EXHIBIT 10(h)
CONFORMED COPY
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TEXAS UTILITIES COMPANY
TEXAS UTILITIES ELECTRIC COMPANY
ENSERCH CORPORATION
__________________________________________
$2,100,000,000
364-DAY AMENDED AND RESTATED COMPETITIVE ADVANCE
AND REVOLVING CREDIT FACILITY AGREEMENT
"FACILITY A"
Dated as of May 28, 1998,
as amended and restated
as of February 26, 1999
__________________________________________
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT
AND
THE CHASE MANHATTAN BANK,
AS COMPETITIVE ADVANCE FACILITY AGENT
Lead Arranger and Book Manager
CHASE SECURITIES INC.
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TABLE OF CONTENTS
Section Page
-----
ARTICLE I DEFINITIONS; CONSTRUCTION . . . . . . . . . . . . . . 2
SECTION 1.01. Defined Terms . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Terms Generally . . . . . . . . . . . . . . . 20
ARTICLE II THE CREDITS . . . . . . . . . . . . . . . . . . . 21
SECTION 2.01. Commitments . . . . . . . . . . . . . . . . . 21
SECTION 2.02. Loans . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.03. Competitive Bid Procedure . . . . . . . . . . 23
SECTION 2.04. Standby Borrowing Procedure . . . . . . . . . 25
SECTION 2.05. Fees . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.06. Repayment of Loans; Evidence of Indebtedness . 27
SECTION 2.07. Interest on Loans . . . . . . . . . . . . . . 27
SECTION 2.08. Default Interest . . . . . . . . . . . . . . . 28
SECTION 2.09. Alternate Rate of Interest . . . . . . . . . . 28
SECTION 2.10. Termination and Reduction of Commitments . . . 28
SECTION 2.11. Prepayment . . . . . . . . . . . . . . . . . . 29
SECTION 2.12. Reserve Requirements; Change in Circumstances 30
SECTION 2.13. Change in Legality . . . . . . . . . . . . . . 32
SECTION 2.14. Pro Rata Treatment . . . . . . . . . . . . . . 33
SECTION 2.15. Sharing of Setoffs . . . . . . . . . . . . . . 33
SECTION 2.16. Payments . . . . . . . . . . . . . . . . . . . 34
SECTION 2.17. Taxes . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.18. Assignment of Commitments Under
Certain Circumstances . . . . . . . . . . . . 37
SECTION 2.19. Term Election . . . . . . . . . . . . . . . . 37
ARTICLE III REPRESENTATIONS AND WARRANTIES . . . . . . . . . 38
SECTION 3.01. Organization; Powers . . . . . . . . . . . . . 38
SECTION 3.02. Authorization . . . . . . . . . . . . . . . . 38
SECTION 3.03. Enforceability . . . . . . . . . . . . . . . . 38
SECTION 3.04. Governmental Approvals . . . . . . . . . . . . 39
SECTION 3.05. Financial Statements . . . . . . . . . . . . . 39
SECTION 3.06. Litigation . . . . . . . . . . . . . . . . . . 40
SECTION 3.07. Federal Reserve Regulations . . . . . . . . . 40
SECTION 3.08. Investment Company Act; Public
Utility Holding Company Act . . . . . . . . . 40
SECTION 3.09. No Material Misstatements . . . . . . . . . . 41
SECTION 3.10. Taxes . . . . . . . . . . . . . . . . . . . . 41
SECTION 3.11. Employee Benefit Plans . . . . . . . . . . . . 41
i
SECTION 3.12. Significant Subsidiaries . . . . . . . . . . . 41
SECTION 3.13. Environmental Matters . . . . . . . . . . . . 41
SECTION 3.14. Year 2000 Compliance. . . . . . . . . . . . . 42
ARTICLE IV CONDITIONS . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.01. Restatement Date . . . . . . . . . . . . . . . 43
SECTION 4.02. Initial Offer Loans . . . . . . . . . . . . . 44
SECTION 4.03. Conditions For All Offer Loans
During the Certain Funds Period . . . . . . . 45
SECTION 4.04. Initial General Loans . . . . . . . . . . . . 45
SECTION 4.05. Offer Loans After the Certain
Funds Period and All General Loans . . . . . . 45
ARTICLE V COVENANTS . . . . . . . . . . . . . . . . . . . . . 46
SECTION 5.01. Existence . . . . . . . . . . . . . . . . . . 46
SECTION 5.02. Business and Properties . . . . . . . . . . . 46
SECTION 5.03. Financial Statements, Reports, Etc . . . . . . 47
SECTION 5.04. Insurance . . . . . . . . . . . . . . . . . . 49
SECTION 5.05. Taxes, Etc . . . . . . . . . . . . . . . . . . 49
SECTION 5.06. Maintaining Records;
Access to Properties and Inspections . . . . . 49
SECTION 5.07. ERISA . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.08. Use of Proceeds . . . . . . . . . . . . . . . 49
SECTION 5.09. Consolidations, Mergers, Sales and
Acquisitions of Assets and Investments
in Subsidiaries . . . . . . . . . . . . . . . 50
SECTION 5.10. Limitations on Liens . . . . . . . . . . . . . 50
SECTION 5.11. Fixed Charge Coverage . . . . . . . . . . . . 52
SECTION 5.12. Equity Capitalization Ratio . . . . . . . . . 52
SECTION 5.13. Restrictive Agreements . . . . . . . . . . . . 53
SECTION 5.14. The Offer . . . . . . . . . . . . . . . . . . 53
ARTICLE VI EVENTS OF DEFAULT . . . . . . . . . . . . . . . . 55
ARTICLE VII THE AGENTS . . . . . . . . . . . . . . . . . . . 57
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . 59
SECTION 8.01. Notices . . . . . . . . . . . . . . . . . . . 59
SECTION 8.02. Survival of Agreement . . . . . . . . . . . . 60
SECTION 8.03. Binding Effect . . . . . . . . . . . . . . . . 60
SECTION 8.04. Successors and Assigns . . . . . . . . . . . . 60
SECTION 8.05. Expenses; Indemnity . . . . . . . . . . . . . 63
SECTION 8.06. Right of Setoff . . . . . . . . . . . . . . . 65
SECTION 8.07. Applicable Law . . . . . . . . . . . . . . . . 65
SECTION 8.08. Waivers; Amendment . . . . . . . . . . . . . . 65
SECTION 8.09. ENTIRE AGREEMENT . . . . . . . . . . . . . . . 66
SECTION 8.10. Severability . . . . . . . . . . . . . . . . . 66
ii
SECTION 8.11. Counterparts . . . . . . . . . . . . . . . . . 66
SECTION 8.12. Headings . . . . . . . . . . . . . . . . . . . 67
SECTION 8.13. Interest Rate Limitation . . . . . . . . . . . 67
SECTION 8.14. Jurisdiction; Venue . . . . . . . . . . . . . 67
SECTION 8.15. Confidentiality . . . . . . . . . . . . . . . 68
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 Thelen Reid & Priest LLP,
special counsel to TUC, TU Electric and
Enserch
Exhibit D-2 - Opinion of Worsham, Forsythe & Wooldridge,
L.L.P., general counsel for TUC, TU Electric
and Enserch
Schedule 2.01 - Commitments
Schedule 3.06 - Litigation
iii
AMENDED AND RESTATED COMPETITIVE ADVANCE AND
REVOLVING CREDIT FACILITY AGREEMENT (the
"AGREEMENT"), dated as of May 28, 1998, as
amended and restated as of February 26, 1999,
among TEXAS UTILITIES COMPANY, a Texas
corporation ("TUC"); TEXAS UTILITIES ELECTRIC
COMPANY, a Texas corporation and a wholly
owned subsidiary of TUC ("TU ELECTRIC"), and
ENSERCH CORPORATION, a Texas corporation and
a wholly owned subsidiary of TUC ("ENSERCH"
and, together with TUC and TU Electric, the
"Borrowers", and each individually, a
"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").
Pursuant to the terms of that certain 364-Day Amended and
Restated Competitive Advance and Revolving Credit Facility
Agreement, dated as of May 28, 1998 (the "ORIGINAL AGREEMENT"),
among the Borrowers, the lenders party thereto (the "ORIGINAL
LENDERS") and the Agents, the Original Lenders agreed 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 Borrowers in an aggregate principal amount at
any time outstanding not in excess of $3,600,000,000. The
Original Lenders also agreed to provide a procedure pursuant to
which the Borrowers may invite the Lenders to bid on an
uncommitted basis on short-term borrowings by the Borrowers.
Subject to the terms and conditions set forth in the Original
Agreement, the proceeds of any such borrowings were to be used
(i) to finance or refinance equity or subordinated loan advances
from TUC to FinCo 1 and FinCo 2 in connection with the
Acquisition and (ii) to refinance the Existing TUC Credit
Agreements and for working capital and other corporate purposes,
including commercial paper back-up. Since the date of the
Original Agreement (i) the Offer Loan Commitments have been
terminated, (ii) the Commitments of various Lenders have been
assigned to other Lenders and certain new Lenders have become
parties hereto and (iii) the parties to the Original Agreement
have determined to extend the availability of the Commitments as
set forth herein. Accordingly, in order to reflect these
changes, the parties hereto now wish to amend and restate the
Original Agreement as herein set forth.
Accordingly, the parties hereto agree as follows:
2
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 2.09 or
2.13(a)(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
Act or by way of open market purchases (and includes where
the 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 FinCo 1,
FinCo 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 TUC (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 FEES" shall have the meaning assigned
to such term in Section 2.05(b).
"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
3
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 (d) the product of (i) the Three-Month
Secondary CD Rate and (ii) Statutory Reserves and (iii) 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 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
applicable 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, (i) on any date from
May 28, 1998, to and including September 2, 1998, 0.0% for
ABR Loans made to any Borrower, 1.05% per annum for
Eurodollar Loans made to TUC, .85% per annum for Eurodollar
Loans made to TU Electric and .85% per annum for Eurodollar
Loans made to Enserch and (ii) on any date following
September 2, 1998 with respect to any Borrower, the
percentage per annum set forth in the column identified as
Level 1, Level 2, Level 3 or Level 4 below, based upon the
Level corresponding to the lower Debt Rating of such
Borrower at the time of determination, provided, that the
4
Applicable Margins set forth below with respect to each
Level shall be increased by .50% with respect to Eurodollar
Loans outstanding at any time following the Revolving
Period, provided, further, that the Applicable Margin with
respect to ABR Loans outstanding at any time following the
Revolving Period shall be equal to, for each Level, the
then-effective Applicable Margin for Eurodollar Loans less
1.00% (but not negative). Any change in the Applicable
Margin shall be effective on the date on which the
applicable rating agency announces any change in the Debt
Rating.
==============================================================
Level 1 Level 2 Level 3 Level 4
------- ------- ------- -------
S&P BBB+or better BBB BBB- BB+ or below*
Moody's Baa1 or better Baa2 Baa3 Ba1 or below*
-------------- ----- ---- -------------
---------------------------------------------------------------
Percentage Per Annum
---------------------------------------------------------------
Eurodollar .625% .85% 1.05% 1.25%
Margin
---------------------------------------------------------------
ABR 0 0 .05% .25%
Margin
===============================================================
* or unrated
"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 applicable Borrower at the time of
each competitive advance auction request made by such
Borrower pursuant to Section 2.03.
"BIDCO" shall mean TU Acquisition plc, a direct wholly
owned subsidiary of FinCo 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 Bids
have been accepted pursuant to Section 2.03) on a single
date and as to which a single Interest Period is in effect.
5
"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.
"CERTAIN FUNDS PERIOD" shall mean the period beginning
on March 2, 1998 and ending on February 25, 1999.
"A CHANGE IN CONTROL" shall be deemed to have occurred
if (a) any person or group of related persons (other than
TUC, any Subsidiary of TUC, or any pension, savings or other
employee benefit plan for the benefit of employees of TUC
and/or any Subsidiary of TUC) shall have acquired beneficial
ownership of more than 30% of the outstanding Voting Shares
of TUC (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 TUC was commenced, by a majority of the
Disinterested Directors of TUC, 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 TUC (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 TUC.
"CITY CODE" shall mean the City Code on Takeovers and
Mergers (UK).
"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 sum of such Lender's General Loan Commitment and Offer
Loan Commitment.
"COMPANIES ACT" shall mean the Companies Act 1985 (UK).
"COMPETITIVE BID" shall mean an offer by a Lender to
make a Competitive Loan pursuant to Section 2.03.
"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.
6
"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 (i) 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 TUC 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 and (C) one-time costs incurred in connection
with the Mergers (as defined in the Joint Proxy
Statement/Prospectus dated September 23, 1996 for Texas
Utilities Company (as predecessor to Texas Energy
Industries, Inc.) and Enserch) in an aggregate amount not to
exceed $100,000,000.
7
"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, including interest on short-term debt and the
current portion of long-term debt, and (iv) preferred stock
dividends and preferred securities distributions of
Subsidiaries, all determined for such twelve-month period
with respect to TUC 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 TUC 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 TUC, TU Electric or Enserch, as
the case may be, 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, (iii) long-term debt (less amounts due
currently) and (iv) the sum of the outstanding aggregate
principal amount of Offer Loans plus the outstanding
aggregate principal amount of General Loans used for the
purposes described in Sections 5.08(ii)(A), (C) and (E), all
determined with respect to TUC and its Consolidated
Subsidiaries on a consolidated basis.
"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 TUC, are treated as a single
employer under Section 414(b) or 414(c) of the Code.
"DEBT RATING" shall mean, with respect to any Borrower,
the ratings (whether explicit or implied) assigned by S&P
and Moody's to such Borrower's senior unsecured non-credit
enhanced long term debt.
"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 TUC who is not affiliated, directly or
indirectly, with, or appointed by, a person or group of
related persons (other than TUC, any Subsidiary of TUC, or
any pension, savings or other employee benefit plan for the
benefit of employees of TUC and/or any Subsidiary of TUC)
acquiring the beneficial ownership of more than 30% of the
outstanding Voting Shares of TUC (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 TUC prior to the Acquisition Date or was
8
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 May 28, 1998.
"ELECTRICITY ACT" shall mean the Electricity Act 1989
(UK).
"EQUITY EVENT" shall mean the date on which the
aggregate amount of the Offer Loan Commitments as of the
date hereof shall be permanently reduced by $1.505 billion.
"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 relevant
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 any Borrower or any of its ERISA
Affiliates from any Plan or Multiemployer Plan; (iv) the
receipt by any 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 any 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 any 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 any
Borrower other than a liability to pay premiums or benefits
when due.
"EURODOLLAR BORROWING" shall mean a Borrowing comprised
of Eurodollar Loans.
"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.
9
"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 Amended
and Restated Competitive Advance and Revolving Credit
Facility Agreements for Facility A and Facility B, each
dated as of April 24, 1997, as amended as of November 10,
1997 and April 15, 1998, among TUC Holding Company
(predecessor to TUC), Texas Utilities Company (predecessor
to Texas Energy Industries, Inc.), 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.
"FACILITY B CREDIT AGREEMENT" shall mean the
$1,400,000,000 Amended and Restated Competitive Advance and
Revolving Credit Facility Agreement, dated as of May 28,
1998, among the Borrowers and certain other parties named
therein, as amended, modified or supplemented from time to
time.
"FACILITY FEE" shall have the meaning assigned to such
term in Section 2.05(a).
"FACILITY FEE PERCENTAGE" shall mean (i) from May 28,
1998, to and including September 2, 1998, .20% per annum and
(ii) thereafter, the percentage per annum set forth in the
column identified as Level 1, Level 2, Level 3 or Level 4
below, based upon the Level corresponding to the lower Debt
Rating of TUC at the time of determination. Any change in
the Facility Fee Percentage shall be effective on the date
on which the applicable rating agency announces any change
in the applicable Debt Rating.
==============================================================
Level 1 Level 2 Level 3 Level 4
------- ------- ------- -------
S&P BBB+ or better BBB BBB- BB+ or below*
Moody's Baa1 or better Baa2 Baa3 Ba1 or below*
-------------- ---- ---- -------------
--------------------------------------------------------------
Percentage Per Annum
--------------------------------------------------------------
Facility Fee 0.125% 0.150% 0.20% 0.25%
==============================================================
* or unrated
"FEES" shall mean the Facility Fee, the Auction Fees,
the Administrative Fees and any other fees provided for in
the Letter Agreement, together with any fees payable on or
10
prior to the Restatement Date in connection with the
amendment and restatement of this agreement as of
February 26, 1999.
"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.
"FINCO 1" shall mean TU Finance (No. 1) Limited, a
company registered in England and Wales, now known as TXU
Eastern Holdings Limited, 100% of the share capital of which
is owned directly or indirectly by TUC.
"FINCO 2" shall mean TU Finance (No. 2) Limited, a
company registered in England and Wales, 90% of the share
capital of which is owned directly by FinCo 1 and 10% of the
share capital of which is owned directly or indirectly by
TUC.
"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.
"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.
"GENERAL LOAN" shall mean a Loan the proceeds of which
are used solely for the purposes permitted under Sections
5.08(i) and 5.08(ii)(A), (C) and (E).
"GENERAL LOAN COMMITMENT" shall mean, with respect to
each Lender, the commitment of such Lender set forth in
Schedule 2.01 hereto to make General Loans, as such General
Loan 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 General Loan
Commitment of each Lender shall automatically and
permanently terminate on the Maturity Date if not terminated
earlier pursuant to the terms hereof.
11
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state,
local or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"INDEBTEDNESS" of any person shall mean all
indebtedness representing money borrowed which is created,
assumed, incurred or guaranteed in any manner by such person
or for which such person 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, Lehman
Commercial Paper Inc. and Merrill Lynch Capital Corporation,
each in its capacity as an initial underwriter of the credit
facilities evidenced by this Agreement and the Facility B
Credit 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
Borrowers and the Administrative Agent), such period shall
be one month or such other periods as the Joint Lead
Arrangers and TUC agree as being necessary to effect the
assignment of 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 (b) 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
12
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., Lehman Brothers Inc. and Merrill Lynch &
Co., each in its capacity as a joint lead arranger of the
credit facilities evidenced by this Agreement and the
Facility B Credit Agreement.
"LETTER AGREEMENT" shall mean, collectively, (i) the
Syndication Letter, dated March 2, 1998, among TUC, the
Joint Lead Arrangers and the Initial Underwriters, (ii) the
Underwriting Fee Letter, dated March 2, 1998, among TUC and
the Initial Underwriters, and (iii) the Agent Fee Letter,
dated March 2, 1998, among the Administrative Agent, the CAF
Agent and the Borrowers, each as amended, modified or
supplemented from time to time.
"LIBO RATE" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, the rate appearing on
Page 3750 of the Telerate Service (or on any successor or
substitute page of such service, or any successor to or
substitute for such service, providing rate quotations
comparable to those currently provided on such page of such
service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest
rates applicable to dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest
Period as the rate for dollar deposits with a maturity
comparable to such Interest Period. In the event that such
rate is not available at such time for any reason, then the
"LIBO RATE" with respect to such Eurodollar Borrowing for
such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office
of 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.
"LICENSES" shall mean those licenses granted under
Section 6 of the Electricity Act authorizing one or more
members of the TEG Group to carry on the business of
electricity generation, supply and distribution and any
activities ancillary thereto, as amended and extended from
time to time.
"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.
13
"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.
"MAJOR DEFAULT" shall mean the occurrence of any of the
following events:
(i) any Event of Default described in paragraph
(h) or (i) of Article VI;
(ii) any Target Insolvency Event;
(iii) default shall be made by TUC in the due
observance or performance of any covenant, condition or
agreement contained in Section 5.14(iii), (iv), (v),
(vi) or (vii);
(iv) on the date of any Offer Loan, any
representation and warranty set forth in Section 3.01,
3.02 or 3.03 shall be false or misleading in any
material respect; or
(v) any other Default that is within the power of
a Borrower to remedy within 7 days of receiving notice
of such Default, but that such Borrower chooses not to
remedy within 7 days following written notice to the
Borrowers by the Administrative Agent requesting the
Borrowers to remedy such Default.
"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 TUC and its Subsidiaries taken as a
whole which makes any Borrower unable to perform any of its
obligations under this Agreement or the Facility B Credit
Agreement or which impairs the rights of, or benefits
available to, the Lenders under this Agreement or the
Facility B Credit Agreement; 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 earlier to occur of
(i) the last day of the Revolving Period, or, if the
Borrowers shall have made the Term Election, the date 364
days following the last day of the Revolving Period and
(ii) the date of termination or reduction in whole of the
Commitments pursuant to Section 2.10 or Article VI.
14
"MINING COMPANY" shall mean Texas Utilities Mining
Company, a Texas corporation, and its successors.
"MOODY'S" shall mean Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which any 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.
"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 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 LOAN" shall mean a Loan the proceeds of which
are used solely for the purposes permitted under
Section 5.08(ii).
"OFFER LOAN COMMITMENT" shall mean, with respect to
each Lender, the commitment of such Lender set forth in
Schedule 2.01 hereto to make Offer Loans, as such Offer Loan
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 Offer Loan Commitment
of each Lender shall automatically and permanently terminate
on the Maturity Date if not terminated earlier pursuant to
the terms hereof.
"OFFER PRESS RELEASE" shall mean the press announcement
in form and substance acceptable to the Joint Lead
Arrangers, delivered pursuant to Section 4.02(a) and
proposed to be 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
15
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 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,
16
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
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, limited
liability 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 any Borrower or any ERISA
Affiliate.
17
"POOLING AND SETTLEMENT AGREEMENT" shall mean the
pooling and settlement agreement, dated March 30, 1990,
between REC and the National Grid Company plc and others.
"REC" shall mean Eastern Electricity plc (company no.
2366906).
"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, at any time, Lenders
having Commitments representing in excess of 50% of the
Total Commitment or, (i) for purposes of acceleration
pursuant to clause (ii) of Article VI, or (ii) if the Total
Commitment has been terminated, 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
responsible for the administration of the obligations of
such corporation in respect of this Agreement.
"RESTATEMENT DATE" shall have the meaning assigned to
such term in Section 4.01.
"REVOLVING PERIOD" shall mean the period beginning on
March 2, 1998 and ending on February 25, 2000.
"S&P" shall mean Standard & Poor's Ratings Services (a
division of The McGraw-Hill Companies, Inc.).
"SEC" shall mean the Securities and Exchange
Commission.
"SIGNIFICANT SUBSIDIARY" shall mean at any time a
Subsidiary of TUC that as of such time satisfies the
definition of a "significant subsidiary" contained as of May
28, 1998, in Regulation S-X of the SEC; provided, that each
of TU Electric, Enserch and any other Borrower hereunder
shall at all times be considered a Significant Subsidiary of
TUC.
"STANDBY BORROWING" shall mean a Borrowing consisting
of simultaneous Standby Loans from each of the Lenders.
18
"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 TUC and its Consolidated
Subsidiaries taken as a whole.
"TAKEOVER PANEL" shall mean the Panel on Takeovers and
Mergers of the U.K.
"TARGET INSOLVENCY EVENT" shall mean any one or more of
the following events:
(i) any Acquisition Company is deemed pursuant to
applicable law unable to pay its debts as they fall due
or commences negotiations with its creditors with a
view to a general re-scheduling of indebtedness;
(ii) any administrative or other receiver or
manager is appointed over any Acquisition Company or
any material part of the assets, business or
undertaking of such Acquisition Company;
(iii) a winding-up order or an administration
order is made in relation to any Acquisition Company;
(iv) any Acquisition Company threatens to pass or
passes a resolution for (or petitions for) its winding
up or administration; or
(v) with respect to any Loan made for the purpose
described in Section 5.08(ii)(D), the occurrence of any
event described in paragraphs (i) through (iv) above
19
with respect to TEG, any Significant Subsidiary of TEG
or any holder of a License.
"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.
"TEG" shall mean The Energy Group PLC.
"TEG GROUP" shall mean TEG and its Subsidiaries.
"TERM ELECTION" shall have the meaning assigned to that
term in Section 2.19.
"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 APPROVAL DATE" shall mean the first date
on which the following shall have occurred: TU Electric
shall have delivered to the Administrative Agent (in
sufficient copies for each of the Lenders) (i) a certificate
of the Secretary or an Assistant Secretary of TU Electric
certifying that (A) attached thereto are true and correct
copies of all corporate resolutions and all orders, consents
and approvals required by any Governmental Authority in
order to permit or authorize TU Electric to borrow and to
repay Loans hereunder and "Loans" under and as defined in
the Facility B Credit Agreement in an aggregate principal
amount at least equal to the sum of the General Loan
Commitments hereunder and the "Commitments" under and as
defined in the Facility B Credit Agreement and (B) that all
such resolutions, orders, consents and approvals are in full
force and effect, sufficient for their purpose and, in the
case of such orders, consents and approvals, not subject to
any pending or, to the knowledge of such Secretary or
Assistant Secretary (as the case may be), threatened appeal
or other proceeding seeking reconsideration or review
thereof and (ii) an opinion of counsel to TU Electric, in
form and substance satisfactory to the Administrative Agent,
as to such orders, consents and approvals and as to the
enforceability of the obligations of TU Electric hereunder
on and after such date.
"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.
20
"U.K. FACILITY AGREEMENT" shall mean the Pound British
3.515 Billion Facilities Agreement, dated March 2, 1998, as
amended March 3, 1998, April 21, 1998 and May 28, 1998,
among FinCo 1, FinCo 2, Bidco, the lenders parties thereto
and certain other parties named therein, as amended,
modified or supplemented from time to time.
"UNCONDITIONAL DATE" shall mean May 19, 1998.
"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 TUC.
"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 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 Borrowers' 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 each Borrower in an aggregate
principal amount at any time outstanding not to exceed such
Lender's Commitment minus the amount by which the Competitive
21
Loans made to any 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) Offer
Loans shall be made solely to TUC and 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 Offer Loans plus (y) the outstanding aggregate
principal amount of General Loans used for purposes described in
Sections 5.08(ii)(A), (C) and (E) and Loans under and as defined
in the Facility B Credit Agreement used for purposes described in
Section 5.08(ii) exceed $2,930,000,000, (iv) at no time shall the
sum of (x) the outstanding aggregate principal amount of all
Loans made to Enserch plus (y) the outstanding aggregate
principal amount of all Loans under and as defined in the
Facility B Credit Agreement made to Enserch exceed $650,000,000,
(v) unless and until the TU Electric Approval Date shall have
occurred, at no time shall the sum of (x) the outstanding
aggregate principal amount of all Loans made to TU Electric plus
(y) the outstanding aggregate principal amount of all Loans under
and as defined in the Facility B Credit Agreement made to TU
Electric exceed $1,250,000,000, (vi) 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
(vii) at all times, the outstanding aggregate principal amount of
all Standby Loans made by each Lender to each 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 such 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 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
22
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 applicable 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 such 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.
(d) A 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 such Borrower pursuant to paragraph (c) above.
23
SECTION 2.03. COMPETITIVE BID PROCEDURE. (a) In order to
request Competitive Bids, a 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 (w) whether the Borrowing then being requested is to be a
Eurodollar Borrowing or a Fixed Rate Borrowing, (x) 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 (y) the Interest Period with respect thereto (which may not
end after the earlier to occur of the last day of the Revolving
Period and 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
such 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 applicable Borrower) of the
Competitive Loan or Loans that the Lender is willing to make to
such Borrower, (y) the Competitive Bid Rate or Rates at which the
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.
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(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) A 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. Such 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
such Borrower to give such notice shall be deemed to be a
rejection of all the bids referred to in paragraph (c) above,
(ii) such 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 such Borrower shall not exceed the
principal amount specified in the Competitive Bid Request, (iv)
if such 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 such Borrower to
exceed the amount specified in the Competitive Bid Request, then
such 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 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 applicable
Borrower. A notice given by a 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
25
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 Borrowers 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 a Borrower pursuant to paragraph (d) above.
(j) Notwithstanding any provision in this Agreement to the
contrary, no Competitive Borrowing shall be made or requested
after the last day of the Revolving Period.
SECTION 2.04. STANDBY BORROWING PROCEDURE. In order to
request a Standby Borrowing, a 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 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 to the limitations set forth in the
definition of "Interest Period"). If a 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 such Borrower shall
(unless such Borrowing is repaid at the end of such Interest
Period) be deemed to have given notice of an election to
26
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 Borrowers agree jointly and
severally 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 June 30, 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 earlier of the
Effective Date and June 30, 1998 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 earlier of the Effective Date and June
30, 1998, 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) Each Borrower agrees jointly and severally to pay the
Administrative Agent, for its own account, the administrative
fees provided for in the Agent Fee Letter referred to in the
Letter Agreement (the "ADMINISTRATIVE FEES").
(c) Each Borrower agrees to pay the CAF Agent, for its own
account, the Auction Fees applicable to such Borrower.
(d) 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.
(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
27
thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from each Borrower to each
Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder from each 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
Borrowers 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 applicable 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; provided
that Chase shall, upon request, provide to the applicable
Borrower a certificate setting forth in reasonable detail the
basis for such determination.
SECTION 2.08. DEFAULT INTEREST. If a 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, such 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
28
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 Borrowers and the Lenders. In the
event of any such determination under clauses (i) or (ii) above,
until the Administrative Agent shall have advised the Borrowers
and the Lenders that the circumstances giving rise to such notice
no longer exist, (x) any request by a 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 a 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 applicable 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 such 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
applicable Borrower a certificate setting forth in reasonable
detail the basis for such determination.
SECTION 2.10. TERMINATION AND REDUCTION OF COMMITMENTS.
1. The Commitments shall be automatically terminated on the
Maturity Date. In addition, until such time as the Equity Event
shall have occurred, the Offer Loan Commitments shall be
automatically reduced by an amount equal to the net proceeds of
any issuance or disposition or any payment to TUC, in each case
described in Section 2.11(d), with such reduction to be effective
on the later to occur of the date of such issuance, sale or
payment, as the case may be, and the date specified under Section
2.11(d) for any related prepayment or repayment of the Offer
Loans.
(b) Upon (i) the date of the withdrawal or lapse of the
Offer and (ii) 28 days after the Effective Date if the Offer has
not yet been posted, the unused Offer Loan Commitments shall be
automatically terminated.
(c) Upon at least two Business Days' prior irrevocable
written notice to the Administrative Agent, the Borrowers, acting
jointly, may at any time in whole permanently terminate, or from
time to time in part permanently reduce, the Offer Loan
Commitments or the General Loan 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
29
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) If the Borrowers shall make the Term Election, then on
the last day of the Revolving Period the Total Commitment shall
be permanently reduced to an amount equal to the aggregate
principal amount of Loans then outstanding. In addition, if on
any date following the last day of the Revolving Period the
aggregate principal amount of Loans then outstanding shall be
less than the Total Commitment, then on such date the Total
Commitment shall be permanently reduced to an amount equal to the
aggregate principal amount of Loans then outstanding.
(e) Each reduction in the Total Commitment hereunder shall
be made ratably among the Lenders in accordance with their
respective Commitments. The Borrowers 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) Each 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 (i) principal amount of any Offer 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 Offer Loan and (ii) any principal amount of any Loan
repaid or prepaid on or after the last day of the Revolving
Period and not refinanced with the proceeds of another Loan on
the date of such repayment or prepayment may not be reborrowed.
(b) On the date of any termination or reduction of the
Commitments pursuant to Section 2.10, the Borrowers 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
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amount stated therein on the date stated therein. All
prepayments under this Section 2.11 shall be subject to Section
8.05 but 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) Until such time as the Equity Event shall have
occurred, upon (i) the issuance by TUC (or any special purpose
financing Subsidiary of TUC, other than FinCo 1, FinCo 2 or any
Subsidiary of FinCo 1 or of FinCo 2) of any debt, equity or other
capital market instruments or other securities (other than stock
of TUC issued in connection with employee stock option and other
stock purchase and incentive plans in effect on May 28, 1998),
(ii) the disposition by TUC (other than to a direct or indirect
wholly owned Subsidiary of TUC) of any of the capital shares of
FinCo 1, FinCo 2 or Enserch, or (iii) the payment by any
Acquisition Company to TUC of any amount in respect of shares of
TUC exchanged for Target Shares, TUC shall prepay the principal
amount of Offer 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 Offer 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 Offer 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 applicable Borrower or, if the
foregoing circumstances do not relate to a particular Borrowing,
the Borrowers 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
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Competitive Loan if 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
Borrowers 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 applicable Borrower or
the Borrowers, as the case may be, and shall be conclusive absent
manifest error. The Borrowers 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 applicable Borrower of any event of which it
has knowledge, occurring after the date hereof, that it has
determined will require compensation by such 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 to such period
32
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 applicable 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 Borrowers 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 Bankruptcy Code or
other security or interest arising from, or in lieu of, such
secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in
respect of any 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. Each 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 or counterclaim with respect to any and all moneys owing
by such Borrower to such Lender by reason thereof as fully as if
34
such Lender had made a Standby Loan in the amount of such
participation.
SECTION 2.16. PAYMENTS. (a) Each 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 707 Travis Street, 8-CBBN- N 96, Houston, Texas 77002,
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 a 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 any
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) such Borrower shall make such deductions and
(iii) such Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable
law.
(b) In addition, each 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 hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this
Agreement or the Letter Agreement ("OTHER TAXES").
35
(c) Each 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 a Borrower, or with respect to
which a Borrower has paid additional amounts, pursuant to this
Section 2.17, it shall promptly notify such Borrower of the
availability of such refund claim and shall, within 30 days after
receipt of a request by such Borrower, make a claim to such
United States Governmental Authority for such refund at such
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 such Borrower (but
only to the extent of indemnity payments made, or additional
amounts paid, by such 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 such Borrower, upon the
request of such Lender (or Transferee) or such Agent, agrees to
repay the amount paid over to such 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 a
Borrower to the relevant United States Governmental Authority,
such 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.
(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.
36
(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
Borrowers 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 any 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) A 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 such 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.
(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 a 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
37
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 such
Borrower any of its tax returns (or any other information) that
it deems to be confidential or proprietary.
(k) Notwithstanding anything herein to the contrary, the
indemnification obligations under this Section shall, to the
extent practicable, be allocated between the Borrowers based upon
their relative liability for the interest, fee or other payments
in respect of which such indemnification obligations arise.
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 any
Borrower shall be required to make additional payments to any
Lender under Section 2.17, the Borrowers shall have the right, at
their 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 Borrowers (which approval shall not be
unreasonably withheld) which shall assume such obligations;
provided that (i) no such assignment shall conflict with any law,
rule or regulation or order of any Governmental Authority and
(ii) the assignee shall pay to the affected Lender in immediately
available funds on the date of such assignment the principal of
and interest accrued to the date of payment on the Loans made by
it hereunder and all other amounts accrued for its account or
owed to it hereunder and the Borrowers shall pay the processing
and recordation fee due pursuant to Section 8.04.
SECTION 2.19. TERM ELECTION. At least 20 but not more than
40 days prior to the end of the Revolving Period, the Borrowers
may, by delivering a written notice to the Administrative Agent
(with such notice being irrevocable), and subject to the
condition set forth below, elect that the Maturity Date be
extended for a period of 364 days, commencing on the last day of
the Revolving Period (any such election to so extend the Maturity
Date being the "TERM ELECTION"). Upon receipt of any such notice
the Administrative Agent shall promptly communicate such notice
to the Lenders. The Term Election shall be effective on the last
day of the Revolving Period, if and only if on such date, no
Default or Event of Default shall have occurred and be
continuing.
38
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to each of the Lenders
as follows (except in the case of the representations contained
(i) in Section 3.05(a), which are made by TUC only, (ii) in
Section 3.05(b), which are made by TU Electric only, and (iii) in
Section 3.05(c), which are made by Enserch only; and provided,
that each representation or warranty made by any Borrower in
respect of TEG or any member of the TEG Group on any date up to
(but not including) the 120th day following the Unconditional
Date shall be subject to the qualification that such
representation or warranty is true and accurate insofar as such
Borrower was aware as of the date of this Agreement:
SECTION 3.01. ORGANIZATION; POWERS. Such Borrower (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 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 such 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 such Borrower or any
of its Subsidiaries to which such Borrower is subject, (B) any
order of any Governmental Authority or (C) any provision of any
indenture, agreement or other instrument to which such Borrower
or any of its Subsidiaries is a party or by which it or any of
its property is or may be bound, (i) 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 (ii) result in the creation or imposition of
any Lien upon any property or assets of such Borrower.
SECTION 3.03. ENFORCEABILITY. This Agreement constitutes a
legal, valid and binding obligation of such 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 such
Borrower, except those as have been duly obtained and as are (i)
in full force and effect, (ii) sufficient for their purpose and
39
(iii) not subject to any pending or, to the knowledge of such
Borrower, threatened appeal or other proceeding seeking
reconsideration or review thereof.
SECTION 3.05. FINANCIAL STATEMENTS. (a) The consolidated
balance sheet of TUC and its Consolidated Subsidiaries as of
December 31, 1997 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
TUC's 1997 Annual Report on Form 10-K, copies of which have been
delivered to each of the Lenders, fairly present, in conformity
with GAAP, the consolidated financial position of TUC and its
Consolidated Subsidiaries as of such date and their consolidated
results of operations and cash flows for such period ending on
such date. The unaudited consolidated balance sheets of TUC and
its Consolidated Subsidiaries as of March 31, 1998, June 30, 1998
and September 30, 1998 and the related consolidated statements of
income and cash flows for each of the three-month periods ending
on such dates, certified by a Responsible Officer of TUC, copies
of which have been delivered to each of the Lenders, fairly
present (subject to year-end adjustments), in conformity with
GAAP, the consolidated financial position of TUC and its
Consolidated Subsidiaries as of such dates and their consolidated
results of operations and cash flows for the periods ending on
such dates.
(b) The consolidated balance sheet of TU Electric and its
Consolidated Subsidiaries as of December 31, 1997 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 1997 Annual Report on
Form 10-K, copies of which have been delivered to each of the
Lenders, fairly present, 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 period ending on
such date. The unaudited consolidated balance sheets of TU
Electric and its Consolidated Subsidiaries as of March 31, 1998,
June 30, 1998 and September 30, 1998 and the related consolidated
statements of income and cash flows for each of the three-month
periods ending on such dates, certified by a Responsible Officer
of TU Electric, copies of which have been delivered to each of
the Lenders, fairly present (subject 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) The consolidated balance sheet of Enserch and its
Consolidated Subsidiaries as of December 31, 1997 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 Enserch's 1997 Annual Report on Form
10-K, copies of which have been delivered to each of the Lenders,
fairly present, in conformity with GAAP, the consolidated
financial position of Enserch and its Consolidated Subsidiaries
as of such dates and their consolidated results of operations and
cash flows for the period ending on such date. The unaudited
consolidated balance sheets of Enserch and its Consolidated
Subsidiaries as of March 31, 1998, June 30, 1998 and September
30, 1998 and the related consolidated statements of income and
cash flows for the three-month periods ending on such dates,
certified by a Responsible Officer of Enserch, copies of which
40
have been delivered to each of the Lenders, fairly present
(subject to year-end adjustments), in conformity with GAAP, the
consolidated financial position of Enserch and its Consolidated
Subsidiaries as of such dates and their consolidated results of
operations and cash flows for the periods ending on such dates.
(d) Since December 31, 1997, there has been no Material
Adverse Change with respect to such 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 such Borrower threatened against or affecting, TUC
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 such 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
such 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
such 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 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 any
Borrower subject to the restrictions of Sections 5.09 and 5.10
are represented by Margin Stock.
SECTION 3.08. INVESTMENT COMPANY ACT; PUBLIC UTILITY
HOLDING COMPANY ACT. (a) Neither such 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) Such 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
Borrowers of this Agreement and their respective obligations
hereunder do not violate any provision of such Act or any rule or
regulation thereunder.
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SECTION 3.09. NO MATERIAL MISSTATEMENTS. No report,
financial statement or other written information furnished by or
on behalf of such 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. Such 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 such 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 such
Borrower nor any ERISA Affiliate has incurred any Withdrawal
Liability that could result in a Material Adverse Change.
Neither such Borrower nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization or
has been terminated within the meaning of Title IV of ERISA,
which such reorganization or termination could result in a
Material Adverse Change, and no Multiemployer Plan is reasonably
expected to be in reorganization or to be terminated where such
reorganization or termination has resulted or can reasonably be
expected to result, through an increase in the contributions
required to be made to such Plan or otherwise, in a Material
Adverse Change.
SECTION 3.12. SIGNIFICANT SUBSIDIARIES. Each of TUC'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. TUC'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,
such 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
42
by such financial statements or other reports, neither such
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 such 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, such Borrower is aware of no events,
conditions or circumstances involving environmental pollution or
contamination that could reasonably be expected to result in a
Material Adverse Change.
SECTION 3.14. YEAR 2000 COMPLIANCE. All material
computer-based systems and software of such Borrower and its
Subsidiaries will record, store, process and present calendar
dates falling on or after January 1, 2000, in the same manner,
and with the same functionality, as such computer-based systems
and software record, store, process and present calendar dates
falling on or before December 31, 1999. In all other respects,
such computer-based systems and software will not in any way lose
functionality or degrade in performance as a consequence of such
computer-based system and software operating at a date later than
December 31, 1999. At the request of the Administrative Agent,
each Borrower shall provide the Administrative Agent and the
Lenders assurances in form and substance satisfactory to the
Administrative Agent and the Lenders as to the proper
functioning, prior to and following January 1, 2000, of the
computer-based systems and software of such Borrower and its
Subsidiaries.
ARTICLE IV
CONDITIONS
The obligations of the Lenders to make Loans hereunder, and
the effectiveness of this amendment and restatement, are subject
to the satisfaction of the following conditions:
SECTION 4.01. RESTATEMENT DATE. The Commitment of each
Lender to make any Loan on or after February 26, 1999 and the
effectiveness of this amendment and restatement are subject to
the conditions (the first date such conditions are satisfied
being hereinafter referred to as the "RESTATEMENT DATE") that on
the Restatement 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
43
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) Thelen Reid & Priest LLP
and Worsham,Forsythe & Wooldridge, L.L.P. each dated the
Restatement 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 Restatement 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 each 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 each Borrower as of a
recent date from such Secretary of State; (ii) a certificate
of the Secretary or an Assistant Secretary of each Borrower
dated the Restatement Date and certifying (A) that attached
thereto is a true and complete copy of the by-laws of such
Borrower as in effect on the Restatement 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 such 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
such Borrower; (iii) a certificate of another officer of
such 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 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 Restatement Date and signed by a Financial Officer
of each 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 Borrowers on or prior to the
Restatement Date.
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(g) The Agents shall have received an executed
counterpart to this Agreement of each Agent, each Lender and
each Borrower.
(h) Each Lender under (and as defined in) the Original
Credit Agreement immediately prior to the Restatement Date
that does not desire to remain a Lender after the
Restatement Date shall have executed and delivered to the
Administrative Agent an Assignment and Acceptance with
respect to such Lender's Commitment in form and substance
satisfactory to the Administrative Agent.
(i) 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 any
Borrower.
SECTION 4.02. INITIAL OFFER LOANS. The Commitment of each
Lender to make its initial Offer Loan shall be subject to the
satisfaction of the following conditions precedent on or after
the Effective Date:
(a) The terms of the Offer as set forth in the Offer
Press Release shall have been found to be acceptable by the
Joint Lead Arrangers prior to the public announcement
thereof by or on behalf of Bidco. The Joint Lead Arrangers
shall have received copies of the Offer Documents and the
Offer Press Release and of all other documents and materials
filed or released publicly by TUC, Bidco or any of TUC's
other affiliates in connection with the Offer, certified as
true and correct copies thereof as of the date thereof by a
responsible officer of TUC, and the conditions set forth in
such documents shall conform to the conditions set forth in
the Offer Press Release as approved by the Joint Lead
Arrangers prior to the release thereof.
(b) All conditions precedent to borrowings under the
U.K. Facility Agreement for the purpose of consummating the
Acquisition shall have been satisfied (other than any such
condition relating to, or that would be satisfied upon, the
making of Offer Loans).
(c) The Unconditional Date shall have occurred.
(d) The Agents shall have received evidence
satisfactory to them that all amounts outstanding under the
Existing TU Credit Agreements have been repaid (or will be
repaid on such date with the proceeds of the Loans hereunder
and the Loans under and as defined in the Facility B Credit
Agreement) and that the "Commitments" thereunder have been
terminated.
SECTION 4.03. CONDITIONS FOR ALL OFFER LOANS DURING THE
CERTAIN FUNDS PERIOD. To ensure that TUC has resources available
to advance to Bidco funds to enable Bidco to fulfill its
obligations in respect of the Offer, the Lenders agree that the
Commitment of each Lender to make each Offer Loan to be made by
45
it (including the initial Offer Loan to be made by it) during the
Certain Funds Period shall be subject to the satisfaction of the
conditions precedent set forth in Section 4.02 on or prior to the
date of such Offer Loan, and the only further conditions
precedent to the Commitment of each Lender to make each Offer
Loan to be made by it during the Certain Funds Period shall be
that on the date of such Offer Loan:
(a) The Agents shall have received a notice of such
Borrowing as required by Section 2.03 or Section 2.04, as
applicable.
(b) No Major Default shall have occurred and be
continuing or would result from the making of such Offer
Loan.
(c) The Agents shall have received a certificate of a
Responsible Officer of TUC certifying that the matter set
forth in the foregoing paragraph (b) is true and correct on
the date of the making of such Offer Loan.
Each such Offer Loan shall be deemed to constitute a
representation and warranty by TUC on the date of such Loan as to
the matters specified in subsection (b) of this Section 4.03.
SECTION 4.04. INITIAL GENERAL LOANS. The Commitment of
each Lender to make its initial General Loan 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 evidence
satisfactory to them that all amounts outstanding under the
Existing TU Credit Agreements have been repaid (or will be
repaid on such date with the proceeds of the Loans hereunder
and the Loans under and as defined in the Facility B Credit
Agreement) and that the "Commitments" thereunder have been
terminated.
SECTION 4.05. OFFER LOANS AFTER THE CERTAIN FUNDS PERIOD
AND ALL GENERAL LOANS. The Commitment of each Lender to make
each General Loan to be made by it (including the initial General
Loan to be made by it), and each Offer Loan to be made by it at
any time on or after the last day of the Certain Funds Period,
shall be subject to the satisfaction of the following conditions
precedent on the date of such Borrowing:
(a) The Agents shall have received a notice of such
Borrowing as required by Section 2.03 or Section 2.04, as
applicable.
(b) The representations and warranties set forth in
Article III hereof (except, in the case of a refinancing of
a Standby Borrowing (whether for Offer Loans or General
Loans) with a new Standby Borrowing that does not increase
the aggregate principal amount of the Loans of any Lender
46
outstanding, the representations set forth in Sections
3.05(e), 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.
(c) At the time of and immediately after such
Borrowing no Event of Default or Default shall have occurred
and be continuing.
(d) The Agents shall have received a certificate of a
Responsible Officer of the applicable Borrower certifying
that the matters set forth in paragraphs (b) and (c) of this
Section 4.05 are true and correct as of such date.
Each such Loan shall be deemed to constitute a representation and
warranty by each Borrower on the date of such Borrowing as to the
matters specified in subsections (b) and (c) of this Section
4.05.
ARTICLE V
COVENANTS
TUC (and each of TU Electric and Enserch, to the extent such
covenants apply to it) 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 member of the TEG Group until the 120th day following the
Unconditional Date, but TUC shall use all reasonable efforts to
cause TEG and all members of the TEG Group to comply with such
covenants at all times on and after the Unconditional Date):
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.
47
SECTION 5.03. FINANCIAL STATEMENTS, REPORTS, ETC. TUC (and
TU Electric and Enserch, to the extent such information relates
to TU Electric or Enserch, as applicable, only) 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 TUC, a
consolidated balance sheet of TUC 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;
(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 TUC a consolidated balance sheet of TUC
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 TUC'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 TUC'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 TUC;
(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 TUC 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 TUC and (ii) a
certificate of a Financial Officer of TUC (A) setting forth
in reasonable detail the calculations required to establish
whether TUC 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 TUC 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;
48
(e) forthwith upon becoming aware of the occurrence of
any Default, a certificate of a Financial Officer of TUC
setting forth the details thereof and the action which TUC
is taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the
shareholders of TUC 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 similar reports which TUC, 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; (i)
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
(ii) 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
TUC 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, TUC
shall make available a copy of the consolidating workpapers used
by TUC 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,
49
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 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 as set forth below:
(i) up to $800 million of the proceeds of the Loans to
refinance the Existing TU Credit Agreements and for working
capital and other general corporate purposes, including
commercial paper back-up (and excluding the purposes
described in clauses (ii)(B) and (D) below); and
(ii) up to $2.8 billion of the proceeds of the Loans
solely to finance or refinance (directly or indirectly,
including as a commercial paper back-up) equity or
subordinated loan advances from TUC to FinCo 1 and FinCo 2
to finance:
(A) consideration payable by Bidco to TEG
shareholders in respect of open market
purchases;
(B) the acquisition of the Target Shares by Bidco
pursuant to the Offer;
(C) fees and expenses of TUC in relation to the
Acquisition and the negotiation, execution
and delivery of this Agreement and the
Facility B Credit Agreement;
(D) the consideration payable pursuant to the
operation by Bidco of the procedures
contained in Sections 428-430 of the
Companies Act; and
50
(E) 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. TUC 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 TUC
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. TUC 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 TUC 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 TUC 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 TUC nor any of its
Subsidiaries will engage to a Substantial extent in businesses
other than those currently conducted by them, or in the case of
Enserch, by Enserch and other businesses reasonably related
thereto, (b) neither TUC 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, TUC 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 TUC 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 TUC 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 TUC or any Wholly Owned Subsidiary of TUC; or
(b) purchase money Liens (including capital leases) in
respect of property acquired by TUC or any Significant
Subsidiary, to secure the purchase price of such property
(or to secure indebtedness incurred prior to, at the time
51
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 TUC 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 TUC; 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 TUC 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 TUC 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 TUC or such Subsidiary, or at the time such
corporation becomes a Subsidiary of TUC, 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 TUC 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 TUC 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 TUC 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
52
aggregate amount not to exceed $400,000,000; provided that
neither TUC nor any Subsidiary of TUC 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 TUC 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) Liens securing the obligations of the Borrowers
(as defined in the U.K. Facility Agreement) under the U.K.
Facility Agreement; or
(k) pledges or sales by TU Electric, Enserch or
Eastern Electric plc of its accounts receivable including
customers' installment paper; or
(l) the pledge of current assets, in the ordinary
course of business, to secure current liabilities; or
(m) Permitted Encumbrances; or
(n) Permitted Security Interests (as such term is
defined in the U.K. Facility Agreement) created by any
Significant Subsidiary subject to the U.K. Facility
Agreement.
SECTION 5.11. FIXED CHARGE COVERAGE. TUC will not, as of
the end of each quarter of each fiscal year of TUC, 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. TUC will not at
any time during any period specified below permit Consolidated
Shareholders' Equity to be less than the percentage of
Consolidated Total Capitalization set forth below next to such
period:
=======================================
Period Percentage
------ ----------
---------------------------------------
Until but excluding
6-30-99 26%
---------------------------------------
6-30-99 to but excluding
6-30-00 30%
---------------------------------------
6-30-00 and thereafter 35%
=======================================
53
SECTION 5.13. RESTRICTIVE AGREEMENTS. TUC will not, and
will not permit TU Electric, Enserch or any other Subsidiary of
TUC 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.
SECTION 5.14. THE OFFER. At all times prior to the end of
the Certain Funds Period, TUC shall:
(i) cause Bidco, until the earlier of the date the
Offer lapses or is finally closed, to comply in all material
respects with the City Code, the Financial Services Act
1986 (UK) and the Companies Act and all other applicable
laws and regulations relevant in the context of the Offer;
(ii) cause Bidco to provide the Administrative Agent
with such information regarding the progress of the Offer as
it may reasonably request and, provided no breach of the
City Code would result, all material written advice given to
it in respect of the Offer;
(iii) not cause or permit Bidco to declare the
Offer unconditional at a level of acceptances below that
required by Rule 10 of the City Code;
(iv) cause Bidco to ensure that at no time shall
circumstances arise whereby a mandatory offer is required to
be made by the terms of Rule 9 of the City Code in respect
of the Target Shares;
(v) not cause or permit Bidco, without the prior
consent of the Administrative Agent (acting on the
instructions of the Required Lenders), to waive, amend or
agree or decide not to enforce, in whole or in part, the
conditions of the Offer set out in paragraph (c) (Referral)
of Appendix 1 to the Offer Press Release;
(vi) not cause or permit Bidco, without the prior
consent of the Administrative Agent (acting on the
instructions of the Required Lenders), such consent not to
be unreasonably withheld or delayed, to waive, amend (but
not including extending the Offer period, which shall be at
Bidco's discretion provided that the Offer is closed within
the period required by paragraph (ix) below of this Section
5.14) or agree or decide not to invoke, in whole or in part,
in any material respect, any of the other material
conditions of the Offer (and the Borrowers acknowledge that
the total indebtedness of the TEG Group requiring to be
refinanced, and the amount of any contingent liabilities of
54
the TEG Group which would or might crystallize upon the
Offer becoming unconditional, are material), provided that
TUC shall not be in breach of this paragraph (vi) if it
fails to cause Bidco to invoke a condition of the Offer
because the Takeover Panel has directed that Bidco may not
do so;
(vii) cause Bidco to keep the Joint Lead Arrangers
informed and consult with them as to:
(A) the terms of any undertaking or assurance
proposed to be given by it, any of its Affiliates or
any member of the TEG Group to the Director General of
Electricity Supply, the Director General of Gas Supply
or the Secretary of State for Trade and Industry in
connection with the Offer;
(B) the terms of any modification to any of the
Licenses proposed in connection with the Offer; and
(C) any terms proposed in connection with any
authorization or determination necessary or appropriate
in connection with the Offer;
(viii) within 15 days of the date on which
acceptances of the Offer are received from holders of not
less than 90% of the Target Shares, procure that a director
of Bidco issues a statutory declaration pursuant to section
429(4) of the Companies Act, gives notice to all remaining
holders of Target Shares that it intends to acquire their
Target Shares pursuant to section 429 of the Companies Act
and cause Bidco subsequently to purchase all such Target
Shares; and
(ix) in any event give notice to close the Offer no
less than 120 days after the Effective Date, unless the
Required Lenders agree in their discretion to extend such
period.
ARTICLE VI
EVENTS OF DEFAULT
In case of the happening of any of the following events
(each an "EVENT OF DEFAULT") (provided that subsection (g) below
shall not apply to any member of the TEG Group at any time prior
to the 120th day following the Unconditional Date):
(a) any representation or warranty made or deemed made
by any 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;
55
(b) default shall be made by any 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;
(c) default shall be made by any 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 any Borrower in the due
observance or performance of any covenant, condition or
agreement contained in Section 5.01, 5.11 or 5.12;
(e) default shall be made by any 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 any 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
such Borrower;
(f) TUC 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) any 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 TUC or any
Significant Subsidiary, or of a substantial part of the
property or assets of TUC or any Significant Subsidiary,
under Title 11 of the United States Bankruptcy Code, as now
constituted or hereafter amended, or any other Federal or
state bankruptcy, insolvency, receivership or similar law,
(i) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for TUC or any
Significant Subsidiary or for a substantial part of the
property or assets of TUC or any Significant Subsidiary or
(ii) the winding up or liquidation of TUC or any Significant
Subsidiary; and such proceeding or petition shall continue
56
undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;
(i) TUC or any Significant Subsidiary shall (i)
voluntarily commence any proceeding or file any petition
seeking relief under Title 11 of the United States
Bankruptcy 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 TUC 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 TUC 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 TUC 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
Borrowers, take either or both of the following actions, at the
same or different times: (i) terminate forthwith the right of
any or all of the Borrowers to borrow pursuant to the Commitments
and (ii) declare the Loans of any or all of the Borrowers 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 such Borrower accrued
hereunder, shall become forthwith due and payable, without
presentment, demand, protest or any other notice of any kind, all
57
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 any
Borrower, the Commitments of the Lenders with respect to such
Borrower shall automatically terminate and the principal of the
Loans then outstanding of the Borrower with respect to which such
event has occurred, together with accrued interest thereon and
any unpaid accrued Fees and all other liabilities of such
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 such
Borrower, anything contained herein to the contrary
notwithstanding; and provided further, that the remedies
described in clauses (i) and (ii) above may be exercised with
respect to the Offer Loans and the Offer Loan Commitments during
the Certain Funds Period only if an Event of Default that is also
a Major Default shall have occurred and be continuing.
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 Borrowers 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 Borrowers 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 Borrowers 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
58
Borrowers 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 any 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 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 Borrowers. Upon any such
resignation, the Required Lenders shall have the right to appoint
a successor Agent acceptable to the Borrowers. 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 Borrowers 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 Borrowers 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
59
Agreement to the extent the same shall not have been reimbursed
by the Borrowers; 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. Each Lender agrees that any allocation made
in good faith by the Agents of expenses or other amounts referred
to in this paragraph between this Agreement and the Facility B
Credit Agreement shall be conclusive and binding for all
purposes.
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 any Borrower, to Texas Utilities Company,
Energy Plaza, 1601 Bryan Street, 33rd Floor, Dallas, TX
75201, Attention of Laura Anderson, Manager of Corporate
Finance and Compliance (Telecopy No. 214-812-2488);
(b) if to the CAF Agent, to The Chase Manhattan Bank,
Loan and Agency Services Group, One Chase Manhattan Plaza,
8th Floor, New York, New York 10081, Attention of Chris
Consomer (Telecopy No. 212-552-5627, with a copy to The
Chase Manhattan Bank at 270 Park Avenue, New York, New York
10017, Attention of Jaimin Patel (Telecopy No. 212-270-
1354);
(c) if to the Administrative Agent, to Chase Bank of
Texas, National Association, 2200 Ross Avenue 3rd Floor,
Dallas TX 75201, Attention of Allen King (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.
60
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.
SECTION 8.02. SURVIVAL OF AGREEMENT. All covenants,
agreements, representations and warranties made by the Borrowers
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 Borrowers 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
Borrowers 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 Borrowers 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 or, if
the amount of the Commitment of the assigning Lender is less than
$15,000,000, the aggregate amount of such Lender's Commitment,
(iii) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Lender's rights and
obligations under this Agreement, (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 (provided that, in the case of simultaneous
assignment of interests under one or more of this Agreement and
61
the Facility B Credit Agreement, the aggregate fee shall be
$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 Borrowers to be given
reasonable notice of any shorter period), (A) the assignee
thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement and (B)
the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto (but
shall continue to be entitled to the benefits of Sections 2.12,
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 Borrowers or the performance or observance by the Borrowers
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.
62
(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 Borrowers, 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 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 Borrowers 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 Borrowers 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 Borrowers, 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 Borrowers 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 Borrowers furnished to such Lender by
or on behalf of the Borrowers; 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.
63
(h) The Borrowers 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 a Borrower without such consent shall be void.
(i) Any Lender may at any time pledge all or any portion of
its rights under this Agreement to a Federal Reserve Bank;
provided that no such pledge shall release any Lender from its
obligations hereunder or substitute any such Bank for such Lender
as a party hereto. In order to facilitate such an assignment to
a Federal Reserve Bank, each 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
such Borrower by the assigning Lender hereunder.
SECTION 8.05. EXPENSES; INDEMNITY. (a) The Borrowers
agree 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 a 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 Borrowers agree 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 such Borrower to borrow or to
refinance, convert or continue any Loan hereunder (including as a
result of such 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 such 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
64
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.
(c) THE BORROWERS AGREE 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, (I) THE USE OF THE
PROCEEDS OF THE LOANS OR (II) 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 BORROWERS OR BY
ANY BORROWER AGAINST SUCH INDEMNITEE, IN WHICH A FINAL,
NONAPPEALABLE JUDGMENT HAS BEEN RENDERED AGAINST SUCH INDEMNITEE;
PROVIDED, FURTHER, THAT EACH 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 appropriate Borrower and shall be conclusive absent
manifest error.
65
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
relevant Borrower against any of and all the obligations of such
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 any 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 Borrowers 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.
66
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 WITH RESPECT TO THE SUBJECT MATTER HEREOF,
INCLUDING, WITHOUT LIMITATION, THE ORIGINAL AGREEMENT, 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,
67
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.
SECTION 8.14. JURISDICTION; VENUE. (a) Each 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) Each 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 Borrowers hereunder or in connection with the
negotiation hereof; provided that such Lender may disclose any
such information, memoranda or extracts (i) to its Affiliates,
accountants or counsel, (ii) to any regulatory agency having
authority to examine such Lender, (iii) as required by any legal
or governmental process or otherwise by law, (iv) except as
provided in the last sentence of Section5.03, 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 Borrowers 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
any 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.
68
[Signature pages follow]
S-1
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/ Kirk R. Oliver
--------------------------------
Name: Kirk R. Oliver
Title: Treasurer
TEXAS UTILITIES ELECTRIC COMPANY
By /s/ Kirk R. Oliver
--------------------------------
Name: Kirk R. Oliver
Title: Treasurer
ENSERCH CORPORATION
By /s/ Kirk R. Oliver
--------------------------------
Name: Kirk R. Oliver
Title: Treasurer
S-2
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION,
as Administrative Agent
By /s/ Allen K. King
---------------------------------
Name: Allen K. King
Title: Vice President
S-3
THE CHASE MANHATTAN BANK,
individually and as Competitive
Advance Facility Agent
By /s/ Thomas H. Kozlark
--------------------------------------
Name: Thomas H. Kozlark
Title: Vice President
S-4
Lenders
-------
ABN AMRO BANK N.V.
By /s/ Kevin S. McFadden
----------------------------
Name: Kevin S. McFadden
Title: Vice President
By /s/ Mark R. Lasek
------------------------------
Name: Mark R. Lasek
Title: Group Vice President
S-5
ARAB BANKING CORPORATION (B.S.C.)
By /s/ Stephen A. Plauche'
-----------------------------
Name: Stephen A. Plauche'
Title: Vice President
S-6
[INTENTIONALLY OMITTED]
S-7
THE BANK OF NOVA SCOTIA
By /s/ F.C.H. Ashby
------------------------------
Name: F.C.H. Ashby
Title: Senior Manager Loan Operations
S-8
THE BANK OF TOKYO-MITSUBISHI, LTD.
By /s/ John M. Mearns
-----------------------------
Name: J. Mearns
Title: VP & Manager
S-9
[INTENTIONALLY OMITTED]
S-10
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By /s/ Curtis L. Anderson
-----------------------------
Name: Curtis L. Anderson
Title: Senior Vice President
S-11
BANQUE NATIONALE DE PARIS
By /s/ David C. Schad
------------------------------
Name: David C. Schad
Title: Executive Vice President
S-12
BARCLAYS BANK PLC
By /s/ Sydney O. Dennis
-----------------------------
Name: Sydney O. Dennis
Title: Director
S-13
BAYERISCHE LANDESBANK GIROZENTRALE
(CAYMAN ISLANDS BRANCH)
By /s/ Peter Obermann
------------------------------
Name: Peter Obermann
Title: Senior Vice President
By /s/ James H. Boyle
-------------------------------
Name: James H. Boyle
Title: Second Vice President
S-14
CHANG HWA COMMERCIAL BANK, LTD., NEW YORK BRANCH
By /s/ Wan-Tu Yeh
--------------
Name: Wan-Tu Yeh
Title: VP & General Manager
S-15
CANADIAN IMPERIAL BANK OF COMMERCE
By /s/ Denis O'Meara
------------------------------
Name: Denis O'Meara
Title: Executive Director
CIBC Oppenheimer Corp., AS AGENT
S-16
CITIBANK, N.A.
By /s/ Robert J. Harrity, Jr.
-------------------------------
Name: Robert J. Harrity, Jr.
Title: Managing Director
S-17
COMMERZBANK AG, ATLANTA AGENCY
By /s/ Harry P. Yergey
------------------------------
Name: Harry P. Yergey
Title: SVP & Manager
By /s/ Subash R. Viswanathan
-------------------------
Name: Subash R. Viswanathan
Title: Vice President
S-18
CREDIT AGRICOLE INDOSUEZ
By /s/ Rene LeBlanc
-------------------------------
Name: Rene LeBlanc
Title: Vice President
By /s/ Sarah McClintock
-----------------------------
Name: Sarah McClintock
Title: Vice President
S-19
CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Robert Ivosevich
-------------------------------
Name: Robert Ivosevich
Title: Senior Vice President
S-20
CREDIT SUISSE FIRST BOSTON
By /s/ Robert N. Finney
------------------------------
Name: Robert N. Finney
Title: Managing Director
By /s/ Andrea E. Shkane
-----------------------------
Name: Andrea E. Shkane
Title: Vice President
S-21
DAI ICHI KANGYO BANK LTD.
By /s/ Azlan S. Ahmad
-----------------------------
Name: Azlan S. Ahmad
Title: Account Officer
S-22
DEN DANSKE BANK AKTIESELSKAB
By /s/ John A. O'Neill
-------------------------------
Name: John A. O'Neill
Title: Vice President
By /s/ Peter L. Hargraves
------------------------------
Name: Peter L. Hargraves
Title: Vice President
S-23
DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN ISLANDS BRANCH
By /s/ Lydia Zaininger
-------------------------------
Name: Lydia Zaininger
Title: Vice President
By /s/ Christopher S. Lane
------------------------------
Name: Christopher S. Lane
Title: Associate
S-24
DG BANK
DEUTSCHE GENOSSENSCHAFTSBANK AG
By /s/ Norah McCann
-----------------------------
Name: Norah McCann
Title: SVP
By /s/ Karen A. Brinkman
----------------------------
Name: Karen A. Brinkman
Title: VP
S-25
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Madeleine N. Pember
---------------------------
Name: Madeleine N. Pember
Title: Assistant Vice President
S-26
FIRST UNION NATIONAL BANK (CHARLOTTE)
By /s/ Joe K. Dancy
-------------------------------
Name: Joe K. Dancy
Title: Vice President
S-27
GUARANTY FEDERAL BANK, FSB
By /s/ Jim R. Hamilton
------------------------------
Name: Jim R. Hamilton
Title: Vice President
S-28
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By /s/ Takuya Honjo
------------------------------
Name: Takuya Honjo
Title: Senior Vice President
S-29
KBC BANK N.V.
By /s/ Katherine S. McCarthy
----------------------------
Name: Katherine S. McCarthy
Title: Vice President
By /s/ Robert Snauffer
--------------------------------
Name: Robert Snauffer
Title: First Vice President
S-30
LEHMAN COMMERCIAL PAPER INC.
By /s/ Michele Swanson
-----------------------------
Name: Michele Swanson
Title: Authorized Signatory
S-31
LLOYDS BANK PLC
By /s/ Windsor R. Davies
----------------------------
Name: Windsor R. Davies
Title: Director, Corporate Banking, USA
By /s/ David C. Rodway
----------------------------
Name: David C. Rodway
Title: Assistant Vice President
S-32
MELLON BANK
By /s/ Roger E. Howard
-----------------------------
Name: Roger E. Howard
Title: Vice President
S-33
MERRILL LYNCH CAPITAL CORPORATION
By /s/ Stephen B. Paras
-------------------------------
Name: Stephen B. Paras
Title: Director Global Loan Syndications
S-34
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By /s/ Yasushi Satomi
-------------------------------
Name: Yasushi Satomi
Title: Senior Vice President
S-35
NATIONAL AUSTRALIA BANK LIMITED
A.C.N. 004044937
By /s/ Scott Tuhy
---------------------------------
Name: Scott Tuhy
Title: Vice President
S-36
NATIONAL WESTMINISTER BANK PLC
By /s/ Jonathan J. Whiticar
------------------------------
Name: Johathan J. Whiticar
Title: Director, MCG
S-37
THE ROYAL BANK OF SCOTLAND PLC
By /s/ Lee Morse
--------------------------------
Name: Lee Morse
Title: Relationship Manager
S-38
THE SANWA BANK, LIMITED
NEW YORK BRANCH
By /s/ John T. Feeney
-------------------------------
Name: John T. Feeney
Title: Vice President
S-39
SOCIETE GENERALE
By /s/ Alan Jaffe
----------------------------------
Name: Alan Jaffe
Title: Director
S-40
SGZ BANK
By /s/ John Dexheimer
------------------------------
Name: John Dexheimer
Title: SVP
By /s/ Jim Deitmer
--------------------------------
Name: Jim Deitmer
Title: VP
S-41
THE SUMITOMO BANK LIMITED
By /s/ William R. McKown, III
-------------------------------
Name: William R. McKown, III
Title: Vice President & Manager
S-42
THE TOKAI BANK LIMITED
By /s/ Shinichi Nakatani
-------------------------------
Name: Shinichi Nakatani
Title: Assistant General Manager
S-43
TORONTO DOMINION (TEXAS), INC.
By /s/ Anne C. Favoriti
-------------------------------
Name: Anne C. Favoriti
Title: Vice President
S-44
WESTDEUSTCHE LANDESBANK GIROZENTRALE
By /s/ Cynthia M. Niesen
-----------------------------
Name: Cynthia M. Niesen
Title: Managing Director
By /s/ Walter T. Duffy III
------------------------------
Name: Walter T. Duffy III
Title: Associate
S-45
THE BANK OF NEW YORK
By /s/ Nathan S. Howard
----------------------------
Name: Nathan S. Howard
Title: Vice President
S-46
FLEET NATIONAL BANK
By /s/ Stephen J. Hoffman
-----------------------------
Name: Stephen J. Hoffman
Title: Assistant Vice President
S-47
BANCA NAZIONALE DEL LAVORO
By /s/ Roberto Mancone
-----------------------------
Name: Roberto Mancone
Title: Senior Loan Officer
By /s/ Leonardo Valentini
------------------------------
Name: Leonardo Valentini
Title: First Vice President
S-48
S-49
EXHIBIT A-1
FORM OF COMPETITIVE BID REQUEST
The Chase Manhattan Bank,
as Competitive Advance Facility Agent
for the Lenders referred to below,
c/o The Chase Manhattan Bank
Loan and Agency Services Group
One Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Attention: Chris Consomer
Telecopy: 212-552-5627
Dear Ladies and Gentlemen:
The undersigned, [Texas Utilities Company][Texas Utilities
Electric Company], [Enserch Corporation] (the "BORROWER"), refers
to the 364-Day Amended and Restated Competitive Advance and
Revolving Credit Facility Agreement, dated as of May 28, 1998, as
amended and restated as of February 26, 1999 (as it may hereafter
be amended, modified, extended or restated from time to time, the
"AGREEMENT"), among the Borrower, [Texas Utilities Company]
[Texas Utilities Electric Company], [Enserch Corporation], 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(ft1) ------------
1. Principal amount of Competitive
Borrowing comprising Offer Loans ------------
2. Principal amount of Competitive
Borrowing comprising General Loans ------------
(C) Interest rate basis(ft2) ------------
- -------------------------------
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.
(D) Interest Period and the last day
thereof(ft3) ------------
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,]
[TEXAS UTILITIES ELECTRIC COMPANY,]
[ENSERCH CORPORATION,]
By
----------------------------
Name:
Title: [Financial Officer]
___________________
3. Which shall be subject to the definition of "INTEREST PERIOD"
and end not later than the earlier of the last day of the
Revolving Period and the Maturity Date.
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 Amended and Restated
Competitive Advance and Revolving Credit Facility Agreement,
dated as of May 28, 1998, as amended and restated as of February
26, 1999 (as it may hereafter be amended, modified, extended or
restated from time to time, the "AGREEMENT"), among [Texas
Utilities Company][Texas Utilities Electric Company], [Enserch
Corporation] (the "BORROWER"), [Texas Utilities Company][Texas
Utilities Electric Company], [Enserch Corporation], 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].(ft1) 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 comprising Offer Loans ----------------
2. Principal amount of Competitive
Borrowing comprising General Loans ----------------
(C) Interest rate basis ----------------
- ----------------------------
1. The Competitive Bid must be received by the CAF Agent (i) 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 (ii) 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.
A-2-2
(D) Interest Period and the last day
thereof ----------------
Very truly yours,
The Chase Manhattan Bank,
as Competitive Advance
Facility Agent,
By
-----------------------
Name:
Title:
EXHIBIT A-3
FORM OF COMPETITIVE BID
The Chase Manhattan Bank,
as Competitive Advance Facility Agent
for the Lenders referred to below,
c/o The Chase Manhattan Bank
Loan and Agency Services Group
One Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Attention: Chris Consomer
Telecopy: 212-552-5627
[Date]
Attention: [ ]
Dear Ladies and Gentlemen:
The undersigned, [Name of Lender], refers to the 364-Day
Amended and Restated Competitive Advance and Revolving Credit
Facility Agreement, dated as of May 28, 1998, as amended and
restated as of February 26, 1999 (as it may hereafter be amended,
modified, extended or restated from time to time, the
"AGREEMENT"), among [Texas Utilities Company][Texas Utilities
Electric Company], [Enserch Corporation] (the "BORROWER"), [Texas
Utilities Company][Texas Utilities Electric Company], [Enserch
Corporation], 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(ft1) -----------------
(B) Competitive Bid Rate(ft2) -----------------
(C) Interest Period and last day thereof -----------------
- ----------------------------
(1) Not less than $5,000,00 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.
A-3-2
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
----------------------
Name:
Title:
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,
c/o The Chase Manhattan Bank
Loan and Agency Services Group
One Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Attention: Chris Consomer
Telecopy: 212-552-5627
Dear Ladies and Gentlemen:
The undersigned, [Texas Utilities Company][Texas Utilities
Electric Company], [Enserch Corporation], (the "BORROWER"),
refers to the 364-Day Amended and Restated Competitive Advance
and Revolving Credit Facility Agreement, dated as of May 28,
1998, as amended and restated as of February 26, 1999 (as it may
hereafter be amended, modified, extended or restated from time to
time, the "AGREEMENT"), among the Borrower, [Texas Utilities
Company] [Texas Utilities Electric Company], [Enserch
Corporation], 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 , , 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
---------------- ----------------- ------
$ [%]/[+/-. %] [Offer] [General]
Loan(ft1)
$ [Offer] [General]
Loan(ft1)
________________
1. Select one.
A-4-2
We hereby reject the following bids:
Principal Amount Fixed Rate/Margin Lender
---------------- -----------------
$ [%]/[+/-. %]
$
The $ should be deposited in The Chase Manhattan
----------
Bank account number [ ] on [date].
Very truly yours,
[TEXAS UTILITIES COMPANY,]
[TEXAS UTILITIES ELECTRIC
COMPANY,]
[ENSERCH CORPORATION,]
By
------------------------
Name:
Title:
EXHIBIT A-5
FORM OF STANDBY BORROWING REQUEST
Chase Bank of Texas, National Association,
as Administrative Agent for the Lenders referred to below,
2200 Ross Avenue, 3rd floor
Dallas, TX 77002
Attention: Allen King
Telecopy: (214) 965-2990
[Date]
Dear Ladies and Gentlemen:
The undersigned, [Texas Utilities Company][Texas Utilities
Electric Company], [Enserch Corporation] (the "BORROWER"), refers
to the 364-Day Amended and Restated Competitive Advance and
Revolving Credit Facility Agreement dated as of May 28, 1998, as
amended and restated as of February 26, 1999 (as it may hereafter
be amended, modified, extended or restated from time to time, the
"AGREEMENT"), among the Borrower, [Texas Utilities Company][Texas
Utilities Electric Company], [Enserch Corporation], 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(ft1) ---------------
1. Principal amount of Standby
Borrowing comprising Offer
Loans ---------------
2. Principal amount of Standby
Borrowing comprising General
Loans ---------------
(C) Interest rate basis(ft2) ---------------
(D) Interest Period and the last
day thereof(ft3) ---------------
_______________________
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.
A-5-2
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,]
[TEXAS UTILITIES ELECTRIC
COMPANY,]
[ENSERCH CORPORATION,]
By
-----------------------
Name:
Title:
EXHIBIT B
ADMINISTRATIVE QUESTIONNAIRE
TEXAS UTILITIES COMPANY
TEXAS UTILITIES ELECTRIC COMPANY
ENSERCH CORPORATION
PLEASE FORWARD THIS COMPLETED
FORM AS SOON AS POSSIBLE TO:
-------------------
Donna McGroarty: Fax (713) 216-2291
PLEASE TYPE ALL INFORMATION.
Agent: Chase Bank of Texas, National Association
707 Travis Street, 8-CBB-N 96
Houston, Texas 77002
Telex:
Chase Securities Inc.
Syndications
Telecopier: (713) 216-2291/Alt. Fax (713) 216-2339
Chase Securities Inc.
Syndications
Contacts: Preston Moore Phone: (713) 216-1010
Ann K. Baumgartner Phone: (713) 216-7582
Donna McGroarty Phone: (713) 216-3617
Operations: Gale Manning Phone: (713) 750-2784
Letters of Credit: Gale Manning Phone: (713) 750-2784
Competitive Auction
Contact: The Chase Manhattan Bank
Chris Consomer Phone: (212) 552-7259
Fax: (212) 552-5627
B-2
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:
Street Address (No P.O. Boxes please):
City, State, Zip:
Phone #:
Telefax #:
B-3
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-4
Movement of Funds: TO US: Wire Fed Funds to:
Chase Bank of Texas, National
Association ABA # 113000609
for account number # 0010-092-4118
Attention: Gale Manning/Loan Syndication
Services
Reference: TEXAS UTILITIES COMPANY
TEXAS UTILITIES ELECTRIC
COMPANY
ENSERCH CORPORATION
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-5
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-6
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:
EXHIBIT C
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Dated: __________, ___
Reference is made to the 364-Day Amended and Restated
Competitive Advance and Revolving Credit Facility Agreement,
dated as of May 28, 1998, as amended and restated as of February
26, 1999 (as amended, modified, extended or restated from time to
time, the "AGREEMENT"), among Texas Utilities Company, Texas
Utilities Electric Company, Enserch Corporation (collectively,
the "BORROWERS"), 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.
C-2
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-3
Percentage Assigned of
Facility/Commitment
(set forth, to at least
Principal Amount 8 decimals, as a
Assigned percentage of the
(and identifying Facility and the
information aggregate Commitments
as to individual of all Lenders
Facility Competitive Loans) thereunder
------------ ------------------- --------------------
Commitment $____________ __________%
Standby Loans: $____________ __________%
Competitive Loans: $____________ __________%
Fees Assigned (if any) $____________ __________%
C-4
The terms set forth and on the Accepted:
reverse side hereof are hereby TEXAS UTILITIES COMPANY
agreed to:
as By:
--------------------------, ----------------------
Assignor Name:
Title:
By: as
-----------------------,
Name: TEXAS UTILITIES ELECTRIC
Title: COMPANY
as
--------------------------,
Assignee By:
----------------------
Name:
By: as Title:
-----------------------,
Name:
Title: ENSERCH CORPORATION
By:
---------------------
Name:
Title:
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION,
as Administrative Agent
By:
---------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as CAF Agent
By:
---------------------
Name:
Title:
EXHIBIT D-1
[LETTERHEAD OF]
THELEN REID & PRIEST LLP
[RESTATEMENT DATE]
To the Lenders on
Schedule 2.01 of the
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"),
Texas Utilities Electric Company, a Texas corporation
("TU ELECTRIC"), and ENSERCH Corporation, a Texas corporation
("ENSERCH"), in connection with the 364-Day Competitive Advance
and Revolving Credit Facility Agreement, dated as of May 28,
1998, as amended and restated as of February 26, 1999 (as so
amended and restated, the "CREDIT AGREEMENT"), among TUC,
TU Electric, ENSERCH, 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 and their successors and assigns (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, TU Electric and ENSERCH 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,
TU Electric and ENSERCH 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 any jurisdiction other than the
State of New York and the federal laws of the United States. As
to all matters of Texas law (including incorporation of TUC,
D-1-2
TU Electric and ENSERCH, titles to properties, franchises,
licenses and permits) we have, with your consent, relied upon an
opinion of even date herewith delivered to you by Worsham,
Forsythe & Wooldridge, L.L.P., general counsel for TUC,
TU Electric and ENSERCH. While we represent TUC, TU Electric and
ENSERCH 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, TU Electric or
ENSERCH and have not reviewed generally their business affairs.
Accordingly, we are relying upon representations of TUC,
TU Electric and ENSERCH contained in the Credit Agreement, in
certificates furnished pursuant thereto, and in certificates
furnished to us by officers of TUC, TU Electric and ENSERCH.
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,
TU Electric and ENSERCH, (iv) the legal capacity of natural
persons, (v) the power, corporate or otherwise, of all parties
other than TUC, TU Electric and ENSERCH 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, TU Electric and ENSERCH.
Based on the foregoing, we are of the opinion that:
1. Each of TUC, TU Electric and ENSERCH (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 each of TUC,
TU Electric and ENSERCH of the Credit Agreement and the
Borrowings by each of them thereunder (collectively, the
"TRANSACTIONS") (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, TU Electric or ENSERCH, or the articles of incorporation, as
amended, or by-laws of TUC, TU Electric or ENSERCH, (2) to our
knowledge, any order of any Governmental Authority presently
applicable to TUC, TU Electric or ENSERCH or (3) any provision of
any indenture, agreement or other instrument known to us to which
TUC, TU Electric or ENSERCH or their respective 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,
result in the creation or imposition of any lien upon or with
respect to any property or assets of TUC, TU Electric or ENSERCH.
D-1-3
3. The Credit Agreement has been duly executed and
delivered by TUC, TU Electric and ENSERCH and constitutes the
legal, valid and binding obligation of TUC, TU Electric and
ENSERCH enforceable against each of them 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).
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, TU Electric
or ENSERCH in connection with the Transactions, except such as
have been made or obtained and are in full force and effect.
5. (a) None of TUC, TU Electric nor ENSERCH is an
"investment company" as defined in, or subject to regulation
under, the Investment Company Act of 1940, as amended, and (b)
TUC, TU Electric and ENSERCH and each of their respective
Subsidiaries are 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 each of TUC, TU Electric
and ENSERCH of the Credit Agreement 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, 1997 and the Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1998, June 30, 1998
and September 30, 1998, filed by TUC, TU Electric and ENSERCH
with the Securities and Exchange Commission and as set forth in
Schedule 3.06 to the Credit Agreements, 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, would, 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
Agreements 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.
The foregoing opinions are limited to existing laws and we
undertake no obligation or responsiblity 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
D-1-4
their successors and assigns 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 Worsham, Forsythe & Wooldridge, 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,
Reid & Priest LLP
EXHIBIT D-2
[LETTERHEAD OF]
WORSHAM, FORSYTHE & WOOLDRIDGE, L.L.P.
[RESTATEMENT DATE]
To the Lenders listed on
Schedule 2.01 of each of the
Credit Agreements referred to below
Ladies and Gentlemen:
We have acted as general counsel for Texas Utilities
Company, a Texas corporation ("TUC"), Texas Utilities Electric
Company, a Texas corporation ("TU ELECTRIC") and ENSERCH
Corporation, a Texas corporation ("ENSERCH"), in connection with
the execution and delivery of the 364-Day Amended and Restated
Competitive Advance and Revolving Credit Facility Agreement,
dated as of May 28, 1998, as amended and restated as of February
26, 1999 (as so amended and restated, the "CREDIT AGREEMENT"),
among TUC, TU Electric, ENSERCH, 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, TU Electric
and ENSERCH and have also made such examination of other
documents and of certificates of public officials and corporate
officers of TUC, TU Electric and ENSERCH, 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, TU
Electric and ENSERCH 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, TU
Electric and ENSERCH, (iv) the legal capacity of natural persons,
(v) the power, corporate or otherwise, of all parties other than
D-2-2
TUC, TU Electric and ENSERCH 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, TU Electric and ENSERCH.
Based upon, and subject to, the foregoing and to such
further limitations and qualifications stated below, we are of
the opinion that:
1. Each of TUC, TU Electric and ENSERCH (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 each of TUC,
TU Electric and ENSERCH of the Credit Agreement and the
Borrowings by each of them (collectively, the "TRANSACTIONS")
(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, TU Electric
or ENSERCH, or the respective articles of incorporation, as
amended, or bylaws of TUC, TU Electric or ENSERCH, (2) to our
knowledge, any order of any Governmental Authority presently
applicable to TUC, TU Electric or ENSERCH or (3) any provision of
any indenture, agreement or other instrument known to us to which
TUC, TU Electric or ENSERCH is a party or by which TUC, TU
Electric or ENSERCH or their respective 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, TU
Electric or ENSERCH.
3. The Credit Agreement has been duly executed and
delivered by TUC, TU Electric and ENSERCH and constitutes the
legal, valid and binding obligation of TUC, TU Electric and
ENSERCH enforceable against each of them 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, TU Electric or
ENSERCH in connection with the Transactions, except as such as
have been made or obtained and are in full force and effect.
D-2-3
5. None of TUC, TU Electric nor ENSERCH is an "investment
company" as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended. TUC, TU Electric and
ENSERCH and each of their respective Subsidiaries are 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 Act and rules and regulations
thereunder, and the execution, delivery and performance by TUC,
TU Electric and ENSERCH of the Credit Agreement 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, 1997 and the Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1998, June 30, 1998
and September 30, 1998, 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, would, individually or in the aggregate, result in a
Material Adverse change.
7. To our knowledge, TUC, TU Electric and ENSERCH are 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. 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 Thelen Reid & Priest LLP, special counsel to TUC, TU
Electric and ENSERCH.
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
D-2-4
document or report and may not be furnished to any person without
our prior written consent, except that Thelen Reid & 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,
WORSHAM, FORSYTHE &
WOOLDRIDGE, L.L.P.
By: ___________________
A Partner
SCHEDULE 2.01
Offer Loan General Loan
Name Commitment Commitment
------ ---------- -----------
The Chase Manhattan Bank 0 38,348,488.02
Chase Bank of Texas 0 38,348,488.02
Lehman Commercial Paper, 0 74,443,646.74
Inc.
The Bank of New York 0 70,000,000.00
Barclays Bank Plc 0 70,000,000.00
Bayerische Landesbank 0 70,000,000.00
Girozentrale (Caymen
Islands Branch)
Canadian Imperial Bank of 0 70,000,000.00
Commerce
Commerzbank AG, Atlanta 0 70,000,000.00
Agency
Credit Lyonnais (New York 0 70,000,000.00
Branch)
Credit Suisse First Boston 0 70,000,000.00
Den Danske Bank 0 70,000,000.00
Aktieselskab
Deutsche Bank AG, New York 0 70,000,000.00
Branch and/or Cayman
Islands Branch
First Union National Bank 0 70,000,000.00
(Charlotte)
The Royal Bank of Scotland 0 70,000,000.00
plc
The Toronto Dominion Bank 0 70,000,000.00
Westdeutsche Landesbank 0 70,000,000.00
Girozentrale
Merrill Lynch Capital 0 67,153,667.57
Corporation
First Chicago NBD 0 52,500,000.00
Corporation
Societe Generale 0 58,023,609.41
ABN-Amro Bank N.V. 0 49,335,191.90
Bank of America National 0 49,335,191.90
Trust and
Savings Association
The Bank of Nova Scotia 0 49,335,191.90
Banque Nationale De Paris 0 49,335,191.90
Citibank, N.A. 0 49,335,191.90
Industrial Bank of Japan, 0 49,335,191.90
Limited
KBC Bank N.V. 0 49,335,191.90
Lloyds Bank, plc 0 49,335,191.90
Mellon Bank, N.A. 0 49,335,191.90
National Australia Bank 0 49,335,191.90
Limited, A.C.N.
004044937
The Sanwa Bank, Limited, 0 49,335,191.90
New York Branch
Fleet National Bank 0 37,718,605.17
The Sumitomo Bank, Limited 0 37,718,605.17
DG Bank, Deutsche 0 28,683,900.00
Genossenschaftsbank
National Westminster Plc 0 28,683,900.00
Arab Banking Corporation 0 25,000,000.00
(B.S.C.)
The Bank of Tokyo- 0 25,000,000.00
Mitsubishi,Ltd.
Credit Agricole Indosuez 0 25,000,000.00
The Dai-Ichi Kangyo Bank, 0 25,000,000.00
Ltd.
Guaranty Federal Bank, 0 25,000,000.00
F.S.B.
Offer Loan General Loan
Name Commitment Commitment
------ ---------- -----------
Banca Nazionale del Lavoro 0 15,000,000.00
The Mitsubishi Trust and 0 15,000,000.00
Banking Corporation
The Tokai Bank Limited 0 15,000,000.00
SGZ Bank 0 8,400,000.00
Chang Hwa Commerical Bank, 0 7,289,979.00
Ltd., New York Branch
----- ==================
TOTAL $0.00 $2,100,000,000.00
Aggregate
Name Commitment
------ ----------
The Chase Manhattan Bank 38,348,488.02
Chase Bank of Texas 38,348,488.02
Lehman Commercial Paper, 74,443,646.74
Inc.
The Bank of New York 70,000,000.00
Barclays Bank Plc 70,000,000.00
Bayerische Landesbank 70,000,000.00
Girozentrale (Caymen
Islands Branch)
Canadian Imperial Bank of 70,000,000.00
Commerce
Commerzbank AG, Atlanta 70,000,000.00
Agency
Credit Lyonnais (New York 70,000,000.00
Branch)
Credit Suisse First Boston 70,000,000.00
Den Danske Bank 70,000,000.00
Aktieselskab
Deutsche Bank AG, New York 70,000,000.00
Branch and/or Cayman
Islands Branch
First Union National Bank 70,000,000.00
(Charlotte)
The Royal Bank of Scotland 70,000,000.00
plc
The Toronto Dominion Bank 70,000,000.00
Westdeutsche Landesbank 70,000,000.00
Girozentrale
Merrill Lynch Capital 67,153,667.57
Corporation
First Chicago NBD 52,500,000.00
Corporation
Societe Generale 58,023,609.41
ABN-Amro Bank N.V. 49,335,191.90
Bank of America National 49,335,191.90
Trust and
Savings Association
The Bank of Nova Scotia 49,335,191.90
Banque Nationale De Paris 49,335,191.90
Citibank, N.A. 49,335,191.90
Industrial Bank of Japan, 49,335,191.90
Limited
KBC Bank N.V. 49,335,191.90
Lloyds Bank, plc 49,335,191.90
Mellon Bank, N.A. 49,335,191.90
National Australia Bank 49,335,191.90
Limited, A.C.N.
004044937
The Sanwa Bank, Limited, 49,335,191.90
New York Branch
Fleet National Bank 37,718,605.17
The Sumitomo Bank, Limited 37,718,605.17
DG Bank, Deutsche 28,683,900.00
Genossenschaftsbank
National Westminster Plc 28,683,900.00
Arab Banking Corporation 25,000,000.00
(B.S.C.)
The Bank of Tokyo- 25,000,000.00
Mitsubishi,Ltd.
Credit Agricole Indosuez 25,000,000.00
The Dai-Ichi Kangyo Bank, 25,000,000.00
Ltd.
Guaranty Federal Bank, 25,000,000.00
F.S.B.
Aggregate
Name Commitment
------ ----------
Banca Nazionale del Lavoro 15,000,000.00
The Mitsubishi Trust and 15,000,000.00
Banking Corporation
The Tokai Bank Limited 15,000,000.00
SGZ Bank 8,400,000.00
Chang Hwa Commerical Bank, 7,289,979.00
Ltd., New York Branch ==================
TOTAL $2,100,000,000.00
SCHEDULE 3.06
TO THE CREDIT AGREEMENT
Litigation
None