
Eurodollar Competitive Loans or Fixed Rate Loans, and each Standby Borrowing
shall be comprised entirely of Eurodollar Standby Loans or ABR Loans, as the
Borrower may request pursuant to Section 2.03 or 2.04, as applicable. 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 paragraph (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 Administrative Agent in Houston, Texas,
not later than noon, Houston time, and the Administrative Agent shall by 2:00
p.m., Houston 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 Administrative 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. Competitive Loans
shall be made by the Lender or Lenders whose Competitive Bids therefor are
accepted pursuant to Section 2.03 in the amounts so accepted. Standby Loans
shall be made by the Lenders pro rata in accordance with Section 2.14. Unless
the Administrative Agent shall have received notice from a Lender prior to the
date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender's portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with this paragraph (c) and the Administrative 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 Administrative 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
Administrative 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 Administrative
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
Administrative Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement.
INTERIM FACILITY
23
(d) The Borrower may refinance all or any part of any Standby
Borrowing with a Standby Borrowing of the same or a different Type, subject to
the conditions and limitations set forth in this Agreement. Any Standby
Borrowing or part thereof so refinanced shall be deemed to be repaid or prepaid
in accordance with Section 2.06 or 2.11, as applicable, with the proceeds of a
new Standby Borrowing, and the proceeds of the new Standby Borrowing, to the
extent they do not exceed the principal amount of the Standby Borrowing being
refinanced, shall not be paid by the Lenders to the Administrative Agent or by
the Administrative Agent to the Borrower pursuant to paragraph (c) above.
SECTION 2.03. COMPETITIVE BID PROCEDURE. (a) In order to request
Competitive Bids, the Borrower shall hand deliver or telecopy to the CAF Agent
a duly completed Competitive Bid Request in the form of Exhibit A-1 hereto, to
be received by the CAF Agent (i) in the case of a Eurodollar Competitive
Borrowing, not later than 11:00 a.m., New York City time, four Business Days
before a proposed Competitive Borrowing and (ii) in the case of a Fixed Rate
Borrowing, not later than 11:00 a.m., New York City time, one Business Day
before a proposed Competitive Borrowing. No ABR Loan shall be requested in, or
made pursuant to, a Competitive Bid Request. A Competitive Bid Request that
does not conform substantially to the format of Exhibit A-1 may be rejected in
the CAF Agent's sole discretion, and the CAF Agent shall promptly notify the
Borrower of such rejection by telecopy. Each Competitive Bid Request shall
refer to this Agreement and specify (x) whether the Borrowing then being
requested is to be a Eurodollar Borrowing or a Fixed Rate Borrowing, (y) the
date of such Borrowing (which shall be a Business Day) and the aggregate
principal amount thereof which shall be in a minimum principal amount of
$5,000,000 and in an integral multiple of $1,000,000, and (z) the Interest
Period with respect thereto (which may not end after the Maturity Date).
Promptly after its receipt of a Competitive Bid Request that is not rejected as
aforesaid, the CAF Agent shall telecopy to each Lender a Notice of Competitive
Bid Request in the form of Exhibit A-2 inviting the Lenders to bid, on the
terms and conditions of this Agreement, to make Competitive Loans.
(b) Each Lender invited to bid may, in its sole discretion, make
one or more Competitive Bids to the Borrower responsive to the Borrower's
Competitive Bid Request. Each Competitive Bid by a Lender must be received by
the CAF Agent by telecopy, in the form of Exhibit A-3 hereto, (i) in the case
of a Eurodollar Competitive Borrowing, not later than 9:30 a.m., New York City
time, three Business Days before a proposed Competitive Borrowing and (ii) in
the case of a Fixed Rate Borrowing, not later than 9:30 a.m., New York City
time, on the day of a proposed Competitive Borrowing. Multiple bids will be
accepted by the CAF Agent. Competitive Bids that do not conform substantially
to the format of Exhibit A-3 may be rejected by the CAF Agent, and the CAF
Agent shall notify the Lender making such nonconforming bid of such rejection
as soon as practicable. Each Competitive Bid shall refer to this Agreement and
specify (x) the principal amount (which shall be in a minimum principal amount
of $5,000,000 and in an integral multiple of $1,000,000 and which may equal the
entire principal amount of the Competitive Borrowing requested by the Borrower)
of the Competitive Loan or Loans that the Lender is willing to make to the
Borrower, (y) the Competitive Bid Rate or Rates at which the
INTERIM FACILITY
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Lender is prepared to make the Competitive Loan or Loans and (z) the Interest
Period and the last day thereof. If any Lender invited to bid shall elect not
to make a Competitive Bid, such Lender shall so notify the CAF Agent by
telecopy (I) in the case of Eurodollar Competitive Loans, not later than 9:30
a.m., New York City time, three Business Days before a proposed Competitive
Borrowing, and (II) in the case of Fixed Rate Loans, not later than 9:30 a.m.,
New York City time, on the day of a proposed Competitive Borrowing; provided,
however, that failure by any Lender to give such notice shall not cause such
Lender to be obligated to make any Competitive Loan as part of such Competitive
Borrowing. A Competitive Bid submitted by a Lender pursuant to this paragraph
(b) shall be irrevocable.
(c) The CAF Agent shall notify the Borrower by telecopy, of all
the Competitive Bids made, the Competitive Bid Rate and the principal amount of
each Competitive Loan in respect of which such Competitive Bid was made and the
identity of the Lender that made each such bid by (i) in the case of a
Eurodollar Competitive Borrowing, not later than 10:00 a.m., New York City
time, three Business Days before a proposed Competitive Borrowing and (ii) in
the case of a Fixed Rate Borrowing, not later than 10:00 a.m., New York City
time, on the day of a proposed Competitive Borrowing. The CAF Agent shall send
a copy of all Competitive Bids to the Borrower for its records as soon as
practicable after the completion of the bidding process set forth in this
Section 2.03.
(d) The Borrower may in its sole and absolute discretion, subject
only to the provisions of this paragraph (d), accept or reject any or all
Competitive Bids referred to in paragraph (c) above. The Borrower shall notify
the CAF Agent by telephone, confirmed by telecopy in the form of a Competitive
Bid Accept/Reject Letter, whether and to what extent it has decided to accept
or reject any of or all the bids referred to in paragraph (c) above by (i) in
the case of a Eurodollar Competitive Borrowing, not later than 10:30 a.m., New
York City time, three Business Days before a proposed Competitive Borrowing and
(ii) in the case of a Fixed Rate Borrowing, not later than 10:30 a.m., New York
City time, on the day of a proposed Competitive Borrowing; provided, however,
that (i) the failure by the Borrower to give such notice shall be deemed to be
a rejection of all the bids referred to in paragraph (c) above, (ii) the
Borrower shall not accept a bid made at a particular Competitive Bid Rate if it
has decided to reject a bid made at a lower Competitive Bid Rate, (iii) the
aggregate amount of the Competitive Bids accepted by the Borrower shall not
exceed the principal amount specified in the Competitive Bid Request, (iv) if
the Borrower shall accept a bid or bids made at a particular Competitive Bid
Rate but the amount of such bid or bids shall cause the total amount of bids to
be accepted by the Borrower to exceed the amount specified in the Competitive
Bid Request, then the Borrower shall accept a portion of such bid or bids in an
amount equal to the amount specified in the Competitive Bid Request less the
amount of all other Competitive Bids accepted with respect to such Competitive
Bid Request, which acceptance, in the case of multiple bids at such Competitive
Bid Rate, shall be made pro rata in accordance with the amount of each such bid
at such Competitive Bid Rate, and (v) except pursuant to clause (iv) above, no
bid shall be accepted for a Competitive Loan unless such Competitive Loan is in
a minimum principal amount of $5,000,000 and an integral multiple
INTERIM FACILITY
25
of $1,000,000; provided further, however, that if a Competitive Loan must be in
an amount less than $5,000,000 because of the provisions of clause (iv) above,
such Competitive Loan may be for a minimum of $1,000,000 or any integral
multiple thereof, and in calculating the pro rata allocation of acceptances of
portions of multiple bids at a particular Competitive Bid Rate pursuant to
clause (iv) the amounts shall be rounded to integral multiples of $1,000,000 in
a manner which shall be in the discretion of the Borrower. A notice given by
the Borrower pursuant to this paragraph (d) shall be irrevocable.
(e) The CAF Agent shall promptly notify each bidding Lender (and
the Administrative Agent), by telecopy, whether or not its Competitive Bid has
been accepted (and if so, in what amount and at what Competitive Bid Rate) and
each successful bidder will thereupon become bound, subject to the other
applicable conditions hereof, to make the Competitive Loan in respect of which
its bid has been accepted.
(f) No Competitive Borrowing shall be requested or made hereunder
if after giving effect thereto any of the conditions set forth in clauses (i)
through (iv) of Section 2.01 would not be met.
(g) If either the Administrative Agent or CAF Agent shall elect to
submit a Competitive Bid in its capacity as a Lender, such party shall submit
such bid directly to the Borrower one quarter of an hour earlier than the
latest time at which the other Lenders are required to submit their bids to the
CAF Agent pursuant to paragraph (b) above.
(h) Each of the Borrower and the CAF Agent shall deliver to the
Administrative Agent by telecopy copies of all notices delivered by it pursuant
to this Section 2.03 at the same times such notices are delivered hereunder.
All notices required by this Section 2.03 shall be given in accordance with
Section 8.01.
(i) A Competitive Bid Request shall not be made within five
Business Days after the date of any previous Competitive Bid which was accepted
by the Borrower pursuant to paragraph (d) above.
SECTION 2.04. STANDBY BORROWING PROCEDURE. In order to request a
Standby Borrowing, the Borrower shall hand deliver or telecopy to the
Administrative Agent a duly completed Standby Borrowing Request in the form of
Exhibit A-5 (a) in the case of a Eurodollar Standby Borrowing, not later than
10:00 a.m., Houston time, three Business Days before such Borrowing, and (b) in
the case of an ABR Borrowing, not later than 10:00 a.m., Houston time, one
Business Day before such Borrowing. No Fixed Rate Loan shall be requested or
made pursuant to a Standby Borrowing Request. Such notice shall be irrevocable
and shall in each case specify (i) whether the Borrowing then being requested
is to be a Eurodollar Standby Borrowing or an ABR Borrowing; (ii) the date of
such Standby Borrowing (which shall be a Business Day) and the amount thereof;
and (iii) if such Borrowing is to be a Eurodollar Standby Borrowing, the
INTERIM FACILITY
26
Interest Period with respect thereto, which shall not end after the Maturity
Date. If no election as to the Type of Standby Borrowing is specified in any
such notice, then the requested Standby Borrowing shall be an ABR Borrowing.
If no Interest Period with respect to any Eurodollar Standby 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, at all times
prior to completion of syndication of the Total Commitment, to the limitations
set forth in the definition of "Interest Period"). If the Borrower shall not
have given notice in accordance with this Section 2.04 of its election to
refinance a Standby 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 Standby Borrowing shall be
requested if the Interest Period with respect thereto would end after the
Maturity Date. The Administrative Agent shall promptly advise the Lenders of
any notice given pursuant to this Section 2.04 and of each Lender's portion of
the requested Borrowing.
SECTION 2.05. FEES. (a) The Borrower agrees to pay to each Lender,
through the Administrative Agent, on each March 31, June 30, September 30 and
December 31 (with the first payment being due on March 31, 1998) and on each
date on which the Commitment of such Lender shall be terminated as provided
herein, a facility fee (a "FACILITY FEE"), at a rate per annum equal to the
Facility Fee Percentage from time to time in effect on the amount of the sum of
the unused Commitment of such Lender plus the principal amount of Loans
outstanding made by such Lender (without regard, in either case, to any
Competitive Loans made by any Lender), during the preceding quarter (or other
period commencing on the Effective Date or ending with the Maturity Date or any
date on which the Commitment of such Lender shall be terminated). All Facility
Fees shall be computed on the basis of the actual number of days elapsed in a
year of 365 or 366 days, as the case may be. The Facility Fee due to each
Lender shall commence to accrue on the Effective Date, and shall cease to
accrue on the earlier of the Maturity Date and the termination of the
Commitment of such Lender as provided herein.
(b) The Borrower agrees to pay the CAF Agent, for its own account,
the Auction Fees provided for in the Agent Fee Letter referred to in the
Letter Agreement.
(c) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders, the Initial Underwriters or the Joint Lead
Arrangers or to the CAF Agent. Once paid, none of the Fees shall be refundable
under any circumstances.
SECTION 2.06. REPAYMENT OF LOANS; EVIDENCE OF INDEBTEDNESS. (a) The
outstanding principal balance of each Loan shall be due and payable on the last
day of the Interest Period applicable thereto and on the Maturity Date.
INTERIM FACILITY
27
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness to such Lender
resulting from each Loan 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.
(c) The Administrative Agent shall maintain accounts in which it
will record (i) the amount of each Loan 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 Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) of this Section 2.06 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein
shall not in any manner affect the obligations of the Borrower to repay the
Loans in accordance with their terms.
SECTION 2.07. INTEREST ON LOANS. (a) Subject to the provisions of
Section 2.08, 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 plus the Applicable Margin from time to
time in effect and in the case of each Eurodollar Competitive Loan, the LIBO
Rate for the Interest Period in effect for such Borrowing plus the Competitive
Bid Margin offered by the Lender making such Loan and accepted by the Borrower
pursuant to Section 2.03.
(b) Subject to the provisions of Section 2.08, the Loans
comprising each ABR Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be, for periods during which the Alternate Base Rate is determined by reference
to the Prime Rate and 360 days for other periods) at a rate per annum equal to
the Alternate Base Rate plus the Applicable Margin from time to time in effect.
(c) Subject to the provisions of Section 2.08, each Fixed Rate
Loan shall bear interest at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal to the fixed rate
of interest offered by the Lender making such Loan and accepted by the Borrower
pursuant to Section 2.03.
(d) 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 Chase, and such determination shall be conclusive absent manifest
error;
INTERIM FACILITY
28
provided that Chase shall, upon request, provide to the Borrower a certificate
setting forth in reasonable detail the basis for such determination.
SECTION 2.08. DEFAULT INTEREST. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount
becoming due hereunder, whether by scheduled maturity, notice of prepayment,
acceleration or otherwise, the Borrower shall on demand from time to time from
the Administrative Agents pay interest, to the extent permitted by law, on such
defaulted amount up to (but not including) the date of actual payment (after as
well as before judgment) at a rate per annum (computed as provided in Section
2.07(b)) equal to the Alternate Base Rate plus the Applicable Margin for ABR
Loans plus 1%.
SECTION 2.09. ALTERNATE RATE OF INTEREST. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative 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 Administrative 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 clauses (i) or (ii)
above, until the Administrative Agent shall have advised the Borrower and the
Lenders that the circumstances giving rise to such notice no longer exist, (x)
any request by the Borrower for a Eurodollar Competitive Borrowing pursuant to
Section 2.03 shall be of no force and effect and shall be denied by the
Administrative Agent and (y) any request by the Borrower for a Eurodollar
Standby Borrowing pursuant to Section 2.04 shall be deemed to be a request for
an ABR Borrowing. In the event the Required Lenders notify the Administrative
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 Administrative Agent shall
notify the Borrower of such notice and until the Required Lenders shall have
advised the Administrative Agent that the circumstances giving rise to such
notice no longer exist, any request by the Borrower for a Eurodollar Standby
Borrowing shall be deemed a request for an ABR Borrowing. Each determination
by the Administrative Agent hereunder shall be made in good faith and shall be
conclusive absent manifest error; provided that the Administrative Agent,
shall, upon request, provide to the Borrower a certificate setting forth in
reasonable detail the basis for such determination.
SECTION 2.10. TERMINATION AND REDUCTION OF COMMITMENTS. (a) The
Commitments shall be automatically terminated on the earliest to occur of (i)
Maturity Date, (ii) the date of the withdrawal or lapse of the Offer and (iii)
28 days after the Effective Date if the Offer has not yet been posted.
(b) In addition, the Commitments shall be automatically reduced by
an amount equal to the net proceeds of any issuance or disposition or any
payment to the Borrower, in each case, described in Section 2.11(d), with such
reduction to be effective on the later to occur of the date
INTERIM FACILITY
29
of such issuance, disposition or payment, as the case may be, and the date
specified under Section 2.11(d) for any related prepayment or repayment of the
Loans.
(c) Upon at least two Business Days' prior irrevocable written
notice to the Administrative Agent, the Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Commitments; provided, however, that (i) each partial reduction of the
Commitments shall be in an integral multiple of $10,000,000 and in a minimum
principal amount of $10,000,000 and (ii) no such termination or reduction shall
be made that would reduce the Total Commitment to an amount (1) less than the
aggregate outstanding principal amount of all Competitive Loans or (2) less
than $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. The
Administrative Agent shall advise the Lenders of any notice given pursuant to
this Section 2.10(c) and of each Lender's portion of any such termination or
reduction of the Total Commitment.
(d) Each reduction in the Total Commitment hereunder shall be made
ratably among the Lenders in accordance with their respective Commitments. The
Borrower shall pay to the Administrative Agent for the account of the Lenders,
on the date of each termination or reduction of the Total Commitment, the
Facility Fees on the amount of the Commitments so terminated or reduced accrued
through the date of such termination or reduction.
SECTION 2.11. PREPAYMENT. (a) The Borrower shall have the right at
any time and from time to time to prepay any Standby Borrowing, in whole or in
part, upon giving telecopy notice (or telephone notice promptly confirmed by
telecopy) to the Administrative Agent: (i) before 10:00 a.m., Houston time,
three Business Days prior to prepayment, in the case of Eurodollar Loans, and
(ii) before 10:00 a.m., Houston 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. No prepayment may be made in respect of any Competitive
Borrowing. Any principal amount of any Loan repaid or prepaid at any time and
not refinanced on the date of such repayment or prepayment (as the case may be)
with the proceeds of another Loan may not be reborrowed.
(b) On the date of any termination or reduction of the Commitments
pursuant to Section 2.10, the Borrower shall pay or prepay so much of the
Standby Borrowings as shall be necessary in order that the aggregate principal
amount of the Competitive Loans and Standby Loans outstanding will not exceed
the Total Commitment, after giving effect to such termination or reduction.
(c) Each notice of prepayment 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 2.11 shall be subject to Section 8.05 but
INTERIM FACILITY
30
otherwise without premium or penalty. All prepayments under this Section 2.11
shall be accompanied by accrued interest on the principal amount being prepaid
to the date of payment.
(d) Upon (i) the issuance by the Borrower (or any special purpose
financing Subsidiary of the Borrower, other than XxxXx 1, XxxXx 2 or any
Subsidiary of XxxXx 1 or of XxxXx 2) of any debt, equity or other capital
market instruments or other securities (other than stock of the Borrower issued
in connection with employee stock option and other stock purchase and incentive
plans in effect on the date hereof), (ii) the disposition by the Borrower of
any of the capital shares of XxxXx 1, XxxXx 2 or Enserch, or (iii) the payment
by any Acquisition Company to the Borrower of any amount in respect of shares
of the Borrower exchanged for Target Shares, the Borrower shall prepay the
principal amount of Loans hereunder in an amount equal to the net proceeds of
such issuance or disposition or such payment, as the case may be, with such
prepayment to be accompanied by payment of accrued interest on such Loans being
prepaid to the date of payment and any amounts payable pursuant to Section
8.05. Any amounts required to be applied to the prepayment of Loans shall be
applied as follows: first, to the immediate prepayment of ABR Loans
outstanding, second, to the prepayment of Eurodollar Loans (not constituting
Competitive Loans) outstanding on the last day of the respective Interest
Periods for such Eurodollar Loans in the order that they occur, and third, to
the repayment of Competitive Loans, on the last day of the respective Interest
Periods for such Competitive Loans in the order that they occur.
SECTION 2.12. RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES. (a)
Notwithstanding any other provision herein, if after the date of this Agreement
any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender hereunder
(except for changes in respect of taxes on the overall net income of such
Lender or its lending office imposed by the jurisdiction in which such Lender's
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 shall result in the imposition on any
Lender or the London interbank market of any other condition affecting this
Agreement, such Lender's Commitment or any Eurodollar Loan or Fixed Rate Loan
made by such Lender, and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any Eurodollar Loan
or Fixed Rate Loan or to reduce the amount of any sum received or receivable by
such Lender hereunder (whether of principal, interest or otherwise) by an
amount deemed by such Lender to be material, then the Borrower shall, upon
receipt of the notice and certificate provided for in Section 2.12(c), promptly
pay to such Lender such additional amount or amounts as will compensate such
Lender for such additional costs incurred or reduction suffered.
Notwithstanding the foregoing, no Lender shall be entitled to request
compensation under this paragraph with respect to any Competitive Loan if
INTERIM FACILITY
31
the change giving rise to such request was applicable to such Lender at the
time of submission of the Competitive Bid pursuant to which such Competitive
Loan was made.
(b) If any Lender shall have determined that the adoption of any
law, rule, regulation or guideline arising out of the July 1988 report of the
Basle Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards," or
the adoption after the date hereof of any other law, rule, regulation or
guideline regarding capital adequacy, or any change in any of the foregoing or
in the interpretation or administration of any of the foregoing by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or any Lender's holding company with any request
or directive regarding capital adequacy (whether or not having the force of
law) of any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Lender's capital or on
the capital of such Lender's holding company, if any, as a consequence of this
Agreement, such Lender's Commitment or the Loans made by such Lender pursuant
hereto to a level below that which such Lender or such Lender's holding company
could have achieved but for such adoption, change or compliance (taking into
consideration such Lender's policies and the policies of such Lender's holding
company with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time such additional amount or amounts as will
compensate such Lender for any such reduction suffered will be paid by the
Borrower to such Lender. It is acknowledged that this Agreement is being
entered into by the Lenders on the understanding that the Lenders will not be
required to maintain capital against their Commitments under currently
applicable laws, regulations and regulatory guidelines. In the event the
Lenders shall otherwise determine that such understanding is incorrect, it is
agreed that the Lenders will be entitled to make claims under this paragraph
(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 setting forth such amount or
amounts as shall be necessary to compensate such Lender or its holding company
as specified in paragraph (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
the amount shown as due on any such certificate delivered by it within 10 days
after its receipt of the same. Each Lender shall give prompt notice to the
Borrower of any event of which it has knowledge, occurring after the date
hereof, that it has determined will require compensation by the Borrower
pursuant to this Section; provided, however, that failure by such Lender to
give such notice shall not constitute a waiver of such Lender's right to demand
compensation hereunder.
(d) Failure on the part of any Lender to demand compensation for
any increased costs or reduction in amounts received or receivable or reduction
in return on capital with respect to any period shall not constitute a waiver
of such Lender's right to demand compensation with respect
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to such period or any other period; provided, however, that no Lender shall be
entitled to compensation under this Section 2.12 for any costs incurred or
reductions suffered with respect to any date unless it shall have notified the
Borrower that it will demand compensation for such costs or reductions under
paragraph (c) above not more than 90 days after the later of (i) such date and
(ii) the date on which it shall have become aware of such costs or reductions.
The protection of this Section shall be available to each Lender 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 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, be
disadvantageous to such Lender.
SECTION 2.13. CHANGE IN LEGALITY. (a) Notwithstanding any other
provision herein, if any change in any law or regulation or in the
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for 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 Agents, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be
made by such Lender hereunder, whereupon such Lender shall not submit
a Competitive Bid in response to a request for Eurodollar Competitive
Loans and any request for a Eurodollar Standby 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 paragraph (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 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 2.13, 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.
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SECTION 2.14. PRO RATA TREATMENT. Except as provided below in this
Section 2.14 with respect to Competitive Borrowings and as required under
Sections 2.13 and 2.18, each Standby Borrowing, each payment or prepayment of
principal of any Standby Borrowing, each payment of interest on the Standby
Loans, each payment of the Facility Fees, each reduction of the Commitments and
each refinancing or conversion of any Borrowing with a Standby 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 Standby Loans). Each payment of principal of any Competitive
Borrowing shall be allocated pro rata among the Lenders participating in such
Borrowing in accordance with the respective principal amounts of their
outstanding Competitive Loans comprising such Borrowing. Each payment of
interest on any Competitive Borrowing shall be allocated pro rata among the
Lenders participating in such Borrowing in accordance with the respective
amounts of accrued and unpaid interest on their outstanding Competitive Loans
comprising such Borrowing. For purposes of determining the available
Commitments of the Lenders at any time, each outstanding Competitive Borrowing
shall be deemed to have utilized the Commitments of the Lenders (including
those Lenders which shall not have made Loans as part of such Competitive
Borrowing) pro rata in accordance with such respective Commitments. Each
Lender agrees that in computing such Lender's portion of any Borrowing to be
made hereunder, the Administrative Agent may, in its discretion, round each
Lender's percentage of such Borrowing to the next higher or lower whole dollar
amount.
SECTION 2.15. 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 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 Standby Loan
or Loans as a result of which the unpaid principal portion of its Standby Loans
shall be proportionately less than the unpaid principal portion of the Standby
Loans 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 Standby Loans of such
other Lender, so that the aggregate unpaid principal amount of the Standby
Loans and participations in the Standby Loans held by each Lender shall be in
the same proportion to the aggregate unpaid principal amount of all Standby
Loans then outstanding as the principal amount of its Standby Loans prior to
such exercise of banker's lien, setoff or counterclaim or other event was to
the principal amount of all Standby Loans 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 2.15 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 Standby Loan deemed to have
been so purchased may exercise any and all rights of banker's lien, setoff
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34
or counterclaim with respect to any and all moneys owing by the Borrower to
such Lender by reason thereof as fully as if such Lender had made a Standby
Loan in the amount of such participation.
SECTION 2.16. PAYMENTS. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder from an account in the United States not later than 10:00
a.m., Houston time, on the date when due in dollars to the Administrative Agent
at its offices at 000 Xxxxxx Xxxxxx, 0-XXXX-X 96, Xxxxxxx, Xxxxx 00000, in
immediately available funds.
(b) Whenever any payment (including principal of or interest on
any Borrowing 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 2.17. TAXES. (a) Any and all payments of principal and
interest on any Borrowings, or of any Fees or indemnity or expense
reimbursements by the Borrower hereunder ("BORROWER PAYMENTS") shall be made,
in accordance with Section 2.16, free and clear of and without deduction for
any and all current or future United States Federal, state and local taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect to such Borrower Payments, but only to the extent reasonably
attributable to such Borrower Payments, excluding (i) income taxes imposed on
the net income of the Administrative Agent, the CAF Agent 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 Administrative Agent, the CAF Agent or any Lender (or Transferee), in each
case by the jurisdiction under the laws of which the Administrative Agent, the
CAF Agent 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 Agents, (i) the sum payable shall be
increased by the amount (an "ADDITIONAL AMOUNT") necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 2.17) such Lender (or Transferee) or Agent (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,
charges or similar levies that arise from any payment made
INTERIM FACILITY
35
hereunder or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or the Letter Agreement ("OTHER TAXES").
(c) The Borrower shall indemnify each Lender (or Transferee
thereof) and each Agent for the full amount of Taxes and Other Taxes with
respect to Borrower Payments paid by such Lender (or Transferee) or such Agent,
as the case may be, 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 CAF
Agent, or the Administrative 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 any
Agent, as the case may be, makes written demand therefor.
(d) If a Lender (or Transferee) or any Agent 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 2.17, 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 any Agent 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 a Borrower or with respect
to which a Borrower had paid additional amounts pursuant to this Section 2.17,
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 2.17 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 such Agent 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 such Agent, agrees to repay the amount paid over to
the Borrower (plus penalties, interest or other charges) to such Lender (or
Transferee) or such Agent in the event such Lender (or Transferee) or such
Agent 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
Administrative Agent, at its address referred to in Section 8.01, the original
or a certified copy of a receipt issued by such United States Governmental
Authority evidencing payment thereof.
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36
(f) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section 2.17
shall survive the payment in full of the principal of and interest on all Loans
made hereunder.
(g) Each Lender or Agent (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 Administrative Agent two
copies of either United States Internal Revenue Service Form 1001 or Form 4224,
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 Section 2.17(g),
a Non-U.S. Lender shall not be required to deliver any form pursuant to this
Section 2.17(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
paragraph (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 a Loan; 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 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 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 paragraph (g) above and (i) below.
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37
(i) Any Lender (or Transferee) claiming any indemnity payment or
additional amounts payable pursuant to this Section 2.17 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 such Lender (or Transferee), be
otherwise disadvantageous to such Lender (or Transferee).
(j) Nothing contained in this Section 2.17 shall require any
Lender (or Transferee) or any Agent to make available to the Borrower any of
its tax returns (or any other information) that it deems to be confidential or
proprietary.
SECTION 2.18. ASSIGNMENT OF COMMITMENTS UNDER CERTAIN CIRCUMSTANCES.
In the event that any Lender shall have delivered a notice or certificate
pursuant to Section 2.12 or 2.13, or the Borrower shall be required to make
additional payments to any Lender under Section 2.17, the Borrower shall have
the right, at its own expense, upon notice to such Lender and the Agents, to
require such Lender to transfer and assign without recourse (in accordance with
and subject to the restrictions contained in Section 8.04) all such Lender's
interests, rights and obligations contained hereunder to another financial
institution approved by the Agents 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 or the Borrower, as the
case may be, 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.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Lenders as follows
(provided, that each representation or warranty made by the Borrower in respect
of TEG or any of its Subsidiaries shall be subject to the qualification that
such representation or warranty is true and accurate insofar as the Borrower
was aware as of the date of this Agreement):
SECTION 3.01. ORGANIZATION; POWERS. Each of the Borrower, TU Electric
and Enserch (a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) 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, (c) 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 (d) has the corporate
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38
power and authority to execute, deliver and perform its obligations under this
Agreement and to borrow hereunder.
SECTION 3.02. AUTHORIZATION. The execution, delivery and performance
by the Borrower of this Agreement, the Borrowings hereunder and the Acquisition
(collectively, the "TRANSACTIONS") (a) have been duly authorized by all
requisite corporate action and (b) will not (i) violate (A) any provision of
any law, statute, rule or regulation (including, without limitation, the Margin
Regulations) or of the certificate of incorporation or other constitutive
documents or by-laws of the Borrower or any of its Subsidiaries to which the
Borrower is subject, (B) any order of any Governmental Authority or (C) any
provision of any indenture, agreement or other instrument to which the Borrower
or any of its Subsidiaries is a party or by which it or any of its property is
or may be bound, (ii)) 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 (iii) 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 Transactions, to the extent they
relate to the Borrower, 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, 1996
and the related consolidated statements of income, retained earnings and cash
flows for the fiscal year then ended, reported on by Deloitte & Touche LLP and
set forth in the Borrower's 1996 Annual Report on Form 10-K and the
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as
of September 30, 1997 and the related consolidated statements of income,
retained earnings and cash flows for the nine-month period then ended and set
forth in the Borrower's Quarterly Report on Form 10-Q, copies of which have
been delivered to each of the Lenders, fairly present (subject in the case of
such financial statements as of September 30, 1997, to year-end adjustments) in
conformity with GAAP, the consolidated financial position of the Borrower and
its Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such periods ending on such dates.
INTERIM FACILITY
39
(b) The consolidated balance sheet of TU Electric and its
Consolidated Subsidiaries as of December 31, 1996 and the related consolidated
statements of income, retained earnings and cash flows for the fiscal year then
ended, reported on by Deloitte & Touche LLP and set forth in TU Electric's 1996
Annual Report on Form 10-K and the consolidated balance sheet of TU Electric
and its Consolidated Subsidiaries as of September 30, 1997 and the related
consolidated statements of income, retained earnings and cash flows for the
nine-month period then ended and set forth in TU Electric's Quarterly Report on
Form 10-Q, copies of which have been delivered to each of the Lenders, fairly
present (subject in the case of such financial statements as of September 30,
1997, to year-end adjustments), in conformity with GAAP, the consolidated
financial position of TU Electric and its Consolidated Subsidiaries as of such
dates and their consolidated results of operations and cash flows for the
periods ending on such dates.
(c) There has heretofore been delivered to each of the Lenders an
unaudited condensed pro forma consolidated balance sheet as of December 31,
1997 and unaudited condensed statement of income for the fiscal year ending
December 31, 1997 which gave effect to the Acquisition (the "PRO FORMA
FINANCIAL STATEMENTS"), which Pro Forma Financial Statements were prepared in
accordance with GAAP. The assumptions used in preparing the Pro Forma
Financial Statements are reasonable, as of the date of such Pro Forma Financial
Statements and as of the Effective Date, and all material assumptions with
respect to the Pro Forma Financial Statements are set forth therein.
(d) Since September 30, 1997, there has been no Material Adverse
Change with respect to the Borrower, other than as a result of the matters
excluded from the computation of Consolidated Earnings Available for Fixed
Charges as set forth in the definition thereof.
SECTION 3.06. LITIGATION. Except as set forth in the financial
statements or other reports of the type referred to in Section 5.03 hereof and
which have been delivered to the Lenders on or prior to the date hereof or as
set forth on Schedule 3.06, there is no action, suit or proceeding pending
against, or to the knowledge of the Borrower threatened against or affecting,
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable
possibility of an adverse decision which could materially adversely affect the
ability of the Borrower to pay its obligations hereunder or which in any manner
draws into question the validity of this Agreement.
SECTION 3.07. FEDERAL RESERVE REGULATIONS. (a) Neither the
Borrower nor any of its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used by the
Borrower, whether directly or indirectly, and whether immediately, incidentally
or ultimately, to purchase or carry Margin Stock (other than the American
Depositary Shares of TEG to be acquired in connection with the Acquisition) or
to refund indebtedness originally incurred for such purpose, or for any other
INTERIM FACILITY
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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 Section 5.09 are represented by Margin Stock.
SECTION 3.08. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT. (a) Neither the Borrower nor any of its Subsidiaries is an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940.
(b) The Borrower and each of its Subsidiaries is exempt from all
provisions of the Public Utility Holding Company Act of 1935 and rules and
regulations thereunder, except for Sections 9(a)(2) and 33 of such Act and the
rules and regulations thereunder, and the execution, delivery and performance
by the Borrower of this Agreement and 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 Agents 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.
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 Federal and
material state and local tax returns which 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
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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
corporate Significant Subsidiaries is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has all corporate powers necessary to carry on its business
substantially as now conducted. The Borrower's corporate Significant
Subsidiaries have all material governmental licenses, authorizations, consents
and approvals required to carry on the business of the corporate Significant
Subsidiaries substantially as now conducted.
SECTION 3.13. ENVIRONMENTAL MATTERS. Except as set forth in or
contemplated by the financial statements or other reports of the type referred
to in Section 5.03 hereof and which have been delivered to the Lenders on or
prior to the date hereof, the Borrower and each of its Subsidiaries has
complied in all material respects with all Federal, state, local and other
statutes, ordinances, orders, judgments, rulings and regulations relating to
environmental pollution or to environmental or nuclear regulation or control,
except to the extent that failure to so comply could not reasonably be expected
to result in a Material Adverse Change. Except as set forth in or contemplated
by such financial statements or other reports, neither the Borrower nor any of
its Subsidiaries has received notice of any material failure so to comply,
except where such failure could not reasonably be expected to result in a
Material Adverse Change. Except as set forth in or contemplated by such
financial statements or other reports, the facilities of the Borrower or any of
its Subsidiaries, as the case may be, are not used to manage any hazardous
wastes, hazardous substances, hazardous materials, toxic substances, toxic
pollutants or substances similarly denominated, as those terms or similar terms
are used in the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the Clean Air Act, the
Clean Water Act or any other applicable law relating to environmental
pollution, or any nuclear fuel or other radioactive materials, in violation in
any material respect of any law or any regulations promulgated pursuant
thereto, except to the extent that such violations could not reasonably be
expected to result in a Material Adverse Change. Except as set forth in or
contemplated by such financial statements or other reports, the Borrower is
aware of no events, conditions or circumstances involving environmental
pollution or contamination that could reasonably be expected to result in a
Material Adverse Change.
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ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Lenders to make Loans hereunder are subject to
the satisfaction of the following conditions:
SECTION 4.01. EFFECTIVE DATE. On the Effective Date:
(a) The representations and warranties set forth in
Article III hereof shall be true and correct in all material respects
on and as of such date 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.
(b) No Event of Default or Default shall have occurred
and be continuing on such date.
(c) The Agents shall have received favorable written
opinions of (i) Xxxx & Priest LLP and Xxxxxxx, Xxxxxxxx & Xxxxxxxxxx,
L.L.P., each dated the Effective Date and addressed to the Lenders and
satisfactory to King & Spalding, counsel for the Agents, to the effect
set forth in Exhibits D-1 and D-2 hereto and (ii) King & Spalding,
dated the Effective Date, addressed to the Lenders and in form
satisfactory to the Agents.
(d) The Agents shall have received (i) a copy of the
certificate of incorporation, including all amendments thereto, of the
Borrower, certified as of a recent date by the Secretary of State of
its state of incorporation, and a certificate as to the good standing
of the Borrower as of a recent date from such Secretary of State; (ii)
a certificate of the Secretary or an Assistant Secretary of the
Borrower dated the Effective Date and certifying (A) that attached
thereto is a true and complete copy of the by-laws of the Borrower as
in effect on the Effective Date and at all times since a date prior to
the date of the resolutions described in clause (B) below, (B) that
attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of the Borrower authorizing the
execution, delivery and performance of this Agreement and the
Borrowings hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C)
that the certificate of incorporation referred to in clause (i) above
has not been amended since the date of the last amendment thereto
shown on the certificate of good standing furnished pursuant to such
clause (i) and (D) as to the incumbency and specimen signature of each
officer executing this Agreement or any other document delivered in
connection herewith on behalf of the Borrower; (iii) a certificate of
another officer of the Borrower as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the
certificate pursuant to (ii) above; (iv) evidence satisfactory to the
Agents that the requisite approvals referred to in Section 3.04 hereof
have been obtained, are in full force and effect (other than (A) any
INTERIM FACILITY
43
such approvals that will be set forth in the Offer Documents as
conditions to the Offer and (B) other approvals the failure to obtain
which could not reasonably be expected to have a Material Adverse
Effect); and (v) such other documents as the Lenders or King &
Spalding, counsel for the Agents, shall reasonably request.
(e) The Agents shall have received a certificate, dated
the Effective Date and signed by a Financial Officer of the Borrower,
confirming compliance with the conditions precedent set forth in
paragraphs (a) and (b) of Section 4.01.
(f) The Agents shall have received all Fees and amounts
due and payable by the Borrower on or prior to the Effective Date.
(g) The Agents shall have received an executed
counterpart to this Agreement of each Agent, each Lender and the
Borrower.
(h) The Agents shall have received such other approvals,
opinions and documents as the Agents may reasonably request as to the
legality, validity, binding effect or enforceability of this Agreement
or the financial condition, properties, operations or prospects of the
Borrower.
SECTION 4.02. ALL LOANS. The Commitment of each Lender to make each
Loan to be made by it (including the initial Loan to be made by it) shall be
subject to the satisfaction of the following conditions precedent on the date
of such Borrowing:
(a) The Effective Date shall have occurred.
(b) The Agents shall have received a notice of such
Borrowing as required by Section 2.03 or Section 2.04, as applicable.
(c) The representations and warranties set forth in
Article III hereof (except, in the case of a refinancing of a Standby
Borrowing with a new Standby Borrowing that does not increase the
aggregate principal amount of the Loans of any Lender outstanding, the
representations set forth in Sections 3.05(d), 3.06, 3.11 and 3.13)
shall be true and correct in all material respects on and as of the
date of such Borrowing 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.
(d) At the time of and immediately after such Borrowing
no Event of Default or Default shall have occurred and be continuing.
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(e) The Agents shall have received a certificate of a
Responsible Officer of the Borrower certifying that the matters set
forth in paragraphs (c) and (d) of this Section 4.02 are true and
correct as of such date.
Each such Loan shall be deemed to constitute a representation and warranty by
the Borrower on the date of such Borrowing as to the matters specified in
subsections (c) and (d) of this Section 4.02.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Lender has any Commitment
hereunder or any amount payable hereunder remains unpaid (provided, that such
covenants shall not apply to TEG or any of it Subsidiaries):
SECTION 5.01. EXISTENCE. It will, and will cause each of its
Significant Subsidiaries to, do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and all
rights, licenses, permits, franchises and authorizations necessary or desirable
in the normal conduct of its business except as otherwise permitted pursuant to
Section 5.09.
SECTION 5.02. BUSINESS AND PROPERTIES. It will, and will cause each
of its Subsidiaries to, comply with all applicable material laws, rules,
regulations and orders of any Governmental Authority, whether now in effect or
hereafter enacted, except where the validity or applicability of such laws,
rules, regulations or orders is being contested by appropriate proceedings in
good faith; and at all times maintain and preserve all property material to the
conduct of its business and keep such property in good repair, working order
and condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times.
SECTION 5.03. FINANCIAL STATEMENTS, REPORTS, ETC. The Borrower will
furnish to the Agents and each Lender:
(a) as soon as available and in any event within 120 days
after the end of each fiscal year of the Borrower, a consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of
the end of such fiscal year and the related consolidated statements of
income, retained earnings and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous
fiscal year, all reported on in a manner reasonably acceptable to the
Securities and Exchange Commission by Deloitte & Touche LLP or other
independent public accountants of nationally recognized standing;
INTERIM FACILITY
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(b) as soon as available and in any event within 60 days
after the end of each of the first three quarters of each fiscal year
of the Borrower a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter and the
related consolidated statements of income for such quarter, for the
portion of the Borrower's fiscal year ended at the end of such
quarter, and for the twelve months ended at the end of such quarter,
and the related consolidated statement of cash flows for the portion
of the Borrower's fiscal year ended at the end of such quarter,
setting forth comparative figures for previous dates and periods to
the extent required in Form 10-Q, all certified (subject to normal
year-end adjustments) as to fairness of presentation, GAAP and
consistency by a Financial Officer of the Borrower;
(c) simultaneously with any delivery of each set of
financial statements referred to in paragraphs (a) and (b) above, (i)
an unconsolidated balance sheet of the Borrower and the related
unconsolidated statements of income, retained earnings and cash flows
as of the same date and for the same periods applicable to the
statements delivered pursuant to paragraph (a) or (b) above, as
applicable, all certified (subject to normal year-end adjustments in
the case of quarterly statements) as to fairness of presentation, GAAP
and consistency by a Financial Officer or the Borrower and (ii) a
certificate of a Financial Officer of the Borrower (A) setting forth
in reasonable detail the calculations required to establish whether
the Borrower was in compliance with the requirements of Sections 5.11
and 5.12 on the date of such financial statements, and (B) stating
whether any Default exists on the date of such certificate and, if any
Default then exists, setting forth the details thereof and the action
which the Borrower is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of
financial statements referred to in paragraph (a) above, a statement
of the firm of independent public accountants which reported on such
statements (i) stating whether anything has come to their attention to
cause them to believe that any Default existed on the date of such
statements and (ii) confirming the calculations set forth in the
Financial Officer's certificate delivered simultaneously therewith
pursuant to paragraph (c) above;
(e) forthwith upon becoming aware of the occurrence of
any Default, a certificate of a Financial Officer of the Borrower
setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders
of the Borrower generally, copies of all financial statements, reports
and proxy statements so mailed;
(g) promptly upon the filing thereof, copies of each
final prospectus (other than a prospectus included in any registration
statement on Form S-8 or its equivalent or with respect to a dividend
reinvestment plan) and all reports on Forms 10-K, 10-Q and 8-K and
INTERIM FACILITY
46
similar reports which the Borrower, TU Electric or Enserch shall have
filed with the SEC, or any Governmental Authority succeeding to any of
or all the functions of the SEC;
(h) if and when any member of the Controlled Group (i)
gives or is required to give notice to the PBGC of any Reportable
Event with respect to any Plan which 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
(i) promptly, from time to time, such additional
information regarding the financial position or business of the
Borrower and its Subsidiaries as the Agents, at the request of any
Lender, may reasonably request.
As promptly as practicable after delivering each set of financial statements as
required in paragraph (a) of this Section, the Borrower shall make available a
copy of the consolidating workpapers used by the Borrower in preparing such
consolidated statements to each Lender that shall have requested such
consolidating workpapers. Each Lender that receives such consolidating
workpapers shall hold them in confidence as required by Section 8.15; provided
that no Lender may disclose such consolidating workpapers to any other person
pursuant to clause (iv) of Section 8.15.
SECTION 5.04. INSURANCE. It will, and will cause each of its
Subsidiaries to, maintain such insurance or self insurance, to such extent and
against such risks, including fire and other risks insured against by extended
coverage, as is customary with companies similarly situated and in the same or
similar businesses.
SECTION 5.05. TAXES, ETC. It will, and will cause each of its
Subsidiaries to, pay and discharge promptly when due all material taxes,
assessments and governmental charges imposed upon it or upon its income or
profits or in respect of its property, as well as all other material
liabilities, in each case before the same shall become delinquent or in default
and before penalties accrue thereon, unless and to the extent that the same are
being contested in good faith by appropriate proceedings and adequate reserves
with respect thereto shall, to the extent required by GAAP, have been set
aside.
SECTION 5.06. MAINTAINING RECORDS; ACCESS TO PROPERTIES AND
INSPECTIONS. It will, and will cause each of its Subsidiaries to, maintain
financial records in accordance with GAAP and, upon reasonable notice and at
reasonable times, permit authorized representatives designated by
INTERIM FACILITY
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any Lender to visit and inspect its properties and to discuss its affairs,
finances and condition with its officers.
SECTION 5.07. ERISA. It will, and will cause each of its Subsidiaries
that are members of the Controlled Group to, comply in all material respects
with the applicable provisions of ERISA and the Code except where any
noncompliance, individually or in the aggregate, would not result in a Material
Adverse Change.
SECTION 5.08. USE OF PROCEEDS. It will not, and will not cause or
permit any of its Subsidiaries to, use the proceeds of the Loans for purposes
other than to finance or refinance (directly or indirectly, including as a
commercial paper back-up) equity or subordinated loan advances from the
Borrower to XxxXx 1 and XxxXx 2 to finance:
(A) consideration payable by Bidco to TEG
shareholders in respect of open market
purchases;
(B) fees and expenses of the Borrower in relation
to the Acquisition and the negotiation,
execution and delivery of this Agreement and
the Existing TU Credit Agreements; and
(C) consideration payable to TEG share options
holders pursuant to any relevant offer to
them by Bidco to purchase or cancel such
share options.
SECTION 5.09. CONSOLIDATIONS, MERGERS, SALES AND ACQUISITIONS OF
ASSETS AND INVESTMENTS IN SUBSIDIARIES. The Borrower will not (a) consolidate
or merge with or into any person unless (i) the surviving corporation is
incorporated under the laws of a State of the United States of America and
assumes or is responsible by operation of law for all the obligations of the
Borrower hereunder and (ii) no Default or Event of Default shall have occurred
or be continuing at the time of or after giving effect to such consolidation or
merger or (b) sell, lease or otherwise transfer, in a single transaction or in
a series of transactions, all or any Substantial part of its assets to any
person or persons other than a Wholly Owned Subsidiary. The Borrower will not
permit any Significant Subsidiary to consolidate or merge with or into, or
sell, lease or otherwise transfer all or any Substantial part of its assets to,
any person other than the Borrower or a Wholly Owned Subsidiary (or a person
which as a result of such transaction becomes a Wholly Owned Subsidiary),
provided that in the case of any merger or consolidation involving TU Electric
or Enserch, such person must assume or be responsible by operation of law for
all the obligations of TU Electric or Enserch, as applicable, hereunder, and
the Borrower will not in any event permit any such consolidation, merger, sale,
lease or transfer if any Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to any such transaction.
Notwithstanding the foregoing, (a) neither the Borrower nor any of its
Subsidiaries will engage to a Substantial extent in businesses other than those
currently conducted by them, or in the case
INTERIM FACILITY
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of Enserch, by Enserch and other businesses reasonably related thereto, (b)
neither the Borrower nor any of its Subsidiaries will acquire any Subsidiary or
make any investment in any Subsidiary if, upon giving effect to such
acquisition or investment, as the case may be, the Borrower would not be in
compliance with the covenants set forth in Sections 5.11 and 5.12 and (c)
nothing in this Section shall prohibit any sales of assets permitted by Section
5.10(d).
SECTION 5.10. LIMITATIONS ON LIENS. Neither the Borrower nor any
Significant Subsidiary will create or assume or permit to exist any Lien in
respect of any property or assets of any kind (real or personal, tangible or
intangible) of the Borrower or any Significant Subsidiary, or sell any such
property or assets subject to an understanding or agreement, contingent or
otherwise, to repurchase such property or assets, or sell, or permit any
Significant Subsidiary to sell, any accounts receivable; provided that the
provisions of this Section shall not prevent or restrict the creation,
assumption or existence of:
(a) any Lien in respect of any such property or assets of
any Significant Subsidiary to secure indebtedness owing by it to the
Borrower or any Wholly Owned Subsidiary of the Borrower; or
(b) purchase money Liens (including capital leases) in
respect of property acquired by the Borrower or any Significant
Subsidiary, to secure the purchase price of such property (or to
secure indebtedness incurred prior to, at the time of, or within 90
days after the acquisition solely for the purpose of financing the
acquisition of such property), or Liens existing on any such property
at the time of acquisition of such property by the Borrower or such
Significant Subsidiary, whether or not assumed, or any Lien in respect
of property of a corporation existing at the time such corporation
becomes a Subsidiary of the Borrower; or agreements to acquire any
property or assets under conditional sale agreements or other title
retention agreements, or capital leases in respect of any other
property; provided that
(1) the aggregate principal amount of
Indebtedness secured by all Liens in respect of any such
property shall not exceed the cost (as determined by the board
of directors of the Borrower or such Significant Subsidiary,
as the case may be) of such property at the time of
acquisition thereof (or (x) in the case of property covered by
a capital lease, the fair market value, as so determined, of
such property at the time of such transaction, or (y) in the
case of a Lien in respect of property existing at the time
such corporation becomes a Subsidiary of the Borrower the fair
market value, as so determined of such property at such time),
and
(2) at the time of the acquisition of the
property by the Borrower or such Subsidiary, or at the time
such corporation becomes a Subsidiary of the Borrower,
INTERIM FACILITY
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as the case may be, every such Lien shall apply and attach only
to the property originally subject thereto and fixed
improvements constructed thereon; or
(c) refundings or extensions of any Lien permitted in the
foregoing paragraph (b) for amounts not exceeding the principal amount
of the Indebtedness so refunded or extended or the fair market value
(as determined by the board of directors of the Borrower or such
Significant Subsidiary, as the case may be) of the property
theretofore subject to such Lien, whichever shall be lower, in each
case at the time of such refunding or extension; provided that such
Lien shall apply only to the same property theretofore subject to the
same and fixed improvements constructed thereon; or
(d) sales subject to understandings or agreements to
repurchase; provided that the aggregate sales price for all such sales
(other than sales to any governmental instrumentality in connection
with such instrumentality's issuance of indebtedness, including
without limitation industrial development bonds and pollution control
bonds, on behalf of the Borrower or any Significant Subsidiary) made
in any one calendar year shall not exceed $50,000,000; or
(e) any production payment or similar interest which is
dischargeable solely out of natural gas, coal, lignite, oil or other
mineral to be produced from the property subject thereto and to be
sold or delivered by the Borrower or any Significant Subsidiary; or
(f) any Lien including in connection with sale-leaseback
transactions created or assumed by any Significant Subsidiary on
natural gas, coal, lignite, oil or other mineral properties or nuclear
fuel owned or leased by such Subsidiary, to secure loans to such
Subsidiary in an aggregate amount not to exceed $400,000,000; provided
that neither the Borrower nor any Subsidiary of the Borrower shall
assume or guarantee such financings; or
(g) leases (other than capital leases) now or hereafter
existing and any renewals and extensions thereof under which the
Borrower or any Significant Subsidiary may acquire or dispose of any
of its property, subject, however, to the terms of Section 5.09; or
(h) any Lien created or to be created by the First
Mortgage of TU Electric; or
(i) any Lien on the rights of the Mining Company or Fuel
Company existing under their respective Operating Agreements; or
(j) pledges or sales by TU Electric or Enserch of its
accounts receivable including customers' installment paper; or
INTERIM FACILITY
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(k) the pledge of current assets, in the ordinary course
of business, to secure current liabilities; or
(l) Permitted Encumbrances.
SECTION 5.11. FIXED CHARGE COVERAGE. The Borrower will not, as of
the end of each quarter of each fiscal year of the Borrower, permit
Consolidated Earnings Available for Fixed Charges for the twelve months then
ended to be less than or equal to 150% of Consolidated Fixed Charges for the
twelve months then ended.
SECTION 5.12. EQUITY CAPITALIZATION RATIO. The Borrower will not at
any time permit Consolidated Shareholders' Equity to be less than 35% of
Consolidated Total Capitalization.
SECTION 5.13. INDEBTEDNESS OF THE BORROWER. The Borrower will not
incur, create, assume or permit to exist Indebtedness (other than guarantees
existing as of [the date hereof] and guarantees of any obligations of
Subsidiaries) in an amount at any time in excess of the sum of the following:
(A) $3,100,000,000;
(B) the excess, if any, of:
(i) cumulative consolidated net income of the Borrower
(after preferred stock dividends and preferred securities
distributions)
LESS:
cumulative combined consolidated net income (after preferred
stock dividends and preferred securities distributions) of the
Subsidiaries of the Borrower in excess of the sum of (x)
dividend income received by the Borrower from such
Subsidiaries and (y) cash proceeds received by the Borrower
from the purchase from the Borrower by a Subsidiary of the
Borrower of common stock of such Subsidiary in lieu of payment
of cash dividends by such Subsidiary
over
(ii) the sum of the aggregate amount of dividends paid by
the Borrower plus the aggregate amount of cash paid by the
Borrower to purchase any of its capital stock from
shareholders (other than pursuant to the Borrower's previously
announced stock buyback program of up to $250,000,000 of
common stock); provided that calculations for clauses (B)(i)
and (ii) shall be applied and included for each fiscal quarter
commencing on or after July 1, 1997; and
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(C) the aggregate proceeds received by TEII and the Borrower from
issuances of capital stock of TEII after April 24, 1997 and
before August 5, 1997 and of the Borrower on and after August
5, 1997 (other than issuances of capital stock of the Borrower
in connection with the Mergers and in any event only to the
extent such proceeds have not been used to prepay Indebtedness
(other than Indebtedness under this Agreement or Indebtedness
under the Corporate Revolvers or any short-term debt));
provided that Indebtedness of the Borrower (other than guarantees existing as
of April 24, 1997 and guarantees of any obligations of Subsidiaries) in an
amount in excess of such sum may be incurred, created, assumed or permitted to
exist for a period of up to 120 days if the Borrower shall have given the
Lenders prior written notice of its intent to issue capital stock within such
120-day period for net cash proceeds to the Borrower sufficient to eliminate
such excess; provided further that notwithstanding the above limitations, the
Borrower may incur additional Indebtedness in an aggregate principal amount of
up to $1,900,000,000 outstanding at any time in the form of commercial paper
for the sole purpose of making intercompany loans (i) to TU Electric in an
aggregate principal amount not to exceed $1,900,000,000 outstanding at any time
and (ii) to Enserch in an aggregate principal amount not to exceed $650,000,000
outstanding at any time.
SECTION 5.14. RESTRICTIVE AGREEMENTS. The Borrower will not, and
will not permit TU Electric, Enserch or any other Subsidiary of the Borrower
with respect to which TU Electric or Enserch is also a Subsidiary to, enter
into any agreement restricting the ability of such Subsidiary to make payments,
directly or indirectly, to its shareholders by way of dividends, advances,
repayments of loans or advances, reimbursements of management and other
intercompany charges, expenses and accruals or other returns on investments or
any other agreement or arrangement that restricts the ability of such
Subsidiary to make any payment, directly or indirectly, to its shareholders if
the effect of such agreement it to subject such Subsidiary to restrictions on
such payments greater than those to which such Subsidiary is subject on the
date of this Agreement.
ARTICLE VI
EVENTS OF DEFAULT
In case of the happening of any of the following events (each an
"EVENT OF DEFAULT"):
(a) any representation or warranty made or deemed made by
the Borrower in or in connection with the execution and delivery of
this Agreement or the Borrowings hereunder shall prove to have been
false or misleading in any material respect when so made, deemed made
or furnished;
(b) default shall be made by the Borrower in the payment
of any principal of any Loan when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise;
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(c) default shall be made by the Borrower in the payment
of any interest on any Loan or any Fee or any other amount (other than
an amount referred to in paragraph (b) above) due hereunder, when and
as the same shall become due and payable, and such default shall
continue unremedied for a period of five days;
(d) default shall be made by the Borrower in the due
observance or performance of any covenant, condition or agreement
contained in Section 5.01, 5.11, 5.12 or 5.13;
(e) default shall be made by the Borrower in the due
observance or performance of any covenant, condition or agreement
contained in Section 5.09 and such default shall continue unremedied
for a period of 5 days or default shall be made by the Borrower in the
due observance or performance of any covenant, condition or agreement
contained herein (other than those specified in (b), (c) or (d) above)
or in the Letter Agreement and such default shall continue unremedied
for a period of 30 days after notice thereof from the Administrative
Agent at the request of any Lender to the Borrower;
(f) the Borrower shall no longer own, directly or
indirectly, all the outstanding common stock of TU Electric (or any
successor) and at least 51% of the outstanding common stock of Enserch
(or any successor);
(g) the Borrower or any Subsidiary shall (i) fail to pay
any principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of $40,000,000, when and
as the same shall become due and payable, subject to any applicable
grace periods, or (ii) fail to observe or perform any other term,
covenant, condition or agreement contained in any agreement or
instrument evidencing or governing any such Indebtedness if the effect
of any failure referred to in this clause (ii) is to cause, or to
permit the holder or holders of such Indebtedness or a trustee on its
or their behalf to cause, such Indebtedness to become due prior to its
stated maturity;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower or any
Significant Subsidiary, or of a substantial part of the property or
assets of the Borrower or any Significant Subsidiary, under Title 11
of the United States Code, as now constituted or hereafter amended, or
any other Federal or state bankruptcy, insolvency, receivership or
similar law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Significant Subsidiary or for a substantial part of the property or
assets of the Borrower or any Significant Subsidiary or (iii) the
winding up or liquidation of the Borrower or any Significant
Subsidiary; and such proceeding or petition shall continue undismissed
for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered;
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(i) the Borrower or any Significant Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal or state bankruptcy,
insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner,
any proceeding or the filing of any petition described in (h) above,
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the
Borrower or any Significant Subsidiary or for a substantial part of
the property or assets of it or such Significant Subsidiary, (iv) file
an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for
the benefit of creditors, (vi) become unable, admit in writing its
inability or fail generally to pay its debts as they become due or
(vii) take any action for the purpose of effecting any of the
foregoing;
(j) A Change in Control shall occur;
(k) one or more judgments or orders for the payment of
money in an aggregate amount in excess of $50,000,000 shall be
rendered against the Borrower or any Subsidiary thereof or any
combination thereof and such judgment or order shall remain
undischarged or unstayed for a period of 30 days, or any action shall
be legally taken by a judgment creditor to levy upon assets or
properties of the Borrower or any Subsidiary to enforce any such
judgment or order;
(l) an ERISA Event or ERISA Events shall have occurred
that reasonably could be expected to result in a Material Adverse
Change;
then, and in every such event, and at any time thereafter during the
continuance of such event, the Administrative Agent, at the request of the
Required Lenders, shall, by notice to the Borrower, take either or both of the
following actions, at the same or different times: (i) terminate forthwith the
right of the Borrower to borrow pursuant to the Commitments and (ii) declare
the Loans 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 paragraph (h) or (i) above with respect to the Borrower, the Commitments of
the Lenders 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.
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ARTICLE VII
THE AGENTS
In order to expedite the transactions contemplated by this Agreement,
Chase Bank of Texas, National Association is hereby appointed to act as
Administrative Agent and Chase is hereby appointed to act as CAF Agent, on
behalf of the Lenders. Each of the Lenders hereby irrevocably authorizes the
Agents to take such actions on behalf of such Lender or holder and to exercise
such powers as are specifically delegated to the Agents by the terms and
provisions hereof, together with such actions and powers as are reasonably
incidental thereto. The Administrative Agent is hereby expressly authorized by
the Lenders and the CAF Agent, without hereby limiting any implied authority,
(a) to receive on behalf of the Lenders and the CAF Agent all payments of
principal of and interest on the Loans and all other amounts due to the Lenders
and the CAF Agent hereunder, and promptly to distribute to each Lender and the
CAF Agent its proper share of each payment so received; (b) to give notice on
behalf of each of the Lenders to the Borrower of any Event of Default of which
the Administrative Agent has actual knowledge acquired in connection with its
agency hereunder; and (c) to distribute to each Lender copies of all notices,
financial statements and other materials delivered by the Borrower pursuant to
this Agreement as received by the Administrative Agent.
No Agent or 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 Agents shall not be responsible to the Lenders for the due
execution, genuineness, validity, enforceability or effectiveness of this
Agreement or other instruments or agreements. The Agents may deem and treat
the Lender which makes any Loan as the holder of the indebtedness resulting
therefrom for all purposes hereof until it shall have received notice from such
Lender, given as provided herein, of the transfer thereof. The Agents 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. Each of the
Agents 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. No
Agent or 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 the other Agent or any Lender of any of its
obligations hereunder or to the other Agent or any Lender on account of the
failure of or delay in performance or breach by any other Lender, the other
Agent or the Borrower of any of their respective obligations hereunder or in
connection herewith. Each of the Agents may execute any and all duties
hereunder by or through agents or employees and shall be entitled to rely upon
the advice of legal counsel selected by it with respect to all matters arising
hereunder
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and shall not be liable for any action taken or suffered in good faith by it in
accordance with the advice of such counsel.
The Lenders hereby acknowledge that the Agents shall be under no 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.
Subject to the appointment and acceptance of a successor Agent as
provided below, either Agent 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 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 retiring Agent gives notice
of its resignation, then the retiring Agent may, on behalf of the Lenders,
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 retiring Agent shall be discharged from its
duties and obligations hereunder. After any Agent's resignation hereunder, the
provisions of this Article and Section 8.05 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.
With respect to the Loans made by it hereunder, each of the Agents, in
its individual capacity and not as an Agent shall have the same rights and
powers as any other Lender and may exercise the same as though it were not an
Agent, and each of the Agents and their 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 an Agent.
Each Lender agrees (i) to reimburse the Agents, on demand, in the
amount of its pro rata share (based on its Commitment hereunder or, if the
Commitments shall have been terminated, the amount of its outstanding Loans) of
any expenses incurred for the benefit of the Lenders in its role as Agent,
including counsel fees and compensation of agents and employees paid for
services rendered on behalf of the Lenders, which shall not have been
reimbursed by the Borrower and (ii) to indemnify and hold harmless each of the
Agents and any of its directors, officers, employees or agents, on demand, in
the amount of such pro rata share, from and against 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 no Lender shall be liable to any 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 such Agent or any of its directors,
officers, employees or agents.
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Each Lender acknowledges that it has, independently and without
reliance upon the Agents 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 also acknowledges that it
will, independently and without reliance upon the Agents 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 VIII
MISCELLANEOUS
SECTION 8.01. 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, to Texas Utilities Company,
Energy Plaza, 0000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, XX 00000,
Attention of Xxxxx Xxxxxxxx, Manager of Corporate Finance and
Compliance (Telecopy No. 000- 000-0000);
(b) if to the CAF Agent, to The Chase Manhattan Bank,
Loan and Agency Services Group, One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxx Xxxxxxxx (Telecopy No.
000-000-0000, with a copy to The Chase Manhattan Bank at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxxx Xxxxx (Telecopy
No. 212-270-1354);
(c) if to the Administrative Agent, to Chase Bank of
Texas, National Association, 0000 Xxxx Xxxxxx 0xx Xxxxx, Xxxxxx XX
00000, Attention of Xxxxx Xxxx (Telecopy No. 214-965-2990); and
(d) if to a Lender, to it at its address (or telecopy
number) set forth in the Administrative Questionnaire delivered to the
Administrative Agent by such Lender in connection with the execution
of this Agreement or previously or in the Assignment and Acceptance
pursuant to which such Lender became a 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 or in accordance with the
latest unrevoked direction from such party given in accordance with this
Section.
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SECTION 8.02. 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 shall survive the making by the Lenders of the Loans regardless of
any investigation made by the Lenders or on their behalf, and shall continue in
full force and effect as long as the principal of or any accrued interest on
any Loan or any Fee or any other amount payable under this Agreement is
outstanding and unpaid or the Commitments have not been terminated.
SECTION 8.03. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrower and each Agent and when the
Administrative 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.
SECTION 8.04. 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 Loans at the time owing
to it); provided, however, that (i) except in the case of an assignment to a
Lender or an Affiliate of such Lender, an assignment to a Federal Reserve Bank
or an assignment made at any time an Event of Default shall have occurred and
be continuing, the Borrower and the Agents 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 Administrative Agent) shall not
be less than $15,000,000, (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, (iv) the parties to each such assignment
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance, and a processing and recordation fee of $3,000, and (v) the
assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire. Upon acceptance and recording pursuant
to Section 8.04(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 Administrative
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
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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 2.12, 2.17 and 8.05 afforded to such Lender prior to its assignment as
well as to any Fees accrued for its account hereunder and not yet paid)).
Notwithstanding the foregoing, any Lender assigning its rights and obligations
under this Agreement may retain any Competitive Loans made by it outstanding at
such time, and in such case shall retain its rights hereunder in respect of any
Loans so retained until such Loans have been repaid in full in accordance with
this Agreement.
(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 5.03 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 Agents, such
assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (vi) such
assignee appoints and authorizes each Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to
such 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 which by the terms of this
Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at one of its offices
in the City of Houston 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 Loans owing to, 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 Agents 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
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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 together with an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) above and, if required, the written consent of the Borrower
and the Agents to such assignment, the Administrative Agent shall (i) accept
such Assignment and Acceptance and (ii) record the information contained
therein in the Register.
(f) Each Lender may without the consent of the Borrower or the
Agents sell participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); 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 2.12, 2.17 and 8.05 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 Agents 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
Loans, (y) extending any scheduled principal payment date or date fixed for the
payment of interest on the Loans 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, 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 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 5.09) by the Borrower without such consent
shall be void.
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(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.
SECTION 8.05. EXPENSES; INDEMNITY. (a) The Borrower agrees to pay
all reasonable out-of-pocket expenses incurred by the Agents in connection with
entering into this Agreement or in connection with any amendments,
modifications or waivers of the provisions hereof (but only if such amendments,
modifications or waivers are requested by the Borrower) (whether or not the
transactions hereby contemplated are consummated), or incurred by the Agents or
any Lender in connection with the enforcement of their rights in connection
with this Agreement or in connection with the Loans made hereunder, including
the reasonable fees and disbursements of counsel for the Agents or, in the case
of enforcement following an Event of Default, the Lenders.
(b) The Borrower agrees to indemnify each Lender against any loss,
calculated in accordance with the next sentence, or reasonable expense which
such Lender may sustain or incur as a consequence of (a) 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 or 2.04, (b) any payment, prepayment or conversion, or assignment
of a Eurodollar Loan or Fixed Rate 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, (c) any
default in payment or prepayment of the principal amount of any Loan 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 (d) the occurrence of any Event of
Default, including, in each such case, any loss or reasonable expense sustained
or incurred or to be sustained or incurred by 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 or a Fixed Rate Loan. Such
loss shall include an amount equal to the excess, if any, as reasonably
determined by such Lender, of (i) its cost of obtaining the funds for the Loan
being paid, prepaid, refinanced, converted or not borrowed (assumed to be the
LIBO Rate or, in the case of a Fixed Rate Loan, the fixed rate of interest
applicable thereto) 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 which would have commenced on the date of such
failure) over (ii) 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.
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(c) THE BORROWER AGREES TO INDEMNIFY THE AGENTS, EACH LENDER, EACH
OF THEIR AFFILIATES AND THE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF THE
FOREGOING (EACH SUCH PERSON BEING CALLED AN "INDEMNITEE") AGAINST, AND TO HOLD
EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES
AND RELATED EXPENSES, INCLUDING REASONABLE COUNSEL FEES AND EXPENSES, INCURRED
BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF (i)THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, INCLUDING THE ACQUISITION, (ii)
THE USE OF THE PROCEEDS OF THE LOANS OR (iii) ANY CLAIM, LITIGATION,
INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER OR NOT
ANY INDEMNITEE IS A PARTY THERETO, INCLUDING ANY OF THE FOREGOING ARISING FROM
THE NEGLIGENCE, WHETHER SOLE OR CONCURRENT, ON THE PART OF ANY INDEMNITEE;
PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO
THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES
(i) ARE DETERMINED BY A FINAL JUDGMENT OF A COURT OF COMPETENT JURISDICTION TO
HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH
INDEMNITEE OR (ii) RESULT FROM ANY LITIGATION BROUGHT BY SUCH INDEMNITEE
AGAINST THE BORROWER OR BY THE BORROWER AGAINST SUCH INDEMNITEE, IN WHICH A
FINAL, NONAPPEALABLE JUDGMENT HAS BEEN RENDERED AGAINST SUCH INDEMNITEE;
PROVIDED, FURTHER, THAT THE BORROWER AGREES THAT IT WILL NOT, NOR WILL IT
PERMIT ANY 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
SECTION 8.05(c) (WHETHER OR NOT ANY INDEMNITEE IS AN ACTUAL OR POTENTIAL PARTY
TO SUCH CLAIM, ACTION, SUIT OR PROCEEDING), UNLESS SUCH SETTLEMENT, COMPROMISE
OR CONSENT DOES NOT INCLUDE ANY STATEMENT AS TO AN ADMISSION OF FAULT,
CULPABILITY OR FAILURE TO ACT BY OR ON BEHALF OF ANY INDEMNITEE AND DOES NOT
INVOLVE ANY PAYMENT OF MONEY OR OTHER VALUE BY ANY INDEMNITEE OR ANY INJUNCTIVE
RELIEF OR FACTUAL FINDINGS OR STIPULATIONS BINDING ON ANY INDEMNITEE.
(d) The provisions of this Section shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term
or provision of this Agreement or any investigation made by or on behalf of any
Agent or any Lender. All amounts due under this Section shall be payable on
written demand therefor.
(e) A certificate of any Lender or Agent setting forth any amount
or amounts which such Lender or Agent is entitled to receive pursuant to
paragraph (b) of this Section and containing an explanation in reasonable
detail of the manner in which such amount or amounts shall have been determined
shall be delivered to the Borrower and shall be conclusive absent manifest
error.
SECTION 8.06. RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower against any of and all the
obligations
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of the Borrower now or hereafter existing under this Agreement held by such
Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
SECTION 8.07. APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 8.08. WAIVERS; AMENDMENT. (a) No failure or delay of either
Agent 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 Agents and the Lenders
hereunder are cumulative and are not exclusive of any rights or remedies which
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure therefrom shall in any event be effective unless the
same shall be permitted by paragraph (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 waive or excuse any such payment or any part
thereof, or decrease the rate of interest on any Loan, without the prior
written consent of each Lender affected thereby, (ii) increase any Commitment
or decrease the Facility Fee of any Lender without the prior written consent of
such Lender, or (iii) amend or modify the provisions of Section 2.14 or Section
8.04(h), the provisions of this Section 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 Administrative Agent or the CAF Agent hereunder without
the prior written consent of the Administrative Agent or the CAF Agent, as the
case may be. Each Lender shall be bound by any waiver, amendment or
modification authorized by this Section and any consent by any Lender pursuant
to this Section shall bind any assignee of its rights and interests hereunder.
SECTION 8.09. ENTIRE AGREEMENT. THIS AGREEMENT (INCLUDING THE
SCHEDULES AND EXHIBITS HERETO) AND THE LETTER AGREEMENT CONSTITUTE A "LOAN
AGREEMENT" AS DEFINED IN SECTION 26.02(A) OF THE TEXAS BUSINESS AND COMMERCE
CODE, AND REPRESENT THE ENTIRE CONTRACT AMONG THE PARTIES RELATIVE TO THE
SUBJECT MATTER HEREOF AND THEREOF. ANY PREVIOUS AGREEMENT, WHETHER WRITTEN OR
ORAL, AMONG THE PARTIES
INTERIM FACILITY
63
WITH RESPECT TO THE SUBJECT MATTER HEREOF IS SUPERSEDED BY THIS AGREEMENT AND
THE LETTER 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 8.10. SEVERABILITY. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good- faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 8.11. 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 8.03.
SECTION 8.12. 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 8.13. 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, shall exceed the maximum
lawful rate (the "MAXIMUM RATE") which may be contracted for, charged, taken,
received or reserved by such Lender in accordance with applicable law, the rate
of interest payable on the Loans of such Lender, together with all Charges
payable to such Lender, shall be limited to the Maximum Rate.
(b) If the amount of interest, together with all Charges, payable
for the account of any Lender in respect of any interest computation period is
reduced pursuant to paragraph (a) of this Section and the amount of interest,
together with all Charges, payable for such Lender's account in respect of any
subsequent interest computation period, computed pursuant to Section 2.07,
would be less than the Maximum Rate, then the amount of interest, together with
all Charges, payable for such Lender's account in respect of such subsequent
interest computation period shall, to the extent permitted by applicable law,
be automatically increased to such Maximum Rate; provided that at no time shall
the aggregate amount by which interest paid for the account of any Lender has
been increased pursuant to this paragraph (b) exceed the aggregate amount by
which interest, together with all Charges, paid for its account has theretofore
been reduced pursuant to paragraph (a) of this Section.
INTERIM FACILITY
64
SECTION 8.14. JURISDICTION; VENUE. (a) The Borrower hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Subject to the
foregoing and to paragraph (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 which 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
or Federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
SECTION 8.15. CONFIDENTIALITY. Each Lender shall use its best
efforts to hold in confidence all information, memoranda, or extracts furnished
to such Lender (directly or through the Agents) by the Borrower hereunder or in
connection with the negotiation hereof; provided that such Lender may disclose
any such information, memoranda or extracts (i) to its accountants or counsel,
(ii) to any regulatory agency having authority to examine such Lender, (iii) as
required by any legal or governmental process or otherwise by law, (iv) except
as provided in the last sentence of Section 5.03, to any person to which such
Lender sells or proposes to sell an assignment or a participation in its Loans
hereunder, if such other person agrees for the benefit of the Borrower to
comply with the provisions of this Section and (v) to the extent that such
information, memoranda or extracts shall be publicly available or shall have
become known to such Lender independently of any disclosure by the Borrower
hereunder or in connection with the negotiation hereof. Notwithstanding the
foregoing, any Lender may disclose the provisions of this Agreement and the
amounts, maturities and interest rates of its Loans to any purchaser or
potential purchaser of such Lender's interest in any Loan.
[Signature pages follow]
INTERIM FACILITY
65
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.
TEXAS UTILITIES COMPANY
By /s/ Texas Utilities Company
----------------------------
Name:
Title:
TEXAS UTILITIES ELECTRIC COMPANY
By /s/ Texas Utilities Electric Company
-------------------------------------
Name:
Title:
ENSERCH CORPORATION
By /s/ Enserch Corporation
----------------------------
Name:
Title:
INTERIM FACILITY
00
XXXXX XXXX XX XXXXX, NATIONAL
ASSOCIATION, as Administrative Agent
By /s/ Chase Bank of Texas, National
Association
----------------------------
Name:
Title:
INTERIM FACILITY
67
THE CHASE MANHATTAN BANK,
individually and as Competitive
Advanced Facility Agent
By /s/ The Chase Manhattan Bank
-------------------------------
Name:
Title:
INTERIM FACILITY
68
LENDERS:
XXXXXX COMMERCIAL PAPER INC.
By /s/ Xxxxxx Commercial Paper Inc.
-----------------------------------
Name:
Title:
INTERIM FACILITY
69
XXXXXXX XXXXX CAPITAL CORPORATION
By /s/ Xxxxxxx Xxxxx Capital Corporation
--------------------------------------
Name:
Title:
INTERIM FACILITY
70
EXHIBIT A-1
FORM OF COMPETITIVE BID REQUEST
The Chase Manhattan Bank,
as Competitive Advance Facility Agent
for the Lenders referred to below,
x/x Xxx Xxxxx Xxxxxxxxx Bank
Loan and Agency Services Group
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Telecopy: 000-000-0000
Dear Ladies and Gentlemen:
The undersigned, Texas Utilities Company (the "BORROWER"), refers to
the 364-Day Competitive Advance and Revolving Credit Facility Agreement, dated
as of March 6, 1998 (as it may hereafter be amended, modified, extended or
restated from time to time, the "AGREEMENT"), among the Borrower, the Lenders
named therein, Chase Bank of Texas, National Association, as Administrative
Agent, and The Chase Manhattan Bank, as Competitive Advance Facility Agent.
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(a) of the Agreement that it requests a
Competitive Borrowing under the Agreement, and in that connection sets forth
below the terms on which such Competitive Borrowing is requested to be made:
(A) Date of Competitive Borrowing (which is a Business Day)
--------
(B) Principal amount of aggregate Competitive Borrowing(1)
--------
1. Principal amount of Competitive Borrowing
comprised of Offer Loans
--------
2. Principal amount of Competitive Borrowing
comprised of General Loans --------
(C) Interest rate basis(2) --------
--------------
(1) Not less than $5,000,000 (and in integral multiples of $1,000,000) or
greater than the Total Commitment then available.
(2) Eurodollar Loan or Fixed Rate Loan.
i
71
(D) Interest Period and the last day thereof(3)
--------
Upon acceptance of any or all of the Loans offered 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,
TEXAS UTILITIES COMPANY
By /s/ Texas Utilities Company
------------------------------
Name:
Title: [Financial Officer]
-----------------
(3) Which shall be subject to the definition of INTEREST PERIOD and end not
later than the Maturity Date.
ii
72
EXHIBIT A-2
FORM OF NOTICE OF COMPETITIVE BID REQUEST
[Name of Lender]
[Address]
New York, New York
[Date]
Attention: [ ]
Dear Ladies and Gentlemen:
Reference is made to the 364-Day Competitive Advance and Revolving
Credit Facility Agreement, dated as of March 6, 1998 (as it may hereafter be
amended, modified, extended or restated from time to time, the "AGREEMENT"),
among Texas Utilities Company (the "BORROWER"), the Lenders named therein,
Chase Bank of Texas, National Association, as Administrative Agent and the
Chase Manhattan Bank, as Competitive Advance Facility Agent. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned
to such terms in the Agreement. The Borrower made a Competitive Bid Request on
__________, [___], pursuant to Section 2.03(a) of the Agreement, and in that
connection you are invited to submit a Competitive Bid by [Date]/[Time].(1) Your
Competitive Bid must comply with Section 2.03(b) of the Agreement and the terms
set forth below on which the Competitive Bid Request was made:
(A) Date of Competitive Borrowing
--------
(B) Principal amount of Competitive Borrowing
--------
1. Principal amount of Competitive
Borrowing comprised of Offer Loans
--------
2. Principal amount of Competitive Borrowing
comprised of General Loans
--------
(C) Interest rate basis --------
------------
(1) The Competitive Bid must be received by the CAF Agent (vi) in the case of
Eurodollar Loans, not later than 9:30 a.m., New York City time, three
Business Days before a proposed Competitive Borrowing, and (vii) in the case
of Fixed Rate Loans, not later than 9:30 a.m., New York City time, on the
Business Day of a proposed Competitive Borrowing.
73
(D) Interest Period and the last day thereof
--------
Very truly yours,
The Chase Manhattan Bank,
as Competitive Advance Facility Agent,
By
------------------------------
Name:
Title:
A-2-ii
74
EXHIBIT A-3
FORM OF COMPETITIVE BID
The Chase Manhattan Bank,
as Competitive Advance Facility Agent
for the Lenders referred to below,
x/x Xxx Xxxxx Xxxxxxxxx Bank
Loan and Agency Services Group
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Telecopy: 000-000-0000
[Date]
Attention: [ ]
Dear Ladies and Gentlemen:
The undersigned, [Name of Lender], refers to the 364-day Competitive
Advance and Revolving Credit Facility Agreement, dated as of March 6, 1998 (as
it may hereafter be amended, modified, extended or restated from time to time,
the "AGREEMENT"), among Texas Utilities Company (the "BORROWER"), the Lenders
named therein, Chase Bank of Texas, National Association, as Administrative
Agent and The Chase Manhattan Bank, as Competitive Advance Facility Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Agreement. The undersigned hereby makes
a Competitive Bid pursuant to Section 2.03(b) of the Agreement, in response to
the Competitive Bid Request made by the Borrower on ___________, [____], and in
that connection sets forth below the terms on which such Competitive Bid is
made:
(A) Principal Amount(1)
--------
(B) Competitive Bid Rate(2)
--------
(C) Interest Period and last day thereof
--------
----------------
(1) Not less than $5,000,000 or greater than the requested Competitive
Borrowing and in integral multiples of $1,000,000. Multiple bids will be
accepted by the CAF Agent.
(2) i.e., LIBO Rate + or - __%, in the case of Eurodollar Loans or ___%, in the
case of Fixed Rate Loans.
75
The undersigned hereby confirms that it is prepared, subject to the
conditions set forth in the Agreement, to extend credit to the Borrower upon
acceptance by the Borrower of this bid in accordance with Section 2.03(d) of
the Agreement.
Very truly yours,
[NAME OF LENDER],
By /s/
----------------------------
Name:
Title:
A-3-ii
76
EXHIBIT A-4
FORM OF COMPETITIVE BID ACCEPT/REJECT LETTER
[Date]
The Chase Manhattan Bank,
as Competitive Advance Facility Agent
for the Lenders referred to below,
x/x Xxx Xxxxx Xxxxxxxxx Bank
Loan and Agency Services Group
One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Telecopy: 000-000-0000
Dear Ladies and Gentlemen:
The undersigned, Texas Utilities Company (the "BORROWER"), refers to
the 364-Day Competitive Advance and Revolving Credit Facility Agreement, dated
as of March 6, 1998 (as it may hereafter be amended, modified, extended or
restated from time to time, the "AGREEMENT"), among the Borrower, the Lenders
named therein, Chase Bank of Texas, as Administrative Agent and The Chase
Manhattan Bank, as Competitive Advance Facility Agent for the Lenders.
In accordance with Section 2.03(c) of the Agreement, we have received
a summary of bids in connection with our Competitive Bid Request dated
_____________, 19[ ], and in accordance with Section 2.03(d) of the Agreement,
we hereby accept the following bids for maturity on [date]:
Principal Amount Fixed Rate/Margin Lender
---------------- ----------------- ------
$ [%]/[+/-. %]
$
We hereby reject the following bids:
Principal Amount Fixed Rate/Margin Lender
---------------- ----------------- ------
$ [%]/[+/-. %]
$
77
The $__________ should be deposited in The Chase Manhattan Bank
account number [ ] on [date].
Very truly yours,
TEXAS UTILITIES COMPANY
By
-------------------------------
Name:
Title:
A-4-ii
78
EXHIBIT A-5
FORM OF STANDBY BORROWING REQUEST
Chase Bank of Texas, National Association,
as Administrative Agent for the Lenders referred to below,
0000 Xxxx Xxxxxx, 0xx xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxx
Telecopy: (000) 000-0000
[Date]
Dear Ladies and Gentlemen:
The undersigned, Texas Utilities Company (the "BORROWER"), refers to
the 364-Day Competitive Advance and Revolving Credit Facility Agreement dated
as of March 6, 1998 (as it may hereafter be amended, modified, extended or
restated from time to time, the "AGREEMENT"), among the Borrower, the Lenders
named therein, Chase Bank of Texas, National Association, as Administrative
Agent and The Chase Manhattan Bank, as Competitive Advance Facility Agent.
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 2.04 of the Agreement that it requests a Standby
Borrowing under the Agreement, and in that connection sets forth below the
terms on which such Standby Borrowing is requested to be made:
(A) Date of Standby Borrowing (which is a Business Day)
--------
(B) Principal amount of Standby Borrowing(1)
--------
1. Principal amount of Standby Borrowing
comprised of Offer Loans --------
2. Principal amount of Standby Borrowing
comprised of General Loans
--------
(C) Interest rate basis(2)
--------
(D) Interest Period and the last day thereof(3)
--------
-----------------
(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 Maturity Date.
79
(E) The Standby Borrowing will [not] comprise
Offer Loans.
--------
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,
TEXAS UTILITIES COMPANY
By
------------------------------
Name:
Title: [Financial Officer]
A-5-ii
80
EXHIBIT B
ADMINISTRATIVE QUESTIONNAIRE
TEXAS UTILITIES COMPANY
PLEASE FORWARD THIS COMPLETED
FORM AS SOON AS POSSIBLE TO:
Xxxxx XxXxxxxxx: Fax (000) 000-0000
PLEASE TYPE ALL INFORMATION.
Agent: Chase Bank of Texas, National Association
000 Xxxxxx Xxxxxx, 0-XXX-X 00
Xxxxxxx, Xxxxx 00000
Telex:
Chase Securities Inc.
Syndications
Telecopier: (000) 000-0000/Alt. Fax (000) 000-0000
Chase Securities Inc.
Syndications
Contacts: Xxxxxxx Xxxxx Phone: (000) 000-0000
Xxx X. Xxxxxxxxxxx Phone: (000) 000-0000
Xxxxx XxXxxxxxx Phone: (000) 000-0000
Operations: Xxxx Xxxxxxx Phone: (000) 000-0000
Letters of Credit: Xxxx Xxxxxxx Phone: (000) 000-0000
Competitive Auction
Contact: The Chase Manhattan Bank
Xxxxx Xxxxxxxx Phone: (000) 000-0000
Fax: (000) 000-0000
81
Full Legal Name of your Institution:
Hard-copy documents, notices and periodic financial statements of the Borrower
should be sent to the following account officer designated by your bank:
Officer's Name:
Title:
Xxxxxx Xxxxxxx (Xx X.X. Xxxxx xxxxxx):
Xxxx, Xxxxx, Xxx:
Phone #:
Telefax #:
B-ii
82
PRIMARY CONTACT INFORMATION
We will send all telecopies regarding time-critical information (drawdowns,
option changes, payments, etc.) to the Primary or Alternate Contact at the
banking location you designate.
1. Your bank's primary contact for telefaxes concerning borrowings,
options on interest rates, etc.:
Primary Telephone Telefax
Name Number Number
-------- -------- ------
Alternate Name/ Telephone Telefax
Phone No. Number Number
---------------- ---------- ------
If at any time any of the above information changes, please advise.
Publicity: Under what name would you prefer your institution to appear in
any future advertisements?
B-iii
83
Movement of Funds: TO US: Wire Fed Funds to:
Chase Bank of Texas, National Association
ABA # 000000000
for account number # 0000-000-0000
Attention: Xxxx Xxxxxxx/Loan Syndication
Services
Reference: TEXAS UTILITIES COMPANY
TO YOU: Wire Fed Funds to:
NAME:
ABA #
For Credit To:
Attention:
Reference:
Other:
If buyer is purchasing Letter of Credit facility as part of this
participation/syndication, please provide the information below:
L/C contact name:
Street Address:
City, State, Zip:
Phone #:
Telefax #:
Wire Fed Funds to:
NAME:
ABA #
For Credit To:
Attention:
Reference:
B-iv
84
PLEASE COMPLETE THE FOLLOWING INFORMATION
FOR COMPETITIVE AUCTIONS ONLY
PRIMARY CONTACT
COMPETITIVE AUCTIONS
Bank Name:
Address:
Primary Contact:
Department:
Telephone Number:
Telefax Number:
ALTERNATE CONTACT
COMPETITIVE AUCTIONS
Alternate Contact:
Department:
Telephone Number:
Telefax Number:
B-v
85
PLEASE COMPLETE THE FOLLOWING INFORMATION
FOR COMPETITIVE AUCTIONS ONLY
PRIMARY CONTACT
COMPETITIVE AUCTIONS
Bank Name:
Address:
Primary Contact:
Department:
Telephone Number:
Telefax Number:
ALTERNATE CONTACT
COMPETITIVE AUCTIONS
Alternate Contact:
Department:
Telephone Number:
Telefax Number:
B-vi
86
EXHIBIT C
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Dated: __________, 19__
Reference is made to the 364-Day Competitive Advance and Revolving
Credit Facility Agreement, dated as of March 6, 1998 (as amended, modified,
extended or restated from time to time, the "AGREEMENT"), among Texas Utilities
Company (the "BORROWER"), the lenders listed in Schedule 2.01 thereto (the
"LENDERS"), Chase Bank of Texas, National Association, as Administrative Agent
and The Chase Manhattan Bank, as Competitive Advance Facility Agent for the
Lenders. 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 the [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
Competitive Loans and Standby Loans owing to the Assignor which 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 8.04 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
Administrative Agent together with (i) if the Assignee is organized under the
laws of a jurisdiction outside the United States, the forms specified in
Section 2.17(g) of the Agreement, duly completed and executed by such Assignee,
(ii) if the Assignee is not already a Lender under the Agreement, an
Administrative Questionnaire in the form of Exhibit B to the Agreement and
(iii) a processing and recordation fee of $3,000.
87
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:
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
Administrative Agent):
C-ii
88
Percentage Assigned of Facility/Commitment
Principal Amount Assigned (set forth, to at least 8 decimals, as a
(and identifying information percentage of the Facility and the
Facility as to individual Competitive Loans) aggregate Commitments of all Lenders thereunder
-------------------------- ----------------------------------- -----------------------------------------------
Commitment Assigned: $ %
------------ ----------
Standby Loans: $ %
------------ ----------
Competitive Loans: $ %
------------ ----------
Fees Assigned (if any): $ %
------------ ----------
C-iii
89
The terms set forth and on the reverse Accepted:
side hereof are hereby agreed to: TEXAS UTILITIES COMPANY
, as By:
---------------------------- ----------------------------
Assignor Name:
Title:
By: , as
---------------------------- CHASE BANK OF TEXAS, NATIONAL
Name: ASSOCIATION, as Administrative Agent
Title:
, as By:
---------------------------- ----------------------------
Assignee, Name:
Title:
By: , as
---------------------------- THE CHASE MANHATTAN BANK, as
Name: CAF Agent
Title:
By:
----------------------------
Name:
Title:
C-iv
90
EXHIBIT D-1
[LETTERHEAD OF]
XXXX & PRIEST LLP
_____ __, 1998
To the Lenders listed on
Schedule 2.01 of each
Credit Agreement referred to below
and from time to time party to such Credit Agreement
Ladies and Gentlemen:
We advise you that we have acted as counsel to Texas Utilities Company, a
Texas Corporation ("TUC"), in connection with the 364-Day Competitive Advance
and Revolving Credit Facility Agreement (the "CREDIT AGREEMENT"), dated as of
March 6, 1998, among TUC, Chase Bank of Texas, National Association, as
Administrative Agent, The Chase Manhattan Bank, as Competitive Advance Facility
Agent, and the banks listed on Schedule 2.01 thereof (the "LENDERS"), and have
participated in the preparation of or have examined and are familiar with (a)
the current financial statements and reports filed by TUC, TU Electric and
Enserch with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934, as amended, (b) the Credit Agreement, (C) the articles of
incorporation and by-laws of TUC and (d) such other records and documents as we
have deemed necessary for the purposes of this opinion.
As to those matters stated herein to be "to our knowledge" or "known to us"
such examination has been limited to discussions with and certificates from
officers of TUC and we have not conducted any independent investigation or
verification or taken any action beyond such discussions and certificates, nor
made any search of the records of any Governmental Authority with respect to
such matters.
Capitalized terms used in this opinion and not defined herein shall have
the respective meanings assigned thereto in the Credit Agreement. This opinion
is delivered to you pursuant to Section 4.01(c) of the Credit Agreement.
We are members of the New York Bar and do not hold ourselves out as experts
on the laws of the State of Texas. As to all matters of Texas law (including
incorporation of TUC, titles to properties, franchises, licenses and permits)
we have, with your consent, relied upon an opinion of even date herewith
delivered to you by Xxxxxxx, Xxxxxxxx & Xxxxxxxxxx, L.L.P., general
91
counsel for TUC. While we represent TUC on a regular basis, our engagement has
been limited to specific matters as to which we were consulted. We have no
direct knowledge of the day-to-day affairs of TUC and have not reviewed
generally their business affairs. Accordingly, we are relying upon
representations of TUC contained in the Credit Agreement, in certificates
furnished pursuant thereto, and in certificates furnished to us by officers of
TUC.
For purposes of the opinions expressed below, we have assumed (i) the
authenticity of all documents submitted to us as originals, (ii) the conformity
to the originals of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such copies, (iii) the
genuineness of all signatures other than on behalf of TUC, (iv) the legal
capacity of natural persons, (v) the power, corporate or otherwise, of all
parties other than TUC to enter into and to perform all of their obligations
under such documents, and (vi) the due authorization, execution and delivery of
all documents by all parties other than TUC.
Based on the foregoing, we are of the opinion that:
1. TUC (i) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas, (ii) has all requisite power and
authority to own its property and assets and to carry on its business as now
conducted, (iii) is qualified to do business in every jurisdiction within the
United States where such qualification is required, except where the failure so
to qualify would not result in a Material Adverse Change, and (iv) has all
requisite corporate power and authority to execute, deliver and perform its
obligations under the Credit Agreement and to borrow funds thereunder.
2. The execution, delivery and performance by TUC of the Credit Agreement
and the Borrowings by it thereunder (collectively, the "TRANSACTIONS") and the
consummation of the Acquisition (i) have been duly authorized by all requisite
corporate action and (ii) will not (a) violate (1) any law, statute, rule or
regulation presently binding on or applicable to TUC, or the articles of
incorporation, as amended, or by-laws of TUC, (2) to our knowledge, any order
of any Governmental Authority presently applicable to TUC or (3) any provision
of any indenture, agreement or other instrument known to us to which TUC or its
property is 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) except as contemplated by the
UK Facility Agreement (as defined in the Existing Credit Agreements), result in
the creation or imposition of any lien upon or with respect to any property or
assets of TUC.
3. The Credit Agreement has been duly executed and delivered by TUC and
constitutes legal, valid and binding obligations of TUC enforceable against TUC
in accordance with its terms except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
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92
4. No action, consent or approval of, registration or filing with, or any
other action by, any Governmental Authority (including pursuant to the Public
Utility Holding Company Act of 1935, as amended) is required on the part of TUC
in connection with the Transactions or the Acquisition, except such as have
been made or obtained and are in full force and effect and, in the case of the
Acquisition, (vi) expiration or termination of the waiting period under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1979 and (vii) [the filing by
TUC of a registration statement on Form S-4] under the Securities Act of 1933,
as amended, relating to shares of common stock of TUC to be issued in
connection with the Acquisition, and action by the Securities and Exchange
Commission declaring said registration statement to be effective under such
Act.
5. (a) Neither TUC nor any of its respective Subsidiaries is an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended, and (b) TUC and each of its
Subsidiaries is exempt from all provisions of the Public Utility Holding
Company Act of 1935, as amended, and the rules and regulations thereunder,
except for Sections 9(a)(2) and 33 of such Act and the rules and regulations
thereunder, and the execution, delivery and performance by TUC of the Credit
Agreement and the consummation of the Acquisition do not violate any provisions
of such Act or any rule or regulation thereunder.
6. Except as described in the Annual Reports on Form 10-K for the year
ended December 31, 1996 and the Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997, filed by TUC, TU
Electric and Enserch with the Securities and Exchange Commission and as set
forth in Schedule 3.06 to the Credit Agreement, to our knowledge there is no
action, suit, or proceeding at law or in equity or by or before any
Governmental Authority now pending or threatened against or affecting TUC, TU
Electric or Enserch (i) which involves the Transactions or (ii) as to which
there is a reasonable possibility of an adverse determination and which, if
adversely determined, could, individually or in the aggregate, result in a
Material Adverse Change.
7. To our knowledge, after due inquiry, the proposed use of the proceeds
of the Loans is in accordance with the Credit Agreement and, if so used, will
not violate the Margin Regulations.
8. We believe that a New York court would give effect to the provisions of
the Credit Agreement that state that they are to be construed in accordance
with New York law.
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93
This letter is solely for the benefit of the named addressees and may not
be quoted in whole or in part or otherwise referred to in any document or
report and may not be furnished to any person without our prior written
consent, except that Xxxxxxx, Xxxxxxxx & Xxxxxxxxxx, L.L.P. may rely hereon in
connection with their opinion being rendered pursuant to Section 4.01(c) of the
Credit Agreement.
Very truly yours,
Xxxx & Priest LLP
D-1-iv
94
EXHIBIT D-2
[LETTERHEAD OF]
XXXXXXX, XXXXXXXX & XXXXXXXXXX, L.L.P.
________, 1998
To the Lenders listed on
Schedule 2.01 of each of the
Credit Agreement referred to below
Ladies and Gentlemen:
We have acted as general counsel for Texas Utilities Company, a Texas
corporation ("TUC"), in connection with the execution and delivery of the
364-Day Competitive Advance and Revolving Credit Facility Agreement (the
"CREDIT AGREEMENT"), dated as of March 6, 1998, among TUC, the banks listed on
Schedule 2.01 thereof (the "LENDERS"), Chase Bank of Texas, National
Association, as Administrative Agent and The Chase Manhattan Bank, as
Competitive Advance Facility Agent.
Capitalized terms used in this opinion and not defined herein shall have
the respective meanings assigned thereto in the Credit Agreement. This opinion
is delivered to you pursuant to Section 4.01(c) of the Credit Agreement.
In connection with this opinion we have examined a counterpart of the
Credit Agreement executed by TUC and have also made such examination of other
documents and of certificates of public officials and corporate officers of
TUC, and have made such other legal and factual examinations and inquiries as
we have deemed necessary or advisable for the purpose of rendering this
opinion; but as to those matters stated herein to be "to our knowledge" or
"known to us" such examination has been limited to discussions with and
certificates from officers of TUC and we have not conducted any independent
investigation or verification or taken any action beyond such discussions and
certificates, nor made any search of the records of any Governmental Authority
with respect to such matters.
For purposes of the opinions expressed below, we have assumed (i) the
authenticity of all documents submitted to us as originals, (ii) the conformity
to the originals of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such copies, (iii) the
genuineness of all signatures other than on behalf of TUC, (iv) the legal
capacity of natural persons, (v) the power, corporate or otherwise, of all
parties other than TUC to enter into and to perform all of their obligations
under such documents, and (vi) the due authorization, execution and delivery of
all documents by all parties other than TUC.
95
Based upon, and subject to, the foregoing and to such further limitations
and qualifications stated below, we are of the opinion that:
1. TUC (i) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas, (ii) has all requisite power and
authority to own its property and assets and to carry on its business as now
conducted, (iii) is qualified to do business in every jurisdiction within the
United States where such qualification is required, except where the failure so
to qualify would not result in a Material Adverse Change, and (iv) has all
requisite corporate power and authority to execute, deliver and perform its
obligations under the Credit Agreement and to borrow funds thereunder.
2. The execution, delivery and performance by TUC of the Credit Agreement
and the Borrowings by it (collectively, the "TRANSACTIONS") and the
consummation of the Acquisition (i) have been duly authorized by all requisite
corporate action and (ii) will not (a) violate (1) any law, statute, rule or
regulation presently binding on or applicable to TUC, or the articles of
incorporation, as amended, or by-laws of TUC, (2) to our knowledge, any order
of any Governmental Authority presently applicable to TUC or (3) any provision
of any indenture, agreement or other instrument known to us to which TUC is a
party or by which TUC or its property is 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 or with respect to any property
or assets now owned or hereafter acquired by TUC.
3. The Credit Agreement has been duly executed and delivered by TUC and
constitutes legal, valid and binding obligations of TUC enforceable against TUC
in accordance with its terms except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
4. No action, consent or approval of, registration or filing with, or any
other action by, any Government Authority (including pursuant to the Public
Utility Holding Company Act of 1935, as amended) is required on the part of TUC
in connection with the Transactions or the Acquisition, except as such as have
been made or obtained and are in full force and effect and, in the case of the
Acquisition, (i) expiration or termination of the waiting period under the
Xxxx- Xxxxx-Xxxxxx Antitrust Improvements Act of 1979 and (ii) [the filing by
the Company of a Registration Statement on Form S-4] under the Securities Act
of 1933, as amended, and action by the Securities and Exchange Commission
declaring said Registration Statement effective.
5. Neither TUC nor any of its Subsidiaries is an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940,
as amended. TUC and each of its Subsidiaries is exempt from all provisions of
the Public Utility Holding Company Act of 1935, as amended, and rules and
regulations thereunder, except for Sections 9(a)(2) and 33 of such
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96
Act and rules and regulations thereunder, and the execution, delivery and
performance by TUC of the Credit Agreement and the consummation of the
Acquisition do not violate any provision of such Act or any rule or regulation
thereunder.
6. Except as described in the Annual Reports on Form 10-K for the year
ended December 31, 1996 and the Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997, filed by TUC, TU
Electric and Enserch with the Securities and Exchange Commission and as set
forth in Schedule 3.06 to the Credit Agreement, to our knowledge there is no
action, suit or proceeding at law or in equity or by or before any Governmental
Authority now pending or threatened against or affecting TUC, TU Electric or
Enserch (i) which involves the Transactions or the Acquisition or (ii) as to
which there is a reasonable possibility of an adverse determination and which,
if adversely determined, would, individually or in the aggregate, result in a
Material Adverse change.
7. To our knowledge, TUC is not in violation of any law, rule or
regulation, or in default with respect to any judgment, writ, injunction or
decree of any Governmental Authority, where such violation or default would
result in a Material Adverse Change.
8. To our knowledge, after due inquiry, the proposed use of the proceeds
of the Loans is in accordance with the Credit Agreement, and, if so used, will
not violate the Margin Regulations.
9. We believe that a Texas court would give effect to the provisions of
the Credit Agreement that state that it is to be construed in accordance with
New York law; provided, however, that we render no opinion as to the
application of New York law that is contrary to a fundamental or public policy
of the State of Texas.
We are members of the State Bar of Texas and do not purport to be experts
on, nor do we opine as to, the laws of any jurisdiction other than the State of
Texas and the federal laws of the United States. To the extent that the
opinions hereinabove set forth involve the laws of the State of New York, we
have relied upon the opinion of even date herewith delivered by you by Xxxx &
Priest LLP, special counsel to TUC.
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97
The foregoing opinions are limited to existing laws and we undertake no
obligation or responsibility to update or supplement this letter in response to
subsequent changes in the law or future events or circumstances affecting the
Transactions. This letter is solely for the benefit of the named addressees
and may not be quoted in whole or in part or otherwise referred to in any
document or report and may not be furnished to any person without our prior
written consent, except that Xxxx & Priest LLP may rely hereon in connection
with their opinion being rendered pursuant to Section 4.01(c) of the Credit
Agreement.
Very truly yours,
XXXXXXX, XXXXXXXX &
XXXXXXXXXX, L.L.P.
By:
----------------------------
A Partner
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98
SCHEDULE 2.01
Name Commitment
---- ----------
The Chase Manhattan Bank $ 300,000,000.00
Xxxxxx Commercial Paper Inc. 300,000,000.00
Xxxxxxx Xxxxx Capital Corporation 300,000,000.00
------------------------------------ ======================
TOTAL $ 900,000,000.00
99
SCHEDULE 3.06
TO THE CREDIT AGREEMENT
Litigation
None
