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EXHIBIT 99(b)
CONFORMED COPY
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TEXAS UTILITIES COMPANY
TEXAS UTILITIES ELECTRIC COMPANY
__________________________________________
AMENDED AND RESTATED
TERM LOAN AND
COMPETITIVE ADVANCE AND
REVOLVING CREDIT FACILITY AGREEMENT
"FACILITIES B AND C"
Dated as of April 26, 1996
__________________________________________
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Administrative Agent
and
CHEMICAL BANK,
as Competitive Advance Facility Agent
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TABLE OF CONTENTS
Article Section Page
- ------- ------- ----
I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.01. Defined Terms . . . . . . . . . . . . . . . . . . . . 2
1.02. Terms Generally . . . . . . . . . . . . . . . . . . . 24
II. THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.01. Commitments . . . . . . . . . . . . . . . . . . . . . . 24
2.02. Loans . . . . . . . . . . . . . . . . . . . . . . . . 25
2.03. Competitive Bid Procedure . . . . . . . . . . . . . . 29
2.04. Borrowing Procedure . . . . . . . . . . . . . . . . . 32
2.05. Fees . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.06. Repayment of Loans; Evidence of Indebtedness . . . . . 34
2.07. Interest on Loans . . . . . . . . . . . . . . . . . . 35
2.08. Default Interest . . . . . . . . . . . . . . . . . . . 36
2.09. Alternate Rate of Interest . . . . . . . . . . . . . . 36
2.10. Termination and Reduction of Commitments . . . . . . . 37
2.11. Prepayment . . . . . . . . . . . . . . . . . . . . . . 37
2.12. Reserve Requirements; Change in Circumstances . . . . . 38
2.13. Change in Legality . . . . . . . . . . . . . . . . . . 40
2.14. Pro Rata Treatment . . . . . . . . . . . . . . . . . . 41
2.15. Sharing of Setoffs . . . . . . . . . . . . . . . . . . 42
2.16. Payments . . . . . . . . . . . . . . . . . . . . . . . 43
2.17. Taxes . . . . . . . . . . . . . . . . . . . . . . . . 43
2.18. Assignment of Interests Under Certain Circumstances . . 47
III. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 48
3.01. Organization; Powers . . . . . . . . . . . . . . . . . 48
3.02. Authorization . . . . . . . . . . . . . . . . . . . . 48
3.03. Enforceability . . . . . . . . . . . . . . . . . . . . 48
3.04. Governmental Approvals . . . . . . . . . . . . . . . . 49
3.05. Financial Statements . . . . . . . . . . . . . . . . . 49
3.06. Litigation; Compliance with Laws . . . . . . . . . . . 49
3.07. Federal Reserve Regulations . . . . . . . . . . . . . . 49
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Contents, p. 2
3.08. Investment Company Act; Public Utility Holding Company Act . . 50
3.09. No Material Misstatements . . . . . . . . . . . . . . . . . 50
3.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
3.11. Employee Benefit Plans . . . . . . . . . . . . . . . . . . . 51
3.12. Significant Subsidiaries . . . . . . . . . . . . . . . . . . 51
3.13. Environmental Matters . . . . . . . . . . . . . . . . . . . 51
IV. CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . . . 52
4.01. All Borrowings . . . . . . . . . . . . . . . . . . . . . . . 52
4.02. Effective Date . . . . . . . . . . . . . . . . . . . . . . . 53
V. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
5.01. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . 55
5.02. Business and Properties . . . . . . . . . . . . . . . . . . . 55
5.03. Financial Statements, Reports, Etc. . . . . . . . . . . . . . 55
5.04. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.05. Taxes, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 58
5.06. Maintaining Records; Access to Properties and Inspections . . 58
5.07. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.08. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 59
5.09. Consolidations, Mergers, and Sales of Assets . . . . . . . . 59
5.10. Limitations on Liens . . . . . . . . . . . . . . . . . . . . 60
5.11. Fixed Charge Coverage . . . . . . . . . . . . . . . . . . . . 62
5.12. Equity Capitalization Ratio . . . . . . . . . . . . . . . . 62
5.13. Indebtedness of TU . . . . . . . . . . . . . . . . . . . . . 62
VI. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . 63
VII. THE AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
VIII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.02. Survival of Agreement . . . . . . . . . . . . . . . . . . . 70
8.03. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . 70
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Contents, p. 3
8.04. Successors and Assigns . . . . . . . . . . . . 71
8.05. Expenses; Indemnity . . . . . . . . . . . . . 74
8.06. Right of Setoff . . . . . . . . . . . . . . . . 76
8.07. Applicable Law . . . . . . . . . . . . . . . . 76
8.08. Waivers; Amendment . . . . . . . . . . . . . . 77
8.09. Entire Agreement . . . . . . . . . . . . . . . 77
8.10. Severability . . . . . . . . . . . . . . . . . 78
8.11. Counterparts . . . . . . . . . . . . . . . . . 78
8.12. Headings . . . . . . . . . . . . . . . . . . . 78
8.13. Interest Rate Limitation . . . . . . . . . . . 78
8.14. Jurisdiction; Venue . . . . . . . . . . . . . . 79
8.15. Confidentiality . . . . . . . . . . . . . . . . 80
8.16. Transition Period . . . . . . . . . . . . . . . 80
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 Borrowing Request
Exhibit B Administrative Questionnaire
Exhibit C Form of Assignment and Acceptance
Exhibit D-1 Opinion of Reid & Priest LLP, special counsel to Texas Utilities
Company and Texas
Utilities Electric Company
Exhibit D-2 Opinion of Worsham, Forsythe & Wooldridge, L.L.P., general
counsel for Texas Utilities Company and Texas Utilities
Electric Company
Schedule 2.01 Commitments
Schedule 3.06 Litigation
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AMENDED AND RESTATED TERM LOAN AND
COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY
AGREEMENT (the "Agreement") dated as of April 26,
1996, and effective as of the Effective Date, among
TEXAS UTILITIES COMPANY, a Texas corporation ("TU");
TEXAS UTILITIES ELECTRIC COMPANY, a Texas corporation
and a wholly owned subsidiary of TU ("TU Electric"
and, together with TU, the "Borrowers"); the lenders
listed in Schedule 2.01 (together with their
successors and assigns, the "Lenders"); CHEMICAL
BANK, a New York banking corporation ("Chemical"), as
Competitive Advance Facility Agent (in such capacity,
the "CAF Agent"); and TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, a national banking association ("TCB"),
as administrative agent for the Lenders (in such
capacity, the "Administrative Agent"; and, together
with the CAF Agent, the "Agents").
The Lenders have been requested to extend credit to the
Borrowers to enable them, upon the terms and subject to the conditions set
forth herein (a) in the case of TU, to borrow term loans on the Effective Date,
in an aggregate principal amount not in excess of $300,000,000, and (b) in the
case of either Borrower, to borrow on a standby revolving credit basis on and
after the Effective Date and at any time prior to the Maturity Date (as
hereinafter defined), an aggregate principal amount not in excess of
$875,000,000 at any time outstanding. The Lenders have also been requested 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. The
proceeds of such term loans are to be used to refinance outstanding
indebtedness of TU, and the proceeds of any other borrowings are to be used for
working capital and other corporate purposes, including commercial paper
back-up. The Lenders are willing to extend such credit on the terms and
subject to the conditions herein set forth.
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Accordingly, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
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 ABR Term Loan or ABR Standby Loan or
any Eurodollar Competitive Loan converted (pursuant to Section 2.13(ii)) to a
loan bearing interest at a rate determined by reference to the Alternate Base
Rate.
"ABR Standby 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.
"ABR Term Borrowing" shall mean a Borrowing comprised of ABR
Term Loans.
"ABR Term Loan" shall mean any Term Loan bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"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 TU (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.
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"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greatest of (a) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%, (b) the Base CD Rate in effect on such day plus 1% and (c) the Prime
Rate in effect on such day. For purposes hereof, "Prime Rate" shall mean the
rate of interest per annum publicly announced from time to time by Chemical as
its prime rate in effect at its principal office in New York City; each change
in the Prime Rate shall be effective on the date such change is publicly
announced as effective; "Base CD Rate" shall mean the sum of (a) the product of
(i) the Three- Month Secondary CD Rate and (ii) Statutory Reserves and (b) the
Assessment Rate; "Three-Month Secondary CD Rate" shall mean, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate will, under the
current practices of the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day), or, if such rate shall
not be so reported on such day or such next preceding Business Day, the average
of the secondary market quotations for three-month certificates of deposit of
major money center banks in New York City received at approximately 10:00 a.m.,
New York City time, on such day (or, if such day shall not be a Business Day,
on the next preceding Business Day) by the CAF Agent from three New York City
negotiable certificate of deposit dealers of recognized standing selected by
it; "Assessment Rate" shall mean, for any day, the annual rate (rounded upwards
to the next 1/100 of 1%) most recently estimated by Chemical as the then
current net annual assessment rate that will be employed in determining amounts
payable by Chemical 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 Chemical'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 Chemical, of the
quotations for the day of such transactions received by Chemical from three
Federal funds brokers of recognized standing selected by it. If for any reason
Chemical shall have determined (which determination
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shall be conclusive absent manifest error; provided that Chemical, 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 Chemical 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.
"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 dated April 29, 1994, between the
Borrowers and the CAF Agent (with references to the Credit Agreements and
provisions referred to therein being deemed to be references to this Agreement
and the Facility A Credit Agreement, as applicable, and the analogous
provisions herein and therein), 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.
"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.
"Borrowing Request" shall mean a request made pursuant to
Section 2.04 in the form of Exhibit A-5.
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"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York or the State of
Texas) on which banks are open for business in New York City and Houston;
provided, however, that, when used in connection with a Eurodollar Loan, the
term "Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"A Change in Control" shall be deemed to have occurred if (a)
any person or group of related persons (other than TU, any Subsidiary of TU, or
any pension, savings or other employee benefit plan for the benefit of
employees of TU and/or any Subsidiary of TU) shall have acquired beneficial
ownership of more than 30% of the outstanding Voting Shares of TU (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 TU was commenced, by a majority of the Disinterested
Directors of TU, 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 TU (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 TU.
"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.
"Commitments" shall mean, with respect to each Lender, the
Standby Commitment and Term Loan Commitment of such Lender set forth in
Schedule 2.01 hereto.
"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.
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"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 Competitive Bid Margin, and (ii) in
the case of a Fixed Rate Loan, the fixed rate of interest offered by the Lender
making such Competitive Bid.
"Competitive Bid Request" shall mean a request made pursuant
to Section 2.03 in the form of Exhibit A-1.
"Competitive Borrowing" shall mean a Borrowing consisting of a
Competitive Loan or concurrent Competitive Loans from the Lender or Lenders
whose Competitive Bids for such Borrowing have been accepted under the bidding
procedure described in Section 2.03.
"Competitive Loan" shall mean a Loan made pursuant to the
bidding procedure described in Section 2.03. Each Competitive Loan shall be a
Eurodollar Competitive Loan or a Fixed Rate Loan.
"Consolidated Earnings Available for Fixed Charges" for any
twelve-month period means (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,
1995, 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 TU and its Consolidated Subsidiaries on a consolidated basis;
provided, however, that in computing Consolidated Earnings Available for Fixed
Charges for any twelve-month period (i) the effect of any regulatory
disallowances incurred in connection with the settlement agreement resolving
fuel and prudency issues in Docket 11735
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of the Commission, (ii) the effect of the recordation of an impairment of
non-performing assets in September 1995 in an amount, after taxes, equal to
$802 million and (iii) the aggregate amount of any other non-cash book losses
during such twelve-month period relating to assets which as of the date of this
Agreement and as of the date of any sale or writedown thereof were
non-operating, non-earning assets, shall be excluded.
"Consolidated Fixed Charges" for any twelve-month period means
the sum of (i) interest on mortgage bonds, (ii) interest on other long-term
debt, (iii) other interest expense and (iv) preferred stock dividends and
preferred securities distributions of Subsidiaries, all determined for such
twelve-month period with respect to TU and its Consolidated Subsidiaries on a
consolidated basis.
"Consolidated Shareholders' Equity" means the sum of (i) total
common stock equity plus (ii) preferred stock not subject to mandatory
redemption, both determined with respect to TU and its Consolidated
Subsidiaries on a consolidated basis.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which would be consolidated with those of TU or TU
Electric, as the case may be, in its consolidated financial statements as of
such date.
"Consolidated Total Capitalization" means the sum of (i) total
common stock equity, (ii) preferred stock and preferred securities and (iii)
long-term debt (less amounts due currently), all determined with respect to TU
and its Consolidated Subsidiaries on a consolidated basis, but without giving
effect to any acceleration or potential acceleration of any long-term debt.
"Controlled Group" shall mean all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with TU, are treated as a
single employer under Section 414(b) or 414(c) of the Code.
"D&P" shall mean Duff & Phelps Credit Rating Agency Co.
"Default" shall mean any event or condition which upon notice,
lapse of time or both would constitute an Event of Default.
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"Disinterested Director" shall mean any member of the Board of
Directors of TU who is not affiliated, directly or indirectly, with, or
appointed by, a person or group of related persons (other than TU, any
Subsidiary of TU, or any pension, savings or other employee benefit plan for
the benefit of employees of TU and/or any Subsidiary of TU) acquiring the
beneficial ownership of more than 30% of the outstanding Voting Shares of TU
(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 TU prior to the Acquisition
Date or was recommended for election by a majority of the Disinterested
Directors in office prior to the Acquisition Date.
"dollars" or "$" shall mean lawful money of the
United States of America.
"Effective Date" shall mean the date on which each condition
set forth in Section 4.02 has been satisfied.
"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 existence with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (iv) the filing pursuant to Section 412(d) of the Code
or Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (v) the incurrence of any liability
under Title IV of ERISA with respect to the termination of any Plan or the
withdrawal or partial withdrawal of the Borrower or any of its ERISA Affiliates
from any Plan or Multiemployer Plan; (vi) the receipt by the Borrower or any
ERISA Affiliate from the PBGC of any notice
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relating to the intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (vii) the receipt by the Borrower or any ERISA
Affiliate of any notice concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA; (viii) the
occurrence of a "prohibited transaction" with respect to which the Borrower or
any of its subsidiaries could be liable; and (ix) any other [similar] event or
condition with respect to a Plan or Multiemployer Plan that could result in
liability of the Borrower other than a liability to pay premiums or benefits
when due.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Competitive Loan" shall mean any Competitive Loan
bearing interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
"Eurodollar Loan" shall mean any Eurodollar Competitive Loan,
Eurodollar Standby Loan or Eurodollar Term Loan.
"Eurodollar Standby Borrowing" shall mean a Borrowing
comprised of Eurodollar Standby Loans.
"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.
"Eurodollar Term Borrowing" shall mean a Borrowing comprised
of Eurodollar Term Loans.
"Eurodollar Term Loan" shall mean any Term 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 Agreement" shall mean the Competitive
Advance and Revolving Credit Facility Agreement dated as of November 22, 1995,
among TU, the Banks listed
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therein (including their permitted successors and assigns), Chemical, as
Competitive Advance Facility Agent, and Texas Commerce Bank National
Association, as Administrative Agent.
"Facility A Credit Agreement" shall mean the $375,000,000
Amended and Restated Competitive Advance and Revolving Credit Facility
Agreement dated as of the date hereof among the parties hereto.
"Facility Fee" shall have the meaning assigned to such term in
Section 2.05(a).
"Facility Fee Percentage" shall mean on any date the
applicable percentage set forth below based upon the Ratings in effect on such
date:
Facility Fee
Percentage
----------
Category 1
----------
A- or higher by S&P; .1000%
A3 or higher by Moody's;
A- or higher by D&P or Fitch;
Category 2
----------
BBB+ by S&P; .1500%
Baa1 by Moody's;
BBB+ by D&P or Fitch;
Category 3
----------
BBB by S&P; .1750%
Baa2 by Moody's;
BBB by D&P or Fitch;
Category 4
----------
BBB- by S&P; .2000%
Baa3 by Moody's;
BBB- by D&P or Fitch;
Category 5
----------
BB+ or lower by S&P; .3125%
Ba1 or lower by Moody's;
BB+ or lower by D&P or Fitch;
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For purposes of the foregoing, (i) if both D&P and Fitch have established
Ratings, only one of such Ratings shall be employed for purposes of determining
the Facility Fee Percentage and the Rating employed shall be the Rating from
the institution that has for the longest period of time had a Rating
established for TU Electric; (ii) if more than two Ratings exist and the
applicable Ratings established or deemed to have been established by the Rating
Agencies shall fall within different Categories, the Facility Fee Percentage
shall be based upon the Category in which the largest number of Ratings falls
or is deemed to fall, provided, that if there shall be no such Category, the
middle Category shall apply; (iii) if only two Ratings exist, the Facility Fee
Percentage shall, subject to clause (iv) below, be based upon the lower of such
Ratings; (iv) if neither S&P nor Moody's shall have a Rating in effect, then
the Facility Fee Percentage shall be based upon Category 5; and (v) if any
Rating established or deemed to have been established by any Rating Agency
shall be changed (other than as a result of a change in the rating system of
such Rating Agency), such change shall be effective as of the date on which
such change is first announced by the Rating Agency making such change. Each
such change shall apply during the period commencing on the effective date of
such change and ending on the date immediately preceding the effective date of
the next such change. If the rating system of any Rating Agency shall change,
or if any Rating Agency shall cease rating the first mortgage bonds of TU
Electric (other than by reason of any action or nonaction by TU Electric
following or in anticipation of a ratings downgrade), the parties hereto shall
negotiate in good faith to amend the references to specific ratings in this
definition (including by way of substituting another Rating Agency mutually
acceptable to the Borrowers and the Agents for the Rating Agency with respect
to which the rating system has changed or for which no Rating is then in
effect) to reflect such changed rating system or the nonavailability of Ratings
from such Rating Agency, and pending agreement on such amendment (but subject
to clause (iv) above), the Rating in effect immediately prior to such change or
cessation will be used in determining the Facility Fee Percentage. If any
Rating Agency shall not have a Rating in effect by reason of any action or
nonaction by TU Electric following or in anticipation of a ratings downgrade,
then such Rating Agency shall be deemed to have established a Rating in
Category 5.
"Fee Letter" shall mean the letter among the Borrowers,
Chemical, and TCB dated March 29, 1996.
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"Fee Share" shall mean, at any time, the greater of (i) 75%
and (ii) the aggregate amount of outstanding Standby Loans to TU Electric
expressed as a percentage of the Total Standby Commitment.
"Fees" shall mean the Facility Fee, the Auction Fees and the
Administrative Fees.
"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.
"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.
"Fitch" shall mean Fitch Investors Service, L.P.
"Fixed Rate Borrowing" shall mean a Borrowing comprised of
Fixed Rate Loans.
"Fixed Rate Loan" shall mean any Competitive Loan bearing
interest at a fixed percentage rate per annum (the "Fixed Rate") (expressed in
the form of a decimal to no more than four decimal places) specified by the
Lender making such Loan in its Competitive Bid.
"Fuel Company" shall mean Texas Utilities Fuel Company, a
Texas corporation, and its successors.
"GAAP" shall mean generally accepted accounting principles,
applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Indebtedness" of any corporation shall mean all indebtedness
representing money borrowed which is created, assumed, incurred or guaranteed
in any manner by such corporation or for which such corporation is responsible
or liable (whether by agreement to purchase indebtedness of, or to supply funds
to or invest in, others or otherwise).
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13
"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, or, 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 converted to a Borrowing of
a different Type in accordance with Section 2.02(e) or repaid or prepaid in
accordance with Section 2.06 or Section 2.11 and (c) as to any Fixed Rate
Borrowing, the period commencing on the date of such Borrowing and ending on
the date specified in the Competitive Bids in which the offers to make the
Fixed Rate Loans comprising such Borrowing were extended, which shall not be
earlier than seven days after the date of such Borrowing or later than 360 days
after the date of such Borrowing; provided, however, that if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless, in the case of
Eurodollar Loans only, such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day. Interest shall accrue from and including the first day
of an Interest Period to but excluding the last day of such Interest Period.
"LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the rate at which dollar
deposits approximately
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equal in principal amount to (i) in the case of a Standby Borrowing or a Term
Borrowing, the Administrative Agent's portion of such Eurodollar Borrowing and
(ii) in the case of a Competitive Borrowing, a principal amount that would have
been the Administrative Agent's portion of such Competitive Borrowing had such
Competitive Borrowing been a Standby Borrowing, and for a maturity comparable
to such Interest Period are offered to the principal London offices of Chemical
in immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" shall mean, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect
of such asset. For the purposes of this Agreement, any person shall be deemed
to own subject to a Lien any asset which it has acquired or holds subject to
the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.
"Loan" shall mean a Competitive Loan, a Standby Loan or a Term
Loan, whether made as a Eurodollar Loan, an ABR Loan or a Fixed Rate Loan, as
permitted hereby.
"Margin Regulations" shall mean Regulations G, T, U and X of
the Board as from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Margin Stock" shall have the meaning given such term under
Regulation U of the Board.
"Material Adverse Change" shall mean a materially adverse
change in the business, assets, operations or financial condition of any
Borrower and its Subsidiaries taken as a whole.
"Maturity Date" shall mean the fifth anniversary of the
Effective Date or if such anniversary does not occur on a Business Day, the
Business Day immediately preceding such anniversary.
"Mining Company" shall mean Texas Utilities Mining Company, a
Texas corporation, and its successors.
"Moody's" shall mean Moody's Investors Service, Inc.
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"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.
"Operating Agreements" shall mean the (i) Operating Agreement
dated April 28, 1978 between Mining Company and Dallas Power & Light Company,
Texas Electric Service Company and Texas Power & Light Company, as amended by
the Modification of Operating Agreement dated April 20, 1979 between the same
parties and (ii) the Operating Agreement dated December 15, 1976, between Fuel
Company and Dallas Power & Light Company, Texas Electric Service Company and
Texas Power & Light Company, as the same may be amended from time to time,
provided that any resulting amended agreement shall not increase the scope of
Liens permitted under Section 5.10(i).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
"Permitted Encumbrances" means, as to any person at any date,
any of the following:
(a) 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, 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 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
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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;
(e) easements, restrictions, exceptions or reservations in any
property and/or rights of way of such person for the purpose of roads,
pipe lines, substations, transmission lines, transportation lines,
distribution lines, removal of oil, gas, lignite, coal or other
minerals or timber, and other like purposes, or for the joint or
common use of real property, rights of way, facilities and/or
equipment, and defects, irregularities and deficiencies in titles of
any property and/or rights of way, which do not materially impair the
use of such property and/or rights of way for the purposes for which
such property and/or rights of way are held by such person;
(f) rights reserved to or vested in any municipality or public
authority to use, control or regulate any property of such person;
(g) any obligations or duties, affecting the property of such
person, to any municipality or public authority with respect to any
franchise, grant, license or permit;
(h) as of any particular time any controls, Liens,
restrictions, regulations, easements, exceptions or reservations of
any municipality or public authority applying particularly to space
satellites or nuclear fuel;
(i) any judgment Lien against such person securing a judgment
for an amount not exceeding 25% of Consolidated
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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; or
(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.
"person" shall mean any natural person, corporation, business
trust, joint venture, association, company, partnership or government, or any
agency or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan described
under Section 3(2) of ERISA (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA that is maintained by any Borrower or any ERISA
Affiliate.
"Rating Agencies" shall mean Moody's, S&P, D&P and Fitch and
any substitute rating agencies agreed upon by the Borrowers and the Agents.
"Ratings" shall mean the ratings from time to time established
by the Rating Agencies for TU Electric's first mortgage bonds issued under the
TU Electric Mortgage.
"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
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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
Standby Commitments and Term Loans representing at least 66 2/3% of the sum at
such time of the Total Standby Commitment and all Term Loans outstanding or,
for purposes of acceleration pursuant to clause (ii) of Article VI, Lenders
holding Loans representing at least 66 2/3% 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.
"S&P" shall mean Standard and Poor's (a division of The McGraw
Hill Companies).
"SEC" shall mean the Securities and Exchange Commission.
"Significant Subsidiary" shall mean at any time a Subsidiary
of TU which as of such time satisfies the definition of a "significant
subsidiary" contained as of the date hereof in Regulation S-X of the SEC;
provided that TU Electric shall at all times be considered a Significant
Subsidiary.
"Standby Borrowing" shall mean a Borrowing consisting of
simultaneous Standby Loans from each of the Lenders.
"Standby Commitment" shall mean, with respect to each Lender,
the commitment of such Lender to make Standby Loans hereunder as set forth in
Schedule 2.01 hereto, as such Standby Commitment may be permanently terminated
or reduced from time to time pursuant to Section 2.10, subject to Section 8.04.
The Standby Commitment of each Lender shall automatically and permanently
terminate on the Maturity Date if not terminated earlier pursuant to the terms
hereof.
"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 Standby Loan.
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"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 TU and its Consolidated Subsidiaries taken as a whole.
"Term Borrowing" shall mean a Borrowing consisting of
simultaneous Term Loans from each of the Lenders.
"Term Loan Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make Term Loans hereunder as set forth
in Schedule 2.01 hereto, as such Term Loan Commitment may be permanently
terminated or reduced from time to time pursuant to Section 2.10, subject to
Section 8.04. The Term Loan Commitment of each Lender shall automatically and
permanently terminate at 5:00 p.m., New York City time, on the Effective Date.
"Term Loans" shall mean the term loans made pursuant to
Section 2.01. Each Term Loan shall be a Eurodollar Term Loan or an ABR Term
Loan.
"Total Standby Commitment" shall mean, at any time, the
aggregate amount of Standby Commitments of all the Lenders, as in effect at
such time.
"Transactions" shall have the meaning assigned to such term in
Section 3.02.
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"TU Applicable Margin" shall mean on any date, with respect to
Eurodollar Standby Loans or Eurodollar Term Loans, the applicable percentage
set forth below under the caption "Standby Loan Spread" or "Term Loan Spread",
as the case may be, based upon the Ratings in effect on such date:
Standby Loan Spread Term Loan Spread
------------------- ----------------
Category 1
----------
A- or higher by S&P; .2500% .3500%
A3 or higher by Moody's;
A- or higher by D&P or Fitch;
Category 2
----------
BBB+ by S&P .3000% .4500%
Baa1 by Moody's;
BBB+ by D&P or Fitch;
Category 3
----------
BBB by S&P; .3750% .5500%
Baa2 by Moody's;
BBB by D&P or Fitch;
Category 4
----------
BBB- by S&P; .5000% .7000%
Baa3 by Moody's;
BBB- by D&P or Fitch;
Category 5
----------
BB+ or lower by S&P; .6375% .9500%
Ba1 or lower by Moody's;
BB+ or lower by D&P or Fitch;
For purposes of the foregoing, (i) if both D&P and Fitch have established
Ratings, only one of such Ratings shall be employed for purposes of determining
the TU Applicable Margin and the Rating employed shall be the Rating from the
institution that has for the longest period of time had a Rating established
for TU Electric; (ii) if more than two
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Ratings exist and the applicable Ratings established or deemed to have been
established by the Rating Agencies shall fall within different Categories, the
TU Applicable Margin shall be based upon the Category in which the largest
number of Ratings falls or is deemed to fall, provided, that if there shall be
no such Category, the middle Category shall apply; (iii) if only two Ratings
exist, the TU Applicable Margin shall, subject to clause (iv) below, be based
upon the lower of such Ratings; (iv) if neither S&P nor Moody's shall have a
Rating in effect, then the TU Applicable Margin shall be based upon Category 5;
and (v) if any Rating established or deemed to have been established by any
Rating Agency shall be changed (other than as a result of a change in the
rating system of such Rating Agency), such change shall be effective as of the
date on which such change is first announced by the Rating Agency making such
change. Each change in the TU Applicable Margin shall apply to all Eurodollar
Standby Loans or Eurodollar Term Loans that are outstanding at any time during
the period commencing on the effective date of such change and ending on the
date immediately preceding the effective date of the next such change. If the
rating system of any Rating Agency shall change, or if any Rating Agency shall
cease rating the first mortgage bonds of TU Electric (other than by reason of
any action or nonaction by TU Electric following or in anticipation of a
ratings downgrade), the parties hereto shall negotiate in good faith to amend
the references to specific ratings in this definition (including by way of
substituting another Rating Agency mutually acceptable to the Borrowers and the
Agents for the Rating Agency with respect to which the rating system has
changed or for which no Rating is then in effect) to reflect such changed
rating system or the nonavailability of Ratings from such Rating Agency, and
pending agreement on such amendment (but subject to clause (iv) above), the
Rating in effect immediately prior to such change or cessation will be used in
determining the TU Applicable Margin. If any Rating Agency shall not have a
Rating in effect by reason of any action or nonaction by TU Electric following
or in anticipation of a ratings downgrade, then such Rating Agency shall be
deemed to have established a Rating in Category 5.
"TU Electric Applicable Margin" shall mean on any date, with
respect to Eurodollar Standby Loans, the applicable
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percentage set forth below based upon the Ratings in effect on such date:
Category 1 Applicable Percentage
---------- ---------------------
A- or higher by S&P; .2000%
A3 or higher by Moody's;
A- or higher by D&P or Fitch;
Category 2
----------
BBB+ by S&P; .2250%
Baa1 by Moody's;
BBB+ by D&P or Fitch;
Category 3
----------
BBB by S&P; .2750%
Baa2 by Moody's;
BBB by D&P or Fitch;
Category 4
----------
BBB- by S&P; .4000%
Baa3 by Moody's;
BBB- by D&P or Fitch;
Category 5
----------
BB+ or lower by S&P; .5375%
Ba1 or lower by Moody's;
BB+ or lower by D&P or Fitch;
For purposes of the foregoing, (i) if both D&P and Fitch have established
Ratings, only one of such Ratings shall be employed for purposes of determining
the TU Electric Applicable Margin and the Rating employed shall be the Rating
from the institution that has for the longest period of time had a Rating
established for TU Electric; (ii) if more than two Ratings exist and the
applicable Ratings established or deemed to have been established by the Rating
Agencies shall fall within different Categories, the TU Electric Applicable
Margin shall be based upon the Category in which the largest number of Ratings
falls or is deemed to fall, provided, that if there shall be no such Category,
the middle Category shall apply; (iii) if only two Ratings exist, the TU
Electric Applicable Margin shall, subject to clause (iv) below, be based upon
the lower of such Ratings; (iv) if neither S&P nor
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Moody's shall have a Rating in effect, then the TU Electric Applicable Margin
shall be based upon Category 5; and (v) if any Rating established or deemed to
have been established by any Rating Agency shall be changed (other than as a
result of a change in the rating system of such Rating Agency), such change
shall be effective as of the date on which such change is first announced by
the Rating Agency making such change. Each change in the TU Electric
Applicable Margin shall apply to all Eurodollar Standby Loans or Eurodollar
Term Loans that are outstanding at any time during the period commencing on the
effective date of such change and ending on the date immediately preceding the
effective date of the next such change. If the rating system of any Rating
Agency shall change, or if any Rating Agency shall cease rating the first
mortgage bonds of TU Electric (other than by reason of any action or nonaction
by TU Electric following or in anticipation of a ratings downgrade), the
parties hereto shall negotiate in good faith to amend the references to
specific ratings in this definition (including by way of substituting another
Rating Agency mutually acceptable to the Borrowers and the Agents for the
Rating Agency with respect to which the rating system has changed or for which
no Rating is then in effect) to reflect such changed rating system or the
nonavailability of Ratings from such Rating Agency, and pending agreement on
such amendment (but subject to clause (iv) above), the Rating in effect
immediately prior to such change or cessation will be used in determining the
TU Electric Applicable Margin. If any Rating Agency shall not have a Rating in
effect by reason of any action or nonaction by TU Electric following or in
anticipation of a ratings downgrade, then such Rating Agency shall be deemed to
have established a Rating in Category 5.
"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.
"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
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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 TU.
"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, (a) to make a Term Loan
to TU on the Effective Date in a principal amount not to exceed its Term Loan
Commitment, and (b) to make Standby Loans to each Borrower, at any time and
from time to time on and after the date hereof and until the earlier of the
Maturity Date and the termination
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25
of the Standby Commitment of such Lender, in an aggregate principal amount at
any time outstanding not to exceed such Lender's Standby Commitment minus the
amount by which the Competitive Loans made to such Borrower and outstanding at
such time shall be deemed to have used such Standby Commitment pursuant to
Section 2.14, subject, however, to the conditions that (i) at no time shall (A)
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 (B) the Total Standby Commitment, (ii) at no time shall (A) the sum of
(x) the outstanding aggregate principal amount of all Standby Loans to TU plus
(y) the outstanding aggregate principal amount of all Competitive Loans to TU
plus (z) the outstanding aggregate principal amount of all Loans to TU under
and as defined in the Facility A Credit Agreement exceed (B) 60% of the sum of
the Total Standby Commitment hereunder and the Total Commitment under and as
defined in the Facility A Credit Agreement, (iii) at no time shall the
outstanding aggregate principal amount of all Standby Loans made by any Lender
exceed the amount of such Lender's Standby Commitment and (iv) 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 Standby Commitment represents of the Total Standby 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 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. Amounts paid or prepaid in respect of Term Loans
may not be reborrowed.
SECTION 2.02. Loans. (a) Each Standby Loan or Term Loan
shall be made as part of a Borrowing consisting of Loans made by the Lenders
ratably in accordance with their respective Standby Commitments or Term Loan
Commitments, as the case may be; provided, however, that the failure of any
Lender to make any Standby Loan or Term 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, Term Loans or Competitive Loans comprising any Borrowing shall
be (i) in the case of Competitive Loans, in an aggregate
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26
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 and Term Loans, in an
aggregate principal amount which is an integral multiple of $5,000,000 and not
less than $10,000,000 (or an aggregate principal amount equal to the remaining
balance of the available Standby Commitments or the outstanding Term Loans, as
the case may be).
(b) Each Competitive Borrowing shall be comprised entirely of
Eurodollar Competitive Loans or Fixed Rate Loans, and each other Borrowing
shall be comprised entirely of Eurodollar Loans or ABR Loans, as the applicable
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 11:00 a.m., 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 and Term 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
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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.
(e) TU shall have the right at any time upon prior
irrevocable notice to the Administrative Agent (i) not later than 10:00 a.m.,
Houston time, on the day of conversion, to convert any Eurodollar Term
Borrowing into an ABR Term Borrowing, (ii) not later than 10:00 a.m., Houston
time, three Business Days prior to conversion or continuation, to convert any
ABR Term Borrowing into a Eurodollar Term Borrowing or to continue any
Eurodollar Term Borrowing as a Eurodollar Term Borrowing for an additional
Interest Period, and (iii) not later than 10:00 a.m., Houston time, three
Business Days prior to conversion, to convert the Interest Period with respect
to any Eurodollar Term Borrowing to another permissible Interest Period,
subject in each case to the following:
(i) each conversion or continuation shall be made pro rata
among the Lenders in accordance with the respective principal amounts
of the Term Loans comprising the converted or continued Term
Borrowing;
(ii) if less than all the outstanding principal amount of any
Term Borrowing shall be converted or
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continued, then each resulting Term Borrowing shall satisfy the
limitations specified in Section 2.02(a) regarding the principal
amount of Term Borrowings of the relevant Type;
(iii) each conversion shall be effected by each Lender and
the Administrative Agent by recording for the account of such Lender
the new Term Loan of such Lender resulting from such conversion and
reducing the Term Loan (or portion thereof) of such Lender being
converted by an equivalent principal amount; accrued interest on any
Eurodollar Term Loan (or portion thereof) being converted shall be
paid by TU at the time of conversion;
(iv) if any Eurodollar Term Borrowing is converted at a time
other than the end of the Interest Period applicable thereto, TU shall
pay, upon demand, any amounts due to the Lenders pursuant to Section
8.05;
(v) any portion of a Term Borrowing maturing in less than
seven days may not be converted into or continued as a Eurodollar Term
Borrowing;
(vi) any portion of a Eurodollar Term Borrowing that cannot be
converted into or continued as a Eurodollar Term Borrowing by reason
of the immediately preceding clause shall be automatically converted
at the end of the Interest Period in effect for such Term Borrowing
into an ABR Term Borrowing;
(vii) no Interest Period may be selected for any Eurodollar
Term Borrowing that would end later than the Maturity Date; and
(viii) upon notice to TU from the Administrative Agent given
at the request of the Required Lenders, after the occurrence and
during the continuance of a Default or Event of Default, no
outstanding Term Loan may be converted into, or continued as, a
Eurodollar Term Loan.
Each notice pursuant to this Section 2.02(e) shall be
irrevocable and shall refer to this Agreement and specify (i) the identity and
amount of the Term Borrowing that TU requests be converted or continued, (ii)
whether such Term Borrowing is to be converted to or continued as a Eurodollar
Term Borrowing or an ABR Term Borrowing, (iii) if such notice requests a
conversion, the date of such conversion (which shall be a Business Day) and
(iv) if such Term Borrowing is to
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be converted to or continued as a Eurodollar Term Borrowing, the Interest
Period with respect thereto. If no Interest Period is specified in any such
notice with respect to any conversion to or continuation as a Eurodollar Term
Borrowing, TU shall be deemed to have selected an Interest Period of one
month's duration. The Administrative Agent shall advise the Lenders of any
notice given pursuant to this Section 2.02(e) and of each Lender's portion of
any converted or continued Term Borrowing. If TU shall not have given notice
in accordance with this Section 2.02(e) to continue any Term Borrowing into a
subsequent Interest Period (and shall not otherwise have given notice in
accordance with this Section 2.02(e) to convert such Term Borrowing), such Term
Borrowing shall, at the end of the Interest Period applicable thereto (unless
repaid pursuant to the terms hereof), automatically be continued into a new
Interest Period as an ABR Term Borrowing. TU shall not have the right to
continue or convert the Interest Period with respect to any Standby Borrowing
or Competitive Borrowing pursuant to this Section 2.02(e).
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 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,
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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.
(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
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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
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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 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
paragraph (i) or (ii) 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.
SECTION 2.04. Borrowing Procedure. In order to request a
Term Borrowing or a Standby Borrowing, a Borrower shall hand deliver or
telecopy to the Administrative Agent a duly completed Borrowing Request in the
form of Exhibit A-5 (a) in the case of a Eurodollar 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, on the
day of such Borrowing. No Fixed Rate Loan shall be requested or made pursuant
to a Borrowing Request. Such notice shall be irrevocable and shall in each
case specify (i) whether the Borrowing then being
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requested is to be a Term Borrowing or a Standby Borrowing, and whether such
Borrowing is to be a Eurodollar 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 Borrowing, the Interest
Period with respect thereto, which shall not end after the Maturity Date. If
no election as to the Type of Borrowing is specified in any such notice, then
the requested Borrowing shall be an ABR Borrowing. If no Interest Period with
respect to any Eurodollar Borrowing is specified in any such notice, then the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. 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 refinance such Borrowing with an ABR
Borrowing. Notwithstanding any other provision of this Agreement to the
contrary, no Borrowing shall be requested if the Interest Period with respect
thereto would end after the 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) TU agrees to pay (and TU Electric
agrees to pay, to the extent that TU shall not have paid all such fees, up to
the amount of its Fee Share (without duplication) from time to time) 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, 1996) and on
each date on which the Standby 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
Standby Commitment of such Lender, whether used or unused, during the preceding
quarter (or other period commencing on the Effective Date or ending with the
Maturity Date or any date on which the Standby Commitment of such Lender shall
be terminated). All Facility Fees shall be computed on the basis of the actual
number of days elapsed in a year of 365 or 366 days, as the case may be. The
Facility Fee due to each Lender shall commence to accrue on the Effective Date,
and shall cease to accrue on the earlier of the Maturity Date and the
termination of the Standby Commitment of such Lender as provided herein.
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(b) TU agrees (and TU Electric agrees, to the extent that TU
shall not have paid such fees, up to the amount of its Fee Share from time to
time) to pay the Administrative Agent, for its own account, the administrative
and other fees provided for in the Fee Letter (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 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 Standby Loan and each
Competitive Loan shall be due and payable on the earlier of the last day of the
Interest Period applicable thereto and the Maturity Date and the outstanding
principal balance of each Term Loan shall be due and payable 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 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.
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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 (i) in the case of each
Eurodollar Standby Loan and each Eurodollar Term Loan made to TU, the LIBO Rate
for the Interest Period in effect for such Borrowing plus the TU Applicable
Margin from time to time in effect, (ii) in the case of each Eurodollar Standby
Loan made to TU Electric, the LIBO Rate for the Interest Period in effect for
such Borrowing plus the TU Electric Applicable Margin from time to time in
effect and (iii) 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.
(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) The interest rate applicable to each Eurodollar Loan made
to TU shall be increased by 0.10% per annum for each day on which Indebtedness
of TU in excess of that permitted under Section 5.13 (without giving effect to
the proviso therein) shall be outstanding.
(e) 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 Chemical, and such determination shall be conclusive absent
manifest error; provided that Chemical shall, upon request, provide to the
applicable Borrower a
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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 Agent pay interest, to the extent permitted by law, on such
defaulted amount up to (but not including) the date of actual payment (after as
well as before judgment) at a rate per annum (computed as provided in Section
2.07(b)) equal to the Alternate Base Rate plus 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 or a Eurodollar Term Borrowing pursuant to Section
2.02 or 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
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applicable Borrower a certificate setting forth in reasonable detail the basis
for such determination.
SECTION 2.10. Termination and Reduction of Commitments. (a)
The Term Loan Commitments shall automatically terminate at 5:00 p.m., New York
City time, on the Effective Date. The Standby Commitments shall automatically
terminate at 5:00 p.m., New York City time, on the Maturity Date.
(b) Upon at least three 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 Term Loan Commitments or the Standby Commitments;
provided, however, that (i) each partial reduction of the Term Loan Commitments
or the Standby Commitments shall be in an integral multiple of $5,000,000 and
in a minimum principal amount of $5,000,000 and (ii) no such termination or
reduction shall be made which would reduce the Total Standby 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
Standby Commitment to $0. The Administrative Agent shall advise the Lenders of
any notice given pursuant to this Section 2.10(b) and of each Lender's portion
of any such termination or reduction of the Term Loan Commitments or the
Standby Commitments.
(c) Each reduction in the Term Loan Commitments or the
Standby Commitments hereunder shall be made ratably among the Lenders in
accordance with their respective applicable Commitments. The Borrowers shall
pay to the Administrative Agent for the account of the Lenders, on the date of
each termination or reduction, 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 and any
Term 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,
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that each partial prepayment shall be in an amount which is an integral
multiple of $5,000,000 and not less than $5,000,000. No prepayment may be made
in respect of any Competitive Borrowing.
(b) On the date of any termination or reduction of the
Standby 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 Standby Commitment, after giving effect
to such termination or reduction.
(c) Each notice of prepayment shall specify the prepayment
date and the principal amount of each Borrowing (or portion thereof) to be
prepaid, shall be irrevocable and shall commit the Borrower to prepay such
Borrowing (or portion thereof) by the amount stated therein on the date stated
therein. All prepayments under this Section 2.11 shall be subject to Section
8.05 but 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.
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
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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 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.
(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
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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 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:
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(i) declare that Eurodollar Loans will not thereafter be made
by such Lender hereunder (or be continued for additional Interest
Periods) and that ABR Loans will not thereafter be converted into
Eurodollar Loans, whereupon such Lender shall not submit a Competitive
Bid in response to a request for Eurodollar Competitive Loans and any
request for a Eurodollar Borrowing (or to convert an ABR Borrowing to
a Eurodollar Borrowing or to continue a Eurodollar Borrowing for an
additional Interest Period) shall, as to such Lender only, be deemed a
request for an ABR Loan (or a request to continue an ABR Loan as such
for an additional Interest Period or to convert a Eurodollar Loan into
an ABR Loan, as the case may be), 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.
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 Borrowing, each payment or prepayment of
principal of any Borrowing, each payment of interest on the Loans, each payment
of the Facility Fees, each reduction of the Term Loan Commitments or the
Standby Commitments and each refinancing or conversion of any Borrowing to or
continuation of any Borrowing as a Borrowing of any Type, shall be
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allocated pro rata among the Lenders in accordance with their respective
applicable Commitments (or, if such Commitments shall have expired or been
terminated, in accordance with the respective principal amounts of their
applicable outstanding 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 Standby
Commitments of the Lenders at any time, each outstanding Competitive Borrowing
shall be deemed to have utilized the Standby 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 Standby
Commitments. Each Lender agrees that in computing such Lender's portion of any
Borrowing to be made hereunder, the Administrative Agent may, in its
discretion, round each Lender's percentage of such Borrowing to the next higher
or lower whole dollar amount.
SECTION 2.15. Sharing of Setoffs. Each Lender agrees that if
it shall, through the exercise of a right of banker's lien, setoff or
counterclaim, or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other
means, obtain payment (voluntary or involuntary) in respect of any Loan or
Loans as a result of which the unpaid principal portion of its Term Loans and
Standby Loans shall be proportionately less than the unpaid principal portion
of the Term Loans and 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 Term Loans and Standby Loans, as the case may be, of such other Lender,
so that the aggregate unpaid principal amount of the Term Loans and Standby
Loans and participations in the Term Loans and Standby Loans held by each
Lender shall be in the same proportion to the aggregate unpaid principal amount
of all Term Loans and Standby Loans then outstanding as the principal amount of
its Term Loans and Standby Loans prior to such exercise of banker's lien,
setoff
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or counterclaim or other event was to the principal amount of all Term Loans
and 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 Term Loan or 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 such Lender had made a Term Loan or
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 1111 Fannin Street, 9th floor, MS 46, 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
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"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 Fee Letter ("Other Taxes").
(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
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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
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full of the principal of and interest on all Loans made hereunder.
(g) Each Lender or Agent (or Transferee) that is organized
under the laws of a jurisdiction other than the United States, any State
thereof or the District of Columbia (a "Non-U.S. Lender" or "Non U.S. Agent",
as applicable) shall deliver to the 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
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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 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 Interests 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
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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 or the Borrowers, as the
case may be, shall pay to the affected Lender in immediately available funds on
the date of such assignment the principal of and interest accrued to the date
of payment on the Loans made by it hereunder and all other amounts accrued for
its account or owed to it hereunder.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to each of the Lenders
as follows (except in the case of the representations contained in Sections
3.05(a) and 3.12, which are made by TU only, and Section 3.05(b), which are
made by TU Electric only):
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 and the Borrowings hereunder
(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, (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of
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time or both) a default under any such indenture, agreement or other instrument
or (iii) result in the creation or imposition of any Lien upon any property or
assets of such Borrower.
SECTION 3.03. Enforceability. This Agreement constitutes a
legal, valid and binding obligation of such Borrower enforceable in accordance
with its terms.
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.
SECTION 3.05. Financial Statements. (a) The consolidated
balance sheet of TU and its Consolidated Subsidiaries as of December 31, 1995
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's 1995 Annual Report on Form 10-K, a copy of which has been
delivered to each of the Lenders, fairly present, in conformity with GAAP, the
consolidated financial position of TU and its Consolidated Subsidiaries as of
such date and their consolidated results of operations and cash flows for such
fiscal year.
(b) The consolidated balance sheet of TU Electric as of
December 31, 1995 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 1995 Annual Report on Form 10-K, a
copy of which has 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 date and their consolidated results of
operations and cash flows for such fiscal year.
(c) Since December 31, 1995, there has been no Material
Adverse Change with respect to such Borrower.
SECTION 3.06. Litigation; Compliance with Laws. 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, TU or any of its Subsidiaries before any court or
arbitrator or
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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 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.
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.
SECTION 3.09. No Material Misstatements. No report,
financial statement or other 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, state and material local tax returns which to their knowledge are
required to be filed
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by them, and have paid or caused to be paid all 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 in respect of any Plan of such Borrower or any ERISA Affiliate that
alone or together with any other ERISA Event has resulted or could reasonably
be expected to result in a Material Adverse Change. The present value of all
accrued benefit obligations determined on a termination basis under each of its
Plans (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date applicable thereto, exceed by more than 5% of the
amount of such obligations the value of the assets of such Plan, and the
present value of all accrued benefit obligations of all underfunded Plans
(based on those assumptions used to fund each such Plan) did not, as of the
last annual valuation dates applicable thereto, exceed by more than the lesser
of (i) 5% of the amount all such liabilities and (ii) $100,000,000, the value
of the assets of all such underfunded Plans. 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 TU'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. TU's corporate Significant
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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
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.
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ARTICLE IV. CONDITIONS OF LENDING
The obligations of the Lenders to make Loans hereunder are
subject to the satisfaction of the following conditions:
SECTION 4.01. All Borrowings. On the date of each 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 with a new Standby Borrowing that does not increase the
aggregate principal amount of the Loans of any Lender outstanding, the
representations set forth in Sections 3.05(c), 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.
Each Borrowing shall be deemed to constitute a representation and warranty by
each Borrower on the date of such Borrowing as to the matters specified in
paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. Effective Date. On the Effective Date:
(a) The Agents shall have received favorable written opinions
of Reid & Priest LLP and Worsham, Forsythe & Wooldridge, L.L.P., dated
the Effective Date and addressed to the Lenders and satisfactory to
Cravath, Swaine & Moore, counsel for the Agents, to the effect set
forth in Exhibits D-1 and D-2 hereto.
(b) 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
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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 Effective 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 Effective Date and at all times since a date prior to
the date of the resolutions described in clause (B) below, (B) that
attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of 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; and (v) such other documents as the Lenders or
Cravath, Swaine & Moore, counsel for the Agents, shall reasonably
request.
(c) The Agents shall have received a certificate, dated the
Effective Date and signed by a Financial Officer of each Borrower,
confirming compliance with the conditions precedent set forth in
paragraphs (b) and (c) of Section 4.01.
(d) The Agents shall have received all Fees and other amounts
due and payable on or prior to the Effective Date.
(e) The Agents shall have received evidence satisfactory to
them that the Existing TU Credit Agreement has been terminated and
that all amounts outstanding thereunder have been repaid.
(f) All the conditions to the effectiveness of the Facility A
Credit Agreement (other than the condition set
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forth in Section 4.02(e) thereof) shall have been satisfied.
(g) All Standby Borrowings outstanding immediately prior to
the date hereof shall have been refinanced with the proceeds of
Borrowings made on the Effective Date simultaneously with the making
of such Borrowings on the Effective Date.
ARTICLE V. COVENANTS
TU (and TU Electric, 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:
SECTION 5.01. Existence. It will, and will cause each of its
Significant Subsidiaries to, do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and all
rights, licenses, permits, franchises and authorizations necessary or desirable
in the normal conduct of its business except as otherwise permitted pursuant to
Section 5.09.
SECTION 5.02. Business and Properties. It will, and will
cause each of its Subsidiaries to, comply with all applicable material laws,
rules, regulations and orders of any Governmental Authority, whether now in
effect or hereafter enacted, except where the validity or applicability of such
laws, rules, regulations or orders is being contested by appropriate
proceedings in good faith; and at all times maintain and preserve all property
material to the conduct of its business and keep such property in good repair,
working order and condition and from time to time make, or cause to be made,
all needful and proper repairs, renewals, additions, improvements and
replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times.
SECTION 5.03. Financial Statements, Reports, Etc. TU (and TU
Electric, to the extent such information relates to TU Electric 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 TU, a consolidated balance sheet
of TU and its Consolidated Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income, retained
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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 TU, a consolidated balance sheet of TU 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
TU'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 TU'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 TU;
(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 TU 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 of TU, and (ii) a certificate of a Financial Officer
of TU (A) setting forth in reasonable detail the calculations required
to establish whether TU was in compliance with the requirements of
Sections 5.11, 5.12 and 5.13 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 TU 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
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believe that any Default existed on the date of such statements and
(ii) confirming the calculations set forth in the Financial Officer's
certificate delivered simultaneously therewith pursuant to paragraph
(c) above;
(e) forthwith upon the occurrence of any Default, a
certificate of a Financial Officer of TU setting forth the details
thereof and the action which TU is taking or proposes to take with
respect thereto;
(f) promptly upon the mailing thereof to the shareholders of
TU 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 TU or TU Electric shall have filed with the SEC,
or any Governmental Authority succeeding to any of or all the
functions of the SEC;
(h) if and when any member of the Controlled Group (i) gives
or is required to give notice to the PBGC of any Reportable Event with
respect to any Plan which might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of
any such Reportable Event, a copy of the notice of such Reportable
Event given or required to be given to the PBGC; (ii) receives notice
from a proper representative of a Multiemployer Plan of complete or
partial Withdrawal Liability being imposed upon such member of the
Controlled Group under Title IV of ERISA, a copy of such notice; or
(iii) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate, or appoint a trustee to administer, any Plan, a
copy of such notice; and
(i) promptly, from time to time, such additional information
regarding the financial position or business of TU 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, TU shall make available a copy of
the consolidating
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workpapers used by TU in preparing such consolidated statements to each Lender
that shall have requested such consolidating workpapers. Each Lender that
receives such consolidating workpapers shall hold them in confidence as
required by Section 8.15; provided that no Lender may disclose such
consolidating workpapers to any other person pursuant to clause (iv) of Section
8.15.
SECTION 5.04. Insurance. It will, and will cause each of its
Subsidiaries to, maintain such insurance or self insurance, to such extent and
against such risks, including fire and other risks insured against by extended
coverage, as is customary with companies similarly situated and in the same or
similar businesses.
SECTION 5.05. Taxes, Etc. It will, and will cause each of
its Subsidiaries to, pay and discharge promptly when due all material taxes,
assessments and governmental charges imposed upon it or upon its income or
profits or in respect of its property, as well as all other material
liabilities, in each case before the same shall become delinquent or in default
and before penalties accrue thereon, unless and to the extent that the same are
being contested in good faith by appropriate proceedings and adequate reserves
with respect thereto shall, to the extent required by GAAP, have been set
aside.
SECTION 5.06. Maintaining Records; Access to Properties and
Inspections. It will, and will cause each of its Subsidiaries to, maintain
financial records in accordance with GAAP and, upon reasonable notice and at
reasonable times, permit authorized representatives designated by any Lender to
visit and inspect its properties and to discuss its affairs, finances and
condition with its officers.
SECTION 5.07. ERISA. (a) 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 and (b)
furnish to the Agents (i) as soon as possible after, and in any event within 30
days after any Responsible Officer of such Borrower or any ERISA Affiliate
knows, or has reason to know, that any ERISA Event has occurred that alone or
together with any other ERISA Event could reasonably be expected to result in
liability of such Borrower in an aggregate amount exceeding $40,000,000 or
requires an increase in payments exceeding $20,000,000 in any year, a statement
of a Financial Officer setting forth details as to such ERISA Event and the
action that the Borrower
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proposes to take with respect thereto, together, in the case of a Reportable
Event, with a copy of the notice, if any, of such Reportable Event given to the
PBGC, (ii) promptly after receipt thereof, a copy of any notice that such
Borrower or any ERISA Affiliate may receive from the PBGC relating to the
intention of the PBGC to terminate any Plan or Plans (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) or to appoint a trustee
to administer any such Plan (iii) within 10 days after the due date for filing
with the PBGC pursuant to Section 412(n) of the Code a notice of failure to
make a required installment or other payment with respect to a Plan, a
statement of a Financial Officer setting forth details as to such failure and
the action that such Borrower proposes to take with respect thereto, together
with a copy of any such notice given to the PBGC and (iv) promptly and in any
event within 30 days after receipt thereof by such Borrower or any ERISA
Affiliate from the sponsor of a Multiemployer Plan, a copy of each notice
received by such Borrower or any ERISA Affiliate concerning (A) the imposition
of Withdrawal Liability or (B) a determination that a Multiemployer Plan is, or
is expected to be, terminated or in reorganization, both within the meaning of
Title IV of ERISA.
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 those set forth in the recitals hereto.
SECTION 5.09. Consolidations, Mergers, and Sales of Assets.
TU 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 TU 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. TU 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 TU 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, such person must
assume
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or be responsible by operation of law for all the obligations of TU Electric
hereunder, and TU will in no 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) TU and its Subsidiaries will not engage to a
Substantial extent in businesses other than those currently conducted by them
and other businesses reasonably related thereto and (b) nothing in this Section
shall prohibit (i) any sales of assets permitted by Section 5.10(d) or (ii) any
sales of assets referred to in clause (ii) of the proviso in the definition of
"Consolidated Earnings Available For Fixed Charges".
SECTION 5.10. Limitations on Liens. Neither TU 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 TU 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 TU or to
any Wholly-Owned Subsidiary of TU; or
(b) purchase money Liens (including capital leases) in respect
of property acquired by TU or any Significant Subsidiary, to secure
the purchase price of such property (or to secure indebtedness
incurred prior to, at the time of, or within 90 days after the
acquisition solely for the purpose of financing the acquisition of
such property), or Liens existing on any such property at the time of
acquisition of such property by TU or by 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 TU; 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
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(1) the aggregate principal amount of Indebtedness
secured by all Liens in respect of any such property shall not
exceed the cost or fair market value (both as determined by
the board of directors of TU or such Significant Subsidiary,
as the case may be), whichever shall be lower, 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 TU, 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
TU or by such Subsidiary, or at the time such corporation
becomes a Subsidiary of TU, 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 TU 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 TU 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 TU or any Significant Subsidiary; or
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(f) any Lien including in connection with sale-leaseback
transactions created or assumed by any Significant Subsidiary on
natural gas, coal, lignite, oil or other mineral properties or nuclear
fuel owned or leased by such Subsidiary, to secure loans to such
Subsidiary in an aggregate amount not to exceed $400,000,000; provided
that neither TU nor any other Subsidiary 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 TU 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) sales by TU Electric of its accounts receivable; or
(k) Permitted Encumbrances.
SECTION 5.11. Fixed Charge Coverage. TU will not, as of the
end of each quarter of each fiscal year of TU, 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. TU will not
permit Consolidated Shareholders' Equity to be less than 35% of Consolidated
Total Capitalization.
SECTION 5.13. Indebtedness of TU. TU will not incur, create,
assume or permit to exist Indebtedness (other than guarantees existing as of
the date hereof and guarantees of any obligations of Subsidiaries) in an amount
at any time in excess of the sum at such time of (a) $1,500,000,000, (b) if
positive, the excess of (i) the cumulative consolidated net income of TU (from
which preferred stock dividends and preferred securities distributions have
been deducted) reduced by the combined net income (after preferred stock
dividends and preferred securities distributions) of the direct
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Subsidiaries of TU to the extent such combined net income exceeds the cash
dividends received by TU from such Subsidiaries for each completed quarter
commencing on or after July 1, 1996, for which results have been reported to
the Lenders pursuant to Section 5.03 over (ii) the aggregate amount of
dividends paid by TU after the Effective Date and (c) the aggregate proceeds
received by TU from issuances of capital stock of TU after the Effective Date
(to the extent such proceeds have not been used to prepay Indebtedness (other
than Competitive Loans or Standby Loans or Indebtedness under the Facility A
Credit Agreement or any other short-term debt)), provided that Indebtedness
(other than guarantees existing as of the date hereof and guarantees of any
obligations of Subsidiaries) in an amount in excess of such sum may be
incurred, created, assumed or permitted to exist for a period of up to 120 days
if TU shall have given the Lenders prior written notice of its intent to issue
capital stock within such 120-day period for net cash proceeds to TU sufficient
to eliminate such excess.
ARTICLE VI. EVENTS OF DEFAULT
In case of the happening of any of the following events (each
an "Event of Default"):
(a) any representation or warranty made or deemed made by 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;
(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
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agreement contained in Section 5.01, 5.09, 5.10, 5.11, 5.12, or
5.13;
(e) 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)
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) TU shall no longer own, directly or indirectly, all the
outstanding common stock of TU Electric (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 TU or any Significant
Subsidiary, or of a substantial part of the property or assets of TU
or any Significant Subsidiary, under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other Federal or
state bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for TU or any Significant Subsidiary
or for a substantial part of the property or assets of TU or any
Significant Subsidiary or (iii) the winding up or liquidation of TU or
any Significant Subsidiary; and such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;
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(i) TU or any Significant Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under
Title 11 of the United States Code, as now constituted or hereafter
amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or
fail to contest in a timely and appropriate manner, any proceeding or
the filing of any petition described in (h) above, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for TU 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 $40,000,000 shall be rendered
against TU 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 TU or any Subsidiary to
enforce any such judgment or order;
(l) an ERISA Event or ERISA Events shall have occurred with
respect to any Plan or Plans that reasonably could be expected to
result in liability of any Borrower to the PBGC or to such Plan or
Plans in an aggregate amount exceeding $40,000,000 or requiring an
increase in payments exceeding $20,000,000 in any year;
(m) (i) any Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan, (ii) such Borrower or
such ERISA Affiliate does not have reasonable grounds for contesting
such Withdrawal Liability or is not in fact contesting such Withdrawal
Liability in a timely and appropriate manner and (iii) the amount of
the Withdrawal Liability specified in such notice, when aggregated
with all other
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amounts required to be paid to Multiemployer Plans in connection with
Withdrawal Liabilities (determined as of the date or dates of such
notification), either (A) exceeds $40,000,000 or requires payments
exceeding $40,000,000 in any year or (B) is less than $40,000,000 but
any Withdrawal Liability payment remains unpaid 30 days after such
payment is due;
(n) any Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within
the meaning of Title IV of ERISA, if solely as a result of such
reorganization or termination the aggregate annual contributions of
such Borrower and its ERISA Affiliates to all Multiemployer Plans that
are then in reorganization or have been or are being terminated have
been or will be increased over the amounts required to be contributed
to such Multiemployer Plans for their most recently completed plan
years by an amount exceeding $40,000,000;
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 one or both of the Borrowers to borrow pursuant to the Commitments and
(ii) declare the Loans of one or both 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 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.
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ARTICLE VII. THE AGENTS
In order to expedite the transactions contemplated by this
Agreement, Texas Commerce Bank National Association is hereby appointed to act
as Administrative Agent, and Chemical 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
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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 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.
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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
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 A 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
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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 either Borrower, to Texas Utilities Company, Energy
Plaza, 1601 Bryan Street, 33rd Floor, Dallas, TX 75201, Attention of
Richard Howard, Manager of Treasury Operations (Telecopy No.
214-812-2488);
(b) if to the CAF Agent, to Chemical Bank Agency Services
Corp., 140 East 45th Street, 29th Floor, New York, New York 10017,
Attention of Tara Kaplan (Telecopy No. 212-622-1308), with a copy to
Chemical 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 Texas Commerce Bank
National Association, 2200 Ross Avenue, 3rd Floor, Dallas, TX 75201,
Attention of Allen King (Telecopy No. 214-922-2997), with a copy to
Texas Commerce Bank, Loan Syndications Services, 1111 Fannin Street,
9th Floor, MS 46, Houston, TX 77002; and
(d) if to a Lender, to it at its address (or telecopy number)
set forth in the Administrative Questionnaire delivered to the
Administrative Agent by such Lender in connection with the execution
of this Agreement or previously or in the Assignment and Acceptance
pursuant to which such Lender became a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy to such party as provided in this Section or in accordance with the
latest unrevoked direction from such party given in accordance with this
Section.
SECTION 8.02. Survival of Agreement. All covenants,
agreements, representations and warranties made by the
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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 or an assignment to a Federal Reserve
Bank, 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 $10,000,000, (iii) each such assignment shall be of a constant,
and not a varying, percentage of all the assigning Lender's rights and
obligations under this Agreement, (iv) the parties to each such assignment
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance, and a
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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
the Facility A 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
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document furnished pursuant hereto; (iii) such assignee represents and warrants
that it is legally authorized to enter into such Assignment and Acceptance;
(iv) such assignee confirms that it has received a copy of this Agreement,
together with copies of the most recent financial statements delivered pursuant
to Section 5.03 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Agents, such assigning Lender or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (vi) such assignee appoints and authorizes each Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to such Agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such assignee
agrees that it will perform in accordance with their terms all the obligations
which by the terms of this Agreement are required to be performed by it as a
Lender.
(d) The Administrative Agent shall maintain at one of its
offices in the City of Houston a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Commitment of, and the principal amount of the Loans
owing to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive in the absence of
manifest error and the 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.
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(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.
(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.
(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
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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 2.02(e), 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
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rate of interest applicable thereto) for the period from the date of such
payment, prepayment, refinancing or failure to borrow or refinance to the last
day of the Interest Period for such Loan (or, in the case of a failure to
borrow or refinance the Interest Period for such Loan which would have
commenced on the date of such failure) over (ii) the amount of interest (as
reasonably determined by such Lender) that would be realized by such Lender in
reemploying the funds so paid, prepaid or not borrowed or refinanced for such
period or Interest Period, as the case may be.
(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, (ii) the use
of the proceeds of the Loans or (iii) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee is a
party thereto; 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.
(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
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determined shall be delivered to the appropriate Borrower and shall be
conclusive absent manifest error.
SECTION 8.06. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of the 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
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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, (iii) increase the percentage set forth
in clause (b)(ii)(B) of Section 2.01, without the prior written consent of each
Lender, or (iv) amend or modify the provisions of Section 2.14 or Section
8.04(h), the provisions of this Section or the definition of the "Required
Lenders", without the prior written consent of each Lender; provided further,
however, that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent or the CAF Agent hereunder without
the prior written consent of the Administrative Agent or the CAF Agent, as the
case may be. Each Lender shall be bound by any waiver, amendment or
modification authorized by this Section and any consent by any Lender pursuant
to this Section shall bind any assignee of its rights and interests hereunder.
SECTION 8.09. Entire Agreement. This Agreement (including
the schedules and exhibits hereto) and the Fee Letter constitute a "Loan
Agreement" as defined in Section 26.03(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 among the parties
with respect to the subject matter hereof is superseded by this Agreement and
the Fee Letter. 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
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constitute an original but all of which when taken together shall constitute
but one contract, and shall become effective as provided in Section 8.03.
SECTION 8.12. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be
taken into consideration in interpreting, this Agreement.
SECTION 8.13. Interest Rate Limitation. (a) Notwithstanding
anything herein to the contrary, if at any time the applicable interest rate,
together with all fees and charges which are treated as interest under
applicable law (collectively the "Charges"), as provided for herein or in any
other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender, shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by such Lender in accordance with applicable law, the rate
of interest payable on the Loans of such Lender, together with all Charges
payable to such Lender, shall be limited to the Maximum Rate.
(b) If the amount of interest, together with all Charges,
payable for the account of any Lender in respect of any interest computation
period is reduced pursuant to paragraph (a) of this Section and the amount of
interest, together with all Charges, payable for such Lender's account in
respect of any subsequent interest computation period, computed pursuant to
Section 2.07, would be less than the Maximum Rate, then the amount of interest,
together with all Charges, payable for such Lender's account in respect of such
subsequent interest computation period shall, to the extent permitted by
applicable law, be automatically increased to such Maximum Rate; provided that
at no time shall the aggregate amount by which interest paid for the account of
any Lender has been increased pursuant to this paragraph (b) exceed the
aggregate amount by which interest, together with all Charges, paid for its
account has theretofore been reduced pursuant to paragraph (a) of this Section.
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
84
80
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
accountants or counsel, (ii) to any regulatory agency having authority to
examine such Lender, (iii) as required by any legal or governmental process or
otherwise by law, (iv) except as provided in the last sentence of Section 5.03,
to any person to which such Lender sells or proposes to sell 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.
85
81
SECTION 8.16. Transition Period. At all times following
April 23, 1996, and prior to the Effective Date, the provisions of this
Agreement in effect prior to the amendment and restatement hereof executed and
delivered as of April 23, 1996, shall remain in effect without modification,
except that (i) the provisions of Section 8.05 shall apply to all parties
signatory hereto (in addition to all persons that are Lenders prior to giving
effect to such amendment and restatement) and to each Borrowing Request
delivered on April 23, 1996 and (ii) each Borrowing Request delivered on April
23, 1996 shall be deemed given solely to the parties signatory hereto and
subject to the provisions hereof as such provisions would be in effect after
the Effective Date.
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, as Borrower,
by
/s/ Peter B. Tinkham
----------------------------
Name: Peter B. Tinkham
Title: Treasurer and
Assistant Secretary
TEXAS UTILITIES ELECTRIC COMPANY,
as Borrower,
by
/s/ Robert S. Shapard
----------------------------
Name: Robert S. Shapard
Title: Treasurer and
Assistant Secretary
86
82
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, individually and as
Administrative Agent,
by
/s/ Allen King
----------------------------
Name: Allen King
Title: Vice President
CHEMICAL BANK, individually and as CAF
Agent,
by
/s/ Jane Ritchie
----------------------------
Name: Jane Ritchie
Title: Vice President
ABN AMRO BANK N.V.,
by
/s/ Peter D. Gaw
----------------------------
Name: Peter D. Gaw
Title: Group Vice President
by
/s/ Kevin S. McFadden
----------------------------
Name: Kevin S. McFadden
Title: Assistant Vice
President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
by
/s/ Robert Eaton
----------------------------
Name: Robert Eaton
Title: Vice President
87
83
BANK OF MONTREAL,
by
/s/ Donald Skipper
----------------------------
Name: Donald Skipper
Title: Director
THE BANK OF NEW YORK,
by
/s/ Nathan S. Howard
----------------------------
Name: Nathan S. Howard
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD.,
by
/s/ John M. Mearns
----------------------------
Name: John M. Mearns
Title: Vice President and
Manager
CIBC INC.,
by
/s/ Robert S. Lyle
----------------------------
Name: Robert S. Lyle
Title: Director
CITIBANK, N.A.,
by
/s/ Sandip Sen
----------------------------
Name: Sandip Sen
Title: Vice President
88
84
COMMERZBANK AG, ATLANTA AGENCY,
by
/s/ Dempsey L. Gable
----------------------------
Name: Dempsey L. Gable
Title: Senior Vice President
by
/s/ Vincas P. Snipas
----------------------------
Name: Vincas P. Snipas
Title: Assistant Cashier
CREDIT LYONNAIS,
by
/s/ Robert Ivosevich
----------------------------
Name: Robert Ivosevich
Title: Senior Vice President
CREDIT SUISSE,
by
/s/ David J. Worthington
----------------------------
Name: David J. Worthington
Title: Member of Senior
Management
by
/s/ Marilou Palenzuela
----------------------------
Name: Marilou Palenzuela
Title: Member of Senior
Management
THE FIRST NATIONAL BANK OF CHICAGO,
by
/s/ Madeleine N. Pember
----------------------------
Name: Madeleine N. Pember
Title: Corporate Banking
Officer
89
85
THE INDUSTRIAL BANK OF JAPAN TRUST
COMPANY,
by
/s/ A. Yoshino
----------------------------
Name: Akijiro Yoshino
Title: Executive Vice
President
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED,
by
/s/ S. Otsubo
------------------------
Name: Satoru Otsubo
Title: Joint General
Manager
MELLON BANK, N.A.,
by
/s/ A.J. Sabatelle
----------------------------
Name: A.J. Sabatelle
Title: First Vice
President
THE MITSUBISHI TRUST AND BANKING
CORPORATION, LOS ANGELES AGENCY,
by
/s/ Shigeki Sakanoue
----------------------------
Name: Shigeki Sakanoue
Title: Manager & 1st Vice
President
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK,
by
/s/ Carl J. Mehldau, Jr.
----------------------------
Name: Carl J. Mehldau, Jr.
Title: Associate
90
86
NATIONSBANK OF TEXAS, N.A.,
by
/s/ Bryan L. Diers
----------------------------
Name: Bryan L. Diers
Title: Senior Vice
President
THE SANWA BANK, LIMITED, DALLAS AGENCY,
by
/s/ Robert S. Smith
----------------------------
Name: Robert S. Smith
Title: Assistant Vice
President
SOCIETE GENERALE, SOUTHWEST AGENCY,
by
/s/ Richard M. Lewis
----------------------------
Name: Richard M. Lewis
Title: Vice President
THE SUMITOMO BANK, LIMITED,
by
/s/ Harumitsu Seki
-----------------------------
Name: Harumitsu Seki
Title: General Manager
THE TOKAI BANK, LIMITED,
by
/s/ M. Muto
----------------------
Name: Masaharu Muto
Title: Deputy General
Manager
91
87
TORONTO DOMINION (TEXAS), INC.,
by
/s/ Linda A. Lavin
----------------------------
Name: Linda A. Lavin
Title: Director
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
by
/s/ Karen Rottman
----------------------------
Name: Karen Rottman
Title: Assistant Vice
President
by
/s/ Paul R. Morrison
----------------------------
Name: Paul R. Morrison
Title: Vice President
WESTPAC BANKING CORPORATION,
by
/s/ R. Christopher Noble
----------------------------
Name: R. Christopher Noble
Title: Senior Vice
President
92
EXHIBIT A-1
FORM OF COMPETITIVE BID REQUEST
Chemical Bank, as Competitive Advance Facility Agent
for the Lenders referred to below,
c/o Chemical Bank Agency Services Corp.
140 East 45th Street (29th Floor)
New York, NY 10017
Attention: Tara Kaplan
Telecopy:
Dear Ladies and Gentlemen:
The undersigned, [Texas Utilities Company][Texas Utilities
Electric Company] (the "Borrower"), refers to the Amended and Restated Term
Loan and Competitive Advance and Revolving Credit Facility Agreement dated as
of April 26, 1996 (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], the Lenders named
therein, Texas Commerce Bank National Association, as Administrative Agent, and
Chemical 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
Competitive Borrowing 1/
------------------
(C) Interest rate basis 2/
------------------
(D) Interest Period and the
last day thereof 3/
------------------
Upon acceptance of any or all of the Loans offered by the
Lenders in response to this request, the Borrower shall be deemed to have
represented and warranted that the conditions to lending specified in Section
4.01(b) and (c) of the Agreement have been satisfied.
Very truly yours,
[TEXAS UTILITIES COMPANY]
[TEXAS UTILITIES ELECTRIC COMPANY]
by
----------------------------------
Name:
Title: [Financial Officer]
____________________
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.
3/ Which shall be subject to the definition of "Interest Period" and end
not later than the Maturity Date.
93
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 Amended and Restated Term Loan and
Competitive Advance and Revolving Credit Facility Agreement dated as of April
26, 1996 (as it may hereafter be amended, modified, extended or restated from
time to time, the "Agreement"), among [Texas Utilities Company][Texas Utilities
Electric Company] (the "Borrower"), [Texas Utilities Company][Texas Utilities
Electric Company], the Lenders named therein, Texas Commerce Bank National
Association, as Administrative Agent, and Chemical 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 __________, 19[ ], pursuant to Section
2.03(a) of the Agreement, and in that connection you are invited to submit a
Competitive Bid by [Date]/[Time]. 1/ Your Competitive Bid must comply with
Section 2.03(b) of the Agreement and the terms set forth below on which the
Competitive Bid Request was made:
(A) Date of Competitive Borrowing
------------------
(B) Principal amount of
Competitive Borrowing
------------------
(C) Interest rate basis
------------------
(D) Interest Period and the
last day thereof.
------------------
Very truly yours,
CHEMICAL BANK,
as Competitive Advance Facility Agent,
by
------------------------------
Name:
Title:
____________________
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.
94
EXHIBIT A-3
FORM OF COMPETITIVE BID
Chemical Bank, as Competitive Advance Facility Agent
for the Lenders referred to below,
c/o Chemical Bank Agency Services Corp.
140 East 45th Street (29th Floor)
New York, NY 10017
Attention: Tara Kaplan
Telecopy:
[Date]
Attention: [ ]
Dear Ladies and Gentlemen:
The undersigned, [Name of Lender], refers to the Amended and
Restated Term Loan and Competitive Advance and Revolving Credit Facility
Agreement dated as of April 26, 1996 (as it may hereafter be amended, modified,
extended or restated from time to time, the "Agreement"), among [Texas
Utilities Company][Texas Utilities Electric Company] (the "Borrower"), [Texas
Utilities Company][Texas Utilities Electric Company], the Lenders named
therein, Texas Commerce Bank National Association, as Administrative Agent, and
Chemical 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 ___________, 19[ ], and in that connection
sets forth below the terms on which such Competitive Bid is made:
(A) Principal Amount 1/
------------------
(B) Competitive Bid Rate 2/
------------------
(C) Interest Period and last
day thereof
------------------
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:
____________________
1/ Not less than $5,000,000 or greater than the requested Competitive
Borrowing and in integral multiples of $1,000,000. Multiple bids will be
accepted by the CAF Agent.
2/ i.e., LIBO Rate + or - __%, in the case of Eurodollar Loans or ___%,
in the case of Fixed Rate Loans.
95
EXHIBIT A-4
FORM OF COMPETITIVE BID ACCEPT/REJECT LETTER
[Date]
Chemical Bank, as Competitive Advance Facility Agent
for the Lenders referred to below
c/o Chemical Bank Agency Services Corp.
140 East 45th Street (29th Floor)
New York, NY 10017
Attention: Tara Kaplan
Telecopy:
Dear Ladies and Gentlemen:
The undersigned, [Texas Utilities Company][Texas Utilities
Electric Company] (the "Borrower"), refers to the Amended and Restated Term
Loan and Competitive Advance and Revolving Credit Facility Agreement dated as
of April 26, 1996 (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], the Lenders named
therein, Texas Commerce Bank National Association, as Administrative Agent, and
Chemical Bank, as Competitive Advance Facility Agent for the Lenders.
In accordance with Section 2.03(c) of the Agreement, we have
received a summary of bids in connection with our Competitive Bid Request dated
_____________, 19[ ], and in accordance with Section 2.03(d) of the Agreement,
we hereby accept the following bids for maturity on [date]:
Principal Amount Fixed Rate/Margin Lender
- ---------------- ----------------- ------
$ [%]/[+/-. %]
$
We hereby reject the following bids:
Principal Amount Fixed Rate/Margin Lender
- ---------------- ----------------- ------
$ [%]/[+/-. %]
$
The $ should be deposited in Chemical Bank account
number [ ] on [date].
Very truly yours,
[TEXAS UTILITIES COMPANY]
[TEXAS UTILITIES ELECTRIC COMPANY],
by
--------------------------------
Name:
Title:
96
EXHIBIT A-5
FORM OF BORROWING REQUEST
Texas Commerce Bank National Association,
as Administrative Agent
for the Lenders referred to below,
2200 Ross Avenue, 3rd floor
Dallas, TX 77002
Attention: Allen King
Telecopy:
[Date]
Dear Ladies and Gentlemen:
The undersigned, [Texas Utilities Company][Texas Utilities
Electric Company] (the "Borrower"), refers to the Amended and Restated Term
Loan and Competitive Advance and Revolving Credit Facility Agreement dated as
of April 26, 1996 (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], the Lenders named
therein, Texas Commerce Bank National Association, as Administrative Agent, and
Chemical 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][Term] Borrowing
under the Agreement, and in that connection sets forth below the terms on which
such [Standby][Term] Borrowing is requested to be made:
(A) Date of Borrowing
(which is a Business Day)
------------------
(B) Principal amount of
Borrowing 1/
------------------
(C) Interest rate basis 2/
------------------
(D) Interest Period and the
last day thereof 3/
------------------
Upon acceptance of any or all of the Loans made by the Lenders
in response to this request, the Borrower shall be deemed to
____________________
1/ Not less than $10,000,000 (and in integral multiples of $5,000,000) or
greater than, as applicable, the Total Standby Commitment or the aggregate
amount of the Term Loan Commitments then available.
2/ Specify (a) Term Borrowing or Standby Borrowing and (b) Eurodollar
Loan or ABR Loan.
3/ Which shall be subject to the definition of "Interest Period" and end
not later than the Maturity Date.
97
have represented and warranted that the conditions to lending specified in
Section 4.01(b) and (c) of the Agreement have been satisfied.
Very truly yours,
[TEXAS UTILITIES COMPANY]
[TEXAS UTILITIES ELECTRIC COMPANY],
by
--------------------------
Name:
Title: [Financial Officer]
98
EXHIBIT B
ADMINISTRATIVE QUESTIONNAIRE
TEXAS UTILITIES COMPANY AND TEXAS UTILITIES ELECTRIC COMPANY
PLEASE FORWARD THIS COMPLETED
FORM AS SOON AS POSSIBLE TO:
Gina Hardwick FAX (713) 216-2291
PLEASE TYPE ALL INFORMATION.
Agent: Texas Commerce Bank National Association 712 Main
Street 8 TCB-N 96 Houston, Texas 77002
Telex: 166-350 TCB HOU
Syndications
Telecopier: (713) 216-2291 / Alt. Fax (713) 216-2339
Syndications
Contacts: Preston Moore (713) 216-1010
Ann Krevis Baumgartner (713) 216-7582
Gina Hardwick (713) 216-2093
Operations: Gale Manning (713) 750-2784
Letters of Credit: Gale Manning (713) 750-2784
Competitive Auction
Contact: Chemical Bank New York
Janet M. Belden - Phone: (212) 622-0011
Fax: (212) 622-0854
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 #:
-------------------------------------------------
99
2
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 PRIMARY PRIMARY ALTERNATE ALTERNATE
NAME/ TELEFAX TELEX NO. & TELEFAX TELEX NO. &
PHONE NO. DEPARTMENT NO. ANSWERBACK NO. ANSWERBACK
--------- ---------- -------- ----------- --------- -----------
PRIMARY PRIMARY PRIMARY ALTERNATE ALTERNATE
NAME/ TELEFAX TELEX NO. & TELEFAX TELEX NO. &
PHONE NO. DEPARTMENT NO. ANSWERBACK NO. ANSWERBACK
--------- ---------- -------- ----------- --------- -----------
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?
--------------------------------------------------------------
100
3
Movement of Funds: TO US: Wire Fed Funds to:
Texas Commerce Bank N.A.
ABA #113000609
for account number #20730
Attention: Loan Syndication Svcs./ Gale Manning
Reference:
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:
--------------------------------------------
101
4
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:
----------------------------------------------------------------
102
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:
----------------------------------------------------------------
103
EXHIBIT C
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Dated: __________, 19__
Reference is made to the Amended and Restated Term Loan and
Competitive Advance and Revolving Credit Facility Agreement dated as of April
26, 1996 (as amended, modified, extended or restated from time to time, the
"Agreement"), among Texas Utilities Company, Texas Utilities Electric Company
(collectively, the "Borrowers"), the lenders listed in Schedule 2.01 thereto
(the "Lenders"), Texas Commerce Bank National Association, as Administrative
Agent, and Chemical 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 owning 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.
104
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):
--------------------------------------------------------
Percentage Assigned of
Facility/Commitment (set forth,
to at least 8 decimals, as a
Principal Amount Assigned (and percentage of the Facility and
identifying information as to individual the aggregate Commitments of all
Facility Competitive Loans) Lenders thereunder)
-------- ---------------------------------------- --------------------------------
Standby Commitment Assigned: $ %
------------- ----------
Term Loan Commitment Assigned: $ %
------------- ----------
Standby Loans: $ %
------------- ----------
Term Loans: $ %
------------- ----------
Competitive Loans: $ %
------------- ----------
Fees Assigned (if any): $ %
------------- ----------
105
The terms set forth and on the Accepted:
reverse side hereof are hereby TEXAS UTILITIES COMPANY,
agreed to:
, as by:
- ------------------------------- -----------------------------
Assignor, Name:
Title:
by:
-----------------------------
Name:
Title: TEXAS UTILITIES ELECTRIC COMPANY,
, as
- -------------------------------
Assignee, by:
-----------------------------
by: Name:
---------------------------- Title:
Name:
Title:
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Administrative Agent,
by:
--------------------------------------
Name:
Title:
CHEMICAL BANK, as CAF Agent
by:
--------------------------------------
Name:
Title:
3
106
EXHIBIT D-1
April 26, 1996
To the Lenders listed on
Schedule 2.01 of each
Credit Agreement referred to below
Ladies and Gentlemen:
We advise you that we have acted as counsel to Texas Utilities
Company, a Texas corporation (TU), and Texas Utilities Electric Company, a
Texas corporation (TU Electric), in connection with the Amended and Restated
Competitive Advance and Revolving Credit Facility Agreement and the Amended and
Restated Term Loan and Competitive Advance and Revolving Credit Facility
Agreement (Credit Agreements), each dated as of April 26, 1996, among TU, TU
Electric, Texas Commerce Bank National Association, as Administrative Agent,
Chemical Bank, as Competitive Advance Facility Agent, and the banks listed on
Schedule 2.01 thereof (Lenders), and have participated in the preparation of or
have examined and are familiar with (a) the current financial statements and
reports filed by TU and TU Electric with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended, (b) the Credit
Agreements, (c) the articles of incorporation and by-laws of TU and TU Electric
and (d) such other records and documents as we have deemed necessary for the
purposes of this opinion.
Capitalized terms used in this opinion and not defined herein shall
have the respective meanings assigned thereto in the Credit Agreements. This
opinion is delivered to you pursuant to Section 4.02(a) of the Credit
Agreements.
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 TU and TU Electric 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.
We are members of the New York Bar and do not hold ourselves out as
experts on the laws of the State of Texas. As to all matters of Texas law
(including incorporation of TU and TU Electric, 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 TU and TU Electric. While we represent
TU and TU Electric on a regular basis, our engagement has been limited to
specific matters as to which we were consulted.
107
-2-
We have no direct knowledge of the day-to-day affairs of TU or TU Electric and
have not reviewed generally their business affairs. Accordingly, we are relying
upon representations of TU and TU Electric contained in the Credit Agreements,
in certificates furnished pursuant thereto, and in certificates furnished to
us by officers of TU and TU Electric.
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 TU and TU Electric, (iv)
the legal capacity of natural persons, (v) the power, corporate or otherwise,
of all parties other than TU and TU Electric 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 TU and TU
Electric.
Based on the foregoing, we are of the opinion that:
1. Each of TU and TU Electric (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
Agreements and to borrow funds thereunder.
2. The execution, delivery and performance by each of TU and TU
Electric of the Credit Agreements 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 either TU or TU
Electric, or the articles of incorporation, as amended, or by-laws of either TU
or TU Electric, (2) to our knowledge, any order of any Governmental Authority
presently applicable to either TU or TU Electric or (3) any provision of any
indenture, agreement or other instrument known to us to which either TU or TU
Electric is a party or by which either TU or TU Electric or its property is
bound, (b) be in conflict with, result in a breach of or constitute (alone or
with notice or lapse of time or both) a default under any such indenture,
agreement or other instrument or (c) result in the creation or imposition of
any lien upon or with respect to any property or assets of either TU or TU
Electric.
3. The Credit Agreements have been duly executed and delivered by
TU and TU Electric and constitute legal, valid and binding obligations of TU
and TU Electric enforceable against each of them in accordance with their 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.)
108
-3-
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 either TU or TU Electric in connection with the Transactions, except
such as have been made or obtained and are in full force and effect.
5. (a) Neither TU nor TU Electric nor any of their respective
Subsidiaries is an "investment company" as defined in, or subject to regulation
under, the Investment Company Act of 1940, as amended, and (b) TU, TU Electric
and each of their respective Subsidiaries is exempt from all provisions of the
Public Utility Holding Company Act of 1935, as amended, and the rules and
regulations thereunder, except for Sections 9(a)(2) and 33 of such Act and the
rules and regulations thereunder, and the execution, delivery and performance
by each of TU and TU Electric of the Credit Agreements do not violate any
provisions of such Act or any rule or regulation thereunder.
6. Except as described in the Annual Reports of TU and TU
Electric on Form 10-K for the year ended December 31, 1995 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 either TU or TU
Electric (i) which involves the Transactions or (ii) as to which there is a
reasonable possibility of an adverse determination and which, if adversely
determined, could, individually or in the aggregate, result in a Material
Adverse Change.
7. To our knowledge after due inquiry, the proposed use of the
proceeds of the Loans is in accordance with the Credit Agreements and, if so
used, will not violate the Margin Regulations.
This letter is solely for the benefit of the named addresses 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 4.02(a) of the
Credit Agreements.
Very truly yours,
Reid & Priest LLP
109
EXHIBIT D-2
April 26, 1996
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 (TU) and Texas Utilities Electric Company, a Texas corporation (TU
Electric), in connection with the execution and delivery of the Amended and
Restated Competitive Advance and Revolving Credit Facility Agreement and the
Amended and Restated Term Loan and Competitive Advance and Revolving Credit
Facility Agreement (Credit Agreements), each dated as of April 26, 1996, among
TU, TU Electric, the banks listed on Schedule 2.01 thereof (Lenders), Texas
Commerce Bank National Association, as Administrative Agent and Chemical 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 Agreements. This
opinion is delivered to you pursuant to Section 4.02(a) of the Credit
Agreements.
In connection with this opinion we have examined a counterpart of the
Credit Agreements executed by TU and TU Electric and have also made such
examination of other documents and of certificates of public officials and
corporate officers of TU and TU Electric, 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 TU and TU Electric 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.
110
-2-
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 TU and TU Electric, (iv)
the legal capacity of natural persons, (v) the power, corporate or otherwise,
of all parties other than TU and TU Electric 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 TU and TU
Electric.
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 TU and TU Electric (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
Agreements and to borrow funds thereunder.
2. The execution, delivery and performance by each of TU and TU
Electric of the Credit Agreements 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 either TU or TU
Electric, or the articles of incorporation, as amended, or by-laws of either TU
or TU Electric, (2) to our knowledge, any order of any Governmental Authority
presently applicable to either TU or TU Electric or (3) any provision of any
indenture, agreement or other instrument known to us to which either TU or TU
Electric is a party or by which either TU or TU Electric or its property is
bound, (b) be in conflict with, result in a breach of or constitute (alone or
with notice or lapse of time or both) a default under any such indenture,
agreement or other instrument or (c) result in the creation or imposition of
any lien upon or with respect to any property or assets now owned or hereafter
acquired by either TU or TU Electric.
3. The Credit Agreements have been duly executed and delivered by
TU and TU Electric and constitute legal, valid and binding obligations of TU
and TU Electric enforceable against each of them in accordance with their 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 Government Authority (including pursuant to
the Public Utility Holding Company Act of 1935, as amended) is or will be
required on the part of either TU or TU Electric in connection with the
Transactions, except such as have been made or obtained and are in full force
and effect.
111
-3-
5. Neither TU nor TU Electric nor any of their respective
Subsidiaries is an "investment company" as defined in, or subject to regulation
under, the Investment Company Act of 1940, as amended. TU, TU Electric and each
of their respective Subsidiaries is exempt from all provisions of the Public
Utility Holding Company Act of 1935, as amended, and the rules and regulations
thereunder, except for Sections 9(a)(2) and 33 of such Act and the rules and
regulations thereunder, and the execution, delivery and performance by each of
TU and TU Electric of the Credit Agreements do not violate any provision of
such Act or any rule or regulation thereunder.
6. Except as described in the Annual Reports of TU and TU
Electric on Form 10-K for the year ended December 31, 1995 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 either TU or TU
Electric (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, TU and TU Electric are not in violation of
any law, rule or requlation, 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 Agreements, and, if so
used, will not violate the Margin Regulations.
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 Reid
& Priest LLP, special counsel to TU and TU Electric.
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 names addressees
and may not be quoted in whole or in part or otherwise referred to in any
document or report and may not be furnished to any person without our prior
written consent, expect that Reid & Priest LLP may rely hereon in connection
with their opinion being rendered pursuant to Section 4.02(a) of the Credit
Agreements.
Very truly yours,
WORSHAM, FORSYTHE
& WOOLDRIDGE, L.L.P.
By:
-----------------------------------
112
Schedule 2.01
===================================================================================================
Name Standby Commitment Term Loan Commitment
---- ------------------ --------------------
- ---------------------------------------------------------------------------------------------------
ABN AMRO Bank N.V. $33,870,967.74 $11,612,903.23
- ---------------------------------------------------------------------------------------------------
Bank of America National Trust and Savings $42,338,709.68 $14,516,129.03
Association
- ---------------------------------------------------------------------------------------------------
Bank of Montreal $28,225,806.45 $ 9,677,419.36
- ---------------------------------------------------------------------------------------------------
The Bank of New York $42,338,709.68 $14,516,129.03
- ---------------------------------------------------------------------------------------------------
The Bank of Tokyo-Mitsubishi, Ltd. $42,338,709.68 $14,516,129.03
- ---------------------------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce $33,870,967.74 $11,612,903.23
- ---------------------------------------------------------------------------------------------------
Chemical Bank $26,814,516.13 $ 9,193,548.35
- ---------------------------------------------------------------------------------------------------
Citibank, N.A. $28,225,806.45 $ 9,677,419.36
- ---------------------------------------------------------------------------------------------------
Commerzbank, AG $42,338,709.68 $14,516,129.03
- ---------------------------------------------------------------------------------------------------
Credit Lyonnais $28,225,806.45 $ 9,677,419.36
- ---------------------------------------------------------------------------------------------------
Credit Suisse $28,225,806.45 $ 9,677,419.36
- ---------------------------------------------------------------------------------------------------
The First National Bank of Chicago $42,338,709.68 $14,516,129.03
- ---------------------------------------------------------------------------------------------------
The Industrial Bank of Japan Trust Company $42,338,709.68 $14,516,129.03
- ---------------------------------------------------------------------------------------------------
The Long-Term Credit Bank of Japan, Limited $28,225,806.45 $ 9,677,419.36
- ---------------------------------------------------------------------------------------------------
Mellon Bank, N.A. $28,225,806.45 $ 9,677,419.36
- ---------------------------------------------------------------------------------------------------
113
2
===================================================================================================
Name Standby Commitment Term Loan Commitment
---- ------------------ --------------------
- ---------------------------------------------------------------------------------------------------
The Mitsubishi Trust and Banking Corporation, $33,870,967.74 $11,612,903.23
Los Angeles Agency
- ---------------------------------------------------------------------------------------------------
Morgan Guaranty Trust Company of New York $33,870,967.74 $11,612,903.23
- ---------------------------------------------------------------------------------------------------
NationsBank of Texas, N.A. $42,338,709.68 $14,516,129.03
- ---------------------------------------------------------------------------------------------------
The Sanwa Bank Limited $33,870,967.74 $11,612,903.23
- ---------------------------------------------------------------------------------------------------
Societe Generale $33,870,967.74 $11,612,903.23
- ---------------------------------------------------------------------------------------------------
The Sumitomo Bank, Limited $33,870,967.74 $11,612,903.23
- ---------------------------------------------------------------------------------------------------
Texas Commerce Bank National Association $26,814,516.14 $ 9,193,548.36
- ---------------------------------------------------------------------------------------------------
The Tokai Bank, Limited $33,870,967.74 $11,612,903.23
- ---------------------------------------------------------------------------------------------------
Toronto Dominion $28,225,806.45 $ 9,677,419.36
- ---------------------------------------------------------------------------------------------------
Union Bank of Switzerland $28,225,806.45 $ 9,677,419.36
- ---------------------------------------------------------------------------------------------------
Westpac Banking Corporation $28,225,806.45 $ 9,677,419.36
===================================================================================================
114
SCHEDULE 3.06
TO THE
CREDIT AGREEMENT
Litigation
None